The European Commission (the “Commission“) has announced a deep, transformative and “disruptive” transition to make sustainable products the norm in the EU over the next decade. Under its new Circular Economy Action Plan (the “Action Plan“), published on 11 March 2020, the Commission promises measures across the entire life cycle of products, from design and manufacturing to consumption, repair, reuse and recycling.
The Action Plan forms a central pillar of the Commission’s strategy for a climate-neutral, resource-efficient EU economy, as announced in the European Green Deal published in December 2019. It builds on the 2015 Circular Economy Action Plan that delivered a range of initiatives and legislation to address, to a certain extent, sustainability aspects of products. As of yet, however, there is no comprehensive set of requirements for all products placed on the EU market to be sustainable and stand the test of circularity. The new Action Plan promises to deliver this.
Key Themes
We have identified the following key themes from the Action Plan as particularly significant for businesses that manufacture and sell products:
- Sustainable product design. By next year the Commission will propose legislation for a ‘Sustainable Product Policy Initiative’. Its aims will be to ensure that products placed on the EU market last longer, are easier to reuse, repair and recycle, and incorporate recycled material instead of primary raw material as far as possible. New legislation will restrict single-use, limit premature product obsolescence and ban the destruction of unsold durable goods. Producers will be incentivised to keep ownership of the product (the “product-as-a-service” model) or to be responsible for product performance throughout its lifecycle.
- Increased consumer information. Major law reforms will require companies to provide far more information to consumers, including on lifespan and the availability of repair services, spare parts and repair manuals. The Commission also proposes stronger laws against green washing and premature obsolescence, with minimum requirements for sustainability labels/logos and for information tools.
- Circularity in production processes. The Commission aims to enable greater circularity in industry by promoting the use of digital technologies for tracking, tracing and mapping of resources, and developing an industry-led reporting and certification system.
- Waste reduction. Companies will have to comply with mandatory requirements for recycled content and waste reduction measures for key products such as packaging, construction materials and vehicles. The goal is to transform wastes into high-quality secondary resources that benefit from a well-functioning market for secondary raw materials. This will entail revisions to legislation on batteries, packaging, end-of-life vehicles, and hazardous substances in electronic equipment. The Commission will also explore setting an EU-wide, harmonised model for the separate collection of waste and a series of actions to minimise EU exports of waste and tackle illegal shipments.
Industry Focus
The following sectors are particular targets for new proposals and initiatives under the Action Plan:
Consumer electronics – This year or next the Commission will introduce a ‘Circular Electronics Initiative’ to promote longer product lifetimes. It will include the following actions:
- Manufacturers will have to design electronics, such as mobile phones, tablets and laptops, for energy efficiency and durability, reparability, upgradability, maintenance, reuse and recycling.
- Companies will have to meet new regulatory measures on chargers for mobile phones and similar devices, including the introduction of a common charger to prevent premature obsolescence.
- The Commission will explore options for an EU-wide take-back scheme to return or sell back old mobile phones, tablets and chargers.
- A new regulatory framework will be introduced for batteries, designed to improve collection and recycling rates, and introducing sustainability and transparency requirements for all batteries.
Packaging – The Commission will review the Packaging and Packaging Waste Directive to reinforce essential requirements for packaging. This will focus on reducing over-packaging and packaging waste, driving design for re-use and recyclability of packaging, and reducing the complexity of packaging materials.
Plastics – Companies will have to comply with new mandatory requirements for recycled content, as well as labelling, standardisation, certification and regulatory measures on unintentional release of microplastics. There will be a new policy framework coming in 2021 for bio-based plastics and plastics with biodegradable properties.
Textiles – The Commission will propose an ‘EU Strategy for Textiles’ in 2021, which will aim to incentivise business and private consumers to choose sustainable textiles, boost the re-use and recycling of textiles and achieve high levels of collection of textile waste.
Construction – In 2021 the Commission will launch a ‘Strategy for a Sustainable Built Environment’, promoting circularity principles throughout the lifecycle of buildings. Companies may also have to comply with recycled content requirements for certain construction products, as part of a revised ‘Construction Product Regulation’.
Food services – The Commission will consider specific measures to increase the sustainability of food distribution and consumption. There will also be a new legislative initiative on reuse to substitute single-use packaging, tableware and cutlery for reusable products in food services.
We will continue to monitor the development of the Commission’s proposals and provide further assessments of their impact.
