The Financial Times' report on the cost of replicating the EU's landmark chemicals regulation within the UK has got a good deal of attention. For those following this agenda, though, this is not new. As 1 January 2021 approaches and minds return to the question of the future EU:UK relationship, it is worth a reminder on some of the key issues we have been highlighting for some time:
- The current plan is for a UK REACH with a UK database of registration dossiers, replicating the EU version held by the European Chemicals Agency (ECHA) in Helsinki. Yes, it would be more cost effective for the UK to use ECHA's database. However, ECHA does not own the data in the database (it belongs to the companies that submitted it) and there are legal questions about whether the EU can allow access. That's before you get to the political question about whether the UK should be entitled to access (or whether it is an example of 'cherry-picking' which the EU has been firmly against). With goodwill on all sides the legal issues may be capable of resolution in a trade deal, but the private sector should not be banking on it.
- The European Chemicals Agency operates on a payroll of some 600 people with an annual budget of €110m and it is supported in its work by the competent authorities in all member states, with workload divided between them. In a parallel UK REACH, the workload would be no smaller: there will be (give or take) the same volume of data to evaluate, and no-one else to share that workload with. So far, there is no suggestion that the Health & Safety Executive will be given anything like the same level of resource (reported figures are £13m / c.50 people). Again, co-operation with ECHA and the EU member states would be the cost effective option. However, in June 2020 the Government ruled out any form of 'associate membership' in REACH making it clear that it would be for the the UK to take its own decisions.
- The Environment Bill, currently before UK Parliament, would give Government ministers powers to make significant changes to the REACH regime through secondary legislation (an easier route to change the law than the default position). The fact that, out of all the EU regulations for environmental protection, it is REACH that has been singled out for this special treatment, strongly suggests reform is on the cards. Such reform would be much more difficult if the EU:UK trade deal locks the UK into replicating REACH. It is, however, difficult to see that EU trade negotiators would be willing to concede access to the ECHA database without some guarantee of the UK maintaining a parallel REACH regime in substance as well as name.
Our conclusion? This is going to be the source of some difficult trade discussions this autumn with no real guarantee of a solution that suits the UK chemicals industry and the much wider UK economy that relies on chemicals. As always, while businesses might hope for a trade deal that addresses these issues, planning for a UK REACH - with its associated costs - is a prudent risk mitigation measure.
UK chemical industry warns of £1bn cost to duplicate EU regime