News

Oko

Nanoco Casts Doubt on Inconclusive Öko Institute Advisory Report

Nanoco Group plc (LSE: NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other nanomaterials, today challenged a new advisory report from the Öko Institute in as far as it recommends the extension of an exemption as part of the Restriction of Hazardous Substances (RoHS) Directive that would allow the use of cadmium-containing quantum dots in Europe in TVs and displays. The same Öko Institute report called for an end to the exemption allowing the use of cadmium in LED lighting. The European Commission, European Parliament and EU Member States will next evaluate the Öko Institute report before making any conclusions.

The Öko Institute’s report was commissioned by the Directorate-General for Environment (DG Environment), the European Commission department responsible for EU policy on the environment. In May 2015, the European Parliament voted decisively by 618 to 33 to reject a Delegated Act by the European Commission extending the use of toxic cadmium in televisions and other displays until July 2018. This triggered the current assessment.

Cadmium is one of six highly toxic substances banned from use in Europe in electrical and electronic equipment by the 12-year old RoHS Directive, which was designed to protect human health and the environment and to facilitate recycling. The RoHS Directive recognizes cadmium as the most hazardous toxic heavy metal, giving it a maximum allowed level 10 times lower than mercury and lead.

The report acknowledges the presence of cadmium-free alternatives as present in the marketplace and that the performance standards of both technologies are similar under different test conditions. The report is not definitive and leaves the decision to the EU institutions on whether an extension should be granted. Nanoco looks to the EU Commission, Member States, and European Parliament to exercise their responsibility to uphold the RoHS Directive by ensuring that minor performance differences do not stand in the way of progress in eliminating a toxic and dangerous substance from the EU environment.

Inconclusive Findings

Nanoco identified a number of issues in the Öko Institute advisory that call the recommendations into question, notably that the report offers no indication of what level of alleged color gamut improvement or alleged energy savings should be regarded as sufficient to warrant an exemption under the RoHS Directive. This could be different for different categories of devices (e.g., consumer TV vs. medical diagnosis monitor displays). Other concerns include:

Toxicity:

  • The report fails to evaluate clear scientific data on the relative toxicity of cadmium vs. cadmium-free materials (both for indium phosphide and the Cadmium-free Quantum Dots (CFQD®) produced by Nanoco), so fails to draw a clear conclusion on the significantly greater hazards of cadmium, which is the only compound of the three regulated under the RoHS Directive.
  • Further, the recommendations contradict earlier Öko Institute statements on the same exemption from 20131 that give precedence to the control of RoHS restricted materials over energy savings potentials.

Energy Savings:

  • The report states that the claimed advantages of energy savings for cadmium QD components depend on the display products in which they are being used, calling energy savings findings into question. It also ignores the impact of rapidly improving cadmium-free quantum dot performance, especially with second generation Samsung SUHD TVs already launched in Q1 this year.
  • The report accepts the claims of lower energy consumption for cadmium-based displays – despite the fact that data on commercial TVs show that those with cadmium-free quantum dots have lower energy consumption, achieving market leading A+ ratings for energy efficiency.

Color Performance:

  • The report accepts the claims of higher color gamut performance, despite its own analysis finding that “the consultants understand the results to be inconclusive.” Moreover, the report questions whether improved color gamut is important to consumers and in all circumstances.
  • The report fails to focus on the most relevant industry standards for color performance, in particular the DCI standard that is now used for digital cinema recordings and the latest UltraHD Premium standard, which requires displays to achieve 90% of DCI. This standard is fully achieved by cadmium-free quantum dot TVs on sale today.

Legal Scope:

  • The report itself accepts that its recommendation is not legally binding.
  • It also says that even if the (contested) claims of improved color performance and energy efficiency are accepted, “it is beyond the scientifically based assessment mandate of the exemption evaluation to conclude whether the use of a RoHS restricted substance to enable a certain function or property is an acceptable cost therefore.”
  • Nanoco believes that extending the exemption would clearly contradict the fundamental purpose of the RoHS Directive, which is to phase out the use of restricted materials including cadmium. It is clear from the massive commercial success of cadmium-free quantum dot TVs that they meet all the required performance standards to effectively substitute for any continuing use of cadmium, so the exemption must end.

Michael Edelman, Nanoco’s Chief Executive Officer, said:
“The intent of the RoHS Directive is to ban the use of hazardous substances in the EU. To recommend a continuation of the use of cadmium under this Directive in light of these inconclusive findings is misguided, at best, and irresponsible, at worst.”

“The reality is that innovative, high performing and energy-efficient TVs and displays can and are being produced with cadmium-free quantum dots, making the need for any sort of cadmium exemption completely unnecessary.”

“Cadmium is an obsolete and hazardous technology that’s never taken off in the mainstream market. In fact, sales of TVs using cadmium-free quantum dots already exceed those using cadmium by 20 to one. So why extend the use of this highly regulated and toxic chemical when there are safe alternatives available today that deliver market leading levels of color performance and energy efficiency?”

“Cadmium-free technology combines brilliant enhanced color with outstanding energy efficiency, while performance levels are continuing to increase rapidly across the board.”

“Major TV and display manufacturers including Samsung have already spoken and focused their product strategies on cadmium-free technology. In the months ahead, other manufacturers will similarly want to compete with leading enhanced color performance display products without risk by adopting cadmium-free technology.”

“Ultimately, cadmium will be a banned substance in the EU even if the recommendation of extending the exemption (due to end July 2014) by three years is adopted. Thus, it’s highly unlikely leading manufacturers will endanger their product strategies by adopting cadmium.”

“Previous calls from the Swedish and British governments and environmental groups such as EEB, ChemSec and Greenpeace are part of the overwhelming tide of opinion against the use of cadmium in the EU environment.”

“It is surprising that three years ago the Öko Institute recommended the extension of cadmium for displays based on the lack of suitable alternatives not being available until 2019. They were on shelves by March 2015. Despite saying energy efficiency was not a deciding criteria in their 2014 report, they now seem to have decided suddenly that it is the critical factor on advocating the new extension.”

“The European Parliament voted overwhelmingly last year against the continuation of this cadmium exemption, and we call on the EU Commission, the EU Member States and again on the European Parliament to follow the democratic and logical course to end this unnecessary exemption for TVs and displays as soon as possible.”