Speech by
Lena Perenius, Executive Director, Product Stewardship, Cefic
The European Sustainable Chemicals Management conference 2011
Brussels, May 31, 2011
"Regulation versus competitiveness - How to strike the right balance"
As the summary on the EuroForum website says, this conference “aims to present a critique of current European legislation, and to explore how it can be improved to provide a high level of public and environmental protection, without stunting the growth of the European Chemicals Industry.”
So the question is – how to strike the right balance between regulation and competitiveness? As the main theme of this conference is REACH I will of course share with you some experiences of REACH but also look at this question in a global perspective and in the context of sustainability. Because in Europe we need a consistent, workable regulatory framework but we need also global regulations based on common principles and the right framework conditions to innovate for the future.
European Regulation
With REACH, Europe has the most comprehensive chemicals regulation in the world. The complexity of REACH and the sheer amount of detailed guidance are an enormous challenge for industry – particularly for SMEs in the chemical and downstream industries – but also for authorities in member states. All the actors, including ECHA and the Commission, are experiencing a learning curve of unprecedented magnitude.
Making REACH work
But let me make it crystal clear – Cefic and the chemical industry are committed to making REACH work.
We want REACH to be a success because we are convinced that with REACH we have got a comprehensive framework that is robust and able to effectively manage chemicals, including PBTs, ED and nanomaterials.
The chemical industry is working hard to make REACH work:
- Firstly, of course, the companies met the first registration deadline with more than 24,000 registrations for 4,300 substances;
- At Cefic, we explain REACH to our member companies, including the smaller ones, in our REACH Implementation Workshops. In June, we are organising the ninth workshop to inform about the latest developments, share best practices and provide a possibility to discuss practical issues.
- We also develop practical guidance and tools which we make available to all industry on our website. This is greatly appreciated.
- Moreover, Cefic created ReachCentrum, a service provider to do the consortium management on a day-to-day basis.
But as said before, we are in a process of learning by doing and improvements are still needed. Two areas where the workability needs to be improved are the SIEFs and the system for information to downstream users. In particular, the second deadline in 2013 brings further challenges as it will involve more substances with less data, more small- and medium-sized enterprises (SMEs)and less experienced companies.
Furthermore, with evaluation and authorisation starting we need to ensure that these processes are workable, fair and transparent. In short, the complicated processes foreseen by REACH have to be well understood and we have to get them right.
But it is not only practical processes that need to be improved. We are still today struggling with some interpretations of the legal text, for example the very rigid interpretation of strictly controlled conditions for intermediates is definitively a threat to the competitiveness of small players and fine chemical products.
Global Product Strategy: Product stewardship that spans the globe
As Europe does not live in isolation and given that the chemicals industry is a truly global one, I would ask that we spend a little time focusing on chemical management globally.
To put the discussion into perspective I would like to share some trends with you.
The chemical industry has been growing faster outside Europe, especially during the last ten years. Asia is having a growth spurt, while Gulf region petrochemical installations are sprouting up at a fast pace. It’s not just a growth story for “emerging markets” but a quality story. Their products are also improving as we speak.
Since 1999, the EU share of global sales has dropped - from 32 per cent in 1999 to 24 per cent in 2009. In parallel, China’s share of the pie jumped from roughly six per cent to over 22 per cent.
So a provocative question is if we are not still over-regulating a shrinking market.
While we are implementing REACH, other regions in the world are reviewing or developing their own regulatory systems. We know that some jurisdictions are looking closely at what we are doing in Europe and being inspired by REACH. We do not want to export REACH as such to the rest of the world. It is far too complicated for that. But as a global industry, we want globally coherent systems, based on common principles, and we believe that our Global Product Strategy provides a good basis for such common principles.
As we are convinced that a balanced combination of regulations and voluntary industry programmes is the best way to achieve safe management of chemicals, the global chemical industry has developed the Global Product Strategy or GPS, which stands for our commitment to manage chemicals worldwide. Mirroring what REACH is supposed to deliver for Europe, GPS is committing the global chemical industry to gather information, assess and make available world-wide information on all marketed substances until 2018 in a fully risk based system.
Like Responsible Care, GPS is our contribution to the United Nations process “SAICM”, or Strategic Approach to International Chemicals Management. Both have the goal to improve the sound management of chemicals globally, and all major chemical companies accepted the obligation to put them into practice.
An important objective of the GPS is to promote knowledge and skills transfer for developing countries and small and medium sized enterprises. A second goal is to improve transparency by increasing the availability of reliable information on chemicals. As I said, we also view GPS as a best practice example which could serve as a basis for the revision of existing regulations in developed countries and for the creation of new policies in developing countries. The ultimate objectives of such policies and GPS are the same – protection of human health and the environment.
Last but not least, we sponsor high-quality research to identify and fill gaps in our understanding of the potential risk posed by chemicals and to improve methods available for risk assessment.
Let me give you a few examples on what we’ve achieved in terms of GPS implementation since 2009. We engaged in capacity building efforts to improve the competency of SMEs worldwide. In addition, we developed a comprehensive set of guidance materials for risk assessment and risk management. The guidance particularly addresses SMEs in developing economies which may need assistance in the assessment of chemicals and to ensure safe handling of substances throughout their life cycle. We made information on chemicals publicly available through the GPS IT portal which is available on the website of ICCA, the international chemicals association. (ICCA.org)
And finally, I would like to say some words about the chemical industry in the context of sustainability. A sustainable chemical industry is the only way to ensure the long-term success and acceptability of our industry, within and beyond Europe. Beyond chemicals regulation and safety aspects, we have to think about the huge societal challenges in front of us.
Last week’s EU Green Week gave us a chance to show how the chemicals industry works to be sustainable – doing more with less – a balancing act that society as a whole must face.
Resource efficiency is essential for the chemical industry
The chemical industry uses energy and raw material in many ways. Energy and raw material inputs impact the cost of production considerably and the chemical industry is exposed to fierce competition on the EU and world markets from countries that have natural or energy or feedstock advantages. Ensuring that these resources are used in the most efficient, sustainable way is therefore key for the competitiveness of our industry.
The chemical industry has already made progress in improving its resource efficiency but further improvements are needed and we are committed to doing so.
One example is CARE+ for small businesses, funded by the EU and designed and piloted by Cefic. It has helped companies get control of their energy bill and lower it while growing production. One consumer plastics company in Poland, called Lamela, used CARE+ to lower their electricity intensity per product by 15 per cent while increasing production by double digits. There are tens of thousands of SMEs out there that need voluntary tools like this which help their bottom line and their competitiveness while remaining sustainable. It’s possible and it works.
This is today but let’s try to imagine the road in front of us. Where do Europe and the world want to be in the next 20 to 30 years?
We will have nine billion people on this planet by 2050. How can we best tackle future problems that are bound to surface, like seeing we have enough clean water, enough food on our plates, and clean air to breath? The chemical industry discusses a lot about these issues and we are ready to step forth to help solve them. But we need to continue to be here…in Europe.
In addition to what we do in-house to improve our own resource efficiency, new technologies developed by the chemicals industry help other industries develop energy saving products for e.g. housing and for transport. Insulation is a great example, to mention but one.
To keep our innovation edge – a key competitiveness issue on the global market and a necessity to contribute to solutions to the challenges of the future– we have to keep the sector “fit”.
- We need to be strategic in the way we source energy and use raw materials.
- We need to train and keep on our roster the best talent – Europe’s future scientists and researchers. Our “Skills for Innovation” report shows that companies in the future need workers who have not only the “hard” skills in their discipline, but also “soft” skills like communications and business skills to get ideas to market faster.
For this forum, the European chemical industry would like to stress the importance of modern and reliable framework conditions– to help succeed in the market and allow us to meet the challenges. The goals of the EU 2020 Strategy and the Innovation Union help a lot, as do the new Industrial Policy and the Promotion of Key Enabling Technologies, including nano- and biotechnologies. All four should be fully integrated in all future-oriented chemicals policies.
They will help us both here in Europe and help us compete on a world market and help keep jobs at home.
As long as our companies – from the largest to the smallest SMEs – generate revenues, as long as we stay profitable, we will be in a position to pay taxes first, of course, and then to invest in research, innovation, sustainable development and yes, also in highly complex systems like REACH.
But for our industry to really thrive, we need balanced regulation, a solid industry base and the right skills. Education and training are indispensable to attracting young talent to science in general and to chemistry in particular. We hope the International Year of Chemistry 2011 helps to bring home how important education is to this industry.
To keep chemistry and the chemical industry in Europe, it’s not only about research and development, but keeping robust innovation and production in Europe. We need to create the right conditions today.
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