On 30 March 2022, the European Commission published a proposal for an Ecodesign for Sustainable Products Regulation. The proposal was subsequently referred to the member states and to the EU's legislatory institutions for initial consideration. The referral responses have been passed to the European Commission and the legislatory procedure has subsequently continued. The institutions within the EU are mainly positive towards the proposal, but are critical of certain parts that should be modified in the proposal's final formulation.
Lindahl has previously written an article about the proposed ecodesign for sustainable products regulation. The article, which was written in connection with Lindahl's contribution to the Swedish Bar Association's consultation response for the proposal, summarises the proposal's content and can be read here. The proposal is a part of the EU's initiative within the framework of the action plan for a circular economy and is expected to impact extensively on the internal market. The member states have commented on the proposal and the European Economic and Social Committee (EESC) has submitted an opinion. The proposal is currently undergoing its first reading by the EU's two legislatory institutions, the Council of the European Union and the European Parliament. It is possible to deduce central points-of-view concerning the proposal from the legislatory procedure that should have an impact on the European Parliament's decision regarding the proposal.
As a step in the legislatory process, the EESC submitted its approach to the proposal on 13 July 2022. The EESC is fundamentally positive to the proposal and considers it to constitute an important and necessary part of the work to establish a circular economy. The EESC particularly welcomes the proposal's extended area of application in relation to the current ecodesign directive, the new ecodesign requirements, the information requirements and prohibition on destroying unsold products. The digital product passport and labelling are highlighted as well-adapted instruments to meet the information requirements. The EESC emphasises that the proposal should as far as possible avoid unnecessary administrative burdens on actors in the internal market, particularly small and medium-sized companies.
The EESC is critical towards the lack of regulation of social sustainability, working conditions and employment relationships for those who work with products during the products' life-cycle. According to the EESC, the fact that the regulation's impact is dependent on all member states conducting effective checks on compliance with the regulation constitutes a concern. There is namely a risk that deficient regulatory control will promote ”green scepticism”, undermine the regulation's purpose and mean that it is not applied equally for all companies within the EU.
Moreover, there is a lot that is unclear concerning the delegating acts as it is anticipated that there will be a large number and the EESC considers that the European Commission should produce a clearer working plan for the establishment of delegating acts. The EESC also observes that the extensive ecodesign- and information requirements that can be set for products can entail a higher purchase price for the consumer. However, the requirements are expected to imply that the consumer will be compensated through obtaining a product with better performance that is upgradable and repairable, and that commands a higher value in the market once the product is no longer of use for the consumer. Finally, the EESC warns that the information requirements may be too extensive and result in companies being forced to share sensitive data. It is therefore important to take into account the companies' interests in protecting their intellectual property rights and trade secrets in formulating the information requirements.
THE COMPETITIVENESS COUNCIL'S POLICY DEBATE
On 29 September this year, the Competitiveness Council, part of the Council of the European Union, held a policy debate on the proposal with the aim of taking a position on the European Parliament's forthcoming decision on the proposal. The debate largely reflected the member states' comments as articulated in the consultation responses to the European Commission earlier this year. The Competitiveness Council underlined that the proposal may constitute a standard for sustainable products and help consumers and companies in the both the green and the digital transition. Like the EESC, the Competitiveness Council considers that the digital product passport and the labelling, along with with adapted ecodesign requirements, can constitute an effective instrument in a circular economy. Moreover, the digital product passport and the labelling can contribute to ensuring free movement of sustainable products in the internal market.
Concern was expressed that: (i) the proposal means that there will be a large number of delegating acts; (ii) the proposal's impact and compliance are dependent on the member states' supervisory role in the market; (iii) the proposal entails a risk of an increased administrative burden for the companies affected by its application; and (iv) the proposal can entail companies within the EU finding it more difficult to compete in the international market. Overall, the Competitiveness Council considers that there is a need for further debate and negotiation of several parts of the proposal.
THE LEGISLATORY PROCESS – WHAT IS THE NEXT STEP?
The legislatory process has now arrived at a stage where the European Parliament is going to produce a draft decision concerning the proposal. The next stage is that a committee in the European Parliament will review the proposal and present its view on whether it should be adopted, changed or rejected. The Committee's stance is presented in a draft report that constitutes the basis for which draft decision is to be submitted to the European Parliament for voting. In view of the comments that the EESC and the Competitiveness Council have already submitted/expressed, it is likely that the responsible committee will propose that the European Parliament makes a decision that the proposal should be amended and that the committee proposes changes to the proposal in its draft decision that are deemed necessary. Only then will the Council of the European Union decide on its approach to the European Parliament's decision and it is highly likely that the comments that the Competitiveness Council have provided as above will be upheld. If the European Parliament does not decide on changes that take into account the comments that have been submitted thus far on the proposal, it may require a second reading of the proposal in the European Parliament and the Council of the European Union.
We will continue to have reason to monitor the EU's legislatory procedure on ecodesign requirements for sustainable products to ascertain in which way the overall criticism is taken into account in the legislatory procedure going forward.
Did the article raise any questions? You are welcome to contact any of us or your normal contact person at Lindahl.