LONDON (ICIS)--The UK government’s current contingency plans for the chemicals industry regulation in the event of no deal being agreed with the EU on its exit from the 28-country club is unworkable and will cause huge damage to the sector, the Chemical Business Association (CBA) said.
The current plan to transpose EU Reach legislation into UK law in the event of a no-deal Brexit could force UK chemicals companies to go through the cost and expense of Reach registration for a second time, with significant implications for the sector and downstream industries, the trade group said.
Regulatory compliance is key to EU market access, CBA chief Peter Newport said in a letter to the UK's Parliamentary Under Secretary of State for the Environment Therese Coffey.
Converting EU Reach into UK law would necessitate the creation of a registered chemicals database equivalent to that held by the European Chemicals Agency (ECHA), and most UK companies do not own or have access to the necessary data.
Players often pay for a letter of access to owners of the information, often developed in substance information exchange forum (SIEF) consortia, Newport said.
According to ECHA, UK companies were the second-largest contributors of Reach registrations, but the majority of information is still owned by European companies, he added.
Whatever the form of the final UK withdrawal agreement, granting third country representatives access to EU data is a commercial decision for companies and cannot be mandated by the European Commission, meaning that the cost of establishing UK Reach could be heavy.
“In recent meetings, Ministers have appeared indifferent to the further costs faced by chemical firms as a consequence of establishing the proposed UK Reach regime," said the CBA.
"Business simply cannot sustain the additional costs implicit in the Government’s current hard Brexit Reach proposals."
The UK government has set a two-year target to acquire all relevant testing data and studies on chemicals used in the UK, compared to the timeframe of nearly a decade set out by ECHA, which is unlikely to be achieved, and could also drive a significant increase in animal testing, according to Newport.
Associate membership to ECHA or some other model to guarantee compliance with EU law and ensure continued access for UK companies under the current terms is the only workable model, he added.
Preparations by UK-domiciled companies for a hard Brexit in the absence of any clarity on the outcome of government talks is already having an impact on the sector.
“We are aware of member companies who have already established new subsidiaries in EU member states - not just a ‘post box’ presence, but substantive operations involving premises and employees,” Newport said.
“Similarly, we are aware of European-owned chemical companies repatriating products. Both outcomes weaken the UK economy."