Is REACH a Threat to Innovation?

In his final address as president of the European Chemical Industry Council (Cefic), Brussels, Giorgio Squinzi warned that the demands of Registration, Evaluation, Authorization and Restriction of Chemical substances (REACH) legislation pose a threat to the industry's ability to both innovate and compete.
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Squinzi, who's also the chief executive of adhesives specialist Mapei Group, Milan, Italy, was addressing the European Chemicals Agency (ECHA), Helsinki, Finland, following the September 18 publication of a European Commission (EC) survey on REACH's impact on innovation. His audience included European Union industry commissioner Antionio Tajani, together with officials from Cefic and ECHA.

Thanking the ECHA for engaging in such an open discussion of topics that are near to the heart of the chemical industry, Squinzi said he's reassured that the close collaboration between industry, the EC and ECHA resulted in successful completion of the regulation phase for REACH. Turning to innovation and competitiveness, however, Squinzi was less encouraged by the experiences associated with REACH.

"The Commission's survey on the impact of REACH on innovation says it all — 63% of respondents indicated that REACH could lead to the diversion of resources from truly innovative research. This is something our industry cannot afford. And while REACH increases interactions at the interfaces of industries, it is in the context of data sharing through vehicles such as safety data sheets. It remains to be seen whether this type of activity really drives concepts such as open innovation with its 'cast the net' approach to problem sharing and solution finding across industrial sectors. Indeed, only 26% of respondents found safety data sheets valuable in this sense. In any event, the simplification of safety data sheets is something we need to work on; and we must avoid pushing complexity along the supply chain."

Turning to competitiveness, Squinzi stressed the impact of costs associated with REACH. The Commission's study indicates the initiative has cost over €2 billion ($2.6 billion) since its 2007 launch.

"This is within the initial cost range for the whole of REACH, yet we have only passed through the first registration deadline. This points to two things: firstly, the costs are high; secondly, as smaller organizations enter the REACH processes we must find ways to eliminate all unnecessary costs. This can range from highlighting the big cost items and amending the legislation to simplifying the procedures at the implementation phase. Here, we look to the agency to review any activities which we're not explicitly required by the legal text."

To further remain competitive, Squinzi warned that commercial confidentiality must be a priority. "I think it goes without saying that we need to respect confidential business information. But in our desire to be transparent on chemical safety and usage, we must handle dissemination appropriately so as not to provide competitors outside Europe with an easy way in."

Squinzi concluded with a look at nanomaterials, which he described as a key enabling technology for the chemical industry.

"We must ensure that nanomaterials fit efficiently within REACH and other existing legislation and not penalize the technology or the pioneering companies who want to provide a better future for us all through the development of these innovative materials. All we ask for is proportionate regulation which is in line with that for other substances. This brings me to a point on stakeholders, and in particular, NGOs [non governmental organizations]. The focus on hazard-based assessments and substitution as the only risk management instrument coupled with disclosure of market-sensitive information needs to be counterbalanced by the need for broad-scale risk assessments and nondisclosure of commercial business information. In this regard, we rely on the agency to retain its independence and sense of proportionality towards safe chemicals management."

Squinzi stepped down as Cefic president shortly after the ECHA address, following the end of his two-year term. New incumbent Kurt Brock, chairman of BASF, immediately picked up the innovation theme. Outlining his goals for the next two years at Cefic's annual conference in London on September 28, Brock noted that the industry's sustainability journey will come from its innovations designed to help meet future challenges facing the planet.

"Successful and quick introduction of innovations in the market is not easy to achieve, but the benefits are clear. New technologies help cities reduce waste, purify water and save energy through building insulation. Innovation is the engine and it decides on the progress we can make on our sustainability journey," he said.