Keidanren is a comprehensive economic organization composed of approximately 1,700 leading Japanese companies and industry-specific associations. Its members span a wide range of sectors, including manufacturing industries such as chemicals, textiles, electrical and electronic equipment, automobiles, steel, pulp and paper, cement, machinery, and shipbuilding, as well as service industries including electric power, petroleum, mining, gas, and construction. As a result of globalization, our member companies' supply chains cover a wide geographical area, including the EU.

On the occasion of the public consultation^#1 on the draft opinion of the Committee for Socio-Economic Analysis (SEAC) in the deliberations on the proposed PFAS restriction (hereinafter, "the proposed restriction") initiated by the European Chemicals Agency (ECHA) in March of this year, on behalf of the Subcommittee on Environmental Risk Response, the organization within Keidanren responsible for environmental risk policy, we submit the following comments.

PFAS possess various properties not found in other substances, such as heat resistance and chemical stability, and are used as indispensable materials in a wide range of applications, including energy (fuel cells, lithium-ion batteries, etc.), semiconductor manufacturing and automotive parts, industrial machinery, various machinery and equipment, telecommunications, medical care, construction, and consumer products. The socio-economic impact of restricting PFAS would be significant, and we appreciate that, based on opinions submitted in the public consultation conducted in 2023, the validity of the proposed restriction has been examined by use category from a socio-economic perspective, on the basis of proportionality, socio-economic impacts, implementability/enforceability, and substitutability. In light of Article 68(1) of the REACH Regulation, instead of regulating PFAS uniformly, necessary restrictions should be set individually and specifically only for substances for which impacts on human health or the environment are recognized, through risk assessment based on scientific evidence, while taking into account economic and social impacts.

On the other hand, although the current draft SEAC opinion reflects in part the opinions submitted in the public consultation conducted in 2023, it cannot be said that concerns have been fully dispelled regarding the economic and social impacts of imposing inappropriate restrictions beyond what is necessary, and regarding consistency with other policy objectives. Supply chains cannot be simply divided by sector and, as they expand globally, it is necessary to consider consistency with the Agreement on Technical Barriers to Trade (TBT Agreement) and to pay due attention so that restrictions beyond what is necessary do not cause disruption to supply chains or international trade. It is also important to coordinate policies so as not to impede investments that are truly necessary to achieve other important policy objectives, such as strengthening industrial competitiveness (as also pointed out in the Draghi report), the green transition, energy security, and economic security. In addition, there is uncertainty regarding the feasibility and timing of developing and socially implementing substitute substances, and there is a risk that additional burdens beyond what is anticipated may arise in identifying and developing substitutes; thus, consideration is also required to avoid excessively rigid operation.

Taking into account new scientific and technical knowledge, the actual conditions of management practices, quantitative data, and other information to be submitted by industry associations and companies involved with PFAS in this public consultation, we hope that appropriate measures reflecting actual circumstances will be taken so as to minimize socio-economic impacts. In doing so, since the diverse application areas of PFAS are closely interconnected through global supply chains, in order to avoid market disruption, we request that priority be given to considering the option of allowing continued use on the condition of management measures that contribute to minimizing emissions (emission control, reporting, monitoring, etc.) (RO3) from the perspectives of proportionality, socio-economic impacts, implementability/enforceability, substitutability, and monitorability. Furthermore, even after the restrictions come into effect, we request that a framework be established for regularly reviewing the scope and conditions of the regulations based on the latest scientific knowledge and data.