Commission’s eco proposal will damage small businesses

News @ European Commission. In aiming to achieve sustainable production, the European Commission has recently proposed a package of measures which are likely to have a severe impact on small business. According to the European Association of Craft, Small and Medium-sized Enterprises, UEAPME, the European Commission Action Plan “might put small businesses at a competitive disadvantage and in some cases price them out of the market, (…).” The Commission, on 16 July, adopted a communication on the Sustainable Consumption and Production and Sustainable Industrial Policy which presents an Action Plan aiming at improving the energy and environmental performance of products. Among the measures proposed by the Commission is the review of the Directive on the Ecodesign of energy-using products. The Commission has been promising to reduce bureaucracy and introduce measures to encourage small and medium sized enterprises however the review of the Ecodesign Directive will put on regulatory burdens and increase costs therefore it will discourage small businesses.

The 2005 Ecodesign Directive introduced rules establishing ecodesign requirements for energy-using products. It set ups a framework under which producers of energy using products are obliged, at the design stage, to reduce energy consumption which occurs throughout the product life. The directive determines the conditions and criteria to the Commission to adopt requirements for products through the comitology procedure. Manufacturers who are marketing an energy using a product covered by an implementing measure adopted by the Commission are obliged to ensure that their product observes the energy and environmental standards put forward by that measure.

The energy-using products which comply with implementing measures possess a CE marking and are placed on the internal market. However, it is not clear yet if such measures will make improvements in energy efficiency.

The Ecodesign Directive only currently applies to energy-using products such as heating, water heaters, electric motor systems, lighting, domestic appliances. The Commission has proposed, as part of its Action Plan, to extend the scope of the Ecodesign Directive to cover all energy-related products, keeping the exception to means of transport.

The Commission wants to put in place a single Community framework establishing ecodesign requirements and therefore wants to harmonise national laws on those requirements for all significant energy related products. Energy-related products are defined in the draft directive as “any good having an impact on energy consumption during use which is placed on the market and/or put into service in the European Union” such as window frames, water-using devices and insulating materials. The revised Ecodesign Directive would cover all energy-related products and set compulsory minimum requirements to put the products on the market. However, the definition of such products is far from precise.

Obviously, since the Commission has proposed to extend the scope of the Directive there will be a widened choice of product groups for which implementing measures can be adopted. The Commission urges industry to develop benchmarks and standards for several products that would be affected by the proposal otherwise the Commission will regulate specific standards when it deems the industry initiatives to be insufficient. The Commission has stressed that “Legislative measures may be needed where market forces fail to evolve in the right direction or at an acceptable speed.” The Commission will develop implementing measures for products with significant environmental impact, and consider potential room for improvement in its environmental impact. The products which will be targeted by the so-called implementing measures still need to be determined. The Commission will put forward a working plan setting out an indicative list of product groups considered to be as priorities meaning those which have a significant environmental impact for the adoption of implementing measures. The implementing measures will take into account the lifecycle of products, environmental aspects and the energy and resource use of products. There is no indication of which products will be targeted in any implementing measures; therefore it is very difficult to make an accurate business impact assessment.

The existing Ecodesign Directive sets minimum requirements for products to be placed on the market as well as environmental performance benchmarks referring to the best performing products on the market. Therefore, this will, under the Commission’s draft proposal, be extended to all energy related products. Member States would be required to take all the necessary measures to guarantee that energy related products affected by implementing measures may be placed on the internal market solely if they comply with such measures and bear the CE marking. In case of noncompliance, the Member State would be required to prohibit the product’s placing on the market or withdrawing it from the market. A manufacturer would be required to ensure that an assessment of such products conforms with the applicable implementing measure requirements are made before placing that product (covered by those measures) on the market or putting it into service.

Professionals in the industry are not pleased with the Commission’s plan to extend the scope of the Ecodesign directive. The Commission is once again over-regulating the industry. Manufacturers would have to change their production methods in order to comply with the Commission rules which would have serious financial implications for them. The SME would have to comply with extra eco-design criteria for a CE mark, further administrative requirements and testing procedures. The conformity assessment will introduce further bureaucracy and red tape and some SMEs will not be able to implement it. Guido Lena, UEAPME Director for Sustainable Development has pointed out that there is a risk of a large number of SMEs not being able to comply with minimum requirements and, therefore, such enterprises will not be allowed to place their products on the market. According to Euractiv, Alexandre Affre, Business Europe’s Advisor on Environmental Affairs, has said “If there are higher standards in the EU as regards the environment than in non-EU countries, this could impact seriously on the cost of EU products.”

The Commission is expecting that its proposal will be adopted by the European Parliament and the Council at first reading before the end of the European Parliament legislature.

-- From The European Journal. Sign up for FREE to Margarida Vasconcelos' 'Through the EU Labyrinth' reports and John Laughland's 'Intelligence Digest' to find out what’s really happening in Europe --