REACH to stifle innovation, hears Parliament committee
A study conducted for the European Parliament's Industry, Research and Energy Committee has claimed that the Commission's proposed new chemicals policy will lead to a 2.9 per cent loss in GDP, a 24.7 per cent loss in production, and a loss of innovation capacity. The new regulatory system, known as REACH (registration, evaluation and authorisation of chemicals), will make industry responsible for producing data on the properties of chemicals and for assessing the risks related to their use. The report by Arthur D. Little concludes that 'Costs will burden mainly price-sensitive products. Changes in time to market, duty of authorisation and duty for disclosure are issues which touch the innovative power of the European chemical industry.' The study did however have a restricted remit, which required it to assess only the impact of the new policy on Europe's chemical industry and not its potential health and environmental benefits. The Commission has claimed that REACH will be a catalyst for innovation. This idea is rejected by the study on account of competition from outside of Europe, where regulations are less restrictive: 'Industry does not expect an immediate innovative push. For this to happen, global implementation of the EU substances policy would be a fundamental prerequisite. In such a situation, all products would be manufactured under comparable conditions and every producer would be confronted with the effects of the new substances policy. [...The] producer with the most innovative product would have a competitive advantage and so there would be an incentive for innovation.' The report also has little room for optimism with regard to the provisions for newly developed substances, the direct result of innovation: 'The easing of registration requirements for newly developed substances tends to be regarded as insignificant in comparison with the additional burdens. The majority of innovations are not based on newly developed substances and their use but on the exploitation of known substances for new applications.' In a committee debate that followed the presentation of the study's findings, several MEPs expressed their dissatisfaction with both the remit of the study and its methodology. The Commission is currently in the process of conducting interviews with business representatives on the likely impact of REACH, and will publish its results before the end of the year.