Sector News

Big costs, no benefits forecast for UK’s replacement for EU chemical regulation

January 30, 2019
Chemical Value Chain

The government has told all UK businesses that use or manufacture chemicals, to take action to register them in the UK to minimise disruption in the event of a ‘no-deal’ Brexit – a scenario where the country leaves the EU without a transition agreement in place. Chemicals are currently controlled under the EU’s registration, evaluation, authorisation of chemicals regulations (Reach), which controls which chemicals can be used, manufactured or imported in the bloc. But with just two months to go until the UK’s departure date, the chemical industry says the government has done nothing to allay its fears over continuing access to chemicals, given the tight timescales and costs of registering in the UK.

Last November, a highly critical House of Lords report concluded preparations were not up to the task of maintaining adequate chemical regulation. The chair of the Lords energy and environment sub-committee has now said the government’s response to the report was ‘vague and insufficient’ and has asked for reassurances by the end of the week on the measures being put in place. Peter Newport, chief executive of the Chemical Business Association, describes government planning as ‘unworkable and not commercially viable … while government is telling us we’ll just have to cope’.

In a no-deal scenario, companies have 60 or 180 days to register in the UK – depending on whether they are a UK or EU business – and two years to provide the new UK regulator, the Health & Safety Executive (HSE), with all the data that supported their original EU Reach registration.

But companies don’t necessarily own the rights to the data that supported their Reach application, as industry made joint submissions, sharing data and costs. According to industry associations, UK companies hold around 12,000 Reach registrations and have invested over £550 million in the EU system. ‘It’s a balancing game [of] how much to prepare in advance and incur costs,’ says Nishma Patel, chemicals policy director at the Chemical Industries Association.

Companies will have to undertake supply chain mapping. ‘Some companies have knowledge of Reach but there will be others who’ve never had to consider Reach regulation because their supply chain has always covered it,’ says Patel. ‘Where they were just a user, they will now be an importer.’

Who owns the data?
Moreover, finding out who owns the data is not straightforward, as there may be multiple owners. ‘In a UK Reach there is no obligation for EU data holders to share data – it’s at their discretion, and also at their discretion how they value this data,’ according to Neil Hollis, reach coordinator at chemicals giant BASF.

‘There will be a big cost to this – and there’s no alternative for the chemical industry but to bear these costs,’ adds Gill Pagliuca, chair of the Chemical Hazards Communication Society. ‘It will spend many millions to achieve the status quo – with no benefits to safety or the environment, and it will make products more expensive in the UK.’

As a result, industry associations predict a reduction in the number of chemicals available in the UK if, for example, costly safety testing has to be repeated, or where companies are selling such small quantities of chemicals that the cost of registration outweighs sales.

BASF’s own mapping exercise identified some 1100 substances where UK registration will be required to maintain supply chains. Of these, there are 400 where BASF – as a downstream user – doesn’t hold Reach registrations. Based on its experience of Reach, BASF estimates dossier compilation and submission could amount to some £65 million. For industry as a whole, there is little time to absorb the extra costs, compared with the 10-year rollout of Reach.

Defra says a new IT system, being developed to handle registrations, will replicate the EU’s system, and be available from day one after Brexit. Industry, however, has not yet seen the system.

A Defra spokesperson said: ‘We are working to ensure any potential new burdens on UK companies are minimised’ and ‘are already well advanced in our preparations to ensure the HSE and Environment Agency have the resources and mechanisms they need to effectively regulate chemicals’.

By Angeli Mehta

Source: Chemistry World

comments closed

Related News

December 3, 2022

Corteva to acquire Stoller Group for $1.2 billion

Chemical Value Chain

Corteva (Indianapolis, Indiana) says it has signed a definitive agreement to acquire Stoller Group (Houston, Texas), a producer of biostimulants and plant nutrition products, for $1.2 billion. Stoller is one of the largest independent biologicals companies globally, with operations in more than 60 countries and more than $400 million in annual sales.

December 3, 2022

OMV introduces new corporate structure to drive sustainable growth and innovation

Chemical Value Chain

OMV has announced its new corporate structure today, designed to fully enable the delivery of Strategy 2030. The new organization will be built on five distinct areas. In addition to the CEO and CFO areas, three business segments will be established: Chemicals & Materials, Fuels & Feedstock, and Energy.

December 3, 2022

What does the current downturn in industrial manufacturing mean for executives searching for a senior role in the chemicals industry?

Chemical Value Chain

The European petchem sector is readying for some tough quarters. It’s a different picture in the US. So is this the best time ever to find a new role in the chemical industry? If you are in Europe, you would expect me to say probably not. But actually, it depends. So let me give you four answers to this question.