05 February 2007 00:00 [Source: ICB]
Reach, Europe's mammoth new chemicals environmental management regime, promises not to hinder business and trade. But will it?
The Reach compromise, which was overwhelmingly supported by the European Parliament and the EU's council of ministers in December last year, sets Europe on a brave new path of chemicals control. But the nature of compromise is that it does not please everyone, and the chemicals industry continues, quite rightly, to worry about the costs of the new rules while environmentalist groups are concerned about their effectiveness.
But the chemicals industry cannot complain too much. It has had the time - and put in the effort - to change what was an unworkable original legislative text.
As a whole, the sector was slow to react to the European Commission's first ideas for a new system of chemicals control. After much wrangling, it has been dealt a mammoth regulation that will take years to implement. Ultimately, though, Reach will become part of the fabric of everyday business life. Indeed, Reach may be the precursor of a global system under which all chemicals have to be registered and sanctioned for use.
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The global reaction to the latest Reach vote is understandable. Chemicals industry opinion in the US and Japan is negative, and the full trade and competition aspects of Reach are not yet widely understood.
The EU says it has aimed to create a regulatory system that does not hinder international trade - and one that does not hurt EU chemicals industry competitiveness either. That position, however, stands to be tested to the full.
European Commission vice president Gunter Verheugen says that Reach will replace 40 separate pieces of current chemicals legislation. So in some respects the EU has set out to simplify its approach to chemicals regulation.
The chemicals industry hardly sees it that way, however. At the post-parliament vote press conference on various aspects of Reach, Verheugen was pointedly asked how small to medium-sized enterprises (SMEs) would cope with the new regulations.
Compliance with Reach will not be easy. The cost of implementing the regulation will hit companies large and small, and SMEs will bear the brunt.
There is already talk of some moving their production out of Europe because of Reach. Product lines have already been withdrawn. This may be a consequence of Reach - on the other hand it may not.
The UK's Chemical Business Association (CBA), which represents smaller producers, has said that Reach is "not fit for purpose."
"MEPs have voted for the 'least worse' solution," says CBA chairman Melvyn Whyte. "SMEs deserved something better than this compromise deal, which serves the needs of politics rather than the sustainable future of one of Europe's most successful industries.
"If Reach was a product manufactured by the European Parliament, it would fail the most basic quality tests."
Such a product would, Whyte adds, "face rejection because it was not user-friendly, and it would not be bought by consumers because it was too expensive."
He has a point.
But the EU, its industry and its citizens need a workable regulatory regime. There is a lot of work to be done to ensure that Reach is made more workable.
The Reach Implementation Projects (RIPs) that are slowly getting to grips with key aspects of the new law will help improve workability. But progress on most RIPs so far appears to have been painfully slow.
The current compromise legislative text includes some major shifts in thinking. The introduction of the "one substance - one registration concept" has, for instance, helped to streamline the law although even this change begs the question of how consortia and indeed the registration process itself will work in practice.
Undoubtedly, the bigger companies in any consortium will make their presence felt. What impact will that have on competition? Registration will be expensive and will be a considerable burden for smaller companies. The registration dossiers may require thousands of data inputs.
Reach success centres on the new chemicals agency in Finland and it is clear that a great deal still needs to be done to ensure its smooth operation.
The registration deadline has already been pushed out by six months. If the regulation comes into effect on 1 June 2007, as expected, pre-registration will last until the end of 2008.
Then the fun begins. The agency needs the staff and the IT infrastructure to be able to deal with many thousands of dossiers. Will it be funded adequately? Will it attract the personnel it needs?
The competent authorities in the EU's 27 member states have a significant part to play in ensuring that industry has a Reach that works, is efficient and cost-effective. The jury is still out on evaluation. Reach will stimulate the search for alternatives to animal testing. Europe cannot sacrifice many thousands of laboratory animals just to sanction some chemicals for use.
Reach will push the boundaries of chemistry, biology and toxicology. Europe will further develop the use of predictive techniques such as quantitative structure activity relationships (QSARs) to inform the regulatory process.
Reach will also look forward in the way it promotes the substitution of chemicals of concern. The big debate of the past few weeks has centred on the Reach authorisation process - although it has encompassed some of the information aspects of the new law.
The European Parliament has pushed hard on substitution. Industry hardly likes the result. Companies will be expected to submit plans for substitution at the time of authorisation. If no alternatives are available, evidence of research into possible alternatives has to be provided.
The industry's position was highlighted by the European business confederation Unice (now known as BusinessEurope) before the Reach vote. Legislators should have taken a more risk-based approach, BusinessEurope says. Its secretary general, Philippe de Buck, warns that the Brussels compromise could undermine the competitiveness of the European chemicals industry.
He criticises the decision to require the submission of a substitution plan for all substances where a suitable alternative exists. The European chemicals industry trade federation, Cefic, calls substitution a totally unnecessary bureaucratic requirement that will hinder innovation and competitiveness in the EU.
If a substance is adequately controlled, the argument goes, then substitution may not be needed, let alone be desirable.
The EU's substitution plans, in particular, could drive product development outside Europe rather than enhance innovation as EU politicians expect.
There is no doubt that the EU's Reach legislation has to be made to work. And companies producing and selling chemicals in Europe have to make sure it does.
Clearly, Reach will put a burden on the chemicals sector. What is less clear are the benefits that firms in the sector and Europe's citizens will gain from the new rules.
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