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Better Regulation tools and regulatory predictability should continue to guide the ‘twin’ transition (green and digital)

IFRA supports adherence to the European Commission’s Better Regulation principles, which call for systematic assessment of the economic, social and environmental impacts of policy action and ensure a consistently high quality of proposed legislation.

This includes integrating strategic foresight in policymaking to ensure that regulation addresses key challenges in a targeted manner that increases economic, health, social and environmental resilience.

The 2021 Strategic Foresight Report presented by the European Commission identifies “Ensuring sustainable and resilient health and food systems” as the first of ten strategic areas where the EU must strengthen its response to global challenges and enhance its global leadership.

During the COVID-19 pandemic, fragrance manufacturing has played a key role as a ‘critical infrastructure’ in the fight against the virus.

Vital products including hydroalcoholic gels used in hospitals, pharmacies and elderly care facilities, as well as sanitary, hygiene and disinfecting products, rely on the sector’s capacity to continue operating as an essential component of the supply chain.

Our members have played a crucial role in ensuring continued access to vital products and in many cases diverted resources to supporting pandemic control.

Beyond the immediate response to the pandemic, our sector is also committed to building increased resilience for the long term and tackling global megatrends. This includes fully leveraging the opportunities of the digital and green transition by continuing to prioritise innovation and applying cutting-edge technologies to achieve sustainable growth.

IFRA also stresses the importance of leveraging digital tools to the benefit of citizens and businesses across Europe. By engaging and informing consumers in an innovative way, digital consumer information can help create a culture of better-informed EU citizens in support of the green and digital transitions.

It can also help reduce packaging waste by limiting the size of packaging and decreasing the need to destroy outdated labels.

IFRA therefore supports a coordinated EU approach to promote uptake of such tools across business sectors, ensuring that small enterprises are empowered and vulnerable customers are supported through the digital transition.

DID YOU KNOW?

Artificial intelligence is being actively explored and developed in the fragrance industry.

Francis Kurkdjian, perfumer-creator and co-President of the International Society of Perfumer- Creators (ISPC) stressed that “Without the human, all you get is a blend.”

That said, data-driven innovation is in development in the fragrance industry, and the interaction between human and machine drives the creative process.

Perfumers are using artificial intelligence to create new fragrances: to find the most efficient dosage between two ingredients to reduce fragrance oil concentration, to pair it with something complementary that makes its effect more powerful, or to measure how intensely we would smell the scent over time.

Artificial intelligence also limits environmental impact, offering a reduced number of trials or proposing alternatives to natural ingredients available only in limited amounts in nature. For example, rose may be enhanced by other notes to preserve the use of the rare and natural oil.

Consistency in policy and regulatory stability is essential for innovation.

When considering changes to the current regulatory framework, the possible impact on predictability, legal certainty and long-term investment must be considered. Investment in R&D by the fragrance industry is high, at around 8% of net sales, as fragrance companies develop new innovative means and technologies for product differentiation, understanding consumer trends and advancing sustainable production.

Innovative solutions and sustainable chemistry are vital to achieving a climate neutral, circular, digital, safer, cleaner, and strategically autonomous Europe.

By ensuring regulatory predictability, policymakers can support the sector’s stability and capacity to make investments for the future.

SMEs are particularly susceptible to outsized burdens and costs caused by new regulations and need time to adapt when new regulations are imposed as they are, often lacking the economic resources, technical capacities and personnel of larger firms.

They have also been disproportionately affected by the economic impact of the COVID-19 crisis. It is important that they be well informed and consulted during the policymaking process, and that any regulatory change takes into account the potential impacts on small enterprises, including through systematic application of the ‘SME test’.

Regulatory predictability is notably a key success factor for REACH. Several proposals introduced in the CSS have the potential to drastically alter the rules of REACH and other chemicals legislation, both in terms of which substances are understood to be ‘of concern’ and in terms of how risk management processes are subsequently pursued for these substances.

IFRA therefore stresses the need to assess the implications and costs of applying legislation, especially for SMEs, including with regard to any revision of REACH.

IFRA also highlights the importance of reality checks on implementation to ensure that proposals are economically and technically feasible and perform as expected.

Finally, IFRA welcomes the Commission’s adoption of a ‘one in, one out’ approach to legislation, which ensures that any new introduction of a regulatory burden is offset by removing an equivalent burden in the same policy area.

While the primary test remains whether the benefits of new legislation outweigh the costs, ‘one in, one out’ offers a powerful and complementary way to guard against accumulated regulatory burdens and ensure policymaking pays attention to process as well as objectives.

The fragrance industry is a resilient and strategic sector

Policymaking should encompass policy consistency and regulatory stability to build increased value chain resilience and tackle global megatrends.