Europe's textile recycling industry is in an expansion phase. Data from market research firm SNS Insider shows that the European textile recycling market was worth approximately $2.23 billion in 2025 and is projected to grow to about $4.09 billion by 2035, with a compound annual growth rate (CAGR) of roughly 6.25% between 2026 and 2035. Globally, the textile recycling market was about $6.34 billion in 2025 and is expected to reach $11.13 billion by 2035, with a CAGR of 5.79%; Europe accounts for about 35.14% of global revenue, making it the largest regional market. These figures come from research published by SNS Insider in September 2026.

Policy and regulation are at the core of Europe's position. Circular economy-related policies, tightening waste management regulations, a relatively mature recycling infrastructure, and sustainability requirements for the AI textile industry together form the region's advantages. The advancement of extended producer responsibility (EPR) mechanisms, initiatives to reduce landfilling, and pressure on fashion brands to handle post-consumer waste are pushing companies to invest in collection, sorting, and fiber regeneration systems. Germany, the UK, the Netherlands, and the Nordic countries are the most active regions in the market: Germany and the UK benefit from mature recycling networks, advanced sorting technologies, and continued investment in fiber-to-fiber recycling. Consumer demand for sustainable products is also driving the use of materials such as recycled polyester, recycled cellulose fibers, and recycled cotton.

In terms of technology structure, chemical recycling accounted for about 52.14% of the market in 2025, because it can extract high-quality fibers from polyester and blended waste; mechanical recycling continues to grow due to its low cost and wide application to cotton, wool, and denim. AI-driven sorting technology is improving fiber identification accuracy and reducing impurity levels.

A group of companies forms the fulcrum of Europe's transformation. Sweden's Renewcell AB recycles waste textiles into the renewable cellulose material Circulose, used to make new clothing; in November 2025 the company began mass production of this recycled cellulose pulp, after which Lenzing signed a five-year contract with it to purchase up to 100,000 tonnes of Circulose per year. Austria's Lenzing AG focuses on recycled cellulose fibers and circular textiles, and its long-term agreements to purchase recycled raw materials reflect rising interest among apparel companies in traceable, environmentally friendly raw materials; the supply relationship between Renewcell and Lenzing is seen as a channel connecting waste textile recycling with new fiber production. Germany-headquartered I:Collect GmbH (I:CO) operates textile collection and recycling systems, and as companies increasingly establish recycling programs and EPR systems, its collection mechanisms play a role in connecting consumers, retailers, sorters, recyclers, and end users of materials.

Looking ahead to 2035, circular economy regulations, sustainable fashion trends, advances in recycling technology, and producer responsibility will continue to support Europe's position as a key regional market. However, high recycling process costs, the complexity of handling blended fibers, and insufficient commercial-scale facilities remain obstacles to be resolved. Chemical recycling, AI sorting, fiber-to-fiber solutions, retailer recycling programs, and increased use of recycled fibers are seen as the main windows of opportunity. As Europe gradually moves away from traditional textile waste management paths toward circular material solutions, Germany, the UK, the Netherlands, and the Nordic countries are expected to continue to play a leading role in innovation.

Source: Europe Textile Recycling Industry Growth & Trends · Originally published 2026-09-17