Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2020

Lord Callanan Excerpts

Tuesday 1st December 2020 Grand Committee

Moved by

[Lord Callanan]

That the Grand Committee do consider the Ecodesign for Energy-Related Products and Energy Information (Amendment) (EU Exit) Regulations 2020

Relevant document: 32nd Report from the Secondary Legislation Scrutiny Committee

[The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)]

My Lords, these regulations were laid before the House on 13 October 2020. The draft instrument serves several purposes, from fixing deficiencies in retained EU law to implementing the Northern Ireland protocol, which I will explain further shortly. Ultimately, it is necessary to ensure the continued operation of ecodesign and energy labelling policy in the UK after the end of the transition period.

Before I talk specifically about the instrument, it may be helpful if I speak briefly about how the EU framework for ecodesign and energy labelling has worked. In recent years, the EU has introduced, through the ecodesign directive and the energy labelling framework regulation, a suite of product-specific regulations. Ecodesign regulations are about minimising the costs and environmental impact of products used in both homes and businesses by setting minimum energy performance standards.

Energy labelling regulations provide consumers with information on a given product’s energy performance to allow them to make informed purchasing decisions. In 2020, these policies will save households approximately £100 on their annual energy bills and lead to greenhouse gas emissions savings of 8 million tonnes of CO₂, while also driving innovation and competitiveness among businesses.

This brings me to the instrument being debated today, which serves four purposes. It amends retained EU law to ensure that the ecodesign and energy labelling regime remains operable in the UK once the transition period has ended. It makes necessary amendments to the 2019 EU exit SI to account for regulations that have come into force between 29 March 2019 and 31 December 2020. It implements the Northern Ireland protocol and unfettered access for ecodesign and energy labelling policy. It also implements a change to replace energy labels’ use of the EU flag with a UK flag, and removes EU languages from these labels.

I turn to the amendments. First, amendments to retained EU ecodesign and energy labelling legislation are required to ensure that the legislation can continue to operate in the UK from 1 January 2021 without disruption. Fixes include, but are not limited to, removing EU-related references. For example, new energy labelling regulations for some products have come into force in the EU. These require suppliers of relevant goods to provide new re-scaled energy labels with their products from 1 November 2020. However, retailers do not need to display these until 1 March 2021. The SI ensures that the March 2021 requirements, which would otherwise not become retained EU law, will still come into force in March as intended.

Secondly, the 2019 EU exit SI for this policy area ensured that, in the event that no agreement was reached with the EU, existing minimum performance and energy labelling requirements would continue to operate and remain enforceable in the United Kingdom. The UK of course remains bound by EU law until the end of the transition period, and a number of EU ecodesign and energy labelling regulations have come into force since this first EU exit SI was laid. As a consequence of those new EU regulations, some aspects of our 2019 EU exit SI no longer work as intended. This SI makes amendments to the original SI to ensure that the new EU ecodesign and energy labelling regulations will be fully operable in the UK after 1 January 2021.

Thirdly, on legislative implementation of the Northern Ireland protocol and unfettered access, this instrument amends our 2019 EU exit SI and the underlying legislation so that certain UK-wide provisions are limited to Great Britain only. This will avoid confusion, as EU requirements continue to apply in Northern Ireland after the transition period, as per the terms of the Northern Ireland protocol.

This SI also allows relevant qualifying Northern Ireland goods that comply with EU ecodesign and energy labelling regulations to be placed on the GB market without undergoing additional checks. Qualifying Northern Ireland goods are defined in another instrument laid by the Cabinet Office. This SI will enable UK market surveillance authorities to ascertain whether a product came into the GB market from a Northern Ireland-based business through the information provided in a product’s declaration of conformity.

Fourthly, on labelling and marking requirements post transition period, this SI implements a decision to replace the EU flag on energy labels with the UK flag. Alongside this, we have removed EU language text from energy labels. As the UK is no longer part of the EU, the continued presence of EU logos and languages on energy labels would be inappropriate in UK legislation and could create confusion for consumers. UK energy labels have been made available to businesses free of charge through an online service to support compliance with this amendment.

Some UK trade associations wrote to the Secretary of State with concerns that they had had little time to prepare for these changes. Minister Kwarteng responded on 18 October, explaining that the change was a necessary fix to deficiencies in the law and that the Office for Product Safety and Standards would take a proportionate approach to market surveillance, as it has always done.

Officials in my department have undertaken the appropriate assessment of the impacts of this instrument on businesses and relevant bodies. It showed that the estimated cost to business was approximately £1.95 million, so a full impact assessment was not required. Nor was a formal consultation required under the legal powers used, Sections 8 and 8C of, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 2018.

In conclusion, these regulations are necessary to ensure the continued functioning of ecodesign and energy labelling policy in the UK, while upholding our commitments under the Northern Ireland protocol, such that the UK, its consumers and its businesses may continue to realise the benefits of this policy. I commend the regulations to the Committee.

--- Later in debate ---

[Lord Callanan (Con)]

I thank noble Lords for their valuable contributions to this debate. The Government are committed to providing certainty for businesses and, of course, the public in any scenario from 1 January 2021 by ensuring that the UK has a functioning statute book after the transition period, and these regulations will play their part in helping to accomplish that. They will ensure continuity for our ecodesign and energy labelling regime, which has to date helped us to achieve significant savings on energy bills and carbon emissions, making a realistic and noble contribution to our national carbon reduction commitment.

In response to my noble friend Lord Moynihan, the noble Lord, Lord Grantchester, and the noble Baroness, Lady Bennett, who raised questions regarding the operation of the policy in Northern Ireland, we are confident that the rules in Northern Ireland are workable. This has been communicated to stakeholders via our technical notice, and UK market surveillance authorities are confident that they have sufficient evidence to ensure compliance with this. Qualifying Northern Ireland goods are goods placed on the GB market by qualifying Northern Ireland businesses and, as such, are entitled to unfettered access to the GB market. This means that they are free to circulate without any customs supervision, tariffs or restrictions. Qualifying Northern Ireland goods are defined in draft regulations laid under Section 8C(6) of the European Union Withdrawal Act 2018 entitled the Definition of Qualifying Northern Ireland Goods (EU Exit) Regulations 2020.

My noble friend Lord Moynihan raised questions about the circular economy principles. They form a part of ecodesign requirements, and of course that is led by officials from Defra. In the UK, we will endeavour to support circular economy principles under ecodesign after the end of the transition period. My noble friend also asked about consultation. Formal consultation was not required, as I said, by the legal powers used, Sections 8 and 8C of and paragraph 21 of Schedule 7 to the European Union (Withdrawal) Act 2018. In addition to that, we concluded that no consultation was necessary as this SI makes the required changes only to ensure a functioning statute book in the UK, and the costs involved are minimal, as I said in my introduction.

On the issue of CE marking, the 12-month standstill approach was agreed by the Cabinet Office on advice provided by officials. Ministers are confident that this timeframe is sufficient. The Office for Product Safety and Standards is responsible for enforcement and has been for a number of years, and it is confident that it has the resources required to continue with those activities.

The need for QR codes has been communicated with stakeholders at many events over the summer and most recently in November. We have also published a technical notice on GOV.UK that supports business preparedness for the end of the transition period. Additionally, my department determined that this deficiency should be fixed from 1 January 2021 without a transition period to avoid creating potential confusion for consumers with the continued presence of EU flags on energy labels for goods designed to meet Great Britain ecodesign requirements from 1 January 2021.

I also thank the noble Baroness, Lady Bennett of Manor Castle, for her questions on whether businesses and traders are prepared for the changes brought in by this SI. We have communicated with a number of small businesses in the UK, through their various trade associations, that represent key sectoral interests in the UK. We have also responded to a large volume of direct communication from businesses, and we are confident that the majority of them are aware of the requirements. As I said in my introduction, a letter was written to the Secretary of State to this end on 14 September 2020, signed by a number of stakeholders, including the British Retail Consortium, Make UK, techUK, AMDEA, BEAMA, the Lighting Industry Association, GAMBICA and the British Home Enhancement Trade Association. However, as the market surveillance authority, the Office for Product Safety and Standards will take a proportionate and reasonable approach to market surveillance on this matter, we believe that the concern is somewhat mitigated. The noble Lord, Lord Grantchester, also raised a question on this point, and I hope that I have been able to reassure him on this matter.

The noble Baroness, Lady Bennett, also asked about the Manchester declaration. As recently announced in the Prime Minister’s 10-point plan, we will set out our world-leading product policy in 2021, continuing to work with international partners and across government to achieve the benefits of energy and resource efficiency.

The noble Baroness also asked a question on the Northern Ireland protocol. I covered that in my earlier response, so I hope that has already been answered. However, I would like to add that the Northern Ireland protocol has been implemented in such a way for ecodesign and energy labelling that it will continue to operate long into the future.

I thank the noble Lord, Lord Grantchester, for his concerns about the lighting regulations, on which officials have launched a consultation. We are closely monitoring amendments at an EU level. We will ensure that future policy meets our ambitions for high standards and consumer savings.

On the EU product database, there are no current plans to create a UK equivalent to the EPREL database. Businesses placing products on the market in Northern Ireland will, of course, have access to the EPREL database to comply with the relevant EU requirements, which they must do.

The noble Lord also asked how we will monitor and enforce the policy should requirements in the EU and the UK diverge. I reassure him that the UK market surveillance authority will continue to carry out its duties in Northern Ireland according to the relevant EU standards and in Great Britain according to the relevant UK requirements.

I hope I have been able to deal with all the questions that have been raised, and I will underline once more the four purposes of the instrument. It will use powers under Section 8 of the withdrawal Act to amend retained EU law to ensure that the ecodesign and energy labelling regimes continue to operate without hindrance in the UK after the end of the transition period. It will amend the first EU exit SI to take account of the new regulations that come into force at an EU level between 29 March 2019 and 31 December 2020, and therefore in the UK following the extension of Article 50 and the transition period. It will implement the Northern Ireland protocol and ensure the unfettered access of energy-related products that meet qualifying Northern Ireland goods requirements, as I outlined. Finally, it will enable labelling and marking requirements to take effect from 1 January 2021, replacing EU flags and language text with UK flags and text on energy labels, while implementing an end date to the recognition of CE marking 12 months after the end of the transition period. With that, I commend the draft regulations to the Committee.

Motion agreed.