The common thread of a circular textile chain

The textile industry is one of the most polluting industries, responsible for 5 to 10 percent of global CO₂ emissions, 35 percent of microplastics in our environment, and 92 million tons of waste per year. A circular textile chain, in which recycled and bio-based materials are used and the lifespan of a garment is extended, can reduce this negative impact. Invest-NL is committed to a circular economy and has investigated how we can stimulate and finance a circular textile chain. The study ‘Towards a Dutch Circular Textile Industry: Exploring the common thread’ provides insight into the bottlenecks in the chain and concrete recommendations for achieving a circular textile chain.

The Dutch government has ambitious goals in the field of textiles. By 2030, all textile products marketed in the Netherlands should consist of fifty percent sustainable materials, of which at least thirty percent should be recycled material. However, the reality is that textile production is still heavily reliant on non-renewable resources, and less than one percent of discarded textiles are recycled in a closed loop. The linear model is deeply embedded in the industry, and primary raw materials are simply too cheap. Additionally, current financing structures do not sufficiently align with the needs of circular business models, resulting in an uneven playing field.

Based on the ambition to contribute to the development and financing of a fully biobased and circular economy by 2050, Invest-NL examined the current system: how do material flows move through the Netherlands, which startups and scale-ups are active, and where are the biggest bottlenecks for circularity? This leads to actions that are necessary in terms of policy, collaboration, and financing.

Material flows mapped out

In cooperation with Metabolic, we have mapped the various material flows of textile products in the Netherlands, from production to end of life. This analysis shows where the greatest waste occurs and in which phase the most negative impact is made.

Download the material flow analysis 'The Dutch textile mass balance'

Concrete actions for policy, collaboration, and financing

In addition, we brought together knowledge and insights from experts in the textile sector with Circle Economy. Seven themes have emerged which require change to make circularity the norm. The close interdependence between parties in the textile chain also means that solutions are closely connected.

The report ‘Towards a Dutch Circular Textile Industry: Exploring the common thread’ contains concrete actions regarding policy, collaboration, and finance, which policymakers, the textile sector, and financiers can start working on. The main recommendations are:

Implement policy measures that incorporate the negative environmental and social impact of new raw materials into the price and reduce VAT on second-hand clothing.
Encourage collaboration between circular startups and larger Dutch fashion brands to ensure the procurement of sustainable materials.
Establish a textile investment coalition with public and private financiers in the Netherlands to help innovative circular startups scale, with shared long-term goals and clear impact objectives.

This research forms the basis for Invest-NL to make the transition to a circular textile chain financeable. By working together with relevant ministries, financiers, and the sector to implement the recommendations, and by investing in entrepreneurs who contribute to a circular textile industry.