Upcoming requirements for product sustainability

The European Commission recently presented its proposal for a regulation establishing a framework for setting ecodesign requirements for sustainable products. According to the proposal, products placed on the Union market will be subject to requirements on, inter alia, reliability, reusability, and reparability in order to reduce negative environmental impacts and to ensure that products are sustainable throughout their entire life cycle. To ensure traceability and to make sure that relevant product information is available to operators in all stages, a requirement for digital product passport is also proposed.

At a time when the transition to a climate-neutral and circular economy needs to happen fast, today’s production and consumption, which is too linear and resource inefficient and has negative consequences for the environment and human rights, is a big problem. As a part of the European Green Deal and the aim for a modern circular economy, the European Commission adopted its proposal for a regulation establishing a framework for setting ecodesign requirements for sustainable products (the Ecodesign Regulation) on 30 March 2022. The proposal is based on a review of the Ecodesign Directive (2009/125/EG), which sets minimum energy performance requirements for energy-related products and will replace the existing directive. 

The proposal aims to regulate sustainability of products throughout their entire life cycle. If adopted, the regulation will provide a framework that sets requirements on ecodesign for products intended for the Union market and empowers the European Commission to adopt acts setting out more specific requirements for different types of products. The regulation imposes obligations on a range of economic operators such as manufacturers, importers, distributors, and retailers.

Below we outline the main features of the ecodesign requirements that are proposed to apply to companies that make products available on the Union market.

Which products are included?

According to the proposal, the regulation will apply to all physical goods placed on the market or put into service within the Union, including components and intermediate products.  The regulation thus extends the scope of the previous Ecodesign Directive from energy-related products to all physical products. However, exemptions are made for, inter alia, food, feed and medicinal products for human use.

What are the requirements?

Firstly, the proposal sets ecodesign requirements for products intended for the Union market. These consist of two different types of requirements: performance requirements and information requirements. The performance requirement constitutes an obligation to comply with rules on, inter alia, durability, reusability, reparability, possibility of maintenance and refurbishment, environmental impacts including carbon and environmental footprints, presence of substances of concern and expected generation of waste materials. The information requirement implies an obligation to provide, together with the product, information on the performance of the product with respect to these product aspects.    

Secondly, the regulation sets out requirements for a digital product passport. All products placed on the Union market must have a product passport that is accessible via electronic means through a data carrier and linked to a unique product identifier. The European Commission will create a digital passport register to store all data on products placed on the internal market.

Thirdly, a transparency obligation regarding the destruction of unsold consumer products is introduced. This means that an economic operator who discards unsold consumer products must disclose information on the quantity of products discarded and the reasons for doing so. This obligation applies at all stages of the value chain, i.e., from the producer to the point of sale. The European Commission will also have the possibility to adopt acts prohibiting the destruction of unsold goods. The aim of the provisions is to reduce waste, discourage overproduction and provide a harmonised market regulation to replace the regulations already in place in some member states.

How is product compliance ensured?

For the purposes of compliance and verification of compliance with the requirements of the regulation, tests, measurements, and calculations shall be made using reliable, accurate and reproducible methods that take into account the generally recognised state-of-the art methods. For certain product groups, use of specific online tools made accessible by the European Commission may be required.

What happens in case of non-compliance?

The Member States shall designate national authorities which, in the event of non-compliance, shall require the economic operator concerned to take corrective action proportionate to the nature and gravity of the non-compliance. If the relevant economic operator fails to take corrective action, the national authority may prohibit or restrict the making available of the product concerned on its national market, withdraw the product from the market or recall it.

Non-compliance will also be subject to penalties laid down by the Member States and the European Commission. The penalties shall be effective, proportionate, and dissuasive, taking into account the extent of non-compliance and the number on non-complying products placed on the Union market.

What is the next step?

The proposal is now to be examined by the European Parliament and the Council. This means that changes may be made before we have a final regulation with binding rules in place. Given the wide scope of the proposed provisions and the European Commission’s proposal for a Corporate Sustainability Due Diligence Directive, there is every reason for companies to already start reviewing their operations, products, and supply chain from a sustainability perspective.