The EU’s New Ecodesign Rules Put the Textile Industry Before a Data and Traceability Challenge

## A Change Starting at the Design Stage

The textile industry exporting to Europe is facing a fundamental change: environmental requirements are no longer focused only on production or waste treatment, but are increasingly being introduced at the product design stage.

At the center of this change is Regulation (EU) 2024/1781 establishing a framework for setting ecodesign requirements for sustainable products, commonly referred to as the ESPR. Adopted by the European Union in 2024, the regulation replaces the previous ecodesign framework, which mainly applied to energy-related products.

The ESPR creates a broader legal framework covering many groups of physical products. It allows the EU to establish specific requirements for each product group through subsequent implementing acts. For textile businesses, the important point is not only a single technical standard, but also the way the EU is shifting its focus from “whether a product meets requirements at the point of sale” to broader questions: how the product is designed, what materials it uses, how long it can be used, how it can be repaired and recycled, and how verifiable the product data is.

This does not mean that every garment sold in the EU must immediately meet an identical set of criteria. Specific requirements will depend on the implementing rules for each product group. However, the legal direction is clear and is creating pressure for manufacturers, material suppliers, brands and exporters to prepare in advance rather than wait until mandatory requirements take effect.

## The ESPR Changes How Textile Products Are Viewed

### From Single-Performance Measures to the Product Life Cycle

According to the European Commission, the ESPR aims to improve product sustainability throughout the entire life cycle. Factors that may be considered include durability, reusability, upgradability, repairability, maintainability, recyclability, resource consumption and the presence of substances of concern.

For apparel, a life-cycle approach is particularly significant. A shirt will not be assessed only by its fiber composition or the amount of water used in dyeing. Seam durability, colorfastness, shape retention, how easily components can be separated, care instructions and the options for handling the product after use may all become part of its sustainability profile.

From a business perspective, this is an important change. If environmental data was previously collected mainly for customer reports or voluntary certifications, in the future it may be directly linked to market access conditions. Design, procurement, production, quality control and export departments will no longer be able to operate as separately as they did before.

### Digital Product Passports

One of the notable tools under the ESPR is the Digital Product Passport. Under the EU legal framework, this passport is designed to provide information related to a product’s sustainability, origin or other characteristics, depending on the requirements applicable to each product group.

For textiles, product passports may increase the need for data across the entire supply chain. Businesses may have to substantiate information about material composition, sourcing, repairability or recyclability, as well as disclosed environmental characteristics. The exact content, level of detail and operating method will depend on the specific EU rules for each product group.

It is important to note that a product passport is not simply a QR code placed on a label. The code only has value when the underlying data is generated through reliable control processes. If data on fibers, dyes, trims, factories or processing stages is inconsistent, creating a verifiable product record will be very difficult.

Therefore, the greatest challenge for many businesses is not purchasing new software, but standardizing data from the outset. Each product code needs a clear identification method; supplier information must be stored in a consistent structure; changes to materials or processes must be recorded; and environmental claims need corresponding evidence.

## Direct Impacts on the Textile Supply Chain

### Materials Will Be Assessed Within a Broader System

Textile companies often face simultaneous pressure from material prices, delivery times, quality requirements and brand standards. As sustainable product regulations expand, materials will also have to meet additional requirements concerning traceability and transparency.

This does not mean that a fiber will automatically be considered sustainable simply because it has a high recycled content, or that a product will lose its advantage merely because it uses virgin fiber. Environmental assessment needs to be placed in context, including the source of the material, the production process, product durability, reusability and options for handling the product after disposal.

However, businesses will find it more difficult to rely on general claims. Statements such as “environmentally friendly,” “green” or “sustainable” need to be supported by data appropriate to the claim being made. This is both a compliance issue and a reputational risk when product information is considered misleading.

For garment factories, the new requirements may encourage closer links with suppliers of yarn, fabric, dyes and trims. Future purchasing contracts may need to define more clearly the required material records, responsibilities for providing data and procedures for handling incomplete information.

### Design and Production Must Be Connected

In many supply chains, the brand or buyer decides the product style and specifications, while the factory is responsible for manufacturing according to the order. This model can create data gaps: the factory knows the details of the processing stages but does not have full information about the source of materials; conversely, the brand has sales data but lacks information at deeper supplier levels.

The ESPR highlights the need to connect both ends of the chain. A design that is difficult to repair, uses multiple inseparable materials or contains complex accessories will create additional problems at the end-of-life stage. A product that is better designed but lacks supporting data will also be difficult to convert into a commercial advantage.

Product development therefore needs early involvement from engineering, quality, procurement and environmental teams. Checking only after the product has been completed may not be enough to correct problems originating in the design.

## Inventory and the Circular Economy Challenge

The ESPR also establishes principles to limit the negative impacts of destroying unsold products. The regulation introduces obligations related to the disclosure of information about discarded unsold consumer products, while also establishing certain requirements and restrictions concerning the destruction of specific product groups. Small and medium-sized enterprises may be subject to different pathways or exemptions depending on the specific provisions of the regulation.

For the fashion industry, this is an important issue because excess inventory can result from inaccurate demand forecasts, canceled orders, changing trends or errors in production planning. As transparency requirements increase, dealing with unsold goods will no longer be merely an internal cost decision.

The practical impact will depend on the implementing rules for each product group and business model. Nevertheless, companies can proactively reduce risk by improving forecasting, shortening production cycles, managing inventory at each stage and increasing the ability to reuse materials. Flexible made-to-order production or the development of product lines that can be sold across multiple seasons are also approaches worth considering based on actual business effectiveness, rather than environmental slogans alone.

The circular economy in textiles does not begin at a recycling plant. It begins with product design decisions, the selection of color and size quantities, the way trims are used, the ability to disassemble components and the plan for handling a product at the end of its life.

## What Do Vietnamese Businesses Need to Prepare?

### Map Data Before Investing in Technology

The first response of many businesses to traceability requirements is to look for a software system. However, software cannot create accurate data by itself if the initial collection process is unclear.

Businesses should start by mapping the information they already have and identifying what is missing. This map may include material codes, suppliers, purchasing documents, test results, production batch information, consumption norms, processing stages and delivery records. It is necessary to distinguish between mandatory data, data used for internal control and data used for environmental claims.

A common problem is that the same material is recorded under different names or codes by different departments. When data is inconsistent, consolidating it for a specific order or product takes more time and is more prone to errors.

### Control Environmental Claims

Businesses also need to review how environmental terms are used on labels, sales materials and documents submitted to customers. Recycled material percentages, fiber origin, recyclability or emissions reductions are all claims that need to be linked to appropriate measurement methods and supporting evidence.

Not all information needs to be disclosed at the same level, but information that is disclosed must be consistent across documents. Differences between technical records, product labels and marketing content may create inspection risks or commercial disputes.

### Prepare for Requirements from European Customers

While specific implementing regulations continue to be developed, brands and buyers may proactively introduce their own requirements for suppliers. These requirements may sometimes appear before a factory has a direct legal obligation, because brands need to prepare data for their entire product portfolios.

Vietnamese businesses therefore need to monitor three layers of requirements at the same time: EU regulations, the standards of individual customers and internal management capabilities. Meeting only one of the three will not guarantee the ability to maintain orders over the long term.

## Early Standardization May Create an Advantage

The ESPR increases preparation costs, particularly for businesses with fragmented supply chains or a heavy reliance on manual data. But it may also provide an impetus for the textile industry to upgrade its management practices.

Clearer material data helps businesses control changes, reduce discrepancies between samples and mass production, and respond more quickly when customers request adjustments. Design that emphasizes durability and repairability may reduce complaints, extend product use and create additional opportunities for after-sales services. Better inventory management may improve cash flow, even without considering environmental benefits.

However, investments in traceability technology should not be viewed as a guaranteed source of competitive advantage. Effectiveness depends on data quality, supplier adoption and the ability to integrate with existing systems. Businesses need to avoid superficial digitalization, in which a product has a traceability code but the information behind it is incomplete or unverifiable.

## Issues That Require Continued Monitoring

In the coming period, the textile industry will need to monitor the EU’s specific implementing acts for each product group, how Digital Product Passports will operate, data requirements and how inspection authorities apply the rules in practice. These factors will determine compliance costs and the specific responsibilities of each link in the chain.

Businesses also need to distinguish between regulations that are already in force, requirements still under development and voluntary customer standards. Mixing these three categories can lead to misguided investments or claims that go beyond the available evidence.

For Vietnam’s textile industry, the biggest change may not come from a single metric, but from the requirement to substantiate the product’s entire story. From fiber and fabric to garment processing, from design to inventory handling, every stage may become part of the market record.

## Conclusion

The EU’s ecodesign regulation for sustainable products is broadening the scope of competition in the textile industry. Price, quality and delivery time remain core factors, but the ability to provide reliable data will increasingly affect the maintenance of relationships with European customers.

Businesses do not need to wait until all implementing guidance is finalized before taking action. The lowest-risk steps are to standardize product and material codes, check suppliers’ ability to provide data, review environmental claims and incorporate traceability requirements into product development processes.

As legal requirements continue to be specified, preparing early does not mean chasing every technology trend. It means building a system transparent enough for a business to know where its products come from, what resources they use and how to substantiate that information when the market requires it.