The REACh Challenge & Innovation in the European Leather Industry

A COTANCE Round Table

Report

Introduction

On Monday 27 October 2008 took place the COTANCE Round Table “The REACh Challenge & Innovation in the European Leather Industry”. It gathered in Bologna, in the Lineapelle Fairgrounds some 30 high level representatives from the European Tanning sector, the leather industry’s main Chemicals suppliers and the European Leather Technology & Training Centres. For details please refer to the list of participants.

The COTANCE Round Table was co-hosted by GERIC, the Grouping of European Leather Research Centres and sponsored by Lineapelle. COTANCE Secretary General, Mr Gonzalez-Quijano, moderated the encounter.

Round Table

  • Morning Session

The Morning Session consisted of a series of welcome messages and opening remarks followed by the introductory speech of the President of COTANCE and an initial debate.

UNIC President, Mr Graziano Balducci, welcomed the participants on behalf of the Italian Tanning Industry and thanked COTANCE for the organisation of the event. Considering it important, he called for regular encounters between the chemical and leather industries focusing on the exchange of trade information that should allow a better mutual understanding between both sides. Mr Balducci indicated the main needs with regards to the efficient use of chemicals from the tanner’s perspective. He said notably that tanners ought to use less chemistry, know in detail the composition of preparations and in particular their possible effects. The President of the Italian tanners outlined a vision where suppliers and users of leather chemicals would work together on a distinctive image for European leather.

Mr Elton Hurlow, President of IULTCS and representative of Buckman Laboratories, introduced the International Union of Leather Technologists and Chemists Societies and its role in the leather industry as an instrument for ensuring solid science and good technology in the sector. With regard to REACh, he said that the initial burden will be borne predominantly by the chemical industry although the costs and impact will be felt on all industry. He did not exclude that this legislation will result in further restrictions for the use on chemicals and their presence in leather and that the decision on what chemistry would remain supported would be up to the individual chemicals suppliers. Mr Hurlow expressed, however, his concern rather on restrictions on the use of chemicals that may come from non-regulatory or voluntary barriers such as eco-labels or technical specifications set up by brands. REACh instead, he affirmed, is reasonably well defined and based on risk assessment and exposure scenarios that lead to sound results.

GERIC President, Mr Alcino Martinho, expressed his satisfaction for the encounter and for the business approach chosen as well as for the timeliness in view of the end of the Pre-registration process. The former, he said, would allow reflecting on the value chain and the strength of its links, the latter, taking last minute decisions with regard to substances that may not have been pre-registered yet. He indicated that the initial idea of a conference on REACh was floated by GERIC but that it was subsequently left to COTANCE to chose the best format. President Martinho introduced GERIC and its long list of services to the leather industry pointing in particular at their role in the development of independent research and innovation as well as of sector relevant test methods.

COTANCE President, Mr Nalle Johansson, thanked for the opening remarks and welcome addresses and started setting the scene for the Round Table. He clearly centred his concern on the leather market and on the many uncertainties that affect the leather business notably in the recent past. In such circumstances, he said, it is necessary to build bridges between business partners. Mr Johansson referred to the developments of the leather industry in the last 25 years, indicating that Europe has lost much of its predominance over the time but asserting that it still remains the region with the highest value adding potential in leather worldwide. He commented what this would mean for chemicals suppliers and their interest in supporting the European sector for continuing to expand the business together based on the leadership of quality leather. COTANCE President addressed the issue of REACh from the angle of “deselection” and called on Chemicals suppliers not to miss the opportunity of pre-registration. With regard to the leather market, he commented the negative impact of an increase in media coverage for leather products that don’t fulfil minimum safety requirements and called for cooperation from the chemical industry for redressing the situation. He said that it would be up to both sides to ensure that Europe’s leather market, worth some 60 billion Euro, increases. Mr Johansson commented the European tanners need from their chemicals suppliers in the context of REACh and what they can offer them in terms of certainty. He said that this Round Table should be the start of a process of joint collaboration that should support the industry to make REACh become a competitive advantage for European operators. Concluding, he referred to the leadership role of the European leather industry and the need to cooperate for renovating the industry and help it to master the challenges of this new Millennium.

The debate that followed addressed several points:

-The sector’s dependence on Brussels for regulatory change. The industry partners can decide to cooperate but the risk that such cooperation is short-circuited by new EU legislation cannot be disregarded (Mr Giorgio Bargiggia/UNIC).

-The sector’s need to be alerted well in advance (6-12 month) in case of deselection of a given substance for allowing the industry to adjust its processes and products (Mr Nalle Johansson/ELMO).

-The various deadlines for the registration of substances (2010, 2013, 2018) and the likeliness that substances disappear. Concerns are not founded with regard to the first deadline. Only for the second deadlines there are risks that some substance result non-registered, and some more at the last one (Dr Jürgen Christner/TFL).

-The involvement of chemical companies in pre-registration. The process is well underway although there are some companies, notably smaller ones, that have waited for the possibility to make bulk submissions to ECHA. It is expected that all relevant leather chemicals will result pre-registered (Dr Alex Föller/TEGEWA).

-The difficulty for tanners using preparations to identify whether their relevant substances are pre-registered since Safety Data Sheets do not necessarily provide full details on the compositions (Dr Elisabetta Scaglia/Conciaricerca).

-The recommendation of TEGEWA to its affiliates to pre-register even if in the likely case of an exemption under Annex IV (Dr Alex Föller/TEGEWA).

-The confidence that the sector may have on the pre-registration of all leather chemicals since lack of pre-registration would result in absence of business for suppliers (Mr Huub Van Beijeren/Stahl).

-The option that tanners have to contact their leather technology centre for the identification of substances in preparations (Dr Alcino Martinho/CTIC).

-The recourse of tanners in case of doubt to their suppliers of preparations for requesting the pre-registration of substances (Dr Jürgen Christner/TFL).

-The issue of collusion or abuse of market position if various chemicals suppliers cooperate for the registration of a given substance (Dr Fabio Giacometti/TCIM).

-The possibility to support the European industry with a quality label (Collective Trade Mark) that could facilitate consumers to identify virtuous operators and distinguish them from others (Mr Gustavo Gonzalez-Quijano/COTANCE).

-The concerns that eco-labels raise with non founded restrictions on certain substances (Dr Jürgen Christner/TFL).

-The need to focus on the way to make REACH become a competitive advantage for companies (Mr Huub Van Beijeren/Stahl).

  • Afternoon Session

The Afternoon Session consisted on three panels addressing different aspects of REACh. This Report will mainly reflect the discussion and comments that followed the various presentations.

1st Panel: Preparedness for REACh

Dr Alex Föller, Director of TEGEWA, starter the Panel with a presentation on the outlook for the implementation of REACh. He presented the impact on costs of chemical substances on the basis of an example of a substance use as water repelling agent and the testing and registration fees that will be necessary. Dr Föller addressed the issue of deselection indicating that it is not in the pre-registration phase that this risk is relevant but rather when the substances will come to the deadline of their respective registration. On volume chemicals, he does not see much problems, but rather on low volume performance chemicals. Another issue is whether manufacturers will consider all possible uses of substances in their registration dossiers. Dr Föller indicated that TEGEWA has been preparing in cooperation with partners, including the German Tanning industry, exposure scenarios that should facilitate the indication of use of a given substance for the leather industry. He said that 5 scenarios are being developed that will be covering the leather production process. Dr Föller further commented the services TEGEWA is offering to the industry in terms of support for REACh compliance. He concluded indicating the cooperation that is being organised with AISPEC for coordinating registration.

In the discussion it appeared that TEGEWA covers around ¾ of all European suppliers of leather chemicals and that they do not work with non-European firms. On The question of what TEGEWA was thinking on what the 25% of non covered leather chemical suppliers would be doing, Dr Föller responded that he expected them to do their act. On the costs of registration, he responded to a participant concerned on substantial increases, that the example cited is to take with caution as the calculation made was 4 years ago and that all efforts are done to drive costs down with joint registrations and guidance.

Dr Filipe Crispim from CTIC commented that there are still significant direct imports of leather chemicals taking place and that tanners are well advised to check their compliance. He also expressed his concerns on the issue of non-REACh chemicals in articles and that controls ought to set a level playing field on the leather market in Europe.

Dr Elisabetta Scagla representing Conciaricerca, the research branch of UNIC, focused her intervention on the preoccupations of the sector. Training of companies on the correct management of substances and preparations is the core service provided by the Italian Tanner’s organization, she said. She commented that tanner’s concerns are threefold: the reduction of the offer of substances for use in tanneries, the competition from non-EU operators using freely substances that are restricted in Europe or that are cheaper, the lack of sensible controls at the border on substances in articles.

The question of costs came up again in the debate and notably whether the reduction of the price of crude oil would beneficially impact the industry with price reductions for oil-derived substances or preparations. The impact on prices of a reduction of the oil price was, however, minimized.

2nd Panel: Outlook for the leather industry

Mr Paul Pearson, Director of UKLF and Secretary of ICT, made a presentation of the development of the global leather industry on the basis of the most recent data available. He showed the evolution of the main raw material segments and the development of leather production. It results that developing countries have taken the lead in leather production but the value of their output still remains below that of developed countries. A look on the main markets concluded his presentation.

Mr Claudio Fontana from LANXESS introduced his company and the network of its operations as well as the products marketed to the leather industry. He reviewed the main REACh requirements for substances and indicated the relevant references for pre-registration as well as the recent list of SVHC. Regarding leather, he indicated its consideration as articles and their irrelevance in the context of registration.

Mr Thierry Poncet representing CTC, the French Leather Technology Centre, focused his intervention on the assistance provided by his organization to the leather industry. He commented notably the databases that have been set up and the analytical support that CTC is giving to the industry. The services to tanners extend also to support in terms of assistance in the communication along the supply chain. Mr Poncet recalled the rights and obligations of tanners in the framework of REACh. He concluded presenting the main short term objectives of his organization with regard to REACh, namely, monitoring the pre-registration, assisting tanneries in substitution, research of alternative substances, etc.

The debate evidenced that REACH is not as constraining as it has been heralded. Brands setting restrictions on chemicals in their products or eco-labels are much more worrying. Regarding the SVHC listed already under REACh, it appeared that none of them is likely to be present in leather. Participants also expressed concern on the articles sold on the EU market and their possible unfair competition if they are produced outside the EU. Participants understood that consumers would be lost in understanding what is the right thing to do. The possibility of a quality mark was floated for guiding the consumers in their purchasing behaviour.

3rd Panel: Innovation

Mrs Bénédicte Vermerie, Director of the French Bureau du Style, made a colorful presentation of the trends to come in leather fashion introducing thus the concept of non-technological innovation in the Round Table. She declined leather in colours, textures and sensations and indicated that the future will see a further rise in ecological attitude of European consumers.

Dr Jürgen Christner, TFL, addressed innovation in the leather industry from various angles: Fashion, Performance and Leather Processing. He did not exclude the possibility that REACh may end up reducing the offer of substances for the European tanning industry but he called on participants not to consider this as a particular problem. He indicated that scarcity is actually good for pulling innovation. The question he raised was rather who would be paying for innovation. Dr Christner, commented that Europe’s strength is actually its capacity to innovate and that it should be confident on its assets. REACh, he underscored, is a bureaucratic monster and one of its main problems is that it may take away resources from R&D. However, he understands, that REACh constitutes also an opportunity for the European industry and that it is up to the European tanners to re-discover leather and to market it adequately. Dr Christner indicated that REACh would become with the time a de-facto requirement also outside the EU. Concluding, Dr Christner expressed his vision for the European tanning industry indicating that it had to find the right positioning for its leather and bet on Quality, that it would be well advised to pool resources and engage in EU projects and partnerships. With regard to consumer expectations, he indicated that he foresees an increase in demand for fashion, value, performance and ethics.

Mr Joan Carles Castell, Director of AIICA and Convenor of WG 1 Chemical Testing in CEN TC 289 Leather, made a presentation on the support for innovation that R&D Centers can provide for fulfilling the objectives of the REACh legislation. He indicated that Leather technology centers are centers of excellence experienced in the development of innovation. He explained the linear model of R&D from the academic research down to the communication of the innovation passing through the development of applied research and technologies. Mr Castell emphasized the need for cooperation of industry and the scientific community. He furthermore commented the heritage on standardization of the European leather sector and indicated the new developments that are taking place at European level. Mr Castell concluded with references of the support given by AIICA for the search of alternatives for chemical substances.

The debate focused on cooperation between chemical suppliers, industry and the scientific community. Strong partnerships were recommended and the developments of joint EU projects for pushing further the knowledge in the European leather industry. The participants understand that consumers need to be educated for distinguishing between good and bad leather and in what the material is and why it is unique.

Conclusions

The participants of the COTANCE Round Table agreed:

  1. COTANCE and TEGEWA will hold regular meetings throughout the REACh implementation phase with the aim of exchanging relevant business information of mutual interest with regard to REACh, Chemicals supplies and the leather industry. These encounters may be enlarged, as appropriate, to other stakeholders such as representatives from AISPEC and/or from organizations or companies from sectors downstream to the Tanning industry. They will be hosted alternatively by TEGEWA or COTANCE and may take place in the headquarters of either organizations, in Frankfurt or Brussels or any other opportune place.