Ross Thompson, Greenbox

 In the face of climate change, governments and businesses are either pushing or being inevitably pulled to reset their strategies, practices and systems from linear to circular. 

Legislation and regulations, along with certifications, are a key lever for this mega trend. Mandatory climate-related financial disclosure for big business in Australia and other jurisdictions are just the start of changing times. Keeping household and business products and materials in use is one part of the circular picture, and countries at the forefront of circularity are creating regulatory frameworks that design waste and pollution out of the system.

Europe is at the leading edge of this seismic shift. The region provides an indication of what Australian companies might expect ahead and indeed will soon be impacted by when exporting. Let’s consider some notable features and implications of Europe’s new product eco-design rules, which came into force in July 2024:

1. Sustainable products becoming the rule, not the exception

The Ecodesign for Sustainable Products Regulations (ESPR) are a framework for setting ecodesign requirements on specific product groups (almost all physical products) – implemented gradually over time based on prioritisation. Priority products range from steel and textiles to tyres, detergents and ICT products and other electronics.

These rules will be developed based on scientific evidence, economic analysis and stakeholder consultation. The aim is to improve circularity, energy performance and other sustainability aspects of products placed on the EU market. This regulation brings in rules for a broader range of products and more expansive rules as appropriate. Towards a circular economy, it’s about better durability, reusability, upgradability, reparability, recycling, resource efficiency, carbon footprint and information transparency.

2. Scanning products for sustainability, stop destroying unsold products, and ‘Green Public Procurement’

Novel measures in the ESPR are a ‘Digital Product Passport’, rules to address the destruction of unsold consumer products, and ‘Green Public Procurement’.

To help track information obligations, a Digital Product Passport will show each item’s sustainability, circularity and regulatory compliance based on which consumers, manufacturers, and authorities can make more informed decisions. Product information, accessible to everyone in the supply chain, may include technical performance, materials and their origins, repair activities, recycling capabilities, and lifecycle environmental impacts.

The ESPR also introduces a new ban on the destruction of unsold textiles and footwear (an environmental problem), which could lead to similar bans in other sectors. Large and eventually medium-sized companies across all product sectors will be required to disclose annual information on their website related to products they discard.

Additionally, mandatory Green Public Procurement criteria can be set by the European Commission for EU authorities who purchase the products the ESPR will regulate.

3. The implications for Australian businesses

The ESPR is a signal to Australian companies, particularly manufacturers, to reorient towards sustainable products.

Firstly, the ESPR will apply to all products placed on the EU market, meaning Australian products selling into the EU will need to abide to the same rules. Online marketplaces are part of this.

There is a need to keep a track on incoming product-specific requirements, and to understand where a business sits to ensure compliance when requirements go live in just a few years.

Longer-term, given public aspirations and emissions targets, we can expect Australian policy and legislation to take on aspects of Europe’s eco-design lead.

The framework is not yet clear, but one thing is: this is where consumer demand, innovation, global standardisation and business competitiveness are all headed. To prosper, Australia needs to be a trade destination of green sustainable products, and companies need to be right on this curve.

As another indicator of the pivot to circular products, Australian governments are now on the move towards green public procurement, and there is pressure for this to happen faster.

Three steps forward for Australian businesses

In the circular economy, all product and service design will be ‘ecodesign’, and businesses need to be managing the entire lifecycle of what they make and consume. Here are three ways for companies to get going with circular practices:

• Perform an audit of your current practices in supply chains, considering how products can be designed and used for regeneration. In positive IT news, the new iPhone 16 and 16 Plus contain over 30% recycled content. Apple notes that low carbon solutions implemented by suppliers reduced product emissions by over 20%.
• Develop a circular strategy that allows realistic but progressive steps (including trials) based on the range of challenges to moving from linear to circular practices, which include costs, collaboration and changing demand in the market.
• From production through to consumption, do the simple things that make a big difference to decarbonisation and the environment such as reuse of IT. Companies choose Greenbox as their ITAD partner to help them close the loop by keeping IT assets in use as long as possible. Devices that are still functional undergo refurbishment and are reintroduced into the market, reducing the need for new production, and conserving valuable resources.

Responsible disposal and recycling of IT assets is a vital step on the journey to reduce electronic waste and carbon footprints. It’s one standard in the global framework being built for a blue planet. If you’d like to find out more about how our team at Greenbox can support you and your business, please get in touch.