MOVING TOWARDS CIRCULARITY IN THE EU FURNITURE MARKET. A study on policy scenarios and their potential impacts

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1 MOVING TOWARDS CIRCULARITY IN THE EU FURNITURE MARKET A study on policy scenarios and their potential impacts

2 p.2 Moving towards circularity in the EU furniture market OBJECTIVES OF THE STUDY commissioned by EEB in Nov Analyse the main constraints & opportunities for circularity at each stage of the supply chains for furniture 2. Identify key interventions and explore policy levers to accelerate the transition towards a circular economy in the furniture sector 3. Assess the potential benefits in terms of material conservation, GHG emission reduction and net cost saving opportunities This report is authored by published in September 2017 and can be downloaded from the EEB Website here.

3 EU consumption weight (tonnes) by furniture group 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 Kitchen Furniture Mattresses Metal furniture Non Upholstered seats Other furniture Upholstered seats/ sofa beds/ futon Wooden furniture

Barriers to a Circular EU Furniture Sector Fundamental economics - low cost of new furniture vs. costs associated with refurbishment Poor durability of materials - e.g.

4 Barriers to a Circular EU Furniture Sector Fundamental economics - low cost of new furniture vs. costs associated with refurbishment Poor durability of materials - e.g. flat pack chipboard restricts second life Poor design for disassembly, reassembly and reconfiguration Method of labelling flame retardant on furniture products encourages removal by consumers; Hazardous chemicals (e.g. certain flame retardants banned) that restrict reuse and recycling Lack of available markets for certain recovered waste material streams Investment and capacity in waste management infrastructure

Case Study: Extended Producer Responsibility for Furniture in France Main objectives of French EPR include decreasing waste furniture to landfill, and achieving a 45% recycling/reuse target 80M

5 Case Study: Extended Producer Responsibility for Furniture in France Main objectives of French EPR include decreasing waste furniture to landfill, and achieving a 45% recycling/reuse target 80M collected via levies paid by furniture producers in 2015 to finance EPR Key requirement of regulations includes fostering reuse, so that the total volume of reused goods back on to the market increases by 50% by 2017 Requirement for reusable furniture to be transferred to social partners

Case Study: Sustech CE Innovation Business Support to Manufacturing Sector, Belgium Programme to accelerate transition towards closed loop models in textiles, wood and furniture

6 Case Study: Sustech CE Innovation Business Support to Manufacturing Sector, Belgium Programme to accelerate transition towards closed loop models in textiles, wood and furniture manufacturing sectors in Belgium: Dematerialisation Sustainable material selection Design for recycling Re-assembly Modularity Recycling Lifetime Extension Partners - Fedustria, Centexbel and WOOD.BE

7 Potential CE interventions Potential policy options that could work effectively together to provide varying degrees of circularity to deal with market failures on the supply side and the demand side include: Package 1: Fully Mandatory Package 2: Part Mandatory Package 3: Full Voluntary Package 4: Incentives Only Package 5: Information Only Package 6: Waste Management Only Some of the policy options presented in the packages would fit some furniture categories better than others We deemed that for this screening work on the potentials for circularity, we could not enter the details of when and how to apply each possible instruments to each product category

8 Necessary horizontal CE interventions But the following horizontal measures need to be added to each package to prevent fundamental barriers to reuse: Mandatory regulation on fire label location and attachment to avoid it being visible (and consequently removed); and Development of a Green Furniture Mark (GFM) namely, a set of criteria to verify the circularity performance scale of furniture, deployed alongside Eco-design, Extended Producer Responsibility (EPR) and modulation, Green Public Procurement (GPP), and Ecolabelling.

9 Package 1: Fully Mandatory Supply Side Mandatory EPR for take back, with preparing for reuse and recycling targets, and with a modulated fee (based on meeting GFM criteria) or an IPR approach, to encourage better design for repair and recycling. Mandatory eco-design measures on durability (repair and recyclability should be covered by EPR drivers to a degree as noted above) or mandatory warranty period of five years to drive durability. Demand Side Mandatory GPP to drive demand for reuse and remanufactured items (other aspects taken care of by mandatory eco-design).

10 Package 2: Part Mandatory Supply Side Mandatory EPR for take back, with preparing for reuse and recycling targets, and with a modulated fee (based on the GFM criteria) or an IPR approach, to encourage better design for repair and recycling. EU-wide voluntary eco-design standards and associated label referring to the GFM - to meet a variety of CE criteria across durability, the use of recycled material content and reused components and to facilitate repair, remanufacture and recycling. Demand Side Mandatory GPP for the public sector, with common criteria based on the GFM.

11 Package 3: Full Voluntary Supply Side EU-wide voluntary agreement (Self-Regulatory Initiative) on take back, preparing for reuse and recycling as an alternative to mandatory EPR. EU-wide voluntary eco-design standards and associated label based on the GFM - to meet a variety of CE criteria like durability, low toxicity and to facilitate repair, remanufacture and recycling. Demand Side Promotion of voluntary GPP criteria to public procurers as now. Promotion of the GFM based Ecolabel to consumers.

12 Package 4: Incentives Only Supply Side EU-wide SME support initiative for CE innovation in the sector, combined with tax incentives, grants and/or low interest loans for CE furniture companies. Deposit-refund incentive for consumers to return furniture for reuse and recycling, i.e. a refundable levy on new furniture, or a modulated bulky waste collection charge free where the item is reusable. Demand Side Mandatory labelling of warranty ( free ) period to allow for market differentiation and conscious choice of consumers. Tax incentives for repair, refurbishment/ remanufacturing activities; e.g. lower rates of VAT.

13 Package 5: Information Only Supply Side Mandatory Product Passports (PP) from the OEMs to facilitate repair and remanufacture. EU-wide voluntary eco-design standards and associated label based on the GFM - to meet a variety of CE criteria like durability, low toxicity and to facilitate repair, remanufacture and recycling. Demand Side Mandatory labelling of warranty ( free ) period to allow for market differentiation and conscious choice of consumers. Promotion of the GFM based ecolabel to consumers.

14 Package 6: Waste Management Only EU wide landfill ban on furniture disposal. Clearer regulation/guidance from the EU around end of waste status and use of recycled materials.

15 Modelling of potential impacts of the different Policy Packages Policy Package Additional tonnes reused Additional tonnes recycled Estimated net carbon impacts for scenario, tonnes CO 2 eq. Additional job creation 1 Full Mandatory 2,097,962 3,670,289-5,713, ,347 2 Part Mandatory 1,546,538 3,149,566-4,933, ,990 3a Full Voluntary - selfregulatory 1,069,288 2,392,433-2,896,593 80,197 3b Full Voluntary - industry-led 717,278 1,470,269-2,172,445 53,796 4 Incentives only 440,452 1,053,690-1,810,371 33,034 5 Information only 227, ,853-1,448,296 17,039 6 Waste management only 168,225 3,185,947-3,343,633 12,617

16 Summary and Conclusions Whilst the EU furniture industry has so far managed to remain competitive, it faces problems in signalling quality and sustainability of its own domestic product. The study has confirmed a wide range of barriers to greater circularity in the EU furniture sector - e.g. technical issues around design and chemicals policy, market issues relating to the low relative cost of new furniture. Circular economy interventions offer potential to counter these trends with repair, refurbishment and remanufacture allowing value recovery, economic growth and job creation within the EU furniture industry. Realising these economic, environmental and social benefits will therefore require the adoption of appropriate demand and supply chain levers, to support a significant step change across the industry.

17 Thank you for your attention! Carsten Wachholz, Senior Policy Officer Resource Conservation and Product Policies / carsten.wachholz@eeb.org With the support of the LIFE Programme of the European Union

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