EUROPEAN COMMISSION Brussels, 25.6.2019 COM(2019) 264 final REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Findings of the Fitness Check of the most relevant chemicals legislation (excluding REACH) and identified challenges, gaps and weaknesses {SWD(2019) 199 final}



REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Findings of the Fitness Check of the most relevant chemicals legislation (excluding REACH) and identified challenges, gaps and weaknesses Introduction Reflecting the increasing role that chemicals play in our society and economy and illustrating the continuous commitment to ensuring a high level of protection of human health and the environment, as well as ensuring the free movement of chemicals on the internal market, the EU chemicals legislation has evolved and expanded significantly since the adoption of the first chemicals related directive in the late 1960s. It now regulates both the chemical sector as well as related downstream industries that use chemicals. It covers the full lifecycle of products manufactured in or imported into Europe and the protection of the environment and human health from chemical hazards and risks. The Commission initiated a Fitness Check of chemicals legislation other than REACH ('the Fitness Check') in 2015, to see whether the legislation was fit for purpose and delivered as intended. This Fitness Check has assessed over 40 pieces of legislation that cover a great part of the EU chemicals acquis, focusing on the chemical hazard and risk assessment and risk management requirements, procedures and processes in the legislation under its scope. It is part of the European Commission's Regulatory Fitness and Performance programme(REFIT). The REACH Regulation, the pharmaceutical, veterinary and food additives legislation were excluded from the scope of this Fitness Check. The complexity and far-reaching effects of the EU chemicals legislation combined with certain data and evidence gaps made the exercise challenging. Notable efforts were made to collect data and evidence via a number of studies and reports. The findings of this Fitness Check have also been informed by a number of consultation activities such as public and targeted stakeholder consultations and two Eurobarometer surveys. They were complemented and took into consideration other chemicals related initiatives and the information and data from recently or nearly-completed evaluations. The assessment provides a comprehensive presentation of how the various pieces of the EU chemicals legislation fit together and what the strengths and weaknesses are. It also takes into account a number of stakeholders’ concerns expressed during the consultation activities. Moreover, the evidence and data collected as part of this Fitness Check will set a baseline and will constitute a point of reference for future assessments of the EU chemicals legislation. This Report presents the main findings and sets the basis for further discussion with stakeholders on how to unlock the full potential of the EU chemicals legislation to deliver a Europe that protects. 1.The EU Chemicals legislation: 50 years of continuous progress The more than 40 pieces of legislation that were assessed for the purposes of this Fitness Check have evolved into a solid framework that reflects 50 years of continuous efforts and progress. These pieces of legislation cover the whole value chain and the full lifecycle, i.e. from the moment chemicals are produced to when they are used and after their release into the environment. Regulated aspects include data gathering, data generation and testing, chemical hazard identification and classification, labelling, risk assessment and risk management. The EU chemicals legislation: state of play The first piece of the EU chemicals legislation, the Dangerous Substances Directive, was adopted in 1967 to protect public health, in particular the health of workers handling dangerous substances. Because differences in national provisions in a Europe of Six were hindering trade and, thus, directly affecting the establishment and functioning of the common market, measures were taken to introduce Community-wide provisions on the classification, packaging and labelling of dangerous substances. Since then, the Dangerous Substances Directive has been amended and replaced by the Regulation on Classification, Labelling and Packaging of substances and mixtures (the CLP Regulation), and other pieces of legislation have been progressively adopted to regulate hazardous chemicals in water, waste, fertilizers, pesticides, industrial activities, consumer products and occupational settings. In parallel, the EU engaged in international processes aiming at regulating hazardous chemicals of the highest concern. Improvements to the EU chemicals legislation reflect the need to overcome many global, economic, societal and environmental challenges. These have shaped the ambition of today and have been translated into a series of new objectives that the EU has committed to, such as the United Nations’ 2030 Agenda for Sustainable Development, or set for itself such as the action plan for the Circular Economy and the strategy for a renewed EU Industrial Policy. By doing so, the EU has become a global frontrunner on many aspects. Its chemicals legislation has become a benchmark for the development of chemical risk management rules, at the international level as well as in other countries and regions. Where the EU acts on restricting the use of hazardous chemicals, other countries and regions often follow. Different EU policy interventions in the chemicals area demonstrate the EU’s commitment to protecting its citizens and the environment and, at the same time, to preserving the internal market which delivers for consumers and where EU business can thrive. EU citizens have much greater confidence in the chemical safety of products manufactured in the EU compared to those imported. Significant investments have gone into the EU-level risk assessment capacity benefitting directly or indirectly many pieces of legislation within the scope of this Fitness Check. The EU contribution from its general budget to the European Chemicals Agency (ECHA) and the European Food Safety Authority (EFSA) amounted in 2017 to EUR 150 million. The EU has also contributed to improving non-animal testing methods by providing more than EUR 650 million since 2000 to research and developmentand EUR 7 million to the operation of the European Union Reference Laboratory for alternatives to animal testing. Different EU funding programmes such as Horizon 2020, LIFE and COSME have also supported innovation in the chemicals area, notably on safe and sustainable chemistry. 2.An overall fit-for-purpose framework of EU chemicals legislation This Fitness Check has assessed whether the EU chemicals legislation meets its objectives in terms of risk and hazard assessment and management of hazardous chemicals, and if it does so in a coherent and efficient way. It concludes that, overall, the EU chemicals legislation delivered results as intended and is fit-for-purpose. However, it also identifies a number of important issues and weaknesses that are holding the EU chemicals legislation back from delivering its full potential and which limits its ability to achieve its objectives and to be fit-for-purpose.

The assessment carried out for the purposes of this Fitness Check focused on the chemical hazard and risk assessment and risk management processes specified by the different pieces of legislation considered. The REACH Regulation, as well as the pharmaceutical, veterinary products, and food additives legislation were excluded from its scope. This presented a number of challenges, particularly in terms of disentangling estimates of costs and benefits as REACH is often an integral part of the policy mix that is responsible for the costs and benefits of reducing the exposure to hazardous chemicals. The Fitness Check looked at the pieces of legislation directly regulating chemical substances and mixtures as well as those regulating conditions under which chemicals are manufactured, treated or used (e.g. occupational health and safety or environmental legislation) or regulating products, which are manufactured using chemicals (e.g. toys and food contact materials) or the impacts of chemicals in certain environmental compartments (e.g. water and marine). EU approach to risk assessment and risk management The human health and environmental risks from the exposure to hazardous chemicals are addressed via hazard and risk assessment procedures prescribed in the EU chemicals legislation. The main steps of the chemicals risk assessment and management process (i.e. decision making and implementation and enforcement) usually involve: The CLP Regulation is one of the cornerstones of the EU chemicals legislation. It deals with the hazard identification, assessment and classification of chemicals and the communication of those hazards to consumers and workers. For their risk management, several product-specific pieces of legislation refer to the CLP Regulation (e.g. cosmetics, detergents, biocides, plant protection products) using its chemical hazard classification criteria. The CLP is the EU implementation of the UN Globally Harmonised System of Classification and Labelling of Chemicals (GHS). In addition to the hazard classification under the CLP Regulation, other pieces of legislation may foresee additional hazard categories. The ECHA, EFSA and the European Medicines Agency (EMA), and two EU scientific committees are responsible for providing the decision makers with scientific advice on hazard and risk assessment. Risk management measures – which can be policy-based and/or technical in nature - are then decided by the Commission in light of the identified hazards and/or risks. Depending on the nature and the dimension of hazards and on the exposure situations involved, risk management measures are taken directly based on the identified hazard classification (generic risk consideration) or based on a specific risk assessment. In most cases, the EU chemicals legislation uses a combination of both of these approaches. The linkages between the different pieces of EU chemicals legislation are generally well-established and functioning reasonably well. The EU legal framework on chemicals is generally designed to make science- and evidence-based decisions. The approach allows it to deliver in an effective, efficient and coherent way. The added value of policy action at the EU level is high and remains relevant. While the overall regulatory costs of the EU chemicals legislation for the EU industry are estimated to be several billion euro per year, the EU chemicals legislation has also led to significant benefits in terms of avoided health and environmental impacts (e.g. healthcare costs, productivity losses, suffering and premature deaths, remediation costs, and degradation of environmental/eco-system services). The quality and the availability of data needed to perform robust risk assessments and to make sound risk management decisions has improved considerably in recent years. Also, the EU’s knowledge base on chemical hazards and risks has become a world-class asset and continues to grow and improve. Much of this reflects the shift of responsibility from EU and Member State authorities to industry for generating the necessary data for hazard and risk assessments and the significant investment of resources in the establishment of recognised and independent EU agencies. 3.Identified challenges, gaps and weaknesses The Fitness Check has identified a number of challenges, gaps and weaknesses. Some of these relate to specific pieces of legislation. However, in line with the broad focus of the Fitness Check, the following sections present only those findings that affect the correct functioning of the legislation from a framework and a more general perspective and that are holding it back from delivering its full potential. 3.1.implementation and enforcement The correct functioning of the EU chemicals legislation relies heavily on the availability of the resources of public authorities in charge of its implementation and enforcement. However, cutbacks in, and variations between, the capacity, available resources and expertise of Member States competent authorities are presenting some significant challenges for the implementation and the enforcement of the EU chemicals legislation and its overall effectiveness and efficiency. A number of stakeholders, for instance, have expressed concerns with respect to the pace of the harmonised classification processes in contrast to the processes of self-classification by industry. Classification enables adequate risk management throughout the EU and also has certain links with the approval process of active substances used in plant protection and biocidal products. The Member States’ capacity to prepare harmonised classification dossiers is limited, in particular following the 2008 financial crisis. Moreover, the workload is unevenly spread between Member States’ competent authorities, with just a few Member States carrying the majority of the burden. Resource constraints at national level affect the capacity to carry out different enforcement activities, such as inspections and other controls including market surveillance activities or reporting. These constraints together with differences in the level of implementation and enforcement from one Member State to another lead to an inconsistent application of the EU law. This can create mistrust amongst Member States, leading to undermining the application of the principle of mutual recognition with ultimately negative consequences on the free movement of goods within the EU. There is also a considerable lack of information on the level of compliance with the existing EU chemicals legislation, particularly with respect to consumer products. The EU Rapid Alert System for dangerous non-food products (RAPEX) and the Rapid Alert System for Food and Feed (RASFF) are efficient and useful tools for exchange of information and measures taken on products posing a serious risk to health or the environment. However, the risk identified may not be due to a lack of compliance. Moreover, non-compliant products which do not represent a serious risk are not notified through RAPEX or RASFF. Consequently these two alert systems can only provide a partial picture about the overall level of compliance of products placed on the EU market. Moreover, articles imported into the EU, including via online sales, still represent a particular challenge for market surveillance authorities for ensuring both overall consumer protection as well as fair competition. Understanding and keeping up-to-date with changes in legal requirements is more challenging for SMEs compared to bigger companies. The level of compliance with the existing rules also depends on the clarity of the rules so that actors understand their legal obligations. The current lack of clarity with respect to how to apply the ‘CLP bridging principles method’ is a case in point. From a Member State and industry association perspective, it can be challenging to reach small companies, and notable differences exist in the level of support that Member States provide to SMEs helping them to understand and comply with the EU chemicals legislation. 3.2.Duplication, burdens and pace of procedures Currently, scientific advice and risk assessment are provided to the Commission by different agencies and scientific committees. Their areas of intervention and their competencies are determined in the relevant pieces of legislation. The rules of procedure governing the functioning of the existing committees explicitly recognise the need to ensure good and effective cooperation among them and with the relevant EU agencies. However, the strength of the obligation to seek convergence varies. While the delineation of their tasks and competencies is often clear, there are areas of potential overlap (e.g. toys, detergents or other consumer goods, nanomaterials). This means that the same substance can be assessed by ECHA or by one of the EU scientific committees, depending on which legislation applies, and possibly lead to diverging opinions. The Commission has already started to work on streamlining the hazard/risk assessment by ECHA and EFSA to better ensure the convergence of conclusions. There are additional opportunities for simplifying the current set-up and streamlining the risk assessment processes among all relevant EU assessment bodies. This could make the functioning of the chemicals legislation more efficient (e.g. avoiding duplication of efforts) and more predictable (e.g. reducing the risk of potentially diverging outcomes of hazard/risk assessments at EU level). This could also reduce the need to provide information to multiple interlocutors and ensure that all relevant stakeholders are actively involved. Some duplication of efforts may also occur in data generation because of the lack of awareness of interested parties of what information is available and where and how the existing data can be used. Problems in data sharing across institutions and legislation are also encountered because of insufficient cooperation but also because of the sometimes too restrictive access and re-use rights. This duplication can generate extra costs, as well as longer-than-necessary timeframes, and, ultimately, negatively affect the level of protection as well as competitiveness and access to the market, in particular for SMEs. These negative impacts risk to be exacerbated in the future given that the wealth of information on substances and their hazardous properties is expected to increase. For example, the shift towards a more circular economy will require tracking substances in articles and waste streams, which will naturally generate more data. At the same time, an increasing amount of information and data is being generated via current and future human and environmental monitoring. A more comprehensive approach across the EU chemicals legislation, including through an open data policy and a better use of smart technologies, could improve the overall efficiency of the EU legal framework for chemicals and contribute to the Commission’s commitment towards more transparency.

The current substance-by-substance approach used in hazard and risk assessment processes is generally effective in identifying the hazards of a specific substance and the risks from the situation in which it is used. Nevertheless, given the high number of substances that need to be assessed and the resources and the time that such an assessment requires, this approach has its limits in terms of the overall efficiency. During the consultation, stakeholders from all categories have highlighted the need for greater flexibility and a more integrated and holistic view in assessing chemicals with similar hazard, risk or function as a group. This could result in considerable efficiency gains in terms of protecting human health and the environment, accelerating the pace of the hazard and risk assessment processes and cost savings for industry, because it would avoid replacement of hazardous substances by alternatives that are likely to be banned subsequently. Finding a meaningful way of defining the group of substances remains however an open challenge. 3.3.Communication of hazard and safety information A recent Eurobarometer survey found that less than half of the respondents (45%) feel well informed about the potential dangers of the chemicals contained in consumer products. The relatively low level of understanding of certain pictograms, labels and precautionary statements is partly due to the overload of information e.g. too much text or chemical names that consumers are not familiar with printed in multiple languages. In other cases, it can be due to overlaps in legal requirements e.g. between the CLP Regulation, the Detergents Regulation and/or the Cosmetic Products Regulation. This makes it difficult for downstream users and consumers to focus on the essential hazard information. The communication of hazard and safety information to consumers can thus be improved and simplified, including by using digital technologies such as Q-R codes. At the same time, the lack of some information on consumer goods impacts the consumers’ ability to make informed choices. This may be the case regarding the lack of labelling requirements on environmental hazards for cosmetic products. Also, the current approach to allergens lacks coherence with respect to the provision of consumer information and to the assessment of risks to human health. It also creates overlaps in terms of labelling obligations. Improvements in the current approach to allergens could therefore help consumers to be better protected and informed. The Fitness Check has also identified challenges regarding the Classification and Labelling Inventory held by ECHA, which affect its value as a hazard communication tool. The Inventory contains classification and labelling information for the substances to be placed on the market as notified by manufacturers and importers. However, there are often multiple classifications for the same substance because different notifiers fail to arrive at an agreed entry despite the legal obligation to make every effort to do so and despite ECHA’s and the Commission’s efforts to provide support to companies. This situation is exacerbated by the lack of a legal basis for ECHA to perform quality checks of the self-classifications and to ensure that the Inventory does not contain any obsolete notifications or errors. 3.4.Consistency of risk management measures A potential important gap is the lack of an overarching approach to the protection of vulnerable groups, as highlighted during the consultation activities by several stakeholders representing civil society and NGOs. Reference to vulnerable groups is not systematic across the legislation and risks to these groups are not always addressed in a consistent manner across product/risk/sector specific legislation. Where such legal provisions do exist, risks are taken into consideration on a case-by-case basis with differences in definition and wording used. This could lead to different levels of protection between different pieces of legislation for the same vulnerable group (e.g. children) or for those groups that are particularly sensitive to certain hazardous substances (e.g. unborn children, young infants and adolescents). Some inconsistencies have been identified regarding risk management decisions in the various pieces of legislation as regards endocrine disruptors, substances that are persistent, bio-accumulative, toxic, substances that are very persistent and very bio-accumulative and substances fulfilling the classification criteria for specific target organ toxicity. It is important to ensure consistency across the EU legislation, including for substances of similar concern to substances that are carcinogenic, mutagenic and reprotoxic. The potential added value of introducing new hazard classes in the CLP Regulation (e.g. terrestrial toxicity, neurotoxicity, immunotoxicity, endocrine disruption, persistent bioaccumulative and toxic, very persistent very bioaccumulative) could be explored. In its recently adopted Communication on endocrine disruptors the Commission undertook to launch a cross-sectoral Fitness Check to assess whether the relevant EU legislation on endocrine disruptors is fit for purpose. The Fitness Check will allow an analysis of how the different provisions on and approaches to endocrine disruptors interact, will identify possible gaps, inconsistencies or synergies, and assess their collective impact in terms of costs and benefits for human health and the environment, the competitiveness of EU farmers and industry, and international trade. In the context of scientific uncertainty and lack of or limited knowledge, the precautionary principle is an important element in helping to ensure the protection of human health and the environment against potential risks, the avoidance of potential costly future impacts and remediation, and the avoidance of disproportionate or unnecessary risk management costs. The Fitness Check highlighted the case of Bisphenol A (BPA) as a positive example of the use of the precautionary principle. In this case, baby bottles containing BPA were banned from being placed on the market and imported into the EU, to avoid infants’ exposure to BPA and possible negative physical and mental consequences. In the public consultation, a number of NGOs, trade unions and some Member State competent authorities still expressed their concerns about the practical application of the precautionary principle considering that it has been applied in very few instances in the chemicals policy area. Its practical application therefore warrants further attention. 3.5.Risk assessment, knowledge gaps and challenges in keeping up with science The proper functioning of the EU chemicals legislation and its capacity to respond to future challenges depends, amongst other things, on the ability of the EU and Member States to make their decisions based on robust and relevant up-to-date data. Enormous efforts have been made at the EU and Member State level to ensure that the necessary data to take effective chemical risk management decisions is available, comparable and of good quality. Likewise, the scientific understanding of how hazardous chemicals impact human health and the environment has improved significantly over the last two decades. The current EU knowledge base on chemicals – including their properties, data on eco-toxicity of chemicals and on chemical uses and exposures – is unique in the world and is, in many instances, made available also to governments, industries and stakeholders beyond the EU. Nevertheless, important knowledge gaps still remain, in particular regarding exposure to hazardous chemicals, their use and their impacts on humans and the environment, including on biodiversity and ecosystems’ resilience. Similar concerns exist regarding new and emerging chemical risks. The role of hazardous chemicals in the complex interaction with other environmental stressors and their actual contribution to the effects seen in the environment are not fully understood. This means that the current regulatory framework, including test and assessment methods, typically cannot focus on these long term, large scale and complex environmental effects. EU research and innovation funding remain therefore paramount to overall improve human and environmental monitoring and to close these knowledge gaps. Information thus gathered could also feed into an EU-level early warning system for identifying new, emerging chemical risks. Information on exposure to hazardous chemicals is necessary to develop exposure scenarios with regard to the intended, normal, reasonable and/or foreseeable use of a product or foreseeable/predictable situation. The evidence shows that industry and public authorities may not always be aware of all the uses of certain hazardous chemicals that have a broad range of applications in a myriad of different consumer products. Moreover, there is only limited information available about the overall volumes of hazardous chemicals emitted/released into the environment. These two elements combined can affect their capacity to develop realistic, acceptable and robust exposure scenarios and as a consequence to identify the most appropriate risk management measures. Authorities in charge of hazard and risk assessment are not always aware of all the potentially relevant or the latest information and data necessary for decision-making process. In this regard, peer-reviewed studies are an important complement provided that they are reliable and properly documented, in particular for the identification of, and reaction to, early warning signals. Tools that bring together and monitor recent and useful scientific publications and ensure that authorities are well aware of what is available are however lacking. Moreover, there are still barriers to the use and acceptance of alternative (non-animal) test methods for regulatory purposes, partially linked to gaps in the available test guidelines. Risk assessment processes implemented within the EU chemicals legislation are not expressly designed to identify and assess potential human health and environmental risks of different hazardous chemicals acting in combination (also known as the ‘combination effect’ or ‘cocktail effect’). The Commission noted back in 2012 that the then “current EU legislation does not provide for a comprehensive and integrated assessment”, and announced a number of follow-up actions to remedy this. Since then, progress has been made with regard to knowledge building and the development of risk assessment methodologies in the context of plant protection products and in the broader context of the food chain. Nevertheless, a workable methodological framework for all chemicals has not been agreed upon. Requirements to ensure the risk assessment of combination effects exist only in some pieces of legislation (e.g. in the area of pesticides) while other relevant pieces of legislation do not contain legal provisions that cater for such an assessment. Lack of knowledge about substances in articles is increasingly concerning as the EU is in the process of shifting towards a more circular economy. While steps have been taken regarding traceability of hazardous chemicals in waste and recycled material streams, the shift towards a more circular economy will require that, instead of looking at the potential risks posed by hazardous chemicals during one and unique ‘life’ based on a linear ‘take-make-dispose’ approach, the risk assessment may need to take into account the potential of such hazarodus chemicals to re-enter the loop via recycling. The way hazard and risk assessments are carried out may need to be adapted accordingly, given the increasing consumer awareness and demand for sustainable and more circular products. 3.6.Global competiveness, innovation and sustainability The EU chemicals legislation has been instrumental in ensuring free circulation of substances, mixtures and articles through harmonisation of standards and requirements. To a large degree, there is a level playing field in Europe, and chemicals legislation has strengthened the internal market and enhanced the competitiveness of EU industry as reflected in the growth in intra-EU trade. The EU chemicals industry remains internationally competitive although the European share of global sales has decreased. Globalisation, a strong growth in the production of chemicals in other parts of the world and rapid technological change are the main challenges for the EU chemicals industry. Significant efforts will be needed by all interested parties at all levels and most importantly by industry itself to maintain and reinforce Europe's industrial leadership. The main assets of the EU chemicals industry are a high level of technological development, a skilled and talented workforce and a world-class science base. These assets, combined with the EU’s global leadership on many sustainability and chemicals related aspects, provide a solid basis for tackling these challenges. The internal market is another asset that the EU and Member States authorities as well as the EU industry can build upon. Digitisation, IT tools and other novel and smart technologies offer many opportunities. The uptake of smart technologies can offer better communication of chemical hazard and safety information to consumers as already explained above. Reaping the benefits of the digital age also means potential burden reduction for SMEs, improving the enforcement and compliance including via the real-time use of data and monitoring, as well as reinforcing cooperation between competent authorities, including customs and market surveillance authorities.