The New Approach in Setting Product Standards for Safety, Environmental Protection and Human Health
4 What is the role of the New Approach in promoting environmental innovation? (Session III)
4.1 Is the New Approach an appropriate means of encouraging innovation that will result in more environmentally friendly products? (Discussion paper for Session III)
4.1.1 Background
The Green Paper on Integrated Product Policy50 proposes the use of the New Approach to promote the design and development of products with a reduced impact on the environment. It views New Approach directives as "total harmonisation measures that define binding essential requirements". Products in compliance with harmonised standards developed by the European standard-setting bodies under a mandate from the EU are presumed to conform to the essential requirements and may circulate freely within the internal market.
The New Approach has been applied for developing environmental product design standards only once to date, with respect to the Packaging and Packaging Waste Directive.51 The Commission did not accept three out of five resulting standards, and hence compliance with the CEN-developed packaging standards may not be considered sufficient to meet the essential requirements set forth in that Directive.
The Commission working paper setting forth a draft text for a Directive on electrical and electronic equipment (EEE) also proposes the New Approach as a mechanism for encouraging innovation in eco-design.52 Annex II of the draft Directive sets certain essential requirements for manufacturers of EEE. These include mandatory life cycle assessment of each product’s environmental impact, in order "to select the design solution for the product which represents an optimal balance between environmental factors and other appropriate considerations, such as technical and economic aspects, while complying with all relevant legislation." The manufacturer is to document the specific design choices and the reasons behind them, so as inter alia to be able to provide information on the environmental design characteristics for the EEE.
In this application, the New Approach would vary considerably from its prior role as a system for developing the regulatory details needed to verify compliance with essential requirements established by EU lawmakers. It ventures into new territory – the use of standardisation to develop a framework of procedures from which environmental innovation is expected to flow.
The relationship between innovation and standardisation is discussed in a recent report on the economics of standardisation.53 The existence of a system of standards helps the customer to know what (s)he is getting, and encourages competition from producers who can apply the necessary technical knowledge from the codified standards. At the same time, it enables a subset of innovative producers to innovate away from the standard, so that they can raise their margins by price discrimination based on product differentiation. As the rate of innovation increases, customers face greater uncertainty and less understanding about the new products and services, and need greater reassurance before buying. Better standards can provide that reassurance. The report recognises that where health, safety or environmental concerns are present, regulation is needed to define a structure along which it is safe for innovation to proceed.
A new consultation document released by DG Enterprise54 confirms the link between innovation and standardisation, by pointing out that the New Approach was devised to facilitate the achievement of the internal market and to encourage flexible and technology-neutral legislation, thus promoting innovation and competitiveness.
In addition, standards can stimulate technology transfer by publishing guidance concerning what constitutes best available techniques (BAT) in an international context, thus raising technological levels generally.
This discussion paper focuses on (1) how environmentally innovative product design can be encouraged; and (2) how standard-setting under the New Approach might be used for encouraging innovation in product design.
4.1.2 Mechanisms for encouraging environmentally innovative product designOne definition of the term innovation is "the introduction of something new". But what is considered "new" depends on the perception of the observer. A technology or product may be innovative for one company, but state-of-the-art for another. This paper uses the term "innovation" to refer to a new technology or product that is not produced or marketed in Europe at present. A policy aimed at encouraging innovative technologies or products should therefore be prospective. It should consider what might be the likely outcome of existing or proposed scientific research projects, before a product emerges ready for the market.
In considering possibilities for encouraging more innovative eco-design, it can be useful to review previous European regulatory interventions that have contributed to environment-related product innovation. These include:
Traditional restrictions and bans. The early EU environmental acquis were command-and-control measures, and some of these led to forced innovation in product design. The bans on specific substances and uses of those substances set in place under Directive 76/769/EEC55 have led to substitution by less harmful substances in specific products. Similarly, the complex of EU legislation aimed at phasing out ozone depleting substances (ODS) in accordance with the Montreal Protocol has stimulated research and development on alternatives to ODS, including innovative technologies for refrigeration and substitution of non-ODS substances as cleaning agents.
It can be difficult to build the political agreement needed to enact a ban. Industries dependent on the use of a substance or activity that is targeted by the ban may not yet have a viable alternative. There is therefore sometimes a need for a warning or transition period to give sufficient time for innovation, production and marketing of alternative products before a proposed ban takes effect. Most often, a ban will not be adopted before alternatives are available at least at a scientific or pre-marketing level. The Danish chemical warning list may be considered as a notice from authorities to industry to look for alternatives and hence start innovation, in that a ban or other restrictions may be launched in the future.56
One of the sister Directives to the EEE -- the proposed Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS Directive)57 -- is expected to bring about substitution by less environmentally harmful substances. Moreover, the proposed system of registration, evaluation and authorisation of chemicals (REACH) described in the White Paper on a Strategy for a future Chemicals Policy58 may also lead to additional restrictions on chemicals, which would have an innovation-forcing effect.
End-of-life requirements (extended producer responsibility). The EU waste management policy is progressively moving to make producers responsible for the environmental impacts of their products, once they have reached the end of their useful life-cycle. The principle of producer responsibility shifts part of the waste management burden from public authorities to private industry, and internalises waste management costs into product prices. Though the principle is directly addressed to the post-consumer stage, it also aims "upstream" at product design and material selection. If producers are required to pay at the end of the product’s life cycle, they have a strong incentive to design products with lower end-of-life costs, e.g., less material use and improved recyclability.
For example, Directive 91/157/EEC on Batteries and Accumulators (as amended by Directive 98/101/EC)59 bans the marketing of batteries containing mercury, cadmium and lead, and aims to ensure separate collection of spent batteries and accumulators, with a view to their safe recovery or disposal. The Commission now aims to extend the requirements to cover nickel-cadmium batteries. The End of Life Vehicles Directive (2000/53/EC)60 aims, as a first priority, at the prevention of waste from vehicles, including restrictions on the use of hazardous substances in new vehicles. The Directive obliges economic operators to set up systems for the collection of all end-of-life vehicles, and sets targets for re-use/recovery.
Similarly, Directive 94/62/EC on Packaging and Packaging Waste61 obliges member states to set up waste collection and recycling systems. The Directive is silent concerning who should fund such systems. However, the Commission has recently proposed to amend the Directive to require packaging producers and traders to pay "in full or in part" the costs of collection and treatment and to relay such costs to consumers. This could be an incentive to producers and traders to develop packaging that would be less costly to collect and treat.
Two new legislative proposals in this area were put forward by the European Commission in June 2000. The proposed Directive on waste electrical and electronic equipment (WEEE)62 establishes producer responsibility for removing and recycling WEEE deposited by consumers at local collection points, including waste from equipment placed on the market prior to the entry into force of the WEEE proposal (historical waste). Producers can choose to pay for recycling individually or to share costs with others. The proposed Directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS)63 obliges industry to find substitutes for certain substances that will be phased out within a given period, i.e., lead, mercury, cadmium, hexavalent chromium, plus the brominated flame retardants PBB and PBDE.
Stakeholder consultations to identify BAT under the IPPC Directive. Council Directive 96/61/EC concerning integrated pollution prevention and control (IPPC)64 aims to bring about an overall reduction of environmental impacts arising from the activities listed in the Directive’s Annex I. The Directive requires operating permits for Annex I activities to be based on Best Available Techniques (BAT). The concept of BAT is defined broadly in the Directive. In order to assist licensing authorities to determine the conditions to set in IPPC permits, the European Commission has established a European IPPC Bureau in Seville, which is developing BAT Reference documents (BREF) for 30 different industry sectors listed in Annex I.65
A consultation process is used to develop the BREF documents, based on an exchange of information between experts from the EU Member States, industry and environmental organisations. This consultation process has been successful in identifying often quite radical environmental improvements as BAT, thus providing a type of environmental benchmark for the various industries within the IPPC framework.
The Eco-Management and Audit Scheme (EMAS). Regulation 761/2001 on a voluntary eco-management and audit scheme (EMAS)66, replacing the 1993 EMAS Regulation, establishes harmonised principles and procedures for environmental management systems in companies throughout the European Union and the European Economic Area (EEA). The objective of the scheme is to promote continuous environmental performance improvements of economic activities by committing organisations to evaluate and improve their environmental performance and provide relevant information to the public. Independent certified verifiers are used to confirm a company’s compliance with EMAS. The EMAS scheme was originally open only to companies in industrial sectors but has now been extended to all sectors of economic activity including local authorities. The EMAS counterpart at international level is the ISO 14001 environmental management system standard.67
The incentive under the EMAS scheme is for an organisation to gain a marketplace advantage by improving stakeholder relations, enhancing the image of the company and its market share, conserving input materials and energy, fostering innovation, and sharing environmental solutions. While products are to be included in the scope of the EMAS review, the scheme does not cover product design per se.
An increasing number of EMAS registered or ISO-14001 certified companies request their suppliers to be ISO-14001 certified and/or to forward environmental product information. It is hoped that such product chain requests will lead to an Product Oriented Environmental Management focus (POEM) and thus lead to an increase of environmental aspects to be included in the design phase of products and their components.
Eco-labelling. The voluntary EU eco-labelling award scheme, first introduced in 1993, has been given new impetus with the recently adopted Regulation 1980/2000.68 The eco-labelling scheme targets selected product groups for comprehensive studies of environmental impacts during their life cycles – from extraction of resources to disposal at the product’s end of life. Criteria based on the life cycle assessment (LCA) are then developed. It should be noted that there are different approaches and methodologies for LCA, and the LCA methodology used for one product group may vary from that used for another. Development of a more standardised and transparent LCA procedure, perhaps building upon the ISO 14041 LCA standard, is therefore needed.
The newly established EU Eco-labelling Board (EUEB), where major stakeholders (industry, environmentalists, consumers, public authorities) are represented,69 supervises the process of developing LCA-based criteria for specific product groups. When ready, the European Commission puts forward the new criteria for approval via a Regulatory Committee procedure. If accepted, the criteria are published as a Commission Decision.
Individual products must comply with all criteria for that product group in order to be awarded the EU eco-label. Criteria for a specific product group are established for a limited period (four to five years), to allow for upgrading reflecting technical improvements and changes in the market. The goal is to set the criteria at a level that allows only the best of the marketed products in that product group to comply. The incentive for producers is the increased marketability of products bearing the eco-label.
Since all major stakeholders are involved in the selection of criteria subsequently adopted via a politically balanced procedure, this can be viewed as a type of "standardisation process". However, eco-labelling criteria have been developed to date for only a limited number of product groups, which has hindered its effectiveness as a mechanism for building a competitive market for goods with lower environmental impacts. More resources will need to be provided by both the Commission and the Member States, if the development of product group criteria and market penetration is to be speeded up.
Self verified environmental claims. Self-declared environmental claims (also known as "green claims") have been defined in ISO standard 14021 ("Type II" environmental labels)70 as the "environmental claim that is made for one or more phases of the product’s life cycle, without independent third-party certification, by manufacturers, importers, distributors, retailers or anyone else likely to benefit from such claims".
The European Commission’s Directorate General for Health and Consumer Protection (DG SANCO) launched in 1998 a project aiming to assess the experience on green claims in Member States and to open a public debate on how the system could be improved to ensure consumer protection and enhance credibility of self-claims. Some of the possibilities that have been proposed by DG SANCO include:
 | Amending Directive 84/450/EEC71 concerning misleading advertising to introduce effective sanctions and essential requirements applicable to green claims, and to reverse the burden of the proof, so that it is the advertiser who has to prove the non-misleading character of the claim; |
| Creating a specific European standard on green claims similar to ISO 14021; |
| Preparing guidelines for assessment of green claims that should be read as a code of good practice in establishing such claims, including use of life cycle analysis. These guidelines would assist both companies to draft self-declared claims, and public authorities and consumers to assess credibility of such claims; |
| Monitoring of green claims at EU and national levels. |
Whilst green claims might prove to be a flexible mechanism for providing wider information to consumers than eco-labels, there is concern that the lack of independent verification of such claims could foster misleading advertising. Environmental NGOs and consumers associations often criticise self-declared claims for the discretion that private companies have to state the environmental performance of their own products, and the lack of ex-ante controls to prevent misleading advertising. On the other hand, this would be the fastest option for small and medium enterprises to proclaim the environmental qualities of their products.
Environmental Product Declarations (EPDs). Environmental product declarations as defined in ISO Technical Report 14025 (ISO "Type III" labels)72 are based on information from an LCA according to internationally accepted standards. They build on structured and quantitative data for a particular type of product group determined via product specific requirements (PSR). These are drawn up by industry in full consultation with stakeholders and competitors. The information is presented on a common format and then verified by a third-party source.
The ISO Type III EPD system is meant primarily as a way to pass life cycle-based environmental information from one company to another – a business-to-business information system. EPDs are expected to play an increasingly important role for companies adopting a POEM approach in their environmental management systems. Competition among suppliers to present the most favourable environmental profile of their products could therefore lead to product innovation.
An international network for EPD, i.e., the Global Type III Environmental Declarations Network initiated in 1999, currently links Canada, Denmark, Germany, Italy, Japan, Norway, Sweden, and South Korea. The network is open to all participants working with Type III environmental declarations based on ISO Technical Report 14025. Its objective is to share practical experiences and seek mutual recognition outside of the ISO process.73
Other European experiences to advance in the area of EPD consist of the following:
| Nimbus project, initiated by industry (partly financed by the Nordic Industry Fund) to create a pan-Nordic (Denmark, Norway and Sweden) EPD by developing pilot projects for particular products . |
| Italian and Swedish mutual recognition that EPD developed under one system will be valid under the other. |
Discussion points:
| Is there still a need for traditional regulation, e.g., restrictions on substances and end-of-life requirements, in stimulating environmentally innovative product design? |
| Are there methods other than standardisation that might be considered for building stakeholder consensus concerning directions for product innovation, e.g., the consultations to determine BAT under the IPPC Directive? |
| How can the process of developing eco-labelling criteria to cover additional product groups be speeded up, and would this build the market for lower environmental impact goods? |
Management standards, as per the European Commission working paper including a draft text for an EEE Directive. Management standards, as opposed to product standards, have been suggested as one possibility for encouraging environmental thinking in product development in cases where product groups are defined too broadly to enable the development of product standards or where products are evolving quickly.
The manufacturing sector producing electrical and electronic equipment is experiencing rapid technological innovation. The draft EEE Directive, if adopted as put forward in the working paper, will become the first Directive to use the New Approach to develop management-type standards for environmental design The draft EEE Directive’s approach represents an effort to set in place a flexible mechanism that can respond to market forces, and that establishes a self-monitoring process to ensure that environmental objectives are reached and maintained.
The Commission’s working paper on an EEE Directive provides that EEE may be placed on the market only if they comply with the draft directive’s provisions, including a number of essential requirements set forth in Annex II of the directive. Annex II sets essential requirements that would include mandatory life cycle assessment (LCA) of a product, and use of the results of that LCA for selecting the design solution for the product. Manufacturers would be given two options for demonstrating conformity with the essential requirements: (1) to follow procedures for applying internal design control, as per the draft Directive’s Annex III; or (2) to follow procedures for applying an environmental assurance scheme, detailed in Annex IV. Conformity with essential requirements would be presumed if the EEE:
| had been awarded the EU eco-Label, |
| was designed by an organisation registered according to the EMAS scheme,74 or |
| complied with the provisions of a Community environmental agreement set up under an eventual Regulation. |
Under the Commission’s working paper on an EEE Directive, a Committee on impact on the environment of electric and electronic equipment (IMPEC) would be established. The IMPEC would comprise Member State representatives, and the Commission as chair. It would function as a regulatory committee inter alia to develop Annexes III and IV, in the light of evolution of technical knowledge and new scientific evidence, or to provide more detailed specification of the essential requirements, "as appropriate".
Though the overall framework set by the ISO standard for LCA could be used for the required life cycle assessment, it is considered not sufficiently detailed to serve as a foundation for the LCA foreseen in Annex II of the draft EEE Directive in the Commission’s working paper. There will therefore be a need to develop and adopt specific guidelines on how to carry out LCA for electrical and electronic equipment.
The draft EEE Directive has been criticised by government officials, environmental NGOs and consumer associations as being too vague to ensure an adequate level of environmental protection. Much concern centers on the democratic deficit that may occur if the draft Directive is not amended to ensure more balanced representation of public interest, e.g., via inclusion of other stakeholders in the proposed IMPEC. The European Environmental Bureau (EEB) has in particular pointed out that the introduction of management standards as one of the systems to assess conformity with essential requirements (environmental assurance system) does not necessarily determine good environmental performance.75
The CEN working group charged with developing the standards to define the essential requirements set forth in the Packaging and Packaging Waste Directive also used a management standard approach for the five specifically mandated standards and one umbrella standard giving general guidance.76
One argument given for turning to management standards rather than product standards was that packaging was not a sufficiently homogenous product group to enable the development of highly technical and specific product standards. Moreover, the essential requirements set forth in the Directive were broadly defined, further increasing the difficulty of drawing up technical standards. The CEN working group used a management (procedural) standard approach in the end as the most likely option for delivering a unified standard covering such a wide typology of products.
The packaging standards have been strongly criticised by consumers and environmental organisations due to their lack of quantifiable criteria to assess compliance with essential requirements.77 Moreover, only one of the packaging standards – that relating to waste composting -- has been fully approved by the European Commission.78
"Living Annexes". There is a general concern that once essential requirements are laid out in a New Approach Directive, they become fixed provisions in the Directive. If new scientific or technological information emerged that indicated a need for upgraded essential requirements, the Directive would need to be amended via a full legislative process.
One proposed solution might consist of the creation of independent technical working groups on innovation to advise committees set up under specific New Approach Directives. Any adaptations to essential requirements needed in light of scientific and technical progress could then be integrated into the Directive by means of "living Annexes".
This suggestion, apart from the more voluntary nature of the independent technical working group, is similar to the method used to develop the EU eco-labelling scheme, where criteria for each product group are revised every three to five years based on the most recent knowledge regarding BAT and market development. New criteria are voted in by Member State representatives through a regulatory committee procedure, and they then overlap one year with the former criteria. The aim is to ensure that only the best products on the market within a product group can meet the criteria, thus pushing innovation.
Similarly, the "living Annexes" could be adapted to keep abreast of new developments, so that the essential requirements would continue to serve as a minimum standard for protecting human health and the environment.
Benchmarking for specific product groups based on standardised LCA. Another proposal is to set up a transparent third party verifiable system that can give producers a way to demonstrate that their product is better than the essential requirements set forth in a New Approach Directive. The system would be based on the essential requirements as a core element but would not be limited to that. Rather, it would use benchmarks based on selected parameters establishing progressively more stringent environmental standards. These benchmarks could then be used to compare the environmental state of art of similar products and thus open up a market-based competition using relevant, documented and verified product information.
The benchmarks could be defined for specific product groups by specially convened product panels, industry workshop groups ("new deliverables"), standardisation working groups, or even the EUEB. The method chosen would need to ensure independently set parameters while involving different stakeholders. One suggestion for ensuring independence is to create parallel committees: one composed of technical experts compensated for their work, and another of stakeholders voluntarily commenting on the work of the technical expert committee.
The proposed scheme may be represented as follows:
Benchmarks for innovation
A framework of criteria would be developed for each product group, based on life cycle assessment and other requirements defined in the New Approach Directive. In the figure above, criterion 1 could be for concentrations of a hazardous substance, criterion 2 could be for energy efficiency, criterion 3 could refer to end-of-life considerations, and so on.
The essential requirements would serve as minimum standards for placing a product on the Internal Market. Progressively more environmentally stringent benchmarks would be then established for each criterion, provided that significant environmental improvements are possible. For product groups where eco-label criteria have been developed, the criteria could form the basis for defining additional benchmarks to be included in the list of parameters. For product groups where a New Approach Directive is considered, the EUEB could be given a role in setting up LCA-based criteria, especially if the products are at least partly marketed to consumers.
For products containing chemicals posing high risk to man or environment or some risk in combination with serious (high cost) consequences for society, essential requirements would be needed as minimum requirements. If special circumstances (e.g., development of new knowledge, identification of special vulnerable populations or environments) required strengthening of the criteria for such chemicals, adoption of mandatory legal measures would be indicated.
These benchmarks would represent scope for further environmental innovation. They would serve several important purposes:
- they would enable companies to analyse and monitor their progress in innovation;
- they would enable companies to make credible environmental product declarations concerning the environmental innovations they had achieved in product design;
- they would provide a systematic scale for measuring and comparing the environmental impacts of similar products that could be used by business and in public procurement when taking purchase decisions;
- they could form the basis for verification of EPDs if needed by the company in its marketing of products, especially to consumers (ISO type III labels); and
- they could form the basis for green claims (ISO type II labels).
Such a scheme would by no means replace the need for legislation and for establishing clear-cut essential requirements that are able to stand alone. It would ideally work as a flexible system to encourage more pro-active companies to move ahead and to document the performance of their products in relation to the essential requirements, and could -- at least for an initial period -- be voluntary. The aim would be to foster the development of creative formulas involving innovation and cost-savings, and aimed at achieving win-win solutions.
The standardised European system for energy efficiency claims clearly illustrates how a benchmarking system can encourage manufacturers to bring out more efficient products and to showcase new technologies.79 The energy label uses colours to depict graphically a series of categories ranging from "A: most efficient" (green arrow) to "G: least efficient" (red arrow). The energy label, which was originally voluntary, has become mandatory since 2000 for domestic refrigeration and freezing devices, washing machines, dryers, and dishwashers. The energy efficiency claims system is currently being supplemented via minimum efficiency standards and negotiated agreements with manufacturers for other products.
Similarly, Member States must introduce fuel economy labels for all passenger cars by 2001, under Directive 1999/94/EC on consumer information on fuel economy and CO2 emissions for new passenger cars.80 The introduction of this label is expected to lead to a 4-5% reduction in fuel consumption and CO2 emissions per year for the entire European car fleet over the next ten to twenty years.81 The fuel economy label is expected to not only influence consumer behaviour, but also to induce a market transformation by encouraging car manufacturers to produce vehicles that are more fuel efficient.
An environmental product declaration system as outlined above will need a credible third party verification system. Verification of compliance could be organised as at present under the New Approach, or in combination with the systems for verification of EMAS and eco-labelling. In both cases, the benchmarks would need to be linked to verifiable standards for testing the relevant parameters.
There is also a need for a more operational life cycle assessment methodology that builds upon the existing ISO standard, as well as a European database for obtaining high quality generic LCA data.
Standards to be used in conjunction with market-based incentives("pull" strategies). It has been argued, especially in the context of the eco-label, that the mechanisms to promote ("push") greening of products necessarily require some additional market-based incentives. Suggestions for such "pull" strategies include:
| Environmental product declarations on Internet and point-of-sale labels, as per the European energy efficiency claims system described above. |
| Public procurement as a driver. Purchasing by public authorities represents around 12% of EU GDP. However, purchasing criteria, although taking into account environmental needs, typically give greater priority to economic matters. The EU is currently in the process of reviewing the Directives on Public Procurement. A shift in this policy should envisage the need for detailed guidelines for public authorities at central and local levels. In this respect, the European Commission has proposed a number of initiatives to enhance greening procurement at EU level, e.g., to prepare an interpretative communication on public procurement and environment, a handbook on green procurement, and a web page containing a database of eco-product criteria that would enable public authorities to exchange best practices. |
Progress in greening of public procurement has been achieved in, e.g., Austria and Denmark where it is obligatory to take into account environmental considerations while contracting goods and services. The city of Hanover in Germany is currently implementing EIA procedures in its procurement policy. In addition, the five Nordic countries have a common web site on greening of public procurement.
| Product Oriented Environmental Management (POEM). The product-oriented aspects of the revised EMAS Regulation could be further elaborated (e.g., practical guidelines) to facilitate possibilities for companies to request environmental information from suppliers. It can be particularly important, wherever modern production techniques rely on extensive upstream supply chains, to determine how to ensure that suppliers incorporate environmental thinking into their own design and production activities. The benchmark system outlined above could facilitate a uniform system for request of data in the supply chain for specific product groups. Incentives should be set in place, therefore, to promote the use of POEM by European companies. |
| Tax breaks for products that do better than minimum standards. Reduced VAT schemes that would lead to price reductions would create incentives for consumers. Some options that have been suggested include82: |
lower VAT rates for products that lead to reduced emissions of greenhouse gases; lower VAT rates for repair services to encourage the fixing of broken products rather than replacing them; a car tax that is differentiated along environmental criteria.
The EEB has also suggested the following market mechanisms: virgin material taxes in order to promote recycling, tradable CO2 credits to create incentives for lower CO2 emissions, tax differentiation to phase out unwanted substances and promote safer substitutes (already existent for lead in petrol or packaging).83
Any market-based mechanisms introduced by national and EU authorities will however need to take into account the potential for collision with internal market provisions or international trade agreements in the context of WTO.
Discussion points:
| How can management standards encourage environmental thinking in product design? |
| Is there a need to develop operational, product-specific methodology(s) for LCA, and, if so, how can this be done? |
| Would it stimulate innovation if there were benchmarks starting from minimum requirements that could be used for a system of verifiable environmental product declarations? If so, how could these benchmarks be developed? |
| What "pull strategies" should be considered to encourage the marketing of green products, and should these be at EU or national level? |
| What elements would need to be in place to enable the New Approach to be used effectively to encourage environmental innovation, e.g., mandatory minimum requirements, criteria based on LCA methodologies, methods of verification, stakeholder consultation? |
4.2 Proceedings of Session III
Facilitator: Eckert Meyer-Rutz, Ministry of Environment, Germany
4.2.1 The proposed use of the New Approach in Integrated Product Policy84
Otto Linher, European Commission, DG Environment
The Integrated Product Policy (IPP) as discussed in the Green Paper85 does not constitute a single instrument, but rather an optimal mix of policies that in combination results in a strategy for improving the environmental performance of products and their markets. IPP consists of taking those elements that already exist in the market and combining them with new possibilities, when possible, to maximise the overall result.
The IPP approach is to be understood within a more comprehensive framework based on the sustainable development strategy of the Sixth Environmental Action Programme, and relevant targets established via thematic strategies or specific policies, e.g., chemicals and waste.
The basic philosophy behind the IPP approach relates to life cycle thinking and focuses on two main phases during the life cycle of products where environmental performance can be influenced, i.e, the design and the purchase stages. The IPP strategy is based on three pillars: stimulating the supply of greener products, greening of consumer demand, and price mechanisms.
Action during the design of products may well be the most efficient way to reduce environmental impacts of products. Eco-design becomes then the best procedure for progressively modifying the thinking of all economic actors on the supply as well as the demand side. This requires public authorities to take on a basic role in influencing product design. In addition, it is necessary to ensure that economic actors are sufficiently rewarded when applying life cycle thinking.
There are three main ways to channel public action:
| command and control legislation (where high risks and high costs are involved), |
| enabling legislation establishing a clear objective but leaving the ways to achieve it to businesses and technical bodies (where the issues are low risk and low cost, but high volume is involved), |
| other supporting instruments, e.g., life cycle management instruments, education and training on eco-design, etc. |
Traditional legislation may continue to play a very important role for regulating the so-called sensitive issues, e.g., chemicals. However, it is a lengthy and highly costly procedure with legal, administrative and enforcement phases that may delay innovation. It is important also to provide a more flexible formula that ensures a clear distinction between political issues, which cannot be delegated, and technical requirements where decisions can be transferred to technical experts.
The Green Paper on IPP considers the logic of the New Approach as one of the possible elements for influencing product design. However, the failure of the experience with the Packaging and Packaging Waste Directive standards shows the need to adopt innovative approaches to address the specificity of environmental issues, and to find an appropriate balance between functionality of a product and its environmental characteristics. Moreover, the system will need to combine a sufficient degree of flexibility to permit the product to adapt to technical progress, and effective mechanisms for control and market surveillance once the product is placed on the internal market (feedback mechanisms). There should be in any case a clear and credible stick behind the market to ensure that economic actors are effectively pushed towards eco-design, and that a product might eventually be withdrawn from the market in the future if it does not incorporate environmental requirements.
Existing instruments, e.g., eco-labels, key performance indicators such as the energy star label, environmental management standards, etc., need to be combined and their use prioritised. There should be a "ladder of preference" towards the more informal instruments with the more stringent tools used only if necessary. Such a system could be called New Approach, or enabling legislation, or any other term, but in any case, it needs to be an intelligent mechanism that combines different elements and provides for a new framework. The earlier such an approach is developed, the better.
The new system to tackle environmental performance of products needs to start by setting minimum mandatory essential requirements. It should be further developed by applying state-of-art eco-design and life cycle thinking (this formula will work in very similar terms to those currently used under the framework of the IPPC Directive when creating BREF documents). The definition of state-of-art of eco-design is to be formulated in the future via discussions taking place in the present and using available instruments. Such definition might be agreed via informal procedures, e.g., discussions between enforcement authorities and producers or industry associations; formal environmental agreements with industry; or other mechanisms such as working groups to elaborate BREFs, product panels setting benchmarks, standardisation, command and control legislation, etc. In any case, further development of state-of-art of eco-design would need to take into account the duration of design cycles to provide a clear and predictable framework for industry. Ultimately, the IPP approach could be enshrined via a general framework Directive for broad product groups and/or product design.
The European Commission is currently discussing the main elements to be described in the IPP White Paper, which is to be released during Spring 2002. The Commission is also investigating how to apply the New Approach on the basis of the experience earned with the Packaging and Packaging Waste Directive.
4.2.2 Panel on environmental innovation
Facilitator: Eckert Meyer-Rutz, Ministry of Environment, Germany
4.2.2.1 Dynamism in the standardisation process: Guiding or delaying innovation?
Eva Schmincke, Büro für Ökologische Studien, Germany
Innovation can be enhanced via a combination of incentives and prescriptive requirements for companies. Dynamism may be pushed via already existing tools, which need to be adequately combined and integrated to maximise results.
Management standards and life cycle criteria prove to be two valid instruments to encourage environmental thinking in product design. More specifically, ISO has recently drafted a guidance document, ISO draft Technical Report 14062, which establishes a number of principles for integrating environmental aspects into product development. The guidance can be applied for all types of good and services, and different sized enterprises. Furthermore, this effort constitutes a joint initiative where broad consensus was achieved among industrialised and developing countries. The ISO draft Technical Report 14062 focuses on relevant phases of life cycle and their main impacts, e.g., energy demand or hazardous substances, and encourages environmental thinking via design strategies.
In any case, environmental thinking and innovation can only be developed effectively via credible and transparent procedures ensuring regular stakeholder participation, sufficient public control, and effective revision procedures.
4.2.2.2 Eco-label as a tool for promoting environmental innovation
Nicola Breier, European Commission, DG Environment
The Commission’s working paper on an EEE Directive is not the first concrete example for the application of life cycle thinking as the EU eco-label has more than ten years of experience in developing and using life cycle criteria. Indeed, EU eco-labelling has most of the features laid out in the IPP strategy, i.e., life cycle thinking, stakeholder involvement, information systems, and "push" strategies to place innovative green products in the market.
The eco-label is an EU-wide instrument, voluntary, selective and transparent, which covers all products of the non-food sector and services. It is multicriteria-based and takes into account the entire life cycle of a product when setting ecological criteria. It is independently awarded by a third party, which is a competent body of each Member State. In addition, the eco-label procedure brings together public authorities and other stakeholders to develop ecological criteria for targeted product groups. Such criteria are revised on a regular basis (three to five years) to provide for adaptations to technical improvements and market changes. So far, criteria have been set for 17 groups of products. Eco-label criteria are set in such a way that only the best products can meet the requirements.
The direct results of the eco-label have not been as successful as expected (although the label has made considerable progress during December 2001) due to the lack of resources with which the scheme is financed. However, its indirect and secondary effects offer considerable opportunities, especially for conceptualising the IPP strategy. Eco-label criteria are currently being used in public and private procurement (e.g., Accor Hotels), or as benchmarks for energy rebate schemes (e.g., in the Netherlands).
There are many other existing examples and possible options to benefit from the existing scheme:
| as benchmarks for a product group within the company, |
| as targets to improve environmental performance of a product, |
| as benchmarks for energy rebate schemes, |
| as a basis to assess that companies have complied with essential requirements as suggested in the working paper on a possible EEE Directive, |
| as a reference to create environmental product declarations (EPD) on the profile of marketed products, |
| as a basis for certification procedures granted by eco-label competent bodies, which could share their role with EMAS verifiers, |
| as criteria for benchmarking under the New Approach. |
All these examples and options should be evaluated for their better use in the future, and further applied for those product groups to which the eco-label criteria have been established. Indeed, there is currently a newly established policy management group of the European Eco-Labelling Board (EUEB), which has been created under the recently adopted eco-label working plan86, to look at the broader policy context of the instrument, and in particular its links to the IPP strategy. Eco-labelling has much to offer to identify environmental excellence among products, and the extensive expertise which has been developed under eco-labelling mechanisms, should be used more widely.
4.2.2.3 Management standards versus product standards
Hugues Plissart, CEN Management Center
Standards have been used successfully as a tool to support legislation. However, the current system is to be improved via a clearer distinction between technical and political issues in standardisation, establishment of reciprocal responsibilities, and definition of unambiguous mandates.
The experience with the use of management standards (e.g., medical equipment standards, space projects, railways, global approach, etc.) proves that they constitute a valid instrument to define performance criteria of a wide spectrum of products. Indeed, the relationship between product and management standards should be seen as complementary rather than antagonistic. Management standards would cover product categories, while product standards would address a specific type of products. Furthermore, management standards would be the first accomplishment in those cases where product standards have not yet been developed, and thus they would represent an appropriate instrument to enhance product innovation.
4.2.2.4 Environmental innovation in product design from the industry point of view
Viktor Sundberg, Electrolux
Environmental performance of products must become part of business thinking and competition of the company, and there should be some incentives to push companies in that direction. However, a reward system given by public authorities cannot be a sufficient guarantee as rewarding schemes might not exist for a long period of time. Moreover, internalisation of costs seems to be at this time the best and most simple option, both for producers and consumers.
Electrolux introduced in 1996 the so-called "green range" criteria for a number of products, including refrigerators, freezers, and washing machines. Since then, the volume of sales and margins of benefit for the company in those products designed following "green range" criteria have substantially increased.
Electrolux encourages private initiative to integrate environmental concerns in product design (e.g., voluntary agreements on energy efficiency), but warns that there is a need to create an effective information mechanism so that consumers are aware of the costs and also the benefits of green products.
Following the Green Paper on IPP, environmental costs need to be fully integrated into the product price. Therefore, producer responsibility as described in the amended proposal for a Directive on waste of electrical and electronic equipment (WEEE) contradicts IPP principles and needs to be reformulated. The draft WEEE Directive reduces producer responsibility to a waste tax. Producers should be responsible for their end-of-life products only, and collective activities are necessary to handle "orphan" waste. Similarly, the Commission’s working paper on a possible Directive on electrical and electronic equipment (EEE) is not feasible as it stands now.
The New Approach should not be considered as a tool to prescribe eco-design, but as an instrument to provide advice based on general guidelines and measurement tools to integrate environmental needs into marketed products. In any case, the New Approach will not be able to replace traditional environmental legislation where political goals need to be protected from market interests.
4.2.2.5 Innovation in product design from an environmental point of view
Karola Taschner, European Environmental Bureau
Integration of environmental issues in standardisation needs to be backed up by legislation defining general requirements and setting clear targets and timetables. According to the philosophy of the New Approach, there needs to be a clear separation between political issues, which have to be decided by the European legislator, and purely technical issues, which can be delegated to private standardisation bodies. Essential requirements need to be clear, unambiguous, and precise. In any case, delegation of rule-making should never be possible for sensitive sectors where there is a direct effect on public health and the environment, such as chemicals.
The proposed WEEE and RoHs Directives represent a good example by setting clear targets and timetables.
However, the system proposed for the current draft EEE Directive does not set clear and unambiguous targets and hence cannot be used to meet the presumption of conformity required under the New Approach. The draft EEE Directive proposes management standards, which do not provide for quantitative data or measurable indicators. This could endanger the implementation of the proposed RoHs and WEEE Directives, which would be difficult to monitor because recycling targets could not be measured.
It would probably be a better idea to draft an EEE framework Directive with daughter directives for specific product groups. Such directives will need to set minimum performance levels to be achieved and clear priorities for improvement according to the general targets and timetables set by the Sixth Environmental Action Programme. The Directive should establish a benchmarking system according to best available technology and best practice (European and national eco-label systems could be used to provide for criteria, quantitative thresholds, and performance levels). A precondition for the good functioning of the system would be, among many others, the good environmental management of the producing company. Producers’ liabilility for environmental damage caused by their products could act as a powerful incentive for producers to improve the environmental performance of all products across the board.
Participation of a broad range of stakeholders in this process, including NGOs, and distribution of responsibility among all producers are also a precondition for the adequate functioning of the above-mentioned scheme.
4.2.3 Discussion
Due to a shortage of time, plenary discussion was postponed in favour of extended discussion time for breakout groups.
4.2.4 Presentation on options for consideration
Preben Kristensen, Head of Cleaner Products Division, Danish Environmental Protection Agency presented the topics for discussion in the Breakout sessions, based on the discussion document prepared in advance (see Section 4.1).
Group I was asked to discuss the need for traditional regulation, e.g., restriction of substances and end-of-life requirements, in stimulating innovative product design.
Group II focused on "push" strategies to encourage the marketing of green products at national and EU level.
Group III addressed formulas to develop a system of benchmarks based on LCA methodologies.
Group IV discussed how management standards could encourage environmental thinking in product design.
4.2.5 Plenary gathering, report backs and discussion
The rapporteur from Group I (Annalisa Oddone, Orgalime) indicated that traditional regulation is still needed in some areas, as for instance chemicals. In addition, conventional legislation could potentially stimulate innovation as it sets rules that industry is necessarily bound to follow. It also guarantees adequate consultation among stakeholders, who at a later stage may decide by consensus that legislation is no longer needed for that particular matter which therefore could be relegated to more flexible mechanisms. However, traditional legislation still needs to be improved via effective enforcement systems and market surveillance. Special attention should be brought to the fact that legislation does not disguise taxation attempts (e.g., the system of the proposed WEEE Directive). Finally, public authorities need to draw a borderline between the role of legislation and that of the New Approach; the New Approach could be used for environmental innovation but the ways and fields of its application need to be carefully assessed.
The rapporteur from Group II (Karin Öberg, Swedish Environmental Protection Agency) indicated that problems arose due to a lack of consensus on what could be defined as "push" and "pull" strategies. She showed a model based on a thermometer diagram to assess "environmental temperature" (see diagram below). Basic "push" strategies are the bottom line and constitute minimum legal requirements (usually related to safety issues). From there, the system may go further in moving to better integration of environmental requirements. Such environmental requirements would not necessarily be mandatory, but need to be encouraged via "pull" strategies. For such a system to move towards upper levels, consumer demand of green products needs to be enhanced via complete and transparent supply of information. Environmental quality of products cannot be totally regulated by public authorities, but it can be at least promoted. Finally, such a system should always keep in mind possible collision with WTO rules.
Environmental Temperature
The rapporteur from Group III (Christian Poll, Danish Environmental Protection Agency) indicated the role of environmental product declarations (EPDs) to enhance innovation. EPDs would then be a flexible, clear and fair system based on life cycle thinking, which would constitute an effective means to provide information to consumers on the environmental characteristics of a specific product. EPDs need to be validated by an independent third party, and although the first aim of such a system would be to provide business-to-business communication, it should also ensure that all stakeholders are involved in the process. Such a system should be built up slowly to guarantee that everyone could follow it. There might be a need for mandatory requirements in order to ensure effective application of EPDs and comparability of data for product categories marketed by different companies.
Finally, the rapporteur of Group IV (Hugues Plissart, CEN Management Centre) concluded that new management standards are needed to enable coverage of a wider number of products. Management standards and product standards are complementary, the linking element between both types of standards being the interest for continuous improvement. There is currently no common definition of EMAS (one could refer to EMASes, but not to a single approach) to guarantee that the fact that a company applies an environmental management system means that its products possess a high environmental performance. Some other issues that were discussed included the need for clarity when combining the different tools enumerated in the Green Paper on IPP; the limits of product information; incentives for consumers to purchase green products; limitations on the European Commission’s capacity to exhaustively list technical specifications for thousands of products; and the need for uniform interpretation of essential requirements.
A more general discussion followed the rapporteurs’ conclusions and especially focused on the role of EPDs. Frank Bill (Confederation of Danish Industries) indicated that in his opinion EPDs had to be exclusively voluntary to provide for effective flexibility, and did not need to be verified by third parties as such procedure would raise internal costs for the company. As EPDs are mostly used for business-to-business communication, their functioning should be regulated by market forces. Eva Schmincke (Büro für Ökologische Studien), Karola Taschner (EEB) and Philip Bennett (Council of European Producers of Materials for Construction) indicated that EPDs are currently considered independently validated systems, which indeed gives more credibility to the system. Viktor Sundberg (Electrolux) underlined the importance of providing for some voluntary schemes to enhance innovation, and noted that experience with the energy label proves that self-declaration from industry could be a valid instrument to speed up innovation.
| 50 | COM(2001) 68 final of 7.2.2001. |
| 51 | European Parliament and Council Directive 94/62/EC on
packaging and packaging waste. OJ L 365, 31.12.94, pp. 10 – 23. |
| 52 | The Commission working paper on a draft EEE Directive was
issued in February 2001 by DG Enterprise, and is currently undergoing consultation among
stakeholders. http://europa.eu.int/comm/enterprise/electr_equipment/eee/index.htm |
| 53 | G. M. Peter.Swann, "The Economics of Standardisation:
Final Report for Standards and Technical Regulations Directorate, UK Department of Trade
and Industry" (11 December 2000). http://www.dti.gov.uk/strd/fundingo.htm#swannrep |
| 54 | Draft consultation document on the review of the New
Approach, 26 October 2001. |
| 55 | Council Directive 76/769/EEC on restrictions on the marketing
and use of certain dangerous substances and preparations (as amended). OJ L 262, 27.9.76,
pp. 201-203. |
| 56 | List of Undesirable Substances (LOU) 2000, Environmental
Review Nr.9 2000. An English version of this document is available at: http://www.mst.dk/homepage/default.asp? Sub=http://www.mst.dk/chemi/01040000.htm. |
| 57 | Amended proposal for a Directive on the restriction on the
use of certain hazardous substances in electrical and electronic equipment. COM(2001) 316
final. OJ C 240 E, 28.8.2001, p. 303. |
| 58 | COM(2001) 88 final of 27.2.2001. |
| 59 | Council Directive 91/157/EEC on batteries and accumulators.
OJ L 78, 26.3.91, pp. 38-41. |
| 60 | European Parliament and Council Directive 2000/53/EC on end
of life vehicles. OJ L 269, 21.8.2000, OJ L 269, 21.10.200, pp. 34-43. |
| 61 | European Parliament and Council Directive 94/62/EC on
packaging and packaging waste. OJ L 365, 31.12.94, pp. 10 – 23. |
| 62 | Proposal for a Directive of the European Parliament and the
Council on Waste Electrical and Electronic Equipment. COM (2000) 347 final of 13.6.2000;
2000/0158 (COD). |
| 63 | Proposal for a Directive on the restriction of the use of
certain hazardous substances in electrical and electronic equipment COM (2000) 347 final
of 13.6.2000; 2000/0159 (COD). |
| 64 | Council Directive 96/61/EC concerning integrated pollution
prevention and control. OJ L 257, 10.10.96, pp. 26 – 40. |
| 65 | Plans to specify BREFs for specific sectors and already
drafted BREF documents can be downloaded at the European IPPC Bureau’s web page:
http://eippcb.jrc.es. |
| 66 | European Parliament and Council Regulation (EEC) No 761/2001
allowing voluntary participation by organisations in a Community eco-management and audit
scheme (EMAS). OJ L 114, 24.4.2001, pp 1-29. |
| 67 | ISO 14001:1996 on environmental management systems. |
| 68 | European Parliament and Council Regulation (EC) No 1980/2000
on a revised Community eco-label award scheme. OJ L 237, 21.9.2000, pp. 1-12. |
| 69 | The EUEB brings Member State representatives together with
members of the (representatives of consumer and environment NGOs, trade unions, industry,
SMEs and commerce). |
| 70 | ISO/DIS 14021 on environmental labels and declarations.
Self-declared environmental claims. |
| 71 | Council Directive 84/450/EEC relating to the approximation of
the laws, regulation and administrative provisions of the Member States concerning
misleading advertising. OJ L 250, 19.9.84, pp. 17-20. |
| 72 | ISO/WD/TR 14025 on environmental labels and declarations
– type III environmental declarations. Guiding principles and procedures. |
| 73 | More information on the work developed under this network may
be found at: http:/www.sms-standard.se/english/type3nw/index.htm. |
| 74 | Christian Hey, Policy Director, EEB, at EEB Workshop on
Standardisation, 28.9.01. |
| 75 | Christian Hey, Policy Director, EEB, at EEB Workshop on
Standardisation, 28.9.01. |
| 76 | The packaging CEN standards include: EN 13428 on Requirements
on prevention by source reduction; EN 13429 on Packaging suitable for reuse; EN 13430 on
Requirements on packaging recoverable by material recycling; EN 13431 on Requirements on
packaging recoverable in the form of energy recovery; EN 13432 on Requirements on
packaging recoverable through composting and biodegradation. The umbrella or guidance
document is covered by EN 13427 on Requirements for the use of European Standards in the
field of packaging and packaging waste. |
| 77 | European Parliament and Council Directive 1999/94/EC relating
to the availability of consumer information on fuel economy and CO2 emissions in respect
of the marketing of new passenger cars. OJ L 12, 18.1.2000, pp. 16 -23. |
| 78 | Results from the project: "Energy Efficiency of
Passenger Cars: Labelling and Its Impacts on Fuel Efficiency and CO2- Reduction",
conducted within the framework of the European Commission's SAVE programme (DG Transport
and Energy) and supported by the Austrian Ministry of Science and Transport, and the Dutch
"Buy Eco-Wise, Drive Eco-Nice" programme. |
| 79 | Energy efficiency labelling programmes. COM(1999) 328 final.
OJ C 274, 28.09.1999 |
| 80 | European Parliament and Council Directive 1999/94/EC relating
to the availability of consumer information on fuel economy and CO2 emissions
in respect of the marketing of new passenger cars. OJ L 12, 18.1.2000, pp. 16 –23. |
| 81 | Results from the project: "Energy Efficiency of
Passenger Cars: Labelling and Its Impacts on Fuel Efficiency and CO2- Reduction",
conducted within the framework of the European Commission’s SAVE programme (DG
Transport and Energy) and supported by the Austrian Ministry of Science and Transport, and
the Dutch "Buy Eco-Wise, Drive Eco-Nice" programme. |
| 82 | Stakeholder Conference on Integrated Product Policy (IPP),
Brussels, 8-9 March 2001. Workshop 1 on the Role of Economic Instruments in Integrated
Product Policy. |
| 83 | EEB response to the Commission Green Paper on Integrated
Product Policy. EEB Document No. 2001/008. Brussels, April 2001. |
| 84 | The views expressed in this document do not necessarily
reflect those of the European Commission. Neither the Commission nor any person acting on
behalf of the Commission is responsible for the use that could be made of the information
given in this document. |
| 85 | COM(2001) 68 final of 7.2.2001. |
| 86 | Commission Decision 2002/18/EC establishing the Community eco-label working plan. OJ L 27, 11.1.2002, p.28 |