Chemicals group slams EC REACH fees scheme

London -  A  European Commission system of discounts for REACH registration fees will be of "doubtful value" in making the new legislation affordable for small and medium-sized firms (SMEs), according to the Chemical Business Association (CBA). Under the scheme - announced within the EC's charging structure for REACH last week - medium-sized firms qualify for a discount of 30%; small firms 60%; and micro firms 90%.

The Commission's proposals for REACH fees have been heavily criticised by industry groups over recent months. The scale of fees would result in "a lack of trust in the operation of the [registration process] and the legitimacy of its fee structure," European chemical industry group Cefic has warned.

The discounts, which were intended to address such concerns are much less significant than they first appear, according to CBA chairman Melvyn Whyte. This, he said, is because of  the way the EC defines each size-category,  based on thresholds relating to headcount, annual turnover and balance sheet total.

Under the EC's definition: 

- A 'medium' company should have less than 250 employees and an annual turnover of Euro50 million or less and an annual balance sheet total of Euro43 million or less

- A 'small' company should have less than 50 employees and an annual turnover of Euro10 million or less and an annual balance sheet total of Euro10 million or less

- A 'micro' company should have less than 10 employees and an annual turnover of Euro2 million or less and an annual balance sheet total of Euro2 million or less.

“The thresholds contained in the definitions used by the Commission have remained at the level set when they were first announced in May 2003. In the intervening five years, chemicals have been subject to a period of significant price inflation, said Whyte. "For many companies, this has resulted in sharply increasing levels of annual sales. It means that – today – only a very few firms will actually qualify for the 60% and 90% discounts because their turnover will exceed the small and micro thresholds.”

According to Whyte, within the CBA’s own membership,  only 8% of the member companies currently qualify as micro businesses under the Commission’s definition, as compared with 34% which would have qualified in 2005. “We suggest that the definitions thresholds are retrospectively adjusted for price inflation over the last five years. We also suggest that the Commission makes a commitment to further adjustments for inflation throughout the implementation period of REACH – to 2018.”