The Cost of REACH Compliance is Out of Reach for Many Small Companies

A business man standing behind many construction caution standsCosts for meeting environmental and sustainability regulations are too much for many small companies, blocking markets and interfering with competition. That’s especially true for companies in the United States trying to sell their products in Europe, where the REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) regulatory nightmare is denying certain companies market access.

Just ask Sal Monte, CEO of Kenrich (Bayonne, NJ), a specialty chemicals company that has spent millions over many decades developing and patenting specialty additives, including those used in polymers. The EU REACH law is having a detrimental effect on the American plastics industry’s raw material supply chain. While there are many conferences on REACH compliance, nothing is mentioned about the astronomical cost of compliance and there is “little discussion as to EU laws pre-empting USA EPA TSCA (Toxic Substances Control Act) laws,” said Monte. “The point is that EU REACH compliance is too expensive for many materials suppliers to the industry.”

For example, Kenrich has been selling a polymeric aromatic hydrocarbon plasticizer, registered as Kenflex A, globally since the 1950s. The EU REACH law does not allow for a company like Kenrich to register polymers—the company must register the monomer, Monte explained. “The monomer in our case is an aromatic feedstock from ExxonMobil, which they have already registered under REACH,” said Monte. “We finally obtained the ExxonMobil REACH dossier through the heroic efforts of ExxonMobil. Our charge for taking the ExxonMobil data and putting it on a Kenrich dossier was €27,000—and the madness continues.”

REACH is built on a concept that Monte describes as “an unobtainable goal of perfect safety—the precautionary principle—which simply is too expensive, except maybe for life-saving drugs.” Monte explained that if the precautionary principle were applied to everyday situations, life would be pretty austere. For example, we would never:

  • Drive a car because of the risk of being injured in a crash or the vehicle being stolen;
  • marry because of the risk of divorce, adultery or the chance of growing apart;
  • have a baby because of potential medical problems or because the kid might grow up to be a drug addict or a criminal;
  • start a business (risk of bankruptcy);
  • or even walk down a flight of stairs because you could trip and injure yourself.

“The precautionary principle states that if an action or policy risks causing harm to the public or to the environment, in the absence of scientific consensus that the action or policy is harmful, the burden of proof that it is not harmful falls on those taking the action,” said Monte. “If risk of harm is possible, then we must err on the side of caution and apply the precautionary principle.”

The core problem is that REACH refuses to acknowledge approvals by other agencies—such as the U.S. EPA TSCA for a product being sold in the United States—as valid for that same product when it is sold in the EU. Monte pointed out that he just completed a U.S. EPA TSCA registration for a modification on Ken-React LICA 44 (a neoalkoxy version of KR 44) that Kenrich will use as part of a formula to make an additive for nano-surface modification of Portland cement that reduces the water-to-cement ratio. The cost to a small company (defined as under 1,200 employees) for EPA TSCA registration was a “reasonable” $940.

“Almost everyone agrees that REACH is outrageously expensive,” said Monte. “The sad thing for the EU is that it stifles innovation. We are not selling new-generation neoalkoxy titanates and zirconates in the EU, while the rest of the world, particularly Southeast Asia, is moving very fast. For example, we registered all of our titanates and zirconates in South Korea at zero cost, which accepts U.S. EPA TSCA standards.”

Kenrich’s EU-only representative, Dr. Anna Piskiewicz, acknowledged in an e-mail to Monte that she understands his view about the costs, as she is hearing the same thing from other companies, “especially small non-EU producers.” She even mentioned one client whose fee would have been €500,000 just “for the letter of access, and this did not include preparation of the member dossier and the ECHA fee.” That client, she said, had to stop the registration process because it simply could not afford the high cost.

The problem with bureaucracies such as the EU’s REACH is that they become kingdoms unto themselves. Rather than accept the research, findings and approvals by U.S. EPA TSCA and charge a reasonable registration fee, the EU wants its own separate testing and research for which it charges astronomical fees, thus blocking access to a company’s product in the EU even as that same product is being sold globally.

“Just like in World War II, I think the American press has to begin an invasion of the EU and start a discussion on the practicality of REACH and save the EU, once again, from the scourge of the precautionary principle, such as the banning of single-use plastics,” said Monte.

Maybe the real purpose of REACH is to allow the EU to reach into your bank account and enrich itself while operating under the delusion that these regulations will save the planet and humankind from some perceived disaster.

Source: https://www.plasticstoday.com/business/cost-reach-compliance-out-reach-many-small-companies/43144281261008/page/0/1

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