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Chemical sector voices concerns at UK’s no-deal Brexit guidance

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British chemical manufacturers and industry experts have expressed fears that the UK government's approach to a no-deal Brexit could diminish competitiveness, duplicate registration duties and weaken the country's environmental credentials.

Their concern follows the release of government guidance for the sector in the event that Britain leaves the EU on 29 March 2019 without a trade deal. The 24 September paper – Regulating chemicals (REACH) if there's no Brexit deal – spells out how businesses producing, registering, importing or exporting chemicals would be affected.

The risks of a disorderly Brexit include disruptions to pan-European supply chains because chemicals registered by British businesses with Echa could no longer cross the border without increased administrative steps.

While the Chemical Industries Association says it appreciates that the UK government does not have an easy task, it points out that "businesses have already spent in excess of £550m investing in registrations under EU-REACH, sharing information and communicating safe use in exchange for a licence to market chemicals in European countries, including the UK."

"Requiring companies to duplicate pre-existing registration duties for a UK-REACH will not only weaken our international competitiveness, but, more importantly, offers nothing more to strengthen health and safety," the CIA says in a statement.

"As a consequence, we urge that a more efficient and less costly option to both businesses and the regulator is considered over re-registrations whereby all existing REACH registrations are recognised in the UK."

'Requiring companies to duplicate pre-existing registration duties for a UK-REACH will not only weaken our international competitiveness but, more importantly, offers nothing more to strengthen health and safety,' the CIA said.

Peter Newport, chief executive officer of the Chemical Business Association (CBA), told Chemical Watch that the UK technical paper was consistent with what the association had been told by Defra and the Department for Business, Energy and Industrial Strategy (Beis) and held no surprises, but he expressed concerned over data agreements.

"Many of the data agreements already signed for REACH are explicitly limited for use on registrations for European Union REACH, and the ability of UK companies to use the data for UK REACH is questionable."

"CBA is aware one or two agreements have been amended to enable use for UK REACH should that become necessary, which is a promising sign but by no means a guaranteed solution," Mr Newport said. 

WTO rules

The chemical sector is one of the UK's main manufacturing industries, with exports to the EU totalling £17bn in 2017, the National Audit Office said in a report released earlier in September.

As a result, UK Chancellor of the Exchequer Philip Hammond warned in August that the sector is likely to be among the hardest hit, should a no-deal breakaway from the EU mean an adoption of WTO rules.

Chemicals trading between the UK and the EU may even come to a "complete standstill" without a Brexit deal, the head of the German Chemical Industry Association (VCI) warned in August.

Responding to the 24 September technical guidance, Susanne Baker, head of environment and compliance for techUK, said the introduction of a new border will generate new regulatory duties for a range of businesses. The trade body represents more than 950 companies and 700,000 people, about half of all tech sector jobs in the UK. 

"Grandfathering existing registrations and authorisations, combined with a light touch transitionary process, is pragmatic and should provide sufficient time for companies to prepare for a UK regime. However, 180 days may not be long enough for those facing new registration duties for the first time."   

"UK companies have worked hard and invested significant time and money into compliance with EU REACH, so the prime minister's pledge to seek to negotiate an associate partnership with Echa must continue to be our ultimate goal," she added.

Divergence from EU

There was some concern too about the UK government's plan to work with a simplified copy of the EU's decision-making process in REACH from the end of next March. Under this the Health and Safety Executive (HSE) would act as the lead UK regulatory authority.

"This won't keep the UK chemical regulation in line with the EU," Michael Warhurst, executive director of the UK-registered charity CHEM Trust, said. "We are very concerned that the UK may not ban future chemicals of concern in parallel with the EU."

Mr Warhurst, speaking to Chemical Watch at the CW Enforcement Summit Europe 2018 conference in Brussels, said there will not be any text to commit the government to implementing future EU decisions on restricting or otherwise controlling chemical use, "instead, everything will be dependent on the decisions made in the new UK 'agency' and how they interact with the secretary of state for the environment."

If the UK were to leave the EU in a no-deal scenario, it would also no longer have a seat or a vote at Echa, which manages the technical and administrative aspects of REACH.

Without Echa's management committee and stakeholder engagement, "we are concerned that the new agency may become a secretive quango which operates mainly with its main clients, Defra and the chemical industry," Mr Warhurst added.

And Jean-Pierre Feyaerts, former head of the Belgian REACH helpdesk and a Brexit commentator, called the government's 24 September notice "rather vague".

While the advice covers registrations, it does not address CLP, the biocidal products Regulation, or substances subject to product and process-orientated research and development (Ppord). A second notice will be needed covering other aspects of UK-REACH including authorisations, restrictions and open dossiers post-29 March, Mr Feyaerts said.

"This notice could have been written in March 2017," Mr Feyaerts told Chemical Watch, adding that more detailed information is required before 29 March 2019 and not later than 22 January 2019.

If no deal has been reached with the EU by 21 January 2019, the UK will have to present its new plan of action to Parliament.

Caroline Byrne, Deputy news editor

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