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German chemical giant says REACH is worth the investment

BASF, the German chemical giant, has distanced itself from the rest of the industry by saying Europe's REACH chemical safety law was worth the investment in the end, reports Euractiv. A review of the legislation is expected this month.

From the moment it was tabled until its eventual adoption in 2006, the REACH regulations gave rise to one of the most epic lobbying battles in the EU's history.

The bitter campaign saw chemical companies warn they could be forced to close factories and leave Europe because of the extra costs generated by the EU law, which sought to protect consumer health and the environment.

These included widely publicised industry studies which claimed that REACH would cost billions of euros to implement, causing millions of job losses in Germany.

"BASF was possibly the single most important player in influencing politicians and in leading the industry lobby against the environmental and health objectives of REACH," says Jorgo Riss, from the Greenpeace European Unit, in a paper recalling the REACH lobbying saga.

Six years on, the European Commission is preparing to launch a review of the controversial legislation.

And BASF has now radically changed its strategy.

Ronald Drews, vice president for chemical regulations and trade control at BASF, says the company has recruited 250 employees to prepare registration dossiers for submission to the European Chemicals Agency in Helsinki and that the company expects to submit around 5,000 REACH dossiers over 10 years, costing the company between €500 million and €550 million.

"The costs are high," he admits, citing an average of €50 million per year, which includes registration fees at ECHA, and other costs such as consultancy fees.

"I think at the end, it is worth the money," he told EurActiv, in response to a question on whether REACH had helped promote innovation in the chemicals sector and bring safer products to the market.
BASF's apparent endorsement of REACH may raise eyebrows among the wider chemicals industry because the cost of implementing the directive may in fact have been under-estimated.

An interim evaluation by the European Commission, published in March, indicated that industry has already spent around €2.1 billion on REACH registration dossiers since the directive was introduced, close to the €2.3 billion it had initially estimated would cost the industry until 2018. (A broader cost estimate could range between €1.1 billion and €4.1 billion, the Commission report added, pointing to a number of caveats in relation to these numbers).

"At this point, we see that costs are higher than originally estimated," admits James Pieper, a spokesperson for the European Chemical Industry Council. "We expect further on that it will indeed benefit human health and the environment, but it is too early to see any impact on innovation."

BASF is equally dismissive about earlier industry claims that REACH would force chemical production abroad.

The first phase of REACH dealt with substances produced or imported in large quantities (more than 100,000 tonnes per year). A plant of such production capacity "is not easily transferred to a place out of Europe," warns Ronald Drews.

"We have to produce where the market is. So for us, having a big downstream user market in Europe with the car manufacturers and so on, it makes sense to have our chemical production here."

In the long run, factory relocation "may happen in some cases", he says, explaining this could happen for chemicals produced in smaller quantities. "But I don't see a big move out of Europe."

CEFIC too admits that the industry's early claims about cost had not materialised but prefers to remain cautious about the future.

Says James Pieper: "The first deadline did not result in a dramatic situation for industry, but we must have a prudent approach for the upcoming deadlines."


6th September 2012

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