New EU Eco Design Law – “Making sUstainable Products the Norm” or Empty Shell?
At the end of March, the European Commission (Commission) presented the Sustainable Products Initiative (SPI) as part of a ‘Circular Economy Package I’, together with a Sustainable Textiles Strategy, and proposals for a new directive empowering consumers for the green transition (please see Sustainability Outlook March 2022), and a new Construction Products Regulation. In its new Circular Economy Action Plan (CEAP 2.0) of March 2020, the Commission had foreseen adopting the SPI in 2021.
The Commission aims at “making sustainable products the norm” and reducing negative life cycle environmental impacts of products, while benefitting from efficient digital solutions, by setting a framework for Ecodesign requirements, creating an EU digital product passport and tackling the destruction of unsold consumer products.
In particular, the SPI includes the proposal for an Ecodesign for Sustainable Products Regulation (ESPR), which would repeal the current Ecodesign Directive 2009/125. It establishes a horizontal framework and broadens the scope of the Ecodesign Directive beyond energy-related products, i.e. beyond any product that has an impact on energy consumption during use. The new Regulation would apply to all physical goods, including components and intermediate products, except food, feed, medicinal and veterinary products, living plants and animals, and products of human origin. According to the Commission’s explanatory memorandum, the ESPR is meant to address products that are not covered by existing legislation or where that legislation does not sufficiently address sustainability, and Ecodesign requirements in the delegated acts that it will adopt cannot supersede requirements set in legislative acts (of the Council and European Parliament).
The proposed regulation provides a framework for the Commission to adopt delegated acts with specific requirements for a product or group of products, following the approach of the current Ecodesign Directive. It would task the Commission with adopting a Working Plan with a list of products for which it plans to adopt such delegated acts, covering at least three years, thus providing some predictability. The Commission would have to prioritise products based on their potential contribution to the EU climate, environmental and energy objectives, and for improving the product aspects without disproportionate costs to the public and economic operators. The Commission stated that it has preliminarily identified textiles, furniture, mattresses, tyres, detergents, paints, lubricants and intermediate products like iron, steel or aluminium as suitable candidates for the first ESPR Working Plan. It expects to prepare and adopt up to 18 new delegated acts between 2024 and 2027 and 12 new delegated acts between 2028 and 2030. In its proposal, the Commission foresees budget implications, as it would need significantly more staff to implement the Ecodesign framework. It estimates that it will have to increase its dedicated staff from currently 14 to 44 in 2023 and up to 54 in 2027.
In principle, each delegated act will provide:
Performance requirements that products must comply with. These are in particular Ecodesign requirements regarding durability; reliability; reusability; upgradability; reparability; possibility of maintenance and refurbishment; presence of substances of concern; energy use or energy efficiency; resource use or resource efficiency; recycled content; possibility of remanufacturing and recycling; possibility of recovery of materials; environmental impacts, including carbon and environmental footprint; and expected generation of waste materials.
Information requirements for all these sustainability aspects. Delegated acts must include requirements that will enable the tracking of all substances of concern throughout the life cycle of products, unless such tracking is already enabled by another delegated act under the ESPR. The delegated acts will also determine the modalities for making the required information available: on the product, its packaging, labels, in a user manual, on a website or in the digital product passport (DPP). They must indicate the type of data carrier to be used and how long the DPP must be available (unless a product category is exempted from using the DPP).
According to the proposal, the DPP should not replace but complement non-digital forms of transmitting information. The Commission may exempt products from the requirement to have a DPP, in particular where other EU law includes a system for providing information in digital form.
The Commission proposes to define substances of concern as substances that (a) meet the criteria for and have been identified as substances of very high concern (SVHC); (b) whose classification is harmonised under the CLP Regulation 1272/2008 regarding specific hazard classes; or (c) negatively affect the reuse and recycling of materials in the product. – In particular, the last alternative could lead to a lot of discussion.
The proposal allows the Commission to formally recognise industry-designed self-regulation as an alternative to delegated acts (under certain conditions and following a certain procedure).
Furthermore, economic operators discarding unsold consumer products would have to disclose the number of such products per year, the reasons for discarding them and information on the amount of (such) products that they have delivered to preparation for re-use, remanufacturing, recycling, energy recovery and disposal. The proposal itself would not ban this practice outright. Rather, it would empower the Commission to prohibit the destruction of certain unsold products through delegated acts. Small and medium-sized companies (SMEs) would be exempted from the transparency obligation as well as such prohibitions, unless the Commission provides otherwise, in particular to prevent circumvention by larger companies.
Companies should neither expect immediately comprehensive and clear requirements from this proposal, nor dismiss it as an ‘empty shell’. Rather, they should understand it as a framework in which the future requirements for their goods may be set, and follow and get involved in the processes foreseen depending on the priority that the Commission will give to their products. Whether the proposal could make a big difference for a given business will largely depend on the combination of two aspects:
Is the company already used to the Ecodesign framework, as its products are energy-related? – Many products have an impact on energy consumption during their use. However, for some of the product categories that the Commission wants to prioritise, as well as intermediate products, the Ecodesign framework is new.
How quickly will the Commission develop and adopt the delegated acts with concrete requirements for the companies’ products? – So far, the Commission has needed many years to develop Ecodesign requirements for 31 energy-using product groups.
Furthermore, even before the adoption of the proposal, they should watch out for the EU Member States in the Council and in particular the European Parliament filling what they might perceive as an empty shell with concrete requirements, even before the Commission gets to implement the process that it has proposed. For example, in a first exchange of views between the responsible committee and the Commission, multiple parliamentarians questioned why the proposal does not ban the destruction of unsold consumer products outright.
The Commission has invited feedback on the proposal until 3 June. It has submitted it to the Council and European Parliament for amendment and adoption, following the ordinary legislative procedure. The Commission plans to launch a public consultation on the categories of products for the first ESPR Working Plan by the end of 2022.