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February 11, 2018 12:00 AM

Brexit to set off REACH complications for UK chemical firms  

Shahrzad Pourriahi
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    The European Chemicals Agency (ECHA) has warned of the major impact on British plastics chemical suppliers and their trading partners in Europe, should the UK push ahead with quitting the European Union (EU) as planned, on 29 March 2019.

    It has released a database seeking to advise chemical producers of how their legal obligations will change.

    ECHA warns British companies: “If your business is in any way part of a supply chain that links you to businesses located within the 27 EU member states remaining after the UK’s withdrawal, you will face some fundamental changes.”

    Importantly, UK-based suppliers of any plastics chemicals and additives (monomers are usually registered – not polymers) will have an obligation by May 2018 to register chemicals under EU chemical control system REACH that are made or imported in annual quantities of between one and 100 tonnes. And yet, on March 29, those registrations will become null and void, following a Brexit.

    As a result, their customers based in the EU (or the European Economic Area – EEA - countries of Norway, Iceland and Liechtenstein), may have to re-register such chemicals themselves, if they want to continue buying them from the British supplier that registered them in the first place.

    There are two other options, said the ECHA guidance. The British chemical manufacturer will have to relocate to the remaining EU or EEA or appoint what is called an ‘Only Representative’ within the remaining EU/EEA. This is company or person who is authorised to make the relevant filing under REACH and be legally responsible for ensuring a British exporter complies with EU rules.

    Also, there are significant changes where a UK company was a lead registrant for registrations of chemicals involving other companies, including those in the remaining EU. After Brexit, these registrations would also expire, warned ECHA, and companies wanting to ensure their products can be legally sold under REACH would have to appoint a new lead registrant, the British lead registrant would have to move to the remaining EU, or it would become an EU-based ‘Only Representative’.

    There is also potential serious concern over the use of chemicals that are sufficiently toxic that they require a special REACH authorisation to be used in the EU market. These are held by the companies supplying such chemicals. Where these are British, then after Brexit, said ECHA, “the respective REACH Authorisation will lose its legal effect with the date of the UK withdrawal” and so the EU purchaser will not be able to buy these chemicals from this British supplier.

    Any buyer of such chemicals in the remaining EU or EEA will have “to assure yourself that you or one of your upstream suppliers based in the EU has obtained a REACH Authorisation for the respective use of the substance, taking the place of your UK-based business partner,” said ECHA. The agency has confirmed to Plastics News Europe that Rolls-Royce plc has obtained an authorisation to sell plasticiser DEHP (di(2ethylhexyl) phthalate), for example.

    Another potential risk for UK companies is over biocides. The EU is undertaking a review of all biocidal chemicals used in Europe, to check their safety, under the EU’s biocidal products regulation (BPR). Ultimately, biocidal chemicals sold in the EU need to be formally authorised under the system, with authorisation holders having to be established within the EU, Iceland, Liechtenstein, Norway or Switzerland.

    So, UK companies with an authorisation to sell biocidal chemicals into these EU and associated companies will have to seek an authorisation to do so from a company based in these export markets.

    There is less concern over the fact that a Brexited Britain would not be covered by the EU’s CLP (classification labelling and packaging) regulation, mainly because it is assumed that this law would end up on the UK Statute Book, via the governments so-called ‘Great Repeal Bill’. Also, the labelling elements of this legislation that are based on the United Nations’ Global Harmonised System (GHS) will remain obligatory in Britain, as the UK will still implement the GHS. “Thus, for example, the pictograms will be valid within the UK,” said ECHA.

    Without question, these changes will cause disruption for the UK plastics and plastics ingredient industry. Maria Cristina Poggesi, scientific and technical advisor for the Italy Federation of Rubber and Plastics (Federazione Gomma Plastica) said that her company members, being small-and-medium-sized enterprises (with few distributors) will most probably end their trade relations with UK suppliers. “We think it would be very unlikely that they would afford a re-registration, due to economic and organisation efforts,” she told Plastics News Europe.

    British chemical manufacturers who wanted to try and ameliorate these problems by appointing an ‘Only Representative’ needed to be working hard to collate all previously collected data as this would help a “quick shift to the new EU structure”.

    Bernhard Reith, purchasing manager for international plastics supplier, Austria-based Lenzing Plastics, warned that “it will not be a problem to find a continental Europe replacement” to British suppliers of plastics ingredients.

    And while “import regulations can be modified on demand within the UK relatively quickly” to ease imports into Britain of plastics and ingredients, for some continent-wide plastics trade issues affecting the UK, “finding a solution with all EU participants on certain topics might be much harder,” he predicted.

    Such problems could be a real headache for industries such as the auto sector who have multiple plastics components, whose processing might happen in two or three different plants, maybe in different European countries, including the UK.

    Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), the trade association representing more than 700 automotive companies in the UK, said: “Brexit is the greatest challenge of our times”.

    He noted that an average car is made up of around 30,000 components, “each crossing borders multiple times before the final vehicle is assembled”.

    As it stands, other EU member states supply 56% of auto industry components used or processed in the UK. How Brexit’s impact on their regulation under REACH and hence on this vital trade remains to be seen.

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