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

Overview

The European Union is introducing stringent regulations under the EU Ecodesign Regulation for Sustainable Products (ESPR 2024/1781), aiming to curb the environmental impact of unsold consumer products. The EU Commission has published draft delegated and implementing acts detailing transparency requirements and a ban on destroying unsold goods, with full enforcement expected by mid-2026. ## Scope and Applicability

• Who is affected? All enterprises placing products on the EU market, including non-EU companies.
• Phased implementation:
  • Large enterprises begin audited disclosure in 2026 (covering 2025 data).
  • Medium-sized enterprises must comply by July 19, 2030.
  • The destruction ban for unsold products applies from July 19, 2026. ## Objectives

The key goal is to prevent the widespread and environmentally harmful practice of destructing unsold consumer goods—especially prevalent due to rising online sales. The EU views this as a mismanagement of valuable economic resources and intends to harmonize rules across member states to remove market distortions and equalize responsibilities.

Key Legal Acts Under Development

1. Implementing Regulation (Article 24 ESPR): Defines disclosure (transparency) requirements.
2. Delegated Regulation (Article 25 ESPR): Specifies justified exceptions to the destruction ban.

These are slated for finalization by Q3 2025 and will set common frameworks for reporting and permissible destruction cases. Member States will enforce penalties; for example, in Germany, fines previously reached up to €50,000 per incident.

Transparency and Reporting Requirements (Article 24)

Disclosure Obligations

Enterprises must annually report:

• The quantity (number and weight) of unsold discarded products, categorized by product type.
• Reasons for discarding goods, including any applicable exemptions.
• Waste treatment methods used (reuse, recycling, recovery, disposal).
• Measures taken and planned to prevent future destruction.

Reporting Format and Verification

• Information must be accessible publicly via an easily accessible webpage or within the enterprise’s sustainability report, per the EU Accounting Directive.
• Parent companies may consolidate reports across subsidiaries.
• Disclosure is to follow a standardized format divided into:
  • Organization identification and disclosure period.
  • Product details, destruction reasons, and waste treatment.
  • Prevention strategies.
• Enterprises required to produce sustainability reports must secure an independent limited assurance opinion confirming data accuracy.

Product Categories

Reporting is based on product classifications aligned with the Combined Nomenclature codes to ensure consistent categorization.

Implications for Businesses

• Enterprises, especially large-scale operators, must prepare to comply swiftly.
• Transparency will become mandatory, driven by audited disclosure, increasing accountability.
• Prohibition of indiscriminate destruction pressures companies to rethink inventory management and end-of-life product strategies.
• The harmonized EU approach eliminates national discrepancies, influencing global supply chains of businesses operating within the EU.

Conclusion

The new EU Ecodesign rules under the ESPR mark a significant step towards sustainable consumption by embedding strict controls on the disposal of unsold consumer products. These measures encourage transparency and responsible product lifecycle management, supporting the ‘E’ in ESG frameworks to reduce environmental waste and promote resource efficiency across the market.

Sources: EU Commission draft delegated and implementing acts; Freshfields Bruckhaus Deringer LLP analysis by Jonas Köster and Tobias Klatt.

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