ESPR

What it is

The Ecodesign for Sustainable Products Regulation (Regulation (EU) 2024/1781) entered into force on 18 July 2024 as the successor to the 2009 Ecodesign Directive. Where the original directive was limited to energy-related products, ESPR extends ecodesign requirements to virtually all physical products sold in the EU. The regulation establishes a framework under which the Commission adopts product-specific delegated acts setting requirements for durability, repairability, recycled content, recyclability, carbon and environmental footprint, and information provision. ESPR also provides the legal basis for the Digital Product Passport (DPP) system.

A provision with immediate commercial relevance to fashion is the ban on destruction of unsold consumer textiles and footwear. For large companies (exceeding two of three criteria: balance sheet above €20M, net turnover above €40M, average employees above 250), this ban applies from 19 July 2026. Medium-sized companies with more than 50 employees and more than €10 million turnover face the same ban from 19 July 2030. Micro and small enterprises are permanently exempt. The textile and footwear sector delegated act setting performance-based ecodesign standards is expected in 2027.

Who it affects

The unsold goods destruction ban applies to any large company placing textile or footwear products on the EU market, whether a manufacturer, importer, or retailer. The threshold uses the EU accounting definition, meaning a brand with 300 employees and €50 million turnover is a large company subject to the 2026 ban even if it would be considered small by fashion industry standards. Affected companies must have disposal practices for overstock and end-of-season inventory that do not involve destruction, including incineration without energy recovery, landfill, or similar terminal disposal methods.

Permitted alternatives to destruction include donation, resale through secondary channels, textile collection infrastructure, or industrial recycling. The regulation does not mandate a specific alternative but requires that the chosen alternative does not amount to destruction. Companies that currently destroy unsold inventory as a brand equity protection measure face the most significant operational change. Large retailers with high volumes of clearance inventory face logistics challenges in redirecting stock away from destruction at scale.

Key economic implications

The immediate commercial impact of the unsold goods ban is on inventory management economics. Fashion's overproduction model has historically treated destruction as a cost-efficient alternative to markdown selling or outlet distribution, avoiding the brand dilution or secondary market price erosion that discounting can cause. Eliminating destruction forces a reassessment of either production planning (reducing overstock creation) or distribution strategy (building relationships with donation partners, resellers, recyclers, or franchise operators in new markets). Neither path is cost-free.

The longer-term ESPR textile delegated act, expected in 2027, will establish product performance standards that fundamentally change product design economics. Requirements for minimum recycled content, durability benchmarks, and recyclability specifications would require reformulation of products currently designed without these parameters, with cost implications across materials sourcing, research and development, and potentially retail pricing. Brands that have already built product durability and material circularity into their design process are better positioned to comply with minimal incremental cost.

ESPR's DPP mandate creates a longer-term cost that is difficult to estimate before the textile delegated act is published. DPP data requirements, the registry infrastructure, and the audit obligations attached to DPP claims will establish a per-SKU compliance cost. For high-volume, high-SKU-count fashion businesses, this could represent a meaningful overhead; for lower-volume premium brands, the cost per unit is higher but the strategic value of verified data is greater.

Where things stand

ESPR is in force. The unsold goods destruction ban for large companies takes effect 19 July 2026. Companies approaching this deadline should have alternative inventory management protocols operational before that date; the regulation does not provide a grace period. The textile ecodesign delegated act is expected in 2027 and will establish performance-based product standards. The Commission published its ESPR working plan in 2024 indicating textiles as a priority category. Monitoring the delegated act drafting process, including public consultations and impact assessments, is the most important near-term intelligence task for fashion brands.

Official sources

• Regulation (EU) 2024/1781, Official Journal 28 June 2024 — https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202401781