Twenty percent of companies surveyed say European Union rules on chemicals do not apply to them while 30 percent say REACH (Registration, Evaluation and Authorization of Chemicals) regulations aren’t important to their business, according to a survey by EEF, a UK manufacturers’ trade group. But the rules could have far-reaching effects, including on US companies.
Firms face a May 31 deadline to register certain substances manufactured in or imported to the EU, at or above 100 tons a year. In addition, the EU is implementing widespread bans on some substances that have been commonly used in manufacturing for years, and gradually restricting the use of other chemicals in certain areas.
The EEF survey says a third of small companies – those making less than £2 million ($3.2 million) per year – aren’t aware that that the REACH regulations will affect them, and even when they do know about REACH, half aren’t monitoring developments.
This compares to 72 percent of large companies and 83 percent of medium-sized that are monitoring developments, according to the survey.
Many manufacturers believe REACH only applies to chemical companies, according to EEF. Its effects, however, are more wide-reaching. REACH applies to all chemical substances including those commonly used in cleaning products, clothing, furniture and electrical appliances. It requires companies to identify and manage the risk linked to products containing these substances, and applies to all companies either manufacturing or marketing such products in the EU. They have to demonstrate to the European Chemicals Agency how the substance can be safely used, and companies must communicate the risk management measures to users.
EEF estimates REACH will cost about €2 billion ($2.7 billion). The trade group says the cost for large companies to apply for continued use of a substance is at least €50,000 ($66,700), but says anecdotal evidence suggests in some cases it can be as much as €200,000 ($266,800).
Where there is a strong enough argument for continued use of a banned substance, companies can apply to the European Commission to continue to use it. But failure to comply with REACH is a criminal offense with the possibility of unlimited fines and up to two years in prison.
EEF says it is calling on government to do more to raise awareness of the implications of REACH on businesses. It is also calling for more user-friendly guidance and a clearer understanding of when the commission is likely to give permission for continued use of banned substances.