INSIGHT: Now Reach costs really start to rise

28 November 2008 16:44  [Source: ICIS news]

Reach registrationLONDON (ICIS news)--The European Chemicals Agency (ECHA) has not had to resort to its Reach pre-registration fall-back plan yet but said late on Friday that it was prepared to  launch the system on 1 December if needed. (Details can be found on this web site)

The final pre-registrations under the EU’s new chemicals control scheme are pouring in - 2,000 bulk pre-registrations were in the system earlier on Friday. Each could hold as many as 500 separate substance or legal entity pre-registrations.

The number of pre-registrations has topped 2m for 50,000 substances - at the outset the EU was expecting something like 200,000 pre-registrations for 30,000 chemicals.

Reach, the registration, evaluation and authorisation of chemicals scheme, is a behemoth that few in the EU legislature could have imagined.

The pre-registration system - which has been in operations since late June - has struggled under the weight of use. Even the world’s largest chemical company, BASF, said this week that it was having difficulties in the run-up to the 1 December pre-registration deadline.

Companies do not simply have to register substances under Reach. Each of their legal entities operating in or importing into the EU have to have their product base covered by the new rules.

For a large company with many legally separate operations this can be particularly burdensome.

The focus for the past few months, at least as far as Reach is concerned, has been on the difficulties companies have faced in trying to pre-register often large product portfolios.

The Reach IT system was not in operation for the first weeks of the six month pre-registration period.

Organisations such as the UK’s Chemical Business Association (CBA) have called for an extension of the Reach pre-registration deadline to give its members - mainly small to medium sized distributors - sufficient time to access and complete pre-registration using the new system.

Reach IT capacities have been increased significantly, the ECHA says, but its own data give some idea of just how overloaded the system has become.

It has a fallback system that would allow registrants to contact the ECHA with their submissions without having to use Reach IT, but it has not been put into operation yet.

The ECHA cannot move the 1 December deadline as it is enshrined in law. So companies wishing to report cannot do anything other than continue to try to do so. They are going to have to work hard to meet their legal obligations.

But the sector and downstream users of chemicals should not be too focused on this first phase of Reach.

An ongoing series of deadlines will see the EU’s new system of chemicals control really come into its own.

'No registration, no market' applies to any seller or maker of chemicals in the EU. From the start of next month the more important registration phase of Reach begins for products produced or sold in volumes of more than 1,000 tonnes.

Over a two-year period, registration dossiers will be prepared on many chemicals, by large and small groups of producers and others.

Overall this will be a costly process involving registration fees paid to the ECHA, administration, general scientific and toxicology work. Companies will share some data, but not others, and confidentiality at this stage becomes a critical issue.

Simply the fees and charges paid to the ECHA per registration could be as high as €30,000. Following registration comes the evaluation phase of Reach which potentially might involve toxicological testing, including animal testing, on a large scale.

The cost of Reach to chemicals firms will rack up to about €4bn, of which €3bn will be for experimental and toxicological studies, BASF believes.

The chemicals giant expects its Reach costs to peak around 2013 but is seeking to keep those costs down by using whatever expertise it can tap into to derive toxicological data.

For Reach participants the next stages are potentially the most difficult to implement and the most costly.

Pre-registration has been popular, if that is a word that can be applied to this particularly onerous and frustrating process, because it is cheap.

From now on Reach becomes much more costly and more difficult to navigate.

Companies will need advice and ideas on how best to streamline registration processes - through the substance information exchange forums (SIEFs) themselves - and how best to minimise the burdens of toxicological testing.

The Reach process has not been easy to understand or employ to date but is about to get a great deal more difficult.

The running total of Reach pre-registrtions and other data is shown in the ECHA home page
To discuss issues facing the chemical industry go to ICIS connect

By: Nigel Davis
+44 20 8652 3214

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