Select Committee on Science and Technology Sixth Report


The EU chemicals industry

6. The turnover of the EU chemicals industry (excluding pharmaceuticals) was €417 billion in 2000, making up roughly 8% of EU manufacturing production. The overall value-added contribution of the EU chemicals industry (excluding pharmaceuticals) in 2001 was €107 billion, contributing 1.3% of total economy GDP.[5] In 2001 its sales exceeded €515 billion in Europe, accounting for 28% of world chemicals production.[6] The EU chemicals industry is mainly concentrated in four countries. Germany is the largest European producing country, accounting for over a quarter (26.2%) of EU production in 2000, followed by France (17%), the United Kingdom (13.5%) and Italy (11.6%). In 1981 there were approximately 100,000 chemicals in production in the EU. It is estimated that there are currently 30,000 substances whose annual production exceeds 1 tonne and 5,000 substances whose production exceeds 100 tonnes.

7. The UK chemicals industry is the sixth largest in the world, with approximately 3% of global production. In 2000, sales of chemicals (excluding pharmaceuticals) were worth £26.1 billion, representing £10 billion in added value (7% of UK total). This is equivalent to 1.2% of GDP. The UK is particularly strong in speciality chemicals. [7]

Existing legislation

8. Current chemical regulation distinguishes between "new" and "existing" (pre-1981) chemicals. Existing substances are regulated by Regulation (EEC) 793/93 and represent 99% of chemicals on the market. New substances are regulated under Directive 67/548/EEC; there are approximately 3,000 which have been tested and assessed for possible risks to human health and the environment before being marketed in volumes starting at 10 kg per year.

9. Existing substances are not subject to the same testing requirements that apply to new substances. Approximately 140 of the 30,000 substances manufactured in volumes over 1 tonne have been identified as priority substances and are subject to comprehensive risk assessment carried out by Member State authorities under Regulation (EC) 793/93.[8] Under Directive 76/769/EEC restrictions on the marketing and use of certain dangerous substances and preparations are applied where necessary. Risk assessments and adequate analyses of the costs and the benefits are required prior to any proposal or adoption of a regulatory measure controlling the marketing and use of chemicals. The proposed legislation will replace over 40 pieces of existing legislation, including these three.[9]

10. The Commission identified the following problems with the current legislation:

    a)  There is a general lack of knowledge about the properties and the uses of existing substances;

    b)  The risk assessment process is slow and resource-intensive and does not allow the system to work efficiently and effectively;

    c)  The allocation of responsibilities is inappropriate because authorities are responsible for the assessment rather than the enterprises which produce, import or use the substances;

    d)  Current legislation only requires the manufacturers and importers of substances to provide information, but not the downstream users (industrial users and formulators). Thus information on uses of substances is difficult to obtain and information about the exposure arising from downstream uses is generally scarce; and

    e)  Decisions on further testing of substances can only be taken via a lengthy committee procedure and can only be requested from industry after authorities have proven that a substance may present a serious risk. Without test results, however, it is almost impossible to provide such proof. Final risk assessments have therefore only been completed for a small number of substances.

Chemical regulation overseas

11. Useful comparisons can be made with the chemical regulatory systems in the USA and Japan. The Royal Commission on Environmental Pollution, in its June 2003 report on Chemicals in Products, discusses the differences in some detail.[10] The key features are outlined below. Both systems employ a risk-based approach to regulation and are cheaper than those currently in operation in the EU. There is also state funding for testing.


12. Industrial chemicals are regulated by the 1976 Toxic Substances Control Act (TOSCA), which is administered by the US Environmental Protection Agency (EPA). Manufacturers or importers are obliged to notify the EPA if a new chemical is being introduced. There are four phases to the process:

13. There is no minimum data requirement for the notification, and often assessment of chemicals does not use toxicological data but employs QSARs (quantitative structure activity relationships) to infer the toxicological properties. On the basis of this information and any extra test results requested, the EPA will act to control the risk. A key difference with the REACH Proposals is that, under TOSCA, the burden of proof is on the EPA not on industry. The process is designed to remove substances of low risk from further consideration at the beginning of the process and to focus resources on substances of greater risk. The US system was criticised by the US General Audit Office in 1994 for providing ineffective protection.


14. The 1973 Chemical Substances Control Law regulates the manufacture of chemicals and provides a framework for the evaluation of toxicity. All chemicals, imported or manufactured, are subject to pre-market evaluation. Persistent chemicals with long-term toxicity are divided into two classes depending on the level of bioaccumulation. Of the 1,280 chemicals introduced between 1973 and 2002, 11 have been withdrawn and 13 are tightly controlled.

REACH principles

15. The REACH Proposals have three main phases: Registration, Evaluation and Authorisation. Registration is a comprehensive attempt to gather data on the chemicals manufactured in, or imported into, the EU. The data requirements vary according to production volume and known toxicity. On the basis of the Registration data, Evaluations are to be undertaken to establish whether further tests are required and whether chemicals should be subject to the Authorisation process. Substances can be banned, their use restricted, or they can continue in production if they are adequately controlled, no suitable alternatives exist or there are socioeconomic implications. A flow chart summarising the process is shown in Figure 1.

5   European Commission, REACH Extended Impact Assessment, October 2003, section 4.1 Back

6 Back

7   Department of Trade and Industry, Enhancing the Competitiveness and Sustainability of the UK Chemicals Industry, a report by the Chemicals Innovation and Growth Team, December 2002, pp 8-9 Back

8   Article 8(1) of Council Regulation (EEC) 793/93 states that: "On the basis of the information submitted by manufacturers and importers in accordance with Articles 3 and 4, and on the basis of the national lists of priority substances, the Commission, in consultation with Member Sates, shall regularly draw up lists of priority substances or groups of substances (hereinafter referred to as priority lists) requiring immediate attention because of their potential effects on man or the environment."; Back

9   DEFRA, UK Consultation paper on the New EU Chemicals Strategy - REACH, March 2004, p 8 Back

10   Royal Commission on Environmental Pollution, 24th Report, Chemicals in Products: Safeguarding the Environment and Human Health, Cm 5827, June 2003, Chapter 3 Back

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