In addition to setting out new requirements, the Package also offers benefits to businesses. Business benefits include cost savings from reused materials as well as new business models generated by providing environmentally conscious products and services. Players in the fashion industry are recognising the need to rapidly develop and adopt new technologies and solutions.

In September 2018, the H&M Foundation in cooperation with the Hong Kong Research Institute of Textiles and Apparel (HKRITA) opened two textile recycling facilities. These facilities, results of accelerated research on textile recycling, are meant to speed up the development of a closed loop for textiles. The recycling plants allow fully separating and recycling cotton and polyester blends. Eventually, the goal of the cooperation is to reduce the dependence on limited natural resources to dress a growing global population and to achieve the UN Sustainable Development Goals (SDGs).

The issue of environmental and social damage caused by so-called “fast-fashion” has been highlighted repeatedly by green groups and consumers, as well as by governments and NGOs. The fashion industry has, it is reported, become well aware of the nature and the extent of the challenges it faces.

One foundation aiming to accelerate the transition to a circular economy is the Ellen MacArthur Foundation (UK). According to its predictions, 25% of the world’s carbon budget would be accounted for by clothing production by 2050. Players in the fashion industry see the need to evolve rapidly and to develop and adopt new technologies and solutions – not only to respect planetary boundaries, but also to avoid business risks.

Another foundation which believes that a radical sustainability shift towards the circular economy is imminent is the H&M Foundation. The independent not-for-profit H&M Foundation (Sweden) focuses primarily on issues of social equality (such as access to education) and environmental sustainability throughout the sector and is working to accelerate progress towards achieving the UN SDGs. The Foundation, although funded by high street retailer H&M, is a separate entity from the latter.

According to the H&M Foundation, the fashion industry needs to catch up with other industries in terms of sustainability at the moment. The H&M Foundation sees the potential of the fashion and textile industry to become one of the fastest-moving sectors in terms of circularity and meaningful social and environmental impact. One of their initiatives, a textile recycling program, ties in with the new landfill goals under the recently adopted Circular Economy Package.

As may be recalled, the package has taken more than five years of work by the European Commission. In February 2018, the European Parliament voted on proposed changes to EU waste laws. In May 2018, the Council of the EU formally adopted the package. In June 2018, the package was published in the EU’s Official Journal and officially entered into force on 4 July 2018.

Under the package, amongst other matters, EU Member States will have to meet recycling targets for the municipal waste of 55% by 2025, and 65% by 2035. Concerning waste from packaging, the new targets state that the Member States must re-use or recycle 65% of materials by 2025, and 70% by 2030.

It will interest Hong Kong’s clothing sellers to know that new EU Directive 2018/851 on waste (which is part of the package) targets textile waste (along with other waste-streams) specifically. It states that “Member States must encourage the re-use of products and the setting up of systems promoting repair and re-use activities, including in particular for electrical and electronic equipment, textiles and furniture, as well as packaging and construction materials and products”. The new Directive also requires that “The Member States shall set up separate collection at least for paper, metal, plastic and glass, and, by 1 January 2025, for textiles”. These legal measures will have to be taken into account by textile and clothing sellers when selling to EU customers as – at the very least – they will likely create additional costs.

The textile recycling program represents a step towards avoiding landfilling waste. According to current estimates, an average household currently generates waste clothing at a rate of 35 kg annually, of which 85% is being sent to landfill.

According to estimates from the Ellen MacArthur Foundation, the global fashion industry loses 100bn USD each year from landfilled or incinerated clothing. In cooperation with HKRITA, the H&M Foundation has come forward with a sustainability solution to this key challenge of a circular fashion industry: recyclability of textile blends.

Although textile blends are the most common type of textile, and account for the majority of products sold by the clothing and home furnishings industries, they are viewed so far as unrecyclable, or at least very hard to recycle.

Recently, the H&M Foundation announced that the partnership with HKRITA led to the successful development of a method to separate cotton and polyester blends. The new process allows fully separating and recycling cotton and polyester blends through a hydrothermal (chemical) process. The hydrothermal process is reported to use only heat, water and less than 5% biodegradable “green” chemicals. The hydrothermal textile recycling plant was opened in Hong Kong, at a former textile mill called “the Mills”.

The recovered polyester material can be reused directly, without any quality loss. This fibre-to-fibre recycling method is said to be cost-effective and aims at ensuring that the life of the recycled material is prolonged in a sustainable way.

While the new recycling process allows the industry to overcome the technological aspect of recycling textile blends, the plant might tackle yet another crucial fast-fashion challenge as well: consumer behaviour change.

The H&M Foundation highlights that, ultimately, change is literally in the hands of consumers who decide whether their used clothing goes to waste or can be recycled as a valuable resource. Despite all evolutions of recycling technology, the industry is still dependent on the will of consumers to actually return clothing as a resource to the system instead of sending it to landfill, and thereby close the loop.

In order to change the mindset of consumers, the H&M Foundation has taken a visual approach towards awareness-raising and making the benefits of circular fashion tangible to consumers. It has installed a miniaturised version of the recycling technology from the new plant at one of H&M’s stores in Hong Kong, allowing customers to see their used clothing being recycled first-hand.