SUBSTITUTION PLAN SUBSTITUTION PLAN. Public version. EC No: CAS No:

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SUBSTITUTION PLAN

Public version

Legal name of applicant: Salzgitter Flachstahl GmbH

Submitted by: Salzgitter Flachstahl GmbH

Substance: Chromium trioxide

EC No: 215-607-8 CAS No: 1333-82-0

Use title: Pretex® functional chrome plating using chromium trioxide in closed reactor systems for the establishment of adjustable hemispherical surface structures on working rolls applied in the steel industry for the manufacture of cold-rolled, high quality textured sheet metal

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Use number: 2 Salzgitter Flachstahl GmbH

CONTENT

CONTENT ... 2 TABLES ... 2 FIGURES ... 2 DECLARATION... 3 DISCLAIMER ... 4 1. INTRODUCTION... 5

2. FACTORS AFFECTING SUBSTITUTION ... 6

3. LIST OF ACTIONS AND TIMETABLE WITH MILESTONES ... 7

3.1 Overview on development process ... 7

3.1.1Phase I: Identification and development of alternatives (≥ X years) ... 9

3.1.2Phase II: Laboratory scale investigations (≥ X years) ... 9

3.1.3Phase III: Industrial scale investigations (≥ X years) ... 9

3.1.4Phase IV: Plant modification and customer approach (≥ X years) ... 9

3.1.5Phase V: Customer approval phase (≥ X years) ... 10

3.1.6Phase VI: Contractual lead time (X years) ... 10

3.1.7Phase VII: Series production (X years) ... 11

3.1.8Derivation of the Review Period ... 11

4. MONITORING OF THE IMPLEMENTATION OF THE SUBSTITUTION PLAN ... 12

5. CONCLUSION ... 13

TABLES

Table 1: Overview on most-promising alternatives and color-coded assessment criteria ... 6

FIGURES

Figure 1: Overview on Salzgitter’s functional chrome plating process ... 5

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DECLARATION

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DISCLAIMER

In light of the Court’s judgment Case-T-837/16, ECHA invited the applicant to consider the submission of a substitution plan, arguing as following:

“On 7 March 2019, the General Court of the European Union annulled a Commission decision granting an authorisation for certain uses of two lead chromate pigments (Case T-837/16, Sweden v. Commission). As regards the assessment of the suitability of alternatives under Article 60(4) of REACH, it follows from the judgment that if suitable alternatives are available in general, albeit not technically or economically feasible for the applicant, and if the applicant demonstrates that the socio-economic benefits of continued use outweigh the risk to human health and the environment, an authorisation may be granted if the applicant submits a substitution plan.” The applicant wishes to clarify that a substitution plan was purposefully not submitted as part of the application for authorisation. Based on REACH Article 62(4)(f) with due reference to Article 60(5), submission of a substitution plan within the application is required only when a suitable alternative is available to the applicant, which is explicitly not the case in relation to this application.

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1. INTRODUCTION

The Analysis of Alternatives (AoA) and the Socio-Economic Analysis (SEA) form part of the Application for Authorisation (AfA) for the continued use of chromium trioxide in Pretex® functional chrome plating of working rolls (Use 2) applied by Salzgitter Flachstahl GmbH (Salzgitter) at their production site in Salzgitter, Germany.

Salzgitter uses chromium trioxide in functional chrome plating for (re-)applying a Pretex® chrome coating (structured surface) on working rolls for steel mill applications. The functional chrome plating process applied by Salzgitter for the surface treatment of working rolls is unique in this industry sector xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx in contrast to ‘traditional’ immersion bath plating processes. Salzgitter developed a highly engineered system technology for the Cr(VI)-based main plating process, which enables a xxxxxxxxxxxxxxreaction in a closed reactor applying the metallic chrome coating on the surface of the working rolls. The overall process is divided in three main phases illustrated in Figure 1. Please see chapter 3.4.1.1.2 of the AoA-SEA document for a detailed description of the functional chrome plating process.

Figure 1: Overview on Salzgitter’s functional chrome plating process

Pretex® structured working rolls are used to emboss sheet metal (see Figure 2 in the AoA-SEA document). Thereby, the characteristic hemispherical Pretex® surface structure is transferred to the metal and by this forming the calotte-like structures (topography). The transferred calotte-like topography (surface texture) of the emerging sheet metal is the negative of the Pretex® topography present on the respective working roll (see Figure 3 in the AoA-SEA document). Please see chapter 3.4.2.1 in the AoA-SEA document for a detailed description of the overall sheet metal production process and the dependency of Use 1 and Use 2.

Identification of possible alternatives

In this Analysis of Alternatives for the substitution of chromium trioxide in Pretex® functional chrome plating three alternatives are described in detail (see chapter 4.4 of the AoA-SEA document). Salzgitter performed a technical and semi-quantitative economic assessment for these alternatives but none of them provides with the required combination of technical and process related performance characteristics at current stage. Therefore, a drop-in-alternative for chromium trioxide in Pretex® functional chrome plating is not available.

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Table 1: Overview on most-promising alternatives and color-coded assessment criteria

Alt e rna tiv e T opo gra phy S u rf ace h ar dne ss W ear re si sta n ce A dhe si on t o su bs tr at e C or ro si on re si sta n ce X xx xx xx xx xx x xx xx xx x R es is ta n ce to te m pe rat u re ch an ge s T ri bo lo gi cal prop er ti es S u rf ace m or ph ol og y Lay er th ic kn es s X xx xx xx xx x xx xx xx xx x xx xx xx xx xx Pr oc es s re qui re m en ts Po st h eat tr eat m en t Cr(III) Ni/Ni alloy EDT

2. FACTORS AFFECTING SUBSTITUTION

Chromium trioxide has multifunctional advantages, mainly based on the characteristics of the hexavalent chromium compound. The Pretex® process makes use of desirable properties of metallic chrome coatings produced from chromium trioxide that have made this compound a state-of-the-art substance for a wide range of applications for more than 50 years. The non-exhaustive beneficial properties of Pretex® functional chrome coatings applied on working rolls are:

• Adjustable hemispherical topography • Excellent wear resistance

• Excellent adhesion between coating and substrate • High surface hardness

• Excellent corrosion resistance

• Adequate and adjustable layer thickness

• Tribological advantages (adjustable friction properties) • xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx • Support of lubrication

• Ability to re-build worn-down parts • Flexibility to plate complex geometries • xxxxxxxxxxxxxxxxxx

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Functional chrome plated surfaces withstand the demanding conditions in metal mills and are compatible with the base materials used for working rolls. Furthermore, the functional chrome coating ensures a long working roll service life with constant high-quality product output. Finally, Salzgitter can perform the functional chrome plating of rolls at their own site which offers multiple advantages such as quality control, short refurbishment intervals, minimized logistic and costs for transporting working rolls with up to X t. No transportation is also an important environmental factor as it plays a huge role in reducing CO2 emissions.

Despite the usage of chromium trioxide as the donor of the mandatory hexavalent chromium ion (Cr(VI)) in Pretex® functional chrome plating, no chromium trioxide residues are present on the final Pretex® textured working roll and therefore no hazard arises from the finished article

3. LIST OF ACTIONS AND TIMETABLE WITH MILESTONES

3.1 Overview on development process

The overall substitution of the Cr(VI)-based functional chrome plating process is bound to the identification, evaluation, up-scaling and industrialization of an alternative. The AoA at hand forms part of describing the efforts and difficulties for identifying a suitable replacement for chromium trioxide in Pretex® functional chrome plating. However, so far, no technical feasible and ready-to-use alternative is available.

The Pretex® technology is the result of intense R&D efforts since the 1990’s and the mechanism behind the topography formation is well understood. The unique shaping and adjustability of the hemispherical Pretex® topography results from the massive intervention in the electro-crystallization of the structure forming layer. For this, a stepwise increase in the deposition potential is necessary. According to the current state of knowledge, the required potential magnitude, holding other electrolysis parameters constant, leads to hydroxidic precipitations in electrolytes other than Cr(VI), thus yielding deficient layers. Therefore, the challenge of substituting chromium trioxide in the Pretex® process is to find an alternative that forms the requested topography (see chapter 3.4.2.2.2 of the AoA-SEA document) and, additionally, provides for key functionalities of 'conventional' chrome plating (see chapter 3.4.2.2.3 of the AoA-SEA document). In fact, the current efforts in substituting chromium trioxide, even in 'conventional' hard chrome plating, do not indicate any ready-to-use alternative (see Use 1). Thus, it is even more difficult to find a suitable alternative forming the required hemispherical topography and providing with required functionalities of ‘conventional’ chrome coatings.

Figure 2 shows the expected R&D phases required for identification, validation and industrialization (up-scaling) of a potential alternative, as well as, the necessary re-construction of the plant and the costumer approval phase. Additionally, Figure 2 shows important business-related phases which need to be considered by Salzgitter for a final substitution of chromium trioxide in its chrome plating process. The individual content and respective goals of the R&D phases is described in detail below.

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3.1.1 Phase I: Identification and development of alternatives (≥ X years)

The first step in finding and developing an alternative is to perform further R&D on the short-listed alternatives by initial laboratory scale trials to identify the most promising alternative which is worth further investigation. Once such a candidate alternative is available, further R&D needs to be conducted on the respective process and process parameters to validate the alternative on a laboratory scale.

The milestone of Phase I is to identify an alternative which is suitable to meet the requirements of the Pretex® functional chrome coating for the most part. As described in chapter 3.4.2.2 of the AoA-SEA document, the requirements on the process and surface performance are very high, requiring an alternative to pass a multi-level assessment. From experience, at least xxxx additional years are estimated for this initial R&D phase which is crucial for the success of subsequent phases and therefore needs to be conducted with extraordinary care to limit economic damage at higher tier

3.1.2 Phase II: Laboratory scale investigations (≥ X years)

After an alternative has passed the milestone requirements for Phase I, a prototype plating system reflecting the relevant use conditions needs to be developed and validated. For this, extensive laboratory scale trials are required to build-up the process (incl. process parameters) and subsequently perform independent, iterative variations of both variables, process set-up and process parameters. This iterative laboratory scale process development including the corresponding evaluation of results and optimization rounds is very time consuming and estimated to take at least xxxx years.

The milestone of Phase II is the establishment of a prototype plating system including optimized process parameters suitable to create a reproducible coating fully meeting the requirements described in chapter 3.4.2.2 (see AoA-SEA document).

3.1.3 Phase III: Industrial scale investigations (≥ X years)

After the prototype plating system is developed to deliver the required results concerning process and surface requirements on a laboratory scale, it needs to be scaled up and validated again with regard to the industrial use, i.e. adjustments for industrial scale (parts with functional work surface up to X m) need to be performed. This includes modifications in the process build-up (e.g. anode geometry, etc.) as well as modifications and fine tuning of the process parameters. The milestone and as a last step of Phase III, trials need to be performed under “real” industrial conditions coating a “real” working roll.

Based on experience, it is estimated that at least xxxx years are needed for the industrial implementation of a potential alternative on the reactor technology. The establishment of a reproducible scaled-up method assumes an identified substance or process has been validated on the laboratory scale and prototyped

3.1.4 Phase IV: Plant modification and customer approach (≥ X years)

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which are for Salzgitter’s electroplating process. These must be adapted to the process and the electrolyte. Otherwise, the anodes1_{could be passivated, or the deposited platinum layer could} dissolve.

As a first step, the alternative process including process build-up needs to be set-up for permanent use and for long-term industrial trials under real conditions, i.e. mass production of working rolls with “new” coating process. In addition, to these structural measures at the plant, Salzgitter needs to inform their customers about the new cold-rolling process and ask for trial delivery and in-field testing of respective metal products (see Phase V).

Please note that > xx % of Salzgitter’s sheet metal production output is texturized with Pretex® chrome coated working rolls, giving the product its unique characteristics. Therefore, the application of a new coating technology on working rolls used for sheet metal texturing also requires customer approval. Especially, the impact in the painting process needs to be evaluated.

The plant re-construction being the time-limiting factor for Phase IV, it is estimated that at least xxxx years are required until a ready-for-mass-production alternative process is available at Salzgitter.

3.1.5 Phase V: Customer approval phase (≥ X years)

After the re-construction of the plant the customer approval phase starts. This approval phase is required because the mass-produced sheet metal products produced with alternatively coated working rolls need to be accepted by the market. Otherwise, an alternative cannot be assessed economically feasible.

The customer approval phase includes customer auditing, trial delivery and an expensive and time-consuming approval process. Since the automotive industry is Salzgitter’s biggest customer (xx % of Salzgitter’s Pretex® related production volume), its approval period is decisive for the evaluation of whether an alternative is technically feasible or not.

For the application of alternatively produced sheet metal in the automotive industry, the customer approval is estimated to take at least xxxx years for all customers affected by the process change.

3.1.6 Phase VI: Contractual lead time (X years)

Due to the complexity of supply chains and required planning security in the automotive industry, Salzgitter is obliged to sign contracts for future series production of “old design” sheet metal products (i.e. produced with chrome plated working rolls) xxxx years in advance to secure its business. In a worst-case scenario, this could mean that Salzgitter signs contracts for “old design” sheet metal products shortly before customer approval in 2034 (see Figure 2). Consequently, a switch to the alternative process (i.e. working rolls produced with alternative) is not possible as this would require two alternative processes for the production of working rolls to be implemented and further that working rolls would need to be changed between lot productions for different customers. This is clearly not possible from capacity (e.g. roll handling, etc.) and economic point of view.

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Concluding, the contractual lead time of xxxxx years needs to be considered for the overall substitution timeline.

3.1.7 Phase VII: Series production (X years)

Series productions in the automotive industry run xxxxx years. Within this period, Salzgitter is not allowed by contract to perform changes to the production process of the sheet metal products. This is because the alternatively produced products would require customer approval, which in turn would require extensive testing accompanied with high costs at the customer. As the automotive industry is very price sensitive, such changes are not possible and not allowed.

Concluding, the xxxxx -year series production of sheet metal products manufactured with chrome plated working rolls needs to be added to the overall substitution timeline required by Salzgitter to finally switch to a Cr(VI)-free production process of working rolls.

3.1.8 Derivation of the Review Period

Salzgitter stated that in a best-case scenario the identification and validation of a potential alternative at lab scale (see Phase I and Phase II) will take at least xxx additional years, taking the current stage of R&D at the beginning of 2020 into account. For scale-up (see Phase III) and industrialization (see Phase IV) of the alternative coating process, it is estimated that at least xxxx years are required. Finally, the product quality needs to be approved by Salzgitter’s customers. The time required for this product re-approval is determined by the automotive industry and estimated to take at least xxxx years (see Phase V). Besides these R&D related topics, Salzgitter also needs to consider timelines which are highly important for securing its business. Together, the implementation timelines from Phase VI and Phase VII, take xxx years (Note: the timelines for Phase VI and Phase VII are not estimated timelines but fixed).

Since no suitable alternative for the substitution of chromium trioxide in the functional chrome coating process is identified yet, the iterative R&D process steps described in Phase I to Phase V need to be fully passed through.

In summary, Salzgitter estimates that for substitution of the chromium trioxide in the Pretex® functional chrome coating process a review period of at least 25 years is required, taking 2020 as a base year for calculations (see Figure 2).

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4. MONITORING OF THE IMPLEMENTATION OF THE SUBSTITUTION PLAN

Salzgitter uses the Strategic Product Planning (SPP) process for product development. In the SPP process, all product developments are accompanied from the product idea through to the launch of the series product. The process serves to efficiently manage development resources while reflecting the technical product requirements and market needs.

In iterative process steps, a product idea continuously passes through a decision-making process in which certain milestones (xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx) require a decision by the xxxxxxxxx committee.

In addition to the areas of R&D (xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx), xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx, the xxxxxxxxxcommittee comprises the technical and commercial departments of Salzgitter’s management. The xxxxxxxxx committee meets mostly monthly, but at least once a year.

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5. CONCLUSION

Comparing the detailed information provided in this document with the publication made by ECHA on “Setting the review period when RAC and SEAC give opinions on an application for authorisation”2_{, the following conclusions are drawn by the applicant on the length of the review} period:

a) It is clearly shown that this AfA meets the criteria and considerations that lead to a recommendation of a long review period (12 years).

b) From a technical perspective, there are clear aspects that show that a much longer review period of at least 25 years is needed until substitution of chromium trioxide in Pretex® functional chrome plating of rolls can be achieved.

• The risk characterized for the continued use of chromium trioxide in Salzgitter’s plating process can be considered as low → the benefits of continued use outweigh the risk by a considerable ratio of at least 1 : 160;

• Salzgitter has been proactive in undertaking research to develop an alternative for the chromium trioxide-based Pretex® chrome coating process for many years. These attempts have been unsuccessful in finding a sustainable replacement with comparable performance (see chapter 2 and 4.1 of the AoA-SEA document). • The identification, development, and industrialization of a potential alternative is

a long-term process. Figure 2 illustrates the steps expected to be required for the successful identification and implementation of a potential alternative. From the time a potential alternative is identified, initial R&D and evaluation efforts on the laboratory scale are expected to take at least xxx years. For the subsequent prototyping, validation in the relevant environments, and up-scaling an alternate coating system or technology, at least xxx additional years need to be calculated. It is important to note that the steps from initial R&D to the up-scaling and validation of a prototype may be iterative in case of failure. Additionally, for the necessary plant modification and the customer approval phase for initial market acceptance at least xxccx years need to be taken into account. Please refer to the detailed information on the R&D plan developed by Salzgitter for the investigation on potential alternatives for the substitution of chromium trioxide in functional chrome plating (in chapter 3.1).

• Planning reliability is crucial especially for customers from the automotive industry. Since it is Salzgitter’s biggest customer (xx % of Salzgitter’s Pretex® related production volume), its approval periods (see chapter 3.1.5) are decisive for the evaluation of whether an alternative is technically feasible or not. Taking into account that in the automotive industry series production cycles are xxccx years (or higher) with contractual arrangements made xxccx years in advance (required planning security requested by the automotive industry) an additional xxcx years need to be considered by Salzgitter for a final switch (implementation) to a Cr(VI)-free alternative.

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and further that these working rolls would have to be changed back and forth depending on the contractual arrangements made for different production lots for different customers, i.e. sheet metal production with Cr(VI)-plated or alternatively coated working rolls. This switch between production lots is clearly not possible from a capacity and economic point of view.

In summary, the successful identification and implementation of an alternative for the substitution of chromium trioxide requires a review period of at least 25 years in a best-case estimated substitution scenario calculated from the current stage of R&D.