A report jointly released by Fashion For Good and Circular Fashion News shows that the global apparel and textile recycling market is expanding from $13.6 billion in 2024 at a compound annual growth rate of 5.9%, and is projected to reach $20.2 billion by 2031. The report argues that the industry has entered a critical phase of commercialization this year, driven by newly introduced regulatory rules, but it also faces enormous funding needs.

Europe Is the Center of Gravity, and Also the Bottleneck

Regionally, Europe's recycling momentum is stronger than elsewhere, with an expected annual growth rate of 10.5%, reaching a market size of €2.4 billion by 2030. But to support this growth, Europe needs to build sorting and collection infrastructure first, with upfront investment estimated at €8 billion to €11 billion, followed by annual operating expenditure of €5 billion to €6.5 billion.

The challenges go beyond funding. The report notes that brands still find it difficult to make long-term offtake commitments, making it hard for recyclers to secure stable downstream demand. The European Recycling Industries' Confederation (EuRIC) offers an even more pessimistic assessment: Europe's textile collection, reuse sorting, and recycling industry is experiencing an "unprecedented crisis"—sorting costs are rising, second-hand clothing sales are declining, recycled textile materials lack demand, and the expansion of online ultra-fast fashion has further exacerbated these difficulties.

The pressure has already reached specific companies. According to the report, earlier this year Texaid scaled back its operations in Germany, Sweden's Sysav sold its Siptex automated sorting line, France's Le Relais withdrew nearly 4,300 collection bins because its business model became unsustainable, and in Spain, despite the addition of 30,000 collection containers, 87% of textile waste still ends up in landfills. In response, French authorities announced they would raise the collection subsidy for 2026 from €228 per tonne to €268.

Financing Is Active, and Capacity Is Beginning to Land

Financing in the first half of 2026 confirms the industry's momentum: Fashion For Good mentions that Reju raised €135 million for its future Dutch hub, Epoch Biodesign secured €10.3 million for enzymatic nylon recycling, and Swedish startup Renasens raised €10 million. On the capacity side, Sweden's Circulose plant restarted commercial production, while Epoch Biodesign plans to build a facility with an annual capacity of 20,000 tonnes by 2028.

In addition, India is positioning itself as a key future player in textile waste processing and recycling, with the government projecting its domestic market will reach $3.5 billion by 2030 and could create 100,000 jobs.

The Policy Framework Is Gradually Taking Shape

The evolution of extended producer responsibility (EPR) schemes is seen as key to the industry's long-term prospects. The report mentions that California further required brands to register in July this year; at the EU level, since July 19, large companies have been banned from destroying unsold clothing and footwear, and the measure will extend to medium-sized companies by 2030.

Regarding the definition of recycled content, the Recycling Europe Textiles association recommends adopting a narrow, targeted scope that prioritizes recognizing European post-consumer textile waste, emphasizes textile-to-textile recycling in legislation, excludes open-loop sources such as plastic bottles, and discourages the generation of post-industrial textile waste.

Another caution in the report comes from recent OECD research: the traceability of recycling operations also involves complex social issues, with nearly 80% of recycling-related jobs globally still informal. As Europe sets out to build long-term, coordinated textile-to-textile recycling infrastructure, this is yet another problem waiting to be solved.

Source: The textile recycling market continues delicate transition towards commercial maturity · Originally published on 2026-09-25