Published May 2003
The European Commission recently unveiled a new policy for registration, evaluation and authorization of chemicals (REACH) that is expected to take effect in 2004. Current EU chemicals policy, in existence for 20 years now, has come to regulate about 3,000 chemicals. REACH will expand that regulation by an order of magnitude, adding another 30,000 chemicals in the coming decade.
So, should we expect to see lots of 'banning battles' such as have been fought over the years about compounds like CFCs, DDT, PCBs and PVC? Perhaps surprisingly, no, because nearly all of the chemicals added under REACH are produced in small quantities, less than 1,000 tonnes per year. It seems more likely that when faced with the costs and headaches of defending a small product under attack, most producers will surrender. Besides, if REACH works according to plan, the attack will be well-organized with firm deadlines.
Actually, the centerpiece of REACH will be exposure testing on an unprecedented scale, paid for by industry. The Commission itself estimates this will cost at least €2 billion and perhaps as much as €6 billion over the coming ten years. That may seem like small change to a European industry with annual revenues of almost €500 billion, but in general, the fixed, one-off cost will not be spread in proportion to revenue. For example, generating test data for a small volume product could cost as much or more than its annual revenue, not to mention profit. This is another ground for surrender (and for attack by opponents of animal testing as well). It seems inevitable that some suppliers will simply withdraw supply of certain chemicals rather than submit to REACH. This will be due to two reasons: 1) profit on the chemical does not justify the expense of putting it through REACH, or 2) the chemical is likely to be restricted, banned or targeted for substitution by REACH. Products most likely to lose the cost-profit comparison are those in the 1-tonne and 100-tonne/year range. The reason the penalties are highest at these points is because these are where economies of scale are at their worst. REACH offers some positives to industry as well, although they are less significant. Regulation of new chemicals will be less onerous and costly than it is now, and some new market space for 'greener' chemicals will be created. Probably the biggest winner will be the testing industry.
This report outlines these impacts of REACH. It also describes what REACH will do, what it will cost and how this differs from current EU chemicals policy.