reach: impact on nafta companies and chemicals presented by edgar rodriguez sierra

REACH:REACH: Impact on NAFTA Companies and Impact on NAFTA Companies and

ChemicalsChemicalspresented by Edgar Rodriguez Sierrapresented by Edgar Rodriguez Sierra

REACH

April 7, 2009 ©ChemADVISOR, Inc. 2009

Registration

Evaluation

Authorisation and Restriction of

CHemicals

REACH – Across the pond



Introduction to REACH REACH applies to chemical substances

Registration is required for chemical substances manufactured or imported into the EU

Registration priority and data requirements are based on manufactured or imported annual tonnages

Benefit from extended registration deadlines through pre-registration or late pre-registration

Share and assess data for chemical substances within Substance Information Exchange Fora (SIEFs)

Submit registration dossiers before or by the registration deadline

Introduction to REACH


Introduction to REACH


Who can register ? Legal Entities based in the EU ! Manufacturers Importers Only Representatives (OR)

Only Representatives are appointed by non-EU base manufacturers/NAFTA based manufacturers to handle all aspects of Registration

Fees and Charges Fees and charges are payable to the European Chemicals Agency

(ECHA) pursuant to the REACH Regulation and apply to the registration of chemical substances

Fees and charges are based on the company size and the annual turnover

Impacts of REACH in NAFTA countries –Negative Aspects

Negative NAFTA based manufacturers without EU based legal entities

cannot register by themselves

Negative NAFTA based manufacturers without EU based legal entities

must appoint an Only Representative to handle Registration of their chemical substances

Negative Only Representatives pay fees and charges based on the size

and the annual turnover of the NAFTA based manufacturer they represent


Impacts of REACH in NAFTA countries –Positive Aspects


Positive Benefit from extended registration deadlines by pre-

registration through an Only Representative

Positive Benefit from extended registration deadlines by late pre-

registration through an Only Representative

Positive Small- and medium-sized NAFTA manufacturers benefit from

reduced fees and charges under REACH

Impacts of REACH in NAFTA countries –Negative Aspects


Negative Certain chemical substances will become subject to

Authorisation and Restrictions in the near future

Negative Classification and Labelling for chemical substances will

become subject to change in 2010

Negative Data requirements for registration dossiers will lead to

additional testing

Impacts of REACH in NAFTA countries –Positive Aspects


Positive Joint submission of registration dossiers leads to reduced

fees and charges

Positive Protection of Confidential Business Information (CBI) by

appointing an Only Representative and/or Third Party Representative (TPR)

Positive All EU based manufacturers and importers must register

their chemical substances too

What general tools are NAFTA companies using for REACH ?


NAFTA based manufacturer with EU based legal entity

REACH-IT and/or IUCLID5 Pre-SIEFs/SIEFs Third Party Representative Services Consortia Supply Chain Communication

NAFTA based manufacturer without EU based legal entity

Only Representative Services Third Party Representative Services SIEFs Supply Chain Communication

Are there any challenges for the NAFTA chemical industry ?

Complying with pre-registration and late pre-registration deadlines

Finding and appointing a Only Representative

Protecting Confidential Business Information



Collecting information up and down the supply chain

Authorisation of certain chemical substances

Restrictions for certain chemical substances




Sharing data with other registrants

Generating missing test data

Access to harmonized REACH approach of major EU industry associations (Cefic, AISE, VCI, FEICA, etc.)

Paying fees and charges

Is there any direct or indirect financial loss due to REACH ?

Implementing REACH into their Supply Chain will cause an increase of costs for NAFTA based manufacturers

Fees and charges payable to the European Chemicals Agency

Costs for Only Representative or Third Party Representative Services

Costs for generating test data

Costs regarding compensation for sharing data

NAFTA based manufacturers are considering carefully the costs paying for REACH versus REACH exports


Are there any NAFTA industry specific REACH exemptions ?

Example:Brazilian Chemical Industry is asking the government for tax relief under REACH in order to pay the large fees for registration

No NAFTA industry specific REACH exemptions in place or planned until today


Are there any REACH consortia in the NAFTA region ?

Several REACH Consortia already in place and working in the EU

No REACH related Consortia in place in the NAFTA region


Conclusions

Failure to meet REACH compliance means that NAFTA based manufacturers will lose access to the export market in the EU

Substantial production, use and export by NAFTA based manufacturers of chemicals already identified by the EU as so called Substances of Very High Concern (SVHCs) will lead to Authorization and Restrictions

Increasing costs regarding REACH compliance is an additional burden for NAFTA based manufacturers

Small- and medium-sized NAFTA companies have to cope with REACH fees and charges


Conclusions

NAFTA based manufacturers without EU based legal entities must use external support to comply with REACH

NAFTA based manufacturers exporting into the EU have to ensure that their chemical substances (products) fully comply with the new regulation

NAFTA organizations will be in closer contact with European groups and associations

No Data (No REACH Compliance) – No Market !


Do Similar Regulations Exist in the United States?


Potential Impacts on Brazilian Exports of Chemicals to the U.S.

No but the United States has ChAMP



Chemical Assessment and Management Program (ChAMP)

In 2008, the U.S. Environmental Protection Agency (EPA) launched the ChAMP.

The ChAMP encompasses EPA’s efforts to meet U.S. commitments under the North American Security and Prosperity Partnership (SPP), as well as enhancements to the Agency’s existing chemicals program under the Toxic Substances Control Act (TSCA).


U.S. commitments under the SPP

Assess and initiate action, as necessary, on over 6,000 existing organic chemicals manufactured in or imported into the U.S. at or above 25,000 pounds per year (lbs/yr)

Includes High Production Volume (HPV) and Moderate Production Volume (MPV) chemicals


HPV Chemicals

Manufactured in or imported into the U.S. at or above 1 million lbs/yr

EPA developing Risk-Based Prioritizations (RBPs) using hazard data obtained under the HPV Challenge Program, use and exposure data obtained under the Inventory Update Rule (IUR), and other available data

HPV Chemicals to be classified for follow-up actions as Low Priority, Medium Priority, High Priority, or High Priority with Special Concern


MPV Chemicals

Manufactured in or imported into the U.S. at or above 25,000 lbs/yr but less than 1 million lbs/yr

Use and exposure data available under the IUR only for MPV Chemicals manufactured in or imported into the U.S. at or above 300,000 lbs/yr at any one site

EPA developing Hazard-Based Prioritizations (HBPs) using Structure Activity Relationships (SARs), Canadian categorization results, and other available data

MPV Chemicals to be classified for follow-up actions similarly to HPVs, but the nature of the actions will likely differ


TSCA Program Enhancements

In September 2008, EPA announced two enhancements to its existing chemicals program under the TSCA:

1. TSCA Inventory Reset2. Inorganic HPV Challenge Program


TSCA Inventory Reset

EPA believes that many of the approximately 83,000 chemicals listed on the current Inventory are no longer in commerce in the United States.

Based on this belief, EPA has proposed to reset the Inventory by removing those chemicals that are no longer being manufactured or imported.


TSCA Inventory Reset (continued)

Under EPA’s proposal, the public version of the Inventory would be posted online.

Companies would then certify the chemicals that they have manufactured or imported within a specified timeframe.

Companies would certify their chemicals online using a secured website.

Following the reset, a new chemical notice would be required if a company decided to manufacture or import a chemical that was removed from the Inventory.


IHPV Challenge Program

Inorganic chemical substances are defined as chemical substances that do not contain carbon, or contain carbon only in the form of: carbonato (=CO3), cyano (-CN), cyanato (-OCN), isocyano (-NC), or isocyanato (-NCO) groups, or the chalcogen analogues of such groups.


IHPV Challenge Program (continued)

The proposed Inorganic High Production Volume (IHPV) Challenge Program is modeled after the HPV Challenge Program, which focused on organic chemicals.

The IHPV Challenge Program will challenge the chemical industry to gather or develop and submit to EPA the data needed:

1. to characterize the physical-chemical properties, toxicity, and environmental fate of IHPV chemicals, and

2. to enable assessment and initiation of needed follow-up actions.

Potential impacts on Brazilian exporters to the U.S.

Near-Term: Requests from U.S. importers for data on

organic HPV chemicals, organic MPV chemicals, and inorganic HPV chemicals

Restrictions on some organic HPV chemicals Removal of chemicals from the TSCA

Inventory followed by new chemical notice requirements for U.S. importers

Opportunities for improved relationships with U.S. importers


Potential impacts on Brazilian exporters to the U.S. (continued)

Longer-Term: Restrictions on some organic MPV chemicals

and inorganic HPV chemicals Declining markets for restricted chemicals

resulting from customer de-selection Increasing numbers of requests for

substitutes for restricted chemicals Opportunities for sales of more

environmentally-friendly and safer chemicals


Do Similar Regulations Exist in Canada?


Potential Impacts on Brazilian Exports of Chemicals to Canada

No but Canada has the Chemical Management Plan


Canada – CMP - The Challenge Program – Overview

February 2007 – “Challenge to Industry” launched by Minister of Health and Minister of Environment

Involves approximately 200 substances identified as “high priority” by DSL categorization

Substances still in commerce in Canada Why high priority?

Bioaccumulate, are persistent and inherently toxic to aquatic organisms AND/OR

Pose a high hazard (great potential for exposure) to human health


Canada – The Challenge Program

“Batches” of 15-20 substances released every quarter

Release of each batch includes: Substance profiles, Mandatory surveys (CEPA 1999 Section 71 Notices), Voluntary questionnaires Industry responsibilities: Industry to provide specified information Industry to comment on substance profiles



Government will review surveys to determine further action Example – “Batch 1” Substances Final

Screening Assessments 9 substances determined “toxic” and

recommended for addition to Schedule 1 and/or addition to virtual elimination list

6 substances determined not “toxic” and no further action is currently required



Example – “Batch 2” Substances Draft Screening Assessments

12 substances proposed as “toxic” with proposal to add to Schedule 1 and/or addition to virtual elimination list

5 substances proposed as not “toxic” 3 proposed no further action 2 proposed to issue Significant New

Activity provisions


REACH Impact in Canadian Chemical Industry

“The following information was obtained during a conversation with Mr. Gordon Lloyd, VP Technical Affairs, Canada’s Chemical Producers and I was given permission to include in this presentation.”

A large number of Canadian chemical companies are at the multinational level, therefore, any and all of the REACH issues were handle through the sister or parent companies in Europe. Furthermore, the impact is low and some of the REACH issues that the U.S., Mexico, and Chile may have, were not as evident in Canada.

There was no input requested by the EU from the NAFTA chemical industry block regarding Polymers.

Canada believes that in the near future NAFTA will encounter exporting bottom-necks. There will be a significant problem with the supply of materials to Europe, and a higher impact for small size companies


REACH Impact in Canadian Chemical Industry (continued)

Canada does not agree with REACH’s requirements of more scientific testing for chemicals. The current CMP’s chemical safety assessments meets all of the REACH requirements

REACH is incredibly expensive for the Canadians companies in regards to:

Pre-registration Pre-SIEF and SIEF Representation OR representation General REACH consulting

There is a need for more training, especially, in the areas of industry responsibility of downstream users and the regulatory requirements imposed by REACH. Now, the chemical companies are re-acting and it is creating a problem during pre-registration


Do Similar Regulations Exist in Mexico?


No, but Mexico is a Member of the Security and Prosperity

Partnership of North America (SPP)


REACH Impacts on the Mexican Chemical Industry

“The following information was obtained during a conversation with Mr. Ruben Garcia, REACH Coordinator, National Association of the Chemical Industry (ANIQ), Mexico and I was given permission to include in this presentation.”

ANIQ confirmed that his office is currently working in evaluating the economical, logistical, and operational impact of REACH in the Mexican chemical industry.

ANIQ knows that several Mexican companies have used their parent or sister companies in Europe to pre-register and be their OR legal entities.



ANIQ developed an online survey for all members to provide REACH feedback information regarding: Monies spent in pre-registration and consulting fees, business lost, type of chemical companies mostly affected, specific problems dealing with Europe, and others. However, the response to ANIQ’s survey has been delayed due to privacy issues among members.



ANIQ stated that most of the feedback regarding the impacts of GHS and REACH within NAFTA are been discussed in the meetings of the Commission for Environmental Cooperation or CEC. www.cec.org

ANIQ will be attending the March 31 – April 3, 2009, CEC San Antonio, TX conference to discussed with the Canadian and US counterparts issues regarding REACH and GHS.



Thank you.Obrigado.

Gracias.

reach: impact on nafta companies and chemicals presented by edgar rodriguez sierra

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