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What you need to know about REACH Authorisation - A guidance note for SMEs

10 July 2014

REACH, which stands for Registration, Evaluation, Authorisation and Restriction of Chemicals, is a substantial piece of legislation controlling chemicals within the EU. It aims to improve the protection of human health and the environment from the risks of chemicals. REACH applies to chemical substances on their own, in mixtures and in articles (objects). As such, REACH has the potential to impact all UK business sectors.

Authorisation is one of the REACH processes for managing the risks of certain hazardous substances, known as “Substances of Very High Concern” (SVHC), and promoting their replacement with safer alternatives.  Substances  that  are  subject  to  Authorisation  may  not  be  used  in  the  EU  unless  a company has been authorised to do so. This will mean that such substances are eventually phased out of all non-essential uses. 

This guidance provides small and medium-sized enterprises (SMEs) with an introduction to REACH Authorisation and what it might mean for your business. It also tells you where you can go to find out further information and where to get help. It has been prepared by the UK Chemicals Stakeholder Forum to help smaller companies in particular understand what the likely impacts of Authorisation will be.

Will Authorisation affect my business?

Your business will be affected if you currently rely on a substance that is going to become subject to Authorisation. The effect can be either direct, if you use the substance, or indirect if your business purchases products or materials that use the substance.  
If your specific use has not been authorised, you will no longer be able to use the substance in the EU regardless of how important it is to your business. Conversely, there could be market opportunities for your business if it provides alternatives that could be used to replace substances that are being considered for Authorisation.

What are my options if a substance I use is subject to Authorisation?

You have five key options:
•  Replace the substance with a suitable alternative or adapt your process to avoid its use.
•  Switch to products (articles) that avoid the use of the substance.
•  Consider applying for Authorisation. 
•  Ensure your use is covered by another Authorisation.
•  Cease use in the EU. 

Where can I find out more about substitution?

Substitution is the replacement of a substance, process, product or service by another that maintains the same functionality. If a substance critical to your business is subject to Authorisation then substitution may offer a solution. However, this needs to be done with care. The viability of substitutes needs to be assessed on health and environmental grounds as well as their technical performance. 

The  UK  Chemicals  Stakeholder  Forum  has  produced  a  useful  introductory  Guide  to substitution1  which describes the process and its potential pitfalls.  Help and guidance is also available online and Subsport2 is a good starting point. This is a free information exchange on alternative substances and technologies, as well as tools and guidance for substance evaluation and substitution management.

How can I obtain permission to continue to use the substance?

Companies need to apply to the European Chemicals Agency’s (ECHA). Permission to continue to use a substance subject to Authorisation can be granted if the applicant demonstrates that:  
* The risks from the use of the substance are adequately controlled (i.e. exposure does not exceed levels which may cause adverse effects to human health and the environment). This route only applies for substances for which a safe level (“derived or predicted no effect level”) can be determined; 
* The risks to human health or the environment from the use of the substance are outweighed by socioeconomic benefits and there are no suitable alternative substances or technologies available. This route is for use for SVHCs for which a safe level (“derived or predicted no effect level”) cannot be determined or when adequate control cannot be demonstrated.   

The application will need to include:
•  A chemical safety report covering the risks arising from the substances properties and demonstrating adequate control of the risk, if this isn’t already available.
•  An analysis of alternatives considering alternative substances, the technical and economic feasibility of using a different substance and any research and development activities you are doing to search for an alternative.
•  A substitution plan outlining actions and timelines required to switch to alternative substances and technologies if they exist but aren’t immediately available.
•  The application may also include a socio-economic analysis, if required.   
Applications  are  initially  assessed  by  the  ECHA’s  technical  committees  and  the  analysis  of alternatives is open to public scrutiny. The European Commission has the final decision on whether to grant Authorisation or not. Seeking Authorisation can be time consuming and resource intensive. It is therefore important that you are proactive in managing Authorisation and that the project is thoroughly planned. Before deciding to apply you must therefore consider all the options available to you. It is essential for you to fully understand what the impact would be if you can no longer use the substance in the EU.

How are substances identified for Authorisation? 

There are three key steps to consider before a substance is subject to Authorisation. The process is outlined in Diagram 1 and explained below.

Step 1: Identifying the most appropriate risk management measure 

Through screening activities, authorities identify potential substances of concern that might require further action. When there is sufficient understanding of the properties of the substance, ECHA or the responsible Member State then carry out a risk management options (RMO) analysis to decide whether measures are needed and, if so, what the most appropriate regulatory route would be. The proposed approach is reviewed by a group of Risk Management Experts (RiME). If it is agreed that Authorisation is the most appropriate route, it is then notified to ECHA’s registry of intentions (RoI). The RoI gives advance warning of ECHA’s or Member States’ intentions to take action.

Step 2: Inclusion of SVHCs on the candidate list

Once on the RoI, the responsible Member State or ECHA then prepares a justification dossier (also known as an ‘Annex XV dossier’) to formally set out why the substance can be defined as SVHC and should be  included  on  the  candidate  list  for  Authorisation.  The  dossier  is  subject  to  a  public consultation,  during  which  interested  parties  can  submit  relevant  information.  If  comments  are received  during  public  consultation,  unanimous  agreement  by  ECHA’s  Member  State  Committee (MSC) is needed before the substance’s inclusion in the candidate list.

Step 3: Prioritisation and inclusion in the authorisation list

ECHA is required to periodically make a recommendation to the Commission on which substances from the  candidate  list  should  be  prioritised  for  Authorisation.  The  prioritisation  is  based  on  the available  information  on  the  substance’s  properties,  uses  and  volumes.  The  draft  ECHA recommendation  is  subject  to  a  public  consultation  and  then  followed  by  a  MSC’s  opinion.  The Commission in collaboration with Member States finally decides whether the proposed prioritised substances  should  be  included  in  the  Authorisation  list  (REACH  Annex  XIV).  Substances listed in Annex XIV are subject to Authorisation.  

It is important to note that while not all substances on the candidate list will be recommended for authorisation, substances are being prioritised for Authorisation every year and once that occurs the inclusion in the Authorisation list is a relatively quick process.

What are the key dates to consider in the Authorisation process?

The Authorisation list outlines the date by which the use of the substance must stop (“the sunset date”) unless authorised and any exemptions, if any.  Sunset dates are typically (but not always) set three years after the substance has been published in Annex XIV. 

If  you  cannot  substitute  the  substance  and  are  considering  continuing  to  use  the  substance,  an application  for  Authorisation  must  be  submitted.  The Authorisation list  includes  the  “latest application date”, which is set at least 18 months before the Sunset date. Companies meeting this deadline  can  continue  to  use  the  substance  after  the  sunset  date  until  their  Authorisation application has been fully processed.  How can I keep track of which substances are being targeted?

It is important to monitor developments in order to plan for, and manage, potential changes. You should monitor the Registry of Intentions3, the Candidate List4 and the Authorisation List5. Both are regularly updated. The Candidate list is usually updated twice a year and public consultations occur in March-April and September-October ahead of the update. Details of substances that are being prioritised  for  inclusion  on  Annex  XIV  can  be  found  on  the  ECHA  website6.  Consultations on new proposals typically run from June to September each year. 

 You can also  sign  up  for  ECHA news alerts7 or the HSE eBulletin8.  Organisations such as EEF9 and REACHReady10 also provide free alerts. These services will notify you when substances are identified as SVHCs, subject to consultation and prioritised for inclusion in, or added to, Annex XIV.

Are there any exemptions to Authorisation?

Yes.  Some  uses  of  substances  are  automatically  exempt  from  the  requirements  of Authorisation.

This means that they can still be used in certain circumstances even if they have been included on the Authorisation  list. This  is mostly  because  risks  posed  by  the  substance  are  already  controlled through other existing European legislation. The exemptions are detailed in Article 2 and Article 56 of REACH. It includes, for example, substances used in medicinal or veterinary products, substances used in food and feed stuffs and on-site isolated and transport isolated intermediates. Check before starting any work and always seek clarification from your competent authority (the HSE in the UK). 

Is it possible to challenge proposals for substances to be subject to Authorisation?

There are a number of opportunities for interested parties to input into the Authorisation process, and this can affect whether or not a substance ends up on Annex XIV.
 It is important that you monitor consultations and input when you can. The most effective way is to submit comments via  industry  sector  groups  and  trade  associations.  Information on uses  of  the substance (including information on the tonnages used per use, exposures or releases resulting from these uses, the complexity of the supply chain, views on transitional arrangements, proposals for exemptions, etc.) is particularly welcomed. 

It may also be prudent to engage with Member States or ECHA when they are preparing a dossier identifying a substance as a SVHC. This could prevent the substance being listed on the candidate list, for example if it can be demonstrated that there are other more effective ways to manage the risks posed by the substance (i.e. Restriction) than Authorisation.

Does Authorisation apply to research and development activities?

Maybe. If you use a substance for scientific research and development, then this is exempt. Scientific research and development is defined as any scientific experimentation, analysis or chemical research carried out under controlled conditions in a volume of less than 1 tonne per year. This would include using a substance for monitoring or control purposes. 

 There is also discretion to exempt, on a case-by-case basis, the use of a substance for product or process orientated research and development (PPORD).  If you want to use a substance subject to authorisation for PPORD you will need to check Annex XIV to see whether an exemption is in place.

Does Authorisation apply to imported goods?

Yes and  no.  Authorisation only  applies  to  chemical  substances.  An importer  cannot  import  a substance on Annex XIV (on its own or in a mixture) after the sunset date unless an Authorisation has been granted which allows them to do so. However, Authorisation does not apply to substances which are  an  integral  part  of  an  imported  article.  Therefore, articles  containing  a  substance  on Annex XIV can be imported into the EU without the need for an Authorisation. However, in order to produce  the  article  within  the  EU  using  a  substance on Annex XIV, an Authorisation  would  be required.
It is important to note that a substance within an article could become subject to a ‘Restriction’ at any time. Substances  which  are  subject  to  a  Restriction  are  listed  in  Annex  XVII  of  REACH.  If a Restriction is introduced for a substance, its presence in an article (either produced in the EU or imported from outside the EU) could be prohibited. 

Who can apply for Authorisation?

European  chemical  manufacturers,  chemical  importers,  Only  Representatives  of  non-European chemical  manufacturers,  formulators  and  companies  using  chemicals  downstream  (and  any combination  of  them)  can  apply  for  an  Authorisation. 

Companies that  use  chemicals  have  a fundamental role as applications are required for the “use” of the substance.  These “downstream users” have two options if they wish to use a substance subject to Authorisation: 
•  Obtain the substance from a manufacturer, importer or another downstream user that holds a valid Authorisation for that particular use. 
•  Directly apply for Authorisation for that use. 

A  chemical manufacturer or  importer’s  Authorisation  may  cover  all  users  down  the  supply  chain. However, a downstream user cannot apply for Authorisation for uses up its own supply chain. If a downstream  user  is  granted  Authorisation  it  only  allows  for  the  substance  to  be  “placed  on  the market” for that use by its immediate supplier (one level up his supply chain).  

Early communication in the supply chain is therefore crucial. Chemical manufacturers and downstream users should share information and discuss the most efficient way to cooperate. The dominant  company  in  the  supply  chain  may  have  an interest in applying and/or coordinating action.

How long do Authorisations last? 

Authorisations do not last forever. When an Authorisation is granted, a ‘time-limited review period’ is set. The duration of the review period is assigned on a case-by-case basis, taking into account information in the application. The likely review periods are 4, 7 or 12 years. 

Is the Authorisation process different for SMEs? 

No, REACH provisions apply to duty holders irrespectively of the company size. 

How much does it cost? 

A fee must be paid to ECHA for each Authorisation application. The level of the fee depends on the number of uses, substances and applicants covered by the application. There are reduced fees for companies  qualifying  as  medium,  small  and  micro-enterprises  as  per  the  EU  SME11  definition.  The reduced  base  fee  covering  one  applicant,  one  substance  and  one  use  ranges  from  €39,975  for  a medium-sized business to €5,330 for a micro-sized business. Please note that ECHA verifies the SME status of all applicants and administrative charges apply in case of incorrect claims. ECHA have a Fee Calculator Tool 12 available to estimate the fee for Authorisation applications. 

However, note that the application fee is likely to only represent a small fraction of your costs. You will  incur  additional  costs  if  consultancy  support  is  needed,  if  you  need  to  access  technical information or if the preparation work is carried out with others. This can be significant. You should be  confident of  success  before  deciding  whether  applying  for  Authorisation  is  the  best  course of action.

What steps can I take to reduce Authorisation application costs?

It is possible to cooperate with other applicants during the preparation of some, or all, of the elements involved in the application. Cooperation with other companies might help to reduce costs.   

There are benefits and disadvantages associated with collaborating with other applicants. Deciding when  to  work  together  and  which  aspects  of  the  application  to  submit  individually  will  be  an important decision. When it comes to the analysis of alternatives or the socio-economic analysis for instance, or if you are describing processes that demonstrate adequate control, there are some parts which may need to be completed individually to maintain confidentiality of business information. However it may benefit the application to conduct a joint analysis of the wider impact of a product’s use. If you do decide to work with other applicants, be mindful of competition law. 

What should I be asking my supplier?

If you are a downstream user, you may want to ask your suppliers what their intentions are. For example,  whether  they  are  considering substitutions or whether they  intend to apply for Authorisation. In the latter case, you should ensure they receive information to cover your use and those of  your  customers.  If  the  Authorisation  is  granted,  your  supplier  will  provide  you  with  an Authorisation  number  on  the  product’s  label  and  safety  data  sheet.  If you  decide  to  obtain an application for your own use, you should ensure that your supplier intends to continue to supply the substance in the long term.

Once an Authorisation has been granted, do other provisions of REACH still apply? 
Yes. Other provisions of REACH continue to apply to the substance, as may be relevant.

How can I find out more? 

You may be able to find out more about Authorisation and whether it will affect your business from your supplier or others within your supply chain. You should also contact sector organisations, which may be coordinating or signposting relevant activity or may have developed guidance specifically for your area  of  business.  The UK  Competent  Authority  provides  a  REACH  helpdesk.  The helpdesk service is free and confidential and can be contacted at UKREACHCA13

There are also a number of guidance materials available that you may find helpful:
·  Industry guidance: REACH authorisation guidance for downstream users14 
·  HSE bite-size information leaflets15
·  ECHA website16 and ECHA Factsheet on applications for authorisation17
·  ECHA’s Guidance on the preparation of an application for authorisation18 and Guidance on Socio-Economic Analysis – Authorisation19

This guidance was drafted by a sub-Group of the UK Chemicals Stakeholder Forum comprising: Susanne Baker (EEF – the Manufacturers’ Organisation - Chair),  Jo  Lloyd  (Chemical  Industries  Association),  Joanne  Lyall  (formally  Society of  Chemical  Industry),  David  Santillo (Greenpeace), Silvia Segna (Chemical Industries Association), David Taylor (Royal Society of Chemistry).  Non-Forum members - Keith Bailey (Defra - REACH Team Leader), Patrice Mongelard (Defra - UKCSF Secretary) and Lindsay Peppin (HSE- UK REACH Competent Authority) also contributed to this work.

Guidance and links

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