“They Used to Just Incinerate Unsold Goods”: Will Luxury Prices Finally Drop as Disposal Is Restricted?

Ban on Discarding Unsold Clothing, Footwear, and Accessories
Resale or Donation Required Instead of Incineration or Landfill

Regulations by the European Union (EU) prohibiting large fashion companies from discarding unsold clothing, footwear, and accessories went into effect on July 19, 2026 (local time).

According to a report by Yonhap News Agency, this measure is based on the EU's "Ecodesign for Sustainable Products Regulation (ESPR)" introduced in July 2024. The regulation was established to suppress excessive production of goods and to reduce textile waste.

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Due to this regulation, large European corporations must now resell or donate unsold products to discount stores or alternative markets, rather than disposing of them through incineration or landfilling. For small and medium-sized enterprises, the measure will apply starting in 2030 after a four-year grace period.

Exceptions where disposal is allowed include: ▲ if there are product safety issues or damages ▲ if manufactured goods infringe intellectual property rights ▲ if charitable organizations refuse to accept donated goods, among other cases. In addition, to prevent abuse of these exceptions, companies are required to release an annual report detailing the scale of unsold stock and its disposal. In cases of non-compliance, each member state will conduct inspections and impose fines. Companies must retain relevant records for five years in preparation for government audits.

The German Retail Association (HDE) told dpa news agency that this measure is expected to increase the supply of discounted products to discount and second-hand distribution channels, benefitting consumers while having a positive impact on the environment. On the other hand, luxury brands that have often incinerated or landfilled large quantities of unsold stock now face difficulties. These luxury brands have disposed of large inventories to maintain brand value. The Financial Times reported, "Luxury companies are likely to be forced to revise their business strategies as a result of this regulation."

In the apparel industry, companies have often opted for disposal—which is relatively less costly than storage, sorting, repair, or resale—even for undamaged goods, drawing criticism from environmental groups. According to the European Environment Agency (EEA), approximately 4–9% of all clothing products released on the European market are discarded each year without ever being used.

This content was produced with the assistance of AI translation services.