Chemicals suppliers facing REACH crux
2 Jun 2008
The European Commission has alerted tens of thousands of chemicals manufacturers and importers that they will soon have to pre-register chemicals under the REACH legislation.
The European Commission has alerted tens of thousands of chemicals manufacturers and importers that they will soon have to pre-register chemicals under the REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) legislation. The alert reflects EC concern that many companies are not aware of their obligations or the specific requirements of REACH, especially those suppliers that are not directly involved in the chemicals sector.
Under the radical regulations, manufacturers, formulators and importers of chemicals are required to register all substances with the new European Chemicals Agency (ECHA) to continue marketing their products within the European Union.
A recent BMT Group survey found that many chemicals and oil companies were under-prepared to pre-register their substances, with an estimated 50% of those companies affected by REACH not taking the necessary action to protect themselves. According to BMT, the biggest challenge is in identifying all the substances that require registering under REACH. Particular areas of concern include the calculation of tonnage data for a number of years' trading.
EU-based companies that manufacture or import chemical substances into the EU should pre-register products if the quantities of the substance are one tonne or more per year. They will then benefit from the extended registration deadlines, which apply to most chemicals that are currently on the market, allowing companies to submit their complete registration dossiers by 2010, 2013 or 2018, depending on the case.
Meanwhile, the EC has unveiled its final charging structure for registration under REACH, as well as a system of discounts (see panel, left), which will see medium-sized firms qualify for a reduction of 30%, small firms 60% and micro firms 90%.
European chemical industry group Cefic has described the REACH fees as excessive, while the London-based Chemical Business Association (CBA) has warned that the discounts will be of "doubtful value" for small and medium-sized firms (SMEs). The discounts are much less significant than they first appear, insists CBA chairman Melvyn Whyte. This, he said, is due to the way the EC defines each size-category, based on thresholds relating to headcount, annual turnover and balance sheet total.
According to Whyte, only 8% of CBA member companies qualify as micro businesses under the European Commission's latest definition, compared with 34% that would have qualified in 2005. The definitions thresholds should be retrospectively adjusted for price inflation over the last five years, argues Whyte, who also wants the EC to commit to further adjustments for inflation throughout the implementation period of REACH - to 2018 .
The CBA still believes that the main impact of the REACH regulation will be felt by smaller firms. "SMEs are particularly vulnerable," said Whyte. "They do not have the resources to cope with over-bearing, over-complicated and over-expensive regulation. The key fact is that industry will carry most of the workload for the operation of REACH. The ECHA cannot also expect to impose excessive charges and fees for this privilege."
The EC's discounts definition
- A 'medium' company should have fewer than 250 employees, an annual turnover of Euro50 million or less, and an annual balance sheet total of Euro43 million or less
- A 'small' company should have fewer than 50 employees, an annual turnover of Euro10 million or less, and an annual balance sheet total of Euro10 million or less
- A 'micro' company should have fewer than 10 employees, an annual turnover of Euro2 million or less and an annual balance sheet total of Euro2 million or less.
Under the radical regulations, manufacturers, formulators and importers of chemicals are required to register all substances with the new European Chemicals Agency (ECHA) to continue marketing their products within the European Union.
A recent BMT Group survey found that many chemicals and oil companies were under-prepared to pre-register their substances, with an estimated 50% of those companies affected by REACH not taking the necessary action to protect themselves. According to BMT, the biggest challenge is in identifying all the substances that require registering under REACH. Particular areas of concern include the calculation of tonnage data for a number of years' trading.
EU-based companies that manufacture or import chemical substances into the EU should pre-register products if the quantities of the substance are one tonne or more per year. They will then benefit from the extended registration deadlines, which apply to most chemicals that are currently on the market, allowing companies to submit their complete registration dossiers by 2010, 2013 or 2018, depending on the case.
Meanwhile, the EC has unveiled its final charging structure for registration under REACH, as well as a system of discounts (see panel, left), which will see medium-sized firms qualify for a reduction of 30%, small firms 60% and micro firms 90%.
European chemical industry group Cefic has described the REACH fees as excessive, while the London-based Chemical Business Association (CBA) has warned that the discounts will be of "doubtful value" for small and medium-sized firms (SMEs). The discounts are much less significant than they first appear, insists CBA chairman Melvyn Whyte. This, he said, is due to the way the EC defines each size-category, based on thresholds relating to headcount, annual turnover and balance sheet total.
According to Whyte, only 8% of CBA member companies qualify as micro businesses under the European Commission's latest definition, compared with 34% that would have qualified in 2005. The definitions thresholds should be retrospectively adjusted for price inflation over the last five years, argues Whyte, who also wants the EC to commit to further adjustments for inflation throughout the implementation period of REACH - to 2018 .
The CBA still believes that the main impact of the REACH regulation will be felt by smaller firms. "SMEs are particularly vulnerable," said Whyte. "They do not have the resources to cope with over-bearing, over-complicated and over-expensive regulation. The key fact is that industry will carry most of the workload for the operation of REACH. The ECHA cannot also expect to impose excessive charges and fees for this privilege."
The EC's discounts definition
- A 'medium' company should have fewer than 250 employees, an annual turnover of Euro50 million or less, and an annual balance sheet total of Euro43 million or less
- A 'small' company should have fewer than 50 employees, an annual turnover of Euro10 million or less, and an annual balance sheet total of Euro10 million or less
- A 'micro' company should have fewer than 10 employees, an annual turnover of Euro2 million or less and an annual balance sheet total of Euro2 million or less.
