Chemicals Industries Association warns that a data-sharing deal is necessary to prevent chemicals companies shouldering heavy costs to duplicate their data from the EU's chemicals database to the UK Reach system
The chemicals industry has warned that the laborious process of copying chemical safety registrations from the EU's chemicals database to a new UK-only database could incur more than £1bn in costs for chemicals companies.
Under the current planned arrangements, chemical companies will have two years to submit safety registration for the chemicals they produce and use into the UK's new Registration, Evaluation, Authorisation and Restriction of Chemicals (Reach) system, which the government expects to launch on 1 January 2021, effectively replicating the long-standing EU REACH regime.
But the chief executive of the Chemicals Industries Association (CIA) told the Financial Times today that the process of duplicating registrations already held in the European Chemicals Agency's (ECHA) REACH database could add more than £1bn in costs for UK companies unless a data-sharing deal is secured with Brussels.
With many businesses lacking the data package necessary for registering into the UK REACH system and the data set required for many chemicals data owned by third parties in the EU, the chemicals industry has warned it faces an administrative nightmare and will struggle to meet the planned two-year timetable for registration in the UK REACH database.
The process will also come at a heavy cost to individual companies, according to today's report in the Financial Times. For example, Aylesbury-based Aston Chemicals estimated that the basic cost of registering each chemical would be "about £5,000", with the additional cost of "letters of access" for chemicals varying from £33,000 for an emollient used in face cream to £150,000 for shea butter used as a base for sunscreen.
When questioned about the estimated £1bn cost of moving chemicals data to the UK's new system in March, the government conceded that its own figures were similar to industry expectations. In a debate in the House of Lords, Minister of State Zac Goldsmith noted that "industry estimates are not a million miles away from our own, but we cannot put a precise figure on them at this stage".
There are also concerns that the UK scheme will lack the bureaucratic bandwidth required to manage the new processes. The government has budgeted £13m a year for UK REACH, including up to 50 staff, whereas the ECHA employs 600 people with an annual budget of €110m, the FT revealed.
In a letter to Environment Secretary George Eustice in early June, the chairman of parliamentary select commitee Environmental Audit Committee (EAC) asked the government to reconsider its failure to secure 'associate membership' of the ECHA, a move that would sidestep the need to create a costly copy of the EU REACH database.
No country currently holds associate membership with the ECHA, but the UK's regulatory overlap with the bloc had fuelled speculation that a new form of continued membership could be established once the country left the Customs Union.
Those hopes were dashed, however, in May, when Environment Minister Rebecca Pow wrote in a letter to the EAC that "while the transition to UK REACH will take some adjustment, we believe that the benefits of having control of our own laws outweigh the costs".
And in an EAC hearing in late June, Eustice reiterated that the government would not be seeking any form of associate membership of the EU's chemicals regime. "This government were elected with a very clear mandate to leave the EU and to seek what we describe as a Canada-style free trade agreement - one that does not involve regulatory alignment and it does not involve a role for the European Court of Justice," he said. Any form of associate membership of ECHA "does not really work", he stressed, because of a "red line" where the UK cannot accept the jurisdiction of the ECJ.
The REACH regime is widely regarded as the centrepiece of EU efforts to manage the safe use of hazardous and environmentally damaging chemicals, providing a framework for tracking the use of potentially dangerous chemicals and phasing them out wherever possible.
The government has repeatedly stressed that it will not dilute environmental rules post-Brexit, but green businesses and campaigners remain fearful that standards could be eroded over time through regulatory changes or a failure to adequately fund and enforce new governance systems.
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