IP/05/495
Brussels, 27 April 2005
REACH: High Level Group meets to assess new impact studies
Under the joint chairmanship of Vice-President Günter Verheugen and Commissioner Stavros Dimas, the High Level Group on further work on the impact assessment of REACH met today to discuss the results of impact studies which were commissioned by industry within the framework of arrangements agreed with the Commission. These studies look into the impact on supply chains on the basis of data supplied by individual firms in the chemicals, automobile, flexible packaging and inorganic (metals, cement, paper and pulp etc.) and electronics sectors. The results of the fourth sector, electronics, will also soon be finalised. The Group also heard a report giving a general survey of the situation in the new Member States, and that this work will be complemented by a further report on the results of case studies involving individual firms in Poland, the Czech Republic and Estonia.
Commenting on the studies, Industry Commissioner Günter Verheugen said: ”These studies make an important contribution to better assess the changes needed to achieve a balanced and workable solution for REACH which will be compatible also with our Lisbon goals to improve the competitiveness of European industry, including SMEs. The Commission believes that these results should be taken into account in the co-decision process and to that end reaffirms its intention to cooperate closely with the European Parliament and the Council.”
Environment Commissioner Stavros Dimas added: “All the parties concerned will recognise that we have gone to great lengths to explore and assess the practical impact of REACH. The results of these studies are reassuring – the costs and impacts of REACH are manageable. There is, however, no reason to become complacent. We need to continue putting all efforts in development of specific guidance and tools to facilitate implementation, which will be helpful for all companies, in particular SMEs, and alleviate most of their concerns.”
The following key messages can be drawn from the study:
- There is limited evidence that higher volume substances are vulnerable to withdrawal following the REACH registration requirements. However, lower volume substances under 100 tonnes are most vulnerable to being made less or non profitable by the REACH requirements.
The one-off costs of registration can demand a significant share of the available cash flow for chemical producers, in particular SMEs. This may lead to a decision not to register part of their portfolios where the one-off costs of registration represent a substantial proportion of the annual profit. This effect would mainly relate to substances which are not considered by chemical suppliers to be technically critical to their customers. However this could nevertheless trigger the need for some reformulation at formulator and downstream user level and may reduce the diversity of substances at the disposal of formulators for innovation.
- There is limited evidence that downstream users will be faced with a withdrawal of substances of greatest technical importance to them.
The study shows that chemical suppliers and formulators will prefer to register substances that are technically important to downstream users in order to keep their portfolio and avoid the potentially high costs of reformulation and/or re-engineering which could otherwise result for their customers. This also applies for the limited number of substances within the assessed sample that could be regarded commercially vulnerable under REACH. Where there is limited communication in the supply chain, it is not possible to rule out the risk that some limited withdrawal of substances may occur in practice.
- SMEs can be particularly affected by REACH having regard to their more limited financial capacity and lower market power in terms of passing on costs.
SMEs generally have more limited resources to implement the new legislation. The study found that some SME chemical suppliers could face financial difficulties to comply with REACH, particularly if they would have to register many substances at the same time. Low volume substances produced by SMEs are more likely to be vulnerable to being made less or non profitable. SMEs also have been shown to face more difficulties in passing-through testing costs to downstream users.
- Companies have recognised some business benefits from REACH
The study found a number of business benefits of REACH within the investigated supply chains, especially to formulators and downstream users. Benefits mentioned by certain companies include: better information about substance properties and dangerous components in preparations, easier risk management and rationalisation of substance portfolio.
The complete list of Commission conclusions and further information on REACH can be found at: