EU

A proposal for a directive empowering consumers for the green transition (the “Green Directive”)

On 17 January 2024, the European Parliament gave its final green light to the Green Directive. Its purpose is to protect consumers from misleading marketing practices and help them to make better purchasing choices. To achieve this, a number of problematic commercial habits related to greenwashing and the early obsolescence of products will be added to the EU list of prohibited commercial practices.

This means that the Green Directive will amend Directive 2005/29/EC, concerning unfair business-to-consumer commercial practices in the internal market, and Directive 2011/83/EU, on consumer rights. Notably, the Green Directive will, in due course, also work hand in hand with the new Green Claims Directive, which is currently being discussed at committee stage in the European Parliament and will provide more specific conditions on the use of environmental claims as part of product marketing and advertising.

What main changes does the Green Directive bring about?

• Terms including “environmentally friendly”, “eco”, and “climate neutral” will no longer be permitted to be used in the EU as part of product advertising or on packaging without concrete evidence to support the same.
• Unfounded durability claims will also be banned, as will prompts to consumers to replace consumables earlier than strictly necessary (often the case with printer ink, for example) and presenting goods as repairable when they are not.
• Only sustainability labels based on official certification schemes or established by public authorities will be allowed in the EU.
• Guarantee information will need to be more visible and a new, harmonised label will be created to provide more prominence to goods with an extended guarantee period.

Once it has also been formally approved by the Council of the EU, the Green Directive will be published in the Official Journal of the European Union (yet to occur). Following this, Member States will have 24 months to transpose it into their national law.

A proposal for a regulation on packaging and packaging waste (the “Packaging Regulation”)

On 18 December 2023, the European Council reached an agreement (its “general approach”) on the Packaging Regulation. The Packaging Regulation aims to tackle the increase in packaging waste generated in the EU, while harmonising the internal market for packaging and boosting the circular economy. To do so, the full lifecycle of packaging will be considered, to ensure it is safe and sustainable, can be recycled and contains minimal presence of substances of concern.

What main changes does the Packaging Regulation bring about?

• The general approach covers all packaging, regardless of the material used and all packaging waste, regardless of its origin (including industry, manufacturing, retail, and household).
• All packaging placed on the EU market must be recyclable (with packaging being considered as ‘recyclable’ when designed for material recycling, and when the waste packaging can be separately collected, sorted and recycled at scale – this latter condition applying from 2035).
• Manufacturers and importers will be required to ensure that the weight and volume of packaging is minimised, except for protected packaging designs.
• The labelling of packaging will sought to be clarified to ensure that consumers are well informed about the material composition of the packaging and how it can be disposed of at its end-of-life.
• Member States will be allowed to set out their own prevention measures concerning packaging waste that are higher than the minimum packaging waste reduction targets prescribed within the Packaging Regulation (namely 5% by 2030, 10% by 2035, and 15% by 2040 – to be reviewed 8 years after the Regulation’s entry into force).

The general approach will now serve as the European Council’s mandate for negotiations with the European Parliament on the final shape of the legislation. The outcome of the negotiations will have to be formally adopted by the European Council and the Parliament. Once this occurs, the Packaging Regulation will apply 18 months after its entry into force.

A proposal for a regulation establishing a framework for setting eco-design requirements for sustainable products (the “Eco-Design Regulation”)

In December 2023, the European Parliament and European Council reached a provisional agreement on revising the EU’s eco-design framework for sustainable products. To do so, the Eco-Design Regulation aims to improve various aspects of products throughout their lifecycle to make them more durable and reliable, easier to reuse, upgrade, repair and recycle and use less resources, energy and water.

What main changes does the Eco-Design Regulation bring about?

• The new regulation will replace the existing Ecodesign Directive (2009/125/EC) and will enlarge the scope of this current legislation (which for now is limited to energy-related products) to set performance and information requirements for almost all categories of products placed on the EU market. In particular, the European Commission will be empowered to adopt eco-design requirements for products to improve their environmental sustainability, by way of delegated acts. Priority will be given to highly impactful products, including textiles (especially garments and footwear), furniture (including mattresses), iron and steel, aluminium, tyres, paints, lubricants, and chemicals, as well as energy-related products, ICT products, and other electronics.
• A new "Digital Product Passport" (i.e. an easily accessible tag) will be introduced which will be used to provide information about products' environmental sustainability. It is hoped that the Passport will help consumers and businesses to make more informed choices when purchasing products as well as assist public authorities to better perform their respective checks and controls.
• There will be a direct ban on the destruction of textiles and footwear (subject to certain derogations for small companies and a transition period for medium sized companies) which will become applicable two years after the entry into force of the Regulation. The Commission will also be empowered to introduce new bans for the destruction of other unsold products by way of delegated acts – meaning other sectors could also be covered by such bans in the future.
• Large companies will need to disclose annually how many unsold consumer products they discard and why.

The provisional agreement reached with the European Parliament now needs to be endorsed and formally adopted by both institutions. Once this occurs, the Eco-Design Regulation will apply 18 months after its entry into force (subject to any other prescribed timelines/derogations).

UK

The EU is not alone in its focus on proposing product environmental focused legislation, and in recent times, the UK’s Department for Environment, Food and Rural Affairs (“Defra”) and the devolved governments have published:

• A joint consultation on reforming the UK producer responsibility system for waste electrical and electronic equipment (“WEEE”) under the Waste Electrical and Electronic Regulations 2013 (SI 2013/3113); and
• A call for evidence on its longer term development.

The proposals include a variety of options which potentially  impact particularly on online international distributors, with the call for evidence seeking views on longer-term ways of reforming the WEEE regime in the UK, including by introducing full net cost recovery, moving to a circular economy through better design, increasing business WEEE collections and improving treatment standards.

The consultation also proposes a range of measures to increase collection and recycling rates, including, among others:

• The collection of small household WEEE, rather than the public having to take WEEE to household waste and recycling centres and waste transfer stations that are designated collection facilities. Producers of electrical and electronic equipment would finance the collections, which would not necessarily require any further bins. Collections would be undertaken for a WEEE scheme administrator by the waste collection authority.
• Large retailers providing in-store WEEE collection drop points, free of charge and without the need to buy a replacement product.
• Retailers and online sellers taking on responsibility for collecting unwanted or broken large electrical items such as fridges or cookers when delivering a replacement.

The consultation and call for evidence will close on 7 March 2024, with the rollout of household collections being anticipated from 2026, along with other reforms occurring later this year.

US

A proposal for changes to the Energy Guide labeling requirements

In the US, regulators are also considering ways to encourage manufacturers to make consumer appliances more environmentally friendly- and ensure that consumers have this information to hand when making purchasing decisions.

Back in 1979, the Federal Trade Commission (“FTC”) created its Energy Labeling Rule. This rule requires manufacturers of major home appliances, like refrigerators and dishwashers, and consumer products, like televisions and lighting products, to attach Energy Guide labels to their products as well as to post certain label information on their websites. The labels must disclose details about the product’s estimated energy usage costs, energy consumption and efficiency, and how those metrics compare with similar products.

Earlier this year, the FTC proposed changes to its Energy Labeling Rule which would expand the rule’s coverage and modernize certain labeling requirements.

What main changes would this rulemaking bring about?

• The Notice of Proposed Rulemaking seeks comment on whether to expand the rule to include air cleaners and purifiers, clothes dryers, certain refrigeration products such as wine chillers, and portable spas and hot tubs.
• The proposed rule also seeks comment on modifying the label requirements for certain appliances and making changes to how the labels are displayed on showroom models.

If adopted, these rule changes would require certain manufacturers of certain categories of products to comply with the label requirements for the first time. Manufacturers who are already subject to the rule may need to make updates to their labels to reflect new layout, format, and placement rules. Retailers would also face burdens in updating the labels on showroom floor models.

Comments on the FTC’s proposal are due 2 April 2024.

Conclusion

Across the globe, environmental concerns are at the top of everyone’s mind. 2024 is poised to be a big year for more (new or expanded) laws and regulations which place obligations on product suppliers to enjoin them into the fight to improve the health of our planet. Both Hogan Lovells Global Products Law team and Global Product Environmental Practice are actively monitoring developments in all of the areas mentioned above, with expertise in the EU, UK, US and beyond. We encourage businesses to keep an eye out for our future updates, and to get in touch with any questions they may have.

For further details on Hogan Lovells Global Products Law team and on its Global Product Environmental Practice, please contact Valerie Kenyon (valerie.kenyon@hoganlovells.com) and Adam Kushner (adam.kushner@hoganlovells.com).

Authored by Valerie Kenyon, Katy Milner, and Vicki Kooner.