Simon Imner // 3 June 2026

Imagine a small furniture manufacturer about to launch a new armchair. The company has around twenty employees, and production is still based in the same town where the business began four generations ago. It took four years to develop the product. The design builds on a predecessor that the company has never really stopped producing, but the proportions are new, the upholstery has been adapted to modern sitting habits, and the materials have been chosen to last for a decade.

However, it is no longer enough for the chair to be safe, durable and compliant with current chemical requirements. The manufacturer must also demonstrate that the armchair can be dismantled in a prescribed manner, that certain parts are replaceable, that it contains a specified proportion of recycled material, and that information about each component follows the product throughout its entire life cycle via a digital product passport. The same requirements are on the way for almost all other products sold on the internal market.

This means that the possibilities for companies to make their own trade-offs are shrinking. What was previously decided at the drawing board, in dialogue with the customer and the market, will increasingly be determined in Brussels. For small businesses with slim margins, this represents a significant change in the very conditions under which they operate.

This is a consequence of the Ecodesign Regulation for sustainable products (ESPR), which came into force in 2024. The regulation covers, in principle, all physical products sold in the EU, with the exception of food, medicines, animals and plants. Product-specific requirements are currently being drawn up, and furniture is in the first priority group. Unlike previous regulations, the ESPR is not primarily concerned with limit values for hazardous substances or energy consumption, but with the actual design and construction of the product. This is where the ideological dividing line between politics and the market lies.

A cornerstone of the market economy is that policy sets the framework and allowd competition and price signals to fill it with content. Companies develop products, and those that do not appeal to consumers are weeded out. The role of policy has been to create stable and technology-neutral frameworks, ensure a functioning internal market and formulate the objectives to be achieved, not to specify the technical solutions that lead there.

The Ecodesign Regulation challenges this relationship. When policy begins to prescribe product design, the innovation process shifts from companies’ development departments to the corridors of the European institutions. For a furniture manufacturer, this means that concrete decisions regarding adhesives, joints, surface treatments and material composition must gradually be adapted to threshold values and documentation requirements set by officials and politicians. Design is the result of countless decentralised trade-offs between price, lifespan, materials, function and aesthetics. With ESPR, it is increasingly becoming a political process.

It is a legitimate political ambition to want products to be sustainable, repairable and circular. But sustainability involves a set of trade-offs that look different for different consumers,industries and markets. When policymakers attempt to codify these trade-offs in advance, there is a risk that freedom of choice will be replaced by uniformity. Products become uniform because the regulatory framework favours certain solutions over others.

This is also a way of thinking that stifles innovation. When regulations specify in advance what characteristics a sustainable product must have, they lock development into today’s solutions. New materials, untested construction methods and business models that challenge the established order find it harder to gain a foothold. This favours established players with the resources to adapt, but disadvantages start-ups who might otherwise challenge them.

Digital product passports, traceability systems and ongoing documentation requirements also entail fixed costs that remain largely the same regardless of whether a company sells ten, a hundred or thousands of products. This favours the largest, most standardised players. The European furniture industry consists of 85% micro-enterprises with fewer than ten employees, and similar structures exist in many other sectors. Market access therefore risks being determined less by who offers the best product, and more by who is best able to bear the increased costs of the regulatory framework. This conflicts both with the market-liberal idea of open competition on equal terms and with the EU’s own rhetoric on competitiveness and reducing the administrative burden for companies.

Furniture is just one of the first product groups. Toys, chemicals, footwear and a long list of other goods are next in line, and the delegated acts currently being drafted will, in practice, set the template for everything that follows. European governments need to set out a clear position on the scope of the regulation. The regulatory framework must be adapted to small businesses’ ability to comply with it.

MEPs will need to scrutinise every delegated act during the two-month period in which the European Parliament can raise objections. And the major review of the Ecodesign Regulation, expected by 2030 at the latest, must be used to assess whether developments are actually promoting European competitiveness and increased innovation. Otherwise, the single market risks ending up with exactly the products prescribed by the regulations, and no others.

Simon Imner is a Policy Manager and expert in industrial policy at the Swedish Wood and Furniture Industry Association. This blog was originally published in Swedish by Timbro.