REACH chemical law ‘worth the money in the end’, says BASF

BASF factory.jpg

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.

From the moment it was tabled until its eventual adoption in 2006, the REACH regulation gave rise to one of the most epic lobbying battles in the EU's history.

The bitter campaign saw chemical companies warn they could be forced to close factories and leave Europe because of the extra costs generated by the EU law, which sought to protect consumer health and the environment.

These included widely publicised industry studies which claimed that REACH would cost billions of euros to implement, causing millions of job losses in Germany.

"BASF was possibly the single most important player in influencing politicians and in leading the industry lobby against the environmental and health objectives of REACH," said Jorgo Riss, from the Greenpeace European Unit in a paper recalling the REACH lobbying saga.

BASF U-turn on REACH

Six years on, the European Commission is preparing to launch a review of the controversial legislation.

And BASF has now radically changed its communications strategy.

Ronald Drews, vice president for chemical regulations and trade control at BASF, said the company has recruited 250 employees to prepare registration dossiers for submission to the European Chemicals Agency (ECHA) in Helsinki. Overall, Drews said the company expected to submit around 5,000 REACH dossiers over 10 years, costing the company between €500 million and €550 million, he told journalists at a June Brussels briefing.

"The costs are high," Drews said, citing an average of €50 million per year, which includes registration fees at ECHA, and other costs such as consultancy fees.

But, "I think at the end, it is worth the money", he added in response to a question from EURACTIV on whether REACH had helped promote innovation in the chemicals sector and bring safer products to the market.

Production did not flee Europe

BASF's apparent endorsement of REACH may raise eyebrows among the wider chemicals industry because the cost of implementing the regulation may in fact have been under-estimated. 

An interim evaluation by the European Commission, published in March, indicated that industry has already spent around €2.1 billion on REACH registration dossiers since the legislation was introduced, close to the €2.3 billion it had initially estimated would cost the industry until 2018. (A broader cost estimate could range between €1.1 billion and €4.1 billion, the Commission report added, pointing to a number of caveats in relation to these numbers).

"At this point, we see that costs [are] higher than originally estimated", said James Pieper, a spokesperson for the European Chemical Industry Council (CEFIC). "We expect further on that it will indeed benefit human health and the environment, but it is too early to see any impact on innovation", Pieper told EURACTIV in an emailed statement.

BASF is equally dismissive about earlier industry claims that REACH would force chemical production abroad.

The first phase of REACH dealt with substances produced or imported in large quantities (more than 1,000 tonnes per year). A plant of such production capacity "is not easily transferred to a place out of Europe," Drews explained.

"We have to produce where the market is. So for us, having a big downstream user market in Europe with the car manufacturers and so on, it makes sense to have our chemical production here."

In the long run, factory relocation "may happen in some cases", he said, explaining this could happen for chemicals produced in smaller quantities. "But I don't see a big move out of Europe", he replied when asked about whether industry claims of de-industrialisation had materialised.

CEFIC too admits that the industry's early claims about cost had not materialised but prefers to remain cautious about the future.

"The first deadline did not result in a dramatic situation for industry, but we must have a prudent approach for the upcoming deadlines", Pieper said.

Update: Reacting to EURACTIV's article, a BASF official in Brussels said the REACH legislation, as adopted in 2006 after three years of negotiation, represented "an ambitious compromise".

"BASF welcomed REACH already in 2006 when it was adopted and has not changed its position on REACH since then," said Bernhard Thier, a senior manager for corporate media relations at the company. "In so far it is misleading to speak of a 'U turn' in our communication on REACH," Thier said in emailed comments sent to EURACTIV.

In that respect, Thier assured that BASF's position on REACH "is aligned with the position of CEFIC and the German chemical industry federation, VCI".

Adopted in 2006, the REACH regulation requires chemical manufacturers to register the 100,000 or so substances currently on the market and submit them for safety screening and subsequent authorisation (>> read our LinksDossier).

Those that are considered to pose an unacceptable threat to human health or the environment may be phased out and eventually replaced.

The European Chemicals Agency (ECHA) has published a list of dozens of chemicals considered of Very High Concern to human health or the environment.

The regulation is due for review in 2012, setting the stage for a lobbying offensive by industry groups that say the rules hurt competitiveness, and consumer and health organisations that want stronger measures.

  • 6 Sept. 2012: BASF conference "REACH for success" in Brussels.
  • Sept. 2012: European Commission expected to launch REACH review with a series of reports examining how the regulation has worked so far. It may decide to table a legislative proposal to amend REACH at a later stage.
  • 31 May 2013: Deadline for the second REACH registration for substances manufactured or imported in quantities of 1 to 1,000 tonnes per year per manufacturer
  • June 2018: Third registration phase closes with substances produced in smaller quantities (1-10O tonnes).

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