The U.K. parliament’s Environmental Audit Committee (EAC) has called on the government to provide clarity on the future of chemicals regulation once the country leaves the European Union (EU).
The EAC is tasked with studying how government policies and programs contribute to environmental protection and sustainable development, and audit their performance against a set of targets.
Its latest report, “The future of chemicals regulation after the EU referendum,” says that certainty is needed because the U.K. chemicals industry is so important to the economy. Currently, the industry sells £15 billion ($19 billion) of chemical products in the European market every year, making it the country’s second largest exporter after the car industry.
Furthermore, the report points out that U.K. companies will have spent an estimated £250 million ($322 million) to comply with a EU REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) registration deadline of May 2018, yet have received no guarantees over whether these registrations will remain valid after the U.K. leaves the EU.
This uncertainty, notes the report, means that one in five U.K. chemicals companies represented by the Crewe-based Chemical Business Association are already investigating registering elsewhere in the EU, a move that could cost jobs and investment.
Committee chair, MP Mary Creagh, says it was disappointing that the government in power during the Brexit vote hadn’t provided the certainty that U.K. businesses urgently need on its plans for future chemical regulation in the U.K.
“The timing of Brexit means that companies face significant costs to comply with EU regulations before we leave, with no guarantee that that investment will be useful to them in the future. The lack of government clarity is causing uncertainty and driving billions of pounds worth of businesses to consider leaving our country for the EU The government needs to provide certainty to ensure that it encourages continued chemical business investment in the U.K.,” she notes.
Creagh was also critical that this lack of clarity had extended to plans for a future chemicals framework for the U.K. “The government has admitted that it will be difficult to transpose regulations such as REACH into U.K. law, yet it has not offered a vision for the replacement. The government needs to ensure it understands the complexity and importance of current regulations in enabling the U.K. chemicals industry to provide not only value to the economy but their expertise and high standards in protecting public health and the environment,” she stresses.
To further add to the confusion, the “Great Repeal Bill” — the piece of legislation designed to ensure a smooth transition from EU to U.K. law — includes a line deeming that REACH now applies in the U.K., but the EAC report states this simply can’t be done. REACH, it points out, was written from the perspective of participants being within the EU, with much of it relating to member state co-operation and mutual obligations, oversight and controls, and freedom of movement of products.
In deciding the future of the U.K.’s relationship with the EU’s single market for chemicals, the EAC report urges the government to take a pragmatic approach. The most important element of REACH, which the government should seek to remain involved in as a minimum, is the registration process for chemicals. Most of the report’s respondents, from both environmental and industry perspectives, want to stay as closely aligned to REACH as possible. Involvement in registration would allow U.K. companies to share testing data with EU companies, sharing costs and allowing them to enter the market without double registration, even if the UK adopts higher standards of chemicals protection, says the report.
Another issue is the potential establishment of a stand-alone U.K. system of chemicals regulation, which likely will be expensive for both the taxpayer and for industry. “The government did not provide us with detail of their scenario planning, although they did admit that the cost of taking on the roles currently provided by the European Chemicals Agency could be in the “tens of millions” of pounds,” notes the report.
However, the ECA believes U.S. efforts might provide insights. “The U.S. is in the process of updating its federal chemicals regulations following the introduction of new legislation in June 2016. Federal agencies are currently developing their new approach to the assessment and regulation of chemicals, and the experiences of the U.S. in developing its own system may prove useful to the U.K.,” concludes the report.
Seán Ottewell is Chemical Processing's Editor at Large. You can email him at email@example.com.