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Circular Economy Package Adopted, While Product Obsolescence Remains in Spotlight for Shaping of Future Laws

On 22 May 2018, EU Member State ministers voting within the Council adopted the much-touted Circular Economy Package which will apply throughout the European Union. Earlier, on 18 April 2018, the Package had been formally agreed to by the European Parliament. The Package lays down recycling targets and other requirements over the forthcoming years, setting binding requirements and strict rules on waste management. The main features of the Package are as follows:

  • New separate collection rules will likely have an impact on Hong Kong sellers, impacting the costs associated with, for example, clothing items. This is because textile waste will have to be collected separately by 2025. Other than that, hazardous household waste will have to be collected separately by 2022, and bio-waste by 2023. Hong Kong sellers of electronics will recall that, in similar vein, the Directive on waste electrical and electronic equipment (the WEEE Directive) already sets down separate collection requirements since 2002.
  • Municipal waste will have to comply with the following recycling targets: 55% by 2025 and 65% by 2035.
  • No more than 10% landfilling will be allowed by 2035.
  • As for all packaging, 65% will have to be collected for recycling by 2025, with the proportion rising to 70% in 2030. Within that framework, there are mandatory recycling rates which vary according to type, with the 2030 targets ranging from 30% for wood-based packaging, to 85% for paper and cardboard. The figure for plastic packaging is set at 55%.

The text is now ready to be published in the Official Journal of the EU. Once published, it will enter into force 20 days later.

Even though the UK is to leave the EU, its government has already said that it is set to include the adopted circular economy measures, partly because they will have become EU law before the country actually leaves.

In related news, the European Commission has launched an initiative to consider how current EU legislation can be improved with a view to the development of more durable, reusable and repairable products. In a roadmap published on 7 May 2018, the Commission stated that the way products are designed, produced, used and discarded have a strong impact on the transition to a fully circular economy. There is felt to be large improvement-potential in terms of sustainability, in moving from linear to circular products: less use of resources, less waste, more jobs in repair and recycling sectors, and monetary savings.

The Commission’s initiative will analyse relevant EU policies for their contribution to the circular economy. Some of the existing EU policy tools to promote the circular economy, such as the Ecodesign Directive, target specific product groups through market restrictions for the poorest performing products. In contrast, other policy tools, such as the REACH chemicals legislation, restrict use of certain substances in product groups (e.g., phthalates in toys).

The problem which the initiative aims to address is that many products in use today are not designed or produced with circularity in mind. They cannot be easily repaired, upgraded or remanufactured, resulting in premature obsolescence. Over the whole life cycle of the product, the use of resources is often sub-optimal. At their end-of-life, products are discarded and their materials not sufficiently recycled, causing valuable resources to be wasted, including critical raw materials. For instance, electrical and electronic products, which apparently have an estimated potential value of more than €48 billion are going to waste annually. Missing or unclear information for consumers on the environmental performance of products, including a proliferation of unverifiable or even misleading 'green' product claims, push in the same direction.

The aim is also to (i) analyse product groups with high circular economy potential currently not or only partially covered by EU policy tools, and (ii) describe actions and options to realise this potential. These steps will take due account of the phase of products’ life-cycles where instruments have their impacts: during design and production (upstream), during the use phase and/or at the end of life. Such products will include textiles, construction products, cosmetics, food and drinks, and furniture.

A wide range of stakeholders will be involved through a public consultation (foreseen for the summer of 2018) and a conference in the autumn of 2018. In addition, more targeted consultation of stakeholders in the sectors addressed by the initiative will take place, for example through workshops. Hong Kong sellers of a variety of goods will be able to voice their opinions should they wish to take part in the consultations that are due to be announced later this year.

Content provided by Picture: HKTDC Research
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