ECHA Underscores Need For New Funding To Improve Functioning Of REACH, CLP

In its third report on the operation of core chemicals safety management programs, the European Chemicals Agency highlights declining fee income in recent years and proposes a new financing model that would afford greater predictability and support for ongoing priorities.

The European Chemicals Agency has important work to do to achieve protection levels for human health and the environment envisioned when the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH) Regulation was adopted in 2006, the agency says.

However, ECHA says, a key need is increasingly urgent: funding.

In its third report on the operation of REACH and the Classification, Labeling and Packaging (CLP) Regulation, ECHA outlines its priorities for the next few years, including addressing substances of concern through its Integrated Regulatory Strategy implemented in 2016.

The strategy aims to efficiently select substances or groups of substances that raise potential concern, ensure appropriate and timely intervention by all actors – ECHA, Member States, the European Commission, and industry – and bolster stakeholder confidence that registrants are meeting REACH information requirements, improving communication of safe use information in the supply chain.

Currently, breakdowns in the EU chemicals management system are evident, ECHA suggests.

“ECHA needs to have long-term financial and human resources stability to fulfil its evolving mandate and to retain and develop its specialist competences and IT applications."

In his foreward to the report, executive director Bjorn Hansen states, “REACH aimed to turn the tables and put the responsibility for ensuring chemicals safety back on industry. Looking back, we can’t help but conclude that this is still a work in progress.”

He continues, “All too often, regulators only get relevant safety information when companies are under pressure to act.”

ECHA has repeatedly stressed a need for registrants to update chemical dossiers as required by REACH. (Also see "ECHA Says 15% Of Inspected Substances Have REACH Registration Problems" - HBW Insight, 14 Dec, 2020.)

Another problem at present, albeit in just a small fraction of cases, is registrants’ refusal to cooperate with national authorities seeking to enforce substance evaluation decisions, according to the report.

ECHA is pushing for changes to REACH that would authorize the agency to revoke noncompliant registrations, a move the European Commission supported in its Chemicals Strategy for Sustainability released in October 2020. (Also see "EU Chemicals Strategy Stands To Transform Cosmetics Regulation" - HBW Insight, 3 Nov, 2020.)

The Commission’s strategy also includes a commitment to develop a common open data platform to facilitate the sharing, access and re-use of information on chemicals coming from all sources.

ECHA is interested in tackling the technical and legal issues that must be overcome to achieve such a platform, it says.

However, the agency could be poorly equipped to take on new tasks stemming from the Chemicals Strategy and to advance other goals, including digitalization of internal processes and IT improvements to support collaboration with Member States and the Commission, the report suggests.

“ECHA needs to have long-term financial and human resources stability to fulfil its evolving mandate and to retain and develop its specialist competences and IT applications,” the agency says.

‘New Fee Types'

ECHA notes that knowledge of the 23,000 chemicals most used in Europe has increased markedly over 15 years of REACH and three registration deadlines for phase-in substances in 2010, 2013 and 2018. (Also see "REACH Phase-In Registration Is Over. Now What? " - HBW Insight, 18 Jun, 2018.)

At the same time, fee income – historically the main funding source for ECHA’s REACH operations – has fallen off precipitously in recent years.

This means that ECHA is relying increasing on an annual EU contribution, which provided 68% of its income in 2020 compared with 31% for the 2008-2020 period, ECHA says.

The situation is only going to grow more dire, according to ECHA’s projections. The agency expects that going forward, a diminishing number of REACH dossier submissions will generate a fee, so that by 2030 just 30% of submissions will provide funds for the agency.

“An additional challenge is the fact that ECHA is required to maintain a strict separation of funding between the regulations that it implements, resulting in inflexibility in budget management and inefficient administrative practices. There have been years when ECHA has developed a surplus in one budget area while experiencing a shortfall in fees in another area,” the agency notes.

One solution ECHA proposes is to have its annual resource requirements determined in collaboration with the Commission, the Management Board and the budgetary authority, with a corresponding EU contribution granted to support the agency’s agreed-upon work.

ECHA would continue to collect fees from industry as defined in an updated fee regulation. That income then would be handed over to the Commission for its treasury and budget management, ECHA suggests.

“ECHA has analyzed scenarios to revise the current fee system and submitted these scenarios to the Commission in March 2021 for its consideration. As the three REACH registration deadlines have passed, ECHA considers it important to consider the introduction of new fee types,” the agency says.

The Commission will undertake its third general review of REACH and CLP in 2022.