EU LEGISLATION UPDATE

Figure 1 Generated by deepai (https://deepai.org/machine-learning-model/text2img)

There are a number of legal instruments working their way through the European Union’s (EU) parliament. Like many EU instruments, these statutory guides have a way of working their way into legislation that the rest of the world adopts. Like US legislation, especially the California Proposition 65 legal example, these laws sometimes do serve to act as a moral compass for many industries, and their impact should be valued, but not overlooked.

Who is responsible?
An idea that took seed in the 1990s, in Germany, that has slowly leached out into other parts of the world is the idea that duty of care has shifted from the end user to the producer of goods and services. The principle used to be that the “polluter-pays” for any undesirable effects caused by the product or service they may have purchased, to something that looks more like the “producer-pays”. Intimately connected to that is the concept of extended producer responsibility (EPR). These were initially viewed as duty-of-care responsibilities that a producing company would be expected to fulfil. The next step for the EU was to make these mandatory, like for the Waste Electrical and Electronic Equipment (WEEE) Directive, the End-of-Life Vehicle (ELV) Directive and EPR for packaging. The Packaging EPR looked to reduce redundant packaging, lower the size of the packaging, use recyclable or compostable packaging.

Mandatory EPRs are now planned for many other industries with textiles, footwear, and leather being EU commitments that are visible on the horizon. EPRs look to ensure that the producers think about the impacts of their operations on the environment and on social arenas. For both of these critical areas, the emphasis is not just on cradle-to-gate but that the producer must be thinking about the cradle-to-cradle or cradle-to-grave. WEEE and ELV commitments force the producers (through third-party companies) to take the products back when a consumer no longer requires the product and to responsibly deal with its disposal or recycling. These are intimately linked to the Corporate Sustainability Due Diligence Directive (CSDDD) which sets out how supply chains must do their due diligence, especially with regard to human rights abuse.

These initiatives have often been accompanied with a taxation platform, in other words EU Member states have created specific instruments that tax the consumers of these products to create a fund that drives the policing or prosecution of companies that do not meet their EPR commitments. Packaging taxes, like the plastic bag tax, that South Africa has is common in many of the EU countries to de-incentivise the indiscriminate use of plastic packaging. Many new laws are being created across the Union to increase pressure on producers. The mechanism will also be copied by industries that are looking to implement EPR schemes. The lack of margin in the leather industry is an excellent reason why the tax laws that accompany the EPR schemes must be part of the execution.

Greenwashing and bad product information
UK Green Claims Code - it aims to combat greenwashing by ensuring environmental claims made by businesses are truthful, clear, and substantiated. Companies in the automotive sector must ensure their sustainability claims are accurate and can be backed up with robust evidence.

TCFD (Task Force on Climate-related Financial Disclosures) - this framework requires companies to disclose climate-related financial risks and opportunities. Empowering Consumers for the Green Transition Directive (ECGT) forbids certain claims and gives clear guidance on how green claims should be made.

CSRD (Corporate Sustainability Reporting Directive) - This requires large companies to disclose information on environmental, social, and governance matters, affecting automotive companies operating in the EU. Digital Product Passports (DPP) are part of how the EU wants to improve communication on the eco credentials of a product. Connected to this is the Textile Labelling Regulation (EU) 1007/2011 that improves the communication on the inclusion of animal products into textile products. This provides a “stick” for the incorrect labelling of products, but is also a “carrot” that leather producers can use to improve the bad labelling of products by vegan companies.

ESRS (European Sustainability Reporting Standards) - these standards will provide detailed reporting requirements under the CSRD, ensuring consistent and comparable sustainability reporting across the EU.

Production and design
ESOS (Energy Savings Opportunity Scheme) - UK-based large enterprises, including those in the automotive sector, must conduct regular energy audits to identify cost-effective energy-saving measures.

ESPR (Ecodesign for Sustainable Products Regulation) - this proposed EU regulation aims to make products more environmentally sustainable throughout their lifecycle, which will impact automotive manufacturing processes and materials. DPP- the EU is also implementing Digital Product Passports as part of the Ecodesign for Sustainable Products Regulation. Starting from 2024, most products sold in the EU will be required to have a DPP, which serves as a digital record containing information about a product's origin, materials, environmental impact, and disposal recommendations. This initiative aims to enhance transparency across product value chains, enabling consumers and stakeholders to make informed decisions and promote a circular economy. ​These measures reflect the EU's commitment to sustainability by holding producers accountable for the entire lifecycle of their products and providing consumers with detailed information to make environmentally conscious choices.​

EUDR (EU Deforestation Regulation) - this regulation aims to minimise EU-driven deforestation and forest degradation, which could affect automotive companies using materials sourced from at-risk areas.

Use of the word "leather" - several instruments provide guidance, such as, the International Council of Tanners (ICT) guidance, the laws from Italy 116/2020 and the French Article 112 of Law 2020-105 that restrict leather deception for consumers.

CSDDD (Corporate Sustainability Due Diligence Directive) - this proposed EU directive aims to foster sustainable and responsible corporate behaviour throughout global value chains, which will significantly impact automotive supply chains.

The last key area is a real gift to the leather industry where a raft of regulation is coming through on how companies must be diligent with regard to the formation of microplastics. There is a huge emphasis on this environmental risk and it is a major factor with product manufacturers. As the problem of microplastics escalates it seems that leather has more advantages.

In the next issue: In the next issue the magazine will turn its attention to a design of compostable leather that has a self-destruct mechanism. A kill switch. Like the piece of string that jet ski operators are attached to so that if they fall off the jet ski, the cord pulls the ignition kill switch and the vehicle comes to a standstill. The kill switch of compostable leather allows a biodegradable leather to work during its life and then when placed in compost it will rapidly degrade. The article will go through what technology is needed for this.