Natural products are collateral damage of an EU initiative to sharpen regulation of chemicals

By
Pieter Cleppe
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It is hard to keep track of new EU regulatory initiatives. Many are related to climate change, as for example expanding the EU’s emissions trading system, but others not necessarily or only indirectly, as for example the proposal to enable snooping into private messages, the EU Regulation on Deforestation-free Products, the plan to extend the EU’s existing “Ecodesign rules” to construction products, the mandatory renovation of buildings regulation, the AI act, the European Chips Act and the proposed comprehensive crypto regulation MiCA.

These regulations intend to protect the environment, fight crime and provide a suitable framework for new technological innovation. The overall tendency from what comes out of the EU regulatory machine is rather protectionist, or as German CDU MEP Axel Voss puts it when it comes to the attitude of EU policy makers towards Artificial Intelligence: “What is happening in the European Parliament is that most people are being guided by fear and concerns and trying to rule out everything.”

This sentiment is confirmed by data. The German Regulatory Control Council estimated that during the pandemic, EU law added an annual compliance burden of €550mn on companies. According to a large-scale survey among global firms in 35 countries by BusinessEurope, the federation of European businesses, 90 percent of them believe that the European Union has become a less attractive place to invest than three years ago. They blame continuously high energy prices and increased regulation for this.

Things were already less than perfect in the past. The cumulative cost of EU regulation introduced between 1998 and 2008 for all 27 EU member states amounted to €928 billion, according to research by my former think tank Open Europe on the basis of government data. Worryingly, already then, 66% of the total €1.4 trillion cost from regulation issued by either member states or the EU emerged from the EU level. There is little evidence suggesting that things have improved, on the contrary.

A case in point is how EU Climate Commissioner Frans Timmermans has morphed from a supporter of the “better regulation” agenda into a green zealot, pushing for ever more expensive EU regulations, supposedly to combat climate change and CO2. Oddly, his European Commission is less than enthusiastic to support the only energy source which is able to reconcile living standards with large scale reduction of CO2 – nuclear power – even if it is legally bound to do so, as a result of the Euratom Treaty.

The overhaul of EU chemical regulations

In the past, a very impactful regulation was the EU Regulation on the registration, evaluation, authorisation and restriction of chemicals (REACH), which the EU calls “the main EU law to protect human health and the environment from the risks that can be posed by chemicals.” A fierce policy debate preceded its emergence, and something similar can be expected in the run up to 2027, when a significant revision of this regulation is scheduled.

In fact, this debate has already begun. Apparently, EU regulators think that chemical firms have been avoiding bans on individual chemicals by tweaking their chemical composition to create sister substances that may also be dangerous, but which then require lengthy legislative battles to regulate.

In response, the EU is coming up with a real hammer, as the European Commission, thereby advised by the European Chemicals Agency, is now intent to deal with chemical substances in groups instead, as a principle. Flame retardants, bisphenols, PVC plastics, toxic chemicals in single-use nappies and PFAS will all be put on a “rolling list” of substances to be considered for restriction by the Agency. The Plan is to regularly review and update this list ahead of the big 2027 revision. It is part of the European Commission’s “Chemicals Strategy for Sustainability (CSS), which itself is part of the European Green Deal. The stated goal is “to ensure that consumer products do not contain chemicals that cause cancers, gene mutations, affect the reproductive or the endocrine system, or are persistent and bioaccumulative”.

The chosen brash approach however carries great dangers, the chemical industry has warned, as it may affect the availability of ordinary products like sun creams and perfumes. Its estimates are that the cost of new bans would amount to more than a quarter of the industry’s annual turnover of around €500bn, this while the EU’s REACH system is already the world’s most extensive chemical register.

Natural products affected by EU chemicals regulation

To make matters worse, not just the chemical industry, but also suppliers of natural products would be affected, as for example lavender oil. The plan reportedly is to require lavender products to carry bold black-and- red warning labels. Lavender producers in France are not against mentioning a potential allergy risk but are strongly against the kinds of dire labels that can be found on chemicals used in industrial processes, also to be found on cleaning products. They think lavender oil should simply be reclassified under agricultural products, but EU regulators disagree and want to register them as chemicals, even if the EU Commission has qualified this by stating that “natural substances whose composition is variable require more effort and expertise in order to be registered compared to ‘classical’ industrial chemicals.”

The proposals have caused a lot of anger in the French region of Provence, where small-scale lavender-oil production provides a lot of people with an income, especially as many lavender farmers have already been selling at a loss for several years.

The EU could thereby brand essential oils, like lavender oil, as endocrine disruptors, which disrupt the body’s normal hormone patterns. The European Federation of Essential Oils, a trade group, opposes this classification and has urged to come up with “solid scientific criteria.” At least chemist Michael Hagel, head of the occupational safety and environmental protection department at Carl Roth GmbH + Co. KG, a German chemical manufacturing company, stresses that adding drops of lavender oil to a warm bath “has no effect on your body.”

Fundamentally, what’s going on here, is yet another application of the so-called precautionary principle embraced by EU policy makers. There is no discussion that sunlight is damaging for one’s skin, despite the upsides for health, but obviously, it is the amount of sunlight that matters. Yet, as a result of the EU’s regulatory proposal to lump chemical substances together in groups, abandoning the approach to scrutinise substance by substance, it ends up tackling natural, non-industrial products as well. At the very least, using chemical compounds at healthy levels should be a factor included in any EU regulatory assessment.

It is not just the lavender oil sector that may be hit. Spanish lemon oil production, Bulgarian rose harvesting for rose oil and Italian Bergamot oil production are all examples of natural oil industries with lots of small companies that are key for rural regions and that may be affected.

The French Senate has called to protect essential oils from becoming “collateral damage” of the EU’s chemical regulation overhaul, requesting additional scientific studies on the oils. The initiator of the resolution, French Senator Jean-Michel Arnaud, who comes from the Provence region himself, estimates that 70% of Provence’s lavender production may be jeopardized as a result of the extra cost for small farmers as a result of the new EU approach. He even warns that in a “worst-case scenario,” synthetic lavender derived from crude oil could overtake the sale of natural oils and exclaims: “Lavender essential oils have existed since ancient Rome and have never caused health problems for humans as long as their use is reasonable.”

Let’s find out how reasonable the European Union will be.

 

 

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