Enterprise Commissioner Erkki Liikanen said: “I believe that we now have arrived at a proposal that strikes the right balance between maintaining growth and employment in Europe on the one hand and improving health and the environment in Europe on the other. Both the chemicals industry itself and Europe's manufacturing sectors that depend on chemicals are key contributors to economic activity in all Member States. Safeguarding their competitiveness is a priority. The mechanisms built into today's proposal are cost-effective and they will enhance the innovative capability of our industry. The proposal will also provide for a stable framework within the internal market and a new independent chemicals agency will help guaranteeing that.”

Environment Commissioner Margot Wallström said: "REACH is a groundbreaking proposal. Once adopted, It will allow us to take advantage of the benefits of chemicals without exposing ourselves and the environment to risks. Thus it will create a win-win situation for industry, workers and citizens, and our ecosystem. It will give Europe's citizens the high level of protection that they have the right to expect. The EU will have one of the most progressive chemicals management systems in the world.”

The REACH system

The proposed Regulation would replace over 40 existing Directives and Regulations. At the core of the proposed system is REACH a single, integrated system for Registration, Evaluation and Authorisation of CHemicals. REACH would require companies that produce and import chemicals to assess the risks arising from their use and to take the necessary measures to manage any risk they identify. This would reverse the burden of proof from public authorities to industry for ensuring the safety of chemicals on the market.

Registration: This is the main element of REACH. Chemicals that were manufactured or imported in quantities of more than one tonne per year and per manufacturer/importer would be registered in a central database. Some groups of substances would not have to be registered (such as certain intermediates, polymers and some chemicals managed under other EU legislation). The registration would include information on properties, uses and safe ways of handling the chemicals. The information required would be proportional to production volumes and the risks that a substance poses. The safety information will be passed down the supply chain, so that those that use chemicals in their own production processes - to produce other products - could do so in a safe and responsible way, without jeopardising the health of workers and consumers and risking damage to the environment.

A new European Chemicals Agency would manage the database, receive the registration dossiers, and be responsible for providing non-confidential information to the public. It is expected that around 80% of all registered substances would require no further action.

Evaluation: There would be two types of evaluation; of dossiers and of substances. Firstly, a dossier evaluation would have to be carried out on all animal testing proposals The main purpose of this compulsory evaluation would be to minimise animal testing. REACH has been designed with the goal of restricting animal testing and costs to industry to the necessary minimum. It would require the sharing of data obtained in tests and encourages the use of alternative sources of information. A dossier evaluation could also be performed to check that the registration was in compliance with the registration requirements.

Secondly, the competent authorities could evaluate any substance where they had justified reasons to suspect that there was a risk to human health or the environment. This would represent a quality and compliance check. The programme of substance evaluations would be based on rolling plans prepared by Member State Competent Authorities. The programme would take account of criteria for setting priorities drawn up by the Agency.

For both types of evaluation, the outcome could be a request for further information. The Agency would take the final decision on requests for further information if all Member States agreed. In case of disagreement, the European Commission would make a decision.

Authorisation: Substances of very high concern would require authorisations for particular uses from the Commission. Substances of very high concern include CMRs, PBTs, vPvBs and substances identified as having serious and irreversible effects to humans and the environment equivalent to the other three categories. If the risks emanating from the use of such a substance could be adequately controlled, authorisation would be granted.

If they could not be adequately controlled, the Commission would look at the level of risk, whether the use of the substance was socially and economically important and if there were substitutes. Based on these factors the Commission would decide whether the substance would be authorised. The Commission would also be able to introduce restrictions at EU level on substances that needed to be managed at an EU-wide level to ensure that the risks they posed were acceptable.

A balanced new system

The proposed new system would set high standards for protection of health and the environment while safeguarding the competitiveness of enterprises and improving the potential for product innovation. This balance would be to the long-term benefit of chemicals manufacturers, importers, users, small and medium sized enterprises, consumers and for health and the environment.

To safeguard the competitiveness and enhance the innovative capability of the chemicals industry in the EU, REACH has been designed to simplify the existing EU regulatory framework for chemicals. The proposed new system would thus focus on:

substances of high concern, including those that are carcinogenic, mutagenic or toxic to reproduction (CMRs), persistent, bio-accumulative and toxic (PBTs) or very persistent and very bio-accumulative (vPvBs)

avoiding unnecessary bureaucracy by only requiring essential safety and use information for chemicals manufactured or imported in volumes of 1-10 tonnes per year

encouraging research and innovation by lengthening the trial period, raising the threshold for the registration of research substances and simplifying the regulation for downstream users

preventing increased bureaucracy for downstream enterprises by utilising existing systems for the exchange of safety information ie Safety Data Sheets (SDS). The SDS is an internationally accepted tool for the communication of information about chemical hazards, risks and risk reduction measures

helping enterprises deliver the objectives of the system at minimum costs.
Innovation

Incentives for research have been built into REACH, which would enhance innovation. The proposed new system would encourage research and innovation by raising the threshold for registration from currently 10 kg to 1 tonne, thus allowing research and development on substances to be carried out below this volume without registration. In addition, the trial period for research and development would be lengthened to up to ten years. This period would be extended by a further 5 years for medicinal products. For downstream users the new system would mean a simplification of the regulation which would make it easier for them to find new innovative uses of substances.

Costs and benefits

The overall costs of the proposal would be substantially reduced compared to earlier estimates. The draft proposal posted on the Internet earlier this year has been thoroughly revised to cut costs and minimise bureaucracy. In the new Impact Assessment, the direct costs of REACH to the chemicals industry are estimated at a total of some € 2.3 billion over an 11 year period representing a saving of 82% costs from the Internet draft.

The costs to downstream users of chemicals are estimated at € 2.8 to 3.6 billion over a period of 11 and 15 years respectively - if the market reacts as expected with 12 per cent of substances being withdrawn because continued production would not be profitable. Costs could rise to € 4.0 to 5.2 billion if industry faced higher supply chain adaptation costs. These estimates include the direct costs passed on from the chemicals sector to downstream users.

The total costs for the chemicals industry and the downstream users are thus estimated to € 2.3 to 5.2 billion.

The anticipated benefits to environment and human health are expected to be significant. An illustrative scenario put the health benefits in the order of magnitude of € 50 billion over a 30-year period.

Consultation

REACH is an example of participatory policymaking. The new system has been drafted in close consultation with all interested parties, and various studies have been conducted to examine the costs and benefits of different options.

In May of this year, the Commission presented a draft of the proposed Regulation on the Internet to gather further comments on the workability of REACH. Some 6,000 replies were sent in. The main contributors were industry associations and individual companies, as well as environmental and animal rights NGOs. A number of Member States also provided comments, alongside several countries outside the EU. In addition, many individuals, including workers, expressed their opinions.

The comments have resulted in important changes to make the proposed new system less costly, less bureaucratic and more workable, while reinforcing the guarantees for health and environmental protection.

Background - problems with the current legislation

The current legislative system for chemicals has been largely unable to identify the risks posed by many chemicals and is slow to act where risks have been established.

The current legislation distinguishes between so-called "existing" and "new" chemicals using 1981 as a cut-off date. "Existing” substances are those that had been introduced before 1981; "new" chemicals are those that have been introduced since.

New chemicals have to be notified and tested in production volumes as low as 10kg per year, while there are no such provisions for existing chemicals. This has encouraged the continued use of "existing", untested substances and inhibited research and development and innovation. The number of new chemicals put on the market since 1981 has reached only around 3,000.

The number of "existing" chemicals in 1981 was 100,106. It has been up to the public authorities to determine whether any of them need to be examined, and if so, to do it. The procedures have been lengthy and cumbersome. For example, since 1993 140 high-volume chemicals have been singled out for risk assessment. Only a very limited number has completed the process so far.