The ‘E’ of ESG: New EU Ecodesign Rules on Unsold Consumer Products

Overview of EU Ecodesign Regulation for Sustainable Products (ESPR)

The European Union is advancing its environmental sustainability agenda through the implementation of new rules under the EU Ecodesign Regulation for Sustainable Products (EU) 2024/1781 (ESPR). These rules specifically target the management of unsold consumer products—a growing environmental and economic concern linked to retail and online sales. The legislation aims to harmonize practices across Member States, prevent needless waste, and foster transparency in product lifecycle management.

Key Provisions and Deadlines

• Audited Transparency Requirements: From 2026 (based on 2025 data), large enterprises operating in or offering products in the EU market must disclose detailed data annually on unsold products.
• Destruction Ban: Effective 19 July 2026, a ban on the destruction of certain unsold consumer products will come into force.
• Future Expansion: By 19 July 2030, medium-sized enterprises will also be subject to disclosure requirements.

Scope and Applicability

The ESPR regulations apply to all enterprises placing products on the EU market, including those based outside the EU. This broad scope ensures a level playing field and reduces market distortions caused by divergent national rules on product destruction.

Transparency Requirements (Article 24 ESPR)

Enterprises must report annually on:

• Quantity: Number and weight of discarded unsold products by category.
• Reasons for Disposal: Including justifications for any permitted exceptions.
• Waste Treatment: Breakdown of products reused, recycled, recovered, or disposed of.
• Prevention Measures: Actions taken or planned to reduce future destruction of unsold goods.

Disclosures must be made either via an easily accessible webpage or within sustainability reports as per the EU Accounting Directive. Enterprises with subsidiaries may provide consolidated reporting.

Implementation Details

• The EU Commission plans to finalize detailed implementing regulations by Q3 2025.
• The final acts will set standardized disclosure formats for comparability and specify product category classifications.
• Verification by a limited assurance opinion from external auditors will be mandatory for enterprises required to produce sustainability reports, enhancing the credibility of disclosures.

Enforcement and Penalties

Member States are responsible for enforcing these regulations. For example, in Germany, penalties for non-compliance under former Ecodesign laws have reached EUR 50,000 per incident, with potential increases depending on unlawful gains.

Significance for Businesses and Sustainability

The ESPR and its implementing rules signify a pivotal shift towards minimizing waste from unsold products, thereby preserving economic resources and mitigating environmental impact. Businesses engaged in the EU consumer markets must prepare for stringent transparency and compliance requirements with imminent deadlines.

Sources:

• EU Ecodesign Regulation for Sustainable Products (EU) 2024/1781
• Freshfields Bruckhaus Deringer LLP analysis by Jonas Köster and Tobias Klatt
• EU Commission draft delegated and implementing acts (expected Q3 2025)

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