The European Commission proceeds pacing with 7-mile steps towards its ambitious climate targets and initiated a new set of regulatory measures under the framework of its Circular Economy Action Plan which in turn is an essential component of the EU Green Deal. This time, the initiatives are aimed at reforming the sector of consumer electronics. What was initially planned as a package termed Circular Electronics Initiative, has now been split into multiple measures that will be successively released over the course of 2022. Such include the right to repair for physical products and software updates and ‘New Design Requirements and Consumer Rights for Electronics’, and more. Similar to the EU Strategy for sustainable Textiles (Read our Blog for more), the primary enforcement tool will again be the Ecodesign for Sustainable Products Regulation.
The issue with consumer and home electronics
The European Commission identified electrical and electronic equipment as one of the priority sectors within its Circular Economy Action Plan in 2020. According to estimates, less than 40% of electronic waste in the EU is recycled. Additionally, electronics represent one of the fastest-growing waste streams in the EU, mounting up to a current annual growth rate of 2%. At the same time, the production and sale of smartphones is expected to grow by 28% from 2020 to 2025.
The current regulatory landscape for consumer electronics in the EU
Currently, consumer and home electronics are regulated under a range of policy instruments in the EU, including legislation on general product safety, sector-specific regulation as well as provisions of consumer protection. This framework is surrounded by a range of other governance mechanisms, such as European Standards and labelling requirements.
Large parts of legislation covering the governance of consumer electronics in the EU fall under broad legislation concerning product safety and consumer protection, designed to provide a broad framework across product categories. Such include:
- The Directive establishing a framework for the setting of ecodesign requirements for energy-related products is the predecessor of the already mentioned Ecodesign for Sustainable Products Regulation, which has now turned into a directly applicable regulation but it’s scope has also been substantially broadened.
- The General Product Safety Directive applies to consumer goods for which no specific provisions in EU law exist and ensures that businesses only place safe products on the market and that national authorities monitor the safety thereof.
- Consumer protection rules have wide implications on consumer electronics, such as under the Contract rules for sales Directive, which introduced -among others- two-year warrantees for consumer electronics.
- Depending on individual circumstances of producers as well as the components of their products, they might further be bound by the REACH Regulation governing the usage of chemicals, the newly proposed Batteries and Waste Batteries Regulation, or the Conflict Minerals Regulation.
- These are further accompanied by information requirements as stipulated by the Regulation for energy labelling and a complex web of standards and their responsible bodies and committees.
Finally, manufacturers and sellers have to comply with a wide range of horizontal pieces of legislation that are also applicable to other sectors, such as the Directive on corporate sustainability due diligence as proposed in February 2022. Fore more information on this initiative, read our respective Blog article.
Amendments and Revisions under the Circular Electronics Initiative
Overall, the Circular Electronics Initiative, as outlined in 2020, aims to extend the lifespan of electronic devices, prevent premature obsolescence, and promote repairing and recycling as well as the overall efficient use of resources. The chosen approach builds up on the Ecodesign for Sustainable Products Regulation. Design requirements are supposed to enhance durability, modularity, repairability and recyclability of electronic devices. Additionally, information requirements shall include repair manuals, source code, components and materials, spare part availability and environmental footprint. Spare parts generally are sought to be made subject to dedicated production/supply and licensing requirements. After having achieved the common charger standard, the agenda now includes the development of take-back schemes and the introduction of a right to repair.
The right to repair
To truly embed a right for consumers to get faulty or broken products repaired, a variety of regulations will have to be changed. First of all, legislators identified a need to adapt the current Ecodesign requirements in a way that products can be repaired more easily. To this end, the Commission is also tackling the availability of the spare parts that are most needed. These and other specific provisions on reparability are part of the newly proposed Ecodesign for Sustainable Products Regulation.
Secondly, manufacturers and retailers will have to inform customers on the reparability of products. The “Empowering consumers for the green transition” initiative foresees a mandatory label that indicates how easy a product can be repaired once broken.
Finally, the right will have to be enshrined in European consumer contract law. A review of the Contract rules for sales Directive is therefore foreseen for November. As every so often, it is worth to already take a closer look at the currently applicable version of this Directive, which inter alia covers provisions of after-sale returns. Accordingly, if a consumer buys a product that proves to be faulty at the time of sale and if this fault becomes apparent within two years of delivery of that product, the seller is required to bring it into conformity. For that to happen, consumers have the choice between repair and replacement of the given faulty product, “unless the remedy chosen would be impossible or […] would impose costs on the seller that would be disproportionate” (Art. 13 (2)). This points to a de facto right to repair in the situation of returns of faulty products within the two-year period. Since the text is a Directive that needs to be transposed into national legislatures – rather than a Regulation that is directly applicable – Member Sates already now have the possibility to introduce stricter rules and a more explicit right to repair. In the Contract rules for sales Directive, one can most likely expect slight wording adaptations rather than radical changes to the current text in order to make the right of repair more explicit.
The European Commission proclaiming an introduction of a right to repair is therefore misleading. However, the new / revised European legislation intends to substantially improve the accessibility and availability of repairs for consumers and keep them informed on their options. The requirements connected to these legal adaptations will have to be met by manufacturers and sellers, potentially imposing restrictions on their current business models and production design. Furthermore, the Right to Repair will be altered to include the right to update obsolete software.
German intentions and the danger of a patchwork
Despite the focus on Brussels and the European regulations coming from there, it is also worth taking a closer look at Germany. What are Europe’s largest economy’s plans for ecodesign and sustainability in consumer and home electronics? This question is particularly interesting in light of the change of government in Germany. Since the Bundestag elections last year, the responsible Federal Ministry for the Environment and Consumer Protection has been headed by Green minister Steffi Lemke.
A glance at the coalition agreement showed that Germany wants to lead the way in terms of sustainability and reparability: increasing producer responsibility in terms of durability and reusability, the introduction of a digital product passport as well as a recycling label, a reparability index, a flexible warranty period or a comprehensive right to repair – all initially Brussels topics that can also be found on Germany’s agenda.
The Federal Ministry for the Environment and Consumer Protection is already taking action. In the second half of the year, for example, an action plan entitled “Repairing instead of throwing away” is to be presented, which will underpin the right to repair with concrete measures. Of particular interest here is that the ministry sees the right to repair as a whole bundle of instruments and regulations that affect both the EU level and the national level.
This in turn would mean a “patchwork” of regulations within the EU. The situation is similar with the repairability index. Ideally, according to the ministry, a Europe-wide seal should be created. However, the intention is to proceed nationally if this does not come about quickly at the European level. The ministry is also developing a prototype of a digital product passport by mid-2023. This is also intended to serve as a model for the EU – the ministry therefore wants to play an active role in shaping the standards of a European product passport.
The flexible warranty period would also be possible as a German stand-alone measure. This is because the Contract rules for sales Directive, which has already been mentioned, only formulates the minimum requirement of the currently applicable two-year warranty period. The directive also allows member states to maintain longer periods.
Overall, a lot is currently going on in environmental and consumer law – both at European and national level. Many initiatives have already been launched, are being implemented or are planned for the near future. While EU and national policy makers want to send a political message, companies in the consumer and home electronics sector must keep an eye on all political levels. This is essential in order to ensure that new and revised regulation goes in the right direction and potential additional, more substantial, legislative changes reasonable. All in all, this demonstrates how important it is to be aware of applicable legislation and the different rules affected to effectively influence it.
