Our EU Sustainability: State of Play series focuses on regulatory developments and policy initiatives emerging from Brussels. In this series, we explore EU sustainability frameworks and their intersection with other areas of EU law.
EU sustainability regulations continue to play a key role in shaping the direction of international ESG frameworks. Latham’s European ESG Practice tracks these EU-driven developments closely by drawing on our connections with EU regulators, our presence in Brussels, and our broader European platform.
The European Union, and in particular the European Commission (Commission), has long sought to advance the concept of a circular economy as a key element of its policy agenda. The circular economy seeks to shift away from the traditional linear model of product use towards a more sustainable system based on the reuse and regeneration of materials. Through a series of legislative initiatives, strategic action plans, and cross-sectoral collaborations, the Commission has set out its aim to foster an economic system in which products, materials, and resources are kept in use for as long as possible to minimise waste.
The key backdrop to the Commission’s goals in this area is the second Circular Economy Action Plan (CEAP), adopted in March 2020 as one of the foundational pillars of the European Green Deal (Green Deal).For more information on the European Green Deal, refer to the State of Play Article: The European Green Deal, Omnibus, and Corporate Sustainability Regulation. While the Green Deal sets out the EU’s overarching ambition to achieve climate neutrality by 2050,The Green Deal aims to cut emissions by at least 50% by 2030 and legally binds the 2050 climate neutrality target through the European Climate Law. the CEAP introduced legislative and non-legislative initiatives to target the entire life cycle of products, including design, use, and recycling, many of which have now been adopted and entered into force.
The CEAP pursues several linked objectives:
This article examines some of the legislative initiatives that form part of the CEAP, considering key obligations, timelines, and current status.
On 13 June 2024, the EU adopted the Ecodesign for Sustainable Products Regulation (ESPR), establishing a legal framework for ecodesign requirements applicable to a wide range of physical products placed on the EU market. The ESPR repeals the Ecodesign Directive,This was focused in particular on energy using and energy related products and was therefore much narrower in focus than the EPSR. marking a further step in the EU’s development of environmental legislation and aligning with the Green Deal and the CEAP.
The ESPR seeks to pursue two interlinked EU objectives: (i) enhancing the environmental sustainability of products throughout their life cycle and (ii) supporting the free movement of sustainable goods across Member States. To achieve this, the ESPR introduces a range of measures, including:
The ESPR enables the setting of performance and information rules for physical goods, also known as “ecodesign requirements”. For a summary of these requirements, see Appendix 1.
The ecodesign requirements aim to enhance product durability, repairability, reusability, and recyclability, while also addressing the presence of concerning substances and reducing the overall carbon and environmental footprint of products throughout their life cycle.
Implementation of the specific requirements will be phased in through product-specific and horizontal requirements. The Commission adopted the first ESPR and Energy Labelling Working Plan in April 2025, outlining which products will be prioritised for specific product rules. The products to be included in the first working plan are set out in the ESPR and include iron and steel, aluminium, textiles (in particular garments and footwear), and tyres. For a summary of the results of the first working plan, see Appendix 2.
Once this secondary legislation (known as delegated acts) is developed, in-scope products must comply with the applicable ecodesign requirements if they are to be placed on the EU market.
In addition to the overarching requirement for economic operators to take “necessary measures” to avoid destroying unsold consumer products, the ESPR introduces a specific ban on the disposal of unsold consumer products in the textile, leather, and footwear sectors. The ban will come into effect on 19 July 2026 for large entities (and 19 July 2027 for medium entities).
This measure aims to reduce waste and environmental impact, in line with the EU’s strategy for sustainable and circular textiles. The ban applies to products listed in Annex VII of the Regulation, but allows for certain derogations, such as health, safety, hygiene reasons, irreparable damage, legal non-compliance, intellectual property infringements, or failed attempts at donation or reuse. These derogations will be specified in a forthcoming delegated act. To ensure compliance and prevent abuse, companies must keep detailed records for ten years to justify any destruction under these exceptions, including inspection and donation reports. Economic operators will also be required to disclose information on discarded products and the reasons for their destruction (including the relevant derogation used in the case of Annex VII products).
The Digital Product Passport (DPP), introduced by the ESPR, is a digital tool designed to ensure traceability and transparency of product information throughout the entire value chain. Each DPP is linked to a unique product identifier (and, when relevant, operator, and facility identifiers), enabling tracking of products from manufacturing to end-of-life. The DPP is intended to be user-friendly, accurate, complete, and regularly updated, and it should be accessible to all relevant stakeholders (e.g., manufacturers, importers, distributors, repairers, recyclers, authorities, and consumers), according to their access rights. When necessary, information can also be provided through physical means, such as labels or manuals.
The Commission is required to adopt technical specifications and create a central DPP Registry by July 2026, which will facilitate enforcement, customs controls, and market surveillance. Economic operators are required to upload relevant data, and the DPP will also apply to imported products, seeking to ensure a level playing field within the EU market. Manufacturers, importers, and dealers have specific obligations to guarantee that products placed on the market comply with DPP and ecodesign requirements, and that the DPP is accessible to customers, including in online “distance” selling.
The Sustainable Product Policy Framework aspect of the CEAP also contains further initiatives, including:
The Packaging and Packaging Waste Regulation (PPWR) is a key initiative under the CEAP, which seeks to strengthen and further harmonise requirements for the quantities and types of packaging used in the EU. It replaces the Packaging and Packaging Waste Directive, and will establish rules to reduce packaging waste, promote reuse and recycling, and minimise use of primary raw materials. The PPWR formally entered into force in February 2025, but will begin to apply in August 2026, with certain provisions phased in over the coming years.
The PPWR introduces a number of requirements, targets, and initiatives; some apply directly to companies acting on the EU market and others to Member States.
Notably, packaging must undergo a conformity assessment procedure and receive an EU declaration of conformity to confirm the packaging meets sustainability requirements, including the use of specific substances (e.g., PFAS) in packaging, recyclability, recycled content, and labelling.See Articles 5-12 of the PPWR. Precise requirements will be set out in subsequent delegated acts.
The obligation to conduct the conformity assessment procedure is on the “manufacturer”This includes those who manufacture packaging or a packaged product, as well as those who have packaging or a packaged product designed or manufactured under their own name of trademark. of the packaging, who assumes responsibility for compliance by drawing up the declaration of conformity. There are separate obligations on importers and other economic operators in the packaging value chain to ensure the packaging is compliant and to avoid actions that negatively impact conformity.
The PPWR requires Member States to support the circularity of the packaging environment. Measures include the development of re-use and refill systems and deposit and return schemes, as well as meeting nationwide targets for recycling. The PPWR also introduces extended producer responsibility schemes (EPR) to packaging producers, expanding the scheme under the Waste Framework Directive.
The EU Batteries Regulation (Batteries Regulation) came into force in August 2023, repealing and replacing the prior Batteries Directive.
The Batteries Regulation applies to all battery types sold in the EU, including portable, industrial, electric vehicle, light means of transport (LMT), and starting, lighting, and ignition batteries, regardless of their origin. Further, it introduces obligations on all manufacturers, producers, importers, and distributors.
The Batteries Regulation will be phased in, with key deadlines spanning 2024 to 2036, depending on the types of obligation, battery, and economic operator.
The Batteries Regulation requires that EV batteries, LMT batteries, and large industrial batteries have a carbon footprint declaration and label indicating the amount of certain hazardous materials. There are also separate restrictions on the maximum amounts of mercury, cadmium, and lead in certain batteries as part of the Commission’s push to make batteries and battery waste less hazardous.
Large entities selling batteries within the EU are required to develop a battery due diligence policy to address certain environmental and human rights risks prevalent in battery supply chains. Such policies must align with international human rights standards, such as the OECD guidelines. The policies were initially required to enter into effect in August 2025, but the EU delayed this deadline by two years as part of one of its Omnibus initiatives — the requirements are now due to come into effect on 18 August 2027.
The Batteries Regulation also contains provisions focused at Member State and economic operator level. Certain types of batteries will require specific “battery passports”, with information of the battery model and its use. Further, from 2027, all batteries must have labels and QR codes providing specific information. Broader, economy-wide targets for battery recycling rates are also included in the Batteries Regulation and differ depending on battery type.
The Product Value Chains Framework of the CEAP also contains further initiatives, including:
The Waste Framework Directive, adopted on 19 November 2008, sets the basic concepts and definitions related to waste management, including definitions of waste, recycling, and recovery. Its primary objective is to reduce negative impacts on the environment and human health, particularly through waste prevention.
The Waste Framework Directive emphasises waste hierarchy as a foundational principle, establishing five steps for managing and disposing of waste: (i) prevention; (ii) preparation for re-use; (ii) recycling; (iii) recovery; and (iv) disposal as a last resort.
Integral to this hierarchical framework is the Polluter Pays Principle (PPP), which ensures that those producing waste or pollution are held financially responsible for managing it. The Waste Framework Directive leverages extender producer responsibility (EPR) schemes to operationalise the PPP. The schemes are a policy tool under which producers are financially and/or physically responsible for the entire life cycle of products they introduce to the market, especially at the post-consumer stage (the schemes are being extended under the PPWR and the Batteries Regulation (see above)).
The reform of EPR under the 2018 revision of the Waste Framework Directive marked a turning point in EU waste policy. Through the introduction of Article 8a, the Directive established minimum EU-wide requirements for all EPR schemes, including clear allocation of roles and responsibilities, mandatory eco-modulated fees, and full producer financing of waste management activities such as collection, sorting, and treatment. Producers are also required to report transparently on scheme performance, with national authorities tasked with ensuring accountability. Beyond Article 8a, the reform also encouraged Member States to introduce EPR for new product categories such as textiles, furniture, and construction materials, laying the groundwork for future expansion.
The 2023 revision of the Waste Framework Directive introduced targeted amendments focused primarily on textile and food waste. Building on the 2018 reform, the revision establishes mandatory, harmonised EPR schemes for textiles across all Member States, and sets binding food waste reduction targets to be achieved by 2030.
These changes aim to promote circular economy practices, improve separate collection and recycling, and ensure that producers take greater responsibility for the life cycle impacts of their products. The updated directive also includes measures to address fast fashion, clarify definitions of waste versus reusable textiles, and strengthen controls on waste exports.
In addition, a further 2025 amendment of the Waste Framework Directive set out a specific EPR regime for textiles, requiring that producers that make textiles available in the EU will be required to cover the costs of collection, sorting, and recycling through new schemes to be set up by each Member State.
The new EU Regulation on Waste Shipments, adopted in April 2024 and replacing the 2006 Waste Shipment Regulation, aims to modernise and tighten control of waste movements within, into, and out of the EU. The regulation enters into full application on 21 May 2026, although certain provisions, such as those concerning electronic data interchange, will apply earlier or be phased in gradually. The regulation aligns waste shipment rules more closely with EU circular economy and environmental protection goals, responding to concerns over illegal exports and the environmental harm caused by waste mismanagement abroad.
Key elements of the regulation include a ban on exports of plastic waste to non-OECD countries and stricter conditions for shipments to OECD countries, with the aim that waste is only exported if it is treated in an environmentally sound manner. The regulation also introduces a fully digital notification and tracking system for all waste shipments, aimed at improving transparency, traceability, and enforcement across borders. Furthermore, it strengthens the powers of national authorities and customs to intervene in illegal waste shipments and requires better cooperation between Member States.
Importantly, the regulation supports the EU’s internal circular economy by facilitating the shipment of waste for recovery within the EU, reducing administrative burdens for compliant operators while tightening rules for waste exports. It also seeks to reflect the PPP by holding waste producers and exporters more accountable for the final treatment of waste.
The EU’s Zero Pollution Action Plan (ZPAP), launched in 2021, sets a long-term vision of achieving zero pollution by 2050, meaning pollution levels that are no longer harmful to human health and ecosystems. To reach this ambitious goal, the ZPAP establishes concrete interim targets for 2030, including a 50% reduction in plastic litter at sea and a 30% reduction in microplastic releases into the environment. These targets provide a strong policy foundation for regulatory measures aimed at tackling microplastic pollution throughout the life cycle of plastic products.
Aligned with ZPAP’s objectives, the EU adopted the Microplastics Restriction of 25 September 2023, which came into force in October 2023. This restriction bans the manufacture, marketing, and use of synthetic polymer microplastic (SPM) particles in products that are likely to release into the environment during normal use, including cosmetics, detergents, fertilisers, and granular infill for artificial sports surfaces. This restriction does not apply to SPMs placed on the market as articles rather than substances or mixtures.
The restriction applies to SPM’s smaller than 5mm that are organic, insoluble, and resistant to degradation.
In October 2023, the European Commission proposed a regulation to prevent microplastic pollution from the unintentional release of plastic pellets, which are a major source of microplastics in the environment. The proposal targets all operators handling plastic pellets in the EU, requiring them to implement best handling practices, prioritise the prevention, containment, and clean-up of spills, and comply with new certification or self-declaration requirements depending on company size.
Entering into force in June 2023, the EU Deforestation Regulation (EUDR) requires that key commodities (including timber, cattle, soy, palm oil, coffee, cocoa, and rubber) and products (set out in an Annex to the EUDR) that are placed on or exported from the EU market are demonstrably deforestation-free and produced in accordance with relevant local legislation. By mandating traceability to the plot of land and robust due diligence throughout the supply chain, the regulation aims to decouple economic activity from environmental harm, particularly the loss of forests and biodiversity.
The EUDR was initially intended to enter into effect on 30 December 2024, but was delayed by one year. Reportedly, the EUDR may be subject to a further one-year delay, until 30 December 2026, ostensibly due to issues associated with the EU’s IT system that will manage submitted due diligence statements.
To comply with the regulation, products placed on or exported from the EU market must be:
Further, traceability is a central requirement under the EUDR. Operators are obligated to provide geolocation data for all plots of land where the relevant commodities were produced.
Entities that are subject to the requirements of the EUDR must comply with differing requirements based on the risk profile of the country of origin of the relevant commodity. In particular, commodities sourced from low-risk countries limit the requirement to conduct a formal risk assessment or take mitigation measures unless specific evidence of non-compliance with the EUDR emerges. The Commission adopted an implementing regulation in May 2025 setting out the initial risk classification for countries, which identified four high-risk countries (Belarus, Myanmar, North Korea, and Russia), and 140 low-risk countries (including the EU Member States, UK, US, and China).
Enforcement of the EUDR is structured around a risk-based approach, with Member States required to conduct annual checks covering at least 9% of operators and product quantities for goods originating from high-risk countries, and at least 1% for those from low-risk countries. Furthermore, the EUDR provides specific provisions for submitting and addressing substantiated concerns raised by any natural or legal persons to the national authorities about potential non-compliance.
The EU adopted the Critical Raw Materials Act (CRMA) in April 2024, in response to growing focus on the security, sustainability, and resilience of the EU’s critical raw materials supply. These materials, including rare earth elements like lithium and cobalt, are essential for the green and digital transitions, supporting sectors such as renewable energy, electric mobility, electronics, defence, and advanced manufacturing.
The EU’s dependence on imports for many critical raw materials, often sourced from a limited number of third countries, was viewed as exposing its economy to supply risks, price fluctuations, and geopolitical vulnerabilities. The CRMA was developed as a legislative framework to tackle these challenges by bolstering raw materials value chains within the EU, including exploration and extraction, processing, recycling, and substitution.
The CRMA introduces a series of measures that change the regulatory landscape for businesses operating in or reliant on critical raw materials.
Central to the CRMA are ambitious targets for Member State strategic raw materials. By 2030, 10% of the EU’s annual consumption of strategic raw materials will be required to be extracted domestically, 40% be processed within the EU, and 25% be sourced from recycling, while no more than 65% of any strategic raw material should come from a single third country.
The strategic importance of a raw material is assessed on the basis of the relevance of a raw material for the green and digital transition as well as defence and aerospace applications, using criteria as the amount of strategic technologies using a raw material as an input; the amount of a raw material needed for manufacturing relevant strategic technologies and the expected global demand for relevant strategic technologies.
To facilitate these targets, the CRMA creates a fast-track permitting process for “strategic projects” in extraction, processing, and recycling, granting them priority status and setting strict time limits for administrative procedures (27 months for extraction, 15 months for processing or recycling), to accelerate project development and reduce bureaucratic delays. The CRMA also mandates Member States to develop national exploration programmes, improve geological data sharing, and integrate raw materials considerations into spatial planning.
The CRMA also sets out requirements for the design, labelling, and recyclability of products containing permanent magnets (e.g., industrial robots, wind energy generators, electric motors), and introduces reporting obligations on the recycled content of such components. Certification schemes for sustainable and responsible sourcing are recognised, and environmental footprint declarations may become mandatory for certain materials.
The CRMA is closely aligned with the EU’s broader circular economy strategy, as articulated in the Green Deal and the CEAP. By seeking to promote investment in Member State extraction, processing, and recycling, and by streamlining permitting procedures and supporting innovation, the Commission hopes that the CRMA will advance the EU’s circular economy objectives. In seeking to encourage the recovery of critical materials from waste streams, the development of secondary raw materials markets, and the integration of circularity principles throughout the value chain, the Commission hopes that the CRMA will enhance supply security and economic resilience, and also ensures that the use of critical raw materials is aligned with environmental sustainability and resource efficiency.
The CEAP has established a comprehensive and integrated framework for advancing the EU’s transition from a linear to a circular economic model. Through a broad range of measures, the CEAP has or will introduce circularity requirements across the product life cycle, encompassing design, manufacturing, consumption, reuse, and end-of-life management. The adoption of key instruments discussed in this article, including the ESPR, PPWR, the Batteries Regulation, and targeted amendments to the Waste Framework Directive, set new standards for product sustainability, transparency, and producer responsibility.
Effective implementation of the new frameworks likely will require a consistent approach to enforcement, harmonised interpretation across Member States, and continued support for innovation and market development.
Between 22 July and 10 September 2025, the Commission set out a Call for Evidence in relation to an “environmental omnibus” (separate from the much-discussed February 2025 sustainability omnibus initiative), pursuant to which the Commission intends to simplify environmental legislation within the EU.
The environmental omnibus proposal will include a series of measures across existing legislation concerning the circular economy (including, likely, CEAP), industrial emissions, and waste management. The exact nature of the amendments remains to be seen.
The forthcoming Circular Economy Act represents the next significant step in the EU’s circularity agenda. Currently under public consultation until November 2025, the Circular Economy Act is intended to address structural barriers by harmonising end-of-waste criteria, strengthening the Single Market for secondary raw materials, and introducing further requirements for transparency, digitalisation, and EPR. It is also anticipated to prioritise the recovery of critical raw materials and the circular management of high-impact waste streams, such as electronic waste and textiles. The Circular Economy Act aims to provide the regulatory certainty and market incentives necessary to facilitate investment, foster innovation, and support the adoption of circular business models across the EU.
As the EU continues to look to progress towards its 2050 climate neutrality and resource efficiency objectives, the CEAP and the forthcoming Circular Economy Act will form the core of a revised economic model that maintains resources in productive use, minimises waste.
This post was prepared with the assistance of Ursula Seliciato in the Milan office of Latham & Watkins.
Latham’s European ESG Practice has experience advising on a broad range of EU sustainability and international ESG topics. If you have questions about this article, please contact one of the authors listed below or the Latham lawyer with whom you normally consult.