The ban on destruction of unsold apparel has reporting requirements. This technical article looks at the data structures required in order for reporting to match the expectations of the EU.
The ten derogations: a working reference for operations and systems teams
Somebody has to type these into a system.
That is the practical shape of the destruction ban once the briefings have been read and the board has been told. A systems analyst opens the reason code table in the ERP, finds the financial codes that have sat there since the last implementation, and is asked to add the legal grounds on which Annex VII stock may lawfully be destroyed. What that person needs is not an explanation of the regulation. It is a list, with the evidence attached to each entry, and an accurate picture of which entries are alternatives and which are not.
Most summaries of Commission Delegated Regulation (EU) 2026/296 present the ten grounds as a flat list, and that is where the configuration goes wrong. Ground h, donation, is available only where none of grounds a to g applies, which makes it a fallback rather than a choice. Grounds f and g share a single evidence provision rather than carrying one each. Cost-effectiveness attaches to one ground only, and to the wrong comparator in almost every internal discussion of it. A reason code table that flattens those relationships produces evidence files that do not support the grounds they claim, at volume, for a year before anybody looks.
This is that list, built from the delegated regulation rather than from summaries of it. Section 4.2 of the destruction ban report carries the reasoning behind each ground. This piece is the version to print.
Table one: the ten grounds and what each one costs in evidence
| Ground | What it covers | Evidence artefact | Who produces it | Retention |
|---|---|---|---|---|
| a. Dangerous product | Dangerous within Regulation (EU) 2023/988, risk not mitigable by other means | Safety assessment under GPSR Articles 6 to 8, or test report citing the law breached | Technical or QA, often via a third-party test house | 5 years from destruction |
| b. Non-compliance, non-safety | Unfit for purpose through non-compliance with Union or national law for a non-safety reason, where destruction is required by law or is proportionate corrective action | Self-assessment statement identifying the type of non-compliance and the law engaged | Compliance or legal | 5 years from destruction |
| c. IP infringement | Final judicial or ADR decision, rights holder or authority notification, or substantiated internal investigation | The decision, notification or investigation record | Legal, or external counsel | 5 years from destruction |
| d. Expired licence | Licence or contract barring sale after a date which has passed | The licence or contract clause, plus a separate justification that destruction is appropriate and proportionate | Legal for the first limb, commercial for the second | 5 years from destruction |
| e. Unsuitable for reuse | Technically unfeasible to remove or obscure IP-protected or inappropriate labels, logos or design characteristics | Inspection report showing options assessed and unfeasible, with visual, technical or expert evidence | Technical or product development | 5 years from destruction |
| f. Damaged, deteriorated or contaminated | Unacceptable for consumer use, wherever the damage arose including consumer return, where repair is either not technically feasible or not cost-effective | Shared limb: either documented quality assessment procedures including sorting that prioritises restocking and repair, or an inspection record of the damage and the unfeasibility of correction | QA, or the 3PL under the brand's procedure | 5 years from destruction |
| g. Design or manufacturing defect | Non-functional through a design or manufacturing defect where repair is not technically feasible. No cost-effectiveness limb | Shared limb, as for f | QA or technical | 5 years from destruction |
| h. Donation not accepted, residual | Offered to at least three suitable social economy entities in the Union, or listed on an accessible page of the operator's website for at least eight weeks, and not accepted. Only where none of a to g applies | Proof of the offer and its outcome, or of the listing and its duration | Operations or CSR | 5 years from destruction |
| i. Social economy entity, no recipient | Received as a donation by a social economy entity in the Union, no recipient found | Declaration from the receiving entity | The social economy entity | 5 years from destruction |
| j. Prepared for reuse, no recipient | Made available after preparation for reuse by a waste treatment operator, no recipient found | Receipt from the operator and record of the failed placement | The waste treatment operator | 5 years from destruction |
The retention column is uniform on purpose. Article 3 of the delegated regulation sets one period for derogation evidence, running from the date the product was destroyed rather than from the write-off, the inspection or the disclosure. A second clock attaches to a different class of document and is covered in the closing note.
Two things the table encodes that a flat list would not. Grounds f and g occupy one evidence provision between them, so a system demanding two different artefacts is asking for something the regulation does not require. And ground h is residual: a damaged unit within ground f cannot be routed to ground h by offering it for donation, however genuine the offer.
The two definitions that do most of the work
Cost-effective. Article 1 of the delegated regulation defines it as the cost of repairing or refurbishing a product not outweighing the total cost of destroying it plus the materials, manufacturing, packaging, transport, stocking and other administrative or logistical expenses of replacing that same product.
The comparator is replacement. It is not resale value, residual value or clearance price. A brand running the test against what the garment would now fetch is running a different test from the one the regulation sets, and will reach the opposite answer on most of its volume. This limb attaches to ground f alone. Ground g turns on technical feasibility only, so a manufacturing defect repairable at an uneconomic cost is still not a ground g case.
Social economy entity. Defined by reference to Article 3(4i) of Directive 2008/98/EC. It is not a synonym for any charity, and an offer to an organisation outside that definition does not build ground h. Nor does an offer to fewer than three, unless the eight-week listing route is used instead.
Table two: reason-code mapping, for handing to IT
Codes below are suggested, not prescribed. Nothing in the regulation specifies a code structure. What matters is that the legal ground is a distinct mandatory field on Annex VII write-offs, and that the financial reason code survives alongside it rather than being replaced, because the audit and the disclosure need different things from the same transaction.
| Ground | Suggested code | Typical trigger in the business | Evidence artefact | Owning function | Financial code retained? |
|---|---|---|---|---|---|
| a | ESPR-A | Safety recall, chemical test failure, RAPEX notification | Safety assessment or test report | Technical / QA | Yes |
| b | ESPR-B | Labelling or composition non-compliance found at goods-in or audit | Self-assessment statement | Compliance | Yes |
| c | ESPR-C | Counterfeit seizure, rights holder notification, internal investigation | Decision or notification record | Legal | Yes |
| d | ESPR-D | Licence expiry flag in the product master or contract calendar | Licence clause plus proportionality justification | Legal / commercial | Yes |
| e | ESPR-E | Branding cannot be removed from a discontinued or withdrawn line | Inspection report with technical analysis | Product development | Yes |
| f | ESPR-F | Post-return QC failure, warehouse damage, water or contamination event | Quality assessment procedure or inspection record | QA / 3PL | Yes |
| g | ESPR-G | Manufacturing fault found in stock, repair not technically feasible | Same shared limb as f | QA | Yes |
| h | ESPR-H | Donation window closed with no acceptance. Blocked if any of A to G applies | Offer or listing evidence | Operations | Yes |
| i | ESPR-I | Returned to the brand by a social economy entity | Recipient declaration | Operations | Yes |
| j | ESPR-J | Returned by a waste treatment operator after failed reuse placement | Receipt and failed placement records | Operations | Yes |
Build ESPR-H with a validation rule rather than as a free selection. Where any of the other nine grounds is available on the same units, the residual code should not be selectable. That one rule prevents the most common misclassification in the regime, and it costs a configuration line. Decision 3 of the destruction ban report sets out why the change lands in a system finance already controls, and why doing it before the next season close matters more than doing it well.
Table three: the three obligations at a glance
| Article 23, prevention | Article 24, disclosure | Article 25, destruction ban | |
|---|---|---|---|
| Applies to | All economic operators, any size | Large enterprises | Large enterprises now, medium-sized from 19 July 2030. Micro and small are exempt from the ban only, not from Article 23 |
| From when | 18 July 2024 | First full financial year commencing on or after 18 July 2024, published within 12 months of year end. For most brands that meant reporting during 2026 on FY25 | 19 July 2026 |
| What it requires | Measures to prevent unsold consumer products becoming waste | Publish units discarded, weight, reason, and the treatment split across reuse, recycling, other recovery, disposal and unknown. Prescribed Annex I format applies to financial years starting on or after 2 March 2027 | No destruction of Annex VII apparel, accessories or footwear that has been placed on the Union market and is primarily intended for consumers, unless a derogation applies and its evidence exists |
| If you get it wrong | National penalties under Article 74 | Absence of a disclosure is a named risk indicator in Annex III of the Implementing Regulation. Discrepancy above 10% against supporting documentation may found non-compliance | Breach on the day the goods are destroyed, not at the next reporting date. National penalties, plus market surveillance powers to restrict making available |
The Article 25 row carries the placing-on-the-market precondition because it decides whether stock is in the table at all. Article 25(1) reaches products that have been placed on the Union market, and Article 2(40) defines placing as the first making available on it. Goods never placed are outside the ban, which is what puts stock in a non-EU warehouse and stock in bonded storage in play. The bonded reasoning follows from the definition, but no Commission statement addresses it directly and it should not be treated as settled.
Penalties are national under Article 74 and must be effective, proportionate and dissuasive. There is no EU-wide 4% of turnover figure in the ESPR. That figure belongs to the EU Deforestation Regulation and has been misattributed in professional commentary.
The eleventh ground that does not exist
Article 25(5) of the ESPR contemplates a derogation where destruction is the option with the least negative environmental impact. Read the parent regulation against the table above and a row will look missing.
It is not. The Commission did not carry that ground into the delegated act, reasoning that reuse of Annex VII products is always environmentally better than recycling. There are ten grounds, not eleven, and an environmental-optimum argument is not available as a derogation however well evidenced.
Constraints that apply across all ten grounds
Retention, two clocks. Derogation evidence: five years from destruction, held electronically, under Article 3 of the delegated regulation. Separately, documentation demonstrating delivery and reception of discarded products must be kept for five years from the date of disclosure. That second clock rests here on named commentary rather than on the operative text, stated in the same terms by Cooley, Bird & Bird and Beveridge & Diamond in their 2026 briefings. The specific article of Implementing Regulation (EU) 2026/2 is left marked rather than guessed at. The practical point is that the clocks run from different events, and the later one is usually the disclosure.
Production on request. Evidence must be produced to a competent authority within 30 days of a request.
Collective documentation. Recital 13 permits documentation to be prepared collectively where the same circumstances affect multiple products. This makes batch-level compliance workable rather than requiring a file per garment, and it is why the process-level limb of ground f is cheaper at volume than the per-unit inspection record.
The Article 4 statement. The operator must give the receiving waste treatment operator a statement identifying the derogation relied on. No content and no format are prescribed. Any template in circulation is somebody's suggestion, and a load carrying two grounds needs two lines rather than one claim.
The waste hierarchy still applies. Recital 3 confirms that lawful destruction must follow the hierarchy in Article 4 of Directive 2008/98/EC, prioritising recycling over other recovery and over disposal. The derogation permits destruction. It does not permit any method of it.
Somebody still has to type these into a system. The version that survives an authority request is the one where the ground is a field rather than a note, the residual is blocked rather than offered, and the evidence is attached to the reference before the pallet moves.
References
- Regulation (EU) 2024/1781 (ESPR), Articles 2(40), 23, 24, 25 and 74, Article 25(5), and Annex VII. eur-lex.europa.eu
- Commission Delegated Regulation (EU) 2026/296, Articles 1, 2, 3 and 4 and Recitals 3 and 13. eur-lex.europa.eu
- Commission Implementing Regulation (EU) 2026/2, Annexes I, II and III. eur-lex.europa.eu
- Directive 2008/98/EC on waste, Article 4 and Article 3(4i). eur-lex.europa.eu
- Regulation (EU) 2023/988 on general product safety. eur-lex.europa.eu
- Cooley Productwise, "Deep Dive: EU Finalises New Requirements for Unsold Consumer Products Under ESPR", 7 May 2026. products.cooley.com
- Bird & Bird, "EU: Destruction of unsold products, is your company Ecodesign compliant?", February 2026. twobirds.com
- Beveridge & Diamond, "EU Clarifies Ban on Destruction of Unsold Apparel, Clothing Accessories, and Footwear", March 2026. bdlaw.com
- Linklaters Sustainable Futures, "EU ESPR: Commission adopts final acts on unsold consumer product destruction and disclosure". sustainablefutures.linklaters.com
- fashion.business, "The EU Destruction Ban: What changes inside your fashion operation after 19 July 2026", sections 4.2, 4.3 and Decision 3. Read the report
