A House of Commons Library briefing paper discussing the EU REACH regulation for chemicals and the potential impacts of Brexit including in relation to a no deal scenario.Jump to full report >>
REACH is the main EU legislation for the regulation of chemicals in the EU (formally the Registration, Evaluation, Authorisation and Restriction of Chemicals Regulation). It requires substances that are manufactured or imported into the EU (in quantities of more than 1 tonne) to be registered with the European Chemicals Agency (ECHA) and provides a framework by which the use of hazardous substances can be restricted.
There are also other EU regulations relating to chemicals, this paper only covers REACH.
The chemical industry a key manufacturing sector in the UK, accounting for 9% of total UK goods exports. Further, chemical products feed into many other manufacturing sectors. Trade in chemicals is highly intertwined with the EU; 60% of chemical exports in 2017 went to EU Member states, and 75% of chemical imports came from the EU. Supply chains in manufacturing sectors are complex, with chemical substances often crossing the channel several times. The chemicals industry employs 88,000 people in Great Britain.
UK companies hold over 12,000 REACH registrations (13% of total). This includes 5721 substances (26%) and 1765 companies (12%).
REACH is an example of directly applicable EU legislation that is not straightforward to copy across into UK law. This is because the regulation relies on the ECHA and is closely tied to the single market.
Brexit will have an impact on the chemical industry driven by changing regulatory requirements and other trade barriers, such as tariffs. The UK and EU chemical industries both want a trade deal that ensures frictionless trade and regulatory consistency between the UK and EU, pointing to the complex supply chains that exist in manufacturing sectors. This paper focuses on REACH as one example of a regulatory trade barrier.
The UK Government proposes to seek an agreement with the EU on a form of associate membership of the ECHA such that REACH registrations remain valid in both the EU and UK markets. This forms part of the Government’s broader proposals for a “future economic partnership” with frictionless trade in goods, which is still being negotiated with the EU.
If there is no deal reached with the EU on some form of associate membership of the ECHA the UK would become a third party to REACH. This means that UK REACH registrations will no longer be valid (in the absence of an agreement otherwise). Two broad issues arise for a no deal scenario:
1) Exporting chemicals to the EU market: Broadly speaking, to preserve EEA market access UK companies would need to transfer their registrations to an EEA-based entity, or alternatively the obligation for compliance falls to the importer. Industry stakeholders warn of significant disruptions to supply chains in manufacturing sectors in the absence of a deal
2) Regulating chemicals in the UK: The Government has said that it would develop its own version of REACH, referred to as “UK REACH”. The Health and Safety Executive (HSE) would be the lead regulatory authority and the Government is working on an IT database for a UK registration system.
Registrations are expected to be “grandfathered” from the EU to UK system, with companies given 2 years to provide a full data package. For more detail, see the Government’s technical notice: Regulating chemicals (REACH) if there’s no Brexit deal.
The House of Lords EU Energy and Environment Sub-Committee and chemical industry stakeholders have expressed concerns that some companies may have difficulty providing a full data package within the 2 year period.
Commons Briefing papers CBP-8403
Authors: Georgina Hutton; Chris Rhodes