The European Fashion Alliance (EFA), a European network of national fashion associations and institutions, published an industry report on the needs of the European creativity-driven fashion industry in 2025 (“On the Needs of the European Creativity-Driven Fashion Industry 2025”) this Thursday. To this end, 26 EFA members were comprehensively surveyed, with a particular focus on small and medium-sized enterprises (SMEs). The findings of the previously published “Status of European Fashion” survey were also used.
“If Europe wants to become a global leader, we need to empower the creatives who are shaping its future. This report sets the direction for that support and clearly shows where targeted investments, policy alignment and structural improvements are needed,” comments Scott Lipinski, CEO of the Fashion Council Germany and Chair of the European Fashion Alliance, in a press release.
The report identifies seven key areas that require systemic support to ensure Europe remains a global leader in sustainable and creative fashion. To this end, 63 recommendations have been compiled to be submitted to the European Union authorities. The seven core areas are sustainability, innovation, training, communication and distribution, responsible consumption, systemic support for the creative fashion industry and strengthening the entire value chain. FashionUnited has summarized the key points and recommendations for each core area.
1. Sustainability and procurement
While 88 percent of industry representatives invest in sustainability, 59 percent of companies lack the necessary tools for high-quality practices. Barriers faced by SMEs include the high cost of “sustainable” materials, a confusing landscape of unreliable certification labels and a lack of data on available suppliers.
The report therefore recommends a revision of the VAT directive to allow reduced rates for certified sustainable materials. Furthermore, the development of a central EU platform with a list of certified sustainable material suppliers in order to shorten supply chains. Providing vouchers or financial support to SMEs to access expensive sustainability certifications is also highlighted.
2. Innovation and technology
Innovation in fashion is seen as a double-edged sword: a need for transparency (traceability), but a threat to intangible creative know-how. One of the current gaps is that 75 percent of the companies surveyed are currently not using innovative solutions to ensure product traceability.
The report therefore proposes grants for SMEs to implement life cycle assessment (LCA) tools, blockchain and the digital product passport (DPP). Likewise, funding AI-powered IP surveillance tools to detect and remove counterfeit goods in real time. The introduction of fashion-specific R&D tax credits or special financing systems would also make sense.
3. Training and skills
The sector is facing a critical shortage of manufacturing skills and a knowledge gap around complex new EU regulations. There is a regulatory gap here: Only 52 percent of those surveyed are familiar with the Ecodesign Regulation for Sustainable Products (ESPR), a cornerstone of the upcoming textile legislation.
The report therefore recommends launching EU-wide campaigns to promote careers in manufacturing and traditional crafts, as well as creating “Erasmus-style” cross-border mobility specifically for apprentices in technical fashion professions. He also mentions the development of a simple regulatory compliance checklist and roadmap for SMEs.
4. Communication and distribution
The report finds significant differences in support between Member States, particularly between Western and Eastern Europe. Market challenges include many brands choosing to stay small and local for sustainability reasons, but they need better digital visibility to compete against ultra-fast fashion.
Key recommendations therefore include subsidies for digitalization, including website development and training for sustainable e-commerce. Grants are also proposed for brands from smaller markets to participate in international fashion trade fairs and showrooms.
5. Responsible consumption
The report emphasizes that changing consumer behavior is essential to supporting creative brands. When it comes to consumer sentiment, 66 percent of respondents believe that the public image of the fashion industry is currently negative or negative. The establishment of an EU seal “Made in Europe” is therefore suitable for products whose design, craftsmanship and production take place in the EU.
The introduction of “repair bonus” systems at EU level to reduce the cost of clothing repairs for consumers is also seen as useful. Finally, funding for research assessing “extrinsic durability” (i.e. emotional attachment to garments) and social labeling is mentioned.
6. Systemic support and value chain
The EFA calls for fashion to be treated with the same cultural and regulatory flexibility as other sectors, such as music or theater.
The strategic initiative proposed is a “European Fashion Hub”, a central digital platform to provide regulatory advice, toolkits and networking for all creative brands. Under the de minimis rules, creative fashion should also be included in the cultural exemptions of the General Block Exemption Regulation (GBER) to enable a higher level of public support. As part of financial inclusion, low-interest loans and microfinance are to be introduced specifically for small producers based in the EU.
7. Strengthening the entire value chain
The report argues that it is essential to strengthen the ecosystem in which creative fashion companies operate to support this systemic perspective. This includes facilitating access to responsible materials for small producers, maintaining and modernizing craft and production know-how across Europe, and promoting more transparent, traceable and fair supply chains – both within the EU and through partnerships with trustworthy suppliers from third countries. By strengthening every link in the value chain, the EU can create the conditions for a more competitive, circular and culturally diverse economy.
“For young designers and independent labels, this report clearly shows what is necessary for a sustainable career in the European fashion industry. Promoting young talent through targeted measures, easily accessible financing and fair framework conditions is at the heart of the work of the Austrian Fashion Association, and this report strongly reinforces this mission. At the same time, achieving these goals requires a clear and sustained commitment from policymakers at European and national levels to translate the report’s recommendations into effective frameworks and long-term support structures for the fashion industry,” summarizes Camille Boyer, President of the Austrian Fashion Association.
More about the report can be found on the European Fashion Alliance website.