European Green Deal: Challenge and Opportunity for WV Exporters

The European Union has been working on a new economic policy called the European Green Deal that will make Europe the first climate-neutral continent by 2050. This means that the EU wants to reduce its greenhouse gas emissions to net zero by the mid-century. But what does that mean for businesses here in West Virginia?

Because the European Green Deal is a major shift in economic policy, businesses need to be aware of the changes and make sure they are prepared to comply with new regulations if they hope to be well-positioned to succeed in the European market. For example, businesses may need to reduce their energy consumption or switch to renewable energy sources and consider the impact their products have on the environment. 

As the full impact of the European Green Deal on exporting becomes clearer in the coming months and years, we want to shed some light on a few policy proposals you can’t ignore if you want to sell in Europe.

Reduce, Reuse, Recycle (and Repair)

If you sell products in Europe, you may already be aware of the new Circular Economy Action Plan, which was introduced in March 2020. Or perhaps your European customer has started referencing Ecodesign for Sustainable Products regulations, which was proposed in March 2022 and currently in the final stages of the approval process. 

The goal of the Circular Economy Action Plan and Ecodesign for Sustainable Products regulations is to reduce the use of natural resources and promote reusing, repairing and recycling products. Right now, these regulations are focused on electronics and information technology, batteries and automotive, packaging, plastics, textiles, construction and building materials. However, almost all products will eventually be subject to sector-specific rules and regulations.

To ensure compliance with these regulations, you may need to make changes to your product design, manufacturing process or packaging. You may also need to provide additional information on the recycled content of your product to your customers and regulatory agencies. Additionally, information on how they can be repaired may need to be shared with third party repair shops in Europe. By complying with these regulations, you can help to ensure the long-term sustainability of your business.

Obtaining a Digital Product Passport

In addition to the requirements placed on products, your product will also require a Digital Product Passport. This passport will provide information about the product, its supply chain and environmental sustainability. It will also create a record and help officials track products as they move through their life cycles within Europe.

The goal of the Digital Product Passport is to help consumers make informed decisions about the products they purchase and assist regulatory bodies check for compliance. The passport is expected to be introduced in textiles, construction, industrial and electrical vehicle batteries and consumer electronics by 2026. Requirements are still being discussed, but expect to be required to display a unique product identifier or a scannable QR code on your product or packaging.

The Digital Product Passport is a new initiative that is expected to have a significant impact on the way products are regulated and marketed. Businesses that are planning to sell products in Europe should be aware of the requirements for the Digital Product Passport and start planning accordingly.

Be Prepared

With this information in mind, West Virginia exporters have a few options for navigating regulations and requirements for selling in the EU. Some businesses, unfortunately, may choose to stop selling to EU countries. Avoiding a market altogether is a drastic measure, which is why we want to encourage you to find creative ways to bring your production and products into compliance. The EU is a large and important market and you would be passing up on so many opportunities if you pulled out of Europe.

We believe knowledge is key to being a successful exporter and that having an export plan reduces the likelihood of you making hasty or reactionary decisions. So, prepare for new regulations in Europe now by documenting your product’s components and researching their origins. You should also start conversations with your engineers and company leadership to find ways to improve product sustainability and recyclability, reduce your manufacturing carbon footprint and mitigate associated costs. If you are selling to Europe through an established partner, reach out and start talking about how they will handle the new requirements and who will be responsible for ensuring they are met. If you sell directly to Europe, you may want to consider finding a reputable European business partner to help navigate these changes.

Whatever you do, you should start preparing for new regulations as soon as possible. This will help you to avoid any disruptions to business and ensure that you can continue to sell your products in Europe.

Sources

• Presentation by Peter Marton, US Commercial Service Webinar on European Regulations and CE Mark, presented on June 8, 2023
• All You Need To Know About the EU Digital Product Passports