Business Advice

Regulatory changes for printers

by FESPA Staff | 28/11/2022
Regulatory changes for printers

Stay on top of the forthcoming regulatory changes that may affect your business.

Despite ongoing global challenges, the outlook for the print sector is promising, with the industry anticipated to reach a value of $337.33bn by 2025 at a compound annual growth rate of 3%. However, this growth will not be realised through a business-as-usual approach, and instead assumes step changes in core operational processes, many of which will be driven by regulatory changes.

For printers already facing a long list of other considerations – economic and environmental – these changes may be viewed as further pressure. For others, however, they represent an opportunity to better align their business with sustainable practices that generate risk resilience, cost savings and competitive advantage that will ensure they thrive in the future. 

For printers in the UK and/or with ties to Europe, there are four key pieces of legislation on the horizon to be aware of.

EU Strategy for Sustainable and Circular Textiles

European consumption of textiles has the fourth highest impact on the environment and climate change, after food, housing, and mobility. It is the third highest sector for use of water and land, and fifth for the use of primary raw materials and greenhouse gas emissions. The European Commission (EC) is working on a cohesive strategy that will ensure that: “By 2030 textile products placed on the EU market are long-lived and recyclable, made as much as possible of recycled fibres, free of hazardous substances and produced in respect of social rights and the environment.”

Some of the strategy’s measures include: 
  • New design requirements for textiles under the Ecodesign for Sustainable Products Regulation
  • Tighter controls on greenwashing under the upcoming Green Claims Initiative
  • A Digital Product Passport based on mandatory information requirements on circularity and other key environmental aspects
  • Action to address the unintentional release of microplastics from textiles
  • Harmonised EU rules on extended producer responsibility for textiles
  • Halting the export of textile waste
  • The co-creation of a Transition Pathway for the Textiles Ecosystem to establish the way forward and set out concrete steps on how to achieve the 2030 goals set by the Textiles Strategy.

The EC is also working on a common industrial technology roadmap on circularity, with financial support for the textile sector's transition available under Horizon Europe's European Partnerships, the LIFE programme, and the Digital Europe Programme for the development of skilled experts.

Directive on Corporate Sustainability Due Diligence, also known as the Mandatory Human Rights and Environmental Due Diligence Directive (mHREDD)

According to the EC, just over one-third of business respondents say that their companies undertake due diligence which takes into account all human rights and environmental impacts, and for the vast majority of these, the due diligence exercise is limited to first tier suppliers. To mitigate the business risks associated with this, in February 2022 the EC released its highly anticipated Draft Directive on Corporate Sustainability Due Diligence.

The Draft Directive sets out duties for companies to undertake due diligence for actual or potential adverse human rights and environmental impacts in their own operations, those of their subsidiaries and established business relationships in their value chains. It largely builds on existing international standards such as the UN Guiding Principles on Business and Human Rights (UNGPs) and the OECD Guidelines for Multinational Enterprises and related guidance.

The Directive applies to both European and non-European companies above a certain threshold: 

  • Large European companies which have more than 500 employees on average and a worldwide net turnover exceeding €150 million in the last financial year
  • After two years the scope will extend to mid-cap European companies which have more than 250 employees on average and a net turnover of over EUR 40 million, provided that at least 50% of this turnover was generated in one or more of three ‘high impact’ sectors. The manufacture and trade of textiles is one of these high impact sectors
  • Non-European companies operating in the EU that generate a net turnover of more than EUR 150 million will also be included. After two years this will be extended to non-European companies that generate a net turnover of more than EUR 40 million, of which 50% is in a ‘high impact’ sector

However, small businesses (including micro companies), which account for the vast majority of all companies in the EU (99%), will be excluded from the duties imposed by the Directive.

Corporate Sustainability Reporting Directive (CSRD)

The CSRD – due to be phased in from 2024 – is designed to directly support the EC’s stated objective of directing investment towards more sustainable activities across the EU. Amending the existing reporting requirements of the Non-Financial Reporting Directive (NFRD), companies meeting the criteria for the Directive will be expected to report on more forward-looking information (including targets and progress); disclose information on intangible factors, such as social, human and intellectual capital; and report in line with the Sustainable Finance Disclosure Regulation (SFDR) and the EU Taxonomy Regulation.

Large companies meeting at least two out of three of the following criteria will be expected to comply:
  • More than 250 employees and/or
  • EUR 40 million turnover and/or
  • EUR 20 million total assets

Listed companies will also be affected, although small and medium listed companies will have an additional three years to comply. 

According to the EC, the legislation is set to impact approximately 50,000 companies – another indicator of the speed at which increased sustainability reporting requirements and standards are sweeping across all sectors.

The Plastics Packaging Tax

The Plastics Tax in the UK came into force in April 2022, and stipulates that companies will be charged for manufacturing or importing plastic packaging components that contain less than 30% recycled plastic. This is currently charged at £200 per tonne.

Despite the regulation’s launch back in April, data shows that just 992 UK businesses registered to pay the tax in the first month of registrations, even though estimates suggest as many as 20,000 businesses are liable. While critics have blamed widespread confusion over the regulation’s complex rules for the slow uptake, it’s important to note that businesses can be held jointly liable with suppliers or customers who fail to pay the tax correctly, and that deliberate failure to comply carries the risk of financial penalties and even criminal charges. It’s therefore vital that print businesses check their obligations.

Getting ready for these regulatory changes – and ensuring you’re in compliance with them – can be challenging. Next, read our guide to anticipating and preparing for legislative change, and staying profitable in the face of a shifting regulatory landscape. 

by FESPA Staff Back to News

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