A New Look for the Fashion Industry: EU Textile Strategy and the Crucial Role of Extended Producer Responsibility

March 2022 Report
A New Look for the Fashion Industry - graphic of shopper with bags sitting on piles of discarded clothes

Executive summary

Eunomia was commissioned by Changing Markets Foundation and the European Environmental Bureau to conduct a study on the role of Extended Producer Responsibility (EPR) and supporting policy measures in driving a circular economy for textiles in Europe.

In 2020, textile consumption in Europe had on average the fourth highest impact on the environment and climate change from a global life cycle perspective, after food, housing and mobility. Total consumption of clothing, household textiles and footwear amounted to 6.6 million tonnes in 2020 (15kg per person). Textiles are identified as a key value chain in the EU Circular Economy Action Plan published in March 2020, will be addressed in the European Commission’s forthcoming Strategy on Sustainable Textiles, and under Article 11(1) of the Waste Framework Directive, Member States are required to set up separate collection for textiles by 2025.

Given the EU’s commitment to a 55% reduction in greenhouse gas emissions (relative to 1990) by 2030, the long-term vision of a climate-neutral EU by 2050, and the significant greenhouse gas impacts of EU textile consumption, the forthcoming Textiles Strategy will need to be ambitious.

EPR should be a core component of the Textiles Strategy, as it will be an essential element in the move towards a European Circular Economy for textiles. It is a key mechanism by which the polluter pays principle, enshrined in Article 191(2) of the Treaty on the Functioning of the European Union (TFEU), can be operationalised. Through EPR, end-of-life costs will be borne by producers, rather than, as is typically the case, by municipalities, and by extension, citizens.

Ensuring that producers bear the financial costs associated with end-of-life management of the textiles they sell means that these costs (to the extent that they are passed through) are ultimately visited on consumers in proportion to the extent they consume. With a recent survey identifying 27% of respondents as ‘high intensity’ consumers of fashion items, it is only fair that those who consume more, pay more.4 Another way of looking at it is that absence of EPR provides an explicit subsidy to consumption (along with implicit subsidies due to a lack of internalisation of external environmental costs). Given that the challenge with textiles is, at root, one of over-consumption, it is essential that, at the very least, the full end-of-life costs are covered through EPR, and incorporated into the price paid by consumers.

EPR also holds out the potential to incentivise improved design of textiles (for example to improve durability, or recyclability) through modulating (or varying) the levels of the EPR fees according to relevant criteria. The strength of such an incentive will depend, amongst other things, upon the size of the fee (and any modulation thereof) relative to the sales price (and the margin) of the textile item to which it is applied.

The French EPR scheme for textiles, Re_Fashion, is the only currently operating EPR scheme for textiles in the EU. Fees paid to Re_Fashion by producers only cover, at present, a small proportion of the full end-of-life costs that could potentially be covered by EPR. Full coverage of end-of-life costs would increase the relative size of fees, and the influence of modulation on design choices. However, there will always be some textile items that are less likely to be influenced by such incentives.

Accordingly, we recommend that as a priority, a number of minimum eco-design requirements are introduced alongside EPR, as well as a ban on the use of substances of very high concern (SVHCs) in textile products. These supporting policy instruments will both help to support the effectiveness of EPR schemes, and complement them by addressing issues that might be harder to address through EPR. The priority supporting measures are:

  • Banning the use of hazardous chemicals and materials in clothing and textile products
  • Implementing minimum eco-design requirements for stress resistance and lifetime of products and components
  • Implement minimum eco-design requirements for design practices per product category that allow disassembly for replacement and repair, or for recycling
  • Implement minimum repairability and modularity requirements

A number of recommendations are also made as to actions that need to be undertaken at the EU level in order to maximise the effectiveness of EPR in driving positive change through harmonisation of specific aspects, as well as requirements for performance. These are:

  • Setting performance targets for the collection and management of used and waste textiles, including repair, collection, preparation for reuse, and recycling (with increasing proportions of closed-loop recycling)
  • Establishing an EU-level definition for obligated Producers
  • Establishing an EU-level classification for when textiles become waste
  • Establishing EU-level classifications for granularity of fee structure and associated reporting obligations
  • Establishing EU-level criteria for eco-modulation and associated reporting obligations

Finally, other supporting measures are recommended in order to address the negative impacts of the textiles across the lifecycle, such as the implementation of recycled content targets in textiles (from closed loop recycling), a VAT reduction on repair and limits on microplastics release. Establishing a data reporting and verification system across the value chain for material flows and impacts will provide significant benefit for any targeted regulatory activity and due diligence, and it can be linked to the utilisation of product passports. Supporting measures such as training, communication campaigns, bans on destruction of unsold stock, taxes and standards ought to be considered too.

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