The European Chemicals Agency (ECHA) has warned of the major impact on British plastics chemical suppliers and their trading partners in Europe, if the United Kingdom pushes ahead with quitting the European Union (EU) as planned, on March 29, 2019.
It has released a database seeking to advise chemical producers of how their legal obligations will change. ECHA warns British companies: “If your business is in any way part of a supply chain that links you to businesses located within the 27 EU member states remaining after the U.K.'s withdrawal, you will face some fundamental changes.”
Importantly, U.K.-based suppliers of any plastics chemicals and additives (monomers are usually registered, but not polymers) will have an obligation by May 2018 to register chemicals under EU chemical control system REACH that are made or imported in annual quantities of between 1 and 100 metric tons. On March 29, those registrations will become null and void, following a Brexit.
As a result, their customers based in the EU or the European Economic Area — or EEA countries of Norway, Iceland and Liechtenstein — may have to re-register such chemicals themselves if they want to continue buying them from the British supplier that registered them in the first place.
There are two other options, said the ECHA outlines. The British chemical manufacturer will have to relocate to the remaining EU or EEA or appoint what is called an "Only Representative" within the remaining EU/EEA. That company or person would be authorized to make the relevant filing under REACH and be legally responsible for ensuring a British exporter complies with EU rules.
Also, there are significant changes where a U.K. company was a lead registrant for registrations of chemicals involving other companies, including those in the remaining EU. After Brexit, these registrations would also expire, warned ECHA, and companies wanting to ensure their products can be legally sold under REACH would have to appoint a new lead registrant.
There is also potential serious concern over the use of chemicals that are sufficiently toxic that they require a special REACH authorization to be used in the EU market. These are held by the companies supplying such chemicals. Where these are British, then after Brexit, said ECHA, “the respective REACH Authorization will lose its legal effect with the date of the U.K. withdrawal” and so the EU purchaser will not be able to buy these chemicals from this British supplier.
Any buyer of such chemicals in the remaining EU or EEA will have “to assure yourself that you or one of your upstream suppliers based in the EU has obtained a REACH Authorization for the respective use of the substance, taking the place of your UK-based business partner,” said ECHA. The agency has confirmed to Plastics News Europe that Rolls-Royce plc has obtained an authorization to sell plasticiser DEHP (di(2ethylhexyl) phthalate), for example.
Another potential risk for U.K. companies is over biocides. The EU is undertaking a review of all biocidal chemicals used in Europe, to check their safety, under the EU's biocidal products regulation (BPR).
Bernhard Reith, purchasing manager for international plastics supplier, Austria-based Lenzing Plastics, warned that “it will not be a problem to find a continental Europe replacement” to British suppliers of plastics ingredients. And while “import regulations can be modified on demand within the U.K. relatively quickly” to ease imports into Britain of plastics and ingredients, for some continent-wide plastics trade issues affecting the U.K., “finding a solution with all EU participants on certain topics might be much harder,” he predicted.
Such problems could be a real headache for industries such as the auto sector who have multiple plastics components, whose processing might happen in two or three different plants, maybe in different European countries, including the UK.
Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), the trade association representing more than 700 automotive companies in the U.K., said: “Brexit is the greatest challenge of our times.” He noted that an average car is made up of around 30,000 components, “each crossing borders multiple times before the final vehicle is assembled.”
As it stands, other EU member states supply 56 percent of auto industry components used or processed in the U.K.