UK and EU sustainability regulations: 2026 milestones, EPR and DRS updates

The UK and EU are entering a dense phase of sustainability regulation in 2026, with direct impacts on packaging, consumer claims, product stewardship and forest-risk supply chains.

In the UK, Packaging EPR moves from set-up to fees and modulation (first invoices Oct-2025; Recycling Assessment Methodology (RAM) based modulation from 2026), the Deposit Return Scheme (DRS) is now set for 1 October 2027 across England, Northern Ireland and Scotland, and CMA powers under the Digital Markets, Competition and Consumers Act 2024 (DMCC) are actively enforcing greenwashing and online sales practices.

In the EU, 2026 brings the ban on destroying unsold apparel/footwear from the Ecodesign for Sustainable Products Regulation (ESPR), Packaging and Packaging Waste Regulation (PPWR) application, Empowering Consumers for the Green Transition Directive (ECGT) anti-greenwashing rules, and Waste Shipments changes (including the Nov-2026 plastic-waste export ban).

UK Forest-Risk Commodities regulations remain delayed, but secondary legislation is expected to target soy, palm oil, cocoa and cattle products and derivatives with due diligence obligations.

Key dates timeline (2025-2028)

UK packaging EPR: First invoices October 2025; modulation from 2026 using RAM methodology. Prepare data quality and redesign packaging to reduce fees.

UK deposit return scheme: Confirmed go-live 1 October 2027 for England, NI, Scotland; plan (Reverse Vending Machine) RVM estates and barcode compliance.

UK plastic packaging tax: Rate rises April 2026; mass balance for chemical recycling allowed April 2027.

UK forest-risk commodities: Secondary legislation delayed; expected scope: soy, palm oil, cocoa, cattle products; due diligence and annual reporting obligations.

EU ESPR: Ban on destroying unsold apparel/footwear from 19 July 2026; Digital Product Passport (DPP) registry due July 2026.

EU PPWR: Applies 12 August 2026; recyclability, PFAS limits, labelling obligations.

EU ECGT: Applies 27 September 2026; restricts generic environmental claims and uncertified labels.

EU waste shipments: Full application 21 May 2026; plastic waste export ban 21 November 2026.

EU deforestation regulation:  Applies 30 December 2026 (large/medium) and 30 June 2027 (micro/small); geolocation and legality checks required.

EU textiles EPR: Member States must have schemes operational by April 2028; eco-modulated fees apply.

Action checklist

• Validate UK EPR invoices and prepare for modulation in 2026.
• Plan DRS infrastructure and labelling for 2027.
• Budget for PPT increase and mass balance eligibility.
• Review marketing claims for UK DMCC and EU ECGT compliance.
• Prepare dual-track due diligence for UK Forest-Risk and EU EUDR.
• Engage with EU Textiles EPR schemes and design for eco-modulation.

UK regulatory framework

UK prospectus rules: Climate disclosures (19 January 2026)

Companies seeking admission to regulated markets must include climate-related disclosures in prospectuses where climate is material to their prospects, including governance arrangements, impacts on business and strategy, summaries of material transition plans, risk management processes, and relevant metrics and targets. This makes transition plans a compliance obligation from January 2026 for affected companies.

Extended producer responsibility for packaging (throughout 2026)

From 2026, fees are modulated based on packaging recyclability using the Recyclability Assessment Methodology, creating financial incentives to redesign packaging using mono-materials, avoiding black plastic, and ensuring adequate size and thickness for effective processing. The complex modulation system requires detailed portfolio assessments to understand fee liability and identify cost reduction opportunities. Legal advice on data reporting obligations and enforcement risk management will be valuable.

Plastic packaging tax (April 2026)

The tax rate increases to £228.82 per tonne in April 2026 for plastic packaging without at least 30% recycled content. From April 2027, mass balance accounting can demonstrate recycled content from chemical recycling processes. Businesses face practical challenges sourcing sufficient high-quality recycled material, potentially requiring investment in developing recycled content supply chains.

Competition and markets authority enforcement (throughout 2026)

The Digital Markets, Competition and Consumers Act 2024 enables the Competition and Markets Authority to impose fines up to 10% of global turnover for misleading environmental claims. Enforcement is expected to intensify throughout 2026, particularly in fashion and beauty sectors. Businesses must hold robust evidence to substantiate claims before making them, ensure claims are clear and not misleading, and avoid hiding material information. Legal review of claims, marketing materials and evidence files will help avoid significant penalties.

Deposit return scheme (1 October 2027)

The deposit return scheme for drinks containers launches on 1 October 2027 across England, Northern Ireland and Scotland. Retailers must install reverse vending machines, whilst producers and importers must register, pay fees and ensure correct labelling. Businesses should begin planning now given substantial lead times for procurement, installation and staff training.

UK sustainability disclosure requirements (under development)

The government consultation closed on 17 September 2025. The Financial Conduct Authority intends to consult in late 2025 (more likely early 2026 now) on requiring UK listed companies to report against UK Sustainability Reporting Standards, based on International Sustainability Standards Board standards focusing on financial materiality. This differs from the EU's double materiality approach, creating challenges for businesses operating in both jurisdictions.

Forest-risk commodities regulation (under development)

UK regulations on forest-risk commodities covering soy, palm oil, cocoa and cattle products have been repeatedly delayed with no definitive implementation date. The delay creates divergence with the EU Deforestation Regulation which is implementing from December 2026. Businesses operating in both jurisdictions may choose to implement systems complying with the more stringent EU requirements.

Modern slavery act (ongoing/under development)

Companies with annual turnover of £36m or more must publish annual statements on steps taken to ensure modern slavery and human trafficking are not occurring in supply chains. Enforcement and scrutiny continue to intensify. The government is considering strengthening requirements, potentially including mandatory due diligence obligations and penalties for non-compliance.

EU regulatory framework

Ecodesign for sustainable products regulation

Destruction ban (19 July 2026): Large enterprises (250+ employees or €50m+ turnover and €43m+ balance sheet) are prohibited from destroying unsold apparel, clothing accessories and footwear, including through recycling operations. Limited exceptions exist for health and safety, irreparable damage, intellectual property infringements or where destruction is least environmentally harmful, but companies must maintain ten-year records justifying any destruction. Medium-sized enterprises receive deferral until 19 July 2030.

Public disclosure (throughout 2026): Large enterprises must publicly disclose information about unsold products discarded during their first full financial year, including number and weight, reasons for discarding, proportion prepared for reuse versus recycling or disposal, and prevention measures.

Digital product passports (July 2026): The European Commission must establish a central registry by July 2026. Mandatory passports for textiles are expected from 2027-2030 following delegated acts anticipated for late 2026 or early 2027, containing data on material composition, recycled content, carbon footprint, repairability and supply chain traceability.

Empowering consumers for the green transition directive (27 September 2026)

Generic environmental claims such as "environmentally friendly," "eco-friendly," "green," "natural," "biodegradable," "climate neutral" or "sustainable" are prohibited unless based on recognised performance standards. Businesses cannot use sustainability labels unless these are based on third-party certification or established by public authorities. Companies must conduct comprehensive audits of all marketing materials to identify and remove or substantiate claims. A legal review of evidence files, certification schemes and marketing approaches will help avoid enforcement action.

Packaging and packaging waste regulation (August 2026)

All packaging must undergo conformity assessment and receive EU declaration of conformity confirming compliance with sustainability requirements, including restrictions on per- and polyfluoroalkyl substances (PFAS), recyclability standards, recycled content requirements and labelling obligations. The regulation introduces harmonised Extended Producer Responsibility schemes across all EU Member States, requiring businesses to navigate 27 different national implementing schemes.

EU deforestation regulation (30 December 2026)

Operators must ensure timber, cattle products (leather), soy, palm oil, coffee, cocoa and rubber and products derived from these are deforestation-free and legally produced. Products must not have been produced on land which was subject to deforestation or forest degradation after 31 December 2020.

Businesses must submit due diligence statements including detailed and accurate geolocation data for all plots of land where commodities were produced. Legal advice on supplier due diligence obligations (including geolocation complexities), contractual warranties and risk allocation will be essential given multi-tier supply chain complexity.

Extended producer responsibility for textiles (mid-2028)

All EU Member States must establish Extended Producer Responsibility schemes for textiles and footwear by mid-2028. Producers will pay fees based on volume or quantity placed on the market, with eco-modulation meaning lower fees for products performing well against sustainability standards, creating financial incentives for sustainable design.

Waste shipments regulation (21 May 2026)

The regulation introduces a ban on plastic waste exports to non-Organisation for Economic Co-operation and Development (OECD) countries from 21 November 2026, stricter conditions for OECD shipments, and fully digital notification and tracking for all waste shipments.

Corporate sustainability reporting directive (delayed)

Following the EU's "stop-the-clock" proposal, large companies with more than 250 employees will now report in 2028 for financial year 2027 (delayed from 2026). The directive requires disclosure of environmental, social and governance impact and risks using double materiality, with reports using European Sustainability Reporting Standards and verified by independent third parties. Even companies not directly subject will face increasing data requests from larger partners requiring supply chain information.

France-specific regulations

Eco-score labelling for textiles (from 1 October 2025)

From 1 October 2025, retailers can voluntarily display environmental eco-score for textiles sold in France, calculated using Life Cycle Assessment and European Product Environmental Footprint methodology.

Extended producer responsibility (existing scheme)

France has operated Extended Producer Responsibility for textiles since 2007. The French "fast fashion" bill, pending European Commission approval, aims to introduce sustainability-based fees, with penalties capped initially at €5 per item, increasing to €10 by 2030, and capped at 50% of pre-tax sale price.

Regulations under development

Corporate sustainability due diligence directive (2028-2029)

The directive applies from 26 July 2028 for companies with 3,000+ employees and €900m+ turnover, and from 26 July 2029 for companies with 1,000+ employees and €450m+ turnover. Businesses must identify, prevent, mitigate and account for adverse human rights and environmental impacts throughout value chains. Critically, companies must adopt transition plans ensuring business models are compatible with limiting global warming to 1.5°C, creating a direct legal obligation for credible transition plans.

EU forced labour regulation (Q4 2027)

The regulation prohibits placing on the EU market, making available or exporting any product made with forced labour. Enforcement begins in Q4 2027. Companies failing to provide evidence when flagged may have products banned, be forced to withdraw items and face financial penalties.

Circular economy act (under consultation)

Currently under public consultation until November 2025, the Act aims to harmonise end-of-waste criteria, strengthen the Single Market for secondary raw materials and introduce further transparency, digitalisation and Extended Producer Responsibility requirements. No definitive implementation date has been set.

Net zero transition plans

Transition plans are moving from voluntary initiatives to mandatory requirements. The Corporate Sustainability Due Diligence Directive requires transition plans from 2028-2029, whilst UK Prospectus Rules require them from 19 January 2026 for companies seeking market admission where climate is material. For retail, fashion and beauty businesses, credible transition plans should include net zero commitments with interim targets, science-based targets covering Scope 1, 2 and 3 emissions, specific action plans with timelines, board-level governance, financial planning and supply chain engagement strategies.

Published transition plans create legal and commercial risks. Plans lacking credible detail or relying excessively on offsetting create significant greenwashing risk given Competition and Markets Authority powers (fines up to 10% of global turnover) and the Green Transition Directive's restrictions. Delivering supply chain reductions requires supplier contracts with emissions reduction requirements, data sharing obligations and audit rights. Legal review of commitments and contractual arrangements will help manage enforcement risk whilst ensuring plans are ambitious but achievable.

Practical compliance considerations

Supply chain transparency

Multiple regulations demand unprecedented visibility. EU Deforestation Regulation requires geolocation data, Digital Product Passports require granular material and carbon data, and transition plans require Scope 3 measurement. Obtaining information depends on supplier cooperation, requiring investment in relationships, training and support. Technical legal advice on contracts, data sharing, audit rights and liability allocation will be essential.

UK-EU divergence

Whilst policy objectives align, specific requirements differ significantly. UK Extended Producer Responsibility and EU Packaging and Packaging Waste Regulation use different recyclability methodologies and fee structures. UK Sustainability Reporting Standards focus on financial materiality whilst EU European Sustainability Reporting Standards use double materiality. Advice on managing multi-jurisdiction compliance and developing efficient strategies will be valuable.

How we can support your compliance journey

Our retail, fashion and supply chain team develops practical, commercially focused compliance approaches managing legal risk whilst supporting business objectives. Our experience includes extended producer responsibility compliance and fee optimisation, environmental claims review and substantiation, supplier agreement drafting and negotiation, net zero transition plan requirements, regulatory risk assessments and compliance frameworks for UK-EU operations, and enforcement investigation advice.

We recognise that sustainability regulation introduces substantial compliance obligations, but also offers opportunity to differentiate and gain competitive advantage. Businesses implementing robust compliance systems, building transparent supply chains and communicating authentically will be well positioned to meet expectations and distinguish themselves from competitors.

Conclusion

The regulatory landscape for sustainability is undergoing fundamental transformation in 2026. Businesses face clear legal obligations across product design, packaging, environmental claims, deforestation and waste management in both UK and EU jurisdictions. Early action to audit practices, identify gaps, implement changes and obtain legal advice on compliance strategies is essential to avoid enforcement action and financial penalties. Businesses engaging proactively and investing in sustainable operations will be best positioned to navigate this landscape successfully.