pdf

Changes Coming to the EU’s REACH Program

September 29, 2015 | Energy, Natural Resources & Utilities

 

A recent decision by the European Union (“EU”) Court of Justice signals a dramatic expansion of the chemical substances falling under the EU Registration, Evaluation, Authorization and Restriction of Chemicals (“REACH”) program. REACH, which entered into force on June 1, 2007, is aimed at protecting human health and the environment from risks posed by chemicals. To comply with this regulation, companies must identify and manage the risks linked to substances they manufacture and market in the EU, demonstrate to the European Chemicals Agency (“ECHA”) how the substance can be safely used, and communicate risk management measures to product users. If the risks cannot be managed, ECHA can restrict the use of substances. In most respects, REACH goes far beyond its counterpart in the U.S., the Toxic Substances Control Act, including in connection with regulation of chemical substances contained within products or “articles.”

New EU Ruling Affects REACH Program Obligations

Among other provisions, REACH requires manufacturers of articles to disclose the presence of chemicals classified as candidate substances of very high concern (“SVHC”) when any of those chemicals are present in the article in a concentration above 0.1 percent weight (based on the weight of the article). There are currently 163 chemicals on the SVHC list.

Under the ECHA guidance, the 0.1 percent threshold applies to the weight of the entire article. For a computer, the disclosure requirement would apply only when the SVHC chemical constitutes more than 0.1 percent of the weight of the entire computer.

The EU Court of Justice recently ruled that the REACH regulation applies to each component within an article, and not just to the article as a whole. Using the computer example, where a specific component of the computer (e.g., a battery, voltage regulator or cable) exceeds the 0.1 percent by weight limit, the manufacturer would have obligations under REACH to provide information to downstream parties regarding the chemical composition of the article. As a result, there will be an increased burden on manufacturers to understand what materials are included in their products and to communicate that information as required by REACH.

The case—Fe´de´ration des entreprises du commerce et de la distribution (“FCD”), Fe´de ´ration des magasins de bricolage et de l’ame´nagement de la maison (FMB) v Ministre de l’e ´cologie, du de´veloppement durable et de le´nergie (Case C-106/14)—was brought by the governments of France, Belgium, Denmark, Germany, Ireland, Greece, Austria, Sweden and Norway to challenge the European Chemicals Agency’s (“ECHA”) April 1, 2011 guidance that interpreted how REACH’s requirements apply to articles.

Given this ruling, manufacturers will have to develop a deeper understanding of the chemical makeup of their products and potentially establish consortiums with fellow producers to perform toxicity testing. More notifications will potentially have to be made to purchasers of products, to retailers and potentially to consumers.

It is anticipated that ECHA will prepare new guidance regarding the treatment of articles. The EU Court of Justice’s ruling is available here.

Regulatory Changes Due in 2018

The last registration deadline for existing chemicals will be on May 31, 2018. This deadline applies to companies that manufacture or import substances in low volumes, between 1-100 tonnes a year (one tonne equals 2204.6 U.S. pounds). ECHA’s current working estimation is that up to 70,000 registrations will be prepared for up to 25 000 substances, which is three times more than for either of the previous deadlines in 2010 and 2013. In addition, ECHA expects that many of the new registrants will be small and medium-sized enterprises (“SMEs”) with little REACH-related experience.

In January 2015, ECHA published its REACH 2018 Roadmap, which outlines the Agency’s plans to improve the registration process and help companies meet the registration deadline. The Roadmap includes the following registration steps:

1. Knowing your portfolio and starting now;
2. Finding co-registrants;
3. Cooperating with co-registrants;
4. Assessing hazards and risks;
5. Preparing the registration dossier in the International Uniform Chemical Information Database (“IUCLID”);
6. Submitting the registration dossier in REACH-IT (the REACH up-loading program); and
7. Keeping the registration up-to-date.

ECHA has committed to pay specific attention to SME needs. In particular, ECHA intends to identify potential practical obstacles that may prevent SMEs from making successful registrations, from participating effectively in substance information exchange forums (“SIEFs”) or from being part of joint submissions. The ECHA Roadmap is available here.

Given the changes to the threshold for SVHC in articles, and the 2018 deadline, companies that do business in the EU should consider reviewing their current and future obligations under REACH.

Additional information on REACH can be found here (“The European Chemicals Agency Lists 38 Chemicals as Potential Substances of Very High Concern,” August 24, 2012) and here (“EU Adopts REACH Chemical Regulation Law,” July 28, 2008).


This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Eric Rothenberg, an O'Melveny partner licensed to practice law in Missouri and New York, Kelly McTigue, an O'Melveny partner licensed to practice law in California, and Bob Nicksin, an O'Melveny counsel licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

Portions of this communication may contain attorney advertising. Prior results do not guarantee a similar outcome. Please direct all inquiries regarding New York's Rules of Professional Conduct to O’Melveny & Myers LLP, Times Square Tower, 7 Times Square, New York, NY, 10036, Phone:+1-212-326-2000. © 2015 O'Melveny & Myers LLP. All Rights Reserved.