UK chemicals industry faces 'huge cliff-edge' after Brexit

The UK’s chemicals industry is facing “a huge cliff-edge” on the day after Brexit, with possible loss of access to an £18bn export market and risks to human safety, a report has warned.

The House of Lords EU Energy and Environment Sub-Committee said government plans for the post-Brexit regulation of the industry are “not progressing quickly enough”, risking disruption to supply chains for companies which rely on chemicals produced across the EU.

And it warned that a plan to simply “cut and paste” information from EU databases to create a new independent register of chemicals approved for use in the UK is “not credible and raises serious legal concerns”.

The cross-party committee said it was “highly unlikely” that the government would succeed in its stated aim of negotiating continued UK participation in the EU chemical regulation system known as Reach after Brexit.

If this cannot be achieved, chemicals registered by UK companies will no longer be valid for sale in the EU after Brexit, while Britain will have incomplete safety information about chemicals being used in the UK.

Under the terms of the Reach system, UK-based companies risk losing access to the EU market unless they transfer registrations to one of the 27 remaining countries.

But the report warned that this may not be possible before the scheduled date of withdrawal from the EU on March 29, 2019.

This creates the danger that the UK’s second biggest manufacturing industry will experience a “trading hiatus” lasting weeks or months following Brexit.

The committee heard that some 21,000 chemicals are registered under the Reach system which certifies them as safe for use, of which around 5,000 were registered by UK-based companies.

It warned: “The loss of access to 16,000 substances after Brexit would have a serious impact on the UK’s chemical industry and the many supply chains that rely on it.”

The report urged the government urgently to clarify whether it will be possible for UK companies to transfer registrations before Brexit Day, and whether Britain plans automatically to accept EU27 chemical registrations.

And it called on ministers to: Explain how their proposed independent regulatory regime would work; Put forward a more credible plan for collecting information on chemicals; Identify which UK agency will take on regulatory responsibility for chemicals; and Enable UK businesses to take the necessary steps to maintain access to EU markets.

The committee’s chairman, Liberal Democrat peer Lord Teverson, said: “Chemical regulation might seem like a niche area of Brexit considerations, but chemicals are used to make products that we all use every day, and the chemical sector is key to the UK’s economy.

“At the moment they’re regulated by Reach, which combines legislation with an EU database, an EU regulator and the EU single market to keep us all safe.

“Although we welcome the government’s aim to remain part of the Reach system after Brexit, its negotiation red line on the UK’s membership of the single market makes that highly unlikely.

“That means it urgently needs to be working on a Plan B, and that simply hasn’t happened, which leaves the sector facing a huge cliff-edge on the day we leave the EU.”