EU officials seek to make sense of 36 REACH reports

National officials meeting in The Hague have recommended cutting
down the costs of the draft EU chemicals law on businesses while
estimating the long-term benefits for society at “tens of billions”
of euros.

National officials meeting for a workshop in The Hague,
Netherlands, have put forward a series of recommendations and
conclusions based on an overview of the 36 impact studies published
on REACH to date. 

In their conclusions, officials agreed that the costs of REACH
to business – and on SMEs in particular – were too high and needed
to be curbed. To this end, they recommended that the bureaucracy
involved with the implementation of REACH be kept to a minimum.
They also urged for effective co-operation from companies on
implementation and information sharing once the law is passed in
order to avoid unnecessary duplication of tests and keep the
overall costs for industry to a minimum.

The national delegates also calculated the health benefits of
REACH for society at large. Those are estimated to be “at least
tens of billions” of euros with the number of cancer deaths reduced
by “several thousands”, especially among workers exposed to
hazardous substances.

The workshop issued observations and recommendations on four
main items which are summarised below:

Direct costs and benefits: 

  • Costs for the EU-25 are approximately 4 billion euros.
  • Main benefits for businesses include: better health for
    employees exposed to hazardous substances (between €18 and €54
    billion over 30 years); creation of a level playing field for
    European businesses; likely positive effect on innovation in the
    long run (increased R&D expenditure to develop safer
    alternatives). 
  • REACH should be as user-friendly as possible with bureaucracy
    kept to a minimum and tools developed to facilitate businesses to
    comply with REACH.
  • Registration costs should be reduced by enhancing co-operation
    between companies on data sharing and avoid duplications.
  • Costs imposed on downstream users should be reduced by further
    exploring the concepts of ‘use’ and ‘exposure’ categories of
    businesses.
  • Expensive animal testing can be replaced by alternative
    methods, thereby reducing costs.

Indirect costs and benefits: 

  • Downstream users need “early stage clarity” about which
    products or ingredients can be supplied in order to keep indirect
    costs at lowest possible level.
  • Companies who momentarily exceed marketing weight thresholds
    may be hampered in their expansion by heavier reporting
    requirements. Resulting (longer) marketing time needs should be
    minimised in order to avoid competitive disadvantages with the US
    or Asia.

Impact on society: 

  • Benefits to society are “undisputed” but hard to quantify. They
    include reductions in diseases, improved worker safety and
    improvement of biodiversity. These are estimated to be “at
    least  tens of billions of euros” until 2020 (ranging from
    less than €10 and €200 billion depending on conservative or
    optimistic scenarios). 
  • Costs to society are also difficult to estimate. They include
    loss of workplaces, less competitive businesses and price increases
    passed on to consumers. 

Competitiveness and innovation:

  • While REACH should ensure a level playing between companies
    within the EU, European companies selling outside the EU may be at
    a disadvantage compared to international competitors.
  • Certain sectors – SMEs in particular – are expected to be more
    affected than others.
  • Short run innovation may be hampered by new legislation, but in
    the long run REACH may stimulate innovative new products and
    provide a first mover advantage for EU companies on the world
    stage.

The workshop also recognised that some substance groups such as
metals and minerals needed special attention (see EURACTIV,21 October 2004).

Positions

The European Environment Bureau
(EEB), Greenpeace
and WWF said they hoped the workshop will
"lead to a more rational debate on REACH by putting the costs in
the broader context". However, they were critical that the workshop
addressed the need to reduce costs "rather than showing how to
improve its benefits". "It was embarrassing to see that industry
continues to use the flawed and heavily criticised ADL and Mercer
studies," said Michael Warhurst of WWF. "In its desperation to
weaken REACH, the industry lobby doesn't seem concerned about the
accuracy of its information. REACH needs to identify and phase out
the worst chemicals - but CEFIC and UNICE are still resisting
this."

Answering to NGO critics, the European Chemicals
Industry Council
(CEFIC) told EURACTIV it had "no reason
to back off" from the ADL and Mercer studies. CEFIC's Annemaria
Ojanperä said the studies were undertaken by "independent
consultants" and based on a "valid methodology". 

Ojanperä agreed with the workshop conclusions which recommended
that cost effectiveness be maximised. She said industry still
needed to "understand better the mechanisms behind these costs, in
order to be able to identify the options to mitigate the effects".
She pointed to an ongoing business impact assessment undertaken
jointly by the Commission, member states and industry which will
"analyse aspects that have not been covered by the studies before"
(potential impacts of REACH on business throughout the supply
chain, on innovation and on the new Member States).

Opening the workshop on 25 October, the Dutch Minister for
Foreign Trade, Ms Karien van Gennip, said:
"We need our industry. A competitive industry. An innovative
industry. An industry that is not overloaded by administrative
burdens and high costs. But at the same time an industry that might
be one step ahead in chemical substance registration and
environmental innovation. (…) So one step ahead, but not 10.
Environment and industry jobs. It is not either/or, it should be
and, and".

Background

The Dutch Presidency held a workshop from 25 to 27 October to
review the 36 studies published to date on the costs and benefits
of the draft EU chemicals legislations (REACH). The aim was to
bring the results together, review the lessons to be learnt and
make recommendations to fine-tune the draft.

Timeline

  • The results of the workshop will be transmitted to the
    Environment and Competitiveness Councils (via the Ad-hoc council
    working group on chemicals in November and December
    2004).
  • A working group set up by the Commission is expected to produce
    a definitive assessment on the costs and benefits of REACH before
    the end of 2004.

Further Reading