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Mr Erkki Liikanen

Member of the European Commission, responsible for Enterprise and the Information Society

"Commission's proposal on Chemicals"

Press Conference on Chemicals

Brussels, 29 October 2003


Shaping the new chemicals strategy is the biggest challenge the Commission has faced in meeting sustainable development goals. This has meant that we have had to undertake a special effort to ensure that the today's proposal is consistent with the economic, social and environmental pillars of sustainable development.

Translating sustainable development into reality has been a long and difficult road. It has been difficult for the Commission and difficult for the stakeholders. That is why our task to support them in working through the implications and preparing the introduction of the measures must go on.

But I do believe that the proposal agreed today genuinely reflects the balance required between the economic, social and environmental pillars.

The reality is that without competitiveness there are no new jobs and we cannot invest in a better environment and better health services. Only competitive businesses can generate the resources for research and development and innovation. And innovation is needed for new and safer chemicals and processes.

The chemicals industry is an industry in its own right. It provides 1.2 million jobs and delivers a favourable trade balance of over € 60 billion.

It is a key supplier to Europe's manufacturing industry, it makes a critical contribution to innovation and to the development of new processes and products. This gives Europe a competitive advantage in many fields. We must keep that advantage.

The chemical industry has an important economic and social impact throughout the Union. It is among the three leading industries in 11 of the 15 current Member States.

Key Benefits of REACH

So, what are the key benefits of this proposal?

First, the proposal will improve the conditions for innovation in the development of chemicals in Europe. There are three elements to this:

- lighter requirements for testing of new substances;

    - increasing the threshold for registering new substances from 10 kilograms to 1 tonne; and

    - increasing the maximum time limit for exemption from registrations in the case of R&D from 6 to 15 years.

Second, the proposal will secure and strengthen the internal market for chemicals and removing the risks of national measures. This means having Article 95 as the legal base and ensuring that the principles of the internal market are observed by consistent application of the requirements across 25 Member States. A strong central Chemicals Agency will facilitate this. Among its key tasks will be to ensure prioritisation in the plans for evaluating substances.

Third, the proposal will encourage environmental concerns to shape business strategies. REACH will ensure that information on the uses, properties, risks and risk management of chemicals is available throughout the industry supply chain. This will enable chemicals to be managed better and switch the emphasis from compliance to opportunity.

A fourth, and unforeseen, benefit of the process that has led to today's proposal is a much wider public appreciation of the importance of the European chemicals industry to economic activity of Europe. The chemicals industry is a precious asset as far as Europe is concerned. More and more people realise that today.

The Question of Savings and Costs

And then on the costs:

The chemicals regime cannot be reformed without added costs. Where more information is needed to identify potential risks, testing and extra costs are unavoidable.

We have done major efforts to minimise costs and to cut bureaucracy. As a response to the Internet consultation the Commission has made changes which lead to an 80% reduction in estimated cost.

Among the key changes are, exempting polymers from registration, reducing information requirements for registration and removing the requirement to complete chemical safety assessments below 10 tonnes These changes have significantly reduced the burden on downstream users and are critical to encouraging manufacturers to maintain products on the market. This is vital for innovation in downstream industries.

We have reduced the direct costs to industry from an estimated € 12.6 billion to € 2.3 billion in present value terms. These costs will be incurred over an 11-year period.

The basis for this estimate is a comprehensive and independent study carried out by an external consultant (Risk Policy Analysts) which can be found on the Commission web site. The estimated savings of € 0.9 billion from use of computer simulated testing, so-called “QSARS”, assumed in these cost figures, are based on analytical work carried out by the Commission's Joint Research Centre. This study is also available.

Estimating costs to downstream users is less certain. But we are convinced that as a result of the changes made the indirect costs have been greatly reduced. Our estimate for the cost to downstream users is in the range of €2.8 to €5.2 billion in present value terms. Under this scenario, the effects in terms of reduction in GDP and in loss of jobs would be very limited.

We are aware that views differ strongly on the impact on downstream users. That is why we will be continuing our dialogue with stakeholders on the methodologies underpinning the impact assessment and have already scheduled a meeting on 21 November for that purpose.

Strategic Partnerships

The Commission has agreed a balanced package of measures. Nevertheless, we are aware of concerns within industry about the impact of REACH. The Commission understands these concerns and will ensure therefore that the preparations for REACH are carried out in close consultation and co-operation with industry.

During the interim period by which I mean the period from today until adoption of the final decision by the Council and Parliament - we are planning to set up strategic partnerships with industry in order to test how the various REACH mechanisms will work out in practice.

This will require the support of the Joint Research Centre, and Member States as well as chemical producers and downstream users.

This process which we hope will be ready to start early next year will run in parallel to the negotiations in the Parliament and Council. This should help ensure that potential “running in” problems are identified and can be addressed as soon as possible.

Concluding comment

This has been a model exercise in terms of consultation and better regulation. Over 6000 stakeholders have been involved through the Internet consultation. Many will have seen their thoughts and ideas reflected in the proposal agreed by the Commission today. We would not have been able to get to this point without the constructive and helpful engagement of all stakeholders.

We now look forward to the negotiations to come in the Parliament and Council. The Commission will be active in this process in order to ensure that the sustainable development balance, which I mentioned at the start, is fully preserved.

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