As part of its ambitious European Green Deal growth strategy to make the EU climate neutral by 2050, the European Commission has unveiled radical proposals to overhaul product design and labelling. The new legal framework plans to boost the circularity of a wide variety of products, including electronics, ICT (Information and Communications Technology) products and textiles, plus intermediate products like iron and steel. With new rules on labelling and reporting on the number of unsold goods discarded annually, manufacturers as well as retailers and online marketplaces will fall under the scope of these ambitious plans to reduce the climate impact of products sold in the EU single market.
What has been proposed?
Today, the European Commission published its Sustainable Products Initiative (SPI). It repeals the existing Ecodesign Directive and creates a new harmonised regulation, whilst also amending the market surveillance regulation. Currently, Ecodesign provides rules to improve the environmental performance of energy-related products, like vacuum cleaners and fridges, setting mandatory energy efficiency requirements. The market surveillance regulation harmonises EU level requirements on non-food products to protect consumers, health and safety, and the environment.
New design requirements
The new proposal establishes a legal framework for setting Ecodesign requirements on a large variety of products, going beyond the current energy-related products scope. The framework expands Ecodesign in two ways:
- Design rules: Ecodesign will introduce new requirements on material efficiency, presence of substances of concern in products, resource efficiency, upgradability and repairability, durability, recyclability, recycled content, reducing carbon and environmental footprint. Not all products will be subject to the same Ecodesign requirements – it will depend on a life-cycle assessment of each product.
- Scope of products: Besides electronics, Ecodesign rules aim to cover all physical goods placed on the market. The list of products covered will be decided once the regulation has been adopted by legislators, but the first list is likely to include furniture, mattresses, tyres, detergents, paints, and lubricants, as well as intermediate products like iron, steel and aluminium. As a matter of principle, the new regulation will not apply to products covered by existing product-specific legislation (e.g. batteries, toys, packaging), but the Commission could set concrete requirements at product-specific level based on the new regulatory framework in the future, and will check for any overlaps/conflicts between existing legislation and the new framework. Food, feed and medicines are excluded from the scope.
The European Commission will adopt supplementary legislation in the form of delegated acts for each product category, where full design and labelling requirements will be listed.
Labelling and digital passports
The Commission will introduce new labelling requirements, including a framework for a mandatory EU Digital Products Passport. Products can only be placed on the market if a product passport is available. The passport will make information freely available, covering the entire value chain, and will complement product manuals and standard labels. These obligations would fall on economic operators, which includes the manufacturer, distributor and dealer, e.g. retailer and seller.
This proposal is also supported by a new EU initiative to empower consumers for the green transition, which will ensure information on products at point of sale includes details on product durability and repairability. The initiative will ban greenwashing and premature obsolescence.
There will be new obligations for economic operators to publicly communicate on the number of unsold good discarded per year, explaining reasons why goods are discarded and how they are discarded (e.g. destroyed, recycled, donated).
Should the Commission feel there are too many goods destroyed in Europe, the Commission can prepare secondary legislation looking to ban the destruction of unsold goods.
There will also be obligations on online marketplaces and search engines to cooperate with market surveillance authorities to ensure sellers are complying with requirements laid out in SPI.
The legislative proposal will be reviewed by legislators in the European Parliament and Council, who will hope to come to an agreement on the proposal in 2023. Once adopted it will be directly applicable. The Commission will then start adopting delegated acts on specific products which will fall under the rules of the regulation. Member States will be free to decide rules on penalties applicable to infringements of the provisions of the regulation.
Global companies manufacturing and selling products on the EU market will need to assess their current product specifications to ensure they are sustainable enough to meet future Ecodesign requirements. Products may need to be redesigned entirely to ensure they are more durable, easier to recycle or repair, or containing less substances of concern, for example, which could prove costly.
Sellers, including traditional brick and mortar stores and online retailers, will have a duty of care in ensuring they are selling products that abide by the new rules, particularly in ensuring all products have a digital passport that contains necessary information covering the entire value chain of a product. Making information accessible to national authorities and citizens may raise concerns about intellectual property rights, whilst also subjecting companies to scrutiny of their due diligence procedures when it comes to product design and suppliers/materials used.
Global companies manufacturing and selling products on the EU market will need to assess their current product specifications to ensure they are sustainable enough to meet future Ecodesign requirements.