24 March 2020
European Circular Economy Action Plan Announces Revamping of EU Product Regulations and Consumer Rights
On 11 March 2020, the European Commission adopted its Circular Economy Action Plan. The Plan complements the Industrial Strategy adopted the day before. Together, these two strategies set out to “green” the European economy as the new growth model of the European Union. Hong Kong traders should be aware that this Circular Economy Action Plan focuses on new product frameworks in particular in sectors such as electronics, batteries, textiles, packaging and plastic.
Unlike previous action plans, this action plan strives for a holistic framework. The roll-out of sectoral and horizontal actions will take place between now and 2023.
The core ambition of the 2020 action plan is to make all products produced and/or used in Europe sustainable. Sustainable products are products which last longer, and can be reused, repaired, upgraded and recycled. Needless to say, the plan will apply to products both manufactured in and imported into the EU.
At the heart of this action plan lies a legislative proposal for a “Sustainable Product Policy” by 2021. This will be translated by means of a legislative proposal from the European Commission to revise the Ecodesign Directive. This proposal will broaden the scope of the Directive to a wider range of products beyond energy related products. In addition, this initiative will also consider the creation of sustainability principles and other appropriate ways to regulate, among others, remanufacturing and high-quality recycling, an increase in the recycled content of products, banning single use and the demolition of unsold durable goods, as well as improving the durability, reusability and reparability of products.
Hong Kong trades should be aware that the 2020 circular economy action plan focuses on sectors that use the most resources and where, according to the European Commission, lies the highest potential for circularity. Those sectors include electronics, ICT, batteries, packaging, plastics and textiles. For each sector the action plan sets out specific measures.
The new action plan announces a “Circular Electronics Initiative” by 2020/2021. This initiative will include, among others, regulatory measures for electronics under the Ecodesign Directive, create a common charger solution and an EU wide take-back system for tablets, phones and chargers. In addition, the RoHS Directive (the Directive on the restriction of the use of certain hazardous substances in electronical and electronic equipment) will be up for review in 2021.
The action plan announces a proposal for a new regulatory framework for batteries by 2020. This proposal will build on the work done by the Batteries Alliance and the evaluation of the current Batteries Directive. In this new regulatory framework Hong Kong trades can expect rules addressing the phasing out of non-rechargeable batteries where alternatives exist as well as sustainability and transparency requirements for batteries and rules on recycled content.
Hong Kong trades involved in plastic products should be aware that the new action plan will complement the 2018 EU Strategy for Plastics with several measures. The new action plan announces that the European Commission will propose mandatory requirements for recycled content and waste reduction measures as well as a forthcoming restriction on intentionally added microplastics. Additionally, a policy framework for bioplastics and biodegradable or compostable plastic will be proposed by 2021.
Regarding textiles, the 2020 action plan sets out a comprehensive EU strategy for textiles by 2021. The aim of this strategy will be to increase the EU market for circular and sustainable textiles. Therefore, the strategy will focus, among others, on the recycling of textiles and separate collection of textile waste by 2025.
The different sectoral strategies will be complemented by a strong and generalised reinforcement of consumer rights. The European Commission will propose a true “right to repair” by 2021. This true “right to repair” will include the upgrading of electronic equipment, which means a right to update obsolete software for consumers. Hong Kong traders should be aware that for the implementation of this right the European Commission announced that it will focus on electronics and ICT.
The 2020 action plan focusses on the European market, but it also has a strong international dimension. The European Commission wants to reach a global agreement on plastic and proposes a Global Circular Economy Alliance.
The roll-out of the 2020 action plan throughout the different sectors will take the form of legislative and non-legislative measures. There will be broad consultations with stakeholders preceding most of those actions.
For businesses in mainland China and Hong Kong, the new Circular Economy Action Plan makes clear that Europe is ready to revamp its product framework and strengthen consumer rights in this regard. The roll-out of all announced measures in the coming three years is expected to impact the global supply chains for goods intended for the European market.