By Paul Davies

The launch of the Ecodesign Working Plan 2016-2019, covering the eco-design and energy labelling framework last month is another key milestone in the Commission’s plan to transition the EU to a more circular economy.

Key points to note from the Working Plan include:

  • The current state of play is that the Commission have adopted 28 Ecodesign Regulations, 16 Energy Labelling Delegated Regulations and three recognised Voluntary Agreements. A number of these regulations will be subject to review in 2019.
  • Going forward, the Commission shall publish a working plan outlining an indicative list of energy related product groups which will be considered priorities for the next three years.
  • Further measures to be adopted include: (i) an eco-design measure for heating and cooling products; (ii) an eco-design and energy-labelling measure on verification tolerances to improve product testing and reduce the scope for cheating; and (iii) a Recommendation for self-regulation to support industry in the pursuit of voluntary agreements as an alternative to regulation.

Eco-design, previously hit the spotlight as the European Commission announced its plans to revise its approach to eco-design implementation including extending its scope. In addition, British Standards Institutions (BSI) have recently developed a framework for a circular economy business standard (BS 8001) which has received positive feedback from major companies including 3M, Tarmac, Antalis, Walgreens Boots Alliance and Highways England.

Europe is not the only region focusing on promoting the circular business model. A Circular Economy Mission was held in China on 23-25 November 2016 organised by the Directorate – General for the Environment of the European Commission in recognition of China’s aligned position to drive circular economy development in various sectors. China’s commitment to focus on enhancing the sustainability and durability of products is particularly significant given China’s position as a key manufacturing hub.

In a recent report, the United Nations Conference for Trade Development (UNCTAD) proposed that by adopting a circular economy framework, India enjoys “regenerative and value-creating” development with annual benefits of $624 billion. In addition to creating cost savings for businesses and households, focusing on the circular economy would reduce negative externalities: greenhouse gas emissions would be 44% lower in 2050 compared to the current scenario, and congestion and pollution would fall significantly, leading to health and economic benefits to Indian citizens.

However, this transition to a more circular economy is not without its critics. Concerns have been raised over what is perceived as the “encroaching” role of European regulation. While the Commission’s announcement to develop eco-design is welcomed and the shift towards a circular economy will be expedited by applying the eco-design regime to a broader range of everyday appliances and extending the policy out more widely; the path to a circular economy is unlikely to be smooth.

This post was prepared with the assistance of Ashleigh Humphries in the London office of Latham & Watkins.