Concerns rising about increasing regulatory costs for chemicals
9 August 2022
Research seen by the Financial Times suggests the total cost to industry of registering chemicals on the new UK REACH database, which replaces EU regulation, could be around £2 billion.
UK REACH will regulate over 22,000 chemical substances that are placed on the market in Great Britain now that the UK has left the EU. Like the EU’s own REACH regime, the aim of the regulation is to protect human health and the environment and make those who place chemicals on the market responsible for managing the risks associated with their use.
Businesses that import or manufacture a chemical substance in Great Britain at or over one tonne per year must register or joint-register the substance to comply. This applies to substances whether they are placed on the market on their own, in mixtures or in some finished products.
As the EU and UK regimes operate independently from one another, there are serious concerns about the cost to businesses of registering and complying with both systems.
According to a government impact assessment seen recently by the Financial Times, UK businesses have spent an estimated £500 million complying with EU REACH over the last decade. The additional cost of UK registration is currently expected to be around £91,000 per substance, resulting in a total potential cost to industry of around £2 billion.
So far, British businesses should have already provided initial information as part of the transition from the EU regime to the UK regime, but the deadline for full registration has been pushed back until at least October 2025 to help spread out the cost.
Chemicals business have been lobbying the government for some time to retain associate membership of EU REACH instead of setting up a UK-specific regime, or find another way to significantly reduce costs. A Defra spokesperson told the Financial Times that the department is currently engaging with stakeholders to find a lower cost solution.
Commenting on the issue, Martin Hyman, Manufacturing Advisor at GC Business Growth Hub, said:
“The expected costs of the new regulatory regime are a big worry for many SME manufacturers we support in Greater Manchester. Not only are there the cost disadvantages of having to comply with both the EU and UK regimes, there is also the risk that some overseas suppliers may simply choose not to register their substance in the UK, hence cutting off future supply.”