Does the EU destruction ban apply to your brand? The size thresholds, plainly
The EU ban on destroying unsold clothing and footwear has applied to large companies since 19 July 2026, and it reaches medium-sized companies on 19 July 2030. Micro and small enterprises are exempt from it. So if you are a founder with a small team, the EU destruction ban almost certainly does not apply to your brand.
Large is decided by a 250-employee ceiling. Small sits at 50 employees and EUR 10 million, micro at 10 employees and EUR 2 million. The full definitions follow, with the two places the rules still touch a brand the prohibition does not cover.
Where a small brand sits under the EU destruction ban
Regulation (EU) 2024/1781 sets no size ceilings of its own. Article 2 closes by adopting somebody else’s: “The definitions of ‘SMEs’, ‘small enterprises’ and ‘microenterprises’ in Article 2(1), (2) and (3), respectively, of Annex I to Commission Recommendation 2003/361/EC apply.” That Recommendation, dated 6 May 2003, is where the numbers live.
A microenterprise employs fewer than 10 people and has annual turnover or an annual balance sheet total of no more than EUR 2 million. A small enterprise employs fewer than 50 people and has annual turnover or an annual balance sheet total of no more than EUR 10 million. Both sit outside the prohibition.
The wider SME category covers enterprises employing fewer than 250 people with annual turnover of no more than EUR 50 million or an annual balance sheet total of no more than EUR 43 million. A medium-sized enterprise is one that sits inside that category without being small or micro.
The construction matters as much as the figures. The headcount ceiling has to be met on its own, and then only one of the two financial ceilings has to be met, because turnover and balance sheet total are written as alternatives to each other. A business with 180 staff, turnover of EUR 60 million and a balance sheet total of EUR 30 million is still an SME. A business with 300 staff and turnover of EUR 5 million is outside the category. A two-of-three test, where any two of headcount, turnover and balance sheet decide the class, belongs to a different instrument and produces a different answer.
Regulation (EU) 2024/1781 never defines a large company. Large is what an enterprise is when it is not an SME, so the question is answered by working through the SME ceilings and finding that none of them holds. The same size classes carry across to the separate duty at Article 24 to disclose unsold consumer products discarded each year, which also does not apply to micro and small enterprises.
The two limits on the exemption
Article 25(2) reaches businesses the prohibition does not cover. It says they must not destroy unsold consumer products supplied to them with the purpose of circumventing that prohibition. A small brand cannot be used as somebody else’s disposal route, and an arrangement where stock arrives from a larger business to be binned is what the provision is written against.
The second limit is a reserve power. Article 25(5) allows the Commission to provide by delegated act that the prohibition, or the Article 24 disclosure duty, applies to micro and small enterprises where there is sufficient evidence that such enterprises could be used to circumvent either one. Recital 58 records that micro and small enterprises were exempted to avoid undue administrative burden on them.
No end date is attached to the exemption and no review date is set for it. The power exists against circumvention, and that is the whole of it.
What Annex VII actually lists
Calling this a ban on destroying unsold goods overstates it. The prohibition reaches apparel, clothing accessories and footwear, in the categories listed at Annex VII to the Regulation, and handbags, luggage and home textiles are not on the list.
One definition is worth knowing from outside the prohibition too, because it is the one people get wrong. Routing stock to a recycler counts as destruction under the Regulation. Discarding a product for the sole purpose of delivering it for preparing for reuse sits outside that definition. What actually counts as destruction under the EU ban works through that in full.
Selling into the EU from outside it
The question turns on whether products are placed on the EU market and on how big the business is, and the country a company is registered in has no part in the test.
The Regulation defines a manufacturer as a person that manufactures a product, or has a product designed or manufactured, and markets it under their own name or trademark. That definition carries no requirement to be established in the Union. Only an importer and an authorised representative have to be established there. A brand having garments made and selling them under its own name is a manufacturer for these purposes whether it is registered in Leeds or in Lisbon.
The size classes work the same way on either side of the EU border. A UK brand selling into the EU is read against the same three classes as a brand in Rotterdam or Copenhagen, and a micro or small brand sits outside the prohibition in both cases. The size class travels with the business.
Growing past a threshold
Crossing a ceiling once changes nothing. Commission Recommendation 2003/361/EC sets the period of assessment at Article 4(2) of its Annex: where an enterprise finds at the date of closure of the accounts that it has exceeded or fallen below the headcount or financial ceilings, that does not change its status unless the ceilings are exceeded over two consecutive accounting periods. The test cuts both ways, so a business coming back under a ceiling holds its previous status for the same length of time.
The data used are those of the latest approved accounting period, calculated on an annual basis. The trigger is a set of approved accounts, not a calendar date and not a filing.
Headcount is measured in annual work units, which is not headcount as a founder counts it. It is the number of people who worked full-time during the reference year, with part-time and seasonal staff counted as fractions. Owner-managers and partners drawing a financial benefit from the enterprise are included. Apprentices and people on vocational training contracts are not counted.
Ownership is the part that catches people out. Under Articles 3 and 6 of the same Annex, a holding of 25 per cent or more of capital or voting rights makes two enterprises partners, and majority voting rights or equivalent control makes them linked. Partner figures are added proportionately and linked figures at 100 per cent. A founder taking investment from a fashion group can move from small to medium-sized on paper without selling another garment. Some investors can hold 25 per cent or more without costing a business its autonomous status, including venture capital companies, universities, and business angels whose total investment in the same enterprise is under EUR 1,250,000.
Moving up a class is a change to how a business is classified in its own approved accounts, and a brand sitting close to a ceiling should take advice on its own figures.
Textile producer responsibility, which does reach a small brand
Directive (EU) 2025/1892 amends the Waste Framework Directive and makes producer responsibility schemes for textiles mandatory across the EU. It entered into force on 16 October 2025. The European Parliament’s summary of 9 September 2025 puts the substance plainly: producers that make textiles available in the EU cover the costs of their collection, sorting and recycling, and micro-enterprises “will have an extra year” to comply. The products named are clothing and accessories, hats, footwear, blankets, bed and kitchen linen, and curtains.
The Directive defines a producer by the act of making textiles available on a member state’s market for the first time, irrespective of the selling technique used, and it does not exempt the smallest producers. Recital 41 asks member states to take account of criteria such as the volume of textiles when setting the financial contribution requested from microenterprises, which gives a proportionate contribution and not an exemption.
Some national schemes are already running. In the Netherlands, the Besluit uitgebreide producentenverantwoordelijkheid textiel has been in force since 1 July 2023. It defines a producer as a person who, in the course of business and whatever the selling technique used, places newly manufactured clothing and household textiles on the market, and it sets no size or turnover threshold. What brands selling in the Netherlands need to know about the Dutch decree goes through it.
In France, Refashion states that brands, distributors and manufacturers of clothing, household linen or footwear in France are subject to the scheme and pay an eco-fee to Refashion. Other member states are at different stages, and some schemes are still in draft. No textile producer responsibility scheme has been made law in the United Kingdom, and the blueprint WRAP published in January 2026 sets out a proposal for one.
For a micro or small brand the position comes out clean. Neither the destruction ban nor the Article 24 disclosure duty applies, and textile producer responsibility does apply wherever the brand sells into a market with a scheme in place.
Why recovery is worth doing at this size
Stock that comes back creased or lightly marked is usually sound and not sellable as it stands. Binning it removes the whole of its value, and an inventory jobber, which is a trader that buys surplus stock in bulk, returns a small fraction of what the garment is worth. That sits the same way for a brand of eight people as for a brand of eight hundred, and it has nothing to do with the destruction ban.
Recovery is the route for stock in that condition. Cleaning and conditioning does most of the work, which means stain removal, drying, ironing and final presentation, with repair as a smaller part of the job. That work is reached through Opera Garment Solutions, a single point of access to a network of professional garment care experts, working in the market where the stock sits and drawing on the garment care knowledge already there. Opera takes small runs. Whether a brand is too small for returns recovery covers that question on its own, and where a returned garment can go covers the routes.
The usual route in is a first test box, then a 90-day pilot for a brand that wants to run it across a season, then a conversation about what a longer arrangement looks like.
Questions founders ask about the size thresholds
Does the EU destruction ban apply to small brands?
Micro and small enterprises are exempt from the prohibition, so for a founder-led brand the answer is almost certainly no. A small enterprise employs fewer than 50 people and has annual turnover or a balance sheet total of no more than EUR 10 million. A microenterprise employs fewer than 10 people and has annual turnover or a balance sheet total of no more than EUR 2 million. Those definitions come from the Annex to Commission Recommendation 2003/361/EC, which is the instrument Regulation (EU) 2024/1781 uses for company size.
What makes a company large enough to be covered?
Regulation (EU) 2024/1781 does not define a large company. It defines the SME category and then exempts or delays the smaller classes inside it. An enterprise is an SME if it employs fewer than 250 people and has either annual turnover of no more than EUR 50 million or a balance sheet total of no more than EUR 43 million. An enterprise outside that category is large, and the prohibition has applied to large companies since 19 July 2026.
Is it the headcount test or the money test that decides it?
Both, in a particular order. The headcount ceiling has to be met. Then only one of the two financial ceilings has to be met, because the source instrument writes turnover and balance sheet total as alternatives to each other. A business under 250 people with turnover above EUR 50 million and a balance sheet total under EUR 43 million is still an SME.
Will the exemption for micro and small companies be removed?
There is no end date on it. Recital 58 of the Regulation records that micro and small enterprises were exempted to avoid undue administrative burden, and Article 25(5) allows the Commission to require by delegated act that the prohibition or the disclosure duty apply to them where there is sufficient evidence that such enterprises could be used to circumvent either one. That is a reserve power against circumvention, and no date is attached to it.
I am a UK brand selling into the EU. Am I covered?
The rules follow the products onto the EU market, and the country the company is registered in does not decide the question. The size classes work the same way for a brand established outside the EU as for one inside it, which means a micro or small brand is exempt from the prohibition either way.
If the destruction ban does not apply to me, does anything?
Textile extended producer responsibility does. Directive (EU) 2025/1892 makes producer responsibility schemes for textiles mandatory across the EU, and the European Parliament’s summary states that producers making textiles available in the EU cover the costs of collection, sorting and recycling, with micro-enterprises given “an extra year” to comply. Schemes are already running in some markets. The Dutch decree, in force since 1 July 2023, defines a producer by the act of placing textile products on the Dutch market in the course of business and sets no size or turnover threshold. In France, Refashion states that brands, distributors and manufacturers of clothing, household linen or footwear in France are subject to the scheme and pay an eco-fee.
References
- European Union. Regulation (EU) 2024/1781 of the European Parliament and of the Council of 13 June 2024 establishing a framework for the setting of ecodesign requirements for sustainable products. Official Journal of the European Union. Articles 2, 24 and 25, Recital 58 and Annex VII.
- European Commission. Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises. OJ L 124, 20 May 2003, p. 36. Annex, Title I Articles 2 and 3, Title II Articles 4, 5 and 6.
- European Commission, Directorate-General for Environment. “New EU rules to stop the destruction of unsold clothes and shoes”, 9 February 2026.
- European Union. Directive (EU) 2025/1892 amending Directive 2008/98/EC on waste. Official Journal of the European Union, 26 September 2025. Recitals 22 and 41.
- European Commission, Directorate-General for Environment. “Revised Waste Framework Directive enters into force”, 16 October 2025.
- European Parliament. “Parliament adopts new EU rules to reduce textile and food waste”, press release, 9 September 2025.
- Government of the Netherlands. Besluit uitgebreide producentenverantwoordelijkheid textiel, BWBR0048093, in force 1 July 2023. Articles 1 and 3 to 7. wetten.overheid.nl.
- Refashion Pro. “Meeting Legal Requirements”. Article L. 541-10-9, Code de l’environnement.
- WRAP. “Blueprint for a UK Textiles EPR scheme”, January 2026.
( About the author )
Joanna Lambert
CEO & Co-Founder, Opera Garment Solutions
Joanna Lambert is CEO and co-founder of Opera Garment Solutions, which recovers returned, damaged and unsold clothing for fashion brands across the EU and the UK from hubs in the United Kingdom, the Netherlands and Spain. She writes on the EU destruction ban and on what returned stock is worth when it goes back to sale.