Producers will soon fund Europe’s textile sorting system through EPR fees. Unless that money properly rewards the infrastructure—collecting, sorting, preparation for recycling and recycling—the capacity won’t be built and the recycled fiber won’t be there. Therefore, brands should take action.
At Looper’s sorting facility in Polch, Germany, we run an automated near-infrared line that identifies garments by fiber composition. It works. We started building it in 2023, on the assumption that textile-to-textile recycling would need a supply of correctly identified fiber and that someone would have to produce it.
It is still a pilot. Not because the technology disappointed us. Because scaling it doesn’t return capital yet.
At Circulose’s plant in Sundsvall, Sweden, we make pulp from cotton-rich textile waste. It is the world’s first commercial-scale chemical textile recycling facility, and production is restarting in the fourth quarter 2026. We want feedstock to come from European post-consumer waste. Today, it largely can’t because sorted post-consumer textile waste isn’t available at the volumes we need, and what is available costs more than the economics allow.
Renewcell, which built the plant Circulose now owns, proved the technology worked at scale. The challenge? The market around it wasn’t ready: recycled fiber cost more than virgin, no brand was obliged to use it and the sorting infrastructure to supply it was immature. Now, 15 brands have committed volume, and existing inventory is covering demand while production ramps back up. Capital moves when demand becomes certain, and not before.
Regulation is about to provide that certainty across the market. The Ecodesign for Sustainable Products Regulation (ESPR) is expected to set minimum recycled content requirements for textiles, with the delegated act indicatively due in 2027 and for which recyclers have proposed 10 percent by 2028. When it lands, buying recycled fiber stops being a matter of brand ambition and becomes a question of market access.
The fiber has to come from somewhere. Today, less than one percent of Europe’s textile waste becomes new fiber and without the right incentives, that gap will keep being filled with pre-consumer waste from outside Europe instead. Global Fashion Agenda and ReHubs put the cost of building the recycling capacity Europe needs at 8-11 billion euros, and name demand certainty for sorters as one of the conditions for unlocking it.
Some of that money already exists. Under the revised Waste Framework Directive, every EU member state must have a textile EPR scheme running by April 2028, funded by the producers that put clothing, footwear and accessories on the market—in practice, brands and retailers. Those fees cover sorting and recycling, not only collection. So the gap is not that the work goes unfunded entirely. It is what the funding is attached to.
France has run a textile EPR scheme longer than anywhere else in Europe, and pays sorters by the tonne. Textiles destined for the secondhand market earn essentially what material sorted to recycling specification earns, even though the second requires fiber-level identification, more processing and far tighter tolerances. Support paid to sorters was raised again this year, to 268 euros per tonne, explicitly as a temporary measure. Enough to keep some operators solvent, not enough to make sorting for recycling an investable business case.
We see the consequence from both ends. The costs of collecting, transporting and processing post-consumer garments at Looper’s sites are significant; the prices recyclers pay are not. Looper is losing money on every tonne sorted for recycling. Meanwhile Circulose needs cotton-rich textiles, identified and separated to a specific standard, and the work of producing that isn’t what the system pays for.
Three things would change that:
First, EPR schemes should pay sorters more for material that meets recycling specification than for material sorted for the secondhand market. Not a higher rate across the board, which would keep existing operators going without getting anything new built, but one that distinguishes what a recycler can use from what it can’t. Same total funding, allocated differently, which is what turns a subsidy into a revenue line an investor can underwrite.
Second, producers should pay lower EPR fees when they use recycled content. The criteria being drawn up reward how a garment is made rather than what it’s made from, and the discount needs to be big enough to change what brands actually buy.
Third, the rules need to be harmonized across the single market. Twenty-seven separate systems would mean a massive administrative burden for anyone operating across borders, which is manageable for large operators and prohibitive for smaller ones.
We have made this argument in Brussels, in conversations with MEPs and DG Environment officials, and on conference panels. It hasn’t yet reached the people setting the payment terms, because those decisions are being made nationally and scheme by scheme.
The rules are being written now, and producer representatives sit on the bodies that shape them. You are already in the room. What is missing is anyone saying what the output should be worth.
Say it, and the European sorting lines get built in time. Stay quiet, and the fiber requirement arrives with nothing behind it which leads to every brand in Europe bidding for the same scarce material.
Erik Lagerblad is CEO of Looper Textile Co. Jonatan Janmark is CEO of Circulose.