1. REACH: Driver of Innovation Andrew Fasey andrew.fasey@ptkltd.com 15 November 2005 Univ of Virginia, USA

2. Why I am here PTK Ltd: consultancy on regulatory chemicals issues (e.g. REACH, GHS, SAICM) DG ENTR (until September 2004) author (1 of) of REACH co-decision process (Council & EP) implementation of GHS in EU UK government (HSE): international chemicals policy policy on chemicals strategy White Paper author (1 of) of GHS: IOMC drafting group Acting head of UK delegation to IFCS III DG ENV chemicals unit (94 – 97) NONS, ESR, C&L

3. Presentation Introduction to REACH –Why? –Summary Innovation: Regulatory Drivers Innovation: Structural Drivers Progress in the Co-decision Process Opportunities Headline Messages Conclusions

4. Introduction to REACH: Registration, Evaluation, and Authorisation of CHemicals

5. Problems Burden of the Past WHY do we need REACH? Current chemicals management system is inefficient Difficult to identify risks – difficult to address risks: –Lack of information about most substances on the market –Burden of proof on public authorities –No efficient instrument to deal with problematic substances Lack of incentives for innovation Lack of confidence in chemicals

6. Lack of Information Lack of hazard data for most substances on the market: Unknown volumes & uses of most substances on the market Incorrect C&L & SDS: only 20% of substances & preparations in full compliance; 20% of errors for preparations ‘severe’. No ‘Official’ Data (20% of number) Limited Data (45%) Base Set (20%) Level 1 (10%) Level 2 (5%)

7. Objectives S ubstitution and precaution underpin system Solution: A New EU Chemicals Policy Sustainable Development –Protection of human health and the environment –Maintain/enhance innovation/competitiveness –Maintain the Internal Market –Increased transparency and consumer awareness –Integration with international efforts –Promotion of non-animal testing –Conformity to WTO obligations REACHREACH

8. A Tiered Approach What is REACH? Single coherent system for new (non phase-in) and existing (phase–in) chemicals Elements: –Registration of substances ≥ 1 tonne/yr (staggered deadlines) –More information and better communication through the supply chain –Evaluation of some substances by Member States –Authorisation only for substances of very high concern –Restrictions - the safety net –Agency to manage system Focus on priorities: –high volumes (early deadline) –greatest concern (CMRs early) High level of health and environmental protection with the goal of achieving sustainable development.

9. Registrant collects information, assesses risk(s) and implement/recommend relevant control measures Registration: general Scope –substances produced/imported ≥ 1 tonne/year –Isolated intermediates: reduced requirements. –Exemptions e.g. PPORD, polymers, non-isolated intermediates Tasks of the registrant (manufacturer/importer/only representative): –obtain adequate information (inc (Q)SAR and existing data) –perform CSR for substances > 10 tonnes/year (demonstrate adequate control per use) –send information to Agency by deadline (and to clients) Consortia encouraged (Pre-registration) No formal acceptance - industry retain responsibility

10. ‘Screening’ High data Intelligent Testing Strategies CSRs Registration: Timing Volume of substance produced or marketed (per manufacturer or importer) Registration period for existing substances (Deadlines in Bold) (assuming 2007 start) ≥ 1,000 tonnes p.a. or CMR 2007 - 2010 100 – 1,000 tonnes p.a. 2007 - 2013 10 – 100 tonne p.a. 2007 - 2018 1 tonne p.a. 2007 - 2018

11. Registration: Substances in articles Substance: dangerous and ≥ 1 tonne per m/i per yr (per article type)? Intended release Registration Unintentional release (quantity hazardous to HH or Env ) Release: known by producer/importer? made known to producer/importer? Notification Agency may require Registration Deadline: 2018?

12. Information through the supply chain What: –Expanded (M)SDSs with information from Chemical Safety Reports (CSR) - exposure scenarios –Information on risk management, authorisations, restrictions, registration number etc. –Information up the supply chain on new hazards Result? –more information on risks –downstream users benefit –dialogue up/down the supply chain- encouraged/stimulated Improve risk management

13. Downstream Users (DU) Manufacturer/importer CSR to cover all uses identified by downstream users. DU benefit from choice of: –supplier carrying out assessment, or –for confidentiality reasons doing own assessment. If using suppliers CSR just have to: –implement supplier’s RRM for identified uses If carrying own CSR will have to: –perform assessments only for ‘unidentified uses’ (using supplier hazard information) –inform Agency of ‘unidentified uses’

14. Key Elements Better information Joined up supply chain Industry responsibility for safe management

15. Innovatory Drivers

16. Regulatory Drivers Ending discrimination of new substances versus existing substances => encourages the development of new substances. Wide exemption for ‘product- and process- oriented R&D’ (PPORD). Far wider than the existing exemption from notification for new substances => encourages R&D, potential to avoid registration (substances and/or uses). PPORD exemption is up to 5 +5 years (15 years for medicinal products), far greater than currently for new substances.

17. Regulatory Drivers Threshold for registration (1 tonne/year) is much higher than the current 10 kg threshold for notification of new substances. The costs of registering a new substance significantly lower than currently as less data is required. Registration will be quicker than the current notification, thus reducing the time to market.

18. Regulatory Drivers Authorisation of SVHC (substances of very high concern) for particular uses. Granted if use adequately controlled or, if not, socio-economic assessment shows benefits outweigh costs, taking alternatives into account. Conditions and review periods may apply. Authorisation (cost, time, uncertainty) will encourage companies to search for safer substitutes and/or processes => companies developing safer substances or processes should be able to gain market share and/or new markets.

19. Structural Drivers Concentration on SVHC: –CMRs and other SVHCs prioritised for Registration –Authorisation of uses of SVHC Industry will have to demonstrate ‘adequate control’ => encourages innovation of safer substances and processes ad ‘safe’ uses

20. Structural Drivers Registration: complete data set (tonnage related), risk assessment of uses (own and downstream users) will identify ‘risky’ substances and uses => incentive to innovate to safer substances &/or uses. Better data may lead to reclassification of substances/mixtures => need to reformulate safer products.

21. Structural Drivers Evaluation: selection using ‘risk’ criteria => industry innovates to reduce chance of evaluation.

22. Structural Drivers Substance withdrawal: estimates of 5 %. Opportunities for alternative substances and processes Information in the supply chain: better information on properties, uses, and needs of customers in the SC will encourage innovation

23. Opportunities

24. Internal Better understanding of REACH and its implications than competitors Holistic organisation to bring company benefits –Efficiency gains –Joined-up working Flexibility in REACH, for example –Data requirements –PPORD –Generic vs specific CSAs Be the solution not the problem

25. Opportunities (cont.) Existing (and new) Business Better supply chain communication –Trust –Understanding –Systems in place Good quality information –SDS –Exposure scenarios Demonstrate REACH compliance to customers (REACH ‘mark’) Competence on, confidence in, and support to, REACH Help suppliers and customers meet REACH requirements –Generic / Customised CSAs –Registration –Data collection, generation and assessment Customers affected by other suppliers –The solution not the problem

26. Opportunities (cont.) New Business Better understanding of supply chain Alternatives - provide alternative substance, process or supply Innovation – safer substances &/or processes &/or uses Marketing - demonstrate CSR, Product Stewardship etc Service - competence and understanding, ‘on top of’ REACH, targeted CSA, support offered

27. Progress in the Co- decision Process

28. Timing Nov 2003: Commission Proposal submitted to Parliament and Council Decision making in EP and Council: 2004-2006  Political agreement between MS: end 2005?  Parliament 1 st reading: November 2005? REACH in force: end 2006/2007?

29. Co-decision Procedure COMP and ENV Councils EP Committees - ENVI lead, ITRE and IMCO Other EP Committees interested including –ECON, EMPL, BUDG, FEMM, INTA Complete First Reading in EP – November 2005 Revised Commission proposal – end 2005 Council Common Position – UK Pres (end 2005) –reaction to 1 st Reading => becomes working text Second Reading in EP (of Common Position) Council Decision (based on 2 nd Reading) Conciliation Procedure? (EP, Council & CION) REACH adopted - end 2006 (FIN Presidency)? REACH in force 2007?

30. Headline Messages

31. 1. Decisions are being taken now Some companies have already made, or are in the process of making, assessments of their portfolio of chemicals. They are making decisions on the chemicals they will register and those that will be withdrawn from the market, uses of chemicals they will support through the Registration process, and the timing of Registrations (the first Registrations may be expected in early 2007). All these decisions can impact on your business.

32. 2. Waiting for a final text will be too late for many to satisfy their duties Final REACH text is not likely to be agreed before the end of 2006 or early 2007 Waiting until then to prepare for REACH would be taking an enormous risk. Decisions are already being taken possibly in your supply chains. Need to be prepared so that you can either influence these decisions or be in a position to react to them. Lack of preparation could mean that decisions taken would be based on incomplete knowledge or analysis. To give an idea of the scale of the problem one major consumer product company has 6,000 substances to consider in their portfolio.

33. 3. Need to understand the implications of REACH for your business REACH will have implications for business costs, personnel resources, R&D, portfolios of chemicals, relations up and down the supply chain, management systems etc. It is important to have a clear and realistic understanding of the implications of REACH so that decisions can be made on objective information, not on rumour and hearsay.

34. 4. Develop supply chain relationships The key to implementing REACH efficiently and effectively is to understand and influence each supply chain. Supplies and customers may be at risk; understand which substances and customers are at risk Decide what steps you are going to take to support and work with others in each supply chain. For example –a supplier may withdraw a substance from the market because of the cost of Registration unless you support (financially or scientifically) the preparation of a Registration; or –they may not support your use if the costs involved are disproportionate to the benefits.

35. 5. Important to keep ‘on message’ You will receive enquiries from customers and suppliers addressing REACH issues. It is important to develop an approach to such enquiries to ensure that customer confidence is maintained or improved.

36. 6. Registration (manufactured or imported substances) will incur significant costs All substances that you export to the EU (on their own, in mixtures, or in articles (conditions apply)) in quantities of over 1 tonne per year will need to be registered (some exemptions apply). Resources needed to develop the data set needed and to prepare risk assessments (known as Chemical Safety Assessments in REACH) for all supported uses (this includes manufacture). Importers or sole rep? Support?

37. 7. Identify and assess alternatives REACH will result in some substances being withdrawn from the market by some suppliers. You need to, based on your assessment of the supply chain, identify where this may happen. Identify or develop alternative processes that could result in the same or equivalent products, alternative substances that could deliver the same or acceptable performance and efficacy, or alternative suppliers of the same substance that could guarantee supply. Identify alternatives to substances that may cause a problem in REACH e.g. subject to authorisation, ‘adequate control’ is hard to demonstrate.

38. Conclusions After 7 years… REACH will happen Real (& often final) political debate and decisions happening now Prepare now for REACH Wait = too late Technical/scientific, legal, and business factors to consider Opportunities presented Innovation encouraged In force early 2007 Don’t forget the GHS

39. Contact Andrew Fasey andrew.fasey@ptkltd.com www.ptkltd.com