House of Commons Library

Brexit and chemicals regulation (REACH)

Published Monday, September 24, 2018

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.

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No Deal Technical Notice: The Government published a Technical Notice Regulating chemicals (REACH) if there’s no Brexit deal on 24 September 2018. This paper has not yet been updated to reflect the technical note.

 

What is REACH?

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 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 UK chemical industry

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.

Brexit implications and challenges

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.

Seeking associate membership of the ECHA

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.

No deal scenario

In the absence of a deal with the EU, the UK will become a third country to REACH on exit day and there will be no transition period. This means that UK companies' REACH registrations will likely become invalid on exit day. Two broad issues arise for a no deal scenario:

  1. How UK companies will be able to export chemicals to the EU if registrations are invalid in the EU market. Without an agreement otherwise, UK companies will have to nominate an “only representative” agent registered in an EU Member State to take over the responsibility of complying with REACH on their behalf. Alternatively, the obligation for compliance with REACH will fall to the importer of the substance. Industry stakeholders warn of significant disruptions to supply chains in manufacturing sectors in the absence of a deal.
  2. How chemicals will be regulated in the UK without REACH in place. The Government has said that in a no deal situation it would develop its own version of REACH, referred to as “UK REACH”. This would require establishing a UK authority to take over the functions of the ECHA and developing a UK database of registered substances. The Government has stated that it is working on a “lengthy” statutory instrument to deal with this situation and is building an IT database for UK registrations.

Wider concerns have been raised about a separate UK REACH system. Industry stakeholders have raised concerns about the cost of compliance with two regulatory systems. Environmental campaign groups raise concerns that a separate UK system may lead to lower standards of chemical safety in the UK.

Commons Briefing papers CBP-8403

Authors: Georgina Hutton; Chris Rhodes

Topics: Environmental protection, EU law and treaties, Manufacturing industries

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