The Regulation Node event highlighted the transformative potential of the ESPR and DPP in promoting sustainability and circular economy practices. While there are challenges to be addressed, particularly in data management, the opportunities for innovation and improved product design are substantial. Future RDI activities should focus on developing robust data ecosystems, enhancing product design for different circular strategies, and explore new business models and value chains enabled by the DPP.
Purpose of the Regulation Node event
The Regulation Node event delves into current regulations being prepared or finalized from a value chain perspective. It explores how these regulations affect value chain actors and operational environments, and how actors can respond to the changed regulations. The event features presentations on the regulation and commentary from different Penta-Helix stakeholders, including insights from the government and public sector, research institutions, businesses, society and environmental groups, and financial organizations. It is an event series operated by CLIC’s innovation ecosystems 4R and GreenE2.
Here are the key takeaways from the event
Juha Toivanen from Energiavirasto provided an in-depth overview of the ESPR, highlighting its aim to make products more sustainable by extending the ecodesign framework to cover a broader range of products and requirements. He elaborated that the product groups will be prioritised and product group specific ESPR working plans with requirements will be developed as next steps. The first ones are expected to be published around 04/2025. The first ones prioritised are iron, steel and textiles. The rest of the groups are aluminium, furniture, tyres, detergents, paints, lubricants, chemicals, ICT products and electronics. If a product category, like packaging, is handled in a different legislation, like packaging is in the packaging and packaging waste regulation PPWR, a working plan will not be made under the ESPR.
Marko Turpeinen, CEO of 1001 Lakes, discussed the integration of technology, data, and business within the context of the DPP. He underscored the value of the DPP in providing valuable information across the value chain, enhancing consumer use, and supporting regulatory compliance. A key message was that the regulatory environment is quickly evolving in the EU, data and AI related regulations are being developed and implemented. 1001Lakes approaches the DPP by combining different critical aspects – business, ethical, legal, tech and security. Setting up DPPs requires collection of data from multiple sources, but also processes and rules that are still being developed. Data ecosystems need governance, and fair and transparent rules. Marko shared as a good tip the Sitra Rulebook model that has been published to help set up DPP systems. The big challenge remains in getting the information that is needed, so access to and quality of data remains biggest hurdles in setting up DPPs.
Mia Nores, Managing Director of the Recycling Industries of Finland, focused on the recycling industry’s perspective. She presented results from the survey of Recycling Industries of Finland 2023, which indicated that the Finnish Circularity Rate Unit (=ratio of recycled material to all material used) was only shockingly 0,6 % – while for example Netherlands was at 28 %. She highlighted the potential of the ESPR to boost recycling demand and support the circular economy, while also addressing the regulatory burdens and challenges faced by recyclers. Improved product design is critical to support circularity – products should be easier and safer to dismantle, repair and recycle. The complexity should be decreased, currently recyclers are faced with dealing multi-material products that also have varying lifetimes. The DPP is seen as a key future tool to provide crucial information about product materials and possible hazardous substances.
Jaana Keränen from VTT presented the FINNPASS project, which aims to promote the implementation of DPPs and explore new business opportunities through data ecosystems in Finland. FINNPASS is generating a DPP Playbook, which would support the development of technologies and businesses. FINNPASS has done extensive stakeholder collaboration and held workshops to collect information on DPP actors and stakeholders, use cases, data requirements, possible barriers and problems in DPP related business development, identified opportunities and concrete actions to grasp on them. Jaana showcased the recent results from the FINNPASS. The FINNPASS network has a LinkedIn group, and you can join it by getting in touch with Jaana (see the presentation for her contact details).
Key messages and future RDI activities
- Data, data, data. The main challenge at the moment relates to data, does it exist? What is the quality of it? Is it complete or insufficient? Implementing the DPP will require significant data management capabilities. Companies will need to gather detailed information from their value chains, which can be challenging given the complexity and global nature of different products’ different supply chains. Ensuring data validity and ownership will be critical to the success of the DPP. The lack of data or the quality of the data can pose significant challenges. The data validity and reliability are important, but who will have the overall responsibility of data reliability? Who will inspect and verify the environmental and carbon footprints of products under the ESPR?
- Product design is going to change, will supply chains too? The ESPR aims to make products more sustainable, durable, reusable, repairable, and recyclable. This regulation will drive innovation in product design, ensuring products are suitable for circular economy. For example, will textiles phase out mixed fibers to facilitate fiber-to-fiber recycling? Will consumer electronics be designed for easier disassembly and repair? Electronics’ working plan is not prioritised at the moment but will be delivered including specific requirements. Nonetheless, ESPR includes provisions that support the ‘right to repair’. This means that by law, products are designed in a way that they can be repaired. It is designed to empower consumers, repair professionals, and third-party service providers. They have the right to obtain information and spare parts and tools to perform repair. These changes will also impact supply chains and value chains, requiring adjustments to manufacturing processes and materials sourcing. Moreover, these changes will bring opportunities to those suppliers who can offer trustworthy, good quality and comprehensive data.
- Opportunities for innovation: The ESPR and DPP present significant opportunities for research, development, and innovation (RDI). Companies can leverage these regulations to develop new products and services, particularly in the IT space but also material and product development and design. For example, data engineering and the development of identification elements in products will be essential for effective recycling and circular economy practices.
About the 4R Innovation Ecosystem
4R is an innovation ecosystem targeting at solving the Plastics Challenge. The ecosystem strives to build new solutions for a circular plastics economy, including sustainable consumption and distribution of goods, enhanced recycling of plastics and uptake of recycled plastics, and alternative materials like composites and bio-based materials to replace plastics. The ecosystem is open for organizations interested in finding new business or in building new competences in the theme.
We are building a pioneer community to solve the systemic issues of plastics. The goal is to create system-solutions to introduce a profitable but sustainable market, for example, for plastics recycling and for substitutive biobased materials. The 4R ecosystem has been established for long-term and systematic collaboration towards sustainable growth. The ecosystem was kick-started in 2019 and previously known as 4Recycling innovation ecosystem, it has grown and evolved to its current form during the past 5 years. We support both knowledge and business development in the context of a transition of traditional industry sectors towards cross-industry collaboration and business.
Addressing societal challenges such as the Plastic Challenge and turning them into opportunities requires the involvement of a wide range of players, taking strategic choices, designing enabling policies and regulations, discovering new technologies and materials, and developing the overall recycling system.
Anna Tenhunen-Lunkka
Head of Circular Economy
CLIC Innovation