On 18 July 2024, the “Ecodesign for Sustainable Products Regulation” (ESPR) came into force, replacing the Ecodesign Directive (2009/125/EC). The latter set “ecological standards for the design of specific product groups” (mostly energy-related and greenhouse gas-intensive (GHG) products) “in the Member States of the EU”.[1] The Directive had a big impact on energy consumption: together with its sister directive, the Energy Labelling Regulation, these pieces of legislation have not only reduced the energy consumption of 12% of the regulated products by 2021, but also saved consumers 120 billion euros in energy costs.
The Ecodesign Regulation, which replaces the Directive, has a wider scope, covering the “broadest possible range of products”, is directly binding and can adopt Delegated Acts to supplement the Regulation.[2] Furthermore, it is expected to deliver energy savings “equivalent in size to the EU’s import of Russian gas” by 2030.[3]
What is the Ecodesign for Sustainable Products Regulation?
The goal of the Ecodesign Regulation is not only to broaden the scope of the Ecodesign Directive but mainly to facilitate the establishment of the circular economy by creating an internal market for sustainable products. This includes common ecodesign requirements that “enable the development, deployment and scaling-up of new circular economy business models” by moving “away from traditional models, and revolutionise the way we design, make, use and dispose of products.” [4] In addition, the Regulation bans the “destruction of unsold products”, counters premature obsolescence, creates a digital product passport and reduces carbon and environmental footprints.[5]
All businesses that place products on the EU market will be affected by the ESPR. This means that manufacturing companies will have to produce their products in accordance with the various requirements which will be set out in the Delegated Acts adopted under the ESPR. Priority sectors (e.g. iron and steel, aluminium and textiles) will receive their first plan in early 2025 and companies will then have 18 months to start their road to compliance with the ESPR, meaning that the first compliance date will be in 2027.[6]
The ESPR sets a framework and companies can prepare themselves by changing their business model to a “proactive Ecodesign approach”.[7] This approach contains the ecodesign requirements, which consists of improving the regulated products aspects to increase “durability, reliability, reusability, upgradability, repairability,… maintenance and refurbishment, energy use and energy efficiency,” optimising “water use and water efficiency, resource use and resource efficiency recycled content,… remanufacturing, recyclability,… recovery of materials” reducing “environmental impacts, including carbon footprint and environmental footprint, expected generation of waste” and ensuring that the products “do not become prematurely obsolete.”[8]
There are also performance and information requirements to be considered. “Performance requirements are based on the relevant product parameter… and include either or both the following: Minimum or maximum levels in relation to a specific parameter or a combination thereof; Non-quantitative requirements that aim to improve performance in relation to one or more of such product parameters.” They will also “reduce significant risks to human health or the environment.”[9]
The information requirements are linked to the digital product passport. Products should be accompanied by: 1) “Information on the performance of the product, including a repairability score, a durability score, a carbon footprint or environmental footprint”. 2) “Information for customers”, 3) “Information for treatment facilities”, 4) “Other information that could influence sustainable product choices for customers.”[10]
How companies can prepare themselves
In order to meet the objectives of the ESPR, which will require companies to ensure that their products meet all the strict requirements, several facilitators will need to be put in place, such as a digital product passport and labels. Companies will need to provide detailed information about their products through digital product passports, which must include data on sustainability characteristics, components and environmental impacts. These passports and labels will increase transparency and traceability, making it easier for companies to monitor and report on sustainability of their products.[11]
The Regulation comes with increased market surveillance, which means that businesses will face stricter scrutiny and need to ensure compliance to avoid fines and other penalties. To help companies comply, they could “automate the calculation of environmental KPI’s and accurately set and hit impact reduction targets” and conduct Life Cycle Assessments (LCA) to evaluate and optimize the environmental impact of their products throughout their lifecycle from raw material extraction to disposal.[12] Greater collaboration with suppliers and other stakeholders will be required to achieve compliance and optimise the entire product lifecycle.
ESPR facilitates the transition to a circular economy
The ESPR acts as a wake-up call that business as usual can no longer be the norm. A transition to a circular economy is therefore essential. The ESPR supports this transition by ensuring that the regulated products are durable, reusable, upgradeable and repairable; By addressing hazardous chemicals in these products; By incentivising “product-as-a-service”; By addressing premature obsolescence is countered; And by prohibiting the destruction of unsold durable goods.[13] To summarise some of the objectives of the ESPR.
The transition to a circular economy is not only crucial for tackling the climate crisis, but also highly beneficial for both citizens and businesses. The ESPR will help deliver “high-quality, functional and safe products, which are efficient and affordable, last longer and are designed for reuse, repair, and high-quality recycling.” It will also create “a whole new range of sustainable services”, accompanied by “product-as-a-service models and digital solutions”, which will improve the quality of life and create “innovative jobs and upgraded knowledge and skills.”[14]
In particular, job creation will have a major impact, with a recent study estimating that by the transition to a circular economy will create around 700.000 new jobs and contribute to an additional 0.5% increase in EU GDP by 2030. Additionally, businesses will benefit not only from the creation of new jobs, but also from reduction in costs. Companies that proactively integrate this Regulation into their operations can gain a competitive advantage through improved sustainability performance, innovative products and risk management.[15] Innovation in product design and manufacturing processes will lead to cost savings through reduced material use, energy consumption, and waste. Furthermore, by complying with the ESPR, companies can differentiate themselves in the marketplace by enhancing their company’s reputation and attracting environmentally conscious consumers and investors.
[1] https://ecochain.com/blog/espr-2024-overview/.
[2] “A new Circular Economy Action Plan for a cleaner and more competitive Europe”, Brussels, 11 March 2020, 4; Art. 4 Regulation (EU) 2024/1781 of the European Parliament and of the Council of 13 June 2024 establishing a framework for the setting of ecodesign requirements for sustainable products, amending Directive (EU) 2020/1828 and Regulation (EU) 2023/1542 and repealing Directive 2009/125/EC (ESPR).
[3] https://ecochain.com/blog/espr-2024-overview/.
[4] (3-4) ESPR.
[5] “A new Circular Economy Action Plan for a cleaner and more competitive Europe”, Brussels, 11 March 2020, 4.
[6] https://www.sustainablebrandplatform.com/articles/ecodesign-for-sustainable-products-regulation.
[7] Idem.
[8] Art. 5 ESPR.
[9] Art. 6 ESPR.
[10] Art. 7 ESPR.
[11] (28) ESPR; Art. 9-11 ESPR.
[12] https://www.sustainablebrandplatform.com/articles/ecodesign-for-sustainable-products-regulation.
[13] “A new Circular Economy Action Plan for a cleaner and more competitive Europe”, Brussels, 11 March 2020, 4.
[14] “A new Circular Economy Action Plan for a cleaner and more competitive Europe”, Brussels, 11 March 2020, 2.
[15] Idem.