ESPR Explained: How the EU’s New Eco-design Rules Will Impact SMEs
- hrvatinstella
- Aug 15
- 11 min read
The European Green Deal is the EU’s big plan for a greener, fairer, and more competitive future. It aims to make Europe the first climate-neutral continent by 2050, while building a modern economy that works for people and the planet.
Right now, most products are made, used, and then thrown away—a “take, make, waste” model. The EU’s Circular Economy Action Plan points out a key gap: there’s no complete set of rules to make all products more sustainable and circular. Many products aren’t designed to last, so they’re replaced too soon—wasting materials, energy, and money.
Businesses and consumers often can’t make more sustainable choices because the right information or affordable options just aren’t there. This leads to missed opportunities for sustainability and for value-retaining operations, limited demand for secondary materials and obstacles to the adoption of circular business models. The Green Deal calls for a circular economy, where materials are reused and waste is minimised. This shift will reduce pollution, cut costs, and create new business opportunities. Energy efficiency is also a top priority. Using less energy in production and products will help decarbonise Europe’s energy system and meet climate targets for 2030 and 2050. For businesses, this means new rules, but also new markets for sustainable products.
New rules are set with Ecodesign for Sustainable Products Regulation (ESPR) which provides a framework for defining performance and information requirements for almost all product categories, from aluminium, over apparel and furniture, to tyres and electronics. Specific product rules will be set out in delegated acts.
What is Ecodesign for Sustainable Products Regulation (ESPR)?
The Ecodesign for Sustainable Products Regulation (ESPR) became EU law on 18 July 2024. It replaces the old Ecodesign rules, which only applied to energy-related products, and now covers almost everything made or sold in the EU—except food, feed, and medicines.
This Regulation establishes a framework for setting of ecodesign requirements that products have to comply with to be placed on the market or put into service, with the aim of
improving the environmental sustainability of products in order to make sustainable products the norm
to reduce the overall carbon footprint and environmental footprint of products over their life cycle,
ensuring the free movement of sustainable products within the internal market.
This Regulation also establishes a digital product passport, provides for the setting of mandatory green public procurement requirements and creates a framework to prevent unsold consumer products from being destroyed.
1. Ecodesign performance and information requirements for products
The ESPR doesn’t set the rules for each product right away. Instead, it’s a framework: the European Commission will introduce specific ecodesign requirements for different product groups over time. These could focus on a single product category (vertical rules) or apply to several categories at once (horizontal rules).
First batch for products in scope
ESPR and Energy Labelling Working Plan 2025-30 published in April 2025, sets priority products for ecodesign and energy labelling requirements. These are steel and aluminium, textiles (with a focus on apparel), furniture, tyres and mattresses.
Timeline for adoption of delegated acts
2026 | 2027 | 2028 | 2029 | |
Intermediate products | Iron & Steel | Aluminium | ||
Final products | Textiles/Apparel Tyres | Furniture | Bed Mattresses | |
Horizontal requirements | Repairability (including scoring) | Recycled content and recyclability of electrical and electronic equipment |
These products were selected based on the report from JRC researchers. They study identified products based on their relevance in terms of environmental impacts, improvement potential, open strategic autonomy, and the extent to which such products are covered by other EU policies. When evaluating the product groups, JRC scientists considered 10 different environmental categories. These include water, air, biodiversity, and soil effects, as well as life-cycle energy consumption, waste generation and management, climate change, human toxicity, material efficiency, and lifetime extension.
But, it is not only about the environment. When assessing products and selecting priorities for first ecodesign rules, the JRC analysis also looked at how the products could enhance EU strategic autonomy by reducing supply chain dependencies and increasing circularity.
Ecodesign requirements
Ecodesign requirements should include, as appropriate, performance requirements or information requirements, or both. Those requirements should be used to improve product aspects relevant for environmental sustainability, such as durability, reusability, repairability, energy efficiency, recyclability, and carbon and environmental footprints. Ecodesign requirements should be transparent, objective, proportionate and in compliance with international trade rules.
Performance requirements | Information requirements |
Under the ESPR, performance requirements will target specific features of a product that can make the biggest difference to its environmental impact. This could mean:
| Information requirements under the ESPR requires manufacturers to share key details about products’ environmental footprint, carbon emissions, and durability.
Clear information allows consumers and public buyers to compare products and make greener choices, encouraging sustainable behavior and supporting the overall goals of the regulation. |
Ecodesign requirements shall meet the following criteria:
there shall be no significant negative impact on the functionality of the product, from the perspective of the user;
there shall be no adverse effect on the health and safety of persons;
there shall be no significant negative impact on consumers in terms of the affordability of relevant products, also taking into account access to second-hand products, durability and the life cycle cost of products;
there shall be no disproportionate negative impact on the competitiveness of economic operators and other actors in the value chain, including SMEs, in particular microenterprises;
there shall be no proprietary technology imposed on manufacturers or other actors in the value chain;
There shall be no disproportionate administrative burden on manufacturers or other actors in the value chain, including SMEs, in particular microenterprises.
To tackle environmental impacts, the ESPR defines a set of product aspects that ecodesign requirements can target. These aspects aim to improve the sustainability of products across their entire life cycle. Depending on the product group, relevant requirements may address:
Durability – making products last longer.
Reliability – ensuring products perform consistently over time.
Reusability – enabling parts or products to be reused.
Upgradability – allowing products to be updated or enhanced.
Repairability – making it easier to fix products rather than replace them.
Maintenance and refurbishment – supporting care and renewal of products.
Presence of substances of concern – limiting harmful chemicals.
Energy use and efficiency – reducing energy consumption during use.
Water use and efficiency – conserving water where applicable.
Resource use and efficiency – optimizing raw materials and resources.
Recycled content – incorporating secondary materials.
Remanufacturing potential – allowing products to be reprocessed into like-new condition.
Recyclability – enabling materials to be recycled at the end of life.
Material recovery – facilitating extraction of useful materials.
Environmental impacts – reducing carbon footprint and overall environmental footprint.
Expected waste generation – minimizing waste throughout the product lifecycle.
By focusing on these aspects, the ESPR encourages manufacturers to design products that are longer-lasting, resource-efficient, and easier to repair, reuse, or recycle. This shift not only benefits the environment but also helps businesses respond to growing consumer demand for sustainable products.
For SMEs, this means design choices made today will directly affect future compliance — and market competitiveness.
2. Use of Digital Product Passport
The ESPR has a strong focus on product information. Information requirements are needed to help consumers make informed choices and stimulate the behavioural change that can powerfully unlock the environmental sustainability benefits of the ESPR beyond the level achievable solely by regulating minimum performance.
A key pillar of the ESPR is the Digital Product Passport (DPP). Every product for which ecodesign measures will be adopted will have a digital product passport, except if there is an alternative digital system providing equivalent information, for example the EPREL database for energy-related products carrying an energy label.
Digital Product Passport (DPP) will hold key data about the product’s composition, environmental performance, and sustainability features — accessible to consumers, businesses, and public authorities. Information on material composition and any substances of concern in the product will be included, together with information on how it can be safely used, recycled and disposed of. This will facilitate end-to- end product life cycle management. The goal is full traceability across the value chain, from manufacture to end-of-life.
The information to be collected and made available in the digital product passport will be specified in product-specific delegated acts under the ESPR, and possibly under other legislation where applicable. This will open up data access on a need-to-know basis for businesses, consumers and public authorities, based on open, non-proprietary international standard.
By making sustainability information easy to find and compare, the EU hopes to influence purchasing decisions and push the market toward greener options.
3. Ban on destruction of unsold products
The destruction of unsold consumer products, such as textiles and footwear, by economic operators is becoming a widespread environmental problem across the Union, in particular due to the rapid growth of online sales. It amounts to a loss of valuable economic resources as goods are produced, transported and afterwards destroyed without ever being used for their intended purpose.
This regulation sets a framework for preventing unsold products to be destroyed. Last three activities on the waste hierarchy, namely recycling, other recovery and disposal are banned, while preparation for reuse, including refurbishment and remanufacturing, are not considered destruction.
Economic operators should:
take the measures necessary to prevent the need to destroy unsold consumer products.
disclose the number and weight of unsold consumer products discarded, the reasons for discarding those products, how discarded products will be handled (reuse, recycling, energy recovery, disposal…) and measures taken and measures planned for the purpose of preventing the destruction of unsold consumer products.
From 19 July 2026, the destruction of unsold consumer products will be prohibited. This will not apply to micro and small enterprises and will apply to medium-sized enterprises from 19 July 2030.
A delegated act will supplement this Regulation by setting out derogations from the prohibition of destruction of unsold consumer products where it is appropriate due to reasons such as health, hygiene and safety, damage that cannot be repaired in a cost effective manner, unsaleability of products due to infringement of intellectual property rights, including counterfeit products, if destruction is the option with the least negative environmental impacts.
Preventing destruction will reduce the environmental impact of those products by reducing the generation of waste and by disincentivising overproduction.
4. Mandatory Green Public Procurement rules
Article 65 outlines rules for public procurement that should present significant market incentives for SMEs to improve sustainability of their products.
Public institutions — such as municipalities, schools, hospitals, or transport authorities — will set minimum sustainability requirements in public procurement.
That means:
Better environmental performance = more chance of winning tenders
Poorly performing products may be excluded from consideration entirely
Additionally, sustainability will carry more weight in tenders. When public contracts are awarded, environmental criteria will account for 15–30% of the scoring — enough to swing a decision even if your price is not the absolute lowest. This will favour favours the selection of the most environmentally sustainable products.
And finally, at least 50% of all public procurement for relevant product categories will need to be for the most sustainable options available.
In practice, this means that investing in sustainability will pay off as public procurement will be looking to spend money on the products that have best performance and least negative impact on the environment. These new public procurement rules will help sustainable SMEs to be positioned ahead of less sustainable competitors.
Article 65 is not just an environmental rule — it’s a market shift. Public procurement will soon favour the greenest products, and SMEs that can prove top sustainability performance will gain a competitive edge and access new market opportunities.
Public contracts such as bed linen and mattresses for hospitals, furniture for schools and offices, occupational safety apparel for marine transportation workers, or tyres for public transport fleets represent a steady, large-scale market in which sustainable products will have an advantage. SMEs that proactively think about ecodesign will be better positioned to win public contracts and their efforts will pay off.
Obligations of economic operators
Manufacturing companies will face the highest burden of compliance. When placing products covered by a delegated act adopted pursuant to Article 4 on the market or putting them into service, manufacturers shall ensure that:
products have been designed and manufactured in accordance with the performance requirements set out in the applicable delegated acts
products are accompanied by the information required under delegated acts
a digital product passport is available
the conformity assessment procedure specified in that delegated act is carried out and the required technical documentation is prepared.
ESPR will impact all economic operators in the value chain. And it has international operations - as long as one part of value chain is located in EU, the whole value chain needs to comply with the requirements of ESPR.
All economic operators will need to ensure that the products they import, distribute, sell and market comply with the applicable rules for that products as set out in the delegated acts.
Support for SMEs
The EU knows that meeting these requirements could be a bigger challenge for SMEs than for large corporations. That’s why Article 22 of ESPR requires the Commission to put support measures in place, such as:
One-stop shops for information and networking
Financial incentives and tax breaks
Improved access to finance for green investments
Specialised training for managers and staff
Organisational and technical assistance to adapt production processes
For smaller manufacturers, this is a real opportunity to use compliance as a growth strategy, rather than just a regulatory burden.
Specific Benefits for SMEs that Proactively Improve Product Sustainability
SMEs that start adapting to ESPR requirements before they become mandatory can gain a measurable competitive edge.
Early action brings:
Priority access to public contracts – With mandatory Green Public Procurement rules, sustainable products will carry more weight in tenders, often winning even if not the cheapest.
New market opportunities – Growing demand for durable, repairable, and recyclable products will open niches that early movers can dominate.
Customer loyalty and brand value – Sustainability credentials, verified through the Digital Product Passport, can strengthen trust and justify premium pricing.
Cost savings over time – Designing for durability, repairability, and efficient material use can cut production and waste management costs.
Supply chain resilience – Using recycled or local materials reduces dependency on volatile global supply chains, enhancing strategic autonomy.
Easier future compliance – Building sustainability into design now avoids rushed, costly redesigns when delegated acts take effect.
Access to financial incentives – SMEs acting early can take advantage of EU and national funding, tax breaks, and technical support programs.
How to prepare
Dedlines for compliance will approach fast. The best time to start preparing is now.
To position yourself for success:
Undertake gap assessment and develop an action plan for compliance
Do life cycle assessments to understand how your products score against ecodesign criteria
Work on the improvements of durability, recyclability, repairability, sustainability of materials and other impact categories in order to place your products in the top performance category
Prepare documentation to enable verification
Watch for market opportunities that proactively address ecodesign so that you can gain advantage
CONCLUSION
The Ecodesign for Sustainable Products Regulation (ESPR) is the legal framework for setting ecodesign requirements. Together with the Energy Labelling Framework Regulation (ELFR) it facilitates consumer choice and encourages the take-up of more sustainable and energy-efficient products.
Ecodesign requirements are effective in reducing the environmental, energy and climate impacts of products and energy consumption and in improving circularity. By providing more information on product sustainability, the requirements help consumers make better informed purchase decisions and create economic benefits for producers of more sustainable products.
At its core, the ESPR delivers four transformative shifts:
Ecodesign performance and information requirements to improve durability, repairability, recyclability, and overall sustainability.
Digital Product Passports for transparency and traceability.
A ban on the destruction of unsold consumer products to curb waste and overproduction.
Mandatory Green Public Procurement rules that reward the most sustainable products in public tenders.
The deadlines are fixed, and the first delegated acts will arrive soon. Starting in 2026 with iron & steel, and continuing in 2027 with aluminium and textile. SMEs that start now - assessing their products, redesigning for circularity, and preparing for documentation - will not only be ready for compliance, they’ll be ahead of the competition. For SMEs, the ESPR is not only a regulatory challenge, it’s an open door to new markets, stronger customer relationships, and long-term business resilience. Those who move first will be best positioned to lead the circular economy transition.
HOW SUSTAINABILITY OFFICE CAN HELP YOU?
Sustainability Office acts as an extension of your company, guiding you through sustainability transformation. We can help you turn the ESPR from a regulatory headache into a growth opportunity.
We provide:
Compliance readiness assessment
Life-cycle assessments of specific products and eco-design support
Access to EU funding, incentives & green investments
Let's get in touch!
Sources:
ESPR and Energy Labelling Working Plan 2025-30
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