New study predicts lower costs of REACH

A study performed by US academics on behalf of the Nordic
Council of Ministers says REACH will cost around 0.06% of annual
sales revenues to the European chemicals industry.

US researchers from Boston’s Tufts University have released
a new study – “The true costs of REACH” – that
will add fuel to the controversy over the costs and benefits of
REACH. 

Published on 13 October by the Nordic Council of Ministers, the
study says the total direct costs of REACH to Europe’s chemicals
industry would not exceed 4 billion euros over 11 years, or an
annual cost of “around 0.06% of the industry’s sales revenues”. In
its current, less ambitious version, the academics estimate the
direct costs of REACH at 3.5 billion euros. 

Bringing indirect costs into account – those passed on to
‘downstream’ users such as carmakers – the researchers project
total costs “should be no more than 1.5 – 2.3 times the direct
costs”. 

Commenting on their findings, the scientists say “economic
analysis confirms that costs of this magnitude are unlikely to harm
European industry”. They add that the ‘Storm’ scenario put forward
in a previous study by Arthur D. Little for the German chemicals
industry, which implies that total costs are 650 times the direct
costs, show “implausible results, based on numerous errors and
exaggerations”. 

They further argue that, since regulatory requirement will be
eased on small-volume new substances, REACH will help
by “boosting innovation and improving the competitive position
of European producers”. Furthermore, they add that “early action on
environmental hazards will lighten the burden on downstream users
and create substantial savings in areas including worker safety,
waste disposal, remediation and liability claims”. 

All in all, they conclude, “European industry will gain the
competitive advantage of being the first to move towards cleaner
and safer production and use of chemicals”.

Karl Wagner, Director of WWF's DetoX
Campaign said that "exaggerated industry claims about the cost of
chemical law reform have already caused REACH to be considerably
weakened" and called on Council and Parliament to strengthen the
proposal. 

Contacted by EURACTIV, the European Chemical Industry Council
(CEFIC) said it was currently looking at the study
and declined to comment at this stage.

Since it was tabled in October 2003, the Commission proposal for
the Registration, Evaluation and Authorisation of Chemicals (REACH)
has given rise to intense debate about its anticipated costs and
benefits for industry, downstream users and consumers. Impact
studies have diverged widely depending on whether they were coming
from industry, NGOs or the Commission. A definitive impact
assessment is yet to be produced that will reconcile all parties to
the debate. 

The study, performed by two researchers from Boston's Tufts
University, takes two regulatory scenarios into account: 'REACH'
(the current, October 2003 version) and 'REACH Plus', a
strengthened variant which restores some features of a previous
version of the proposal.

The researchers made a distinction between 'existing' substances
- put on the market before 1981 - and 'new' substances which were
introduced afterwards. New substances, they say, "already face
rigorous testing requirements", comparable to or even greater than
those imposed by REACH. For existing substances, the scientists say
testing would require "hundreds, if not thousands, of years" to
complete. One of the benefits or REACH, they argue, is that it
eliminates this distinction, applying the same standards to all
chemicals produced or imported in quantities above one
tonne. 

A working group set up by the Commission is expected to submit a
definitive impact assessment study by the end of 2004

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