ESPR and the Ban on Destroying Unsold Goods

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Introduction: The End of Wasteful Destruction

One of the most striking provisions of the Ecodesign for Sustainable Products Regulation (ESPR) is the ban on destroying unsold consumer products. This provision addresses a practice that has drawn significant public criticism in recent years: the deliberate destruction of perfectly functional goods simply because they remain unsold. From luxury fashion brands incinerating surplus stock to protect brand exclusivity, to electronics manufacturers crushing returned items rather than refurbishing them, the destruction of unsold goods represents a profound waste of resources and energy.

The ESPR tackles this issue head-on by prohibiting the destruction of certain categories of unsold consumer products and requiring transparency from businesses about their practices regarding unsold goods. This article examines the scope of this ban, the products it covers, the exemptions that apply, and how businesses must fundamentally rethink their approach to inventory management, returns handling, and end-of-season stock.

Understanding these requirements is essential for any business operating in the EU market, as the ban applies not only to EU-based manufacturers but to all economic operators, including importers, distributors, and online platforms, that handle unsold consumer products covered by the regulation. The provisions form part of the broader ESPR regulatory framework that is reshaping how products are designed, sold, and managed throughout their lifecycle.

Which Products Are Covered by the Ban

The ESPR's ban on destroying unsold goods does not apply to all product categories simultaneously. The regulation takes a phased approach, beginning with product categories where destruction of unsold goods has been particularly prevalent and environmentally damaging.

The initial product categories covered by the ban include:

• Clothing and clothing accessories, including all textile garments regardless of material composition
• Footwear of all types, from sports shoes to formal wear
• Electrical and electronic equipment as defined under existing EU waste legislation

The European Commission has the power to extend the ban to additional product categories through delegated acts, based on evidence of significant destruction practices. Product categories that may be brought under the ban in the future include furniture, toys, cosmetics, and other consumer goods where overproduction and destruction are documented problems.

It is important to note that the ban covers "unsold consumer products," which includes not only goods that have never been sold but also products that have been returned by consumers and are in a condition suitable for use or refurbishment. The definition is deliberately broad to prevent businesses from circumventing the ban by classifying destroyed goods as "returns" rather than "unsold stock."

Exemptions and Permitted Exceptions

The ESPR recognises that there are legitimate circumstances in which unsold products may need to be destroyed, and it provides for specific exemptions. These exemptions are narrowly defined to prevent abuse while accommodating genuine health, safety, and practical considerations.

Permitted exceptions to the destruction ban include:

• Products that pose health or safety risks and cannot be made safe through other means, such as goods contaminated with hazardous substances or those subject to safety recalls
• Products that are counterfeit and whose release into the market would infringe intellectual property rights, provided that donation or recycling is not feasible
• Products that have been damaged to the extent that they cannot be repaired, refurbished, or repurposed in a manner that is economically reasonable
• Products returned under explosive ordnance, pyrotechnic, or similar safety regulations
• Small and medium-sized enterprises (SMEs) and microenterprises, which are exempt from certain reporting obligations though not necessarily from the ban itself

Crucially, wanting to protect brand exclusivity or maintain price levels is not a valid justification for destroying unsold goods. This directly targets the practices of luxury brands that have historically destroyed surplus stock to prevent it from being sold at a discount. The regulation makes clear that economic motivations alone do not constitute a basis for exemption.

Businesses seeking to rely on an exemption must be prepared to document and justify the reasons for destruction. This documentation may be subject to review by market surveillance authorities as part of the broader ESPR enforcement framework.

Transparency and Reporting Obligations

Beyond the outright ban on destruction, the ESPR introduces transparency obligations that require businesses to disclose information about their management of unsold goods. These reporting requirements apply to a broader range of economic operators and product categories than the destruction ban itself.

Medium and large enterprises must publicly disclose the number and weight of unsold products discarded annually, the reasons for discarding those products, the proportion of discarded products that were delivered for re-use or remanufacturing, recycling, or other waste recovery operations, and a description of the measures taken to prevent discards. This information must be made available on the company's website or through other publicly accessible means.

The transparency obligations serve multiple purposes. They create public accountability, enabling consumers, investors, and civil society organisations to assess a company's practices regarding unsold goods. They also provide the European Commission with data to inform future regulatory decisions, including whether to extend the destruction ban to additional product categories.

The reporting requirements interact with other EU sustainability reporting obligations, including the Corporate Sustainability Reporting Directive (CSRD). Businesses should integrate their unsold goods reporting into their broader sustainability reporting processes to ensure consistency and efficiency.

Impact on Inventory and Returns Management

The ban on destroying unsold goods requires fundamental changes to how businesses manage inventory and handle returns. Traditional business models that relied on overproduction followed by clearance and eventual destruction of residual stock are no longer viable under the ESPR.

Businesses must adopt more sophisticated demand forecasting and production planning to minimise overproduction in the first place. Investment in data analytics, closer integration with retail partners, and adoption of made-to-order or small-batch production strategies can help reduce surplus stock. For fashion and seasonal industries, this may require significant changes to production calendars and buying practices.

Returns management also requires rethinking. Rather than treating returned products as waste, businesses must develop processes for inspecting, refurbishing, and remarketing returned goods. This may require investment in reverse logistics infrastructure, including dedicated processing facilities, quality assessment protocols, and secondary sales channels.

Alternative disposition channels for unsold goods include donation to charitable organisations, sale through secondary markets or outlet channels, redistribution to markets where the products are in demand, remanufacturing or refurbishment for resale, and material recovery through recycling where reuse is not feasible. Businesses should establish relationships with these alternative channels well in advance of the ban taking effect, as building effective partnerships and processes takes time.

The Role of Digital Product Passports

Digital product passports play an important supporting role in the implementation and enforcement of the unsold goods destruction ban. The DPP can track a product's status throughout its lifecycle, providing evidence of whether a product has been sold, returned, or remained unsold, and ultimately what happened to it.

By linking each product to a digital product passport, businesses can create an auditable record of product disposition. This documentation serves multiple purposes: it demonstrates compliance with the destruction ban to market surveillance authorities, supports transparency reporting obligations, and provides data for improving inventory management practices.

The digital product passport can also facilitate the alternative disposition channels that businesses must develop. When unsold products are redirected to secondary markets, donated, or sent for refurbishment, the DPP can be updated to reflect the product's new status and destination. This traceability is valuable both for compliance purposes and for understanding the environmental impact of different disposition strategies.

Implementing a robust DPP system using tools like MyProductPassport not only addresses the digital product passport requirements of the ESPR but also provides the tracking and documentation infrastructure needed to comply with the unsold goods provisions.

Environmental and Business Benefits

While the ban on destroying unsold goods imposes new obligations, it also presents significant environmental and business benefits. The environmental case is clear: preventing the destruction of functional products avoids the waste of all resources and energy invested in their production, from raw material extraction through manufacturing to transportation.

The European Commission estimates that millions of tonnes of consumer products are destroyed annually in the EU without ever being used. This destruction contributes to greenhouse gas emissions, resource depletion, and waste generation. By redirecting these products to use, the ban contributes directly to the EU's circular economy and climate objectives.

From a business perspective, the ban incentivises more efficient production and inventory management, which can reduce costs over time. Companies that develop effective systems for managing unsold goods through secondary channels can recover value from products that would previously have been written off entirely. Some businesses may discover new revenue streams through outlet channels, refurbishment services, or material recovery programmes.

The ban also creates opportunities for new business models focused on handling unsold goods. Services that aggregate, refurbish, and redistribute surplus stock, specialist secondary market platforms, and recycling operations optimised for specific product categories are all areas of potential growth. Businesses that position themselves as leaders in responsible management of unsold goods can also build consumer trust and brand value in an increasingly sustainability-conscious market.

Preparing for the Ban: Practical Steps

Businesses should begin preparing for the unsold goods destruction ban immediately, even if their specific product category is not yet covered. The phased implementation approach means that additional categories may be added through delegated acts, and the transparency obligations apply more broadly than the ban itself.

Essential preparation steps include:

• Audit current practices to understand the volume and value of unsold products currently destroyed
• Develop demand forecasting improvements to reduce overproduction
• Establish or expand secondary sales channels for surplus and returned goods
• Build partnerships with charitable organisations, recyclers, and refurbishment specialists
• Implement tracking systems to document the disposition of all unsold products
• Review insurance and accounting practices related to unsold goods destruction
• Train procurement and merchandising teams on the new regulatory requirements

The transition away from destruction as a default disposition for unsold goods represents a significant operational change, but it aligns with broader industry trends towards circularity and waste reduction. Businesses that embrace this change proactively will be better positioned to comply with the ESPR and to benefit from the growing consumer and investor emphasis on sustainable business practices.

For detailed guidance on the broader ESPR requirements, including the implementation timeline and compliance preparation, refer to our comprehensive ESPR resources. The full ESPR regulation text contains the complete legal provisions regarding the destruction ban in Articles 24 and 25 and Annex VII, and Commission Delegated Regulation (EU) 2026/296 of 9 February 2026 sets out the derogations from the prohibition.