1. Timo Unger Substances in Articles Challenges & Tools Insights from an Automotive Industry perspective

2. Hyundai Motor Europe Tech. Center GmbH 2 ? Numbers and Challenges 9.000 500.000 900 4,3 187Bn 100 12 7 2.848

3. Hyundai Motor Europe Tech. Center GmbH 3 REACH Art 31 – SDS Obligations Upon receipt of a SDS, the DU should : –Check the SDS content for errors and shortcomings (plausibility check) –Check whether there is for each substances classified as hazardous a SDS available (provided by the supplier) –Check whether the SDS is supplied in the official language of the Member State(s) where the substance or mixture is placed on the market. –Check whether the information mentioned in the SDS is sufficient for workplace and environmental risk assessment. –Make a risk assessment for the workplace –Inform the substance/mixture supplier about new findings A complete inventory of all substances and their uses A systematic content check of the SDS A documentation of your decisions and the reasoning Needed is: For dangerous substances you get Safety Data Sheets: Nothing new but with REACH the number of SDS will increase

4. Hyundai Motor Europe Tech. Center GmbH 4 If I receive an eSDS… Checklist for eSDS: –Is the substance registered under REACH ? –Is the substance classified as hazardous? –Have sections of the main part of the SDS been modified ? –Is your use covered? See ES title and check use description for the relevant ERCs, PROCs, ACs, SUs, … –If use is covered/identified, make a Risk Assessment to check if OCs and RMMs are appropriate for environment and human health? Expertise in chemical language and capacity… Needed is: For dangerous substances >10t/a you get extended Safety Data Sheets (eSDS = SDS + Exposure Scenarios): Up to 900 pages !!!

5. Hyundai Motor Europe Tech. Center GmbH 5 The Challenge PROCs ERCs PCs SUs ACs ??? DU Industry (especially SMEs) need a solution which enables non chemical experts to understand their chemical suppliers, and to fulfill their legal obligations! Preferred solution: End users shall not receive eSDS but “only” consolidated SDS incl. the for the customer relevant content from the Exposure Scenarios & written in an easy understandable language. ECETOC TRA RCRs OCs DNELs PNECs REACH Annex II: 0.2 General requirements for compiling a safety data sheet –0.2.3. “The information in the safety data sheet shall be written in a clear and concise manner…” –0.2.4. “The language used in the safety data sheet shall be simple, clear and precise, avoiding jargon, acronyms and abbreviations…”

6. Hyundai Motor Europe Tech. Center GmbH 6 Sector recommendation to process SDSs S/P * Supplier 1 S/P Supplier 2 S/P Supplier 3 S/P Supplier 4 Customer (e.g. OEM) PDF (SDS Format 2006) Excel (SDS Format 2009) Word (SDS Format 2010) Print out (SDS Format Korea) Current standard Process: SDS Transfer Manual SDS CreationManual SDS Processing (Analyzing, Checking, Implementing, …) *S/P: Substances / Preparations Customer (e.g. OEM) Agreed future Process: Semi Automatic SDS Creation -> In House Tool or eSDB Semi Automatic SDS Processing (Analyzing, Checking, Implementing, …) -> In House Tool (e.g VW, BMW, Daimler) -> Already existing IHTs can be adjusted with low internal effort. eSDSComXML +EuPhraC S/P * Supplier 1 S/P Supplier 2 S/P Supplier 3 S/P Supplier 4 eSDSComXML

7. Hyundai Motor Europe Tech. Center GmbH 7 Position paper on electronic data exchange format The Automotive Industry has agreed on a common communication paper to implement a xml based electronic data exchange format for Safety Data Sheets on a long term. Other sectors are also considering to joined (e.g. Construction machines, Aerospace (under consideration)) A common project with CEFIC has started Harmonization of their xml project for Exposure Scenarios with the EDAS approach Also ECHA & COM have shown interests Outlook & Recommendation: An electronic exchange of SDS will become a cross industry standard

8. Hyundai Motor Europe Tech. Center GmbH 8 How many parts a vehicle contains? Depending on the complexity, there are between 4.000 & 9.000 different main components contained in a vehicle platform (without multiple entries for one specific part). –e.g. The vehicle platform of one OEM contains 8.400 components (=28.000 incl. common parts) from 1.800 suppliers! –Up to 75% of a car are pre-manufactured by supply chain Total number of components assembled to one vehicle: up to 28.000 (example: 1 tire = 1 part reference number; number of tires per vehicle = 4) Products from other industries may be even more complex! (e.g. aerospace, engineering industry)

9. Hyundai Motor Europe Tech. Center GmbH 9 How many parts a vehicle contains? A car radio is counted as one main component… Considering all parts contained in all components and sub-components, we come to many tens/hundreds of thousands of articles per vehicle!

10. Hyundai Motor Europe Tech. Center GmbH 10 How many different part numbers a vehicle manufacturer has in its warehouse? How many parts supplier (Tier 1) does a vehicle manufacturer have? and how many Tier 2 suppliers the Tier 1 has in average? How many Tier 1 suppliers are coming from outside Europe? How many levels the supply chain in the Automotive Industry has? Other interesting figures… 1.500 to 4.500 500 to 1.500 20% to 30% (from European Vehicle Manufacturers) 50% to 80% (from non-EU Vehicle Manufacturers) 3-7 levels up to 500.000

11. Hyundai Motor Europe Tech. Center GmbH 11 The Challenge of Supply Chain Communication Tier1 Tier 2 Tier 3 1 (OEM) 3.500 (Tier1s) 1,75 Mio 8,75 Bn Using this data and adding some conservative assumptions a number of several billion possible substance communications for the tens of thousands of parts per vehicle are generated. Tier 4 X 500 175 Mio X 100 X 50 1 (OEM) 1.500 750.000 3,75 Bn X 500 75 Mio X 100 X 50 Tier 5 187 Bn X 50 Levels

12. Hyundai Motor Europe Tech. Center GmbH 12 GADSL – Global Automotive Declarable Substance List European- Requirements collected by European members Korean- Requirements collected by Korean members Japanese- Requirements collected by Japanese members US- Requirements collected by US members www.gadsl.org Substance is to be expected in automobile part or vehicle (NOT in the production process and not outside the Automotive Industry!) Substance is regulated or projected to be regulated Reportable threshold levels will be based on the lowest level required by regulation or scientific evaluation. Considering the following criteria:

13. Hyundai Motor Europe Tech. Center GmbH 13 GADSL – A short insight 2848 Substances (CAS numbers) in 141 Substance Groups GADSL today includes: The sources to analyze, evaluate and finally decide are – The know how of the GASG Group (Decades of experiences!!!) – In addition and with minor impact, information from IMDS (has this substance already been used within a vehicle)

14. Hyundai Motor Europe Tech. Center GmbH 14 Since 12 years a standard process within the Automotive Industry Raw Material Manufacturer Supply Chain (Tier 4, 3, 2, 1) Car Manufacturer GADSL One reference list for declarable substances IMDS Communication of substance information GADSL One reference list for declarable substances How Automotive is collecting substance information For reasons of know how protection, the systems allows the usage of „Jokers“ (max 10%) BUT ONLY… …if the relevant Joker is not “hiding” a substance listed on GADSL

15. Hyundai Motor Europe Tech. Center GmbH 15 IMDS History 2000 2001/02 2004 2003 2005 2006 2007 2008 2009 2010 2011 2012

16. Hyundai Motor Europe Tech. Center GmbH 16 IMDS – International Material Data System A unique success story USERUSER MDSMDS Source: HP

17. Hyundai Motor Europe Tech. Center GmbH 17 Helpdesk per Region since 2008 Source: HP / IMDS SC

18. Hyundai Motor Europe Tech. Center GmbH 18 How the IMDS is managed? Implementation and Operation Requests, Remarks Speaker EDS Definition of Responsibles (Spokesman) Steering Committee ( Experts ) Speaker EDS Sponsors Groupe (Managers) Suppliers  Operational Execution  Strategy & Costs Tasks: Japanese Steering Committee EDS North American Steering Committee Order

19. Hyundai Motor Europe Tech. Center GmbH 19 A data flow throughout the full supply-chain Send Material Data Sheets (MDS) to: IMDS Address of Raw Material supplier PP Proofing, Linking with own data and Sending new Material Data Sheets to: IMDS Address of Tier n supplier Insert Proofing, Linking with own data and Sending new Material Data Sheets to: IMDS Address of Tier 2 supplier Doortrim Carrier Proofing of MDS and using Data for internal benefit IMDS Address of the Car Manufacturer Complete Car Proofing, Linking with own data and Sending new Material Data Sheets to: IMDS Address of Tier 1 supplier Doortrim MDS Example: Time (1-5 month*) * Estimate of a real data collection. Depending on the complexity of the part & the strategy of the vehicle manufacturer (PPAP).

20. Hyundai Motor Europe Tech. Center GmbH 20 Not included in IMDS In IMDS, only substances have to be reported that are contained in the final part and that exceed the impurity threshold of 0,1%/(0,01%). IMPORTANT: No other substances, e.g. used for: Production Packaging Transport …have to be entered into the IMDS ( except they are still available on the final part) e.g.: Release Agents, Cleaning Agents e.g.: Transport Boxes, Paper, Plastic Foil e.g.: Fuel, Containers e.g.: No Polyol and no Isocyanate but only Polyurethane (PUR)

21. Hyundai Motor Europe Tech. Center GmbH 21 Challenges on investigations of substances in articles Complexity (of product and supply chain) Frequency (of legislative updates) Availability (of spare parts & information on spare parts) Harmony (of global legal requirements) Impossibility (of legal compliance)

22. Hyundai Motor Europe Tech. Center GmbH 22 Complexity Data collection obligations & complex articles 100% data completeness is almost impossible? Complex products Complex supply chain Complex data collection It is almost impossible to fulfill e.g. REACH Art 33, even with an experience of >12 years in the collection of substance information throughout the supply chain. well developed tools and processes (IMDS, GADSL, …)

23. Hyundai Motor Europe Tech. Center GmbH 23 Outlook: Thousands of substance information have to be collected Source: Substances classified as carcinogenic, mutagenic and toxic for reproduction (CMR) and other substances of concern in consumer products Identification of relevant substances and articles, analytical control and consequences for the regulation of chemicals On behalf of the Federal Environment Agency (Germany) - UMWELTBUNDESAMT 2080 potential SVHCs Today 20152018 100 300 500 Possible Solution: Preferable is a less frequent requirement (with more substances) Frequency Today 2020 73 (+13) 478 Number of regulated dangerous substances End 2012 ~110 Challenge: A small step approach on data collection is very resource consuming Update: 2/year There are approx. 2000 substances fulfilling the criteria of REACH, Article 57 for so called Substances of Very High Concern (SVHCs) In addition, there are several other substances that have an potential unacceptable risks to human health or the environment. By today, REACH is already targeting around 86 substances. By the end of 2012 there are in total 110 substances scheduled (only for the CL).

24. Hyundai Motor Europe Tech. Center GmbH 24 Availability Substance Substitution vs. Spare Parts Production Timeline of the Automotive Production Development 3 - 4 years Vehicle Production 5 - 8 years Spare Parts Production 8 - 12 years (after EOP) Spare Parts availability 0 - X years (after EOSP) Spare parts (still produced in very low volumes mostly by SMEs) have to be re-developed & re-validated (several times?) = Hugh impact on cost side or even impossible to do!!! Could have negative consequences on service parts strategy Results in: Increasing costs for customers or Decrease of the vehicle lifetime Substance substitution

25. Hyundai Motor Europe Tech. Center GmbH 25 A possible solution for (still produced) spare parts Under the ELV (End of Life Vehicles) Directive 2000/53/EC the problem has been understood by EC and solved in the year 2006 by implementing an exemption for spare parts into the ELV Annex II, called the „repair as produced principle“. One (of many) proposal for a similar exemption under REACH: Add to REACH Annex XIV a clause such as e.g. Spare parts put on the market after the sunset date which are used for vehicles put on the market before the sunset date shall be exempted from the provisions of Article 56, REACH. How to deal with spare parts for long life products? Will they have to be re-developed after the relevant substance phase out deadline, again and again and....?

26. Hyundai Motor Europe Tech. Center GmbH 26 Challenge: Spare parts on stock (for old vehicles) Name: Volkswagen Beetle Surname: Taillight Born: 1970 in Wolfsburg/Germany Place of residence: Volkswagen-Audi Classic Parts Centre, Wolfsburg Parents: Defunct Population: 6

27. Hyundai Motor Europe Tech. Center GmbH 27 Challenge: Used parts & cars And it is not only challenging “new” spare parts on stock… The backyard dealer does not know anything about REACH The supply- & communication chain never existed! How to collect the necessary information?

28. Hyundai Motor Europe Tech. Center GmbH 28 Challenge: Spare & used parts The preferred solution for the future (Lobbying activities) Automotive Industry requests that under Art 33 only the substances have to be communicated that were legally required at the time of production Automotive Industry requests 6 month lead time for data collection between the CL update and start of obligations on communication

29. Hyundai Motor Europe Tech. Center GmbH 29 Harmony Challenge: Not harmonised legislation O5A Once an article, always an article Legal text and majority of EU MS Calculation base: Complex Part Opinion of 6 dissenting MS Calculation base: Single Component Calculation of reporting thresholdm=1500kg 0.1%=1500g m=0.1g 0.1% = 0.1mg Consequence All CL-substances >1500g in the car have to be reported All CL-substances >0.1mg in the car are in scope Example If a substance is exceeding the 1500g, then it would have to be reported for that car If a substance in one single sub component of the complete car is exceeding 0.1mg, then it would have to be reported for that car Worst Case Example: Dissenting opinion of EU member states on the calculation of the REACH communication threshold

30. Hyundai Motor Europe Tech. Center GmbH 30 Output of O5A List of SVHCs in Articles Member States and NGOs to overload indutsry and consumers ? ? ? ?

31. Hyundai Motor Europe Tech. Center GmbH 31 General Impact of not Harmonised Legal Obligations Non-harmonized obligations... Hamper the functioning of the market Discriminates companies depending on their geographical location Generates unnecessary effort to modify already existing and compliant processes and systems Already collected compliant data would have to be (partly) recollected Calculation Basis: Complete Vehicle Calculation Basis: Smallest Component (O5A)

32. Hyundai Motor Europe Tech. Center GmbH 32 O5A – When reasonable or always absurd? Enforcement of the O5A-approach... for a simple dummy „YES!“, but for a vehicle...? A solution that reduces effort and increases the environmental benefits: Focus on the life phases of a product and their potential exposure pathways Require reporting only for such (sub-)components with potential exposure of dangerous substances

33. Hyundai Motor Europe Tech. Center GmbH 33 Impossibility Calculation of the 1t Notification Threshold REACH Art. 7(2) requires article manufacturers to calculate whether in their manufactured or imported articles the amount of a CL-Substance is exceeding 1tpa. How can we calculate over the last 3 preceding years without having any chance to get the necessary data? Substance XYZ is placed on the CL 1.1.2012 I must know, if XYZ is contained in my article 1.1.20111.1.20101.1.2009 and notify once 1tpa is reached I must know, if XYZ exceeds 1tpa 6 Month Start of Notification obligations 1.7.2012 1.1.2013 Calculation re-starts with 0 No communication obligations are existing. My suppliers have no obligation to inform me about the amount and existance of XYZ in my article ECHA recommends in their „Data Submission Manual“ that the tonnage must be calculated as the average of the last year or last 3 years.

34. Hyundai Motor Europe Tech. Center GmbH 34 REACH is a „tour de force“......but the Automotive Industry is well prepared!!!

35. Hyundai Motor Europe Tech. Center GmbH 35 Free Download of Version 3 under: http://www.acea.be/reach/ Available languages: English (Release date: 07/11) German (Release date: 03/12) Chinese(Release date: 03/12) Japanese (Release date: 03/12) French (Release date: 03/12) Korean(Release date: 03/12) The Automotive Industry Guideline on REACH Since the publication of the last AIG in 2008, the REACH discussions where continuing on both Industry as well as on COM / Authority side. Some of the outcomes are heavily impacting our business. V3.1 of the AIG is providing guidance for all critical subjects

36. Hyundai Motor Europe Tech. Center GmbH 36 Our Way Remains Challenging… Thank you for your attention ! Timo Unger tunger@hyundai-europe.com