Impact assessment on Possible amendments of Annexes to REACH for registration of nanomaterials

A. Need for action

Why? What is the problem being addressed? Maximum 11 lines

As any other chemicals, nanomaterials are used in different products, addressed by various legislation, most importantly REACH. Jointly they should provide adequate information on their safe use. There is however a lack of clarity on how nanomaterials should be addressed and safety demonstrated in REACH registration dossiers. The information requirements depend on the total tonnage in which a substance (in all forms) is placed on the market. The information to demonstrate safety may depend on the form of a substance, and although the dossier structure allows it and ECHA encourages it, there is no explicit requirement in REACH to identify such different forms, undertake specific tests for different forms or to justify why the information provided is valid for all forms. Based on an evaluation of registration dossiers submitted by 2010 for substances that exist also in nanoforms, the Commission identified the need for more specific requirements on how nanoforms should be addressed in registration dossiers. In case of inaction, the observed insufficient demonstration of safe use for nanoforms might continue, resulting in increased risk for health and environment due to potentially poor risk management and safety measures, and companies wishing to register nanoforms will face uncertainties, resulting in ineffective implementation and increased costs, affecting innovation, investment decisions and competitiveness.

What is this initiative expected to achieve? Maximum 8 lines

REACH aim is to ensure a high level of protection of human health and the environment, including the promotion of alternative methods for assessment of hazards of substances (mainly to reduce animal testing), as well as the free circulation of substances on the internal market while enhancing competitiveness and innovation. In line with the aim of the legislation, the objective of this initiative is to ensure clarity on how nanoforms of a substance are to be addressed and safety to be demonstrated in registration dossiers, thus allowing REACH to be fit for the purpose of dealing with nanomaterials. This will in turn enable REACH to play its part, as for other chemicals, in supporting availability of adequate information on safe use of nanomaterials.

What is the value added of action at the EU level? Maximum 7 lines 

Regulation (EC) No 1907/2006 on REACH is an EU Regulation based on Article 114 TFEU. REACH sets out the registration obligations for chemicals that are placed on the EU market and provides rules for their free circulation, including the manufacture or use of nanoforms of a substance. Legislative initiatives in Member States pertaining to the placing on the market of substances, including their nanoforms, would be in breach of REACH. The possible modification of the provisions established in REACH can only be adopted at EU level.

B. Solutions

What legislative and non-legislative policy options have been considered? Is there a preferred choice or not? Why? Maximum 14 lines 

Further to the no-change scenario (option 1), several other options have been considered, each consisting of a set of specific measures, most of which could be evaluated individually. Option 2 would introduce changes to the information requirements of various REACH Annexes clarifying explicitly what the European Chemicals Agency (ECHA) considered, up to Board of Appeal Decision of 2 March 2017 on titanium dioxide, to be the implicit requirements of REACH. Option 3 would introduce measures of soft law nature to provide more clarity on the registration obligations through guidance without any changes to REACH Annexes. Option 4 assumes full implementation of option 2 and would introduce additional measures to demonstrate safe use in cases where the existing information requirements in REACH are not tailored for nanoforms of a substance or where specific considerations are required for them. Option 5 would clarify registration obligations and reduce certain information requirements based on the explicit assumption that the information in a registration dossier for a substance is independent of its form. Option 6 assumes full implementation of options 2 and 4 and would require the generation of comprehensive information about any potential specific effects and extensive additional testing for nanoforms of a substance with the objective of reducing any uncertainty. The preferred option is a mix of measures based on a slightly adapted option 2 and including specific measures from options 4 and 6 further chosen to maximize effectiveness, efficiency and coherence of the action taken. During discussion with the Member States in the REACH committee, some of the measures of this option were modified or extended.

Who supports which option? Maximum 7 lines 

Respondents in the public consultation can be grouped into three main categories:

1.    Industry representatives, trade associations and private companies supported option 5;

2.    Government authorities, academic/research institutions, NGOs, consumer associations and individual citizens support option 6 followed by option 4;

3.    'Others' (i.e. not having identified their affiliation) supported in equal shares options 6, 4 and 2.

However, when considering the efficiency (i.e. the appropriate demonstration of safe use versus the associated costs) of the specific measures within the options, respondents ranked option 2 first, followed by option 4.

C. Impacts of the preferred option

What are the benefits of the preferred option (if any, otherwise main ones)? Maximum 12 lines

The proposed changes of the REACH Annexes for the registration of substances with nanoforms that are contained in the preferred option will lead to better knowledge about the potential effects of nanoforms on health and environment, and hence to more appropriate measures to prevent risks, which is the underlying rationale for the REACH Regulation for all chemicals. However, most of the health and environmental benefits are expected to materialise only with significant delays after implementation of the measures of the preferred option and are difficult to quantify. In terms of economic and social benefits, it is expected that legal clarity and certainty may positively affect companies' investment decisions and may improve the consumer's trust in the safe use of substances with nanoforms.

What are the costs of the preferred option (if any, otherwise main ones)? Maximum 12 lines

The main costs of the preferred option are the additional compliance costs for companies registering substances with nanoforms. The lack of clarity of the current REACH requirements for nanomaterials resulted in different interpretations by industry and ECHA with both options 1 and 2 as potentially the baseline, and costs of the preferred option can be compared to either of them. Board of Appeal Decision of 2 March 2017 on titanium dioxide clarified that the baseline should be considered closer to option 2, but not the option 2 in its entirety, as the nanoform characterisation cannot be presently requested as part of the substance identity information. During discussion with the Member States in the REACH committee, the Commission modified some of the provisions in its initial proposal, introducing explicit requirements for two relevant physico-chem parameters and mandatory inhalation rather than oral acute toxicity testing. Headline information on cost and animal use is complemented in the report: the cost for the registration of one nanoform would increase by 32% compared to the estimated baseline. The cost of a registration dossier (of a substance with a bulk form and 4 nanoforms) would increase by 27%. The total cost of the preferred option, as modified, for the registration of all nanoforms assumed to be on the market is estimated at 1.4 billion EUR, i.e. 337 million EUR in addition to the estimated baseline. These results are highly sensitive to several key assumptions in the underlying calculations leading to uncertainties of at least 50%. The preferred option increases some requirements on animal testing compared to the baseline. Significant negative impact on employment is not expected.

How will businesses, SMEs and micro-enterprises be affected? Maximum 8 lines

Companies placing on the market nanomaterials will be directly affected due to their obligation to register substances with nanoforms (both EU manufacturers and importers). The effects will be additional compliance costs and administrative burden for such businesses, partly compensated by a clearer legislative environment for fulfilling their obligations. External studies performed for the European Commission in the preparation of the REACH Review 2013 estimated the total number of European nanomaterial manufacturers in the range of 200 to 400. Other companies from various downstream sectors that use nanomaterials may be affected. As is the case for REACH in general, SMEs would be more affected by the preferred option than other companies, because the cost increase is relatively higher for low tonnage registrations, where more SMEs are usually active.

Will there be significant impacts on national budgets and administrations? Maximum 4 lines

The initiative will not have any significant impact on national budgets and administrations. Since all the options aim to create more clarity for registrants of nanoforms of a substance, it is anticipated that the overall compliance and enforcement costs for public authorities will decrease.

Will there be other significant impacts? Max 6 lines

The preferred option would not cause any other significant impacts. The changes foreseen in the preferred option would have non-significant impacts on the requirements under the CLP Regulation and under Annex II of REACH in relation to the communication of safety information in the supply chain via Safety Data Sheets for the registered nanoforms of substances. Other non-significant impacts, such as impacts on downstream users, cost and price competitiveness, international competitiveness or capacity to innovate are assessed in one appendix to the impact assessment.

D. Follow up

When will the policy be reviewed? Maximum 4 lines 

The Commission is required to publish every five years a general report on the operation of REACH in accordance with its Article 117(4). The first REACH Review Report was published in February 2013. The second review was published in 2018 and the next is due in 2022. Given that the measures foreseen in the preferred option are expected to start to deliver as of 2018, with full effect only sometime after 2018, the 2022 report will be the first occasion for their review.