BRUSSELS--If the European Union (E.U.) gets its way, toxicology will soon be booming in Europe. And, to hear chemical manufacturers tell it, their industry will be in decline.

Last week, officials from the European Commission, Europe's executive body, met with industry and environmental groups here to discuss proposed legislation that would require chemical manufacturers to run extensive safety tests over 11 years on the 30,000 most common chemicals on the market, many of which have been used for decades. The proposal would also severely restrict the use of an estimated 1500 chemicals considered the most hazardous to humans and the environment. "The new policy introduces a radical paradigm shift," E.U. environment commissioner Margot Wallström told the conference. "It is high time to place the responsibility where it belongs, with industry."

The chemical industry, understandably, is up in arms. It estimates that testing will cost at least $7.5 billion, and the policy could "impose a regulatory stranglehold on our industry," says Alain Perroy, director-general of the European Chemical Industry Council.

At the root of this ideological fight is the so-called "precautionary principle." This concept, codified in the E.U. charter, states that governments should base regulatory policy on the significant possibility of risk, taking action even before all the data are compiled. In contrast, U.S. regulations are not imposed until there is concrete evidence of harm. "The United States is usually reactive when it takes steps to protect citizens against toxic chemicals," says Mary Graham, co-director of the John F. Kennedy School of Government's Transparency Policy Project in Cambridge, Massachusetts. The E.U. chemicals legislation, she adds, "is a remarkable effort because it is very expensive and it isn't in response to a public crisis."

Perroy maintains that industry already has safety data on its products and that if the E.U. legislation goes too far, it will be a "totally bureaucratic approach to build a knowledge base without use." Industry also predicts that the increased costs of testing, and the possibility that hundreds of chemicals could be taken off the market, could result in major job losses. Lobbyists cite a study commissioned by the Federal Association of German Industry, which predicts that in Germany alone more than 2 million jobs would disappear, a figure that E.U. officials say is hugely overblown.

The proposed legislation does, however, contain some good news for the research community: It would significantly loosen existing regulations on R&D. Under the current system, quantities of experimental substances of less than 1 metric ton are exempt from registration with the E.U. for a year. The proposed rules would lift the weight restriction and waive registration for 5 years, with the possibility of a 5-year extension. "This is good news," says Patrick Peuch, a director of product stewardship at BP Chemicals-Europe. The existing deadlines are often so tight they constrain evaluation and testing, he says.

Some in the industry do see a positive side to the legislation. Horst Mensel, a lobbyist at Bayer AG, believes that the new policy will encourage innovation by forcing companies to develop substitutes for chemicals deemed hazardous. Michael Warhurst of the environmental pressure group World Wide Fund for Nature argues that the proposed rules will create new markets for safer products and spur the creation of innovative safety testing and risk assessment tools.

A final draft of the proposed legislation is not expected before the end of this year, so industry is still lobbying hard. But the European Parliament, which must approve the new directive, has a strong environmental leaning so will likely try to strengthen it. Final approval by a council of ministers from E.U. member countries is expected in 2005 at the earliest, and individual members must then incorporate it into their national laws.