TTJ: IS BREXIT NOW ANCIENT HISTORY OR DO CHALLENGES REMAIN FOR THE COATINGS SECTOR?
Tom Bowtell: The added costs of import/ export remain as companies still need to deal with Rules of Origin and other extra paperwork. However, the situation has eased a little if only because it is no longer new. More broadly, three years on and there are still Brexit-related issues to be resolved, not least the future of chemicals regulation in the UK. These still need to be worked out domestically and the impact of new or revised measures is yet to be seen.
TTJ: THE BCF HAS HAD CONCERNS REGARDING THE IMPACT OF THE PLANNED UK REACH SYSTEM – WHAT IS THE SITUATION NOW?
TB: We were pleased that the UK REACH registration deadlines were lengthened. This has allowed Defra to engage with industry on finding a new approach that will be more proportionate and workable for industry and regulators alike. After two years of consultations and working groups – which BCF was pleased to play a role in – Defra published a statement setting out a new broad policy direction. This proposes a new Alternative Transitional Registration model (ATRm) that departs significantly from the original proposals for UK REACH in many important and welcome ways.
Among other things, it calls for only ‘the essential minimum’ hazard data to be required for ‘transitional registration’ substances, except in cases where UK regulators’ concern, or global evidence suggests, detailed reviews or more data is needed. This more targeted approach on ‘hazard’ data for transitional registration substances will be accompanied by a greater focus on collecting ‘use and exposure’ at work data, building knowledge of how chemicals are used across the UK and therefore the risks that might need to be managed. While the latter will still require substantial input from industry, overall, the new proposal seems to offer the potential for a much more workable and proportionate system, without lessening existing protections to the environment or human health and safety.
Formal written consultations are due to be published in January and February and we look forward to seeing more detailed information then. In the meantime, BCF gives an initial cautious welcome to Defra’s new proposals for UK REACH. It seems more proportionate and workable than the original and will mean the UK still remains at the forefront of environmental and human safety when it comes to chemicals regulation. It takes account of the work carried out elsewhere in the world by other regulatory regimes and allows UK regulators to focus their time and resources on those substances and uses where there may be most legitimate concerns. Indeed, this approach could mean regulators are able to better police concerns than under the current system. Taken together, these steps seem a sensible way to deal with the issue after Brexit.
TTJ: THE UK HAS BEEN WORKING ON ITS OWN CHEMICALS STRATEGY AND THE EU HAS BEEN LOOKING AT REVISING REACH – CAN YOU UPDATE US ON BOTH THOSE ISSUES
TB: The UK Chemicals Strategy was meant to have been published by the end of 2023. However, that has been delayed until 2024. We continue to engage with Defra on that, although much of the conversation is linked closely to the debate on UK REACH. We note that amendments to EU REACH have also likely been delayed until after the European elections in June. Although the UK is no longer part of the EU our members, as exporters, are still very much affected by any changes that occur to chemical regulations there. EU Classification, Labelling and Packing (CLP) is another example which is currently being changed and which affect the coatings sector. We work with and through our European sister organisation, CEPE, when looking to feed into EU regulatory changes.
TTJ: IS THE UK STILL A NET EXPORTER OF PAINT? IN 2022, 40% OF COMPANIES THE BCF HAD SURVEYED HAD SEEN A DROP IN EXPORTS THAT YEAR – DID THAT CONTINUE IN 2023?
TB: Yes. While members reported a drop in exports to the EU in 2022, the UK coatings sector remains a net-exporter. In fact, that holds true for all our coatings categories – paint, printing ink and wall coverings. It is something we are proud of and we hope to be able to build exports in the EU, and across the world, still further in future.
TTJ: THE GLOBAL RAW MATERIALS SHORTAGE OF THE LOCKDOWN ERA SEEMS TO HAVE ABATED FOR MOST SECTORS – WHAT IS THE SITUATION FOR THE COATINGS SECTOR?
TB: Thankfully raw material issues have receded somewhat, with certainly a better picture than during Covid or the opening stages of the war in Ukraine. However, energy / Brexit surcharges mean that raw material prices are still close to record highs, albeit with some recent welcome softening in some raw material categories.
TTJ: COSTS, FROM RAW MATERIALS TO ENERGY CONTINUE TO BE A MAJOR HEADACHE – HOW HAS THE SECTOR BEEN DEALING WITH THE INEVITABLE IMPACT OF THIS?
TB: As with companies across all sectors dealing with rising energy and raw material prices, our members have generally tried to keep their own prices down but have had to succumb to increases eventually. The good news is that raw material prices for coatings do seem have started to drop towards the end of 2023 and so we hope that carries over into 2024. Energy prices remain unstable, though, and this is still impacting members.
TTJ: WHAT IS THE LATEST NEWS ON BCF’S NET ZERO BY 2050?
TB: We were delighted to be able to publish a Net Zero Roadmap (https://coatings.org. uk/page/NetZeroRoadmap) for the coatings sector as a whole back in November. Over 100 delegates attended the launch, which took place alongside a day-long seminar on the subject. The aim of the Roadmap is fourfold:
- To provide background and context to Net Zero legislation and requirements;
- To set out the important role that coatings have to play in helping the world meet Net Zero targets;
- To set an initial estimated baseline for the whole UK coatings sector, against which to measure future progress;
- And, perhaps most importantly, to provide members with guidance, tools, resources and links to help them set and pursue their own Net Zero targets.
This is the first time a document like this has been attempted for our industry. The Roadmap will be updated regularly to hone emissions data for the sector, measure progress and provide updated guidance to members as appropriate.
We know that many of the BCF’s larger members are already well advanced along their Net Zero journey. Indeed, there are many excellent corporate leaders in this regard. However, we also know that Net Zero is perhaps more difficult for SMEs to tackle. This is why we have also produced a shorter ‘Quick Start Guide’ alongside the main document, focusing on the most salient guidance that smaller companies can use to get up and running.
TTJ: WHERE DO YOU THINK THE CHALLENGES AND OPPORTUNITIES WILL COME FROM IN 2024?
TB: We still need to nail down exactly what UK REACH looks like. That remains a major factor for all of our members and so will be a challenge to help the government arrive at a proportionate, fair and workable system as soon as possible.
Alongside chemicals regulations there is a huge amount of work going on across the sustainability field. Extended Producer Responsibility for packaging rules have been delayed in the UK and there are significant issues with what was originally proposed. That is another issue that needs resolving. And the continued drive to Net Zero will offer companies both challenges but also opportunities if they get things right.
In the background, there will almost certainly be a General Election in the UK in 2024. Whether there is a change of government or not, this generates yet more policy uncertainty on the back of several years of upheaval due to Brexit and Covid, among other things. That policy backdrop needs navigating too.
The other big project we have been working on at BCF, alongside our Net Zero Roadmap, was a new report highlighting just how important the coatings sector is to the UK economy and wider society.
The new Essential Coatings report (https://www.coatings.org.uk /page/EssentialCoatings) was launched in the House of Commons in early December, at an event with around 100 guests including BCF members, various leading stakeholders, and MPs.
Sometimes in our work we get bogged down in the weeds of various pieces of legislation. This new project is about taking a step back and communicating at a basic level just what coatings are and why they are essential. Our report uses numerous case studies to show how coatings are crucial not just in themselves, but through enabling other key parts of manufacturing, construction, in allowing greater communication and selfexpression, as well as the effect they have on helping people live better, safer and more comfortable lives. This is a message we will taking to politicians, media, and other policy- and decision-makers over the course of 2024.
