From the linear to the circular economy: This path is taking more and more shape because laws, guidelines and regulations set the direction. What’s behind it all and what it means for companies.
As part of the Green Deal and the goal of climate neutrality by 2050, the European Union has introduced comprehensive initiatives and policies to promote a carbon-neutral, low-emission and closed-circular economy. Clear rules in the areas of raw materials, production, recycling as well as objectives for reducing the material and consumption footprint are planned in order to pursue sustainability goals and economic interests in harmony and to ensure planning security for economic actors.
These European regulations and circular economy efforts are coming to companies:
New ecodesign requirements
The European Union, as part of its circular economy strategy, has introduced new ecodesign requirements aimed at expanding the scope and establishing specific minimum criteria for the circularity of products. These criteria include:
- Product durability, reusability and repairability
- Avoidance of substances that impede circulation
- Energy and resource efficiency
- Proportion of recycled materials
- Remanufacturing und Recycling
- Minimize environmental footprint
- Information requirements, including a Digital Product Passport
With these criteria, the Ecodesign Regulation pursues the overarching goal of efficient and environmentally friendly products on the market, particularly in the key product value chains of electronics, information and communication technology, packaging and textiles.
Product environmental footprint and data collection
Introducing and implementing the guidelines for measuring and improving the product environmental footprint is a central aspect of the EU strategy for a sustainable and circular economy. This requires transparency and reliable data about the environmental impact of products.
The EU Ecolabel and in particular digital product passports, which provide detailed information about the composition, origin and environmental impact of products, are initiatives to provide consumers and consumers with the greatest possible transparency about the environmental aspects of products.
Digital product passports are also valuable for companies as they enable better traceability of materials and components and help make recycling and reuse processes more efficient. Standardizing the way information about products is collected and presented can also increase the efficiency of regulatory audits and improve industrial partnerships in value chains.
EU taxonomy and credible data collection
The EU Taxonomy Regulation is a key element of the EU strategy for sustainable finance.
With regard to the circular economy, the EU taxonomy aims at the aspects of waste avoidance, reuse, recycling, as well as reducing the consumption of primary raw materials and improving energy efficiency. These criteria are intended to be used to identify economic activities that contribute substantially to the circular economy. The taxonomy is intended to help encourage investment in such activities. Not only product design that increases repairability and longevity is taken into account, but also the development and implementation of processes and technologies to increase recycled content in production processes.
EU-wide extended producer responsibility (EPR)
Extended Producer Responsibility (EPR) is a principle of EU environmental policy that aims to hold producers responsible throughout the life cycle of their products. Specific requirements have been introduced, particularly in the areas of batteries and textiles.
- Batteries: Here, the EPR stipulates that marketers are responsible for the collection, recycling and disposal of used batteries. The aim is to minimize the environmental impact of batteries and ensure efficient use of resources. This also means that battery distributors must create incentives to facilitate the return of used batteries and implement efficient recycling processes.
- Textiles: The EPR requires manufacturers to promote the take-back and recycling of textiles. This includes measures to increase collection rates for used textiles and improve recycling processes. EPR in the textile sector aims to reduce waste production and increase the proportion of recycled materials in new textile products. Among other things, fully functional unsold textiles may no longer be burned; instead, in the spirit of the circular economy, they must first be given priority for secondary use.
CE standards and transparency
The CE marking in the EU is a well-known symbol of compliance with safety and health standards. As part of the circular economy, these standards are being expanded to also take ecological aspects into account. This is reflected, for example, in the EU plastics strategy, which aims to reduce the environmental impact of plastics. The strategy includes measures to promote the use of recycled plastics, reduce plastic pollution and improve the sustainability of plastic products. This expansion of CE standards aims to achieve a higher level of transparency regarding the environmental impact of products and the critical examination of green product claims.
Due diligence and circular economy in supply chains
The European Supply Chain Due Diligence Act, also known as the Corporate Sustainability Due Diligence Directive (CSDDD), is intended to strengthen human and environmental rights in global supply chains. The CSDDD requires large companies to implement comprehensive environmental and human rights due diligence in their global supply chains.
As part of the Circular Economy Action Plan and through increased due diligence, the CSDDD is also intended to contribute to preserving and restoring biological diversity and improving the condition of the environment, especially air, water and soil. The goal: accelerate the transition to a non-toxic circular economy.
Corporate Social Responsibility Directive (CSRD)
Thanks to the transparency obligation, the CSRD is considered a key enabler on the path from a linear to a circular economy. The ESRS reporting standard means that companies must report transparently on their current and future planned resource consumption, taking into account the depletion of non-renewable resources and the regeneration of renewable resources.
The ESRS area E5 covers resource consumption, waste generation, circular design and recovery of products and materials. Because the standard encourages companies to assess their circular economy across the entire value chain, the CSRD, in addition to the CSDDD, has the power to consider the opportunities and risks associated with circular measures.
While regulations always involve efforts in the area of operational bureaucracy, it is important to also consider the level of opportunity. Circular economy and resource efficiency are not necessarily new topics for companies.
The regulations now have the advantage that a similar level playing field is created for all market participants. Resource efficiency, increasing resource security, innovation and competitiveness are just an excerpt of the potential that can arise from promoting a strong circular economy.
2024-01-30 21:06:04
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