Some of the most significant changes in the coming years for the automotive sector will be down to decarbonisation, mainly thanks to the impetus to low-carbon fuels and the limitations on the carbon footprint of electric vehicle batteries. Furthermore, the leading companies of the sector are signing up to initiatives and alliances to become carbon neutral (such as Race to Zero and SBTI) and are giving increasingly greater importance to reputation systems such as CDP, as a means of environmental recognition and transparency.
The automotive sector will also be affected by the review of the Ecodesign Directive, as part of the European initiative for sustainable products, as it will affect essential products for the sector, such as steel.
Companies of the automotive sector are also facing the problem of the shortage of raw materials and the obligations regarding minimum content of recycled material for new vehicles, including plastic, steel and aluminium.
This is all pushing towards the adoption of circular economy strategies throughout the value chain, with important ramifications for the companies of the BAC, which will have to adopt solutions to face customers’ demands as regards the limitation of their carbon footprint and the introduction of secondary raw material.
One of the main challenges for the sector is the supply problem of certain critical materials for electrical and electronic products, which will require those materials to be replaced or recirculation solutions to be sought throughout the value chain.
Furthermore, the proposal for a new Ecodesign Regulation to replace the previous ErP Directive, as part of the Sustainable Products Initiative, establishes new measures for the Ecodesign of electrical and electronic equipment (EEE) that includes energy efficiency and circularity (durability, reparability, recyclability …) requirements. In that same vein, the approval of the “right to repair” establishes obligations to guarantee the reparability of the EEE, along with spare parts being available beyond the legal warranty. Furthermore, the EEE Repairability Index announced by the Ministry of Consumer Affairs will provide consumers with the information required to make more responsible decisions and will encourage the repairing of products.
The companies of the electrical and electronic sector are also facing a more restrictive legislative framework to manage the end-of-life of the EEE, such as a ban on destroying unsold surpluses of electrical appliances and the charges and restrictions on landfill and incineration operations.
All this will encourage the assessment and improvement of circularity parameters and a change towards more circular business models, along with repairing and remanufacturing, to comply with market and legal requirement with a focus on improving competitiveness.
Moderator: Ana Mezo, responsable de Empresas Circulares. Ihobe, Public Environmental Management Company. Basque Government
The habitat sector still functions under a rather linear production and consumption model, given its huge circularity potential. The reuse rate continues to be quite low and managed mainly by social entities, and a high percentage of furniture waste ends up in landfill or incineration. The sector, like so many others, is also facing a shortage of raw materials and the problems throughout the supply chain.
As regards the environmental legislative framework, different legislative initiatives are being developed that will have a great impact on the sector. These include the review of the Ecodesign Directive that will address the presence of harmful chemical substances in furniture, and the obligation to deploy the Extended Producer Responsibility for furniture established in the Spanish Legislation on Waste and Contaminated Soil for a Circular Economy.
Companies will have to work on applying Ecodesign criteria to increase the recycled material content, increase durability and facilitate the recovery of its products in order to improve the sector’s circularity. That will be achieved thanks to a modular design and to the use of quality materials with great potential to have a second life. Furthermore, it will be essential to give impetus to circular business models, such as servitization, and the development of an inverse logistics infrastructure. Applying the concepts of the circular bioeconomy is also essential to guarantee sustainable growth.
As regards environmental positioning, companies may pursue the different certifications available to show the sustainability of the products, such as the European eco-label.
Moderator: Eduardo Jiménez, deputy director. Habic
The metal sector is primarily facing two major environmental challenges, namely, to increase the circularity of the materials and their quality, and, fundamentally, decarbonisation.
As part of the review of the Industrial Emissions Directive, the best available techniques will be considered to contribute to the European goals regarding climate, energy and the circular economy. Conversely, steel, iron and aluminium produced outside the EU and imported to the EU will become subject to the Carbon Border Adjustment Mechanism and will no longer receive free emission allowances. This will balance the market and optimise decarbonisation efforts.
This sector’s main customers, which include the automotive and construction industries, are signing up to voluntary initiatives and alliances to become climate neutral earlier than required. Decarbonised production technologies will need to be developed and applied to face those challenges, along with systematising and standardising the collection and processing of the information needed to meet market demands regarding environmental transparency.
Conversely, given that it is foreseeable that the demand for secondary material by the customers is increasing, the metal sector will be forced to identify opportunities to recover metals and reintroduce them in the value chain, ensuring the traceability of the secondary raw materials.
The machinery and equipment sector will also be affected by the challenge of overcoming the raw material supply problems, but it must fundamentally respond to the need to increase value retention and to extend the life cycle of their products. Incorporating corrective but fundamentally predictive maintenance services and the different strategies to facilitate the repair, reconditioning and remanufacturing the equipment, are particularly important in this sector.
Furthermore, companies must comply with the new legislative requirements regarding product Ecodesign, by defining and integrating sustainability and circularity criteria and using the results of the environmental assessments to detect areas of improvement.
Additionally, the machinery and equipment sector will also be greatly influenced by the environmental legislative framework affecting its customers (such as the automotive sector and other productive industries) and its suppliers (e.g., the metal sector). The new environmental transparency obligations stand out, along with the obligation to provide true and harmonised environmental information through the environmental footprint. Many of those customers are also signing up to voluntary decarbonisation commitments that involve the whole value chain. Those market drivers will require the gathering and processing of environmental information to be systematised and the environmental performance of the organisation and of its products to be communicated.
Under the future Prevention of Food Loss and Waste Act, the food chain stakeholders will have to have a prevention plan, report losses and transform unsold food. Food will therefore need to be assessed and quantified using a proven methodology, to be able to establish improvements. Thus, a crucial legislative instrument in combatting food waste will be the new labelling criteria regarding the “Use-By” and “Best Before” date.
Progressing in the circularity of the food sector will require optimising the use of resources with a life cycle perspective and advancing in the reuse and recovery of by-products and waste, by developing new upgrading processes and applying bio-economy strategies.
Food sector companies will also have to be aware of the review of the Industrial Emissions Directive, as it envisages the extension of the scope of application of the directive to new sectors, such as livestock and mixed farms.
As regards packaging, the legislation calls for Extended Producer Responsibility to be established regarding industrial and commercial packaging, the defining of minimum requirements for recycled material with a tax based on the amount of virgin plastic and new recycling targets for packaging waste. Furthermore, eco-modular fees will be established for managing packaging waste.
Due to its high impact and wide scope for improvement, this sector is a priority in the various circular economy policies and strategies. This is demonstrated by all the actions and initiatives to develop more circular products and materials, such as reviewing the Construction Products Regulation to include circularity and environmental assessment criteria, or incorporating steel and cement into the new Ecodesign Directive.
In this context, the sector also has to comply with new legal requirements on CDW related to mandatory selective demolition, limitations on landfill and aggregate extraction, and new requirements on secondary materials in public works. To meet these requirements, actors in the sector should identify opportunities for using secondary raw materials and systematising their inclusion in construction products and projects, while identifying and developing specialised recovery processes for CDW and quality standards for recovered materials.
Another important challenge will also involve meeting the growing demand for environmental transparency throughout the entire value chain, driven by the Digital Books, the voluntary Building Renovation Passport scheme, and requirements from the Taxonomy Regulation to identify and declare environmentally sustainable activities. As a driver of the sector’s circular transition, they also highlight the criteria for public and private green procurement. To meet these regulatory and market challenges, companies can systematise collection and processing of environmental information and use the different certifications as tools for transparency and positioning.
Moderator: Oscar Iñiguez, Eraikune
Moderator: Adolfo Uriarte Villalba, Natural Heritage and Climate Change director. Vice-Ministry for Environmental Sustainability, Basque Government
Luis Lehmann, especialista en soluciones de economía circular