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    Business Corner

    An Update on the Status and Impacts of European Regulatory Activity on the Coatings Market

    ...

    An Update on the Status and Impacts of European Regulatory Activity on the Coatings Market
    An Update on the Status and Impacts of European Regulatory Activity on the Coatings Market
    Gary Shawhan, Chemark Consulting03.12.21
    CW interviews Ray Rex, CSB Compliance Group, president, CRC-US

    European regulatory activity continues to provide the guideposts for compliance within the global coatings market. This article’s focus is to provide an update on the status of regulatory initiatives coming out of Europe. To accomplish this objective we interviewed Ray Rex, president of CRC-US who is part of the CSB Compliance Group headquartered in Krefeld, Germany.

    CW: What are the most critical regulatory initiatives that need to be considered by our industry?

    Rex: The three most important initiatives coming out of Europe that need to be addressed as part of a company’s compliance program include Brexit; Poison Control Notification (CN); and the new SDS Standards.

    CW: What is the status and timing for each of these initiatives?

    Rex: From Jan. 1, 2021, BREXIT is a concrete reality – UK REACH exists and is implemented through the Health and Safety Executive (HSE). Coating companies are moving on and making business decisions for this new reality. 

    Two other ongoing EU regulatory requirements are starting Jan. 1, 2021, that impact coatings suppliers. The first is the harmonized Poison Center Notification initiative. The second is the new SDS standards. Both of these efforts stem from Europe’s CLP-Regulation (Classification, Labeling, and Packaging).

    Poison Center Notification was delayed one year because neither the authorities nor the industries/markets effected were ready to implement the system. Any product covered by these regulations requires notification before being placed on the European market. However, some EU countries allow for notification within four weeks after placing a product on the market. The new SDS standards are to be implemented by Dec. 31, 2022. 

    CW: Can you tell us more about BREXIT?

    Rex: I have always felt that the REACH-type initiatives are essential and going down the right path of protecting people and the environment. I also believe that these efforts create barriers to entry that will cost companies money and favor larger companies over time.

    UK REACH requirements brought into existence by BREXIT are no different - they will cost companies money. the HSE initiatives for BREXIT have not onerously impacted the compliance process. They have also allowed significant time for companies to make business decisions regarding their products and the UK markets.

    HSE (Health and Safety Executive) administers UK REACH – think of it as the ECHA of the UK.  The HSE website provides essential information regarding UK REACH (www.hse.gov.uk/reach/). Great Britain (England, Scotland, and Wales) are the countries governed by UK REACH.

    Although Northern Ireland is a part of the United Kingdom (for 100 years on May 3, 2021), it will remain under EU REACH regulations. The Republic of Ireland (the southern part of Ireland) is an independent sovereign state and not a part of the United Kingdom.  As such, the Republic of Ireland was never under consideration for UK REACH and remains under EU REACH.

    CW: Can you provide more specifics regarding UK REACH?

    Rex: UK-based companies, who previously held an EU-REACH registration, can Grandfather those registrations into UK-REACH by April 30, 2021. This also applies to those registrations that were held by UK-based companies after March 29, 2017, but was transferred to an EU-based company or an OR (Only Representative) before the actual Brexit date at the end of last year.

    Grandfathering allows for the use of existing EU dossiers, seemingly providing a less costly and easy path for UK registration. However, it remains to be seen how well the UK system operates and what will be acceptable to UK authorities.

    Additionally, the Downstream User Import Notification (DUIN) is to be implemented by Oct. 28, 2021. DUIN allows UK importers to continue importing chemicals and delays the substance registration from 2-6 years after October 28, 2021. The delay period depends on the classification of the substance and import volume. This concept is similar to that employed by ECHA for the EU REACH registration process.

    Non-UK-based companies can register using the DUIN on behalf of their customers by appointing an OR (Only Representative). This concept allows a company to relieve a customer’s regulatory burden and protect proprietary product data. Compliance personnel now will find comfort in this “EU similar” concept.

    CW: Regarding Poison Center Notification changes, can you tell me what paint companies must do to comply?

    Rex: Poison Center Notification requires that each EU importer, your customers, will need to comply by submitting a notification to ECHA. There is no possibility to relieve EU importers from this obligation in a way REACH allows with the Only Representative concept.

    Products sold to private end consumers and professional users require immediate notification to place them on the market - industrial use has a prolonged deadline until 2024. Coatings companies can expect EU clients to request this information from you (if they have not done so already).

    The problem for coatings companies lies with the information requirements that Poison Centre Notification imposes on the notifiers (your customers). The notification dossier needs to include the full product formula – there is little room for exemptions. This creates an issue for coatings companies wishing to protect Confidential Business Information (CBI).

    The solution to maintaining the CBI confidential is the ominous UFI (Unique Formula Identifier), a tool coatings companies can use to protect CBI. In simple terms, the UFI is a product identifier that must be placed on EU-based companies’ product labels to protect CBI. The UFI allows you to keep your formula confidential while allowing your EU-based clients to comply with the notification obligation.

    You can provide the product formula to a trusted EU-based company (call it a representative similar to the REACH OR concept) to perform a voluntary notification on your behalf. This notification will result in a UFI, which your clients can use on product labels. Knowing the UFI will allow your clients to use the UFI for notification without knowledge of the formula. Only the required disclosures on an SDS will be in the public domain.

    CW: When we talked about SDSs, it appears that the new SDS requirements involve some work to assure compliance. Can you highlight some of the significant changes and their impact on coatings manufacturers?

    Rex: Amendments to REACH Annex II identify the SDS requirements necessary to incorporate into the SDS the specific information needed for nanoforms, endocrine disruptors, and unique formula identifiers (UFI).

    Some of the changes to the SDS sections are listed in Table 2. The above table is a small window into the complex set of regulations for CLP (Classification, Labeling, and Packaging) and REACH that will bring more requirements to SDS authoring. The changes are clearly different from the old EU SDS and the UN standard SDS.

    Compliance is mandated by Dec. 31, 2022. This legislation allows for non-compliant SDS’s to be used until that date. Nevertheless, it would be prudent to have any new SDS’s conform to the new standards. The new SDS’s are significantly different and it will be easy for your customers to spot a non-compliant SDS. 

    At this early-stage coatings companies can commit to the new formats and identify the differences. Have your SDS authors take an existing EU SDS and author it under the new standards. Conduct a data gap analysis comparing the two SDS versions to determine needs and deficiencies in your information.

    CW: Ray, beyond what you have, are there other regulatory initiatives in Europe that can impact suppliers to the coatings market you can comment on?

    Rex: Yes, there are other ongoing ECHA initiatives that will also impact coatings companies. 

    Specific nano substance requirements have been under review for REACH registrations and are now in place. ECHA has begun requesting additional information and testing from the members of various substance consortiums. The requested testing costs will be borne only by those companies selling nanomaterials.

    Next, the European Biocidal Products Regulation (BPR) of September 2013 requires active biocide approval (Article 95 listing) followed by the authorization of the biocidal product. The requirements, laws and the approval process associated with BPR are complex, and there are national laws that still apply to a lot of disinfectants, notably ethanol-based products. The COVID pandemic has undoubtedly created the push to bring new disinfectants to market, spurring significant activity in the authorization of biocidal products.

    Regionally, Eurasia and Turkey In 2020 completed chemical pre-registration initiatives. However, Turkey reopened pre-registration again in 2021, after the 2020 deadline. Nevertheless, it will be quiet for at least a year until the registration process begins.

    For polymers, ECHA, together with the EU commission, is rapidly progressing with a significant initiative regarding polymer registration to address the polymer exemption in the original legislation. The thrust is to develop a methodology to register polymers directly. This will possibly be in a grouped approach, rather than the current exemption, requiring registration of the monomer constituents. We expect to see details in 2022 followed by implementation circa 2023-2024. The Canadian system of polymer classification is one of many concepts under consideration. 

    And, of course, ECHA regulations continue to lead the way in the chemical regulatory arena. The legal text changes every five years as mandated, and the early indication is that sustainability will play a role in the next version. Driving this initiative is the EU’s recent Green Deal and its new chemical strategy that will impact the chemical regulatory landscape in Europe within the next five years.

    1. Links providing additional information.
    a.  January 1, 2021    
      i. UK REACH: REACH after Brexit (hse.gov.uk) 
    b. “Comply with UK REACH”
      i. How to comply with REACH chemical regulations - GOV.UK (www.gov.uk)
    c. Downstream User Import Notification by October 27, 2021
      i. UK REACH: Notification of status as a GB-based downstream user or distributor under EU REACH (hse.gov.uk)
    d. Grandfathered registration notification by April 30, 2021.
      i. UK REACH: Recognizing your EU REACH registrations under UK REACH (grandfathering) (hse.gov.uk)
    2. CSB Compliance Group (csb-compliance.com) 
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