As part of the European Green Deal ambitions, the proposal encourages sustainable consumption through additional incentives to repair products to reduce waste and emissions.
On 22 March 2023, the European Commission (Commission) adopted a new proposal on common rules promoting the repair of goods (the Proposal). The Proposal seeks to deliver on the environmental targets outlined in the European Green Deal, specifically regarding sustainable consumption, by increasing consumer incentives to repair products rather than replace them, especially after a product’s legal guarantee under the EU’s Sale of Goods Directive has expired. The Proposal will therefore aim to create growth in the market for refurbished products, furthering the Green Deal ambition of promoting a circular economy.
A recent Eurobarometer[1] survey, referenced by the Commission in the Proposal, showed that a majority of EU citizens feel a personal responsibility to act to limit climate change. However, according to the Commission, consumers often see repairing goods (an activity that the Commission views as an essential aspect of a circular, and therefore net zero, economy) as challenging or impractical, and thus prematurely discard products. In addition, limited incentives are available for consumers to repair goods when the legal guarantee under the Sale of Goods Directive expires, which results in significant waste and associated greenhouse gas emissions.
The Proposal focuses on two groups of stakeholders in seeking to address this problem:
- For consumers — to make it easier and more cost effective to repair goods when their legal guarantee under the Sale of Goods Act has expired or the product is no longer functional
- For industry — to boost the repair sector through higher demand, and to incentivise producers and sellers to increase the sustainability of their business models
The Proposal is the Commission’s latest initiative to seek to further the Green Deal’s objective of sustainable consumption and transforming the EU into a circular economy. The New Circular Economy Action Plan and New Consumer Agenda have previously contained announcements that the Commission will promote sustainable consumption through repair and work towards a right to repair. Subsequently, the proposals for the Ecodesign for Sustainable Products Regulation[2] on the supply side, and the Directive on Empowering Consumers for the Green Transition[3] on the demand side, have sought to promote such a right to repair further. The Commission intends for the Proposal to complement these initiatives and cover the entire life-cycle of a product.
Right to Repair
The Proposal introduces a “right to repair” for consumers, which would cover the period within the legal guarantee under the Sale of Goods Directive, during which sellers will be required to offer a repair option except when it is more expensive than replacement. It would also cover the period beyond the legal guarantee, during which a new set of rights and tools would be available to consumers:
- A right for consumers to claim repair to producers for products technically repairable under EU law[4]
- A producer’s obligation to inform consumers about products they are obliged to repair themselves
- An online matchmaking repair forum to connect consumers with repairers
- A European Repair Information Forum to bring transparency to price and repair conditions
- A European quality standard for repair services to be developed to help consumers identify repairers who commit to a higher quality
Through the above measures, the Proposal seeks to remove obstacles to repair, including high costs, lack of information, and the absence of standardisation.
Potential Effects on Supply Chain
The Commission indicated that it hopes the Proposal would increase demand for repairs; however, a sharp rise in such a demand could affect supply chains as producers try to complete repairs within reasonable timeframes. There also exists certain areas of uncertainty, such as who would be responsible for the cost of repairs.
What’s Next?
As a next step, the Proposal will need to be adopted by the European Parliament and European Council.
Latham & Watkins will continue to monitor developments in this area.
Endnotes
[1] Eurobarometer — Fairness perceptions of the green transition
[2] Ecodesign for Sustainable Products regulation
[3] Directive on empowering consumers for the green transition
[4] Such products include washing machines and vacuum cleaners. As it stands the Proposal would not apply immediately to smartphones and tablets, although the Commission has indicated these devices will be covered in the future.
