PUBLIC VERSION OF THE SOCIO-ECONOMIC ANALYSIS

SOCIO-ECONOMIC ANALYSIS

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PUBLIC VERSION OF THE


Legal name of applicants: Doosan Electro-Materials Luxembourg SARL

Doosan Energy Solution Kft (Company in the course of

incorporation),

Submitted by: EPPA SA on behalf of the applicants

Substance: Chromium trioxide (EC: 215-607-8, CAS: 1333-82-0)

Use title: Industrial formulation of a chromium trioxide solution

below 0.1% w/w concentration for the passivation of

copper foil used in the manufacture of Lithium-ion

Batteries (LiB) for motorised vehicles.

Use number: 1


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CONTENTS

DECLARATION .......................................................................................................................................................... 3

LIST OF ABBREVIATIONS ....................................................................................................................................... 4

SUMMARY OF SOCIO-ECONOMIC ANALYSIS ................................................................................................... 6

1. AIMS AND SCOPE OF SEA ................................................................................................................................. 7

1.1. Aims and scope of SEA .................................................................................................................................. 7

1.2. Definition of “applied for use” scenario ......................................................................................................... 9 1.2.1 “Applied for use” scenario and key economic data ............................................................................... 9

1.3. Definition of “non-use” scenario .................................................................................................................... 11

1.4. Information for the length of the review period.............................................................................................. 12

2. ANALYSIS OF IMPACTS .................................................................................................................................... 14

2.1 Human health impacts ....................................................................................................................................... 14 2.1.1 Reference dose response relationship for carcinogenicity of hexavalent chromium (ECHA:

RAC/27/2013 Rev. 1 Final)................................................................................................................. 15 2.1.2 Epidemiology of lung cancer and risk factors ....................................................................................... 16 2.1.3 Medical treatment for lung cancer and its costs ..................................................................................... 17 2.1.4 Productivity loss due to lung cancer ...................................................................................................... 19 2.1.5 Welfare loss ........................................................................................................................................... 20 2.1.6 Number of people exposed at the applicants’ new plant ....................................................................... 22 2.1.7 Monetization of the impact on the human health (lung cancer, workers) .............................................. 24

2.2 Environmental impacts ..................................................................................................................................... 24

2.3 Man via the environment .................................................................................................................................. 24 2.3.1 Exposure and risks for man via the environment ................................................................................... 26 Epidemiology of small intestine cancer and risk factors ................................................................................ 28 Medical treatment for small intestine cancer and its costs.............................................................................. 28

2.4 Economic impacts .......................................................................................................................................... 30

2.5 Social impacts ................................................................................................................................................. 32

2.6 Wider economic impacts ................................................................................................................................ 34

3. COMBINED ASSESSMENT OF IMPACTS .......................................................................................................... 35

3.1 Comparison of impacts and distributional analysis ........................................................................................ 35

3.2 Uncertainty analysis .......................................................................................................................................... 36

4. CONCLUSIONS ..................................................................................................................................................... 41

ANNEX I – MAN VIA THE ENVIRONMENT, MAIN CALCULATIONS .............................................................. 43

ANNEX II – JUSTIFICATIONS FOR CONFIDENTIALITY CLAIMS .................................................................... 44


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DECLARATION

We, Doosan Electro-Materials Luxembourg SARL and Doosan Energy Solution Kft

(Company in the course of incorporation), request that the information blanked out in the

“public version” of the Socio-Economic Analysis is not disclosed. We hereby declare that, to

the best of our knowledge as of today (17th May 2018) the information is not publicly

available, and in accordance with the due measures of protection that we have implemented, a

member of the public should not be able to obtain access to this information without our

consent or that of the third party whose commercial interests are at stake.

17th May 2018, Luxembourg (L)/ Környe (HU)

Signature:

Honggi Moon

General Manager


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LIST OF ABBREVIATIONS

AoA: Analysis of Alternatives

APF: Actual Protection Factor

CFL: Circuit Foil Luxembourg

Cr (III): Trivalent chromium

Cr (VI): Hexavalent chromium

CrO3: Chromium trioxide or Chromium Acid

CSR: Chemical Safe Report

DCE: Doosan Corporation Europe

DEL: Doosan Electro-Materials Luxembourg SARL

DSC: Doosan Corporation (Doosan South Korea)

DE: Doosan Energy Solution

EBIT: Earnings Before Interest and Tax

ECHA: European Chemicals Agency

EEA: European Economic Area

ELR: Excess Lifetime Risk

ESIR: Excess of Small Intestine cancer Risk

EU: European Union

EU RAR: European Union Risk Assessment Report

EUROSTAT: Statistical office of the European Union

EUSES: European Union System for the Evaluation of Substances

GDP: Gross Domestic Product

GWh: GigaWatt hour

IARC: International Agency for Research on Cancer

JRC: Joint Research Center

kg bw: Kilogram of body weight

LiB: Lithium-ion Battery

LIST: Luxembourg Institute of Sciences and Technology

m3: Cubic metre

NPV: Net Present Value


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OECD: Organisation for Economic Co-operation and Development

OEM: Original Equipment Manufacturer

PEC: Predicted Environmental Concentration

RAC: Committee for Risk Assessment

REACH: Registration, Evaluation, Authorisation and Restriction of Chemicals

R&D: Research and Development

RPE: Respiratory Protective Equipment

SEA: Socio-Economic Analysis

SEAC: Committee for Socio-Economic Analysis

TWA: Time Weighted Average

VCM: Value of Cancer Morbidity

VSL: Value of a Statistical Life

WCS: Worker Exposure Scenario

WTP: Willingness To Pay

w/w: Weight by weight

xEV: Hybrid and Electric Vehicle

µg: Microgram


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SUMMARY OF SOCIO-ECONOMIC ANALYSIS

Chromium trioxide is classified as carcinogenic (category 1A) and mutagenic (category 1B).

The substance was prioritized for inclusion in Annex XIV in ECHA’s 4th recommendation

and formally added to Annex XIV under entry 16 with the latest application date on 21st

March 2016 and sunset date on 21st September 2017.

The applicants of this application for authorisation are subsidiary companies of

Doosan South Korea (Doosan Corporation, DSC). The applicants are planning to open a new

industrial plant in Hungary to manufacture only copper foils. Hence, the applicants are

applying for an authorisation to use in the future chromium trioxide for the passivation of thin

copper foils because there are no technically suitable substitutes, as shown in the Analysis of

the Alternatives (AoA). The pilot production is expected to start in January 2020, whereas the

mass production is expected to start in July 2020.

It is important to highlight that Circuit Foil (another subsidiary company of Doosan

South Korea) is the only producer of electrodeposited copper foils in the EU accounting for a

75% market share in the EU. Circuit Foil applied for and was granted an authorisation for

using chromium trioxide for a similar production process of copper foils.1 However, Circuit

Foil does not have the production capacity to produce in sufficient quantity, beyond its

standard production, copper foils, as required by the exclusively three expected customers

(XXXXXXXXXXXXXXXXXXX) of the applicants. These three customers will use the

whole production of copper foil from the new plant only for the manufacture of Lithium-ion

Batteries (LiB) used in motorised vehicles. Excellent passivation of copper foils is essential

in the manufacturing process of LiB. This is an application for authorisation for a future use,

as the site at which production will take place has yet to be built. The location has already

been chosen; the engineering, process management, health, safety and environment expertise

of CFL will be used to construct the new site in Hungary.

In terms of benefits to the society, the monetized residual risk of lung cancer related

to workers operating in the new plant has been quantified at: € 0.63 (over 7 years), € 0.99

(over 12 years), and € 1.18 (over 15 years). Both direct and indirect costs have been

considered when quantifying the impact on the human health of lung cancer. In addition, the

residual risks associated with the man via the environment (general population) have been

quantified at: € 0.00 over 7, 12, and 15 years for lung cancer (via inhalation) because no

person (either resident or worker from nearby plants) will be exposed within 100-meter

radius from the new plant. This inhalation route will be further analysed in the uncertainty

analysis to consider a potential of 200 people (this further assessment takes into account also

the small amount of time new plant’s workers will spend in proximity of the plant within

100-meter radius). For intestinal cancer (via drinking water and fish consumption) we have

estimated € 126.50 (over 7 years), € 197.80 (over 12 years), and € 234.33 (over 15 years).2

1 The applicant makes reference to all the elements of the CFL application with permission of the latter. The

application is for a future use, however the manufacturing process is based on the state of the art section of the

CFL factory in Luxembourg and the output (copper foil for use in electronic applications) is practically

identical. Nevertheless, there are some differences with regard to the CFL application that are relevant to the

current application. 2 Throughout this SEA a “.” separates units from decimals, whereas a “,” indicates thousands and millions.


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Hence the total benefits for the European society in case of a refused authorisation

would be: € 127.13 (over 7 years), € 198.79 (over 12 years), and € 235.51 (over 15 years).

Conversely, the total costs for the European society would be at least (rounded): € 55.1

million (over 7 years), € 96.2 million (over 12 years), and € 119.1 million (over 15 years).

The main costs for the European society come from:

a) the loss of the return coming out of the investment that the applicants are

planning to do in Hungary (macroeconomic effect);

b) the loss of the expected production (we calculate this by using either EBIT or

net profits) of copper foils in the EEA;

c) XXX future employees would lose the possibility of being immediately

employed in the new plant located in Környe (Hungary).

This means that the costs of a refused authorisation are equal to (at least) more

than 433,626 times, 484,323 times, and 506,064 times the benefits over 7, 12, and 15

years, respectively. We have also assessed the non-use scenario with strong assumptions

to show the robustness of the findings. Even with extreme assumptions, the costs of a

refused authorisation are equal to (at least) more than 40,943 times, 45,731 times, and

47,749 times the benefits over 7, 12, and 15 years, respectively.

Against this background, the applicants should be granted the authorisation to use

chromium trioxide in the production of copper foils in accordance with the article 60(4) of

REACH for a period of 15 years.

1. AIMS AND SCOPE OF SEA

1.1. Aims and scope of SEA

Chromium trioxide is classified as carcinogenic (category 1A) and mutagenic (category 1B).

The substance was prioritized for inclusion in Annex XIV in the ECHA’s 4th

recommendation and formally added to Annex XIV under entry 16 with the latest application

date on 21st March 2016 and the sunset date on 21st September 2017. This means that the

substance cannot be placed on the market or used (as from the sunset date) unless an

authorisation has been granted. On the basis that chromium trioxide is considered as non-

threshold substance, the application for authorisation can only be applied under the Socio-

Economic Analysis (SEA) route.

The applicants of this application for authorisation are subsidiary companies of

Doosan South Korea. The applicants are planning to open a new industrial plant in Hungary

to manufacture only copper foils to be used in LiB.


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XXXXXX XXXXXX XXXXXX XXX

In Figure 1, DSC (Doosan Corporation) stays for Doosan South Korea, DEL stands

for Doosan Electro-Materials Luxembourg SARL (one of the applicants), and DCE indicates

Doosan Corporation Europe. The other applicant is indicated as DE (Doosan Energy

Solution).

The applicants are applying for an authorisation to use chromium trioxide during the

manufacturing process of copper foils, because there is no technically suitable substitute, as

shown in the Analysis of the Alternatives (AoA). XXXXXXXX XXXXXXXXXX

XXXXXXXXXX XXXXXXX XXXX XXXX XXXX XXX will use copper foils in the

manufacture of Lithium-ion Batteries (LiB) for motorised vehicles.

The use has been defined as follows: “Industrial formulation of a chromium trioxide

solution below 0.1% w/w concentration for the passivation of copper foil used in the

manufacture of Lithium-ion Batteries (LiB) for motorised vehicles.”

The focus of this SEA is on the EEA, though references to outside the EEA will be

done where needed. It is important to highlight that Circuit Foil Luxembourg CFL (another

subsidiary company of Doosan South Korea) is the only producer, to date, of copper foils in

the EEA, accounting for a 75% market share in the EU However, Circuit Foil does not have

the production capacity to produce in sufficient quantity, beyond its standard production,

copper foils, as required by the expected customers of the applicants. The remaining 25% is

covered by imports, mainly from Japan, South Korea and China, which are the top global

players in the production of copper foils.

In line with the ECHA guidance on the preparation of the Socio-Economic Analysis,

this report aims to assess and quantify (when feasible) all the relevant impacts expected in the

“non-use” scenario (i.e., refused authorisation). The identification of the most likely non-use

scenario (expected customers of the applicants that will import copper foils from Asia) and

the assessment of the related impacts are based on information provided by the applicants and

no third parties have been interviewed.


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1.2. Definition of “applied for use” scenario

1.2.1 “Applied for use” scenario and key economic data

Since the increasing demand of LiB for automotive OEM, which is promoted by the EU’s

environmental policies, three Korean LiB battery makers (viz. these are the global key

players), XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX, have invested to start

manufacturing in the EEA. These three companies will be the future launching customers of

the applicants. There are also other potential target customers of the applicants that have

plans to start businesses in the EEA (e.g., XXXXXXXXXXXXXX) as well as existing

European players such as XXXX3

In the EEA Circuit Foil has the intellectual property and process knowledge to

produce copper foils suitable for LiB. The AoA outlines why expansion on the Luxembourg

site is impractical. Doosan Corporation has decided to build a new plant and to launch a

business in Hungary to deal with the three future customers’ demand.

Currently, the amount of manufactured copper foils and LiB is zero for Hybrid and

Electric Vehicle (xEV) batteries in the EEA. Nevertheless, LiB for xEV, planned to be

produced in the EEA, will be mostly consumed within the EEA market.

Regarding the market forecast for the xEV market, the compound annual growth rate

(CAGR) from 2019 to 2030 is expected to be 42.1%.

Figure 2. LiB demand in EU4

[unit: GWh]

Therefore, in case the authorisation will be granted, the applicants’ new plant will be

the second producer of copper foils in the EEA (the first one is Circuit Foil, which is located

in Luxembourg). The new plant will be established in XXXXXX and employ XX people at

the beginning (with a potential of XX employees from XXX).

3 For a complete overview of future producers of LiB in the EEA, see

http://publications.jrc.ec.europa.eu/repository/bitstream/JRC108043/kjna28837enn.pdf 4 Forecasts provided by the applicants.

http://publications.jrc.ec.europa.eu/repository/bitstream/JRC108043/kjna28837enn.pdf


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Table 1. The applicants’ employment evolution (from the business plan)

According to the applicants’ sales plan, the new plant’s expected market share (sales

of copper foils for LiB) in the EEA will be 3% in 2025 (maximum 13%, depending on the

market dynamics), whereas the remaining will be covered by imports from Asia.

All competitors are located in Asia. Currently, major competitors are Korean

companies (e.g., Iljin, LSM) and Japanese (e.g., Furukawa Electric, Nippon Foil Mfg, Nippon

Denkai). Nevertheless, Chinese companies will boost the future competition. All these

competitors are increasing their production capacities in Asia. This is so because of the strong

expectation of high profits due to the forecast of future demand for xEV and, in turn, for LiB.

This also means that the prices of both xEV and LiB will be stable, and the expectation is that

there will be low price erosion due to the high demand. This implies that the competitors will

invest more and more over time to expand their production capacities. Indeed, this is what the

applicants are also planning to do, if the market moves as expected and sales increase, by

investing more in facilities in the new plant in the EEA. Given the expected strong growth, a

site expansion has been anticipated in the applicants’ business plan.

Table 2. The applicants’ sales (from the business plan)

Circuit Foil has already invested approximately 2.5 million EURO in R&D from 2012

to 2014. 5 Since 2015, Circuit Foil has engaged with two research programs with LIST

(Luxemburg Institute of Sciences and Technology) for an amount of 45,000 EURO (one

engineer works on this subject for 0.5 Full Time Equivalent). All potential findings that

should be generated from these R&D activities will be shared with the applicants.

5 Details of R&D expenses are in Annex I of the SEA for the Application for Authorization for the use of

chromium trioxide submitted by Circuit Foil.

Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Employees XX XX XX XX XX XX XX XX XX XX XX

Year 2031 2032 2033 2034

Employees XX XX XX XX

Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Sales

(million

EURO)

XX XX XX XX XX XX XX XX XX XX XX

Year 2031 2032 2033 2034

Sales

(million

EURO)

XX XX XX XX


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The new plant is expected to use 15.0 tons of chromium trioxide per year during the

manufacturing process of copper foils. Chromium trioxide ensures that, via the passivation

(protective chemical conversion coating), copper foils are resistant to the atmospheric

oxidation, preventing corrosion. The quantity of chromium trioxide needed by the new plant

is expected to remain stable over time, as no viable alternatives are expected in the near

future.6

In this future “applied for use” scenario the new plant will be able to start its

production of copper foils in Hungary in January 2020 (pilot manufacturing).

1.3. Definition of “non-use” scenario

The AoA concludes that no technically viable alternative to chromium trioxide will be

available in the near future. The applicants have come to that conclusion after its sister

company Circuit Foil tested different potential substitutes.

Being aware that no alternative will be available in the near future, in the most likely

“non-use” scenario the customers will import copper foils from Asia (China or South Korea).

This is obvious because there is no hexavalent chromium (hereafter Cr (VI)) on the finished

copper foils. Namely, the “non-use” scenario in this application means that no new plant will

be established in Hungary for the production of copper foils.

A refused authorisation to the applicants will be a lost opportunity for the EEA. With the

new plant, the EEA will play a key role in a recently developed and fast growing sector

(LiB), which is strongly incentivized by environmental as well as clean-energy policies, those

same policies promoted by the EU. Indeed, in a recent report of the European Commission

(JRC) it is written that:7

“The current lack of a domestic LIB cell manufacturing base in the EU jeopardises the

competitive position of EU industrial customers of LIBs for xEV and ES applications because

of security of supply chain issues, increased costs due to transportation, loss of part of the

value, time delays, and relinquished control on quality and limitations on design options.” (p.

11)

Note that all these negative aspects also apply to the current situation in the EEA in which

no producer of copper foils for LiB is currently establised. In addition, the same JRC report

reports that:

“For domestic LIB cell manufacturing by European companies to be globally

competitive, […] the risk for private investors has to be reduced [...]” (p. 28)

As already argued above, having a producer of copper foils in the EEA for the

manufacturing of LiB adresses the risks for private investors in the LiB market in the EEA.

6 For the full assessment of the alternatives, please see the Analysis of Alternatives for this application, as well

as for Circuit Foil’s one. 7 Available at http://publications.jrc.ec.europa.eu/repository/bitstream/JRC108043/kjna28837enn.pdf

http://publications.jrc.ec.europa.eu/repository/bitstream/JRC108043/kjna28837enn.pdf


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In the words of Maros Sefcovic, Vice President of the European Commission in charge of

the Energy Union, said on 23 February 2018 regarding the manufacturing of LiB in the

EEA,8 but it could also be referred to the manufacturing of copper foils for LiB in the EEA:

“Do we want to leave this [market] to our global competitors?”

1.4. Information for the length of the review period

Based on the above arguments and in line with the conclusions reported in the AoA, the

applicants request an authorisation for the future use of chromium trioxide in the

manufacturing of copper foils for 15 years, starting from 2020. This request is based on the

following considerations:

For the time being no viable alternative to Cr (VI) has been identified;

R&D efforts made so far (by Circuit Foil) have not found an alternative that could be

available within 12 years. For several years, Circuit Foil has been proactive in R&D

to find an alternative to chromium trioxide. Unfortunately, thus far, all these attempts

have been unsuccessful in finding a suitable alternative with equal performances;

Even if a technically and economically viable alternative to Cr (VI) was to become

available, it would surely take more than 12 years to develop an alternative that would

lead to copper foils with equal quality;

The investment cycle of the new plant is demonstrably long: main machines will need

to be changed every 10 years. Other machines will have an amortization period of 8

years, and buildings have an amortization period of 20 years; in addition, the

applicants has a phased expansion plan as customer demand will grow;

The remaining risks to human health are demonstrably low and socio-economic

benefits are high.

In addition to the above points, we are asking for a 15-year review period for the following

reasons making this application an exceptional case, which the reader should keep in mind:

This application is not only for a future use, but for a future plant (i.e., a green field

investment);

This future plant will be the first, in the whole EEA, to produce copper foils for

Lithium-ion batteries;

The sector of copper foils is characterized by very strong competition from Asia;

The sector of Lithium-ion batteries is recent and rapidly growing. This implies that a

similar dynamics will follow for the sector providing copper foils (to date totally

concentrated in Asia) downstream to the sector producing Lithium-ion batteries;

8 Available at http://europa.eu/rapid/press-release_SPEECH-18-1168_en.htm

http://europa.eu/rapid/press-release_SPEECH-18-1168_en.htm


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External financiers for this project need a very high level of confidence in doing an

investment for a future plant in the EEA and will want to be certain of the permission

for a future use of an Annex XIV substance;

Downstream customers likewise will be concerned if the supply of their new factories

could be impacted by a limitation of the future production. It goes without saying that

this does not detract from the applicant’s desire to substitute when possible.

Therefore the applicants believe that any review period shorter than 15 years would not

be sufficiently long for identifying a viable alternative and completing the transition to a

chromium-trioxide-free process. Furthermore, to enable the investment decision to be made

there must be a reasonable certainty that it can be recouped. If a shorter review period were

granted this could make the viability of the investment and its financing uncertain.

The applicants are convinced that a long review period of 15 years is appropriate and

justifiable, as all criteria that are laid out by ECHA (2013) are fulfilled.9

In addition, as the CSR has shown, the additional requirements as set by ECHA (2017)10

are also fulfilled:

For applications for non-threshold substances, the applied risk management measures

and operational conditions should be appropriate and effective in limiting the risks

and it should be clearly demonstrated that the level of excess lifetime cancer risk is:

o below 1x10-5 for workers and

o below 1x10-6 for the general population.

As one can see in the CSR and in the table below (Table 7), the excess lifetime cancer

risk in workers via inhalation exposure (once adjusted by concentration of exposure

and time of exposure) is equal to 3.16x10-8 (for WCS 2) and to 7.73x10-8 (WCS 3).

Yet, for the general population, Annex I shows that the excess lifetime cancer risk in

the general population is equal to 7.39x10-8 (for the oral intake) and 9.92x10-7 (for

inhalation).

The analysis of alternatives and the third party consultation on alternatives should

demonstrate without any significant uncertainties that there are no suitable

alternatives for any of the utilizations under the scope of the use applied for and

that it is highly unlikely that suitable alternatives will be available and can be

implemented for the use concerned within a given period (that is longer than 12

years).

9 ECHA (2013), Setting the Review Period when RAC and SEAC Give Opinions on an Application for

Authorisation (SEAC/20/2013/03), available at:

https://echa.europa.eu/documents/10162/13580/seac_rac_review_period_authorisation_en.pdf 10 ECHA (2017), REACH Authorisation - Criteria for Longer Review Periods (CA/101/2017). Available at:

https://echa.europa.eu/documents/10162/13580/ca_101_2017_criteria_longer_review_period_afa_en.pdf/4cda0

778-02c3-c949-f1c2-6deb1622a754

https://echa.europa.eu/documents/10162/13580/seac_rac_review_period_authorisation_en.pdf

https://echa.europa.eu/documents/10162/13580/ca_101_2017_criteria_longer_review_period_afa_en.pdf/4cda0778-02c3-c949-f1c2-6deb1622a754



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We strongly believe to have fulfilled also this second requirement, as the AoA

shows. Moreover, all R&D activities that have been carried out by the sister

company Circuit Foil further back this requirement.

This exceptional case requires such a long review period, beyond the standard long

review period of 12 years. Notice that any review period shorter than 15 years will yield the

same effect of a refused authorisation because no economic actor will start a new (green

field) investment without very strong guarantees in an economic framework as that depicted

above.

2. ANALYSIS OF IMPACTS

2.1 Human health impacts

The following sections aim to quantify in monetary terms the future residual risk of using

chromium trioxide at the applicants’ new plant. As chromium trioxide is a non-threshold

carcinogen, a safe level of exposure cannot be determined. Therefore, to assess the benefits to

the society in the “non-use” scenario, we have estimated the number of lung cancer and

intestinal cancer cases that could be attributed to the use applied for (following ECHA dose

response curve for Cr (VI)) and then monetized the related human health impacts in

accordance with the ECHA guidance on the valuing health impacts of chemicals.

Comparing the manufacturing process of the applicants with that of Circuit Foil

(which also produces copper foils but for Printed Circuit Board), in the applicants’ plant there

will be a reduction of the tasks falling under the REACH authorisation process, the decrease

of the tonnage (15.0 vs. 15.8), and the limited volume of wastewater released into the aquatic

environment. Hence, both workers and the general population are at a reduced level of risk

compared with the assessment already done for Circuit Foil.11

This sub-section is structured as follows:

Conclusions from ECHA document on reference dose response relationship for Cr

(VI): RAC/27/2013 Rev. 1 Final (the focus is on the excess lung cancer risk for

workers);

Epidemiology of lung cancer and risk factors;

Medical treatments for lung cancer and its costs;

Productivity loss due to lung cancer;

Estimation of the welfare loss according to the ECHA guidance.12

11 See Section 9 of the CSR for Circuit Foil’s Application for Authorization, available at:

https://echa.europa.eu/documents/10162/fbc98c11-bd5c-4307-a03a-6d454aa6d2b3 12 ECHA (2016), Valuing Selected Health Impacts of Chemicals. Available at:

https://echa.europa.eu/documents/10162/13630/echa_review_wtp_en.pdf

https://echa.europa.eu/documents/10162/fbc98c11-bd5c-4307-a03a-6d454aa6d2b3



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2.1.1 Reference dose response relationship for carcinogenicity of hexavalent chromium

(ECHA: RAC/27/2013 Rev. 1 Final)

The reference dose response relationship derived by ECHA may serve as a reference value to

assess the risk of granting an authorization for using chromium trioxide. A review was

performed for the carcinogenic dose responses of 14 Cr (VI) compounds.13 The ion of Cr (VI)

causes those compounds to be carcinogenic, but it is only so when the substances solubilise

and dissociate. Cr (VI) may be the cause of lung cancers in humans and animals through the

inhalation route and tumours of the gastrointestinal tract in animals by the oral route. These

are both local site-of-contact tumours. There is no evidence that Cr (VI) causes tumours

elsewhere in the body.

Risk assessment for the inhalation route (airborne residues of chromium trioxide)

should use the estimates for inhalation given below. Hence, if data are provided on exposure

via inhalation of not respirable size particles, then the risk arising from exposure to that

fraction should be estimated using risk estimate for gastrointestinal route. In cases in which

applicants only provide data for the exposure to the inhalable particulate fraction (as in this

application for authorisation), as a default, it will be assumed that all particles are in the

respirable size range. Considering the relevant RAC report (RAC/27/2013 Rev. 1 Final),14 the

only relevant route to consider is the inhalation route. The oral route will not be taken into

account as explained in section 9.0.2.2 of the CSR (therefore assuming that all particulate

fractions are in the respirable size range). The impacts related to man via the environment

are separately assessed in Section 2.3.

Exposure assessment for consumers is not applicable as there are no consumer-related

uses for the substance. Indeed, the final product, the copper foils, do not contain any Cr (VI).

During the passivation process the Cr (VI) is transformed into Cr (III) and any remaining Cr

(VI) on the surface of the product is removed.

13 Ammonium dichromate, potassium chromate, acids generated from chromium trioxide and their oligomers.

Names of the acids and their oligomers: chromic acid, dichromic acid, oligomers of chromic acid and dichromic

acid, chromium trioxide, potassium dichromate, sodium chromate, sodium dichromate, lead sulfochromate

yellow, lead chromate molybdate sulphate red, lead chromate, dichromium tris(chromate), strontium chromate,

pentazinc chromate octahydroxide, potassium hydroxyocataoxodizincatedichromate. 14ECHA. (2013), Application for Authorisation: Establishing a Reference Dose Response Relationship for

Carcinogenicity of Hexavalent Chromium. Available at:

https://echa.europa.eu/documents/10162/13579/rac_carcinogenicity_dose_response_crvi_en.pdf/facc881f-cf3e-

40ac-8339-c9d9c1832c32

https://echa.europa.eu/documents/10162/13579/rac_carcinogenicity_dose_response_crvi_en.pdf/facc881f-cf3e-40ac-8339-c9d9c1832c32

https://echa.europa.eu/documents/10162/13579/rac_carcinogenicity_dose_response_crvi_en.pdf/facc881f-cf3e-40ac-8339-c9d9c1832c32


16

Table 3. Reference dose response values for carcinogenicity of hexavalent chromium via

inhalation exposure (RAC/27/2013/06 Rev. 1 Final)

Inhalation exposure

Workers

Based on a 40 year working life (8h/day, 5 days/week), the following risk estimates are used:

An excess lifetime lung cancer mortality risk = 4 x 10-3 per μg Cr (VI)/m3

Excess lifetime (up to age 89) lung cancer risk estimates for workers exposed at different 8h-

TWA concentrations of Cr (VI) for 40 years

TWA Cr (VI) exposure concentration (μg/m3) Excess lung cancer risk in EU workers (x10-3)

1 4

0.5 2

0.25 1

0.1 0.4

This dose response relationship was derived by linear extrapolation outside the range of

observation. This process inevitably introduces uncertainties. As highlighted by RAC, the

mechanistic evidence is suggestive of non-linearity. RAC acknowledges that the excess risks

in the low exposure range (as for this application for authorisation) might be an overestimate.

2.1.2 Epidemiology of lung cancer and risk factors

Lung diseases are one of the world’s most important health concerns, causing one sixth of all

deaths worldwide.15 Each year in the EEA, one eighth of all deaths is due to respiratory

diseases, and lung conditions cause at least six million hospital admissions annually.16 Lung

cancer is the most common cause of cancer death in Europe, with around 410,000 deaths in

2012 (20% of the total deaths due to cancer).17 The main causes are: smoking (by far the

main contributor), radon gas, asbestos, 18 air pollution, or genetics. Nevertheless, other

substances are found to have a causal link with lung cancer: among others, chromium, arsenic

and inorganic arsenic compounds.19 The latest data available on survival rates of cancers have

been produced by EUROCARE-5 database on survival of cancer patients in Europe between

2002 and 2007. Specific data for Hungary is unfortunately unavailable so, the age-

standardized 5-year relative survival rate for adult patients (both sex) diagnosed between

2002 and 2007 with cancer of lung with a 95% confidence interval is calculated by taking the

average for the available data for Eastern European countries (Bulgaria, Czech Republic,

15 Ferlay, J., Steliarova-Foucher, E., Lortet-Tieulent, J., Rosso, S., Coebergh, J.W.W., Comber, H., Forman, D.,

Bray, F., 2013. Cancer Incidence and Mortality Patterns in Europe: Estimates for 40 Countries in 2012.

European Journal of Cancer 49(6), 1374-1403. 16 Ibidem. 17 Ibidem. 18 Set of six silicate minerals composed by fibers that can be carcinogenic through a prolonged inhalation. See

Alleman, J.E., Mossman, B.T., 1997. Asbestos Revisited. Scientific American 277(1), 54-57. 19 Cogliano, V.J., Baan, R., Straif, K., Grosse, Y., Lauby-Secretan, B., El Ghissassi, F., ..., Wild, C.P., 2011.

Preventable Exposures Associated with Human Cancers. Journal of the National Cancer Institute 103(24), 1827-

1839.


17

Estonia, Latvia, Lithuania, Poland, Slovakia): 10.8%. 20 Survival rates are important in

assessing the economic impact of cancer. Indeed the survival rate will have an impact on the

average medical treatment cost for each cancer case, given that the follow up costs can

represent an important share of the total direct costs. The higher survival rates will be the

longer healthcare and medicine costs will last and the more expensive they will become.

2.1.3 Medical treatment for lung cancer and its costs

Lung cancer is a particularly hard disease to cure, as it is highly heterogeneous. With more

than 50 recognized histopathological variants,21 there is a strong need for different medical

therapies (surgery, radiation, and chemotherapy) because those variants imply different

properties and responses to treatments. In general, there are two major types of lung cancer:

small cell lung cancer and non-small cell lung cancer. The two types are different mainly in

terms of treatments: non-small cells being less sensitive to radiation and chemotherapy. They

are therefore better treated via surgery. The other ones are better treated by radiation and

chemotherapy because they are usually diagnosed at an advanced stage.22

Lung cancer treatment is expensive, but due to the rapid evolution of the disease, total

treatments and their costs are mostly concentrated within the year of diagnostic. There is a

recent and comprehensive study on the economic burden on cancers across the European

Union for the monetization of the lung cancer (Luego-Fernandez et al., 2013).23 The authors

have estimated that in 2009 the cost of the economic burden of lung cancer in Hungary was 4

EURO per each Hungarian citizen. In 2012, the total number of lung cancer in Hungary was

9,288.24 Using the GDP deflator,25 the economic burden of lung cancer in Hungary in 2012

was (rounded) 4.23 EURO per Hungarian citizen. The population of Hungary in 2012 was

9,920,362.26 This means that the economic burden for one lung cancer in Hungary in 2012 is

given by: (9,920,362*4.23)/9,288 = 4,517.99 EURO. Then, one can actualize this value to the

2017 price level. One proceeds as before, by using the GDP deflator for Hungary over the

20 De Angelis, R., Sant, M., Coleman, M.P., Francisci, S., Baili, P., Pierannunzio, D., ..., EUROCARE-5

Working Group, 2014. Cancer Survival in Europe 1999–2007 by Country and Age: Results of EUROCARE-

5—a Population-Based Study. The Lancet Oncology 15(1), 23-34. Adopted data available at:

https://w3.iss.it/site/eu5results/docs/Documentation_on_data_and_%20methods.pdf 21 Travis, W.D., Brambilla, E., Muller-Hermelink, H.K., Harris, C.C., 2004. Pathology and Genetics of

Tumours of the Lung, Pleura, Thymus and Heart. World Health Organization Classification of Tumours. Lyon:

IARC Press. 22 International Agency for Research on Cancer, 2014. World Cancer Report 2014. Geneva: WHO. 23 Luengo-Fernandez, R., Leal, J., Gray, A., Sullivan, R., 2013. Economic Burden of Cancer Across the

European Union: A Population-Based Cost Analysis. The Lancet Oncology 14(12), 1165-1174. 24Ferlay, J., Soerjomataram, I., Ervik, M., Dikshit, R., Eser, S., Mathers, C., ..., Bray, F., 2013. GLOBOCAN

2012 v1.0, Cancer Incidence and Mortality Worldwide: IARC CancerBase No.11. International Agency for

Research on Cancer, Lyon. Available at http://globocan.iarc.fr/old/age-

specific_table_n.asp?selection=86348&title=Hungary&sex=0&type=0&stat=1&window=1&sort=0&submit=%

C2%A0Execute 25 Implicit GDP deflator for Hungary (PD10_EUR; Price Index; seasonally and calendar adjusted data; 2010 =

100). For Hungary one has that 2009Q1=91.33 and 2012Q1=96.59. This means that 2012 prices are equal to

105.76% of 2009 prices. Available at:

http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=teina110&plugin=1 26 Data from World Bank: https://data.worldbank.org/indicator/SP.POP.TOTL?locations=HU

https://w3.iss.it/site/eu5results/docs/Documentation_on_data_and_%20methods.pdf

http://globocan.iarc.fr/old/age-specific_table_n.asp?selection=86348&title=Hungary&sex=0&type=0&stat=1&window=1&sort=0&submit=%C2%A0Execute



http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=teina110&plugin=1

https://data.worldbank.org/indicator/SP.POP.TOTL?locations=HU


18

period 2012-2017.27 Hence, the estimated annual economic burden of one lung cancer in

Hungary is 4,939.52 EURO (2017 price level).

Price Adjuster from 2017 to 2020 (reference year)

Before proceeding further, we need to establish a reference (base) year. As the production at the new

plant is expected to start at the beginning of 2020, we set 2020 as the reference year for this socio-economic

analysis, to which all present values of costs and benefits refer. To adjust the values to the reference year (2020),

these values are multiplied by a price adjuster, which is the appropriate price index of the reference year divided

by the appropriate price index of the year 2017 (last available year for the GDP deflator issued by EUROSTAT).

We take the geometric average (average annual growth) from the last 5 years of the GDP deflator (Q1,

seasonally and calendar adjusted) for the EU-28 area (not for Hungary), to obtain a more reliable (being not

country specific) estimate because of the extrapolation outside the time range of available data:28

2013Q1: 103.92

2014Q1: 105.21 (year-on-year growth: 1.01241339)




We assume that prices will continue to raise in the future from 2017Q1 to 2020Q1 to the same derived average

annual growth: 2020Q1 values equal to 2017Q1 x (1.00922959)3 = 2017Q1 x 1.028 (rounded up).

Therefore, applying the derived price adjuster to the value derived above implies that

the estimated annual economic burden of one lung cancer in Hungary is 5,077.83 EURO

(2020Q1 price level).

In line with the EUROCARE-5 database on the relative survival rate for the lung

cancer in Hungary, the analysis below assumes that in 89.2% of cases the patients will live

five years after the diagnosis is given. Following Cancer Research UK, in 5% of cases the

patients will survive ten years after the diagnosis.29 Given those two percentages, we assume

that 5.8% of people will survive eight years after the diagnosis. We discount future values of

the costs of treatments at 4%. The calculations are reported in Table 2.

27 Implicit GDP deflator for Hungary (PD10_EUR; Price Index; seasonally and calendar adjusted data; 2010 =



http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=teina110&plugin=1 28 Available at: https://sdw.ecb.europa.eu/browseTable.do?node=9691222 29 Cancer Research UK (2012), Lung Cancer Statistics, Available at: http://www.cancerresearchuk.org/health-

professional/cancer-statistics/statistics-by-cancer-type/lung-cancer


http://www.cancerresearchuk.org/health-professional/cancer-statistics/statistics-by-cancer-type/lung-cancer

http://www.cancerresearchuk.org/health-professional/cancer-statistics/statistics-by-cancer-type/lung-cancer


19

Table 4. Medical treatment costs (adjusted by assumed survival years; future values

discounted at 4%)

Assumed

number of

survival years

Percentage (%)

Estimated annual average

medical treatment cost per

case (€)

Total average cost based

on survival years (€)

5 89.2 5,077.83 20,970.76 30

8 5.8 5,077.83 2,062.20 31

10 5 5,077.83 2,141.66 32

Total average health care cost (rounded) 25,175

2.1.4 Productivity loss due to lung cancer

Productivity loss is a very uncertain but important component of cancer’s economic burden.

This section aims to quantify this indirect component of the total cost following the human

capital approach methodology. Among other factors, the estimation takes into account the age

incidence of lung cancer, the number of years to the retirement, and the average earnings in

the manufacturing sector in Hungary.

Table 5. Estimated incidence of lung cancer by age, year 201233

Age Range Total 0-14 15-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+

Lung Cancer 9,288 0 58 187 423 881 1,535 1,718 1,492 1,193 1,801

% 10034 0 0.62 2.01 4.55 9.49 16.53 18.50 16.06 12.84 19.39

We compute the total productivity loss due to lung cancer in Hungary, taking into

account that 62.2 is the average effective age of retirement in Hungary in period 2011-2016

(average of the values for men and women),35 and that 10,328 EURO is the annual mean

earnings in the sectors of industry, construction and services in Hungary in 2014.36 The

annual mean earnings for the 2014 have been adjusted first to the 2017 price level, resulting

30 Using the excel function: =PV(4%,5,- 5077.83,0,1)*0.892. 31 Using the excel function: =PV(4%,8,- 5077.83,0,1)*0.058. 32 Using the excel function: =PV(4%,10, -5077.83,0,1)*0.05. 33 Ferlay, J., Soerjomataram, I., Ervik, M., Dikshit, R., Eser, S., Mathers, C., ..., Bray, F., 2013. GLOBOCAN

2012 v1.0, Cancer Incidence and Mortality Worldwide: IARC CancerBase No. 11. International Agency for

Research on Cancer, Lyon. Available at: http://globocan.iarc.fr/old/age-


C2%A0Execute 34 The sum of values of the percentages of all age ranges is 99.99% due to the rounding. 35 OECD, 2016. Average Effective Age of Retirement versus the Official Age, 2011-2016. Available at

https://www.oecd.org/els/emp/average-effective-age-of-retirement.htm 36 Eurostat. Available at http://ec.europa.eu/eurostat/web/labour-market/earnings/database




https://www.oecd.org/els/emp/average-effective-age-of-retirement.htm

http://ec.europa.eu/eurostat/web/labour-market/earnings/database


20

in 10,874.35 EURO,37 then to 2020 by applying the price adjuster derived above, yielding to

the final estimation of 11,178.83 EURO.

To maintain a conservative approach we assume that employees contracting lung

cancer cease working altogether after the diagnosis, and do not resume work during the

treatment period, even though people affected by cancer can usually work at least part-time.

Table 6. Productivity loss per one lung cancer case38

Age range Incidence by

age (%)

Median age Number of

working

years to the

retirement

(62.2 minus

median age)

Total productivity

loss per patient

assuming a

constant increase

of 1% of earnings

Total productivity

loss * number of

cases

0-14 0 7

15-39 0.62 27 35.2 486,237.78 EURO 3,014.67 EURO

40-44 2.01 42 20.2 248,608.17 EURO 4,997.02 EURO

45-49 4.55 47 15.2 181,743.90 EURO 8,269.35 EURO

50-54 9.49 52 10.2 130,497.83 EURO 12,384.24 EURO

55-59 16.53 57 5.2 57,593.50 EURO 9,520.21 EURO

60-64 18.50 62 0.2 11,201.10 EURO 2,072.20 EURO

65-69 16.06 67

70-74 12.84 72

75+ 19.39 75+

Total

productivity

loss (rounded

up)

40,258 EURO

Note: The incidence by age is extracted from Table 5.

2.1.5 Welfare loss

The total monetization of the impact on human health of lung cancer is likely to be

underestimated if based only on healthcare costs and productivity loss. Cancer (like any other

disease) is associated with welfare losses that can account for an important share of the total

costs, which are particularly difficult to quantify in economic terms. Willingness to pay

(WTP) methods are normally used to assess welfare loss in economic terms:

Welfare loss from increased mortality;

Welfare loss from increased morbidity.

37 Implicit GDP deflator for Hungary (PD10_EUR; Price Index; seasonally and calendar adjusted data; 2010 =



http://ec.europa.eu/eurostat/tgm/table.do?tab=table&init=1&language=en&pcode=teina110&plugin=1 38 Ferlay, J., Soerjomataram, I., Ervik, M., Dikshit, R., Eser, S., Mathers, C., ..., Bray, F., 2013. GLOBOCAN

2012 v1.0, Cancer Incidence and Mortality Worldwide: IARC CancerBase No. 11. International Agency for

Research on Cancer, Lyon. Available at: http://globocan.iarc.fr/old/age-


C2%A0Execute






21

Here we make reference to the recent ECHA report on the valuing health impacts of

chemicals.39 The value of a statistical life (VSL) of 3.5 million EURO (year 2012) has been

applied in the quantification of the welfare loss from the increased mortality. In the

estimation of the welfare loss from the increased morbidity (e.g. the costs in terms of pain

and suffering), we have used the WTP of 410,000 EURO (year 2012), which is the value for

morbidity due to cancer, VCM.40 This value expresses the WTP to avoid any disutility caused

by the cancer morbidity in addition to premature death.

We proceed as indicated in the ECHA guidance on the valuing health impacts of

chemicals, in which

Value of cancer case = discount factor * (fatality probability * VSL + VCM)

with:

a) discount factor = (1 + 4%)-10 ; 10 is the latency period, assumed to be 10 years for

lung cancer, as done in the ECHA report;41 4% is the standard discount factor to be

used in socio-economic analysis;

b) fatality probability = 89.2%, as derived from EUROCARE-5 of the average of the

values for Eastern European countries (and applied to Hungary);

c) VSL = 3.5 million EURO (year 2012; lower bound) * GDP deflator adjustement

(2017Q1 value divided by 2012Q1 value = 109.33%) * price adjuster derived above

(1.028). Adjusted 5 million EURO (year 2012; upper bound) and 2% discount rate

will be used for the uncertainty analysis in Section 3.2 (following the mentioned

ECHA guidance on WTP);

d) VCM = 410,000 (year 2012) * GDP deflator adjustement (2017Q1 value divided by

2012Q1 value = 109.33%) * price adjuster derived above (1.028).

This means that the value of a lung cancer case (lower bound) is given by:

(1 + 4%)-10 * (89.2% * 3,933,693.40 + 460,804.08) = 2,681,759 EURO (rounded up).

39 ECHA (2016), Valuing Selected Health Impacts of Chemicals (p. 41). Available at:

https://echa.europa.eu/documents/10162/13630/echa_review_wtp_en.pdf 40 ECHA (2016), Willingness-To-Pay Values for Various Health Endpoints Associated with Chemicals

Exposure (SEAC/32/2016/05.2 Rev.1). 41 ECHA (2016), Valuing Selected Health Impacts of Chemicals (p. 41). Available at:





22

2.1.6 Number of people exposed at the applicants’ new plant

Table 7 gives an overview of the number of workers exposed per WCS. WCS1 (no exposure) and WCS4 (out of the scope) are not considered.

Table 7. Number of workers exposed

Use scenario

Numbe

r of

worker

s per

WCS

Average

number of

hours

exposed per

day

Time

adjust

ment

factor

(to

take

into

accou

nt the

time

of

expos

ure)

Average

inhalati

on

exposur

e

(µg/m3)

– 8h

expositi

on

Exposu

re

calculat

ed,

measur

ed

Average

inhalation

exposure

used for

the

calculation

or lung

cancer

risk

associated

with the

use

applied for

(µg/m3)

Dermal

exposure

Excess

lung

cancer risk

in workers

via dermal

exposure

Excess lung

cancer risk in

workers via

inhalation

exposure

(adjusted by

concentration of

exposure)

(=4.00E-

03*concentratio

n)

Excess lung

cancer risk in

workers via

inhalation

exposure

(adjusted by

concentration

of exposure

and time of

exposure)

Number of fatal

lung cancer cases

associated with

the use applied

for (over 40y) for

each WCS on the

basis of number

of employees

exposed and given

the mortality risk

Total number of

lung cancer cases

over 40 years

(=fatal

cases/0.892)

WCS 2

5

Duration:

<45

minutes/day

(2 to 3

minutes per

barrel

(opening,

transfer,

rincing,

closing) with

16 barrels

per task

Frequency:

1 day/week

266 0.0021

Modell

ed data

(ART

1.5)

0.0021

Not

relevant

regarding

the RAC

documen

t (there is

no

evidence

that

dermal

exposure

to

inorganic

compoun

ds has

caused

skin or

other

Not

relevant

regarding

the RAC

document

(there is no

evidence

that dermal

exposure to

inorganic

compounds

has caused

skin or

other

tumours in

humans)

8.40E-06 3.16E-08 1.58E-07 1.77E-07

CrO3

Dissolution


23

Note: The total number of lung cancer cases over 40 years (0.00000148) represents 100% of cases given that the number of fatal cancer cases (0.00000132) is calculated on

the basis of the mortality risk and it represents 89.2% of cases. Remark: the exposure concentrations do not take into account the correction of RPE. We could divide this

concentration by the APF factor of the RPE (APF = at least 20 regarding the supplier specification).

WSC 3

15

Duration:

2 hours/day

(with

contaminate

d devices)

Frequency:

2

days/month

(intervention

on

chromium

contaminate

d devices:

vacuum

pumps,

rums, baths,

…)

300 0.0058

Modell

ed data

(ART

1.5)

0.0058

tumours

in

humans)

2.32E-05 7.73E-08 1.16E-06 1.30E-06

Maintenance

Total number

of lung cancer

cases in the use

applied for

0.00000132

0.00000148


2.1.7 Monetization of the impact on the human health (lung cancer, workers)

Table 8 reports the monetization of the impact on the human health of 0.00000148 cases of lung

cancer (over 40 years). The costs over 1 year, 7 years, 12 years, and 15 years (period applied for) are

reported as well.

Table 8. Lung cancer, workers

1.1 Health care cost Number of cases Average cost per case (€) Total health care cost

associated with use (€)

1.2 Calculations of

health care cost

1.48E-06 25,175 0.04

2.1 Productivity loss Number of cases Productivity loss per case

(€)

Total productivity loss


2.2 Calculations of

productivity loss

1.48E-06 40,258 0.06

3.1 Welfare loss from

mortality and morbidity

Number of cases Value of a cancer case (€)

(VSL and VCM)

(see Section 2.1.5)

Total welfare loss


3.2 Calculation of

welfare loss from


1.48E-06 2,681,759 3.97

Total over 40 years 4.07

Total over 1 year 0.10




Note: The values for the total over 7, 12, and 15 years are discounted at 4% rate.

2.2 Environmental impacts

Regarding the intrinsic hazardous properties of the substance (carcinogenic 1A and

Mutagenic 1B) and in accordance with article 62-4.d) of the REACH regulation (EC) No

1907/2006, potential risks to the environment do not need to be considered. Obviously the

company takes care of its release in the environment and respects the national regulatory

framework. See Sections 9.0.2.1 and 9.1.1 of the CSR for details.

2.3 Man via the environment

Humans may potentially be exposed to chromium trioxide via the environment. As there is no

threshold for effect, conclusions of RAC report RAC/27/2013/06 Rev.1 were used to

conclude on the hazard of the exposure.


25

Here we consider the inhalation and oral intake (i.e., only drinking water and fish

consumption) exposure route for the general population as well as corresponding risks and

monetized impacts (estimate of cancer cases).

As noted in the EU risk assessment report (RAR) for Cr (VI) substances (European

Chemicals Bureau, 2005),1 “the impact of Cr (VI) as such is therefore likely to be limited to

the area around the source.” (p. 26). Therefore, EU RAR (2005) for Cr (VI) substances

focuses on the assessment of the local impacts of the emissions. This limited focus has been

adopted in previous opinions by RAC.2 The focus on the local exposure is justified by the

fact that Cr (VI) will transform in the environment to Cr (III), therefore the impacts are

assumed to occur only at the local scale.

Regarding the general population around the plant site (local exposure), people are

likely to be exposed to Cr (VI) within a 100-meter radius from the new plant site (for

inhalation), as well as within 1-kilometer radius (for soil; default population is 10,000

persons).

For this assessment, we adopt a conservative approach, by assuming the default size

of local population of 10,000 people (recommended as the basis of the local exposure

assessment in the Guidance on information requirements and chemical safety assessment,

chapter R.16, Version 2.1, October 2012). This is a reasonable worst case, given that the

plant will be established outside of the center of Környe (a village of about 5,000 inhabitants

in Kómarom-Esztergom County) and where there is not much urbanization. We use this value

for the oral intake exposure routes: drinking water and fish consumption. On the below

picture one can see that the nearest houses (red circle) is about 300 meters from the site

corner (yellow rectangle). In that area there are about 50 houses and the number of residents

is less than 200. There is no other residential area within 1-km radius of the site. Therefore,

ther default value of 10,000 persons for the oral intake assessment is clearly a worst case.

As the below pictutre also show, there is no resident population within 100 meters

from the plant. Then, for the assessment of the inhalation route we use zero as number of

people exposed via inhalation route for the man via the environment assessment. In addition,

no even workers of nearby plants will be exposed within 100-meter radius from the new

plant.

1 European Chemicals Bureau. (2005), European Union Risk Assessment Report - Chromium Trioxide, Sodium

Chromate, Sodium Dichromate, Ammonium Dichromate, Potassium Dichromate. Available at:

https://echa.europa.eu/documents/10162/3be377f2-cb05-455f-b620- af3cbe2d570b 2 See, for example, AFA-O-0000006480-78-01/D, at p. 35 where it is written: “Cr(VI) is effectively reduced to

Cr(III) in the environment, which is why EU RAR concluded that the regional exposure may not be relevant.

RAC agrees with EU RAR that regional exposure is likely not to be very relevant.”


26

Figure 3. Location of the new plant at Környe (yellow rectangle) and of the

closest residential area (red circle)

Table 9. Type of risk characterization required for man via the environment

Route of exposure and

type of effects

Type of risk

characterisation

Hazard conclusion (see RAC/27/2013/06 Rev. 1)

Inhalation: local, long-term Quantitative ELR for lung cancer mortality: 2.9E-02 per µg Cr (VI)/m3 for

70 years 24h/day, every day (general population)

Oral: local, long-term Quantitative ELR for intestinal cancer mortality: 8.0E-04 per µg Cr

(VI)/kg bw/day for 70 years 24h/day, every day (general

population)

The oral route takes into account the non-respirable fraction of particles that is also

swallowed. The applicants decided not to consider this route for the following reasons:

The recommendation of the RAC report RAC/27/2013/06 Rev.1 is: “in cases where

the applicant only provides data for the exposure to the inhalable particulate fraction,

as a default, it will be assumed that all particles were in the respirable size range”;

Moreover, considering that all particles are respirable is the worst case, as the ELR for

lung cancer is higher than the ELR for intestinal cancer.

2.3.1 Exposure and risks for man via the environment

The exposure concentrations (using EUSES 2.1.2 modeling) and risk characterization are

reported in Tables 10 and 11.


27

Table 10. Exposure concentrations and risks for the environment

Protection target Exposure concentration Risk characterisation

Man via environment-Inhalation Local PEC: 3.42E-08 mg/m3 ELR= 1.0E-06

Man via environment-Oral Local PEC: 9.24E-08 mg/kg dw/day ESIR=7.4E-08

ELR: Excess of Lung cancer Risk. ESIR: Excess of Small Intestine cancer Risk

Table 11. Contribution to oral intake for man via the environment from local

contribution

Type of food Estimated daily dose

Drinking water 8.74E-08 mg/kg bw/day

Fish consumption 5.03E-09 mg/kg bw/day

Cr (VI) will transform in the environment to Cr (III), which has been previously

described in the EU RAR for chromates (EU RAR 2005). This will reduce the potential for

indirect exposure to humans via the environment after release, particularly via the oral route

of exposure. As a consequence, exposure via the oral route has only been taken into account

for drinking water and fish consumption but neither for indirect intake via deposition of Cr

(VI) on the ground nor intake via the roots of consumable plants and deposition on leaves of

consumable plants. It has to be noted that “[a]s the mechanistic evidence is suggestive of non-

linearity, it is acknowledged that the excess risks in the low exposure range might be

overestimated” (RAC/27/2013/06 Rev.1).

For the risk assessment we assume that for acidic (or neutral where high

concentrations of reductants for Cr (VI) exist, soils, sediments and waters, Cr (VI) will be

rapidly reduced to Cr (III) and that 3% of Cr(III) formed will be oxidised back to Cr (VI).

The net result of this is that of the estimated Cr (VI) release to the environment 3% will

remain as Cr (VI) and 97% will be converted to Cr (III) (EU-RAR 2005). For the

asseessment of the man via the environmental (oral intake: drinking water and fish

consumption) we use the values in Table 11 (i.e., estimated daily doses), which already

shows 3% of the estimated daily doses.

The total monetization of the impact on human health of the assessed exposed man

via the environment is (all calculations are in the related excel file; see also Annex I):


28

Lung cancer:

Table 12. Lung cancer (man via the environment: inhalation route)



1.2 Calculations of

health care cost

0 25,175 0.00


(€)



2.2 Calculations of

productivity loss

0 40,258 0.00




(VSL and VCM)

(see Section 2.1.5)

Total welfare loss


3.2 Calculation of

welfare loss from


0 2,681,759 0.00







Intestinal cancer:

Epidemiology of small intestine cancer and risk factors

We use again the EUROCARE-5 database on survival of cancer patients in Europe between

2002 and 2007. The data for Hungary are unavailable. Therefore, the age-standardized 5-year

relative survival rate for adult (15+ years) patients (both sex) diagnosed between 2002 and

2007 with cancer of small intestine cancer with a 95% confidence interval is calculated by

taking the average (upper bound) for the available data for Eastern European countries

(Bulgaria, Czech Republic, Estonia, Latvia, Lithuania, Poland, Slovakia): 51.28%.3

Medical treatment for small intestine cancer and its costs

Adopting a prudent approach, we continue to use the value for lung cancer, being aware that

this will yield an overestimation of the monetization of the impact on human health of the

cases of small intestine cancer.

3 De Angelis, R., Sant, M., Coleman, M.P., Francisci, S., Baili, P., Pierannunzio, D., ..., EUROCARE-5

Working Group, 2014. Cancer Survival in Europe 1999–2007 by Country and Age: Results of EUROCARE-

5—a Population-Based Study. The Lancet Oncology 15(1), 23-34. Adopted data available at:

https://w3.iss.it/site/EU5Results/forms/SA0007.aspx


29

Productivity loss due to small intestine cancer

Adopting a prudent approach, we continue to use the value for lung cancer, being aware that

this will yield an overestimation of the monetization of the impact on human health of the

cases of small intestine cancer.

Welfare Loss

For the monetization of the impact on human health due to the intestinal cancer we need to

calculate the value of an intestinal cancer case, as we have done for the lung cancer. We

proceed as before:

Value of cancer case = discount factor * (fatality probability * VSL + VCM)

with:

a) discount factor = (1 + 4%)-26 ; 26 is the latency period, assumed to be 26 years for

intestinal cancer (Nadler and Zurbenko, 2014);4 4% is the standard discount factor to

be used in socio-economic analysis;

b) fatality probability = 51.28%, as derived from EUROCARE-5 of the average of the

values for Eastern European countries (and applied to Hungary);

c) VSL = 3.5 million EURO (year 2012; lower bound) * GDP deflator adjustement

(2017Q1 value divided by 2012Q1 value = 109.33%) * price adjuster derived above

(1.028). Adjusted 5 million EURO (year 2012; upper bound) and 2% discount rate

will be used for the uncertainty analysis in Section 3.2 (following the mentioned

ECHA guidance on WTP);

d) VCM = 410,000 (year 2012) * GDP deflator adjustement (2017Q1 value divided by

2012Q1 value) * price adjuster derived above (1.028).

This means that the value of an instestinal cancer case (lower bound) is given by:

(1 + 4%)-26 * (51.28% * 3,933,693.40 + 460,804.08) = 893,789 EURO (rounded up)

4 Nadler, D.L., Zurbenko, I., 2014. Estimating Cancer Latency Times Using a Weibull Model. Available at:

https://www.hindawi.com/archive/2014/746769/

https://www.hindawi.com/archive/2014/746769/


30

Table 13. Small intestine cancer (man via the environment: drinking water and fish

consumption)



1.2 Calculations of

health care cost

1.48E-03 25,175 37.23


(€)



2.2 Calculations of

productivity loss

1.48E-03 40,258 59.54




(VSL and VCM)

(see previous page)

Total welfare loss


3.2 Calculation of

welfare loss from


1.48E-03 893,789 1,321.81

Total over 70 years 1,418.57






2.4 Economic impacts

The direct cost of a refused authorisation is represented by the loss of the contribution to the

EEA economy of the production of copper foils in Hungary, estimated in the business plan of

the applicants. As a refused authorisation of this application will be equivalent to the case of

a permanent shut down because the company does not exists yet, here we provide the two

measures of the economic impacts given by EBIT and net profits. For this purpose, we

assume that the net profits will be, on average, equal to 10% of sales, as reported in the

business plan. The two measures of economic impact will not be, of course, summed, but for

the sake of completeness we provide both of them.


31

Table 14. The applicants’ sales, EBIT, and net profits (from the business plan)

Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Sales (million

EURO) XX XX XX XX XX XX XX XX XX XX XX

EBIT (million


Net Profits

(million

EURO)

(assumed to be

10% of sales)


Year 2031 2032 2033 2034

Sales

(million

EURO)

XX XX XX XX

EBIT

(million

EURO)

XX XX XX XX

Net

Profits

(million

EURO)

(assumed

10% of

sales)

XX XX XX XX

Monetization (net present values, NPV, with 4% discount rate) of the economic impacts

(EBIT and net profits) are reported below. The exchange rate used for the conversion from

US dollar to EURO is: 1 EURO = 1.23 US$ (8th April 2018).

EBITs:

NPV over 7 years: XXXXXXXXXXXXX 50-100M€ (non confidential ranges)

NPV over 12 years: XXXXXXXXXXXXX 200-300M€(non confidential ranges)


Net Profits

NPV over 7 years: XXXXXXXXXXXXX 50-100M €(non confidential ranges)

NPV over 12 years: XXXXXXXXXXXXX 50-100M €(non confidential ranges)



32

Continuing to maintain a prudent approach, we consider the net profits in Section 3

(combined assessment of the impacts) because the NPVs of the net profits are lower of the

NPVs of the EBITs.

2.5 Social impacts

In the non-use scenario XX (100-200) unemployed people (mainly located close to the

applicants’ future plant) would lose a tangible possibility to get an immediate job as a result

of the refused authorization (notice that the employment will rise over time reaching XX

people in XXX). Although Hungary has a low long-term unemployment in the EEA,5 it is

clear that the impact on the unemployment, especially at the local level, would be important.

As this is an application for authorisation for a green field investment (i.e., the plant

does not exist yet), this is a particular situation as concerns the assessment of unemployment.

Indeed, this situation needs to estimate job creation, not job loss(es). Furthermore, the

applicant predicts a rapid growth in the market, which again makes its application different

from applications for ongoing uses.

Here we try to frame a logic approach toward this particular situation. If an industrial

plant is already operative and has to close down because of a refused authorisation, then

statistical data are available on the average duration of unemployment. One can use those

statistics because all people working in the plant will loose the job on the same day. So that

we can say that, on average, all of them will remain in the job market for, say, 6 month.

If the plant does not exist, then the day it becomes operative it will hire

workforce in the job market. This will stop the unemployment status of hired people. But

these people have been in the job market for different period. Hence, assuming that a refused

authorization will not allow the plant to begin being operative, those people have to continue

to remain in the job market. This means that one should not use the statistical data on the

average duration of the unemployment. Doing so, implicitly one assumes that the average

duration of the unemployment is longer than the average. The only extreme case in which one

could use this simplistic approach of the average duration of the unemployment in this

particular case is the one in which either all people in the job market have started to be

unemployed on the same day - which is impossible - or the job market is so perfect that

immediately after the plant does not obtain the authorisation another company on that same

day will start the business in that given local area and hire the same amount of workforce

(very unlikely). Unfortunately, in the short-run, frictional unemployment is always present in

job markets. Both the ECHA document on the evaluation of the unemployment

(SEAC/32/2016/04)6 and the paper of Dubourg (2016)7 endorsed by ECHA does not provide

specific advice for evaluating job creation.

5 http://ec.europa.eu/eurostat/statistics-

explained/index.php?title=File:Unemployment_rates,_seasonally_adjusted,_February_2018_(%25)_F2.png 6 ECHA (2016). The Social Cost of Unemployment. Available at:

https://echa.europa.eu/documents/10162/13555/seac_unemployment_evaluation_en.pdf/af3a487e-65e5-49bb-

84a3-2c1bcbc35d25 7 Richard Dubourg, 2016. Valuing the social costs of job losses in applications for authorization. The

Economics Interface Limited.

http://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Unemployment_rates,_seasonally_adjusted,_February_2018_(%25)_F2.png

http://ec.europa.eu/eurostat/statistics-explained/index.php?title=File:Unemployment_rates,_seasonally_adjusted,_February_2018_(%25)_F2.png


33

Therefore, to simplify we assume that the workforce follows a uniform distribution in

the job market regarding the duration therein. Hence, the new plant is expected to enter in the

job market in the middle of the time period given by the average duration of the

unemployment status. This means that for example, if the average duration would be 6

months (for the “representative” unemployed worker), the new plant will enter into the job

market in the middle of this time period, so as in case of a refused authorisation, the

“representative” unemployed worker has to continue to remain in the job market for other

three months.

In a nutshell, for what concerns the assessment of the social costs of unemployment,

we will take the 50% of the average duration of the unemployment. For the rest we proceed

as suggested by ECHA (SEAC/32/2016/04) and Dubourg’s paper. Therefore:

1) We know from the new plant’s business plan that the applicants are planning

to pay each worker XXXXXXXX gross per year (= XXXXXXXXXX; 1

EURO = 1.23 US$, exchange rate of 8th April 2018);

2) XX people are expected to be hired in 2020 (start of the production);

3) Using Table A7 (column F) in Dubourg’s paper, the total social costs of

unemployment in Hungary is equal to 2.75 (value adjusted by Dobourg for

considering Hungary) times the annual gross salary.8 This is a reasonable

rule of thumb derived in Dubourg’s paper, which is endorsed by ECHA in

their document SEAC/32/2016/04;

4) Duration of unemployment (Eurostat data: Hungary, age 15-64 years, both

males and females, 2017Q4):9

Table 15. Duration of unemployment

Duration Grouping

Thousand

units Proportion (A)

Assumed

duration (B)

Weighted average

(A*B)

Less than 1 month 25.2 0.143835616 0.5 0.071917808 From 1 to 2 months 19 0.108447489 1.5 0.162671233 From 3 to 5 months 27.8 0.158675799 4.5 0.714041096 From 6 to 11 months 36.1 0.206050228 8.5 1.751426941 From 12 to 17 months 22.9 0.130707763 14.5 1.895262557 From 18 to 23 months 8.1 0.046232877 20.5 0.947773973 From 24 to 47 months 21.7 0.123858447 35.5 4.396974886 48 months or over 14.4 0.082191781 48 3.945205479

Total 175.2 1

13.88527397

8 This value is greater than 1 because it takes into account the following components: lost wage, costs of job

searching, recruitment costs, scarring costs (i.e. the impact of unemployment status on future wages and

employment possibilities), and leisure time (which is a benefit and therefore subtracted from the previous

components). 9 Data extracted from http://appsso.eurostat.ec.europa.eu/nui/show.do?wai=true&dataset=lfsq_ugad

http://appsso.eurostat.ec.europa.eu/nui/show.do?wai=true&dataset=lfsq_ugad


34

As already explained above, we consider only 50% of the average duration calculated

above: 6.95 months. Hence, the social costs of “delayed” employment due to a refused

authorization is given by:

XXXXX XXXXXX XXXXXX XXXXX XXXXX XXXXX XXXXX (0-5M€ -public range)

2.6 Wider economic impacts

In the “non-use” scenario the EEA would lose the second European producer of copper foils.

As in the “non-use” scenario Circuit Foil will remain the only producer of copper foils but it

will not be able to supply the applicants’ prospective customers. It is therefore clear that in

the “non-use” scenario the entire European LiB market would become dependent on imports

of copper foils from Asia.

A refused authorisation creates a situation without flexibility in the European market. All

suppliers of copper foils are located in Asia (except Circuit Foil, which is not able to produce

a quantity of copper foils as demanded by the applicants’ prospective customers). It takes

four to six weeks to deliver copper foil products from Asia to Europe. So the customers

would have to finance four to six weeks inventory.

As previously explained, in the most likely “non-use” scenario the applicants will not

establish the plant outside the EEA. This means that the three expected customers would

import copper foils from Asia. This would also mean an increase of costs for the applicants’

future European customers due to import tariffs (8% at the actual level) and the consequent

worsening of the competitiveness of the EEA producers of LiB.10 Moreover, the applicants’

future customers will have to manage the exchange rate risk.

Another negative macroeconomic effect of a refused authorisation would be associated

with a worsening of the European trade account due to increased imports.

Finally, satellite activities (and their employment) would loose the possibility to obtain

gain from the economy created in Hungary by the applicants. The total amount of investment

to establish the applicants’ new plant, as estimated in the business plan, is approximately XX

X X X X X XXXXXX XXXXXX XXXXXX XXXXXX XX11 Such a consistent amount of

investment is very likely to be able to affect positively primarily the economy at the local

level, as well as indirectly the whole Hungarian economy. Indeed, the 2017 GDP of Hungary

was about 123 billion EURO. 12 This means that the investment that the applicants are

planning to do is equivalent to XXX% (0.1 - 0.5% - public range) of Hungarian GDP. One

should also keep in mind that the macroeconomic (Keynesian) multiplier is likely to boost

further these figures over time.

10 We have not considered transport costs of eventual imports because to date the price of copper foil in Asia is

almost identical to the price that the applicants have used in their business plan minus transport costs. 11 Exchange rate, 8 April 2018 (1 EURO = 1.23 US$). 12 Eurostat data. Available at: http://ec.europa.eu/eurostat/web/national-

accounts/data/database?p_p_id=NavTreeportletprod_WAR_NavTreeportletprod_INSTANCE_Hx0U2oGtTuFV

&p_p_lifecycle=0&p_p_state=normal&p_p_mode=view&p_p_col_id=column-2&p_p_col_count=3


35

3. COMBINED ASSESSMENT OF IMPACTS

3.1 Comparison of impacts and distributional analysis

When analysing all the impacts in the “non-use” scenario, the monetization of the residual

lung and intestinal cancer risks (associated with the use of chromium trioxide) represents a

benefit to the society, whereas the economic, wider economic, and social impacts are the

expected costs. The following table aims to summarize all the monetized impacts derived in

the previous sections.

Table 16. Overview of impacts (non-confidential version with public ranges)

Type of impacts

expected in the “non-

use” scenario

Stakeholder/region

impacted

Over 7 years

Values in EURO

Over 12 years

Values in EURO

Over 15 years

Values in EURO

Benefits for the avoidance

of the number of lung and

small intestine cancer

cases that might be linked

to the use of chromium

trioxide during the

production of copper foils

at the applicants’ new

plant

Workers at the new

plant and the local

population close to

Környe (Hungary)

+ 100—200€ + 100—200€ + 200—300€

XX people would lose the

possibility to be

immediately hired by the

applicants (frictional

unemployment)

Workers in Hungary

(most of them likely

to live not far from

the village of Környe)

- 0-5M€ - 0-5M€ - 0-5M€

Loss of net profits from

the production of copper

foils in the EEA

Society (EEA):

village of Környe

(Hungary) and the

local economy in

which is located

- 50-100M€

- 50-100M€

- 100-200M€

Net costs of a refused

authorization

- 50-100M€

- 50-100M€

- 100-200M€

Note: the symbol “+” is used for benefits in the “non-use” scenario and the symbol “-” for the costs.

In addition to the above impacts, we have qualitatively highlighted the following negative

impacts for the European society:

- A rise in the dependency on imports of copper foils from Asia, with a consequent

worsening of the EEA trade balance;

- A worsening of the competitiveness of the EEA producers of LiB due to the

additional costs for import duties;


36

- Risk of exchange rate for EEA customers that have to import copper foils from

outside the EEA;

- Less flexibility for business due to delays in delivering (four to six weeks; inventory

financing);

- Loss of new business opportunities for satellite activities (and employment) generated

by the applicants’ (green field) investment.

Given the peculiarity of the market of copper foils, it can be reasonably assumed that non-

EEA (Asian) producers would benefit of a refused authorization to the applicants’ new plant.

However, the geographical scope of this socio-economic analysis is the EEA. Therefore, the

positive impacts for non-EEA producers have not been taken into consideration.

3.2 Uncertainty analysis

The quantification of the direct cost of treating a disease is always a difficult exercise given

that the available literature offers a range of values based on different methodologies and

different follow-up periods.

A number of uncertainties can also be identified in the estimation of production loss

because the quantification of this cost component requires the adoption of several

assumptions and there is no standard procedure to follow. With the purpose of minimizing

the level of uncertainty, the human capital approach has been used as it provides higher

estimates than the friction method. It has been assumed that workers diagnosed with lung

cancer stop working once the disease is diagnosed. These simple assumptions intend to

overestimate the production loss given the difficulties in calculating the friction period or the

exact number of working days lost once the cancer is diagnosed.

The number of people considered for the oral intake route (drinking water and fish

consumption) has been assumed to be 10,000, although it is clear that within 1-km radius

from the new plant much less than 10,000 people live there (the village of Környe has about

5,000 inhabitants).

Welfare losses from mortality and morbidity have been monetized by applying the

WTP approach, as suggested by ECHA. We have used the lower bound for the VSL. Here

we apply the upper bound.

We have assumed in the previous section that the net profits are equal to 10%. Here

we assume that they are equal to only 5%.

We have not estimated the man via the environment for the inhalation route because

we have shown that no person will be exposed within 100-meter radius from the new plant.

Here we assume that the number of people to be considered for the man via the

environment (inhalation route) are 200.

This section aims to recalculate the monetization of the impact on the human health of

lung and small intestine cancer cases that can be attributed to the use applied for. For this

uncertainty analysis we are going to assume other strong assumptions in addition to those

highlighted in bold above in this sub-section. Notice that for this additional exercise we take

all the below assumptions together in one single “stress test” scenario:


37

Workers spend 8 hours in WCS 2 and WCS 3. This is equivalent to assume that the

duration of time spent doing the work is the same as indicated in the CSR, but the

concentration in the air of chromium trioxide is equal to 266 and 300 times the

concentrations derived in the CSR (see Table 17) for WCS 2 and WCS 3,

respectively;

200 people of the general population will be exposed via the inhalation route (man via

environment). This further assessment takes into account the small amount of time

new plant’s workers will spend in proximity of the plant within 100-meter radius;13

Upper bound for the value of VSL (i.e., 5 million EURO, adjusted value with GDP

deflator from year 2012 to year 2020; in addition the discount rate is lowered to 2%;

see Section 2.1.5 for details on the calculations):

- Lung cancer:

(1 + 2%)-10 * (89.2% * 5,000,000 * 1.0933 * 1.028 + 460,804.08) = 4,490,138

EURO (rounded up).

- Small intestine cancer:

(1 + 2%)-26 * (51.28% * 5,000,000 * 1.0933 * 1.028 + 460,804.08) = 1,997,418

EURO (rounded up).

These upper-bound values for VSL are used in Tables 19, 20, and 21.

The net profits are equal to an average over time of 5% (not 10% as assumed before)

of the sales;

13 The dose-response curve for Cr (VI) (RAC/27/2013 Rev. 1 Final) for the general population is taken as a

worst case for workers, because workers would be exposed for less time than the general population (24 hours

per day for 365 days of exposure).


38

Table 17. Net profits (assumed 5% of expected sales)

Year 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030

Sales (million


Net Profits

(million

EURO)

(assumed 5%

of sales)


Year 2031 2032 2033 2034

Sales

(million

EURO)

XX XX XX XX

Net Profits

(million

EURO)

(assumed

5% of

sales)

XX XX XX XX

NPV over 7 years: XXXXXXXXXXXXX 20-30M€ (non confidential range)



The NPV are calculated by applying a standard XX discount rate.

The social impacts of unemployment has been re-assessed by using a lower reference

salary of XXXXXXX (not XXXXXXX as reported in the new plant’s business plan).

This means that the social costs of unemployment is now the 50% of that derived

before:

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX 0-5M€ (non

confidential range)


39

Table 18. Number of workers exposed (assuming 8h/day, 5 days/week)

A B C D E F G H

Use

scenario

Number of

workers

per WCS

Average

number of

hours exposed

per day

Average

inhalation

exposure

(µg/m3)

Exposure

calculated,

measured

Excess lung cancer

risk in workers via

inhalation

exposure (given the

average inhalation

exposure)

Number of lung

cancer cases on the

basis of mortality

risk

(F*B)

Number of lung

cancer cases

associated with the

use applied for

(over 40y)

(G/0.892)

WCS 2 5 8h (in reality:

<45

minutes/day, 1

day/week)

0.0021 Modelled data

(ART 1.5)

8.40E-06 4.20E-05 4.71E-05

WCS 3 15 8h (in reality: 2

hours/day, 2

day/month)

0.0058 Modelled data

(ART 1.5)

2.32E-05

3.48E-04

3.90E-04

Total

number of

lung

cancer

cases in the

use applied

for

0.00039 0.00043722

Note: The total number of lung cancer cases (0.00043722) represents 100% of cases on the basis of fatal lung

cancer cases (0.00039) that represent 89.2% of cases.

Table 19. Lung cancer, workers



1.2 Calculations of

health care cost

0.00043722 25,175 11.01


(€)



2.2 Calculations of

productivity loss

0.00043722 40,258 17.60




(VSL and VCM)

(see Section 2.1.5)

Total welfare loss


3.2 Calculation of

welfare loss from


0.00043722 4,490,138 1,963.18








40

Table 20. Lung cancer, man via the environment: inhalation route



1.2 Calculations of

health care cost

2.22E-04 25,175 5.60


(€)



2.2 Calculations of

productivity loss

2.22E-04 40,258 8.95




(VSL and VCM)

(see Section 2.1.5)

Total welfare loss


3.2 Calculation of

welfare loss from


2.22E-04 4,490,138 998.50







Table 21. Small intestine cancer, man via the environment: drinking water and fish

consumption



1.2 Calculations of

health care cost

1.48E-03 25,175 37.23


(€)



2.2 Calculations of

productivity loss

1.48E-03 40,258 59.54




(VSL and VCM)

(see previous page)

Total welfare loss


3.2 Calculation of

welfare loss from


1.48E-03 1,997,418 2,953.94








41

Table 22. Overview of impacts when addressing uncertainties (non confidential version)

Type of impacts

expected in the “non-

use” scenario

Stakeholder/region

impacted

Over 7 years

Values in EURO

Over 12 years

Values in EURO

Over 15 years

Values in EURO

Benefits for the avoidance

of the number of lung and

small intestine cancer

cases that might be linked

to the use of chromium

trioxide during the

production of copper foils

at the applicants’ plant

Workers at the new

plant and the local

population close to

Környe (Hungary)

+ (500-1000€) + (1000-2000€) + (1000-2000€)

XX people would lose the

possibility to be

immediately hired by the

applicants (frictional

unemployment)

Workers in Hungary

(most of them likely

to live not far from

the village of Környe)

- (0-5M€) - (0-5M€) - (0-5M€)

Loss of net profits from

the production of copper

foils in the EEA

Society (EEA):

village of Környe

(Hungary) and the

local economy in

which is located

- (20-30M€) - (40-50M€) - (50-60M€)

Net costs of a refused

authorisation

- (20-30M€) - (40-50M€) - (50-60M€)

Note: the symbol “+” is used for benefits in the “non-use” scenario and the symbol “-” for the costs.

4. CONCLUSIONS

The applicants are applying for an authorisation to use chromium trioxide in the production

process of copper foils to be used in the manufacture of Lithium-ion batteries because there

are no technically suitable substitutes. This SEA, as a part of the authorisation application,

has analysed all the main impacts expected in the “non-use” scenario.

The total benefits for the European society in case of a refused authorisation

would be: € 127.13 (over 7 years), € 198.79 (over 12 years), and € 235.51 (over 15 years).

Conversely, the total costs for the European society would be at least (rounded): € 55.1

million (over 7 years), € 96.2 million (over 12 years), and € 119.1 million (over 15 years).

This means that the costs of a refused authorisation are equal to (at least) more

than 433,626 times, 484,323 times, and 506,064 times the benefits over 7, 12, and 15

years, respectively. Even with extreme assumptions, the costs of a refused authorisation

are equal to (at least) more than 40,943 times, 45,731 times, and 47,749 times the

benefits over 7, 12, and 15 years, respectively.


42

Given the above considerations, we believe that the applicants should be granted the

authorisation to use chromium trioxide in the production of copper foils in accordance with

the article 60(4) of REACH.

Based on the above arguments and in line with the conclusions reported in the AoA, the

applicants requests an authorisation for the future use of chromium trioxide in the

manufacturing of copper foils for 15 years, starting from 2020 because, as this application for

authorisation has shown, all criteria laid out by ECHA (2013)14 and ECHA (2017)15 are

fulfilled.

Circuit Foil Luxembourg, which also produces copper foils for the European market, was

granted an authorisation for using chromium trioxide in its production process. Comparing

the manufacturing process of the applicants’ new plant with that of Circuit Foil, in the new

plant there will be a reduction of the tasks falling under the REACH authorisation process,

the decrease of the tonnage, better state of the art worker protection practices and a limited

volume of wastewater released into the aquatic environment. Hence, both workers and the

general population are at a reduced level of risk compared with the assessment already done

for Circuit Foil Luxembourg at the time of its application.16

14 ECHA (2013), Setting the Review Period when RAC and SEAC Give Opinions on an Application for

Authorisation. Available at:

https://echa.europa.eu/documents/10162/13580/seac_rac_review_period_authorisation_en.pdf 15 ECHA (2017), REACH Authorisation - Criteria for Longer Review Periods (CA/101/2017). Available at:

https://echa.europa.eu/documents/10162/13580/ca_101_2017_criteria_longer_review_period_afa_en.pdf/4cda0

778-02c3-c949-f1c2-6deb1622a754 16 See Section 9 of the CSR for Circuit Foil at: https://echa.europa.eu/documents/10162/fbc98c11-bd5c-4307-

a03a-6d454aa6d2b3

https://echa.europa.eu/documents/10162/13580/seac_rac_review_period_authorisation_en.pdf






43

ANNEX I – MAN VIA THE ENVIRONMENT, MAIN CALCULATIONS

CHROMIUMTRIOXIDE Manviaenvironment

Routeexposurelevelinµg/kgbw/day(DrinkingWater+Fish

Consumption)andµg/m3(inhalation)

Excesslungcancerrisk(inhalation)

Excessintestinalcancerrisk(Drinking

Water+FishConsumption)

numberexposed

people

DrinkingWater+FishConsumption 9.24E-05 7.39E-08 10000

Inhalation 3.42E-05 9.92E-07 200

DRINKINGWATER+FISHCONSUMPTIONexposure(generalpopulation) DrinkingWater 8.74E-05 perµgCr/kgbw/day

basedonanexposurefor70years(24h/dayeveryday)anda89-yearlifeexpentancy FishConsumption 5.03E-06 perµgCr/kgbw/day

anexcesslifetimeintestinalcancermortalityrisk=8E-04perµgCr/kgbwday 8.00E-04 Total 9.24E-05 perµgCr/kgbw/day

INHALATIONexposure(generalpopulation)

basedonanexposurefor70years(24h/dayeveryday)anda89-yearlifeexpentancy

anexcesslifetimelungcancermortalityrisk=2.9E-02perµgCr/m3 2.90E-02

Localscale

Localscale

Numberofpeopleexposedataregionalscale Exposuretime N.ofyearsofexposure

Oralexposureusedforthe

calculationorlungcancer

riskassociatedwiththeuse

appliedfor

Excesscancer

riskinthe

populationata

localscalevia

Numberoffatal

cancercases

Totalnumber

ofcancercases

associatedwith

theuseapplied

foronthe

Inhalation

exposure200 24h/day-Everyday 70 - 3.42E-05 9.92E-07

Inhalationexposure

usedforthe

calculationorlung

cancerriskassociated

withtheuseapplied

1.48E-03

1.98E-04 2.22E-04

DrinkingWater

+Fish

Consumption

Exposure

10,000 24h/day-Everyday 70 9.24E-05 - 7.39E-08 7.39E-04


44

ANNEX II – JUSTIFICATIONS FOR CONFIDENTIALITY CLAIMS

Blanked out

item

reference

Page

number

Justification for blanking

Customers

names

p6-p8-p9 Information on customers is of considerable value to the

competition who could use these data and – due to the

uncertainty in the market place regarding the question of

whether authorisation will be granted or not – work in a more

targeted fashion to recruit the applicant’s customers to their

product offering with supply chain certainty being a significant

commercial motivation. The information is claimed

confidential in line with Article 119 of REACH.

Nbr of

employees

P7, 9-p10-

p32-p33-

p35-p41

The information regarding the number of employees at the

Hungarian site are commercially sensitive information whose

publication would be harmful to the applicant. The information

is claimed confidential in line with Article 119 of REACH.

Business

p10-p31-

p33-p34-

p38 table 16

and 22

These data constitute business secrets as defined by DG

Competition as they include ´financial information relating to

an undertaking's know-how, methods of assessing costs,

production secrets and processes, supply sources, quantities

produced and sold, market shares, customer and distributor

lists, marketing plans, cost and price structure and sales

strategy”

Documents

PUBLIC VERSION OF THE SOCIO-ECONOMIC ANALYSIS