Essential oil products generate hundreds of millions euros for several countries in Central and Eastern Europe. New rules threaten the industry.
New rules by the European Union’s Chemical Agency (ECHA) would significantly impact the commercialisation and use of essential oil products.
This includes a wide variety of products consumers use, including everything from perfumes and other fragrances, to humidifier scents and insect repellents. The agency intends to adopt a new way of measuring harm caused by chemicals that doesn’t take into account the actual dosage that consumers will be exposed to.
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It is unfortunate that the ECHA has chosen this exact moment to put overly restrictive chemical regulations in place.
Following the European Green Deal’s footsteps and its vision of a toxic-free environment, the ECHA is replacing careful risk assessments based on actual exposure levels with a sweeping hazard-based approach grounded in hypothetical scenarios. The difference in practice between the two is radical. Where the first allows the use of a substance so long as it satisfies a safety threshold, the latter would prohibit compounds so long as something could go wrong.
The regulations will not spare even safe natural products from this effect, including steam and water-distilled (or manually pressed) extracts like essential oils. Under the current framework, policymakers classify them as complex natural substances. But all that would change with the hazard mentality, which would identify essential oils as mixtures of “more than one constituent substance” and restrict them as though they were volatile artificial materials, by legislation EU 2021/1902 on “toxic cosmetics”.
Impact in Central and Eastern Europe
The new ECHA guidelines will make it unfeasible for the sizeable Central and Eastern European essential oils industry to bring goods to the market.
The businesses in Bulgaria’s famous Rose Valley harvest around two tonnes of rose oil yearly and earn 445 million euros for the country in exports of essential oils and toiletries. Similarly, the Tedre farm in Estonia produces 2.5 hectares of world-class raspberries and extracts raspberry oil based on a proprietary carbon monoxide method. Lithuania created 379.9 million euros worth of cosmetics exports from mint, chamomile, juniper, and spruce emulsions.
Finally, Hungary benefits from 713.78 million euros of beauty industry exports. If only one part of a rose, raspberry, or mint product could be toxic or highly allergic, their goods will receive a harsh warning label at best. At worst, policymakers will make sure that they cannot commercialise these products at all.
Firms in Bulgaria, Estonia, Lithuania, and other Central and Eastern European countries are smaller than most international conglomerates and cannot pay the extra costs of compliance; instead, they will withdraw their goods from exchange entirely.
The last thing Central and Eastern Europeans need right now is needless red tape complicating consumers’ daily lives. The ECHA’s overly cautious approach would only add fuel to the fire. Inflation, the general rise in prices across the economy, has hit Central and Eastern European countries harder than most, leaving most people unable to afford as much as they did before and devaluing their savings.
Annual inflation rates are projected to be higher than the 2023 EU average of 7.1 per cent (6.1 in the euro area) in countries such as Bulgaria (8.6 per cent), Lithuania (10.7 per cent), Estonia (11.2 per cent), and Hungary (a whopping 21.9 per cent). Yet the hazard-based process will ultimately exacerbate inflationary pressures.
Convincing the EU to change course
As the insights of economics show, the lower supply coupled with the same demand results in higher prices, driving inflation forward and causing more suffering to ordinary buyers. For all its good intentions, the hazard-based mentality will deteriorate Central and Eastern European consumers’ purchasing power and living standards.
The way to stop the worst scenario from materialising is to convince EU regulators to change course.
Some member states, Bulgaria among them, have already acted via the Permanent Representatives Committee.
On June 30 this year, the Committee requested the European Commission re-evaluate the status of essential oils as “more than one constituent substance” four years into the new legislation. All Central and Eastern European states should support the request.
Moreover, they should champion the reinstatement of a risk-based mentality as the only science-driven option that keeps consumers safe without sacrificing their economic well-being.
Central and Eastern Europeans would have one less thing to worry about.
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