04 Apr 2023
by Raj Takhar

UK supply chain traceability mechanism: The missing link in UK Net Zero goals and Circular Economy ambitions | #techUKDigitalTrade

The traditional linear economic model assumes the ‘take-make-consume-waste’, a trait of the modern industrial era, purchasing raw materials in vast amounts, to produce finished products in large volumes, to obtain economies of scale, to reduce manufacturing costs, achieving lower product prices in order to remain competitive in the marketplace; #techUKDigitalTrade

Fears over the traditional linear economic model, date back over 25 years ago to the Bruntdland report[i], which the need for society adopting a sustainable mindset. The Paris Accord signed in 2015[ii], was a global agreement to limit global warming by reducing the amount of greenhouse gas emissions by 2030, this resulted in the term Net Zero, being adopted as part of strategies and plans from both industry and government’s alike to describe their intentions to reducing greenhouse gas emissions close to zero as possible[iii], in order to achieve this requires changing societal behaviours, for example moving away from energy sources that rely on fossil fuels, resulting in emissions and therefore impact climate change, towards using renewable energy sources that have little or no emissions.

The Circular Economy strongly aligns with Net Zero goals, as it promotes societal use of products which consume less natural resources ergo less emissions, where products should: (i) manufactured using recycled materials, (ii) not contain any hazardous chemicals, unless they are essential, (iii) be reusable, to last longer via repair or refurbishment, (iv) be capable of different ownership models such as leasing or taken back by the manufacturer for repair, refurbishment or recycling activities, (v) be capable of being repurposed to different products meeting new uses, and, (vi) recyclable when entering a waste stream to recover secondary raw materials.

The UK government set out its UK Net Zero goals[iv] in 2020, updated in 2021[v], the UK Net Zero goals have been legally challenged[vi], independently reviewed[vii], and subsequently updated in 2023[viii]. In addition to this several pieces of related UK legislations on: (i) emission rates[ix] (ii) environment[x] [xi], (iii) sustainability disclosures and investment labels[xii], (iv) human rights[xiii], (v) waste[xiv], (vi) chemicals[xv], and (vii) critical raw materials (CRM)[xvi] [xvii], all alluding to some form of monitoring and reporting obligations.

A key pillar missing from the current UK Net Zero and Circular Economy plans, is the lack of a clearly defined strategy on a UK supply chain traceability mechanism, that enables to track the flow of imported or domestic raw materials (substances, mixtures, materials, semi-components) as the enter value chains and then transform into finished products, which may then enter into waste collection and recycling activities.

Not having some form of UK supply chain traceability mechanism results in various illogical assumptions or presumptions being made, based on: (i) information being compiled using basic internet data scrubbing techniques, (ii) the quality of both internal and publicly available data, is likely to be very basic, (iii) applying Machine Learning (ML) and Artificial Intelligence (AI) to the compiled data, may potentially then result in further quality issues, for example using ML and AI for tracing CRMs may work based on minerals into metals logic, but applying the same logic into chemical substances into mixtures in products is very complex. Ultimately this results in poorer quality assessments of potential actions resulting ineffective decision-making outcomes.

Brexit has resulted in implementing pieces of legislation which either (i) clone or mimic EU approaches, or (i) follow the UK’s own approach, the issue here is not understanding the whole emerging EU ‘system of systems’ approach.

Europe, on the other hand, has since publication the EU Green Deal[xviii] in 2019, embarked on announcing several pieces of connected EU strategies, directives and regulations, for example: (i) economic operators that place products on the EU marketplace having to report data on hazardous substances contained within products (articles) to EU central  ‘Substances of Concern In articles as such or in complex objects (Products)’ (SCIP) database[xix], the data is then cleansed, by removing submitter information and made available to waste operators and the public[xx], (ii) hazardous chemicals and mixtures must be reported into the EU Poisons Centre[xxi], (iii) energy powered products legislated under the EU Ecodesign Directive[xxii], traditionally encompassed energy consumption, efficiency, recycling data, are currently being updated to include reporting of product specific ‘scare materials’ which may include CRMs, (iv) amendments proposed to the EU Classification, Labelling and Packaging (CLP) regulation[xxiii] introduce new registration requirements on substances and mixtures which include full substance disclosure and electronic labels, (v) the EU Ecodesign for Sustainable Products Regulation (ESPR) proposal[xxiv] will: (a) apply to all durable goods, where existing product regulations and approval systems will be reviewed in the context of sustainability related information, (b) where the current sustainability information is deemed to be lacking a product specific delegated will appear with detailed reporting requirements, (c) the new required sustainability data will reside on a decentralised blockchain infrastructure maintained by the EU, (d) where information may be submitted by EU and non-EU actors, covering entire value chains, (e) the EU actor would then submit a technical file, which be reviewed by an existing or new EU notified body, and a EU Digital Product Passport (DPP) is then issued. In addition to which, the EU has built integrated enforcement systems and is currently developing digital twin models of both the EU and the world, to model future policy making decisions. This would not have been possible without implementing product traceability mechanism, first.

[i] UN (1987), ‘Our common future’ (Also Known As ‘Brundtland Report), available from: https://digitallibrary.un.org/record/139811

[ii] UN (2022), ‘UN Climate Change: The Paris Agreement’, available from: https://unfccc.int/process-and-meetings/the-paris-agreement.

[iii] UN (2022). ‘For a livable climate: Net-zero commitments must be backed by credible action’, available from: https://www.un.org/en/climatechange/net-zero-coalition.

[iv] UK Gov (2020), ‘The Ten Point Plan for a Green Industrial Revolution’, available from: https://www.gov.uk/government/publications/the-ten-point-plan-for-a-green-industrial-revolution.

[v] UK Gov (2021), ‘Net Zero Strategy: Build Back Greener’, available from: https://www.gov.uk/government/publications/net-zero-strategy.

[vi] ClientEarth (2022), ‘Historic High Court ruling finds UK government’s climate strategy ‘unlawful’’, available from: https://www.clientearth.org/latest/press-office/press/historic-high-court-ruling-finds-uk-government-s-climate-strategy-unlawful/

[viii] UK Gov (2023). ‘UK Net Zero Research and Innovation Framework: Delivery Plan 2022 to 2025’, available from: https://www.gov.uk/government/publications/uk-net-zero-research-and-innovation-framework-delivery-plan-2022-to-2025.

[ix] UK Gov (2019), ‘The Climate Change Act 2008 (2050 Target Amendment) Order 2019’, available from: https://www.legislation.gov.uk/uksi/2019/1056/contents/made.

[x] UK Gov (2020), ‘Environment Bill 2020’, available from: https://www.gov.uk/government/publications/environment-bill-2020.

[xi] UK Gov (2021), ‘Environment Act 2021’, available from: https://www.legislation.gov.uk/ukpga/2021/30/contents/enacted .

[xii] UK FCA (2023),  ‘CP22/20: Sustainability Disclosure Requirements (SDR) and investment labels’ available from: https://www.fca.org.uk/publications/occasional-papers/op-62-improving-consumer-comprehension-financial-sustainability

[xiii] UK Gov (1998), ‘Human Rights Act 1998’, available from: https://www.legislation.gov.uk/ukpga/1998/42/contents

[xiv] UK Gov (2020), ‘The Waste (Circular Economy) (Amendment) Regulations 2020’, available from: https://www.legislation.gov.uk/uksi/2020/904/contents/made.

[xv] UK Gov (2021), ‘The REACH etc. (Amendment) Regulations 2021’, available from: https://www.legislation.gov.uk/uksi/2021/904/contents/made.

[xvi] UK Gov (2022), ‘Resilience for the Future: The UK’s Critical Minerals Strategy’,  available from: https://www.gov.uk/government/publications/uk-critical-mineral-strategy/resilience-for-the-future-the-uks-critical-minerals-strategy.

[xvii] UK Gov (2023), ‘Critical Minerals Refresh: Delivering Resilience in a Changing Global Environment’, available from: https://www.gov.uk/government/publications/uk-critical-mineral-strategy/critical-minerals-refresh-delivering-resilience-in-a-changing-global-environment-published-13-march-2023.

[xviii] EU (2019), ‘The European Green Deal sets out how to make Europe the first climate-neutral continent by 2050’, available from: https://ec.europa.eu/commission/presscorner/detail/en/ip_19_6691.

[xix] ECHA (2023). ‘SCIP’, available from: https://echa.europa.eu/de/scip.

[xx] ECHA (2023), ‘WFD SCIP Database’, available from: https://echa.europa.eu/scip-database.

[xxi] ECHA (2023), ‘Poisons Centre’, available from: https://poisoncentres.echa.europa.eu/home.

[xxii] EU (2009), ‘Framework for setting ecodesign requirements for energy-related products’, available from: https://single-market-economy.ec.europa.eu/single-market/european-standards/harmonised-standards/ecodesign_en.

[xxiii] EU (2023), ‘Revision of the EU Regulation on classification, labelling and packaging of substances and mixtures’, available from: https://www.europarl.europa.eu/thinktank/en/document/EPRS_BRI(2023)740223.

[xxiv] EU (2022). ‘Proposal for Ecodesign for Sustainable Products Regulation’, available from: https://environment.ec.europa.eu/publications/proposal-ecodesign-sustainable-products-regulation_en.

thumbnail.png 3



Raj Takhar

Regulatory and Sustainability Expert, Assent Inc