Closing the loop through circularity in the textile value chain

The textile industry is responsible for an estimated two to eight percent of the world’s greenhouse gas emissions.

Textiles present an essential part of our daily lives with a diverse range of products starting from fashion and apparel to healthcare, industrial fabrics, and car upholstery. The textile industry contributes 2.4 trillion US dollars to global manufacturing and employs more than 300 million people worldwide across the value chain (many of them are women) . The Indian textile and apparel industry is expected to grow at a ten percent Compound Annual Growth Rate (CAGR) from 2019-20 to reach 190 billion US dollars by 2025-26 .

However, there is also a downside. The textile industry is responsible for an estimated two to eight percent of the world’s greenhouse gas emissions, accounting for approximately nine percent of annual microplastics losses to the oceans and annual material loss of 100 billion US dollars due to underutilisation. Each year, people throw away apparel that is still in good condition. Fast fashion trends result in large quantities of low-quality fashion items which are used for only a short amount of time.

A transition towards a circular economy is not only expected to deliver environmental and social benefits but also to unlock significant economic opportunities by capturing the value of underutilised and land-filled or incinerated clothes. In line with this, large global brands and manufacturers are committed to circularity but lack alternative pathways. Only one percent of textiles are recycled into new materials whereas 99% are land-filled or down-cycled. As a result, 15 million tons of textile waste are lavished every year.

The industry has certain limitations and needs to address the critical sectoral challenges to adopt circularity in the value chain.

Infrastructure and technology: The textile industry lacks a systematic infrastructure to collect, sort and distribute textile waste. This also includes the required capacities to ensure the safe handling of machinery complying with safety standards. Reality shows that there is no full-scale sorting centre. In addition, a certain limitation in technological advancement due to the fragmented nature of the industry can be observed. However, technological innovations are crucial as they have the potential to enhance the recyclability of textile waste and fill the gaps where manual labour is needed. Being a very resource-intensive industry, it is essential to upgrade the technology as well as to develop and adopt more resource-efficient processes and practices.

Data on knowledge and circularity: The Indian textile and apparel sector lacks systematic data collection and analysis, including data on waste production as well as pre-and post-consumer waste, among others. A systematic data collection and analysis would provide important information, for instance, on the quantities of waste available and the type of waste (composition, colour, material, etc.). The generated database could lead to a better understanding of the needs and untapped opportunities within the industry. Circular concepts of textiles require deeper knowledge and innovative design processes. With limited indicators and technical innovations around a circular value chain, it becomes challenging to make informed operational decisions and maximise value and circularity simultaneously. Moreover, there are often gaps in the research which restrain and slow innovative processes.

Incentives to design for extended use of life and recyclability: During the design process, stakeholders in the textile industry sometimes miss considering how the lifespan of a product can be extended or how materials can be looped back into the economy after completing their life cycle. However, these considerations are fundamental in the design of textiles, which requires investment, a collaboration between brands, manufacturers, and innovators, as well as financing that is currently not awarded by the market. This reveals a clear need for an effective incentive mechanism for companies to initiate circular design changes.

Collaboration and financing: More than small incremental improvements need to be achieved. Starting points for a sustainable transition towards a circular textile industry are the closure of knowledge gaps, sharing of best practice examples and experiences, funding of innovative technologies, the development of new circular business models, and the implementation of sustainable practices in the various textile manufacturing stages of the value chain. Consequently, it is important to provide education, skills, as well as support for new business models.

Considering this background, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and Concordia, together with Enviu and PurFI, have joined forces with the goal of demonstrating and replicating a model for a scalable and inclusive value chain for textile waste in India. The project is funded by the develoPPP programme that the German Federal Ministry for Economic Cooperation and Development (BMZ) has initiated to foster public-private partnerships.

The develoPPP project ‘Building an Inclusive and Circular Textile Waste Value Chain in India’ aims at demonstrating and replicating a scalable and inclusive value chain of textile waste in India. It will build a new textile waste management methodology that will be shared widely through a network of industry players committed to closing the loop in the textile sector. Key components of the project include the set-up of two-three sorting centres as well as upskilling and building capacities of waste workers.

The impact and business potential of turning textile waste into a valuable resource is huge. There is the potential to unlock an entirely new job market for waste workers.

Research suggests that for every 1,000 tons of textile waste handled, twenty decent jobs can be created, and each ton of re-used fibre can create an additional seven jobs.

The project is a blueprint that shows that there are many approaches that could be leveraged to further drive innovations and advance circularity.

Setting up infrastructure and technology: The impact of the project has been significantly increased by partnering with a private sector company that has developed an innovative technology to rejuvenate textile waste containing cotton. With this technology it is possible to rejuvenate textile waste back into high-quality (virgin quality) cotton fibres, keeping the strength and the length of the fibres intact.

Strong policies: The public sector is an essential driver of change. Gaps in policy and legislation hamper the transition towards a more sustainable and circular textile value chain. Legislative frameworks and policies are therefore needed to enable businesses to move towards new circular business models. A blueprint of the business model can be replicated across regions and countries as well as translated into policies issued by the government.

Collaboration: In the textile industry, strong collaborative platforms are necessary to create an inclusive, sustainable and resilient ecosystem. This can be achieved by establishing public-private partnerships and cooperation with other relevant stakeholders. The develoPPP project explored partnerships with global fashion brands (H&M, Decathlon), manufacturers (Arvind, SCM, Shardha, Welspun, Geena, Bergner), venture builders (Enviu), private companies (Material Library of India), and solution providers (purFI, renewcell). This example also shows that multistakeholder partnerships have the potential to foster knowledge exchange across countries.

Knowledge and Circularity: In order to generate more impact at the industry level, the project envisions creating a re-use guide as an open-source knowledge product targeted at solution providers. This guide aims to enable the increased use of waste by both formal and informal enterprises and the Textile Waste Management Methodology (TWMM), a methodology which creates a framework that helps to categorise waste, and as a result determine solution pathways.

Capacity building and co-creating avenues: Educating companies about the benefits and opportunities of new circular business models, the project builds capacities of fashion brands, manufacturers, solution providers, and waste workers to better manage textile waste. The emphasis lies on building capacities within vulnerable groups of society, focusing on the collection, cleaning, sorting, and recycling of textile waste with gender mainstreaming as a core aspect.

This approach will make a significant contribution towards supporting the Indian textile and apparel industry in its efforts to become more circular. It will help industry players to fulfil their commitment to turning a significant percentage of their supply chain into a more sustainable direction by 2025, addressing global issues such as climate change and contributing to the UN Sustainable Development Goals.

(Written by Isha Sharma, Junior Climate Change Advisor, GIZ India and Meghana Kshirsagar, Senior Advisor Climate Change and Circular Economy, GIZ India)

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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