Could EU risk-based regulation stop innovation in the beauty industry?

The European Commission’s Chemicals Strategy for Sustainable Development aims to create a ‘toxin-free environment’ for all and is an important part of the EU’s zero emissions ambition – a key commitment of the European Green Deal (EGD).

With the end goal of the EGD in mind, many regulations are currently under review and the European cosmetics industry is currently in a period of continuous regulatory adjustment.

Indeed, when it comes to these developments, the main concern of the cosmetics industry is that some of the newly created policies being considered are not necessarily based on proven science and data and that these decisions may in turn place EU-based cosmetics companies at a competitive disadvantage all over the world.

The International Fragrance Association (IFRA) – the global representative of the perfume industry – has commented on this matter and published a number of recommendations for the EU mandate. One of these points requires decision-makers to “follow the science” and “base decisions on time-tested science and data – maintaining an exposure-based approach to risk assessment.”

What is the European Commission regulation on cosmetics?

At the annual conference Cosmetics Europe 2024, held in Brussels on 19–20^vol In June 2024, expert panelists took to the stage to review and discuss the regulations that currently impact the cosmetics industry beyond the “core” regulations: the Cosmetic Products Regulation (CPR), and the main observation was that classification and labeling of chemicals has a huge and unexpected impact on future NPD.

Commenting on the key takeaways from the conference, Cosmetics Europe CEO John Chave said that while there were many positive messages about the industry’s contribution to sustainability, its capacity to innovate and the potential of new technologies, much of the session was about a few challenges facing the industry, especially in regulatory matters.

Chave said the beauty industry usually focuses on the “core legislation” being the CRP, but a significant change in recent years is “how much we are influenced by external regulation.”

He highlighted that there is currently a lot of focus on CLP (classification, labeling and packaging of chemicals) and that one of the panelists noted that while it was originally about labeling, it is now about hazardous substances.

Chave noted that “the potential for the classification of hazardous substances to impact our ingredient palette right now is, in my opinion, quite significant.”

“The ingredient atmosphere continues to be challenging,” he continued. “At Cosmetics Europe, we have been discussing the challenges associated with natural complex substances over the last year. Many fragrances use natural, complex substances, and protecting ingredients in this context doesn’t really fit with the current regulatory paradigm that we have.”

“You can’t just look at the CPR regulation, you have to look at the whole regulation to understand the exact position of the industry, particularly in relation to the CLP regulation,” he explained.

He stated that while the industry is constantly trying to innovate, there is “ingredient risk”, which in turn means that “you can’t plan for innovation and investment, and I think that’s something that’s going to cause major problems,” he said .

“We spend so much time defending current ingredients that we divert investment away from what we need to create new ingredients, and that presents a significant challenge.”

This problem applies not only to the EU cosmetics market. In the neighboring UK market, industry body the Cosmetics Toiletries and Perfumery Association (CTPA) recently published its first-ever manifesto to present to the next government, which has also turned its attention to the issue.

“Basing regulations on inherently dangerous properties risks removing safe and beneficial ingredients from the market,” CTPA CEO Dr. Emma Meredith said in the manifesto.

Expect more of this and get ready to innovate

At the CEAC conference, during a lecture on “Weapons Threat: Regulation of Ingredients Beyond CPR”, Meglena Mihova, an expert in chemical regulations and managing partner at EPPA (a specialist advisory consultancy that manages compliance between business and EU institutions and governments) stated that all these regulatory changes have taken the cosmetics sector “out of its comfort zone”.

Mihova noted that the new regulations place more emphasis on “environmental” issues and in light of this, the industry “can expect more such problems in the future.”

Her advice was to “do more research on neurotoxicity and endocrine disruptors, as well as the environment.”

“You need to speak up now and have a say in the design of this,” she insisted. “We need to promote ongoing research. Go beyond what you know from the cosmetics regulatory system and look outside, because it has a much greater impact.

Changing the paradigm from risk to risk

Mihova noted that a potential “way out” of this looming challenge is a fundamental use “argument”: the idea is that many beauty products, like sunscreen and toothpaste, are necessary to prevent future health problems. She also advised companies to focus on functionality and efficiency.

However, it also acknowledged that materiality could not actually be recognized in terms of “luxury goods”. “Who can judge what is a luxury good? Is a cosmetic product a luxury good? – she asked.

Mihova said beauty and personal care brands and ingredient companies will need to “clarify the dynamics of their supply chains” because there will be aspects of the phenomenon that lawmakers don’t understand or know about.

She explained that “we can’t isolate ingredients for organic claims right now” because the regulations examine many aspects, such as whether a company is omitting hazardous chemicals from water supplies.

She advised companies to focus on environmental innovation and said: “Don’t get defensive – actively participate in the process.”

“As the political cycle changes, it’s time to step out of your comfort zone and get involved. You need to explain what you are doing. Take the time to educate, otherwise we will go into firefighting mode,” she said.

“Take on challenges and make constructive recommendations.”

ERIF (European Regulatory and Innovation Forum) Secretary General Jan Ahlskog also participated in the panel and described the current state of affairs as a “paradigm shift from risk to threat”.

For Ahlskog, the “basic use” argument for this defense was “useless” because “the world is complex.”

However, he also noted that in the light of the results of the last EU elections, “we will probably see a shift to the right in the EU”, which he believed would then result in a greater focus on competitiveness.

Ahlskog also stressed that “Member States are unable to cope with such a rapid pace of change.”

“Many inconstancies” and “extremely perceptual”

Meanwhile, partner at international law firm Mayer Brown, Pavlina Chopova-Lepretre, also said that CLP “has become central to the regulation of the cosmetics industry”.

“There used to be chemical labeling and there were cosmetics, but now there are more crossovers,” she said.

She explained that potential hazards can now include everything from endocrine disruptors to respiratory disruptors to ozone-damaging chemicals, and the first criterion by which these hazards are assessed is whether the substance is harmful to the environment or society.

The second criterion is whether there is an “acceptable alternative” that can be used as a substitute, which she stated is “extremely perceptive.”

“Large groups of substances can be combined and classified,” she explained. “However, there is very little guidance on this topic, and how you can be sure that the science you are referring to is correct is debatable.”

On stage, Chopova-Lepretre examined some of the formulations from a legal point of view and noted that “you can see so many classifications of so many substances and that’s why you can find different answers to the same question.”

She noted that one particular ingredient is still allowed to be used in places where: “A high level of disinfection is required, e.g. in a hospital or other similar places” and asked: “What are ‘other similar’ places?” Could this be beauty? like the living room?”

“Will toothpaste be considered a ‘luxury?’” she continued. “How that will be decided remains a mystery.”

“And will they be able to evaluate every use?” she asked.

“From a practical point of view, it’s a question mark,” she continued. “The way it’s worded right now is not good enough for me.”

Chopova-Lepretre also noted the “danger” that member states will draw inspiration directly from it and interpret it in different ways.

“It’s loose and poorly written – it’s going to take the lawyers some time,” she continued.

“Customers ask me if something qualifies as ‘essential,’ and I often don’t know the answer. I would argue that it is, but it’s not good for consistency,” she concluded.

“Departure from science”?

“It’s not just about moving towards a threat-based approach, we are moving away from science,” said IFRA’s director of global regulatory affairs, Cristina Arregui Garcia.

From her perspective, this “dilution of knowledge” was a challenge, and she noted that while the threat is the starting point for any regulatory decisions, “the industry currently has fewer opportunities to discuss it.”

“CSS is focused on accelerating these decisions, and this acceleration has a major impact on the beauty industry,” she continued.

She criticized the “lack of dialogue” and “failure to listen to the industry”, noting that a “more preventive approach” is now being used and some chemicals are being grouped together.

“The perfume industry is facing a defense of certain floral ingredients and we don’t have time to discuss our opinions – there is no dialogue. It is impossible to have a scientific discussion on this topic,” she said.

“This will significantly restrict the industry and it is happening now.”

Potential ban on the use of paracymene in cosmetic formulations

Arregui Garcia also mentioned the upcoming potential ban on the use of paracimene in cosmetic products.

“The discussion will take place in two weeks and the final decision will be made in September – the clock is ticking,” she said.

“Paracimene is present in thyme oil and is approved for higher intake levels,” she explained

Arregui Garcia said that the problem concerns “not only paracimene” and stated that “this problem related to natural substances must now be solved.”

“The impact on further development is large and we cannot accelerate the development of the situation in this way,” she said. “The classification is for hazard – use is not considered.”

So what are the prospects for the future of cosmetic formulation in the EU?

While Chave agreed that there are certainly challenges in some areas that need to be addressed, he remained optimistic about the future.

“The industry has always been dynamic and adaptive. There has never been a better time to implement this aspect,” he said.

“We look at the development of the industry over the last year and it is positive; has exceeded growth in recent years. This shows that our consumers need and value our products,” he continued.

“Stay engaged, be aware of the pace of the industry and be prepared to adapt,” he concluded.

What is the European Commission regulation on cosmetics?​

What is the European Commission regulation on cosmetics?