April 2006

June 2006

May 2006

April 2006

March 2006

February 2006

January 2006

2005

2004

Comprehensive New European Chemical Legislation Within REACH

“In practice, working with REACH will be a challenge for downstream users, big and small.  The European Commission now has the Herculean task of providing easily accessible guidance, preferably as user-friendly digital tools.  This will be the key to help ensure that this important European chemical legislation will bring positive changes for man and nature.”

Alexander de Roo, Chairman of  PRODUCE

(Piloting REACH on Downstream Use and Communication in Europe)

The European Parliament has reached “political agreement” to proceed with the implementation of new legislation known as “REACH,” the Registration, Evaluation and Authorisation of Chemicals.  This law will require European chemical manufacturers and importers to submit comprehensive information on the properties of the chemicals they produce or import if volumes exceed one ton per year.  These companies must also demonstrate that they are safely handling and using the chemicals.ⁱ    “Rigorous control” by public authorities will be exercised over substances that cause cancer, mutations or fertility problems and those that hinder the development of children or accumulate in the human body or the environment.ⁱⁱ

REACH will create a new European Chemicals Agency based in Helsinki, Finland.  The agency will be responsible for evaluating and authorizing over 30,000 chemical substances that are expected to come within the scope of the legislation.  As “a single system for all chemical substances,”ⁱⁱⁱ  the legislation will replace 40 existing laws relating to the chemical industry.  The provisions in this legislation give increasing authority to the European central government for interpretation of responsible practice in the chemical industry.  

The European Commission (EC) claims that REACH will produce great innovation, replace certain chemicals with safer ones, and promote the introduction of new and safer products.  An “Environment Fact Sheet”^iv published by the EC claims that the long-term health benefits will be $60 billion, while “total costs” to industry and downstream users will be only $3.3 billion to $6.2 billion.  

These estimates are highly controversial.  The benefits assume an arbitrary and directly attributable 10% reduction of chemical-related disease.  Of the methodologies reported, only the weakest approach of three includes, in its range of $5.1 billion to $62 billion, the benefit level forecasted on the Fact Sheet. Another calculation drawn from the same report^v referenced by the fact sheet uses a “more robust” approach and produces a benefit of only $3.3 billion to $10.7 billion.  Even these figures are qualified as “based on a very weak data set.”  A negligible (1%-2%) cost is included for reformulating or developing new chemical replacements for those that will be “withdrawn.”  Furthermore, the cost basis was drawn from the first 11 years of implementation whereas the benefit is extrapolated to cover a 25-30 year window. 

A number of concerns have been voiced by industry, including claims that the legislation is anti-competitive within the global context.  Other criticisms are that it imposes high compliance costs on European downstream users, it mandates potentially unfair disclosure of confidential information, and application among member states may be inconsistent.  Despite acknowledging these concerns, the EC has “not detected any potential problems”^vi and is proceeding “to act quickly and decisively.”^vii  

A European Task force known by the acronym PRODUCE (Piloting REACH on Downstream Use and Communication in Europe) has convened to assess the viability of implementing this legislation.  Comprised of three EC members, four EU member states, chemical suppliers, and chemical users, PRODUCE has concluded “although exceedingly complex and needing various improvements, REACH will be workable for those with sufficient training and experience.”^viii 

This law, as written, does not appear to directly impact the European terminal industry.  However, indirect effects are evident, as PRODUCE has made a series of recommendations for “downstream users.”  These include developing awareness, enhanced communication with suppliers, sharing information and experience, and membership in “Substance Information Exchange Forums”.  There is currently no evident momentum within Congress to extend REACH applicability to the United States.  Yet as has been seen through the migration of ISO quality and environmental standards, precedent does exist for the United States to follow a European lead in environmental matters. 

REACH is expected to become effective during the latter half of 2006.  An 18-month transition period will commence as the European Chemicals Agency assumes its functions.  The agency will become fully operational during 2008.