A new industry report has revealed that scaling textile-to-textile (T2T) recycling in Europe is technically feasible but economically challenging, requiring at least €11 billion in investment over the next decade to become viable.
The report, published by industry association ReHubs in collaboration with Boston Consulting Group (BCG), highlights a significant gap between sustainability ambitions and economic reality. While T2T recycling is positioned as a critical solution for circular textiles, current cost structures remain uncompetitive compared to established recycling routes such as bottle-to-textile.
Economic Barriers and Structural Cost Challenges
According to the report, T2T recycled fibres represent a new category designed to address environmental pressures, but they come with inherently higher processing costs. As a result, profitability remains weak—particularly for standalone recyclers.
In some cases, polyester recyclers face negative EBIT margins ranging from -75% to -25%, underscoring the financial risks involved. Without coordinated support mechanisms across the value chain, the sector is unlikely to attract sufficient private investment.
The authors stress that bridging this economic gap will require shared risk models, policy support, and stronger collaboration between stakeholders.
Collection and Sorting Bottlenecks Limit Progress
Despite growing volumes of textile waste in Europe, the infrastructure needed to support large-scale recycling remains underdeveloped.
In 2025, Europe generated approximately 15.2 million tonnes of textile waste, with around 13.3 million tonnes classified as post-consumer waste. However, only 1.5 million tonnes were collected and sorted—highlighting a major bottleneck in the system.
Current collection rates stand at roughly 33%, while sorting capacity reaches only 36%. These limitations significantly reduce the volume of materials available for T2T recycling, restricting its scalability.
At the same time, fast fashion continues to accelerate waste generation. European consumers now purchase an average of 95 textile items per year, with demand expected to grow further over the next decade.
Scaling Targets Require Systemic Transformation
The report outlines ambitious targets for expanding T2T recycling, aiming to increase its share from below 1% today to approximately 15% by 2035.
To achieve this, collection rates would need to rise from 33% to 50%, while sorting capacity must expand from 36% to 63%. In parallel, recycling output would have to reach 2.7 million tonnes of new fibres annually.
Meeting these targets would require capital expenditure between €8–11 billion and annual operational costs of up to €6.5 billion.
Policy Support and Industry Alignment Critical
The study highlights that regulatory momentum is already building across Europe, including initiatives such as mandatory textile collection. However, translating policy into operational success remains a key challenge.
Recommended actions include expanding collection infrastructure, improving sorting technologies, introducing recyclability standards in textile production, and aligning industry definitions and data frameworks to increase investor confidence.
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Crucially, the report argues that a full economic assessment should also consider the avoided costs of landfill and waste management, which are currently borne by public systems.
Outlook: Circular Ambitions Face Economic Reality
While the push toward circular textiles continues to gain momentum, the report makes it clear that achieving large-scale T2T recycling will require more than technological readiness.
Without significant financial support, regulatory alignment, and value chain coordination, the sector risks falling short of its sustainability goals.
However, with the right investment and policy framework, Europe has the potential to build a robust textile recycling ecosystem—one capable of transforming waste into a valuable resource and redefining the future of the industry.
