06 December 2010 00:00 [Source: ICB]
From December 1, all manufacturers and importers of over 1,000 tonnes/year operate illegally, if unregistered
Europe's chemical sector entered a new era on December 1, when Reach finally came into force, with unprecendented levels of regulation for chemical production and imports.
The industry has been preparing for this first deadline for years and coped well with registration as the November 30 deadline for substances manufactured or imported in amounts over 1,000 tonnes/year approached, according to a senior executive at trade group Cefic.
Its members and national associations reported no problems as the deadline approached, Erwin Annys, director for Reach/Chemicals Policy, told ICIS. "There have been quite a few obstacles but looking at the current situation, surprisingly, I don't get any real sense of alarm. There is a feeling that companies have submitted their dossiers in time," said Annys.
"We're confident that the chemical industry will continue to manufacture in Europe from December 1; the substances manufactured here are covered by registration," he added.
However lessons must be learned for the next phase in 2013 when substances over 100 tonnes/year must be registered. This phase could cause more problems as it is likely to affect small and medium-sized enterprises that do not have the resources of larger groups to tackle compliance.
"It will be very important to really evaluate difficulties and find solutions to avoid problems in the second round. It's only two and a half years, and there will probably be more substances with less data available and more smaller companies in the picture. These companies will have less legal and information technology experience," Annys said.
Lessons also need to be learned from the difficulties experienced in communicating down the supply chain, he said. There have been calls for delays to Reach deadlines by downstream manufacturers who fear they will be unable to source raw materials as non-Reach-compliant manufacturers or importers cease business to avoid operating illegally.
"Messages from downstream users are much more alarming. But it is important to remember that this is only the first registration deadline. Many substances will be covered by the 2013 and 2018 deadlines.
LOOKING PAST STOCKPILING
The European Chemicals Agency (ECHA) - which manages Reach implementation - says regulators are searching for a new long-term solution for downstream chemical users whose supply chains are threatened by Reach. ECHA already recommends stockpiling among downstream users who are concerned that they will no longer be able to source raw materials.
Now the directors' group - which includes ECHA, chemical producers, and downstream users - is searching for a more permanent and legal solution to ensure supply chains are not broken.
ECHA executive director Geert Dancet told ICIS that guidance had already been issued to downstream users of imported substances suggesting they could themselves register the substance: "They will [in effect] become new manufacturers so they can start preparing dossiers," he said.
But no solution has been found for European manufacturers relying on a European chemical supplier which ceases production because of a failure to comply with Reach. Dancet said: "We have agreed we must look for solutions. We are the regulator so we must apply the law. We must find a legal solution. It depends on whether we take a straightforward interpretation of the law or [one that is] different but plausible."
He said the issue would be discussed at the next directors' meeting, in January. The European Commission and member states might have to help find or approve any new procedure, Dancet added.
Companies that fail to register by the deadline and continue to produce or market unregistered chemicals in the EU face prosecution and heavy fines. As ICIS Chemical Business went to press, 16,209 substance dossiers had been registered with 22,000 in the system in total. Dancet said he expected around 25,000 registrations by the November 30 deadline, with around 3,000 substances registered.
Although this is less than earlier estimates, Dancet said he was not concerned because industry representatives have told him a number of SIEFs had merged. Some manufacturers have also chosen to register under the 2013 deadline.
WTO GIVES NOD TO REACH
Dancet said he did not believe Reach was a barrier to international trade. "Around 20% of registrations are from 'Only Representatives' from exporting companies. Reach is working for them," he said. Only Representatives work for non-EU chemical suppliers in the Reach process.
There are concerns that Reach could be seen as a trade barrier. Some buyers in Europe are thought to have swapped from international to domestic suppliers to ensure compliance. However, Annys pointed out that the World Trade Organization (WTO) has repeatedly stated the legislation does not breach free trade rules.
"Every step in the development of Reach and every change [to the detail] has been presented to the WTO. It has always said Reach is not a technical barrier to trade," Annys added.
Cefic estimates the average cost of putting a dossier together for substances over 1,000 tonnes/year is €2m-3m ($3m-4m) - but there are examples where costs have spiked to more than €10m when additional work is needed. This includes the total cost of tests, administration, safety reports and management of the SIEF. "To my knowledge no one has stopped production of a substance due to these costs," said Annys.
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