EU policy offers the lighting industry risks and opportunities
Fig 1: Source: Ellen MacArthur Foundation, drawing from Braungart & McDonough
The European Union is pushing a number of policy initiatives in the coming months and years that will have a profound impact on the business models of firms competing in the European lighting industry.
LightingEurope (LE) is the industry’s eyes and ears in Brussels and its foremost representative in dialogue with policymakers. Like trade associations from all industry sectors it is monitoring potential policy threats to its members. But it also identifies growth opportunities that should be embraced by the lighting industry.
In order to minimize the risk and maximize the opportunities the lighting industry, led by LE, engages with policymakers to help them get the policy framework right. Without a clear voice in Brussels the industry risks being on the receiving end of ill-informed regulations. With the range of different policy initiatives currently underway or about to begin, the potential risk now is greater than ever.
As both the lighting industry and the EU agenda evolve there are more and more policy areas to monitor and help steer. Rules related to energy and the environment still are the most relevant and numerous. They include laws governing the use of hazardous substances, durability and reparability, rules designed to minimize waste and reduce the amount of it that ends up in landfill sites, rules on energy efficiency, energy labelling and eco-design.
Add to them internal market rules and in particular the complex legislative packages in the area of digitization and the data economy. These policy areas impact a wide range of industries that are all adapting to take advantage of the potential offered by the emergence of Big Data and the Internet of Things (IoT).
In such a complex legislative environment, the lighting industry can learn from other industries such as automotive, consumer electronics and home appliances, how they have been affected by, for example, CE-marking requirements or new data protection rules.
But in the area of environmental protection the lighting industry often leads the way. Hardly any other industry has done more to optimize the ecological footprint of the products it builds: LED technology has enabled further energy savings and coupled with lighting systems offers even more opportunities.
The same is possible with serviceability and the so-called
One of the four loops in the circle involves servicing products in use in order to extend their technical and economic lifespan. This isn’t only good for the environment and the end user, it is also opening up lighting firms to new business models, and the move is very similar to what has been seen in other industries, such as the computer industry, where manufacturers like IBM and Microsoft are moving towards a business model based around service contracts rather than product supplier contracts.
In the lighting industry this trend is still at an early stage, and it is most evident in business-to-business markets. The Lighting-As-A-Service model has been piloted in airports and warehouses for example and is now also becoming common in some municipal areas such as street lighting.
The benefits to the lighting industry of moving towards serviceable luminaires are numerous. It creates new opportunities for professionals to offer customers added value through monitoring and maintenance services. Also, as service providers, manufacturers get much closer to their customers, allowing them to build stronger relationships with them.
The EU has a dedicated Circular Economy Action Plan and is looking to drive more circular products and business models in Europe. It’s not all about serviceability, and it’s not all good news. There are elements in the EU Circular Economy Action plan that pose serious challenges to many players in the industry. For example, some policymakers especially in some EU countries and in the European Parliament, who are pushing for longer-life products that are easy to repair and recycle, are asking for modular products that can be opened up, and the components easily separated and replaced by the customer.
A proposal for mandatory removability of light sources and control gears was introduced into a draft text for the next set of energy efficiency rules for lighting products.
This poses problems for a wide range of manufacturers: from those that build heavy-duty, airtight luminaires designed for extreme conditions; to those that make the popular integrated household LED luminaires sold in retail outlets where the long-life light source inside the luminaire cannot be removed and replaced. The problem extends beyond the lighting industry – think of the manufacturers of furniture or home appliances that integrate light sources and control gears in their products (e.g. kitchen, bathroom cabinets).
It is vital for the lighting industry to explain to policymakers why mandating the removability of all light sources and control gears from all products and irrespective of the application for which they are intended, would be a serious mistake.
While LE members fully subscribe to the objectives of the Circular Economy, individual players must be allowed to choose the technology, design and business model for their products to deliver on the Circular Economy.
LE has been very active on this issue, making it clear that while some mandatory requirements are acceptable, EU policymakers must avoid pursuing a one-size-fits-all approach to removability and circular product design.
LE has had some success explaining why it would be undesirable to force all luminaires to have removable light sources, irrespective of where and how they are used. Some policy makers understand but others are less willing to consider the fact that in some circumstances forced removability would be against the interests of consumers. And in other cases – like an airtight, dust-resistant luminaire in a road tunnel - it could even be dangerous to insist that light sources are made removable.
LE calls for clear guidance from regulators, and it advocates an approach to the removability question that is fully in line with the position developed in the standardization body CEN CENELEC - JTC10 (Energy Related Products – Material Efficiency Aspects for Ecodesign) which requires removability only for the purposes of verification by market surveillance authorities and for recycling of light sources and the luminaire, all its containing components included, at the end of life.
LE has been talking regularly with the decision-makers in Brussels and, thanks to the support of the LE member national associations, to ministries in the EU countries. In addition to the removability question, it also urged policymakers to avoid setting rigid timeframes for the removal from the market of non-LED lighting technologies, such as some small halogen light sources or very common fluorescents lamps (e.g. T8, CFL, T5, HID), as well as lamps used in specific applications (a.k.a. special purpose lamps).
The phase out of conventional products and technologies is another aspect of the EU Circular Economy, looking to move away from the use of hazardous substances that risk harming people and the environment. Currently conventional lamps are being addressed by two separate EU processes.
Mercury containing lamps such as T8, CFL, T5, HID and Special Purpose lamps, already regulated by EU energy rules, are under threat in a parallel legislative initiative on the restriction of hazardous substances. The European Commission’s Environment directorate is currently evaluating whether to renew RoHS exemptions for most conventional lamps on the market and may decide to ban many of these products from the market inconsistently and quicker that in the energy proposal (which foresee a phase out in September 2021), i.e. removing more products and even by 2020.
LE is asking policymakers to carry out a detailed impact assessment on removal of products and in particular on circular economy in time for the next review of eco-design rules expected to start around 2024. And it has urged the Commission not to introduce any other Circular Economy measures before the 2024 review.
There are two other potential regulatory challenges in the pipeline in Europe: the development of a scoring system to rate the ability to repair and – where relevant – to upgrade products. For the time being, this initiative excludes luminaires but there is every possibility that the reparability scoring system may become mandatory and may be extended to cover lighting.
The other potential challenge on the horizon is the EU Product Policy Framework. This broad initiative will examine options and potential action to adopt a more coherent policy framework from the different strands of work of EU product policy in their contribution to the circular economy. It will include among other things an analysis of the use of chemicals at all stages of manufacture and their impact on the recycling and reuse of materials. It will consider whether to use Green Public Procurement and Extended Producer Responsibility fees to boost circular products and incentivize consumers to choose them.
Both upcoming initiatives fall under the Circular Economy plan. The current Commission is unlikely to pursue any concrete steps in either case, beyond the consultations it has launched, leaving it for the next Commission to pick it up in the following year as of 2020.
These policy initiatives are not going away. The lighting industry must engage with policymakers to transform current policy initiatives into business opportunities and to avoid the risk of serious mistakes that could undermine firms competing in Europe’s lighting market. LE is doing just that. It has established a good working relationship with a wide range of policymakers in all the Commission departments involved in these initiatives, in the European Parliament and in the EU countries.
The lighting industry has its work cut out for it in the months and years ahead. LE is the voice of over 1,000 lighting companies competing in Europe. It is a strong voice in Brussels, and it always welcomes others to help it shape the debate and the future.