The EU's Efforts To Cut Textile Waste and Boost Circularity

As of 19 July 2026, large companies in the EU cannot destroy unsold clothing, accessories or footwear under the Ecodesign for Sustainable Products Regulation, which started in 2024 and aims to cut textile waste.

Medium-sized companies must follow these rules from 2030, while small and micro-businesses are always exempt.

Every year, 4% to 9% of textiles sold in Europe are destroyed before they are used. This adds up to 264,000 to 594,000 tonnes of textiles thrown away every year.

The wasted textile mountain creates about 5.6 million tonnes of carbon dioxide, which is similar to Sweden’s total emissions in 2021.

Shift in retail inventory practices

The new rules require businesses to keep products in use for as long as possible.

They can sell extra stock at a discount, offer it on secondary markets, donate it to charities, or give it to social enterprises.

Companies can also repair, refurbish, or remanufacture items to make them reusable. The goal is to save the raw materials, water, energy and labour used to make these products.

Unsold stock can only be destroyed in certain cases, for instance, if the products are unsafe, damaged, break intellectual property laws or are counterfeit.

If charities or donation programmes reject the items, they can also be destroyed. When this happens, companies must prioritise recycling.

“Having invested significantly in sustainability over the past 25 years, we see the growing legislative attention as an opportunity – both to accelerate the industry transition we have long worked toward and to contribute to fair competitiveness and a level playing field,” says a spokesperson for fashion retailer H&M Group.

“We believe the Ecodesign for Sustainable Product Regulation (ESPR) can be a strong driver for improved sustainability practices in the industry and we fully support measures that aim to reduce waste across the industry.”

Strict reporting and enforcement mechanisms

Companies that require exemptions must provide proof, such as technical documents or official test results, to explain why they are discarding stock. They must also publish yearly reports showing how much unsold stock they discard.

The European Commission set up standard reporting formats in February 2026, and companies must use them starting February 2027. To make things easier, these reports use existing logistics and customs codes.

National authorities are responsible for checking that companies follow the rules and can fine those who break them.

Businesses must also keep detailed inventory records for five years so inspectors can review them if needed.

“This is circularity in practice: preserving the value of products and materials, preventing waste and encouraging more resource-efficient business models,” says Jessika Roswall, Commissioner for Environment, Water Resilience and Competitive Circular Economy at the European Commission.

“It is also an important building block of our wider circularity agenda.

“With the future Circular Economy Act, we want to go further: strengthening the Single Market for circular products, services and secondary raw materials, reducing Europe’s dependence on primary resources and making circularity a stronger business case for European companies.

“Circularity is not only an environmental objective, it is central to Europe’s competitiveness, resilience and economic security.”

Financial scale of unsold stock

Throwing away unsold goods has been common in Europe when companies have too much inventory.

For instance, businesses in France destroy about €630m (US$720m) worth of unsold products each year. In Germany, almost 20 million returned items are thrown away.

In 2022, the EU’s textile and apparel sector made €167bn (US$190bn) in sales and employed 1.3 million people in 192,000 companies, according to data from the European Environment Agency.

Households spent €282bn (US$322bn) on clothing and €68bn(US$78bn) on footwear, averaging €630 (US$720) per person.

Studies show that unsold stock makes up about 21% of all textile inventory with about one-fifth of that being destroyed.

"The ban on the destruction of unsold consumer goods, including apparel, clothing, accessories and footwear, combined with the upcoming Delegated Act on textiles under the Ecodesign for Sustainable Products Regulation (ESPR), marks a significant step forward in textile policy for a circular economy," says Sophie Moggs, Policy Officer for Fashion & Textiles at the Ellen Macarthur Foundation.

"Transitioning to a circular economy for fashion and textiles requires a coherent policy mix. While the ban on unsold goods won’t address overproduction by itself, since it doesn’t regulate the volumes being produced, it is a meaningful step towards avoiding unnecessary textile waste.

"It also sits alongside the upcoming Delegated Act on textiles under the ESPR, as well as other actions outlined in the EU’s Strategy for Sustainable and Circular Textiles. Together, they build the policy mix needed to drive this transition.

"It's hard to overstate the importance of the ESPR. The ban on unsold goods is among the first requirements for textiles to come out of this regulation, and the upcoming Delegated Act for textiles is where this upstream design and market access regulation sets a minimum bar for what good design should look like."

The growth of online shopping has made it harder for retailers to manage their inventory. In 2020, online sales made up 11% of textile sales, compared to just 5% in 2009.

By 2022, 68% of EU internet users bought clothes, shoes, or accessories online.

Online stores see return rates up to three times higher than physical shops.

On average, 20% of online clothing purchases are returned, and footwear returns range from 22% to 37%, averaging 30%.

Handling these returns is complicated and can take weeks, making it hard to resell seasonal items at full price.

Processing a single online return costs retailers between 55% and 75% of the original price. As a result, about 22% to 43% of returned clothing bought online is destroyed instead of being resold.