Reach spells trouble for manufacturing firms

New chemicals legislation could see large numbers of chemicals currently used by manufacturers disappear from the market

European businesses are under-prepared for new chemicals legislation that will take effect in June next year and have consequences for the electronics, textiles, automotive and aeronautical industries.

The Reach (Registration, Evaluation, Authorisation and Restriction of Chemical Substances) directive introduces new environmental and safety standards for chemical manufacturers and importers.

Under the rules, all European companies importing or manufacturing over one tonne of chemicals per annum will have to register the properties of the chemical substances.

Failure to pre-register a chemical substance with the newly appointed European Chemicals Agency (ECHA) by December 2008 will prevent businesses from producing or importing the substance. The legislation is likely to affect over 30,000 chemical substances and carries implications for all European firms, not just chemical manufacturers and importers but also their customers, such as manufacturers of electronic and IT equipment, textiles and engineering products.

Kate Geraghty, principal consultant at green consultancy WSP Environmental, said the new rules could lead to some widely used chemicals disappearing from the market, potentially causing severe disruption for downstream manufacturers. " Reach requires manufacturers and importers to investigate the hazards and manage the risks arising from the chemicals they are selling," she explained. "They will need to decide which chemicals will be supported and which are not."

Geraghty said early preparation is essential if firms are to minimise disruption to their products because Reach will have "broad impacts across a business, through research and development to procurement, and will involve multi-discipline teams working together to comply".

Tim Jessel, commercial director at advisory firm ReachReady, agreed that "downstream users" of chemicals would be affected, with electronic hardware firms likely to be particularly badly hit. Even though a business may not be manufacturing or importing a substance, it will need to make sure its suppliers are Reach-compliant, he added.

Aad van Keulen, vice president for regulation and compliance at Atrion International, a company that provides software for helping firms manage their regulatory compliance efforts, added that businesses need to find out if Reach will be applicable to them, " digest the relevant paper work, seek advice where and when necessary, and 'walk the talk'".

In preparing for Reach, van Keulen advised organisations to first perform a product portfolio analysis, gathering information on what chemicals they buy and how they are used, and then begin organising administrative processes to ensure they can prove compliance with the new legislation. "The mantra for Reach is not only 'no data no market', but also 'the less prepared the higher the cost'," he said.

The number of chemicals removed from the market as a result of Reach is also likely to increase over time. Once registration has taken place, evaluation of the registered chemicals will get underway, with officials committed to phasing out dangerous chemicals when suitable alternatives have been found. Moreover, from autumn 2008, "substances of very high concern" (SVHC) will be included on a candidate list and made available on the ECHA web site.

Geraghty predicted that the SVHCs "will become a de facto red list, used by pressure groups in campaigning against product manufacturers and retailers". " Original equipment manufacturers (OEMs) may therefore want to proactively work to eliminate the likely SVHC chemicals from products in advance to gain competitive advantage," she added.

Greenpeace International toxin campaigner Martin Hojsik said that despite the possibility of some chemicals disappearing from the market, the legislation would have a positive effect for manufacturers because they will gain access to more safety information on chemical products without having to deal with the administrative burden of registering substances that the chemical manufacturers will face.

He added that many firms would also be able to draw on the recent experience of complying with the EU's Restriction on Hazardous Sunbstances (RoHS) directive, arguing that the IT sector in particular "will cope well with Reach because of lessons the industry learned by conforming to RoHS".

However, Geraghty was far less confident about firms' ability to prepare for the new legislation, arguing that RoHS caused plenty of headaches for manufacturing firms and that there were few signs they were better prepared for the far more onerous Reach legislation. "RoHS is a walk in the park compared with the compliance effort required by Reach," she warned.