European Commission Launches Roadmap for Sustainable Products Initiative to Usher in New Era of Product Regulatory Requirements

On September 14, the European Commission (Commission) released the roadmap for its Sustainable Products Initiative (Initiative) – an ambitious new vision for legislative reform that will establish minimum sustainability and information requirements for products sold in the European Union (EU). Stakeholders can provide feedback on the roadmap until November 2, 2020, which the Commission will consider as it refines the Initiative’s content.

Background on the Sustainable Products Initiative

The Initiative’s proposals are an outgrowth of the EU’s Circular Economy Action Plan, released in March 2020, as well as the European Green Deal. The roadmap provides a clear vision of the Commission’s goals and promises concrete, far-reaching measures on the near horizon for the next generation of circular economy and product-regulatory controls. Because of the size of the EU market and the influence of EU regulators, EU product regulatory requirements take on outsized global influence. They frequently serve as de facto global product standards for covered product categories, and they increasingly function as direct models for state-level regulatory initiatives. For this reason, product manufacturers in the United States and elsewhere have a direct interest in this emerging wave of “circularity”-focused initiatives, even if their products are not intended for export to the EU market.

Implications

In addition to establishing overarching product sustainability principles and expanding the Ecodesign Directive beyond energy-related products, the Commission plans to issue rules governing:

• extended producer responsibility,
• resources for product repair,
• mandatory sustainability labeling,
• disclosure of information to market actors (e.g., digital product passport),
• mandatory minimum sustainability requirements for public procurement, and a ban on the destruction of unsold durable goods.

The Initiative includes measures for addressing social aspects of the product lifecycle and production processes to further sustainable objectives, such as facilitating use of recycled content and tracking use of hazardous substances. These new sustainability requirements will prioritize certain high impact product categories, including:

• electronics and information and communications technology;
• textiles;
• furniture; and
• intermediate products, such as steel, cement and chemicals.

These efforts continue EU trends imposing sustainability-related disclosure obligations on product manufacturers and importers. By January 5, 2021, manufacturers, importers, and other supply chain actors must undertake detailed reporting related to the presence of substances of very high concern (SVHCs) in articles. The information must be input into the newly-created Substances of Concern in Articles As Such or in Complex Objects (Products) database (SCIP database). Preparing to meet these reporting obligations has required companies to closely coordinate reporting and information-gathering across their supply chains. For instance, as described in EU guidance, the importation of an automobile would require separate – but linked – SCIP database entries for the automobile, its internal combustion engine, and an O-ring engine component containing a threshold amount of an SVHC. The SCIP database concept was originally envisioned as a circular economy initiative and was created by a 2018 amendment to the Waste Framework Directive.

The Commission has a track record of converting ambitious product-regulatory goals into legal obligations. As such, stakeholders should expect the resulting proposed rules and measures to hew closely to the Initiative’s outline. Once these proposals become law, it will mark the start of a new era of product regulation that places unprecedented requirements upon producers to meet the EU’s rapidly evolving sustainability and circular economy goals.

Ecodesign Directive for Energy-Related Products

Even while the Initiative ramps up, circular economy measures already play an increased role under the existing Ecodesign Directive for Energy-Related Products. While the earliest iteration of the Directive focused on energy efficiency, the regulatory scope has expanded over time to cover material efficiency measures, such as reparability, durability, reuse, and recycling. In October of 2019, the Commission adopted ten implementing measures, incorporating reparability and recycling requirements along with more traditional energy efficiency measures. “Right to repair” provisions were included in some of the implementing regulations, including televisions and other displays, where manufacturers must make spare parts available for seven years.. The server and data storage implementing regulation requires manufacturers to design products so as not to prevent the disassembly for repair or reuse of certain components, to make firmware and security updates available for eight years, and to make repair information available. The Ecodesign/Energy Labeling Working Plan for 2020-2024, which will be published later this year, is expected to expand upon these requirements for both existing and new regulated “energy-related” product categories.

Beveridge & Diamond’s International and Product Stewardship, Global Supply Chains practices work with U.S. and multinational companies that make, distribute, transport, or sell consumer products in a hyper-competitive and evolving consumer goods market. We help identify, understand, and comply with complex regulatory requirements throughout the product lifecycle. For more information, please contact the authors.