Current EU developments relating to the circular economy

The creation of a circular economy is at the heart of the European Green Deal, with the focus on ensuring products are fit for a climate-neutral and resource-efficient economy. In 2020, the European Commission published a Circular Economy Action Plan to help decouple economic growth from resource use.

One of the key initiatives is to develop a framework to make sustainable products, services and business models the norm and ensure products are efficient, affordable, last longer and are designed for reuse, repair and recycling - thus moving away from a “take-make-use-dispose” model and avoiding unnecessary waste. There is also a focus on providing consumers with better information and tackling false green claims.

Some initiatives under the Circular Economy Action Plan are expected to gain momentum in the coming weeks or months:

Sustainable products initiative

With its proposal for a new regulation on sustainable batteries from December 2020, the European Commission kicked off the first initiative to be delivered under the Circular Economy Action Plan. The new regulation shall ensure that batteries placed in the EU market are sustainable and safe throughout their entire life cycle. The proposal is currently being scrutinized by the EU co-legislators with discussions currently accelerating after a quieter period.

In the meantime, however, the EU also looks at a broader range of products: with its sustainable products initiative, the Commission aims to make all products placed on the EU market more sustainable. Following a public consultation in 2021, the Commission is expected to adopt a proposal for a directive in March. In addition, there are more sector-specific initiatives on the horizon early this year (e.g. for textiles or construction products).

Substantiating green claims

In parallel, the Commission is preparing a proposal for a regulation on green claims which is expected to be adopted in March and shall require companies to substantiate claims they make about the environmental footprint of their products/services by using standard methods for quantifying them. The aim is to make the claims reliable, comparable and verifiable across the EU, thereby preventing companies from giving a false impression of their environmental impact (so-called greenwashing).

Sustainable consumption of goods

Finally, the Commission published a call for evidence and a public consultation on an initiative for the sustainable consumption of goods in January 2022. The main objective is to encourage consumers to use consumer goods for a longer time, by repairing defective goods and by purchasing more second-hand and refurbished goods. According to the Commission, one of the main causes for the premature disposal of goods lies in the difficulties with repairing broken products. The initiative shall lead to a proposal for an amendment of the Sale of Goods Directive and a new initiative on the right to repair (which will involve either an amendment to the Sale of Goods Directive or will be set out in a separate legal instrument).

The Commission is considering several legislative and non-legislative options, including:

• encouraging voluntary business commitment to promote repairs and refurbished goods (non-legislative),

• extending the legal guarantee period beyond two years for new goods that consumers choose to repair and for second-hand and refurbished goods (amendment to the Sale of Goods Directive),

• making repair the preferred legal remedy when less expensive than replacement (amendment to the Sales of Goods Directive), and

• a mandatory obligation for producers and sellers to repair goods beyond the legal guarantee period, eventually for free (new right to repair within the Sale of Goods Directive or in a separate legal instrument).

The call for evidence and public consultation close on 5 April. The Commission intends to publish a legislative proposal in Q3/2022.