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Document 52013SC0112
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Communication from the Commission to the European Parliament and the Council Building the Single Market for Green Products: Facilitating better information on environmental performance of products and organisations
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Communication from the Commission to the European Parliament and the Council Building the Single Market for Green Products: Facilitating better information on environmental performance of products and organisations
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Communication from the Commission to the European Parliament and the Council Building the Single Market for Green Products: Facilitating better information on environmental performance of products and organisations
/* SWD/2013/0112 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Communication from the Commission to the European Parliament and the Council Building the Single Market for Green Products: Facilitating better information on environmental performance of products and organisations /* SWD/2013/0112 final */
COMMISSION STAFF WORKING DOCUMENT EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT Accompanying the document Communication from the Commission
to the European Parliament and the Council Building the Single Market for
Green Products: Facilitating better information on environmental performance of
products and organisations 1. Problem
definition 1.1. The underlying issue: the proliferation of methodologies is hampering the functioning of the market of green products Many methodologies are available and used
to assess and communicate the environmental footprints of products and
organisations[1]. Their number is rapidly increasing leading to a proliferation of
national[2] and private sector initiatives[3].
Companies are in principle free to choose which one to apply, but are also
often required to use a particular one either by a national administration or
by clients downstream in the supply chain. If a firm supplies several other
firms, then it may be asked to supply environmental information in multiple
ways implying the use of multiple methodologies. At the same time, there is no
natural coalescence around a single specific methodology. There are numerous voices from
industry calling for a harmonisation of methods to assess the environmental
performance of products in order to create a level playing field, reduce costs,
and prevent free riding. Respondents to the
public consultation considered the lack of consistency as one of the most
important barriers to the display and benchmarking environmental performance
(72.5% agreement). When asked about the drivers of the barriers, multiple
initiatives in the EU (70.8%) and multiple ways of reporting (76.3%) received
high agreement from stakeholders. 1.2. The scope and scale of the
problem (a)
Additional costs for businesses The co-existence of different methodologies
implies a direct increase of costs for those who want to assess and communicate
the environmental footprints of their products or organisations. The increase
of costs is due to: (1) increase in training costs to be able to cope with the
requirements of the different methodologies; (2) increase in costs related to
gathering of different information; (3) different labelling requirements; (4)
different verification requirements. (b)
Reduced opportunities for cross border trading
of green products Given the lack of a
commonly agreed definition of green products, it is difficult to substantiate
the scale of intra-EU and extra-EU trade that is affected by this issue.
However, surveys suggest that 90% of consumers buy green products at least
sometimes, of which export products would have a share. Overall, there is
clearly considerable trade in green products, and this is likely to be
increasing. However, the proliferation of methodologies
may hinder this positive trend, reducing the opportunity of cross border
trading of green products, because companies find that the requirements related
to the environmental information for the products they intend to sell change
across those borders. Increasingly, different environmental information is
requested by national governments in the case of public procurement, reporting
or labelling requirements, or by private initiatives, for instance by a
retailer to let the product be displayed in stores. (c)
Lack of clarity for consumer choices At present,
consumers have very poor information on what is genuinely 'green'. Without
providing this information in a trusted way, purchasing decisions are distorted
and many consumers end up not buying green products
despite their declared intention to do so. This has been shown by a
Eurobarometer survey: while 75% respondents say they are ready to buy
environmentally friendly products, only 17% had actually done so in the month
before the survey[4]. The number of green claims is growing, even if they are becoming more
superficial and vague in their use of terminology, further deteriorating
consumer trust: 48% of consumers do not trust environmental information on
products[5]. People tend to distrust green claims, both
those attached to products and those included in companies' Corporate Social Responsibility (CSR) or
other environmental reports[6].
This situation penalises those companies who have been
investing a lot in improving their performances and greening their business
models. The perception is that companies are competing on the basis of their
claims rather than on the basis of the underlying environmental performance. (d)
Missed opportunities for resource efficiency The more proactive companies have
understood the large margins for further efficiency gains along their supply
chain and in order to exploit that they are more and more using life cycle
management approaches[7]. Those who are using life cycle approaches to improve their
resource efficiency can also enjoy other benefits, like a better return on investment, develop new markets, improved
corporate image, better customer loyalty, a better understanding of the risks
across their full supply chain, and better product differentiation. More green products being sold on the
market and more organisations getting greener would contribute to achieving the
objectives of the Resource Efficiency flagship and the EU 2020 Strategy. Although environmental reporting per se does not mean
performance improvement, many of the companies measuring performance set up
targets and actions. The low take up of green products has repercussions on the
take-up of eco-innovation as well, putting at risk the competitive edge of EU
eco-industries, which are still leading globally and are growing. Indeed, green
technologies have been identified as an important source of growth in the
Industrial Policy Update[8]. 2. Analysis
of Subsidiarity The proliferation of methodologies, the
related difficulties and the increased costs calls for co-ordinated EU action,
as they directly affect the smooth functioning of the Single Market. If
the EU chooses to intervene at a later stage, companies will have had to comply
with several methodologies already, bearing the cost of compliance; national
administrations will have had to build their policy implementation structures –
costs that could have been foregone through earlier EU action. Thus
action at EU level is justified now. The EU is ideally placed to promote
harmonisation of methodologies across the Single Market, relying on experiences
of Member States and private initiatives in this area and in discussion with
the stakeholders. The EU can bring an important value added, as further
co-ordination would bring significant cost savings for national governments and
the private sector[9]. 2.1. The inapplicability of the
principle of mutual recognition In the absence of EU level rules, private
economic operators as well as public authorities are free to adopt and apply
the preferred scheme to calculate and communicate environmental performance.
However, in case of a Member State, the regulatory flexibility is limited by
the requirement that technical regulations are not prepared, adopted or applied
with a view to, or with the effect of, creating unnecessary obstacles to trade.
In the case of national regulations, the principle of mutual recognition is
often the best way to ensure the free movement of goods within the internal
market. However, it does not seem useful in this context because at present
some Member States do not even have methods to calculate and communicate the
environmental performance and in others the methods applied have different
scope, ambition and rules. As a result, it is currently not possible to
establish equivalence between them. In addition, mutual recognition would not
remove other non-technical hurdles to intra-EU trading: even without legal
requirements, exporters will need to use the communication methods familiar to
consumers in the foreign market in order not to be disadvantaged vis-à-vis
local producers. 3. Objectives The general objective of the EU action is to improve the
availability of reliable information on the environmental performance of
products and organisations. 3.1. Specific objectives Promote the use of a
common methodology to assess and communicate the environmental performance of
products and organisations. 3.2. Operational
objectives The above specific
objective can be broken down into operational ones as follows: Table 1 - Operational objectives Specific objective || Operational objectives Promote the use of a common methodology to assess and communicate the environmental performance of products and organisations || 1. Launch two methodologies that are relatively simple to use, but also robust, one for the measurement of the environmental performance of products and one for the measurement of the environmental performance of organisations 2. Encourage the take-up of the methodologies in Member States and by private actors 3. Develop product and sector specific environmental footprint category rules through an open, transparent, multi-stakeholder process 4. Policy Options 4.1. Option
1. Baseline scenario – no policy change Without further EU intervention the
proliferation of private and public initiatives would persist. Although some
spontaneous approximation of methods is expected to arise in widely covered
areas such as Greenhouse Gases, companies would still need to face markets with
differing requirements. This would represent a particularly heavy burden for
SMEs. With a confusing range of information available, private, public and business
consumers would continue to mistrust green claims regarding environmental
performance. 4.2. Option 2. A new mandatory product policy framework
A new EU legal
framework for sustainable products will replace and consolidate the existing
product-related policy instruments included in the 2008 SCP/SIP Action Plan
(such as for instance Ecodesign and Ecolabel). In practice, this would generate
a stronger consistency between requirements concerning product-related
environmental performance, by using common evidence to
improve coordination in standard setting[10];
by establishing a single, streamlined (and less costly) “criteria setting”
process for the same product categories[11];
and by applying a single process for developing and approving the requirements
for the same product categories as well as homogeneous testing and verification
methods. 4.3. Option
3. A mandatory Organisation Environmental Footprint (OEF)
reporting framework Under this option
the use of the OEF methodology will be obligatory for large organisations in
priority sectors for reporting/information provision purposes[12]. In order to prompt continuous
improvement, the requirement will be associated with incentives for use and
benchmarking. In collaboration with stakeholders the Commission will develop
over time OEF sector rules (OEFSR)[13],
increasing the consistency of their environmental reporting and also, to some
extent, the comparability of their overall environmental performance. Thus, it
will be possible for an organisation to provide OEF-based information with the
purpose of communicating its environmental performance and showing progress
over the years; but in order to participate in benchmarking or sector-based
league tables, an organisation will have to report on the basis of the established
sector rules (the sector-specific OEFSR). 4.4. Option 4. Integration of the
methodologies for the environmental footprint of products (PEF) and
organisations (OEF) in relevant policy instruments Under this option
the PEF and OEF methodologies are integrated in existing voluntary and
mandatory policy instruments where relevant and technically implementable[14]. For instance PEF and OEF will be
immediately used in instruments such as Ecolabel, GPP and EMAS for informing
the criteria-development process[15]
and the creation of Sectoral Reference Documents[16] for determining relevant
environmental impacts and life cycle-based key performance indicators. Under
this option it would also be necessary to establish a set of incentives, both
by the public and private sector, that would reward companies and reinforce the
positive effect on environmental performance improvements[17]. 4.5. Option
5. Recommending the application of PEF and OEF on a voluntary basis A Commission
Recommendation will be addressed to Member States to recommend that whenever a Member State intends to introduce a voluntary scheme or requirements related to the
measurement, verification, reporting, benchmarking, and communication of the
environmental performance of products and organisations, it should apply the
PEF and OEF methodologies respectively[18]. The Recommendation
will be addressed to business as well. It will recommend using PEF and OEF
methodologies in the calculation of the environmental footprint of products or
the overall footprint of the company whenever such a calculation is undertaken.
It would also invite the financial community (investors, insurers, banks) to
use environmental performance information based on the application of OEF
and/or OEFSRs in assessing environmental risks.
5. Assessment
of Impacts and Comparison of Options For the purposes of the assessment and
comparison as well as to create groups of options that are mutually exclusive,
the policy options presented above are clustered according to whether they
relate to the environmental performance of products or of organisations. Please
refer to the Impact Assessment report for a detailed analysis of the economic,
social and environmental impact of each option. 5.1. Comparison
of policy options related to environmental performance of products Table 2 – Comparison of impacts of options related to the environmental
performance of products Policy option Impact category || 2. A new mandatory product policy framework || 4. Integration of PEF and OEF in relevant policy instruments || 5. Recommending the application of PEF and OEF on a voluntary basis Functioning of the internal market and competition || +++ || ++ || ++ Competitiveness, trade and investment flows || ++ || ++ || + Operating costs and conduct of business || - || 0 || + Impact on SMEs || - || 0 || + Administrative burdens on businesses || + || 0 || 0 Burden for public administrations and simplification potential || - || + || + Innovation and research || ++ || ++ || ++ Consumers and households || + || + || + Overall economic impact || 0 || 0 || + Employment and labour markets || ++ || ++ || ++ Social inclusion and protection of particular groups || + || 0 || 0 Public health || + || + || + Overall social impact || + || + || + Overall environmental impact || +++ || ++ || ++ 5.2. Comparison
of policy options related to environmental performance of organisations Table 3 – Comparison of impacts of options related to the environmental
performance of organisations Policy option Impact category || 3. Mandatory OEF reporting framework || 4. Integration of PEF and OEF in relevant policy instruments || 5. Recommending the application of PEF and OEF on a voluntary basis Functioning of the internal market and competition || +++ || ++ || ++ Competitiveness, trade and investment flows || ++ || ++ || + Operating costs and conduct of business || - || 0 || + Impact on SMEs || - || 0 || + Administrative burdens on businesses || - || 0 || 0 Burden for public administrations and simplification potential || - || + || + Innovation and research || ++ || ++ || ++ Consumers and households || 0 || + || + Overall economic impact || 0 || 0 || + Employment and labour markets || ++ || ++ || ++ Social inclusion and protection of particular groups || 0 || 0 || 0 Public health || + || + || + Overall social impact || + || + || + Overall environmental impact || +++ || ++ || ++ 5.3. Comparison
of options according to efficiency, effectiveness and coherence The scoring system
used for the comparing tables 2 and 3 helps in the assessing the relative
strength of alternative options in each impact category considered, but it does
not provide the relative weight of each impact category. Therefore, the
analysis is complemented by a comparison of the options in terms of their
effectiveness, efficiency and coherence[19].
This shows that although mandatory options (2 & 3) contribute to reaching
the objectives and are also associated to the biggest potential for
environmental improvement, they are also associated with higher initial costs
for business and public authorities, making them less attractive in current
times of economic crisis. Previous experiences in law-making in the EU has
shown that the adaptation and transaction costs for business and public
administration are less important when the introduction of a legislative
instrument has been preceded by its voluntary application. On the basis of the
analysis carried out in this report, this appears to be the case also for
option 2 and 3, which could become more cost-effective after a piloting application
of PEF and OEF as proposed under option 5. Option 1 would only marginally
contribute to reaching the objectives and would fall short on environmental and
resource efficiency improvements as well. The performance of Option 4 is
variable, depending on the instrument where PEF and OEF are integrated. 5.4. The preferred option The preferred option
is 5 "Recommending the application of PEF and OEF on a voluntary
basis" for the following reasons: ·
It scores positively on all relevant aspects
compared to the baseline scenario and overall it scores better than the
alternative options. ·
A voluntary application allows for gradual
further development of the PEF and OEF methodology in a piloting process
involving Member States and a wide range of stakeholders to reach full
potential in the following years (e.g. through a mandatory application or
through wide take-up); ·
It enables exploiting important efficiency
opportunities both from an economic and environmental point of view. ·
Despite some significant benefits across the
three pillars, Options 2 and 3 would entail higher costs at the current level
of development of the methodologies. Furthermore, there is a risk that
stakeholder ownership would be lower, affecting the acceptance and
effectiveness of the instrument. ·
In general, all stakeholders were favourable to
the introduction of a voluntary scheme based on a PEF methodology, except NGOs
(50% in disagreement). Stakeholder opinion was divided on integrating the PEF
methodology into the EU SCP regulatory instruments and policy measures and
mostly unfavourable to a new mandatory measure (60% disagreement). ·
Stakeholders provided the second highest
agreement to option 5 (41% strongly agree or agree). The majority was in
disagreement with policy options related to mandatory tools in priority (43%)
or all sectors (52.8%) and to the integration of OEF into existing mandatory
instruments (44%) 6. Monitoring and Evaluation The Impact Assessment sets out a series of
Specific, Measurable, Achievable, Relevant and Time-bound indicators related to
the take-up and implementation of the preferred option, grouped under relevant
objectives. These are presented in detail in the Impact Assessment Report. An overall review of the policies
introduced by the policy initiative subject to the present Impact Assessment is
foreseen by 2015, in correspondence with the review of some key SCP policy
instruments. [1] See a list of the most important (diverging)
initiatives on the assessment of the environmental footprint of product and organisations
in Annexes 17, 18 and 19. [2] E.g. France is currently evaluating a pilot programme
on product environmental labelling. Since 2008, private companies have been
invited to participate in the programme to demonstrate and test concrete
example of multi-criteria environmental labelling . A preliminary evaluation of
agri-food products show that 75% of the companies involved in the pilot
programme intend to continue with environmental labelling and about 64% are in
favour of a EU harmonised approach. (http://www.developpement-durable.gouv.fr/IMG/pdf/LPS125.pdf)
Other initiatives exist in the UK, Switzerland, internationally in Japan, Australia and Canada. See Annex 19 for more details. [3] E.g. the Sustainability Consortium, Envifood
Protocol, GHG Product Protocol, different labels and standards (carbon
footprint, LCA, water footprint); Carbon Disclosure Project, sustainability
indices, Global Reporting Initiative, etc. See Annexes 18 and 19 for more
details. [4] Eurobarometer Attitudes of
European citizens towards the environment, 2008. [5] The Flash Eurobarometer 332 . [6] The second Eurobarometer survey on the Attitudes of European citizens towards environment (2011) showed a decline of respondents thinking that labels on
products allow the
identification of those environmentally friendly (47% compared to 52%, scored in 2008). [7] For a list of studies supporting this statement,
please consult Annex 21. [8] COM(2012) 582 final, A
Stronger European Industry for Growth and Economic Recovery - Industrial Policy
Communication Update [9] Interesting to note that the UK and French schemes already make strong cross-reference to EU developments
and Italy foresees a strong
link as well. Member States
appear to be calling for a harmonised EC-level guidance/support on the assessment
of the environmental footprint. See also the Council
conclusions of 20 December 2010 inviting the Commission
"to develop a common methodology on the quantitative assessment of
environmental impacts of products, throughout their life-cycle". [10] The criteria for the EU
product-related policy instruments are usually set on
the basis of technical and market evidence that is collected by way of specific
preparatory studies. If this evidence is univocal for all the EU SCP
instruments, assumptions on environmental and economic/competitive effects of
new criteria are the same and the result can be a higher level of homogeneity. [11] If the criteria are set as a result of a single process
for different “uses”, taking into account the different objectives of the EU product-related policy instruments, a
stronger consistency can ensured (e.g.: in defining the thresholds for
Ecolabel and Energy label). [12] Since 2010 the EU's Joint Research Centre has been
developing the Product Environmental Footprint (PEF) and Organisation
Environmental Footprint (OEF) methods (umbrella methods). Both PEF and OEF are
LCA-based methodologies to identify and quantify the most relevant
environmental impacts of products (good and services alike) or a product and
service portfolio (organisation). They build on existing approaches and
international standards, even if using LCA for organisation-level assessment
represents a relatively novel approach. See Annex 9 for a more complete description of PEF and OEF features. [13] Organisation Environmental Footprint Sectoral Rules are
a set of tailored methodological specifications and instructions to be applied
for a specific sector. See Annex 9 [14] The option for integration and
the technical implementability would need to be assessed in detail on a case by
case basis. See Annex 9 for more information about the methodological developments needed
to fully implement PEF and OEF in existing policy instruments. [15] http://ec.europa.eu/environment/ecolabel/products-groups-and-criteria.html
[16] http://susproc.jrc.ec.europa.eu/activities/emas/index.html
[17] For more details on incentives,
see Annex 20 and Annex 14. [18] E.g. in case of national scheme or requirements related
to non-financial reporting or promoting the use of environmental performance
indicators in risk assessments in investment, the reference methodology would
be OEF, coupled with OEFSRs. [19] Effectiveness is defined as the extent to which options
achieve the objectives; Efficiency is defined as the extent to which objectives
can be achieved in a cost-effective manner; coherence is defined as the extent
to which options are coherent with the objectives of EU policy and are likely
to limit trade-offs across environmental, social, and economic domains. See
table 6 in the Impact Assessment report.