Key points

  • BCG and ReHubs estimate that Europe's textile recycling infrastructure will need an additional €8–11 billion in capital before 2035, plus €5–6.5 billion in annual operating costs.
  • ReHubs identifies about 2.7 million tonnes per year of recycled textile material as Europe's potential "tipping point", roughly equivalent to 15% of Europe's available post-consumer textile waste.
  • Currently, less than 1% of Europe's textile waste is recycled into new textiles; most is still downcycled into insulation or wiping cloths.

Europe's technology pathways for textile recycling are relatively complete: mechanical recycling processes are mature, chemical recycling technologies continue to improve, and more companies are entering recycled fibers. Yet the circular economy is far from becoming the norm in Europe's textile industry, and cases that have moved from pilot projects to industrial-scale implementation remain relatively few. The industry's core focus has shifted from "whether recycling is feasible in principle" to "whether it can be implemented economically at scale."

Pål Erik, founder and chief growth officer of Norwegian textile recycling company Norsk Tekstilgjenvinning (NTG), says bluntly that the current obstacle is demand, not feedstock. The company processes mono-material and blended fabrics, mechanically recycling fibers after collection and sorting, and then handing them to spinners to make new textiles. The problem Erik describes is fairly representative of the industry: the technology is in place, some capacity already exists, and what is really missing is stable, predictable demand for recycled textile fibers at sufficient scale.

Robert van de Kerkhof, chairman of the European textile recycling alliance ReHubs and its former CEO, calls this supply-demand standstill the biggest challenge—without guaranteed demand, companies are unwilling to build new recycling capacity; without reliable, scalable and competitive supply, brands are unwilling to commit to using recycled materials. ReHubs brings together more than 30 stakeholders, including recyclers, sorters, fiber and technology suppliers, brands, manufacturers, extended producer responsibility (EPR) organizations and investors, with the goal of scaling European textile-to-textile recycling to industrial level.

According to the latest analysis by BCG and ReHubs, expanding Europe's recycling infrastructure to a significant level by 2035 may require €8–11 billion in additional capital and €5–6.5 billion in annual operating costs. The chain—uncertainty discourages investment, insufficient investment hinders scaling, limited scale drives up costs, and high costs suppress demand—is therefore hard to break. Europe actually has considerable existing mechanical recycling capacity, but it is highly fragmented; some chemical recycling plants are only economical when textiles from multiple countries are aggregated, which requires cross-regional coordination.

Building recycling plants alone is not enough. Collection, sorting, automated sorting, pretreatment, logistics, recycling and demand for recycled fibers must grow in tandem. Van de Kerkhof stresses that the entire system needs to evolve together, and the industry often focuses too much on recycling innovation itself, while the bigger problem lies in overall system efficiency and scale. Acerina Trejo Machin, chief technology officer of Belgian company Resortecs, warns that if large-scale chemical recycling capacity is built but not enough suitable textiles can be collected and sorted, the bottleneck will simply shift elsewhere within the value chain, and plants will still not be profitable.

Resortecs is betting on "design for disassembly": its heat-activated sewing thread Smart Stitch can, after a product's useful life ends, selectively undo seams through an automated heat-treatment process, turning pretreatment from a labor-intensive manual step into an industrializable recycling stage. Trejo Machin points out that as much as 80% of recyclable textiles fail at the pretreatment stage, and the core difficulty is usually not the fiber itself but the difficulty of efficiently separating pure fabric from synthetic seams, linings and trims. In her view, disassembly should be regarded as part of recycling infrastructure.

In Europe, textile-to-textile recycling remains a marginal business, with less than 1% of textile waste recycled into new textiles. ReHubs believes that about 2.7 million tonnes per year of recycled textile material could be Europe's tipping point, equivalent to about 15% of Europe's available post-consumer textile waste. At that volume, technologies can move beyond the "first-of-a-kind" stage, facility utilization rates can rise, and the relationships among collection, sorting, recycling, fiber production and textile manufacturing will stabilize. ReHubs had previously aimed for 2.5 million tonnes by 2030 or 2032; because progress has fallen short of expectations, the target date has been adjusted to 2035.

The starting point of the cycle also lies at the design stage. Brands need to shift from designing only for the first-use phase to considering the product's entire life cycle. This does not mean every garment must prioritize recyclability above all else; the first question should be what the most valuable next use of the product is—sometimes repair, sometimes reuse, refurbishment or recovery of a valuable component, and only then recycling. Some major brands have adopted design guidelines that limit certain blend ratios and consider disassembly pathways, but van de Kerkhof says the gap between frontrunners and the rest of the industry is stark.

Regulation is seen as key to reducing risk. Digital product passports could play a useful role if the information they contain genuinely helps determine a product's next disposition; extended producer responsibility (EPR) mechanisms are more important, as they can narrow the price gap between virgin and recycled fibers by charging for virgin and hard-to-recycle materials. But van de Kerkhof warns that as EPR systems are implemented across Europe, differing fee structures and national regimes could make investment in pan-European recycling infrastructure even harder. ReHubs is working with French member Refashion and the PRO forum to advance coordination. Lucien Grandval, public affairs director at Refashion, says harmonization is essential to reducing brands' administrative burden and providing predictable framework conditions for recyclers, and that common definitions, reporting and traceability requirements, as well as standardized methods for measuring recycling rates and recycled content, are urgently needed. EPR revenue must cover the entire chain, initially for collection and sorting and increasingly for pretreatment and recycling capacity.

There is currently a timing gap: a funding gap remains between today's investment needs and the time when EPR generates substantial revenue, which van de Kerkhof calls the "valley of death before EPR." Additional risk-mitigation tools such as guarantees, public funding and private investment are therefore needed, and the key is to give banks reliability and predictability, for example through firm offtake agreements. Nacho Bueno, marketing director of Spanish textile recycling company Coleo, concludes that what is missing is a connected value chain that gives all participants the right economic incentives—from collection, sorting and recycling to fiber, yarn, fabric and finished products, every link needs a reason to be profitable.

Source: Textile recycling: The next challenge is scaling up · Originally published on 2026-10-13