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Large fashion companies in the European Union are now prohibited from destroying unsold clothing, shoes, and accessories, as part of a new regulation aimed at promoting sustainability within the industry. This change, effective immediately, is enforced under the EU’s Ecodesign for Sustainable Products Regulation, which targets businesses with over 250 employees or annual revenues exceeding 50 million euros (approximately $55 million).
The regulation mandates that companies must find alternative solutions for excess inventory, such as markdowns, selling through alternative markets, or donating items to charities. The legislation allows for very few exceptions, primarily for goods that are deemed unsafe, counterfeit, or too damaged for use, as well as items that charities have already declined.
Historically, many fashion companies opted to destroy unsold items as a cost-saving measure. The financial burden of storing and managing unsold stock can be significant, and the practice of incineration was often cheaper than discounting or coordinating donations. The European Environment Agency reported that between four to nine percent of unsold textile products in the EU are destroyed annually, a figure exacerbated by the high rate of online returns, where one in five items ordered is sent back and never resold.
Under the new law, large firms are now required to explore clearance channels, outlet sales, and charity partnerships to manage unsold stock. Additionally, these companies must publish annual reports detailing the amount of goods they have discarded, maintaining these records for five years. Medium-sized companies will be subject to similar rules starting in 2030.
The legislation represents a significant shift toward a circular economy, promoting practices where products are designed for longevity and are reused, repaired, or recycled. The European Environment Agency emphasized that this regulatory change is not just a theoretical concept, but a legal requirement that compels companies to reconsider their production and disposal strategies. By making disposal more costly, the regulation aims to mitigate overproduction and encourage more sustainable practices in the fashion industry.
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