EU Regs Could Clobber Grease Suppliers

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U.S. lubricating grease producers could soon slam into new barriers to delivering products to customers in Europe, as wide-sweeping chemical safety legislation passed by the European Union begins to take effect. According to U.K. grease expert and consultant Michael Morris, the legislation known as REACh effectively will bar from sale in Europe any lubricating grease that is not in compliance — and that means not only bulk or packaged greases, but also grease used to pre-fill equipment intended for eventual sale in Europe, such as factory-lubricated bearing sets.

To alert grease producers and equipment manufacturers to the impact REACh will have on their businesses, Morris will address the upcoming NLGI annual meeting, Oct. 29 to 31 in Orlando, Fla. He’ll also tell attendees about a consortium of grease producers that is working to share the burden of complying with the new legislation.

“Grease producers outside Europe don’t seem to be focused on this yet,” he told Lube Report last week, “but U.S. grease folks could get clobbered by it. Asian grease producers also don’t seem to be involved at this point. But REACh puts the focus on the entire chemical supply chain, so that if you sell a grease into a bearing made in the United States, and that bearing is sold to another equipment maker, and then that equipment is sold into Europe, that indirect export is subject to the REACh provisions.”

REACh establishes a legal obligation to register chemical substances sold in Europe, to carry out chemical safety assessments, and obtain authorization for sale there. Most lubricating fluids are simply blends of base oils and chemical additives, Morris explained, and since their components don’t change, the burden of compliance falls on the upstream suppliers of the raw materials. But lubricating grease usually requires a chemical reaction — saponification — to create the soap structure that gives grease its thick consistency. This reaction process is what triggers REACh’s oversight, if the substance is placed on the EU market in volumes greater than one metric ton per year.

Cost of complying with the testing and registration requirements of REACh has been estimated at anywhere from 400,000 to 1 million per “substance” sold in excess of 1,000 tons per year. To not comply, though, means being shut out of the EU market entirely, warned Morris.

Manufacturers will have three to 11 years to register substances that are covered by REACh, depending on the volume and the hazard of the substance. Eventually though, noncompliant chemicals will not be able to be produced, imported, marketed or used in the EU.

Earlier this year the European Lubricating Grease Institute established a consortium to deal with REACh, and it already has about 30 member companies, who have agreed to jointly share the cost of testing and registering the most widely used grease substances. The specific substances are still under discussion, but most probably will get started with 12-hydroxy stearate, the basis for lithium soap used in nearly 70 percent of the world’s greases. “We’re still discussing substances beyond that,” said Morris, who has been retained by ELGI to chair the consortium.

Consortium members are companies that manufacture grease soaps in the EU and/or import soaps into the EU with a legal representative based there. The consortium remains open to new members, he added, and the cost to join is 1,000. That initial payment is expected to cover only the administrative costs of the consortium for the first year. “The big cost will be with testing of the substances to be registered, and that will come later,” Morris added.

The group expects to finalize its legal structure and agreements at a meeting next week, to clarify issues such as confidentiality, sharing of costs, liability issues and competition law.

Although several of the major multinational oil companies are on board with the consortium, “only one or two purely American grease manufacturers have joined so far,” Morris reported. “Others seem to have the feeling this is mainly a European issue, and they’re not involved.” That apathy could hurt, if end users begin to specify European-made greases for equipment destined to be exported to that market, he suggested.

REACh is an acronym for Registration, Evaluation and Authorization of Chemicals. Theregulations take effect in the spring of 2007. See the April 25, 2006 issue of Lube Report for more information.

Morris will give his presentation, “European REACh Regulations: The Impact on North American Grease Manufacturers and Exporters,” on Monday, Oct. 30, at the NLGI annual meeting at the Walt Disney Swan Hotel, Lake Buena Vista (Orlando), Fla. For information about the meeting or to register, go to http://www.nlgi.org/annual_meeting.htm.

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