NIS2 for Chemicals: Manufacture, Production and Distribution

In this lesson

Quote Annex II, point 3, exactly, and break it into its three activities: manufacture of substances, distribution of substances or mixtures, production of articles.
Read the REACH definitions the row borrows, manufacturer, distributor and article, and the conditions hidden in them.
Identify who the row leaves out on its wording, and declare as open the questions it does not settle.
Identify the legal person that is the entity, and write a scope memo a supervisor can follow line by line.

One row among the other critical sectors

Annex II of Directive (EU) 2022/2555 is headed “OTHER CRITICAL SECTORS”. Point 3 is the manufacture, production and distribution of chemicals. The annex has three columns, sector, subsector and type of entity, and for point 3 the subsector column is empty: chemicals has no subsectors. When a Member State builds its list of entities, article 3(4)(c) asks for “where applicable, the relevant sector and subsector referred to in Annex I or II”. A chemical undertaking declares a sector and no subsector.

Unlike point 5, manufacturing, which uses NACE divisions for five of its six subsectors, point 3 borrows definitions from the REACH Regulation. And the annex to Directive (EU) 2022/2557 on the resilience of critical entities (CER) has no chemicals row, which matters for the class (lesson m1l2).

Point 3, word for word

Sector column: Manufacture, production and distribution of chemicals. Subsector column: empty. Type of entity column:

“Undertakings carrying out the manufacture of substances and the distribution of substances or mixtures, as referred to in Article 3, points (9) and (14), of Regulation (EC) No 1907/2006 of the European Parliament and of the Council (2) and undertakings carrying out the production of articles, as defined in Article 3, point (3), of that Regulation, from substances or mixtures”

Footnote (2) identifies Regulation (EC) No 1907/2006 concerning the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH). The row describes three activities. Any one of them makes an undertaking of the point 3 type; the size test comes next.

Which text of REACH this course quotes

REACH, art. 3

REACH has been amended since 2006; the definitions below are quoted from the Publications Office consolidated text of 23 June 2025, which is not the authentic text: it states that it “is meant purely as a documentation tool and has no legal effect”, the authentic versions being those published in the Official Journal. Where an amendment replaced a word, the consolidated text marks it; those marks are left out of the quotations.

First activity: manufacture of substances

REACH, art. 3(1), (8), (9)

Point (1) defines a substance as “a chemical element and its compounds in the natural state or obtained by any manufacturing process, including any additive necessary to preserve its stability and any impurity deriving from the process used, but excluding any solvent which may be separated without affecting the stability of the substance or changing its composition”. Point (8) defines manufacturing as “production or extraction of substances in the natural state”. Point (9), the one the annex cites, defines a manufacturer as “any natural or legal person established within the Community who manufactures a substance within the Community”.

Read together:

Both the person and the manufacture must be in the Union: a Union company selling substances made in its group's plants outside the Union is not their manufacturer under point (9).
Manufacturing includes extraction. On the wording, an undertaking that extracts substances in the natural state carries out manufacture of substances; whether the legislator meant point 3 to reach extractive undertakings is not settled by the text.

Second activity: distribution of substances or mixtures

REACH, art. 3(2), (12), (14)

A mixture is “a mixture or solution composed of two or more substances” (point (2)). Point (14) defines the distributor: “any natural or legal person established within the Community, including a retailer, who only stores and places on the market a substance, on its own or in a mixture, for third parties”. Placing on the market, in point (12), means “supplying or making available, whether in return for payment or free of charge, to a third party. Import shall be deemed to be placing on the market”.

Retailers are named. A retailer of paints, solvents or cleaning products is a distributor under point (14); whether it is in scope depends on its size (lesson m1l2).
“Only” is a real condition. A REACH distributor does nothing to the substance but store it and place it on the market. A manufacturer selling its own production is not a distributor; it is already covered as a manufacturer.
The “and” reads most naturally as a list. The row cites two separate definitions describing two different actors, and the sector heading names manufacture and distribution as activities in their own right. Since a distributor only stores and places on the market, no undertaking is both manufacturer and distributor of the same substance; a cumulative reading would cover only undertakings that manufacture some substances and distribute others, leaving pure distributors out. The text is not explicit: this course follows the list reading; check that your national transposition does too.

Third activity: production of articles from substances or mixtures

REACH, art. 3(3), (13), (24)

Point (3) defines an article as “an object which during production is given a special shape, surface or design which determines its function to a greater degree than does its chemical composition”. In REACH terms, producing an article is a use: point (24) defines use as “any processing, formulation, consumption, storage, keeping, treatment, filling into containers, transfer from one container to another, mixing, production of an article or any other utilisation”. A producer of articles that neither manufactured nor imported the substances it uses is, in REACH terms, a downstream user of them (point (13)). REACH also defines the producer of an article, in point (4), a point the row does not cite.

The definition is broad: a moulded part, a film, a fibre or a tyre is an object whose shape, surface or design determines its function more than its chemistry does. The row does not confine this limb to the chemical industry, and the sector heading, which speaks of chemicals, does not narrow the wording of the type-of-entity column. How far the limb reaches is the largest open question of the row.

What the row does not name

Importers. REACH defines the importer separately (point (11)) and the row does not cite that point. Import is deemed placing on the market, so an importer that only stores and resells may fit the words of point (14); whether the row reaches it is open.
Formulators of mixtures. A paint, adhesive or detergent maker mixing purchased substances is a downstream user: formulation and mixing are uses. It does not manufacture substances unless its process creates them, a mixture is not an article, and it does more than only store and place on the market. On one reading it is outside the row; on a broader reading of distribution of mixtures as an activity rather than a status it is inside. The text does not decide.
Other downstream users. Point (13) says “A distributor or a consumer is not a downstream user”; a plant that consumes chemicals in its process without manufacturing substances or producing articles is not named.
Carriers and storage providers. A carrier does not place goods on the market; whether a warehouse storing a client's chemicals does so for third parties is a question of fact and contract.
Waste. REACH article 2(2) provides that waste “is not a substance, mixture or article within the meaning of Article 3 of this Regulation”. Because the carve-out is expressed through article 3, the definitions arguably carry it into the annex; waste management has its own row, Annex II, point 2.

An open question is recorded, not resolved by assumption: write down the reading you adopt and why, and check national guidance on /transposition.

Overlaps with other rows

Annex I, points 1 and 5; Annex II, point 5

One undertaking can be of several types. Annex I lists “Operators of oil production, refining and treatment facilities, storage and transmission”, “Operators of hydrogen production, storage and transmission” and “Entities manufacturing basic pharmaceutical products and pharmaceutical preparations referred to in section C division 21 of NACE Rev. 2”. A refinery, a hydrogen producer or an active-ingredient plant may also manufacture substances in the REACH sense. Some manufacturers under Annex II, point 5, also produce articles from substances or mixtures. Record every type you are: an Annex I type changes the class.

Who is the entity?

Art. 2(1), 6(38)

Article 2(1) applies to “public or private entities of a type referred to in Annex I or II”, and article 6(38) defines an entity as “a natural or legal person created and recognised as such under the national law of its place of establishment, which may, acting under its own name, exercise rights and be subject to obligations”. A group with a production, a sales and a logistics company has three legal persons to assess, each against the row and then the size test; a plant is assessed through the company that operates it.

Profile	Point 3 activity	Reading	Next step
Plant synthesising substances in the Union	Manufacture of substances	Within point (9)	Size test
Chemical wholesaler storing and reselling drums	Distribution	Within point (14)	Size test
Plastics converter moulding parts from granulate	Production of articles	Within point (3) on the wording	Size test, record the reading
Formulator blending purchased substances into coatings	None clearly named	Open question	Written reasoning, national guidance

In practice

A fictional group, here called Orvane Chemicals, has four legal persons in the Union. Orvane Production synthesises intermediates and specialty substances at one site and employs 640 people in annual work units. Orvane Coatings, 210 work units, blends purchased resins and pigments into industrial coatings. Orvane Polymers Parts, 140 work units, moulds technical parts from granulate. Orvane Trading, 60 work units, imports substances from the group's plant outside the Union and resells them from its warehouse. The four are linked enterprises, so each is measured with the group's data and none is small (lesson m1l2).

Its scope memo has one line per legal person. Production: manufacture of substances, point (9). Polymers Parts: production of articles, point (3), reading recorded. Coatings: formulation is not named; the memo sets out both readings, notes that one line reacts monomers in situ, which may be manufacture of a substance, and asks counsel to check national guidance. Trading: an importer; open question under point (14).

What a supervisor will ask

Which activity of Annex II, point 3, do you carry out? A scope memo quoting the row and the REACH definition relied on, activity by activity.
Why do you consider an activity outside the row? The written reasoning on formulation, import or storage, with the national guidance consulted.
Which legal person is the entity? A group chart showing which company manufactures, distributes or produces articles, and at which sites.
Are you also of an Annex I type? The check against the energy and health rows.

Key points

Annex II, point 3, has no subsectors. It covers three activities: manufacture of substances, distribution of substances or mixtures, and production of articles from substances or mixtures.
It borrows REACH article 3, points (9), (14) and (3). The definitions quoted here are those of the consolidated text of 23 June 2025, which has no legal effect.
A REACH manufacturer is established and manufactures in the Union; a REACH distributor, retailers included, only stores and places on the market.
Importers and formulators of mixtures are not named; producers of articles are named in terms that go well beyond the chemical industry. Declare these questions as open.
Assess each legal person, and record any Annex I type you also are.