Ecodesign and Right to Repair: Implications for risk and liabilities

The EU has recently introduced two landmark legislative measures aimed at fostering sustainability and promoting a circular economy: the Ecodesign Regulation (EU Regulation 2024/1781) and the Right to Repair Directive (EU Directive 2024/1799).

These initiatives not only signal a paradigm shift in the lifecycle management of consumer goods but also pose potential challenges for businesses in terms of compliance and liabilities (and, as a consequence, of insurance coverages).

 

The Ecodesign Regulation: Creating sustainable products

Adopted on 13 June 2024, the Ecodesign Regulation establishes a comprehensive framework for setting ecodesign requirements to enhance the environmental performance of products throughout their lifecycle.

The key innovations are:

• Ecodesign requirements: duty to comply with new requirements which will be introduced by delegated regulations.
• Digital Product Passport (DPP): a centralized digital repository providing stakeholders with essential product sustainability and circularity information.
• Mandatory green public procurement: strengthens the integration of sustainability criteria in public tenders.
• Ban on destroying unsold products: starting in 2026, destroying unsold items, such as apparel and footwear, will be prohibited to reduce waste.

As a consequence of the new regulations, products must comply with ecodesign performance and information requirements, such as durability, repairability, and sustainability, as outlined in future delegated acts. Economic operators – including manufacturers, importers, and distributors – have to ensure compliance, maintain documentation and cooperate with market surveillance authorities.

The regulation expressly empowers consumers to seek compensation when products fail to comply with ecodesign standards. Recent amendments to Directive 2020/1828 on representative consumer actions strengthen enforcement mechanisms by facilitating collective actions to address such breaches.

By broadening its scope to include all product categories (beyond energy-related goods), the regulation advances the EU’s commitment to a sustainable and circular economy.

 

The Right to Repair Directive: Extending product lifespans

Also adopted on 13 June 2024, the Right to Repair Directive seeks to reduce waste by promoting the repair of consumer goods both within and beyond the seller’s liability under Directive 2019/771.

The core futures of this new regulation are:

• Obligation to repair: manufacturers, or their representatives, will have to repair products if feasible and if repairability requirements are specified under EU law. Repairs must be reasonably priced or free, with consumers free to choose their repairer.
• Extended warranty: repairs performed during the warranty period automatically extend the commercial warranty by an additional 12 months.
• Enforcement and class actions: member states must enforce compliance through administrative or legal measures. The directive also amends Directive 2020/1828 to allow representative actions addressing repair-related violations.

With member states having to transpose the directive by 31 July 2026, this initiative emphasizes extending product lifecycles, aligning with the EU’s broader sustainability goals.

 

Increased risk exposure: What to expect

These regulations may heighten risk exposure for businesses. The Ecodesign Regulation could lead to more contractual and non-contractual liability actions as compliance expectations grow. Similarly, the Right to Repair Directive might cause an increase in claims for non-compliance with repair obligations, particularly as consumer awareness rises.

These dynamics could affect various insurance products, so businesses have to thoroughly evaluate their risk management frameworks to identify and address potential vulnerabilities.