Why fashion is less circular than ever – and what it’ll take to change course

Over the last decade, circularity has been one of the loudest conversations in the textile industry. Today, resale platforms are growing, innovative solutions are gaining traction and circular business models are headlining innovation reports. On the surface, it looks like the industry is beginning to close the loop. In reality, it’s still wide open. To really make circularity work, we first need to rethink how we invest, regulate, create demand and design circular value chains.

In 2024, the textile industry produced close to 132 million tonnes of textile fibre, which is more than double its volume compared to 2000 (Materials Market Report 2025). At the opposite end of the value chain, there are billions of garments going to landfill or incineration every year, and less than 1 percent of the materials being recycled back into new garments (A New Textiles Economy: Redesigning fashion’s future).

Measured against how fast we produce, buy and discard, the textile industry is – in material terms – less circular than ever. And circularity is not only about fibres, fabrics, technologies and innovations. It’s also about the people who collect, sort and process materials. And that work is still, in many countries, informal, insecure and unsafe.

For most of history, clothes were used in circular ways without anyone calling it circularity. Wardrobes were small, fabrics valuable, and garments were worn, repaired and passed on until there was almost nothing left. With industrialisation and global supply chains, that logic flipped. As production scaled and prices went down, fashion shifted from scarcity to abundance.

Making this global, high-volume system circular is far harder than simply going back to how clothes were used before. According to the Circularity Gap Report Textiles, by Circular Economy, today’s textile economy is structurally linear. Capital, policy and purchasing decisions still favour virgin production. Without shifting those incentives, circular solutions struggle to scale.

In the early 2010s, circularity was still a novel topic in the industry. Organisations like the Ellen MacArthur Foundation helped change that. The Foundation’s 2017 report A New Textiles Economy gave the entire industry a tangible blueprint on how to design products to be used more, made to be made again, and created from safe and renewable inputs. Since then, resale has moved from niche to mainstream and textile-to-textile recyclers have left the lab.

As Mark Buckley, Fashion and Textiles Lead at the Ellen MacArthur Foundation, puts it:

“In 2017, circularity was an idea. Today, it’s a business imperative. It has captured the creativity and commercial ambition of an industry ready for reinvention. The shift that matters most isn’t any one technology or business model – it’s in how the industry thinks. In a world of fragmenting supply chains and resource pressure, the case for circularity has never been stronger.”

While progress is taking place, the last few years have seen momentum hit a speed bump, and in many markets, circularity is at risk of becoming a buzzword instead of business model. This, however, doesn’t mean circularity has failed. It means we’ve learned more about how complex it really is. While systems change is possible, it takes time, patience and the right incentives for every part of the value chain – including the current informal workforce involved in circular value chains, from collectors and sorters to recyclers, manufacturers and brands.

Recent years have shown that circularity can create successful businesses, and those businesses have shown that it’s sometimes easier to reinvent the wheel than to fix the one we have. Resale is an example of this: platforms like Vestaire Collective, Vinted and Sellpy have gone mainstream, proving that extending product life can be commercially viable. Textile-to-textile recyclers such as Ambercycle, Syre and Circulose show that lowcarbon fibres made from textile waste can be competitive. The more capital that flows into solutions with a clear path to scale, the faster circularity can move from small pilots to industry-level impact.

The EU’s new textile rules, from Extended Producer Responsibility to ecodesign and stricter controls on waste and green claims, point in this direction. Policy can level the playing field for brands and make it increasingly expensive to rely on virgin, fossilbased materials with no circular pathway.

But regulation alone will not deliver transformation. Policy must be paired with clear timelines, financing and capacity-building, otherwise smaller manufacturers and brands risk being pushed out rather than supported to adapt. Strong rules matter, but so does enabling the industry to comply.

Demand must come from brands and valuechain partners, not only from consumers. Circular solutions scale when brands set timebound targets, build multiyear partnerships with circular actors, and let circularity influence decisions on assortment, margins and risk.

Upstream partners also need clear, consistent signals to justify changing how they operate.

When capital, regulations and demand inside the system all pull in the same direction, circularity can move from trend to transformation. To get there, brands, policymakers and investors must begin turning pilot projects into long‑term commitments, and treating circularity not as an add‑on, but as a functioning operating system ready for hard launch.