David Bailey / Nov 2022
Comments by Vice-President Šefčovič at last month's European Parliament Plenary on the 2023 Commission Work Programme seemed innocuous enough on first reading; “We will propose a targeted revision of the legislation on the registration, evaluation and authorisation of chemicals (Reach) to promote sustainable chemicals”. Nothing to see here, it seemed.
But the reality is that the European Union looks set to effectively ditch plans to further regulate toxic chemicals, in a move that health and environmental campaigners see as nothing short of betrayal.
Game over for Revised Reach?
Two years ago, the European Commission (EC) announced a far-reaching overhaul of Reach, its framework that regulates dangerous chemicals, as part of its European Green Deal. The Chemicals Strategy for Sustainability aimed to simplify chemical controls and to accelerate checks on potentially dangerous substances.
The roadmap for this was set out in May this year, as a pillar of the EU Green Deal ‘zero pollution’ and was seen as nothing less than a ‘revolution’ for Reach. The proposal – in particular a shift to risk assessment per substance group rather than a case-by-case basis – was initially supposed to be presented before the end of the year, then delayed to next spring, and now to the fourth quarter of 2023 instead.
That decision to postpone again was made last week by Commissioners meeting as the College of European Commissioners. But, with European elections scheduled for 2024, the delayed reform now stands little chance of success during the term of the European Commission President. Effectively it is game over for revised Reach.
Chemical industry lobbying
The European chemical industry has been lobbying heavily for a delay, with the German Chemical Industry Federation (VCI) recently demanding that policymakers stop "slowing us down with ever new, unaffordable requirements" and calling for a "reassessment" of the EU's Reach reforms.
Right of centre parties across the EU picked up these calls at both a national and European levels, culminating in a call by the European Parliament's centre-right European People's Party (EPP) group for a "legislative embargo" on new regulations which "burdening" business.
A key argument by business for delay is over rising energy costs, with firms like BASF embarking on a major cost cutting drive. Critics respond by arguing that the Ukraine invasion and cost of living squeeze have been ‘instrumentalised’ to try to avoid further regulation on chemicals.
Regulatory Ground Hog Day?
Those with long memories will recall a similar process when Reach was first set up 15 years ago. The European chemicals industry threw the proverbial kitchen sink at the proposals, with a major lobbying effort, a quest to come up with numerous loopholes, and an effort to refocus the debate on jobs and competitiveness rather than health and the environment.
The end result was a Reach framework still seen as a genuinely new effort to regulate chemicals, but one full of loopholes and compromises. These are evident today in the time it takes to regulate hazardous chemicals – a situation termed a ‘regulatory log jam.’ The European Commission has itself recognised that Reach is “too slow to sufficiently protect consumers and professional users against risks from the most hazardous substances.”
Yet despite reforms being needed, the European chemicals industry has effectively succeeded in getting reforms kicked into the long grass. It has also succeeded in changing the actual reform agenda.
Indeed, Commissioners last week completely changed the key goals of the reform. Out go strengthened health and environmental protections, faster decision-making, improved legal compliance and support for industry transition towards safer and sustainable chemicals. In comes an agenda of “securing European competitive advantages” and reducing burdens.
UK Chemical Regulation after Brexit
Meanwhile, post Brexit the UK chemicals sector remains alarmed at the uncertainty and costs of the UK’s own regulatory framework beyond EU Reach. A chemicals Annex to the TCA was short and did not secure access for British firms and authorities to the EU Reach database, in turn requiring duplication of work and huge costs to set up a new UK regime (‘UK Reach’). The UK government has been at odds with the British chemical industry on this.
While the government has highlighted possible regulatory divergence as a benefit of Brexit, the industry sees it as a cost as it had already invested heavily to comply with the EU framework. Under EU membership, British firms had spent some £500 million complying with EU Reach which gave market access to 27 countries
A government impact assessment mid-2022 put costs for registering chemicals on the new ‘UK Reach’ database (often duplicating existing registrations with the EU) at between £1.5bn and £3.5bn. This is double previous estimates, and is a reflection of the government accepting that more substances will need to be registered than was previously recognised. A big chunk of the anticipated UK Reach costs relates to UK companies simply buying access to existing data, rather than having to repeat tests to generate the same data.
At the time of writing, it is not clear if the current October 2023 deadline for registering the UK’s chemical supply chain will be met. DEFRA is thought to be exploring an ‘alternative transitional registration model’ to try to reduce the costs of transitioning to UK Reach. What that involves remains unclear as the government has ruled out a ‘Swiss-style’ approach whereby full registration data for chemicals registered in EU Reach are not required. A Swiss approach would reduce duplication costs for industry, but would keep regulations aligned with the EU, which is politically unacceptable to the UK government.
Given that EU Reach reform is needed but has been effectively sidelined, is there a ‘Brexit opportunity’ for the UK in coming up with its own, faster regulatory regime? There may be, but so far the UK has failed to grasp it.