HELSINKI: The Indian chemicals industry may find it difficult to export their products to European countries after November 2010. The European commission (EC) has recently passed a new legislation, 'Reach', making it mandatory for companies to produce animal safety data and risk management data and also to register with EC to be able to sell their products in the countries.

Indian chemical exporters will now have to make significant investments to comply with the new global norm. "Becoming Reach-compliant is very costly and a time consuming exercise for a company," an Indian industry official said. The cost of conducting tests and completing paper work for Reach could cost anywhere between $50,000 to $2,000,000. A number of Indian companies are of the view that business in the European market may not be worth this investment, an official with a chemical industry association said.

The new norm comes in the backdrop of India and the EU (European Union) locking horns over the seizure of some Indian drug consignments in ports of EU over allegations of counterfeits.

The EC, on the other hand, argues that the latest legislation is an attempt to ensure safety of environment and human beings through chemical safety analysis. "The credibility of the chemical industry rests upon this new legislation and they need to ensure that they produce chemicals that are safe for environment and people. The new law aims to ensure safety of people and places of production in the complete supply chain," EC environment commissioner Stavros Dimas said.

Chemical companies have a year to register substances under Europe's new Reach legislation. The registration process, involving cumbersome paperwork, could make it a rough ride for Indian companies that are planning to double chemical production by 2015, an industry analyst said.

"It may have some impact on trade but the idea behind the legislation is to leave the risk management system in the hands of the industry and to start with a flow of information that would correspond with the supply chain," European Chemicals Agency director Andreas Herdina said.

BRUSSELS -- As of June 1, all EU suppliers are now required to comply with a raft of substance restrictions under the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) Regulation. The substance restrictions apply every time an article is supplied (including components, sub-assemblies and finished equipment) and enforcement action can be taken at any point in the supply chain. The substance restrictions also apply to distributors that resell components and sub-assemblies, and retailers that resell finished equipment. The 53 substance restrictions are detailed in Annex XVII of the REACH Regulation (as amended) and cover a range of applications. In addition to substances already restricted under the RoHS Directive, there are 19 additional REACH substance restrictions that can be relevant to electrical and electronics equipment and hardware. More substances are expected be added to the list by the European Chemicals Agency and EU Member States. However, the list of REACH restricted substances is expected to develop more slowly than the REACH Candidate List of Substances of Very High Concern, which may grow by up to 25 substances per year according to the ECA. Substances on the Candidate List require declaration if the component, sub-assembly or finished equipment contains more than 0.1% w/w of that substance. REACH enforcement is carried out through Member State regulations and is coordinated across Europe by the ECHA Forum for Exchange for Information on Enforcement. In France, for example, companies that do not comply with REACH restrictions face a maximum prison

REACH-IT status update (01/12/2008 14:00)

Today is the last day to pre-register: pre-registration closes on 1 December at 24:00 GMT. REACH-IT is working extremely well: we have less concurrent users than last week, so the system is quite fast today.

In order that we can keep REACH-IT working well for everyone, ECHA asks:

-Please do not to enter REACH-IT unless you want to submit pre-registrations. -Prepare bulk files off-line. -Do not run automated scripts. Offenders' accounts will be blocked.

Please remember: Modifications and additions to information submitted can be made after the pre-registration period.

Bulk pre-registration files are steadily being processed. Please do not send your bulk file again, unless you have received a failure message within 3 hours.

Pre-registration numbers for bulk files may be assigned in the days after 1 December.

Proof of submission is received within a few minutes via your REACH-IT mailbox. The time of submission is used to determine if the pre-registration was in time.

Total number of pre-registrations: 2,212,129

'The European Chemicals Agency (ECHA), which is responsible for running the European Union's new Reach scheme to regulate the production and use of chemicals, is still struggling to put its IT system fully into operation more than two weeks after the start of the project's pre-registration period. Chemical producers and importers have six months (from 1 June) to pre-register the chemicals they handle - or face being forced to take them off the EU market. The Helsinki, Finland-based ECHA had warned in May that it was having problems resolving teething problems with the system for bulk pre-registration of substances. But it indicated that its IT facility would be working properly within a fortnight of the start of pre-registration. Now ECHA officials are saying that 'sometime in the coming weeks' its IUCLID 5 software for processing Reach data should be functioning effectively enough to handle pre-registrations of large numbers of chemicals from single files, which would allow companies to submit data on hundreds of chemicals virtually at the touch of a single button.

'Many companies have prepared files for bulk pre-registration,' says Jo Lloyd, technical director at REACHReady, London, a Reach support service set up by the UK Chemical Industries Association (CIA). 'Now they will have to wait until ECHA has sorted out the bugs in its system.'

Some businesses have instead been pre-registering each substance individually. By 13 June, 7,363 substances had been pre-registered while 1,427 companies had signed up with the agency in order to submit Reach data. By the end of November around one million pre-registrations are expected to have taken place. These are likely to cover around 30,000-40,000 substances, an average of 25-30 per pre-registering company.

Companies want to pre-register their products as quickly as possible in order to reassure their customers of their commitment to registration, and to give themselves a competitive edge over competitors slower off the mark. Distributors in particular want pre-registration to go smoothly because of their need to satisfy the requirements of a wide range of suppliers, many of them producers outside Europe, and a large numbers of small downstream users. 'It is outrageous that ECHA has not been able to process bulk submissions from 1 June,' says Peter Fields, chief operating officer for Azelis, one of Europe's largest chemical distributors. 'It is not right, fair or moral that they have not been able to meet a starting date which is written into the Reach regulation.'

Massive task: Pre-registration requires data on the identity of substances and the production tonnage of the chemicals, factors that determine the deadline for full registration. The first full registrations for substances with an annual output of 1,000 tonnes or more must be completed by 2010, while for other chemicals the deadlines extend to mid-2018. 'We understand that the ECHA will . make bulk pre-registration submissions possible for end June or beginning of July,' says Lena Perenius, executive director of the European Chemical Industry Council (Cefic). 'The industry is eagerly waiting for this, and if this promise is kept we feel that it will be ready in time.'

But some companies fear that these initial glitches in the agency's computer system will be the first of many difficulties that the ECHA and the European Commission will face in dealing with the massive task of pre-registering and then fully registering every single substance available on the market which has an annual production of more than one tonne.

The chemicals went in one by one: Despite the hitches, some large chemical producers have managed to enter enough chemicals one by one in the ECHA databank to announce that they have started pre-registration. SABIC Europe, the Netherlands-based subsidiary of Saudi Basic Industries Corporation (SABIC), the Saudi Arabian petrochemicals giant, has been able to pre-register a number of products so that it can start the procedure of registering its commodity chemicals by the 2010 deadline. 'We've pre-registered manually a cluster of chemicals in one of our business units,' explains Juliette van de Ven, SABIC Europe's communications advisor for Reach. 'We wanted to make sure we were one of the first petrochemical companies to pre-register its chemicals Sean Milmo

Under the REACH regulations, everyone has been eager to see what the SVHC substances will be. Here is the proposed SVHC 16 that was just released:

The proposal includes the following 16 substances:

- Anthracene - 4,4'- Diaminodiphenylmeth ane - Dibutyl phthalate - Cyclododecane - Cobalt dichloride - Diarsenic pentaoxide - Diarsenic trioxide - Sodium dichromate, dihydrate - 5-tert-butyl- 2,4,6-trinitro- m-xylene (musk xylene) - Bis (2-ethyl(hexyl) phthalate) (DEHP) - Hexabromocyclododec ane (HBCDD) - Alkanes, C10-13, chloro (Short Chain Chlorinated Paraffins) - Bis(tributyltin) oxide - Lead hydrogen arsenate - Triethyl arsenate - Benzyl butyl phthalate

More information about the Proposed Candidates List is located here:

http://echa. europa.eu/ consultations/ authorisation/ svhc/svhc_ cons_en.asp

Click on 'Link to the Annex XV report' for details on each substance.

Once the list is finalized and in effect, Authorization will be required if companies use these substances.

This is one of the few press pieces we have seen about REACH from a United States source. Hopefully, this kind of information will begin elevating the awareness for U.S. companies about the potential consequences REACH may have on their EU business market.

Washington Post Article

Despite a November 30 deadline, business leaders appear lax about taking steps to comply with the Registration, Evaluation and Authorization of Chemicals legislation, or REACH, according to a survey released March 11 by PricewaterhouseCoopers, titled "Waking up to REACH." Two-thirds of North American organizations have limited knowledge of the operational impacts the European Union (EU) legislation could have on their business. There is also concern that North American companies will miss important REACH deadlines, consequently suffering significant business disruptions.

The clock begins ticking on June 1 for companies to begin REACH pre-registration, which provides manufacturers and exporters of chemicals to Europe six months to complete the process. In anticipation of this looming deadline, PricewaterhouseCoopers surveyed 241 senior executives across six industries in 29 countries to gauge readiness and reaction to REACH. The survey shows that two in five companies appear to have limited awareness of the regulation and one in four executives feels Europe's newest rules on chemicals and their safe use will have no impact on their business.

REACH became law on June 1, 2007, to streamline and improve the former legislative framework on chemicals in the EU. REACH places greater responsibility on the industry to manage the risks that chemicals may pose to health and the environment. It applies to all chemicals – those used in industrial processes as well as in products such as cleansers, paints and appliances – meaning upstream and downstream in the chemicals supply chain.

"REACH ensures that the industry maintains some accountability in improving the protection of human health and the environment from the risks that can be posed by chemicals," said Saverio Fato, global leader of PricewaterhouseCoopers Chemicals practice. "That being said, U.S. companies that are facing these new regulations do not appear to be on track for compliance, which may lead to operational problems down the line."

Large companies have greater awareness of the legislation than smaller ones and the survey found that European companies are best prepared for REACH, as they are most aware of the legislation. Among industries, chemical companies lead the way on awareness followed by pharmaceuticals; industrial manufacturing; forest, paper and packaging; retail and consumer; and automotive.

The survey found that not only is REACH awareness low among North American companies, but most survey respondents had not discussed the European law with customers or suppliers to determine the impact on their supply chains. In comparison, half of European companies surveyed said they've initiated contact with suppliers concerning REACH.

This apparent lack of action to contact suppliers and engage in discussions with downstream companies and customers could negatively affect business. The European Chemicals Agency (ECHA) estimates between 10 percent and 30 percent of classified chemicals that are listed with the ECHA will disappear as a result of REACH. Early communication with downstream companies and suppliers, whose businesses may be adversely impacted by the disappearance of these substances, is essential to maintain supply chains.

Most organizations said they have not yet completed risk assessments on how REACH will impact their businesses. Only 10 percent had completed a detailed assessment, 30 percent completed some risk assessment and 31 percent had no risk assessment. North American and Asia-Pacific companies are the worst offenders in terms of not carrying out the necessary level of risk assessment to measure the impact of the REACH legislation.

Those executives surveyed who are in the know about REACH said there would be risks to implementing the law. Most (54 percent) cited the cost and time involved, followed closely by supplier risk (49 percent). Only 14 percent of executives surveyed feel REACH will have a positive impact on their businesses; the majority is withholding judgment until the legislation goes into effect.

When asked what action companies were most likely to take as a result of the REACH legislation, an overwhelming 66 percent said they were ensuring suppliers adhere to REACH compliance deadlines, otherwise known as supply chain assurance. Another 46 percent said they would take action to help suppliers comply with REACH, and 45 percent said the legislation would require them to renegotiate or modify their supplier contracts.

"While an 11-year timeline to register chemicals may seem like a long time, it will certainly be a huge undertaking to register the 30,000 or so existing chemicals for REACH compliance. Only those companies that meet pre-registration deadlines for REACH will truly capitalize on the legislation. This includes continuing to operate business as usual and qualifying for an extended timeline to register existing substances used in the European market," said Fato.

"The pre-registration process is not very time-consuming, but it is required in order for companies to secure access to the EU market," added Dr. Hans Schoolderman, director of sustainability and climate change services for PricewaterhouseCoopers. "If handled properly, the legislation can enhance the bottom line by increasing the customer confidence in product safety. Consumers have little to no tolerance for chemicals that are a risk to human health and the environment. It is good practice and good governance for companies to be transparent to their customers regarding their products and the safe use of the products – and REACH will help get us there."

RP Newswires

REACH applies to substances manufactured or imported into the EU in quantities of 1 tonne per year or more. Generally, it applies to all individual chemical substances on their own, in preparations or in articles (if the substance is intended to be released during normal and reasonably foreseeable conditions of use from an article).

Some substances are specifically excluded:

• Radioactive substances

• Substances under customs supervision

• The transport of substances

• Non-isolated intermediates

• Waste

• Some naturally occurring low-hazard substances

Some substances, covered by more specific legislation, have tailored provisions, including:

• Human and veterinary medicines

• Food and foodstuff additives

• Plant protection products and biocides

Other substances have tailored provisions within the REACH legislation, as long they are used in specified conditions:

• Isolated intermediates

• Substances used for research and development

Whether manufacturers, importers, downstream users or distributors, small and medium-sized enterprises (SMEs) doing business in Europe must comply with Reach regulations. Even if a company produces less than the 1 tonne/year lower limit for registration, Kline & Company recommends that SME's preregister products. In doing so they become part of a Substance Information Exchange Forum (SIEF) that includes companies registering the same chemical substance, making it possible for members to share data and costs.

Without in-house expertise and the necessary financial resources, many SMEs will find registration costs uneconomical and may no longer offer certain products in the European market. Those that are downstream users may be left searching for new suppliers or substitutes for key raw materials if their suppliers don't register these materials.

The act of preregistering does not mean that a company must ultimately register a product. But it does give SMEs an opportunity to see who else is in the SIEFs for certain compounds and "opens up strategic opportunities for SMEs to divest product lines, purchase new lines, or even acquire competing companies," according to Kline. Also, any chemical substance with an annual volume of greater than 1 tonne/year not preregistered during June 1 to November 30, 2008 will be banned from production or marketing in the EU as of December 1.

Separately, Indian chemical industry officials have conservatively estimated that the country could lose as much as $2.2 billion (Euro 1.5 billion) in trade if companies in the country elect not to comply with Reach and therefore cannot trade with the EU. Compliance with Reach is very expensive, according to one trader, and definitely will have an impact on profits. But many in India believe that companies will preregister so that they can continue to do business with Europe.

The EU engineers' trade body Orgalime argues that with substance risks due to be assessed and controlled under the REACH Regulation, there should not be a need for substance restrictions to continue in future under the EU 2002 Directive on the restriction of hazardous substances in electrical and electronic equipment. But also responding to a European Commission consultation paper reviewing the RoHS Directive, the American Chamber of Commerce (Amcham) says it remains to be seen whether REACH can accommodate all aspects of RoHS. NGOs last week also strongly argued against abandoning RoHS in favour of REACH, noting it could take some time for its controls to take effect.