diff --git a/packages/e2e-test-kit/src/project-runner.ts b/packages/e2e-test-kit/src/project-runner.ts
index 852841fee..9b35381d1 100644
--- a/packages/e2e-test-kit/src/project-runner.ts
+++ b/packages/e2e-test-kit/src/project-runner.ts
@@ -304,6 +304,11 @@ export class ProjectRunner {
     protected loadWebpackConfig(): webpack.Configuration {
         const config = require(join(this.testDir, this.options.configName || 'webpack.config'));
         const loadedConfig = config.default || config;
+        if (loadedConfig.output?.path) {
+            throw new Error(
+                'output.path is not allowed in webpack.config.js when running with project-runner. please use webpackOptions.output.path in the spec file instead.'
+            );
+        }
         return {
             ...loadedConfig,
             ...this.options.webpackOptions,
diff --git a/packages/webpack-plugin/src/index.ts b/packages/webpack-plugin/src/index.ts
index 79bb9f7ec..f51c9d7a4 100644
--- a/packages/webpack-plugin/src/index.ts
+++ b/packages/webpack-plugin/src/index.ts
@@ -30,7 +30,6 @@ export {
     provideStylableModules,
     replaceCSSAssetPlaceholders,
     replaceMappedCSSAssetPlaceholders,
-    reportNamespaceCollision,
     staticCSSWith,
     uniqueFilterMap,
 } from './plugin-utils';
diff --git a/packages/webpack-plugin/src/mini-css-support.ts b/packages/webpack-plugin/src/mini-css-support.ts
index ddc3cdfc6..8de9836cd 100644
--- a/packages/webpack-plugin/src/mini-css-support.ts
+++ b/packages/webpack-plugin/src/mini-css-support.ts
@@ -29,6 +29,10 @@ export function injectCssModules(
         const chunkGraph = compilation.chunkGraph;
 
         for (const [module] of stylableModules) {
+            const stylableBuildData = getStylableBuildData(stylableModules, module);
+            if (stylableBuildData.isDuplicate) {
+                continue;
+            }
             const cssModule = new CssModule({
                 context: module.context,
                 identifier: module.resource.replace(/\.st\.css$/, '.css') + '?stylable-css-inject',
@@ -42,7 +46,7 @@ export function injectCssModules(
                         dependencyTemplates,
                         runtime: 'CSS' /*runtime*/,
                         runtimeTemplate,
-                        stylableBuildData: getStylableBuildData(stylableModules, module),
+                        stylableBuildData,
                     })
                 ),
             });
diff --git a/packages/webpack-plugin/src/plugin-utils.ts b/packages/webpack-plugin/src/plugin-utils.ts
index d96697d87..8566623a5 100644
--- a/packages/webpack-plugin/src/plugin-utils.ts
+++ b/packages/webpack-plugin/src/plugin-utils.ts
@@ -255,7 +255,10 @@ export function createStaticCSS(
     dependencyTemplates: DependencyTemplates
 ) {
     const cssChunks = Array.from(stylableModules.keys())
-        .filter((m) => getStylableBuildMeta(m).isUsed !== false)
+        .filter((m) => {
+            const buildMeta = getStylableBuildMeta(m);
+            return buildMeta.isUsed !== false && !buildMeta.isDuplicate;
+        })
         .sort((m1, m2) => getStylableBuildMeta(m1).depth - getStylableBuildMeta(m2).depth)
         .map((m) => {
             return replaceMappedCSSAssetPlaceholders({
@@ -365,31 +368,63 @@ export function getSortedModules(stylableModules: Map<NormalModule, BuildData |
     });
 }
 
-export function reportNamespaceCollision(
+export function handleNamespaceCollision(
+    stylableModules: Map<NormalModule, BuildData | null>,
     namespaceToFileMapping: Map<string, Set<NormalModule>>,
     compilation: Compilation,
-    mode: 'ignore' | 'warnings' | 'errors'
+    mode: 'ignore' | 'warnings' | 'errors',
+    experimentalDedupeSimilarStylesheets?: boolean
 ) {
     if (mode === 'ignore') {
         return;
     }
     for (const [namespace, resources] of namespaceToFileMapping) {
         if (resources.size > 1) {
-            const resourcesReport = [...resources]
-                .map((module) => getModuleRequestPath(module, compilation))
-                .join('\n');
-
-            const error = new compilation.compiler.webpack.WebpackError(
-                `Duplicate namespace ${JSON.stringify(
-                    namespace
-                )} found in multiple different resources:\n${resourcesReport}\nThis issue indicates multiple versions of the same library in the compilation, or different paths importing the same stylesheet like: "esm" or "cjs".`
-            );
-            error.hideStack = true;
-            compilation[mode].push(error);
+            const modules = [...resources];
+
+            const shouldReport = experimentalDedupeSimilarStylesheets
+                ? areAllModulesTheSameCssAndDepth(stylableModules, modules)
+                : true;
+
+            if (shouldReport) {
+                const resourcesReport = modules
+                    .map((module) => getModuleRequestPath(module, compilation))
+                    .join('\n');
+
+                const error = new compilation.compiler.webpack.WebpackError(
+                    `Duplicate namespace ${JSON.stringify(
+                        namespace
+                    )} found in multiple different resources:\n${resourcesReport}\nThis issue indicates multiple versions of the same library in the compilation, or different paths importing the same stylesheet like: "esm" or "cjs".`
+                );
+                error.hideStack = true;
+                compilation[mode].push(error);
+            } else if (experimentalDedupeSimilarStylesheets) {
+                // we keep the first one start index from 1
+                for (let i = 1; i < modules.length; i++) {
+                    getStylableBuildMeta(modules[i]).isDuplicate = true;
+                    getStylableBuildData(stylableModules, modules[i]).isDuplicate = true;
+                }
+            }
         }
     }
 }
 
+function areAllModulesTheSameCssAndDepth(
+    stylableModules: Map<NormalModule, BuildData | null>,
+    modules: NormalModule[]
+) {
+    let common: { css: string; depth: number };
+    return modules.some((mod) => {
+        const { css, depth } = getStylableBuildData(stylableModules, mod);
+        if (!common) {
+            common = { css, depth };
+        } else if (common.css !== css || common.depth !== depth) {
+            return true;
+        }
+        return false;
+    });
+}
+
 export function normalizeNamespaceCollisionOption(opt?: boolean | 'warn') {
     if (opt === true) {
         return 'ignore';
diff --git a/packages/webpack-plugin/src/plugin.ts b/packages/webpack-plugin/src/plugin.ts
index 263cb9eba..aff52a26c 100644
--- a/packages/webpack-plugin/src/plugin.ts
+++ b/packages/webpack-plugin/src/plugin.ts
@@ -23,7 +23,7 @@ import {
     findIfStylableModuleUsed,
     staticCSSWith,
     getStylableBuildMeta,
-    reportNamespaceCollision,
+    handleNamespaceCollision,
     createOptimizationMapping,
     getTopLevelInputFilesystem,
     createDecacheRequire,
@@ -51,7 +51,16 @@ import { parse } from 'postcss';
 import { getWebpackEntities, StylableWebpackEntities } from './webpack-entities';
 
 type OptimizeOptions = OptimizeConfig & {
+    /**
+     * Enable css minification
+     */
     minify?: boolean;
+    /**
+     * @experimental
+     * Remove modules with the same target css and same depth from output
+     * This can be beneficial when you have multiple versions of the same package in your project
+     */
+    experimentalDedupeSimilarStylesheets?: boolean;
 };
 
 export interface StylableWebpackPluginOptions {
@@ -136,6 +145,7 @@ const defaultOptimizations = (isProd: boolean): Required<OptimizeOptions> => ({
     shortNamespaces: isProd,
     removeEmptyNodes: isProd,
     minify: isProd,
+    experimentalDedupeSimilarStylesheets: false,
 });
 
 const defaultOptions = (
@@ -321,6 +331,7 @@ export class StylableWebpackPlugin {
                         const stylableBuildMeta: StylableBuildMeta = {
                             depth: 0,
                             isUsed: undefined,
+                            isDuplicate: false,
                             ...loaderData,
                         };
                         module.buildMeta.stylable = stylableBuildMeta;
@@ -418,6 +429,7 @@ export class StylableWebpackPlugin {
                     css,
                     isUsed: module.buildMeta.stylable.isUsed,
                     depth: module.buildMeta.stylable.depth,
+                    isDuplicate: module.buildMeta.stylable.isDuplicate,
                 });
             }
         });
@@ -434,12 +446,14 @@ export class StylableWebpackPlugin {
             const { usageMapping, namespaceMapping, namespaceToFileMapping } =
                 createOptimizationMapping(sortedModules, optimizer);
 
-            reportNamespaceCollision(
+            handleNamespaceCollision(
+                stylableModules,
                 namespaceToFileMapping,
                 compilation,
                 normalizeNamespaceCollisionOption(
                     this.options.unsafeMuteDiagnostics.DUPLICATE_MODULE_NAMESPACE
-                )
+                ),
+                optimizeOptions.experimentalDedupeSimilarStylesheets
             );
 
             for (const module of sortedModules) {
@@ -509,7 +523,10 @@ export class StylableWebpackPlugin {
                             getEntryPointModules(entryPoint, compilation.chunkGraph, (module) => {
                                 const m = module as NormalModule;
                                 if (stylableModules.has(m)) {
-                                    modules.set(m, getStylableBuildData(stylableModules, m));
+                                    const buildData = getStylableBuildData(stylableModules, m);
+                                    if (!buildData.isDuplicate) {
+                                        modules.set(m, buildData);
+                                    }
                                 }
                             });
                             if (modules.size) {
diff --git a/packages/webpack-plugin/src/types.ts b/packages/webpack-plugin/src/types.ts
index ec24a4075..2163dab2a 100644
--- a/packages/webpack-plugin/src/types.ts
+++ b/packages/webpack-plugin/src/types.ts
@@ -10,11 +10,12 @@ export interface StylableBuildMeta {
     isUsed: undefined | boolean;
     globals: Record<string, boolean>;
     unusedImports: string[];
+    isDuplicate: boolean;
 }
 
 export type BuildData = Pick<
     StylableBuildMeta,
-    'css' | 'namespace' | 'depth' | 'exports' | 'isUsed' | 'urls'
+    'css' | 'namespace' | 'depth' | 'exports' | 'isUsed' | 'urls' | 'isDuplicate'
 >;
 
 export type LoaderData = Pick<
diff --git a/packages/webpack-plugin/src/webpack-entities.ts b/packages/webpack-plugin/src/webpack-entities.ts
index 0bf055a15..a48f530b3 100644
--- a/packages/webpack-plugin/src/webpack-entities.ts
+++ b/packages/webpack-plugin/src/webpack-entities.ts
@@ -147,7 +147,7 @@ export function getWebpackEntities(webpack: Compiler['webpack']): StylableWebpac
             }: DependencyTemplateContext
         ) {
             const stylableBuildData = getStylableBuildData(this.stylableModules, module);
-            if (!stylableBuildData.isUsed) {
+            if (!stylableBuildData.isUsed || stylableBuildData.isDuplicate) {
                 return;
             }
             if (this.cssInjection === 'js') {
diff --git a/packages/webpack-plugin/test/e2e/duplicate-namespace-css-asset.spec.ts b/packages/webpack-plugin/test/e2e/duplicate-namespace-css-asset.spec.ts
new file mode 100644
index 000000000..06a323919
--- /dev/null
+++ b/packages/webpack-plugin/test/e2e/duplicate-namespace-css-asset.spec.ts
@@ -0,0 +1,52 @@
+import { StylableProjectRunner } from '@stylable/e2e-test-kit';
+import { expect } from 'chai';
+import { dirname, join } from 'path';
+
+const project = 'duplicate-namespace';
+const projectDir = dirname(
+    require.resolve(`@stylable/webpack-plugin/test/e2e/projects/${project}/webpack.config`)
+);
+
+describe(`(${project}) css asset`, () => {
+    const projectRunner = StylableProjectRunner.mochaSetup(
+        {
+            projectDir,
+            launchOptions: {
+                // headless: false,
+            },
+            throwOnBuildError: false,
+            webpackOptions: {
+                output: { path: join(projectDir, 'dist2') },
+            },
+            configName: 'webpack.config.css-output',
+        },
+        before,
+        afterEach,
+        after
+    );
+
+    it('should report detailed path of duplicate namespaced files', () => {
+        const errors = projectRunner.getBuildErrorMessages();
+        expect(errors.length).to.equal(1);
+        const { message } = errors[0];
+        expect(message).to.includes('Duplicate namespace');
+        expect(message).to.includes('./src/index.js\n  ./src/index.st.css <-- Duplicate');
+        expect(message).to.includes('./src/index.js\n  ./src/same-index.st.css <-- Duplicate');
+    });
+
+    it('should only load one copy of duplicated module with same content and depth ', async () => {
+        const { page } = await projectRunner.openInBrowser({ captureResponses: true });
+
+        const { rulesLength, stylesLength } = await page.evaluate(() => {
+            const stylesLength = document.styleSheets.length;
+            const rulesLength = document.styleSheets[0].cssRules.length;
+            return {
+                stylesLength,
+                rulesLength,
+            };
+        });
+
+        expect(stylesLength, 'only stylable.css should exist').to.equal(1);
+        expect(rulesLength, 'sheet has 3 rules (one is omitted because duplication)').to.equal(3);
+    });
+});
diff --git a/packages/webpack-plugin/test/e2e/duplicate-namespace.spec.ts b/packages/webpack-plugin/test/e2e/duplicate-namespace.spec.ts
index 51a4c21dd..e947ef69e 100644
--- a/packages/webpack-plugin/test/e2e/duplicate-namespace.spec.ts
+++ b/packages/webpack-plugin/test/e2e/duplicate-namespace.spec.ts
@@ -1,4 +1,4 @@
-import { StylableProjectRunner } from '@stylable/e2e-test-kit';
+import { browserFunctions, StylableProjectRunner } from '@stylable/e2e-test-kit';
 import { expect } from 'chai';
 import { dirname } from 'path';
 
@@ -12,7 +12,7 @@ describe(`(${project})`, () => {
         {
             projectDir,
             launchOptions: {
-                // headless: false
+                // headless: false,
             },
             throwOnBuildError: false,
         },
@@ -29,4 +29,16 @@ describe(`(${project})`, () => {
         expect(message).to.includes('./src/index.js\n  ./src/index.st.css <-- Duplicate');
         expect(message).to.includes('./src/index.js\n  ./src/same-index.st.css <-- Duplicate');
     });
+
+    it('should only load one copy of duplicated module with same content and depth ', async () => {
+        const { page } = await projectRunner.openInBrowser({ captureResponses: true });
+
+        const styleElements = await page.evaluate(browserFunctions.getStyleElementsMetadata);
+
+        expect(styleElements).to.eql([
+            { id: './src/same-index.st.css', depth: '1' }, // same content, different depth
+            { id: './src/same-v1.st.css', depth: '1' }, // duplicated only one survived
+            { id: './src/index.st.css', depth: '2' }, // component import +1 depth
+        ]);
+    });
 });
diff --git a/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/index.js b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/index.js
index 936daf1d4..17a73cca5 100644
--- a/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/index.js
+++ b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/index.js
@@ -1,5 +1,9 @@
 import { classes as a } from './index.st.css';
 import { classes as b } from './same-index.st.css';
+import { classes as v1 } from './v1.st.css';
+import { classes as v1Same } from './same-v1.st.css';
 
 document.documentElement.classList.add(a.root);
 document.documentElement.classList.add(b.root);
+document.documentElement.classList.add(v1.root);
+document.documentElement.classList.add(v1Same.root);
diff --git a/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/same-v1.st.css b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/same-v1.st.css
new file mode 100644
index 000000000..7d4ca2695
--- /dev/null
+++ b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/same-v1.st.css
@@ -0,0 +1,7 @@
+@namespace "V1";
+
+.root {
+    font-size: 20px;
+}
+
+/* st-namespace-reference="v1" */
diff --git a/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/v1.st.css b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/v1.st.css
new file mode 100644
index 000000000..7d4ca2695
--- /dev/null
+++ b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/src/v1.st.css
@@ -0,0 +1,7 @@
+@namespace "V1";
+
+.root {
+    font-size: 20px;
+}
+
+/* st-namespace-reference="v1" */
diff --git a/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/webpack.config.css-output.js b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/webpack.config.css-output.js
new file mode 100644
index 000000000..6459602a2
--- /dev/null
+++ b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/webpack.config.css-output.js
@@ -0,0 +1,18 @@
+const { StylableWebpackPlugin } = require('@stylable/webpack-plugin');
+const HtmlWebpackPlugin = require('html-webpack-plugin');
+
+/** @type {import('webpack').Configuration} */
+module.exports = {
+    mode: 'development',
+    context: __dirname,
+    devtool: 'source-map',
+    plugins: [
+        new StylableWebpackPlugin({
+            cssInjection: 'css',
+            optimize: {
+                experimentalDedupeSimilarStylesheets: true,
+            },
+        }),
+        new HtmlWebpackPlugin(),
+    ],
+};
diff --git a/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/webpack.config.js b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/webpack.config.js
index 4b6b84678..83369cc02 100644
--- a/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/webpack.config.js
+++ b/packages/webpack-plugin/test/e2e/projects/duplicate-namespace/webpack.config.js
@@ -6,5 +6,12 @@ module.exports = {
     mode: 'development',
     context: __dirname,
     devtool: 'source-map',
-    plugins: [new StylableWebpackPlugin(), new HtmlWebpackPlugin()],
+    plugins: [
+        new StylableWebpackPlugin({
+            optimize: {
+                experimentalDedupeSimilarStylesheets: true,
+            },
+        }),
+        new HtmlWebpackPlugin(),
+    ],
 };