New European Union rules requiring firms to register and document metals and other substances they handle is causing consternation among companies which fear the law will be costly and difficult to meet.

EU figures suggest the direct cost to European industry, including chemicals companies, of meeting the regulations are likely to be as much as 2.3 billion euros ($3.37 billion) over 11 years.

"We are absolutely horrified by the potential cost to fully comply with all the legislation for the products we handle," said Peter Nicholson, director at London Chemicals and Resources, an international distributor and supplier of metals.

The law covers all metals from high volume copper and aluminium to minor metals such as indium, used to make liquid crystal displays for screens, and selenium, used in glass making, construction and agriculture.

The directive -- REACh, or Registration, Evaluation and Authorisation of Chemicals -- is designed to protect people and the environment from potentially hazardous materials found in manufactured goods, including clothing and vehicles.

"It could cost us millions – just to continue our day to day business," Nicholson said.

The rules apply to all companies handling metals and other substances such as chemicals, including importers, manufacturers and those in the construction industry.

Industry organisations say many downstream users, such as fabricators of glass, are still unaware of the legislation.

"We are trying to convince small and medium-sized firms it is really necessary to start with REACh now," said Christina Messner, responsible for environmental policy at the German metal association Wirtschafts Vereinigung Metalle.

She said it was necessary for the firms to start and get a clear view of which substances that would have to be pre-registered and then secondly to focus on data collection.

Two parts

By June 2008, metal firms must have pre-registered the substances falling under the new law and by 2010 technical dossiers describing their environmental impact must be ready for submission to the European Chemicals Agency (ECHA).

"Each company will have a registration cost for each substance it puts on the market," said general manager Tony Newson of the Stainless Steel Producers Group at the European Confederation of Iron and Steel Industries (EUROFER).

The steel industry has nearly 30 different substances it would have to register, but due to sensitive information sharing when setting up a consortium -- and sharing the cost when submitting a technical dossier -- the original plan was delayed.

"The plan was to have an iron and steel cooperation platform but this is taking rather a long time to get off the ground," Newson said, referring to difficulties to set up a consortium.

In other industries, lawyers had been involved to reduce the risk of sharing sensitive business information by using confidentiality agreements when setting up the consortiums.

Newson said the EU Commission had calculated that if a firm had no previous data and handled more than 1,000 tonnes of a substance, the cost of meeting the rules could be up to 2.5 million euros.

"With the steel industry, most of the substances that we use are more than 1,000 tonnes -- so it can be very expensive."

In the tin industry ITRI, a UK-based consultancy, had formed a consortium with five members and an additional two were awaiting approval to share the costs of gathering information.

"For the four years, 2007-2010, we have got around $3 million budgeted and that is the minimum amount we anticipate," said Kay Nimmo, manager of environmental affairs and responsible for REACh at ITRI.

"It is shared according to the tonnages of the members for the European market," she added.

She said the largest challenge would be the technical work necessary to generate the right kind of data required by the EU. – Guardian