How Europe is utilising taxes to protect itself from fast fashion avalanches

Fast fashion may offer inexpensive, trendy clothing, but it comes at a steep environmental cost. Each person in Europe generates around 12kg of textile waste annually, yet only 1% of that is recycled into new garments. Producing a single cotton T-shirt consumes roughly 2,700 litres of water — equivalent to what a person drinks over three years. The fast fashion industry produces too much, too fast, and too cheaply, but efforts are underway to slow it down. In recent years, the EU and individual European countries have begun proposing and implementing taxes and legislation to address the problem.

Until 2021, millions of packages from online retail giants such as Shein and Temu, valued under €22, entered Europe without paying VAT. This gave them an unfair advantage over local businesses, according to an article by The Conversation, which notes that those non-EU imports have been subject to VAT since 2021.

The European Commission has proposed further measures. In July 2025, it suggested a €2 processing fee for each EU shipment and plans to remove the €150 import tariff exemption, ensuring even small orders pay customs duties. These steps aim to prevent non-EU sellers from artificially splitting orders and strengthen oversight of products often made under unsustainable conditions or poor labour practices. In 2024, 91% of all e-commerce shipments under €150 came from China.

Brussels also approved Directive (EU) 2024/825 in 2024 to combat greenwashing. Starting in 2026, brands will be barred from labelling themselves “carbon neutral” or “eco-friendly” without verifiable evidence, and must provide transparency on garment durability and repairability.

Real-life implementations

France has taken the lead in Europe by introducing a fast fashion tax. In June 2025, the French Senate approved a progressive penalty system per garment. Ultra-fast fashion brands will pay an additional €5 per item, with the tax rising to €10 by 2030. The tax varies based on each company’s environmental impact and practices, but cannot exceed 50% of the sales price excluding VAT.

"With this measure, the French government is sending a clear message: extremely cheap garments, designed to last barely a season, must pay for the damage they cause," the article notes. Brands producing durable, recyclable clothing with a smaller environmental footprint are rewarded. The policy draws inspiration from environmental taxes applied to fuels and single-use plastics.

It also echoes initiatives and solutions discussed elsewhere on tackling excessive waste and overconsumption, such as during the Zero Waste Forum. The platform was held for the first time in October 2025 in Istanbul in co-operation with key UN agencies.

In the UK, a parliamentary committee suggested a one-penny tax per garment in 2019 to fund textile collection and recycling. While it was rejected, it sparked debate around Extended Producer Responsibility, where brands pay in proportion to the waste their products generate: lower-quality items incur higher costs, while durable, recyclable goods are charged less.

Other countries are focusing on prolonging clothing life. Sweden has reduced VAT on clothing and footwear repairs from 25% to 12%, while the Netherlands applies a 9% rate for services like sewing, zip replacement, and resizing.

Early effects of these measures are visible. VAT changes and tax adjustments have levelled the playing field, forcing international platforms to revise pricing and logistics. Lower VAT on repairs is reviving local workshops, benefiting small businesses and gradually changing consumer behaviour. New taxes, such as France’s, increase the cost of disposable clothing, pressuring large brands to improve design, traceability, and materials.

"Cheap, disposable items should cease to be the most attractive option, and repairing, reusing or buying quality clothing should become the norm. If these measures are consolidated, the European textile industry could become one of the most advanced in terms of sustainability, positioning Europe as a global leader in the fight against fast fashion," the article concludes.

By Nazrin Sadigova