Good practice:

Financial support businesses for applying the European ecolabel

Environmental Investment Centre (EIC) is one of the main funders of environmental projects in Estonia. With the support of various funds, the EIC has helped to implement activities within the scope of different ministries in Estonia for over 20 years.

Ecolabels are the environmental management tools that allow the producers to communicate about the low environmental impact of their products. As ecolabels are certified by a third party, they are more trustworthy than self-declared labels. Conforming the strict environmental criteria set for product groups ensures that each eco-labelled product is environmentally friendly throughout its life cycle. This is especially useful in public procurement, as procurers can easily refer to ecolabel criteria in their procurement documents when they purchase environmentally sound products and services. Ecolabels also help the suppliers to easily verify that the procurement criteria are met.

Since 2014 The EIC has had a program to support the companies acquiring European Ecolabel to cover the expenses of the activities related to the application of European Ecolabel. It is possible to get support for developing the products, lab tests, hiring experts and cover the costs of application. The funding program covers 50% of the costs, the rest must be co-financed by the company.

This supporting scheme supports the implementation of environmental policy and contributes to better uptake of green public procurement.

Financial and human resources are needed for building up and operation as well as the promotion of the financial scheme. If the scheme is part of the existing programme, the resources needed are relatively lower. The projects vary between 10 -40 thousand €, depending on the no of products included.

There have been several companies getting the support to acquire ecolabel for more than 20 products (cleaning and cosmetic products and paints).

Even though the programme has been in place for several years now, it has been utilised only by few companies due to:
• The demand for ecolabel is low both at private and public sector
• General environmental awareness and performance is low among the companies.

Applying ecolabel is a process that requires quite a lot of resources. The process includes many stages that require investment before the ecolabel can be acquired. First, the development of the products that conform the criteria of the ecolabel is needed. Usually, it is not possible with minor changes in the formula or production process but requires some extensive changes or involves developing a completely new product. Secondly, there is a need to carry out several laboratory tests to prove that the product conforms the ecolabel criteria. Thirdly, there might be a need to hire external expertise related to the ecolabel application process and to finalise all the necessary documents.
As resources are needed for all these stages, some companies might not go through the whole process because they do not have enough resources for that, especially in case of SMEs. Such funding program would allow for higher uptake of ecolabels.