For years, environmental compliance was the responsibility of the CSR department — handled through shared spreadsheets and annual carbon reports. That era is over. Since 2024, a series of EU regulations has introduced product-level traceability obligations, waste reporting requirements, and minimum recycled content mandates that can no longer be managed outside the company’s central information system.
The ERP, sitting at the crossroads of purchasing, production, logistics, and finance flows, is becoming the essential regulatory register for the circular economy. But which of your modules is affected? What data do you need to capture now? And what do ESPR, PPWR, and WEEE actually mean for your IT roadmap?
The EU Circular Economy Package: Three Texts, One Logic
The European Commission has built a coherent set of regulations to drive the economy toward reducing waste, extending product lifespans, and closing material loops. These regulations share a common logic: they impose requirements at the product level — not just at the company level as with CSRD — which forces companies to go deep into their ERP’s item and supplier master data.
ESPR: The Ecodesign for Sustainable Products Regulation
Regulation (EU) 2024/1781, known as ESPR (Ecodesign for Sustainable Products Regulation), entered into force on 18 July 2024. It replaces and substantially extends the 2009 Ecodesign Directive, which previously applied only to energy-related products. Now, almost any physical product placed on the EU market can be subject to durability, repairability, recyclability, and recycled content requirements.
The framework regulation is in force, but concrete obligations arrive through sector-specific delegated acts. According to the European Commission, the first categories targeted in 2026 are textiles and steel, followed by aluminium, tyres, furniture, and mattresses over the 2026–2029 period. Each delegated act sets sector-specific criteria and triggers the obligation for a Digital Product Passport (DPP).
19 July 2026 is also a key date: the ban on destroying unsold consumer products enters into force for large companies (SMEs benefit from additional transition periods).
PPWR: The Packaging and Packaging Waste Regulation
Regulation (EU) 2025/40, known as PPWR (Packaging and Packaging Waste Regulation), was adopted on 19 December 2024 and published on 22 January 2025. It replaces Directive 94/62/EC — in force for thirty years — with binding obligations across the entire packaging value chain.
Key deadlines include:
- 12 August 2026: Packaging, including e-commerce parcels, must comply with strict space efficiency rules. Empty space in a parcel cannot exceed 40% unless technically justified with documentation.
- From 2030: Only packaging classified A, B, or C for recyclability may be placed on the market. Minimum recycled content thresholds apply to plastic packaging — between 30% and 65% depending on category — with reinforced targets for 2040.
For manufacturers and distributors, the immediate impact falls on the ERP’s packaging item master: every packaging reference must be qualifiable by material type, recycled content percentage, and recyclability class.
WEEE: The Revised Waste Electrical and Electronic Equipment Directive
Directive (EU) 2024/884, adopted on 13 March 2024, amends WEEE Directive 2012/19/EU. It clarifies and strengthens obligations for manufacturers and distributors of electrical equipment, particularly regarding photovoltaic panels and waste treatment financing. Member States were required to transpose it into national law by 9 October 2025.
More structurally, the Commission has mandated a full review of the WEEE Directive before 31 December 2026, which could lead to a more binding regulation as early as 2027–2028.
How This Differs from CSRD
A frequent confusion among IT and sustainability teams deserves clarification. The CSRD (Corporate Sustainability Reporting Directive) measures and discloses the environmental impact of the company as a whole — it is a corporate-level reporting obligation. The circular economy regulations (ESPR, PPWR, WEEE) impose requirements at the individual product level: composition, recyclability, declaration of volumes placed on the market. These two frameworks overlap but do not replace each other. A company can publish an excellent CSRD report while still being out of compliance on the recyclability of its packaging by 2030.
What These Regulations Require Concretely in Your ERP
Here is the operational translation of regulatory obligations into IT data requirements:
| Regulatory obligation | Text | What the ERP must capture |
|---|---|---|
| Minimum recycled content (plastic packaging) | PPWR, from 2030 | % recycled material per packaging reference and per supplier |
| Space efficiency of parcels | PPWR, from August 2026 | Actual vs. minimum dimensions per parcel reference |
| Digital Product Passport (DPP) | ESPR + delegated acts 2026–2028 | Material composition, durability, repairability, recyclability per item reference |
| WEEE manufacturer declaration | WEEE 2024/884 | Volumes placed on market by category, financial contributions to approved schemes |
| Industrial waste register | National regulations from EU directives | Nature, volume, waste code (European nomenclature), approved carrier, destination |
| Ban on destruction of unsold goods | ESPR, from 19 July 2026 | Traceability of destroyed or redistributed stock by item reference |
The ERP Modules Directly Impacted
The circular economy is not a module to activate — it is a data layer to add on top of existing modules.
Purchasing and supplier management: to meet PPWR and ESPR obligations, the ERP must store material data sheets for each purchased component or packaging item, including the percentage of certified recycled material, the supplier’s environmental certifications, and the country of origin for future DPPs. Most current ERP systems do not have these fields natively: they require extensions to the item master or supplier master.
Production management: traceability of inputs and manufacturing waste becomes a regulatory requirement. What the ERP must know is not only what enters production, but also what exits as waste — the volume, nature, and processing route. Production management modules are rarely configured to systematically capture manufacturing waste data.
Stock management: from 19 July 2026, large companies can no longer destroy unsold consumer products without documentation. The ERP must therefore record the reason for each stock write-off, with the date, volume, and destination.
Quality and compliance module: non-conformances related to waste and environmental incidents must be tracked with their regulatory codes. This module also serves as the register for annual WEEE declarations.
Financial reporting: provisions for regulatory obligations — contributions to WEEE producer responsibility schemes, potential penalties on packaging recyclability — must be documented in the ERP in an auditable form.
Digital Product Passport and ERP: Who Owns What?
The Digital Product Passport (DPP) is probably the most structurally significant obligation under ESPR. Every product placed on the EU market will need to carry a unique identifier (QR code or RFID) pointing to a standardised dataset covering its composition, expected lifespan, and recycling guidelines.
The European Commission plans to establish a centralised EU registry for DPPs from July 2026. The battery passport will be the first mandatory DPP: from 18 February 2027, every industrial or electric vehicle battery with a capacity above 2 kWh sold in the EU must carry a Battery Passport (Regulation (EU) 2023/1542). For textiles, the delegated act is expected in 2027, with realistic effective application around 2028–2029.
The practical question for IT directors is: who owns the DPP data? The ERP is the system of record for purchasing flows and production volumes, but product composition data often lives in the PLM (Product Lifecycle Management) or PIM (Product Information Management). The DPP requires an integration architecture that aggregates this data and exposes it via a standardised API to the European registry. The ERP is a data provider — rarely the system that exposes the DPP itself.
How Major ERP Vendors Are Positioning Their Offering
SAP S/4HANA: SAP offers SAP Sustainability Footprint Management, natively integrated with the SAP Environment, Health & Safety (EHS) module in S/4HANA. The solution calculates the carbon footprint per product and manages environmental declarations. SAP is positioned as a Leader in the IDC MarketScape 2026 for carbon accounting applications. On waste and DPP, SAP is developing extensions via SAP Sustainability Data Exchange to expose product data.
IFS Cloud: the IFS EHS (Environment, Health & Safety) module delivers a solid level of maturity for industrial waste management, environmental incident tracking, and regulatory declarations. IFS is one of the vendors that best covers the needs of manufacturers subject to WEEE directives and waste registers.
Microsoft Dynamics 365: Microsoft Cloud for Sustainability provides an ESG reporting layer, but dedicated functionality for product-level traceability and industrial waste remains in development. For ESPR and PPWR obligations, third-party integrations are typically required.
Odoo: no native module dedicated to circular economy compliance. Companies using Odoo will need to rely on third-party tools such as EcoVadis or Tennaxia, connected via API, to manage regulatory environmental data.
Oracle Fusion: the Oracle Sustainability module integrates corporate-level ESG reporting, but product-level granularity for DPP obligations remains limited without custom development.
IT Roadmap: What Must Be Ready Before 2028
Now (mid-2026): map your waste flows in your current ERP. What waste exits your production? Is it codified according to the European waste nomenclature (European Waste Catalogue, Decision 2000/532/EC)? Do you have the treatment provider in your supplier master? Also identify the packaging items subject to the first PPWR obligations of August 2026.
2027: build the enriched material master. For every purchased item entering the composition of your products or packaging, document the recycled content percentage, the source supplier, and the associated certification. This project is time-consuming — typically 6 to 12 months for a catalogue of several thousand references. It is the prerequisite for DPPs.
2028: make the DPP operational for priority categories (batteries if applicable, textiles if your sector is concerned). This assumes the integration API toward the EU registry is built and that composition data is reliable in the ERP or PLM.
Questions to ask your ERP vendor at your next maintenance review:
- What native fields allow storing % recycled material per packaging reference?
- Does the EHS or waste module cover the European waste nomenclature (catalogue 2000/532)?
- What is the DPP roadmap for my sector? Is there a connector to the EU registry?
- How does the stock module manage traceability of unsold goods destruction?
- What integration exists with a PLM or PIM for product composition data?
Three Mistakes to Avoid
Conflating CSRD with product-level obligations. CSRD measures your company’s ESG impact and requires a global report. ESPR, PPWR, and WEEE impose requirements at the level of each product or packaging reference. The two are complementary, not interchangeable. A team that delegates circular economy compliance to the CSRD manager without involving operations and supply chain leadership is missing the point entirely.
Deferring to 2027 what can be configured now. Building a reliable material master takes time. Composition data by item reference does not come automatically from suppliers — you have to request it, validate it, and integrate it into the ERP. The later you start, the more costly and compliance-risky the catch-up becomes.
Buying a “sustainability” module without verifying its scope. Some modules marketed under this label cover only corporate-level carbon reporting (useful for CSRD) with no waste traceability or DPP management functionality. Ask explicitly which regulatory obligations are covered: ESPR, PPWR, WEEE, waste register. The answer will tell you whether the module is appropriate for your situation.
The circular economy represents a paradigm shift in how ERPs track products, materials, and waste. This is no longer a peripheral CSR topic — it is an operational obligation with imminent application dates, with the first wave beginning in August 2026.
To go further, read our guide on the Digital Product Passport (DPP) and its impact on industrial ERPs, our analysis of CSRD reporting and its integration into the ERP, and our overview of CBAM and carbon border adjustment obligations in the EU.
