REACH said to be hurting European specialty chemicals sector

06 March 2012 21:11  [Source: ICIS news]

BALTIMORE, Maryland (ICIS)--The European REACH programme is inhibiting sales of US specialty chemicals into Europe, subjecting US technology to piracy and smothering chemicals innovation among EU nations, a top US industry official said on Tuesday.

Bill Allmond, vice president for government and public relations for the Society of Chemical Manufacturers and Affiliates (SOCMA), said that the EU REACH programme (registration, evaluation, authorisation and restriction of chemicals) “has created a bar for US specialty chemicals manufacturers selling into Europe”.

Allmond, speaking on the sidelines of the annual GlobalChem regulatory conference, said that reports from specialty chemical producers who belong to SOCMA indicate that the expense of complying with REACH requirements in many cases outweighs the market benefit of selling to Europe.

In addition, he said, those US specialty and batch chemicals producers still in the EU market have encountered a range of problems in dealing with the “only representative” (OR) mandate under REACH.

That REACH mandate requires that US and other foreign chemical producers doing business in the EU operate, for purposes of REACH, through a solitary entity.

“That has created trust issues for some of our member companies,” Allmond said.

“Under REACH requirements, US specialty producers are furnishing technology to EU ORs who may not have your best interests at heart,” he said.

“I suspect there has been some piracy of US technology in this process,” Allmond said, adding that there may be more data available on this issue in 2013.

In addition, said Allmond, with US producers having to deal through the REACH only representatives, the process of US sales to the EU has been slowed.  That delay, he said, has given a competitive advantage to domestic EU specialty chemical producers.

But that regulatory edge might not last long, Allmond indicated.

He said member reports indicate that the regulatory rigours of REACH are smothering domestic EU specialty chemicals innovation and development.

“For one thing, REACH has decreased the amount of money that EU firms have for innovation enterprise,” he said.  “Some EU companies are having to chose between spending on R&D [research and development] versus compliance costs for REACH.”

“This is especially true for batch and specialty chemical producers,” he said, noting that specialty chemical manufacturers typically are smaller companies with far less capital resources than industrial chemicals manufacturers.

Allmond said that REACH compliance costs already are retarding EU chemicals development in a way that indirectly gives an advantage to US specialty innovators in the global marketplace.

He said the impact of REACH on European chemicals R&D is becoming apparent in the relocation to the US of some EU specialty chemical producers.

Cosponsored by SOCMA and the American Chemistry Council (ACC), the GlobalChem conference runs through Wednesday.

By: Joe Kamalick
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