Metals market participants are scrutinising the UK government's planned launch of its own independent chemicals regulatory framework, UK Reach, on 1 January 2021, raising concerns that the plans outlined so far still leave some key questions unanswered.
The initiative would mark the UK's departure from the existing EU Reach system when the Brexit period transition ends. "This, combined with our position on not remaining within the jurisdiction of the European Courts of Justice, means that we are not seeking associate membership of the European Chemicals Agency (ECHA) and participation in EU Reach," environment minister Rebecca Pow said in a letter to parliament's environmental audit committee.
UK Reach is intended to retain the principles and fundamental approach of the EU Reach system, although provisions have been included in a recent environment bill to allow the government to amend the Reach regulations in future. "We want to keep the transition to UK Reach as simple and straightforward as possible, minimising the burdens and costs for the industry. We will not diverge for the sake of it and are avoiding change for change's sake," said Pow.
Her comments came in response to multiple concerns raised by business groups about the impact of Brexit on the chemicals sector, with widespread implications also being flagged by the metals industry. Pow acknowledged that one area of concern is the government's earmarking of 23 "protected provisions" that are intended to preserve the aims and principles of Reach but avoid "freezing" the details of how Reach operates.
Metals market participants told Argus there are many other issues that also need clarifying before January, such as whether UK companies would need to re-register to join UK Reach and if there would be a cost, and whether the government has a clear provision in place, depending on whether the UK strikes a deal with the EU or leaves with no deal.
And while the government's comments so far indicate that UK Reach has scope to deviate from EU Reach where it deems necessary, the details are currently vague as to how exactly the two systems might differ, a market participant said.
The EU Reach system is not without its controversies, with traders of some key non-ferrous metals having argued for some time that the way it is implemented creates excessive challenges for the sector. One particular concern has been the cost of proving to the ECHA that chemicals are safe for workers to handle, which they argue is making it economically impossible to supply raw materials such as antimony.
Some market participants are also concerned that the way in which Reach is implemented in Europe is putting the financial burden on small suppliers more than it does on large foreign producers, appearing not to consider the possibility that some producers may be exempt by virtue of not residing in that jurisdiction.
