Amidst the vast challenge of excess waste production and declining circularity rates, the focus on transitioning from linear to circular economies intensifies. This article delves into the crucial role of product design in shaping sustainable practices, exploring the EU's response through the proposed Ecodesign for Sustainable Products regulation. As the regulatory landscape evolves, businesses are urged to rethink strategies and reposition themselves as sustainability pioneers in a circular future.

THIS ARTICLE IS WRITTEN BY BART LADRU AND GIDION LONT. BART ([email protected]) AND GIDION ([email protected]) HAVE A STRONG FOCUS ON ESG AND BUSINESS INTELLIGENCE WITHIN RSM NETHERLANDS BUSINESS CONSULTING SERVICES.

With an annual waste production exceeding 2.1 billion metric tons, the EU grapples with a staggering challenge in its current linear economy. Merely 40% of this vast waste volume is subjected to recycling, often resulting in subpar quality products, a phenomenon known as 'downcycling' . The 2023 circularity gap report reveals a decline in global circularity from 9.1% in 2018 to 7.2% in 2023 . 

Amidst the complexity of transitioning from a linear economy to a circular economy, the fundamental concern of product design emerges as a pivotal factor, bearing up to 80% of a product's environmental impact throughout its lifecycle . However, product design's role in enabling sustainability and circularity has largely been overlooked, leading to premature waste generation and the loss of valuable resources. Addressing this issue aligns with the EU's vision of a resource-efficient, competitive economy, prompting the introduction of the Ecodesign for Sustainable Products regulation.

Ecodesign for Sustainable Products regulation

The proposed Ecodesign for Sustainable Products regulation, set to replace the 2009 Ecodesign Directive, introduces three core adjustments. Firstly, it establishes minimum ecodesign prerequisites for all products in the EU market, encompassing various criteria such as reliability, durability, repairability, resource efficiency, and recycled content. Products meeting these criteria would be eligible for market placement. Secondly, the proposed introduction of digital product passports offers businesses and consumers easy access to crucial information like ESG performance, technical specifications, harmful substances, and manufacturer details. This transparency facilitates repair and recycling processes, empowering consumers to make informed choices. Lastly, the regulation will mandate companies to transparently disclose the destruction of unsold goods, with the eventual aim of banning this for products with significant environmental impacts.

While the specific sectors influenced by the regulation remain undefined, the European Commission plans to publish a prioritized list in Q1 2024. The anticipated end-use product groups include Textiles and Footwear, Furniture, Ceramic Products, Tyres, Cosmetic Products, and more. It also covers intermediary products like Iron and Steel, Chemicals, Plastic and Polymers, and Glass. The projected implementation start date in 2028 may seem distant, yet its far-reaching implications demand significant preparations from businesses.

Rethinking your strategic choices

The forthcoming transformation necessitates a comprehensive reevaluation of product design to align with circular economy principles. This entails incorporating environmentally friendly materials, reducing energy consumption, enhancing resource efficiency, and minimizing waste generation. Such transformations will prompt companies to invest in research and development and potentially restructure supply chains. To navigate these changes, businesses are advised to analyze their product's entire lifecycle, from raw material acquisition to disposal. This assessment will identify current environmental impacts and highlight areas for enhancement, thereby informing strategic prioritization. Undoubtedly, the legislation is predicted to heighten costs for impacted companies in the short term. Stricter requirements regarding raw materials and durability are anticipated to drive up investment and production costs. 

The regulation’s introduction should eventually lead to reduced demand for primary materials and new products in the long run, paving the way to a circular economy in which Product-as-a-Service (PaaS) are more common. While primary product sales revenues might decline, alternative revenue streams can be established through offerings like spare parts, repair, servicing, and maintenance.

The EU's unequivocal commitment to a green, sustainable, and circular future offers businesses an opportunity to position themselves as sustainability leaders. By embracing eco-design principles, companies can not only adhere to the impending regulations but also contribute to the reduction of waste production. As businesses gear up for this transformative journey, tracking the regulation's development remains paramount for informed and strategic adjustments. The landscape is shifting, and with proactive measures, companies can embrace a greener path forward.