Possible synergies between the EU Eco-label and other product-related instruments and tools

Possible synergies between the EU Eco-label and other product-related instruments and tools Background Paper for the consideration of the Policy Management Group of the European Union Eco-labelling Board Draft September 2004 DELIVERING SUSTAINABLE SOLUTIONS IN A MORE COMPETITIVE WORLD

BACKGROUND PAPER NR 6 European Union Eco-labelling Board Policy Management Group Possible synergies between the EU Eco-label and other productrelated instruments and tools Draft Please note that this is a discussion paper about the European Eco-label for the EUEB Policy Management Group, and the views expressed in it do not necessarily represent those of any Member State, Competent Body, or the European Commission September 2004 Reference: 0000674 00 Prepared by: Robert Nuij

CONTENTS 1 INTRODUCTION 4 1.1 CONTEXT 4 1.2 SETTING THE SCENE 4 2 POSSIBLE SYNERGIES WITH OTHER TOOLS AND INSTRUMENTS 6 2.1 SYNERGIES WITH OTHER LABELS 6 2.2 SYNERGIES WITH OTHER TYPES OF ENVIRONMENTAL PRODUCT INFORMATION 10 2.3 SYNERGIES WITH OTHER PRODUCT-RELATED INSTRUMENTS AND TOOLS 13 3 CONCLUSIONS AND RECOMMENDATIONS 21 ANNEX A: EXAMPLE OF AN ENVIRONMENTAL PRODUCT DECLARATION 23 3

1 INTRODUCTION 1.1 CONTEXT With the revision of the Community eco-label award scheme in July 2000, the EU Ecolabel entered a new phase in its development. A new governing body, the European Union Eco-labelling Board (EUEB) was established and revised procedures for the management of the scheme and the establishment of product group criteria were adopted. Part of this revised approach was the establishment of 3 management groups, created in the context of the Community eco-label working plan 1, to assist the Commission and the Member States in the elaboration of different aspects of the eco-label scheme. These management groups are: The Policy Management Group; The Co-operation and Co-ordination Management Group; and The Marketing Management Group. Of these 3 groups, the Policy Management Group (PMG) was specifically set up to develop and adapt the long-term policy and strategy of the scheme, and to coordinate with, and provide input to, relevant policy developments (such as IPP, greening public procurement, other labelling initiatives, etc.). To support the work of the PMG, a consultant (Robert Nuij) was asked to provide background analysis on two key issues: How the current ecolabelling scheme should be developed at a policy and strategic level up to the next revision of the Regulation in 2005; and How the Regulation should be revised in 2005. This paper is the sixth of a number of background documents, which attempt to look at some of these issues in more detail. 1.2 SETTING THE SCENE When the Commission started developing its Integrated Product Policy (IPP) in the second half of the 1990s, there was a feeling that European environmental policy was embarking on a new and exciting journey. Talk about the integration of different policies and the use of a variety of often non-legislative instruments to improve the environmental performance of products (the so-called IPP toolbox), promised a different approach to product-related environmental policy, which until then was a mainly ad-hoc and diffuse affair. 1 Commission Decision of 21 December 2001 establishing the Community eco-label working plan (2002/18/EC). OJ L7 of 11.01.2002 p. 28-47 4

This shift in approach was not lost on the EU Eco-label community which in its working plan indicated that the new IPP framework offers new opportunities for the European eco-label, which has so far had to operate with little or no support from other policy measures. The Eco-label working plan continued by saying that the eco-label offers a reference point for environmental excellence at European level, for example in greening public procurement and for identifying green products on which taxation could be reduced. Moreover, in the draft directive on the environmental impact of electrical and electronic equipment, the eco-label is proposed as giving a presumption of conformity with the requirements of the directive. Indeed, the desire to link the eco-label more closely to other instruments directly gave rise to the objective of the Policy Management Group, i.e.: Continue to develop and adapt the long-term policy and strategy of the scheme, as well as the integration of the eco-label in the various policies being developed in relation to sustainable consumption (such as IPP, greening public procurement, wider labelling, reduced taxation for green products, etc.). This paper explores the possible synergies between the EU Eco-label and other product-related instruments in more detail. It is not meant to be an exhaustive study but aims to indicate where such synergies might lie and what actions could be taken to make them a reality. 5

2 POSSIBLE SYNERGIES WITH OTHER TOOLS AND INSTRUMENTS There are many possible ways in which to look for synergies between the EU Eco-label and other product-related instruments. For the purpose of this paper, the following three main areas have been identified: 1. Other labels 2. Other types of environmental product information 3. Other product-related instruments and tools The following sections will address each of these areas in more detail. 2.1 SYNERGIES WITH OTHER LABELS 2.1.1 Type I labels Eco-labels were one of the earliest information instruments used by governments to help consumers choose green. After Germany established the first governmentsupported scheme - the Blue Angel - in 1978, other countries soon followed (for example the Nordic Swan, the Dutch Milieukeur and the US Green Seal) and in 1992 the EU established its own scheme, the EU Eco-label. Partly as a reaction to the global proliferation of labelling schemes, ISO started the development of an international standard for ecolabels, which culminated in the adoption of ISO 14024: Environmental labels and declarations Type I environmental labelling Principles and procedures in 1999. Basically, these are declarations which meet criteria set by third parties, based on life cycle impacts (like the EU Eco-label). Most, if not all, government supported eco-label schemes nowadays adhere to this standard. Over the years, many other label types have appeared including energy labels, single issue labels, social labels, etc. While some of these schemes are also government supported, others are driven by the NGO community or by industry. The next paragraphs will look at possible synergies between the EU Eco-label and some of these labels. The establishment of the EU Eco-label in 1992 was initially seen as a way of countering the proliferation of national labels within Europe. However, over time, the idea that the EU scheme would replace the various national labels was pushed to the background. Instead, the current approach is to establish a stronger co-operation between the organisations running the different labels. Internationally, cooperation between Type I labelling schemes is organised and furthered by the Global Ecolabelling Network of which most schemes including the EU Eco-label - are members, so within the context of this paper this international dimension will not be addressed. 6

Possible synergies 2.1.2 Energy labels Potential synergies between the EU Eco-label and the existing Member State eco-label schemes can broadly be divided into two areas; those related to product group development and those related to marketing. In the area of product group development, the co-operation between the EU Eco-label and the Member State schemes has been formalised in the working plan which established the Cooperation and Coordination Management Group. This group has the objective to progressively and systematically develop the cooperation and coordination between the Community eco-label and other eco-labels in the Member States. Over the past 3 years, significant progress has been made in this area including on the harmonisation of criteria, choice of product groups and mutual adoption of product group criteria. One promising development is the piloting of the so-called fast track procedure, which uses national criteria as the basis for criteria in the EU scheme. The EUEB is slowly gaining experience with this approach, which has the potential to significantly speed up the criteria development process for the EU Eco-label. In a similar vein, the EU scheme is also encouraging national schemes to adopt the EU criteria in national labelling schemes, where these schemes wish to do so. Similarly, efforts to develop joint marketing initiatives have been led by the Marketing Management Group which was established to coordinate the marketing efforts of the EUEB, the Commission and the Member States, and develop and implement joint actions. This has so far resulted in a number of successful joint initiatives, including promotional events, publication materials and newsletters. Overall, the approach that has been followed in the past 3 years should be sustained so that further synergies between the Eco-label and the national labelling schemes will continue to be systematically explored. Although appliance energy labels were already used in several European countries as early as the mid-1970's, widespread use began only in the 1990s with the implementation of the EU Framework Directive for mandatory energy labelling of household appliances that was agreed in 1992 1, the same year the EU Eco-label was established. Since the European Energy label is a mandatory instrument with significant industry support, it has since the start developed autonomously from the Eco-label and synergies have proved difficult. Indeed, after some initial discussions the Eco-label has consistently adopted the top levels of the energy label (where available) as the basis for its appliance criteria documents. The same applies to office equipment, where the 1 Directive 92/75/EEC of 22 September 1992 on the indication by labelling and standard product information of the consumption of energy and other resources by household appliances (Official Journal L 297, 13/10/1992 p. 0016-0019) 7

Energy Star label has recently been introduced in the EU, although this is not a mandatory instrument. The EU Eco-label logo is also allowed to be used within the Energy label, provided of course the product has been awarded the Eco-label (see figure 2.1) Figure 2-1 Example of the Energy label with the EU Eco-label logo Because industry focuses on these labels for most household appliances and office equipment, and because in practice energy and water use constitute by far the biggest environmental impacts for these products, the Eco-label has so far struggled to make an impact in these product groups. This situation will probably intensify with the new WEEE and RoHS Directives (which will force companies to recycle their electrical and electronic products and substitute a number of hazardous substances) and the proposed EuP Directive. Possible synergies With the Energy label and Energy Star already allowing consumers to choose the most efficient products, and with the WEEE and RoHS Directives addressing two other 8

2.1.3 Other labels important impacts (i.e. waste and hazardous substances), the question is what added value the Eco-label can offer. There seem to be three ways to address this issue. Firstly, the Eco-label could decide to continue with the affected product groups as is happening now, on the basis that it adds value by covering additional impacts not covered by such schemes. Criteria would be updated regularly taking into account the developments with the Energy label, Energy Star and other applicable legislation. Secondly, the Eco-label could decide to remove the appliances and office equipment product groups from its catalogue. This would significantly reduce the number of product groups (though not the number of licences) but would free up resources to devote to other product groups. Finally, the Eco-label could decide to change the strategy for these product groups by recognising only the very best or most innovative performers. This would require more radical criteria supporting for example new energy-efficient technology (as was done by Greenpeace for hydrocarbon refrigerators), products free of hazardous substances or 100% recyclable products. This would obviously severely restrict the market access to the Eco-label, but might make the label more attractive to products with strong green credentials. The mandatory nature of the EU Energy label and the strong industry support for both the Energy label and the Energy Star, make it difficult to present a strong case for further synergies between these instruments and the Eco-label. A more successful approach could be to more strongly differentiate the Eco-label from the energy labels so that it becomes more attractive to potential applicants. This issue of added value also applies to the national eco-labels and it would be advisable to jointly discuss a way forward. While Type I eco-labels typically address a number of environmental impacts associated with a specific product group, the last decade has seen a strong increase in the use of labels that address one specific environmental issue or other elements in the product life cycle. Examples of such labels are single issue labels (e.g. the FSC for sustainable forestry), social labels (e.g. Rugmark for child labour), fair trade labels (e.g. Max Havelaar for various fair trade products) and health labels (e.g. the Ökotex label for textiles). Many of these labels are industry or NGO driven (although sometimes government supported) and often address issues related to developing countries. The relative simplicity of many of these labels, combined with strong industry marketing opportunities and the credibility given to them through NGO support, has made such labels quite successful, though sometimes only in niche markets. Possible synergies As with energy labels, some of these specialty labels are in direct competition with the EU Eco-label. One way of creating synergies would be for the EU Eco-label to adopt some of the criteria used in these labels, or include the award of such a label as 9

one of its criteria, which could potentially boost both labels. However, sensitivities about ownership of such labels seems likely to prevent such total incorporation. The fact that most of these labels are industry or NGO driven means that their criteria are influenced by other factors, which would restrict the use of stricter criteria as a way to differentiate the Eco-label from these labels. Again, a more successful approach might be to focus more on the added value of the Eco-label compared with some of these other labels. This would have to be done via a specific marketing strategy that would carefully position the Eco-label versus its various competitors, perhaps focusing on factors such as the Commission s backing for the scheme, its Europe-wide reach, and its visibility across a wide range of product groups. 2.2 SYNERGIES WITH OTHER TYPES OF ENVIRONMENTAL PRODUCT INFORMATION 2.2.1 Green claims While the labels described above all make use of predefined criteria (voluntary or obligatory) to which companies have to adhere, there are a number of other types of environmental product information that have somewhat different characteristics. Most well known are the ISO defined Type II self-declared environmental claims (or green claims) and Type III product declarations (or EPDs). Next to type I eco-labels, these voluntary tools have all been developed to stimulate the exchange of information about the environmental impacts of products. As a result, in certain product sectors, including electronics and construction, the different types exist alongside each other within the same product group. To add further complexity, the distinction between the different types can be blurred; again in the construction sector, declaration schemes exist which are a mixture of Type II environmental claims and Type III EPDs. In view of these existing links the question is what further synergies could be developed? Self-declared environmental claims became a widespread phenomenon in the late 1980s and early 1990s. Products often carried claims such as environmentally friendly, CFC free and recycled. This proliferation and the lack of rules and guidance on self-declared green claims created a situation in which some environmental claims in the marketplace were misleading, meaningless or simply untrue, which in turn led to a loss of credibility with some consumers. Today, selfdeclared environmental claims are less prevalent but are still the most visible environmental label type in some Member States 1, particularly those without well established national Type I schemes. The key issue with green claims continues to be how to address the problem of false claims without reducing the number of valid type II claims in the marketplace. 1 See: Green Claims Environmental claims on products and packaging in the shops: an international study, Consumers International 10

Member States have implemented different levels of control including legislation, codes of conduct and guidelines. Internationally, the ISO standard 14021: Environmental labels and declarations Self-declared environmental claims (Type II environmental labelling), was finalised and adopted in 1998. ISO 14021 specifies requirements for self-declared environmental claims including statements, symbols and graphics on products. The standard specifies requirements for meaningful and non-misleading claims and describes a general evaluation and verification methodology. It also describes selected terms commonly used in environmental claims, and gives qualification for their use. At European level, the Commission is considering issuing interpretative guidelines to facilitate the understanding and application of ISO 14021, entitled Guidelines for Making and Assessing Environmental Claims. Also the UK Government has done significant work in recent years to improve the quality of green claims, including the publication of the Green Claims Code and Guidance for Business on how to make good green claims. Possible Synergies To comply with ISO 14021, Type II claims should concern the product s key environmental impacts and should be able to provide justification, for example in the form of test certificates or other documentation, to demonstrate the validity of the claim being made. The criteria documents for eco-label product groups could provide this kind of information; they identify the key environmental impacts of a product thus providing guidance for making a type II claim and they often include references to testing methods allowing the type II claim to be verified. Given that there are no organisational bodies for Type II claims as there are for Type I labels, a second possibility would be for EU Eco-label Competent Bodies to perform the role of verifiers of green claims. The product and verification knowledge present within Competent Bodies could be used to provide companies with advice on how to make good green claims as well as with a verification service. Such a set up would be easier to envisage in the case where a Competent Body already provides such services in other areas, for example AFNOR in France. Where the Competent Body is part of a Ministry, as in the UK, such direct services to business could be more difficult. 2.2.2 Environmental Product Declarations A Type III Environmental Product Declaration is a set of quantified environmental data consisting of pre-set categories of parameters based on Life Cycle Assessment (LCA) according to the ISO 14040 series of standards, with at least a minimum set of parameters for a/each product group. There is a requirement for presenting a minimum of inventory data together with interpretation, and the information should be critically reviewed. Often, non-lca data, for example whether the company has an EMS system or recycling instructions, will also be presented on the EPD (see Annex A for an example). 11

The declaration should be embedded in a Type III programme, which is a voluntary process by which an industrial sector or independent body develops a Type III environmental declaration, including setting minimum requirements, selecting categories of parameters, defining the involvement of third parties and the format of external communications (ISO TR 14025). A key element of any EPD programme are the so-called Product Specific Requirements (PSR) which establish the specific contents that must be considered to identify the requirements necessary for carrying out the LCA study and for publishing the EPD for each product or group of products. This is necessary to make sure EPDs within the same product group are comparable and based on the same rules for conducting the underlying LCA. Possible synergies From an environmental and technical perspective, PSRs or EPDs themselves could be used as the underlying documentation for a Type I label. This could take two main forms: There are similarities between the development of PSRs within EPDs and the development of environmental criteria for eco-labels in that both aim to identify a product group s main environmental impacts across its life cycle. This link could be exploited via the use or incorporation of PSRs during the development or revision of eco-label criteria. In this way, the process of developing PSRs could be used to establish eco-label criteria or vice versa, with subsequent benefits in terms of reduced time and costs and increased harmonisation. Secondly, EPDs could be used within the conformity assessment process for Type I labels. To achieve this, Type I schemes could formally recognise the role of EPDs issued under specific Type III schemes or independently verified EPDs as acceptable evidence of conformity with certain eco-label criteria. This could have the dual benefit of encouraging the use of Type III as well as reducing the time and costs of the Type I conformity assessment. It can be foreseen that integration between Type I and Type III will be easiest to achieve where the PSR within a Type III scheme/declaration reflects the eco-label criteria for the corresponding product. From an organisational perspective, there has been some discussion of broadening the role of Type I secretariats or Competent Bodies to cover Type III declarations. Various roles could be envisaged for Type I bodies in this regard, ranging from establishing PSRs to undertaking the verification or certification of Type III declarations. The proponents of this approach see it as offering an opportunity to speed up the development and dissemination of EPDs. Critics, on the other hand, fear that broadening the role of eco-label Competent Bodies to cover EPDs would bring with it the bureaucracy, regulations and costs some industry representatives associate with Type I schemes. The balance between maintaining flexibility whilst also achieving the comparability, reduced costs and other benefits that could result from this approach would obviously be a key factor. One of the key elements of EPDs at present is that 12

they tend to be industry driven and initiated. In addition, competency and expertise in Type III declarations would have to be built up within Type I bodies. 2.2.3 Environmental reporting Environmental reporting has traditionally been a voluntary method of communicating environmental performance to an organisation s stakeholders, although several countries (e.g. Denmark, The Netherlands and Sweden) now require environmental statements from certain types of industry. The proliferation of environmental reports during the 1990s resulted in the publication of a number of guidelines (of which the Global Reporting Initiative is probably the best known), which aim to harmonise how companies should report their environmental performance. Meanwhile, investors and stock exchanges are beginning to recognise the relevance of environmental compliance and performance as a liability and risk management issue, which has led to a number of sustainability indexes such as the FTSE4Good and the Dow Jones Sustainability Index (DJSI). Possible synergies While companies have often been reporting on their use of eco-labels within their environmental or sustainability reports, this has so far not been a formal requirement in any of the existing guidelines. As an example, related to products, the GRI guidelines only ask for a description of the significant environmental impacts of principal products and services. One possible synergy would be achieved if the existing reporting guidelines (such as GRI) specifically asked companies to report on their use of eco-labels, both on their own products as well as on the products they routinely buy (e.g. copying paper). The strongest synergies would be achieved if the questionnaires used for assessing companies under the sustainability indexes (such as FTSE4Good and DJSI) would explicitly address eco-labelled products. This could apply both to the company s own products as well as to those procured from suppliers. In this way, eco-labels would become a formal assessment criteria, albeit of limited importance, and companies would be rewarded for having eco-labelled products or buying them. 2.3 SYNERGIES WITH OTHER PRODUCT-RELATED INSTRUMENTS AND TOOLS As already indicated in the introduction, the advent of Integrated Product Policy (IPP) in the EU promised a different approach to product-related environmental policy with its focus on the integration of different policies and the use of a variety of instruments to improve the environmental performance of products (the so-called IPP toolbox). The Communication on IPP 1 lists a wide range of possible tools that could be examined for possible synergies with the EU Eco-label including taxes and subsidies, 1 Integrated Product Policy. Building on Environmental Life Cycle Thinking. Communication from the Commission to the Council and the European Parliament. COM 2003 (302)final 13

standardisation, green public procurement, environmental management systems and other types of legislation (e.g. EuP, REACH, RoHS, etc.). However, before looking at these individual instruments in more detail, it is worthwhile to address briefly another key element of the IPP strategy; the so-called pilot projects. In the Communication, the Commission indicated that one of the key challenges of IPP was to make the concept of life cycle thinking operational. It proposed to achieve this via a pilot project exercise looking at a number of individual product groups. These pilot projects (of which in the meantime two have started) are to follow the same basic path to a solution, namely: 1. Document and analyse all the environmental impacts of the product throughout its life cycle; 2. Analyse the potential environmental, social and economic effects of all possible options to reduce the environmental impacts, including examining the effectiveness of existing policy tools; 3. Identify, with stakeholders, the most feasible options for improvement; 4. Agree on implementation plans, identifying the responsibilities of different stakeholder groups; 5. Implementation. These pilot projects thus take a sectoral approach and hence are an excellent opportunity to investigate where the possible synergies between the various instruments (including the EU Eco-label) might lie. As a result, it seems desirable for Members of the EUEB to be closely involved in the pilot exercises, to represent the interests of the EU Eco-label where necessary and to find out what role the Eco-label could play in combination with other product-related tools. The following sections look in more detail at the possible synergies with a number of other product-related environmental instruments. 2.3.1 Taxation and subsidies Related to the issue of taxes and subsidies, the Communication on IPP states that getting the prices right, through internalising environmental externalities into the price of a product so that its environmental impacts are accurately reflected in the price, is the Commission s long-term goal. Price signals give incentives for the continuous environmental improvement of products throughout the life-cycle. They facilitate and reinforce measures, such as greener public procurement and product design obligations, by improving the economic rewards for green design and production. They also provide consumers with important information and encourage them to buy products with lower environmental impacts. However, in view of the subsidiarity principle and the restricted competency of the Commission in tax matters, it sees limited scope for EU intervention in this area other than to to promote and encourage the use of fiscal measures, such as environmentally-related taxes and incentives, at the appropriate local, national or Community level. 14

Possible synergies One of the oldest ideas related to synergies between the Eco-label and taxation is that of using a differentiated tax rate (VAT) for eco-labelled products. While this idea always had a lot of support from the Eco-label community, the IPP Communication dismissed it by stating that in the light of the stakeholder comments received, in particular from Member States, the Commission will not develop initiatives to apply reduced VAT rates to products bearing the EU eco-label for the time being. It continued by saying that for other types of tax, Member States, where appropriate, should promote and encourage the use of the aforementioned fiscal measures to favour greener products. While these statements leave the door open for possible future initiatives, it clearly puts the onus on the individual Member States to develop any synergies they might see fit. One such possibility has already been implemented for energy labelled products, where several Member States have used product rebates to encourage consumers to buy A-labelled products. However, the mandatory nature of the EU Energy label makes it particularly suitable for such an approach and preliminary investigations into applying the same system for eco-labelled products have so far not been successful. 2.3.2 Greening of standardisation Standards can be seen as documented, voluntary agreements, which establish important criteria for products, services and processes. As such, they determine technical aspects by influencing design, manufacture, packaging, use and end of life stages of products. They help to make sure that products and services are fit for their purpose and are comparable and compatible. As a result, standards are widely adhered to since companies benefit from the compatibility and inter-operability of products, services and processes. The importance of standards in the international market place means that, by additionally considering environmental aspects, standardisation could make a positive contribution to sustainable development and the relevant implementing policies, such as IPP in the EU. There are also a growing number of European standards for test and measurement methods, which contribute to the implementation of environmental policies. At the beginning of 2004, the Commission published a Communication on the integration of environmental aspects into European standardisation 1. This document aims to encourage action at the European level and concentrates on areas where there is consensus among the stakeholders in standardisation on how progress can best be achieved, including by: Encouraging environmental thinking amongst the technical experts who write standards. Prioritising the most important standards for the environment. Improving the participation of environmental experts and representatives of environmental interests in the Technical Committees that develop standards. 1 Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee. Integrating environmental aspects into European standardisation. COM (2004) 130. 15

Increasing the use of environmental tools such as checklists, guides and helpdesks, all of which have already been put in place by the standards bodies themselves. The Commission has also awarded a service contract to ECOS, a consortium of European environmental non-governmental organisations, to contribute to the integration of environmental aspects into the European standardisation process. Possible synergies Despite the fact that they are not specifically mentioned in the Communication, ecolabels could play a role in the greening of standardisation. This possible synergy was the subject of a study by AEA Technology for ANEC (the European Association for the Co-ordination of Consumer Representation in Standardisation), which investigated if and how the existing eco-labelling efforts in the EU could be used to establish minimum performance standards for products. The results indicated that the criteria setting processes could be used provide a framework for identifying performance parameters, although lack of, especially market, data is still a problem for many product groups. Next to this, eco-label information is not always helpful in terms of informing the derivation of minimum baseline requirements; information audit trails are often missing and data is often incomplete. Although these problems could be overcome, any solution would most likely put a heavy burden on the criteria development process, as more, and more detailed, research would be needed. Unless there was a firm commitment from the standardisation community that such an effort would be used during standardisation process, it is questionable whether such an investment should be made. 2.3.3 Green Public Procurement As public procurement constitutes around 16 % of Community Gross Domestic Product, there is plenty of scope for public authorities to drive the greening of products. To assist procurers with this task, the Commission has published an Interpretative Communication on Public Procurement and the Environment 1, which explains the legal situation and shows that there are ample possibilities for taking into account environmental considerations in the tendering of contracts covered by these rules. In addition, the Commission recently published a handbook on environmental public procurement 2. The real tasks for greener public procurement are to ensure that existing possibilities are used by public purchasers. Possible synergies Despite the complexities of the public procurement legislation in the EU, there is significant scope to use EU Eco-label criteria within the procurement process. Both the 1 Commission Interpretative Communication on the Community law applicable to public procurement and the possibilities for integrating environmental considerations into public procurement, COM(2001) 274 final 2 Buying Green! A handbook on environmental public procurement. Commission Staff Working Document. SEC (2004) 1050 16

Interpretative Communication as well as the Handbook mentioned above provide practical advice as to how such criteria can be used. The real task is to raise awareness among public authorities about the possible use of eco-label criteria during the procurement process, and to help them find simple ways of integrating green specifications into their various procurement systems. There are many ways in which greater awareness could be achieved, for example via workshops, training, conferences, websites, procurement handbooks, etc. The Member States have a key role to play in this process and many guidelines, handbooks and case studies are available to assist them in this task. The challenge of helping public purchasers with simple procurement specifications is more difficult. The present approach of the Eco-label is too complex for most procurement purposes and the levels are often too high for many competitive contracts. Some countries have experimented with procurement approaches which borrow a few criteria from the Eco-label (for example, the UK Government has developed a set of procurement quick-win specifications, which borrow some basic criteria from the Eco-label, the Energy Label, Energy Star, etc) 1. The potential for the Eco-label to influence environmental improvement through public procurement is very high, but the scheme would have to be adapted to fit with the needs of purchasing authorities. 2.3.4 Environmental Management Systems Environmental management systems (EMS) have been operating for several years. The European EMAS scheme became available for participation by companies in 1995 (Council Regulation (EEC) No. 1836/93 of 29 June 1993) and this was followed in 1996 by the publication of the ISO14001:1996 standard on EMS. Both systems are very similar, especially since the revision of the EMAS regulation in 2001 2, which integrated EN/ISO 14001:1996 as the environmental management system required by EMAS. The main reason for this amendment was to allow companies to use the synergies between ISO 14001:1996 and EMAS, and to allow organisations to move from ISO 14001 to EMAS without duplication. The major difference between both systems is that EMAS requires the continuous improvement of the environmental performance of participating organisations and the publication of a validated statement of their environmental performance stating the results achieved against the environmental objectives and the future steps to be undertaken in order to continuously improve the organisation s environmental performance. Next to these formal, certifiable schemes, several companies, including many SMEs, operate their own management system, usually based closely on the ISO 14001 standard but seldom verified. 1 Examples of existing and possible new specifications can be viewed at http://www.mtprog.com/referencelibrary/quickwins_proposed%20specifications_27_08_04.pdf 2 Regulation (EC) No. 761/2001 of the European Parliament and of the Council of 19 March 2001 17

Management systems have so far mainly focused on improving the environmental performance of a company within the gate and as a consequence have dealt with facility level issues such as waste minimisation and cleaner production. However, companies have realised that the biggest environmental impact of their activities often does not occur within their facilities but elsewhere, for example in the use phase of the products they manufacture, and have tried to address these issues within their EMS. This has led to POEMS (product-oriented environmental management systems) on the one side and environmental product development or ecodesign on the other. However, environmental product information is usually seen as a secondary, and mainly internal, data management process and the communication of such information to the outside world is seldom covered by an EMS. Possible synergies One possible way in which management systems can be used to support the use of product-related information is the development and maintenance of proper processes for the management of such information. Information management is an important part of running a business and most companies have established specific systems just for this purpose. Product-related environmental information of the level that is needed for an eco-label would also require a systematic way in which such information is collected, used and communicated, and a management system can provide the necessary structures and procedures for ensuring this happens properly. Another way in which management systems can be used is via the verification of product-related information and thus also eco-labels. Since many environmental management systems (and definitely those covered by EMAS) are certified by external auditors, there is the possibility that during the certification process not only the management procedures are verified but that there is also a check of any productrelated information needed to show compliance with the Eco-label criteria. This would most likely reduce costs since a separate verification procedure would not be necessary and, according to a Danish study on the this subject 1, companies seem keen to obtain joint verification. However, for this to happen, typical EMS verification organisations (including EMAS verifiers) would have to be allowed to check compliance of a product with Eco-label criteria and hence take over some of the Competent Body tasks. Alternatively, Competent Bodies could be allowed to verify the existing management systems. This is already possible, provided the Competent Body is accredited as an appropriate verification organisation for EMS or EMAS purposes. The idea of combining EMS verification with eco-label compliance verification is not new. In the context of the development of the EMAS scheme, the Commission is looking at the possibilities of using the EMAS verification process for the validation of product information. However, the integration of the product dimension into the EMAS scheme is relatively new and has been taken up by only a few companies. As a 1 Nielsen, B. Possible interaction and synergy between environmental management systems and ecolabels. Valør & Tinge. September 2002. 18

2.3.5 Ecodesign result, there is little practical experience and further work needs to be undertaken to assess any potential synergies. An important and contentious element in this is the fact that the revised EMAS Regulation offers organisations the opportunity to use the EMAS logo on or in adverts for products, activities and services, only under circumstances defined in Commission guidance., which shall ensure that there is no confusion with environmental product labels (Article 8.2a). Subsequently, Article 8(3) precludes the use of the logo on products or their packaging, or in conjunction with comparative claims concerning other products, activities or services until the Commission has, as part of its evaluation of the use, recognition and interpretation of the EMAS logo, considered in which exceptional cases the logo may be used in these ways. The Commission is currently in the process of identifying these guidelines. As a result, the main discussion point is most likely not if the EMAS scheme could be used for validating product-related environmental information but if the new EMAS logo should be used on the product and how it would interact with existing Type I ecolabels. Those involved in such labels have expressed fears that the EMAS logo could compete with such labels, as illustrated by recent cases in the paper sector where companies have discontinued their use of the Nordic Swan in favour of publicising improvements under EMAS. Since EMAS, ecolabels, claims and product declarations are all voluntary instruments, one could argue that it is up to the market to decide which type of information it prefers to give and accept, provided that it is of a certain quality (e.g. correct, not misleading, etc.) and not confusing to the users of the information. The issue of possible confusion leads back to the fact that having an environmental management system does not necessarily mean that the product itself is good for the environment, let alone better than a competitor s one. An EMAS type verification, and the possible use of the logo, would in principle only mean that the information given about the product is correct. As a result, a clear distinction between what it means to have the EMAS logo on a product and other types of labels, such as the EU Eco-label, would have to be ensured. The upcoming review of the EMAS and Eco-label schemes will also address the potential synergies between both instruments. Over the years ecodesign has come to mean different things to different people. In some cases it stands for the creation of specific, environmentally preferable products, for example a solar powered lawnmower or the development of washing services. This specific application of ecodesign is sometimes also known as eco-innovation. Most of the time however, ecodesign means the introduction of environmental aspects in traditional product design with the aim of improving the environmental performance of the product without drastically changing the product concept. In this way, ecodesign is not a defined way of creating new, environmentally friendly 19

products, but rather a way of manipulating environmental parameters together with usual design parameters in the product development process. The IPP Green Paper correctly pointed to the importance of ecodesign when it stated that the main decisions on the environmental impacts of products are taken at the design table. Given the central role that ecodesign plays in the improvement of the environmental performance of products, it is important to identify if ecolabels can play a role within the ecodesign process or of if ecodesign can contribute to the further development of eco-labels. Possible synergies One of the most important ways in which eco-labels are used within the context of ecodesign is as a benchmark for product development. In fact, this is probably one of the most important indirect benefits of eco-labels. In this case, eco-label criteria are used by companies (most often SMEs) to obtain knowledge about the key environmental impacts of their products and to provide designers and engineers with practical criteria for product development. Another possible area of co-operation has been proposed by the draft Directive on the eco-design of Energy using Products (EuP). This Directive, which in itself does not introduce directly binding requirements for specific products, aims at defining conditions and criteria for setting, through subsequent implementing measures, requirements regarding environmentally relevant product characteristics, such as energy consumption. In the proposal, the EU Eco-label is given a role in the conformity assessment under Article 8 (3) which states: EuP which have been awarded the Eco-label pursuant to Regulation (EC) No 1980/2000 shall be presumed to comply with the eco-design requirements of the applicable implementing measure insofar as those requirements are met by the Eco-label. As such, the Eco-label can be used to show compliance with certain ecodesign requirements introduced by the implementing measures of the EuP Directive. 20

3 RECOMMENDATIONS AND CONCLUSIONS 3.1 RECOMMENDATIONS Based on the above outlined potential synergies, there are a number of recommendations that could benefit the advance of the EU Eco-label. Other labels Continue the approach taken by the Co-ordination and Co-operation Management Group, thereby ensuring continuous attention to the possible development synergies between the EU Eco-label and the national labels. Continue the approach taken by the Marketing Management Group, thereby ensuring continuous attention to the possible marketing synergies between the EU Eco-label and the national labels. Continue the work started on the fast-track approach to criteria development. Develop a clearer strategy to better position the EU Eco-label in the market alongside other labels which compete for attention, such as the EU Energy label and the various social and health labels. Other types of environmental product information Organisations responsible for Type I and Type III schemes could explore how to co-ordinate their activities and the advantages and disadvantages involved, for example in terms of costs, market response, etc. Competent Bodies could explore the possibilities of using their expertise for advising companies on the use of environmental claims. The Commission could explore the possibilities of having the Eco-label incorporated in environmental reporting guidelines and assessment questionnaires for sustainability indexes and green or social investment funds. Other product-related instruments and tools EU Eco-label representatives should ensure participation in the IPP pilot projects to explore the possible role of the Eco-label in combination with other tools. EMAS and Eco-label experts should examine the possibility of establishing a onestop-shop for both schemes, including information to applicants and verification services. Member State should investigate the possible use of taxes and/or rebates for ecolabelled products. Member States should ensure that eco-label references are included in training and manuals for public purchasers. The review of the Eco-label scheme should consider how the scheme could much more directly support the needs of public purchasers. 21

3.2 CONCLUSIONS The Eco-label working plan and the resulting management groups have has some success in exploring and capturing the potential synergies between the Eco-label and the national labels. This should be continued, and ideally strengthened, and a similar approach could be envisaged to more systematically investigate the possible links between the Eco-label and other instruments such as Type II and Type III labelling, EMAS, standardisation and ecodesign. However, one has to bear in mind that the exploitation of such synergies depends very much on the willingness of the relevant instruments and tools to adapt. For example, for any significant synergies between the Eco-label and EMAS to be realised might mean that the Competent Bodies have to give up their unique position in checking compliance and awarding the label. Similarly, for the Eco-label criteria to be useful to public purchasers might mean that they need to become much simpler and more inclusive. Such changes would in some cases mean a new approach to the present core aim of the EU Eco-label, which is to provide guidance and accurate, non-deceptive and scientifically based information to consumers on products which have the potential to reduce negative environmental impacts, as compared with the other products in the same product group. Since the Eco-label is the only significant environmental product information instrument at European level (other than the Energy label which obviously only focuses on energy use), the question is if is suited for all these different purposes. Changing too much might mean shifting the current view of its key function, while changing too little might mean it will not be able to take advantage of the more significant synergies which are achievable. One possible solution could be to split the information provision function (such as information needed for eco-label criteria development, standardisation and greening public procurement) from the label function. This could be achieved by establishing something like a European Product Information Centre which would be in charge of gathering and disseminating product-related environmental information (including market data) that could subsequently be used for the development of eco-label criteria, procurement criteria, minimum requirements for product standards, implementing measures for EuP, PSRs for EPDs, etc. This approach has been discussed in meetings of the EU s IPP Informal Network of Member States and a similar idea was proposed by the EEB in its vision paper towards a European Integrated Product Policy. In the meantime, some useful synergies between the EU Eco-label and other productrelated instruments are already possible and more effort should be made to make them a reality. 22

Annex A Example of an Environmental Product Declaration 23

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