Impact of international, open standards on circularity in Europe
Leveraging the power of data to support circular supply chains
With the EU taking strong regulatory action on sustainability, the Circular Economy features as an essential paradigm towards which Member States must guide businesses. The Digital Product Passport (DPP) has been proposed as a crucial tool, enabling not only the efficient technical management and oversight of implementing systems (such as Extended Producer Responsibility -EPR- schemes), but also supporting a central goal of the new Circular Economy Package – consumer empowerment through enhanced supply chain transparency.
The importance of transition to a circular economy is recognised in the European Green Deal, with the dedicated Circular Economy Action Plan introduced by the Commission in March 2020. The key cross-cutting measure of the Plan is the ecodesign for Sustainable Products Regulation (ESPR), which builds on the existing ecodesign framework (which sets ecological requirements for energy-related products). The ESPR will expand the coverage of these product standards to a broader set of resource-intensive products and introduce requirements related to circularity. These parameters include, amongst other things, durability, reusability, reparability, recyclability, and environmental footprint of products.The ESPR is designed to synergise with the wider regulatory ecosystem, including the EU Taxonomy, Product Environmental Footprint methodology, Strategy for Sustainable and Circular Textiles, and many more directives, regulations and legislative acts leading to sustainability.
To further enable improved resource flow management in supply chains, the ESPR proposes the roll-out of DPP. As the name suggests, these Passports will be assigned to each product (similarly to passports that are held by citizens), providing amongst other key information on its characteristics and origins – information required to more effectively reuse and/or recycle it in the future (e.g., type of used materials and components), which is otherwise lost along the supply chain.
With the European Commission electing to require standards for circularity purposes, decisions are yet to be made on the specifics of implementation – to come in the form of delegated acts. Whether an open standard or a mixture of proprietary alternatives, centrally controlled and defined or left mostly to market forces, the decisions of regulators could create differing scenarios with numerous implications for businesses, consumers, and even global markets. This report explores these impacts, and how the creation of barriers to trade, duplication of data and burden on businesses can be avoided or minimised.