EU Ecodesign Regulation: new sustainability requirements for products

Taking years to finalise, last week the European Parliament signed off on an agreement that establishes a new framework to shape the design, sale and disposal of products including textiles, furniture, steel and chemicals: the Ecodesign Regulation for Sustainable Products (ESPR). Following endorsement by the European Parliament, the ESPR will enter into force in the coming months.

The ESPR replaces the existing Ecodesign Directive (in force since 2009) with a new harmonised and much more comprehensive framework that ensures products placed on the market in the EU are produced more sustainably, labelled appropriately and easier to recycle. This includes consumer and industrial goods, but excludes food, vehicles, medicinal and veterinary products, amongst other exemptions.

Here we look at some of the main provisions adopted and detail the next steps for the ESPR. 

Scope

The ESPR applies to “any physical good” that is placed on the EU market or put into service, irrespective of its origin – and hence includes goods placed by non-EU market participants. In doing so, the ESPR moves beyond the more limited energy-related scope of the original Ecodesign Directive. Essentially, any product not already covered by its own product-specific laws falls within the scope of the ESPR. Notable exceptions include food, medicinal products and living plants.

The ESPR itself does not establish specific sustainability requirements for products. Rather, the European Commission is empowered to adopt delegated acts in which these details are spelled out. The first delegated act may not come into force until one year after the ESPR has come into force itself. 

The European Commission is required to focus on establishing acts for the following products: iron, steel, aluminium, textiles (notably garments and footwear), furniture, tyres, detergents, paints, lubricants and chemicals. Preparatory work has already started by the European Commission on textile requirements , which will outline priority products every three years in a dedicated workplan. 

Sustainable by design

Products sold on the EU market will need to be more ‘circular’ in the future, with improved material and resource efficiency, recyclability and repairability, higher share of recycled content included in new products and fewer substances of concern employed. However, different products will be subject to different sustainability requirements and there is no one-size-fits-all approach. Rather, these details will be spelled out in the delegated acts to be prepared by the European Commission.

Digital Product Passport 

To ensure compliance with the new design requirements, the ESPR establishes the Digital Product Passport (DPP), a single, digital entry point to access product information throughout the product life cycle, on a need-to-know basis. Companies will be able to use the DPP to showcase the environmental impact of their products (e.g. energy efficiency score, availability of spare parts), whilst customs authorities will use the DPP to ensure technical documentation is included. The DPP will be linked to a product or component, accessed via a unique product identifier. Secondary legislation will have to be developed by the European Commission to set out rules and requirements for DPP service providers by the end of 2025. The DPP is a newly introduced traceability and disclosure tool that is required under several new items of legislation proposed by the EU.

Ban on destruction of textiles

Subject to much discussion during the legislative process, the ESPR also introduces a ban on the destruction of unsold apparel, clothing accessories and footwear, which will come into effect two years after entry into force of the ESPR (i.e. by mid-2026). Some exceptions will be introduced for SMEs and other scenarios, such as for health, hygiene and safety reasons. These exemptions will be outlined in secondary legislation. The ban on the destruction of unsold textiles could also be expanded to other products in the future, including small electronics, with any product extension subject to an assessment by the European Commission. 

Those economic operators discarding any unsold textile goods will face due diligence requirements in the form of annual reporting obligations. Companies will have to report unsold goods on their website and will be encouraged also to report in their CSRD submissions. Information must include the number and weight of textiles discarded per year, differentiated by category of products, as well as information on the fate of items (e.g. re-used, recycled, incinerated). First disclosure would cover unsold goods in the first full financial year of ESPR being in force. 

To ensure compliance, market surveillance authorities are expected to beef up their efforts to monitor products entering the market. 

Penalties

Member States will have to implement national laws on penalties for non-compliances. While penalties may differ in the respective Member States, fines and exclusion from public procurement have to be established as a minimum requirement. National legislators may however add other measures (e.g., criminal sanctions). When establishing penalties Member States have to ensure that a variety of criteria set by the ESPR are reflected, which include inter alia the financial situation of the person responsible (indicated for example by total turnover), the economic benefits from the non-compliance and the environmental damage caused.

What happens next? 

The ESPR is due to be published in the Official Journal of the EU and enter into force by July 2024. The first delegated acts spelling out specific Ecodesign requirements may not come into force until one year later, so these should be expected for the second half of 2025. The first Ecodesign requirements are expected to apply to textiles and steel, which may enter into force by mid-2027.  

In addition, the EU is expected to publish a three-year working plan prioritising Ecodesign requirements per product in March 2025, providing further guidance as to when products will come under increased scrutiny. The timeline below shows the dates when secondary legislation under the ESPR will be published. 

What should I be thinking about now?

For many industries, the ESPR will be a gamechanger with respect to the handling of their products. For instance, the textiles sector will be heavily affected by these new rules requiring a rethink of traditional business models and operations. That said, more stringent Ecodesign requirements will not apply overnight and there is in fact more work to be done by the European Commission to draw up specific Ecodesign requirements. Nevertheless, given design and production cycles, manufacturers of products, especially those on the European Commission’s priority list, should begin to familiarise themselves with the ESPR’s requirements now and assess what needs to be done to ensure their products are compliant. Otherwise they could risk losing access to the EU market.