Companies race to meet EU chemicals legislation deadline

Turbulence ahead

02 June 2009 00:00  [Source: ICB]

Listen to an audio interview with Liisa Rapeli-Likitalo

Chemical companies have a year to register substances under Europe's new Reach legislation. The huge amount of work involved, plus some sizable obstacles, could make it a rough ride

COMPANIES ARE navigating their way through the critical next stage of Reach, the European Union's new chemical legislation. They are creating substance-related forums so they can share data and prepare joint registrations but the vast number of substances that have been preregistered is hampering the process.

There are widespread concerns, particularly among small and medium-sized enterprises (SMEs), about whether it will be possible to meet next year's deadline for registration. Substances produced or imported in quantities of above 1,000 tonnes have to be registered by the end of 2010.

"Everything we touch [in Reach] is turning out to be more complicated than we ever imagined," remarks Liisa Rapeli-Likitalo, manager of the Reach competence center at Finland's Kemira.

"We need more time for the first phase of registrations," she says. "For the most common substances, for which we have considerable risk assessment experience, we can meet the deadline. But we have numerous substances for which we will face difficulties with this timing."

The official deadline for the first phase of registrations is December 1, 2010. But, in practice, companies will need to submit their registrations several months earlier.

"We have this nominal date for registering of December 1, 2010, but in reality, if you look at the proceedings, the lead registrant has to have the dossier in by June or perhaps July of next year," says Dave Buckland, corporate regulatory affairs manager at Netherlands-based AkzoNobel. "They are very tight deadlines that we have to work to."

The process of matching up companies that have preregistered the same substances to create the substance information and exchange forums (SIEFs) commenced earlier this year, following the preregistration deadline at the end of 2008. Through the SIEFs, producers, distributors and importers - the substance preregistrants - are expected to share substance toxicity and other data, and decide on a classification for the substance - whether a skin irritant or a carcinogen, for example.

The high number of substance preregistrations is making communication between SIEF members extremely difficult. The EU had been expecting preregistrations of just 30,000 substances but the European Chemicals Agency (ECHA), which is responsible for running the Reach program, says about 140,000 substances were preregistered. It is estimated that about 55,000 need to be registered by 2010.

"ECHA's error in underestimating the number of preregistrations has resulted in SIEFs which are completely unmanageable and in some cases have 5,000 participants," says Melvyn Whyte, chairman of the Reach task force at the UK's Chemical Business Association (CBA). "The whole situation needs to be urgently addressed, otherwise Reach implementation will just grind to a halt."

The higher-than-expected number of preregistrations not only poses a serious problem for the effective implementation of Reach, but also increases the likelihood that ECHA will be over-funded, according to the CBA, whose members are mainly SMEs. A mechanism is needed to review the Reach fees, particularly given the worsening economic situation, says Whyte.

Communication within the SIEFs has been further complicated by information technology (IT) problems. SIEFReach, an IT platform backed by the European Chemical Industry Council (Cefic) and designed to help communication between SIEF members, has not been functioning correctly, says Rapeli-Likitalo. "The main tool at the moment is email, and our email systems are getting clogged up," she explains.

Cutbacks in companies' travel budgets are also making communications within SIEFs more difficult. "We can't have face-to-face meetings," she says. "Today's business policies don't allow much traveling anymore."

Martin Schneiter, Reach director at US-headquartered Huntsman Advanced Materials, agrees that the size of the workload is overwhelming, particularly for the lead registrants responsible for compiling the data and submitting the registration dossiers for each SIEF. "I think politicians and ECHA have underestimated the workload that needs to be done by next year," he says.

In particular, there is a huge amount of work involved in preparing, for each substance, the robust toxicology summary and use descriptor, which involves asking all downstream customers what they are doing with that substance, Schneiter adds.

FACILITATING THE FACILITATOR
Selection of the SIEF formation facilitator (SFF), which is responsible for initiating the SIEF and encouraging the participants to work together, has also proved problematic. In many cases consultants, rather than companies actively involved in a particular substance, have become the SFF by ticking the appropriate box in the preregistration process.

"Unfortunately, a large number of the SFF roles have been grabbed by consultancies," says Buckland. "Some of the consultants are very active in sending their prices lists out but that's all they are doing."

AkzoNobel currently has the SFF role for about 20 substances and expects to end up with a total of between 100 and 120. "This is much more than we really wanted," says Buckland. "But it's necessary for the SFF to be an active member of the SIEF."

Alongside the SIEFs, companies are also working in voluntary consortia, which generally contain the key producers and were established ahead of the SIEFs.

Work on the consortia is more advanced because of the smaller number of members. "The consortia are probably where things are done," says Schneiter. While a SIEF might have 300 members, a consortium could have just 15, all of which are active, he continues. "The toxicological work has been done by the ones that are today in the market. All the others, such as importers, have nothing to offer here."

The idea is that the key producers reach an agreement through a consortium, and then offer membership of that consortium to the smaller players, explains Buckland. "We are going to try and do as much as possible in consortia."

Within the consortia, participants try to share the work burden. One might look after IT issues, another might look after legal issues and another might take responsibility for creating a portal for the exchange of toxicological data.

The consortia generally stem from preexisting sector groups, says Buckland. For example, AkzoNobel's chelates are covered by a consortia agreement within the chelates sector group, while its quaternary ammonium chloride compounds are covered either by the European Oleochemicals and Allied Products Group (APAG) or the European Committee of Organic Surfactants and their Intermediates (CESIO).

Agreement on working methods within the SIEFs and consortia is also taking longer than expected. The problem, says Buckland, is that there are two standard legal contracts for consortia formation, one from German industry association Verband der Chemischen Industrie (VCI) and one from Cefic. "Some members preferred one version, some members preferred the other and some preferred a hybrid of the two," he says. For the SIEFs, Cefic is still drafting a legal agreement for the SIEF formation, he adds.

Deciding how to share costs within the SIEFs and consortia can also raise problems. "When it comes to actually making the data available, it becomes a question of money," says Rapeli-Likitalo. Companies have realized that they can earn money by sharing their data, and this is likely to complicate the discussions, she adds.

But despite all the hurdles, many remain optimistic that companies will meet the 2010 registration deadline. "Reach is a piece of legislation that the industry can't be seen to fail in," says Buckland. "The credibility of the chemical industry rests upon this. If you don't get your registration, you stop production."

By: Anna Jagger
+44 20 8652 3214

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