Økonomisk konsekvensanalyse af blybekendtgørelsen
English summary
The purpose of this project is to evaluate the socio-economic costs for society in connection with the introduction of the Lead Act banning the use of lead in a number of products. The Lead Act was passed in 2000, gradually coming into force from 1 March 2001 and the three following years.
The economic costs for society include:
 | The direct substitution cost for producers and users. These will equal the sum of changes in: |
Production costs Lifetime Quality Working environment, environment and waste treatment Other effects (aesthetic, etc.)
| Costs as a consequence of changed competitive conditions |
| Costs for other groups of society (in this case the State) |
This project does not evaluate the environmental impact due to the Lead Act, and therefore the analysis in this project is one of cost-effectiveness where the costs of attaining a given (but not further evaluated or quantified) environmental impact is analysed.
The Act includes lead in a large number of products. However, the present analysis is limited to the evaluation of the costs of the lead prohibition for the four most affected areas of use. These are:
- Lead for roof flashings
- Lead in fishing tools for commercial fishing
- Lead for coating low tension cables
- Lead as a stabiliser in PVC
In advance it is estimated that the four areas of use together constitute around 90% of the affected lead consumption5 and correspondingly minimum 90% of the total substitution costs.
The substitution costs are estimated as the annual additional cost compared to a scenario where the Lead Order was not proposed and adopted. Because of the development of new and improved alternatives, these costs are likely to diminish over time.
Roof flashings
The total consumption of lead for roof flashings is estimated at 2,700 - 3,500 tonnes a year (1998-2000). This analysis uses an average estimate of 3,100 tonnes.
The Lead Act only includes roof flashings for new buildings, whereas lead for repairs and maintenance is exempted. It is estimated that around 35% of the lead flashings is used for new buildings. This means that the best estimate for reduction of roof flashings as a result of the Lead Act is 1,085 tonnes.
The following relevant alternatives for lead are available at the present time:
| Zinc flashings |
| Form fittings |
| Pleated ductile aluminium flashing |
| Polymer with metal reinforcement |
| Side gutters |
The analysis of the general costs shows that the side gutters and zinc flashings on average are the cheapest alternatives, whereas form fittings generally appear to be the most expensive solution.
The general costs vary from one flashing to another. Therefore the chosen alternative will not always be the one estimated as the cheapest on average.
Based on knowledge about the technical substitution possibilities of the alternatives, the average substitution costs and the variation among these, the analysis provides an estimate of the expected substitution pattern resulting from the Lead Act.
Based on the estimated extra unit costs of the individual alternatives and the substitution pattern, the average substitution costs are estimated to amount to approximately 12 DKK pr. kg substituted lead. The aggregated substitution costs are expected to reach an annual 13 million DKK. On top of this are the possible quality and aesthetic drawbacks. However, these are not quantified.
Fishing tools for commercial fishing
In Denmark the annual consumption of lead for fishing tools is estimated to reach 7006 tonnes. The Lead Act only includes lead used for new products, whereas lead for repairs and maintenance is not included. According to a rough estimate, 80% of the lead consumption is used for new products. The Lead Act is therefore estimated to include approximately 560 tonnes of lead. Fishing tools containing lead can be divided into sinkers, sinking lines and seine ropes.
During the last couple of years work on the development of alternatives to lead in fishing tools has been forthcoming. The work, however, has not yet resulted in any alternatives that possess the same qualities as lead without being considerably more expensive.
Alternatives that seem relevant at this stage are zinc and iron. Zinc seems to be a promising alternative for sinking lines and seine ropes but has certain disadvantages concerning quality and possibly also environmental impacts. Iron in its pure form may be used in sinkers but also has some disadvantages which, however, are hard to quantify. A possible alternative for sinkers would be a cast iron solution which is approximately 25% or 3 DKK pr. kg lead more expensive than the traditional lead solution. For sinking lines and seine ropes a new invention consisting of iron pieces covered with nylon in a special plastic line is a possibility. In terms of quality, the alternative is estimated to be on the same level as the lead solution but production costs are expected to double for seine ropes as well as sinking lines.
The actual substitution pattern for sinking lines and seine ropes is uncertain, as it is not yet known whether zinc is a viable solution. If the zinc solution is accepted the substitution costs will be in the order of 5.5 DKK pr. kg substituted lead. Furthermore there will be a number of readjustments of the production equipment, along with a possible quality deterioration of the tools, which, however, are not quantifiable. If the alternative solution with the iron pieces covered with nylon is used the substitution costs increase to approximately 26 DKK pr. kg substituted lead.
The total substitution costs are therefore estimated to be approximately 2.5 million DKK for the zinc solution for sinking lines and seine ropes and the cast iron solution for sinkers. If the iron pieces covered with nylon are used as an alternative to the zinc solution the total substitution costs will be approximately 9 million DKK per year.
Coating for low tension cables
The Act bans the use of lead in coating for low tension cables in soil. Low tension cables for lakes/open sea and high-tension cables are not included in the ban.
Producers of low tension cables have informed the consultant that lead is no longer used in low tension cables for soil. The substitution took place in the 1990's in a move to further develop the cables, substituting oil/paper insulation with PEX insulation. In connection with this, lead cables were rendered superfluous. The substitution has therefore been a natural part of the development of the industry and therefore not estimated to be a consequence of the Lead Act as such. The substitution costs for this area of use are estimated to be zero.
Stabiliser in PVC
Lead is used as a stabiliser in PVC in a number of products that are exposed to heat and ultraviolet light. The large majority of PVC with lead stabiliser is used in the following products:
| Profiles for windows, doors etc. |
| Pipes |
| Gutters and downpipes |
| Roof sheets |
| Cable insulation |
Based on information from the producers, the total consumption of lead stabiliser in PVC is estimated to be approximately 570 tonnes a year7.
The last couple of years have seen work with calcium-zinc as an alternative to lead, and considerable progress has been achieved within most product groups. The general quality of calcium-zinc is estimated to be as good as lead, but is more expensive than the lead solution. The extra cost depends on the specific use of PVC, but is estimated to be in the interval of 25-50 DKK pr. kg substituted lead. This corresponds to an average of 4-6% of the production costs of PVC. The total substitution costs of this area are 23 million DKK pr. year.
Total economic costs for society
The total direct substitution cost for the producers and users are expected to be approximately 39-45 million DKK pr. year, resulting in the substitution of approximately 2,000 tonnes of lead. Possible non-quantifiable effects should be added to this. The numbers are subject to considerable uncertainty and sensitivity analyses show that costs probably will amount to 26-55 million DKK, considering the uncertainty concerning quantity and unit costs.
Apart from the direct substitution costs the ban also influences the conditions of Danish producers, nationally as well as internationally.
The ban includes import and the sale of lead-containing products for domestic use. Therefore in principle exports are not affected. For Danish producers this means that, on the one hand, they may need a (lead-free) production for the Danish market and another production (containing lead) for the international market, if they want to keep up both national and international sales. In most cases it will be very hard to keep up with the international competition with the more expensive lead-free product. On the other hand, the ban may in some cases result in reduced competition on the Danish market because some of the foreign competitors will withdraw from the market rather than engage in the development of lead-free solutions. This will benefit Danish companies.
In the long run the Danish producers may have an advantage internationally because of the their know-how in this area compared to foreign competitors. On the other hand Danish producers have had proportionally high development costs, which are likely to be lower for their successors.
Finally certain costs for the state are expected in connection with the administration and maintenance of the Act.
| 5 | Miljøstyrelsen (2000b). |
| 6 | Miljøstyrelsen (1999). |
| 7 | Estimated for the years 1998-2000. |