Entering the European market for recycled fashion

The European market for recycled fashion is made up of the 27 European Union member states, the United Kingdom and the European Free Trade Association (EFTA) four member countries (Iceland, Liechtenstein, Norway and Switzerland). Demand for recycled fashion in this market is growing. So are the requirements. This is the result of stricter policies and regulations, and increasing awareness among brands, retailers and end-consumers.

European Union policies promoting recycled fashion

The European Union (EU) and national governments have increased the speed and scope of new laws that promote circular solutions for fashion. Most of these laws come from the EU Green Deal: a policy programme that aims to make Europe the first climate-neutral continent by 2050. The EU has also pledged to become the world leader in the circular economy by 2030. The following important pieces of legislation aim to support these ambitions.

• The Circular Economy Act (adoption likely in 2026) is a policy framework that aims to create a single European market for recycled materials and stimulate demand for them.
• The EU’s Waste Framework Directive requires EU member states to introduce policies for ‘Extended Producer Responsibility’ (EPR). This makes producers responsible for how products are disposed of, recycled or repaired. France, the Netherlands and Sweden have already introduced national EPRs. Italy and Spain are currently working on EPRs.

There is also the EU’s Circular Economy Action Plan (2020), a policy programme under the EU Green Deal that has resulted in several new laws promoting circular fashion: 

• The Ecodesign for Sustainable Products Regulation (ESPR, 2024, adoption likely from 2026 onwards). It requires clothing products to meet minimum sustainability and quality standards.
• The Digital Product Passport (adoption likely in 2027) will require European brands and retailers to provide detailed information at the point of sale about the traceability of materials and environmental impacts. This may be the most influential piece of EU legislation for apparel exporters to Europe, because they will need to provide accurate data on materials, recycled content, origin, substances and more.
• The Directive on repair of goods (adoption likely in 2026) gives European end consumers the ‘right to repair’.
• The Empowering Consumers Directive (adoption scheduled for 2026) bans companies from making generic, vague or misleading claims such as ‘green’ or ‘eco-friendly’. It also bans false claims about the durability and reparability of products. 
• The related Green Claims Directive (adoption pending) sets out rules for the verification of such claims. 

Figure 1: The denim sector is a pioneer in recycling textile waste into new garments and home textiles

Source: Forward in Fashion

1. What requirements and certifications must recycled fashion meet to be allowed on the European market?

Besides new EU regulations for the promotion of circular fashion, there are several basic legal requirements you need to meet to export apparel to the EU. European buyers also have company-specific requirements. These are not legal but still mandatory. Other requirements are voluntary, but meeting them can give you a competitive advantage. Some requirements apply only to certain niches within the recycled fashion market.

What are mandatory requirements?

There are several legal requirements for exporting recycled fashion to Europe, covering aspects such as product safety, the use of chemicals (REACH), quality and labelling. Check the EU Access2Markets online helpdesk for an overview. Follow the steps below to be sure your product meets the basic legal requirements:

1. Make sure your product complies with the EU’s General Product Safety Regulation (GPSR: 2023/988) ensuring consumer safety. If your buyer supplied the product design, compliance is their responsibility. 
2. Make sure you follow the EU’s REACH Regulation. This restricts the use of chemicals in apparel and trims, including certain Azo-dyes; flame retardants; waterproofing and stain-repelling chemicals and nickel. Test input materials before production to prevent non-compliance.
3. Pay special attention to the safety standard that applies to children’s apparel: EN 14682. This contains requirements to ensure that cords and drawstrings are placed safely on apparel for children up to 14 years.
4. Specify the material composition of every item of apparel that you export to the EU, in line with Regulation (EU) 1007/2011. Check the EU Access2Markets online helpdesk on how to do it. 
5. Do not violate any Intellectual Property (IP) rights and do not copy or share designs with other buyers. If your buyer provides the design, they will be liable if the item is found to violate a property right. 

Non-legal mandatory requirements

Buyers may confront you with additional, company-specific terms and conditions. Such requirements are usually written down in a buyer manual. By signing a contract, you confirm that you will meet all the requirements listed in the manual. If a buyer does not have a manual, make sure all terms and conditions are clear and agreed beforehand. The following topics can be included in a buyer manual.

Payment terms

For first-time orders, European buyers may give you a down payment via bank transfer (for instance 30%). They will pay the rest (70%) after the order has been completed, again via bank transfer. Buyers may also give you a bank guarantee. This statement guarantees that the sum will be paid at a certain date.

Another payment method is the L/C (Letter of Credit). With an L/C the buyer’s bank must pay the supplier when both parties meet the conditions they have agreed upon. This is the safest payment method for a manufacturer. An L/C can also be used to get finance to purchase materials. However, many buyers no longer favour L/C payments, because they block their cash flow. Also, the administrative cost in case of changes in delivery terms is high. Be aware that L/Cs do not offer financial protection against bankruptcies. 

For any further orders, most European buyers will ask for a TT (Telegraphic Transfer/Open Account) after 30, 60, 90 or sometimes even 120 days. This means you as a manufacturer finish the production and hand over the shipment to the buyer, including the original documents, before payment is due. The payment will be made after the number of days that you have agreed on with the buyer. Be aware that this agreement puts the full financial risk on the manufacturer.

Delivery terms

Free on Board (FOB) is the standard Incoterm used by buyers and sellers to agree on delivery of goods. With FOB, the buyer becomes responsible for the goods once you have delivered them to the vessel. Due to rising shipping costs and closure of shipping lanes, some buyers may ask you to agree on Delivered Duty Paid (DDP). This means you, as a seller, are responsible for the goods during the entire journey, except for unloading by the buyer. This is the riskiest Incoterm for you as a manufacturer, so beware!

Nominated suppliers

Some buyers may require you to source materials (fabrics, trims, labels, packing materials) from a specific supplier. This means that you are responsible for the ordering, delivery and payment of the materials (but not the quality, as this is confirmed beforehand by the buyer). This may negatively impact your flexibility, cost, speed and liquidity. Always discuss locally-available solutions with your buyer as an alternative.

Acceptance quality limit

To guarantee product quality, buyers may set an acceptance quality limit (AQL). This refers to the worst quality level that is still acceptable. For instance, AQL 2.5 means that your buyer will reject a batch if more than 2.5% of the items are defective. Defects are classified as critical, major and minor defects. Buyers will specify their expectations in the inspection protocols. Check industry network Eurofins’s website for instructions.

Packaging requirements

Typically, your buyer will give you instructions on how to package the order. If you agree on delivering FOB, your buyer will clear customs in the country of import. It is their responsibility to ensure the instructions on the packaging follow EU import procedures. Always try to reduce the environmental impact (and financial cost) of packaging materials. Try to use less packaging by putting more items in a polybag, or use materials made from recycled cardboard (including hangers) or biodegradable plastics (polybags).

Restricted substances

Ask your buyer if they use a Restricted Substances List (RSL). These lists are often inspired by the guideline on safe chemicals use from the Zero Discharge of Hazardous Chemicals (ZDHC) foundation. Download the ZDHC Conformance Guidance here.

Equality

All individuals in your company should have equal opportunities, regardless of gender, race, religion or other characteristics. To improve worker happiness, pay a living wage and cover basic needs, such as safety, fair treatment, social security, healthcare, daycare support and transportation. Workers also need respect, open communication and opportunities for growth. Young workers appreciate flexibility, freedom, learning opportunities and personal growth. This CBI webinar on improving worker happiness provides tips.

Animal welfare

If you use blends that contain wool, animal welfare is an important concern. Buyers may require that you only use RWS-certified wool. If you use merino, many European buyers require that you only use non-mulesing wool. If real down is used, most buyers only allow Responsible Down Standard (RDS) certified down.

Carbon footprint

Many European brands and retailers have committed to climate neutrality and CO2-reduction. Calculating the carbon footprint of an apparel item is a complicated process. Check the CBI study Tips to go green for more information. 

Certification

Many European buyers require suppliers to get certified for sustainable and/or fair production or the use of recycled materials. The following standards and certifications are most popular in Europe: 

• In Europe, Amfori BSCI is almost a standard requirement for social and environmental compliance. The same applies to OEKO-TEX® STANDARD 100 but for product safety.
• Popular standards for recycled content include the Global Recycled Standard, Recycled Claim Standard and Cradle to Cradle Certified™.
• Other popular standards include WRAP, SA8000, Sedex, B-corp, OEKO-TEX® STeP, GOTS and BCI. 

What additional requirements and certifications do buyers often have?

Besides legal and non-legal mandatory requirements, there are many services that buyers implicitly expect or at least highly appreciate if you do business with them. These requirements can differ from buyer to buyer. 

Product design and development

The major challenge for the recycled fashion industry is meeting market demand and expectations for quality and design. In general, there are three different ways to recycle textile waste. Each has its own challenges and benefits. 

Table 1: Recycling methods and their characteristics

Source: FT Journalistiek, 2026

Recycling cuttings versus post-consumer waste

All textile recycling requires specialised shredding, spinning and fabric-making capabilities that may not be available in all production countries. Recycling cutting waste is easier, however, than recycling post-consumer waste. Cuttings are typically cleaner, more consistent and can easily be selected for colour and composition. They do not require complex collection logistics like post-consumer waste does. Although most recycled yarns made from cuttings still need to be stabilised with virgin fibres, the end result is typically higher quality. 

Not all cutting waste can be recycled back into apparel. Recycled cutting waste is currently used in a wide range of products, including: apparel, accessories, curtains, carpets, blankets, insulation and stuffing. Post-consumer textile waste is more challenging to recycle because of the (lack of) quality, inconsistency and lack of data about origin and composition.

Transparency and legal challenges

In well-organised factories, cutting waste is often picked up by local collectors. It is not always clear where the cutting waste ends up. It may involve export, local informal markets or incineration. In some cases, collectors are the only ones allowed to export cutting waste.

Some countries have additional legal challenges. In Jordan, for example (where CBI organised an export-coaching programme from 2019 to 2023), manufacturers that imported fabrics for export orders are often not allowed to sell cutting waste locally. All material has to be re-exported. As a result, cutting waste is sometimes dumped. EU apparel buyers should take responsibility for the waste, however, rather than the factory. This responsibility gap is expected to shift as recycling creates growing value.

Even if you can use cross-border recycling solutions, make sure you monitor the process carefully. Cutting waste that originates from the EU may comply with EU chemical standards, but mixing it with waste from other origins can lead to contamination. This can make the resulting yarn unsuitable for re-export to the EU.

Resale market

European brands and retailers are implementing take-back schemes more and more often. They sometimes offer consumers discounts on future purchases. Collected garments are processed by companies like Wolkat, which sells around 50% of its products on the second-hand market. End consumers often resell items on platforms like Vinted. 

Cleaning, repairing and repackaging are essential to scale second-hand markets, but they are also labour-intensive. This creates opportunities for factories in countries with low production costs near the EU.

Limitations for different apparel items

Quality limitations for recycled yarns and fabrics have the following consequences for individual apparel subcategories:

• Thicker yarns (3GG–7GG) made with recycled cotton or wool used for products like flat knits are already common. 
• For knitwear, achieving fine gauges such as 14GG and 16GG is still very difficult using mechanically recycled undyed yarns. Optical white is also very difficult to achieve using unbleached recycled yarns.
• T-shirts are still difficult to make from 100% mechanically recycled yarns as T-shirt fabric requires a very fine yarn. Check Recover™ Fabrics and Wolkat’s mechanically recycled yarns.
• Denim fabrics made from 40–100% mechanically recycled post-consumer waste are now available. Check, for instance, Italian denim mill Candiani, Dutch denim brand MUD, Turkish textile mill Bossa in collaboration with Kuyichi and Dutch denim brand Kings of Indigo.
• Jackets can be made from 100% recycled polyester from used PET bottles.
• Viscose made from chemically recycled cotton, such as Circulose and Infinited Fiber, can result in a fine yarn made from 100% recycled material. 

Designing for recycling

Design plays an important part in the second life stage of recycled apparel. Some materials, such as wool and cashmere, are relatively easy to recycle. Others, such as mixed materials and low-grade cotton, are difficult to recycle as the final material standards do not meet EU buyer expectations. 

Table 2: Example list of recycling companies

Source: FT Journalistiek

Communication

Smooth communication is an implicit requirement that all buyers have. Always reply to emails within 24 hours, even if it is just to confirm that you have received the email and will reply in full later. If you find a problem with a production order, notify the customer immediately and try to offer a solution. Another good tip is to create a ‘time and arrival’ (T&A) file for every order and share it with your buyer. This file will help you manage expectations and monitor progress.

Flexibility

Many factories only want ‘convenient’ orders, with simple styles, large quantities and long delivery times. If you want to start a business relationship with a European buyer, be prepared to accept complicated orders first, with a size below your normal minimum order quantity (MOQ). Buyers will want to test your factory before giving you big, easy orders. Make sure at the start that buyers will not place only difficult orders with you and easy orders elsewhere.

Figure 2: rPET is a popular yarn, but use the certified version. Textile-to-textile rPET is even more desirable

Source: Photo by tanvi sharma on Unsplash

What are the requirements for niche markets?

There is a distinction between mainstream recycled fashion and some up-and-coming recycling methods and business models. Because they are still uncommon, these niches are often buyer-specific. 

100% traceable recycled apparel

Some buyers only work with recycled fabrics made from a 100% traceable source. For some, this source may be Europe to guarantee that input materials are REACH-compliant. Other brands, such as MUD Jeans, go so far as to collect their apparel after the end of use and recycle it at a designated plant. The fact that MUD Jeans rents out jeans and controls the collection process makes this easier. 

Biodegradable apparel

Some European buyers use fabrics that break down into natural elements. Outdoor sportswear brands Houdini (which also rents out clothes) and VAUDE, for instance, work with PrimaLoft Bio, a 100% recycled biodegradable performance fabric.

Designed-for-recycling

Most European brands and retailers are familiar with using recycled content in their garments, but only a few truly design for recycling. Try to use high-quality materials for durability and mono-materials instead of blends for easy recycling. Avoid chemicals, prints and coatings, and simplify trims and accessories. You can do this by replacing sewn labels with printed ones, and using fabric buttons instead of plastic or metal buttons. Design for easy disassembly (for example detachable linings and single-thread stitching). 

The NGO WRAP offers an excellent guide to circular apparel design. You can download the document for free after leaving your contact details. This article by bluesign lists several tips about circular design and brands that have introduced circular models.

2. Through which channels can you get recycled fashion on the European market?

Before you start to approach European recycled fashion buyers, you need to determine what market segment fits your company best and through what channel(s) you want to sell your product. 

How is the end-market segmented?

European buyers of recycled fashion can best be grouped by price/quality level as this determines the quality and price level of the materials they use in fashion designs. 

Table 3: Recycled fashion market segmentation

Source: FT Journalistiek

Luxury consumer

European luxury consumers shop at European apparel brands in the luxury and upper-middle market. These brands want top-quality recycled materials and workmanship. Recycled cashmere and wool are popular fabrics in this segment, as is recycled cotton combined with a relatively expensive virgin yarn (such as Tencel™). Another common material is recycled polyester, because of its yarn stability, competitive price level and good sustainability story.

Practical consumer

The middle market caters to practical consumers. Recycled cotton (both cutting waste and post-consumer textile waste) and wool are popular materials in this market segment. This market segment also has demand for recycled polyester (a popular fabric in all market segments, from luxury to budget).

Price-conscious consumer

The lower-middle and budget markets cater to price-conscious consumers. They are characterised by demand for recycled polyester and cheap yarns and fabrics made from cutting waste.

Through which channels does a product end up on the end-market?

A buyer’s position in the value chain determines how they do business with you. Every buyer has their own approach. Always try to find out in what part of the value chain your buyer is operating, what challenges they face in the market and how you can support their sales strategy.

Table 4: Sales channels on the European apparel market

Source: FT Journalistiek

The figure below shows the many ways you can get your product on the European market, either via an intermediary, your own brand or via brands, retailers or online (multi-brand) platforms. Notice how, ideally, consumers return their apparel items to the seller after use, to be reused, repaired, refurbished or recycled.

Figure 3: The fashion market value chain

Source: FT Journalistiek

What is the most interesting channel for you?

As you move higher up the value chain, your margin will increase, but so will the service level that your buyer will require from you. When you have little experience with exporting to Europe, intermediaries and brands are likely the best starting point for you. Such companies have the largest market share, they service every price/quality segment of the market and they are used to working with suppliers in different production countries worldwide.

3. What competition do you face on the European recycled fashion market?

The European market for recycled fashion is small but growing and far from settled. Many buyers are still looking for the best way to set up an efficient supply chain that meets their requirements. At the other end of the value chain, many manufacturers worldwide are entering the post-consumer recycled apparel market. If you want to do this too, you need to secure a supply of second-hand clothes or fabrics before shortages push up prices. 

Which countries are you competing with?

Many apparel-producing countries make items from recycled fabrics, but not all have locally produced recycled materials. China is big in recycled polyester (rPET), Spain and Morocco in recycled denim, India in recycled cotton and Italy in recycled wool. 

Table 5: Competing countries

Source: FT Journalistiek

Which companies are you competing with?

At Yousstex International, jeans fabric is cut, sewn, washed and branded. Thanks to innovative production techniques, Yousstex can produce jeans with a highly sustainable profile. The factory is located in Touza, a rural area of Tunisia. With 550 employees, Yousstex is quite small for a garment manufacturer and has a family feel.

Shasha Denims in Bangladesh began as a family-owned company with a vision to set a global standard in green and sustainable denim manufacturing. It develops and refines environmentally-friendly techniques and procedures. Shasha has now positioned itself as one of the leading 100% export-based denim manufacturers in Bangladesh. 

SITEX denim is a market leader in Tunisia in recycling industrial waste into new fabrics. The company works closely with its international buyers and manufacturers to develop circular solutions and create export opportunities. Its manufacturing setup is one of the largest in Tunesia and a large contributor to the country’s green transition.

Which products are you competing with?

Recycled fashion competes with several other types of fashion products and practices in the broader fashion industry. Some of the primary competitors and alternatives to recycled fashion are:

Vintage

Second-hand and vintage stores offer pre-owned clothing and accessories at lower prices. While recycled fashion may incorporate second-hand items, it competes by emphasising upcycling, repurposing and reimagining used garments to create unique items.

Sustainable fashion

Sustainable fashion brands produce clothing using environmentally-friendly materials (such as organic cotton, Tencel™ or bamboo), with ethical labour practices and sustainable production processes. Recycled fashion competes by focusing on the specific use of recycled or upcycled materials as a primary selling point.

Rental

Clothing rental and subscription services let consumers access a changing wardrobe without the need for constant purchasing. Recycled fashion can compete by offering a similar service with an emphasis on sustainable and repurposed garments. 

4. What are the prices of recycled fashion on the European market?

The factory price of your product (in fashion industry jargon, the Free On Board, or FOB, price) depends on many factors, including the cost of materials, workforce efficiency, overhead and profit margin. For a step-by-step guide on how to calculate the FOB price of apparel items, see this CBI study on cost-price calculation.

The average cost breakdown of your FOB price should look like this:

Source: FT Journalistiek

Retail pricing

The retail price of an apparel item is on average four to eight times the FOB price (known as ‘retail markup’). Because of this, the FOB price is on average 12.5-25% of the retail price of the product. There are exceptions. In the budget market, some large European retail chains may only double the FOB price markup. Retailers mark up the FOB price by four to eight times to account for import duties, transport, rent, marketing, overhead, stock-keeping, markdowns and VAT (15-27% in EU countries), amongst other things.

Material pricing

Collecting, selecting and processing post-consumer apparel waste is a labour-intensive process. Among other things, it involves selecting waste apparel items by composition (fibres, blends), colour, cleanliness and removing all trims and tags before shredding. In countries where wages are low, this can result in fabrics that are price-competitive with fabrics made from virgin yarns. In countries with higher labour costs, these yarns and fabrics cannot yet compete with virgin fabrics. 

Another major influence on fabric price is the percentage and price/quality level of the virgin yarn blended with the recycled yarn. Virgin yarns are mixed with recycled yarn to stabilise the final yarn. Any yarn can be used, but for reasons of sustainability, buyers may choose relatively expensive yarns such as Tencel™ or organic cotton. In any case, blending yarns cancels out the economy of scale of 100% cotton yarn production.

FT Journalistiek carried out this study in partnership with Frans Tilstra and Giovanni Beatrice on behalf of CBI. 

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