Thank you. I have already circulated a document to members outlining answers to the queries they raised. This is a somewhat unusual initiative, since most EU legislative initiatives are more specific regarding products. Certain substances have been banned, or waste issues at the end of a product's life have been dealt with, as happened with the electrical (WEEE) directive and the end-of-life vehicles directive. This one is unusual; other EU initiatives which seek to address environmental product issues have dealt mainly in more abstract or aspirational terms. There have been various initiatives from the EU such as the sixth environmental action programme. There is an EU sustainable development strategy. However, those do not get down to the nitty-gritty of the products.
Another unusual feature of this initiative is that it is a joint one from two branches of the European Commission, DG Enterprise and DG Energy. One hopes that that reflects more joined-up administration from the EU. Since this initiative is about both the environmental performance of products and energy saving, it was very appropriate that those two DGs got together to produce a combined proposal.
The underlying premise of this initiative is the assumption that 80% of the environmental impact of products is determined during the product design phase. That means that, no matter what happens after the product has come on to the market, the environmental impact will essentially happen, and it is very difficult to effect changes thereafter. The impact of products on the environment covers quite a range of environmental aspects. There is the aspect of climate change when energy is used and greenhouse gases can be emitted. There is the issue of energy use, and products can vary considerably in the amount of energy that they use to fulfil their task. There is the issue of what natural resources are being used and whether they are being used efficiently and well. There is also the question of how much waste is generated and whether hazardous substances are released, either during the product's life or at its end.
The initiative has three overreaching objectives as enunciated by the EU. It wants the free movement of energy-using products. That is obviously central to how the EU operates, and it is very desirable that there be no artificial barriers in place. If a new regime is introduced throughout the EU, that facilitates the free movement of those goods. They also want to improve the environmental performance of products. Quite a pressing issue in recent years has been the security of energy supply. Last summer there were quite a few energy shortages throughout Europe, involving both power cuts and gas shortages, and any initiative which helps reduce products' energy use will obviously go towards fulfilling that objective.
The type of initiative that has been decided on is a framework directive. That will lay down the selection criteria, and after that the specific product measures will be laid down in implementing measures. That is a much more flexible arrangement than if the directive itself went into the specifics of individual products. We feel it is very appropriate that they have done it this way, since the changes that happen in technology and the way trends change mean that, if measures were prescribed in the directive, it would then be very cumbersome to change because the lead-in time for initiating directives is obviously longer. The framework directive lays down the ground rules, and the specifics come later in more flexible implementing measures.
Discussion of the measure has started in Brussels in a working group. There has been some high-level discussion of the principle, but the specific textual details have not yet been worked out. However, as a result of those discussions, the text has now been revised, and there are quite a few provisions now in the draft directive - some were there already, and others were introduced subsequently - which provide quite a high degree of comfort to those of us worried about the competitiveness aspects of the measure. Products must have a significant volume of sales before they are targeted under the measure. They must also have a significant environmental impact which can be substantially reduced without entailing excessive cost. All those provisions mean that it would be extremely unlikely that measures would be introduced to target products on the fringes.
Other provisions in the latest draft are that a detailed analysis, including an impact assessment, must be carried out in each case. That is a very significant feature. The full implications of a measure must be adequately considered. The impact on SMEs must be taken into account. There must also now be stakeholder consultation. There has always been unease that measures can be introduced in Brussels and in the EU without the people most affected being adequately consulted. However, now stakeholder consultation is stitched into the measure. The functionality of the products shall not be negatively impacted. Perhaps that is self-evident, but it is good that it is in the text, since it would obviously be totally counterproductive if a measure were introduced which changed the functionality of the product so much that it was not able to do the job as well as previously. The affordability and life-cycle cost of the product shall not be negatively impacted, so those measures should not result in a huge or significant increase in the cost of purchase or the cost of the product throughout its life cycle.
To allay fears that the great unknown was coming and that people would have very little notice of which products were being selected, the Commission now has to prepare a three-year working plan listing the priorities and products to be selected. The manufacturers have to supply certain information relating to products, and there was a fear that commercially sensitive information might come into the public domain or be made available to competitors, but there is now a safeguard in the measure on that. Of great interest to business is the fact that account must now be taken of relevant self-regulation and measures taken by industry. Many voluntary measures are undertaken by industry in this area, and targets have been set. Measures are being introduced, and it is absolutely reasonable that account be taken of them, since they have the same ultimate aim.
There are some areas which still concern us and where clarity is needed, of which the most obvious is that it is still not clear which products will be selected and how many of those there will be. Obviously that follows from its being a framework directive, details not being available until later. It means that the measure will be introduced affecting a large or small number of products. It is probably unlikely that it will be a large number of products. However, that cannot be decided at this stage.
What will be the costs for businesses, especially SMEs, in complying with this measure? Will it impose an onerous and costly regime on business and take a lot of time? That is still not clear. My Department has been consulting widely with industry interests and will continue to do so. We will also be involved in the negotiations in Brussels. We want to achieve a workable and balanced solution which will be effective and not impose undue burdens on industry and consumers.
