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What is the impact of the eco-design regulations on domestic companies?
On July 18, 2024, the European Union (EU) officially enacted the ‘Eco-Design Regulation for Sustainable Products’ (ESPR). This regulation aims to improve the circularity, energy performance, and environmental sustainability of products launched in the EU market. In this article, we will explore the key points of the regulation and its impact on domestic companies, along with potential response strategies.
Jul 29, 2024
What is the impact of the eco-design regulations on domestic companies?
On July 18, 2024, the European Union (EU) officially enacted the ‘Eco-Design Regulation for Sustainable Products’ (ESPR). This regulation aims to improve the circularity, energy performance, and environmental sustainability of products launched in the EU market. In this article, we will explore the key points of the regulation and its impact on domestic companies, along with potential response strategies.
Jul 29, 2024
What is the impact of the eco-design regulations on domestic companies?
On July 18, 2024, the European Union (EU) officially enacted the ‘Eco-Design Regulation for Sustainable Products’ (ESPR). This regulation aims to improve the circularity, energy performance, and environmental sustainability of products launched in the EU market. In this article, we will explore the key points of the regulation and its impact on domestic companies, along with potential response strategies.
Jul 29, 2024
What is the impact of the eco-design regulations on domestic companies?
On July 18, 2024, the European Union (EU) officially enacted the ‘Eco-Design Regulation for Sustainable Products’ (ESPR). This regulation aims to improve the circularity, energy performance, and environmental sustainability of products launched in the EU market. In this article, we will explore the key points of the regulation and its impact on domestic companies, along with potential response strategies.
Jul 29, 2024
What are the key points of the eco-design regulations?
Expansion of applicable items
The biggest change in the Eco-design regulation is the expansion of the scope of application. Previously, only products related to energy efficiency were subject to regulation, but now all physical items are included. Components, intermediate goods, and digital content are all applicable, greatly expanding the range of products entering the EU market. However, items related to food, feed, pharmaceuticals, living organisms, specific vehicles, as well as national defense and security are classified as exceptions. Within 9 months of the regulation coming into effect, a priority list of items is expected to be established, with textiles, steel, aluminum, furniture, tires, detergents, paints, lubricants, chemicals, and ICT products likely being prioritized. The first implementation regulations for specific items are expected to be enacted in 2027.
What are the key points of the eco-design regulations?
Expansion of applicable items
The biggest change in the Eco-design regulation is the expansion of the scope of application. Previously, only products related to energy efficiency were subject to regulation, but now all physical items are included. Components, intermediate goods, and digital content are all applicable, greatly expanding the range of products entering the EU market. However, items related to food, feed, pharmaceuticals, living organisms, specific vehicles, as well as national defense and security are classified as exceptions. Within 9 months of the regulation coming into effect, a priority list of items is expected to be established, with textiles, steel, aluminum, furniture, tires, detergents, paints, lubricants, chemicals, and ICT products likely being prioritized. The first implementation regulations for specific items are expected to be enacted in 2027.
What are the key points of the eco-design regulations?
Expansion of applicable items
The biggest change in the Eco-design regulation is the expansion of the scope of application. Previously, only products related to energy efficiency were subject to regulation, but now all physical items are included. Components, intermediate goods, and digital content are all applicable, greatly expanding the range of products entering the EU market. However, items related to food, feed, pharmaceuticals, living organisms, specific vehicles, as well as national defense and security are classified as exceptions. Within 9 months of the regulation coming into effect, a priority list of items is expected to be established, with textiles, steel, aluminum, furniture, tires, detergents, paints, lubricants, chemicals, and ICT products likely being prioritized. The first implementation regulations for specific items are expected to be enacted in 2027.
What are the key points of the eco-design regulations?
Expansion of applicable items
The biggest change in the Eco-design regulation is the expansion of the scope of application. Previously, only products related to energy efficiency were subject to regulation, but now all physical items are included. Components, intermediate goods, and digital content are all applicable, greatly expanding the range of products entering the EU market. However, items related to food, feed, pharmaceuticals, living organisms, specific vehicles, as well as national defense and security are classified as exceptions. Within 9 months of the regulation coming into effect, a priority list of items is expected to be established, with textiles, steel, aluminum, furniture, tires, detergents, paints, lubricants, chemicals, and ICT products likely being prioritized. The first implementation regulations for specific items are expected to be enacted in 2027.
Strengthening sustainability requirements
According to the new regulations, products must meet various sustainability requirements such as durability, ease of repair, reusability, recyclability, and carbon footprint. To prove that the product meets these requirements, it must obtain the CE mark, and after the product is launched in the market, acts that unfairly change product performance or misrepresent it are prohibited. In particular, the use of technologies harmful to reusability and repair should be avoided, and the key is to extend the product's lifespan and reduce waste. These sustainability requirements will become an important factor in determining competitiveness in the EU market.
Strengthening sustainability requirements
According to the new regulations, products must meet various sustainability requirements such as durability, ease of repair, reusability, recyclability, and carbon footprint. To prove that the product meets these requirements, it must obtain the CE mark, and after the product is launched in the market, acts that unfairly change product performance or misrepresent it are prohibited. In particular, the use of technologies harmful to reusability and repair should be avoided, and the key is to extend the product's lifespan and reduce waste. These sustainability requirements will become an important factor in determining competitiveness in the EU market.
Strengthening sustainability requirements
According to the new regulations, products must meet various sustainability requirements such as durability, ease of repair, reusability, recyclability, and carbon footprint. To prove that the product meets these requirements, it must obtain the CE mark, and after the product is launched in the market, acts that unfairly change product performance or misrepresent it are prohibited. In particular, the use of technologies harmful to reusability and repair should be avoided, and the key is to extend the product's lifespan and reduce waste. These sustainability requirements will become an important factor in determining competitiveness in the EU market.
Strengthening sustainability requirements
According to the new regulations, products must meet various sustainability requirements such as durability, ease of repair, reusability, recyclability, and carbon footprint. To prove that the product meets these requirements, it must obtain the CE mark, and after the product is launched in the market, acts that unfairly change product performance or misrepresent it are prohibited. In particular, the use of technologies harmful to reusability and repair should be avoided, and the key is to extend the product's lifespan and reduce waste. These sustainability requirements will become an important factor in determining competitiveness in the EU market.
Regulations for the disposal of unsold products
This regulation has also introduced strict regulations regarding the disposal of unsold products. Disposal for reuse, reprocessing, or remanufacturing is recognized as an exception, but in other cases, companies must disclose the quantity, weight, reasons for disposal, disposal processes, and measures taken to prevent disposal of unsold products each year.
This obligation will take effect from July 2026, especially focusing on clothing, footwear, and certain clothing accessories. Small businesses are exempt from this regulation, while medium-sized enterprises are expected to be subject to it after 6 years.
Regulations for the disposal of unsold products
This regulation has also introduced strict regulations regarding the disposal of unsold products. Disposal for reuse, reprocessing, or remanufacturing is recognized as an exception, but in other cases, companies must disclose the quantity, weight, reasons for disposal, disposal processes, and measures taken to prevent disposal of unsold products each year.
This obligation will take effect from July 2026, especially focusing on clothing, footwear, and certain clothing accessories. Small businesses are exempt from this regulation, while medium-sized enterprises are expected to be subject to it after 6 years.
Regulations for the disposal of unsold products
This regulation has also introduced strict regulations regarding the disposal of unsold products. Disposal for reuse, reprocessing, or remanufacturing is recognized as an exception, but in other cases, companies must disclose the quantity, weight, reasons for disposal, disposal processes, and measures taken to prevent disposal of unsold products each year.
This obligation will take effect from July 2026, especially focusing on clothing, footwear, and certain clothing accessories. Small businesses are exempt from this regulation, while medium-sized enterprises are expected to be subject to it after 6 years.
Regulations for the disposal of unsold products
This regulation has also introduced strict regulations regarding the disposal of unsold products. Disposal for reuse, reprocessing, or remanufacturing is recognized as an exception, but in other cases, companies must disclose the quantity, weight, reasons for disposal, disposal processes, and measures taken to prevent disposal of unsold products each year.
This obligation will take effect from July 2026, especially focusing on clothing, footwear, and certain clothing accessories. Small businesses are exempt from this regulation, while medium-sized enterprises are expected to be subject to it after 6 years.
Introduction of the Digital Product Passport (DPP)
Eco-design regulations require the introduction of a digital product passport (DPP) that contains information about the product's life cycle. This passport must include eco-design requirements, materials, supply chain information, recycling, and disposal methods, and must be electronically accessible. This enables consumers, manufacturers, and authorities to make better decisions based on information about sustainability and circularity. EU customs authorities can automatically verify the presence and accuracy of the DPP for imported products, thus helping to prevent regulatory violations.
The executive committee plans to establish a priority list for the items to be applied and set up a delegated regulation containing detailed regulatory content within 9 months of the enforcement of the eco-design regulations. It is expected that, after the delegated regulation is adopted in the 3rd to 4th quarters of 2025, it will be implemented in mid-2027 for steel and textiles.
Introduction of the Digital Product Passport (DPP)
Eco-design regulations require the introduction of a digital product passport (DPP) that contains information about the product's life cycle. This passport must include eco-design requirements, materials, supply chain information, recycling, and disposal methods, and must be electronically accessible. This enables consumers, manufacturers, and authorities to make better decisions based on information about sustainability and circularity. EU customs authorities can automatically verify the presence and accuracy of the DPP for imported products, thus helping to prevent regulatory violations.
The executive committee plans to establish a priority list for the items to be applied and set up a delegated regulation containing detailed regulatory content within 9 months of the enforcement of the eco-design regulations. It is expected that, after the delegated regulation is adopted in the 3rd to 4th quarters of 2025, it will be implemented in mid-2027 for steel and textiles.
Introduction of the Digital Product Passport (DPP)
Eco-design regulations require the introduction of a digital product passport (DPP) that contains information about the product's life cycle. This passport must include eco-design requirements, materials, supply chain information, recycling, and disposal methods, and must be electronically accessible. This enables consumers, manufacturers, and authorities to make better decisions based on information about sustainability and circularity. EU customs authorities can automatically verify the presence and accuracy of the DPP for imported products, thus helping to prevent regulatory violations.
The executive committee plans to establish a priority list for the items to be applied and set up a delegated regulation containing detailed regulatory content within 9 months of the enforcement of the eco-design regulations. It is expected that, after the delegated regulation is adopted in the 3rd to 4th quarters of 2025, it will be implemented in mid-2027 for steel and textiles.
Introduction of the Digital Product Passport (DPP)
Eco-design regulations require the introduction of a digital product passport (DPP) that contains information about the product's life cycle. This passport must include eco-design requirements, materials, supply chain information, recycling, and disposal methods, and must be electronically accessible. This enables consumers, manufacturers, and authorities to make better decisions based on information about sustainability and circularity. EU customs authorities can automatically verify the presence and accuracy of the DPP for imported products, thus helping to prevent regulatory violations.
The executive committee plans to establish a priority list for the items to be applied and set up a delegated regulation containing detailed regulatory content within 9 months of the enforcement of the eco-design regulations. It is expected that, after the delegated regulation is adopted in the 3rd to 4th quarters of 2025, it will be implemented in mid-2027 for steel and textiles.
Impact on domestic companies and response strategies
The enforcement of the Ecodesign Regulation (ESPR) is expected to bring significant changes not only to the EU market but also across the global market. Accordingly, domestic companies launching products in the EU market or belonging to the global supply chain are faced with the necessity of developing response strategies.
In March 2024, according to the survey on 'Recognition and Response Levels of Export Companies to ESG Export Regulations' conducted by the Korea Chamber of Commerce and Industry, domestic companies showed very low scores of 42 and 34 for regulation recognition and response levels, respectively. This indicates that domestic companies lack awareness and preparedness for new regulations, highlighting the necessity to quickly establish response strategies. The eco-design regulations can apply to all companies seeking to enter the EU market or supply related products, so a precise understanding and prompt response to these regulations is more important than anything else.
Impact on domestic companies and response strategies
The enforcement of the Ecodesign Regulation (ESPR) is expected to bring significant changes not only to the EU market but also across the global market. Accordingly, domestic companies launching products in the EU market or belonging to the global supply chain are faced with the necessity of developing response strategies.
In March 2024, according to the survey on 'Recognition and Response Levels of Export Companies to ESG Export Regulations' conducted by the Korea Chamber of Commerce and Industry, domestic companies showed very low scores of 42 and 34 for regulation recognition and response levels, respectively. This indicates that domestic companies lack awareness and preparedness for new regulations, highlighting the necessity to quickly establish response strategies. The eco-design regulations can apply to all companies seeking to enter the EU market or supply related products, so a precise understanding and prompt response to these regulations is more important than anything else.
Impact on domestic companies and response strategies
The enforcement of the Ecodesign Regulation (ESPR) is expected to bring significant changes not only to the EU market but also across the global market. Accordingly, domestic companies launching products in the EU market or belonging to the global supply chain are faced with the necessity of developing response strategies.
In March 2024, according to the survey on 'Recognition and Response Levels of Export Companies to ESG Export Regulations' conducted by the Korea Chamber of Commerce and Industry, domestic companies showed very low scores of 42 and 34 for regulation recognition and response levels, respectively. This indicates that domestic companies lack awareness and preparedness for new regulations, highlighting the necessity to quickly establish response strategies. The eco-design regulations can apply to all companies seeking to enter the EU market or supply related products, so a precise understanding and prompt response to these regulations is more important than anything else.
Impact on domestic companies and response strategies
The enforcement of the Ecodesign Regulation (ESPR) is expected to bring significant changes not only to the EU market but also across the global market. Accordingly, domestic companies launching products in the EU market or belonging to the global supply chain are faced with the necessity of developing response strategies.
In March 2024, according to the survey on 'Recognition and Response Levels of Export Companies to ESG Export Regulations' conducted by the Korea Chamber of Commerce and Industry, domestic companies showed very low scores of 42 and 34 for regulation recognition and response levels, respectively. This indicates that domestic companies lack awareness and preparedness for new regulations, highlighting the necessity to quickly establish response strategies. The eco-design regulations can apply to all companies seeking to enter the EU market or supply related products, so a precise understanding and prompt response to these regulations is more important than anything else.
Impact on the global supply chain
When domestic companies produce and supply parts or materials for global companies, those products may need to comply with eco-design regulations. This is because EU regulations apply not only to the final products but also across the entire supply chain. For example, domestic companies that produce parts or materials used in products sold within the EU may also be subject to this regulation. This means that considerations for the circularity, durability, ease of repair, and reusability of products must be taken into account at every stage of the supply chain.
Therefore, domestic companies must ensure that the parts or materials they provide meet the stringent standards of the EU, and implement any necessary technical or environmental improvements. If these preparations are not made, their position in the global supply chain may be threatened, and in the worst case, contracts may be canceled or transactions may be halted.
Impact on the global supply chain
When domestic companies produce and supply parts or materials for global companies, those products may need to comply with eco-design regulations. This is because EU regulations apply not only to the final products but also across the entire supply chain. For example, domestic companies that produce parts or materials used in products sold within the EU may also be subject to this regulation. This means that considerations for the circularity, durability, ease of repair, and reusability of products must be taken into account at every stage of the supply chain.
Therefore, domestic companies must ensure that the parts or materials they provide meet the stringent standards of the EU, and implement any necessary technical or environmental improvements. If these preparations are not made, their position in the global supply chain may be threatened, and in the worst case, contracts may be canceled or transactions may be halted.
Impact on the global supply chain
When domestic companies produce and supply parts or materials for global companies, those products may need to comply with eco-design regulations. This is because EU regulations apply not only to the final products but also across the entire supply chain. For example, domestic companies that produce parts or materials used in products sold within the EU may also be subject to this regulation. This means that considerations for the circularity, durability, ease of repair, and reusability of products must be taken into account at every stage of the supply chain.
Therefore, domestic companies must ensure that the parts or materials they provide meet the stringent standards of the EU, and implement any necessary technical or environmental improvements. If these preparations are not made, their position in the global supply chain may be threatened, and in the worst case, contracts may be canceled or transactions may be halted.
Impact on the global supply chain
When domestic companies produce and supply parts or materials for global companies, those products may need to comply with eco-design regulations. This is because EU regulations apply not only to the final products but also across the entire supply chain. For example, domestic companies that produce parts or materials used in products sold within the EU may also be subject to this regulation. This means that considerations for the circularity, durability, ease of repair, and reusability of products must be taken into account at every stage of the supply chain.
Therefore, domestic companies must ensure that the parts or materials they provide meet the stringent standards of the EU, and implement any necessary technical or environmental improvements. If these preparations are not made, their position in the global supply chain may be threatened, and in the worst case, contracts may be canceled or transactions may be halted.
Impact on indirect exports
If a product manufactured by a domestic company is indirectly exported to the EU through a third country, this product may also be subject to eco-design regulations. This means that even if the product is not directly exported to the EU, it must comply with eco-design regulations if the final destination is the EU market. For example, if electronic components produced in Korea are exported to China and then the finished products containing those components are exported to the EU, those components must also meet eco-design regulations.
Therefore, domestic companies must thoroughly analyze the regulatory impacts on products indirectly exported to the EU and prepare response measures considering these indirect effects. Such response measures may include increasing the transparency of the supply chain and designing products with compliance in mind from the design stage. In particular, to meet new requirements such as the Digital Product Passport (DPP) required by the Eco-Design Regulation, companies need to establish systems to collect and manage detailed data on the product's life cycle.
Impact on indirect exports
If a product manufactured by a domestic company is indirectly exported to the EU through a third country, this product may also be subject to eco-design regulations. This means that even if the product is not directly exported to the EU, it must comply with eco-design regulations if the final destination is the EU market. For example, if electronic components produced in Korea are exported to China and then the finished products containing those components are exported to the EU, those components must also meet eco-design regulations.
Therefore, domestic companies must thoroughly analyze the regulatory impacts on products indirectly exported to the EU and prepare response measures considering these indirect effects. Such response measures may include increasing the transparency of the supply chain and designing products with compliance in mind from the design stage. In particular, to meet new requirements such as the Digital Product Passport (DPP) required by the Eco-Design Regulation, companies need to establish systems to collect and manage detailed data on the product's life cycle.
Impact on indirect exports
If a product manufactured by a domestic company is indirectly exported to the EU through a third country, this product may also be subject to eco-design regulations. This means that even if the product is not directly exported to the EU, it must comply with eco-design regulations if the final destination is the EU market. For example, if electronic components produced in Korea are exported to China and then the finished products containing those components are exported to the EU, those components must also meet eco-design regulations.
Therefore, domestic companies must thoroughly analyze the regulatory impacts on products indirectly exported to the EU and prepare response measures considering these indirect effects. Such response measures may include increasing the transparency of the supply chain and designing products with compliance in mind from the design stage. In particular, to meet new requirements such as the Digital Product Passport (DPP) required by the Eco-Design Regulation, companies need to establish systems to collect and manage detailed data on the product's life cycle.
Impact on indirect exports
If a product manufactured by a domestic company is indirectly exported to the EU through a third country, this product may also be subject to eco-design regulations. This means that even if the product is not directly exported to the EU, it must comply with eco-design regulations if the final destination is the EU market. For example, if electronic components produced in Korea are exported to China and then the finished products containing those components are exported to the EU, those components must also meet eco-design regulations.
Therefore, domestic companies must thoroughly analyze the regulatory impacts on products indirectly exported to the EU and prepare response measures considering these indirect effects. Such response measures may include increasing the transparency of the supply chain and designing products with compliance in mind from the design stage. In particular, to meet new requirements such as the Digital Product Passport (DPP) required by the Eco-Design Regulation, companies need to establish systems to collect and manage detailed data on the product's life cycle.
The necessity for immediate response
If domestic companies fail to adequately respond to the global regulatory environment, they risk losing competitiveness in the EU market. This may not only lead to a decrease in sales but also result in disadvantages in cooperation with global companies. Therefore, businesses need to raise awareness of eco-design regulations and establish systematic strategies to comply with them. Such strategies should include applying sustainable design from the product development stage and ensuring compliance with environmental standards throughout the supply chain.
The implementation of the Eco Design Regulation (ESPR) signifies a turning point for the global industry towards a sustainable future, going beyond mere regulation. Domestic companies must recognize that this regulation is part of a growing demand for sustainability not only in the EU market but globally. New requirements such as the Digital Product Passport (DPP) may initially pose a burden, but in the long run, they will enhance corporate transparency and reliability while providing an opportunity to increase global competitiveness. Companies should seize this regulation as an opportunity to strengthen their ESG management and achieve their sustainable management objectives.
The necessity for immediate response
If domestic companies fail to adequately respond to the global regulatory environment, they risk losing competitiveness in the EU market. This may not only lead to a decrease in sales but also result in disadvantages in cooperation with global companies. Therefore, businesses need to raise awareness of eco-design regulations and establish systematic strategies to comply with them. Such strategies should include applying sustainable design from the product development stage and ensuring compliance with environmental standards throughout the supply chain.
The implementation of the Eco Design Regulation (ESPR) signifies a turning point for the global industry towards a sustainable future, going beyond mere regulation. Domestic companies must recognize that this regulation is part of a growing demand for sustainability not only in the EU market but globally. New requirements such as the Digital Product Passport (DPP) may initially pose a burden, but in the long run, they will enhance corporate transparency and reliability while providing an opportunity to increase global competitiveness. Companies should seize this regulation as an opportunity to strengthen their ESG management and achieve their sustainable management objectives.
The necessity for immediate response
If domestic companies fail to adequately respond to the global regulatory environment, they risk losing competitiveness in the EU market. This may not only lead to a decrease in sales but also result in disadvantages in cooperation with global companies. Therefore, businesses need to raise awareness of eco-design regulations and establish systematic strategies to comply with them. Such strategies should include applying sustainable design from the product development stage and ensuring compliance with environmental standards throughout the supply chain.
The implementation of the Eco Design Regulation (ESPR) signifies a turning point for the global industry towards a sustainable future, going beyond mere regulation. Domestic companies must recognize that this regulation is part of a growing demand for sustainability not only in the EU market but globally. New requirements such as the Digital Product Passport (DPP) may initially pose a burden, but in the long run, they will enhance corporate transparency and reliability while providing an opportunity to increase global competitiveness. Companies should seize this regulation as an opportunity to strengthen their ESG management and achieve their sustainable management objectives.
The necessity for immediate response
If domestic companies fail to adequately respond to the global regulatory environment, they risk losing competitiveness in the EU market. This may not only lead to a decrease in sales but also result in disadvantages in cooperation with global companies. Therefore, businesses need to raise awareness of eco-design regulations and establish systematic strategies to comply with them. Such strategies should include applying sustainable design from the product development stage and ensuring compliance with environmental standards throughout the supply chain.
The implementation of the Eco Design Regulation (ESPR) signifies a turning point for the global industry towards a sustainable future, going beyond mere regulation. Domestic companies must recognize that this regulation is part of a growing demand for sustainability not only in the EU market but globally. New requirements such as the Digital Product Passport (DPP) may initially pose a burden, but in the long run, they will enhance corporate transparency and reliability while providing an opportunity to increase global competitiveness. Companies should seize this regulation as an opportunity to strengthen their ESG management and achieve their sustainable management objectives.
Source
The `Korea International Trade Association International Trade and Commerce Research Institute`, "Implications and Countermeasures Following the Implementation of the EU Eco-Design Regulations", p.6-24, p.28-32
What is the core content of the eco-design regulation proposal?
(Contents on the impact on domestic companies and response strategies)
Source
The `Korea International Trade Association International Trade and Commerce Research Institute`, "Implications and Countermeasures Following the Implementation of the EU Eco-Design Regulations", p.6-24, p.28-32
What is the core content of the eco-design regulation proposal?
(Contents on the impact on domestic companies and response strategies)
Source
The `Korea International Trade Association International Trade and Commerce Research Institute`, "Implications and Countermeasures Following the Implementation of the EU Eco-Design Regulations", p.6-24, p.28-32
What is the core content of the eco-design regulation proposal?
(Contents on the impact on domestic companies and response strategies)
Source
The `Korea International Trade Association International Trade and Commerce Research Institute`, "Implications and Countermeasures Following the Implementation of the EU Eco-Design Regulations", p.6-24, p.28-32
What is the core content of the eco-design regulation proposal?
(Contents on the impact on domestic companies and response strategies)