Far-reaching proposals for a more sustainable future: the new Circular Economy Action Plan

Published in mid March, the European Commission’s new Circular Economy Action Plan (the “Plan”) aims to accelerate the European Union’s transition towards a circular economy. This is to be achieved through a number of interrelated initiatives that target improvements to the sustainability of products and materials, the reduction of waste and develop the market for high quality secondary raw materials. The proposals are far-reaching and will affect a wide range of sectors from consumer products (including electronics, ICT, food and textiles), to the automobile and construction industries. The measures outlined in the Plan should be monitored closely. Whilst COVID-19 may have an impact on timings of some measures, given the EU’s Green Deal commitment, a raft of proposals and significant change is to be expected.

The Plan forms an important part of strategy outlined in the recently launched European Green Deal, which sets out overarching objectives to inform EU legislation and policy going forward with a view to achieving climate neutrality by 2050, mainstreaming sustainability and promoting “nature-based solutions”. It will build on the measures adopted in the first Circular Economy package (reported on here), revise a number of existing directives and will work in parallel with the EU Industrial Strategy, which aims to move the industrial sector towards a sustainable growth model. The timeline for the introduction of the detailed proposals and measures is ambitious – the Annex to the Plan setting out dates over the course of this year and next for the majority of the key actions. The public health crisis and economic shock caused by COVID-19 is likely to prompt review of certain timescales given efforts focused on dealing with the pandemic but the breadth of change alluded to should not be mistaken.

Sustainable Product Policy Framework

One of the key parts of the Plan is the Sustainable Product Policy Framework, which aims to respond to and disrupt the traditional linear pattern of “take-make-use-dispose” under which producers are not incentivised to make their products more circular, particularly at the design stage.

The framework will include a legislative proposal for a sustainable product policy initiative, the core of which will be to widen the Ecodesign Directive beyond simply energy-related products to cover “the broadest possible range of products”. Complementary legislative proposals may also be put forward to regulate a number of aspects of products placed on the market including: their durability; reusability; upgradability; reparability; energy and resource efficiency; restricting single-use and countering premature obsolescence; whilst also addressing the presence of hazardous chemicals in products; and increasing the amount of recycled content in products. A ban may also be introduced on the destruction of unsold durable goods.

When introducing such measures, the European Commission will target certain, resource-intensive sectors such as textiles, ICT and electronics, known as ‘key value chains’. Other product groups targeted include furniture and high impact intermediary products such as steel, cement and chemicals. The Commission will also consider introducing mandatory sustainability requirements for services, in addition to goods.

Key proposals contained in the Plan include:

• a revision of EU consumer law to improve the information received by consumers at the point of sale;
• the establishment of a new “right to repair” for consumers (with a particular focus on electronics and ICT);
• exploring the role that changes to product guarantees can play in providing more circular products;
• the development of an industry-led reporting and certification system to facilitate industrial symbiosis;
• the registration of the EU Environmental Technology Verification scheme as an EU certification mark to encourage the uptake of green technologies;
• specific measures in relation to ‘key value chains’ including the introduction of a common charger for mobile phones (as well as a take back scheme for mobile phones and chargers) and a new regulatory framework for batteries;
• reviewing the regulation of packaging and packaging waste, focussing on reducing over-packaging and driving design for re-use and recyclability of packaging;
• waste reduction measures for construction materials;
• measures to address microplastics including restricting intentionally added microplastics and developing labelling, standardisation, certification and regulatory measures on the unintentional release of microplastics;
• a new policy framework on the sourcing, labelling and use of bio-based plastics and the use of biodegradable or compostable plastics;
• a new, comprehensive EU Strategy for Textiles (which will include developing eco-design measures, providing consumers with easy access to repair services, boosting the recycling of textiles and extended producer responsibility) and a new Strategy for a Sustainable Built Environment to promote the circularity principles throughout the lifecycle of buildings;
• a commitment to explore the harmonisation of separate waste collection systems and labelling; and
• a proposal for a food waste reduction target in line with the UN Sustainable Development Goals.

Comment

At the end of last year, the European Council urged the Commission to develop an ambitious, long term strategic framework, including a common vision for a circular economy and to adopt a new circular economy plan with targeted actions. Arguably, the Commission has done just that. The ultimate success of the Plan is hinged on how such proposals will be delivered in practice. The effect of COVID-19 recovery efforts may slow or pause the rate of change but change is clearly coming.

As more detail on the measures is anticipated it will be crucial for all those in value chains to keep abreast of developments. The legislative initiatives will impact upon all sectors as part of the EU’s overall objective to mainstream circularity. All businesses, including UK businesses operating in the EU, will need to be prepared to adapt and respond to increased regulation on product design and reduction of waste and carbon emission measures.

Article co-authored by Lucy Charatan.