The EU’s Ecodesign Regulation and the New Challenge for Vietnam’s Textile and Garment Enterprises

Vietnam’s textile and garment industry is facing an important change in the way it approaches the European market. Requirements for a garment product will no longer focus only on origin, chemical safety, or delivery conditions. In the coming years, businesses will have to demonstrate more about how products are designed, how materials are used, how operations are managed throughout the supply chain, and how products are handled after reaching the end of their life cycle.

At the center of this change is Regulation (EU) 2024/1781 establishing a framework for the setting of ecodesign requirements for sustainable products, commonly known as the Ecodesign for Sustainable Products Regulation, or ESPR. The regulation was adopted by the European Union on June 13, 2024, and entered into force on July 18, 2024. It is a legal framework, not a single set of standards that immediately applies to every product. The EU will continue to issue specific regulations for individual product groups.

For the textile and garment industry, the greatest significance lies in the fact that environmental criteria are being brought earlier into the product life cycle. Businesses cannot simply deal with waste at the end of the process or purchase certificates for part of their materials. Design capabilities, data management, and supplier control will increasingly have a direct impact on market access.

From green production to sustainable product design

In the past, discussions about sustainable textiles and garments often focused on electricity, water, chemicals, emissions at factories, or the proportion of recycled materials. These issues remain important, but the ESPR expands the scope of assessment to the product itself and the decisions made from the design stage.

Under the EU text, ecodesign requirements may concern durability, reusability, upgradability, repairability, maintainability, recyclability, resource and energy efficiency, as well as the proportion of recycled materials. The regulation also allows requirements to be established regarding environmental footprints, the amount of waste generated, and the ability to provide information to users or other actors in the value chain.

For textile and garment products, these requirements could change many decisions that have traditionally been viewed as purely commercial. Fabric type, product structure, seam durability, the ability to detach accessories, blended-fiber composition, and labeling methods could all become matters requiring control. A low-cost product that is difficult to repair or sort, or that contains too many components incompatible with recycling processes, could face higher requirements in the future.

It is important to note that the ESPR does not automatically require all products to meet the same set of criteria immediately after the regulation enters into force. Detailed requirements will be established through separate measures for each product group. Therefore, businesses need to distinguish between obligations that are already effective at the framework level and the technical criteria that will be issued later.

Digital Product Passports place data at the center

One of the ESPR’s most closely watched elements is the Digital Product Passport. This is a mechanism intended to provide electronic information about a product and its related components or materials throughout the life cycle. Depending on the product group and the requirements issued later, the data may include information on performance, materials, repairability, recyclability, or other environmental aspects.

For textile and garment businesses, a product passport is not simply a matter of adding another QR code to a label. The code is only a means of access; the more difficult issue is that the underlying data must be consistent, verifiable, and linked to the correct product or batch. Information about fiber composition, material sources, dyeing processes, finishing treatments, and relevant certifications is often scattered across different departments or suppliers.

The more multi-tiered the textile supply chain, the more complex data collection becomes. A garment company may purchase fabric from a domestic supplier, while yarn, dyes, accessories, or recycled materials come from other sources. If the management system only tracks orders and quantities, the business will find it difficult to answer deeper questions about the product’s composition and history.

Data gaps can become commercial risks

In the new context, environmental data will no longer serve only social responsibility reporting or internal assessments. Data may become part of technical documentation, customer inspection procedures, and the conditions for placing goods on the market. This increases the requirements for traceability, document retention, and the allocation of responsibilities among exporters, material suppliers, and buyers.

Businesses also need to be cautious when using claims such as “green,” “environmentally friendly,” or “sustainable.” A convincing claim cannot be based solely on the proportion of recycled fibers. It needs to be placed in a broader context, including, for example, the method used to determine the proportion, the source of the materials, product durability, usage instructions, and the options for handling the product after it is discarded.

Unsold inventory and pressure to change production models

The ESPR also introduces provisions related to unsold consumer products. The regulation prohibits large businesses from destroying certain categories of unsold consumer products, including clothing, clothing accessories, and footwear, while also requiring information to be disclosed in certain circumstances. The provisions on unsold clothing, clothing accessories, and footwear will apply according to a separate timeline after the transition period specified in the regulation.

This signals that the EU wants to address product overproduction within business models, rather than merely encouraging the treatment of goods that have already become waste. For Vietnamese manufacturers, the direct impact may depend on their contracts with European brands and importers. However, indirect impacts may emerge earlier through customer requirements concerning demand forecasting, production planning, order management, and arrangements for defective or returned goods.

Traditional contract manufacturing often gives factories less control over product design and sales. Nevertheless, factories may still be required to cooperate in providing data, reducing defects, controlling quality, and supporting traceability. When European customers want to reduce inventory, the ability to respond quickly and produce flexibly may become just as important as the capacity to accept large orders.

In the long term, this regulation creates additional momentum for models such as on-demand production, small batches, replenishment based on sales data, and design that takes disassembly or reuse into account. However, this is an analysis of the policy’s direction of impact, not a claim that every Vietnamese business will have to immediately shift to a specific business model.

Impact on Vietnamese textile and garment enterprises

Businesses exporting to the EU will need to prepare on several levels. The first is compliance with customer requirements and current product regulations. The second is building data capabilities to meet new criteria when they are issued for individual product groups. The third is adjusting product design, materials, and production processes if those requirements become mandatory conditions.

Businesses with direct relationships with international brands or retailers may receive requirements earlier than businesses involved only in contract manufacturing. These requirements are often communicated through customer standards, supplier evaluation procedures, and material declaration systems. Therefore, preparation should not be limited to import-export or environmental departments.

Product development departments need to understand material composition and the possibility of replacing materials. Purchasing departments need to evaluate suppliers based on data quality, not only price. Production departments need to monitor defect rates, waste, and consumption levels. Information technology departments need to ensure that data can be linked across material codes, production orders, batches, and finished products.

Not every business needs to invest in the same way

The scale of investment in transformation will vary according to each business’s position in the chain. A sewing factory that receives materials and designs from a customer may prioritize standardizing production data recording, controlling batches, and maintaining traceability documentation. A business that owns a brand or develops products needs to go further, including life-cycle assessment, material selection, packaging design, and post-use planning.

It is important to avoid turning the green transition into a shopping list for equipment. New software cannot create reliable data by itself if recording procedures at the factory are unclear. Similarly, increasing the proportion of recycled materials does not automatically resolve issues related to durability, sortability, or the transparency of environmental claims.

Businesses can begin by mapping data for several key product lines intended for export. The map should identify who creates the data, where it is checked, how long it is retained, and which documents it can be linked to. Only then should the business determine where investment is needed in software, testing equipment, or personnel training.

Supply chains need to shift from end-stage inspection to continuous control

One notable change is that final inspection will not be enough to demonstrate a product’s sustainability. If information about fibers, chemicals, or processing stages is not recorded from the outset, businesses will find it difficult to fully reconstruct the data when customers request it. This is particularly important for materials made from recycled sources, materials containing multiple fiber types, or products that pass through several outsourced stages.

Vietnamese textile and garment businesses therefore need to strengthen vertical coordination within the supply chain. Spinning, weaving, dyeing, finishing, and sewing factories should not be viewed as completely separate links when they jointly contribute to an exported product. Each stage needs a consistent method for identification and data transfer.

Conversely, compliance with the new regulations could also create opportunities for domestic suppliers. Suppliers that can demonstrate material origins, maintain consistent quality, and provide data in the correct format will have an advantage during customer evaluation. This could encourage Vietnam’s supporting-materials industry to invest in traceability and standardization.

However, transition costs will be a practical issue, especially for small and medium-sized enterprises. Costs may arise from testing, certification, software, personnel, and process changes. If requirements are passed down the supply chain without consistent guidance, small businesses may have to comply with several different data systems for different customers.

What to monitor in the next phase

The ESPR has created a common legal framework; the specific requirements for each product group will determine the actual level of impact. Therefore, businesses should not wait until all technical criteria are finalized before beginning preparations. At the same time, they should not invest based on unconfirmed interpretations or treat every claim in the market as a legal obligation.

Three groups of information should be monitored: product-specific implementing measures, requirements related to Digital Product Passports, and guidance on unsold consumer products. Businesses should also maintain communication with industry associations, customers, and suppliers to understand which requirements have already been incorporated into contracts and which remain at the preparation stage.

At the management level, the important question is not only “does the product meet current requirements?” but also “what data can the business use to prove it?” The ability to answer this question will affect negotiations with customers, the speed of handling complaints, and the degree of preparedness for new standards.

For Vietnam’s textile and garment industry, the EU’s ecodesign regulation is not a barrier that appears only at the border. It is a change extending from design, material purchasing, and production organization to inventory management and information provision. Businesses that prepare early through verifiable steps—standardizing data, clarifying responsibilities in the chain, and reassessing products—will have a stronger foundation when specific requirements are implemented.