Europe chems ready for May REACH deadline, questions over supply chains - Cefic

Source: ICIS News

2018/02/02

Clarification: Recasts Marco Mensink's title in paragraph 23)

bureaucracyLONDON (ICIS)--Most of the European chemicals industry is prepared and on track to meet the final 31 May deadline for regulatory system REACH, but there is less clarity on the readiness of smaller importers and some downstream supply chains, according to a director at trade body Cefic.

“I think that the vast majority of European-based chemical manufacturing companies will do the job in time, and I expect that all the substances that we as an industry are using are registered,” said Erwin Annys, Cefic’s director for REACH and chemicals policy.

“The only uncertainty is smaller importers, which are  importing chemicals  and selling directly to some dedicated supply chains. In those cases, I have less of an idea of how well-prepared they are… This makes the automotive and aerospace supply chains in particular nervous,” he added.

A member of the European Chemicals Agency (ECHA)’s directors’ contact group (DCG), an informal platform for the European Commission, ECHA and industry groups to trade views on REACH, Annys was among the speakers at ECHA’s stakeholder day earlier this week.

The event was convened earlier than usual in the year, despite the Helsinki winter, due to the rapidly approaching registration deadline for materials produced or marketed in Europe in quantities of 1-10 tonnes.

With the final deadline covering much smaller tonnages than previous hurdles, the number of registrations is expected to dwarf those submitted in 2010 and 2013, with a final total of 60,000 expected for up to 25,000 substances.

The rush predicted over the next few months is such that ECHA was forced to arrange its summit off-site from its headquarters, due to the number of additional staff brought in to assess dossier submissions.

The number of registrations has been higher than expected so far at 15,000 but the number of substances has undercut expectations, according to ECHA representative Mercedes Vinas.

The number of smaller firms registering has also undercut expectations, representing 16% of new registrants, she added.

“We don’t have the absolute figures,” Annys said of the disparity so far. “But are basing our estimates on figures from 2003 in combination with the absolute numbers that we got from the 2010 and 2013 deadlines. To what extent this is really correct no one knows,”

While the industry may be broadly on track, anxiety about the impact of studies and registrations missing the deadline was evident among attendees, with enquiries on the issue dominating audience question sessions throughout the stakeholder day.

Some of the representatives asking questions over the firmness of the deadline worked for Europe’s largest chemicals firms, indicating that deadline worries are not restricted just to smaller firms coming into the REACH dragnet for the first time in 2018.

Deadline concerns indicate that there is more work to do by national authorities and trade groups in communicating with the industry, according to Annys.

“I was really surprised by the number of repeated questions on what to do if studies are not completed in time,” he said.

“This means that communication from industry groups and authorities towards individual companies has clearly not been perfect on the issue, and that is something that we have to tackle in order to reassure companies which are new to this.”

The third ECHA registration period has been characterised by a fear of how the financial and logistical costs of the programme would impact on smaller companies less equipped to take on the burden.

Multiple small company sources over the last year have spoken of discontinuing some product lines because the cost of ECHA registration wipes out the projected profit margin for the product over several years.

Speaking at the stakeholder day, Karin Van de Velde of the REACH Orphan Substances Consortium spoke of how substantial the expenses can be for small firms, and of the additional demands it can place on firms with low managerial headcounts.

“I’ve worked with SMEs for many years, and I’ve seen that they often don’t have registration people in-house. Often it is one of the salespeople or the CEO that is dealing with REACH on top of daily jobs, so not very straightforward to deal with REACH, which is very complicated,” she said.

However, while a 10-person firm is always going to feel the impact of registration more keenly than a multinational, steps have been taken to assist SMEs to comply with the REACH process, and the system as it stands works more often than not, according to Annys.

“I think one of the participants [at the ECHA day] said correctly that probably the majority of the costs that are presented to SMEs have ended up being handled in a decent way,” he said.

“In general, the systems in place have worked in the majority of the cases, and in those cases where it is not, the authorities have been trying to find ways to be of help. I think that, in principle, companies have the tools in hand to correct unjust situations if necessary,” he added.

Cefic has long warned that the European industry, facing less competitive energy, labour and feedstock prices than many competitor regions, should not be left handicapped by REACH.

Growth in the industry has been slower than expected, but it is difficult to attribute that to the ECHA legislation, Annys said, while the REACH framework has continued to grow in influence across the world.

“We have seen the European chemical industry in Europe continuing to grow, albeit at a slower rate than we expected at a certain moment in time. But… we have to be very careful in the analysis of what the underlying causes of that are, and whether REACH was a factor. We saw a comparable slowdown in other parts of the world that were not confronted with REACH legislation.

Cefic director general Marco Mensink has spoken in favour of global enforcement of chemicals safety regulation, and numerous developing countries have adopted standards based at least in part on western standards.

With different local concerns and market dynamics in every country, an a la carte method of assembling chemicals legislation is understandable, according to Annys. However, there is a risk of creating an unmanageable number of different systems that every international company must comply with, that could be alleviated by standardising some architecture.

“We are not asking policymakers elsewhere to copy what we have in Europe in every part of the world, I think every country has a responsibility to look at their local needs,” he said.

“But in doing so there is the danger of creating lots of additional requirements in every country, and harmonisation should be the goal, instead of creating additional burdens for the industry,” he added.

Picture source: WestEnd61/REX/Shutterstock

Interview article by Tom Brown