How will a ban on PFAS impact future fluorspar demand?

News Analysis




How will a ban on PFAS impact future fluorspar demand?

The consultation period on the European Commission’s proposal to completely ban PFAS closes by 2026.

A six-month consultation period ended which drew 5,600 comments and input from 4,400 organisations, companies and individuals, and included “lively meetings” according to those who participated. There is a lot at stake for the fluorine industry, which is gearing up to fight a universal ban in the European Economic Area on per- and poly-fluoroalkyl substances (PFAS) which could come into play as early as 2026. This would include all fluoropolymers and is the broadest restriction on a class of product that has been proposed and submitted since the 1950s in Europe.

The ramifications of the ban could impact a myriad of industries as PFAS are used in an estimated 10,000 different applications from non-stick cookware to weatherproof garments, including the highly geopolitical semiconductor and electric vehicles sectors. PFAS are used because of their properties including water, oil and dirt repellence, electrical and thermal insulation, and their durability under extreme conditions when exposed to temperature, pressure, radiation, and chemicals. However, it is the exceptional durability of PFAS that causes the material to persist and remain intact for decades, or only break down into other persistent PFAS, earning them the environmental impact moniker of ‘forever chemicals’. 

The legislation would also cover fluorinated gases used in refrigerants and air conditioning as well as flame retardants. The proposal was set out in detail in a report published by the European Chemicals Agency (ECHA) in February this year, following the EC PFAS action plan in 2019, and European Green Deal in 2020. According to the report, there were 75,000t of PFAS emitted in Europe in 2020, a figure based on production and uses of PFAS, including waste products.  

There are two proposals put forward. The first is a universal ban which would include the manufacturing of PFAS, placing on the market and additionally the use of PFAS in any other substances such as polytetrafluoroethylene (PTFE) – commonly known as Teflon®. The second proposal is a universal ban with use-specific exemptions where there is no known substitute to transition to. However, even under the second proposal the time given for industry to adapt is limited. If there is an alternative compound or system in development such as with food contact materials, then the industry has five years to meet the universal ban. If no alternative is known, then manufacturers will have 12 years to identify and develop an alternative. For both proposals a maximum concentration limit will be set for fluorine.

Some of the fluorochemicals industry have already started to move away from PFAS-based surfactants, sometimes used as a manufacturing aid for PFAS, which were recognised as a risk to human health or the environment. There is also pushback from industry as many of the fluoropolymers meet the OECD definition of polymers of low concern and they are inert during use and pose no risk to human health or the environment. Comments made to the ECHA also point out that fluoroplastics are relatively expensive and already only used where there are no substitutes available. 

The Semiconductor Industry Association has written several reports on how a ban would affect the industry and would require a total reinvention to find a PFAS-free alternative for photolithography, an important production stage. This comes at a time when the semiconductor industry is in the middle of the Chip Wars, as raw material trade and IP transfer bans are put in place between China and the West. It is likely that the semiconductor industry will be derogated, which will allow PFAS to be used for another 12 years to allow time for a substitute to be found. Other exemptions are likely to be made for implanted medical devices such as pacemakers.

On the other side of the argument for the ban, the OECD definition does include emissions during production or at the end of the polymer life, which could release molecules. Once in the environment, PFAS do not degrade, and they are not recovered from any waste streams. Already there is concern over PFAS pollution in the USA, which is now being reflected in Europe, although the EC proposals go far further at the moment.

The universal nature of the proposed ban would be hugely complex to implement and administer and is likely to change in nature and shape through the committee stage next year. Decisions are anticipated in 2025, with restrictions in place as early as 2026/27 initially targeting household items such as non-stick pans, cosmetics, and food packaging. 

The fluorocarbon market, including fluoropolymers, accounts for 2-3Mtpy of acidspar demand and around two-thirds of the total hydrofluoric acid (HF) market. Already some replacement has been taking place with its market share in HF falling from over 70% a decade ago, but with many of the 10,000 applications for PFAS substitutes are not readily available.

The growth of the HF market – and by extension acidspar demand – is forecast to come from other chemical applications. HF is demand is locked into various parts of the lithium-ion battery supply chain. HF is an essential feedstock for electrolytes and polyvinylidene fluoride (PVDF) used as binders. In addition, HF is used in natural flake graphite processing to produce a spherical graphite material, which has to date captured the majority market share of graphite form used in the Li-ion battery anode.

Acidspar demand in HF chemical applications is forecast to triple by the early 2030s and Project Blue’s base case scenario sees known projects and expansions fall short of demand projections by 2028. However, there are several developments that could hamper some of the demand growth. Not only is the PFAS regulation pointing towards a downside for nearly half of the current acidspar market, but natural graphite via spherical graphite is also facing increasing competition from synthetic graphite, which would lower the forecast for fluorine demand.

In our base-case outlook for fluorocarbons, some growth is expected to return as HFOs replace older fluorocarbons together with growing volumes required to meet the demand from fluoropolymer production (such as PTFE, PVDF and FEP) and fluoroelastomers. Over the next year, a compromise will have to be found between reducing any potential environmental impacts of PFAS in the future and the needs of industry to meet technical requirements in so many different walks of life, including the energy transition.

Even if some demand downside would be realised, acidspar demand via HF is forecast to grow. In the base-case outlook, an additional 9Mt of acidspar supply will be required to meet demand by 2050.