Small steps to wider circularity

Conditions remain challenging globally but recent policy initiatives in Europe offer hopes for a more sustainable secondary supply chain.

Unsurprisingly, given that we have been through the summer period, little has changed in the international used textiles market since the previous report.

Market conditions remain extremely challenging, particularly for collectors and sorting businesses across Europe and other parts of the global North. There continues to be too much supply in relation to demand in many areas, while the prices that can be achieved for used clothing and recycling grades remain under pressure. At the same time, labour, transport and other operating costs remain high, meaning that margins continue to be extremely tight.

Logistics disruption

The wider geopolitical situation also continues to create uncertainty. Disruption to international shipping routes, particularly those serving markets through the Middle East, continues to add costs and make some established trading routes more difficult.

This is on top of the longer-term problems facing the sector, including weaker demand in some traditional markets and, importantly, the declining quality of some of the clothing entering the used clothing stream.

There have, however, been a couple of interesting policy developments which could have longer-term implications for our industry.

New policies

France has introduced additional environmental charges specifically aimed at ultra-fast fashion and the business models associated with companies such as Shein and Temu, which put enormous numbers of new products onto the market at very low prices.

At EU level, the Ecodesign for Sustainable Products Regulation has introduced a ban on the destruction by large companies of unsold apparel, clothing accessories and footwear. Instead of destroying unsold stock, businesses have to find other routes for these goods, including resale, donation, repair, refurbishment and reuse.

Fundamental issues

What is interesting about both of these measures is that they are beginning to address one of the fundamental problems that sits much further upstream from the used clothing and textile recycling industry, which is quite simply the enormous amount of new clothing that is being produced and placed onto the market.

If policies such as these result in less overproduction and encourage manufacturers and retailers to produce better quality clothing in more realistic quantities, then there could be a trickle-down effect for the used clothing industry.

If less clothing eventually enters collection systems, and the clothing that does enter is of better quality, this could help to bring supply and demand back into better balance and potentially improve values.

However, neither of these policies directly addresses the more immediate need to invest in collection, sorting, reuse and recycling infrastructure. Even if we start to reduce the amount of new clothing being produced, billions of garments are still being consumed every year and we need viable businesses and infrastructure in place to collect, sort, reuse and recycle these goods.

‘Unfair’ claims

There are also some wider international issues to consider. China has raised concerns that the French measures could discriminate against Chinese businesses and potentially conflict with World Trade Organization rules. They may have a point. Environmental measures must apply fairly and should be aimed at the business model and its environmental impacts, rather than simply where a company comes from.

For the used textile industry, therefore, the immediate outlook remains difficult. There is still international demand for good quality reusable clothing but the economics of collecting and sorting increasingly mixed quality material remains extremely challenging.

Policies which start to tackle overproduction are welcome and could help to rebalance the market over time. But we also need policies which recognise the economic and environmental value of the existing reuse and recycling industry and, importantly, provide the investment needed to sustain that infrastructure.

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