The decision to extend UK REACH deadlines has only deepened and increased concerns over the government’s commitment and support for the chemicals sector, says Tim Doggett, CEO of the Chemical Business Association (CBA).
The chemical supply chain is one of the UK’s most critical and strategically important industries, underpinning every part of our economy and national infrastructure. Yet, after years of disruptions and ongoing geopolitical uncertainty, it continues to be overlooked by Government.
Two issues in particular continue to weigh heavily – ongoing uncertainty on UK REACH, and Government’s broader neglect and continued failure to recognise chemicals as a key sector for economic growth.
The ongoing impact of UK REACH
Despite consistent lobbying efforts by the CBA and other stakeholders to make Government aware of the impact of UK REACH, progress has been frustratingly and painfully slow.
Because of the far-reaching impact of UK REACH, the challenges created by ongoing delays do not simply affect the chemical supply chain, but the entire economy and the UK’s global competitiveness.
It was deeply disappointing when the chemical supply chain was overlooked during the EU-UK Summit in May, despite pre-election promises from Rachel Reeves that the Government would seek a bespoke arrangement for the chemicals sector. There were hopes that the event, which was designed to help reset the UK’s relationship with the EU, would see steps made to find a pragmatic solution to UK REACH, but the topic was entirely absent.
This disappointment was compounded by Government’s decision to shelve the UK Chemicals Strategy, a commitment made in 2018 and the first since 1999. To see it quietly dropped after years of delay was not only disheartening, but especially frustrating considering the strategic importance of the chemical industry and the current Government’s often-repeated ambitions for economic growth.
The continued absence of a long and much-needed Chemicals Strategy not only weakens the UK’s global competitiveness and deters investment but puts the environment at risk and undermines future growth across the economy.
The most significant blow, however, was the recent announcement by the Department for Environment, Food and Rural Affairs (DEFRA) to consult on yet another delay to UK REACH registration deadlines.
DEFRA originally announced it would explore an alternative model for UK REACH and consult separately on extending the existing deadlines in December 2021 – a move that led to the initial extensions. However, lack of progress on the Alternative Transitional Registrational model (ATRm) means that registration dates could now be extended by a further three years, which as a result would see the final registration deadline falling nearly 13 years after the Brexit transition!
Exclusion from the Industrial Strategy
DEFRA’s decision to once again extend UK REACH deadlines has only deepened and increased concerns over the Government’s commitment and support for the chemicals sector. The anxiety was compounded when the sector was not explicitly recognised in the UK Modern Industrial Strategy and chemicals were not included as a key growth-driving sector (IS-8), despite the essential role the sector plays in UK industry and, indeed, the wider economy.
Chemicals are one of the Critical National Infrastructure (CNI) sectors – to effectively omit it from the Industrial Strategy is not just a missed opportunity for growth, but sends the wrong message to a sector that underpins everything, from pharmaceuticals and agriculture, to construction, technology, and consumer products, including the essential food and drinks industry.
In fact, over 97% of all manufactured products contain inputs from the chemical sector. Combined with pharmaceuticals, the chemical sector is the UK’s second largest export. It is also a major contributor to the UK economy – CBA members alone contribute more than £5 billion and employ over 12,000 people nationwide.
Impact on the chemical supply chain
The CBA represents over 170 companies, many of which operate in – and trade between – both the UK and the EU. A significant proportion of these businesses are family-owned SMEs, many of them high-growth companies of the future, but which require government support to realise their full potential. These businesses face the burden of having to duplicate registrations made under EU REACH to comply with UK REACH – an exercise that comes at considerable cost. DEFRA’s own estimates put the financial impact on industry around £2 billion and as much as £3.5 billion.
Additionally, a recent survey of CBA members found that 80% are facing import and export difficulties due to UK REACH, while nearly 90% believe it is having a negative impact on the UK economy.
The CBA has consistently highlighted, from the outset, UK REACH’s impact on the chemical supply chain and on the numerous downstream industries that now come under the regulation’s scope. At the time of the first extension, we stressed that this additional time was not simply for DEFRA to develop the ATRm, because industry needs sufficient time to implement it.
What the sector needs now
Until the strategic and economic importance of the UK chemical sector is acknowledged and progress is made on an effective, workable solution for UK REACH, investment, innovation and growth within the UK chemical supply chain and wider UK economy will remain stifled.
What is needed is clarity, coupled with clear policy direction and decisive action, to break the inertia and unlock the full potential of this vital sector.
For more information visit www.chemical.org.uk.
