UK chemicals industry faces £1 billion bill to build post-Brexit database

The UK chemicals industry will have to pay again to duplicate research already conducted in the EU. [deepakrit / Pixabay]

The UK is facing a £1 billion bill to replicate the EU’s chemical database after the government opted to leave the bloc’s REACH system on 31 December.

As part of Brexit, the UK has decided to build up its own chemicals database, a process that will take years to complete.

Under the new UK REACH system, registration of chemical data will be staggered over a period of 6 years, starting on 28 October 2021.

The UK’s system “is empty at the moment,” says Simon March, communications director at the UK chemicals industries association.

“This is not a case of copy-paste, as companies will need to review their entire product portfolio, renegotiate data sharing agreements with other companies that have registered the same substance under EU REACH to have permission to use the same data  for UK REACH and then re-submit the dossiers to the new UK Agency,” March told EURACTIV.

The duplication will require huge amounts of money from the chemicals industry, which already paid once for the creation of an existing database set up under the EU’s regulation for the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH).

“Failure to secure access to what has been a decade’s worth of investment by UK chemical businesses in data for EU REACH will leave the industry facing a bill of more than £1 billion in unnecessarily duplicating that work for a new UK regime,” said Steve Elliott, chief executive of the Chemical Industries Association.

Building the new system may require duplicating animal testing, paying for rights to use EU testing data and maintaining a database with less resources for a similar number of chemicals.

According to the Chemicals Business Association, UK firms do not own the testing data needed for registrations under UK REACH. Most of this is owned by European companies and UK firms may need to obtain permission and pay for the extension of the rights to this.

Without this, companies may have to repeat tests, which could involve duplicate animal testing.

“The system will impose considerable new costs on industry and the taxpayer, but in our view, will result in a system that’s weaker and less protective than the EU’s,” said Chloe Alexander, Trade Campaigner at CHEM Trust, a charity based in the UK and Germany.

“It will have fewer staff, a smaller budget, even though it’s not likely to have to regulate significantly fewer chemicals, will not have access to the full chemical safety data held by ECHA and does not have an equivalent transparent structure to provide effective oversight and scrutiny,” she added.

End of data-sharing

Data-sharing between the UK and REACH has ceased, cutting Britain off from the most comprehensive chemicals database in the world. This loss is the biggest concern for UK companies, according to the UK Chemical Industries Association.

“If it just becomes too costly to comply, does it mean they decide to stop registering a percentage of their product portfolio in the UK?” wondered Nishma Patel, policy director at the Chemical Industry Association. “Or if they have a new product coming in and, for example, the cost is exactly the same under EU REACH and UK REACH, do they start choosing markets?”

Chemicals are covered in a short annex to the trade agreement between the UK and the EU, but the UK government’s original objective for data-sharing, which would have avoided resubmitting contracts and shifting data, has not been met.

Instead, the agreement provides for the same kind of cooperation that the EU has with countries like Canada and Japan, according to CHEM Trust. And although there is scope for deeper cooperation and exchanges in the future, nothing is confirmed as yet.

Environmental protection

On the bright side, the agreement does include a “non-regression” clause on environmental protection, meaning neither the UK nor the EU can weaken these requirements. Some UK ministers say they even want to go beyond current EU laws, as the UK chairs the G7 and looks ahead to the UN climate summit at the end of the year.

But when it comes to chemicals, duplicating the EU system will inevitably take time.

“That duplication of registration does put the regime on the backfoot and it doesn’t keep up with some of the pace that’s happening, whether it’s in the EU or whether it’s under any other REACH-like regime across the world,” said Patel.

There are also fears the UK will diverge from European standards and become the “dirty man of Europe” with unscrupulous manufacturers dumping products on the UK market that do not meet EU standards.

Lacking access to chemical safety data may make it difficult for the UK to identify and control hazardous chemicals and to defend these from legal challenges.

According to CHEM Trust’s initial assessment, the new UK system does not provide adequate protection to human health and the environment because the UK is no longer within the EU’s REACH system.

“There is no justification for the UK to reduce protection of UK consumers and environment from hazardous chemicals. Beyond public and industry opinion, the trade agreement will also present problems for any attempt by the UK to become a new dirty man of Europe,” wrote  Michael Warhurst, CHEM Trust’s executive director.

Chemicals trade without tariffs

Perhaps the only good news for the UK and EU chemical industry is that no tariffs or quotas will be applied on trading.

“We shouldn’t underestimate the huge value that this deal brings in terms of certainty for companies to operate in. Certainty that was most needed,” said Marco Mensink, Director General at CEFIC, the EU chemical industry lobby group.

As the UK’s biggest manufacturing exporter, with most products going to Europe, the chemicals industry supported remaining in the European Union during the 2016 referendum. Following the vote, it called for tariffs to be avoided.

However, divergence is a concern for the industry. While the non-regression clause means the UK cannot decrease its environmental protection or climate ambition, it is not bound to mirror the EU’s policy as the European Commission rolls out its new chemicals strategy.

“The UK will have to decide if it follows these new legal developments in the EU from the first day the new trade deal is in place. It is likely the two regulatory regimes will differentiate from the start, which is a concern to all of us,” said Mensink.

[Edited by Frédéric Simon]

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