Fashion
EU laws push APAC factories towards data over certificates
One of the first visible changes arrives with the EU’s ban on the destruction of unsold textiles, taking effect on 19 July 2026, less than three months from now, for large companies under the Ecodesign for Sustainable Products Regulation (ESPR). While the rule focuses on what happens to unsold goods, its implications reach much further upstream. Brands facing restrictions on overproduction now have an immediate commercial incentive to improve demand planning, tighten order volumes, increase inventory accuracy, and reduce discrepancies across the supply chain. As a result, data quality and traceability at the production level are becoming a matter of regulatory compliance, not just operational efficiency.
EU rules are shifting sourcing from certificates to data-driven verification.
ESPR and upcoming Digital Product Passports demand structured, traceable product data.
Factories offering real-time, item-level visibility gain a clear edge over audit-based peers.
With RFID adoption still limited, early movers can strengthen competitiveness and secure future orders.
Alongside this, the EU is developing the Digital Product Passport (DPP) framework, which will introduce structured data requirements for products placed on the EU market. Textiles are a priority category, with specific delegated acts and implementation timelines expected to be finalised in the near future. This follows the Omnibus I Directive, which already entered into force in March 2026. While the final DPP requirements are still being defined, the direction is clear: Standardised product data, greater supply chain transparency, and the ability to share information across systems and stakeholders.
This regulatory direction is already influencing how brands evaluate suppliers. According to a recent EcoVadis study, sustainability clauses in supplier contracts are evolving into enforceable governance tools. Traditional compliance tools such as certifications and audit reports remain important, but they are no longer sufficient on their own. They are increasingly complemented by expectations around digital data availability, traceability across production stages, and structured formats that integrate into brand systems.
In practice, digital traceability is not about a single technology, but about combining several elements: Unique product identifiers such as QR codes, RFID, or NFC; data capture at key production and logistics stages; and platforms that structure and share this data across the value chain. Together, these elements enable products to carry a digital identity that links physical items to their associated information.
This is where factory-level infrastructure becomes increasingly important. Solutions such as SML’s Factory Care Solutions (FCS) are designed to capture production data at source, enable on-demand RFID encoding and labelling, validate shipments, and reduce discrepancies. They create a reliable data foundation during manufacturing.
Importantly, these solutions do not replace a brand’s Digital Product Passport system; Rather, they act as the essential data capture and verification layer that feeds into DPP platforms and brand systems.
“Factories have always been evaluated on their ability to meet quality and compliance standards,” says Nanna Ingemann Dalsgaard, VP Sustainability, Digital ID & Marketing at SML Group. “What’s changing now is that brands increasingly expect that compliance to be backed by structured, verifiable data. The factories that can provide that data seamlessly are not just meeting requirements – they are making it easier for brands to operate in a more regulated environment.”
To see the commercial impact of this shift in action, consider two factories competing for a Spring/Summer 2027 order. Both hold the same sustainability certifications. However, Factory A submits quarterly audit summaries by email, while Factory B provides real-time, item-level digital traceability for every garment, verifiable through RFID. By delivering the seamless data Nanna describes, Factory B transforms a regulatory baseline into a decisive operational advantage, making it the obvious choice for the brand.
At the same time, adoption of item-level digital identification is still far from universal. According to IDTechEx, RFID tagging currently reaches only around 40 per cent of the total addressable market for apparel. This creates a significant window of opportunity for manufacturers to build capabilities ahead of regulatory deadlines, align more closely with evolving brand requirements, and strengthen their position in future sourcing decisions.
The regulatory timeline is moving fast, and the direction is consistent: More transparency, more structured data, and greater accountability across the value chain. For manufacturers, the key question is no longer whether these requirements will materialise, but how quickly they can build the capabilities needed to support them.
Certifications will continue to signal commitment. But increasingly, it is the ability to translate that commitment into reliable, shareable data that will win the order.
Note: The headline, insights, and image of this press release may have been refined by the Fibre2Fashion staff; the rest of the content remains unchanged.
Fibre2Fashion News Desk (MS)