REACH ‘an asset to competitiveness’
9 Jun 2005
The European Commissions proposed chemicals policy, REACH (Registration, Evaluation and Authorisation of Chemicals) will ‘give a push to competitiveness in Europe’, rather than increasing costs for industry, according to Luxembourg’s minister for the environment Lucien Lux.
The minister was speaking at a workshop on REACH organised by Luxembourg’s government, which currently holds the EU presidency.
Lux was reacting to a study carried out by the management consultancy KPMG, which looked at the effect of REACH on the supply chains of the chemical, automobile, flexible packaging, electronics and inorganics (metals, cement, pulp and paper) sectors.
The study did conclude that REACH would not stimulate investment in R&D. However, Lux said, ‘modern regulation of chemical products that focuses on health and environmental protection constitutes less of a brake than an asset for European competitiveness.’
The KPMG report estimates that product costs could increase from 6 to 20% as a result of REACH; but that these are one-off costs, not to be paid every year.
‘If a company wants to pass on these costs to the customer, it has to increase the price of all substances by 20% for one year, or the company might prefer to increase the price by 5% on top of inflation for 5 years.’
It also says that REACH is unlikely to cause delocalisation of production, because of the existing capital investment base and the importance of proximity to customers.
However, it warns, REACH ‘may add to delocalisation pressures, especially for commodities’; and that in global industries, small price changes can lead to shifts in international sourcing of materials.
