In late March, the European Commission published another package of proposals aimed at making the European Green Deal a reality. Some of the proposals relate to specific product categories, e.g. construction products and textiles, but there is also no shortage of proposals to make products more sustainable and environment-friendly.
The idea of the circular economy is part of the European Green Deal. The essence of the circular economy includes extending the life of products and increasing the efficiency of their use. Consumer habits and manufacturers’ practices pose barriers to implementing the circular economy, including accelerating wear and tear of products, the need to replace them frequently, and a lack of knowledge on how products can be used further. Published in late March, the package of initiatives aims to implement more sustainable practices. A draft regulation on the eco-design of sustainable products is an element the package.
The idea of eco-design is reflected in the current provisions already in force, but its scope is limited. Meanwhile, the legislative proposal presented by the European Commission is intended to cover all products that do not have their own regulation or whose regulation does not take sustainability into account. The draft regulation provides for exceptions; it does not apply to, among other things, food, animal feed, medicinal products for humans, or veterinary medicinal products.
First: eco-design of sustainable products
Under the proposal, products covered by the regulation will have to meet a number of requirements ensuring their durability, reusability, and energy efficiency. Detailed guidance will be adopted by the Commission through delegated acts, but it is already clear that, in principle, there should be separate requirements for each product category (where there are technical similarities between products, several groups can be covered by horizontal requirements). In practice, the requirements may consist of ensuring the availability of spare parts, the compatibility of parts with commonly available parts, and avoidance of technologies preventing upgrading or repairing the product. An example is the standardisation of charger connections for portable devices.
Since the aim of the regulation is to improve the environmental impact of products while preserving the convenience of their use, the tools to enable more efficient recycling of used products, product remanufacturing and material recovery are relevant for EU lawmakers. The product requirements themselves will not be allowed to have a significant negative impact on the functionality of a product from the user’s point of view or materially affect its affordability. The draft regulation also takes into account the interests of manufacturers. Requirements resulting in an obligation to use a particular technology or imposing excessive administrative burdens are to be banned.
Second: Quality testing
To subsequently verify if a product complies with individual eco-design requirements, the Commission has foreseen the necessity to apply appropriate methods. Again in this case, the Commission will detail the rules by means of delegated acts for performing tests, measurements or calculations, as well as the use of online tools for this purpose. It can be expected that the Commission will ensure that verification of a sustainable product is meticulous and corresponds to its actual characteristics. In particular, it will be prohibited to market products whose performance during conformity testing differs from performance during use by consumers. This is significant, if only in the context of software for devices. Henceforth, software updates to a product could not, without the explicit consent of the end user, lead to degradation of the product’s performance as defined in the delegated acts—with consent being given prior to the update.
The CE mark is also regulated in the draft. The Commission has provided that it should be visible, legible and indelible on the product before it is placed on the market. However, if this is not possible due to the nature of the product, the CE marking will have to be affixed on the packaging and in the documents accompanying the product (e.g. the instruction manual).
Third: Digital product passport
Selected products will have a digital passport that will only allow them to be marketed (or put into service). At the same time, the draft regulation does not state whether the digital passport should refer to a model, a batch, or perhaps an individual article. This is another issue that needs to be detailed in the expected delegated act. The digital product passport itself is to be linked via a data carrier to a unique product identifier. In turn, the carrier will be physically present on the product, packaging, or accompanying documentation. The information contained in digital product passports will be stored in a register set up by the Commission.
The draft regulation does not precisely delineate the elements of the passport for each product category. However, it is intended to meet the general requirements for providing information, such as how to install, use, maintain and repair the product and how to return or dispose of it. In the case of some products, there will be a need to include instructions, warnings or safety information. In addition, compliance documentation may have to be included. The passport will contain product markings, e.g. unique identifier, Global Trade Item Number and TARIC code.
New obligations for businesses
The rules for eco-design and digital product passports are not the only proposals of the European Commission in relation to sustainable products. The draft regulation provides for a number of obligations directed at manufacturers, authorised representatives, importers, distributors and other entities at various stages of the product lifecycle.
Especially noteworthy are the disclosure obligations. Among other things, information on potentially dangerous substances in the product is to be provided directly on the product, on its packaging, in the user manual, on a free website or app, on labels or through a digital product passport. Information affecting the use of the product will also be relevant, including information for consumers and other end users on the method of installation, use, maintenance, repair, return and disposal of the product and information for treatment facilities on disassembly, recycling or end-of-life disposal.
One way to provide product information will be including it on labels. The delegated act will specify their content, layout (including visibility and readability), display method and electronic means of generation. Entities marketing or putting into service products covered by the labelling obligation will be required to provide a label for each item, including also at the request of the seller. Another obligation will be to include a reference to the information contained in the label in visual advertising or technical promotional material.
The purpose of the draft regulation is not only to extend the lifecycle of marketed products, but also to prevent waste of unsold products. Entities disposing of unsold consumer products will be required to disclose the number of unsold products per year, indicating:
- Type or category of unsold products
- Reasons for disposing of unsold products
- Whether the discarded products were sent for preparation for reuse, regeneration, recycling, energy recovery and disposal.
Additionally, the Commission will be able to establish a ban on destruction of products having a significant impact on the environment. Exceptions to this ban would be possible, for example, for damaged products returned by the consumer.
In principle, small and medium-sized enterprises, which make up the majority of companies operating in the European Union, will not be affected by the rules on dealing with unsold products. This does not mean that these entities will be absolutely exempt from these obligations. They could be banned from destroying unsold consumer products in two cases:
- If medium-sized enterprises were responsible for a significant portion of unsold destroyed consumer products
- When the exemptions would circumvent the bans on destruction of unsold consumer products and disclosure of information.
The proposal from the European Commission includes solutions that could make a real contribution to offering much more environment-friendly products, through both resource efficiency and increased energy efficiency. Among other things, the eco-design regulations implemented so far have reduced annual electricity consumption and resulted in savings on the consumer side. The success of the proposed provisions will largely depend on the wording of the delegated acts adopted by the Commission. The alternative would be self-regulatory measures, adopted by businesses under certain conditions.
Agata Matysiak, Paulina Wojtkowska, Environment practice, Wardyński & Partners