INSIGHT: Reach is revealing its global credentials

09 March 2007 16:32  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS news)--The costs and the potential burden on industry of the European Union's Reach chemicals control programme are becoming more widely apparent.

Sellers of chemicals in Europe already understand the implications of the mammoth new regulatory process; they are starting to assess the costs.

Farther afield, chemical makers in North America are becoming concerned about the possible introduction of Reach-style laws.

The global shift from primarily risk based chemicals control to a regime centred on the woolly ‘precautionary principle’ is gathering momentum.

Europe’s aims to streamline outdated chemicals legislation and further protect its citizen’s health are laudable but have created a behemoth.

The Reach statute requires that all chemicals sold on EU markets are first registered, then assessed and finally authorised for use.

Reach is huge and will require under best estimates – those of the EU executive and the European Commission – expenditure of €2.3bn by industry over 11 years, the time it will take to embed the new rules.

Industry estimates of the potential cost of Reach have varied enormously, but chemicals giant BASF late last year put its Reach costs at €550m ($724m) over the next 10-12 years.

BP this week in its annual report to shareholders was more direct. It said that the work needed to prepare products for registration under Reach, pre-registration and registration alone would cost it $60m.

Reach applies to all BP’s petroleum products, petrochemicals, lubricants and other chemicals: some 1,000 substances either made by the company or imported into Europe directly or in preparations, but not to oil and gas.

The BP case gives some idea of the extent to which the new chemicals rule will apply across industry.

Of concern to all chemical producers and traders and indeed other manufacturers must be the fact that the Reach word is being spread.

News from the US shows that there were as many as 80 state legislative proposals last year that contained elements of Reach. As many as 150 Reach-like initiatives are expected in 2007.

Confidence in the long-standing Toxic Substances Control Act (TSCA) which has served the US so well is being undermined and pressure for a review of the act is increasing.

Manufacturers risk losing out unless they more firmly address the issues presented by the Reach precautionary principle approach.

“Our industry has a tough job ahead of it,” in dealing with the anticipated spread of local legislation mimicking Reach, American Chemistry Council president Jack Gerard admitted this week. But it goes much further than that.

As the Reach-type approach spreads, the TSCA itself comes under more pressure and Reach begins to look increasingly like a global standard.

As at least one delegate to this week’s industry regulatory conference in Baltimore, Maryland, suggested it might be in the chemical industry’s interest to support appropriate changes to the law.

Manufacturers need to maintain confidence in the sector and demonstrate that companies can manage risk prudently and effectively. If they cannot then the burden placed on them by weighty new toxics controls can only increase.

By: Nigel Davis
+44 20 8652 3214

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