Fast Fashion Firms Prepare for EU Crackdown on Waste Mountain

In a warehouse on the outskirts of Barcelona, women stand at conveyor belts, manually sorting T-shirts, jeans and dresses from large bales of used clothing - a small step towards tackling Europe's towering problem of discarded fashion.
Within a year, the sorting center run by garment re-use and recycling charity Moda Re plans to double the volume it handles to 40,000 metric tons annually.
"This is just the beginning," said Albert Alberich, director of Moda Re, which is a part of Spanish charity Caritas and runs Spain's biggest second-hand clothing chain.
"Increasingly we are going to turn used clothes into raw material from Europe for fashion companies."
Partly funded by Zara-owner Inditex, Moda Re will expand sites in Barcelona, Bilbao, and Valencia, in some of the first signs of a planned ramp-up in garment sorting, processing, and recycling capacity in response to a barrage of new European Union proposals to curb the fashion industry.
Also in Spain, rivals including H&M, Mango and Inditex have created a non-profit association to manage clothing waste, responding to an EU law requiring member states to separate textiles from other waste from January 2025.
Despite such efforts, less than a quarter of Europe's 5.2 million tons of clothing waste is recycled and millions of tons ends up as landfill every year, the European Commission said in July.
Precise data on the growth of clothing waste is scarce but collection for recycling and reuse increased gradually in several European countries from around 2010, a 2021 EU report said.
Fast fashion, or making and selling cheap clothes with a short lifespan, is "highly unsustainable", the Commission said in July. The textile industry is a major contributor to climate change and environmental damage, it noted.
Inditex, which in March said it placed 10 percent more items of clothing on the market globally last year than in 2021, aims to use 40% recycled fibers in garments by 2030 as part of sustainability goals announced in July.
"The main problem that we are facing is overconsumption," said Dijana Lind, ESG analyst at Union Investment, Frankfurt-based asset manager that holds shares in Adidas , Hugo Boss, Inditex, and H&M.
Lind said she had been engaging with Adidas, Hugo Boss, and Inditex about the need for those companies to increase their use of recycled textiles, and for the apparel industry as a whole to increase textile recycling.
Hugo Boss said in a statement to Reuters that "overproduction and overconsumption are, in general, an industry-wide problem," adding that it was using data analysis to better adjust production to demand.
Between 6 and 7 billion euros of investment will be needed by 2030 to create the scale of textile waste processing and recycling that the EU is aiming for, consultancy McKinsey estimated in a report last year. Reuters could not establish what level of investments were currently being made in the industry.
Lind said companies had introduced some first steps but "more needs to be done."
Inditex said it would invest 3.5 million euros in Moda Re over three years and had recycling containers in all its Spanish stores. It did not respond to a request for comment on the suggestion it needed to do more.
In a statement to Reuters, H&M said it recognized it was "part of the problem."
"The way fashion is produced and consumed needs to change – this is an undeniable truth," H&M said.
The obstacles to significantly reducing clothing waste are formidable, despite the EU crackdown, industry sustainability commitments and initiatives like the Moda Re expansion.
Hundreds of similar plants, along with investment in technology and market interventions will be needed to meet industry goals to recycle 2.5 million tons of textile waste by 2030, McKinsey said in the report.
Fourteen textile recycling companies in Europe have plans to increase their production capacity, according to Fashion For Good, a recycled fiber start-up investment company that surveyed 57 recyclers in a September 2022 report.
The EU has not set specific targets for recycled content in garments, but by 2030 aims for all textile products sold in the bloc "to a great extent" be made of recycled fibers, as well as being durable, repairable and recyclable.
To create the capacity to meet the goals, ReHubs Europe, an association set up by garment lobby group EURATEX, promotes investments in "fiber-to-fiber" recycling: processes that turn used garments into yarn to make new textiles.
EURATEX did not immediately respond to a Reuters question about the level of investments made in the technology.
Less than 1% of clothes are currently recycled in this manner and the processes are still being developed. Challenges include separating different types of fiber into feedstock suitable for recycling.
With such techniques still in their infancy, the higher cost of recycled fabric compared to new fabric remains a barrier to widespread adoption.
At the Barcelona plant, garments arrive from more than 7,000 donation bins in supermarkets and Zara and Mango stores. Infrared machines donated by Inditex identify the fiber make-up of garments to speed up the largely-manual sorting.
Currently around 40% of the clothes Moda Re receives are sent to other facilities for recycling. Of that, just a fifth is then recycled fiber-to-fiber, a share that Moda Re expects will grow to 70% over the next three to four years.
For now, most of the recycling is instead for lower grade products like dishcloths.
Almost half the clothes donated to Moda Re are shipped for resale in African countries including Cameroon, Ghana, and Senegal. Moda Re says the clothes it exports can be reused.
According to United Nations trade data, the EU exported 1.4 million tons of used textiles in 2022, more than twice as much as in 2000. Not all those clothes get reused, and exports of used clothes from Europe to Africa can lead to pollution when clothes that can't be resold end up in dumps, the EU has said.
Proposed European Commission rules seek to clamp down on unscrupulous operators that export damaged items destined for dumps, and would require countries to demonstrate their ability to manage the material sustainably.
Moda Re said it aims to reduce the volume of clothes it sends to Africa.
Only 8% of the donations are currently resold at Moda Re's second-hand shops, the method widely seen as the more efficient way of reusing old clothes. A similar amount ends up as European landfill.
The company aims to double the amount it resells by expanding to 300 second-hand shops in Spain over the next three years from just over 100 presently, it told Reuters.
Despite the challenges, employees at Moda Re said they felt their work was positive.
"We take the clothes that have been thrown away to make new clothes," said Aissatou Boukoum, a young Senegalese worker, feeding garments through a machine that slices them into ribbons to be sent for recycling. "For me, it is good."
As well as the efforts by Inditex, Puma has partnerships with garment collecting and sorting companies I:CO in Germany, Texaid in Switzerland and Vestisolidale in Italy.
Adidas, Bestseller, and H&M have invested in Finnish start-up Infinited Fiber Company, which manufactures fibre out of textile waste, cardboard and paper.
The Commission's legislative push includes rules to make retailers contribute to the cost of collecting used clothes for reuse and recycling.
Under the proposed rules, retailers would pay a fee of roughly 12 euro cents per item for each garment sold in the bloc, with higher rates for garments that are harder to recycle, the Commission estimated in July.
As in Spain, textile waste associations would be set up in each country. In France this system has already been in place since 2008 under an organization called Refashion.
Reuters asked ten leading fashion companies including Adidas, H&M, and Primark how the fees would hit their profitability. None provided an estimate. All said they hoped the fees would be the same across the EU.
"It's a tsunami of legislation," said Mauro Scalia, director of sustainable businesses at EURATEX.

Garment factories in Bangladesh, one of the world's biggest clothing production hubs, are struggling to complete orders on time as flooding disrupts their cotton supplies - exacerbating a backlog caused by recent political turmoil.
Bangladesh is a leading global cotton importer due to the size of its textile and garment industry, but the devastating floods mean few trucks and trains have been able to bring supplies to factories from Chittagong port over the last week, industry officials and analysts said.
The disruption, on top of the unrest and protests that led to factory closures earlier this month, have caused garment production to fall by 50%, said Mohammad Hatem, president of the Bangladesh Knitwear Manufacturers and Exporters Association.
"The industry is now under immense pressure to meet deadlines, and without a swift resolution, the supply chain could deteriorate even further," Reuters quoted Hatem as saying.
Bangladesh was ranked as the third-largest exporter of clothing in the world last year, after China and the European Union, according to the World Trade Organization, exporting $38.4 billion worth of clothes in 2023.
At the clothing factory she runs in the capital, Dhaka, Rubana Huq is counting the cost of lost production.
"Even for a moderate-sized company like ours, which makes 50,000 shirts a day and if the price of one single shirt is $5, there was $250,000 of production loss," said Huq, a former president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
She said some garment plants were slowing resuming production, but estimated that complete recovery "would be at least six months away", warning that Bangladeshi manufacturers could lose 10%-15% of business to other countries.
Bangladesh's readymade garments industry, which supplies many of the world's best-known fashion brands, accounts for more than 80% of the country's total export earnings.
Buyers are adopting a cautious approach and could potentially delay new orders, said Shahidullah Azim, a director of the BGMEA industry group.
"The longer this uncertainty persists, the more challenging it becomes for us to maintain the momentum we have built," he told Reuters.
The Bangladesh Meteorological Department said flood conditions could persist if the monsoon rains continued, as water levels were receding very slowly.
Some cotton shipments could get diverted to India, Pakistan and Vietnam, commodity analysts said.
"We are already hearing and seeing some cotton for prompt delivery wanted by Pakistan and Vietnam," said Louis Barbera, partner and analyst at VLM Commodities based in New Jersey.
New orders shifted from Bangladesh could also be accommodated in southern India, said Atul Ganatra, president of the Cotton Association of India.
Even before the floods and political unrest, the Bangladeshi garment industry was grappling with power shortages that remain a problem, said Fazlee Shamim Ehsan, vice president at the country's knitwear manufacturers and exporters association.
"Energy shortages continue to hamper our operations," he said.

Fast Fashion Firms Prepare for EU Crackdown on Waste Mountain