Working to Modify REACH Proposals

By Sean Milmo, Ink World European Editor | 09.12.05

European ink and chemical manufacturers are adding their input into the European Commission's REACH legislation.

The European Commission is finalizing details of draft legislation on a system for testing the safety of chemicals used in printing inks, coatings and a vast range of other products.

The Commission, the European Union’s executive, has hailed the plan, Registration, Evaluation, Authorisation of Chemicals (REACH), as a major step forward in the protection of people’s health and of the environment. However, ink and other downstream sectors which are customers of chemical makers warn that REACH could have a devastating effect on them.

The European Council of the Paint, Printing Ink and Artists’ Colours Industry (CEPE) has warned that up to 50 percent of the chemicals used by the paint and printing ink industries could disappear from the market.

There will be difficulties with substances which are considered to pose risk. But there will also be problems with chemicals which are not harmful. They may no longer be provided to printing ink and paint manufacturers because no one is prepared to pay for the cost of testing them, CEPE says.

The organization is particularly concerned about the impact on small- and medium-sized makers (SMEs) of ink and coatings who will not be able to afford the extra costs it will generate.

“It will affect SMEs dramatically,” says Jacques Warnon, CEPE’s technical director. “From a practical point of view they will not be able to meet all its requirements because so much paper work will be needed.”

Competition Concerns
CEPE is not alone in its hostility to many aspects of the REACH proposal. A lot of other downstream sectors also feel threatened by the legislation, although the paint and coatings segments are probably proportionately the biggest consumers of chemicals.

The European Chemical Industry Council (CEFIC), to which CEPE and a lot of other downstream sector associations are affiliated, points out that virtually every manufacturing industry depends on chemicals in their activities, especially in the development of innovative products. Hence, it argues, the international competitiveness of the European manufacturing sector is being endangered.

CEFIC argues that without major changes, REACH will precipitate cuts in output and jobs while imports of finished products would rise. “The issue is sustainability and thus specifically the jobs and prosperity of people in Europe,” said Eggert Voscherau, CEFIC president and a senior executive at BASF, Europe’s largest chemicals producer and also one of its biggest ink makers.

Thus, a big alliance is being put together to combat certain parts of the legislation before it is finally approved by the European Parliament and the Council of Ministers, representing the EU member states.

The challenge for CEFIC, CEPE and other downstream organizations will be to persuade most of the EU member countries and the majority of parliament that REACH has to be modified to safeguard jobs and European industry.

The impetus behind REACH comes from demands by politicians, environmentalists, consumers and other groups for the chemical industry to provide safety information on the products it markets.

“Everyday, we are exposed to chemicals in our environment, at work or in our homes,” said Margot Wallstroem, the commission’s environment commissioner, who has been mainly responsible for the new legislation. “However, for many of them, we do not know enough about their risks or long-term effects.”

REACH covers an estimated 30,000 substances with an annual output of more than 1 metric ton. Approximately 80 percent will have to registered with a certain amount of test data provided by manufacturers and users.

The remainder will have to undergo an additional evaluation which may result in restrictions on their use, while some, because of concerns about their potential harm, will have to be granted specific authorization.

The legislation, which has been developed during the last three years, is based on the concept that manufacturers and users of chemicals have a duty to ensure that they do not adversely affect human health or the environment.

CEPE, CEFIC and other organizations support the objectives of the legislation, in particular the need for health and environmental protection and for more transparency in regulations. They argue that the REACH process must be simplified so that greater priority is given to the testing of substances about which there is widespread concern.

CEPE has suggested that initially substances would be subject to a ‘pre-registration’ procedure requiring only basic data. If this shows that a chemical is not hazardous, it would not have to undertake other assessments.

“Too much unnecessary information is being demanded for a lot of chemicals,” said Mr. Warnon. “The REACH system will be too bureaucratic unless it is made less complicated.”

So far the only major concession made by the commission is that certain intermediates and polymers will require less safety data for registration.

At What Price?
However, for the vast majority of chemicals, their producers or users will be obliged to provide information on hazards such as physico-chemical, toxicological and eco-toxicological properties. Thus, health, environmental and exposure assessments will have to be conducted, on the basis of which a risk characterization will have to be made.

The estimated cost of testing a small volume chemical is E100,000 to E150,000 ($120,000 to $170,000), according to CEPE. For a high volume substance the cost could be as high as E1.8 million.

CEFIC calculates that the total costs of testing all the chemicals covered by REACH will be E8 billion. Consultants working for the commission believe that it is more likely to be approximately half that level.

Whatever the final amount, much of the total cost will be carried by chemical manufacturers. But inevitably some downstream users will have to bear part of it, with the biggest burden being placed on producers of printing inks and coatings, which between them use around 10,000 chemicals.

CEPE is worried that many ingredients and additives may be withdrawn by their producers because their small volumes do not justify the costs of tests and assessments.

The onus could then be placed on ink or paint makers to share the cost of registration and testing by setting up consortia specifically for this purpose.

This is an option favored by CEPE. It emphasizes that there would need to be legislation protecting consortia from free-riders who would take advantage of a consortium’s registered product without having helped to fund the cost of testing it. There could also be difficulties with issues like confidentiality and intellectual property.

“There has to be a level playing field which takes into account contributions made to testing costs,” said Mr Warnon. “Information about registered chemicals should also be protected because companies would not want it to be available to their competitors, particularly those outside the EU.”

Another alternative is for the downstream user to register and test a key chemical itself, which could be extremely expensive for an SME. Another option is that a company could try reformulating its ink or coating.

“(Reformulation) is not as easy it may sound,” says CEPE in a position paper on REACH. “It takes years to find a perfect formulation and reformulating a product requires just as much research and, again, costs a lot of money.”

A recent report by Mercer Management Consulting, commissioned by the French chemical industry association (UIC) and the French government, concluded that a large proportion of products in some downstream sectors like paints may have to be abandoned. Approximately 30 percent of industrial paints and 20 percent of decorative paints would have to be reformulated.

Much of the burden of REACH in the ink and coatings sectors would fall on producers in Germany, France, Italy and the U.K., which account for a large proportion of sales and output in those segments. Approximately three quarters of European ink sales by value and a similar proportion of production takes place there.

Two-thirds of chemical manufacture is accumulated in the four states, while another three – Belgium, Spain and Netherlands – account for a further 20 percent.

This concentration of the industry and its major customer sectors within a relatively few countries could be a disadvantage when battling to gain support for changes to REACH among EU governments and parliament.

The strongest backing for the plan is coming from Scandinavian and other countries without large chemical industries but with influential environmental and consumer groups.

CEFIC and its affiliated organizations are seeking to raise awareness about the dangers of REACH among customer segments. CEPE has had some success in alerting the European printing industry to the threats posed by the new legislation.

The chemical industry is pinning a lot of its hopes on an objective agreed by EU leaders in Lisbon three years ago to make the union “the most competitive and knowledge-based economy” in the world by 2010.

The EU governments recently set up a competitiveness council mainly comprising employment and industry ministers with the task of ensuring that new legislation safeguards the competitiveness of European industry.

The REACH legislation will almost certainly have to be supported by this competitiveness council before being approved by EU governments, although it will also have to be backed by environmental ministers as well.

There will be time for the industry and its allies to gather sympathy for its position, as the commission is thought unlikely to complete the final version until the autumn.

The European Parliament and the Council of Ministers could then take more than two years to approve REACH. Some officials in the chemical industry believe there will be opportunity for changes before it arrives on the statute book.