Smaller metal firms shy away from costly EU law

New European Union rules requiring firms to register and document
metals and other substances they handle is causing consternation among
companies which fear the law will be costly and difficult to meet.

EU figures suggest the direct cost to European industry, including
chemicals companies, of meeting the regulations are likely to be as
much as 2.3 billion euros ($3.37 billion) over 11 years.

"We are absolutely horrified by the potential cost to fully comply
with all the legislation for the products we handle," said Peter
Nicholson, director at London Chemicals and Resources, an
international distributor and supplier of metals.

The law covers all metals from high volume copper and aluminium to
minor metals such as indium, used to make liquid crystal displays for
screens, and selenium, used in glass making, construction and
agriculture.

The directive -- REACh, or Registration, Evaluation and Authorisation
of Chemicals -- is designed to protect people and the environment from
potentially hazardous materials found in manufactured goods, including
clothing and vehicles.

"It could cost us millions – just to continue our day to day
business," Nicholson said.

The rules apply to all companies handling metals and other substances
such as chemicals, including importers, manufacturers and those in the
construction industry.

Industry organisations say many downstream users, such as fabricators
of glass, are still unaware of the legislation.

"We are trying to convince small and medium-sized firms it is really
necessary to start with REACh now," said Christina Messner,
responsible for environmental policy at the German metal association
Wirtschafts Vereinigung Metalle.

She said it was necessary for the firms to start and get a clear view
of which substances that would have to be pre-registered and then
secondly to focus on data collection.
Two parts

By June 2008, metal firms must have pre-registered the substances
falling under the new law and by 2010 technical dossiers describing
their environmental impact must be ready for submission to the
European Chemicals Agency (ECHA).

"Each company will have a registration cost for each substance it puts
on the market," said general manager Tony Newson of the Stainless
Steel Producers Group at the European Confederation of Iron and Steel
Industries (EUROFER).

The steel industry has nearly 30 different substances it would have to
register, but due to sensitive information sharing when setting up a
consortium -- and sharing the cost when submitting a technical dossier
-- the original plan was delayed.

"The plan was to have an iron and steel cooperation platform but this
is taking rather a long time to get off the ground," Newson said,
referring to difficulties to set up a consortium.

In other industries, lawyers had been involved to reduce the risk of
sharing sensitive business information by using confidentiality
agreements when setting up the consortiums.

Newson said the EU Commission had calculated that if a firm had no
previous data and handled more than 1,000 tonnes of a substance, the
cost of meeting the rules could be up to 2.5 million euros.

"With the steel industry, most of the substances that we use are more
than 1,000 tonnes -- so it can be very expensive."

In the tin industry ITRI, a UK-based consultancy, had formed a
consortium with five members and an additional two were awaiting
approval to share the costs of gathering information.

"For the four years, 2007-2010, we have got around $3 million budgeted
and that is the minimum amount we anticipate," said Kay Nimmo, manager
of environmental affairs and responsible for REACh at ITRI.

"It is shared according to the tonnages of the members for the
European market," she added.

She said the largest challenge would be the technical work necessary
to generate the right kind of data required by the EU.