The legal framework for assessing chemicals and deciding what action to take is seen as too slow and public confidence in the chemical industry and its products is low. The European Commission publishes proposals for the overhaul of EU chemicals policy. Alarmed, Cefic says they will create more bureaucracy, slow progress and lead to more ‘arbitrary’ bans on chemicals on the basis of their intrinsic properties. Environmental NGOs give them a cautious welcome, but animal welfare groups say they will increase animal testing.
The year was 2001 and the proposals appeared as the Commission’s white paper on chemicals policy. Later that decade they came into force in the form of the REACH and CLP Regulations. The rest, as they say, is history.
Today we stand at another key point on Europe’s chemicals management journey. A review of REACH two years ago by the Commission said progress was behind expectations and compliance with information requirements by registrants, insufficient. More broadly, the legal framework and assessment procedures for chemicals lacked cohesion and were difficult for companies and authorities to track. Although the chemical industry says REACH is "working" and may even, in some cases, offer European companies competitive advantages, 84% of Europeans remain worried about the impact on their health of chemicals present in everyday products, while 90% are worried about the impact on the environment.
The Commission’s response this time – the chemicals strategy for sustainability – largely builds on existing legislation rather than creating a new Regulation like REACH. But it is no less ambitious and over the next ten years will drive changes in the chemicals marketplace. Here’s why:
1. More substances will be banned from the EU market and the pace at which this happens will quicken
New hazard classes for endocrine disruptors, substances that are persistent, bioaccumulative and toxic (PBTs) and persistent and mobile (P&M) will be added to the EU’s classification framework, as set out in the CLP Regulation. Endocrine disruptors and P&M substances will also be added, alongside PBTs and substances that are carcinogenic, mutagenic or reprotoxic (CMRs), to the list of substance categories that are listed in REACH as automatic candidates for the authorisation process. The Commission will produce a roadmap for REACH restrictions – using a grouping approach – for CMRs, PBTs, immunotoxicants, neurotoxicants and other hazard endpoints, and allow use of the fast-track restriction procedure for all of them – not just for CMRs as at present.
If these mandatory classification categories for EDCs, PBTs and others are included in CLP; if the Commission gains the power to propose mandatory classifications for substances or substance groups; if more types of substances are explicitly listed as qualifying for addition to the candidate list and authorisation, businesses can assume that the rate at which substances become subject to restrictions of some sort will grow.
Firms in downstream sectors will need materials for their products that do not contain such chemicals – and here lies the threat and the opportunity for chemical companies.
Customers in a wide range of sectors, from medical devices to tech, from textiles to cosmetics, and from packaging to building materials, will be looking to their chemical suppliers for reassurance that their supply chains will not be disrupted. They will want to avoid substances likely to face future restriction or authorisation, and they will try and guess which these will be. They will start to think that instead of asking their suppliers to confirm that their materials do not contain any chemicals on their restricted substances list, it would be more efficient to ask them what substances are in the material – in other words, for full material disclosure.
All this will be happening within the wider framework of the Commission's Green Deal and efforts to maintain Europe’s competitiveness in the face of a rapidly growing Chinese economy and cheap fossil fuel energy in the US. Brussels has put its faith in turning ‘Made in Europe’ into a high-value brand for technologies, services and products that will help the region and its export markets slash their GHG emissions and become less reliant on virgin materials, thus improving their security of supply.
Chemical companies should look at their portfolios and decide which returns on investment are now threatened. Should they pay PR firms to defend certain substances for as long as possible and fend off restrictions for as long as they can? Are there some markets where they have alternatives ready to sell or where they can quickly develop new chemistries, for example, by tweaking their existing chemistries and production processes? Do they have competitors that may beat them to it? These are things chemical firms were doing to some extent before the strategy was published, but now they need to do this systematically, thoroughly and quickly.
To minimise exposure to risk, companies should assume that most of the legislative actions included in the strategy’s annex will happen. This may turn out not to be the case, but the strategy – subject to negotiations between several DGs – provides a political mandate for DG Environment to take its goals forward. It is difficult to predict the precise details of the obligations that will be placed on companies, and the powers available to the Commission, national authorities and Echa to ensure compliance, but the direction of travel is clear.
2. Policy implementation will be big, complex and intense
Just as companies in the EU are adapting to their new trading relationship with the UK and the raft of other policy proposals included in the Green Deal, they will need to gear up for the task of tracking the strategy’s more than 50 legislative and non-legislative proposals.
These have all been given ‘indicative timing’ dates falling between now and 2024, so DG Environment’s ambition is to get all its detailed proposals published within three years. A few, such as requirements for the registration of some polymers, have already been under discussion for some time – but most have not. Trade bodies and companies need to ensure they will be poised to take advantage of consultations, including the evaluations and impact assessments that will be conducted on changes to REACH.
The regulatory compliance workload will significantly increase for chemical companies and their immediate customers, and those firms which thought REACH and CLP compliance was largely ‘done’ should think again. Experienced staff will be particularly valuable. The strategy is great news for consultants, testing laboratories and law firms because some businesses will need a lot of help with strategy, data generation and interpretation of their legal obligations.
3. The worlds of chemicals, climate change and the circular economy will interconnect
Although (to the concern of the chemicals sector) the strategy is more vague in this area than in its proposals for a "stronger" legal framework, it is clear that the direction it wants the chemical industry to move in ensures chemicals are not only safer, but also help grow the circular economy and use less energy to manufacture. The concept of "safe and sustainable chemicals", which is shorthand for this, may not be written into legislation but lies behind the strategy’s promises of financial assistance and support for improving the industry’s skills base, especially for SMEs and start-ups.
How policy makers square the circle of competing political goals will be interesting to see. Trade-offs will have to be made in some cases between a chemical’s safe use and its energy intensity or effect on materials recycling. Some of the strategy’s objectives may conflict with others in the Commission’s updated circular economy action plan or 2030 climate target plan. But look out for more references to recycling and energy, in documents such as authorisation Decisions. And in time, such factors will be systematically embedded in legislation for food contact materials and products.
The strategy frames its proposals within the wider goal of ensuring Europe’s chemical industry – and industry more broadly – has a healthy future. "Considering the trends in global chemical production," it says, "this is an opportunity for the EU chemical industry to regain competitiveness by further developing safe and sustainable chemicals and to bring sustainable solutions across sectors, notably for construction materials, textiles, low-carbon mobility, batteries, wind turbines and renewable energy sources." Plotting a successful route through the trade-offs that await will be no mean feat for the EU.