"It's not about weakening competitiveness!"

The atmosphere between the electroplating and surface technology industry and the EU regulatory authority ECHA has been tense since the EU Chemicals Regulation REACh came into force in 2007. The authority has been the subject of much criticism, with some even accusing it of intending to deindustrialize. As is well known, the decision to restrict the use of chromium trioxide was a particularly important turning point. Galvanotechnik sought an interview with Matti Vainio, ECHA Head of Risk Management, who has been working with the industry for some time.

In the interview, he provides an insight into the authority's decision-making processes and objectives and explains the philosophy on which ECHA's work is based. He also provides an indication of the latest cause for displeasure in the industry - the annulment of the CTAK authorization application for chromium trioxide by the European Court of Justice, which had taken place the day before.

Mr. Vainio, electroplating and surface technology has been in a constant state of flux since the REACh regulation came into force. Chromium(VI) coatings are being replaced by chromium(III) coatings wherever possible. Many chemicals are now being dispensed with and processes have had to be redesigned. This has cost time, money and competitiveness. How do you see this? After all, the fates of many people depend on the industry - around 50,000 employees in Germany, including suppliers ...

We are aware of the situation you have described and also see the change in applications for approval. This change has cost companies, but also the authorities, time and money. There is a publication on our website called "Socio-economic impacts of REACh authorizations" (see link collection) - a recent publication from 2021. It gives an overview of the costs and benefits of the continued use of substances subject to authorization. The aim of the authorization procedure is not a ban. From the applicant's point of view, an application for chemical authorization costs money, but also gives them the opportunity to continue using the chemicals. It is therefore an investment in the continuity of a company. Once the authorization has expired, the company can write a review report to apply for a renewal - this is also possible under REACh. Companies can therefore continue to use chromium (VI) if they have good reasons for doing so - technical reasons, economic reasons, often both! We know that, particularly in the case of surface treatment by chrome plating, the business is dominated by small and medium-sized companies and not by large ones, as is usually the case in the chemical industry. This is a special feature of the electroplating sector. Contract platers, i.e. companies that do not work for themselves but for others, are also a special economic feature. We have therefore sought dialog with German industry, either directly with the companies or with associations, in order to sound out points of contact. We have also tried to make the application process as transparent and efficient as possible within the framework of the law. Companies should know what we are doing at ECHA: For example, when we receive an application, we provide a detailed timeline, preferably within the week of receiving the application. What is important to understand, however, is that ECHA does not decide on applications for authorization, but prepares an opinion for the EU Commission, and then it is up to the Commission to approve or reject an application. At ECHA, we design the application procedure in such a way that it costs both sides - companies and the authority - as little time and money as possible. However, we are aware that it is more difficult for SMEs to go through such processes.

"Nickel is suspected of being carcinogenic"

Keyword chromium(VI): Hard chrome plating without chromium(VI) is not possible. Electroless nickel can be used as a substitute. However, many German electroplating companies now fear that nickel could one day also be regulated by REACh. Nickel is as elementary in electroplating as flour is for baking bread. Can you give the 1500 or so electroplating companies in Germany some reassurance here?

I can tell you what we know at the moment. Nickel is suspected of being carcinogenic, so it doesn't fall into the same category as the known carcinogens. It is also a skin irritant that people are allergic to. For this reason, there are some restrictions on the use of nickel and it is possible that more will be added in the future. I repeat once again: the use of chromium(VI) is not prohibited, but it is subject to authorization. If you get an authorization, you can continue to use chromium(VI) for the duration of the authorization. Admittedly, the authorization system is rather cumbersome, but this is what the European Parliament wanted. Nickel is currently not a substance subject to authorization and is not on the so-called candidate list. But of course the suspicion is already a kind of warning. In order to be placed on the candidate list, a Member State or the Commission must apply to the ECHA. The ECHA then makes a recommendation to the Commission as to which substances from the candidate list should be included in Annex XIV, i.e. the list of substances subject to authorization. Chromium trioxide is included in this Annex. As I said, nickel is not on any of these lists. I cannot assure you that it will never be included there. But at the moment, the criteria for inclusion in these lists are not met and the assessment of the two substances is very different. This will only change with new scientific findings.

Why do you think regulation is necessary at all?

The substances used in electroplating are never holy water. I think every company that works with hazardous substances should do everything it can to reduce risks. If companies are proactive here, they have healthy workers, a good reputation and it's good for their business in general. The problem is the smaller companies that don't always know how to ensure future production. This requires information from associations such as ZVO and magazines such as Galvanotechnik.

How does a regulatory procedure at the ECHA work? Are studies consulted? Is it checked where the chemicals subject to authorization are used and what consequences restrictions may have for the industries? How is a decision made?

As already mentioned, a substance must first be included in the candidate list, as was the case with chromium trioxide. The ECHA makes a recommendation to the Commission, and after a waiting period the substance is included in Annex XIV, whereupon companies can apply for authorization. The situation is different when we restrict a substance. This procedure is started when the Member States or the Commission ask ECHA to submit a proposal to restrict a substance. ECHA's scientific committees then have to submit an opinion on the proposal. Finally, the EU Commission decides. This is a different process to authorization. We have a few common principles. One is transparency: whenever we do something, it is first discussed in the Committee of Member States. If a substance is classified as carcinogenic, category 1, it is automatically placed on the candidate list for substances subject to authorization by law. We recently sent our recommendation for an extension of the list with 12 substances, including lead, to the Commission. It consults the Member States and the Parliament before adding substances to Annex XIV of REACh. As soon as a substance is added to this list, the ECHA website provides information on how the authorization process works. In a restriction procedure, there is a consultation of both the proposal and the opinions of the scientific committees where anyone can share their views with the Agency and its panels. Comments and responses are also published on the website. Once the Member States and the Commission have decided on a restriction proposal and the Parliament has no objections to the decision, a new restriction will be added to Annex XVII of the REACh Regulation.

"We recommended to the EU Commission in 2015 to include boric acid in Annex XIV"

Boric acid has been a component of electroplating electrolytes for more than 100 years. Experts work in electroplating companies who know the dangers and protect themselves accordingly. Coated products are harmless after electroplating. Could boric acid not continue to be approved within such a protected framework?

We recommended to the EU Commission in 2015 that boric acid be included in Annex XIV. The substance is currently undergoing a waiting procedure. It was on the candidate list, and that is a clear warning. But even if boric acid is included in Annex XIV of REACh, its use is not banned but subject to authorization.

I would like to add a question: Why is the Commission including substances in Annex XIV? Firstly, it is not a question of weakening the competitiveness of the European economy. The point is that these substances are very worrying. They are either carcinogenic, mutagenic or, among other things, harmful to fertility. This means that, if it can be avoided, no one should come into contact with these substances. However, if the applicant provides sufficient evidence that it is necessary to use these substances, they can continue to use them. The decision for or against continued use is based on whether the benefits of continued use outweigh the associated risks and whether there are suitable alternatives.

"This is the first time in the world that chemicals have been regulated in this way"

Secondly, this is the first time in the world that chemicals have been regulated in this way. The authorization system is still relatively new and has only been applied in Europe for about 10 years. Unfortunately, the system has become quite extensive. We get a lot of applications. This could be prevented if the process were more efficient. However, the system itself has already changed the industry and made the use of chromium, for example, much safer. This is thanks to the approval process - we have made the industry accountable. That's what I mean by extensive. The requirements may seem excessive. But that is very much the intention, including substitution.

"Boric acid must not be released into wastewater because it is a reprotoxicant"

The alternatives to chemicals that are now banned or restricted are often stronger complexing agents that pose new problems for wastewater treatment. How do you weigh this up?

For example, you are talking about chromium(III) as an alternative to chromium(VI) in decorative electroplating, which does not work without borates. This has to do with chemistry and surface smoothness and was identified as a potential problem at our electroplating workshop in February this year. Boric acid must not get into waste water because it is a reprotoxicant. Of course, it is difficult to balance between a carcinogen and a reprotoxicant. But this is a problem that has been recognized. If someone thinks that they can use chromium(VI) safely and with very low worker exposure and then have the alternative of using chromium(III) with borates, perhaps they should stick with chromium(VI). That is an argument we have heard in this context. I hope that companies will do more life cycle assessments to have a better data basis for cases like this.

Can you give us a brief impression of which electroplating-relevant chemicals are still expected to be restricted by the ECHA? If only to give the industry some certainty. There are already tendencies to move to other countries ...

I have heard this argument very often and I have often asked myself: is there any evidence for this? So far, I have seen little evidence that companies are actually migrating. An SME in Germany will not just close down and go to China if there are suitable alternatives for substances regulated in the EU. It could close down for many reasons, e.g. because it has not applied for an authorization that it could have obtained. My concern is rather that new companies that want to come to Europe will be put off by the regulations. In electroplating, for example, we have the company Grohe - the owner is Japanese. The company has been considering whether or not to invest in Europe. I have seen signs of reluctance to invest here. But I don't see that as relocation. Companies generally base their investments on whether they are close to the market and how strongly the market is growing. So there are often other reasons than environmental regulations. I don't see many companies relocating from Europe to other countries because of REACh and the approval process.

And what about chemical companies that stop producing important chemicals in Europe? I recently heard that the REACh regulation promotes the monopolization of certain chemicals. What is worthwhile will continue to be produced, what is not will be relocated to other sites. In a German electroplating company, for example, this has led to bottlenecks for one chemical, so that the introduction of a chromic acid-free pickling system has been massively delayed.

Profit is what counts for companies, and if the margins are small and there is regulation, then it naturally has an impact if a barely profitable chemical also needs approval. It is easy for the chemical company to stop producing a chemical, but it could be critical for downstream users because the chemical will then no longer be sold in Europe. I have an economic background, so I don't think this is a particularly big problem. After all, we don't have to grow bananas in Finland, we can import them. Dependencies such as those we had with Russian gas are another matter. To come back to the monopolies: In Europe, we have other regulatory authorities that are pretty ruthless in their crackdown on cartels and monopolies. If there are tendencies towards monopolization, the German competition authority should act. The decision to stop production of the chemical in Germany or Europe due to a low profit margin could have been made without REACh. REACh has made it necessary to provide data on all chemicals. Previously this was not necessary and that was a big change. All companies that import chemicals into the EU in quantities over one ton per year or manufacture them here must register. These companies work with ECHA on a regular basis and this is very important. They are required by law to submit regular tests. Many countries around the world see Europe as a benchmark for their chemicals legislation. South Korea, for example, has a similar system.

What can the industries affected by REACh do to ensure their continued existence?

They can comply with REACh and at the same time work transparently with each other and with industry associations in Germany to find solutions. Refusal makes little sense. After all, industry and regulatory authorities ultimately have similar interests - the safe use of chemicals to ensure prosperity in Europe without exposing citizens and nature to unnecessary risks.

"The EU needs a strong industrial base"

How do you personally see the future of European industry, which is heavily affected by the REACh regulations?

The EU needs a strong industrial base that is economically and environmentally sustainable. ECHA's role is to take appropriate account of health and environmental concerns. It has to strike a good balance between the different interests in a legal context. The context is sometimes not so clear, but regulators try to make it as clear as possible. European regulations are often quite strict compared to the US - not Japan or Canada. Companies that operate under strict conditions are prepared for the global market and are competitive because they produce cleaner and more ethically produced products. They can also be more resilient. This is why the dialog between the regulatory authorities and the industry is so important. Because then regulation can be proportionate. In this way, we can achieve better regulation in the future - together with the industry, non-governmental organizations and the regulatory authorities.

"As things stand, galvanizing with chromium trioxide must be discontinued by all companies that do not have their own approval or are covered by another approval"

There is one more thing I must mention. The European Court of Justice ruled yesterday (20.4.2023, the ed.) in a very important case on the approval of the CTAC consortium (Chromium Trioxide Application Commission) for different uses of chromium trioxide. The European Parliament and the EU Commission had asked the court for a ruling. The Court annulled the Commission's previous decision, meaning that the authorization granted was declared invalid. As things stand at present, all companies that do not have their own approval or are covered by another approval must therefore cease galvanizing with chromium trioxide (comes into force one year after the ruling, editor's note). It is not clear what the Commission will do now. What are the consequences for the German economy? Chromium trioxide can still be approved. The ruling will certainly have repercussions, but ECHA cannot comment further on the European Court of Justice ruling.