Textile EPR in Europe: Why Fashion Needs to Prepare Now

Europe’s approach to textile waste is changing. Under a revised EU Waste Framework Directive, responsibility for the end of a product’s life is shifting increasingly from municipalities and taxpayers to the businesses that put clothing, footwear and textiles onto the market.

For fashion and apparel businesses, Extended Producer Responsibility (EPR) is therefore much more than another sustainability reporting requirement. It will introduce a new recurring cost, require more sophisticated product and market data, and create operational obligations spanning Finance, Legal, Product, Sourcing, Sustainability, IT and local market teams, with potentially significant financial implications.

Textile EPR is moving rapidly up the agenda

The scale of the challenge behind the regulation is substantial. The EU textile and clothing sector generated €170 billion in turnover in 2023, while Europe generated 12.6 million tonnes of textile waste in 2019. Only around one-fifth was separately collected for reuse or recycling.

The revised Waste Framework Directive seeks to change those economics by making producers responsible for financing the collection, sorting, reuse and recycling of products they place on individual national markets.

The timetable is increasingly concrete. Member States must transpose the Directive into national law by 17 June 2027, with national schemes required to ensure producers cover the relevant costs by 17 April 2028.

For businesses, the commercial timeline starts sooner. Changes to product specifications, supplier data, sourcing decisions, systems, budgets and Producer Responsibility Organisation (PRO) selection all require lead time. Waiting until national tariffs are finalised risks leaving too little time to respond effectively.

One European direction, but many different systems

One of the biggest challenges for international fashion businesses is that textile EPR will not operate as a single European system.

France, the Netherlands, Hungary and Latvia already have operational schemes, and their approaches vary significantly. France has the most mature system, with product- and category-specific contributions and eco-modulation. The Netherlands uses a predominantly weight-based model through multiple producer organisations, while Hungary operates a highly centralised kilogram-based system. Latvia combines a statutory tax with exemptions for producers participating in approved waste-management systems.

Other European markets are at very different stages of development. Germany has published policy cornerstones, while countries including Italy, Spain, Belgium, Sweden and Ireland are developing their respective frameworks.

Multinational businesses therefore face a difficult balancing act: creating a common European approach to EPR while remaining flexible enough to accommodate different national fees, reporting requirements, PRO structures and implementation timelines.

The P&L impact could be significant

The precise economics remain uncertain in many markets, but existing schemes provide an indication of the potential exposure.

Our analysis suggests EPR fees could reach around 1–2% of sales in higher-exposure scenarios, while the annual impact for larger businesses could readily exceed €10 million. We expect some of this cost ultimately to be passed through to consumers, with around 50–70% pass-through providing a reasonable central planning range. The remainder may need to be addressed through margins, sourcing, productivity, assortment and other commercial measures.

The challenge will also evolve. Early schemes are likely to rely on relatively simple quantity- or weight-based contributions. As systems mature, however, eco-modulation is likely to become more important, differentiating fees according to characteristics such as durability, recycled content, certification and recyclability.

This turns EPR from a compliance cost into a potential input to product, sourcing, pricing and assortment decisions.

Waiting for certainty is not a strategy

There is still considerable uncertainty around individual national schemes. But businesses already have enough information to begin preparing.

The priority should be to establish clear ownership of EPR, understand exposure by country and category, close gaps in product and market-placement data, model potential financial impacts and establish the controls required for future declarations and audits. Businesses should also begin assessing mitigation opportunities across product design, weight, durability, recyclability, recycled content and certification.

Critically, companies should avoid building separate compliance solutions market by market. A common European data and control backbone – with country-specific modules where required – can support EPR while also creating reusable capabilities for adjacent requirements such as the Ecodesign for Sustainable Products Regulation and Digital Product Passport.

The businesses that start building these capabilities now will be better placed not only to manage the cost of EPR, but to make more informed decisions as the regulatory landscape develops.

Download the full report to understand your potential exposure and the actions businesses should be taking now.