New EU rules signal shift towards circular fashion models, says Reconomy expert 

In a recent interview with Textile Technology, Reconomy’s Development Director for Textiles EPR discussed the new EU rules that are encouraging more circularity in the fashion industry.

New European regulations designed to prevent the destruction of unsold clothing and footwear are expected to accelerate the fashion industry’s transition towards more circular business models.

These measures, introduced under the European Commission’s Ecodesign for Sustainable Products Regulation (ESPR), look to reduce waste and emissions, and encourage more responsible inventory management across the apparel sector. For brands and retailers, the regulation represents a clear signal that the traditional “produce, sell, dispose” model is no longer sustainable and must be reconsidered.

Speaking on the new regulations, Aimee says that the new rules challenge long-standing industry practices where unsold stock could simply be written off and destroyed.

“The new regulation breaks that logic. Instead, it pushes brands towards resale, reuse, repair, donation and recycling – while also encouraging better demand forecasting so fewer products reach the ‘unsold’ stage in the first place”, says Aimee.

Greater transparency around unsold stock

Alongside the ban on destruction, the ESPR introduces new requirements that will see companies needing to track and report how unsold products are handled.

This means brands will need to build more transparent and traceable systems across their supply chains. From allocation and returns to resale and end-of-life pathways, businesses will be expected to document the decisions made about unsold products and demonstrate that destruction is justified in rare circumstances.

Internally, this shift aims to improve the visibility of unsold stock within organisations.

Operational changes for brands and retailers

Adapting to the regulation will require significant operational changes across the fashion sector.

Brands and retailers will need to redesign clearance strategies that currently rely on destruction as a last resort. Many will also need to strengthen returns management processes so that products can be graded and routed more effectively into resale, donation, refurbishment or recycling streams.

Improving size and fit accuracy, along with better demand forecasting, will also play a critical role in reducing overproduction and high return rates.

While these changes present challenges, Aimee believes they also align with stronger commercial performance.

A phased timeline for implementation

The regulation will be introduced in stages, with large companies expected to comply by 2026 and medium-sized businesses by 2030.

Large organisations will therefore be the first to feel the impact, needing to establish alternative pathways for unsold goods and ensure they can evidence their decisions.

However, smaller businesses won’t be unaffected during the transition period.

“Many medium-sized businesses supply larger retailers and brands,” Aimee noted.

The staggered timeline does provide an opportunity for companies to pilot new approaches before scaling them more widely.

Turning compliance into opportunity

For companies willing to move early, the new rules could also create competitive advantages.

Along with other upcoming measures such as Digital Product Passports and Extended Producer Responsibility schemes, the ESPR encourages products that are durable, repairable and traceable throughout their lifecycle.

It also strengthens the case for circular business models that keep products in use for longer.

“This regulation shouldn’t be viewed purely as a compliance burden; it’s also a design and business-model brief,” Aimee said.

Brands that embrace change early will find opportunities to differentiate on quality and longevity, while also building new customer relationships through services such as repair, resale and takeback programmes.

At the same time, improving product data and inventory visibility can help businesses reduce waste, minimise markdown dependency and protect margins.

Preparing for the circular transition

As the fashion sector continues to adapt to a changing regulatory landscape, many businesses are preparing for broader circular economy policies such as extended producer responsibility for textiles.

Reconomy works with global organisations across the sector to navigate complex regulatory developments while building more sustainable, circular supply chains.

Learn more about how businesses can prepare for upcoming regulations through Reconomy’s services covering Extended Producer Responsibility for textiles.

For Aimee, the direction of travel is clear.