 "Here's why EU's ecodesign regulation can hurt export of textiles, footwear")
The European Union’s (EU) latest ecodesign regulation, which imposes rigorous sustainability criteria on all products within the bloc, will prohibit the disposal of unsold textiles and footwear which can potentially restrict order volumes, according to a report in The Times of India.
The new regulation is likely to impact Indian exporters, especially smaller enterprises, the report said.
Under the new regulation, certain products are required to meet minimum standards for energy efficiency, known as ecodesign requirements. The objective is to diminish the adverse environmental effects over the entire lifecycle of the product, the EU said.
The guidelines issued recently mandate product durability, reusability, and energy efficiency. These align with a series of measures, such as the carbon border adjustment mechanism (CBAM) and regulations aimed at preventing deforestation.
Regulation to impact businesses in India
The news report quoted Mithleshwar Thakur, secretary general at Apparel Export Promotion Council, as saying that as the industry adapts to the new ESG (environmental, social, and governance) standards, such sudden changes impact smaller businesses.
Another industry source, as cited in the report, said the new regulation is being seen as a non-tariff barrier and governments should raise this issue during the free trade negotiations, as these standards could nullify the benefits of tariff reductions being pursued. Although small and medium enterprises have temporary exclusions from the regulations adopted by the Council of the European Union, they are deemed inadequate.
What is the EU’s new ecodesign regulation?
The EU regulation applies to a wide range of products, with limited exclusions such as automobiles, and defence and security-related items. The latest regulation states that there will be new standards in terms of durability, reusability, upgradability, and reparability. It also mandates rules concerning substances that can hinder circularity, as well as requirements for energy and resource efficiency, recycled materials, remanufacturing, and recycling.
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Additionally, it addresses carbon and environmental impacts, and includes specifications for information disclosure, such as the Digital Product Passport.
Ecodesign standards will apply to public procurement to encourage the acquisition of environmentally-friendly products. The regulation prohibits the destruction of unsold textiles and footwear (with temporary exemptions for SMEs) and grants the European Commission authority to enact similar prohibitions for other products in the future. The ecodesign regulation will harmonise with the Digital Services Act regarding products sold online, the EU stated.
When will the regulation come into force?
“The Commission will be empowered to set ecodesign requirements by delegated acts and the industry will have 18 months to comply with them,” EU said on its website.
It said that following approval from the Council of the European Union, the legislative act has been adopted. “After being signed by the President of the European Parliament and the President of the Council, the regulation will be published in the Official Journal of the European Union and will enter into force on the 20th day following that of its publication. It will apply from 24 months after the entry into force,” the EU said.