UK government must provide clarity on future of chemicals regulation after Brexit

The House of Commons Environmental Audit Committee called on the government to urgently provide certainty to the UK chemical industry over the future of EU regulation, in a report published this week.

UK companies will have spent an estimated £250 million in order to comply with the EU REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) deadline of May 2018, yet have received no guarantees over whether these registrations will remain valid after the UK leaves the EU.

This uncertainty means that one in five UK chemicals companies represented by the Chemical Business Association are investigating registering elsewhere in the EU, in a move that could cost jobs and investment, according to the report.

“It is disappointing the government has not provided the certainty that UK companies urgently need on their plans for the future chemical regulation in the UK,” said Mary Creagh, chair of the Committee. “The timing of Brexit means that companies face significant costs to comply with EU regulations before we leave, with no guarantee that investment will be useful to them in the future.”

The lack of clarity extends to plans for a future chemicals framework for the UK, Creagh said. “The government has admitted that it will be difficult to transpose regulations such as REACH into UK law, yet it has not yet offered a vision for the replacement,” she said.

The report highlights the importance of regulation in enabling the UK chemicals industry to provide value to the economy whilst also protecting public health and the environment.

The committee’s key findings are:

• The chemicals regulation framework established by the EU through REACH is difficult to transpose directly into UK law. Writing EU regulations into UK law could not be done simply by having a line in the Great Repeal Bill, by which it is intended to transpose EU law to the UK statute book. REACH was written from the perspective of participants being within the EU, with much of it also relating to member state co-operation and mutual obligations, oversight and controls, and freedom of movement of products.
• Companies face significant uncertainty over the validity of current REACH registrations after the UK leaves the EU and the government must clarify its position on the future regulatory framework as a matter of urgency. Companies face significant costs relating to the upcoming REACH registration deadline in May 2018, yet it is unclear whether these registrations will remain valid once the UK leaves the EU in 2019. This uncertainty may already be having an impact on long-term investment decisions by companies.
• In deciding the future of the UK's relationship with the EU's single market for chemicals, the government should take a pragmatic approach. The most important element of REACH, which the government should seek to remain involved in as a minimum, is the registration process for chemicals. Most people who made submissions to the committee, from both environmental and industry perspectives, wanted to stay as closely aligned to REACH as possible. Involvement in registration would allow UK companies to share testing data with EU companies, sharing costs and allowing them to enter the market without double registration, even if the UK adopts higher standards of chemicals protection.
• Establishing a stand-alone UK system of chemicals regulation is likely to be expensive for both the taxpayer and for industry. The government did not provide detail of its scenario planning, although it did admit that the cost of taking on the roles currently provided by the European Chemicals Agency could be in the “tens of millions” of pounds.