Is Excessive Bureaucracy Delaying New Chemical Products going to Market Excessively?

27 October 2016

With many parts of the world experiencing new legislation on chemicals, there is growing concern among chemical industry leaders over the challenges that the new bureaucracy is causing, with many beginning to count the cost of delays in bringing new chemical products to market. This has recently lead to Socma (the Society of Chemical Manufacturers and Affiliates) voicing its fears over the updated procedure for reviewing new chemical products, and to speak out over the way the red tape is impacting chemical producers’ ability to make products available to customers.

Commenting on the implementation of the Lautenberg Chemical Safety Act, which passed into American law in June 2016, Kelly Franklin, North American Editor at the industry journal Chemical Watch notes that, “Under the new law, the EPA (US Environmental Protection Agency) must now make an ‘affirmative finding’ of safety before a new substance is allowed on the market. If the agency decides a substance poses an unreasonable risk, it must issue an order to prohibit or restrict it.”

The number of new chemical products requiring EPA review is estimated to be around 1,000 per year, and these reviews are not necessarily small. This is because, to make an ‘affirmative finding’ means calculating the effects of all ‘reasonable foreseen’ uses. This in turn, may require the EPA to order a ‘section 5(e)’.

This part of the law requires that chemical producers provide sufficient information of the new product, so that it may assess the chemical product on the following criteria:

  • Testing for toxicity or environmental fate once a certain production volume or time period is reached
  • Use of worker personal protective equipment
  • New Chemical Exposure Limits (NCELs) for worker protection
  • Hazard communication language
  • Distribution and use restrictions
  • Restrictions on releases to water, air and/or land, and
  • Recordkeeping.

All of which takes time. As Chemical Watch noted when it reported of one example where a chemical manufacturer, “… has a pending case that is in a mixture, and one of the major components of this is already on the TSCA inventory and is what contributes to the hazards.”

Under the new law, despite the fact that the chemical has previously been passed by the EPA, its use in a new product requires a full review, adding to the delay, and creating a backlog of chemicals needing to go market but awaiting permission to do so. The significance of which was outlined by Dan Newton, Senior Manager of Government Relations at Socma, when he explained how, “Timely access to market is very important, especially for batch manufacturers who make chemicals on demand.”

Furthermore, whilst this backlog for new products impacts businesses, calls are being made to implement the wholesale review of all chemicals listed on the US market. As Richard Denison, of the EDF (Environmental Defence Fund) writes on the non-profit organisation’s website, “A key reform under the Lautenberg Act is the requirement that the EPA generate an accurate, up-to-date list of all chemicals in active commerce.  This is to be accomplished by enforcing a rule to do a full ‘reset’ of the TSCA Inventory [some 85,000 chemical products] that distinguishes between active and inactive chemicals.”

The total cost of implementing the newly enacted Lautenberg Chemical Safety Act has been estimated at $100 million. Some of this will be paid by the chemical industry, and as such may have a negative impact on innovation, especially for smaller chemical companies.

As Newton explains, “As EPA continues to implement the new TSCA, much of how its success or failure will depend on resources and how they are allocated. Some of the resources will come from industry.  Twenty-five percent, or $25 million of program costs, whichever is the lower, will come from industry.

This creates somewhat of a dilemma. If EPA puts too much focus on section 5 new chemicals and attempts to get smaller businesses to foot more of the bill, innovation could be negatively impacted. We could see a significant decline in the number of new chemicals introduced, particularly by smaller companies.”

As the current trend of tightening industrial chemical regulations reaches its climax, with the EU’s REACH laws, the Korean Act on the Registration and Evaluation of Chemicals (K-REACH), China’s Existing Chemical Inventory (IECSC) and the US’s TSCA, all now passed into law (with more countries following suit), it will take time for chemical companies and the industry as a whole to measure the economic impact of the extra red tape.

But with economic stagnation a reality in Europe and Japan, and a threat in North America and even Asia, governments are becoming increasingly aware of the importance of the chemical industry to the global economy. As such, how long will it take before a review of the legislation and its impact will take place?

Every time a new law is introduced, there is a risk that part of it will not be effective or helpful. What sounds good in a government committee room or looks good in a white paper, does not always implement well in the real world.

So, when all the dust settles from the recent tsunami of law changes, and when all the analysis of the impact of chemical products is over, will anyone from government be free to test the impact of the law on the health of the chemical industry?

 

 

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