Increased EU LED Energy Efficiency Standards Spells Bad News for Small Manufacturers

The EU has recently issued the newest LED lighting product energy efficiency regulations which will take effect September 1st. According to the regulations, all LED exports to Europe must meet the new energy efficiency standards. The EU has set up three stages that will be implemented in three year increments slowly increasing energy efficiency standards for LED lighting.

Industry insiders analyzed that some LED industries which export to Europe will have an increase in cost while some small and medium sized industries will run into financial difficulties. In the past few years, LED product prices have dropped leading to rapid increases in sales volumes making more and more companies flood into the LED market. However, the ever increasing competiveness of the market leads to an increasing demand for high quality energy efficiency. This has caused industries to move towards a survival of the fittest mentality which Chinese manufacturers like Elec-Tech, San’an, Foshan, Cnlight, and KINGSON believe is a needed for market development.

New EU Standard Leads to Rise in Cost

The new LED energy efficiency standards will be implemented in three stages: stage one on September 1st 2013, stage two September 1st 2014, and the final stage on September 1st 2016. During the second stage, energy efficiency index requirement will be 0.2. After the employment of the new standard, verification and sampling costs for a single product must increase to about NT $10,000. 

Insiders point out that the new standard set by the EU will not have a large effect on big companies whose technology standards are already high. Instead, those that will feel the biggest impact will be smaller companies, especially those who sacrifice product quality for lower prices.

The implementation of the new regulations issued by the EU will increase cost for export manufacturers and add market pressure. From a different perspective, this will also lead to the industry adding more regularity. In order to reach the new standard in energy efficiency set by the EU, export production costs must increase 20-30 percent. LED lighting currently still remains in the initial stages of development. Industries that lack the technology, products, and market superiority to meet the new standard could possibly slowly drop out of the market. 

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