Author: Vivian S. C. Tunn
Adding bio-based products and materials to statistical classifications

3. Changing and adding codes to the PRODCOM list

The findings presented in this section are based on desk research and interviews with PRODCOM experts working at organisations such as Statistics Netherlands and Eurostat.

3.1 What are PRODCOM codes and who governs them?

The PRODCOM list provides codes to label products manufactured in European countries for the EU production statistics. This list is governed by Eurostat. Some PRODCOM headings refer to industrial services (finishing, installation and maintenance etc.). The term PRODCOM comes from the French PRODuction COMmunautaire (Community Production). PRODCOM covers mining, quarrying and manufacturing: sections B and C of the Statistical Classification of Economy Activity in the European Union (NACE 2). “The purpose of PRODCOM is to inform the European business sector (including business associations, business consultants, and firms), the Commission, and the DG’s of for example Environment, Enterprises, Industry, Agriculture, Business Negotiation and Competition, on the EU supply of industrial products.” (see the PRODCOM User Guide, European Commission, 2017)

Table 02Table 2 Structure of statistical codes of the PRODCOM list D i g i t # 1 2 3 4 5 6 7 8 G o ve r n ed b y Corresponds t o N AC E classification Corresponds t o N AC E classification Corresponds t o N AC E classification Corresponds t o N AC E classification Corresponds t o CPA classification Corresponds t o CPA classification PRODCOM specific, governed at EU-level by Eurostat PRODCOM specific, governed at EU-level by EurostatTable 2 Structure of statistical codes of the PRODCOM listDigit # 1 2 3 4 5 6 7 8 Governedby Correspondsto NACE classification Correspondsto NACE classificationCorrespondsto NACE classificationCorrespondsto NACE classificationCorrespondsto CPA classificationCorrespondsto CPA classificationPRODCOMspecific,governedat EU-levelby EurostatPRODCOMspecific,governedat EU-levelby Eurostat
 

Some recent changes have been made to the PRODCOM list to improve capture of circular economy products and services. More specifically, codes for secondary raw materials have been added, namely 38.32.20.00 Metal secondary raw materials and 38.32.30.00 Non-metal secondary raw materials (based on NACE section E). These two codes have been adopted from the CPA classification; however, these are the first two codes from this section of the CPA that have been added to the PRODCOM list.

The first steps towards better representation of bio-based products in statistics were taken in 2016, when three dedicated codes for bio-based products were introduced in the CN and PRODCOM classification systems: bio-based lubricants (PRODCOM code 20.59.41.59), succinic acid (20.14.33.82) and 1-4 butanediol (20.14.23.38). The proposals to include these products date back to recommendations by the Renewable Raw Materials (RRM) Group to DG TAXUD. In this case, it took one to two years from submitting the proposals until approval. One reason for this was that the majority of the proposals were initially rejected by the Member States within the PRODCOM Working Group and were then resubmitted by DG GROW. These examples show that there is an interest at the European level to cover this type of activities better in statistical classifications.

3.2 Official guidelines for the use and alteration of PRODCOM codes

The PRODCOM survey has to fulfil three conditions:

  • in each reporting country at least 90 percent of production in each (4-digit) class of relevant NACE classes must be recorded
  • all enterprises with 20 or more employees in each NACE class should be covered
  • if a Member State’s production in each NACE class represents less than 1 percent of the Community total, then data for the headings in that class do not need to be collected. In this case production should be reported as zero.

The PRODCOM list has an irregular revision schedule. The latest PRODCOM list became applicable as of 1 January 2019 (European Business Statistics Manual, Eurostat, 2021a). Until 2017 the PRODCOM list was revised yearly. The list is now revised irregularly with the aim to preserve and improve its relevance.

“Currently there are almost 3,900 products available in the PRODCOM list and it was agreed by the PRODCOM Working Group of November 2016 to keep the list stable and update it only with the frequency required by the technological changes in the industries and as driven by the related nomenclatures (i.e. the PRODCOM list will be updated if the NACE and the HS/CN classification are updated).” (PRODCOM user guide, 2017).

3.3 Steps for proposing and introducing new PRODCOM codes

  1. Initiation of revision and suggestions for changes (revision roughly every 2 years)
    a. EC DGs can propose new PRODCOM codes in response to identified emerging trends that need to be captured.
    b. NSIs of the EU Member States can propose new codes.
    c. PRODCOM group members can propose the merging, splitting or clarification of codes.
    d. Business associations can also propose new codes.
    e. Changes in CPA, NACE, or CN codes (e.g. merge, split, reorganisation) can trigger changes in the PRODCOM list.
  2. Submission of proposed changes
    a. Proposals are submitted to the PRODCOM working group.
  3. Evaluation of proposals and decision (steps and criteria)
    a. Evaluation steps:
    i. Internal consultation: organisations of the European Commission provide their feedback on the proposed changes.
    ii. There is a PRODCOM Working Group and a PRODCOM Task Force, both with roughly the same members. The PRODCOM Task Force is a technical group that discusses proposals and implications of changes to the NACE and CPA classifications. This Task Force usually meets once a year around June. The PRODCOM Working Group meets once a year around November and decides which codes should be added or removed. In these meetings proposals are discussed and voted on. Proposals supported by a qualified majority of one these committees proceed to the next step.
    iii. The Commission submits a draft of measures to the Council of the European Union and the European Parliament.
    iv. Member States vote formally (weighed by population).
    b. Evaluation criteria:
    i. Relevance of codes: new codes should correspond to needs of policy users (e.g. governments, DGs etc.) and be meaningful for policy.
    ii. Economic value and volume of production of proposed new code.
    iii. Feasibility: it needs to be practically feasible for companies to report on the proposed code.
    iv. Corresponding CN codes: the new PRODCOM codes should correspond with existing CN codes as there are quite some waste material CN codes. In general, the PRODCOM Working Group tries to avoid splitting codes further than the corresponding CN codes.
  4. Publication and implementation
    a. As PRODCOM revisions are irregular events, there is no fixed date for the publication and coming into force of the updated PRODCOM list.
    b. The revision that is taking place in 2021 will come into force in 2022.

Figure 01Figure 1 Process of proposing and introducing new PRODCOM codesFigure 1 Process of proposing and introducing new PRODCOM codes

3.4 Interrelation with other classifications

The PRODCOM is partly based on the NACE and CPA classifications and will thus follow changes made to these classifications.

NACE (Statistical classification of economic activities). The products in the PRODCOM list are those related to activities listed in sections B and C of the NACE classification. The first four digits of the PRODCOM codes correspond to the NACE.

CPA (Statistical classification of products by activity). The first six digits of the PRODCOM codes correspond to the CPA codes.

CN (Combined Nomenclature). Most eight-digit PRODCOM codes have a (near) complete reference to the CN. A complete reference means full comparability between data from PRODCOM and data from foreign trade classified by the CN (PRODCOM user guide, 2017). Each PRODCOM heading normally corresponds to one or more CN codes.

3.5 Recommendations for proposing new PRODCOM-codes

  • Consider whether the proposed codes could be implemented in practice and whether companies could actually report on them accurately.
  • Ideally one proposal would include a very limited number of suggestions for new codes (for example three to five new codes).
  • One challenge for bio-based materials is that there are very few CN-codes for bio-based products and materials while the CN is usually more detailed than the PRODCOM. PRODCOM Working Group members are generally reluctant to accept PRODCOM codes that are more detailed than the corresponding CN codes.
  • For research groups it would be preferable to submit a proposal via an NSI.
  • As materials are usually not considered in the PRODCOM codes, a strong case needs to be made for why codes should be split into a bio-based and a non-bio-based code.
  • The CPA classification is generally more detailed; check this classification for relevant codes. The process of defining a code and connecting it to other classifications can be easier if the code already exists in other classifications.
  • In practice proposals often go through several iterations before they are potentially  eventually implemented.