Textile-to-textile recycling needs over EUR 17 billion in a decade

A new report into text-to-textile recycling in Europe argues a viable sector requires major investment in the next decade at a time when profitability remains unattractive, especially for standalone recyclers.

Industry association Rehubs and consultants BCG believe scaling textile-to-textile (T2T) recycling in Europe is feasible. However, it will require a minimum investment of EUR 11 billion and annual costs of up to EUR 6.5 billion.

‘Bridging the economics gap requires enabling mechanisms that coordinate the chain and share risk,’ the authors state. ‘T2T recycled fibres are a new product category answering a planetary need for circularity but with structurally higher processing costs.’

They conclude that, under current conditions, T2T cannot be cost‑competitive with established routes such as bottle‑to‑textile.

Value chain challenges

Europe generates around 25kg of post-consumer textile waste a year but only a fraction is captured for recycling. In 2025, Europe generated around 15.2 Mt of textile waste, of which 13.3 Mt is post-consumer (around 90%).

Generation is accelerating with the rise of fast fashion which is projected to expand at 11% annually between 2025 and 2035. EU consumers buy around 95 textile pieces per year (up 12% on 2019).

The report finds that each part of the value chain faces challenges. Once generated, the collection and sorting elements are constrained, limiting the playing field for T2T recycling. Of the 13.3 Mt of post-consumer textile waste generated in Europe in 2025, only 1.5 Mt is collected and sorted.

With collection around 33% and sorting around 36%, the volume for T2T to target remains small and concentrated, it is argued.

Range of measures

The authors acknowledge that European policymakers are taking action across the value chain, such as requiring mandatory collection. The next step, they say, is to translate policy momentum into operational reality:

• expand collection capabilities
• upgrade sorting depth into recycling grade streams
• introduce recyclability and recycled-content criteria in textile production
• align definitions and data to provide more confidence for investors

The report considers what would be required to boost T2T recycling from below 1% today to around 15% by 2035. Collection through dedicated channels would need to increase materially from 33% in 2025 to 50% by 2035, it calculates. Sorting would have to scale from 36% in 2025 to 63% by 2035.

Recycling into new textiles has to expand sharply and reach 2.7 Mt of textiles processed into new fibres. Achieving this scale-up will require an estimated EUR 8-11 billion in capex investment and EUR 5-6.5 billion in opex.

Lower profitability

‘Under the baseline assumptions used in this economic model, T2T circularity tends to imply lower profitability for several links in the chain, compared to incumbent textile waste-management streams,’ the report says. ‘This translates into compressed or negative EBIT margins in some cases (eg -75% to -25% for polyester recyclers).

The report finds that enabling mechanisms are required for T2T circularity to become investable and scalable. These could take the form of public policies, targeted grants, eco-modulated fees and regulatory measures.

The authors also maintain that a complete business case should account for the avoided costs currently borne by the general waste system to manage textiles that end up in residual streams.