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Nov. 19, 2007

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Nov. 19, 2007
European industry will incur lower costs for the registration of chemical products than had been expected. As an internal document of the European Commission relating to the implementation of the Chemicals Ordinance (Reach) states, manufacturers or importers should pay between EUR1,600 and EUR31,000 for the registration of a normal chemical, depending on the quantity produced annually. This is somewhat less than the amount originally estimated by the authority.

If several producers apply for a registration jointly, their fees are reduced by 25 per cent. Small and medium-sized companies should also receive an additional discount on the standard fees. This would mean very small producers having to pay a maximum of EUR160 for the registration of materials produced in quantities of between 1 and 10 tonnes per year, and EUR3,100 for substances produced in quantities in excess of 1000 tonnes per year. Correspondingly, medium-sized companies would have to pay EUR1120 and EUR21,700.

In December of last year after many years of dispute, the member states and the European Parliament had reached an agreement on the EU ordinance for the registration, evaluation and authorisation of chemical materials. This obligates producers and importers to have approximately 30,000 previously unregistered materials registered within a period of eleven years. It is intended that the data collected for all substances produced in quantities of more than 1 tonne per year will help to determine the health and environmental risks that they pose. To date, only chemicals brought onto the market after 1981 (a total of around 4300) have been tested to determine their health and environmental consequences.

The EU ordinance also provides for very hazardous chemicals gradually being replaced by less dangerous ones. The Reach agency must authorise the substances so that they can remain in use temporarily. The duration of the approval varies depending on the substance involved.

According to the internal Commission paper, the authorisation of very hazardous chemicals should cost EUR50,000. This same fee should become payable for applications for an approval to be extended. In both cases, small companies must pay half that amount. Because the approval is limited to an actual use of the chemicals, new costs are incurred for each additional use. The producers must also pay an additional fee if they want to ensure that the data they submit is treated confidentially.

The producers are granted no approval as long as the fee remains unpaid. The pre-registration phase is scheduled to begin in June next year. The producers must then finally have the substances registered with the Reach Agency in Helsinki from December 2008 onwards. Depending on the annual production quantity and the potential hazards that the substances pose to humans and the environment, producers and importers have until the end of May 2018 to register their substances with the agency. However, new substances must already be registered before they come onto the market.

In addition to the cost of just registering the chemical materials, there are also the costs of the necessary tests. This means that according to the estimates of the Chemicals Industry Association (VCI), the cost of registering a chemical will, in total, run to anything between EUR20,000 and over EUR1 million, depending on its production quantity and the potential hazards that it poses. In total, the EU Commission estimates that Reach will cost the chemicals industry up to EUR2.3 billion. If we add the costs incurred by the processing industry when, for example, substances disappear from the market, in an extreme case the total payable could be as much as EUR5.2 billion. The Commission still has to approve the table of fees.

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