On July 6, 2023, the European Commission proposed a new rule, which aims to reduce textile waste and bolster used textile markets across the European Union (EU). EU says the new initiative will “accelerate the development of the separate collection, sorting, reuse and recycling sector for textiles in the EU, in line with the EU Strategy for Sustainable and Circular Textiles (released in March 2022).
Just-Style consulted a panel of industry experts and scholars to assess the potential ramifications of the new EU rule. Below are my contributions to the discussion, for consideration only.
What are your thoughts on the latest update on the new proposed rules?
The new EU rule goes far beyond existing regulations on sustainable textile and apparel production. For example:
- While circular fashion is mostly voluntary efforts by companies, the new rule will impose a mandatory “eco-modulation fee” that is used to collect, sort, and recycle used textiles.
- The proposal also aims to address “the issue of illegal exports of textile waste to countries ill-equipped to manage.” Notably, despite the controversies surrounding the negative impacts of the used clothing trade on the developing world, few countries impose export restrictions on used clothing.
- Additionally, there are few specific rules or regulations that explicitly mention stopping “fast fashion.” The new EU rule will be the first of its kind. It will be interesting to see how EU-based fast fashion giants like Zara and H&M respond to the proposal.
How do you think it will affect global apparel production, sourcing and trade?
While we are still waiting for the proposal’s details, the new rule is expected to substantially promote more use of recycled textile fibers in clothing with profound implications for the future of global apparel production, sourcing, and trade patterns.
For example, one of my recent studies found that given the many ways of recycling textile waste (e.g., mechanical and chemical), the supply chain of clothing made from recycled materials is versatile, potentially allowing countries of all kinds to get involved. Also, sourcing clothing made from recycled textile materials may offer many exciting business benefits beyond sustainability, such as reducing “China exposure,” expanding near-shoring, and diversifying the sourcing base.
What are the opportunities for the global apparel industry given these new proposed rules?
One opportunity is on the supply side–the new proposed rule could drive significant new investments in textile recycling, from exploring new textile recycling methods and improving the efficiency of collecting and sorting used clothing to expanding the production capacity in making garments using recycled textiles. In the future, clothing made from recycled textile materials may no longer be a “niche product” but a mainstream offering.
The new rule may also raise public awareness of the environmental and social aspects of clothing. For example, consumers may continue to push brands and retailers to make the apparel supply chain more transparent and inform them about the product’s detailed environmental, climate, and social impact.
What are the challenges for the global apparel industry given these new proposed rules?
It is unsure whether the “eco-modulation fee” will apply to EU-based textile and apparel producers only or will affect any producers that sell products in the EU markets. Given the long and fragmented nature of the textile and apparel supply chain, who will be subject to the “eco-modulation fee” needs clarification.
Fashion brands and retailers may also face higher sourcing costs and more limited product choices when sourcing clothing using recycled textiles. Like it or not, achieving “cost neutral” remains a critical principle for most fashion companies.
On the other hand, reflecting the unique supply chain of clothing made from recycled textiles, fashion companies must strengthen the monitoring efforts beyond the garment factories (i.e., tier 1 suppliers) to include tier 2 and 3 suppliers that handle the initial stages of recycled textile production.
by Sheng Lu
Related reading:
- EU factsheet: Extended Producer Responsibility for textiles (July 2023)
- Euratex’s comment on the EU Strategy for Sustainable and Circular Textiles (June 2023)
- Transition Pathway for EU Textiles: For Sustainable and Circular Value Chains (Webinar)
- Ellen MacArthur Foundation perspective on Extended Producer Responsibility for textiles (July 2022)
- US Customs and Border Protection (CBP) Green Trade Strategy (launched in June 2022)
FASH455 Global Apparel & Textile Trade and Sourcing 
The EU’s proposed Extended Producer Responsibility rule for textiles displays a large shift towards sustainability in the global apparel industry. The required “eco-modulation fee” is intended to grow the use of recycled textile fibers, which creates great opportunities for businesses in recycling. But the issues lyes in the uncertainties about deciding whether the fee applies to only EU producers or those selling in the EU markets. Another issue is that businesses may face more expensive sourcing costs and limited product choices. But on a more positive note, the rule also encourages diversifying sourcing, which reduces dependence on specific countries. It is important to find a balance between sustainability and economic considerations.
I think it is such a great thing for the European Commission to aim to reduce textile waste. There is so much pollution in the world especially because of the fashion industry. Stopping fast fashion was mentioned but I can not really picture how that will play out. I do not think there is one solid way to stop fast fashion like H&M and Zara. I think they are capable of figuring ways around these obstacles. H&M for example, has claims to be sustainable but no real evidence to the public is given as they aren’t transparent and are greenwashing. Trying to find loopholes like this and putting up a front and acting like something they are not. Truth is, they are fast fashion and the majority of this clothing ends up wasted in landfills. I think great points were made above about using recycled textiles and materials. I hope that with these new regulations, transparency can finally be given to consumers. The eco-modulation fee seems like it could be a great concept but seems to be still in the works. I think this can be the start of a lot of great opportunities and outcomes.
I was most interested in the new versatility of recycled materials. I expect this to be a growing interest within a variety of countries which could be very beneficial in a sustainable way. This could also offer a variety of business benefits for some of these countries. For example, the US could continue to combat China by using this to their advantage. They could reduce China’s exposure which in turn will increase the production of nearshoring while continuing to diversify their sourcing bases.