A new red-tape mission is about to worsen the lives of Eastern European consumers, producers, and suppliers. Under the influence of the Green Deal, the European Union’s Chemical Agency (ECHA) will transition to a hazard-based approachpremised on preventing any potential threat. Regulators will no longer focus on concrete exposure levels to determine whether a product is safe for consumers, as they used to in the older risk-oriented assessments. Instead, policymakers will use lab-related hypothetical scenarios or advanced statistical tests to label a consumer good as dangerous or remove it entirely from store shelves if it could constitute a problem in any way, shape, or form.
However, trying to achieve zero dangers comes at a high cost. In the case of the ECHA’s revised rules, increasing regulatory pressure raises the costs of complying with said rules. This increase leaves many smaller companies unviable, making perfectly safe goods unavailable to consumers. The effect will be decisive for Eastern European countries already heavily invested in chemical markets, which therefore have the most to lose from any disruption.
The best example of this dynamic comes from an unlikely source – essential oils. Often assumed to be just relaxation tools, these steam or water-based plant extracts are widespread ingredients in most toiletries, cosmetics, and perfumes and are the economic bread and butter of many Eastern European countries. Bulgaria is the world’s top producer of rose oil, with up to two tonnes of rosesharvested yearly in the famous region of Rose Valley. Not to be outdone, the Tedre farm in southern Estonia has cultivated a waste-efficient carbon monoxide method of extracting oil from its 2.5 hectares of raspberries. Though not comparable to Bulgaria or Estonia in terms of output, Lithuania does produce important essential oils like mint, chamomile, juniper, and spruce.
However, hazard-based regulations would have essential oils on the chopping block. Policymakers plan to replace their current designation as complex natural substances with the nebulous idea of ‘more than one constituent substance.’ In practice, this redesignation means that essential oils will be treated the same way as synthetic mixtures – subject to the complete restrictions of hazard-based rules.
Most Eastern European firms will quickly find their businesses unviable because of the ECHA’s decision. Like the Tedre farmers, Bulgarian cultivators in the Rose Valley, and Lithuanian agriculturalists, these producers and retailers tend to besmaller domestic enterprises. Scaring consumers away with severe warnings on labels and prohibiting products are extra costs they can ill afford to take on (which is why 85% of all firms signed up to onerous legislation are large international conglomerates).
The economic consequences for the essential oils market in countries like Bulgaria, Estonia, Lithuania, and others in the region will be severe. Looking at export numbers alone, Bulgaria could lose 445 million euros from its sale of essential oils and associated toiletries. Lithuania and Estonia’s numbers are more modest but still significant, at 379.9 million euroand 19.1 million euro, respectively.
Eastern European member states should encourage the ECHA to abandon its cause before it is too late. Tentative steps occurred on the 30th of June when Bulgaria and seven other states in the Permanent Representatives Committee urged the European Commission to prepare a report four years into the future on essential oils. The analysis will outline different norms regulating the ‘more than one constituent substance’ category. Estonia, Lithuania, and all other Eastern European countries should join Bulgaria in this endeavor.
Yet they should aim to do more. They must encourage the revival of risk-based thinking in the EU’s attitude towards chemicals. Risk-bearing is the only form of decision-making grounded in concrete toxicological data, aware of the fundamental economic trade-offs, and sensitive to the consumer experience. The time to end destructive campaigns (no matter how well-intentioned they may be) is here and now.
Originally published here