New EU Ecodesign Regulations Put the Textile Industry Before Data and Circularity Challenges

The textile industry exporting to Europe is entering a phase in which production capacity and cost are no longer the only two criteria determining competitiveness. How a product is designed, how materials are selected, how data is recorded, and how the product is handled after use are increasingly falling within the scope of regulation in the importing market.

At the center of this change is the European Union’s Ecodesign for Sustainable Products Regulation, commonly known as the ESPR. The regulation was adopted as Regulation 2024/1781 and expands the ecodesign approach from certain energy-related product groups to a broader range of products. Textiles are one of the sectors identified by the EU as requiring specific measures in the transition toward a circular economy.

For Vietnamese textile companies, the immediate impact is not limited to a new set of technical requirements. The larger issue is the shift from a model of supplying goods to a model of supplying both goods and verifiable information about those goods. Companies that cannot control data on fibers, dyes, finishing processes, durability, and material origins will find it difficult to meet the new requirements, even if their products still meet traditional quality standards.

How the ESPR Changes the EU’s View of Textile Products

Under the previous production model, many environmental requirements focused on waste treatment, wastewater control, or chemical use. These remain important, but the ESPR moves the focus earlier in the product life cycle: to the design stage.

Regulation 2024/1781 allows the EU to establish sustainability requirements for product groups within its scope. These requirements may relate to durability, reusability, repairability, upgradability, recycled content, recyclability, resource efficiency, and environmental impacts throughout a product’s life cycle. Specific requirements for each product group will have to be set out in the corresponding EU implementing acts.

An important point is that the ESPR does not mean there will be a single green label immediately applicable to all textile products. It is a legal framework through which the EU will establish requirements for specific product groups and at different stages. Therefore, companies should not wait until a final regulation specifically covering their products is issued before beginning preparations.

The EU’s direction on textiles also shows that regulators want to reduce the prevalence of products with short life spans that are difficult to repair or recycle. The EU Strategy for Sustainable and Circular Textiles takes a broader approach, under which textile products are expected to be more durable, safer, more repairable, and more recyclable, while being produced under conditions that respect environmental and social objectives.

Design Becomes Part of Export Capability

For contract garment manufacturers, design is often viewed as the brand’s responsibility. However, as requirements for materials, durability, and end-of-life treatment become quantified, factories will also have to participate more deeply in product design and development.

For example, combining multiple fiber types, using difficult-to-separate trims, or applying finishing layers that hinder recycling may become a problem as early as the sample-development stage. A design optimized for sewing speed and cost is not necessarily optimized for repair, disassembly, or recycling. This requires the technical, purchasing, product development, and quality management departments to participate together rather than operate separately.

Companies also need to distinguish between marketing claims and technical evidence. A product described as “green,” “sustainable,” or “environmentally friendly” does not automatically meet legal requirements. Claims such as the percentage of recycled fibers, the origin of materials, or water-saving performance need to be supported by supply-chain records, test results, relevant certifications, or traceable data from suppliers.

Digital Product Passports and the Data Challenge

One of the notable elements of the ESPR is the Digital Product Passport mechanism. Under the EU’s legal framework, this is an electronic data system linked to a product that allows relevant parties to access necessary information about the product’s sustainability, origin, or other characteristics as required by the applicable rules.

A Digital Product Passport is not simply a QR code placed on packaging. The value of the system lies in the quality of the data behind that access code. The data must be organized in an appropriate structure, linked to the product or batch, and updated by the responsible parties. Depending on the requirements for each product group, the information may concern materials, composition, repair, recycling, environmental impacts, or other indicators.

This is a significant challenge for textile supply chains, which often have many tiers. A shirt may use yarn from one supplier, fabric from another factory, and dyes and finishing chemicals from separate sources before being cut, sewn, packaged, and distributed across multiple markets. If each stage stores data in a different format, consolidating information for a finished product will be time-consuming and prone to discrepancies.

Vietnamese companies should therefore view product data management as an operational capability, not paperwork to be completed only when a customer asks for it. At a minimum, internal systems need to clearly identify what data is generated at each stage, who is responsible for verification, which documents constitute evidence, and how long records must be retained.

Three Data Layers Companies Should Standardize

The first layer is material data. Companies need to know the fiber type, blend ratio, source, relevant certifications, and changes in materials between batches. For recycled fibers, records should distinguish between pre-consumer and post-consumer recycled material if customer requirements or applicable standards treat them differently.

The second layer is process data. This may include spinning, weaving or knitting, dyeing, finishing, cutting and sewing, defect handling, and packaging. Not all information will necessarily be required at the same level of detail, but companies need to be able to identify which data is directly related to environmental or sustainability claims about the product.

The third layer is post-production data. This area is often overlooked because companies do not directly control the stage at which consumers use and dispose of products. However, information about composition, trims, disassembly options, or care instructions can affect durability and end-of-life treatment. Label design, user instructions, and product structure therefore also become part of a circularity strategy.

Impact on Vietnamese Textile Companies

The impact of the new requirements will not be the same for every company. Suppliers producing according to a brand’s complete design may receive criteria and templates from their customers. By contrast, companies with independent product development capabilities will need to take greater initiative in assessing materials, design, and life-cycle data.

In the short term, costs may arise at many stages, including material testing, digitizing records, staff training, supplier assessments, and adjustments to quality management systems. This is not a reason to view environmental requirements as a separate cost item. If implemented properly, the same data system can serve multiple objectives: meeting customer requirements, reducing discrepancies in purchasing, controlling quality, and supporting sustainability reporting.

The greater risk lies in inconsistent data. A company may use compliant materials but be unable to prove their origin; it may reduce resource consumption but lack baseline data for comparison; or it may declare a recycled content percentage without controlling changes between batches. In these cases, actual production capability and the ability to prove production will no longer be equivalent.

Supply chains may also be affected. European brands are likely to ask suppliers to share more information, while material suppliers will need to provide data earlier. Garment companies should therefore include data and traceability criteria in supplier selection, rather than evaluating suppliers only on price, delivery time, and defect rates.

Do Not Start by Buying Software

Faced with pressure to digitalize, a common response is to look for a software platform to create QR codes or manage product passports. However, software solves only part of the problem. If input data is incomplete or inconsistent, or if no one is responsible for verification, the technical platform will merely present incorrect information in a more modern format.

A more appropriate sequence is to map the supply chain, identify where data is generated, standardize terminology and checking rules, and only then select the tools. Companies should also test the system on a product group or with a specific customer to identify gaps before expanding it.

For small and medium-sized companies, cooperation through clusters or industry associations can help reduce standardization costs. Yarn, textile, dyeing, and garment suppliers can jointly agree on a minimum data set, methods for exchanging records, and ways of storing evidence. This approach does not replace the individual requirements of each brand, but it can limit the situation in which every customer uses a completely different system.

Opportunities from the Transition to a Circular Economy

The new requirements also create opportunities for companies capable of investing in differentiated products and processes. Durable fabrics, easy-to-repair designs, easily disassembled structures, and materials with clear records can create advantages in relationships with brands seeking to reduce compliance risks.

However, circularity is not simply about increasing the proportion of recycled fibers. If a product deteriorates quickly, is difficult to use, or is difficult to collect, replacing part of the virgin material with recycled material is not enough to create an effective circular model. Companies need to consider durability, repairability, design, chemicals, trims, packaging, and post-use treatment at the same time.

At the factory level, projects to save energy, reduce water use, recover materials, and control chemicals remain directly relevant. But to turn these efforts into a commercial advantage, companies must measure the results, define the calculation boundaries, and record the measurement methods. An environmental claim has value only when buyers or evaluating bodies can understand how the data was generated.

The EU’s shift toward design and data may also accelerate differentiation within the industry. Companies that compete mainly on processing costs will face new demands from customers. Meanwhile, companies capable of developing materials, designing products, managing supply chains, and providing transparent records will have more opportunities to participate in orders with higher requirements.

What to Monitor in the Coming Period

Textile companies should not view the ESPR as a requirement that appears only at the border. Product-group-specific regulations, technical criteria, methods for disclosing data, and the responsibilities of different parties will determine the actual level of impact. Export, legal, product development, and sustainability teams should therefore monitor EU documents directly rather than relying only on word-of-mouth information within the supply chain.

Three questions can be used to assess a company’s level of readiness. First, does the company know the exact composition and origin of the materials entering each product? Second, can the company link material data to the production process and a specific batch? Third, can the company prove claims about durability, recycling, or environmental impacts through consistent records?

If the answers are still unclear, the first step does not necessarily have to be a major investment. A company can select a key export product line, map data from materials to finished goods, identify gaps in evidence, and establish control procedures. The results of the trial will help the company determine whether changes are needed in design, purchasing, production, or technology systems.

The EU’s legal framework has not turned every textile product into a “digital passport” overnight. But the direction is relatively clear: environmental impacts will be considered earlier in the product life cycle, while data will become a condition for demonstrating compliance. For Vietnam’s textile industry, preparing now is not only about meeting a European market regulation; it is also a way to build competitiveness based on quality, transparency, and the ability to control the supply chain.