Table of contents

1.    Introduction: Political and legal context    

1.1.    Benefits of Ecodesign and Energy Labelling    

1.2.    Legal framework    

1.2.1.    Current Regulation for off mode, standby and networked standby electric power consumption    

1.3.    Legal context of the review    

1.4.    Political Context    

1.5.    Need to act    

2.    Problem definition    

2.1.    What are the problems?    

2.1.1.    Problem 1: Outdated scope    

2.1.2.    Problem 2: Outdated exemption creating uneven playing field    

2.1.3.    Problem 3: Outdated requirements on maximum consumption in low power modes    

2.1.4.    Problem 4: Lack of readily available information and use of unclear terms    

2.2.    Who is affected by the problems?    

2.2.1.    Consumers    

2.2.2.    Manufacturers    

2.2.3.    EU, Member States and MSAs    

2.2.4.    Society as a whole    

2.3.    How will the problem evolve?    

2.3.1.    Market failure due to outdated scope    

2.3.2.    Slow uptake of available technologies for more efficient low power modes would lead to missed energy savings    

3.    Why should the EU act?    

3.1.    Legal basis    

3.2.    Subsidiarity: Necessity of EU action    

3.1.    Subsidiarity: Added value of EU action    

4.    Objectives: What is to be achieved?    

4.1.    General objectives    

4.2.    Specific objectives    

5.    What are the available policy options?    

5.1.    What is the baseline from which options are assessed? - BAU (PO 1)    

5.2.    Measures common to all policy options    

5.2.1.    Measure 1 - Extension of scope to include adjustable furniture and motor-operated building elements    

5.2.2.    Measure 4 - Requirement for information to be available on publicly accessible websites and in user manuals    

5.2.3.    Measure 5 - New definition and further clarifications    

5.3.    Policy option 2 - Lenient Measure (PO 2)    

5.3.1.    Measure 2, sub-measure 2.1 - Remove exemption for stationary products with LV EPS (while maintaining it for portable products)    

5.4.    Policy option 3, sub-option 1 - Balanced EU measure (PO 3.1)    

5.4.1.    Measure 3, sub-measure 3.1 - Reduce the power consumption in standby for products with status displays to 0.8 W    

5.4.2.    Measure 2, sub-measure 2.1 - Remove exemption for stationary products with LV EPS (while maintaining it for portable products)    

5.5.    Policy option 3, sub-option 2 - Balanced EU measure (PO 3.2)    

5.5.1.    Measure 2, sub-measure 2.2 – Remove exemption for all products with LV EPS    

5.6.    Policy option 4, sub-option 1 – Alternative Balanced EU measure (PO 4.1)    

5.6.1.    Measure 3, sub-measure 3.2 - Lowering off mode requirement to 0.3 W    

5.7.    Policy option 4, sub-option 2 – Alternative balanced EU measure (PO 4.2)    

5.8.    Policy option 5 - Stringent EU measure (PO 5)    

5.8.1.    Measure 3, Sub-measure 3.3: Reduce the power consumption in standby to 0.3 W    

5.9.    Options discarded at an early stage    

5.9.1.    Voluntary agreement by the industry    

5.9.2.    Energy labelling    

5.9.1.    Measures in support of circular economy objectives    

5.9.2.    Introducing professional products and other office equipment in the scope    

6.    What are the impacts of the policy options?    

6.1.    Methodological considerations and key assumptions    

6.2.    Environmental impacts    

6.2.1.    Electricity savings    

6.2.2.    Greenhouse gas emissions reduction    

6.3.    Business impacts    

6.4.    Consumer expenditure    

6.5.    Social impacts    

6.6.    Other impacts    

6.6.1.    Small and Medium Size Enterprises (SMEs)    

6.6.2.    Administrative burden and compliance costs    

7.    How do the options compare?    

7.1.    Summary of the impacts    

7.2.    Sensitivity analysis – reduction of compliance costs over 6 years    

7.3.    Sensitivity analysis – the general level of compliance costs    

7.4.    Assessment of policy options    

8.    Preferred option    

8.1.    Preferred option – Why?    

8.1.    REFIT (simplification and improved efficiency)    

9.    How will actual impacts be monitored and evaluated?    

Annex 1    Procedural information    

Annex 2    Stakeholder consultation    

Annex 3    Who is affected and how?    

Annex 4    Analytical methods    

Annex 5    The Ecodesign and Energy Labelling Framework    

Annex 6    Existing policies, legislations and standards affecting off mode, standby and networked standby    

Annex 7    Evaluation of Regulation (EC) No 1275/2008 on ecodesign requirements for standby and off mode, and networked standby    

Annex 8    Sensitivity analyses    

Annex 9    Clarification of scope    

Annex 10    Glossary    

1.Introduction: Political and legal context

This impact assessment relates to the review of Commission Regulation (EC) No 1275/2008 1 on the ecodesign requirements for standby and off mode, and networked standby, electric power consumption of electrical and electronic household and office equipment. 

1.1.Benefits of Ecodesign and Energy Labelling

Ecodesign and energy labelling are recognised globally as one of the most effective policy tools in the area of energy efficiency. They are central to making Europe more energy efficient, contributing in particular to ‘The European Green Deal’ 2 , the ‘Energy Union Framework Strategy’ 3 , and to the priority of a ‘Deeper and fairer internal market with a strengthened industrial base’ 4 . Firstly, this legislative framework pushes industry to improve the energy efficiency of products and removes the worst performing ones from the market. Secondly, it helps consumers and companies to reduce their energy bills. In the industrial and services sectors, this results in support to competitiveness and innovation. Thirdly, it ensures that manufacturers and importers responsible for placing products on the European Union (EU) market only have to comply with a single EU-wide set of rules.

It is estimated that by 2020, ecodesign and energy labelling regulations has delivered around 150 Mtoe (i.e. about 1748 TWh) of energy savings per year in primary energy, roughly equivalent to Italy's energy consumption, or around 45% of the EU 20% energy efficiency target by 2020 5 .  This represents savings of around 15% versus a Business-As-Usual scenario.

The average household will invest in more expensive and efficient products, but in return saves about € 285 annually on its energy bills by 2020. Although the cost for industry, service and wholesale and retail sectors will increase, it will result in € 66 billion per year of extra revenue by 2020.

This legislative framework benefits from a broad support from innovative European industries, consumers, environmental non-governmental organisations (NGOs) and Member States (MSs), because of its positive effects on innovation, increased information for consumers and lower costs, as well as environmental benefits.

The maximum standby and off mode consumption 6 for a wide range of products have been subject to EU ecodesign requirements starting from 2010. Furthermore, networked standby 7 consumption has been regulated since 2015.

Since its introduction, the scope of the Regulation has been amended several times, by removing some products from scope (see details in Section 1.2.1). The electricity savings estimated to be achieved by the current Regulation, after taking into account all scope amendments, are estimated at 33 TWh/year by 2020 and 44 TWh/year by 2030 (see details in Annex 7). It should be also noted that the ecodesign requirements on off mode, standby and networked standby set by the current Regulation have been transposed in the specific regulations for products that were exempted from scope. Thus, the current Regulation had in fact triggered energy savings far beyond those quantified here. However, for avoiding double-counting, those savings are accounted for in the impact assessments dedicated to e.g. televisions and electronic displays, computers, dishwashers and washing machines.

Additional savings of around 4 TWh/year by 2030 are estimated to be achieved after the application of the measures proposed in this impact assessment. In other words, the proposed new measures will bring around 9% additional savings by 2030 compared to what the Regulation in force is estimated to bring.

1.2.Legal framework

In the EU, the Ecodesign Framework Directive 8 sets a framework requiring manufacturers of energy-related products to improve the environmental performance of their products by meeting minimum energy efficiency requirements, as well as other environmental criteria such as water consumption, emission levels or minimum durability of certain components before they can place their products on the market.

The Energy Labelling Framework Regulation 9 complements Ecodesign by enabling end-consumers to identify the better-performing energy-related products, via the well-known A-G/green-to-red scale. The energy label is recognised and used by 85% of Europeans 10 .

The legislative framework builds upon the combined effect of the two aforementioned pieces of legislation. See Figure 1 for a visualisation of this effect. 

Figure 1 Synergetic effect Ecodesign and energy labelling

The Ecodesign framework Directive and the Energy Labelling framework Regulation are implemented through product-specific implementing and delegated Regulations. Pursuant to Article 15.2 of the Ecodesign Framework Directive, the energy-related products that are covered must:

(I)represent a significant volume of sales (more than 200,000 units a year);

(II)have a significant environmental impact within the EU, and

(III) represent a significant energy improvement potential without increasing the cost excessively.

Pursuant to Article 17 of the Ecodesign Framework Directive, the industry can present voluntary agreements or other self-regulation measures as an alternative to the mandatory ecodesign requirements. If certain criteria are met, the Commission formally recognises these voluntary agreements 11 . The benefits are a quicker and more cost-effective implementation, which can be more flexible and easier to adapt to technological developments and market sensitivities.

For more details about the legal framework, including a full list of ecodesign and energy labelling measures, see Annex 5.

1.2.1.Current Regulation for off mode, standby and networked standby electric power consumption

Commission Regulation (EC) No 1275/2008, hereafter called the “Regulation”, currently sets ecodesign requirements with regard to off mode, standby, and networked standby electric power consumption. These modes are hereafter collectively called “low power modes”.

The scope of the Regulation covers electrical and electronic household and office equipment. The requirements are set with regard to their low power modes. Thus, the requirements address the states in which the equipment is not providing its main function(s) because it is either turned off or is in a state waiting for an activation signal, e.g. from a remote control (in standby) or from a smartphone app via an ICT network (in networked standby). Other power modes, such as active mode, are not addressed by this Regulation. They are usually addressed in product-specific regulations.

The Regulation is horizontal and covers a very broad range of vastly different products, grouped under four main categories: (i) household appliances (such as electric hobs and ovens, toasters, coffee machines, etc.), (ii) IT equipment (e.g. routers, Wi-Fi access points, printers and scanners), (iii) consumer equipment (Hi-fi and home theatre systems, video recording equipment, game consoles, electric musical instruments, etc.) and (iv) toys, leisure and sports equipment. Annex I of the Regulation presents an exhaustive list of the products covered.

To fall within the scope of the Regulation the products have to: (i) be sold as a single functional unit, (ii) be intended for use in households and/or offices, (iii) be dependent on energy inputs from the mains power source for functioning, and (iv) have a nominal voltage rating of 250 V or under.

Exemptions from scope – Since the Regulation was adopted over a decade ago, a conscious decision was made to move, whenever possible, the requirements on low power modes from this all-encompassing horizontal Regulation into vertical, product specific-regulations. This is usually done when new vertical regulations are adopted or when existing ones are amended. In these cases, when the requirements on low-power modes are transferred in product-specific regulations, the horizontal Regulation is amended by exempting from scope the products in question. This approach has two main benefits: (i) helps keeping the product-specific regulations simple enough, with all relevant ecodesign requirements (i.e. energy efficiency in active modes and in low-power modes) contained in the same piece of legislation, and (ii) allows adapting better the requirements on low power modes to the specificity of those respective products (both regarding the definitions of low power modes, and the maximum consumption allowed).

Three product groups, which were initially covered by this horizontal Regulation, have been removed from scope in the past, namely: televisions, computers, and products with low-voltage external power supplies. This change was made when vertical, product-specific regulations were adopted for these products. Additionally, three other product groups will be exempted from the scope of the Regulation starting with March 2021 as a result of recent revisions of their respective ecodesign regulations, namely: dishwashers, washing machines and electronic displays. See more details at the end of this section, explaining how various amendments to the current Regulation have added various exemptions to its scope.

Ecodesign requirements regarding the low power modes - while functioning, many products in scope of the Regulation spend the majority of their time in off mode, standby, or networked standby while plugged into the electric socket. It is thus essential to strictly limit their power consumption in these modes. Although some energy consumption is technically necessary in low power modes, it should be kept very small otherwise it would have a significant impact on the overall household and office energy consumption due to the high number of appliances in current use. This Regulation is also essential for protecting the users’ interest, as not all of them might be aware that their products are still consuming small amounts of energy even if they are not rendering any noticeable service.

The main difference between standby and networked standby is that in networked standby the products can be reactivated by other devices (e.g. by a smart phone using an app for remotely starting a dishwasher or switching on the television, by a computer requesting internet access from a router, or by an incoming internet telephone call), while in standby the product can only be reactivated through built-in functions (e.g. self/delayed start based on timer) or an accompanying remote control.

The Regulation has been amended eight times in the past, as shown in Table 1 . The first three amendments removed specific products from the scope and were made through the adoption of specific (vertical) regulations addressing those products. For televisions and computers, off mode and standby requirements were transferred from the horizontal Regulation to the product-specific ones and were further adapted to their specificities. In the case of external power supplies (EPSs), products using low voltage (LV) EPSs (such as mobile phones) were exempted from the Regulation with the argument that the off mode consumption of these products would be compensated by the more stringent no-load requirements in the EPS Regulation.

The fourth amendment was made due to technological developments resulting in many electronic appliances being often in networked standby rather than in standby. The aim was to enable them to be turned on via a network trigger signal. Networked standby is a different condition than standby and therefore needs separate definition and separate power limits, as it typically needs more power.

The fifth amendment was made to better specify how to use tolerances in verification procedures. Similar amendments were made to most of the other ecodesign regulations in force. Finally, three more amendments have removed computer displays, dishwashers and washing machines from the scope of this Regulation, in a similar manner to the past amendments regarding computers and televisions.

Table 1: List of amendments and their effects to Regulation 1275/2008

The ecodesign requirements specify maximum power consumption in off mode, standby, and networked standby mode, and have been introduced in different tiers by Regulations 1275 and 801 (entering into force in different years). The requirements are listed by year of effect in Table 2 . The Regulation additionally requires that devices have an off and/or standby mode, and that devices automatically go into off mode, standby or networked standby after a certain period of inactivity. 

Table 2: Ecodesign requirements for maximum energy consumption in low power modes.

1.3.Legal context of the review

Article 7 of the Regulation requires the Commission to review it in the light of technological progress no later than 7th January 2016 and to present the results to the Consultation Forum. It also requires the review to address in particular: the scope and the requirements for standby/off mode, the appropriateness and the level of the requirement for networked standby with regard to its third stage of implementation (that starts in January 2019), products equipped with electric motors operated by remote controls, and professional equipment. A review study 23 focusing on a technical, economic and environmental analysis was carried out to assess the potential for updating the Regulation.

Moreover, the Ecodesign working plan 2016-2019 24  also includes this review.

1.4.Political Context

Several new policy initiatives indicate that ecodesign and energy labelling policies are relevant in a broader political context. The main ones are The European Green Deal, which calls for the prioritisation of the energy efficiency principle when acting to decarbonise Europe by 2050, the Energy Union Framework Strategy, which calls for a sustainable, low-carbon and climate-friendly economy, the Paris Agreement 25 , which calls for a renewed effort in carbon emission abatement, the Gothenburg Protocol 26 , which aims at controlling air pollution, the Circular Economy Initiative 27 , which amongst others stresses the need to include durability, reparability and recyclability in ecodesign, the Emissions Trading Scheme (ETS) 28 , aiming at cost-effective greenhouse gas (GHG) emissions reductions and is indirectly affected by the energy consumption of the products in the scope of ecodesign and energy labelling policies, and the Energy Security Strategy 29 , which sets out a strategy to ensure a stable and abundant supply of energy.

1.5.Need to act

The need to act is driven by the following main considerations:

Cost effective energy savings:

Consumers, manufacturers and society as a whole stand to benefit from the fact that cost effective energy savings can still be achieved with regard to energy consumption in low power modes. By way of illustration, further electricity savings of 2 TWh per year by 2025 and 4 TWh per year by 2030 could be secured in a cost-effective way. This would be additional to the savings brought by the existing ecodesign requirements (estimated at 33 TWh per year by 2020, according to the evaluation of the current Regulation in Annex 7).

Other policies/political imperatives:

Several other policies and political priorities require the ecodesign reviews to look beyond the technical revisions mentioned in the review article of the existing regulations, e.g.:

·renewed effort in carbon emission abatement through the Paris agreement on climate change;

·the Better Regulation policy aiming at more efficient and effective legislation;

·renewed EU energy efficiency target for 2030.

2.Problem definition

2.1.What are the problems?

The problems identified, in relation with possible options for addressing them, were discussed with stakeholders in meetings that took place during the review study, and at the Consultation Forum. Stakeholders’ views are outlined in Section 5, and a detailed account is presented in Annex 2.

2.1.1.Problem 1: Outdated scope

Figure 5 Problem 1, its drivers and consequences

The problem: Not all relevant products are regulated and therefore consume more energy than they should have when are in low power modes. The Regulation was adopted 10 years ago, when the scope was defined for covering all household and office products that were considered suitable for being covered by a uniform, horizontal regulation. Meanwhile, technological progress led to a substantial increase in the number, type and functionalities of products having low power modes, which is beyond the analyses and projections carried out over a decade ago. This results in the scope of the Regulation no longer being able to cover adequately the market today and in the near future.

The review study that supports the current revision of the Regulation investigated additional product groups, not yet regulated with regard to consumption in low power modes. It concluded that two large product groups (motor-operated building elements and adjustable furniture) have substantial energy savings potential for being included in the scope. Examples of motor-operated building elements, as can be seen in Figure 6 , feature electric motors and integrated controllers (used only to move elements such as windows and blinds) linked to a central control system. All these elements can have standby or networked standby consumption. The motor-operated building elements in question are simple products used for home automation, not the complex Building Management Systems (BMS) used for larger commercial buildings, which are in the scope of a separate Commission ecodesign initiative on Building Automation and Control Systems (BACS) 30 . Examples of adjustable furniture can be height-adjustable desks for home and offices that allow people to adjust height according to needs, and elevation beds that allow the shape of the bed to be altered for comfort or assistance, see Figure 7 . 

According to the review study, these products are typically in off mode, standby or networked standby 98% 31 of the time, waiting for a control signal sent by remote controls, switches, sensors, etc. The market for motor-operated building elements is growing due to the increasing popularity of smart homes and Internet of Things (IoT) 32  (see driver 1 below for details). The market for adjustable furniture is also increasing, due to the influence of other legislation (see driver 2 below) and consumers’ growing demand for comfort and convenience. It is therefore expected that the low power mode consumption of the installed stock of such products will grow in the future, especially if the market continues to evolve without having in place requirements on maximum energy consumption in low power modes.

Figure 6: Example of a home automation system using motor-operated building elements, which enables remote control of windows and blinds.

Source: Velux

Figure 7: Examples of adjustable furniture

Source: Linak , under “desks” and “comfort furniture” business areas

A total EU stock of 111 million products (86 million motor-operated building elements and 25 million adjustable furniture units) consuming 2.4 TWh/year in low power modes was estimated for 2015. In 2030, a stock of 282 million with low power modes consumption of 5.4 TWh/year is estimated if no EU action is taken, according to this impact assessment. Including these products in scope of the Regulation would considerably reduce this consumption, by providing estimated savings of 3.1 TWh per year by 2030.

Other product groups, including professional products (e.g. professional ovens, dishwashers, washing machines, and dryers) and other office equipment not covered by the current Regulation (e.g. paper shredders, binding machines, staplers etc.), were considered by the review study for inclusion in the scope. However, they were not retained as a proposal because of two main considerations. Firstly, the estimated annual energy savings potential for such office equipment (not currently regulated) were assessed to be very small (approx. 0.06 TWh by 2025), and it was expected that in the future the demand for this type of products will continue to decrease. Secondly, although the potential annual savings for professional goods were estimated to be a little higher (around 0.4 TWh/year by 2025), due to the specialist use of these products there is currently a lack of harmonisation of their low power modes and therefore standardised testing would be challenging. For the latter category it was concluded that it would be more appropriate to include requirements on low-power modes in product-specific vertical regulations, whenever possible. For further details see Section 5.9.4.

Finally, the current scope has an exemption that is no longer fit for purpose. However, this is seen as a specific problem in its own right (with specific drivers and technological implications), and is therefore analysed under the next point (see Section. 2.1.2).

A special note should be made with regard to IoT. This term is a general designation stretching over products from many different categories. All these products have communication capabilities and exchange data between them (and over the internet). However, IoT is not a homogenous category of products, as it spans from smart thermostats and temperature sensors, to smart home appliances and intelligent chargers for electric vehicles. Many products falling under the ‘IoT’ designation are already covered by the current Regulation or by product-specific regulations as a result of scope amendments (as described in Section 1.2.1). They are the ‘smart’ versions of products such as televisions, washing machines, dish washers, coffee machines, game consoles, multimedia equipment and loud speakers etc. Some other IoT products, which are now present in increasing numbers on the market, are evaluated for inclusion in the scope through the current proposal (see the explanations below regarding motor-operated building elements, some of which are connected to the internet). Should there be other prominent IoT products emerging on the market in large numbers following future technological developments, and which would consume energy in low power modes, they will be examined in future revisions of this Regulation for potential inclusion in scope.

Driver 1: Technological progress

A major driver is technological progress over the last decade, which increases the number and types of products that started to be operated by small motors or actuators 33 , which means they consume electricity in low power modes. The convergence of multiple technologies such as omnipresent wireless communication, real-time analytics, sensory advancement, and embedded systems have enabled the bloom of the IoT products, which are forecast to increase greatly during the next 10 years (see Figure 8 ). This development includes sensors to be used for motor-operated building elements e.g. sensors for temperature, rain, pressure, light, presence and motion detection. This enhances the functionalities and facilitates the wide deployment of motor-operated building elements.

For exemplification, the number of IoT devices is expected to more than double from 2016 to 2020 34 , and the reduction in costs 35 and increase in efficiency of electronic circuits have resulted in more products being equipped with electronically extended functionalities. Although motor-operated building elements controlled via sensors could be estimated to be a small fraction of the total IoT products, these products and similar manually controlled ones have emerged in great numbers over the last decade on the back of this technological progress.

Figure 8: Worldwide connected IoT devices

 
Source: Statista.com, accessed April 2018

Driver 2: Incentives triggered by other legislation

Legislation passed both at EU and Member States level, which results in overall energy savings and brings multiple benefits in other areas (e.g. GHG emissions abatement, personal/worker health and safety), incentivises automation in buildings (as explained below). Therefore, some (traditionally simple, not electrically-operated) products might become more sophisticated and start consuming energy.

Buildings are responsible for 40 % of energy consumption and 36 % of GHG emissions in the EU  36 . Currently, about 35 % of EU buildings are over 50 years old. By improving the energy efficiency of buildings, total EU energy consumption could be reduced by 5‑6 %, whilst GHG emissions could decrease by about 5 %36. These are the reasons for the legislation at EU and national levels addressing building energy consumption.

However, the use of structure, design and material composition start to reach the upper threshold of efficiency. Therefore, to reduce further the energy consumption of a building, many are turning to automation and controls. Experts expect that there is an annual energy saving potential of 23.4% in residential buildings 37 , and much of it can be achieved by residential and home automation using motor-operated building elements. Industry has anticipated a boost in building automation and controls growth 38 due to the legislation targeting building energy consumption.

There is also an increasing global focus on ergonomics at the workplace due to occupational health concerns. According to the standby review study, in the Nordic countries, such as Sweden, Finland, Denmark and Norway, at least 80% of all workers already have height-adjustable desks. In Denmark it is a mandatory requirement for the employers to offer desks that are easy to adjust to the employees and to both sitting and standing positions 39 , hence creating incentives and boost for the industry. In other countries, such as Germany, the penetration rate is only 25 % and even lower in southern European countries. However, according to industry, there has been a strong growth in sales in the recent years and it is estimated to increase in the coming years 40 .

2.1.2.Problem 2: Outdated exemption creating uneven playing field

Figure 9 Problem 2, its drivers and consequences

The problem: The current exemption for equipment with low voltage external power supplies 41 (LV EPS) is outdated and no longer fit for purpose because: (i) many more products than initially intended are now exempted, and (ii) an uneven playing field is created between products with identical functionalities, where some of them are exempted from the Regulation while others are not. 

The current Regulation exempts from scope products that use LV EPSs to function. The exemption was intended to apply mainly to mobile phones 42 or small portable products, which were seen to be already energy efficient and therefore only the EPS consumption was important (see additional explanations in section 1.2.1). However, according to the review study, due to the technological development towards products using 5 V as the supply voltage level, there has been an important influx of products other than mobile phones beginning to use LV EPSs. These include both stationary 43 and portable products: small network equipment (including Wi-Fi routers and modems), toys and consumer equipment (such as camcorders and wireless speakers with rechargeable batteries). This development goes well beyond what was initially intended to be exempted.

Additionally, the exemption was based on a specific assumption regarding the functioning of products with LV EPS. Mobile phones are put on charge and, after the charging cycle is completed, they are either unplugged from the power mains or they remain plugged in but draw virtually no electricity. Thus, having a requirement in place that sets a good efficiency of the LV EPS in no-load mode 44 was seen as a proxy for guaranteeing a good overall efficiency of the whole combination (LV EPS plus phone) for when the phone is fully charged and in standby. Therefore, the ecodesign regulation for EPSs, which guaranteed a good EPS efficiency in no-load mode, added an exemption in the standby Regulation for products equipped with LV EPS. However, this usage pattern is no longer typical for the more recent products that are being exempted. For instance, stationary products such as small network equipment are permanently plugged in and draw electricity. Consequently, the LV EPS efficiency in no-load mode no longer helps to achieve a good efficiency of the whole combination LV EPS plus product. 

Figure 10: Picture of a LV EPS for smartphones.

Source: EPS manufacturer

Furthermore, an uneven playing field was first experienced by the manufacturers of mobile phones, where products are charged at different voltage levels and thus some products have LV EPSs (and are exempted from the Regulation), and others do not have such EPSs and therefore need to comply with the Regulation. The functionality of phones - both within the scope and exempted - is fundamentally identical. Networking equipment is another example where products with similar functionalities could be either in scope or exempted. These products are particularly problematic, as they tend to have high networked standby consumptions due to their high network availability 45  functions. For instance, according to the review study about 30% of all routers are equipped with LV EPSs and are thus currently exempted from the Regulation.

The exemption has also created a loophole that could be exploited for circumventing the Regulation. Manufacturers can produce equipment with weaker designs, which consumes more energy than technically needed in standby, as long as the product is equipped with a LV EPS. As this is a design choice it is of course challenging to obtain figures regarding counter-factual scenarios (i.e. how many products were designed to use a LV EPS for being able to claim an exemption under this Regulation). However, it is clear that such a practice could create and/or deepen an uneven playing field, and could potentially force other manufactures to follow suit. This could result in higher user expenditure over the life cycle of products (due to higher energy consumption) and an increase in related GHG emissions. The effect of the Regulations would hence diminish, and the full savings potential not would not be reached.

Finally, technological progress over recent years has made it difficult to assess for some products whether they are exempted or not. A new type of adaptive charging EPS (so called ‘fast chargers’) can supply different voltage outputs depending on the products they are connected to. These EPSs can supply an output of 5 V (i.e. they could potentially meet the LV EPS definition) if the main product they connect to is not compatible with fast charging. However, the same EPS can also supply output voltages of up to 20 V (so no longer being a LV EPS) to products which are compatible with fast charging. This could create real difficulties in market surveillance, when interpreting whether some products are using LV EPS (and therefore are allowed to be exempted from the Regulation), or not (and therefore should comply with the ecodesign requirements).

This impact assessment estimates a total stock of 797 million products equipped with LV EPS, consuming 1.5 TWh/year in low power modes in 2015. The projections increase this numbers to 918 million products, consuming 2.1 TWh/year in low power modes in 2030. Applying ecodesign requirements would save 0.4 TWh/year by 2030.

Driver: Technological progress

Technological developments regarding the size and efficiency of microprocessors have resulted in products generally becoming more efficient. This, coupled with the rapid advancement in low-voltage components 46 , has enabled many products to function with LV EPSs. This is especially the case for small products operated by microprocessors such as network equipment.

This technological progress is complemented by consumer demand for convenience, in this case meaning the use of the same EPS with several devices. The newer USB Power Delivery (USB PD) specification allows the use of so-called USB Type-C standardised charging connectors to be installed in notebook computers, mobiles, tablets and other electronic equipment. EPSs with USB Type-C connectors enable charging with variable power outputs (up to 100 W) and variable voltage levels (5-20 V), thus catering for the needs of a wide range of devices. As evidence of the increasing popularity of products with USB Type-C connectors, their number has increased globally from nearly zero to more than 1 billion in 2017 and is expected to grow to 5 billion in 2021 47 . 

2.1.3.Problem 3: Outdated requirements on maximum consumption in low power modes

Figure 11 Problem 3, its drivers and consequences

Problem: Outdated requirements on low power modes do no longer capture all possible energy savings. Technological progress now makes it possible for a wide range of products to consume less electricity in various low power modes (see the driver below). Without a timely update of the ecodesign limits set by the Regulation, this effect will be lost as manufactures have little to no incentive to integrate state-of-the-art technologies and redesign current and future products.

The review study analysed the possibilities of reducing consumption in off mode and standby. Networked standby was subject to the study only with regard to non-HiNA 48 equipment, with a view to assess the suitability of its third tier of implementation (which entered into force in January 2019). The networked standby requirements for HiNA equipment were not analysed, as the latest tier only entered into force recently (January 2017), and therefore the full impact is not yet established.

As the Regulation is horizontal and covers very diverse types of products, general Best Available Technology (BAT) levels are rather hard to quantify. The review study however concluded that many products on the market already consume less than 0.5 W in both standby and off modes, with BAT products reaching 0 W consumption. See Table 3 for a comparison between the BAT levels from the Regulation, compared to the findings from the review study.

Table 3: Benchmark levels from the Regulation compared to the review study.

Source: Regulation No 1275/2008 and standby review study 2017

The review study states that many product groups can consume below 0.3 W in off mode on average, showing that the market is technologically ready for new regulatory limits. As an example, Figure 12 plots the off mode consumptions for some major household appliances and equipment.

Figure 12: Off mode consumption of tumble dryers, printers, audio equipment.

Source: Review study on Standby Regulation, Viegand Maagøe 2017, figure 18

It is estimated that within the scope of the current standby Regulation there will be 5.1 billion products in use in the EU in 2030 (see Figure 13 ). They are projected to consume 31 TWh/year of electricity in low power modes (see Annex 7 - Evaluation of current Regulation) according to this impact assessment.

Figure 13: Sales and stock estimates for products with standby consumption.

Source: Based on calculations by Viegand Maagøe (see Annex 4)

Lowering the off mode consumption level could result in 2.1 TWh/year additional energy savings by 2030.

Driver: Technological progress

The main driver is the general technological progress in integrated electronic circuits. The efficiency of a circuit is evaluated in terms of both energy consumption and the density of processing power compared to size of the printed circuit board and/or microprocessor die. Both aspects have improved considerably in the last 10 years, especially as the size of transistors has moved from the 45 nm technology in 2008 to 10 nm in 2017 49 . This results in much smaller microprocessors, which have lower power consumptions 50 . This is the general effect of “Moore’s law” 51 , and even though the effect is starting to diminish, further improvements of transistor sizes are expected in the years to come 52   53 .

This technological process facilitated the inclusion of integrated electronic circuits in products that did not have them before, such as toasters (timer and display), hand blenders (speed and child protection) and coffee machines (auto-off, display and brewing process control). With integrated electronic circuits, soft switch 54 buttons are often used because it is both cheaper and more design-friendly to use soft instead of hard switches. The first generations of the soft switches had higher power consumption allowing them to comply only with 0.5 W off mode requirement. However, technological progress over recent years has made it possible to use low power on-off controls with power levels typically below 0.3 W. These control parts come at practically no cost increase for the product, and in combination with efficient power supplies they allow a wide variety of appliances to reach very low off and standby consumptions.

2.1.4.Problem 4: Lack of readily available information and use of unclear terms

Figure 14 Problem 4, its drivers and consequences

Problem: The current Regulation does not require manufacturers to publish information regarding the off mode and standby consumption, although this is required for networked standby. In the latter case, the information is made available on manufacturers’ freely available websites and in the user manuals.

This creates problems for market surveillance authorities (MSA) in the MS. As the scope of the Regulation is very wide, the lack of freely available information on standby and off mode consumption hinders a rapid gathering of information or the use of data acquisition tools such as web crawlers 55 , which would facilitate inexpensive market screenings. This reduces the efficiency of market surveillance due to low data availability.

For consumers, although standby consumption is not a deciding factor when buying new appliances, the visibility of standby and off mode consumption for all products will raise awareness of the importance of low power modes consumption and their rational use. The inconsistency of availability of standby consumption (compared to networked standby) could confuse the consumers, and the lack of information could also be misinterpreted as a lack of a standby mode in the product.

Additionally, the experience gathered by the MSAs, the Commission and the industry in implementing the Regulation revealed that some terms and formulations need further clarifications. These are:

·‘Main function’ is used in several articles, sometimes in combination with ‘intended use’. Neither of them is defined, but rather common sense was applied for judging the situations a product might be in. However, the main functions are instrumental for market surveillance, and without proper descriptions in the technical documentations the MSAs might encounter problematic situations during inspections; 

·The test procedure for networked equipment with so-called ‘active cable connections’ needs to be slightly amended for adapting to the specifics of this technology;

·The requirement to offer the users the possibility to deactivate wireless connections needs to be further detailed. In some cases, the equipment does not function without a wireless connection, therefore this requirement should not apply.

Diver: Complex regulation with an early adoption

The Regulation was one of the first ecodesign regulations ever adopted in the EU. Therefore, the Regulation was already in place when the provision of information on freely accessible websites became a common requirement for all Ecodesign Regulations. The Ecodesign Framework Directive lays down the basis for having information requirements (i.e. specific data and information on the product's performance relevant for consumers, organisations and MSAs to be published on web sites and added in the user manuals).

The requirement to provide some information online was introduced later in the Regulation, with an amendment focusing on the introduction of networked standby (Regulation (EU) No 801/2013). However, the information requirement applied only to that mode, and not to standby and off mode.

With regard to the terms used, the ‘main function’ was neither defined in the initial Regulation, nor in the amendment with regard to the networked standby. The amendment brought many important changes to the Regulation, and relies heavily on correctly identifying the ‘main function(s)’ and ‘intended use’ of products for setting ecodesign requirements. Furthermore, these changes to the Regulation introduced requirements that, based on the practical experience gained in enforcing them on the market, need to be better explained.

2.2.Who is affected by the problems?

2.2.1.Consumers

Consumers are affected by missed energy and financial savings because the scope of the Regulation does not include products with LV EPS, motor-operated building elements and adjustable furniture. Annual financial savings of 3.5 billion € by 2030 would be missed simply because the manufacturers lack the economic incentives to adopt voluntarily more efficient off mode and standby technologies.

Consumers could also miss energy and financial savings because the products might not use optimal solutions. Technological progress has resulted in inexpensive and efficient off mode solutions being readily available, but manufacturers would not actively adopt them in the absence of regulatory requirements, A household containing 14 products 56 in the scope of the Regulation would spend around 96 € for the electricity costs of these products for low power modes over seven years (taken as the average product lifetime). As an example, potential savings of 9-15 € 57 (i.e. 9 to 16% of the associated electricity costs) could be ach if the off mode requirement was strengthened.

2.2.2.Manufacturers

Some manufacturers could try avoiding the Regulation by using LV EPSs for their products, thus having them exempted from the Regulation. By doing so, they would save development and integration costs by using cheaper components. They could thus gain an unfair advantage over competitors offering similar products, but which are not using LV EPSs and need to bear full compliance costs stemming from the Regulation requirements. Thus, some manufacturers could be affected by the uneven playing field created.

2.2.3.EU, Member States and MSAs 

For EU and Member State policy makers, less effective and efficient ecodesign requirements means less contribution from a wide range of electrical and electronic products with low power modes consumption to achieving policy goals regarding single market, energy efficiency, energy security of supply, and climate change.

Enhancing information availability on websites via a regulatory instrument can improve the productivity of the MSAs, making the market surveillance of standby and off mode power consumption more cost-effective. Publicly available information facilitates the work of policy makers and researchers (for gathering evidence) and raises the awareness of consumers regarding consumption of products when placed in low power modes.

2.2.4.Society as a whole 

For society as a whole, ambitious policies in the area of energy efficiency are important tools to mitigate climate change. Effective and efficient ecodesign regulations contribute to achieving the goals set in the Paris Agreement, and they help achieve the 2030 EU climate goal.

2.3.How will the problem evolve? 

2.3.1.Market failure due to outdated scope

Ecodesign is a key driver for innovation in improving the energy efficiency of products and an excellent support to the EU’s technological and environmental leadership. However, without an updated scope that corresponds to the current technology and market trend, the Regulation fails to capture additional savings that could be quite important.

Without suitable ecodesign requirements in place, manufacturers have very little incentives to improve low power modes consumption as it is neither the most visible information to the consumers, nor it is (financially) rewarding for manufacturers to take action. Even though the technology is readily available with moderate additional costs, because of competitiveness reasons the manufacturers cannot market at higher prices products with lower consumption in of mode and standby. Without a push force from ecodesign, this could impact the component suppliers as well as end-product manufacturers negatively to abandon further Research and Development (R&D) into more efficient circuitry and electronics.

2.3.2.Slow uptake of available technologies for more efficient low power modes would lead to missed energy savings

Low power modes are found in a wide variety of household and office equipment. A typical household owns up to around 27 products that have off mode, standby or networked standby consumption. The number is increasing as consumers demand more convenience at home and at work. The figure below shows the sales-averaged consumption of low power modes per unit of product per year. The current Regulation has rapidly reduced the overall consumption in low power modes over the last decade despite the increasing number of products (see details in Annex 7 - Evaluation). The average standby power is 0.6 W and average off mode is 0.5 W from 2015. However, the consumption would generally stagnate around this level from now, instead of taking up the lower consumption level.

Figure 15 Sales-averaged electricity consumption in standby and off mode per unit of product per year in business-as-usual (BAU) and technically feasible (TF) scenario

Source: Based on calculations by Viegand Maagøe (see Annex 4)

Users of household and office equipment might forego additional energy savings resulting from the use of products with more efficient low power modes.

3.Why should the EU act?

3.1.Legal basis

The legal basis for acting at EU level through the Ecodesign framework Directive and the Energy Labelling Framework Regulation is Article 114 and Article 194 of the Treaty on European Union (TEU) 58  and the Treaty on the Functioning of the European Union (TFEU) 59  respectively. Article 114 relates to "the establishment and functioning of the internal market", while Article 194 gives, amongst others, the EU the objective "in the context of the establishment and functioning of the internal market and with regard for the need to preserve and improve the environment" to "ensure security of energy supply in the Union" and "promote energy efficiency and energy saving and the development of new and renewable forms of energy".

The Ecodesign Framework Directive includes a built-in proportionality and significance test. Articles 15(1) and 15(2) state that a product should be covered by an ecodesign or a self-regulating measure only if the following conditions are met:

·The product should represent a significant volume of sales;

·The product should have a significant environmental impact within the EU;

·The product should present a significant potential for improvement without entailing excessive costs, while taking into account:

oan absence of other relevant Community legislation or failure of market forces to address the issue properly,

oa wide disparity in environmental performance of products with equivalent functionality;

The procedure for preparing such measures is described in Article 15(3). In addition, the criteria of Article 15(5) should be met:

·No significant negative impacts on user functionality of the product;

·No significant negative impacts on health, safety and environment; 

·No significant negative impacts on affordability and life cycle costs;

·No significant negative impacts on industry’s competitiveness (including SMEs see Section 6.6.1).

During the review process (Review study 2017), it was established that requirements for standby, off and networked standby modes of household and office electrical and electronic equipment fulfil the above-mentioned eligibility criteria.

The option of self-regulation has been considered. However, no industry proposal that would meet the requirements (inter alia minimum 80% market coverage) was put forward (see Section 5.9.1 for more details). In short, during the consultations, none of the MSs or any other stakeholder suggested any option other than setting minimum requirements at EU level.

3.2.Subsidiarity: Necessity of EU action

Action at EU level gives end-users the guarantee that they buy an energy efficient product and provides them with harmonised information no matter in which MS they purchase their product. This is becoming all the more relevant as the online trade increases. With ecodesign and energy labelling at EU level, energy efficient products are promoted in all MSs, creating a larger market and hence greater incentives for the industry to develop them.

It is essential to ensure a level playing field for manufactures and dealers in terms of requirements to be met before placing an appliance on the market and in terms of the information supplied to customers across the EU internal market. For this reason, EU-wide legally binding rules are necessary.

Market surveillance is carried out by the MSAs appointed by MSs. In order to be effective, the market surveillance effort must be uniform across the EU to support the internal market and incentivise businesses to invest resources in designing, making and selling energy efficient products.

In the particular case of low power modes, the Regulation should be updated to: (i) enable further cost-effective energy savings for end users, (ii) expand the scope by including products with potential for further energy savings and for closing a potential regulatory loophole, and (iii) improve the information provided to the users and other stakeholders with regard to the electricity consumption in off mode and in standby.

3.1.Subsidiarity: Added value of EU action

There is clear added value in requiring minimum energy efficiency levels at EU-level.

Without harmonised requirements at EU level, MSs would be incentivised to lay down national product-specific minimum energy efficiency requirements in the framework of their environmental and energy policies. This would undermine the free movement of products. Before the ecodesign and energy label measures were implemented, this was in fact the case for many products.

4.Objectives: What is to be achieved?

4.1.General objectives

The general objectives of a revised regulation on of mode, standby and networked standby are:

1.Facilitate the free circulation within the internal market of EU of electrical and electronic household and office equipment with low energy consumption in off mode, standby and networked standby;

2.Promote competitiveness of the EU electrical and electronic products industry through the creation or expansion of the EU internal market for more sustainable products;

3.Promote the energy efficiency by employing low consumption in off mode, standby and networked standby for electrical and electronic products as a contribution to the Commission’s proposal to reduce energy consumption by at least 30% and to the EU's objective to reduce domestic greenhouse gases (GHG) emissions by 40% by 2030; implement the ‘energy efficiency first’ principle established in the Commission Communication on Energy Union Framework Strategy: and

4.Increase the energy security in the EU and reduce energy dependency through a decrease in energy consumption of products in low power modes.

There are several synergies between these objectives. Reducing electricity consumption (by increasing the energy efficiency) leads to lower carbon, acidifying and other emissions to air. Tackling the problem at EU level enhances efficiency and effectiveness of the measure.

4.2.Specific objectives

The specific objectives of the policy options considered in this impact assessment are intended to correct the identified problems (see Section 2). These objectives aim to:

1.Expand the scope to (i) include new product types placed on the market in increasing numbers, and to (ii) close potential loopholes and ensure a level playing field, thereby promoting competitiveness of the EU industry of electrical and electronic products;

2.Update the requirements on low power modes in line with the technological developments, so that they continue to effectively support a functioning internal market, ensure further energy savings and reduce environmental impacts;

3.Enhance transparency regarding consumption in low power modes, raise their profile and improve consistency with other Ecodesign Regulations, thereby raising awareness of the policy framework update under objectives 1 and 2 with consumers and improving enforcement by Member States.

These objectives will drive investments and innovations in a sustainable manner, increase monetary savings for the end-users, and contribute to the objectives of the Energy Union Framework Strategy and the Paris Agreement. See below how the proposed measures relate to the specific objectives.

5.What are the available policy options?

The procedure for identifying policy options follows from the Better Regulation Toolbox 60 . Specific measures in the policy options are the result of a combination of initiatives mentioned in the Review study 2017, comments from stakeholders and inspiration taken from the Ecodesign Framework Directive. They are aimed at addressing the issues identified in Section 2 and achieving the policy objectives defined in Section 4.

The options were designed in such a way as to allow analysing different ambition levels applied to two main aspects: (i) extension of scope, and (ii) maximum energy consumption in low power modes. Thus, the policy options were selected in such a way as to allow assessment of impacts for incremental increases in stringency of both dimensions previously mentioned.

The policy options considered are listed in Table 4 (with detailed description presented in the next sections). Three measures, largely supported by stakeholders, are included in all policy options. PO 2 (‘Lenient option’), is considered a “low-hanging fruit” as it includes the common measures plus an additional one, also largely supported by stakeholders. As such PO 2 could be seen as a starting point, on top of which the other measures start building up in complexity and level of ambition. 

PO 3 and 4 (‘Balanced options’) are based on the draft regulation discussed in the Consultation Forum in December 2017, and on the related feedback received from stakeholders. There were identified two decision points that needed special attention: 1) how much should the scope be expanded by including products with LV EPS (i.e. include only stationary products as supported by the industry, or include all products with LV EPS as asked by other stakeholders); and 2) how much should the energy efficiency requirements be tightened? For allowing a detailed analysis of the first point, each of PO 3 and PO 4 have two sub-options, with different ambitions in terms of scope expansion. For analysing the second point, PO 3 to 5 have increasing ambition levels in terms of energy efficiency. As such, PO 4 is largely the same as PO 3, with the additional requirement of reducing consumption in off mode to 0.3 W. Lastly, PO 5 (‘Ambitious option’) contains the most stringent elements proposed by the Review Study 2017 and collected from the stakeholder consultations. It builds on PO 4.1 by adding the measure of reducing to 0.3 W also the consumption in standby. Being the most ambitious measure, it also includes the most ambitious expansion of scope with regard to inclusion of products with LV EPS (i.e. inclusion of all such products).

Table 4: Available policy options

5.1.What is the baseline from which options are assessed? - BAU (PO 1)

The baseline used for the assessment of the policy options assumes the current standby Regulation is in place and maintained without further action, also known as the “Business as usual” (BAU) scenario. This means all changes to the scope, exemptions and regulation text introduced by the existing five amendments are reflected in this scenario and are kept as they are currently. Section 2.3 explains why continuing with BAU is problematic and EU action is needed.

It is worth noting that the current BAU scenario, which is the basis for assessing the impacts of the proposed policy options, differs from the “No regulatory effect” scenario denoted as BAU 0, which assume no standby regulation ever took place. BAU 0 is needed as a baseline to evaluate the effectiveness and efficiency of the existing Regulation. Further distinctions between BAU 0 and BAU are described in Annex 7.

In the BAU scenario, the current ecodesign regulation has transformed the market towards more efficient products with low off mode, standby and networked standby consumption (see evaluation of current Regulation in Annex 7). However, the effect of the Regulation is projected to slow down from 2019 onwards (as seen in the sales-averaged electricity consumption presented in Annex 7), due to the last tier of the networked standby requirement coming into force in January 2019. From then on, the low power modes consumption of products in scope are assumed to stagnate at the same level. This is assumed to happen because, according to industry stakeholders, increased functionalities and faster start-up are required in many modern products. This would lead to increased energy needs in low power modes, which will counterbalance any natural improvements in their consumption.

The requirement in the EU ETS to reduce CHG emissions, from amongst other things electricity production, will impact standby/off mode and networked standby of household and office equipment in the BAU scenario. Indeed, if the energy consumption in standby and off-mode is not reduced, the indirect emissions (i.e. from electricity consumption) relative to the allowed emissions will increase. In general, this means that more EU ETS emission allowances will have to be bought by electricity producers and that the price of electricity could slightly increase.

5.2.Measures common to all policy options

Measures 1, 4 and 5 described below are applicable to policy options 2 to 5. These measures are largely accepted by the stakeholders, will bring highest benefits (as is the case of measure 1 in terms of energy savings), or are clearly needed for improved clarity and consistency of the Regulation (measures 4 and 5). Therefore, they are included in all options, will apply under same conditions and are additional to the specific measures put forward by each policy option. For modelling purposes, the entry into force of the revised Regulation is assumed for July 2019.

5.2.1.Measure 1 - Extension of scope to include adjustable furniture and motor-operated building elements

Policy options 2 – 5 include different levels of scope extensions. However, the extension to include adjustable furniture and motor-operated building elements is common to all 4 options and responds to problem 1 in section 2.1. This would mean that these products would be subject to all applicable ecodesign requirements regarding off mode, standby and networked standby.

Stakeholder views: Generally wide acceptance of the proposal expressed by stakeholders. Member States (DE, DK, FR, NL) expressed support of the scope extension. Industry representatives (CECAPI and eu.bac) expressed doubts about the extension of the scope to motor-operated building elements and requested a clearer definition 61 .

5.2.2.Measure 4 - Requirement for information to be available on publicly accessible websites and in user manuals

Measure 4 would ensure that the product information requirement is applicable to both networked and non-networked products and the information is published on manufacturers’ publicly accessible websites and in user manuals. As such, all interested parties will be informed regarding power consumption in standby and off mode, and the period of time after which the power management function will turn products in standby or off modes. This information will complement the similar information on networked standby, which is already available. The measure will enter into force two years after the revised Regulation is adopted. This measure responds to problem 4.

Stakeholder views: MSs (DE, DK) and NGOs (ECOS, EEB) expressed support for the extension of the requirement to provide information to cover all equipment in scope of the Regulation. Industry representatives (ARRIS) support the Commission’s efforts to increase transparency of energy consumption but expressed concern about software update altering the energy consumption already stated in the technical documentation before placing the product on the market. No other stakeholder expressed any particular concerns about this requirement, and there is a general agreement regarding the need to enhance consistency with other Ecodesign regulations. DIGITALEUROPE, as an industry representative, requested a reasonable transitional period for implementing this measure.

5.2.3.Measure 5 - New definition and further clarifications

A new definition is added on the “main function(s)” of equipment and linking them with the “intended use”. Furthermore, it is required that the main functions are described in the technical documentation provided by the manufacturers. This will further support the enforceability of the Regulation and will enable MSAs to verify if and when a product is performing its main function(s).

The requirement on the possibility of deactivating wireless network connection(s) will be further clarified by adding the possibility to not implement the deactivation function in cases where it would be inappropriate for the intended use of the product 62 .

In the test procedure for networked equipment, it will be allowed to manually deactivate network ports instead of cable disconnection in some specific cases where only the first procedure would make sense technically, and the latter would not.

This measure responds to problem 4.

Stakeholder views: DE expressed concerned about the main function being defined by the manufacturers, as it should be objectively determinable. DE stressed that in any case, these functions should be described in the technical documentation. NL appreciated the value and simplicity of the definition proposed. The NGO ECOS supported the clarification of ambiguity and that any time a product is not providing main a function should comply with standby/off mode or networked standby requirements. APPLiA (formerly CECED) expressed reservations regarding a simple definition and proposed a more sophisticated approach, including at least one additional definition.

5.3.Policy option 2 - Lenient Measure (PO 2)

PO 2 consists primarily of elements supported by the industry in the comments made at the Consultation Forum 63 and the subsequent written feedback. This option is considered a “low-hanging fruit”, as the measures included are largely accepted by stakeholders. Apart from the common measures described above, it includes the following measure:

5.3.1.Measure 2, sub-measure 2.1 - Remove exemption for stationary products with LV EPS (while maintaining it for portable products)

PO 2 removes the exemption for stationary products with LV EPS, while maintaining it for the portable products which are battery-operated (e.g. mobiles, smartphones portable game consoles etc.). This requirement will thus maintain the exemption existing in the current Regulation for equipment with LV EPS, but will apply it to a reduced number of such products, i.e. only to the battery-operated ones.

Stakeholder views: Keeping the exemption for battery-operated portable products with LV EPS is strongly supported by the industry stakeholders such as DIGITALEUROPE. The industry also claims that portable products with LV EPS are very efficient and the testing for compliance of battery-operated products would be difficult as (networked) standby would be hard to be separated from the charging functions. Its removal is supported by a number of MSs (DE, DK, FR, NL) and NGOs (ANEC/BEUC and ECOS).

The transition periods for different requirements in PO 2 are illustrated below.

Table 5: Implementation timeline under policy option 2

5.4.Policy option 3, sub-option 1 - Balanced EU measure (PO 3.1)

The Balanced EU measure (PO 3 with its two sub-options) builds on the draft regulation presented at the Consultation Forum in December 2017 combined with subsequent inputs from stakeholders. The common measures 1, 4 and 5, as well as measure 3, sub-measure 3.1 on reducing the power consumption in standby for products with status display to 0.8 W, are included in PO 3. This policy option has two alternative sub-options, which differ only in scope: (i) PO 3.1 includes in the extended scope only stationary products with LV EPS, while (ii) PO 3.2 includes all products with LV EPS. Analysing both sub-options would allow to decide the extent to which the scope should be amended with regard to products having LV EPSs.

5.4.1.Measure 3, sub-measure 3.1 - Reduce the power consumption in standby for products with status displays to 0.8 W 

The current Regulation allows products with status displays to consume 1 W in standby mode, compared to 0,5 W for products that do not have such displays. According to MSs and NGOs, the products with status displays do no longer require, due to technological development, such a high allowance (effectively doubling the consumption). This is in agreement with the result of Standby Review Study data collection, which concluded that the majority of products with status display did not exceed 0.8 W, and some of them even being under 0.5 W.

Stakeholder views: This measure was not investigated per se in the preparatory study, but was introduced based on the comments received during and after the Consultation Forum. DE shared the view of ANEC/BEUC regarding reducing the standby consumption for products with status displays.

5.4.2.Measure 2, sub-measure 2.1 - Remove exemption for stationary products with LV EPS (while maintaining it for portable products) 

Explanations and stakeholder views are provided in Section 5.3.1 above.

The transition periods for different requirements in PO 3.1 are illustrated below.

Table 6: Implementation timeline under policy option 3.1

5.5.Policy option 3, sub-option 2 - Balanced EU measure (PO 3.2)

PO 3.2 is the same as PO 3.1, except that the scope extension applies to all products with LV EPS.

5.5.1.Measure 2, sub-measure 2.2 – Remove exemption for all products with LV EPS

Stakeholders view: Member States (DE, DK, NL) and NGOs (ANEC/BEUC, ECOS) strongly supported the full removal of the exemption for products with LV EPS. Most industry stakeholders (DIGITALEUROPE, APPLiA) opposed this and preferred keeping the exemption for mobile products, while an equipment manufacturer (ARRIS) supported it as it will level the playing field.

The transition periods for different requirements in PO3.2 are illustrated in the table below.

Table 7: Implementation timeline under policy option 3.2

5.6.Policy option 4, sub-option 1 – Alternative Balanced EU measure (PO 4.1)

The Alternative Balanced EU measure policy option is identical to PO 3, with the exception of the additional requirement of reducing power consumption in off mode to 0.3 W. As such, this option too builds on the proposal and discussions at the Consultation Forum, but aims at additional energy savings compared to PO 3. The split in two alternative sub-options, with different scope coverage, is the same as in PO 3.

5.6.1.Measure 3, sub-measure 3.2 - Lowering off mode requirement to 0.3 W

The review study concluded that lowering off mode consumption to 0.3 W is technically feasible for the majority of products on the market, with around half of them possibly being already compliant. This measure responds to problem 3.

Stakeholder views: The views on this measure were divided. While MS tended to support it, they asked for a thorough assessment (during the impact assessment phase) of the costs vs. benefits. One MS (BG) opposed it, believing that it would be difficult to apply horizontally this measure to a wide variety of products, where for some of them it would be very difficult to comply. They suggested to try to apply such a reduction in vertical regulations, only for product groups that could comply in cost-effective ways. The NGOs supported the measure, while the industry associations opposed it (stating that for some products it would be technically impossible to comply, while for others it would not make economic sense).

The transition periods for different requirements are illustrated hereafter.

Table 8: Implementation timeline under policy option 4.1

5.7.Policy option 4, sub-option 2 – Alternative balanced EU measure (PO 4.2)

This sub-option differs from PO 4.1 only in scope and includes all products with LV EPS in scope.

Stakeholder views: Positions regarding the requirements on energy consumption were presented in Section 5.6, and positions regarding scope options were presented in Sections 5.3.1 and 5.5.1.

Table 9: Implementation timeline under policy option 4.2

5.8.Policy option 5 - Stringent EU measure (PO 5)

This is the most ambitious option based on the conclusion of Review study 2017 and stakeholder consultation. Environmental and consumers NGOs requested more ambitious requirements, such as further lowering the limits on power consumption in both standby and off mode. This policy option proposes this approach, by building up on PO 4.2 and strengthening its requirements. As such, PO 5 includes the same measures as PO 4.2 and additionally requires the reduction of consumption in standby mode.

5.8.1.Measure 3, Sub-measure 3.3: Reduce the power consumption in standby to 0.3 W

The Review study concluded that only around half of the data points (representing various products) collected for standby consumption can achieve 0.3 W. For many product types it might be technically more challenging to reach this level. Therefore, this measure is considered as part of the most ambitious policy option. In parallel, it should be noted that other very recent product-specific ecodesign regulations (e.g. for dishwashers, washing machines, and TVs and displays), which transferred the requirements on low power modes from the horizontal regulation to those vertical ones, have maintained the standby requirement at 0.5 W.

The transition periods for different requirements are illustrated below.

Table 10: Implementation timeline under policy option 5

Stakeholders view: NGOs such as ANEC/BEUC and ECOS supported such a more ambitious regulation with lower limits for both standby and off-mode consumption, and even suggested lowering further both limits to 0.2 W. MS varied in their preference for more stringent regulation, but generally supported keeping the standby limit at 0.5 W as it is seen as stringent enough for many product groups. The industry stakeholders opposed this option, as they see no feasible technical solutions for various products to further reduce the standby consumption.

5.9.Options discarded at an early stage

The potential options described below will not be further analysed in this impact assessment. The reasoning for doing so and the stakeholder views on the matter are explained below.

5.9.1.Voluntary agreement by the industry

A voluntary agreement must be given priority according to the Ecodesign Framework Directive, provided it meets the objectives in a quicker and more cost-effective manner. However, off mode, standby and networked standby are found in an extremely wide range of very diverse products. A voluntary agreement would be extremely difficult, as a large number of manufacturers of different types of equipment and their industry associations would have to be involved and agree on common requirements. Today minimum mandatory requirements are already in force. Furthermore, when substituting mandatory requirements by a voluntary agreement there would also be a risk of free riders 65 , should not all actors present on the market sign and comply with the agreement.

Since no proposal has been put forward by the industry, there is no voluntary agreement that meets the conditions of the Ecodesign Directive. Consequently, this option is discarded from further analysis.

Stakeholder views: None of the stakeholders are in favour of a voluntary agreement for the reasons described above.

5.9.2.Energy labelling

A complementary option to minimum energy efficiency requirements could be the use of energy labels according to the Energy Labelling Regulation 66 . These provide comparable information on the energy efficiency levels and other relevant information to consumers. Such a measure would mean that labelling targeting specifically off mode, standby and networked standby would be put in place in addition to or replacing Ecodesign requirements.

However, a horizontal regulation on energy labelling for low power modes would be extremely challenging because:

-Manufacturers already comply with the current ecodesign Regulation. There would be very little extra-incentives from potential energy labelling to determine manufacturers to further lower the consumption in low power modes;

-There will be very little differentiation between products, due to the already low limits of consumption in low power modes. Thus, it would be challenging to differentiate energy classes;

-Some products that already have energy labels for their overall performance are also in scope of this Regulation. An additional label dedicated only to low power modes would confuse consumers rather than helping them to make optimal purchasing choices.

An energy label under the Energy Labelling Regulation would thus create administrative burden on manufacturers and retailers while offering little to no gain. Therefore, this option is discarded from further analysis.

Stakeholder views: None of the stakeholders are in favour of energy labelling for the reasons described above.

5.9.3.Measures in support of circular economy objectives

The Regulation has a horizontal nature and refers to energy efficiency in low power modes for a wide range of products. As such, it is not aiming at regulating for improving the overall environmental performance of a specific product group, but at regulating a specific feature common to many different product types in order to reap energy savings across the board. Measures such as requirements on material efficiency that support the Commission’s circular economy objectives would not be feasible for this Regulation as the products in scope are too diverse and different in their functions, designs and compositions. Typical measures for resource efficiency, as included in other ecodesign regulations, include aspects regarding reparability and availability of spare parts, provision of information for repairs, requirements regarding end-of-life dismantling and recycling, limitation of use of specific substances and/or declaration regarding such content. All these requirements are product-specific (e.g. what types of spare parts should be made available, what substances should be declared etc.). Some of them might indeed not be applicable to all products (e.g. repairs might not be economically viable for some simple products, therefore spare parts are not available on the market). Thus, such measures are very difficult or impossible to conceive for a horizontal regulation such as this one, and they remain suitable for vertical (product-specific) regulations.

Stakeholder views: This approach was presented to the Consultation Forum. DE confirmed that they did not see a resource efficiency requirement as being appropriate for this horizontal regulation. ANEC/BEUC suggested to include this aspect in the revision clause, to be investigated during the next revision of the Regulation.

5.9.4.Introducing professional products and other office equipment in the scope

The Review study investigated the possibility of including professional products (e.g. professional ovens, dishwashers, washing machines and dryers) and other office equipment not currently in scope of the Regulation (e.g. paper shredders, binding machines, staplers etc.). It was concluded to not propose the inclusion of these products in an extended scope of the revised Regulation based on the following reasons:

(I)The estimated annual energy savings potential for other office equipment product category were considered small (approx. 0.06 TWh by 2025) and it is expected that in the future the demand for this type of products will decrease;

(II)The potential annual savings for professional goods were a little higher (around 0.4 TWh in 2025). However, due to the specialist use of these products, important methodological problems would be faced (e.g. there is currently a lack of harmonisation of low power modes for these products and therefore standardised testing would be challenging). It was concluded that it would be more appropriate to investigate the possibilities to include requirements on low-power modes in the product-specific vertical regulations.

Stakeholder views: NGOs such as ECOS and ANEC/BEUC supported the inclusion of professional office equipment in the scope. The industry stakeholders largely opposed this proposal.

6.What are the impacts of the policy options?

6.1.Methodological considerations and key assumptions

The methodology and key assumptions used in this impact assessment are as follows:

The analytical methods used to determine the impacts and the details about the level of low power modes energy consumption under different scenarios are described at length in Annex 4. A model is used for calculating the stock of products in scope (based on current stock, sales and lifetime), overall energy consumption and GHG emissions (based on unit consumption and total stock), user expenditure (including purchase price and energy costs), and industry turnover and jobs created. This model is built on 41 ‘base cases’, representing the different types of electrical and electronic equipment on the market. Each base case has specific usage patterns, expected lifetimes, low power modes consumptions, and purchase costs. For each policy option (PO) the additional improvement costs needed for modifying the products to achieve the proposed ecodesign requirements are also calculated. Life cycle costs (LCC) for each of the 41 base cases are calculated based on purchase costs (including additional compliance costs for each PO) and energy consumption costs (including specific gains for each PO). The LCC presents a valuable insight on the cost-effectiveness at the level of each individual group of products, while the overall consumer costs present a consolidated image over the whole scope of the Regulation.

A key assumption is that the annual sales of all the products in scope would comply with the revised requirements two years after the entry into force of the regulation. In specific, for the analysis below it was assumed that the revised regulation will into force in 2019 (i.e. “year of entry into force”) and that the products would comply in 2021 67 . Another important assumption is the improvement costs entailed in each PO. These are based on cost data provided by a supplier of integrated circuits and by equipment manufacturers (see details in Annex 4). Key assumptions were also used for modelling the industry turnover and jobs created. The total improvement costs are assumed to be passed on entirely to the customers, without the demand being affected. This indeed seems to be the case, as the improvements costs for the low power modes are very small compared to the product prices Additional employment is then derived from the industry turnovers and turnover per employee ratios. Although this is an imperfect approximation and the estimated additional employment cannot be guaranteed in practice, it is based on a method widely used in the ecodesign impact assessments.

Additional assumptions and details on calculations are presented in the following sections, based on the analytical method detailed in Annex 4.

6.2.Environmental impacts

6.2.1.Electricity savings

The total energy consumption is based on a scope including all the products listed in Annex 4 and can be seen in  Figure 16 . All policy options have energy saving potentials, but of varying degrees. PO 3.1 and PO 3.2, as well as PO 4.1 and PO 4.2 are showing very similar potentials as the only difference between the sub-options of the same policy option is the inclusion in scope of portable products equipped with LV EPSs. 

The difference between PO 2 and PO 3.1 is small as not many products are affected by the reduction in standby consumption of products with information displays, as many such products already have standby consumption below 1 W (i.e. the current requirement). The difference between the savings potential of PO 1 and PO 2 is mainly due to the inclusion of motor-operated building elements and adjustable furniture in the scope which accounts for around 96% of the savings. The rest is attributed to the inclusion of stationary LV-EPS products. The difference between PO 3.1 and PO 4.1 is due to the reduction of off-mode consumption from 0.5 W to 0.3 W. Finally, the difference between PO 4.2 and PO 5 is the effect of reducing the standby consumption from 0.5 W to 0.3 W.

Note: the reason for the slight increase in energy consumption in PO 1 (BAU) towards 2030 is an increase in the stock of products projected to be in use at that time.

Figure 16: Total energy consumption from 2016 to 2030 for the different policy options.67

Source: Based on calculations by Viegand Maagøe (see Annex 4). PO-1 is the Business As Usual scenario.

Table 11  shows the energy consumption, and annual and cumulative savings compared to PO 1 (BAU). Energy savings in 2030 are estimated to vary between 3.2 TWh/year and 7.9 TWh/year for PO 2 to PO 5 respectively.

Table 11: Total energy consumption, and savings potentials of the different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

6.2.2.Greenhouse gas emissions reduction

The greenhouse gas emissions are based on the electricity consumption levels from section 6.2.1 and emission rates in kg CO2-eq./kWh from the Ecodesign Impact Accounting status report 2016 68 . The annual emissions are illustrated in Figure 17 , and annual and cumulative savings compared to PO 1 (BAU) are shown in Table 12 .

As the GHG emissions are directly correlated to the electricity consumption, the trends are similar. Note however that the relative difference between the policy options are smaller towards 2030, as the emission factor is gradually reduced (due to an increase proportion of renewable energy sources in electricity production). A reduction potential in 2030 between 1.09 and 2.69 Mt. CO2-eq./year is estimated for the different policy options.

Figure 17: GHG emissions in Mt. CO2-eq/year for the different policy options. 67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

Table 12: Greenhouse gas emissions and reductions compared with PO 1 for the different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

6.3.Business impacts

The policy options 2 – 5 are assumed to increase the total industry turnover. This is based on the cost of ensuring compliance of products with the proposed new requirements, which is considered to be additional to the current manufacturing costs. The added costs are incurred by manufacturers and assumed to be transferred integrally to the consumers as an increase in product prices. Thus, this assumption also leads to an increase in the turnover of both wholesalers and retailers. The compliance cost for the different product groups are listed in Annex 4. The sales margins for the different segments in the electronic and electrical supply chain are based on values from DIGITALEUROPE 69 , having the breakdown defined as follows. The manufacturer selling price is estimated at 57% 70 of the final product price paid by the consumer. This is multiplied by the annual sales to obtain the annual turnover. The wholesaler’s selling price is assumed to be 74% 71 of the product price (having a 17% wholesaler margin added on top of the 57%). This is also multiplied by the annual sales to calculate the wholesale turnover. The turnover of the retailer (where a margin of 26% is assumed) is the actual product price multiplied by the annual sales.

The current compliance costs are assumed to be reduced by 25% after 6 years as a result of economies of scale (higher demand of efficient electronics and components leading to reduced prices, details in Annex 4). The policy options have 2 years transitional periods, which means that by 2027 the added costs are assumed stable. The change in turnover in 2030 are listed in Table 13 , and the increase in industry turnover for 2019 – 2030 can be seen in Figure 18 .

PO 5 has a relatively higher increase in product price illustrated by the large increase after 202167. This is because the reduction of both off-mode and standby consumption is assumed to be three times as expensive as reducing only the off mode consumption (e.g. as calculated for PO 4, see detailed assumptions in Annex 4). A total industry turnover increase between 0.54 and 6.42 billion €/year is thus estimated for the different policy options in 2030.

Figure 18: Total industry turnover for the different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

Table 13: Industry turnover for manufacturers, wholesalers, and retailers in 2030, and the increase compared with PO-1, for the different policy options. 67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

The derived revenue figures are global figures as many electronic and electrical equipment manufacturers are multinational companies with R&D and administration in the EU, but production often located elsewhere. Data on the global electrical and electronic industry from ZVEI 72 indicated that the EU accounts for around 14% of the global market (in terms of bln. €). Thus, it is estimated that the EU industry turnover is 14% of the calculated figures. This means that the EU industry revenue increase is estimated to be between 76 million € and 900 million € in 2030 for policy options 2 to 5.

6.4.Consumer expenditure

The total consumer expenditure is based on the acquisition cost, which includes the additional compliance cost in a given year, and the cost of electricity consumption in low power modes in the same given year.

The acquisition cost is based on the same assumptions as explained in section 6.3. It thus follows the industry turnover, and the same conclusions are applicable here. The consumer acquisition cost can be seen in Figure 19 . The general increase in acquisition cost for all policy option is caused by the combination of increase in stock and increase in product prices due to general inflation obtained from EUROSTAT (see details in Annex 4).

Figure 19: Consumer acquisition cost for the different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

The cost of electricity is based on the electricity consumption from Figure 16 and the cost per kWh from PRIMES 73 , and can be seen in Table 14 together with savings potential (related to energy costs) compared to PO 1 (BAU). 

Table 14: Energy costs and savings compared to PO-1 (BAU) for the different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

The total user expenditure is thus a sum of acquisition costs and energy costs ( Figure 19 and  Table 14 ). The annual total expenditure can be seen in Figure 20 . Furthermore, Table 15  shows the annual and cumulative overall financial savings compared to PO 1.

For PO 2, 3.1, and 3.2, the cost savings obtained from reduced energy consumption outweigh the increased acquisition costs due to compliance. This becomes even more important after the improvement cost are reduced due to economies of scale (compliance costs reduced by 25% after 6 years). This also shows that the outcome of the user expenditure analysis depends on the step of reducing over time the improvement costs. Therefore, a sensitivity analysis was carried out to further assess this influence (see Sections 7.2 and 7.3, and Annex 8).

However, the increase in acquisition costs outweighs the reduction in electricity costs for PO 4.1, 4.2 and 5. This means that the immediate effect for the consumer will be an increase in total expenditure for these policy options. This happens because for several types of products (usually spending fewer hours in low power modes) the energy costs saving is outweighed by the compliance costs. In particular small kitchen appliances (such as juicers, blenders, toasters etc.), complex set top boxes and stationary products with LV-EPSs have relatively large improvement cost per unit in comparison with the savings brought by reduced off mode and standby consumption. These negative life cycle costs (LCC) per product, multiplied by the large stocks of products in use, lead to important negative savings estimated per policy option.

The model is considered robust with regard to the impacts that variations in costs could have on user expenditure, and is based on the standard methodology used for in other Ecodesign impact assessments. As PO 3.2 ensures the Least Life Cycle Costs (LLCC, see details in Table 16 ), it guarantees savings for consumers realised over the whole life cycle of products. Changes (e.g. increases) in total user expenditure (see Table 16 below) would mean different quantities of products (e.g. more products) are being purchased. This would change the total expenditure in all policy options, but proportional savings would be also achieved leading to the same conclusion (i.e. the LLCC ensures consumer savings). On longer term, both annual savings and cumulative savings for consumer expenditure would show that LLCC is the best option, given enough time after the purchase. In time, the initial slightly higher upfront purchase costs are balanced by financial savings due to energy savings during the products useful life. For policy options beyond LLCC (e.g. PO 4 and 5), the product improvement costs result in upfront consumer extra expenditure that is too high and it cannot be recuperated during the product life time via lower energy bills.

Figure 20: Total user expenditure for the different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

Table 15: Total user expenditure and savings compared with BAU for different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

To evaluate the net effect in consumer expenditures at a disaggregated level (i.e. per product group), the LCC of individual product types are calculated in different policy scenarios (see  Table 16 ). The calculations are made from 2021 up to the estimated lifetime (see details in Annex 4). 

Savings from PO 2 – PO 5 are shown in comparison to the LCC of PO 1 (BAU). An immediate observation is that PO 4.1, 4.2 and 5 will result in increased LCC for an important number of product groups, which means that the higher initial investment in more efficient products is not paid back through the energy costs savings in the lifetime of the products. On the other hand, for all policy option, motor-operated building elements and adjustable furniture show great promise due to their high current consumption in low power modes. The inclusion of LV-EPS in PO 3.2 will result in a slight increase in LCC (0.28 € and 0.04 € respectively) for both stationary and portable products, however the increase is minimal and will bring the benefit of improving the level playing field.

Table 16: LCC Calculation for the different product groups and policy options based on product purchase in 2021. 67 

Red shading and the colour scale illustrate negative savings and size of these savings, green shading illustrates positive savings, “ – “ means there are no savings as LCC remains the same as in BAU.

Source: Based on calculations by Viegand Maagøe (see Annex 4)

Note: some product groups do not display changes in LCC between different policy options because these products use networked standby (rather than standby and/or off mode), which is not impacted by any PO. Nevertheless, these product groups are included for analysing the energy aspects, i.e. consumption trends and overall energy savings in all low power modes. The latest requirements for network standby entered into force in January 2019, as per Regulation in force.

6.5.Social impacts

The increased manufacturer turnover shown in Figure 18 can be linked to an increase in employment for manufacturers. This is calculated based on production statistics from EUROSTAT containing values on turnover per person employed. The increase in turnover (following the new regulatory measures) divided by this value represents thus the additional employment. The total and the added jobs due to the different policy options can be seen on Figure 21 and Table 17 .

Since the compliance costs with proposed requirements are directly transferred to consumers as increase in product price, the turnover of wholesalers and retailers have also increased. However, it is not expected that the increase in product prices would result in higher employment in wholesalers and retailers, this aspect being different from the impact on manufacturer employment. This is estimated because compliance with the new requirements could lead to more research and development work during product design, but it is not expected that more staff would be needed to sell these products at the wholesaler and retailer levels.

However, the extra employment cannot be guaranteed in practice, as it is based on the assumption that all extra costs borne by the industry for developing and producing more efficient products will be transferred to consumers (and accepted by them), resulting in higher turnover for the manufacturers. See details calculation of employment and key assumptions made in Annex 4.

Figure 21 shows between 510 – and 6620 jobs are created in 2025 globally depending on the policy option. As mentioned for business impacts, the EU accounts for 14% of the global electrical and electronic market, using the same market share, between 71 and 926 jobs are estimated to be added in 2025 in the EU depending on the policy option (see Table 17 ). PO5 shows the most employment due to the highest compliance costs.

Figure 21: Increased global manufacturer employment compared to BAU for different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

Table 17: Total employment and change compared to BAU for the difference policy options within the EU. 67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

While there is a correlation between revenue and employment for manufacturing industry, there are other influencing factors not related directly to the Regulation (e.g. macro-economics, EU trade policy, strategy of EU companies to move workforce to low-cost countries outside the EU, etc.) that have not been taken into account in the impact modelling. Hence, the real job impacts are expected to be lower than indicated in the report.

6.6.Other impacts

6.6.1.Small and Medium Size Enterprises (SMEs)

EUROSTAT statistics 74  are available for the SMEs in two major sectors “manufacture of computer, electronic and optical products” and “manufacture of electrical equipment”. The SME share of the household and office electrical and electronic equipment is estimated to be 28 – 33% based on the turnover statistics from EUROSTAT. Out of the number of enterprises, there are estimated to be around 40,000 and 46,000 SMEs respectively in the above-mentioned two sectors, i.e. 98% of the total number of enterprises.

Applying an average turnover share of SMEs of 30%, the annual SME and extra turnover compared with BAU are shown in the table below, assuming all the added compliance costs are transferred to consumers via increased product price. PO 2, 3.1 and 3.2 would result in maximum 0.03 bln. €/year improvement costs for SME in 2030, this is assumed to represent the extra turnover that year. PO 4.1 and 4.2 would result in ca. 0.11 - 0.12 bln. €/year compliance costs and PO 5 has the highest compliance costs, 0.29 bln. €/year, this is equivalent to 2.7% of the total SME turnover in 2030. 

Table 18 SMEs' turnover and extra turnover within EU compared to BAU for different policy options67

Source: Based on calculations by Viegand Maagøe (see Annex 4)

6.6.2.Administrative burden and compliance costs

In line with the established practice of legislation for the EU single market for goods, the proposed policy options would make use of the CE marking, based on a declaration of conformity. In practice, when placing products regulated by Ecodesign on the market, companies are therefore required to:

I.assess the products' conformity with the relevant requirements (typically requires physical testing of the energy efficiency of products);

II.issue an EC declaration of conformity;

III.affix the CE mark on the products;

IV.keep the documents relating to conformity assessments and declarations of conformity available for inspection by Member States for a period of 10 years after the last product has been manufactured.

Such costs are business as usual for products placed on the European market. A change to the current Regulation would mean that the household and office electrical and electronic manufacturers (SMEs and large companies), would be subject to product improvement and testing costs to prove compliance.

The testing cost for off/standby modes is on average 1300 € per model 75 . Products with networked standby would cost an additional 1300 € per model, in order to account for the different testing method needed for networked standby. It is assumed that for each model 4 tests (1 original test plus 3 repetitions 76 ) are undertaken. An average testing cost of 0.028 € per unit 77 of sales is assumed based on the number of models estimated for several product groups (see details on this estimation in Annex 4). This is equivalent to a total testing costs for EU SMEs of ca. 8.6 million € and 20 million € for EU larger companies. The testing cost is assumed to be the same in all policy options. 

Compliance costs (i.e. redesign, improved components etc.) for different policy options vary due to the different stringency of requirements. The majority of the compliance costs are obtained through consultation with a supplier of integrated circuits 78 , in order to find out the actual costs for changing technology, and with the testing costs added. For several products, manufacturers have supplied product specific improvement costs. For PO 2, 3.1 and 3.2, the compliances costs are mostly for improvement of products falling in the extended scope: 7.84 € per unit for motor-operated building elements 79 , 2.06 € per unit for adjustable furniture, 0.53 € per unit for stationary products with LV EPS 80 , and 0.34 € per unit for portable products with LV EPS 81 . For PO 4.1 and 4.2, the compliance costs are typically in the range of 1.11 € per unit for products with around 5 W power inputs, 1.47 € per unit for 10 W, and 2.06 € per unit for 20 W and above 82 , a few exceptions were adjusted according to stakeholder inputs 83 . For PO 5 where the standby mode requirement is also proposed to be reduced, the costs per unit is assumed to triple for those that have changes made to both standby and off modes. See table below for total compliances costs in million € for both SMEs and large companies within the EU split into testing and improvement costs.

Table 19 Compliances costs (testing and improvement costs) for SMEs and large companies within the EU in 2030

Source: Based on calculations by Viegand Maagøe (see Annex 4)

7.How do the options compare?

7.1. Summary of the impacts

Table 20  lists the major environmental, consumer, business, and social impacts in 2030 for the difference policy options. The total energy consumption in the EU can be further reduced by 3.21 to 7.90 TWh/year depending on the policy option. PO3.2 has the highest user costs savings, of over 0.52 billion euros in 2030.

Table 20: Comparison of impacts of different policy options in 2030

Source: Based on calculations by Viegand Maagøe (see Annex 4)

7.2.Sensitivity analysis – reduction of compliance costs over 6 years

The percentage of reduction in compliance cost from the effective date to 2030 proved to be an important input element, therefore the robustness of the conclusions is further assessed against variations of this factor. Currently, as explained in section 6.3, the compliance cost is assumed to be gradually reduced by up to 25% after 6 years due to economies of scale, after which it remains at the same level. This results in PO 3.2 having the lowest user expenditure in 2030. The conclusion of this sensitivity analysis is that PO 3.2 remains the option that brings highest consumer cost savings when the compliance costs are reduced by up to 58% after 6 years of requirements being in force. Only after that threshold other policy options become more appealing (see Table 21  below and detailed explanations in Annex 8). However, it is difficult to assume that such a drastic reduction in improvement costs would be possible before 2030.

Table 21: Results of a sensitivity analysis for compliance cost reduction percentage

7.3.Sensitivity analysis – the general level of compliance costs 

The level of compliance costs considered is also an important factor in the outcome for the 2030 user expenditure savings. This sensitivity analysis assesses the impacts on the outcome of the best policy option if the compliance costs levels are reduced or increased, while the cost reduction over time is kept at 25% after 6 years (i.e.75% of cost remains). If the initial compliance costs are reduced by up to 43%, the best policy remains PO 3.2. If the costs are decreased by more than 43%, PO 4.1 becomes the best policy (however with only a marginal saving of 0.02 bln. € compared to PO 3.2, see details in Table 22 below and additional explanations in Annex 8). PO5 would be the best option for 88% to 100% reduction in compliance costs. However, such important reductions in compliance costs are considered unlikely.

Table 22: Results of a sensitivity analysis for a flat compliance cost modification.

Note the switch between PO 4.1 and PO 3.2 being the best options is at 43%

7.4.Assessment of policy options

In accordance with Article 15 of the Ecodesign Directive, each policy option should not have a significant negative impact, and therefore should fulfil the criteria in Table 23 . This assessment, which is discussed in various parts of Section 6, is summarised below.    

Table 23 Evaluation of policy options in terms of their impacts compared to the baseline.

Although PO 5 has the best values in most of the categories in Table 20, it cannot be retained because it does not fulfil the criterion ‘no significant negative impact on consumers’ of Article 15(5) for the following two reasons:

§As shown in Table 16, the consumer expenditure in PO 5 is too high in terms of life cycle cost at product level for almost all product categories;

§The overall consumer savings projected for 2030 (in Table 20) are negative, meaning that this option will bring an increase in overall consumer expenditure.

Furthermore, PO 4.1 and PO 4.2 are not cost-effective options either. Table 20 shows that they result in substantial less savings for the end-users than PO 3.1 and 3.2, albeit the savings remain positive in this case (as opposed to PO 5). In addition, at individual product level Table 16 shows that PO 4.1 and PO 4.2 are also problematic, as they result in negative savings (i.e. higher LCC costs for users than the BAU option) for 10 more product groups compared to PO 3.1 and PO 3.2. Therefore, PO 4.1 and PO 4.2 are not retained either. This is also reflected in Table 15 in cumulative savings vs. BAU in 2030, which are negative. That means that consumers will not realise financial gains in the next decade in these policy options.

For PO 4.1, PO 4.2 and PO 5, the negative impacts on consumers do not stem from affordability. This is not an issue in this case, as the increase in product price is marginal and therefore the purchasing power would not be affected to a significant extent. However, the life-cycle costs (sub-) criterion is determinant here. The analysis shows that the energy saving for numerous product groups are not high enough to compensate the consumers, over the whole life cycle of respective products, for the higher upfront purchase costs. Therefore, the life cycle costs for these product groups remain negative.

On the other hand, PO 2 and PO 3.1 and PO 3.2 fulfil all the criteria of Article 15(5).

An assessment of the options against the objectives set in Section 4 is presented in Table 24 below. The assessment is based on the impacts detailed in Section 6.

Table 24: Score of impacts against objectives. No Change (0), limited improvement (+), significant improvement (++). (Impact Assessment Study 2018)

*Innovation will enhance competitiveness of the EU manufacturers; the effect on innovation is therefore included in this objective.

8.Preferred option

8.1.Preferred option – Why?

PO 3.2 – Balanced EU measure (sub-option 2) fulfils all the criteria in Article 15(5) of the Ecodesign Regulation and will achieve the objectives set out in Section 4 in a cost-effective way. PO 3.2 is the least life-cycle cost option and thus brings the highest consumer savings by 2030 (over half billion euros/year, see Tables 16 and 20). It also remains the most robust in the sensitivity analyses, where assumptions regarding variations in consumer costs were tested for assessing possible variations in overall consumer savings (see Annex 8). Against this background, PO 3.2 is estimated to bring the highest energy savings among the eligible options, of around 4 TWh/year by 2030. This represents around half of the current energy consumption of Malta or one fifth of Cyprus. It is also roughly equivalent to the savings estimated to be achieved by the recently adopted regulation for external power supplies, double than the savings estimated for the new regulation on dishwashers, and 40% of the savings estimated for the new regulation on domestic refrigeration. Finally, it is the most effective in expanding the scope and ensuring level playing field (by including all products with LV EPS).

Table 25 Preferred policy option

By 2030, PO 3.2 will result in:

·Energy savings of 4.01 TWh/year and GHG emission reductions of 1.36 MtCO2-eq./year (i.e. 0.27% of the EU 2030 target for final energy consumption savings and 0.13% of the EU 2030 target for GHG emissions reduction). 

·Savings on annual end-user expenditure of € 0.53 billion and extra business revenue for manufacturers of 185 million € per year, which is estimated to create around 95 jobs in the EU;

·An update of ecodesign requirements to keep up with technological progress in a cost-effective way. This includes expanding the scope of the Regulation and closing potential loopholes;

·Maintaining limited impacts on SMEs manufacturing electronic and electrical equipment.

On the other hand, the second-best option (PO 4.1 – Alternative Balanced EU measure, sub-option 1) could bring higher energy savings (5.8 TWh/year by 2030), but this is done at the expense of increasing the life cycle costs for the end users. As such, the total cost savings, calculated as a grand total of all savings brought by all categories of products, are substantially lower (around 0.2 billion €/year by 2030). At the level of individual product types, many of them will have negative LCC, meaning that the users will end up paying more over their life cycle than they do now, with the current Regulation in place. This happens because the improvement costs for these products (reflected in higher purchasing prices) will not be outbalanced by the related energy savings. Examples of such product types are: small appliances, mobile phones and smartphones. In such cases, according to some manufacturers, their standby/off mode consumption is already below 0.5 W, therefore the potential energy savings are rather modest. This, combined with the relatively reduced number of hours that these products spend in low-power modes, result in cost savings that are relatively small compared to the improvement costs needed.

As this Regulation is a horizontal one that covers a very wide variety of vastly different products, setting common requirements could be done in a cost-effective way only when it makes economic sense for the majority of these product types. This is not the case for PO 4.1 or PO 4.2.

In view of the above, PO 3.2 is retained as the preferred option.

8.1.REFIT (simplification and improved efficiency)

The new regulation provides an important simplification to the legislation, as will result in a single (new) legal text that replaces a regulation and five subsequent amendments. The new regulation brings clarifications of the terms used, responding to issues raised by the MS based on their experience in implementation and surveillance of the market. It also eliminates potential loopholes and provides important clarity for market surveillance by removing an exemption that became obsolete.

The main impact on the Member States' administrative burden is positive and relates to the requirement for product information to be made available on freely accessible websites. This can provide the Member States' market surveillance authorities with easily accessible information, which will facilitate the screening and selection of products for possible reinforcement checks.

The cost savings for these impacts are however difficult to assess because they are very much linked to the specific activities at each individual MS, with no central point of information regarding these costs being available for reference.

9.How will actual impacts be monitored and evaluated?

The main monitoring element will be the tests carried out to verify compliance with the Ecodesign requirements. This monitoring should be done by MS market surveillance authorities to ensure that requirements are met.

The main indicator for evaluating the impact of potential Ecodesign regulations is the achievement of a market improvement towards products with lower consumptions during low power modes and hence result in smaller environmental impacts. An analysis of the products on the market will determine if the shift towards more efficient low power modes has happened as estimated in particular based on the following sub-indicators, which reflect the general and specific objectives:

·Compliance with energy efficiency requirements, i.e. maximum off mode, standby and networked standby consumption in W;

·Compliance with the revised Regulation of those products that were initially excluded;

·Reduction of the electricity consumption and related GHG emissions for products in low power modes;

·Increasing the economic savings for European consumers;

·Safeguarding the competitiveness of the European industry for household and office electronic and electrical equipment and the full value chain;

·Improving the regulatory effectiveness and efficiency of the Regulation.

The evaluation should therefore assess these sub-indicators.

The Ecodesign regulations include legal obligations for the Commission to review them. These review obligations are usually the trigger for evaluating the measures in place, and for developing new policy options that ensure a continued alignment of the ecodesign requirements with the pace of technological progress and the latest international policy developments.

It is proposed to evaluate the new Regulation five years after it enters into force. The results of this evaluation should be presented to stakeholders and Member States in the Ecodesign and Energy Labelling Consultation Forum.

Annex 1Procedural information

1.Lead DG, Decide Planning/CWP references

DG ENER is the lead DG for the Ecodesign Regulation on standby/off mode and networked standby.

The Decide number of the underlying initiative for the review of ecodesign requirements for is PLAN/2016/444. An inception impact assessment was published on 26 January 2018 and is available at

https://ec.europa.eu/info/law/better-regulation/initiatives/ares-2018-476688_en .

The following DGs (Directorates General) have been invited to contribute to this impact assessment: SG (Secretariat-General), GROW (Internal Market, Industry, Entrepreneurship and SMEs), ENV (Environment), CNECT (Communications Networks, Content and Technology), JUST (Justice and Consumers), ECFIN (Economic and Financial Affairs), REGIO (Regional policy), RTD (Research and Innovation), CLIMA (Climate Action), COMP (Competition), TAXUD (Taxation and Customs Union) EMPL (Employment), MOVE (Mobility and Transport), TRADE (Trade) and the JRC (Joint Research Centre) were consulted on the draft IA report in October 2018.

2.Organisation and timing

According to Article 7 of Commission Regulation (EC) No 1275/2008, the review of the regulation should take place no later than 7 January 2016 in the light of technological progress. The review will in particular address the scope and the requirements for standby/off mode and the appropriateness and level of the requirements for networked standby with regard to the third stage of implementation (2019). The review could address, inter alia, professional equipment and products equipped with electric motors operated by remote control.

The latest Ecodesign Working Plan 2016-2019 84 , adopted in November 2016, confirms that off mode, standby and networked standby continue to be a priority regulation.

The timing of the review process of Regulation (EC) No 1275/2008 is as follows:

·Entry into force of Regulation (EC) No 1275/2008: 6 January 2009