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Difficult EU authorisation is detrimental to Danish companies

The EU’s authorisation scheme for chemical substances can become very expensive and difficult for Danish companies such as Haldor Topsøe. They will face challenges given that non-EU companies have easier access to such substances.
Technology firm Haldor Topsøe is worried that EU regulations for the use of chemicals - which are currently the tightest in the world - will become even tighter, more expensive and more administratively burdensome. The image shows the production of catalysts in Frederikssund.

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Technology firm Haldor Topsøe produces catalysts that, in addition to helping to ensure a better environment, are also part of the manufacturing of indispensable products such as plastic, fuels and fertilisers.

But in order to produce the catalysts, it is necessary to use substances that are harmful if handled incorrectly and for which there are no alternatives. In the future, some of these substances may be subject to the EU’s authorisation scheme.

In that case, EU regulations will require that companies using the substances go through the so-called REACH procedure to receive authorisation to use them. According to regulations, these authorisations must normally be renewed every 4 to 7 years through an expensive and administratively burdensome procedure.

“Our worry is that the regulations - which are currently the tightest in the world - will become even tighter, more expensive and more administratively burdensome without society actually reaping any benefit,” says Group Vice President Henrik Guldberg Pedersen from Haldor Topsøe.

See also: Input from businesses to the Ministry of Environment and Food’s new Chemicals Initiative 2018-2021 (in Danish)

Extend the length of authorisations

Before long, the Danish government must decide how to prioritise the Chemicals Initiatives for the next four years. The Confederation of Danish Industry urges that politicians find the right balance between necessary environmental protection and efficient authorisation procedures.

“We believe that it is possible to ease requirements for documentation and extend the duration of authorisations to 15 years, for example. Particularly the requirement for companies to prove that they cannot replace the harmful substances with something else can be very difficult to fulfil,” says Environmental Policy Director at DI Karin Klitgaard.

“If companies were given a longer time frame to work within, they would also have more time and capacity to find new forms of production or to develop other technologies that might mean that more harmful substances could be phased out. But as the rules currently stand, they create both unnecessarily high costs and a high degree of uncertainty - for both manufacturers and for the companies that purchase products,” she emphasises.

Regulations give import goods an advantage

Henrik Guldberg Pedersen from Haldor Topsøe emphasises that the company supports regulations, control and responsibility. But when regulations - perhaps even unintentionally - end up unnecessarily distorting competition, there is reason to draw attention to it.

And seen through lens of the company, that is exactly what is happening. Manufacturers outside the EU would be able to produce e.g. catalysts more cheaply and export to the EU, since they do not have to fulfil the expensive authorisation procedures. They would also be able to make more long-term investments in new products and technologies because they do not need to worry about short authorisation periods.
 
“Basically, we would not be able to compete on equal footing. Then what? In the end, we would have to find another location and continue exporting to the EU - because that is legal. And that’s absurd. We are a responsible company that handles substances in the very best way possible out of consideration for the environment and our employees,” he says and points out that the company’s desire is precisely not to relocate from Denmark.

“We’re in Denmark because we wish to be in Denmark in the future. Here, we have highly skilled workers and talented employees that mean we are able to compete at a global level despite special regulations. But there is a limit, and things are getting tight,” he says and continues:

“Approximately 70 per cent of our production in the EU goes to markets outside the EU. Here, we’re up against players that are not subject to the tough regulations we must follow. If regulations are tightened further, it will definitely impact our competitiveness on the global market.

There aren’t always alternatives

Oppositely, one might ask whether it is not precisely the point that EU regulations pressure companies to become better and find alternatives to the substances that are most harmful to humans and the environment? To that, Henrik Guldberg Pedersen replies:

“Yes, and that works to a certain degree, but at some point you hit a limit. Our competitors around the world use the same substances because less harmful alternatives do not exist. And one must remember that the catalysts we produce help solve the world’s major challenges by using our resources in the best way possible, obtaining food for a growing global population and limiting pollution. And the same applies to other products and technologies that will be in demand in the future, such as electric cars.”

Haldor Topsøe is far from alone

Haldor Topsøe’s production means that the company is hard hit by the difficult REACH procedures, but the scope of the problems extends widely among Danish and European business, notes Karin Klitgaard.

“It is not only manufacturers who use the substances that will be affected. It is everyone who uses or resells the products that needs to do research regarding which limit values and disclosure requirements apply in relation to both employees and consumers,” she says.

All parts of the value chain, from producer to consumer, will simultaneously pay the higher price for products from the EU, which will easily become the result of the comprehensive authorisation procedures. That might mean both that consumers increasingly opt to purchase products outside the EU - and that European companies consider moving their production outside the EU.

“At DI, we would therefore very much like to encourage that we in Denmark prioritise the initiative highly. We must continue to ensure high quality with regards to the environment, which Denmark is already a proponent for in the EU, but the initiative should not come unnecessarily at the expense of positive and innovative development in industry and business in general,” says Karin Klitgaard.  

Our worry is that the regulations - which are currently the tightest in the world - will become even tighter, more expensive and more administratively burdensome without society actually reaping any benefit.
GROUP VICE PRESIDENT HENRIK GULDBERG PEDERSEN FROM HALDOR TOPSØE
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PUBLISHED: 10/5/2017 LAST MODIFIED: 10/5/2017