The EU’s circular economy action plan (CEAP) adopted in March 2020 put forward a push towards more sustainable products in the market, ensuring a circular economy that will not only reduce pressure on natural resources but also promote sustainable jobs and a larger economy. Such measures are realised as a prerequisite to climate neutrality targets set by the EU.

In light of these targets, the Sustainable Products Initiative (SPI) released on 30th March proposes a set of frameworks that attempts to broaden the sectors covered by the CEAP, but also promote sustainable measures in the entire lifecycle of these products.

The SPI acknowledges and attempts to tackle existing market failures by including externalities and establishing sustainability principles. We welcome the frameworks established in the SPI, and the potential it holds for key sectors such as heavy industries such as cement, steel and chemicals, as these sectors emit 6.3 Gt of CO2 per year.

There are several points of promise with respect to the SPI and its climate potential:

• Extension of the Ecodesign directive to more sectors as well as establishing consideration at all stages of the product’s lifecycle expands upon the already largely successful directive.
• The EU digital passport is a positive step in ensuring transparent product information across the entire value chain that is also traceable.
• The Ecodesign forum brings together a variety of relevant stakeholders to engage in the delegated acts proposed.
• The SPI also puts forward an obligation to disclose information on discarding unsold products, holding economic operators accountable for not participating in climate-friendly resource management.

However, to truly realise its potential in contributing to the EU’s ambitious climate targets, quantifying externalities such as climate impact is crucial.

The foundation to ensure this is through a detailed accounting of emissions of products under the SPI. Accounting for emissions is increasingly complicated especially within a circular economy, as actions such as recycling do not directly translate into a reduction in emissions. Thus, ensuring that true emissions of products are reported transparently is a step in the right direction. This policy briefing highlights the climate potential and drawbacks of the SPI, especially within the heavy industry.