The paper examines the role EU taxation plays in support of a transition towards more sustainable production models in the fashion industry. Clothes and clothing are an essential part of people’s everyday life and they are recognized and protected by several international human rights instruments, including the International Covenanton Economic, Social and Cultural Rights (art. 11(1)), and the Universal Declaration of Human Rights (art. 25(1)). In the European Union, clothing is also associated with the right to life as protected by Article 2(1) of the Charter of Fundamental Rights. The manufacturing of clothing and apparel, fundamentally treated as disposable goods subject to the ebbs and flows of fashion trends, doubled from 2000 to 2014: while the current global fashion industry production chain carries with it huge economic implications, it has also been shown to have an extremely problematic negative environmental impact, characterized by an elevated consumption of water and is recognized as one of the most polluting industrial sectors. Against this background, the president of the UN Economic and Social Council stated at the 2019 Sustainable Fashion Summit that the transformation of the fashion industry into a sustainable industry is a key for achieving the goals of the Agenda 2030. In the EU, Directive 2018/851 on waste requires EU Member states to take measures to both reduce waste and prevent the production of waste, in line with the Agenda 2030. Prevention is recognized as the most efficient way to improve resource efficiency and to reduce the environmental impact of waste: additionally, the Directive mandates the use of fiscal measures to promote industrial use of products and materials that can be reused or recycled.

An analysis of current circular business models demonstrates that traditional practices related to mending, repairing, sharing, second-hand use and donation can be employed to curb waste production and help transition the fashion industry to a more sustainable system. The use of recycled fibers as a raw material could also potentially reduce the reliance on high-impact materials and contain the use of pollutants .A number of different tax measures have been proposed, for example by environmental organizations, NGOs, and public authorities, that suggest either new taxes on virgin raw materials or reduced VAT rates for second-hand clothes and repair services to support circularity. In March 2022, the EU Commission published its “EU Strategy for Sustainable and Circular Textiles” that encourages Member states to adopt favorable taxation measures for the reuse and repair sector. Currently, a comprehensive and clear EU approach to the problem is missing but, because of its economic and social weight and of its negative environmental impact, a coherent approach to a greener fashion industry is a critical part of any sustainable development strategy meant to achieve the goals of the Agenda 2030. The paper intends to support the critical conversation on the role of taxation in this reconversion process through an examination of the EU position as it may emerge from the “EU Strategy for Sustainable and Circular Textiles” document in the light of the EU Charter.