2 May 2017

2025: Product Environmental Footprint (PEF) in practice

The transition to a supply chain that gives consumers complete and accurate product information, and to a consumer who understands that information and knows that their choices really matter.

How great would it be if you could walk into a supermarket and not only be able to compare the prices of products, but also their environmental performance? But how far off is that dream? Perhaps, not so far into the future as you might think. A lot depends on how the European Commission’s Product Environmental Footprint (PEF) method is developed. This framework of principles and requirements has been set up over the past few years to determine the environmental impact of products. The methodology is almost complete, but what still needs to be done to realise this dream by 2025?

This article sets out a scenario in which the European Union, national governments and European industry associations guide the process needed to make it all happen.

Step 1: EU policy and PEF label

The first, essential step is adopting a European policy, for example in the form of an obligation or regulation, on using the PEF method when communicating the environmental performance of products. Given the necessary procedures and the usual sluggish pace of EU decision-making, we estimate that such a policy will be in place no earlier than 2020.
A crucial aspect of such a policy is a PEF label, which must have a consistent design across the whole of Europe. It could be based on environmental classes, like the energy label (A, B, C, etc.), which would have the advantage of being both familiar and credible to consumers. Consumers and food companies should not be burdened with ‘LCA information and methodological aspects’ – leave all that black box stuff to the scientists and consultants like us – but the detailed information on environmental performance must be available to the interested consumer, for example via a QR code.

Incentive schemes such as a reduced VAT rate for products with a PEF label or a VAT exemption for products with an A label, the best environmental performance class, could also have a big influence on producers and consumers alike.

A valuable lesson from the past is the need to have enforcement and/or legal instruments available to prevent any misuse of the label. Verification and validation of claims must be completely reliable and trustworthy to minimise any risk of another ‘dieselgate’.

About PEF

Measuring environmental sustainability of products is a big challenge. There exist many labels, which currently confuses consumers en producers. Therefore, the European Commission proposed to develop a standard method for measuring and communicating environmental performance throughout the life cycle. This method is called Product Environmental Footprint (PEF). The proposed PEF method is a framework of general requirements and principles to measure the environmental impact of products.

Read more about PEF

Step 2: National policy

Efforts will also be required at the national level to make the PEF a success.
A possibility is setting rules for sustainable procurement, for example purchasing only products with a B class or better environmental label. This would be a vital improvement on the current sustainable procurement policy, which in our view has got no further than a label counting exercise. Government authorities often do not have enough in-house expertise to identify misleading environmental claims. Marketing terms like ‘climate neutral’ only cause confusion and in some cases can lead to an unsustainable choice.

Many consumer and labelling organisations, such as Milieu Centraal, BEUC (The European Consumer Organisation) and Stichting Milieukeur, will have to adapt their underlying methodologies and align them with the PEF methods to ensure that all products are assessed in the same way.

Step 3: European industry associations

The European industry associations also have their work cut out.
It will have to adopt a proactive approach, for example by developing PEF standards, default datasets and tools for their members. This will cut costs and make it easier for food companies to truly incorporate PEF into their procedures.

Follow-up actions

Besides governments and industry associations, other organisations will of course be needed to make the PEF a success. For one thing it will be important for food companies to re-examine their own supply chains. This will help them to identify any hotspots and reveal opportunities to improve the environmental performance of products and earn a better PEF label. The quality of the data will be crucial. Company-specific data, for example from partners in the supply chain, are to be preferred, so it may be sensible to include data provision clauses in purchase agreements with supply chain partners.
Steps can also be taken in the retail sector, such as not buying products in certain environmental classes or stacking products with the better environmental labels in the more prominent positions on the shelves.

Also, a good deal of scientific work will be needed to improve the underlying models. A solid foundation for modelling and measuring environmental impact has already been established, but regular updates will be needed to take account of new insights.
Lastly, we should not forget the consumer. The choices consumers make in the supermarket will make a real difference. We are convinced that the PEF will give consumers the information they need to make the right choices. If everyone does their best, then sometime between 2020 and 2030 we should make the transition to a sustainable supply chain that gives consumers complete and accurate product information, and to a consumer who understands that information and knows that their choices really matter.

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Questions about the Product Environmental Footprint project?
Get in touch with Jasper Scholten