Why Small Brands Are Unhappy About the EU’s Newest Regulation

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Hello and happy Friday ahead of the summer bank holiday weekend here in the UK.

This is Shayeza Walid, BoF’s sustainability reporter, bringing you this week’s edition of The Frayed Edge.

If you follow a lot of small fashion and beauty businesses on social media, you might have seen some outcry recently over an obscure environmental rule that governs how businesses handle packaging, and which some brands say will make it untenable for them to ship to EU countries. What they’re talking about is the EU’s Packaging and Packaging Waste Regulation, which was approved in February 2025 and finally came into force on August 12. The regulation, which applies to any goods sold into the EU, regardless of where the seller is actually located, is designed to dramatically cut packaging waste and make packaging in the EU market recyclable in an economically viable way by 2030.

While the change is intended to make the EU cleaner and reduce plastic packaging waste — 40 percent of all plastic in the EU comes from packaging — the move has led to much chatter and criticism from small business owners who say they are faced with a financial and administrative burden that could make selling into Europe unjustifiably difficult. These are costs that bigger companies like Amazon, Shein and Temu, key drivers for the regulation, are better equipped to absorb.

In this edition, I break down:

• The actual requirements and timeline of the new regulation
• Why small businesses fear they will shoulder a disproportionate compliance burden
• Whether regulation could finally push alternative packaging materials from niche innovation into the mainstream

What Actually Changes Under PPWR

The New: While PPWR took effect this month, many of its most consequential requirements will roll out in stages over the next decade. This means, in the immediate term, there’s little for fashion businesses to do, other than register with their country’s packaging authorities and wait for that system to get synchronised EU-wide. The authorities will then offer guidance on labelling requirements for packages, as well as material composition.

But companies selling across EU borders will also need to appoint an authorised representative to handle their extended producer responsibility obligations in each country, as packaging is nationally administered. This is one of the stipulations that has small businesses in a panic, as companies with just a few employees worry about needing someone on staff in every EU country they sell in.

“Every country has its own register, its own forms, its own deadlines,” Casey Fuchs, owner of a Berlin-based jewellery business, posted to Instagram days before the regulation took effect. She estimated compliance costs for her one-person studio could be €300 to €1,500 ($350 to $1,750) per country each year.

Since the flurry of social media reactions, the EU Commission has clarified it is working to get this requirement suspended so that the registration process is streamlined.

The Small Business Problem

The Reaction: It’s not the environmental ambition behind PPWR that has caused the biggest stir online. It’s the bureaucracy involved in complying with it.

For a business selling across several EU markets, the new rules can mean registering separately with national packaging authorities, navigating different forms and deadlines, paying into local EPR schemes and, where required, appointing an authorised representative to handle tasks such as registration, packaging reports, payments and communication with national authorities. An Amazon-commissioned study of packaging registration across 10 EU markets this May found 64 different registration fields, 55 percent of which were country-specific.

“I’m not against less packaging waste. I ship in small boxes made of recycled materials,” Fuchs said in her Instagram post. “But whether you’re a giant like Amazon or LVMH or a small business owner like myself, the regulations are the same. The difference is these guys have legal teams and a lot of money.”

The EU’s Response: The Commission has pushed back against some of the warnings online, stressing that PPWR isn’t a “big bang” for small businesses and that many requirements will be introduced gradually.

Minimum reusability measures will roll out in 2027. In 2028, packaging across the bloc will be subject to a harmonised labelling system designed to make it easier for consumers to sort waste and improve the efficiency of recycling and composting systems. The bigger shift comes in 2030, when rules will limit empty space in packaging, restrict certain single-use plastic formats and introduce recycled-content thresholds and reuse targets.

In the meantime, the EU Commission has acknowledged that parts of the new regulation risk creating unnecessary bureaucracy, particularly the requirement for companies selling across EU borders to appoint an authorised representative to handle their extended producer responsibility obligations.

“We asked the European Parliament and the Member States to stop this obligation,” the Commission wrote in comments to concerned business owners on social media. “We want to make it easy and smooth for our companies, big and small, to sell all over Europe.”

Until then, it said it has suggested national authorities avoid sanctioning companies that aren’t compliant and issue warnings instead. For now, businesses have until September 10 to submit feedback to the European Commission on proposed rules governing national packaging producer registers, including the information companies will be required to provide, which multiple social media posts criticising the new regulation have since added in as a correction or update.

Could Regulation Finally Move the Needle on Packaging?

One hope for the law is that it could ultimately create a much bigger market for packaging innovation. Fashion and beauty companies have experimented with alternatives to conventional packaging for years, from refillable systems and recycled paper to bio-based materials, but many of those solutions remain relatively niche or failed to garner demand.

Part of that problem has been commercial — plastic is cheap, widely available and supported by existing supply chains. But PPWR could start to make recyclability, material use and packaging reduction compliance issues, rather than voluntary sustainability ambitions.

Beauty is emerging as one testing ground. London-based biomaterials company Shellworks has developed Vivomer, a material made through microbial fermentation using plant-based feedstocks that’s being used to produce packaging like jars or droppers. It is designed to function like conventional plastic but biodegrade after it’s discarded.

Paper manufacturers are also positioning themselves to benefit from companies reassessing their packaging. Sweden’s Holmen, for instance, is promoting its fibre-based paper and paperboard products for cosmetics, e-commerce and other packaging applications. That could be particularly significant for fashion, where boxes, bags and e-commerce shipping materials offer an opportunity to move away from plastic.

Looking Ahead: With PPWR, conventional packaging is likely to become harder or more expensive to use, and while big companies might choose to pay the penalties and push ahead, the alternatives are also in a position to be more commercially attractive. For small businesses with limited resources, absorbing the costs or making the switch is likely to be harder.

That challenge illustrates how dependent fashion and beauty are on plastic, including for something as seemingly minor as packaging, and how hard it will be to change that.

What Else You Need to Know:

The Financial Cost Extreme Heat Is Gaining Corporate Attention: The FT reported that a record number of European companies flagged effects of extreme heat, drought and wildfires during earnings calls in recent weeks. A step forward in tackling a disheartening but exacerbating climate reality. [Financial Times]

Why “Polyester” Is a Gen-Z Insult: A new TikTok trend reaffirmed my recent story on Why Consumers Are Ditching Polyester for Natural Fibers as Gen-Z is now using fashion’s most used fossil-fuel based synthetic fibre as shorthand for something — or someone — cheap, fake or low quality. This USA Today explainer breaks down the viral trend well. [USA Today]

900 Textile Mills in Bangladesh Close Due to Gas Shortage: A prolonged gas shortage has forced half of the mills in world’s second largest fashion exporter to pause operations, while garment manufacturing continues at lower than usual capacity, according to local industry groups. [The Business Standard]

Heat Dampens UK Retail Sales: Scorching weather and fewer discounts discouraged shoppers and ended a recent rebound in consumer spending as retail sales fell for the first time since April in the UK. [The Business of Fashion]

Boohoo Fined Over Deceptive Discounts: The Debenhams-owned fast-fashion brand was fined $2.7 million by a French watchdog after nearly half of the examined promotions were revealed to be price increases, with terms like ‘leather also used’ to sell synthetic products. [The Business of Fashion]