In March 2020, the European Union (EU) adopted the Circular Economy Action Plan (CEAP). This plan is central to the European Green Deal and the EU’s transition into a circular economy, which focuses on reducing pressure on natural resources and creating sustainable jobs and growth.
As one of the CEAP’s central building blocks, the Ecodesign for Sustainable Products Regulation (ESPR) (which entered into force on July 18, 2024) will present manufacturers with new, robust product design and reporting requirements they must meet before they can place products on the EU market.
So, what is the ESPR, what do you need to know to prepare for it?
You don’t want to miss this webinar. Join us for ESPR Essentials: Understanding the New Ecodesign for Sustainable Products Regulation on September 19, 2024. Register now.
A Brief Outline of ESPR
The ESPR is a cornerstone of the CEAP. Specifically, it aims to improve the environmental sustainability, circularity, and performance of products placed on the EU market.
To accomplish this goal, ESPR sets ecodesign requirements (in other words, performance and information conditions) for almost every physical good and its parts bought and sold on the EU market. ESPR will replace the existing Ecodesign Directive while also broadening the scope of future ecodesign requirements impacting manufacturers.
ESPR’s goals are:
- Improve products’ durability, reusability, and upgradability
- Make more energy- and resource-efficient products
- Address substances that prevent circularity
- Increase recycled content
- Make products easier to recycle and remanufacture
- Set carbon and environmental footprint rules
- Improve the availability of product sustainability information
ESPR Is Broader Than We’ve Seen Before
While the Ecodesign Directive covered over 40 product groups, including boilers, lightbulbs, and TVs, ESPR’s scope is significantly larger, with broader reporting topics. Before, manufacturers were required to report on energy-efficiency data. Now, under ESPR, they must report that data along with material requirements; recycling; environmental, sustainability, and governance (ESG); carbon footprint; and more.
Information requirements have also expanded under ESPR, and includes a Digital Product Passport (DPP). This digital identity card stores information that supports a product’s sustainability, strengthens legal compliance, and promotes circularity. DPP information is accessible electronically so consumers, manufacturers, and regulators can make more informed sustainability decisions that align with regulatory compliance requirements.
How Manufacturers Maintain EU Market Access
ESPR represents a shift in chemical and material compliance. Previously, compliance data was only needed at the last stages of the manufacturing process, as part of the quality documentation for products and parts. But now this information will be needed to obtain the CE marking before products are manufactured. This means the data must be provided at the early product design stage, before the go-to-market decision has been taken.
Given this, chemical and material compliance information becomes an asset to CPO/CFO decision-making, changing the stakeholders that need to be concerned with that information.
The cost of compliance will also be factored in early, introducing a stronger emphasis on the chemical and material properties and the sourcing decisions based on these properties. Since ESPR is about product sustainability, this regulation will directly inform all corporate sustainability reporting requirements and have direct and indirect impacts on the valuation of investments’ sustainability.
Maintaining EU market access and avoiding non-compliance will require more robust supplier data gathering. Since ESPR covers virtually all products that enter the EU market, in-scope manufacturers will need to expand existing data collection efforts to prove that their products align with ESPR requirements. ESPR will also have indirect impacts on companies outside the EU and around the globe. This is because the companies that are directly in scope of ESPR will need data from their global supply chains.
Failure to comply with ESPR may have negative consequences: fines, loss of EU market access, and reputational damage, among others. Enforcement is subject to member states’ measures, but manufacturers can expect consistency in enforcement given the evolving market surveillance capabilities in the EU. That’s why it’s vital to be proactive and prepared for these new requirements when they enter into force.
ESPR: Our Thought Leadership Position
Assent is the only supply chain sustainability management solution provider that helps you understand new requirements like the ESPR and be proactive in meeting them. We are the leader in part-level data collection, with extensive experience handling bills of materials (BOMs) built on primary data. We work with our clients and their suppliers to help them develop their program maturity and comply with global regulations. Our user-friendly software is uniquely designed for manufacturers and their complex products, and delivers high-quality data, including supplier, product, and part information, complemented by public sources.
If you want to learn more about ESPR, how it might affect your company, and what you can do to prepare, register for our webinar. On September 19, Assent’s regulatory and sustainability experts, Marcus Schneider and Emma Owens, will be hosting ESPR Essentials: Understanding the New Ecodesign for Sustainable Products Regulation. During this webinar, they’ll cover everything you need to know about ESPR, how it impacts manufacturers, and how the new regulation affects data requirements throughout the product life cycle.
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