Chemical industry lobbyists have stepped up their criticism of Europe’s REACH chemical safety regulation, branding the law “a monster” that “will devour” the industry’s ability to innovate.
Policymakers should set “tangible” regulatory burden reduction targets to unleash the innovation potential of Europe’s chemical companies, industry body CEFIC said in a statement released today (29 April).
Marco Mensink, CEFIC Director General, said 96% of the association’s 29,000 member companies are SMEs which “face a sometimes complex European patchwork of rules and procedures”.
“CEFIC wishes to ensure that policy-makers and regulators adequately consider impacts on innovation before taking decisions, from investment in new technologies to the marketing of new products and processes in the EU,” Mensink said.
In the industry’s firing line is the REACH regulation, which requires manufacturers to register thousands of chemicals currently on the market and submit them for safety screening and subsequent authorisation.
The initial stages of REACH involved chemicals produced in large quantities – over 1,000 tonnes per year – a process that industry sources admit has been going smoothly enough.
BASF, the German chemical giant, has distanced itself from the rest of the industry by saying Europe's REACH chemical safety law was worth the investment in the end. A review of the legislation is expected this month.
But CEFIC Vice-President Tony Bastcok warned that the worst effects of REACH were still lying ahead for chemicals produced in smaller quantities.
“The biggest deadline for REACH is coming in 2018 when 30,000 compounds will have to be registered,” Bastock said at a CEFIC workshop on Better Regulation Friday, reminding industry participants that REACH was “not done yet” for the bulk of chemical substances.
Bastock complained in particular that chemical companies were now spending more money on regulatory compliance than innovation at a time when Europe was struggling to compete on global markets.
“The burdens that are awaiting us are still there. And yet this monster continues to devour the innovation of Europe. So that’s my comment, I’m afraid: We are not there on REACH and the glass is half empty.”
The European Chemicals Agency (ECHA) expects up to 70,000 chemicals will be registered by the 2018 deadline for substances produced in the smallest quantity band, between 1-100 tonnes per year.
According to the Commission, this is three times more than for either of the previous deadlines, which covered chemicals produced in larger quantities. “Significantly, many more of the registrants are expected to be from companies outside the chemical sector, and there will be more small and medium-sized enterprises (SMEs),” the Commission wrote in a note.
Jean-Eric Paquet, of the European Commission’s General Secretariat, which ensures policy coordination at the EU executive, backed CEFIC’s general objective of reducing the regulatory burden on industry, and SMEs in particular.
Paquet reminded participants about the “fitness check” on chemical legislation currently underway and the related REFIT initiative on REACH, saying it will “focus on cost and burden reduction” in line with the executive’s Better Regulation agenda.
REACH “is indeed a complex set of legislation, which creates a burden on industry – that is clear”, Paquet admitted. In that sense, he said “adjustments” can be made to streamline REACH and preserve the industry’s ability to innovate, which is “particularly important” for the Commission.
But he said the Better Regulation initiative had other policy objectives, which also need to be upheld, including the initial objectives of REACH relating to the protection of human health and the environment.
“And form that point of view, I would certainly not qualify REACH as a monster,” Paquet said.
Paquet’s more measured approach was shared by Gé Linssen, Deputy Director for Innovation at the Ministry of Economic Affairs, Agriculture and Innovation of the Netherlands, which currently holds the rotating EU presidency.
“The Dutch Presidency sees Better Regulation as a very important one in the context of competitiveness, economic growth, jobs, SMEs and so on,” Lindssen told the CEFIC event. “But of course, Better Regulation is not only an economic issue, it also has to do with public goals such as health and environmental protection,” he added, saying the two were not always contradictory.
EU ministers in charge of competitiveness and industry are currently examining the European Commission’s Better Regulation package, tabled in May last year. They are expected to conclude at the Competitiveness Council of 26 May, Lindssen said, describing the Commission proposal as “a very big step forward” towards better law-making at European level.
Better regulation, led by First Vice-President Frans Timmermans, is part of the Juncker Commission’s desire to make EU policy-making “big on the big things and small on the small things”.
As part of the initiative, the European Parliament and national governments are being asked to submit any substantial changes to EU laws back to the Commission where experts will assess the potential cost of the amendments for business.
But the initiative has run into criticism from environmental groups, which called it “a huge power grab” from the Commission that would “give a group of unaccountable persons a huge influence” on decision-making.
The European Commission has denied claims that its plans to introduce expert panels to scrutinise changes to its legislation by the EU Parliament and Council of Ministers are an attempted power grab.
Anneleen Van Bossuyt, a Belgian deputy from the European Conservatives and Reformists (ECR) group in the European Parliament, admitted that Better Regulation had turned into a hot political potato. An own-initiative report she drafted on the topic was only narrowly adopted on 12 April, reflecting deep divisions in Parliament, she said.
“It didn’t go as well as I had expected,” she told the CEFIC event. “I thought Better Regulation was something of common sense but this is apparently lacking in the European Parliament,” she added saying the legislature was divided along clear political lines when the report was submitted to a vote in plenary.
“It was really left against right,” she said. “Contrary to what many think, Better Regulation is not synonymous with removing all regulation,” she claimed, accusing left-wing parties of polarising the debate.
Paquet came out to defend the Commission’s Better Regulation initiative, claiming it was not “just another layer of bureaucracy to kick the can down the road”, but a genuine attempt at improving policy-making and looking at complex evidence.
He also warned industry representatives about the potential costs of Better Regulation, saying legislative review processes “require quite an investment” and additional studies by outside consultants, which do not come cheap.
“I totally agree that within Europe we’re doing too much studies,” Van Bossuyt concurred.
With the adoption of the Better Regulation Agenda on 19th May, the European Commission is taking first concrete steps in the definition of its policy.
Pieter de Pous, Policy Director at the European Environment Bureau (EEB), a green NGO, was not surprised by CEFIC’s attack on REACH, branding it another attempt by the chemical industry to weaken environmental legislation.
This is “more of the same old fact-free proposals from an industry unwilling to do its share to protect citizens from toxic chemicals,” de Pous told EurActiv in emailed comments. “Setting and achieving high environmental standards brings benefits to citizens, our environment and our economy,” which “also entails additional costs to polluting industries,” he said. “A target to reduce those costs to industry will inevitably mean fewer benefits for the rest of society.”
De Pous added that adopting a target to reduce regulatory burden on chemical makers “would send a disastrous political signal to citizens across Europe that their health and well-being comes second to the profit margins of a polluting industry.”
“At a time when Europe is losing support among all publics, EU decision-makers should be focusing on how to bring Europe closer to its citizens and not listening to the tired, out-dated arguments of industry that will not even achieve their stated aim of growth, jobs and innovation.”
Angelika Pullen, communication director at WWF’s EU Office, said Better Regulation has tended to focus on re-assessing the effectiveness of environmental legislation such as the Birds and Habitats Directives, “with a clear mandate to cut red tape for industry”.
But she said other areas like the Common Agriculture Policy (CAP) were also worth looking into. “The CAP was designed to boost food production in Europe after the World War II, but does this still fit with today’s challenges?," she wondered. "And is it coherent with other EU policies, such as on biodiversity and development?,” Pullen added, saying the Better Regulation drive might also provide an opportunity to fundamentally rethink the sustainability of Europe’s food and farming system.
Jean-Claude Juncker, the President of the European Commission, pledged to refocus the EU executive on the bigger political issues of the day and cut regulations seen as unnecessary or hampering business activity.
Juncker appointed his First Vice-President Frans Timmermans to a new role, watching over the subsidiarity principle, whereby the EU should only intervene where it can act more effectively than national or local governments.
The Council of the EU and European Parliament make amendments to draft law. The better regulation strategy calls for substantive amendment to be scrutinised by experts.
- 26 May: Competitiveness Council expected to adopt Better Regulation package
- 2018: Deadline to register substances produced in the smallest bond of quantities, between 1-100 tonnes.
- European Commission: Press release and fact sheet on Better regulation agenda (19 May 2015)
- European Commission: REFIT - Stakeholder suggestions on chemicals (8 Feb. 2016)
- European Parliament: Report - Towards improved single market regulation (12 April 2016)
- CEFIC: Press release and general page on Better Regulation