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How the AGEC law is influencing merchants in the circular economy? Article

August 1, 2023


The circular economy is an economic model aimed at optimizing the use of resources by promoting the reuse, repair and recycling of products, while minimizing the production of waste. Against a backdrop of growing awareness of environmental issues, the anti-waste law for a circular economy (AGEC) was passed in France in February 2020. This law aims to transform production and consumption patterns by promoting a more sustainable and responsible approach, while establishing an incentive-based legislative framework for this transition. In this article, we'll look at how the AGEC law will influence merchants to embrace the circular economy, highlighting the key measures and opportunities it offers.

Regulatory compliance: a lever for circularity

The AGEC law imposes specific measures on merchants to combat waste and encourage the transition to a circular economy. These provisions oblige them to be more responsible towards their products and their impact on the environment throughout their life cycle. By complying with these requirements, merchants must rethink their practices and adopt more sustainable strategies, thus promoting greater awareness of environmental issues and accountability for their actions.

The first impact of the AGEC law on retailers is regulatory. The new provisions oblige companies to rethink their production and distribution models to reduce waste and encourage recycling and reuse. For example, the law prohibits the destruction of unsold non-food products and encourages their donation or recycling.

In addition, producers, importers and distributors of construction products are now required to contribute to the management of the waste generated by their products. This measure could encourage retailers to opt for more durable, less polluting products, and to set up systems for recovering and recycling end-of-life products.

Economic incentives: stimulating transition

The AGEC law extends the principle of extended producer responsibility to new products, including toys, sporting goods, DIY and gardening items, and electronic cigarettes. This extension means that merchants are more involved in managing the waste from these end-of-life products. To comply with this measure, they must set up collection, sorting and recycling systems for the products concerned. This increased responsibility encourages them to become more involved in the circular economy and adopt more eco-responsible practices.

In addition to regulations, the AGEC law also offers economic incentives to encourage the circular economy. This includes subsidies, tax breaks or grants for businesses that adopt more sustainable production and consumption practices. As a result, retailers who embrace the circular economy could benefit from financial support, making this transition more attractive.

Innovation: the circular economy as a source of creativity

The AGEC law encourages eco-design of products, setting targets for waste reduction and recyclability. Merchants are thus encouraged to rethink the design of their products to make them more durable, easy to repair and recycle. This approach stimulates innovation and encourages the emergence of more environmentally-friendly products, while helping to create a market for better-quality, more sustainable consumer goods.

The AGEC Act can stimulate innovation by encouraging companies to develop new, more sustainable production and distribution methods. The circular economy is not just a constraint; it can also be a source of opportunity and creativity. For example, retailers can consider retail models that focus on reuse, such as depot-sale or rental.

Promoting longer product lifetimes

The AGEC law also aims to encourage longer product life by facilitating repair. Merchants are required to provide consumers with spare parts for a minimum period, thereby extending the useful life of products and reducing the need to purchase new ones. This measure encourages merchants to promote durable and repairable products, thereby encouraging consumers to adopt a more responsible and frugal approach.

The AGEC law also prohibits the destruction of unsold non-food products and limits aggressive promotional practices, such as "2 for 1" offers. These measures are designed to combat waste. Merchants must therefore rethink their commercial strategies and encourage consumers to buy more thoughtfully and sustainably, prioritizing quality over quantity.

In a nutshell...

The AGEC law provides an incentive framework for retailers wishing to commit to the circular economy. This law represents a real opportunity for retailers to actively participate in the transition to a more sustainable and environmentally friendly economy. By embracing these changes, merchants are also helping to create a more resilient and prosperous economy for the future.

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