European Biocide Product Directive causes industry headache

Regulation headache

22 July 2009 10:51  [Source: ICB]

Tougher biocide product rules in Europe are forcing the industry to submit to a different regulatory framework
Consultant's corner
Anna Ibbotson/Kline

IN EUROPE, suppliers of biocides face great regulatory challenges following the introduction of the Biocide Product Directive (BPD).

In 1998, Directive 98/8/EC on the market placement of biocidal products was adopted, with the member states having to transpose the rules by May 14, 2000 into national law.

The aim of the BPD is to harmonize the market for biocidal products and their active substances, while providing a high level of protection for humans, animals and the environment.

The responsibility for adhering to the directive lies with the producers and formulators, who must apply for authorization by submission of a dossier containing the relevant materials such as scientific studies.

However, following extension after extension of deadlines due to the immense work required to gain approvals, by the start of 2009, only a limited number of biocides had been approved.

The latest step in the regulatory saga is that on June 12, the European Commission adopted a proposal, COM(2009)267, for a regulation concerning the market placing and use of biocidal products. This proposed Regulation, which would enter into force on January 1, 2013, would extend the regulatory scope to include articles and materials treated with biocidal products, including furniture and textiles.

One key challenge in the entire process is the cost of the dossier preparation - ­estimated at up to €2m ($2.8m) - which has driven some organizations to join together to create task forces to generate the dossier and support the product. Examples include the EU Anti-Fouling Copper Task Force. However, companies are typically pursuing registrations independently, and therefore shouldering the burden of the cost.

The European market for specialty biocides in water treatment was valued at just over €100m in 2008, with nearly 25,000 tonnes consumed across the segments each year. Biocides used within water treatment/industrial applications are often segmented into oxidizing and non-oxidizing biocides.

Quats (Quaternary ammonium compounds) along with peracetic acid and sodium bromide are the major groups of specialty biocides used within the water treatment industry, accounting for nearly 60% of the market due to significant usage across all applications.

Quats are currently being supported through the process by the European QUATS Consortium, while peracetic acid is supported by European trade body CEFIC's Peracetic Acid Registration Group.

Other major product groups are glutaraldehyde and tetrakis hydroxymethyl phosphonium sulfate (THPS) used in all applications bar recreational water.

Glutaraldehyde is being pursued by Germany's BASF and US-based producer Dow Chemical, while France's Rhodia is the only company supporting THPS through the BPD. Although the outcome of the BPD remains uncertain, it is unlikely that these products will be affected.

BIOCIDES PLUS NEW TECHNOLOGIES
A number of alternative technologies are being investigated and invested in. However, to date these technologies are not suitable to completely replace biocides, and in many cases complement the biocide within the water system, for example enzymes and ozone. The advantage of these new technologies is that they are not covered by the BPD.

Enzymes are being explored in both cooling water and pulp and paper applications. In cooling water, enzyme usage can result in cleaner water loops, reducing the need for contaminant control agents and biocides.

In pulp and paper, they have been formulated to improve pulp bleaching, de-inking, and refining, while reducing chemical consumption and refining energy, improving paper quality, including strength, and increasing production rates. At this time, they are not able to completely remove biocide usage from a system.

Enzymes are complementary and are being touted as a more environmentally friendly alternative.

Ozone treatment is used, within cooling water systems and recreational water treatment applications, as an alternative to conventional biocide treatment.

Ozonolysis is effective, as it is a stronger oxidizer than chlorine or bromine, and environmentally friendly. However, the initial outlay in purchasing the ozone generator is significant and this has impinged on uptake of the technology, particularly within recreational water treatment.

In cooling water, the effect of anti-corrosives and hardness stabilizers is thought to be strengthened by the use of ozone. However, one key disadvantage within cooling water is that ozone only targets the immediate area in which it is operating.

A technology more recently introduced than those mentioned above is an ammonium-based biocide that is produced by blending an ammonium bromide solution with sodium hypochlorite and water under specific reaction conditions. The biocide created is a mild oxidizer, which can control microbial population and minimize the adverse side effects associated with strong oxidizing biocides. This technology is now gaining share in Europe, and has been found to be an effective and low-cost program.

Other similar products are rumored by the industry to be in development. A major attraction of this type of product is that they are not controlled by the BPD and therefore do not have the associated registration expense.

Other alternative technologies include UV exposure, ultrasound and copper or silver ionization. Ultraviolet and ultrasonics treatments have not been proven to be more effective than biocides if used on their own.

However, the main advantage is that the process is environmentally friendly and does not involve chemicals. Copper or silver ionization involves passing the water through a chamber where charged copper and silver ions are created to destroy the microorganisms.

As many of these alternative technologies have proved to be less effective than biocides if used on their own, they are not expected to significantly affect biocide consumption in the short term.

Despite developments in new technology and the ongoing investment required to support products through the BPD, there has been limited change in the competitive landscape in Europe.

In 2005, there were more than 35 companies active in the market, with the leading three players in each water treatment segment accounting for over 40% of market share. Today, this number remains similar.

Two major acquisitions have, however, occurred, with BASF acquiring Switzerland-based Ciba and Dow acquiring compatriot Rohm & Haas in recent months. However, the impact on the specialty biocide industry of both these ventures is yet to be understood. BASF and Dow Chemical are both leading players in Europe, along with Chemtura.

Although not linked with the BPD, but due to weakened sales in the recession, Chemtura filed for Chapter 11 bankruptcy for its US operations. Chemtura is a key player in the European market, with significant sales within water treatment of products including NaBr (sodium bromide), chloroisocyanurates and BCDMH (bromochlorodimethylhydantoin). It also supplies a number of actives to other biocide manufacturers active in the value chain.

In light of these recent developments, it is likely that there will be some impact on the competitive landscape in the coming months, but not because of the BPD.

In the past few years, corporate ownership may have changed, but the industry incumbents still have similar characteristics with companies such as Belgium's Solvay, US-based Ecolab, and Rhodia, focused on single, active chemistries, with other organizations, such as Arch Chemicals of the US, Germany's LANXESS, and Dow Chemical, supplying a variety of actives across a broad range of industrial markets. These strategies are also not expected to change significantly with the BPD.

LEADING THREE SUPPLIERS BY APPLICATION

Application	Market Share	Rank 1	Rank 2	Rank 3
Cooling water: 2008	60%	Chemtura	Dead Sea Bromide	BASF
Oilfield and gas field: 2008	62%	BASF	Rhodia	Arch Chemicals
Recreational water: 2008	41%	Inquide Flix	Chemtura	Lonza
Paper: 2008	49%	Solvay	FMC Foret	Evonik Degussa

Source: Kline

GROWTH PREDICTED
Although uncertainty due to the BPD and investment in alternative technologies are challenges facing suppliers within the industry, by 2013 consumption of specialty biocides in water treatment applications is expected to exceed 30,000 tonnes in Europe. Average growth of 4.5% is predicted, with recreational water exceeding the average growth of the segment and oilfield and gas applications lagging.

At this time, the full impact of the BPD remains uncertain. However, changes have been observed, with some low-volume, unsupported products no longer being marketed.

It is unlikely that the BPD will drive significant consolidation through further acquisitions, but more likely from smaller players simply exiting the market. The most significant impact long term is expected to be reduction in innovation due to the cost of registering new products.

The European market for specialty biocides was valued at just over €100m in 2008

Anna Ibbotson is responsible for the global specialty biocides market research program at Kline. Located in Oxford, UK, she has more than 10 years' experience in the chemical industry. Contact: anna.ibbotson@klinegroup.com

ASHLAND THINKS SMART
Will Beacham/London
According to Ian Gould,US specialty group Ashland's biocides manager for Europe, the company has implemented the Biocides Product Directive without too many headaches so far.

Ashland is adopting a clever procedure to ease the process: "We can seek authorization for a formula in one country, but then we'll [also] need to seek authorization in all 26 EU countries. This should be easy as there is a principle of mutual recognition, but it may not go that smoothly."

Gould says Ashland intends to start selling all its biocides in all European countries so that it can benefit from the so-called "grandfather" period. This a two-year period of grace where existing biocides can continue to be marketed without authorization.

There is a huge variation in the ease of compliance across Europe in the national systems set up to register products, he adds. 

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