Changing Compliance Regulations in the U.S. Chemical Industry

October marks a major event in the fight against global warming. The chemical industry, in collaboration with numerous countries, has come to an agreement to gradually phase out the use of hydrofluorocarbons (HFCs), a greenhouse gas common in cooling units, starting in 2019. This landmark announcement, known as the Kigali deal, aims to lower global warming predictions by 0.5 degree Celsius. The deal involved over 100 nations and features multiple timelines for countries to end the use of HFCs. U.S. Secretary of State John Kerry, chemical and food companies, and representatives from numerous countries collaborated in the groundbreaking effort. The deal is not a major blow to the U.S. chemical manufacturing industry, but it is yet another development in the ever changing regulatory and compliance framework impacting chemical production in the United States.

Because nearly all HFCs are made by a handful of giant western chemical companies and are used in air-conditioning units and cooling systems made and sold in rich countries, it was relatively easy for their governments to put pressure on a single global industry. Alternatives such as hydrocarbons, ammonia and CO2 are widely available, safe, approved and on the market,” writes John Vidal in The Guardian, referring to the Kigali deal.

The United States is the world leader in chemical manufacturing, accounting for 19 percent of the global chemical output. In response to worldwide trends like climate change, resource scarcity, and population grown, U.S. chemical companies have transitioned into science and technology companies to stay in front of these concerns. This change in identity has exposed chemical companies to the regulations of other industries that would not have applied to traditional chemical manufacturers.

One example of this is the growing trend among governments, including the U.S., to treat petroleum producers less favorably, resulting in fewer tax incentives and stricter regulations that increase the price of petroleum feedstocks that supply chemical companies. Looking across the Atlantic, U.S. chemical companies have witnessed the implementation of the Europeans Union’s Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) regulations, which have put in place strict and complex rules regarding the production and use of chemicals. REACH is estimated to cost the European chemical industry US$2.8 billion in the first 11 years, according to the European Commission.

Back at home, the Environmental Protection Agency (EPA) has been at work to deliver the promises in the Frank R. Lautenberg Chemical Safety for the 21st Century Act that was signed in June of this year. The law reforms the Toxic Substances Control Act (TSCA) and puts in place new rules for the chemical industry. Of note, the law prohibits the exporting of five specific mercury compounds and gives the EPA the power to determine whether or not new chemicals are allowed to enter the marketplace.

Now more than ever, chemical companies are required to adhere to a wide variety of regulations that govern more than just the chemical industry. Production techniques, materials, packaging, and, of course, chemicals are all subject to the rules of multiple laws and agencies which force chemical companies to maintain strict quality management, diligent record keeping, and detailed product information. Naturally, these extra steps add cost to the development and manufacturing processes.

Bercen is an innovative specialty chemical company that understands the continuously changing landscape of U.S. chemical regulations and has the expertise to adjust and streamline lean processes to produce tailored chemical solutions. We take pride in delivering value to our customers through responsive and friendly customer service paired with our high quality chemical products.

To learn more about our capabilities and our pilot plant for product development, visit us at Bercen.com.

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