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

Overview of the EU Ecodesign Regulation (ESPR)

The European Union is advancing its sustainability agenda through new implementing rules under the EU Ecodesign Regulation for Sustainable Products (ESPR) 2024/1781. These rules, being finalized by the EU Commission, introduce stringent transparency requirements and a destruction ban focused on unsold consumer products. This regulation aims to minimize environmental harm and economic waste linked to discarding unsold goods, particularly driven by the increase of online sales.

Key Objectives and Scope

• Environmental Impact: ESPR seeks to prevent the widespread destruction of unsold consumer products, which the EU identifies as a significant environmental challenge and a loss of valuable resources.
• Market Harmonization: Due to differing national laws in EU Member States creating market distortions, ESPR establishes common rules and incentives throughout the EU.
• Applicability: The rules apply to all products placed on the EU market, regardless of whether the respective businesses operate inside or outside the EU.

Timeline and Compliance

• Current Status: ESPR has been effective since 18 July 2024, though major obligations rely on upcoming delegated and implementing acts, expected by Q3 2025.
• Deadlines:
  • Audited disclosure requirements start in 2026 (covering 2025 data).
  • The destruction ban becomes enforceable from 19 July 2026.
  • Medium-sized enterprises face disclosure obligations starting 19 July 2030.
• Penalties: Non-compliance penalties vary by Member State, with Germany, for example, imposing fines up to €50,000 per incident or higher based on profits realized.

Transparency Requirements under Article 24 ESPR

Large enterprises are required to annually disclose detailed data on unsold products they discard, including:

• Quantitative Data: Number and weight of unsold consumer products discarded, categorized by product type.
• Reasons for Disposal: Explanation of discarding causes and applicable exceptions.
• Waste Treatment: Breakdown of products sent for reuse, recycling, recovery, or disposal.
• Prevention Measures: Efforts taken and planned to avoid future destruction of unsold goods.

Disclosure Format and Verification

• Reports must be accessible either on an enterprise’s website or within their sustainability report under the EU Accounting Directive.
• Parent companies may consolidate disclosures covering subsidiaries.
• A standard disclosure format will be mandated to ensure consistency, with detailed reporting sections on organizational data, product info, waste treatment, and preventive plans.
• Statutory auditors or accredited assurance providers must give a limited assurance opinion verifying report accuracy for entities subject to sustainability reporting obligations.

Conclusion

The forthcoming ESPR implementing rules mark a significant step towards enforcing environmental responsibility in product lifecycle management across the EU. Enterprises marketing goods in the EU must prepare to comply with stringent transparency measures and embrace sustainable practices aimed at drastically reducing waste from unsold consumer products. Early preparation is essential for large businesses to meet the demanding 2026 deadlines and avoid penalties.

Sources:

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

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