Brussels, 28 Apr 2005
An impact assessment study on the European Commission's proposals for a new chemicals policy, entitled REACH, has found that the companies affected by the proposals would not increase research spending after the directive's introduction.
Under REACH (Registration, Evaluation and Authorisation of CHemicals), enterprises that manufacture or import more than one tonne of a chemical substance per year would be required to register it in a central database. The Commission says that the aims of the proposal are to improve the protection of human health and the environment while maintaining competitiveness and enhancing the innovative capability of the EU chemicals industry.
The study was carried out by consultancy firm KPMG and was monitored by a multi-stakeholder group comprising the European Commission, trade unions and environmental and consumer non-governmental organisations (NGOs). By conducting case studies on the automotive, electronics, flexible packaging and inorganics sectors, KPMG was able to assess the likely impact of REACH in areas such as cost, profit, market share, portfolio, delocalisation, innovation and recycling.
Proponents of the directive had argued that REACH would stimulate innovation. However, 'economic withdrawal' that companies anticipate means that they have no plans to invest in the reformulation or re-engineering of chemicals.
The involvement in registration activities by some companies' research and development (R&D) departments means that some are also predicting a delay in time-to-market.
Another concern raised by companies during the impact assessment process relates to the workability of the exemption, as outlined in the proposals, for product and process-oriented R&D. The stumbling block for the parties concerned is the need to communicate information on a specified R&D project to the proposed European Chemicals Agency.
One area where the directive may have a positive effect on innovation is in polymers. Companies that manufacture part of their substances as polymers have indicated that they will shift research activities to this area.
The automotive sector has warned that the restriction of substances could impact upon innovation to a larger extent if new technology needs to be developed and longer term testing is needed to gain confidence and customer acceptance. This is true at chemical supplier, formulator and downstream user level, according to the report.
A statement from the REACH Alliance, which represents 12 industrial sectors, emphasises its support for the basic aims of the directive, but highlights that the sectors involved have a number of concerns. The Alliance therefore proposes a 'more focused scope' for REACH in order to 'bring it back to what was originally intended'. Recommendations include exempting wastes and secondary raw materials from REACH, and exempting minerals, ores, substances occurring in nature and materials derived from them by mineralogical processes or physical transformation processes.