Brexit and Chemicals - who's diverging from whom?
(Article by Steve George, Senior Advisor at Rud Pedersen Public Affairs)
As the UK left the European Union, commitments were made to uphold high standards of environmental protection, and a level playing field, through commitments on economic development, social development and environmental protection, and to cooperate on shared environmental concerns. Should either party seek to gain advantage by deregulating environmental protections, there is the potential for trade sanctions, though environmental commitments other than on climate change are not among the most “essential” elements identified in the Trade and Cooperation agreement dispute mechanism.
Chemicals in the EU are managed mainly through the REACH regulation, “Registration, Evaluation, Authorisation and restriction of Chemicals”, operated by the European Chemicals Agency (ECHA), which manages chemicals data in their REACH IT database.
During negotiations, UK attempts were made in the UK to negotiate first an “associate membership of” the European Chemicals Agency keeping the UK within the EU REACH chemicals framework and with access to chemicals data. Where that failed, a data sharing arrangement was requested, to avoid a need to duplicate chemical registration data in a separate UK REACH database. These initiatives failed as a result of political and/or legal difficulties, leaving the UK with a choice between duplicating the EU REACH system in a standalone UK REACH system, or doing something very different. So a standalone UK REACH was born, initially as a “no deal” legal backstop and subsequently as the only plan available.
In order to prevent supply chain disruptions and to avoid opening up the market completely to unregistered chemicals, transitional elements were built into UK REACH with the following (simplified) principles in mind.
British holders of existing EU Registrations and Authorisations would be supported for a period of time (“grandfathering”), but they must provide all relevant data in time.
Companies importing from the EU would need to resolve their new importer obligations in the same timescale as grandfathered registrations.
New chemical supply chains must establish Registration data before being placed on the market, under the “No Data No Market” principle.
As a result of the estimate £1bn cost to re-establish existing substance data, government is exploring options to mitigate costs to industry. First the UK Government is consulting on extending the deadline for companies to provide chemicals’ registration data to comply with UK REACH, and secondly is exploring an alternative registration model put forward by the Chemicals Industry Association.
Meanwhile, EU REACH is developing, with addition of various substances to monitoring and authorisation lists, and the EU is considering sweeping changes to EU REACH under its Chemicals Strategy for Sustainability, developing away from the version used to establish UK REACH at the end of 2020.
Civil Society fears that the UK is considering is watering down UK REACH due to industry concerns and “not keeping up” with the EU. Some NGOs have suggested they are “hoping that the EU will take swift action” to hold the UK to account for standards dropping below those at Brexit, and also express concern that the UK will become a “dumping ground” for chemicals if there is regulatory divergence.
Given that UK proposals to mitigate registration costs do not undermine the basic requirement for new substance supplies to be registered prior to being placed on the market, these proposals do not appear to undermine the Trade and Cooperation Agreement commitments on the environment. Also the agreement does not require the UK to match every EU move. If the EU wishes to avoid divergence it could be argued that the EU needs to first negotiate changes in EU REACH with the UK, given that the UK has no obligation to match the EU amendments beyond cooperation on common environmental concerns. We do not expect the EU to challenge the UK on either registration costs mitigation nor on divergence, and nor do we think that pragmatic solutions to industry costs creates a “dumping ground” for chemicals. UK REACH will remain in the top rank of chemical regulations despite teething troubles and some divergence.