Automotive Industry Trends

China’s RoHS: Another Delay but Few New Answers

The Chinese Ministry of Information Industry (MII) announced promulgation of its Administrative Measures on the Control of Pollution Caused by Electronic Information Products, the law known as China’s RoHS. The new effective date is March 1, 2007.

Though the timeframe may be clearer now, the effect of the law on the U.S. automotive industry is still uncertain. The Chinese measure shares a nickname—RoHS—with an environmental directive issued by the European Union: Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment. The EU’s RoHS sets limits for the use of lead, mercury, cadmium, hexavalent chromium, polybrominated bephenyls (PBBs), and polybrominated diphenyl ethers (PBDEs). The automotive industry is exempt from the EU RoHS, because the restrictions do not apply to electronic equipment within an assembly that is not powered by electricity. Car radios, for example, are excluded from coverage.

The question is, Will automobiles be exempt from China’s RoHS? That question can be answered only when the MII issues its catalogue of products covered by the measure. When the catalogue will be available is not yet known.

If the U.S. auto industry is not exempt, it will be forced to look carefully at the Chinese measure and try to interpret its boundaries. American high-tech firms are struggling with compliance issues for Europe’s RoHS, which go into effect on July 1, 2006, and for similar laws from other countries and a handful of U.S. states that will commence in the near future. But when it comes to China’s RoHS, those precursors will be of little help to develop strategies of compliance, because the boundaries of the Chinese law are almost indiscernible.

China’s RoHS restricts the same six substances as the EU directive—lead, mercury, cadmium, hexavalent chromium, PBBs, and PBDEs—but it does not specify a threshold amount for each substance, nor does it spell out the “other toxic and harmful substances,” which will be subject to the law. It is not known if being Joint Industry Guide (JIG)-compliant will serve as an adequate barometer. China reserves the right to add other substances to the list and to review it yearly, a provision that might pose a considerable challenge to U.S. automotive design and manufacturing schedules. The directive states that not only are restricted substances banned from the finished product, they are also forbidden from use in the making of the product. Computer manufacturers, for example, who use some restricted substances as sacrificial layers in the manufacturing process for PC boards will find this a difficult obstacle to design around.

Other differences include responsibility, labeling, and inspection, among others. Article 3 of the EU’s RoHS delegate responsibility to the producer. China’s RoHS leave it unspecified, so that the OEM, designer, distributor, or other entity in the supply chain may be held accountable for noncompliance.

China has extensive labeling requirements that include the country of origin, the names and amounts of restricted substances contained in a product, a list of packaging material and ink ingredients, and a declaration of safe-use life for the product, an estimate of the length of time before a product containing restricted substances will begin to deteriorate or leak.

U.S. electronics firms have already encountered delays for products entering EU member states, but it is believed that those delays will seem mild compared to those that may result from China’s RoHS. Contrary to other countries, China requires that all products entering its markets after March 1, 2007, be inspected at the port of entry. These inspections are to be carried out by customs, and certification requires testing only in labs certified by China, and at the time of the law’s promulgation, only eighteen labs were so designated. The prospect of shipments sitting in port for indefinite terms awaiting inspection is a daunting thought.

Many in the automotive industry are anxious to see what will be included in the catalogue of covered products for China’s RoHS. U.S. car manufacturers reported double-digit sales increases in China in 2005 (GM, 35.2%; Ford, 46%). Growing confidence in that market has generated robust investment in it, and so hopes remain high that China’s RoHS will be both comprehensible and fair. Clarifications from the MII will be welcomed, and analysis will be swift.

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