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BMT warns the industry: REACH out and pre-register before it’s too late
06-Nov-2007
"Company inactivity over new regulations presents serious risks to drilling and production activities in the EU"
With only seven months before chemical and oil companies have to pre-register their substances under the radical EU Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulations, experts believe that many companies are under prepared. A survey conducted by BMT suggests that as many as half the companies affected by this legislation are not taking the necessary action to protect themselves.
Manufacturers, formulators and importers of chemical substances are required to register all substances with the new European Chemicals Agency (ECA) in what is the biggest shake-up of chemical legislation in 40 years. Failure to do so will prohibit these companies from marketing their products within the EU.
Approximately 30,000 substances are affected by the new regulations, a significant proportion of the UK market which has product sales in the oilfield chemical supply sector worth £28.7 billion in 2005.
Dr. Nikki Robinson, Principal Consultant at BMT Cordah, said: "It is of great concern that so many companies are ill-prepared for REACH and it will have a fundamental impact on their future operations. BMT surveyed organisations at this year's Offshore Europe and 50 per cent were unclear as to their obligations under the new regulations. It's a shocking situation because they may find themselves barred from the market come June and this, in turn, could present serious risks to drilling and production activities in the EU.
"Seven months will prove a tight deadline for even medium-sized chemical manufacturers with a modest portfolio of less than 100 chemicals. The data that will need to be collated and submitted for each substance as part of the pre-registration is likely to require significant resources, even without the complication of having third party suppliers' intentions and practices to think about."
BMT's experts feel that the biggest area of work is in identifying all the substances which require registering under REACH. Particular areas of concern include the calculation of tonnage data for a number of years' trading.
Dr Robinson expanded on this: "A company with 50 products may have as many as 150 substances used in these product formulations - it might manufacture some of the substances and buy in others from suppliers. All of this data needs to be collated. Organisations also need to ensure that their suppliers are registering and, if they are not, whether a substitute supply route can be organised."
For the UK offshore oil and gas sector, REACH not only places duties upon manufacturers and suppliers of oilfield chemicals, but also upon operating companies that are downstream users (DU) of these products. It is important for DUs to notify their particular applications and uses to suppliers so that the impact of emissions to human health and the environment may be assessed.
Therefore, operators must review their chemical use inventory and seek assurances from suppliers regarding their commitment to registering all chemical substances. If they neglect this duty, the operators themselves could be liable to penalty.
A consortium of BMT Group subsidiary companies in Europe (BMT Cordah), North America (BMT Entech), Asia (BMT Asia Pacific) and Australia (BMT WBM) are providing consultation, strategy and analysis services. The team has just been commissioned to prepare an in-depth business impact assessment by a large offshore operator.