The Action Plan is part of the European Green Deal promoting actions to boost the efficient use of resources by moving to a cleaner and more competitive Europe.
On 11 March 2020, the European Commission published its Communication to the European Parliament, the Council, the European Economic and Social Committee, and the Committee of the Regions laying down the details of a new “Circular Economy Action Plan For a Cleaner and more Competitive Europe”.
The first Circular Economy Action Plan, which entered into force in 2018, led to the adoption and implementation of measures regulating the entire lifecycle of products, from production and consumption to waste management and the creation of a market for secondary raw materials.
Why did the Commission issue a new Circular Economy Action Plan?
The new Circular Economy Action Plan outlines measures aimed at cutting down waste in new sectors such as textile, buildings, and electronics. It also includes new targets for the reduction of waste and promotes the adoption of a long-term path for waste management and recycling. Moreover, the European Commission announced a set of interrelated legislative and non-legislative initiatives aimed at establishing a product policy framework for sustainable products.
Previous EU initiatives and existing legislation already address, to some extent, the sustainability of products, which typically entail minimum requirements applicable on a voluntary basis. In this respect, the new legislative initiative suggests offering consumers by 2021 a “right to repair” electronic products (such as smartphones and computers). However, how this right would be developed from a regulatory perspective is not yet clear.
What is the possible impact on the eco-design of products?
Through this initiative, the Eco-design Directive framework would go beyond energy-related products and become applicable to a broader range of products, including electronics, information and communications technology (ICT), furniture, and textiles, as well as high-impact intermediary products such as steel, cement, and chemicals.
The European Commission will base its initiative on the following key sustainability principles:
- Improve durability, reusability, upgradability, and reparability of products
- Increase products’ energy and resource efficiency to reduce the environmental footprint
- Identify and better address the presence of hazardous chemicals in products
- Enable remanufacturing and high-quality recycling
- Adopt a ban on the destruction of unsold durable goods
- Restrict single-use products and contrast premature obsolescence
What does a Sustainable Product Policy Framework also include?
The European Commission will undertake the review of the Eco-design Directive and adopt the Energy Labelling Working Plan 2020-2024 for individual groups of products.
In this respect, the European Commission will create a common European “Dataspace for Smart Circular Applications” to provide consumers with product information and data on the value chains (including, for example, digital product passports). Moreover, together with the national authorities, new sustainability requirements for products placed on the EU market, including inspections and market surveillance measures, are expected to be adopted.
The European Commission announced it will also propose a revision of EU consumer law to ensure that reliable information on products’ lifespan, repair services, and spare parts are made available to consumers, also with reference to premature obsolescence. Consequently, companies will have to comply with new minimum requirements on sustainability labels, information tools, and, in the case of ICT and electronics, will have to provide upgrading services.
With respect to growing waste deriving from electrical and electronic equipment, the European Commission stated that it will address the issue through a ‘Circular Electronics Initiative’ to promote longer product lifetimes, granting reusability and reparability, as well as upgradeability of components and software to avoid premature obsolescence.
In light of the far-reaching nature of the proposals, the Action Plan may attract criticism from certain businesses and stakeholders, particularly in relation to the potential for an EU-wide take back scheme for the return or sell back of old mobile phones, tablets, and chargers and with respect to the measures to tackle premature obsolescence.
A set of legislative and non-legislative measures targeting areas as described above will be adopted in 2020 and 2021, and the European Commission will develop further indicators on the efficient use of resources, including consumption and material footprints.
Latham & Watkins will continue to monitor developments in this area.
 COM (2020) 67 final.