If companies are taking raw materials worth more than zero, and turning them into clothing worth less than zero, then I think deterring them from doing that is beneficial to society overall.
But companies stockpile goods in anticipation of potential demand. For example, they'll "overproduce" winter coats because some winters are colder than average. This sort of anti-overproduction law means that the next time there's an unexpected need -- for example an unusually cold winter -- there will be a shortage because there won't be any warehouses full of "just in case" inventory.
Every business decision is a tradeoff. Smart government interventions in the economy add weight to that tradeoff to reflect externalities not otherwise accounted for; this is how cap-and-trade on SO2 emissions works. Hamfisted government interventions set hard and fast rules that ignore tradeoffs and lead to unintended consequences.
Climate change is coming, fast and brutal. I'm okay with these multi-billion-dollar revenue companies making a few points less in profits, if it means slowing climate change by even a fraction of a fraction of a point.
They don't need those profits. But our children need a viable planet.
supply and demand is that an oversupply makes prices fall, rather than driving artificial scarcity
(Although the original commenter would say, I suspect, that it's perfectly OK if there are minor consumer shortages in luxury goods for the sake of the climate.)
Clothes are something extremely overabundant in the EU. And even if they weren't, the unexpected overdemand will result in just using your old coat another year or buying one you like less. Workers are being unnecessarily exploited and resources are being unnecessarily wasted... so I think nudging companies in the right direction is way overdue. Will it work the way EU thinks? Probably not. Just like GDPR was well-intended, but the result is higher entry barrier to new companies and a bunch of annoying popups. But I'd argue that's a result of "not enough" regulation rather than "too much". Companies caught abusing our data should have been outright banned IMHO.
Due to the high shipping costs, they err on the side of filling up the containers to cover the fixed cost. After selling the clothes, there might be enough clothes left over to fill shipping containers to return the clothes, but they will be clothes from different brands and manufacturers.
It would require extraordinary coordination on both the origin and destination country to return the clothes to the manufacturer where they could add the left over clothes to the next batch that is being shipped out to a different country.
> A company can't prevent a consumer from ruining the wasted clothes.
When a consumer ruins clothing during try on he needs to buy it. I have always expected that rule to be the same everywhere.