Fast fashion companies brace for EU textile waste rules

by Corina Pons and Helen Reid

BARCELONA/LONDON, Sept 1 (Reuters) – In a warehouse on the outskirts of Barcelona, ​​women stand in front of conveyor belts and manually sort T-shirts, jeans and dresses from large bales of used clothing.

The sorting center run by the charity organization Moda Re, which deals with the reuse and recycling of clothing, plans to double the volume processed within a year to reach 40,000 tonnes per year.

“This is just the beginning,” comments Albert Alberich, director of Moda Re, which is part of Spanish charity Caritas and runs Spain’s largest second-hand clothing chain.

“We will increasingly transform used clothing into European raw materials for fashion companies.”

Funded in part by Inditex, owner of Zara, Moda Re will expand its sites in Barcelona, ​​Bilbao and Valencia, as part of a project to build capacity in the sorting, processing and recycling of garments, in response to a series of new European Union (EU) proposals aimed at curbing the fashion industry.

Also in Spain, competitors such as H&M, Mango and Inditex have set up a non-profit association to manage textile waste, in response to an EU law requiring member states to separate textiles from other waste at from January 2025.

Despite these efforts, less than a quarter of the 5.2 million tonnes “of post-consumer textile waste is collected separately for reuse or recycling, with the rest often incinerated or landfilled”, it said. the European Commission in July.

Precise data on increases in clothing waste are scarce, but collection for recycling and reuse has gradually increased in several European countries starting around 2010, according to an EU report from 2021.

“Fast fashion”, or short-lived fashion, is “very unsustainable”, the Commission said in July. The textile industry is one of the main contributors to climate change and environmental damage.

Inditex, which said in March it brought 10% more clothes to market last year compared to 2021, aims to use 40% recycled fibers in clothes by 2030, as part of sustainability goals announced in July.

According to Dijana Lind, ESG analyst at Union Investment which owns shares of Adidas, Hugo Boss, Inditex and H&M, “the main problem we face is overconsumption”.

The analyst explains having spoken with Adidas, Hugo Boss and Inditex about the need to increase their use of recycled textiles, and more broadly the clothing industry as a whole.

Hugo Boss told Reuters he was using data analytics to better match production to demand because “overproduction and overconsumption is, in general, an industry-wide problem.”

Between €6 and €7 billion of investment will be needed by 2030 to create the scale of textile waste treatment and recycling the EU is aiming for, consultancy firm McKinsey estimated in a report last year.

Reuters was unable to determine the level of investment currently being made in the sector.

Companies have started to take action but there is still a lot to do, says Dijana Lind.

Inditex said it would invest €3.5 million in Moda Re over a three-year period and had installed recycling containers in all its Spanish stores. Asked about the need to do more, the company did not respond.

For its part, H&M told Reuters that it recognizes that it is “part of the problem”. “The way fashion is produced and consumed needs to change – that’s an undeniable truth.”

OBSTACLES

The barriers to significantly reducing clothing waste are considerable, despite EU demand, industry sustainability commitments and initiatives such as Moda Re’s expansion.

Hundreds of similar factories, along with investments in technology and market interventions will be needed to meet industry goals to recycle 2.5 million tonnes of textile waste by 2030, McKinsey says in his report.

Fourteen textile recyclers in Europe plan to increase their production capacity, according to Fashion For Good, a recycled fiber investment start-up, which surveyed 57 recyclers in a September 2022 report.

The EU has not set specific targets for recycled content in clothing, but by 2030 it wants all textile products sold in the EU to be made to a large extent from recycled fibers and that they are durable, repairable and recyclable.

In order to create the necessary capacity to achieve these objectives, ReHubs Europe, an association created by the European Confederation of Clothing and Textiles (Euratex), encourages investment in “fibre to fibre” recycling: processes that transform clothing used as yarn to make new textiles.

EURATEX did not immediately respond to a question concerning the level of investment made in this technology.

Less than 1% of clothing is currently recycled in this way and the processes are still under development. The challenges to be met include separating the different types of fibers into raw materials suitable for recycling.

As these techniques are still in their infancy, the higher cost of recycled fabric compared to new fabric remains a barrier to widespread adoption.

LANDFILLS IN AFRICA

At the Barcelona factory, the clothes come from more than 7,000 bins from supermarkets and Zara and Mango stores. Infrared machines donated by Inditex identify the fiber composition of garments to speed up sorting, which is largely manual.

Currently, approximately 40% of the clothes received by Moda Re are sent to other recycling centers. Of this total, only a fifth is recycled fiber by fiber, a share which, according to Moda Re, should reach 70% in the next three or four years.

At the moment, most of the recycling is for lower quality products, such as dishcloths.

Nearly half of the clothes donated to Moda Re are shipped for resale in African countries such as Cameroon, Ghana and Senegal. Moda Re claims that the clothes it exports can be reused.

According to UN trade data, the EU exported 1.4 million tonnes of used textiles in 2022, more than twice as much as in 2000. Not all of this clothing is reused, and exports of used clothing from Europe to Africa can lead to pollution when clothes that cannot be resold end up in landfills, the EU said.

The rules proposed by the European Commission aim to tackle unscrupulous operators who export damaged items destined for landfills, and require countries to demonstrate their ability to manage the materials in a sustainable way.

Moda Re said it wants to reduce the volume of clothes it sends to Africa.

Only 8% of donations are currently resold in Moda Re’s second-hand shops, a method generally considered the most efficient for reusing used clothing. A similar amount ends up in European landfills.

The company aims to double the amount of clothes resold by expanding to 300 second-hand shops in Spain over the next three years, from just over 100 currently, the company told Reuters.

Despite the difficulties, the employees of Moda Re consider their work to be positive.

“We take clothes that have been thrown away to make new ones,” said Aissatou Boukoum, a young Senegalese worker, as she passes clothes through a machine that cuts them into ribbons before sending them for recycling. “For me, that’s a good thing.”

CORPORATE RESPONSIBILITY

In addition to Inditex, Puma has entered into partnerships with the clothing collection and sorting companies I:CO in Germany, Texaid in Switzerland and Vestisolidale in Italy.

Adidas, Bestseller and H&M have invested in Finnish start-up Infinited Fiber Company, which makes fibers from textile waste, cardboard and paper.

The Commission’s legislative initiative includes rules to make retailers contribute to the cost of collecting used clothing for reuse and recycling.

Under the proposed rules, retailers would pay a fee of around 12 euro cents per item for each garment sold in the European Union, with higher rates for garments that are harder to recycle, the Commission estimated in July.

As in Spain, textile waste management associations would be created in each country. In France, this system has already been in place since 2008 as part of an organization called Refashion.

Reuters asked ten major fashion companies, including Adidas, H&M and Primark, how royalties would affect their profitability. None provided an estimate. All said they hoped they would be the same across the European Union.

“It’s a legislative tsunami,” commented Mauro Scalia, director of sustainable businesses at Euratex.

(Reporting Corina Pons in Madrid and Helen Reid in London, with contributions from Horaci Garcia and Nacho Doce in Barcelona; French version Kate Entringer, editing by Blandine Hénault)