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European Parliament Votes Overwhelmingly in Favour of Energy Labelling Reform

On 13 June 2017, members of the European Parliament voted in favour of recalibrating the scale for energy efficiency product labels. The measure was approved by 535 votes to 46, with 79 abstentions. Hong Kong traders of energy-related products will appreciate that the intention of the reform is to increase the intensity of the market forces driving enhanced product energy efficiency.

The first EU energy label was introduced in 1994, classified from G (least efficient) to A (most efficient). With improving product efficiency, the scale was extended upwards to ‘A+++’. This was argued to have reduced the efficacy of the labelling system, as most products would be in class A or higher, suggesting a ‘high’ absolute standard of efficiency, when in fact the product may have become relatively inefficient.

The new measure will eliminate the ‘A+’ classes, and re-establish the ‘A’ grade as the market benchmark. As technology improves and products are increasingly found in the top energy efficiency categories, this measure is future-proofed by a rescaling provision which will be triggered over time. Thus, it will be triggered whenever 30% of labelled products are in the top efficiency class ‘A’, or 50% are in ‘A’ and ‘B’ together. This provision ensures that the energy scale keeps up with technological development. In addition to the product itself, related visual advertisements and promotional material will also be required to make reference to the energy efficiency class.

The proposal also provides for the establishment of a product database which will have a dual function, and is hoped to be in operation by January 2019. The publicly available part of the database will focus on user-friendliness and is expected to contain a complete bank of energy efficiency labels belonging to different products. This feature will allow customers to more easily compare the energy efficiency of appliances.

Hong Kong traders should be made aware, however, that a ‘private’ side of the database will also be set up to assist Member States’ market surveillance enforcement activities. Above all, it will allow national enforcement authorities of all Member States to more easily ensure that efficiency calculations displayed on labels actually correspond to manufacturers’ declarations. The increased pressure this will bring to bear on manufacturers goes some way in explaining why this aspect of the measure proved particularly contentious in negotiations over the text between the Council of the EU and the European Parliament.

A European Commission spokeswoman has said that new A-G labels for TVs, lamps, washing machines, fridges and dishwashers will be introduced from the start of 2020 onwards. For products like air-conditioners, tumble dryers, vacuum cleaners, ovens, range hoods, and residential ventilation units, “this will happen most likely between 2021 and 2025”, she said. For heating products, the latest date on which the new label will be available to consumers will be around 2030.

The rapporteur (chief draftsperson) for the Regulation in the European Parliament, Italian Five Star Member (MEP), Dario Tamburrano, commented after the vote on 13 June that “citizens will have a clear, smart, digital system. Thanks to open, accessible data, new tools will allow citizens to compare products based on their habits and so buy more wisely”.

The measure has, nonetheless, faced criticism. In arriving at a compromise with the European Parliament, the text of which was published on 5 April 2017, the Council of the European Union extended the length of time before the new labelling system would actually appear in shops. This decision has proved controversial. The policy director of the European Consumer Organisation said in a statement: “consumers will have to wait up to 2030 to see the new label on space and water heaters. This delay is unacceptable because when consumers buy a new heater, they need to know how much energy it consumes… Also, the fact that the two labels will coexist on the market for about a decade might confuse consumers”.

On this point of criticism, it should be noted that the bulk of the 79 abstentions on the vote were from a group of environmentalist MEPs who wished for a more rigorous energy labelling regime ‘now and not in ten years’. The environmental group, European Environmental Citizen’s Group for Standardisation (ECOS), similarly criticised the length of time the Regulation will take to fully come into effect, and further criticised the absence of provisions to discourage the purchase of excessively energy consuming goods, regardless of their efficiency: “There is nothing stipulating that energy labels should be based on metrics that avoid promoting over-sized products, or products with questionable energy-consuming features”.

Despite these criticisms, it is largely the depth and not the principle of the measure which has been contentious. The large vote ratio seen on 13 June at the European Parliament is seen to indicate general approval for a reform of energy labelling. Hong Kong companies with EU interests will want to monitor for continued development in this area. The current legislation awaits mere formal adoption by the national governments represented in the Council of the EU. Thereafter, the Regulation will be published in the EU’s Official Journal.

Content provided by Picture: HKTDC Research
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