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Upcoming EU legislation puts industry at crucial crossroads

Industry leaders have called on the European Commission to work together to develop an EU Chemical Industry Transition Pathway to sustain the massive investments required to meet the objectives of the EU Green Deal.

This call follows the release by European Chemical Industry Council (Cefic) of the first in a series of studies, conducted by independent economic research consultancy Ricardo Energy & Environment, on the business impacts of the EU Chemicals Strategy for Sustainability (CSS). The data from more than 100 European chemical companies will be used as an input to the European Commission’s impact assessments on the Classification, Packaging and Labelling Regulation (CLP) and REACH, the centrepieces of EU chemical legislation. Cefic president Dr Martin Brudermueller said: “The EU chemical industry supports the goals of the Chemicals Strategy for Sustainability and we are ready to work with the Commission and Member States to deliver on the policy goals just like we are already working on our industry’s climate transition. The results of the first in a series of reports show that we have an enormous challenge ahead of us. To enable industry to transform, it needs a robust Chemical Industry Transition Pathway. I am inviting European policymakers and EU Member State governments to work with us and turn the CSS into a genuine Growth and Innovation Strategy”. According to this first study, as many as 12,000 substances could potentially be in the scope of the two upcoming legislative proposals alone – the changes to Classification, Packaging and Labelling Regulation (CLP) and the application of a Generic Risk Approach (GRA). The study found that these substances could cover up to 43% of the European chemical industry’s total turnover. After applying different weighting factors to account for uncertainty about definitions and criteria in the CSS, the consultants concluded that the most likely impacted portfolio would be as much as 28% of the industry’s estimated turnover. The companies consulted indicated that around one third of this most likely affected portfolio of 28% could potentially be substituted or reformulated. However, the ability of companies to substitute potentially affected products will largely depend on the details of the upcoming regulations, on what might be technically and economically feasible, and especially on how customers will react to the substitutes or reformulated products. The most significantly impacted downstream sectors are expected to be adhesives and sealants, paints, washing and cleaning products. Dr Brudermueller added: “The role of the chemical industry is to supply downstream customers with

crucial materials to meet the targets of the Green Deal. The EU chemicals industry is a major supplier of all manufacturing industries and essential and strategic value chains, including pharmaceuticals, electronics, EV batteries, construction materials. The intended policy changes coming with CSS will also create a significant “ripple effect” across many value chains relying on chemicals.” The economic analysis concluded that even when derogations are taken into account, a heavy net impact remains. Regardless of the scenario considered, this would represent a net market loss of at least 12% of the industry’s portfolio by 2040, according to the study. As only two of the measures proposed by the CSS have been assessed so far, the cumulative impact of all other changes proposed by the Strategy will be bigger. The effect that these changes could have on EU chemical exports has not been examined, which could add significantly to the overall impact. He continued: “The chemical industry has always been driven by innovation, passion for new technologies and entrepreneurial spirit. The results of this study indicate that there could be an opportunity for an industry-wide substitution effort to deliver on the goals of the Chemicals Strategy for Sustainability. However, there is a lot of uncertainty as to how businesses along the value chain could achieve it under the current framework. Industry needs a predictable growth framework for economic investments in the coming two decades. For us to meet the many challenges of the Green Deal, we need a robust Chemical Industry Transition Pathway.” The proposed Transition Pathway should include timelines and measures for the industry to develop substitutes and focus on those products where these substitutes could be available first. In this, it should build on proven and established approaches such as the risk assessment under REACH. Incentives will be needed to create markets for these new chemicals, combined with a doubling down on enforcement of REACH and product safety legislation for imports. The package should be complemented by a strong innovation agenda to accelerate the development of safe and sustainable-by-design alternatives. Finally, the Transition Pathway should also address the other three transitions that the chemical industry has to undergo – climate neutrality, digitalisation and circularity. The next report is expected to be published in Q2 2022.

“The EU chemical industry supports the goals of the Chemicals Strategy for Sustainability and we are ready to work with the Commission and Member States to deliver on the policy goals just like we are already working on our industry’s climate transition.”

Dr Martin Brudermueller, Cefic president

Time is ticking for Turkey’s KKDIK...Less than 2 years for full compliance!

With not so many appointed Lead Registrants in Chemical Registration System - KKS (Turkish acronym), industry is wondering whether a postponement of the final registration deadline (31.12.2023) is in the loop or not. The answer of the Ministry is an unambiguous - “No” and the co-registrants are waiting for the Lead Registrant’s and the Only Representative/consultancy companies’ informative communications to take action, as the deadline is approaching.

With less than 700 days to go, the Turkish chemical industry is getting excited about the upcoming registration deadline, as the flow between the Lead Registrants and the coregistrants started increasing in 2022.

MINISTRY’S NAME AND FUNCTIONS ARE UPDATED

A fresh news following the completion of the MoEU’s EU-financed project “Technical Assistance to Conduct Chemical Safety Assessments under the scope of REACH Regulation”, is that the name of the Ministry managing the KKDIK regulation is recently updated via the Official Gazette numbered 31463 on the 29th of October 2021. Formerly known as the Ministry of Environmental and Urbanization (MoEU), the Ministry is now named as the Ministry of Environment, Urbanisation and Climate Change (MoEUCC). This update being the alignment of Turkey with the recently ratified Paris Agreement.

UPDATES IN KKS

As of November 2021, the Ministry launched its own Turkish Chemical Safety Report tool for its users, called Chemical Safety Assessment and Reporting System (CSARS, with Turkish acronym - KGDRS). And within a short period of 2 months, the supporting guidance document is already updated a few times as the minor changes within the KKS system still occur. Companies placing substances on the Turkish market for 10 tonnes or more per year must prepare a Chemical Safety Assessment (CSA) and include the Chemical Safety Report (CSR) to their registration dossier. If companies conclude that their substance is not hazardous or PBT/vPvB, the CSA use description can be limited with hazard assessment, PBT assessment, and CSR Sections 1-8. Unlike EU’s separated systems IUCLID and Chesar, CSARS is fully integrated with CRS and the CSRs can be generated within the same IT environment.

There are also changes in the system that are related to the Only Representatives (OR). One of the dissimilarities between the ECHA’s REACH-IT and CRS is that ORs have to have one single account for all the companies they are representing. Now the Ministry is altering their system to encourage ORs to use a numeric design to identify the nonTurkish manufacturers. Though this technic was already used by some of the experienced ORs. As an essential remark, it is mandatory for companies to enter their Downstream User information into the registration dossier. However, in practice, it is still a question mark for companies to gather this information for their indirect importations (exportations for non-Turkish manufacturers) without transgressing confidentiality or competition laws. REACH Global Services Group

Tugce Gizem GURLEROGLU

Deputy Director

www.reach-gs.eu

CHALLENGES FOR THE INDUSTRY

Currently, the payment procedures are carried out by a physical deposit of cash money to one pre-defined bank of Turkey. Though when tens or hundreds of dossiers are taken into account this scheme can be impossible to follow as a daily task. The industry is trying to figure out alternative ways to effectively manage the transactions. One of the challenges is that; even though more than 163.000+ (includes repetitive EC, CAS numbers) preregistrations were submitted under CRS (ref. October 2021) prior to the pre-registration deadline 31.12.2020, Lead Registrants are appointed only for the 1-2 % of the substances. EU REACH experienced non-Turkish companies or big players in the Turkish chemical industry should eventually decide on stepping up as the Lead Registrant if no other company does. This would avoid any last-minute panic in 2023 within the SIEFs, as it will be hard for companies to meet the deadline on short notice. Especially with the complexity of data sharing procedures becoming evident, most of the companies are waiting for each other to take action. On the other hand, it should be reminded that the data sets that will be used for KKDIK registrations are in parallel with REACH dossiers, therefore no further evaluation is required. Coordination is needed to manage cost modeling, Letter of Access selling, to implement the right to use data, etc.; which are sensitive topics and should be carried out by experienced and trustworthy hands. Since 2008, as RGS Group of companies, we are assisting more than 1100 manufacturers in over 55 countries to comply with global chemicals legislations. We have joined our forces with Chemservice Group to establish ChemAdvocacy Turkey (CATR) in April 2021 to independently coordinate the administrative and technical processes of the SIEF management with the Lead Registrants, and the relevant consortia in the EU. CATR will transpose its EU REACH, K-REACH, UK REACH experience on Consortia Management, Data Management, Financial Management into KKDIK. If you have any questions on Turkish chemicals regulations, do not hesitate to contact RGS for more details on our services.