REACH as business case

Sao Paulo 07.07.2008

Dr. Thomas Jostmann

Talking points

• Setting the scene

• Business implications

• Industry cooperation

• Major activities under REACH

• Pre-Registration

• Registration

• Authorization/Restriction

• Role of industry associations

• Opportunities under REACH

• Summary and outlook

REACH – a European exercise or a global mega trend (1)?

Some general remarks:

Risk assessment for chemicals is not a new invention of REACH (Biocides Directive, ICCA HPV, US Challenge…), but

• Shift of „burden of proof“ to evaluate risks from authorities to companies is „shift in paradigm“

• Shared responsibilities between manufacturers and users of chemicals changes transparency in supply chain

• Improved information of downstream users about safe handling of chemicals based on intrinsic properties and exposure information

• „right to know“ for end users and NGOs is changing companiesattitudes towards more transparency to the public

• regulators to challenge substances of high concern

• ban of critical substances if safe use cannot be demonstrated

REACH – a European exercise or a global mega trend (2)?

• REACH entered into force in mid 2007

• US, Canada and Mexico started the CHAMP initiative

• China has introduced a „REACH-type“ regulation for new substances

• UNEP summit on „Strategic approach on international chemicalsmanagement (SAICM)“ in 2006 started a global approach for safemanagement of chemicals

So; REACH is not an isolated initiative of Europe but has somespecifities which are so far unique and may have some immediate business implications!

Business implications

Get clarity about your own role in REACH

Specify your own obligations under REACH:

• Are you selling substances or preparations in Europe?

• Are you a manufacturer / importer or downstream user?

• Will you need to register or „just“ provide information about your ownuse?

• Do you have all information on hand which are necessary to fullfil yourobligations?

• Do you have an overview about your substances / applications fallingunder REACH requirements?

In case you‘re a downstream user make sure that your use is takencare of by your supplier, otherwise your product can not be exported to the EU!

No registration – no market

First immediate business impacts:

First (easy) hurdle is given by the pre-registration.

No Pre-Registration means loss of „phase-in“ Status and by that need to register before entering the market or continuing existing business

Pre-Registration will no be followed by registration:Expiration of respective registration period (depending on tonnage band)

determines end of marketing within Europe.

Registration dossier not complete:If missing infomation will not be provided in due time, ECHA can stop marketing

of corresponding substance.

Specific use is not covered by the registration dossier:Three options:

require either separate DU-registration

Supplier has to update his dossier

Use of substance in this specific application has to be stopped

Each Business Step is affected byREACH?

Core processes

supplier

Data exchange and communication

customers

§

purchasingProduct-safetyt

Production

R&D

Sales offices

authoritiesSIEFS

Substance Data

RegistrationsDocuments

§

Quelle Grafik: Technidata

Starting the communicationchain under REACH

Communication alongthe value chain

competitor

EU

Non-EU

Only Representative

Industry cooperation –sharing expertise

Registration is team work which requires expertise in different areas and planning of available resources

• Organisation within the company• specify data requirements and gaps• collect inhouse information

• Dialogue within various supply chains• identify „intended uses“• collect information about conditions of use

• Cooperation within consortia• evaluate data• identify data information gaps

May be that in-house resources may notsuffice and need to be (re-) activated

Is industry prepared to communicate ?

„European transparency“ is not backed up at global level thus creating an unevenlevel playing field

Dialogue ......increases market transparency...provides market intelligence to

potential competitors...discloses confidential business

information

Supplier

Formulators

Downstream users

Chemical suppliers are used to provide information via SDS to theircustomers but development of exposure scenarios and listing of identified uses needs open dialogue with downstream users !

Is your European customer prepared to „open the books“?

CBI – clarify first before sharing

CBIIUCLID 5: proprietary information can be indicated as

confidential in the registration dossier (Caviat: fees foreach individual CBI)

Exchange of important data / information about usepatterns o specific applications with customers is basedon an SA (Secrecy Agreement) vereinbart.

Consortia; in each consortium in with Evonik Degussa is actively participating CBI is covered in the contract(contract examples by Cefic, Redeker)

REACH Subgroups

SVT (Substance Volume Tracking)SVT (Substance Volume Tracking)ContractsContractsTrainingTrainingRisk

AssessmentRisk

AssessmentAgency contactsAgency contacts

IUCLID 5IUCLID 5Cost sharingCost sharingMarketingMarketingCSRCSRSubstance-identificationSubstance-

identification

REACH-BaseREACH-BaseCompetitorCompetitorCustomer Questionnaire

Customer Questionnaire

Standard-dossier

Standard-dossierChecklistsChecklists

DRIP (TeamDoc)

DRIP (TeamDoc)Data SharingData SharingPurchasing

(Feedstock)Purchasing (Feedstock)eSDSeSDSData-

collectionData-

collection

IT-ToolsIT-ToolsConsortiaConsortiaCommuni-cation

Communi-cation

Risk evaluation

Risk evaluation

Pre-Registration

Pre-Registration

REACH Implementation Working Group (CES, BUs, IT, LE, PR …)

Subgroups within Evonik to prepare for REACH

Preparatory steps (1)

Cost calculation (1)

Pre-Registration (internal costs)

- Information gathering (Art. 28)- IT for pre-registration (IUCLID 5-Modul, REACH-IT, own IT-solution)

Registration (internal costs)

- List of substances, intermediates, on-site, transported, tonnage band- Evaluation of available data, identification of data gaps, costs for necessary

studies- Generaton of registration dossier- Generation of eSDS- Generation of exposure scenario(s)- Generation of CSR (chemical safety report)

Registration costs (only direct costs)Cost evaluation by VCI ( 2007)

Cost evaluation by KPMG (2005)

Cost includes :Tests, Registration dossier incl. internal administration, CSR etc.not included:Waiving, existing data (e.g. for phase-in substances), registration fees

1 – 10 t/a ca. 10.000 – 30.000 €10 – 100 t/a ca. 100.000 – 200.000 €100 - 1.000 t/a ca. 300.000 – 700.000 €> 1.000 t/a Up to ca. 3 Mio €

1 – 10 t/a 14.602 €

10 – 100 t/a 162.723 €100 - 1.000 t/a 282.097 €> 1.000 t/a 323.163 €

Preparatory steps (2)

Cost calculation (2)

Registration (external costs)

- Registration fees ECHA (registration / CBI protection / PPORD / etc.)- Consultant

Kosten IT

- IUCLID 5, own systems (e.g. SAP EH&S modul, SDS software)

Registration fees: new (1)

Tonnage band Full base fee

Joint Submission

Medium sized (single)

Medium sized (joint)

1 – 10 t 1600 Euro 1200

Euro

1120

Euro

840

Euro10 – 100 t 4300 Euro 3225

Euro

3010

Euro

2258

Euro

100 t – 1000 t 11500 Euro

8625

Euro

8050

Euro

6038

Euro> 1000 t 31000

Euro23.250

Euro

21700

Euro

16275

Euro

Version 10/2007

Registration fees: new (2)

Tonnage band Small sized

Small sized (joint)

Micro sized (single)

Micro sized (joint)

1 – 10 t 640 Euro 480

Euro

160

Euro

120

Euro10 – 100 t 1720 Euro 1290

Euro

430

Euro

323

Euro

100 t – 1000 t 4600 Euro 3450

Euro

1150

Euro

863

Euro> 1000 t 12400

Euro9300

Euro

3100

Euro

2325

Euro

Stand: 10/2007

Get in touch with your supplier

Check your supplier situation in order to prepare for any changeswhich may occur in the course of REACH registration

Supplier questionnaire

“Will you pre-register the substance you’re supplying?”

“Will you register the substance and – if yes- when?”

“’What are the specific use patterns”

“Can you describe the exposure situation during application (Scenario)”

Risk CommunicationProcess flow

Manufacturer/Importer

ES/UEC

ES/UEC

ES/UEC

Formulator I

Downstream user

Formulator II Identified use

Identified use

Identified use

Data CSA CSRES/UEC

Check

Check

Check

ECHA

Substances of very high concern will need special treatment

Check the toxicological or ecotoxicological properties of your substance:

CMRs class 1 & 2 are already today not allowed for end use products. UnderREACH is will be necessary to apply for an authorization to cover the use in industrial applications

PBTs and vPvBs are under severe scrutiny by European regulators and maydissapear from the market in the midterm run.

Sensitizers are going to be subject for authorization, criteria not yet clear

Endicrine disrupters are in the focus

All substances which have such intinsic properties will qualify for authorization, whichmay be given under certain restrictions and timely limitations

A list of substances which will disappear from the market midterm

First list of candidates for authorization has been published by ECHA: Update everytwo years

Anthracene

4,4'- Diaminodiphenylmethane

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)

Hexabromocyclododecane (HBCDD)

Alkanes, C10-13, chloro (Short Chain Chlorinated Paraffins)

Bis(tributyltin)oxide

Lead hydrogen arsenate

Triethyl arsenate

Benzyl butyl phthalate

Pre-Registration

Pre-Registration (1)

Aim: Overview about all relevant substances, possible data sharing and avoidance of unnecessary animal testing, formation of SIEFs,

Pre-registration (and registration) required for each legal entity

Just one submission number and one pre-registration number per combination substance / legal entity

When?: 1. June 2008 – 1. December 2008 (only limited possibility to extend this period)

Who is affected?: Manufacturers and importers

How to do it?: XML-File based on own IT tools, via REACH-IT (online), via IUCLID 5

Actual Problems: Bulk upload not yet available

Pre-Registration (2)

List I: Agency publishes substance list on 1. January 2009

Substance names, CAS-/EINECS-No./intended registration period

List II: Only for manufacturers and importers

Name of Manufacturer/Importer, Adress (-> for SIEF)

Important impact of pre-registration:

If manufacturer / importer does not pre-register his substance in due

time, production / import has to be stopped immediately after expiration of pre-

registration period Substance becomes Non-Phase-in-Substance!

Phase-in-Substance (Art.20):

• Substance is listed in EINECS

• Substance produced in the EU but not marketed within the last 15 years (e.g. intermediates, R&D, Export)

• NLP: definition has been changed (limited to period 1981 - 1993 , Art 3, 20c)

• Monomers in polymers

Non-Phase-in-substance: new substance

Pre-Registration (3)REACH-IT

Workflow-System of ECHA called „REACH-IT“ with some shortcomings

- Launched on 1st June 2008

- Not all functionalities available (e.g.no bulk-upload). Planned availability earlyJuly

- manual online-pre-registration of substances is possible

- PPORD and „Early-Bird-Registrations“ actually only per e-mail/CD-ROM

- Disconnect in „Messaging system“: Informations via mail-box of REACH-IT will not be passed on to own mailing systems.

- Invoices for registration fees of ECHA cannot be downloaded from REACH-IT (one exemption: Firefox)

-> associations are in permanent contact with ECHA to solve problemsin due time.

Pre-Registration (4)REACH-IT

Actual situation in REACH-IT (18.6.2008)1851 legal entities registered

170 Third Party Representatives (TPR) nominated

9555 Pre-registrations already sucessfully done (2% with mistakes)

169 PPORD (but: no template available so far)

43 Inquiries

5 Full-Registrations (but: very often without any standardized templates)

18 Registrations for intermediates (template problems)

16 Proposals for SVHC from member states

What to do right now?

Time is running fast if not already done it is now high time to prepare for pre-registation.

5 months left to safe your business in Europe!

Actions to prepare for pre-registrations:

• describe / define substance identity• prepare inventory• check feedstock (e.g. ingredients in prep‘s)• decide strategically what to pre-register• who is the registrant in your company

What to do right now (2)?

Actions to prepare for registration

Organisational setup defined (e.g. project structure)Resource planning with additional staff (internal / external) Data gap analysis cost estimation for additional testsCollection of use informationstart communication with customers about exposureConsortia strategy resource managementstrategic management process Plan „B“ for SVHCportfolio management

Registrationmechanisms

Process of risk assessment

Identification and descriptionof use:• Registrants own use• Downstream uses• Entire life cycle (incl. articles & waste)• based on descriptor system

Identification and descriptionof use:• Registrants own use• Downstream uses• Entire life cycle (incl. articles & waste)• based on descriptor system

Exposure scenario

• Exposure determinants• Generic vs. Specific ES• ES for preparations and articles• Derive DNELs and PNECs

Exposure scenario

• Exposure determinants• Generic vs. Specific ES• ES for preparations and articles• Derive DNELs and PNECs

Exposure estimation• measured data (per exposureroute)• modelling

• Occupational health• Environmental exposure• Comsumer exposure• Man indirect via environment

Exposure estimation• measured data (per exposureroute)• modelling

• Occupational health• Environmental exposure• Comsumer exposure• Man indirect via environment

CSA iteration• improve hazard information• improve exposure information• higher tier models• substitute model bymeasurement

CSA iteration• improve hazard information• improve exposure information• higher tier models• substitute model bymeasurement

Safe useUse adviced against

DNEL= derived no effect levelPNEC= predicted no effect concentration

Risk evaluation

There is no „golden“ assessment tool available to evaluate all kinds of exposure; existing tools are

and have…..preset scenariosconservative default valueslimited variability (e.g. in exposure determinants, risk management

measures)complex input structureneed „work-around“ expertise

Occ. ExposureECETOC TRACOSHH/BAuA

Occ. ExposureECETOC TRACOSHH/BAuA

Cons. ExposureConsExpo

EUSESECETOC TRA

Cons. ExposureConsExpo

EUSESECETOC TRA

Env. ExposureEUSES

A/B tables

Env. ExposureEUSES

A/B tables

Without any experience in exposure modelling and basic know-how in risk assessment it will become difficult to judge the validity of themodelling results

OnlyRepresentative

Only representative (OR)

Manufacturers outside of the EU may nominate a “Only Representative”

who can take over all duties for a foreign company not being located within the

EU-

Caution: Definition of OR has been changed

Change from one OR to another is now possible! Update of ECHA. Important: The

previous OR must agree to this change (fix in contract!), otherwise a new Dossier required!

Tonnages of numerous companies of one OR will not be accumulated, but the OR has to

provide a separate Dossier for each registrant.

The OR can cover imports of a Non-EU-Manufacturer, even if the substance has been

traded outside of the EU

Only representative (OR) (2)

The OR will have to take over all activities within the cooperation between companies

SIEF: Definition of sameness of the substance

Negotiation with competitors about scope and structure of SIEF

Data evaluation of own and external data

agreement on cost sharing mechanisms and own contribution

Confidentiality agreements to protect CBI

Consortia cooperation

Contractual issues

Sweat equity contribution

Administrative burden sharing

Agreement on joint and separate activities

Preparation of registration dossier

Information about use and exposure

Role of associations

SIEF-Information exchange forum

Facilitation of inter-company interaction to find cooperation partners

Cefic, VCI, UIC, CIA, FEIQUE and Federchimica have cooperated to form a SIEF-Portal

• System should be ready for use in July (Release 1.0)

• Company owning this system is named REACHLink, the system itself SIEFreach.

• It is compatible with pre-registration functionality of REACH-IT.

• Costs for user of this system: one-time payment of 300.- Euro per LE/Substance/user

• For invited experts: 150.- Euro

• For data holder: 150.- Euro

• Early birds can gain fee reduction of 10% (registration to the system before 31. July)

Contact: Jack Wille, JWE@Cefic.be ARE@cefic.beor Alain Renard,

Preparation of standard tools

Evaluation of exposure situation in many standard application is the mostdemanding part in CSA generation.

• Many downstream associations have started to work on their standard exposurescenarios (e.g. detergents, paints, adhesives, …)

• ECETOC is actually refining its tiered risk assessment tool to simplify risk evaluation

• Business Europe is currently developing a standard phrase catalogue to facilitateeSDS generation and standardized communication along the value chain

• Cefic is updating a risk management measures (RMM) library to provide assistence in RMM evaluation and communication

• DU associations prepare calculation tools to enable their membership to evaluatediverging exposure situations

Opportunities under REACH

A REACH registration is a „licence to do business in Europe“

• Customers may ask for covering their specific use in theregistration dossier (=selling point)• Dialogue with customers and downstream users will providebetter inside view about potential product advantages(=customer intimacy)• Conducting special risk assessments for your customer canensure exclusivity (=customer bonding)• Low margin products may be taken off the market (=reductionof complexity)• Screening of SVHC can open business opportunities

Summary

• If you‘re doing business in Europe you better check yourobligations under REACH• Importers do have the same obligations as European manufacturers• Expertise is necessary to conduct a risk assessment – strivefor alliances• Missing deadlines for pre-/registration means loss of business• Your customer will need supply security in order to securehis own business• Manage your own resources (financial & human) to avoidshortages there are no experts anymore on the free market

KONTAKT

REACH@EVONIK.COM

Generation of eSDS

Substance on the market

Stoff erfüllt die Einstufungskriteriennach Art. 31.1 und

Art 31.3

SDB erforderlich(ohne Annex)

SDB mit Annex

“Substances of very high

concern” (Art 57 Kriterien)

GenerischesVorgehenmöglich? Generisches ES

(GES (Option)

SektorspezifischesES (Option) detailliertes ES (Option)

kein SDB erforderlich(mögliche Anwendung Art. 32

prüfen)

YesNo

Ja

< 10 jato(zum Zeitpunkt

derRegistrierung)

Ja

Ja

Nein

Nein

Nein

IT Project – REACH-Base (Evonik)

REACH Base

Registration Substances

- Substance name, LE- Registration data

Pre-registration substances

- Substance name, LE

- Little data

Substance Registration Decisions

- Substance name, LE- Decision data (generally,

not in IUCLID 5) - Cost planning

Management Data

- Substance checklists- Endpoint status- Endpoint costs

Front End (Access, Web)IUCLID5 Front End

Evaluations (e.g., Excel, Access, Web)

IUCLID5Add on

Add on Add on

Pre-RegistrationRegistration

10.000 Pre-registrationsBulk-upload aktually not possile250 pre-registrations ready (online)50 Legal entities

. . . . . . . . . .

.

. . . . . . . . . . .

Extended REACH Projekt (2007-2010)– Projektorganisation

REACH Implementation Working Group

Subgroups (SG)

Representatives of Business Units (product safety), IT, LE, PR …

BUs

REACH Assurance Program

- Competence center- Best Practice- SPC (Single Point of Contact)- OFA (One Face to Agency)- internal training- Master IUCLID5 (IT-Tool for

Registration)- Quality check- Proof reading

Project team

Steering committeeBlauth, Dr. Jostmann,

Dr. Rettig, Hetzke

Project teamDr. Wiegand, Dr. Soballa, Dr. Lutz, Rößler

SG1:

Vor

regi

strie

rung

SG2:

Bew

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ng

SG3:

Kom

mun

ikat

ion

SG4:

Kon

sort

ien

SG5:

IT-T

ools