Circular economy is a hot topic when it comes to sustainable development. Circular economy concept is based on a production and consumption model that entails recycling and repurposing materials for as long as possible. The aim of circular economy is therefore to extend the life cycle of the products we use on a daily basis (household appliances, cellphones, computers etc.) in order to reduce the use of raw materials.
The implementation of circular economy could deliver several benefits such as reduction of CO2 emissions, providing new jobs, thus increasing the world GDP.
The European Union proposal
The European Union has long been committed to green transition, supported by most of the Next Generation EU fund. Circular economy is a key feature of the European Green Deal, whose main aim is to become climate neutral by the year of 2050.
To this end, on 30 March 2022, the European Commission proposed a package of legislative measures concerning the strategic approach to industrial products. The goal of the aforementioned measures is to implement circular economy business models, often weighted down by significant bureaucracy, and to encourage the cooperation between entrepreneurs and stakeholders, thus steering investments towards this business model.
Among the new rules adopted, the ban on greenwashing stands out for its importance: it prohibits multinational companies from making vague and misleading environmental claims. Another significant measure consists of the introduction of a digital product passport, that contains information about the product components and its recyclability.
In the next few months, the Commission will provide further information about the new rules and what companies they will apply to. The legislative procedure is most likely to be applied to the major coal consuming industries such as steel and pneumatic tires. However, it must be said that the new legislative package did not come out by chance: the ongoing war between Russia and Ukraine has revealed Europe’s excessive dependance on Russian gas and other raw materials such as wheat and fertilizers, hence the urge for an EU green deal that increases European Union energy independence.
The amendment process and the following steps
Since there were already European environmental policies available, what Europe aims to introduce is not necessarily new legislation, but rather a revised regulation. European Union aims to implement Directives such as 2011/83/EU on consumer rights and 2019/2161 on better enforcement and modernization of EU consumer protection.
The former Directive lays down specific information requirements: consumers must be provided with accurate information on the durability and repairability of products. The latter Directive aims to strengthen the consumers protection, increasing transparency requirements, in order to avoid unfair, deceptive, or abusive acts and practices.
Moreover, the so-called blacklist of prohibited practices will include: the omission of information on the central characteristics of the product, or restrictions on the use or availability, making generic and vague misleading environmental claims or portraying products as having more environmental benefits than they truly have.
Yet, the ambitious Brussels’ circular economy action plan is only in the initial stage of its development. Two more steps will need to be completed: the legislative procedure must first be approved by the European Parliament and the Council. Afterwards, national governments will be called upon to introduce legislative measures that follow the directions set by the EU, after the bill is passed to the Parliament for scrutiny (the bill must go through the same stages of any ordinary legislative process).
Translated by Iuliana Cindrea