How will circularity rules reshape sustainable product strategy?

The regulation defines a set of environmental performance aspects that future product-specific rules must address. These include attributes like durability, energy efficiency, reparability, reusability, upgradeability, recyclability, the presence of hazardous chemicals and recycled content. Manufacturers will be obliged to ensure that products meet minimum thresholds on these parameters once the relevant delegated acts are in force.

While the ESPR itself is primarily a product design regulation, it aligns with a broader shift in EU policy that is expanding the concept of Extended Producer Responsibility (EPR).

New measures are pushing producers to ensure not only that they pay for waste management, but also that they design products that last and are repairable in the first place. The ESPR’s emphasis on durability, repairability and the Digital Product Passport reinforces this trend. In practice, companies will need to integrate ecodesign considerations into the design phase, e.g. choosing materials and designs that facilitate easy recycling and maintenance, since they are increasingly held responsible for the product’s entire lifecycle.

ESPR introduces a DPP system to improve transparency and traceability of product information across the supply chain. For designated products, manufacturers will have to create a standardized digital record (e.g., via a QR code) containing key data on the product’s composition, maintenance, repair instructions, origin of components and end-of-life handling. This DPP allows consumers, businesses and regulators to easily access sustainability information. It is planned that the EU-wide DPP registry should be operational by July 2026. There are indications that this plan is on track. Forward-looking firms are already treating the DPP as a critical part of their digital transformation – for instance, setting up data systems to track material content and carbon footprint for each product so they can “get DPP-ready” with pilot projects before the requirement on their products kicks in.

The ESPR sets out staggered timelines for different obligations, reflecting the scale of changes required. Key dates include:

• July 2024: The ESPR became law, empowering the EU to develop specific standards. Existing Ecodesign Directive rules remain in effect until they are replaced or until end-of-2026/2030 deadlines for older measures.
  
  
• July 2026: Unsold Goods Destruction Ban (Textiles) – The ESPR explicitly prohibits the destruction of certain unsold consumer products, starting with textile products (clothing and footwear) in large companies by 19 July 2026. Furthermore, all industries (not just textiles) are required to transparently report the number of products they discard and justify why, which will likely pave the way for expanding the ban to other goods (e.g., some electronics) in the future.
  
  
• July 2026: DPP launch. By this date, according to latest plans, the EU will establish the digital system and registry for product passports, and initial product categories may start requiring DPPs when placed on the market. Companies should not underestimate the effort as creating the data infrastructure and cross-supplier collaboration for DPPs can be complex.
  
  
• Ongoing Delegated Acts (2026 onward): Product-specific requirements and labeling. From 2026 onward, we will see a series of delegated regulations specifying particular ecodesign criteria per product group (e.g., obligatory percentage of recycled content in textiles or plastics, minimum durability metrics for appliances, limits on carbon footprint per unit of product, etc.). Each will come with its own transition period and deadlines. Textiles, electronics (ICT equipment), batteries, tires, packaging and steel/cement will be among the first to be addressed.

The PPWR covers all packaging regardless of material (plastic, paper, metal, glass, wood, etc.). Crucially, its scope includes every entity in the packaging lifecycle, from packaging manufacturers to the companies that use packaging for their products, importers, distributors and even online marketplaces. If you make, fill, import or sell packaged goods in Europe (including via e-commerce), you are impacted by the PPWR. This applies equally to non-EU companies shipping products into Europe.

This is a cross-sector approach mainly impacting food and beverage, consumer goods, cosmetics and pharmaceuticals, electronics (which have substantial packaging) and logistics/retail (due to transport packaging and e-commerce boxes).

A core goal of the PPWR is that packaging should be either recyclable or reusable by 2030, with stricter requirements by 2035 and 2040. The regulation establishes that from 2030, all packaging must be recyclable in an economically viable way by design (i.e., able to be collected, sorted and recycled). Packaging that cannot achieve at least a 70% recycling rate in practice will be graded “non-recyclable” (Grade C or worse) and banned from the market by 2030. By 2035, the bar rises – packaging must in fact be recyclable at scale across the EU, meaning the appropriate recycling infrastructure is widely available. Companies will need to eliminate hard-to-recycle packaging formats (for example, certain multi-layer plastics or composite materials) or face being unable to sell those products in the EU.

The PPWR also sets minimum recycled content targets for plastic packaging to foster demand for recycled plastics (“closing the loop”). By 2030, most plastic packaging must incorporate between 10% and 35% recycled content depending on the application (e.g., 30% for PET beverage bottles, 35% for other plastic packaging). These thresholds rise by 2040 (e.g., 65% recycled content in many cases). Notably, some sensitive uses (medical, certain food applications) are exempt for safety reasons, but the direction is clear: virgin plastic use must decrease over time, so businesses should invest in recyclable packaging design and partnerships to secure recycled material supply.

The regulation also tackles the overuse of packaging and single-use culture. It introduces EU-wide packaging waste reduction targets (by weight), such as a 5% reduction by 2030 and 10% by 2035 (compared to 2018 levels), pushing companies to cut unnecessary packaging and switch to reusables.

The PPWR also targets packaging design and system optimization in very specific ways. One notable requirement is to eliminate excessive empty space in packaging (empty space ratio). Other design mandates include potential bans on certain problematic packaging formats (for example, very small shampoo bottles in hotels).

To support proper disposal and boost recycling rates, the PPWR introduces harmonized EU-wide packaging labels. From 2028, all packaging must carry a clear label indicating what material it’s made of and how to sort or recycle it. By 2029, reusable packaging will need a dedicated “reusable” label with information (often via QR code) about how to return or refill it. These measures will standardize the patchwork of recycling symbols across Europe, helping consumers dispose of packaging correctly.

Substances of concern in packaging materials or components must be minimized, including their presence in emissions, waste management outputs (such as secondary raw materials, ashes, or disposal residues) and their harmful environmental impacts, including microplastics.

The EU Commission, together with the European Chemicals Agency, will assess and identify substances which present an unacceptable risk to human health and the environment.

As of today, this concerns certain PFAS and certain heavy metals. Food-contact packaging shall not be placed on the market if it contains PFAS in a concentration equal to or above the limit values defined in Art. 5 PPWR. Further, the sum of the concentrations of certain heavy metals (lead, cadmium, mercury and hexavalent chromium) resulting from substances present in packaging or packaging components shall not exceed 100 mg/kg.

PPWR places a significant administrative burden on companies to demonstrate compliance. Manufacturers will have to perform PPWR conformity assessments,  issue an EU Declaration of Conformity (DoC) confirming that their packaging meets all applicable requirements and keep these documents on file for authorities. The PPWR explicitly requires that as of the August 2026 start date, every packaging type must be backed by a DoC and technical file. The technical documentation should detail the design, materials and compliance test results, and demonstrate how the package fulfills the law’s criteria. These records must be retained for at least 5 years for single-use packaging and 10 years for reusable packaging. Manufacturers of packaging (or packaged goods) hold primary responsibility for this conformity process. The process is similar to other legal declarations where manufacturers have to declare that their products meet all applicable EU harmonized product-legislation requirements.

These are the two main topics to be addressed until 12 August 2026 (see also section above on requirements related to substances of concern).

Importers and distributors, for their part, must verify that the packages they import or sell have the required documentation and labeling before they reach the market. They can also become manufacturers if they amend the packaging or place it on the market in their own name.

PPWR demands that companies establish rigorous compliance systems. Many firms will need to update their quality assurance and supply chain traceability processes for packaging. In practice, this will mean working closely with packaging suppliers to obtain necessary data (e.g., proof of recycled content percentages, test results for recyclability), updating IT systems to generate and store digital DoCs and training teams on the new requirements. Companies are advised to conduct comprehensive packaging audits to identify all packaging types they use, assess gaps against PPWR criteria and prioritize redesign efforts.

The PPWR reinforces EPR in packaging. EU member states are required to have mandatory EPR schemes for all packaging. This means that producers will have to register in the relevant register of producers and cover the full costs of collecting, sorting and recycling their packaging waste, including the cost of public information campaigns and clean-up of litter. Under the new rules, packaging producers also assume operational responsibility and fee structures will be modulated by how recyclable or reusable the packaging is. Producers will need to register with national registers and report the types and volumes of packaging they put on the market, paying fees that fund the waste management systems. This creates a financial incentive to design packaging that is easier and cheaper to recycle as fees for non-recyclable or hard-to-recycle packaging will likely be higher.

PPWR introduces a new definition of “producer”, covering manufacturers, importers and distributors that make packaging available on the market for the first time or that unpack products without being end users. Main responsibility should lie where packaging becomes waste.

After August 2026, failure to meet the new packaging requirements or documentation obligations can result in fines and even prohibition from selling in EU markets. It makes sense to establish cross-functional “PPWR task forces” to ensure every aspect of packaging – from design and materials to labeling, supplier contracts and recycling partnerships – is reviewed and aligned with the upcoming rules. Timely action is critical not just to avoid penalties, but also because the transition can be lengthy. For example, securing supply of high-quality recycled material or developing new packaging designs can take multiple years. Those who start now will be better positioned to adapt smoothly, whereas laggards may face rushed, costly changes or supply chain disruptions close to the deadline.

The PPWR is expected to influence regulatory developments beyond the EU. In Switzerland, the draft Packaging Ordinance (Entwurf Verpackungsverordnung), published in mid‑2025, proposes a comprehensive modernization of national packaging rules in line with circular‑economy principles. The ordinance would expand EPR obligations to all packaging materials, requiring producers and retailers to take back packaging or to participate in financed recycling schemes. High recycling targets, such as 70% for beverage cartons and 55% for plastics, would be enforced through measures including deposits or disposal fees. The draft also reflects EU‑aligned design requirements, mandating minimal packaging, high recycled content and full recyclability. The new rules are scheduled to enter into force on 1 January 2027, with take‑back obligations beginning in 2028 and reporting duties from 2029 onward.

Monitoring the evolution of EPR frameworks globally remains a challenge for companies. For example, several U.S. states (e.g., California, New York, Maine) have been enacting their own packaging EPR laws and recycled content mandates for plastics – though not as uniformly as under the EU’s PPWR. China’s EPR framework is also evolving at speed, with major updates introduced through the 2016 national EPR Implementation Plan and strengthened further lately in 2025. Japan is now also undergoing rapid updates shifting towards more ambitious circular‑economy policies, to mention just a few.

In summary, the PPWR along with other globally fragmented initiatives is set up to transform packaging from being a major environmental challenge into an integral part of how companies run their business in a circular way. Companies across sectors should take this as an opportunity to rethink packaging design and business models.

Place ecodesign at the heart of product development. Use the known parameters from regulations as design guidelines. Set sustainable products KPIs. For example, even before formal standards are finally set, companies can begin designing products for repair and recycling (anticipating later ESPR requirements), and design packaging to eliminate unnecessary material and maximize recyclability (anticipating later PPWR requirements). 

Given the strategic importance, setting up a dedicated sustainability or circular economy steering committee at group level, reporting to the C-suite or board appears to be an adequate governance measure. Such a body can oversee compliance with new regulations (ESPR, PPWR and the many sector specific challenges asking for product and supply chain transparency coming along the way) and facilitate coordination and decision making across departments (R&D, procurement, operations, marketing).

Assess how upcoming regulations and market shifts will affect your core business impact scenarios. Perform a gap analysis for each key regulation. This includes identifying which product lines or packaging types will need redesign, which materials might become non-compliant or hard to source and what investments are required (e.g., new recycling processes, new supplier qualifications). Prioritize these findings by impact and urgency.

Start engaging with suppliers to ensure they can deliver materials and components that meet new sustainability criteria (e.g., recycled materials, traceable and conflict-free raw materials, non-toxic substitutes for hazardous substances). Likewise, product manufacturers may need supplier data for the DPP – requiring systems to exchange information on material composition, carbon footprint, etc. Forming strategic partnerships now (with recyclers, material innovators, digital traceability providers, etc.) will pay off. Timely engagement also helps suppliers adjust to your demands ahead of schedule. Suppliers that can’t meet new requirements could pose compliance or supply continuity risks.

The same data used for compliance can provide insights into inefficiencies and cost recovery. From an operational point of view, it makes sense to start with a pilot project highlighting challenges in data collection so they can be addressed as soon as possible.