For the European chemical industry, the key, golden piece of legislation is REACH: the Registration, Evaluation, Authorisation and Restriction of Chemicals.
It is perhaps the most in-depth statute made by the EU, offering a framework of safety regulation and standards for the production, transportation, sale, and application of chemical substances. It covers complex issues such as public health and environmental concerns, as well as establishing the European Chemicals Agency (ECHA) to administer and update the law.
But only now, thanks to Brexit, is its true importance being felt.
This is because, for the UK’s chemical industry, leaving the EU means not just leaving the customs union and single market, it also means losing access to REACH.
After the Trade and Cooperation Agreement between the EU and the UK was signed in December 2020, Steve Elliot, head of the UK’s Chemical Industry Association (CIA), commented that REACH was ‘conspicuous by its absence’. With the UK Chemical industry directly employing 153,000 British workers and accounting for 9% of UK exports (57% of which is sold to EU members), other chemical industry leaders also questioned the logic of not keeping the UK under REACH’s governance.
REACH ensures that every member of the European chemical industry, as well as those importing products to Europe, knows what standards and classifications a substance must have if it is to make it to market. Without influence over the system, UK chemical leaders are facing an uncertain future.
For Elliot, the single biggest cost concern for both high value, low volume and low value, high volume chemical producers is ‘regulatory continuity’.
Understanding this, the British government has replaced REACH with its own version – UK REACH.
While not exactly identical to the original, it does maintain the same “aims and principles” of:
· the ‘no data, no market’ principle
· the ‘last resort’ principle on animal testing
· access to information for workers
· the precautionary principle over safety
So far, the transition has hardly been noticeable for most chemical companies.
January 1st, 2021 saw the introduction of the Comply with UK REACH IT system, which according to Gabrielle Edwards, the UK’s Department for Environment, Food and Rural Affairs’ Deputy Director for Chemicals, Pesticides and Hazardous Waste, was ‘smooth’ with ‘largely positive feedback’.
Among other things, the system allows chemical companies to:
· transfer EU REACH registration into UK REACH (also known as ‘grandfathering’).
· submit a new registration for a substance.
· submit a downstream user import notification (DUIN) for those planning to import chemicals from the EU.
All of which are essential if chemical suppliers want to maintain access to the British chemicals’ market. Northern Ireland, notably, remains under EU REACH regulation, as well as the single market and customs union.
However, this change comes at a price, as the New York Times reports, “Companies now face the prospect of making voluminous and largely duplicate filings on the chemicals they want to sell in Britain. The fees charged and the work required in reconstructing data on product safety and other matters, which is expected to take several years, could [according to the CIA] eventually add up to £1 billion.”
The costs are high because although the two chemical registers may end up being almost identical, “A company can’t simply cut and paste statements and files that have been previously lodged with the European regulator because, in many cases, the filings are full of commercially sensitive intellectual property belonging to other firms.”
With the British government determined to avoid following EU legislation, UK chemical companies are compelled to register their substances into the new system. With the CIA estimating that the UK chemical industry has already spent £500 million and ten years fulfilling its EU REACH obligations, to start all over again is infuriating many chemical business owners.
It will certainly require a Herculean effort, as The Financial Times estimates that the EU version of REACH contains data on “more than 23,000 unique substances and information from almost 102,000 dossiers.”
Elliott describes the process of replicating the register almost “word for word” as “a pointless use of resources” and a “huge distraction”.
However, with political will from Downing Street determined to take a new path of ‘independence’ and ‘sovereignty’, chemical leaders can only hope that UK REACH provides a return on investment. A chemicals’ register designed for the UK chemicals industry’s needs with the flexibility to be a useful resource to all stakeholders.
In the long-term these goals are possible. As Dr Julian Little, Head of Communications and Public Affairs at Bayer Crop Science, makes clear, “Given that chemical businesses are already subject to a high level of legislation and regulation, they need four things from UK REACH – simplicity, consistency, well-regulated and fairly regulated.”
White elephant or streamlined regulation? Only time will tell.