PODCAST 9: THE EU SUSTAINABLE PRODUCT POLICY GUIDES TOWARDS BUSINESS ALIGNED WITH THE CIRCULAR ECONOMY

The EU-level actions have tremendous impact in speeding up the circular economy. Eero Jalava, Specialist at Sitra, views the EU circular economy legislation as a way to make the circular economy mainstream. The European Green Deal, a green growth strategy, acts as an umbrella for actions that advance the circular economy. The EU Green Deal sets out to make the EU carbon-neutral by 2050 while taking competitive economy and digitalisation into account.

“This is a sort of double transition where we aim to live in harmony with nature and to strengthen the economy”, Jalava clarifies.
The Green Deal includes various sets of measures. One of these is the EU Circular Economy Action Plan which consists of 35 legislative initiatives – with regard to sustainable product policy, among others.

The sustainable product policy is based on the idea that the product design is at the centre of everything. According to the Commission, 80 percent of the environmental footprint of a product is determined in the product design phase. Therefore, it is important to address product design in particular, and require longevity, repairability, upgradability, and finally, recyclability from products. This would help to set sustainability principles to specific product groups – such as textiles, for example, in order to lengthen the life cycle of products.

Furthermore, the aim of the product policy is to increase the amount of recycled content in products and to introduce digital product passports that would inform, for example, about the environmental impacts of the products throughout their supply chain. It is also possible that minimum criteria and sustainability goals will be established, for instance, for public procurements.

Meeting the criteria of sustainable product policy requires knowhow of the circular economy and sustainable development from the designers. It is important to consider the whole life cycle of a product as well as used materials.

“In practice, everything should start from material design. What kind of materials, are there any harmful substances, how is the product assembled or something like that, what does it consist of. Also, how the lengthening of the life cycle of a product or material with specific measures in different stages, makes it possible for it to become business”, Jalava says.
It would be good for companies to know the basic principles of sustainable product policy. The Commission will prepare the legislative initiative of sustainable product policy during the autumn, after which it will be expected to be published in mid-December. After that, the initiative will proceed to be negotiated in the Council of European Union, the Environment Council and the European Parliament. According to Jalava, the process usually lasts approximately two years.

In addition to the sustainable product policy, the EU Circular Economy Action Plan encourages to utilise business models that are aligned with the circular economy such as product-as-a-service model.

“In practice, this would mean that people would not buy but lease, rent a garment, a certain product, and the consumer would not necessarily own the product but the ownership would stay within the company, which in turn would have the incentive to keep the product intact as long as possible and to repair, maintain and upgrade it.”

However, Jalava wants to remind us that even though the business models of circular economy – e.g, the lengthening of the life cycle of a product or the product-as-a-service model – are not yet mainstream, we already have extremely good examples of these in Finland. You can have a look at these examples at the Sitra’s list of Most interesting companies in the circular economy in Finland and think about the directions into which different industry sectors are moving.

“It has probably helped me to understand a lot better that we are not necessarily talking about something like “we are hoping that the development is moving towards something” but that we already have genuinely great examples of companies that are already putting this into practice – even though the sustainable product policy has not taken effect yet”, Jalava summarises.