EU's Ecodesign for Sustainable Products Regulation – the essentials

After years in the making, on 27 May 2024, the Council adopted the new Ecodesign for Sustainable Products Regulation ("ESPR"). The ESPR establishes a comprehensive framework setting requirements for the design, sale and disposal of a broad range of products with the aim of improving their environmental sustainability throughout their life cycle. 

The ESPR replaces the existing Ecodesign Directive 2009/125/EC (in force since 2009) and aligns with the European Green Deal by promoting a circular economy. 

This overview is intended to provide answers to the most important questions:

When do companies have to implement the ESPR and what steps can they expect next?

After the Council's approval on 27 May 2024, the ESPR was adopted. Following the signing by the President of the European Parliament and the President of the Council, the regulation will be published in the Official Journal of the European Union and will enter into force on the 20th day after its publication. It will apply 24 months after its entry into force – i.e. June or July 2026.

According to the projected timeline published by the European Commission ("EC"), by late 2024 or early 2025, the first meeting of the Ecodesign Forum will take place. By March 2025, the first ESPR working plan will be adopted. 

Thereafter, the first ESPR measures, including those for textiles and steel, will be adopted in 2026, with the first product requirements starting to apply in 2027 or 2028.

What are the scope and aim of the ESPR?

The scope of the existing Ecodesign Directive 2009/125/EC, which only covers energy-related products, will be expanded significantly by the ESPR. The new proposal will essentially apply to all physical products, including their components and intermediates, that are placed on the EU market or put into service, irrespective of their origin. Therefore, the ESPR also includes goods placed on the market by non-EU market participants.

As of now, the only sectors excluded are food, feed, medical and veterinary products, living plants and animals or products of human origin, meaning that all other physical products will be within the scope of the ESPR.

The ESPR's requirements for the specific product groups will be set in product-specific legislation (so called delegated acts) and will include rules to make such products (according to the criteria set out in the ESPR) more durable, reliable, reusable, upgradable, reparable, easier to maintain and refurbish, and energy and resource efficient. 

However, these criteria are balanced out by counter-criteria set out in the ESPR in order not to disadvantage companies on the EU market. This means there should be no significant adverse effects on product performance, health and safety of persons or affordability of the product. 

Further, there should be no disproportionate adverse effects on the competitiveness of economic operators, and "proprietary technologies" should not be imposed on them.

How will the ESPR be implemented?

The ESPR does not set out specific measures but rather establishes a framework for their later implementation. The requirements for each product or product group will be laid down in a second stage through delegated acts under Art. 290 of the Treaty on the Functioning of the European Union, which will be adopted by the EC after consultation with Member States. It is expected that up to 18 new delegated acts will be developed and adopted between 2024 and 2027, which will also further specify the concerned product groups.

The EC must develop a work plan every 3 years prioritizing products based on their potential contribution to achieving the EU's climate, environmental and energy efficiency goals. The public will be consulted in developing the plan.

In addition to the consultation with the Member States, the EC will be accompanied by a group of experts and stakeholders referred to as the "Ecodesign Forum", which the EC must involve in all decisions to ensure "a balanced participation of representatives from member states and all interested parties in this product or product group".

A preliminary assessment by the EC has identified that product categories such as textiles, furniture, mattresses, tyres, detergents, paints, lubricants, as well as intermediate products like iron, steel and aluminium, have high environmental impact and potential for improvement, and may thus be prioritised in the first workplan. To take into account individual characteristics and specificities of products, rules will be set product by product. However, where sufficient commonalities across certain products exist (such as electronic appliances or textiles), rules covering groups of products may be set. 

As mentioned above, these rules will apply equally to all products placed or put into service on the EU market, regardless of their origin - produced in the EU or imported. 

What are the key requirements of the ESPR?

Digital Product Passport

A key feature of the ESPR is the introduction of the Digital Product Passport ("DPP") under Art. 8 ESPR which will provide a digital entry point to access product information throughout its life cycle. This includes information about product design, manufacture, use (including repairability and spare parts), recycling, and disposal. Products regulated under the ESPR can only be placed on the market or put into service if a product passport is available. The DPP will be linked to a product via a unique identifier (such as a QR code), with detailed rules and requirements for DPP service providers to be developed by the end of 2025.

Disclosure requirement and ban on destruction of textiles

Following discussions with Member States, the EC recognised that the destruction of products, particularly textiles and shoes, largely due to online trade, represents a "widespread environmental problem across the Union," and results in the loss of valuable economic resources. As a solution, the ESPR adopts a two-tiered concept, consisting of (i) a "transparency requirement" and (ii) a "ban on the destruction of goods".

1. The ESPR imposes a disclosure obligation on economic operators who dispose of unsold consumer products either directly themselves or on behalf of other economic operators. These obligated operators must disclose the number and weight of products destroyed per year, the reasons for their destruction, the type of waste treatment operation used, and the measures taken to avoid destruction. Companies will have to report this information on their website. 
2. Further the ESPR empowers the EC to implement delegated acts that prohibit the destruction of certain unsold consumer products where the destruction of unsold consumer products falling within a certain product group has significant environmental impact. The EC may adopt those delegated acts to determine the product groups that fall under the ban on destruction, including for example, clothing, shoes or small electronic devices. Exceptions (e.g. health and safety reasons) should also be included in these delegated acts in order to take account of the concerns of the obligated companies.

What will be the consequences if companies disregard the regulation?

Member States must implement national laws on penalties for non-compliance, with minimum requirements including fines and exclusion from public procurement. Additional measures, such as criminal sanctions, may be introduced by national legislators. Penalties must consider various criteria set by the ESPR, such as the financial situation of the responsible person, economic benefits from non-compliance, and environmental damage caused. Although implementation has not yet taken place, we expect that severe penalties will be applied.

How to prepare for the ESPR?

The ESPR will greatly affect many industries, especially textiles, requiring changes to traditional business models. Although these requirements will not take effect immediately, companies in the EU market should start preparing for the ESPR's impact on their products to avoid losing access to the EU market. It's important to follow the regulation's adoption process and get ready to meet the new requirements. Moreover, raising awareness among supply chain partners is crucial to ensure a coordinated approach to compliance with the new regulation.