Legislation and Directives
Since 2015, the European Commission has been promoting the EU Circular Economy Action Plan. Advancing the circular economy is seen as a key means to achieve the goals set out in the European Green Deal. According to the Commission, building a climate-neutral, resource-efficient, fair, and sustainable Europe requires a systematic shift towards the circular economy. Legislation related to the circular economy is progressing rapidly, and soon the principles of circular design will become a prerequisite for all business operations. Corporate responsibility legislation also presents challenges for businesses.
Circular Economy Challenges Businesses
The first EU Circular Economy Action Plan was already published in 2015. The plan was updated in 2020. The EU Circular Economy Action Plan is part of the European Green Deal, through which the economic area aims to achieve carbon neutrality by 2050. In order to promote the circular economy, the European Commission has also updated the EU Industrial Strategy to address the challenges of green and digital transformation. EU legislative measures become incorporated into national regulations as the parliament updates laws to align with EU regulations.
Finland advocates systematic change
In the spring of 2021, the Finnish government made a policy decision on the strategic program for the circular economy, aiming to establish a new foundation for Finland’s economy by 2035. The “Carbon-Neutral Finland 2035 – National Climate and Energy Strategy,” published by the government in the fall of 2022, also emphasizes how the circular economy provides solutions to greenhouse gas emissions, particularly in production activities.
The tightening emission reduction targets will primarily manifest through the expansion of the emissions trading system and stricter regulations. Energy legislation will also be tightened, and the share of renewable energy in production will increase to 40% by 2030. Updated and new regulations will guide all business-related activities, from product design to packaging materials, sharing product and service information, waste reduction, building energy efficiency, and fuels and agricultural chemicals.
The Eco-design Directive and Product Passes
Regarding product information, the European Commission introduced the Sustainable Products Initiative in 2022, based on which the EU’s Eco-design Directive will be updated. Products will need to be designed in a way that minimizes energy and resource consumption. Additionally, their repairability and recyclability should be as easy as possible, and their lifespan should be maximized. The main change in the updated directive is the introduction of a digital product passport, which will eventually cover almost all physical products. In the initial phase, the digital product passport will be implemented for batteries, electronics, vehicles, and textiles, as these sectors contribute significantly to environmental impact
Questions
- How has your company prepared for industry-specific changes?
- Does the Eco-design Directive have any impact on your operations?
- Are you aware of your company’s carbon footprint?
- Have you familiarized yourself with the roadmap of your industry?
Lost in the Legislation Jungle?
Sector-specific roadmaps to guide towards low-carbon solutions
Sector-specific low-carbon roadmaps were prepared under the leadership of the Ministry of Economic Affairs and Employment in 2020. The roadmaps outline the stages of development for each sector in implementing low-carbon strategies. The roadmaps are compiled on the website of the Ministry of Economic Affairs and Employment. Up-to-date information on regulations related to product eco-design and energy labeling requirements can be found on the eco-design service maintained by the Finnish Energy Authority.
