EU chemical industry Reach fears were unfounded - Spain’s FEIQUE

27 September 2017 12:41 Source:ICIS News

Juan Antonio LabatLONDON (ICIS)--European chemical companies and trade groups alike were wrong about the potential negative consequences that the EU’s chemical regulation Reach could have in the industry, the director general at Spain’s trade group FEIQUE said on Wednesday.

Juan Antonio Labat (pictured) went even further and said the EU’s regulation Reach had helped the industry overall by stopping chemicals produced in less-stringent jurisdictions entering the EU.

Reach came to be the most advanced chemical regulation in the world when rolled out in 2007. FEIQUE’s Labat recognised that studies about its implementation from trade groups overstated the risks and minimised the benefits.

“We published a report stating Spain’s GDP would fall 1.5% as a consequence of Reach. Our French peers estimated the loss of national output would be at 2%. We were wrong, obviously,” said Labat.

“Moreover, Spain’s credit crisis struck soon after [Reach's implementation] and over the last 10 years the chemical industry has grown; we have the same number of companies than at the time, including small companies. Reach did not prove as harmful as we thought.”

Labat’s passionate defence of Reach is, however, uncommon among the chemical industry, with companies tending to complain about the cost of implementing Reach.

In an interview with ICIS on 25 September, the executive director at the EU’s chemical regulator, the European Chemicals Agency (ECHA), demanded from companies and the European trade group Cefic to “proactively engage” with the registrations process before the regulator “takes action”.

“We were wrong [about Reach]. We made fearful calculations about its consequences and, since then, I am not a friend of this type of alarmist studies forecasting doom and gloom: rather than strength, they can show weakness,” said Labat.

He went on to say that Reach had been the “best thing” occurring to European chemicals as of late because, apart from securing a safer use of chemicals, it had also acted as a “barrier” to stop non-Reach compliant chemical producers elsewhere in the world shipping product to Europe.

Specifically, he mentioned chemicals from the US, China and the Middle East.

The outright prohibition to produce and distribute hazardous chemicals is also a normal process, and chemical companies would do well to get over that.

“Not a big deal [prohibiting chemicals]. There are products that simply cannot be in the market as they are harmful to the environment and/or human health. Companies may tell you negative tales about Reach, but, as a trade group, I can say Reach has benefited the industry, on average.”

“The EU has the toughest chemical regulation in the world and that has helped to protect our production in Europe from other competitors in less-advanced jurisdictions.”

Labat said he did not oppose that small amounts of chemicals also need to go under the regulator’s watch. In 2018, Reach establishes that quantities from 1 to 100 tonnes also need to be registered.

Some chemical players in Europe are concerned the 2018 deadline could put some small and medium-size enterprises (SMEs) out of business as they would not be able to face the cost implied by the registration process.

ECHA’s director general told them that, perhaps, the solution would be to rationalise their portfolio and stop producing or importing small amounts of certain chemicals to focus on their strong side of the business.

“I can feel sympathetic when a company tells me that a registration process which would cost €2m is not worthwhile, like in some solvents producers for instance. Although we do ask for proportional costs for SMEs in 2018 – registrations should not have the same costs for small firms as for those registering large amounts,” said Labat.

“Over the last 10 years, we may have seen a few cases of companies withdrawing some products because it was not worthwhile producing it because margins were too small that any other implied costs would make it difficult. However, the number of companies in Spain – large and small – remains at the same levels [than before Reach].”

Interview article by Jonathan Lopez

By Jonathan Lopez