REACH - Joint press release (German)
Environmental NGOs in Germany look at benefits of REACH for Small and Medium Enterprises
25.04.2005 |Sonja Haider
Die Pressemitteilung zum runterladen (164 KB pdf.)
"Overall the study says that the cost (of REACH) that industry said would make it impossible to compete -- those costs are much exaggerated. This is what the study seems to prove,"
EU Chemicals Bill Less Costly Than Feared - Study
BRUSSELS - A controversial European Union draft law on chemicals testing will not be as costly as industry has feared, a new study shows, according to a summary of the report and an official familiar with its contents.
But the EU's REACH legislation (Registration, Evaluation and Authorisation of Chemicals) will be more difficult and expensive for small and medium-sized enterprises or businesses (SME) to absorb, the summary of the industry-backed report said.
REACH, designed to protect humans and the environment from adverse side effects of chemicals, would require the testing and licensing of thousands of commonly used substances across Europe.Industry has said the bill's complexity and costs would put European companies at a competitive disadvantage and lead to the withdrawal of substances from the market. The study seemed to dispute that, according to the summary.
It said chemical suppliers of additives and pigments would face a one-off product price rise ranging from 6 to 20 percent.The study was carried out by KPMG LLP, the audit, tax and advisory firm, on behalf of industries affected by the legislation.The EU executive Commission, author of the draft legislation, has received a copy of the summary. The conclusions in it are due to be made public on Wednesday.
"Companies will not move away or will not drop certain products or chemicals because the costs remain within the acceptable boundaries," said one EU official, describing the report's conclusions."Overall the study says that the cost (of REACH) that industry said would make it impossible to compete -- those costs are much exaggerated. This is what the study seems to prove," said the source, who asked not to be named.The study focused on four sectors and their suppliers: automotive, organic and inorganic materials, flexible packaging and electronics. It covered materials from engine oil to cement.
PASS ON THE COSTS A summary of the report obtained by Reuters said chemical suppliers and formulators, companies that convert bulk chemicals into a usable form, would be likely to pass on the compliance costs to firms buying their products.
"Passing on costs is seen as a feasible option by the companies in some situations," it said, adding that small companies would face more hurdles passing on costs.Businesses like ink makers that use chemicals to make their products -- known as downstream users -- would see a minimal effect on profits because the cost of meeting the requirements would be covered earlier, the summary said."The direct REACH cost of the end-use material studied will have a limited impact on the profitability of the downstream users," the summary said.Numerous impact studies have been conducted on REACH, many of them offering differing takes on the cost of the rules.
The Commission has indicated a willingness to alter the legislation to make it less expensive, though environmental groups have urged the EU executive not to water it down.REACH covers organic chemicals and inorganics like metals, steel, and alloys as well as the waste and scrap materials used in recycling.Industry lobby group Cefic has said the law could strangle the European chemical industry in red tape and result in the loss of its world leadership position. The United States says REACH would disrupt global trade and hurt innovation.
Story by Jeff Mason
REUTERS NEWS SERVICE
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