Focus On Printed Circuit Boards and Assembly

World Wide Environmental Compliance

Overview of Environmental Trendsand IBM Requirements

John H. Quick – Sr. EngineerIBM Poughkeepsie, NYNovember 19, 2009

— 2 —

IBM Product Stewardship ProgramIBM's Product Stewardship program was established in 1991 to bring additional focus tothe corporate environmental affairs policy objectives on product environmental designand performance.

The Product Stewardship program within IBM's worldwide EMS provides developmentorganizations with direction and goals, infrastructure, tools and expertise to applyenvironmental life cycle considerations from product concept through product end-of-lifemanagement.

The objectives of IBM's Product Stewardship program include:• Develop products with consideration for their upgradeability to extend product life. • Develop products with consideration for their reuse and recyclables at the end of

product life. • Develop products that can safely be disposed of at the end of product life. • Develop and manufacture products that use recycled materials where they are

technically and economically justifiable. • Develop products that will provide improvements in energy efficiency and/or reduced

consumption of energy. • Develop products that minimize resource use and environmental impacts through

selection of environmentally preferred materials and finishes. • Environmental design requirements are communicated and verified with suppliers.

— 3 —

Storage: DS8000

Blade: BladeCenter H

System z: z10 EC

System z: z10 BC

System x: 3455

System x: 3655

System i: 570 stack

Power System w/ xSeries servers in a rack

Various Power Systems

IBM Customers want value added “Greener” products

Let’s Build A Smarter Planet – Finding the Value In “Green”

— 4 —

Environmental leadership

http://www.ibm.com/ibm/responsibility/

1990-2007 Early Results– IBM reduced or avoided CO2 emissions by an

amount equivalent to 45% of its 1990 emissions through the company's global energy conservation program.

–Earned Leadership Status

– 2009 #1 Green IT Vendor, Computerworld

– 2007 #1 Vendor “Green 500” Supercomputing

– 2008 CNET UK Business Technology “Green IT Initiative of the Year”

– 2008 One of top 15 Green IT companies, InfoWorld

– 2008, CERES ranked IBM #1 among 63 different companies across 11 different industry sectors for corporate climate change governance practices.

– 2008, Gartner and WWF-UK ranked IBM #1 among fourteen I/T companies for Basic Environmental Management of Climate Change.

– 2008, Climate Counts ranked IBM #1 among electronics companies for Climate Friendliness.

— 5 —

About 1 billion computers will become potential scrap between now and 2010(IDC, Gartner and the National Safety Council)

55% of US-based companies do not have an IT disposal strategy (IDC)

In 2006 IBM processed over 100 million pounds of used equipment and sent less than 1% to the landfill

Environmentally Responsible disposal

“To optimize TCO benefits,

companies require a

corporate standard

disposition strategy”

Gartner Group

— 6 —

Road to World Wide Environmental Compliance Is Wide

IBM systems are designed and specified to be compliant with IBM systems are designed and specified to be compliant with all countries' regulationsall countries' regulations

no matter where we ship themno matter where we ship them

— 7 —

World Wide Environmental Regulations Examples

Europe• RoHs Directives 2002-95-EC• WEEE Directive 2002-96-EC• EuP Directive 2005-32-EC• REACH Regulation (EC) 1907/2006 • Packaging Directive 2004-241-EC• Phthalates /PVC / Halogen free (future)

North America• California Waste Electronics Recycling Act- SB 20/50 (CA version of RoHS / WEEE)• Product take-back regs in several states• Individual State RoHS like legislationadopted or proposed.

• USA-Environmental Design of ElectricalEquipment Act (H.R. 2420) introduced

• Canada Provincial legislation gaining focus

Brazil • CONAMA Resolution 257/99)• Solid waste Policy PL 203/91 (Draft)

China• RoHS / WEEE Regulation for administrative Measure on the Control of Pollution Caused by Electronic Information Products• Catalog published

South Korea• South Korea: Basic Environmental Policy Act• Industry agreements to limit certain

materials and for products to be recyclable

Japan• J-MOSS / Basic The Law for the Promotion

of Effective Utilization of Resources-3Rs - reduce, reuse, and recycling

…… and Continually Growing and Continually Growing No harmonized WW Standard

Australia RoHSOther Drivers • Non-Government Organizations (NGO’s)- GreenPeace,

— 8 —

Federal RoHS Bill Introduced in U.S. House of Representatives

What about a federaltake back bill ?

On May 14, 2009, Rep. Michael Burgess (R- TX) introduced H.R. 2420, which proposes to amend the Toxic Substances Control Act (“TSCA”) to prohibit the manufacture after July 1, 2010 of “electroindustry products” that contain lead, mercury, cadmium, hexavalent chromium, polybrominated biphenyls (“PBBs”), and polybrominated diphenyl ethers (“PBDEs”) above the maximum concentration levels specified in the European Union’s Directive on the Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment 2002/95/EC (“RoHS Directive”). See H.R. 2420, § 4(a).

Bill really focused on electronic waste (e-waste)

— 9 —

State Legislation and World Wide WEEE RegulationsGenerally, the scope of products covered is getting broader

Source: Electronics TakeBack Coalition (June, 2009)

— 10 —

Environmental Compliance Process & Challenges

DfE Manufacture Supply Chain Take-Back, Disposal,& compliance

Design forEnvironment

Material Compliance

for RoHS

Design For RoHS

Design For EuP

Design For IPP

Disposal Operations

Lead Free Compliant

RoHSCompliant

REACHCompliant

Proof OfCompliance

CompliantProcesses

Identify Parts & Assemblies

Substance management

BirthCertificate

(DoM)

Substance data

Material Declaration

(PCD)

Ship toRestrictions

CountrySpecific

Legislation

Waste Stream

WEEE

Recovery

Treatment

Disposal Confirmation

ELV(Vehicles)

MaterialManifest

Destruction Certificate

Audit

Non-Conformance

CorrectiveAction

Process

CategorizeIdentify Treatment Reporting/Analysis

SiteInspection

— 11 —

Design for Environment

Think about material types:

• Use less harmful materials• Use materials from sustainable sources• Use materials from recycled sources• Use materials which can be recycled

DfE

— 12 —

Who Is Responsible for Regulation Compliance ?

Amended RoHS Directive removes the term ‘producer’ and replaces ‘manufacturer’, ‘distributor’, ‘importer’ or ‘authorised representative’ – to be collectively known as ‘economic operators’. Unlike ‘old’ RoHS, where generally only one of these operators would be defined as the ‘producer’, under the change, each of these operators will have obligations under the Directive. Just because IBM doesn’t physically make equipment (OEM, ODM, black box) doesn’t remove IBM’s obligations to ensure whatever we import or distribute complies fully with the requirements of the legislation and is suitably documented and labeled.

Everybody

IBMs Environmental “Due Diligence” approachFocus on Records

“Product Content Declaration (PCD) Document

Manufacture

— 13 —

New use for “CE” Conformity Mark

Member states shall presume electrical and electronic equipmentbearing the CE marking as conforming to this (RoHS ) Directive”

The CE Mark is a mandatory conformity symbol required for products sold in the European Economic Area. The CE mark indicates conformity to the legal requirements of the European Union (EU) Directive with respect to safety, health, environment, and consumer protection.

By affixing the CE marking, the manufacturer, its authorized representatives, or any entity placing the product on the market asserts that the item meets all of the essential requirements of all the applicable EU Directives and that the applicable conformity assessmentprocedures have been applied correctly. All products offered for sale anywhere within the EU must have the mark or they cannot be sold. Each EU country inspects equipment and documentation to make sure that products conform as required. Any deviations from complete conformity will lead to sanctions such as warnings, sales bans, fines or even imprisonment.

Source: Present EU recast draft - this recast is simply a proposal and is not yet in force.it is highly likely that the “CE” mark for RoHS compliance will be adopted early 2010

— 14 —

IBM Environmental Requirements

• IBM Engineering Specification (ES 46G3772) establishes baseline environmental requirements for all Deliverables where this specification is referenced in a Statement of Work, print, contract or other procurement document's.

• ES 46G3772 implements IBM's environmental policy objectives and contains some, but not all, environmental legal requirements for deliverables.

• Supplier shall ensure the Deliverables comply with all “Environmental Laws” and are ready for import, export, sale or other distribution of the Deliverable in all jurisdictions worldwide, regardless of where they are sold to IBM.

• IBM Global Procurement: Information for suppliershttp://www-

03.ibm.com/procurement/proweb.nsf/contentdocsbytitle/united+sta tes~information+for+suppliers

Baseline Environmental Requirements for Supplier Deliverables to IBM

— 15 —

IBM Environmental Requirements

• “Environmental Laws” include laws, rules and regulations at local, state, provincial, national or international level that relate to environmental matters, including without limitation material restrictions, material bans, labeling, availability of product environmental information, energy efficiency, end-of-life take back, battery requirements and other similar requirements.

• Full compliance requirements with the European Union (EU) Directive 2002/95/EC on the Restriction on the use of Certain Hazardous Substances in Electrical and Electronic Equipment (RoHS) are not part of ES 46G3772, but are rather applied through the combination of ES 46G3772, other applicable contract provisions and IBM engineering specifications, such as 53P6233 or 97P3864. In circumstances where multiple documents contain restrictions on the same chemical or substance in the same application, the most restrictive requirements apply.

Baseline Environmental Requirements for Supplier Deliverables to IBM

— 16 —

REACH

• The overriding aim is to ensure that the most dangerous substances are replaced with safer alternatives. In effect, businesses must prove that substances that they produce or use are safe – a change from the previous way chemicals were regulated which put the burden of proof on the authorities.

• All companies that produce or use chemicals are being given obligations under REACH. Manufacturers and importers must gather information on the properties of all substances that they produce or import in quantities greater than one tonne and register them in a central database. Users of chemicals must apply risk management measures for certain substances and provide information on how they use substances to their suppliers.

• Registration is to be staggered so chemicals are phased into the REACH system by 2018. The European Chemicals Agency, based in Helsinki, is the central authority dealing with the REACH system.

• Provisions are made for companies that produce or use the same chemicals to work together in consortium at national and EU levels, in order to reduce to the minimum the administrative and financial burdens on companies, particularly for SMEs.

Source: EU’s regulation on the Registration, Evaluation, Authorisation and Restriction of chemicals (REACH) website

— 17 —

Design for Environment (DfE) requirements & NGO’s

Source: NGO - Clean Production Action, an ETBC partner organization

Toxic material restrictionsalso driven by NGO’s

Published: September 2009

Electronics manufacturers, standards bodies, and legislators have begun to take notice of the human health and environmental concerns associated with the use of brominated and chlorinated compounds in electronic products. An array of conflicting definitions and policies have emerged to address these concerns at various levels

NGO's asking for clear timelines when industry will have halogen free equipment

Environmental Working Group

— 18 —

Human health and Environmental Concerns

Every organo-halogen compound used in electronics can produce dioxins and furans, particularly during the end-of-life treatment of obsolete equipment. This chart shows just a few of the bromine- and chlorine-containing compounds used in electronics products manufactured over the past few decades. In addition to well-known BFRs (HBCDD, PBB, PBDEs, and TBBPA), the chart mentions some phthalates used with PVC plastic (BBP and DBP), as well as other persistent and bioaccumulative substances used in electronics production, such as chlorinated paraffins (SCCP and MCCP).PBT is the acronym for persistent bioaccumulative and toxic substances.

PBB PBDEs PVC & DEHP/BPP / DBP

SCCP / MCCP *TBBPA HBCDD New HalogenatedSubstances

Forms Dioxins When Incinerated (most potent cancer causing agents)

Based on ref. source: Clean Production Action, an ETBC partner organization

Previously Used - BannedProhibited in IBM Deliverables

REACHSwitzerlandNorwayCanada

Washington State

In use TodayRestricted Limits in IBM Deliverables

Prohibited above 0.1 %by weight

•The European Union has approved without restriction its use in circuit boards and plastics with no significant health concerns. *Largest BFR in terms of production. 70% used as a reacted flame retardant in electrical and electronic equipment and 20% used as an additive to plastics

EU ApprovedFor Use InPCB’s

PotentialNew Material

IntroductionOf

Restrictions Annex 1V

Ban + limits

Currently Regulatory Practice IBM – Voluntarily prohibited PBBs and PBDEsfrom use in products in 1993

?Introduction

Of Restrictions

Annex 1VBan + limits

— 19 —

EU Recast Draft

• (3d) Regulation (EC) No 850/2004 of the European Parliament and of the Council of 29 April 2004 on persistent organic pollutants1 recalls that the objective of protecting the environment and human health from persistent organic pollutants cannot be sufficiently achieved by the Member States, owing to the transboundary effects of those pollutants, and can therefore be better achieved at Community level. Pursuant to that Regulation, releases of persistent organic pollutants, such as dioxins and furans, which are unintentional by-products of industrial processes, should be identified and reduced as soon as possible with the ultimate aim of elimination, where feasible. Thermal treatment or uncontrolled disposal of waste electrical and electronic equipment containing halogenated flame retardants or PVC can contribute significantly to the formation of dioxins and furans.

• The RoHS recast needs to be put into the context of the EU’s international obligations to reduce total releases of dioxins and furans, with the goal of their continuing minimization and, where feasible, ultimate elimination.

Emissions of dioxins and furans can only be addressed via material choices at design stage.

Phasing out brominated and chlorinated flame retardants as well as PVC and its hazardous additives.

— 20 —

Status of IEC 62321 Test Standards: RoHS Testing• New standard structure has been approved. The next version of IEC 62321 will

split into separate horizontal standards by Substances for ease of standard development, maintenance, and adding new substances. Draw back: need to buy separate standards

• New name of standard: Determination of Certain Substances in Electrontechnical Products

• Goals are to turn PBBs/PBDEs and Cr(VI) (surface coating & polymer) from informative methods to a full test standard by 2012

• New Work Item Proposals had been finalized and will be submitted for voting in Nov. International Round Robin Study 2H2010

• Cr(VI) testing of surface coating:– Harmonize the detection limit of Cr(VI) with EN15205, at 0.1 mg/cm^2 – no

objections thus far– Pressure to provide guidance/risk assessment due to the uncertainty of

coating weight determination – proceeding with caution due to the potential implication

• Cr(VI) testing in Polymer:– Progress on Extraction Efficiency by China and Korea– Still working to understand how to overcome Matrix Interference issues

Source: IEC TC111 WG3 - IEC 62321 Standard Meeting Report

— 21 —

News headlines

Mac Pros accused of emitting toxic gas,placing blame on someone else

Greenpeace takes a break from issuingReports to vandalize HP corporate HQ

California Proposition 65

Greenpeace slams HP, Lenovo, and Dell in latest report

— 22 —

IBM Volatile Organic Compound (VOC) Testing

California Proposition 65,OSHA, ACGIH

IPC Standard IPC-6012B –Qualification and Performance Specification for Rigid Printed Boards

Section 3.10.1Outgassing: The degree of outgassing shall have a Total Mass Loss (TML) of less than one percent (1%) and Collectible Volatile Condensable Material (CVCM) ofless than one tenth of one percent (0.1%). Mass loss shall be determined on testcoupons or production boards of representative substrates when tested in accordancewith IPCTM-650, Method 2.6.4.

Example: Found in recent testing – Epichlorohydrin

Used in epoxy resins – to offer corrosion resistance, solvent andchemical resistance, hardness and adhesion

Recognized CA Prop 65 Carcinogen and Reproductive Toxicant

— 23 —

Source: iNemi 2009 Technology Plan Board Assembly TIG – April 03, 2009

— 24 —

— 25 —

New “Green” PCB Materials ?

• Elimination of Halogenated Flame Retardants– Flame Retardants in PCB Material (are required) – Characteristics of Halogen-Free Laminates– Processing Challenges of Halogen-Free Laminates– Activities to develop Halogen-Free Laminate

• Reduction of Toxic Solvents

• Renewable Resin for PCBs

— 26 —

Renewable resins for PCBs

• Use of biopolymers to replace the oil-based epoxy resins – Lignin.

• What is Lignin?– The glue like substance found that ties the cellulose together

in plants and trees – Produced in large volume as a by-product of paper

manufacturing– Its molecular structure provides the thermal stability and

chemical resistance necessary for PCBs.

• Experiments with epoxy resins with 50-percent lignin are proving to provide a PCB with equivalent or better thermal and electrical performance than current high-volume PCB's

— 27 —

Expect expanded and new legislative requirements

The Nanotechnology Discussion“Risk management”

“Because nanotechnology would have such wide applications and so little was known about its potential effects, its risks could fall under a wide variety of existing lines, including environmental, product and professional liability, as well as workers' compensation, medical malpractice and directors' and officers' insurance, Dr. Blaunstein said.”

Source: The Royal Gazette on-line edition May 21, 2008

— 28 —

Summary

• It is inevitable that the transition to environmental compliance will have a significant impact on IBM “Mission Critical” Information Technology product Printed Circuit Boards and assembly as more BFR’s and other SVHC materials are restricted.

• Capability & timeliness to comply with RoHS, WEEE, REACH and China and other worldwide environmental regulations now become key competitive differentiators in the industry.

— 29 —

Thank You

Questions ?