EU Sustainability: State of Play – Circular Economy and Product-Related Frameworks

Date: October 15, 2025
Source: Latham & Watkins LLP

Overview: The EU’s Circular Economy Ambition

The European Union (EU) is advancing its circular economy framework to transform product policies for sustainable resource use, waste minimization, and global leadership in sustainability. Central to this vision is shifting from a traditional linear economy—take, make, dispose—to one emphasizing reuse, repair, and regeneration of materials throughout product lifecycles.

The initiative is closely aligned with the European Green Deal, which mandates climate neutrality by 2050 and at least a 50% reduction in emissions by 2030 under European Climate Law.

Circular Economy Action Plan (CEAP)

• Adopted: March 2020
• Role: A pillar of the European Green Deal, CEAP introduces legislative and non-legislative measures targeting sustainable production, use, and recycling of products across key sectors such as packaging, batteries, electronics, textiles, and construction—areas with high environmental impact and strategic material dependencies.

CEAP Objectives:

• Embed circularity in product design and manufacturing.
• Extend product durability, reparability, and recyclability.
• Promote resilient secondary raw material markets to reduce reliance on imports.
• Foster EU-wide collaboration in innovation, research, and standards development.

Sustainable Product Policy Framework

Ecodesign for Sustainable Products Regulation (ESPR)

• Adopted: June 13, 2024
• Scope: Applies ecodesign requirements to all physical products on the EU market, a significant expansion from the prior focus on energy-related goods. The ESPR supports the Green Deal and CEAP targets by boosting product sustainability across the entire lifecycle.

Key Measures Under ESPR:

• Comprehensive ecodesign standards: Requirements focus on durability, reparability, recycled content, and energy efficiency.
• Digital Product Passport (DPP): A digital identity system providing transparent environmental data on products, components, and materials to all stakeholders including consumers and regulators.
• Ban on destruction of unsold goods: Starting July 2026 for large companies (July 2027 for medium-sized), particularly targeting textiles, leather, and footwear to reduce waste—subject to certain derogations for health, safety, or legal reasons.
• Green Public Procurement: Mandatory environmental criteria for public sector purchasing to promote sustainable products.

Ecodesign Requirements and Implementation

The ESPR introduces “ecodesign requirements” aimed at:

• Enhancing product lifespan and the ability to repair and reuse.
• Lowering the usage of hazardous substances.
• Reducing the carbon and environmental footprint.

A phased implementation is planned through delegated acts targeting priority products including iron, steel, aluminum, textiles, garments, footwear, and tyres. Compliance with these requirements is mandatory for products placed on the EU market.

Digital Product Passport (DPP)

• Function: Enables end-to-end traceability and transparency throughout product life cycles with unique product IDs.
• Accessibility: Data will be available to manufacturers, importers, distributors, recyclers, and consumers according to their access rights.
• Registry Launch: A central DPP registry will be operational by July 2026, facilitating enforcement and market surveillance.
• Obligations: Manufacturers and market operators must ensure DPP compliance and data accuracy. The scheme includes imported products to maintain fair market conditions.

Conclusion

The EU’s evolving sustainability and circular economy frameworks, notably through the CEAP and ESPR, present comprehensive and enforceable policies designed to create a resilient, resource-efficient economy. These measures intertwine legislative rigor with innovations like the Digital Product Passport to promote transparency, reduce waste, and support sustainable product design and consumption in line with the EU’s ambitious climate and environmental goals.

For businesses and consumers alike, these developments signal an important shift toward sustainable production and consumption that will shape the European market and influence global ESG standards for years to come.

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