Brussels, 16/10/2003 (Agence Europe) - The total estimated cost of the future European proposal of legislation on chemical products (the famous REACH system concerning registration, assessment and authorisation of chemical products) aimed at improving health and environmental protection will be EUR 10 million below the first Commission estimates. The Commission announced this on Thursday when publishing the preliminary results of an impact assessment study on this legislative proposal expected by the College of Commissioners on 29 October with a view to submitting it to the Parliament and Council. The study, conducted by an independent consultant, assesses the impact of the REACH system as remoulded by the Commission to reduce the cost for industry and lighten the bureaucratic burden that is considered excessive by the European chemicals industry (CEFIC) and by Messrs Schröder, Chirac and Blair. The previous estimates were founded on the 1981 White Paper and, more recently, on the draft text published on the Internet during the public consultation.
The first results of this impact assessment study were presented to the press by two experts from the DG Environment at the European Commission and communicated the same day to all interested parties (CEFIC, industry, employers, environmental defence NGOs, consumer organisations, health defence groups). These results are:
The direct costs expected to be borne by the chemicals industry for remoulding the test are estimated at around EUR 2.3 billion over an eleven-year period, instead of the EUR 12-13 billion estimated for the text diffused online. This saving of EUR 10 billion can be explained by the fact that the new REACH system will now apply to only 10,000 chemical products instead of the 30,000 initially foreseen. The requirements in testing have been reviewed downward, with simplification of the registration procedures for chemical substances produced in small quantities (between 1 and 10 tonnes) which represent 60% of the chemical substances but only 0.01% of total production, and polymers will not be subject to the obligation of registration. Also, the requirements concerning downstream users have been lightened. Direct costs will be covered by the industry, that is, costs linked to the obligation to record substances, testing costs for providing required data (some tests must be practised on animals and so increase these costs), and the financial contribution by the industry to management of the new agency for chemical products via payment of a registration fee evaluated at EUR 3 billion (that is, three quarters of the Agency's operating costs). Costs for downstream users of chemicals (mainly the processing industry and, eventually, the end user) should be somewhere between 2.8 and 3.6 billion EUR, if, as planned, 1 to 2% of substances go from the market, as it will not be cost-effective to continue producing them. Costs could reach 4 to 5.2 billion EUR if industry is faced with higher costs to adapt its production chain (for instance, having to use another producer or find an alternative product once the chemicals currently used are withdrawn from sale). These estimates include direct costs passed on by the chemical industry to its downstream users.
Total costs to the chemical industry and its downstream users could therefore be in the region of 2.8 to 5.2 billion EUR.
For purposes of comparison, however, the expected benefits to health and the environment should themselves be significant, having been estimated at 50 billion EUR over 30 years.
Cefic satisfied, NGOs somewhat less so
Cefic has said it is satisfied, as it feels that its concerns have largely been listened to. The environmental NGOs are partially satisfied, because, as they point out, the cost of 2.3 billion EUR over eleven years represents just 0.05% of the sector's annual turnover. "These figures show that the chemical industry has grossly overestimated the cost of REACH. They smash to pieces the alarmist forecasts of the industry on gross domestic product and job losses", says the EEB, Friends of the Earth and Greenpeace in a joint press release. These NGOs, however, regret the fact that, in their opinion, the REACH system has been considerably watered down. "It is sensible to improve the cost-efficiency ratio in European legislation, but it is wrong to place industry profits above consumer and employee interests. The impact assessment shows that the plans to get rid of requirements to supply safety data for 20,000 substances used in clothes, shampoo and other consumer products underway will save just 0.5 million EUR", said Mary Taylor of Friends of the Earth.
Greenpeace's Jorgo Iwasaki Riss said that "The Commission should use these figures as a basis to return to the initial objectives of its chemicals policy and stop giving in to the pressures of the industry and of the United States".
The full results of the impact study will be published by the Commission on 29 October; when its proposal to replace twelve existing directives will be formally presented.