Obsolescence Insurance, a New High-Margin Business for EMS Companies
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This summer, at the end of July, China’s Ministry of Industry and Information Technology (MIIT) proposed a draft “catalog” of “Electrical and Electronic Products” (EEPs) that would be subject to substance restrictions under the current “China RoHS 2” regulation (AKA Management Methods for the Restriction of the Use of Hazardous Substances in Electrical and Electronic Products). This is not the first time MIIT has tried to restrict substances under China RoHS, however. More on that below.
Since March 2007, when it first came into force, China RoHS has only required substance disclosure and labeling. Restriction, while an aspect of the regulation, has not yet been implemented. The new proposed EEPs subject to restriction are as follows:
- Refrigerators
- Air conditioners
- Washing machines
- Water heaters
- Printers
- Copiers
- Fax machines (!)
- TV sets
- Monitors
- Microcomputers
- Cell phones
- Telephones
MIIT also provided a list of exemptions that would apply to these products, which follow the existing European Union RoHS exemptions.
While there is nothing particularly striking about the list (except, perhaps, to learn that fax machines are still in use), the administrative aspect of compliance remains outstanding. All of these products are sold in the European Union so the technical aspect of complying with such a regulatory requirement should already have been addressed. The only technical concern should be the power cable/external power supply necessary to adapt the product for Chinese power outlets.
Article 18 of the China RoHS 2 regulation notes that the state will develop a “conformity assessment system” (CAS) that manufacturers must follow in order to comply and to sell these EEPs in the Chinese market. The problem is that, as of today, no information about the CAS exists. Until this is understood and negotiated with the industry, identifying the products subject to substance restrictions is relatively meaningless.
The last time MIIT (then MII) tried to restrict substances, the defined CAS-equivalent required manufacturers to test every component of every product down to the homogeneous materials, in a finite number of state-run Chinese labs. The industry rejected this approach as impractical, since the testing process would take more time than some of these products’ lifecycles and cost an enormous amount. Manufacturers effectively said that they would have to withdraw from the market. Unacceptable to both sides, this approach was never implemented and China RoHS remained a labeling and declaration regulation.
How will MIIT approach it this time? We have an acceptable model, based on harmonized standard EN 50581:2012, conveniently issued as an international standard by the International Electrotechnical Commission’s Technical Committee 111 (IEC TC 111) as IEC 63000:2016. Non-EU countries that wish to implement a RoHS-like regulation and require due diligence should specify the IEC standard, since their countries, assuming they are IEC members, actually have a say in it.
Will MIIT adopt this approach? Stay tuned.
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Click here for an update to the UAE RoHS regulation.
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