A new amendment to EU essential oils regulations spells victory for European consumers and industry

Good policy-making means correcting unfortunate mistakes. For this reason, it is wonderful to see the European Parliament address burdensome essential oils rules. In today’s plenary vote, Members of Parliament approved amendment 32, designed to adjust Classification, Labelling, and Packaging (CLP)regulations. Instead of grouping essential oils under the ambiguous label of mixtures containing more than one substance, any natural water or steam emulsions will now be more accurately described as substances of natural botanic origin, separate from already extant rules (EU) No 1107/2009 and (EU) No 528/2012 for organic insecticides.

The proposal significantly improves the European Union Chemicals Agency’s (ECHA) ruling. The initial plan was based on a hazard mentality, which allowed for no amount of risk so long as a single part of a substance may be troublesome in a hypothetical laboratory setting. It further equated essential oils with hazardous artificial compounds when all the available evidence suggests they are natural and perfectly safe. As a result, the ECHA would most likely have curtailed essential oils from being bought or sold via EU regulation 2021/1902.

The original regulations would have only added fuel to the fire consumers face. The EU-wide inflation rate remains high at 4.3%, a figure well above the European Central Bank’s price stability target of 2%. Higher prices translate into a general price rise, making it harder for ordinary Europeans to make ends meet. Thanks to the extra regulations, the few available products would have become more expensive due to the added compliance costs, piling further momentum to price rises. In the worst-case scenario, ordinary buyers could have been deprived of some of their favorite perfumes, shampoos, and make-up kits (which contain at least nine hundred and ninety-two substances derived from rose, chamomile, lemon, tree bark, or other natural components).

The amendment will prevent either scenario– essential oils never have to be withdrawn from the market because of unfounded safety concerns or comply with additional labeling rules and regulations. Consumers are left to enjoy the same items at affordable prices.

Producers in European member states also have reasons to celebrate the certainty the amendment brings to their businesses. France could have lost its position as the second-biggest supplier of lavender and the third-biggest exporter of the plant, and 458 million euros in exports. Bulgaria’s Kazanlak Valley is famous worldwide for its rose oil. It alone yielded two tonnes of essential oils, then exported for 92 million euros annually. Bulgarian workers and companies who were reasonably concerned about the implications of the ECHA’s actions can now breathe a collective sigh of relief. So, too, can the 4500 families in Italy’s Reggio Calabria responsible for harvesting 95% of all bergamot around the world. Italy’s 174 million euros in exports are safe and secure.

Smaller players in the market were even more vulnerable to change. Lithuanian cosmetics companies could see their mint, chamomile, juniper, and spruce overseas exchange disappear, losing 379.9 million euros. Minor yet entrepreneurial enterprises like the Tedre Farm in Estonia, originators of a more efficient carbon monoxide extraction method for raspberry oil, may have been rendered insolvent under the ECHA’s plans. With amendment 32, they and others can make their mark in the broader market unperturbed.

However, policymakers should go further and urge the ECHA to change its mentality towards regulation altogether. Currently, the ECHA operates based on a hazard-based, “better safe than sorry” approach, which has led it to oppose essential oils needlessly. Instead, regulators should practice the risk-based method, assuming realistic intended use levels. In doing so, they should incorporate the empirical evidence that shows essential oils to be harmless to humans and the environment into regulatory decision-making.  This way, they will avoid making any future mistakes.

Originally published here

Central European Affairs has recently dealt extensively with the EU overregulating essential oils. We had a podcast here at CEA Talks with the expert on this proposal, Dr. Emil Panzaru, who works at the Consumer Choice Center as Research Manager and also ran an op-ed with our magazine in which he explained the problems of the proposed legislation. Now, we are going after the story, and we want to see what happens on the EU level when there is a push from experts, stakeholders, and civil society to cancel the proposal or change it if possible. It is fascinating looking at how the “Brussels bureaucracy” operates when we experience every day that the Hungarian government would never give in to anything coming from other actors but its politicians.

CEA: Dr. Panzaru, when we last talked, you enthusiastically outlined why the proposal by the European Union Chemical Agency is terrible for the industry of essential oils and, in the long run, bad for the consumer. Can you update us on whether there are any developments regarding this issue?

Emil Panzaru: First, I would like to reiterate what I told you last time. Placing essential oils with other harmful substances is a big mistake. When we see such an example of overregulation, we have to raise our voices, especially when we know those who will be hurt the most are mainly SMEs, small farmers, and, last but not least, consumers.

CEA: Would anyone benefit from the changes to chemical regulations outlined initially by the European Chemicals Agency?

EP: Regulations change the balance of costs and benefits firms must make. As such, there are always benefactors and losers of every regulation; in this case, those who need not comply, for example, outside competitors like the Chinese, would overtake their European competitors and take over the market with their essential oils products.

CEA: Do you see any positive change in the run-up to the decision-making?

EP: Definitely. Just over a week ago, a new amendment was put forward, which suggests that water or stem-based extracts like essential oils are safe as they are organic botanic products. The proposal also recommends a new category for these substances apart from existing legislation on biocides and natural pesticide. 

CEA: Can the industry and consumers now be relieved that these products will continue to be produced as before?

EP: Not yet. This amendment still needs to be voted on and accepted. But I must say that this amendment is going in the right direction. Probably, some decision-makers finally realized that removing these products from the shelves just because one in a hundred substances might prove dangerous under laboratory conditions was not feasible and would have been downright economically harmful to European businesses and consumers. Based on the initial logic, anything can be labeled harmful. 

CEA: Speaking of which, would the original proposal bring about extra costs for producers?

EP: It surely would. This is a solid argument as well. When you look at the extra procurement costs that it would entail in an economic environment of high inflation, which you, as a Hungary-based outlet, must understand much better than in some other parts of Europe, you will see that a lot of producers would have to close operations or increase prices, which would then be unable to compete with producers who are not affected by the original proposal and further drive the price momentum of inflation. Due to this unnecessary supply problem, consumers will have fewer items to choose from and be able to afford fewer of them in the first place.

CEA: Following this note, could you share more insights into how this proposal affected countries that are the leading producers and what this amendment means for their industries?

EP: Before the amendment, these regulations were causing significant concerns for countries heavily reliant on essential oil production. For instance, Bulgaria is the world’s leading rose oil producer, and the threat of their business being wiped out by irresponsible regulations was a real threat. Italy, France, and Estonia also faced the potential loss of substantial export revenue due to the overregulation. Amendment 32 provides much-needed relief for these countries, ensuring their essential oil industries can thrive without unnecessary hurdles and economic losses.

CEA: What are your expectations for the EU’s future of essential oil regulations?

EP: Recognizing essential oils as organic and safe in Amendment 32 is a step in the right direction, but there’s still work to be done in promoting sensible, risk-based assessments in regulatory processes. My expectation for the future is that policymakers and regulatory agencies will employ a risk-based (rather than hazard-based approach) and continue to listen to scientific evidence. That means prioritizing common sense in their decision-making and ensuring that essential oils and other natural substances are regulated in a fair and balanced manner to the benefit of both consumers and industries.

Under its strict “better safe than sorry” hazard approach, the ECHA intended to modify existing Classification, Labelling, and Packaging (CLP) rules and group essential oils under the nebulous category of mixtures containing more than one substance. The original plan meant essential oils were wrongly considered on par with dangerous artificial substances and became open to potential market restrictions under EU regulation 2021/1902.

Introduced on the 21^st of September as a correction to the CLP, Parliament’s amendment 32 now rightfully recognizes these water or steam-based extracts as organic and safe. The proposal creates a new rubric of multi-constituent substances of natural botanical origin not covered by existing rules (EU) No 1107/2009 and (EU) No 528/2012 for organic insecticides.

Consumers and producers have every reason to support this potential return to regulatory and economic common sense. Emulsions like rose or lemon oil are vital ingredients for bio-make-up kits, shampoos, deodorants, and other cosmetics. The 2.29 billion euro European clean beauty industry could not exist without them. Provision 32 reassures suppliers that their items will not be spontaneously removed from shelves just because one particle out of a hundred could prove dangerous in a hypothetical laboratory setting. It also guarantees that no frightening labels or warnings will be present on the packaging, which would have needlessly scared many consumers away.

Most importantly, it means companies do not have to incur extra costs when inflation is already driving prices up across the board. It is worth remembering that EU-wide inflation rates remain stubbornly high at 5.9%(jumping in Hungary to a whopping 14.2%). Now was not the time for a thicket of unexpected chemical regulations to make things even harder. Thanks to the Parliament’s intervention, consumers can still find their favorite items in stores at the usual prices.

EU member states should feel even more encouraged by the amendment. Bulgaria is the world’s number one rose oil producer, harvesting almost two tonnes of emulsions annually for exports worth 92 million euros. Bulgarian producers were understandably worried the ECHA might wipe their business out. Approximately 4500 family-owned small companies in Reggio Calabria generate 95% of global bergamot production.

The ECHA’s initial decision left their future uncertain, and Italy could have lost 174 million euros in exports. France’s renowned lavender business and 458 million euros were on the line. Estonia’s Tedre Farm, inventor of a novel carbon monoxide method for emulsifying raspberries, would have squandered the fruits of its innovation. Bulgaria,  Italy, France, Estonia, and other member states can now rest assured that EU regulations do not unfairly disadvantage them.

There is still work to be done, of course. The proposal has only been tabled and is pending formal adoption in a Parliament plenary. For all the reasons mentioned above, MEPs should move to approve the amendment at the first available opportunity.

More so, policymakers should strike at the root of the problem and urge the ECHA to consider a change in mentality. In light of the essential oils case, it has become clear that hazard-based thinking does not accurately reflect the dangers of substances. Such reasoning must be replaced with a risk-based assessment of emulsions and other compounds. A risk-based evaluation would operate with safe intended use levels and take realistic evidence seriously. Research has shown that essential oils are harmless to people, plants, animals, and the environment and preferable to artificial repellents like DEET and picaridin. Regulators should listen and follow suit. That would be the best news to look forward to.

Originally published here