EU Bans Destruction of Unsold New Clothing, Raising Questions About Overproduction

The European Union has preliminarily passed the Ecodesign for Sustainable Products Regulation (ESPR), which aims to bring transparency to the apparel and textile industry. The ESPR will require companies that put apparel products into the EU market to meet certain requirements regarding the durability, reusability, upgradability, and reparability of their products, as well as the presence of substances that inhibit circularity.

The ESPR specifically prohibits the destruction of unsold apparel-related accessories and footwear, beginning two years after the legislation's entry into force (six years for medium-sized enterprises). This move prompts inquiries about overproduction in the fashion industry and how companies will handle unsold inventory.

The legislation is expected to have a significant impact on the apparel industry, and companies should start paying attention to the impending requirements, despite some uncertainty around the implementation details. The ESPR also introduces a requirement for companies to use digital product passports, which will provide information on the sustainability credentials of products to consumers, regulators, and other businesses in the supply chain.

Why this matters: The EU's ban on destroying unsold clothing highlights the growing concern over the environmental impact of the fashion industry's overproduction practices. This legislation could prompt companies to reevaluate their production strategies and find more sustainable solutions for managing excess inventory.

The issue of overproduction in the fashion industry has been a growing concern, with major brands like LVMH and Kering writing down billions in unsold inventory last year. This has created a challenge for what to do with the excess clothing and accessories.

Some companies are already taking steps to address overproduction and make their manufacturing processes more sustainable. Rodinia Generation, a Danish tech startup, has raised €3 million in seed funding to introduce high-tech software and hardware to the fashion industry to combat garment overproduction. The company runs a network of automated microfactories that make clothes exactly when needed, near the customer, and only in the amounts people buy.

The EU's ban on destroying unsold clothing is part of a broader push for sustainability and ethical practices in the fashion industry. France is moving forward with a bill that would impose a 'sin tax' of up to €10 per item on fast fashion products by 2030, and the EU has approved rules to ban the sale, import, and export of goods made using forced labor.

As the ESPR comes into effect, fashion companies will need to adapt their business models to comply with the new regulations and find sustainable solutions for managing unsold inventory. This could potentially lead to price reductions for unpopular items or increased donations to charities. The legislation also presents an opportunity for innovative startups like Rodinia Generation to help the industry become more efficient and environmentally friendly.

Key Takeaways

• EU passes Ecodesign for Sustainable Products Regulation to bring transparency to apparel industry.
• ESPR prohibits destruction of unsold apparel, accessories, and footwear, prompting changes in overproduction.
• ESPR requires digital product passports to provide sustainability information to consumers and supply chain.
• Startups like Rodinia Generation develop solutions to combat garment overproduction through on-demand manufacturing.
• EU and France introduce sustainability measures, including a 'sin tax' on fast fashion, to promote ethical practices.