GlobalChem: Regional regulation gathers pace

27 February 2014 11:15 Source:ICIS Chemical Business

As Europe’s Reach regulation enters a new phase, other countries are quickly developing their own chemicals safety frameworks, with some drawing on Reach or following the UN’s GHS packaging and labelling initiative

Across many regions of the globe, countries are accelerating moves towards developing a tougher chemicals regulatory framework. The drive has been led by Europe where the now well-established Reach chemicals policy (for Registration, evaluation, authorisation and restriction of chemicals) has moved into the next phase, covering chemicals produced and imported in amounts between 100 and 1,000 tonnes/year.

Reach is being keenly observed by other governments, such as South Korea, which see it as a reference for their own plans.

 
The Reach regulation is now fully embedded in Europe’s chemical industry, as all larger producers and importers have already put the testing and compliance infrastructure in place to deal with the earlier 2010 deadline for amounts over 1,000 tonnes/year and substances of very high concern (SVHC) as well as the 2013 deadline for 100-1,000 tonnes/year.

The next target date of 2018 applies to chemicals produced at volumes in the 1-100 tonnes/year tonnage band and will impact a whole range of new companies doing business in Europe – producers of specialty materials, many of whom are small- to-medium-sized enterprises (SMEs).

The Finland-based European Chemicals Agency (ECHA) originally estimated that 2018 could involve a significantly higher number of chemicals too – up to 20,000 – though it now believes this could be an overestimate. This compares to 9,030 dossiers and 2,998 substances for the 2013 deadline.

Many of the substances registered in 2013 had already been registered for the higher tonnage 2010 deadline. In these cases, new registrants have had to ask for a letter of access to the lead registrant in the relevant Substance Information Exchange Forum (SIEF). Costs for these registrants were lower because they needed less data. ECHA has acted as the judge in some disputes over fees.

During 2014 ECHA will start initial quality checks on the 2013 dossiers to give companies a chance to improve information before official, more detailed compliance checks.

ECHA says it has now met a regulatory target for performing spot checks on 5% of the dossiers submitted under the first phase of Reach, the 2010 deadline. In all, 69% were found to be non-compliant, which seems a high percentage. However, ECHA points out that around 70% of the checks were targeted on dossiers where concerns had already been flagged up.

The two main reasons for failure were poor information about the identification and composition of the substance, and a lack of justification for not submitting the required studies or missing information in the chemical safety report.

If ECHA is not satisfied with a dossier, it makes a draft decision and the company has 30 days to react to this. Latest figures from ECHA show that out of 781 draft decisions taken by ECHA, most are still in the registrant’s commenting phase. Already 83 draft decisions have been withdrawn because of remedial action by the registrant.

During 2014 ECHA will start working on compliance checks and testing proposals on registrations submitted for the 2013 registration deadline.

EVALUATION UPDATE
Evaluation, authorisation and restriction are the most powerful tools within the Reach process for controlling chemicals produced or sold within the EU area. After the initial registration process, EU member states identify which substances should be further evaluated. These chemicals are substances of some concern, for example for nanotechnology use, potential endocrine disrupters or are suspected of causing some other environmental concern.

Member states can propose other actions instead of restriction or authorisation such as harmonised classification under the EU’s regulation on the classification, labelling and packaging of substances and mixtures – known as CLP. CLP proposes a harmonised system of pictographic labels throughout the EU from 2015. It is the EU’s interpretation of the UN’s Globally Harmonized System of Classification and Labelling of Chemicals (GHS).

Evaluation of substances registered in 2010 is continuing at full speed. For 2012 – the first year – 36 substances were evaluated. In 2013 there were 47 substances selected for evaluation. Member states will have to provide their assessment and a draft decision, if necessary, to ECHA by 20 March 2014.

Around the same date, ECHA plans to publish the updated list for substance evaluation (CoRAP). It will contain about 50 chemicals for 2014 and the annual target is to process at least 50 substances per year.

SVHC are classified as carcinogenic, mutagenic, toxic for reproduction (CMR) or persistent, bioaccumulative and toxic (PBT) or very persistent and very bioaccumulative (vPvB). According to the Commission’s 2020 roadmap, all SVHC substances should be on the candidate list for authorisation by 2020. Whenever a substance moves to the authorisation list, there is a deadline for companies to apply for authorisation of its continued use.

According to Geert Dancet, ECHA’s executive director, for some substances there were no authorisation requests, meaning they must be removed from the EU market. For others, like some phthalates, ECHA has received several applications. The first – from aircraft engine maker Rolls-Royce – was approved in January 2014 and seven others are in the pipeline, all phthalates.

Authorisations can be granted if the applicant shows that the risk from the use of the substance is adequately controlled or that its socioeconomic benefits outweigh the risks and no suitable alternatives are available.

UPDATES TO REACH
Dancet points out that the European Commission’s Reach review of 2013 concluded that Reach does not need to be updated significantly, though it is considering changes to annexes on nanomaterials, with a decision expected this year.

The Commission is also reviewing whether to move from two-generation to one-generation animal testing, following similar moves by the Organisation for Economic Co-operation and Development (OECD). “We have no objection to moving to one-generation testing but this will require amendments to Reach annexes,” says Dancet.

The Commission also has to clarify if more or less testing is required on polymers. There is no timeline for this but the Commission would like to conclude by the end of 2014.

ECHA also has its own five-year strategic plan with several objectives for 2014 including a drive to increase the quality of information in registration documents and other dossiers.

“We’re going to review our compliance check strategy. We achieved the target of 5%… but we’re planning… to verify if there is anything we can do to increase the effectiveness of our selection and evaluation methods,” says Dancet.

Dancet wants to use smarter IT screening to identify the weakest dossiers which need improvement as he believes that targeted, rather than random, checks are more effective.

MESSAGE TO INDUSTRY
Dancet urges the chemical industry to react in time to decision-making and any letters they receive asking for improvement to their dossiers. “Also, we urge industry to analyse now which substances they will need to register in 2018 and start planning. Don’t postpone dossier preparation until the very end.”

Dancet says it is a challenge to keep handling ever-higher volumes of dossiers. “The entire evaluation process on particular substances can take years and we already have more than a thousand such dossiers somewhere in the improvement pipeline – up to 10,000 within a couple of years.”

ECHA, he adds, requires additional tools and ways to handle these volumes with fewer resources. “So we’ll continue to develop IT tools and try to automate wherever possible. We want member states to prioritise the interventions they make where they require changes in the decisions and not to overload the system.”

ECHA’s budget is under pressure as the amount of money coming in from registrations dwindles until the 2018 deadline. The organisation will become more reliant on public funds, having been 100% self-reliant in 2013 when revenues were €89.1m while reserves from the 2010 registration covered a shortfall.

Dancet insists that Reach has had a considerable positive impact on human health. “In terms of risk management, even placing a substance on the candidate list can be enough to see the substance removed from the market. Far fewer CMRs were registered than originally anticipated. The 2010 deadline led to the withdrawal of several hundred CMRs.”

He expects that by 2020 the risk chemicals pose to human health and the environment will be cut still further. He adds: “The impact on industry is important to analyse and the Commission will undertake a further study this year.”

Dancet believes that Reach is a reference standard in chemicals regulation that other countries are examining closely. “ECHA has contact from other authorities asking for practical support and to understand our experience. It is easier to base legislation on hazard rather than risk which means more chemicals will require action and intervention.”

Industry is always in favour of a risk-based approach because this reduces the number of chemicals that require action, he concludes.



ECHA APPOINTS SME AMBASSADOR
Late in 2013, ECHA decided that it needed to improve communications with SMEs globally, especially as the 2018 smaller tonnage deadline approaches in 2018. Andreas Herdina, who is already ECHA’s director of cooperation, has added the role of SME ambassador.

He says the new role has two main elements, inward facing and outward-facing. “Inwardly, my role is to galvanise the attention of colleagues in all processes to the needs and concerns of SMEs. Outwardly, I have to look towards the voices of SMEs which are sometimes difficult to hear, and to make ECHA aware of their concerns.”

Herdina has already attended several meetings where SMEs have voiced their concerns. He adds: “I need to hear more precisely the voices of SMEs on the implementation of Reach.” Key concerns in his view are: disputes on costs of data-sharing in SIEFs, the fact that Reach costs are burdensome on SMEs in general, and disruption to supply chains caused by product withdrawal.


REACH IMPACTS US SMES
In November the Society of Chemical Manufacturers and Affiliates (SOCMA) sent a study on trade barriers for SMEs exporting to Europe to the US International Trade Commission. According to Bill Allmond, SOCMA’s vice president, government and public relations, it identified Reach as the single largest barrier and gave examples such as the compliance, specifically the costs of testing and employing an Only Representative.

“We also wrote to [ECHA’s] Mr Dancet about the lack of compliance resources for SMEs. We estimate it costs around $100,000 per substance to comply and we expect these costs to rise: the 2018 deadline for 1-100 tonnes/year will affect a lot of our members,” says Allmond.

SOCMA suggests that one solution for US SMEs would be to have more accessibility from ECHA during US working hours to help US manufacturers on compliance questions.



NATIONAL GOVERNMENTS PROGRESS REGULATION

China
In China, the world’s largest chemical market, a revised list of hazardous chemicals is being drawn up to replace the current list, which was issued in 2002. All chemicals on this list are subject to the requirements of China’s key law on the management of hazardous chemicals, Decree 591, which also governs safe management throughout the supply chain. Chemicals on the list will need a licence to be produced, used or imported.

Under Order 53, any chemical listed in the hazardous chemicals catalogue, plus any specified by authorities, must be registered by producers and importers. Companies marketing substances with unknown hazards are obliged to provide additional information. Guidance is being revised by authorities for new substance registration and testing.

According to SOCMA, customs is an ongoing problem in China where ports are doing their own hazard testing and issuing different rules on what is classed as hazardous.

South Korea
With an implementation date of 1 January 2015, South Korea is making swift progress towards the implementation of the Registration and Evaluation of Chemicals Act, or “K-Reach”. This legislation follows the processes of Europe’s Reach legislation quite closely.

Unlike existing legislation – the Toxic Chemicals Control Act – K-Reach covers existing chemicals as well as new substances. It requires registration of all new chemicals regardless of volume, unlike the TCCA, which applied a 100 kg/year threshold. It requires annual reporting for all new chemicals and existing chemicals above 1 tonne/year.

More details on the timetable for implementation are now emerging. The first batch of existing substances that will be subject to registration is due to be announced by October 2014, and will total fewer than 500 chemicals. Existing substances subject to registration are due to be announced every three years, and once a batch is announced, manufacturers and importers will have three years to submit their registrations.

Whilst producers and exporters scramble to prepare, the government has agreed plans to help domestic companies, especially SMEs, meet their obligations.

According to SOCMA’s Justine Freisleben, draft decrees from the Ministry of the Environment were expected in early February giving information about threshold limits and registration requirements. “We expect to see a similar timeline structure to Reach based on volumes with high volume and high concern chemicals first. We’re optimistic that there will be simplified requirements for low-volume, new chemicals,” she says.

Southeast Asia
Elsewhere in Asia, some countries are focussing on the implementation of regulation related to the UN’s GHS.

In Malaysia, new regulations on classification, labelling and safety data sheets (CLASS) for hazardous chemicals were published in October 2013. Following the adoption of CLASS, the Department of Environment’s parallel notification system for industrial chemicals, known as the Environmentally Hazardous Substances Notification and Registration Scheme (EHSNR), will move forwards. This covers all substances not governed by other notification or registration schemes in Malaysia.

In Indonesia, guidance is being developed for decree 23/2013, which requires companies to update safety data sheets and labelling for imported and domestically-manufactured substances. These will cover risk management, chemical safety and security, as well classification, labelling and SDSs, based on the GHS approach.

Meanwhile in the Philippines, criteria are being developed to allow new substances to be added to its Priority Chemicals List (PCL), which currently only includes substances in the Philippines Inventory of Chemicals and Chemical Substances (PICCS). The GHS will be implemented in four phases over a six-year period from 2015.

According to SOCMA’s Justine Freisleben, manager of global relations, Taiwan published a new chemical law at the end of November. “The official translation was published in January and our members are reviewing it now. It looks more like Reach than we’d anticipated.”


US ADVOCACY JOHN BAKER LONDON

ACC DEFENDS MEMBER BUSINESS ABROAD
Greg Skelton, senior director for global affairs at the American Chemistry Council, comments that there is a lot of activity at national level right now, particularly in Asia. “South Korea has enacted its own Reach legislation and is now developing how to implement the regulations. Taiwan has its own TSCA-style proposals; in China the government has issued a number of decrees, and in India they are talking about revising its chemical policy.”

One of the goals of ACC in coming years, he notes, will be to monitor these developments and try to influence them so that US producers can export efficiently to global markets. ACC, he adds, recognises that countries regulate for legitimate reasons, but often take differing approaches.

Skelton explains that the ACC supports risk- and science-based systems of chemical regulation and wants it to be replicated around the world. He is encouraged that in the US this approach will be adopted and hopes a reformed US TSCA will serve as an example for the rest of the world.

In Europe, ACC has some concerns that Reach will affect company’s ability to innovate, especially as the thresholds get down to the lowest levels in the next phase of reach implementation. Already some evidence emerging, in the difference between the number of new chemicals being introduced and registered in the US and EU. ACC is interested in looking at this issue more deeply, says Skelton, and ACC is thus working closely with Cefic on Reach

Skelton explains that ACC has a number of ways of influence overseas regulation – through direct approaches to governments, via US government representatives, local US chambers of commerce, and local industry. There are a number of levers we can pull, he says.

“We want to ensure our members can ship product across borders without extra costs. We stress the role and importance of the chemical industry to all other sectors - chemicals is critical to manufacturing development and we will reach out to other manufacturing groups as well to help us see regulations are not onerous.”


TRADE

US-EU TTIP TALKS PROMISE SAVINGS
Since the US and EU began their Transatlantic Trade and Investment Partnership (TTIP) negotiations in July last year, chemical associations on both sides of the Atlantic have been working hard, and in collaboration, to make sure the outcome is beneficial for the chemical sector.

In direct cost savings TTIP has the potential to save the chemical sector some $1.5bn/year if tariffs, already at a comparatively low level, can be eliminated altogether. One-third of this arises from intra-company trade, thus reducing company’s costs of manufacture.

“We don’t want to minimise the tariff element of the TTIP talks,” says Greg Skelton, senior director, global affairs, at the American Chemistry Council (ACC), “there are gains to be made there.” But he believes there are even more important gains to be made in the regulatory arena and it is here that ACC and its European counterpart Cefic have been most active.

The aim, explains Skelton, is to attempt through TTIP to improve the way the two major economic blocks cooperate on chemical policy and regulation, “getting them to interact well and avoid unnecessary duplication.” There is also the opportunity, he says, to maintain high levels of protection for human health and the environment on both sides of the Atlantic.

This does not mean, he adds, that the scope of the talks includes harmonisation of regulations and legislation. This is not on the agenda and, he stresses, the two trade partners will still have sovereignty over their own chemicals policies.

Areas where the TTIP talks may prove beneficial are in information sharing, prioritisation of chemicals testing, enhance scientific cooperation, and improved transparency of the overall regulatory process, aided by regular inter-governmental dialogue and involvement of stakeholders such as the chemical industry.

ACC made its priorities known to US trade officials mid-last year. It estimates that enhanced US-EU regulatory cooperation on chemicals could generate upwards of $2bn of economic output for the US alone. Well worth fighting for as the talks progress through 2014 to a possible conclusion in 2015.

Information in this article was sourced from Chemical Watch http://www.chemicalwatch.com

By Will Beacham