Starting July 18, 2024, the Ecodesign for Sustainable Products Regulation (ESPR) came into effect. This regulation is a key part of the EU’s strategy to make products more environmentally friendly and promote circularity.
Products and their usage can greatly impact the environment. In the EU, consumption is a major contributor to climate change and pollution. The ESPR is a crucial component of the 2020 Circular Economy Action Plan, aimed at helping the EU meet its environmental and climate goals. This includes doubling the rate of material circularity and achieving energy efficiency targets by 2030.
A significant element of the EU’s Circular Economy Package is the Digital Product Passport (DPP), which aims to improve the tracking of products and their components. This initiative targets sectors that consume the most resources and have high circularity potential, such as electronics, ICT, batteries, vehicles, packaging, plastics, textiles, construction, furniture, food, water, nutrients etc.
Key Elements of ESPR
The ESPR is a framework legislation, meaning specific product rules will be determined progressively over time. These rules will apply to individual products or groups of products with similar characteristics. The regulation includes several products that the Commission will need to prioritize unless there is a valid reason not to.
The prioritized key products value chains include:
- Electronics and ICT
- Batteries and vehicles
- Packaging
- Plastics
- Textiles (garments and footwear)
- Construction and buildings
- Food, water and nutrients
The proposed rules under the ESPR will apply to all products sold in the EU, regardless of whether they are produced within or outside the EU.
The Digital Product Passport (DPP)
According to a report written by Wuppertal Institute for Climate, Environment and Energy, the European Commission defines a ‘product passport’ as a digital data set that can be accessed electronically. The DPP may include information about:
- Product’s technical performance
- Materials and their origins
- Repair activities
- Recycling capabilities
- Lifecycle environmental impacts
The information will be determined by the Commission in close collaboration with all relevant stakeholders and will vary depending on the specific product.
According to Regulation (EU) 2024/1781 of the European Parliament and of the Council of 13 June 2024, Article 13, by July 19, 2026, the Commission will establish a secure digital registry (the ‘registry’) to store at least the unique identifiers of the DPP. The Commission will manage the registry, ensuring secure data processing and compliance with Union law, including personal data protection rules.
This picture shows how information about a product gets lost throughout its lifecycle in a linear economy.
Image credit: Digital Product Passport: the ticket to achieving a climate neutral and circular European economy?
Key benefits of the Digital Product Passport (DPP)
The Digital Product Passport (DPP) offers several key benefits for businesses, consumers, and policymakers:
- Access to reliable and comparable product information helps substantiate sustainability claims. This benefits businesses, consumers, and policymakers by providing a clear understanding of product attributes.
- The DPP can protect intellectual property rights, creating new business opportunities and models.
- By recording sustainability data along the value chain, DPPs will improve information accessibility, enhancing transparency and traceability. This allows businesses to highlight product benefits and helps consumers make informed choices.
- Will provide detailed information on recycled content and raw materials, aiding materials can support these sustainability claims.
- DPPs will provide precise information on product recyclability, benefiting recyclers and consumers by making recycling processes clearer and more efficient.
- As public awareness of sustainable practices grows, consumers will increasingly demand information on product recyclability and carbon footprints, supporting informed purchasing decisions in recycling efforts and circular design improvements. This fosters a circular economy by ensuring products can be efficiently reused and recycled.
- DPPs will serve as tools for monitoring and reporting supply chain indicators, such as Scope 3 GHG emissions. This can streamline compliance and reduce administrative burdens.
- With standardized data, DPPs will enable direct comparisons between products and businesses regarding carbon footprints, circularity, and recycling practices.
- DPPs can aid in qualifying criteria for decisions like green public procurement and foster innovative circular practices by providing detailed product lifecycle information.
- DPPs can lead to new business models, such as producer ownership, sharing, and renting, and facilitate recycling services that disassemble and upcycle products.
What products will be impacted?
According to the “A new Circular Economy Action Plan For a cleaner and more competitive Europe”, the implementation of the Digital Product Passport (DPP) will occur gradually and become standard for all products under the Ecodesign for Sustainable Products Regulation (ESPR). Initially, priority will be given to product groups identified in the value chains of the Action Plan, such as electronics, ICT, textiles, furniture, and high-impact intermediary products like steel, cement, and chemicals. Additional product groups will be identified based on their environmental impact and potential for circularity.
Possible impact on businesses
- They will need to provide comprehensive and accurate information about their products. This will require robust data management and verification processes.
- Companies must ensure their products meet the new sustainability standards, which may necessitate changes in production methods, sourcing, and overall supply chain management.
- Implementing DPPs may involve initial costs for data collection, system updates, and training.
- Effectively adopting DPPs can give businesses a competitive edge by demonstrating their commitment to sustainability, attracting environmentally conscious consumers, and opening new market opportunities.
- The requirement for detailed product information can drive innovation in product design and business models, such as product-as-a-service, recycling, and upcycling initiatives.
- DPPs will necessitate close monitoring of supply chains, ensuring that all components and materials meet sustainability criteria, leading to stronger supplier relationships and more resilient supply chains.
- Prioritizing transparency and sustainability through DPPs can differentiate companies in the marketplace, potentially leading to increased brand loyalty and higher market share.
Conclusion
The Ecodesign for Sustainable Products Regulation (ESPR) represents a significant stride toward achieving the EU’s environmental and climate objectives. By incorporating the Digital Product Passport (DPP), the regulation increases the traceability, transparency, and sustainability of products throughout their lifecycle. This initiative targets high-impact sectors such as electronics, textiles, and construction, ensuring that products are designed for longevity, repairability, and recyclability.
We are expecting a great change in the furniture industry as well, with many suppliers already preparing services tailored for ecodesign principles.
The DPP facilitates informed decision-making for consumers and stakeholders, promotes innovative business models, and drives the circular economy by ensuring products can be efficiently reused and recycled. It is expected that businesses will face initial challenges in data management and compliance but will ultimately benefit from increased efficiency, consumer trust, and market opportunities.
The FGOI consortium is going to support sharing of information on this topic for our members and stakeholders so that we are prepared at the European industry level to tackle this.
References
- “Ecodesign for Sustainable Products Regulation”, https://commission.europa.eu/energy-climate-change-environment/standards-tools-and-labels/products-labelling-rules-and-requirements/sustainable-products/ecodesign-sustainable-products-regulation_en
- “Digital Product Passport: The ticket to achieving a climate neutral and circular European economy?”, Thomas Götz, Holger Berg, Maike Jansen and Thomas Adisorn (Wuppertal Institute) and David Cembrero, Sanna Markkanen and Tahmid Chowdhury (CISL)
- REGULATION (EU) 2024/1781 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 13 June 2024, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32024R1781&qid=1719580391746
- “A new Circular Economy Action Plan For a cleaner and more competitive Europe”, https://eur-lex.europa.eu/resource.html?uri=cellar:9903b325-6388-11ea-b735-01aa75ed71a1.0017.02/DOC_1&format=PDF
The content of this news represents the views of the author only and is his/her sole responsibility; it cannot be considered to reflect the views of the European Commission and/or the European Innovation Council and SMEs Executive Agency (EISMEA) or any other body of the European Union. The European Commission and the Agency do not accept any responsibility for use that may be made of the information it contains.
