What does the EU Ecodesign Regulation mean for fashion brands?

The EU Ecodesign for Sustainable Products Regulation (ESPR) came into force on 18 July 2024. One of its provisions is a ban on destroying certain unsold products. Fashion brands will need to adapt their business models and product lifecycles accordingly.

What is the ESPR?

The ESPR (Regulation (EU) 2024/1781) is part of the 2019 European Green Deal and the 2020 Circular Economy Action Plan. It replaces the EU Ecodesign Directive (2009/125/EC) and aims to enhance product traceability, material composition transparency and lifecycle impact reporting. Its scope extends beyond energy-related products to include nearly all physical goods sold within the EU, including components and intermediate products.

The ESPR establishes product-specific requirements aimed at improving the durability, repairability, reusability, recyclability and resource efficiency of consumer products. These requirements affect not only textile and apparel manufacturers and distributors operating within the EU, but also importers of those products into the EU.

How will the ESPR affect fashion retailers?

Alongside the enhanced ecodesign requirements and the introduction of digital product passports for all in-scope products placed on the market or put into service in the EU, the main impact of the ESPR on fashion retailers is likely to come from the requirement for all ‘economic operators’ (manufacturers, authorised representatives, importers, distributors, dealers and fulfilment service providers) to take measures to prevent the need to destroy specified categories of unsold consumer products. This requirement comprises an information disclosure obligation and a destruction ban. The specified categories of products include apparel, clothing accessories and footwear.

What information needs to be disclosed about unsold consumer products and when?

The ESPR requires economic operators to publicly disclose on their website information about unsold consumer products discarded directly or on their behalf. The information must comprise:

• the number and weight of unsold products discarded annually, differentiated by type or category of product
• the reasons for discarding them (and any applicable exceptions
• the proportion of products prepared for reuse (including refurbishment and remanufacturing), recycling, other recovery (including energy recovery) and disposal, in accordance with the ‘waste hierarchy’
• measures taken and planned to prevent the products’ destruction.

The disclosure requirement already applies to large enterprises (250 or more employees, or annual turnover of €50m and annual balance sheet total of €43m), whose first disclosure must cover the unsold consumer products they discard during their first full financial year during which the ESPR is in force. A large enterprise with a 1 January to 31 December financial year will therefore need to make its first disclosure to cover the period 1 January 2025 to 31 December 2025.

The disclosure requirement is extended to medium-sized enterprises (50-249 employees, or annual turnover €10m-€50m and annual balance sheet total €10m-€43m) for their first full financial year starting on or after 19 July 2030.

How will the destruction ban operate?

The ESPR defines ‘destruction’ as the ‘intentional damaging or discarding of a product as waste with the exception of discarding for the sole purpose of delivering the discarded product for preparing for reuse, including refurbishment or remanufacturing operations’. It therefore includes landfill and incineration. The ban applies to large enterprises from 19 July 2026 and is extended to medium-sized enterprises from 19 July 2030.

Are there any exceptions to the disclosure requirements and destruction ban?

Neither the disclosure requirements nor the destruction ban apply to small and micro enterprises (49 or fewer employees and annual turnover and/or annual balance sheet total below €10 million).

The destruction of unsold consumer products is also permissible in certain circumstances:

• health, hygiene and safety reasons
• damage caused to products as a result of their handling, or detected after products have been returned, which cannot be repaired in a cost-effective manner
• unfitness of products for the purpose for which they are intended, taking into account, where applicable, EU and national law and technical standards
• non-acceptance of products offered for donation
• unsuitability of products for preparing for reuse or for remanufacturing
• unsaleability of products due to infringement of intellectual property rights, including counterfeit products
• destruction is the option with the least negative environmental impacts.

What are the potential penalties for non-compliance?

Individual member states must set their own penalties for non-compliance with the ESPR, but as a minimum those must include fines and exclusion from public procurement procedures. Any penalties adopted must have regard to a range of factors, including any economic benefit derived from the non-compliant activity.

What action can brands take?

Fashion brands placing their products on the EU market, particularly those who currently destroy their unsold products, need to adapt their business models and product lifecycle practices to comply with the ESPR. Examples of steps they can take include:

• using artificial intelligence analytics such as data-driven demand forecasting to align production more closely with demand and minimise overproduction
• transforming unsold products into new designs or limited-edition collections, which can maintain brand value and align with circular economy goals
• hosting invitation-only sales to discreetly move unsold stock without affecting brand exclusivity or brand perception
• recycling unsold products for use in new production cycles
• re-releasing unsold stock as part of curated archive collections to appeal to nostalgia or collector demand
• offering customisation services such as personalisation or alteration services to reposition unsold items for sale
• promoting unsold items as timeless rather than seasonal, extending shelf life and marketing opportunities.