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1 KEMIA SPECIAL ISSUE 5/2009 Finnish Chemical Magazine In this Issue: TOWARDS Sustainable Use of Resources SUDDEN DEATH of Demand CHEMICAL SAFETY Mission Possible Kaikki tarvitsemasi laboratoriotuotteet Tuotteet sovellusalueellesi laitteet tarvikkeet kemikaalit ja reagenssit laboratoriokalusteet Palvelut käytössäsi verkkokauppa vsr-varastopalvelu asiakaspalvelu tekninen tuki laboratorion suunnittelu asiakaskohtaiset tuotteet REACH Fair Competition at Risk VWR International Oy Pihatörmä 1 C Espoo

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3 Usein riskinhallinta säästää selvää rahaa. INKUBOINTI JA LÄMPÖKÄSITTELY ELATUSAINEIDEN VALMISTUS KEMIKAALIEN SÄILYTYS ULTRAÄÄNIPESU LÄMPÖTILAN SEURANTA JA DOKUMENTOINTI MIKROBIOLOGINEN SUOJAUS KRIITTINEN LÄMPÖ- KÄSITTELY MIKROAALTO- AVUSTEISILLA UUNEILLA STERILOINTI, SEURANTA JA DOKUMENTOINTI KYLMÄSÄILYTYS Ääriolosuhteiden asiantuntija. labo line oy Karjalankatu 2, Helsinki p. (09) , Kattavaa ja mutkatonta palvelua: konsultointi ja koulutus tarve- ja kuntokartoitukset laitetoimitukset ja -asennukset määräaikaishuollot laitepäivitykset varaosatoimitukset laitevuokraukset

4 CONTENTS 6 Towards Sustainable Use of Resources Timo Leppä 10 Finnish Chemical Industry in 2008 Sudden Death of Demand Pasi Ahde REACH 14 Fair Competition at Risk Nicolas Gardères 16 Worldwide Chemical Safety Mission Possible Hannu Vornamo 18 The Chemical Industry Facing Challenges and Providing Solutions Aimo Kastinen 22 Getting the Right Approvals Irina Rauvanto 26 City of Kokkola Chemistry Success Story Ville Honkala and Johanna Rantanen 29 Recession Fought by Innovation and Education Riitta Juvonen 32 Luma Centre Promoting Interest in Science Maija Aksela 34 Biotechnology and Life Sciences Cooperation is Key Tero Piispanen and Saara Hassinen 37 Developing Wood Biorefineries Ali Harlin 39 Pharmaceutical Industry Pharma Meets Academia Mia Bengtström 42 The Cosmetics Market Facing a Change Eeva-Mari Karine2 The chemical industry is plagued by the recession worldwide. (p. 10) 46 For the Plastics Industry Flexibility is a Must Vesa Kärhä 48 The Rubber Industry Good Year Behind, Tough Challenges Ahead Tuula Rantalaiho 52 Paint and Printing Ink Industries Waiting for an Upturn Aimo Kastinen 56 Industrial Minerals and Rocks The End of the Boom Markku J. Lehtinen 59 Näkökulma Ei kemikaaleille! Anja Nystén 59 Silloin ennen 60 Industrial Gases Energy Projects for the Future Jukka Gustafsson and Pauli Toiviainen 62 Ajankohtaista Kemia-lehdellä aktiivisia lukijoita Leena Laitinen Sikatautirokotukset ovat puolen vuoden urakka Päivi Ikonen 64 Ioninesteiden käyttö laajenee Jari Koponen 65 Uutisia 72 Tutkimuksessa tapahtuu 76 Geenitutkimus paljastaa tautien taustat Arto Jokinen Kultaiset mukulat matkaavat pian kohti tähtiä. (s. 78) 78 Andeilta Marsiin Pelastajana peruna Pekka T. Heikura 80 Ulkomailta 82 Keemikko Vähän paljon 83 Henkilöuutisia Tryffelitaikuri loihtii Aarteita maan mullasta 86 Tulevia tapahtumia 87 Seurasivut Scanstockphoto 88 Puolet petäjäistä Jäkälä jäi petun varjoon Pekka T. Heikura Scanstockphoto Cosmetics from Arctic nature. (p. 42) Lumene Suomen saloilla kasvaa mustaa kultaa, kiitos Salem Shamekhin. (s. 83) Juvan tryffelikeskus 4

5 EDITORIAL September 3, 2009 KEMIA Kemi Vol. 36 Coden: KMKMAA ISSN Toimitus Redaktion Office Pohjantie 3, FIN Espoo puh faksi Päätoimittaja Chefredaktör Editor-in-Chief DI Leena Laitinen Toimituspäällikkö Redaktionschef Managing Editor Päivi Ikonen Taitto Layout K-Systems Contacts Oy Päivi Kaikkonen Sihteeri Sekreterare Secretary Irja Hagelberg Vakituinen avustaja Permanent medarbetare Contributing Editor Sanna Alajoki Ilmoitukset Annonser Advertisements Myyntipäällikkö Forsäljningschef Sales Manager Arja Lindsberg Tilaukset Prenumerationer Subscriptions puh , faksi Tilaushinnat Kotimaassa 89 euroa (kestotilaus 79 euroa), muut maat 120 euroa Kouluille 45 euroa, Prenumerationspris i Finland 89 euro, övriga länder 120 euro Subscription price (out of Finland) EUR 120 Irtonumero/Lösnummer/Single copy EUR 15 (special issue 5/2009 EUR 19) Osoitteenmuutokset Suomen Kemian Seura puh , faksi Kustantaja Utgivare Publisher Kempulssi Oy Toimitusjohtaja Verkst. direktör Managing Director Leena Laitinen Pohjantie 3, FIN Espoo puh Toimitusneuvosto Redaktionsråd Editorial Board Laboratoriopäällikkö Susanna Eerola, Roal Oy Toimitusjohtaja Saara Hassinen, Suomen Bioteollisuus FIB Professori Matti Hotokka, Åbo Akademi Toimituspäällikkö Päivi Ikonen, Kemia-Kemi Tutkija Helena Laavi, TKK Päätoimittaja Leena Laitinen, Kemia-Kemi Professori Jan Lundell, Jyväskylän yliopisto Tutkimuskeskuksen johtaja Ilkka Pollari, Kemira Oyj Apulaisjohtaja Juha Pyötsiä, Kemianteollisuus ry Professori Markku Räsänen, Helsingin yliopisto Tiedotuspäällikkö Sakari Sohlberg, VTT Aikakauslehtien Liiton jäsenlehti Painos Upplaga Printing order Forssan Kirjapaino, Forssa 2009 ISO 9002 Life is hard and then you die? One day I went back to bed and lay under the covers again once the children had left for school, said a friend of mine, single parent to three children and academic career woman who has been hit for six by burn out. Suddenly it occurred to me that life is actually quite pleasant. I have my own home, I am warm and my stomach is full, my loved ones are safe, and when I get up, I am able to move around and function like others do. All the important things in life are fine for me. It was a familiar story. I have experienced days that I would gladly switch for another. Because that wasn t possible, I had to focus my thoughts on what had to be done there and then. Right now I am cooking, now I am writing this article, now I am breathing in and out. Distress crystallises the essential things in life. I am healthy, I have my own home and loved ones, and I have a meaningful existence. I wonder whether the enormous strides made in science, technology and the economy have obscured our view of reality of which previous generations had first-hand experience. Life sometimes deals you a tough hand, and catastrophe can strike at any time. Nevertheless, upheaval does not mean the end of the world. My family lived for centuries in a village which is now part of Russia. Every so often, the village had to be rebuilt following a destructive visit from the enemy. People hung on to their homelands tenaciously, until 65 years ago they had to leave, not knowing where life would take them. The children had to be fed, and a new home had to be built from any materials people could get their hands on. After the war, life was tough for everyone. Even so, people were cheerful through the working day, started families and built communities. Happiness didn t depend on the circumstances around, rather on outlook on life. When you follow the media nowadays, it feels like the crises and illnesses are wholly unnatural. These things certainly cause pain when they happen, but once they are over, life must go on. Do we have to dedicate unlimited column space to horror scenarios and pessimists of the worst kind? Antti Mannermaa Leena Laitinen 5

6 Towards Sustainable Use of Reso The whole world faces an ever-intensifying challenge to use natural resources wisely as the world population is growing and the standard of living is rising. One of the key questions is how to continue economic growth without increasing the world s environmental burden. The chemical industry can be part of the solution. Timo Leppä Chemistry is present everywhere, and so are the products of the chemical industry. The chemical industry is needed to produce chemicals but also to provide solutions for other industries and consumers. Development of the industry as a whole has always been closely linked to advances in the natural sciences. The challenges that mankind is currently facing require new materials, processes and services that can be developed by the chemical industry. Customer segments for the chemicals industry cover virtually all sectors of the economy. All segments are also represented in the Finnish chemical industry. The chemical industry gains from being close to customer industry. This is part of the reason why it is important that both Finnish and European chemical industries remain in the home market. The chemical industry in Europe is largely concentrated in a few countries. While Germany, France, Italy, Great Britain and the Netherlands account for more than 70% of the EU s chemical sales, Finland s proportion is 1.3 %. However, by focusing on sustainable use of raw materials and effective energy use, the Finnish chemical industry can play a bigger role than its size would suggest. Globally, the European chemical industry is in second place after Asia. In the EU, there are around 29,000 chemical and pharmacentical companies employing some 1.8 million people. Representing 15% of Finland s industrial production, the chemical industry is the country s third biggest industrial sector after the technology and forest industries. In 2008, the chemical industry employed around 36,000 people, slightly less than 10% of the total work force in industry. Chemistry allows wise use of resources In reducing greenhouse gases and slowing global warming, energy consumption and ways to produce energy play an essential role. As sources of energy and raw materials, oil and other fossil fuels are limited. Thus, we need to cut energy consumption and find new, efficient ways to produce energy. By producing new fuels through chemical and biological processes, the chemical industry can help solve this problem. Developed in Finland, renewable diesel production technology is a prime example of a new technology that helps reduce greenhouse gases by replacing fossil raw materials with renewable raw material, refined with new production technology. The chemical industry also produces effective insulation materials for buildings, enabling new construction systems to be used to diminish energy consumption, while new materials also make light-weight construction possible. Price development and dependency on oil and gas has led the chemical industry to search for renewable raw materials as a complement and replacement for traditional feedstocks. Large amounts of different chemicals can be produced from renewable materials, but the financial, technical, and often logistical difficulties must be solved before new processes can be used on a larger scale. Industrial processes need a reliable flow of raw materials of consistent quality. The use of renewable materials has a long tradition in chemical production. Chemicals from the forest industry and agriculture, such as cellulose and vegetable oils, are refined into a wide array of chemicals. The goal of reducing carbon footprints and diminishing the use of fossil hydrocarbons has led to a competition for biomass, which can be burned in order to produce energy. Regulation and subsidies in agricultural or energy industries can seriously endanger the current use of biomass in the chemical industry and slow down development work for new uses of renewable raw materials. It is therefore important that value-adding processes and production are prioritised over direct energy use for renewable raw materials. 6

7 urces Scanstockphoto 7

8 Innovations Needed and Achieved For sustainable development in the chemical industry, the key is new innovations and products. This is clearly seen in Finland as the competition from emerging countries, Asia in particular, is getting stronger. Mainly fuelled by the rapid growth in Asia, especially China, we have seen a rapid increase in raw material prices during the past five years. The current downturn in the economy will not solve the problem, since it is linked with scarcity of natural resources. Even if the outlook is gloomy right now, the world economy will face a new growth period. The chemical industry is often an enabler, providing innovations or sources of innovation to other industries using chemicals in their processes. Therefore, it will always be a strategically, economically and socially important player in the society. Innovation within the chemical industry is thus of utmost importance for all of industry. Finland has natural resources that are or can be used as raw materials for chemicals. Sustainable and wise use of natural resources is possible when technological know-how is combined with the right strategic choices. This can offer a sustainable competitive advantage for the chemical industry in the future, as Finland has all the necessary prerequisites for pursuing this strategy. Clean water is becoming an even more important issue than energy. Clean water over energy A prerequisite for life, clean water is becoming an even more important issue than energy. Today, clean water is a scarce resource in many big cities, regions and countries. Water is a natural resource necessary not only in agriculture but also in numerous industrial processes. Megacities around the world are facing challenges in water purification, and new ways to clean and circulate water are needed globally. Water treatment chemicals are needed both in preparation of drinking water and in waste water treatment. Finland has long traditions in environmental protection and preservation of our water resources, and the Finnish chemical industry is solving water treatment problems globally. A good understanding of water chemistry and deep knowledge of water treatment technologies are distinct features of the Finnish water cluster, which includes the chemical industry, universities and authorities, all representing the highest levels of expertise in their fields. Population growth and decreases in arable land put tremendous pressure on agriculture. Besides water, fertilisers and plant protection agents are essential, and food production at the global level could not function without the chemical industry. Without products made for agriculture, famine and malnutrition would be even bigger problems than they are now. The basis of the Finnish fertiliser industry is pure raw materials combined with modern production technology. Recycling saves raw materials Essential ways to reduce the use of raw materials are recycling and material efficiency. New legislation and new innovations can turn waste streams and by-products into materials that can be used in processes instead of virgin natural resources. Sometimes, the quality of the product is even enhanced by using recycled materials. The production of metals is a good example of an efficient use of secondary raw materials. Globally, about 70% of the steel produced today has been recycled at some point. Another example is paper. In order to reach the optimum printing quality for newspaper, around one third of the fibre should be recycled material. Hence, the recycling of metals and different fibre-based materials represents a vast market. In Finland, the use of solid recovered fuel (SRF), which mainly consists of soiled cardboard, plastics and wood, has been an efficient way to reduce the use of fossil fuels and also greenhouse gas emissions. The writer is Director General of the Chemical Industry Federation of Finland. Scanstockphoto 8

9 Chemistry everywhere in Finland Lean Times Demand Faster Results May 2010 Helsinki, Finland Oikotie ÄHTÄRI Tel Fax Sustainable competitiveness through high-performance processes VTT offers multitechnological know-how for the chemical and related industries. We help our customers to upgrade current processes and product qualities as well as to develop entirely new products, methods, and processes - carefully managing their environmental effects. Our particular strength lies in demanding experimental facilities in various research environments and under factory conditions. We also provide advanced modelling, simulation, and measurement tools to support and improve our customers activities. VTT TECHNICAL RESEARCH CENTRE OF FINLAND Technology and Strategic Product and service IPR and Assessments, testing, market foresight research development licensing inspection, certification Technology partnership Technology and innovation management

10 Scanstockphoto 2008 was a poor year for the Finnish chemical industry. Despite some hints of slackening activity, nothing prepared the industry for the sudden death of demand at the end of the year. In the spring of 2009, the situation improved only slightly. The sudden death of demand took the industry by surprise. 10

11 Finnish Chemical Industry in 2008 SUDDEN DEATH of Demand Pasi Ahde As demand collapsed only very late in 2008, yearly figures describing the Finnish chemical industry suggest no big drama. Unfortunately, this will probably change when 2009 figures become available. According to Manufacturing Statistics by Statistics Finland, the gross output of the chemical industry in 2008 was 19.9 billion, value added 3.4 billion and the number of people employed 35.8 thousand. Relative to Finnish manufacturing as a whole, the chemical industry produced 15.5% of the gross output, created 11.0% of the value added, and employed 9.5% of the work force. Measured by gross value of production and work force numbers, the volume of operations as a percentage of total products. The largest employer is the Finnish manufacturing chemical increased, but it remained industry plastic products sub-sector, in while 2008 basic unchanged when measured by value added. In 2008, the gross value of production was boosted by expensive oil, as prices of oil products and some basic chemicals followed the price of crude oil. Considered % together with the increasing number of personnel, the poor development of value added probably means that the profitability of the chemical industry has deteriorated. However, there is no more detailed information available, as the data from the yearly profitability study of the Chemical Industry Federation of Finland is not available. Measured in terms of gross output, production of petroleum and coal products (primarily petroleum refining) strengthened its position as the largest sub-sector of the Finnish chemical industry, followed by production of basic chemicals. In value added terms, the largest subsector was production of basic chemicals, followed by plastic products and medical chemicals comes second. Production decreased Measured by the value added data of the Finnish National Accounts, the 0.5%, respectively. Personnel in the Finnish chemical industry in 2008 Personnel in the Finnish chemical industry in 2008 Rubber products 9 % Plastic products 35 % Oil products 7 % production volume of the chemical industry was 8.4% lower than in Different statistics give a slightly different picture of this development. Measured as gross output at constant prices, production increased by 1.3%. During recent changes in statistical methods, the quality of the Finnish value added statistics was compromised. In the case of the chemical industry, gross output at constant prices is a more reliable indicator of production growth, indicating that the chemical industry grew more or less on par with the GDP. According to the Finnish National Accounts, there were some differences in growth rates between the main sectors of the chemical industry. Measured by gross output at constant prices, the 1.3% production growth is mostly due to rubber and plastic products, where the growth was 4.9%. In oil refining and basic chemicals and chemical products, the growth figures were barely positive. Gross output at constant prices increased by 0.3% and Basic chemicals 21 % Paints and inks 6 % Pharmaceuticals 11 % Total 35,800 Source: Statistic Finland Other chemical products 8 % Soap and detergents, toiletries 3 % 11

12 20,94E+01 29,09E+00 3,33E+00 8,59E-01 Employment 1 increased,72e-01 According 1 to Manufacturing Statistics,09E+00 by Statistics 4 Finland, the number of,01e+00 persons 4 employed in the chemical industry increased by more than 300, or,63e+00 9 about 1%, totalling 35,791 persons in,09e The increase mainly occurred in,00e+02 oil 100 refining. Unfortunately, at least part of the increase was based on an overly optimistic picture of the future development of the demand for chemical industry products. Layoffs during the first eight months of % 2009 have more than offset the increases 28 in New investments by the chemical 5 industry in plants and equipment was million, down from 1,258 million 3 in This great decline was mostly 4 due to smaller investments in oil refining, 13 but investment decreased in other sectors, 42 too. However, the decline does not yet 100 reflect the recent recession but was only a return to normal levels after a few years of above-average investment activity. Consequences of the recession will be seen in 2009 investment statistics. Due to rising oil and energy prices, the price increase for chemical industry products was fast, especially in oil products and basic chemicals. Prices of rubber and plastic products increased only 2.1%. This was less than general inflation, which was 4.1%. nnish chemical industry % ish chemical industry Growth in value of exports According to the Finnish Board of Customs, the value of exports of chemical industry products increased by 14.1%, totalling 10.5 billion. The growth was mostly due to higher prices for oil products. The value of exports of chemicals and chemical products increased too, but exports of rubber and plastic products declined. Finland s neighbours Sweden and Russia are the most important destinations for the exports of the chemical industry. Exports to the USA also surpassed the limit of one billion euros. Countries around the Baltic Sea seem to be strengthening their position as targets of exports, and both Poland and Germany are now among the most important export countries. However, the exports started to decline rapidly after summer The trough was reached in January 2009, when the value of exports was only half of the peak value reached the previous summer. The writer is Economic Counsellor at the Chemical Industry Federation of Finland * 0 Chemicals and chemical products Petroleum and coal products Rubber and plastic products Fixed investment of Finnish chemical industry (mill., in 2008 prices) 1500 Plastic products 9 % 1250 Rubber products Other chemical % products 4 % Total bill Source: Board of Customs 500 Fibres Gross value of the Finnish chemical industry 1 % in 2008 Gross 250 value of the Finnish chemical industry in Basic chemicals % * Chemicals and chemical products Petroleum and coal products Rubber and plastic products Plastic products Value 13 added % in Finnish chemical Rubber Other chemical industry products products (mill, in prices) % 3 % Total 19,899 mill Source: 6000 Statistic Finland Value added of the Finnish chemical industry in Value added of the Finnish chemical industry in Oil products % * Other chemical products 7 % Chemicals and chemical products Petroleum and coal products Rubber and plastic products Investment ratio in Finnish chemical industry (% of turnover) Investment ratio in Finnish chemical industry (% or turnover) Exports of the Finnish chemical industry by product group in 2008 Exports of the Finnish chemical industry by product group in 2008 Oil products 41 % Oil products 42 % Plastic products 24 % Rubber products 8 % Total 3,418 mill Source: Statistic Finland Soap, detergents and toiletries 2 % Basic chemicals 29 % Paints and inks 3 % Pharmaceuticals 6 % Soap, detergents and toiletries 1 % Basic chemicals 31 % Paints and inks 6 % Pharmaceuticals 19 % Paints and inks 3 % Pharmaceuticals 8 % Soap, detergents, toiletries 1 % * Rubber and plastic products Petroleum and coal products Chemicals and chemical products 12

13 f chemical products in 2008, mill urce countries Finnish imports Finnish of imports chemical of chemical products products in 2008, in 2008, mill mill The most important source countries Russia Germany Sweden Netherlands Belgium Great-Britain France Denmark rt countries Kazakstan of 309 Finnish chemical industry 30 by value though, that in the analysis 2008, fell far short mill of The biggest export countries of Finnish chemical 10 The biggest export countries industry by of value Finnish in 2008, chemical mill industry by value in 2008, mill 0 Sweden Russia United States Poland Germany Belgium Netherlands Great-Britain 50 France Denmark * Norway Employment in Finnish chemical 40 industry Employment in Finnish (1000 chemical persons) industry (1000 persons) * * 0 Employment in Finnish chemical 372 industry 314 (1000 persons) Chemicals and chemical products Petroleum and coal products Rubber and plastic products Chemicals and chemical products Petroleum and coal products Rubber and plastic products Fixed investment of Finnish chemical Fixed investment of Finnish industrychemical industry (mill., in 2008 (mill. prices), in 2008 prices) Fixed investment of Finnish chemical industry (mill., in 2008 prices) * Chemicals and chemical products Petroleum and coal products Rubber and plastic products Chemicals and chemical products Petroleum and coal products Coping with the Recession Employment in Finnish chemical Eindustry conomists have been accused of not (1000 being persons) able to forecast the downturn of 2008, which is not completely justified. For example, my article last year ran under the headline Changes in the Air for It must be confessed, Source: Board of Customs predicting the sudden death of demand at the end of the year. According to the Volume Index of Industrial Production by Statistics Finland, the production of the chemical industry during the first half of 2009 was 17% lower than same time in * 0 Source: Board of Customs A decline in the production index did not continue into this year, but despite some growth since December 2008 we are still far below the production levels of summer The chemical industry is plagued by the recession world-wide, and the Finnish chemical industry is not among Chemicals and chemical products Petroleum and coal products Rubber and plastic products Fixed investment the worst of hit. Finnish However, chemical there is some doubt as to whether or not this situation industry will continue. The most important (mill. domestic, in 2008 customer prices) of the chemical industry, the pulp and paper industry, is still in deep trouble, reflecting its structural problems. The outlook for exports is not very bright either. The most important destinations, Sweden and Russia are both in economic difficulties and in addition, the competitiveness of the Finnish chemical industry is hurt by the devaluation of the Swedish crown. However, according to the latest business confidence indicators, 2008* expectations are approaching neutral territory. This, of course, only means that companies expect the recent decline to come to an end, but at least the chemical industry is not more pessimistic than the rest of Finnish manufacturing. Chemicals and chemical products Petroleum and coal products Rubber and plastic products Value added in Finnish chemical Value added in Finnish industry chemical industry (mill., in 2008 (mill prices), in 2008 prices) * Chemicals and chemical products Petroleum and coal products Rubber and plastic products Scanstockphoto 13

14 REACH Established in order to share the studies and the costs of Reach implementation, the SIEFs are raising many legal questions in a wide range of areas including intellectual property and tort law. The most significant risk relating to SIEFs and consortia is, however, the potential violation of competition law through anticompetitive agreements. Nicolas Gardères Scanstockphoto Reach requires companies to share data, thereby indicating that they should meet and communicate on a regular basis. However, the resulting proximity between the companies tends to increase the risk that they will enter into anticompetitive agreements with one another and, more generally, violate the competition law. Data sharing is part of the compulsory information exchange of the SIEF (Substance Information Exchange Forum) framework as well as part of the optional, but nevertheless encouraged, consortia framework. Despite its role in protecting the environment and human health, Reach is not a safe harbour from competition law where companies are free to agree production quantities and determine prices. It is therefore important to 14

15 Fair Competition at Risk contractually determine the manner in which companies will communicate with one another and the terms under which they agree to share costs. Insufficient framework The SIEFs may implement these provisions by adopting written charters. It is clear indeed that the SIEF system needs order, as its regulatory framework is far from sufficient. The drafting of charters for most of the SIEFs thus appears necessary in order to clarify the roles of each set of participants and more than anything else, to establish clear rules concerning the communication of information within the SIEF, the cost sharing process and the methodology of work relating to the existing studies and data. The data provided by the members of the SIEFs must thus be taken into account or rejected only on an objective and scientific basis and must not be used as a means of discriminating against a company. As the SIEFs and consortia ultimately have the same purpose, they also face the same fundamental problem. However, regarding the question of competition law, consortia are perhaps under greater pressure as they are contractual agreements drafted and signed outside of the Reach regulation. The parties to a consortium agreement therefore need to be very careful in the way their contract is drafted and in particular the way they open membership. Indeed, the membership to a consortium can only be restricted by objective criteria. Another significant issue related to consortium agreements is the fact that all costs administration of the consortium and cost of studies must be shared by the members in a fair manner. Indeed, an equal allocation of costs between members without taking into account the size of the company may in some cases be seen as discriminatory. Nevertheless, the drafting of the contract is certainly not the biggest challenge that faces the members of a consortium. Indeed, by adopting these simple recommendations the consortium should be compliant with competition law. The main challenge concerns the concrete work of the consortium. While this form of cooperation has long since existed on an international level and is commonplace in the context of calls for public tender, it is not the usual form of cooperation for competitors and requires strict supervision. The performance of the contract requires holding meetings of the consortium and the establishing channels of communication between the members. It is recommended that a competition law specialist assists in the preparation of the meetings and, for the purposes of legal analysis, that the specialist receives all sensitive information that is to be circulated, as well as all the minutes of these meetings. The specialist may even attend the most important meetings in order to ensure that the law is respected. Two kinds of risks Two main categories of risks related to competition law violation within the activity of the consortium can be found. Firstly, there is a significant and intrinsic tension between Reach implementation and the respect of competition law. The amount of data that must be provided and shared and the difficulty for companies to understand the precise scope of their obligations is by itself a threat to competition law. Even in good faith, there is a risk that a company discloses data to competitors that should have remained secret. The second type of risk is much more difficult to contain as it is linked to the free will of companies: the decision to enter in an anticompetitive agreement. Outside of the consortium meetings, there will be a real temptation to discuss, even in an informal manner, strategy, prices and various prohibited figures. With a sense that they are not supported by their relevant national bodies or by Europe in complying with such a far reaching, stringent and expensive regulation, weakened companies might decide to organise the market in order to at least to survive the crisis or to damage or even kill off the competitors which stay out of the agreement. There are many ways in which companies can violate competition law by implementing the Reach regulation. As Reach is by itself partly incompatible with this body of rules the objectives are contradictory violation of competition law can follow naturally from a lack of care when trying to comply with the regulations set out in SIEFs and consortia. Moreover, through the obligation to share data Reach favours opportunities that endanger fair competition on the European market. The writer is a lawyer specialised in environmental law with the international law firm ADAMAS. 15

16 Worldwide Chemical Safety Mission Possible For more information, check out HELSINKI proclaimed itself the chemicals capital of Europe at the first Helsinki Chemicals Forum held in May This was with good reason, too: Finland s capital is also the location of the European Chemicals Agency, ECHA. The agency s client base is formed by all manufacturers and importers of chemical products worldwide essentially the majority of the users, too who operate in the chemicals business in the European Union area. This is due to the EU s new chemicals legislation, Reach, and its official proceedings. The agency received more than two million pre-registrations, and the number of clients in the actual registration may be around one hundred thousand, many of whom are operators outside the EU. No wonder Helsinki has already attracted experts, consultants and decision makers to hundreds of Reach meetings, and the level of activity can only increase in the future. EVEN if the number of delegates did fall as a result of the economic recession, the extremely wide international representation came as a surprise at the first HCF. Around 200 inquisitive guests attended from 31 countries. The best and most anxious questions about the future of global chemicals policy came from outside Europe. The inadequacy of worldwide discussion and interaction in the chemical industry along with the clear need to improve standardisation of legislation in the industry around the world emerged as the main findings of the forum. A good example is the way in which global harmonisation (GHS) of labelling of chemicals is already progressing. The congress audience were of the opinion that even strict regional legislation, such as Reach, will not remove the risks relating to the use of chemicals. Instead, they may even create artificial barriers to world trade. Representatives of the developing countries perceived various risks from transferring the manufacturing of the most hazardous chemicals to these countries. However, HCF 2009 was not a Reach seminar but a themed discussion platform where the subjects of competitiveness and innovation in the chemical industry, legislation, chemical safety and consumers were brought to the forefront. The forum received good feedback from the delegates. They gave special thanks to the panel-based sessions and to the high-level key-note speakers who gave talks at lunch and dinner. Feedback showed that delegates regarded the congress as interesting and of high quality, and people hoped that it would be continued. THE GLOBAL economic recession that started at the end of 2008 has turned out to be quite severe. It has struck industry and construction hard, and services have been similarly affected, albeit with a time lag. Businesses financial results for 2009 will be more modest than usual, which will be seen everywhere, for instance as a cooling in investment. The profitability of the chemical industry will be one of the main themes of HCF 2010 arranged for next May. The congress will include discussions on innovations and consumers, and in addition the role of chemistry in preventing climate change shall be highlighted. Isn t it in the interests of businesses to improve global chemical legislation for competition-related reasons only? Can you imagine policymakers reducing the requirements of Reach or extending the time table? How can we ensure adequate investment in innovation in present circumstances? What would be the role of the EU and the member states? These questions shall also be raised in Helsinki from 19 th to 21 st May The next HCF will also cover regulation to a greater extent than before, particularly preparation for actual registration of chemicals and the running of SIEF forums. The congress also aspires to create a framework for interaction between legislators, operators, and customers on different continents. The Helsinki Chemicals Forum 2010 programme is being planned in collaboration with ECHA and UNEP, amongst others. ECHA will organise its own stakeholder day as it did in connection with the previous event. Interest in this will be considerable when you remember the problem areas arising from the first phase of registrations of chemicals that is to be implemented next year. The forum, for its part, will provide the opportunity to study areas in greater depth, and it will allow interaction between the authorities and industry. Good-quality networking ranked among the most positive outcomes of the first HCF, and this will continue next spring. See you in Helsinki! Hannu Vornamo The author is the Secretary General of the Helsinki Chemicals Forum

17 Responsible Care Vastuu Huomisesta Breaking News! EBD Group joins BioTech Forum 2009 In the biotech and medtech industries, EBD Group is synonymous with partnering. Utilizing the platform partneringone ensures that BioTech Forum maintains its position as the top Scandinavian partnering event by providing delegates with state-of-the-art functionality, usability and on-site services. Combining the industry's most advanced collaboration software with best practices implementation, partneringone transforms conferences into world-class partnering events. Currently partneringone generates over 30,000 meetings annually and has become an important catalyst for the growth of the bio-economy. Experience the dynamics yourself by signing up for the 2009 proceedings at Welcome to Stockholm, November 25-27, 2009 Official media partner Finnish Chemical Industry and Responsible Care 2009 Responsible Care is the chemical industry s global initiative in health, safety and environmental issues. Finland joined in 1992 under the title Responsible Care Vastuu Huomisesta. In Finland already 107 companies have joined the initiative. Their production amounts to over 80 per cent of Finland s whole chemical industry production, and employ over 22,000 people. Chemical Industry Federation of Finland P.O. Box 4, FI Helsinki, Finland Tel Arranged by: Stockholm International Fairs Address: Stockholmsmässan Mässvägen 1 Älvsjö Tel: Fax: Visit for the results of the initiative 17

18 The Chemical Industry Facing Challenges and Providing Solutions Among the challenges of the next decade are energy and climate policy, material efficiency and sustainable use of natural resources. Chemistry and the chemical industry can provide solutions to many of these problems. Aimo Kastinen The chemical industry uses a lot of energy, but with its products we can also save energy. The best operators already have a positive energy balance. Chemistry can play a central part in solving climate- and energy-related problems of the future. Whether this in fact happens in the EU area and Finland shall be resolved in the next few years. It is essential that wise choices are made in all areas of energy policy. With short-sighted subsidy policy and taxation policy or emissionstrading solutions that have been poorly implemented, there may be long-term negative effects on the whole of society. Emissions trading raises the cost of energy The policy announcements concerning the EU s third emissions-trading period, starting in 2013, were made last December. As a result of a year-long debate, a compromise was reached in which the views of industry were also accommodated. However, fundamental questions such as determination of the carbon-leakage sector have been transferred for resolution via comitology procedures, and compensation procedures for electricity-intensive industry have been transferred to the national level. Emissions trading will expand in the third period to cover new basic industry companies in the chemicals sector that have a heat generation of more than 20 megawatts. Also included in the scope of application are new greenhouse gases, such as nitrous oxide. As a general rule, the companies will purchase emissions allowances needed by them via an auction. It has not yet been resolved as to which businesses belong to the carbon-leakage sector and will receive allowances free of charge. Initially, it seems that chemical companies fulfil the carbon-intensity and/or trading-intensity criterion of the emissions-trading directive, and thus they will receive at least part of their allowances free of charge. Based on experiences in the first periods, the effect of emissions trading on the price of electricity is known very well. The market price of electricity is determined by the most expensive means of generation at a given time, which in the Nordic countries is normally coalfired condensing. This form of pricing mechanism provides generators of hydroelectric and nuclear power with significant additional revenue and leads to a corresponding additional cost for energy users. The situation will become even more unfair in the third period. The price of electricity is one of the most significant cost factors in basic industries, so it is essential to find ways of making the situation more reasonable. So far, market-based means have included the establishment of a collective purchasing organisation or partnerships in energy production. At the start of the year, The Federation of Finnish Technology Industries commissioned a report from Pöyry Oy on the possibility of arranging a pricing mechanism whereby those buying electricity would pay the actual costs resulting from emissions trading to the electricity generators. In the model presented by Pöyry, this requirement would be satisfied, and it would not compromise the goal of carbon-free energy production. Innovations in chemistry help solve environmental and energy problems. 18

19 Scanstockphoto 19

20 COMMENT Reach Implementation in Trouble The operational hypotheses of those drafting the Reach regulation seem to have been flawed. The estimated volume of administrative procedures was as much as an order of magnitude smaller than the actual level. The SIEF collaboration between competing companies is not running as smoothly as expected. The IT systems of the European Chemicals Agency have not operated according to plan. Application instructions have arrived late. In practice, there is only a year left for the registration of the first phase. The number of problems will not diminish and, if anything, is growing. A huge amount of work has been done and is still being done in businesses so that the regulation can be enforced according to the planned schedule. However, if this turns out to be unfeasible, it should be possible to change the deadlines. So far, neither the EU commission nor the European Chemicals Agency has specified what kind of corrective measures could be undertaken if this is necessary. Aimo Kastinen Operating in Helsinki, Finland, the European Chemicals Agency is the authority to manage the Reach process at Community level. Päivi Ikonen In the emissions-trading directive, the link between emissions trading and the price of electricity was recognised along with the fact that the rising price of electricity may jeopardise the existence of electricity-intensive export industries in the EU. The opportunity for electricityprice compensation was provided to member states, but subsequent developments have started slowly. Finnish national policy was announced last November in a report issued to Parliament on energy and climate policy. This report deals primarily with solutions to be implemented in the decade commencing in The Government has prepared a new longterm paper which shall be presented to Parliament in the autumn. In addition, the Government has made specific decisions, such as the wind-power feed-in tariff decision, which means an additional annual cost of around 200 million euros for energy users. Energy taxation decisions, for their part, raise costs by several hundred million, as from The industry has actively raised its energy efficiency in two energy-saving periods implemented since During the third period which ends in 2016, an improvement in energy efficiency of 9 % is sought. Included in the agreement are all energy-intensive companies in the chemical industry and the majority of small- and mediumsized enterprises. Innovations in chemistry solve problems When solutions to climate and energy 20

21 Huge Task Under Way Implementing Reach has proven far more difficult than anyone had ever imagined, says Cefic, the European Chemical Industry Council. Reach is a very complex and demanding piece of legislation. Companies that have to register their substances need to have the data ready in less than two years if they are producing more than 1,000 tonnes of a substance per year. They also need to share their data and form Substance Information Exchange Forums (SIEF). Instead of 150,000 or so pre-registrations, the number turned out to be at least 2.7 million. This twentyfold greaterthan-expected number of pre-registrations has created huge difficulties both for the IT system in the European Chemicals Agency (ECHA) and with companies preparing registrations. ECHA recently launched an awareness campaign called The clock is ticking form your SIEF now, which intends to raise awareness of the urgent need for action if companies are to Scanstockphoto The Reach clock is ticking, but many problems need yet to be solved before chemical companies can form properly acting SIEFs. meet the first substance registration deadline of 30 November Much additional guidance for SIEF formation has been published by ECHA and the chemical industry, but it will be up to the chemical companies to solve all practical problems before they can establish a properly acting SIEF and prepare a registration dossier. It is extremely important that chemical manufacturers and importers manage to do this, as all other industrial branches depend on chemical substances. It will not be in the interest of anyone if companies fail to register their substances on time. Juha Pyötsiä The writer is an Assistant Director at the Chemical Industry Federation of Finland. Scanstockphoto TESS Toolbox to Help SMEs The product of an EU-financed project, TESS (Toolbox to Support Environmental and Sustainable Systems) is an easy-to-use set of tools especially intended to assist small- and medium-sized enterprises to comply with the Reach regulations and to migrate towards alternative, more sustainable manufacturing chains with lower impacts on human health and the environment. The toolbox is useful for all actors within Reach, including manufacturers, importers, downstream users and trade associations. It can also be used for solving case studies in Reach-related training. The TESS Toolbox is freely available, without cost, at Tuula Rantalaiho The writer is a Counsellor at the Chemical Industry Federation of Finland. problems and sustainable use of natural resources are sought, innovations in chemistry and products of the chemical industry play a pivotal role. Chemistry is producing lighter, stronger and more durable materials than before and is using less energy in the process. Totally new possibilities are provided by surface chemistry and nanotechnology. An example of the use of renewable energy is biofuels. With the help of chemistry, the energy input required by other activities is also reduced. Chemical technology can be used for example in the future recovery of carbon dioxide emitted from power stations; in construction work, we can benefit from lighter structures and better thermal insulation. Europe s chemical industry has a long heritage and a lot of expertise. Our global competitiveness is improved by the synthesis of information technology and materials technology. So, we have a good starting point for the exploitation of innovations. However, a condition for development is the encouragement of policy that supports innovation instead of restrictive standardisation. The recommendations of the EU commission s chemical industry high level group published in the winter will act as a good signpost in the future. The writer is a Director at the Chemical Industry Federation of Finland. 21

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