The European Circularity Industry Is Fighting a Battle with the EU

Written by Simon Bryant

On 28 December, the EU will introduce the Radio Equipment Directive, defining the requirements of the “common charging” solution and requiring phones to support USB-C. Most people agree it’s a reasonable and necessary law to make big companies like Apple use a common standard for cables to help cut down e-waste.

However, on 19 June, a group of over 50 organizations from different sectors of the European circular industry urgently submitted a letter to the EU. The group pointed out a crucial oversight in the directive that would slash the number of used devices available in the region and inadvertently promote sales of brand-new devices over used ones, resulting in significantly higher carbon emissions.

The group is made up of the GSMA and leading companies in the secondary device space including Back Market , refurbed , Easy Cash , Flip , Fnac Darty , 英迈 , Swappie and WeFix , which argue that the EU’s Radio Equipment Directive should clearly distinguish between new and second-hand devices. They emphasize the need to delay the USB-C requirement on second-hand devices until the feature has filtered through to most used devices.

The law has been instrumental in forcing manufacturers to adopt USB-C in new devices, but we estimate that the market lag means that more than 60% of the European second-hand market won’t support USB-C when the ruling comes into force. Although the ban applies only to imported models, CCS Insight predicts that in 2025 it’ll cut two out of five units from supply, or 8 million units worth €2 billion in sales.

This will strain the still-emerging circular industry, which has seen several companies cease trading this year because of tough conditions. It’ll also push trading to unregulated channels and promote “parallel imports” bypassing EU customs. But the main case the group makes is that the move will deprive people of low-cost and perfectly usable premium smartphones, encouraging them to buy new devices over second-hand devices — which should be a conflict of interest for all organizations committed to sustainability.

There are also practical and philosophical impacts on regions outside Europe. CCS Insight research shows that Europe is the leading importer of used phones — primarily obtained from the US but also from Japan and Singapore, as illustrated below. Europe represents a premium market for smartphones from Apple, 三星电子 and 谷歌 .

The situation has also demonstrated Europe’s dependence on devices used in other regions and, ultimately, the non-circular behaviour of consumers and channels in Europe despite being committed to sustainability initiatives. The European telecom industry broadly recognizes that it needs to address low trade-in volume in the region, but it’s still far off the pace of the US and Japan, which generate much higher trade-in volumes.

The European industry is beginning to offer better incentives through trade-in programmes like those offered in the US and initiatives to heighten consumer awareness. Further measures include engaging the enterprise channel and forcing circular behaviour through effective regulation. These efforts will be crucial to improving circularity and ensuring a global supply chain that is sustainable and commercially viable.

This ruling also raises more searching questions about sustainability. For example, how should governments and the industry prioritize reducing e-waste such as cables and cutting carbon emissions from manufacturing and shipping? Is buying second-hand a sustainable practice when the devices are sourced from another continent? Is the EU law overreaching by challenging commercial enterprise and circularity?

But the immediate and fundamental questions are whether the inclusion of used devices was an oversight by the EU and whether this ruling directly harms European commerce and the circular economy. CCS Insight will continue to monitor the market landscape and the impact of regulation through our Pulse tracking service .

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