INTERNATIONAL WORKSHOP ON REACH - THE NEW EUROPEAN COMMUNITY REGULATION ON CHEMICALS REACH – State of Play Today Mathias Berner Partner, Sales Director 7th of April 2009, Brasilia Copyright © 2008 REACHLAW Ltd. All rights reserved. Agenda 1. REACHLaw Introduction 2. Basic REACH concepts & terminology 3. The complexity of REACH 4. Current Status of REACH 5. SIEF and Consortia Strategy 6. Cost Estime for REACH 7. Authorization 8. Conclusions Copyright © 2008 REACHLAW Ltd. All rights reserved. REACHLaw Introduction Copyright © 2008 REACHLAW Ltd. All rights reserved. Our mission REACHLaw Ltd exists exclusively to provide full set of REACH services and timely solutions to its clients by offering unique combination of expertise in REACH, legal, chemistry, environmental and business Introductions: Our Executive Team & skills Mr Lasse Kurkilahti, Partner and Chairman of the Board, former CEO and President of Kemira Ltd, also former Chairman of Finnish Chemical Industry Association, MSc in Business Admistration Mr Lasse Musakka, Partner and CEO, MSc in Economics Mr Mathias Berner, Partner and Sales Director, D.Sc. (Tech) Mr Riku Rinta-Jouppi, Partner and Chief Legal Council, MA Law, MSc in Bioinformation Technology Mrs Ying Zhu, Partner and COO, PhD in Bio Chemistry, MBA Mr Jouni Honkavaara, Partner, CFO and CMO, MSc , MBA > 40 specialists in REACH/EU competition law, chemistry, toxicology and business Key capabilities of REACHLaw: Chemical Industry, business and legal REACH knowledge, Chemistry, Close Co-operation with ECHA and Helsinki REACH Centre, Independence Our Service Model Non-EU Countries EU M SIEF Non EU Industry Associations OR Consortium LR Consortium DH REACHLaw Ltd Brussels REACHLaw Ltd Helsinki, Finland Non–EU Manufacturers Own subsidiaries & Partners for on site support and additional competencies ECHA Process development & Confidential Information Management EU EU Manufacturers Manufacturers Importers (→ DU) Downstream Users (EU Market) Some of Our Partners > > > > > China > Huateng www.hthitech.com CPCIA www.cpcia.org.cn India > Dynamic Orbits www.dynamicorbits.com Russia > Petrofinn www.petrofinn.com Thailand > Pro-Application Service www.proapplication.com USA > ChemRisk www.chemrisk.com Latin America CIQyP & MOURAO ENRIQUE ASSOCIADOS With the support of: ABIQUIM, ANIQ, ASIQUR, ASIQUIM, ASOQUIM. AUSTRALIA Pamir Consulting www.pamirconsulting.com REACHLaw Ltd today : global, world class REACH service provider Partners Customers Our customers: > 200 major manufacturers in 25 countries with around 2000 substances Examples on our REACH service packages Services for Manufacturers Registration Service Package Service/outsourcing/Third party agreement model for EU manufacturers and subsidiaries of non-EU manufacturers Only Representative model for non-EU manufacturers Service Package for Late Arrivals Sourcing and Supply Chain Strategies: REACH Risk Analysis Services for Lead registrants & Consortia Pre-Consortium Study for Consortia Formation Lead Registrant Support Service Package Consortium Support Service Package Services for Downstream users Downstream User Registration Package Exposure Scenarios Basic REACH concepts & terminology Copyright © 2008 REACHLAW Ltd. All rights reserved. Comment to the Presentation The presentation is built on previous REACH knowledge and only a very concise summary and key terms will be repeated What is REACH? REACH is the new chemical legislation in EU affecting the sale and manufacture of all chemicals unless specifically exempted REACH is in Force NOW! No (pre)-registration – no Market What to register? All substances – on their own, in preparations or articles (if intended to be released) manufactured or imported in quantities of 1 tonne or more per year unless they are explicitly exempted from the scope of registration, notably Annex IV, V. How to Register? 1. Independent, professional Only Representative 2. Own legal entity (subsidiary in the EU) as registrant 3. (Importer in the EU as OR/registrant) 4. (Test laboratories) 5. (Multinational companies) 6. (Non-EU Government affiliates) When to Register? Milestones Pre-Registration preparations ongoing 1000 t/y, CMR 1&2 R50/53 100 - 1000 t/y 1 - 100 t/y 2007 Dec 1 2010 2008 In Force June 1, 2007 2009 June1 2013 June 1 2018 TODAY’S FOCUS Pre-Registration (June 1 – December 1 2008) Dec 1 2008 Evaluation, SDS & Down Stream User Data maintenance Evaluation, SDS & Down Stream User… Evaluation… 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Terminology SIEF = Substance Information Exchange Forum All pre-registered substances are automatically part of the (pre)SIEF. After sameness of the substances is agreed the SIEF officially starts Purpose of SIEF: agree on CLP and data sharing Consortia “Voluntary” Formalized co-operation between companies The complexity of REACH Copyright © 2008 REACHLAW Ltd. All rights reserved. The context/concept/paradigma of REACH (Background:Scope of our risk analysis) EU - customers 7. Independent importers Your OR / subsidiiary 4. 1c. New counterparts ECHA, SIEF, Consortia.... 6. EU – supplier Substance A 5. EU Scope: topics to be covered Non-EU Independent Non - EU Manufacturer 1b. 3. Your company Your company (Group) Group 1a. 2. Non-EU Non-EU suppliers suppliers 1a. Appointing Parties, substances, legal entities 1b. Appointment Process 1c. Appointed Party (OR) 2. Independent non-EU suppliers 3. Indirect export 4. Independent EU importers 5. Potential EU suppliers, re-import 6. New ”REACH counterparts/liabilities/risks” 7. New liabilities against your customers Comments to REACH risk analysis Understand all REACH relationships very well Especially Focus on Supply chain issues Pressure created by your customers in EU Liabilities arising from REACH TECHNICAL WORK IN REACH ORGANIZING EXISTING DATA SHARING THE EXISTING DATA TESTING REQUIREMENTS EVALUATION OF THE DATA QUALITY IDENTIFICATION OF DATA GAPS GENERATION OF NEW DATA PREPARATION OF TESTING PROPOSALS CHEMICAL SAFETY ASSESSMENT CSA HAZARD ASSESSMENT (HA) Dangerous or PBT, vPvB EXPOSURE ASSESSMENT (EA) RISK CHARACTERISATION (RC) FINAL EXPOSURE SCENARIO (ES) PREPARATION AND CHECK OF CSR DOCUMENTATION IN CHEMICAL SAFETY REPORT (CSR) Starting point If substance is not hazardous, only data for physicochemical properties required (Annex III) When there is an information gap which cannot be filled by any non-testing method, registrant has to take action - Annexes VII or VIII : generate new information - Annexes IX or X : prepare a testing proposal Tests needed (1/4) Tests Needed (2/4) Tests Needed (3/4) Tests Needed (4/4) Conclusions on technical requirements There is an incredible workload coming towards substance with the 2010 deadline Numerous tests have either to be performed (Annex VII-VIII) or testing proposals submitted (Annex IX-X) Requires completely new interactions between competitors (NOTE: Competition LAW!) How is the industry coping with this? European Chemical Industry Council (CEFIC) Alert 4.3.2009 A key warning to companies is that in practice, they should aim to submit lead registration dossiers by June 2010 - six months before the deadline - to be on the safe side. This is so that it can undergo a technical completeness check and secure registration after the registration fee has been paid - in time so that all other members of the substance information exchange forum (SIEF) that are sharing data in that dossier can refer to it. The timeline also indicates that already: SIEF formation facilitators should have been identified; codes reflecting the role companies will play within SIEFs should have been communicated; and agreement on the sameness of a substance represented by the SIEF should have been achieved. For many SIEFs this will not have happened--it is understood that only 10% of pre-SIEFs had a potential formation facilitator lined up via the pre-registration process. EU Response on REACH and costs Current status of REACH Copyright © 2008 REACHLAW Ltd. All rights reserved. Some statistics: pre-SIEF’s Percentage of preNo of Pre-SIEFS in SIEF covered by No of Participants range consortia 1000-4999 138 ? 500-999 287 ? 200-499 1114 ? 100-199 2006 ? 75-99 1290 ? 50-74 2733 ? 25-49 9734 ? 10-24 35439 ? 1-9 94428 ? Grand Total 147169 0 Low cost? High cost? If > 1000 ton and no existing consortia -> major difficulty in registering on time Which substances will be affected 20092010 (=deadlines for registration) 30.000 Current status:Types of SIEF’s (according to our experiences from 2000 Pre-SIEFs) Type of SIEF Activities/status Characteristics Dominating players Key issues 1. ”Dormant” No progress, major type so far No leading manufacturer No one so far Leading must show up, others can just wait 2. ”Mess” Playground for commercial service providers No real leading manufacturer having industrial interest No one so far Leading must show up, 3. ”Nominal” Low activity in SIEF, leading has taken to role Major work done in existing consortia Large USA/EU based manufacturers Cost sharing issues, membership in consortium 4. ”Fighting” Discussions dominated by one manufacturer Major work done by the leading company (no consortium) One large manufacturer Cost sharing mechanism 5. ”Real” No existing examples Major work done by SIEF No one Role in SIEF depending on existing data CEFIC tried to help Deadline is within 2 weeks after the sending of the letter but no later than 1st of March 2009 if the earliest registration deadline in the SIEF is 30 November 2010. Assignment of SIEF codes is not static and may change over time No assignment of code will mean default code 4 (please note that these codes can be changed at any time by contacting the SFF). SIEF Code 1 Leading 2 Involved 3 Passive 4 Dormant Position My position (please indicate the appropriate cell) This is a substance of high strategic importance for my company and I have available resource to (co) lead and drive registration to completion My company is registering and may be actively involved. My company will receive a SIEF progress report, an invoice* and an invitation to comment My company has the intention to register this substance. My company will receive a SIEF progress report and an invoice* My company has no intention to register nor to spend money. My company will receive no communications and no invoice (besides mandatory data sharing). * Invoice will include the data needed for the corresponding registration and any additional management compensation according to cost sharing system agreed in the entire SIEF. Chemistry making a world of difference European Chemical Industry Council – Cefic aisbl Avenue E. van Nieuwenhuyse 4 B - 1160 Brussels Belgium Tel: +32 2 676 72 11 Fax: +32 2 676 73 01 email@example.com www.cefic.org Why so slow progress – major reason ? Big ones not taking the lead, especially non-EU manufacturers Pre-registration, basic challenges Major tasks Substance identification (chemistry) Knowledge about & interpretation of REACH regulation (legal) Volume calculation REACH-IT Registration, completely new challenges Pre-SIEF , SIEF and consortia formation: Who should take the leading position, what it means, how to cooperate in SIEF / Consortia, cost sharing etc (legal & business) Later: Evaluation of data, new research (toxicological & ecotoxicological tasks) Current status: Pre-SIEFs have started, but… We (= our customers) have made pre-registrations for around 2.000 substances Less than 200 Pre-SIEFs are running… Reason to be worried ?? SIEF and Consortia Strategy Copyright © 2008 REACHLAW Ltd. All rights reserved. Immediate Actions needed Products in over 1000 t category or CMR’s are in very real danger of missing the 2010 deadline if no one is taking the lead What is the pre(SIEF) status? Data availability? SIEF distribution? But first, let’s understand the individual role... Our Categorization - first understand the status Next Step: (pre)SIEF status What is the status of the pre-SIEF? Is it progressing Based on the pre-SIEF lisiting are there other major manufacturers Who is the SIEF Formation Facilitator? ECHA will not assist in this process! IF THE MAJOR MANUFACTURERS WILL NOT TAKE THE LEAD, REGISTRATION DEADLINE WILL BE MISSED Pre-consortia Study or Lead registrant Pre-SIEF status alone LEAD REGISTRANT Others in similar position Pre-Consortium Study If successful Consortium Authorisation Service – Providing Evidence of Adequate Control to ECHA Copyright © 2008 REACHLAW Ltd. All rights reserved. Authorization process Substances Prioritised by ECHA for Authorisation 5-tert-butyl-2,4,6-trinitro-m-xylene (musk xylene) Alkanes,C10-13,chloro (short chain chlorinated paraffins; SCCPs) Hexabromocyclododecane (HBCDD) and all major diastereoisomers identified 4,4’-Diamino diphenyl methane (MDA) Bis (2-ethylhexyl) phthalate (DEHP) Benzyl butyl phthalate (BBP) and Dibutyl phthalate (DBP) ECHA Authorisation Process ECHA consultation now open until 14 April 2009 for evidence from industry that certain uses for these substances should still be exempted from authorisation The criteria used are: Intrinsic properties (CRM, PBT, vPvB) Volumes applied Nature of Uses ECHA Fees For Authorisation Cost estimtion for REACH Copyright © 2008 REACHLAW Ltd. All rights reserved. 5% SIEF 70-80% Data Big variation Oil industry: Total average cost estimate 100.000 to 200.000 euro/substance 10% ECHA 10% Consulting Pre-registration service 1-2% Registration service Cost components of Registration phase Principal model for cost estimate (simplified) Some major cost factors 1. The exported volume (= data requirement) 2. Your individual data gap (= your missing data) 3. The total data gap (cost for new research) 4. Number of potential registrants sharing the cost 5. Cost sharing mechanism 6. Consortia costs 7. Echa fees 8. External service fees Data requirement (=studies) You Other potential Registrants Total Information gap > 10 X 0 0 X 0 X X 0 X 100 X 0 0 0 X 0 X X 1000 0 0 0 0 0 X 0 0 x ECHA Fees STANDARD FEES Individual Submission Fee for substances in the range of 1 to 10 tonnes Joint Submission REDUCED FEES FOR SMEs Medium Medium Enterprise Enterprise (Individual (Joint Submission) Submission) Small Enterprise (Individual Submission) Small Enterprise (Joint Submission) Micro Enterprise (Individual Submission) Micro Enterprise (Joint Submission) EUR 1 600 Fee for substances in the range of 1 to 10 EUR 1 200 tonnes EUR 1 120 EUR 840 EUR 640 EUR 480 EUR 160 EUR 120 EUR 4 300 Fee for substances in the range of 10 to 100 EUR 3 225 tonnes EUR 3 010 EUR 2 258 EUR 1 720 EUR 1 290 EUR 430 EUR 323 Fee for substances in the range of 100 to 1000 tonnes EUR 11 500 Fee for substances in the range of 100 to EUR 8 625 1000 tonnes EUR 8 050 EUR 6 038 EUR 4 600 EUR 3 450 EUR 1 150 EUR 863 Fee for substances above 1000 tonnes Fee for substances above 1000 EUR 31 000 EUR 23 250 tonnes EUR 21 700 EUR 16 275 EUR 12 400 EUR 9 300 EUR 3 100 EUR 2 325 Fee for substances in the range of 10 to 100 tonnes 30 000 Substance * 23 250 €/substance = 697 500 000 euro Conclusions Copyright © 2008 REACHLAW Ltd. All rights reserved. Conclusions – short term All substances are covered correctly and REACH compliance exists Enforcements have started and will continue to grow in activity There is not any time to be lost of your deadline is in 2010 and no consortia exists Be careful of consultant SIEF Formation Facilitators (wrong interest) Pre-consortium study Lead registrant Are intermediates relevant? Conclusions – long term REACH is not a short term operational issue but a very stratgic one. It will effect: Future investments at plants Process changes Supply chain changes (e.g raw material quality) REACH will be a tool for competition Non-EU suppliers will be divided into compliant vs noncompliant companies with an economic effect What will happen after 2010? Will EU buyers prefer to buy from fully REACH compliant suppliers regardless of registration deadline? Let us not repeat the pre-registration problem…not possible now… Thank you for your attention !