Everything You Need to Know About the Ecodesign for Sustainable Products Regulation (ESPR)

‍

Dated: 17 October 2023

‍

Executive Summary of the Ecodesign for Sustainable Products Regulation

‍

A cornerstone of the EU’s Circular Economy Action Plan and the European Green Deal, the proposed Ecodesign for Sustainable Products Regulation (ESPR or Proposed Regulation) is expected to set game-changing performance and disclosure requirements for virtually all products placed on the EU market. 

‍

The Proposed Regulation builds upon the existing Ecodesign Framework Directive, which has long applied performance and disclosure requirements for energy-related products like refrigerators and televisions. Under the newly Proposed Regulation: 

• A much broader range of products (like textiles) would have to meet a series of performance and information requirements specific to the product type.
• In addition, products will need to be accompanied by a Digital Product Passport which details their adherence to the performance requirements as well as other relevant information. 
• Finally, recent amendments have strengthened the proposed ban on the destruction of unsold goods for certain specified sectors, including textiles, footwear and electronics.

‍

While the Proposed Regulation is still not law, negotiations are underway and adoption is expected in the near future. Companies should begin planning now for compliance, which may be required as soon as 2026 for prioritized sectors like textiles and furniture, with certain elements such as the ban on destruction of unsold goods potentially applicable even sooner.

‍

Timeline and Current Status of the ESPR

‍

The ESPR was first proposed by the European Commission on March 30, 2022. Over the course of 2023, both the European Parliament and the Council of the EU have issued negotiating positions which include a series of competing amendments to the Proposed Regulation.

‍

Trialogue negotiations are now underway between the institutions, through which agreement will be sought on the conflicting versions. The first trialogue meeting was held on August 30, 2023. While the negotiations are expected to take some time, it is projected that the ESPR may be formally adopted as law as early as late 2023 or early 2024.

‍

Under the current terms of the draft text, the European Commission would then be empowered to begin adopting requirements for specific product categories via delegated acts. Under the Council version, economic actors would then have at least 18 months after the adoption of the delegated act before compliance is required. Depending on the pace of this process for different product groups, it is conceivable that requirements could begin coming into effect by late 2026 or 2027.

‍

What Products and Companies Will Be Covered by the ESPR?

‍

The ESPR would broadly apply to almost every physical good that is placed on the EU market or put into service (with the exception of food and some other discrete product categories, such as medical products). It will also apply in some capacity to virtually all economic operators, with distinct requirements specified for manufacturers, online marketplaces, search engines, importers, dealers, distributors, and fulfillment service providers.

‍

Certain aspects of the ESPR are likely to contain limited exemptions or grace periods for SMEs, such as the proposed ban on the destruction of unsold goods, although these provisions remain subject to ongoing negotiation and are likely to be subsequently defined in delegated acts specific to different product groups. 

‍

What Will be Required by the ESPR?

‍

When it comes to what will be required by the ESPR, products covered will be subject to performance and information requirements, which may include disclosures on any of the following matters, among others:

‍

• Durability and reliability
• Product reusability
• Product upgradability, reparability, maintenance and refurbishment
• Presence of substances of concern
• Energy and resource efficiency
• Recycled content
• Recycling
• Product carbon and environmental footprints
• Generation of waste materials

‍

Whether a given parameter applies to a product, and what specifically will be required, is to be subsequently defined in separate delegated acts for each product group. The process of setting such requirements across the broad range of products sold in the EU is expected to take many years to be completed, with much of the underlying work occurring through separate, product-specific working groups.

‍

How will the ESPR’s Digital Product Passport Work?

‍

Much remains uncertain regarding how the Digital Product Passport will work and operate in practice. With regard to basic user functionality, the Proposed Regulation envisions that end consumers will have access to the product passport through a “data carrier” – a barcode or QR code that links directly to the passport. The data carrier must appear directly on the product, its packaging, or in documentation accompanying the product to ensure ease of access.

‍

The product passport must also enable the sharing of different levels of information with supply chain businesses, government authorities, and consumers. Different access levels will be required, which will ensure that the scope of available information is limited based on the needs of different user classes (i.e., a customs officer versus a consumer).

‍

With regard to the background mechanics, the Commission in its initial draft proposed that the product passport be flexible, with a decentralized data system set up and maintained by economic operators. Yet elsewhere and in subsequently proposed amendments, the EU has described a more centralized, standardized system and registry that would facilitate consumer searching and comparisons through a single online database. Working groups are currently developing the technical requirements that will govern the operation and design of this unified, but simultaneously decentralized, system. 

‍

What are the Penalties for Non-Compliance with the ESPR?

‍

Companies will be barred from selling products in the EU that do not comply with the ESPR. While specific penalty amounts are not yet specified, the current proposal text makes clear that “effective, proportionate and dissuasive penalties” must be applied by Member States, which may include a combination of fines, confiscation of relevant revenues, and exclusion from public procurement processes.

‍

How Should Businesses Be Preparing for the ESPR?

‍

While the precise requirements of the ESPR are not yet defined, compliance will inevitably require thorough collection, understanding, and management of supply chain data, as well as the coordinated and seamless delivery of different aspects of that data to end consumers. 

‍

Additionally, parallel legal requirements in France (see AGEC Decree 2022-748) are already requiring businesses to disclose some environmental quality and characteristic information to end consumers, presenting companies with both an obligation and an opportunity to begin building their internal capacities now. 

‍

Proactive preparation and a deeper understanding of data management will be crucial for businesses to align with ESPR expectations and capitalize on emerging opportunities in the evolving European regulatory landscape.

‍

Disclaimer: This Insight is provided for informational purposes and is not intended to be relied upon or used as specific legal advice.

‍

‍The retail sector is confronted with a dynamic regulatory landscape that is continually evolving. We are continuing to support our retail partners and the broader industry, so feel free to reach out to learn how we can assist your company now and in the future.