Saturday, May 15, 2010

First REACH Deadline Approaching Fast - Time to Panic?

The REACH chemical control law in Europe has been in force for a couple of years now, but November 30, 2010 is the first big deadline for companies to register their chemicals. To do that they have to provide extensive dossiers of health and safety data. No data, no registration, no market.

Since this is the first deadline and it is for larger volume chemicals (the three deadlines are spaced out, with lower tonnages not due until as late as 2018), there has been a lot of work to do...and a lot of confusion about how to do it. Even as companies and consortia are working hard to finish up their registration packages, ECHA (the chemicals agency in Helsinki) is still revising and creating guidance documents and software. And all this has many companies on edge.

But there are some reasons to relax. Okay, not relax, but at least not get too anxious.

While ECHA has 3 weeks to run the submitted dossiers through an automated completeness check, if companies don't submit until October or November (assuming they still meet the November 30 deadline), that window actually expands to 3 months. If it is not completely acceptable, companies will have up to 4 more months to fix it and provide corrected documents. In practice what this could mean is that there will be a lot of companies at the last minute more worried about checking the right boxes in the electronic form to ensure it passes the automated completeness check then getting the assessments right. If they can get past that, then they are home free to continue producing or importing the chemicals until ECHA or a member state targets a particular chemical for further review.

There is also a right to appeal some decisions to ensure integrity of supply chains.

So the bottom line is that companies have a lot of work to get down between now and the fall, but then can relax and wait for further assessment, if any, from ECHA, all while continuing to market their chemicals.

Just make sure your dossier passes the completeness check.

Friday, May 14, 2010

Climate Crock of the Week

I normally don't do promos, but I wanted to make a plug for a particular YouTube channel that has been very useful in educating the public on the status of climate change.

Peter Sinclair produces the Climate Denial Crock of the Week video series. A long time advocate of environmental awareness and energy alternatives, Sinclair is an award winning graphic artist, illustrator, and animator. His syndicated cartoons have appeared worldwide, and his work has been profiled in numerous publications, including the New York Times. Greenman Studios is run from his home in Midland, MI.

To obtain funding to continue to produce the videos at a high quality, Crock of the Week has submitted for funding at the Brighter Planet's Project Fund. The Brighter Planet Project Fund seeks to foster local leadership and seed worthy community projects that will help people fight or adapt to climate change. You can read more about the Brighter Planet Project Fund, and vote for the Climate Denial Crock of the Week video series here.

You can visit Peter Sinclair's web page here.

EU Coalition Argues that Regulations Help Innovation of New Chemicals

Yesterday I suggested that regulation under the newly proposed Safe Chemicals Act in the United States would actually stimulate innovation and development of new, safer chemicals in contrast to concerns by industry that regulation hinders innovation. In a timely piece of news, today I came across a new report published by the International Chemical Secretariat (ChemSec), a coalition founded by four non-profit organizations in Europe. ChemSec is the organization that previously released a SIN List of dangerous chemicals.

The report is called "Electronics Without Brominated Flame Retardants and PVC – a Market Overview" and the basic conclusion is that "greener, more environmentally-friendly electronics are possible!"

ChemSec notes that many companies are moving in this direction, and argues that "to stimulate this development, regulators, nationally and globally, have the opportunity, and responsibility, to establish legal frameworks confirming the elimination of replaceable, toxic chemicals used in electronics." They believe taht EU legislators can "confirm sustainable developments like the one reflected in the ChemSec Market Overview, by taking action on brominated flame retardants and PVC."

So apparently the RoHS Directive in the EU has stimulated innovation and development of alternatives that would not have been attempted if the costs of proving safety were not included in the business calculus. Thus, as I noted yesterday, it is highly likely that the Safe Chemicals Act will provide incentives for innovation. It can do this both by accurately counting the costs of safety and by providing financial and regulatory incentives for development of green chemistry.

Assuming that the bills actually are passed and become law.

Thursday, May 13, 2010

Will TSCA Chemical Reform Hinder - or Help - Development of New Chemicals?

As Congress and stakeholders debate whether the newly introduced Safe Chemicals Act of 2010 will get passed this year, the chemical industry is concerned that the more stringent standards "could actually hinder the development of new products that could be safer than existing ones now 'grandfathered'under the old law."

But is that true?

Let's be honest. The first reaction to any new regulations, no matter the topic, is always the same. It will "kill jobs" and "hinder innovation." It's a mantra that is mimed whenever a new regulation is proposed, and frankly, no longer has any credibility. On the other hand, some regulations could, in fact, inhibit innovation. So which is it?

In looking at the history of innovation you see a mixed bag. But the bottom line is that regulation actually enhances innovation more than not. Why? Simply put, why come up with a new chemical that would make your old chemical obsolete when the old chemical is making you lots of money? Basic chemicals that were developed years ago have the advantages of:

1) a robust and mature market, where the chemical has been found to be useful in a variety of different product types,

2) established comfort zones, where customers are comfortable using your chemical in their products because they know they work, already have supply chains set up, and have streamlined operations to minimize costs and maximize profit margins,

3) being inexpensive, that is, relative to more recently developed chemicals that are still paying for substantial R&D costs, marketing efforts to get into new products, and no track record.

So given that there are essentially no costs to continuing to sell the old chemical, why spend lots of money developing a chemical that does the same thing (though perhaps not as well) except require you to convince current customers to switch to something more expensive? It just doesn't make economic sense.

Unless there is a cost to the old chemical. Of course, there is a cost, but that cost is "hidden" in the sense that any health or environmental costs are spread around to society as a whole (unless there is a huge spill, such as the current Deepwater Horizon in the Gulf). And how does one capture the actual cost of proving safety of chemicals (i.e., rather than wait until after the fact)? By requiring testing up front. So the health and environmental costs, if there are any, will be included in the costs of the manufacturer. If those costs are excessive, for example if the chemical is a substance of very high concern, a PBT, a carcinogen, mutagen or reproductive toxicant, then the company now has incentive to develop newer, safer, more innovative chemicals.

It's just basic free market economics. And all one has to do is look at what happens after some egregious regulation is passed that will "kill jobs" and "inhibit innovation." The ingenuity of companies is released and new products come on the market, usually quite quickly. Jobs are always being created in emerging technology areas while more mature technologies have been giving up jobs to overseas sourcing for decades.

So it is likely that the Safe Chemicals Act will encourage the funding and development of new, safer chemicals. Emergent and innovative companies and chemicals that are currently unable to break into established markets will have a better chance of competing. Requiring safety data on all chemicals, both existing and new, will ensure that dangerous old chemicals are not replaced with dangerous new chemicals.

And the poor guy who has the "next best thing" but can't get his foot in the door because no one wants to lose their biggest suppliers will finally get a seat at the table.

Wednesday, May 12, 2010

EPA sends new chemical "action plans" to OMB for review

EPA continues to try to make the "old TSCA" work while Congress and stakeholders work on developing a "new TSCA." The "Safe Chemicals Act of 2010" was introduced in the Senate last month, with a companion bill introduced in the House. While it's unclear when or even if some form of the bills will become law, EPA is determined to aggressively use the authority it believes it has in the old Toxic Substances Control Act.

One activity has been the introduction of "action plans" on specific chemicals. The latest two plans have now been sent to the White House Office of Management & Budget for review. The two plans - one for nonylphenol and its ethoxylates (a common laundry detergent chemical) and the other for hexabromocyclododecane (a brominated flame retardant) - were sent to OMB this week. It's unclear how long OMB will take to review them, but EPA has said it plans to issue them shortly.

The nonylphenol plan could be particularly contentious as industry may have to do substantial testing and yet still have to phase-out the chemical for use. A trade association representing textile rental services has already proposed a phaseout by 2016 in lieu of an EPA test rule. The hexabromocyclododecane is important because it joins other brominated flame retardants on the potential chopping block.

So expect these two action plans to get through OMB quickly and be released as early as the end of this month. Meanwhile, EPA is also working on action plans for benzidine dyes and pigments, diisocyantes and siloxanes. These are in addition to the actions plans already released for bisphenol A; multiple phthalates; certain perfluorinated chemicals; penta, octa, and decabromodiphenyl ethers; and short-chain chlorinated paraffins.

So EPA pushes forward while Congress decides whether it can act on the bills already introduced.

Tuesday, May 11, 2010

Obama Sends Energy Secretary Chu to Monitor BP's Oil Spill Response

In continuing his "all-hands-on-deck" response to BP's Deepwater Horizon oil spill, which is quickly reaching the spill record long held by ExxonMobil with it's Exxon Valdez accident, President Obama is sending Energy Secretary Chu to the Gulf coast.

Along with Chu will be a team of "top administration officials and government scientists" who will swarm on BP's command facility in Houston. The move follows another meeting of Obama's cabinet and senior staff to get an update on the efforts to stem the flow of oil from 5,000 feet down off the coast of Louisiana.

The hope is that somehow they can figure out how to "contain the spread, mitigate the environmental impact and provide assistance to affected states, including individuals, businesses, and communities."

But Chu isn't the only top official to be involved. EPA Administrator Jackson has made several visits to the Gulf region to oversee efforts to mitigate the environmental and human health impact of the spill. Interior Secretary Ken Salazar has been there and yesterday dispatched Director of the Bureau of Land Management Robert Abbey to the Gulf Coast to support ongoing response efforts. Other federal level resources responding include the Navy, the Coast Guard, NOAA, the Fish & Wildlife Service, the US Geological Survey, and even the Department of Agriculture's Natural Resource Conservation Service.

In addition, "to deal more generally with the harms created by oil spills, the President has requested that legislation be sent to Congress to toughen and update the law surrounding caps on damages."

More information and daily updates on the response can be found on the official Deepwater Horizon response site.

Monday, May 10, 2010

Companies Challenge ECHA Candidate Listings

As I've reported in the past, the European Chemicals Agency (ECHA) has been adding chemicals to "candidate lists" designating them as "substances of very high concern" (SVHC). Well now several companies are starting to push back on these listings.

The first instance was when lawyers challenged the listing of acrylamide. The substance was initially dropped from the published list, though it was added back on within short period. Now we see that several companies have gotten together to legally challenge the inclusion of four more substances to the lists, specifically, "pitch, coal tar, high temperature" (PCTHT); anthracene oil; "anthracene oil, anthracene low"; and "anthracene oil, anthracene paste." Actually the challenges were made back in February for the list issued in January, but only now have the challenges been made public. The companies feel the decision to list is faulty and based not only on errors in the hazard assessment but also on a misinterpretation of the law. In fact, they assert that there is no legal basis in REACH for the listing.

We'll see how the challenge comes out. But it is no surprise that companies are starting to push back against candidate listing. Once a chemical is designated a SVHC it then gets on a fast track for being pushed out of the market. Candidate list chemicals are eligible for the Authorization phase of REACH, which means they will be banned unless the manufacturer or importer of the chemical applies for authorization to continue using it. And if an authorization is granted, it will be time limited (likely less than 5 years) and also limited to specific uses that can be controlled. The company getting the authorization also is required to come up with a plan to replace the authorized chemical with a safer alternative, again on a very restrictive time frame.

This case is a reminder that while companies are focused on preparing their data packages for the first registration deadline on November 30, 2010, other parts of the REACH regulation are also moving forward on separate tracks. It is wise for companies to be aware of all of the facets of REACH, not just the registration dossier.