New EU Ecodesign Rules Targeting Unsold Consumer Products: Enhancing ESG through Sustainability

The European Union is strengthening its Environmental, Social, and Governance (ESG) framework by introducing rigorous new rules under the Ecodesign Regulation for Sustainable Products (EU 2024/1781, ESPR). These measures focus on unsold consumer products, aiming to curb wasteful destruction and promote circular economy principles across the EU market.

Scope and Key Objectives

• Applicability: The rules apply to all consumer products placed on the EU market, impacting enterprises both inside and outside the EU that sell to EU consumers.
• Deadline Highlights:
  • Audited disclosure requirements begin in 2026, covering data from 2025.
  • The destruction ban for certain unsold products starts on 19 July 2026.
  • Medium-sized enterprises face expanded disclosure duties from 19 July 2030. The EU Commission targets harmonization to eliminate market distortions caused by disparate national laws on unsold product destruction. The regulation addresses the widespread environmental and economic concerns tied to systematic product destruction, which has grown with online sales.

Transparency Requirements (Article 24 ESPR)

Large and medium-sized enterprises must annually disclose information on unsold products they dispose of, including:

• Quantity: Number and weight of discarded products, sorted by product type/category.
• Reasons: Justifications for disposal, including any applicable regulatory exemptions.
• Waste Treatment Methods: Proportions of products prepared for reuse, recycling, recovery, or disposal.
• Prevention: Current and planned measures to avoid future product destruction.

Disclosure Format and Verification

• Information must be easily accessible via the company’s website or embedded in sustainability reports according to the EU Accounting Directive.
• The EU Commission encourages consolidated disclosures by parent enterprises when relevant.
• Disclosures must follow a standardized format defined in the upcoming implementing act, which includes organizational data, product details, reasons for disposal, waste treatment methods, and preventive measures.
• Enterprises obligated to produce sustainability reports must obtain a limited audit assurance from qualified auditors to verify the accuracy of disclosures.

Ban on Unsold Product Destruction (Article 25 ESPR)

Along with transparency, the regulation enforces a near-total ban on systematic destruction of unsold consumer goods, subject to justified exceptions outlined in upcoming delegated regulations. This harmonized legal framework aims to phase out environmentally harmful destruction practices and incentivize circular economy solutions.

Penalties and Enforcement

Member States are responsible for national enforcement mechanisms, including penalties for non-compliance. For instance, Germany’s previous ecodesign penalties could reach up to EUR 50,000 per violation, potentially higher if non-compliance yields profitable unfair advantages.

Practical Implications for Businesses

• Urgency: Especially for large enterprises, compliance deadlines are imminent even before these draft regulations are officially adopted.
• Global Impact: Foreign companies marketing products in the EU must align with these new standards, underscoring the EU’s leadership in sustainable product governance.
• Strategic Adjustments: Businesses must prepare enhanced reporting systems, align internal processes for waste management, and innovate to prevent unsold goods destruction.

Conclusion

The EU’s new Ecodesign rules under ESPR mark a significant advancement in embedding sustainability into product lifecycle management, emphasizing transparency, accountability, and waste prevention. For enterprises, aligning with these regulations is critical to meeting rising ESG expectations, avoiding penalties, and contributing to a circular economy that preserves both environmental and economic value.

References:

• EU Ecodesign Regulation for Sustainable Products (EU 2024/1781)
• EU Commission draft delegated and implementing acts (expected Q3 2025)
• EU Accounting Directive 2013/34/EU
• Freshfields Bruckhaus Deringer LLP analysis on ESPR by Jonas Köster, Tobias Klatt et al.

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