Why the need for enforcement? THE « TYRE » CASE www.etrma.org European tyre & rubber manufacturers’association EFWG-02-01 Why the need for enforcement? THE « TYRE » CASE Enforcement Informal Working Group WP.29, June 27 2013 – Geneva FAZILET CINARALP, SECRETARY GENERAL

Content ETRMA Tyre regulations: REACH, type approval, tyre labelling European tyre & rubber manufacturers’association Content ETRMA Tyre regulations: REACH, type approval, tyre labelling Why is “enforcement” an issue?

TYRE INDUSTRY REPRESENTATION IN EUROPE EUROPEAN TYRE & RUBBER MANUFACTURERS ASSOCIATION Represents 12 major tyre manufacturers producing within the EU-27 Acts in legislative matters, such as road safety & transport, environment & health protection, global trade Represents the industry towards the European institutions and other international bodies ETRTO is a technical organisation: Issues Internationally referred tyre Standards and Recommendations on tyre use & maintenance Contributes actively to UNECE WP29 tyre regulatory activities in Geneva Provides expertise to ETRMA on technical matters related to tyre performance

TYRE INDUSTRY REPRESENTATION IN EUROPE EUROPEAN TYRE & RUBBER MANUFACTURERS ASSOCIATION Represents 12 major tyre manufacturers producing within the EU-27 Acts in legislative matters, such as road safety & transport, environment & health protection, global trade Represents the industry towards the European institutions and other international bodies Is a technical organisation: Issues internationally referred tyre Standards & Recommendations on tyre use & maintenance Contributes actively to UNECE WP29 tyre regulatory activities in Geneva Provides expertise to ETRMA on technical matters related to tyre performance EUROPEAN TYRE & RIM TECHNICAL ORGANISATION

BACKGROUND The tyre industry operating in the E.U. Most stringent safety and environmental regulations The tyre market is very diversified, fragmented and huge > 240 different tyre brands on the market > 62000 product lines ~ 300 million tyres annually sold with 25% imports Sophisticated and expensive testings Mix of type approval (third party homologation) and self-declaration Tyres replaced on average 3.7 times in the life of a car (and more frequently in the case of Heavy Duty Vehicles) Significant increase of tyre imports from low cost countries (also on higher performance segments!) Enforcement is responsibility of 27 individual countries (28 from July 2013) Need to: preserve consumers/citizens’ trust in legislation secure coordinated action against non-compliant products and products presenting a serious risk protect fair economic operators against unfair competition from operators ignoring or by-passing the rules of the game

SOPHISTICATED AND COSTLY REGULATORY FRAMEWORK Example: the TYRE sector The same industrial sector, could be, directly or indirectly, significantly impacted by various regulatory policies AT ALL LEVEL OF BUSINESS. Proper enforcement ensures the competitiveness of the EU market! Materials Production & Process Logistic Product use End of Life Consolidated framework (2010-2020) ETS , IPPC, SEVESO UN ECE regs 30,54,75,117 REACH, CLP General Safety Reg., TYRE LABEL, VEHICLE EMISSIONS Waste legislation, EPR (1) With the introduction of environmental and safety standards, both at international and EU level, the industry is continuously responding to the need to adapt products and production processes. The tyre sector is no exception. Over the last few years alone, the EU regulatory landscape for tyres has significantly changed, introducing more stringent requirements for safety, health and environmental purposes, and enhancing information transparency towards consumers. It will not be exaggerated to say that while the EU tyre producers just succeed in making technological adjustments to meet legislation coming into force, they are already confronted with additional new high requirements to become effective in the short to medium term. (2) Under this increasing EU regulatory pressure for a safer and “greener” environment, the European tyre industry has been acting to the best of its efforts to ensure timely and efficient compliance with the norms. This requires a costly, complex and lengthy process for developing, testing and implementing new technologies and substances for the tyre production against tight deadlines. Also, it needs to be kept in mind that these efforts occur on the background of the additional burden generated by the economic and financial crisis, which has hit particularly seriously the automotive industry.   However the producer’s consciousness alone is not a guarantee for proper enforcement of EU regulations and, ultimately for the achievement of the EU vision for a safer and cleaner society. ETRMA members make all necessary efforts to fully comply with current and pending legislation. They wish to see firm guarantees that all the liable economic actors on the EU market will be compliant. Tyres produced in or imported into the EU should be either compliant with all relevant rules or must be removed from the market. National and EU authorities should make all efforts to build and maintain a level playing field in the EU tyre market for NON EU manufacturing-based players EU Authorities market surveillance potential for EU manufacturing-based players

- Mandatory Compliance EUROPEAN REGULATORY FRAMEWORK - Mandatory Compliance REACH REGULATION Restricted Substances (PAHs) in tyres “High PAH” restriction imposed per EU REACH Regulation 1907/2006, Annex XVII, Entry # 50. (based on carcinogenic nature of certain PAHs used in extender oils for tyre production) Has been applicable for tyres produced since 1 January 2010 Covers all tyres intended for road use faster than 25 km/hour (cars, motorcycles, trucks, buses, agricultural and earthmover) Applies equally to imported tyres and EU-produced tyres EU importer is legally responsible for product compliance, but non- EU producers can assist with own testing and Manufacturer Compliance Certificate, or, EU importer may perform own-test and provide Importer Compliance Certificate for the downstream supply chain (1) With the introduction of environmental and safety standards, both at international and EU level, the industry is continuously responding to the need to adapt products and production processes. The tyre sector is no exception. Over the last few years alone, the EU regulatory landscape for tyres has significantly changed, introducing more stringent requirements for safety, health and environmental purposes, and enhancing information transparency towards consumers. It will not be exaggerated to say that while the EU tyre producers just succeed in making technological adjustments to meet legislation coming into force, they are already confronted with additional new high requirements to become effective in the short to medium term. (2) Under this increasing EU regulatory pressure for a safer and “greener” environment, the European tyre industry has been acting to the best of its efforts to ensure timely and efficient compliance with the norms. This requires a costly, complex and lengthy process for developing, testing and implementing new technologies and substances for the tyre production against tight deadlines. Also, it needs to be kept in mind that these efforts occur on the background of the additional burden generated by the economic and financial crisis, which has hit particularly seriously the automotive industry.   However the producer’s consciousness alone is not a guarantee for proper enforcement of EU regulations and, ultimately for the achievement of the EU vision for a safer and cleaner society. ETRMA members make all necessary efforts to fully comply with current and pending legislation. They wish to see firm guarantees that all the liable economic actors on the EU market will be compliant. Tyres produced in or imported into the EU should be either compliant with all relevant rules or must be removed from the market. National and EU authorities should make all efforts to build and maintain a level playing field in the EU tyre market www.etrma.org

EUROPEAN REGULATORY FRAMEWORK – Mandatory Compliance General Safety Regulation 661/2009 and tyres For both original and replacement tyres, must satisfy technical requirements relating to: wet grip; rolling resistance; and rolling noise (UNECE 117.02) in addition to Tyre Integrity, dimensions and markings (EU Directive 1992/23 -> UNECE 30 or 54) Rolling Noise: Reduction by average of 4 db(A); mandatory for new tyre types (C1/C2/C3)from11/2012 and existing types from 11/2016 Wet Grip: Identical to the current requirements in UNECE Regulation 117; Mandatory for new C1 tyre types from 2012 and existing types from 2014 Rolling Resistance: Phase 1: 2012 (New) 2014 (Existing types-C1&C2) 2016 (existing types-C3) Phase 2: 2016 (New 2018 (Existing types-C1&C2) 2020 (existing types-C3) EU Directive 1992/23 on tyres replaced from 1 November 2017 Type-approval in accordance with mandatory UNECE regulations

EUROPEAN REGULATORY FRAMEWORK – Mandatory Compliance UN reg.30 or 54 + 117.01/02=EC 661/2009

EUROPEAN REGULATORY FRAMEWORK – Mandatory Compliance Tyre Safety & Environment Labelling Requirements Regulation 1222/2009 provides harmonized labelling rules aimed to encourage consumers to purchase tyres with higher standards for rolling noise, fuel efficiency and wet grip (i.e., tyres meeting higher than minimum standards required by Regulation 661/2009) Refers to ISO test methods, except RR alignment is EU specific Applies to passenger car tyres (C1), light commercial vehicle tyres (C2) and heavy vehicle tyres (C3). Others exempt Mandatory from 1 /11/ 2012 for tyres produced from 1 July 2012 Self certification but laboratory alignment for rolling resistance Opportunity for every producer to demonstrate quality of its products – wherever produced

 11% of the tyres tested were found not-compliant REACH: CONTROLS AT POINT OF SALE Private and public authority test programmes have been conducted (2010 & 2011) Test programmes were objective/fair ECHA test campaigns, 94 tyres tested, 59 brands, manufactured in 53 factories in 20 countries Industry test campaigns (2), >200 tyres tested, 84 brands; manufactured in 92 factories in 20 different countries (both EU and non- EU) More than 400 tests/controls were carried out.  11% of the tyres tested were found not-compliant

TYPE APPROVAL: CONTROL ACTIVITIES AT CUSTOMS Non compliant marking Controls by Dogane e Guardia di Finanzia (Italian Customs and Competition authorities)  stopped a container with (motorcycle) tyres imported from a third country: strangely marked and raising doubts about proper homologation (1) With the introduction of environmental and safety standards, both at international and EU level, the industry is continuously responding to the need to adapt products and production processes. The tyre sector is no exception. Over the last few years alone, the EU regulatory landscape for tyres has significantly changed, introducing more stringent requirements for safety, health and environmental purposes, and enhancing information transparency towards consumers. It will not be exaggerated to say that while the EU tyre producers just succeed in making technological adjustments to meet legislation coming into force, they are already confronted with additional new high requirements to become effective in the short to medium term. (2) Under this increasing EU regulatory pressure for a safer and “greener” environment, the European tyre industry has been acting to the best of its efforts to ensure timely and efficient compliance with the norms. This requires a costly, complex and lengthy process for developing, testing and implementing new technologies and substances for the tyre production against tight deadlines. Also, it needs to be kept in mind that these efforts occur on the background of the additional burden generated by the economic and financial crisis, which has hit particularly seriously the automotive industry.   However the producer’s consciousness alone is not a guarantee for proper enforcement of EU regulations and, ultimately for the achievement of the EU vision for a safer and cleaner society. ETRMA members make all necessary efforts to fully comply with current and pending legislation. They wish to see firm guarantees that all the liable economic actors on the EU market will be compliant. Tyres produced in or imported into the EU should be either compliant with all relevant rules or must be removed from the market. National and EU authorities should make all efforts to build and maintain a level playing field in the EU tyre market TA identification number missing or incomplete, or mis-used means that the tyre might not have been homologated. Therefore it should not be allowed to circulate in the EU as its safety is not guaranteed. www.etrma.org

20% of motorcycles were fitted with tyres not- homologated TYPE APPROVAL : ROADSIDE CONTROLS Not - homologated tyres Controls by Italian Traffic Police from 2003 to 2012 More than 70.000 vehicles checked on almost the entire territory of Italy 20% of motorcycles were fitted with tyres not- homologated 10% of passenger vehicles were fitted with tyres not-homologated (1) With the introduction of environmental and safety standards, both at international and EU level, the industry is continuously responding to the need to adapt products and production processes. The tyre sector is no exception. Over the last few years alone, the EU regulatory landscape for tyres has significantly changed, introducing more stringent requirements for safety, health and environmental purposes, and enhancing information transparency towards consumers. It will not be exaggerated to say that while the EU tyre producers just succeed in making technological adjustments to meet legislation coming into force, they are already confronted with additional new high requirements to become effective in the short to medium term. (2) Under this increasing EU regulatory pressure for a safer and “greener” environment, the European tyre industry has been acting to the best of its efforts to ensure timely and efficient compliance with the norms. This requires a costly, complex and lengthy process for developing, testing and implementing new technologies and substances for the tyre production against tight deadlines. Also, it needs to be kept in mind that these efforts occur on the background of the additional burden generated by the economic and financial crisis, which has hit particularly seriously the automotive industry.   However the producer’s consciousness alone is not a guarantee for proper enforcement of EU regulations and, ultimately for the achievement of the EU vision for a safer and cleaner society. ETRMA members make all necessary efforts to fully comply with current and pending legislation. They wish to see firm guarantees that all the liable economic actors on the EU market will be compliant. Tyres produced in or imported into the EU should be either compliant with all relevant rules or must be removed from the market. National and EU authorities should make all efforts to build and maintain a level playing field in the EU tyre market TA identification number missing or incomplete, or mis-used means that the tyre might not have been homologated. Therefore it should not be allowed to circulate in the EU as its safety is not guaranteed. TA identification number missing or incomplete, or mis-used means that the tyre is not homologated and therefore it is not allowed to circulate in the EU and unsafe for road drivers.

LABEL: CONTROLS AT POINT OF SALE Fake labels could be different from that design or the performances may not be corresponding to the grades shown on the label. Controls on the compliance of the label, the documents accompanying it and tests on the tyre are needed to ensure that the labelling scheme is correctly implemented. Tyres that do not deliver on the expectation created by the label are not only a scam for the consumer, but also hurt the whole credibility of the scheme. An Administrative Cooperation for Market Surveillance (ADCO)on Tyres Labelling - ADCO Group on Tyre Labelling was created in June 2012. (1) With the introduction of environmental and safety standards, both at international and EU level, the industry is continuously responding to the need to adapt products and production processes. The tyre sector is no exception. Over the last few years alone, the EU regulatory landscape for tyres has significantly changed, introducing more stringent requirements for safety, health and environmental purposes, and enhancing information transparency towards consumers. It will not be exaggerated to say that while the EU tyre producers just succeed in making technological adjustments to meet legislation coming into force, they are already confronted with additional new high requirements to become effective in the short to medium term. (2) Under this increasing EU regulatory pressure for a safer and “greener” environment, the European tyre industry has been acting to the best of its efforts to ensure timely and efficient compliance with the norms. This requires a costly, complex and lengthy process for developing, testing and implementing new technologies and substances for the tyre production against tight deadlines. Also, it needs to be kept in mind that these efforts occur on the background of the additional burden generated by the economic and financial crisis, which has hit particularly seriously the automotive industry.   However the producer’s consciousness alone is not a guarantee for proper enforcement of EU regulations and, ultimately for the achievement of the EU vision for a safer and cleaner society. ETRMA members make all necessary efforts to fully comply with current and pending legislation. They wish to see firm guarantees that all the liable economic actors on the EU market will be compliant. Tyres produced in or imported into the EU should be either compliant with all relevant rules or must be removed from the market. National and EU authorities should make all efforts to build and maintain a level playing field in the EU tyre market

GENERAL EXPECTATIONS EU continues to maintain high level of safety and environment protection concerning tyres as well as for other sectors and goods (chemicals, workplace H&S), and may continue to get stricter EU industry has had to invest heavily to comply fully with the strict EU standards; expects that all producers wanting to share the EU market will make the same investment to comply with the stricter EU rules Appears that market surveillance and enforcement activities will be strengthened in future This is an opportunity to show product quality in a very competitive international market.

INDUSTRY PROPOSALS Harmonization of minimum level of penalties at EU level to avoid that certain member states become more attractive for non-compliant and unsafe goods. Clear definition of responsibilities amongst various market operators. Specific guidelines to Member States on verification criteria, facilities where to find expertise. Because the testing methods are sophisticated and costly, build a network of testing labs fully recognized and approved at EU level for running compliance test. Measures to ensure cooperation amongst various market surveillance authorities, between these and the customs authorities and between these and customs authorities of third countries. Public-private cooperation for market surveillance as well as earmarking of funding derived from penalties.

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