Blog: Brexit ‘question of damage limitation’ for chemicals – CIA’s CEO – ICIS

LONDON–Brexit has always been a question of
damage limitation for the chemicals sector,
according to the head of the UK’s chemicals
trade body.

New regulations have come into play as of the 1
January after a deal was agreed at the eleventh
hour, swerving the possibility of a no-deal
exit at the end of 2020.

While avoiding quotas and a £1bn annual hit in
tariffs is a relief to the chemicals industry,
the CEO of the UK’s CIA trade body said the
devil is in the detail in around the rules of
origin.

Steve Elliott urged chemicals producers to
study the agreement.

Elliott was speaking at the ICIS Brexit webinar
‘UK Chemicals stand alone in a post-Brexit
world’, in which he addressed what would happen
to the country’s industry following its exit
from the EU.

One key issue remains access to the EU’s
chemicals regulatory framework Reach, which
contains data of all chemicals registered in
the 27-country bloc, as the UK no longer has
the right to access this information.

“[UK negotiators] pushed the chemicals annex,
they pushed for us to be able to access pre-end
of year investment in EU Reach but received a
very firm rebuttal that access is a gift of the
single market and thou shalt not pass,” said
Elliott.

He said that, although access to data “seems
like a firm political no”, CIA would continue
to explore if there is room to discuss this
again at a later date.

The UK had been the second largest registrant
of chemicals to Reach, after Germany, and there
are concerns around the compliance of
transferring previous valid Reach registrations
to the EU chemicals regulator the European
Chemicals Agency (ECHA) to secure ongoing
access to the European market.

Another way of tackling the challenge could be
through grandfathering – exempting previously
registered chemicals from new legislative
challenges.

“Again, tall order but in the annex language is
positive and talks about future opportunities
and would remove a lot of the obstacles,” said
Elliott.

The final way of ensuring the health and safety
standards of chemicals in UK Reach would be to
duplicate the information.

“Duplication with no additional health and
environment benefit, that is not why we left
EU, complete waste of effort and resources. It
will be about purchasing data and, how we
minimise that cost,” he added.

Departing the EU has left the UK open to other
free trade agreements (FTAs) on a global scale,

Compliance with an independent UK Reach could
also bring with it the threat of tariffs which
could bring another potential £1bn to
importers.

“The suspicion remains if you are rushing
towards a trade deal as a more minor player
than you were, then you have given away more
than you had…” said Elliott.

“Ultimately the issue is how important,
significant, and attractive for UK chemicals
industry going to be for foreign investment.”

Another short-term challenge could be borders
and customs. While there is no immediate
problems, this could be because of the
significant stock building made by producers
before the year end.

This could become more prevalent at the end of
the month, when stocks have been depleted if
border disputes and delays continue.

BENEFITS
Although access
to Reach data has been removed, the UK could
still be placed to be involved with Horizon
Europe – the EU’s research and development
(R&D) framework.

“It’s a bit of a surprise that it is there, but
it is great that it is there given our industry
is a big beneficiary of R&D. The big
question mark is whether the UK government will
commit financially to this,” said Elliott.

The UK’s chemicals sector has proved resilient
throughout the pandemic, and with the focus on
vaccines and hand sanitizers production, it is
easy for the industry to demonstrate its value
to politicians.

In parallel to the EU, sustainability has
become a key issue for the UK government, with
plans talked about including wind farms,
battery plants, decarbonisation, hydrogen and
sustainable production.

These projects are all intrinsically linked to
chemistry and chemicals, and in order to flesh
out what Elliott described as a “wish list”,
more details will be needed to help the UK’s
chemicals industry prosper and meet these
objectives.

Front page picture: UK’s port of Dover, the
largest linking to the rest of
Europe

Source: Martin Dalton/Shutterstock

 

Dover Docks Kent first day of new lockdown,
Kent, Dover, England – 05 Jan 2021

 

A quiet Port of Dover on the first day of a new
national lockdown

5 Jan 2021

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here

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