By:Mark Schaub (肖马克), Effie Liu (刘冠男) and Zheng Wei (郑未).
China's government does actively direct industrial policy and the recent Industrial Structure Adjustment Guidance Catalogue (2019) ("2019 Industrial Catalogue") issued by China's National Development and Reform Commission (CNDR) which came into force on 1 January 2020 directly affects the cosmetics industry.
Based on the 2019 Industrial Catalogue China is set to ban the production of new cosmetic products containing microbeads by 31 December 2020. Sales of existing cosmetic products containing microbeads will be prohibited by 31 December 2022.
China's war on microbeads will first target manufacturing of microbead-containing cosmetics and later the ban will expand to cover sales activities.
USE OF MICROBEADS IN COSMETICS
Microbeads are not specifically defined in the 2019 Industrial Catalogue or any other laws and regulations in China. According to the United Nations Environment Program (UNEP) microbeads are small pieces of plastic particle which are smaller than 5 millimeters .
Microbeads are widely used in personal care and cosmetic products, such as facial scrubs, cleansers, sunscreen and eye shadow. Microbeads support a range of effects including film formation, exfoliation, emulsification and glittering effect. For this microbeads are commonplace in the sector.
REASONS FOR THE BAN
China's ban is in line with similar moves by the UK, the U.S. and New Zealand. The overarching purpose is to tackle the country's microbeads pollution problem.
China has been looking critically at microbeads for some time. Back in 2017, cosmetics and cleaning products containing microbeads were listed as products with a high pollution and high environmental risk by China's former Ministry of Environmental Protection (now the Ministry of Ecology and Environment). According to the UNEP report most microbeads in cosmetics and personal care products contain non-degradable polymers that may take hundreds of years to break down.
While there is no clear evidence that plastic microbeads have a direct detrimental effect upon human health, there are concerns that microbeads from cosmetic and personal care products will wind up posing a threat to ecosystems and biological diversity as they end up in the ocean.
IMPACT UPON COSMETICS COMPANIES
Domestic cosmetics manufacturing companies now face a race with a tight deadline (i.e. end of 2020), to develop alternative ingredients for microbeads. International cosmetics manufacturers have a bit more time as imported cosmetics containing microbeads will be permitted two extra years (i.e. end of 2022).
Replacing ingredients will likely lead to increased costs. Cost increases from both: (i) R&D activities, and (ii) replacement materials very likely to be higher cost than microbeads (their low cost is one of the reasons they are so pervasive through the industry).
Although costs are important an even greater issue is that the replacement ingredient will need to be already used in cosmetics in China. If not and such use is a first then the company will need to undergo a tedious process for new ingredient registration before cosmetics with the new ingredient can be launched on the Chinese market. Major market issues will arise if the product cannot be sold seamlessly on the Chinese market.
PART OF AN INTERNATIONAL TREND
There has been growing concern about microbeads in the marine environment globally in recent years.
The British government banned the production of microbeads in rinse-off cosmetics and cleaning products in England from 9 January 2018 and followed this by a sales ban on 19 June 2018. Other countries including USA, Switzerland, Italy, Canada and New Zealand have also taken measures to ban the use of microbeads in cosmetics.
However, action is not limited to the government. Increasing numbers of cosmetic companies have actively committed to support the removal of microbeads from cosmetics. In 2013, the Johnson & Johnson became one of the first companies to undertake to remove microbeads from their cosmetic and personal care products globally. Proctor & Gamble, Shiseido and Estee Lauder have also made public commitments in this regard.
Few people will be opposed to the ban on microbeads. The regulation is welcome from a number of perspectives – it is good for the environment, it reflects concerns of consumers, it requires companies to be socially responsible and it is further evidence that China takes the environment seriously.
However, the clock is ticking for cosmetics companies – domestic and international alike. Alternative ingredients need to be sourced quickly. Cosmetics companies will face constraints in possible cost factors but also due to the rigidity of the Chinese system for using new ingredients. Companies failing to take action quickly may find themselves locked out of the world's largest market in the very near future.