Imposing stringent sustainability requirements on all products within the bloc, European Union's new ecodesign regulation is poised to impact Indian exporters, especially smaller businesses. Banning the destruction of unsold textiles, the regulation is likely to reduce the number of new orders.
Mandating, mandate product durability, reusability, and energy efficiency, the new guidelines align with other EU measures such as the carbon border adjustment mechanism (CBAM) and deforestation regulations. Considered a unilateral move, the CBAM may face challenges at the World Trade Organization (WTO). The ecodesign regulations will take effect 24 months after being published in the official journal.
According to the EU website, the ecodesign requirements aim to reduce the environmental impact throughout a product's lifecycle by ensuring energy efficiency and other sustainability measures.
Replacing the existing ecodesign directive, the new regulation broadens its scope to include all goods sold in the EU market, beyond just energy products. It encourages public procurement of green products by applying ecodesign criteria and aligns with the Digital Services Act for online sales.
The regulation covers a wide range of products, with exceptions for items like cars and defense-related goods. It introduces requirements for product durability, reusability, upgradability, reparability, and energy and resource efficiency. Additionally, it includes norms related to substances that restrict circularity, recycled content, remanufacturing, recycling, and environmental footprints.
Mithleshwar Thakur, Secretary General, AEPC, advises the government to address the issue before engaging in bilateral talks with the EU. Sudden changes like these might particularly affect small players, he says.
Describing the regulation as a non-tariff barrier, another industry representative urges the government to highlight the concern during free trade negotiations, as these norms could negate the benefits of any tariff cuts being negotiated.
