Circularity and Carbon: Stable Regulatory Priorities in 2025 and 2026
TL;DR
Circularity and carbon policies remain stable and continue maturing through 2025–2026. Key impacts include expanded EPR laws, Digital Product Passports (DPP), greenwashing rules, CBAM updates, and new waste, recycling, and repair regulations across the EU, USA, Canada, China, and other regions. Companies must integrate sustainability into product design, sourcing, manufacturing, and end-of-life strategies, supported by traceability and data systems.
Circularity and EPR Developments in 2025
In 2025, multiple jurisdictions expanded EPR frameworks, especially for packaging and textiles. These laws commonly include producer-funded waste management, eco-modulated fees, recyclability targets, and incentives for circular design.
Key Legislative Updates:
EU Packaging and Packaging Waste Regulation (PPWR): Entered into force February 2025; applies from August 2026 with requirements on EPR, recyclability, labeling, Digital Product Passport, and digital deposit systems.
EU Waste Framework Directive (WFD): Newly agreed provisions include food waste reduction targets and EPR for textiles by 2028.
USA textile EPR expansion: California’s Responsible Textile Recovery Act and New York’s EPR for Textiles bill advance producer obligations.
USA packaging EPR rollout: Maine, Colorado, Oregon, California, Minnesota have programs in place; Maryland and Washington enacted new laws; 10 additional states introduced packaging EPR proposals.
Right-to-Repair Laws Strengthen Worldwide
Repairability and product lifetime extension remain a central circularity strategy. Key updates:
Belgium: Repairability Index for dishwashers, vacuums, lawn mowers, and laptops.
EU: A–E repairability rating for tumble dryers in 2027, added to the energy label.
New Zealand: Consumer Guarantees Amendment introduces rights to spare parts, tools, software, and third-party repairers.
USA: Washington, Oregon, Texas and additional states adopt digital electronics repair legislation.
Mexico: The General Law on Circular Economy, including EPR, reached the final legislative stage.
Taxes and Controls on Small Parcels and Fast Fashion
Governments are tightening controls on low-value imports to reduce the environmental footprint associated with fast fashion, transportation, packaging waste, and end-of-life management.
Examples:
France Fast-Fashion Law: Parcel tax (€2–4), eco-contribution bonus/malus (up to €10 per item by 2030), and advertising restrictions.
Italy: Proposed eco-score system for parcel taxes and potential ad bans.
Netherlands: Parcel taxes on shipments below €150 in early 2026.
EU: Removal of de minimis from July 1, 2026; €3 duty per item under €150.
Global Greenwashing and Environmental Claims
Regulations Regulators continue addressing misleading sustainability claims.
Major developments:
EU Omnibus I: Simplifies EU Taxonomy reporting with materiality exemptions and reduced data requirements (from January 2026).
Approved Product Environmental Footprint Category Rules (PEFCR): Applies to apparel and footwear.
France: Environmental labeling pilot for textiles (Oct 2025–Oct 2026) using Ecobalyse database; mandatory thereafter.
EU ESG Ratings Regulation: Technical standards issued.
EU Empowering Consumers for the Green Transition (ECGT): FAQs clarify environmental claims rules (from September 2026).
Canada: Competition Bureau releases environmental claims guidance and announced the development of made-in-Canada sustainable investment guidelines, or Taxonomy.
Digital Product Passports (DPP)
DPPs are becoming a core feature of EU sustainability legislation. They support accuracy, traceability, and lifecycle information.
Key milestones:
EU laws integrating DPPs: Eco-design Regulation, Batteries Regulation, Toy Safety Regulation, PPWR.
Rollout: 2026 (construction materials, iron, steel), 2027 (textiles, batteries, aluminum).
China: CAICT introduces a proposal for a national DPP system to standardize product data for exporters.
Carbon Tax and Border Adjustment Measures
Carbon-pricing mechanisms remain central to climate strategy.
Updates:
EU Carbon Border Adjustment Mechanism (CBAM):
Mass-based threshold of 50 tons
Indirect emissions excluded for iron, steel, aluminum
New default values and calculation methods ahead of January 2026 phase-in.
UK: Preparing UK CBAM for 2027, aligned with EU on indirect emissions.
Serbia: Proposes national carbon tax aligned with EU ETS pricing trajectory.
USA New York: rulemaking for Mandatory GHG Reporting Program concluded
What’s Coming in 2026
Key timelines for 2026 include:
USA EPR PROGRAM DEADLINES
Colorado: Producer fees due January 1, 2026
California: PRO designation January 1, 2026; producers join by July 1
Washington: PRO designated by March 1; fees by September
Maine: Producers join PRO and report by May; fees by September
Maryland: Producers join PRO by July 1, 2026
EU REGULATORY DEADLINES
Eco-design Regulation: Ban on destruction of unsold apparel/footwear (July 19, 2026)
EU Right to Repair Directive: Member State transposition by July 31, 2026
PPWR: PFAS thresholds apply to food-contact packaging (August 12, 2026)
ECGT: Requirements apply for B2C practices (September 27, 2026)
France: Mandatory textile environmental labeling (October 2026)
ADDITIONAL ITEMS TO WATCH
EU Green Claims Directive (2026 workplan)
EU Circular Economy Act (Q3 2026)
Canada Competition Act greenwashing updates
Canada Taxonomy by end 2026
Mexico: Expansion of ETS to additional sectors and General Law on Circular Economy
What Companies Must Do in 2026
Sustainability and product compliance are converging. Companies must integrate circularity, carbon management, and legal compliance into every lifecycle stage.
Key priorities:
Map all applicable sustainability regulations to prevent duplication of efforts.
Understand product composition, purpose, origin, and end-of-life pathways.
Apply circular design principles (the 5 Rs: Refuse, Reduce, Reuse, Repurpose, Recycle).
Integrate traceability across the supply chain to support due diligence.
Digitize data management to maintain accuracy, timeliness, and retention.
Use expert verification to substantiate sustainability claims and compliance data.
FAQ
What are the biggest regulatory changes in 2026 for circularity? Key changes include the EU ban on destruction of unsold textiles, mandatory French textile environmental labeling, multiple US states activating packaging/textile EPR programs, and new PFAS limits in EU food-contact packaging.
When do Digital Product Passports become mandatory? First wave begins in 2026 (construction materials, iron, steel), expanding to textiles, batteries, and aluminum in 2027.
How does CBAM change in 2026? The EU introduces a 50tonne mass-based threshold and removes indirect emissions from cost calculations for iron, steel, and aluminum.
What must companies do to prepare for stricter sustainability rules? Strengthen product traceability, circular design, data collection, supplier engagement, and documentation to meet EPR, DPP, CBAM, and environmental claims requirements.
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