Introduction

Transitioning towards a circular textile economy is a primary objective of the European Union’s sustainability policy. The textile industry currently imposes significant ecological pressure, ranking third in water and land use and fifth in raw material consumption and greenhouse gas emissions within the EU. These impacts are exacerbated by the ‘fast fashion’ trend, leading to approximately 73% of post-consumer textiles being landfilled or incinerated. Moving to circular value chains aims to retain textile value for as long as possible through reuse, repair, and recycling, thereby reducing dependency on virgin raw materials and enhancing the resilience of European supply chains.

Textile recycling in the EU

The EU’s regulatory framework for circularity is currently being established. The EU Strategy for Sustainable and Circular Textiles sets a 2030 vision for all textile products placed on the market to be durable, repairable, and recyclable. Key legislation includes the Ecodesign for Sustainable Products Regulation (ESPR), which prohibits the destruction of unsold apparel for large enterprises from 19 July 2026. Furthermore, the revised Waste Framework Directive introduces mandatory separate collection of textile waste from 2025 and establishes extended producer responsibility (EPR) schemes. However, horizontal directives like the Corporate Sustainability Reporting Directive (CSRD) have had their scope curtailed to cover only companies with more than 1,000 employees and over €450 million in annual turnover.

Technological developments

Textile recycling is a complex process involving multiple interconnected stages. Mechanical recycling is the most common method but results in shorter fibres and reduced yarn strength, often limiting recycled content to 20-30% in high-quality applications. Thermal processes, such as gasification and pyrolysis, can handle heterogeneous waste but risk ‘greenwashing’ if the output is used primarily as fuel rather than feedstock. Chemical recycling, including polymer-level and monomer-level approaches, shows promise for mixed polyester-cotton (PES/CO) blends but currently lacks mature, large-scale solutions. Feedstock sorting remains a significant hurdle; while near-infrared (NIR) spectroscopy is used, it faces limitations with multilayer textiles, dark colours, and specific finishes.

Recycling pilots and initiatives

Several European initiatives are currently trialling circular business models. ReHubs aims to develop infrastructure to process 2.5 million tonnes of textile waste annually by 2032. Feedstock Activation Europe (FAE) focuses on regional sorting hubs to bridge the gap between collectors and recyclers. The TexMat project (2025–2029) is piloting automated reuse and reward systems. Other projects like CISUTAC and SOLSTICE are developing chemical recycling technologies for challenging streams like elastane and polyurethane, with SOLSTICE aiming to save four million tonnes of greenhouse gas emissions annually by 2030. Additionally, the TEXAD project focuses on municipal governance for waste prevention and sorting.

Literature review of the barriers and enablers of textile circularity

Academic literature identifies numerous barriers, particularly for mixed PES/CO blends, where separation is technically and economically difficult. Financial barriers are prominent, as recycled materials often remain more expensive than virgin alternatives due to the high costs of sorting, chemical solvents, and reverse logistics. Regulatory gaps include a lack of coherent rules for waste collection and imprecise waste classification. On the consumer side, low awareness and a perceived lower quality of recycled garments inhibit demand. Conversely, enablers include innovations in automated sorting, public funding, and ecodesign that facilitates disassembly. EPR fees and tax reliefs, such as reduced VAT on repair services, are also identified as potential drivers.

Methodology

The report combines extensive desk research with qualitative insights from 20 semi-structured interviews with stakeholders representing the full textile value chain. Interviewees included representatives from textile producers, retailers, collectors, and technology developers. The data was coded using a combination of top-down and bottom-up approaches across seven categories: technology, finance, policy, supply chain, behaviour and culture, organisation, and society.

Empirical results

Stakeholders highlighted a lack of technological readiness for scaling up recycling value chains. Inherent trade-offs exist between recyclability and durability in product design. For recyclers, the current volumes and quality of feedstock are often too low, complicated by contaminants and complex blends. Economically, recycled materials are less cost-efficient than virgin ones, leading to higher and more volatile prices. Supply chains are described as fragmented and geographically dispersed, particularly with the lack of fibre spinning skills within Europe. Behavioural barriers include a low willingness to pay more for circular products among both consumers and business customers. Organisational constraints include a shortage of workers skilled in circular processes and new technologies.

Conclusions and policy recommendations

The transition to circularity requires a systemic approach rather than isolated technological improvements. The report offers three primary recommendations. First, policymakers should support demand-side measures, such as mandatory recycled-content requirements and green public procurement, to create a viable business case. Second, dedicated research and innovation funding must continue to support sorting and recycling technologies to fill knowledge gaps. Third, collaboration across the textile value chain should be strengthened through matchmaking platforms and the implementation of Digital Product Passports (DPP) to facilitate data sharing and traceability. Targeted financial support, including subsidies and eco-modulated EPR bonuses, remains essential to bridge the current price gap between virgin and recycled materials.