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REACH Impact Assessments

The Commission’s impact assessment on the REACH Regulation

The Commission has carried out various studies to assess the impact of the REACH Regulation:

Analysis of studies discussing benefits of REACH

Various studies have been carried out to determine the costs of REACH for businesses and the European economy at large, however, the description and quantification of benefits for human health, the environment and for businesses has been addressed to a much lesser degree. Well funded information on benefits of REACH is scarce. This is due to the lower emphasis on benefit assessment and the various difficulties connected to benefit estimation - such as the dependency of impacts on the behaviour of industry actors, the lack of data on cause-effect links, current chemicals related damage or baseline information at enterprise level.

However, the fact that benefits are created is substantiated at qualitative and quantitative level by the studies analysed on the request of the Commission. The report identifies the types of benefits linked to actual mechanisms or policy outcomes of REACH and extracts how those benefits have been assessed and quantified.

Since the realisation of benefits largely depends on enterprises taking their responsibility for safe products, the study recommends to motivate companies by quantifying expected benefits based on case studies. Furthermore, an illustration of how enterprises could integrate REACH mechanisms in their business strategies in such a way that benefits would be generated, might encourage enterprises to be pro-active, foster quality differentiation in the market and thus promote the implementation of REACH in their own supply chains. The study was performed by the German Institute for Environmental Strategies, Ökopol, and finalised in February 2007.

Full study

"Announcement effect" in the market related to the candidate list of substances subject to authorisation

Substances identified under REACH as 'substances of very high concern' (SVHC) will be gradually included in Annex XIV of the REACH Regulation: Substances subject to authorisation. One aim of the authorisation is that these substances are progressively substituted with safer alternatives where economically and technically viable. To announce the potential substances for authorisation beforehand on a publicly available candidate list might be an incentive for producers and users of these substances to start proactively looking for safer substitutes.

Especially companies representing the end of the supply chain are highly interested in an EU wide harmonised list of substances regarded as very dangerous. With regard to the different roles in the supply chain, it seems as if it will be mainly the task of formulators to substitute SVHC in their preparations and that they will often react to a strong demand by their customers. It is yet not clear to what extent the manufacturers and importers of chemicals will invest in the development of alternatives. They might not behave proactively if they see no incentives (like a strong customer demand or the potential to capture new markets) to invest in risk reduction as long as it is not legally required.

However, importers, producers and professional recipients of articles will prefer articles without substances of very high concern. The retailers and owners of consumer brands may demand SVHC-free products from their suppliers to ensure product safety and give no reason for criticism. The study was performed by the German Institute for Environmental Strategies, Ökopol, and finalised in January 2007.

Full study

Environmental benefits of REACH

Within the framework of the further work on impact assessment, the Commission had also launched a study to assess the benefits of REACH on the environment.

The study assessed the impact of current chemicals releases on the environment and on humans who are exposed via the environment. The long-term benefits of REACH were estimated to be up to €50 billion over the next 25 years, depending on the method used. The benefits have been calculated by three different approaches: via the willingness of citizens to pay for avoiding the environmental damage, via an identification of monetary costs caused by environmental damages, and via an estimation of the current costs that could be avoided if the release of chemicals would be better controlled (e.g. less expensive drinking water purification). The study was performed by the Danish environmental consultancy DHI between October 2004 and September 2005.

Executive summary - Full study

Further Work on impact assessment

Subsequent to the publication of the REACH proposal in October 2003, several impact assessments commissioned by stakeholders appeared.

The estimates of the costs in these REACH impact assessment studies varied widely. As a result of the discussion with stakeholders, the Commission agreed to undertake further impact assessment work, complementary to its extended impact assessment.

Two major studies were conducted under a Memorandum of Understanding between the Commission and the industry associations UNICE and CEFIC. Commissioned by the industry associations, KPMG consultants elaborated detailed business case studies in the sectors of inorganics, automotives, flexible packaging and high tech electronics. Another study by the Joint Research Centre of the Commission (DG JRC/IPTS) focussed on the situation in the new Member States, through business case studies and surveys in the chemicals sectors of Poland, Estonia and the Czech Republic.

Environment Commissioners Stavros Dimas and Enterprise and Industry Commissioner Günter Verheugen jointly chaired a High Level Group which discussed the results of these further impact studies and drew specific conclusions (Press release of April 2005)

Extended impact assessment

Before adopting its proposal on REACH in October 2003, the Commission published an extended impact assessment which assessed the benefits for health as well as the costs for industry and the future Chemicals Agency of the proposed Regulation. Total costs were estimated between €2.8 and 5.2 billion over 11 and 15 years respectively.

Health benefits were estimated in the order of magnitude of €50 billion over the next 30 years. This figure was based on an illustrative scenario which had been developed with the support of recognised international organisations such as the World Bank and World Health Organisation.

A series of further analyses and a Commission funded study (Report of March 2003) broadly confirmed these results. The additional benefits to the environment were expected to be significant but were not quantified (Report of June 2003 )

In view of the expected economic, social and environmental impacts of REACH, the Commission considered that the balance required by the EU Sustainable Development Strategy had been achieved.

Disclaimer: Note that the reports herein referred to were prepared by contractors at the request of the European Commission and do not necessarily represent the views of the European Commission.