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 introducing significant new rules under the Ecodesign Regulation for Sustainable Products (EU) 2024/1781 (ESPR), targeting how unsold consumer products are managed. These regulations aim to promote sustainability by reducing waste, enhancing transparency, and preventing the destruction of unsold goods across all enterprises placing products on the EU market, regardless of their location.

Key Objectives

• Prevent destruction of unsold products: The EU recognizes the environmental harm and economic waste caused by the widespread destruction of unsold consumer goods, especially given the growth of online sales.
• Harmonize regulations across Member States: Existing national laws vary and risk market distortions; a unified EU framework ensures consistent rules and enforcement.
• Enhance transparency and accountability: Enterprises will face audited disclosure requirements detailing disposal practices and preventive measures.

Implementation Timeline and Scope

• In force since 18 July 2024: ESPR is active, but several critical provisions await detailed delegated and implementing acts, expected by Q3 2025.
• Disclosure obligations:
  • Beginning 2026 (based on 2025 data), large enterprises must report annually on unsold product disposals.
  • Medium-sized enterprises will have similar obligations starting from 19 July 2030.
• Destruction ban: Prohibits destruction of unsold consumer products from 19 July 2026, with some exceptions.

Disclosure Requirements (Article 24 ESPR)

Enterprises must annually disclose via their website or sustainability reports the following:

1. Quantity and category: Number and weight of discarded unsold products, categorized by product type.
2. Reasons for disposal: Detailed explanations and applicable exceptions.
3. Waste treatment methods: Extent of reuse, recycling, recovery, or disposal.
4. Prevention measures: Actions taken or planned to reduce future destruction.

Large enterprises must obtain limited assurance from auditors regarding this data to ensure accuracy.

Draft Implementing Act Details

The EU Commission’s draft implementing regulation further clarifies:

• Standardized reporting format: Information structured into organization details, product data, and preventive strategies to improve comparability.
• Product categorization: Based on Combined Nomenclature codes for clear classification.
• Verification: Auditors must provide limited assurance for disclosures included in sustainability reports.

Enforcement and Penalties

Member States will establish penalties for non-compliance. For example, Germany previously imposed fines up to €50,000 per incident under the former Ecodesign Directive, potentially higher depending on profits derived from violations.

Practical Implications for Businesses

• Enterprises selling products in the EU must prepare for transparency and reporting duties, including companies outside the EU.
• Early adaptation is critical as deadlines approach swiftly.
• Businesses should review and enhance their product life cycle and waste management practices to comply and minimize unnecessary destruction.

Sources & Further Reading:

• European Commission draft delegated and implementing acts (expected Q3 2025)
• EU Accounting Directive 2013/34/EU
• Freshfields Bruckhaus Deringer LLP analysis by Jonas Köster, Tobias Klatt, Juliane Hilf, and Sam Houshower

This evolution in EU sustainable product regulations reflects a growing commitment to environmental responsibility and economic efficiency under the ‘E’ pillar of ESG, marking an important step towards waste reduction and greater corporate transparency in the consumer goods sector.

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