EU Ecodesign Regulation Poses New Challenges for Vietnam’s Textile and Garment Industry

For many years, environmental requirements for textile and garment products exported to Europe have focused mainly on chemicals, production conditions and corporate responsibility across the supply chain. A new layer of requirements is gradually taking shape: products must be designed from the outset to last longer, be easier to repair, more convenient to recycle and supported by more transparent data.

This change is linked to the European Union’s Ecodesign for Sustainable Products Regulation, commonly known as the ESPR. The regulation expands the EU’s approach from energy efficiency for certain product groups to a wide range of other physical goods, with textiles and footwear among the categories mentioned in the bloc’s policy directions.

For Vietnamese businesses, the immediate impact is not limited to meeting a new technical standard. The larger issue concerns how products, materials, suppliers and data are managed. Companies may have to provide clearer evidence of what a garment is made from, how durable it is, how much recycled content it contains, which chemicals were used to process it and whether it can proceed into a recycling process.

From environmental requirements to product design requirements

The EU issued the ESPR in 2024 to establish a legal framework for improving the sustainability of products on the European market. The regulation does not mean that every product must immediately meet an identical set of criteria. Instead, the EU will establish specific requirements for each product group through subsequent implementing measures.

This approach is particularly significant for the textile and garment industry. In the past, businesses often addressed environmental requirements during stages such as material procurement, dyeing, finishing or wastewater management. With an ecodesign mindset, many factors must be considered from the product development stage. The weave, type of fiber, fabric structure, accessories, dye colors and the way components are assembled can all affect durability as well as how the product can be processed after it is discarded.

Durability is a typical example. A product with a high proportion of recycled fibers that wears out quickly does not necessarily create greater environmental benefits than a product with a long lifespan that is used many times. Therefore, businesses cannot focus only on a single indicator such as the proportion of recycled materials. They need to consider the product’s entire life cycle, from raw material extraction through production, transportation, use and end-of-life processing.

Digital product passports will increase the demand for data

One of the ESPR’s notable tools is the digital product passport. Under the EU’s direction, product-related data may be used to provide information about a product’s sustainability characteristics, origin or processing potential. The specific format and content will depend on the regulations applicable to each product group.

In the textile and garment industry, this could change how businesses store information. Data currently scattered across multiple departments—from purchasing and technical teams to dyeing facilities and subcontractors—will need to be linked and verified. A material code on a purchase order is not sufficient if the company cannot reconcile it with documents, fiber composition, production processes or supplier information.

The challenge is even greater for businesses that use multilayer subcontracting models. A garment order may involve a yarn supplier, a weaving mill, a dyeing company, a finishing facility, a printing facility and a garment factory. If each stage uses a different method of recording data, compiling information for customers or regulators will be time-consuming and prone to discrepancies.

Therefore, digital transformation in this context is not simply a matter of investing in production management software. Businesses need to standardize material catalogs, coding rules, supplier records and document-retention methods. Factors that may appear to be internal matters could become conditions for maintaining relationships with international customers.

What pressures will Vietnamese businesses face?

Vietnam’s textile and garment industry is highly integrated into global trade and significantly dependent on export orders. The EU is one of the important markets for Vietnamese apparel, while brands and retailers there often impose their own environmental requirements before new legal requirements fully take effect.

This means that pressure may emerge through two channels. The first is mandatory requirements under EU law for products placed on the market. The second is commercial requirements from brands, importers and retail systems. In practice, customers may request data on materials or emissions before an official legal obligation comes into force.

The businesses affected first may be suppliers producing for international brands, as they are often required to meet customers’ assessment and reporting systems. However, the impact will not stop there. As data requirements move upstream through the supply chain, yarn, textile, dyeing and auxiliary-material companies will also need to provide more consistent information.

Recycled materials are not the only solution

Recycled materials are often considered a pillar of circular fashion, but increasing the proportion of such materials does not automatically resolve every environmental requirement. Fiber quality, the source of the input materials, traceability and recycling methods can all affect the assessment outcome.

The issue is even more complex for fabrics made from multiple types of fibers. Blending can help a product achieve certain characteristics related to durability, feel or cost, but it can also make sorting and recycling more difficult. Accessories such as zippers, buttons, labels, sewing thread and coatings must also be considered when evaluating end-of-life processing potential.

Businesses should therefore avoid the simplistic approach of replacing part of the virgin fiber with recycled fiber and treating that as an entire green strategy. A more suitable design could involve fewer difficult-to-separate components, fewer unnecessary details, greater repairability and material choices based on actual intended use.

Compliance costs and opportunities to upgrade the supply chain

Meeting the new requirements will certainly create additional costs. Businesses may need to invest in testing, certification, data-management software, staff training and equipment improvements. These expenses are particularly significant for small and medium-sized enterprises, which often do not have dedicated departments for sustainability or product data management.

Costs may also arise from changing suppliers. If a source of materials cannot provide the required documentation, a company must find an alternative source or establish additional inspection procedures. In some cases, switching to a new material may affect production capacity, color, consumption norms and delivery schedules.

However, data and design requirements also create opportunities to upgrade the supply chain. When material information is standardized, businesses can better control waste rates, input quality and their ability to fulfill orders. Detailed monitoring of each stage can help identify waste that previously went unnoticed.

Businesses with reliable data systems will also be in a stronger position when negotiating with customers. As brands face increasing requirements to report on environmental impacts, a supplier able to provide complete records will have an advantage over one that competes only on price and capacity.

Steps that can be taken before specific requirements are issued

Because not all requirements for textiles and garments have yet been set out in detail in a single set of criteria, businesses should avoid making trend-driven investments. The first step should be to map existing data: what the company knows about its materials, where the data is located, who is responsible for it and which parts cannot yet be verified.

The next step is to classify products by market, customer and level of risk. Product lines exported to the EU or made for brands that already have their own environmental standards should be prioritized for review. Businesses should also identify materials that may create difficulties for recycling, processes that consume significant resources and suppliers with incomplete records.

At the design level, product development teams can test options that use fewer types of materials, reduce difficult-to-separate accessories or increase durability in areas that commonly fail. These tests should be linked to customer requirements and actual production conditions rather than based solely on appearance-related objectives.

For small businesses, cooperation through clusters or industry associations can help reduce training costs and improve access to experts. Issues such as data standards, testing methods and traceability are often shared concerns, so exchanging experience may be more effective than having each business build its own system from scratch.

European policy will affect how companies compete

The ESPR will not force every supplier to change overnight, but it signals that competition in the textile and garment industry will no longer be based solely on price, delivery speed and sewing capacity. The ability to demonstrate a product’s characteristics will increasingly become part of export capability.

This may widen the gap between businesses. Companies that already have systems for quality management, traceability and supplier control will be better positioned to update their practices in line with new requirements. By contrast, businesses that rely on paper-based records, fragmented data or unstable material sources may need to spend more time strengthening their operating foundations.

From a market perspective, the new requirements may also encourage business models that extend product life, such as repair, reuse, take-back and resale. However, the development of these models will also depend on collection infrastructure, logistics costs, sorting capacity and consumer behavior. It should not be assumed that an ecodesign regulation will automatically create a complete circular system.

For Vietnam, the opportunity lies in moving from a position focused solely on carrying out production stages to providing product development capabilities and supply chain management. Businesses can become more deeply involved in material selection, design testing, quality control and data provision for customers. This direction requires long-term investment, but it could help reduce dependence on the advantage of low labor costs.

What to monitor in the coming period

The key issue to monitor is the EU’s specific implementing regulations for each product group. These documents will determine what types of data businesses must provide, the required level of detail, how product characteristics must be demonstrated and when the requirements will apply. Businesses should not turn requirements that are still at the policy-direction stage into legal obligations that are already in force, but neither should they wait until customers make demands before beginning preparations.

In the short term, an appropriate approach is to treat product data and sustainable design as business capabilities. Businesses need to clearly distinguish three layers of work: legal compliance, meeting customers’ specific standards and improving operational efficiency. When these three layers are separated, investment plans will be more realistic and the risk of following unsupported green claims will be reduced.

The EU’s Ecodesign Regulation is therefore not merely a matter of a new set of rules in an import market. It raises a broader question for the entire industry: does Vietnam’s textile and garment sector want to compete through production capacity, cost or the ability to create products with transparent information, long life cycles and compatibility with the requirements of a circular economy? The answer will determine how manufacturers prepare for the years ahead.