The report, by the German division of Arthur D Little and commissioned by the European Parliament's Industry, Research and Energy Committee, claims that the REACH (Registration, Evaluation and Authorisation of CHemicals) proposals will lead to a 2.9 per cent loss in GDP, and a 24.7 per cent loss in production.
The study highlights a loss of innovation capacity and its conclusions state that "costs will burden mainly price-sensitive products. Changes in time to market, duty of authorisation and duty for disclosure are issues which touch the innovative power of the European chemical industry."
But it has already been met with scepticism by those who claim the data is based on an earlier study conducted by the Confederation of German Industry, and reveals nothing new.
REACH will make industry responsible for producing data on the properties of chemicals and for assessing the risks related to their use. By its own admission, the study had a narrow remit and was limited to the effects on Europe's chemical industry. It did not attempt to address the wider potential environmental and health gains.
The report concludes that 'Costs will burden mainly price-sensitive products. Changes in time to market, duty of authorisation and duty for disclosure are issues which touch the innovative power of the European chemical industry', according to a report on the CORDIS news service.
The Commission's claims that REACH will in fact be a catalyst for innovation is rejected by the study on account of competition from outside of Europe, where regulations are less restrictive:
"'Industry does not expect an immediate innovative push. For this to happen, global implementation of the EU substances policy would be a fundamental prerequisite. In such a situation, all products would be manufactured under comparable conditions and every producer would be confronted with the effects of the new substances policy. [...The] producer with the most innovative product would have a competitive advantage and so there would be an incentive for innovation," it claims.
At a meeting held last week to present the findings of the study, Green MEP Rebecca Harms said "There are too many assumptions in the study and the study is not new." Arthur D Little's Ralf Baron replied that the work was completely independent but was based, to some extent, on an extrapolation from the previous German study.
The report is sceptical that REACH will lead to the development of new chemicals. "The easing of registration requirements for newly developed substances tends to be regarded as insignificant in comparison with the additional burdens," it said.
"The majority of innovations are not based on newly developed substances and their use but on the exploitation of known substances for new applications."
The European Commission is currently in the process of conducting interviews with business representatives on the likely impact of REACH, and is scheduled to publish its results before the end of the year.