The European Commission has proposed a 19.5% increase in REACH fees charged by the European Chemicals Agency (ECHA).

The increase in REACH fees draft proposal considers processes under the REACH Regulation (Registration, Evaluation, Authorisation, and Restriction of Chemicals). This adjustment aims to address the growing demands on ECHA’s resources and ensure the agency can continue to effectively manage its regulatory responsibilities. Alongside the fee increase, the Commission has also proposed changes to the way small and medium-sized enterprises (SMEs) are verified, with the goal of expediting fee reductions for smaller companies and alleviating the administrative burden on both businesses and the agency.

Key Details of the Proposal:

1. Reason for the Fee Increase:

   • The 19.5% increase reflects the cumulative inflation rate from 2021 to 2024, as fees were last adjusted for inflation in 2021. This adjustment ensures that ECHA’s income keeps pace with rising operational costs.
   • ECHA’s workload has grown significantly due to the increasing number of chemical registrations, compliance checks, and the need for more rigorous chemical safety assessments to protect human health and the environment.

2. Exemption for SMEs:

   • This fee increase will not apply to SMEs, which will continue to benefit from reduced fees under the REACH framework. This exemption is designed to support smaller businesses, which often have fewer resources to absorb additional costs.
   • The Commission has also proposed changes to the SME verification process to make it more efficient. This will help expedite fee reductions for qualifying companies and reduce administrative delays.

3. Impact on Industry:

   • Larger companies will bear the brunt of the fee increase, which will apply to processes such as chemical registrations, dossier updates, and applications for authorisation or exemptions.
   • While SMEs are exempt from the fee hike, they may still face indirect impacts, such as increased costs for raw materials or services provided by larger companies affected by the changes.

4. Draft Implementing Regulation:

   • This proposal is outlined in a draft implementing regulation, which is currently under review. The regulation highlights the need for the fee adjustment to ensure ECHA’s financial sustainability and its ability to meet its regulatory obligations.
   • The draft regulation also emphasizes the importance of maintaining a fair and transparent fee structure, particularly for SMEs, which play a critical role in the EU’s chemical industry.

5. Timeline and Implementation:

   • The proposal is subject to approval by the European Parliament and the Council of the EU.
   • If approved, the new fee structure and SME verification changes could come into effect in 2025 or later, depending on the legislative process.

6. Broader Context:

   • The fee increase aligns with the EU’s broader goals under the European Green Deal and the Chemicals Strategy for Sustainability, which aim to reduce the environmental and health impacts of hazardous chemicals.
   • It also reflects the increasing complexity of chemical risk assessments and the need for ECHA to adapt to new scientific and regulatory demands.

7. Stakeholder Reactions:

   • Industry groups have expressed concerns about the additional financial burden on larger companies, particularly in the context of other regulatory and economic challenges.
   • Environmental and health advocacy organizations generally support the increase, arguing that it is necessary to ensure robust chemical safety assessments and protect public health.
   • SMEs are likely to welcome the streamlined verification process, which will help them access fee reductions more quickly.

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Source: Enhesa