New EU Ecodesign Rules Targeting Unsold Consumer Products: A Leap Forward for Sustainable Products under ESG

The European Union is advancing its Environmental, Social, and Governance (ESG) agenda by introducing robust regulations targeting the sustainable management of unsold consumer products. Spearheaded by the EU Ecodesign Regulation for Sustainable Products (ESPR 2024/1781), these rules impose new transparency and destruction bans with significant implications for businesses inside and outside the EU.

Key Elements of the New EU Ecodesign Rules

Applicability and Timeline

• Scope: The rules apply to all products placed on the EU market, affecting both EU-based and international enterprises.
• Deadlines:
  • Audited disclosure obligations commence in 2026 (reporting on 2025 data).
  • The ban on destruction of certain unsold products is effective from 19 July 2026.
  • Medium-sized enterprises will have disclosure obligations starting 19 July 2030. ### Objectives
    The ESPR aims to:
• Prevent Wasteful Destruction: Tackling the environmental issue of increasing unsold product destruction fueled by the surge in online sales.
• Create a Level Playing Field: Harmonize regulations across member states to avoid market distortions from varied national laws.

Transparency Requirements (Article 24 ESPR)

Reporting Obligations

Annually, qualifying enterprises must disclose comprehensive data on discarded unsold products, including:

• Quantity and weight of discarded products by category.
• Reasons behind product disposal, including any applicable exemptions.
• Waste treatment methods: reuse, recycling, recovery, or disposal.
• Preventive measures implemented or planned to reduce product destruction.

Disclosure Format and Verification

• Information must be made publicly accessible via the company’s website or sustainability report.
• Enterprises subject to sustainability reporting under the EU Accounting Directive must secure limited assurance from auditors or accredited providers to verify report accuracy.
• Disclosure follows a standardized format categorized into organization details, product-specific information, and preventive measures.

Draft Implementing Act Details

The EU Commission aims to finalize implementing and delegated acts by Q3 2025, setting out:

• Detailed transparency obligations with standardized reporting formats.
• Product classification aligned with the Combined Nomenclature system.
• Clear criteria for justified exceptions to the destruction ban.

Enforcement and Penalties

Member States will enact national penalties for non-compliance. For example, Germany’s penalties under previous ecodesign laws have reached up to EUR 50,000 per infringement, potentially rising based on profits from violations.

Practical Implications for Enterprises

• Businesses must prepare to establish systems for tracking, auditing, and reporting unsold product data.
• The ban on destruction demands exploring alternatives such as redistribution, reuse, or recycling.
• Early compliance planning is crucial to meet the fast-approaching deadlines, particularly for large enterprises.

Conclusion

The new EU Ecodesign rules under ESPR represent a major step in integrating sustainability into supply chain and product lifecycle management. By enforcing transparency and banning wasteful destruction of unsold goods, the EU fosters a circular economy mindset that benefits the environment and creates economic value. Enterprises engaging with the EU market should prioritize compliance strategies now to align with this evolving sustainable product landscape.

Sources:

• European Commission ESPR draft regulations (2024-2025)
• Freshfields Bruckhaus Deringer LLP analysis by Jonas Köster and Tobias Klatt (2025)
• EU Accounting Directive 2013/34/EU
• Combined Nomenclature product classification system

This summary aims to support sustainable business practices and informed compliance with emerging EU environmental regulations.

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