Textile Recycling Market Size & Forecast Report - 2026 to 2030

Valued at around USD 5 billion in 2024, the global textile recycling market is anticipated to register a considerable CAGR of over 4% during the forecast period from 2025 to 2030. The market is gaining momentum as sustainability becomes a key focus across industries, particularly in fashion and manufacturing. Growing awareness about the environmental impact of textile waste, including landfill overflow and pollution from synthetic fibers, has led governments, brands, and consumers to seek responsible disposal and reuse solutions. Recycling helps conserve resources by recovering fibers from discarded garments, production scraps, and household textiles, which can then be reused in new products such as clothing, insulation materials, and automotive components.

The market is segmented by recycling processes, including mechanical and chemical methods, with mechanical recycling currently being the most widely used. Recycled textiles are derived from both post-consumer waste (used clothing) and pre-consumer waste (industrial scraps), with demand rising for systems that can efficiently handle blended fabrics. Polyester and cotton remain the most commonly recycled materials, driven by their high use in fast fashion. Key end-use sectors include apparel, home furnishings, and automotive interiors. Regionally, Asia-Pacific leads in textile recycling due to its strong manufacturing base, while Europe is advancing rapidly with stringent regulations and circular economy initiatives.

Market Snapshot:

Market Drivers:

The global textile recycling market is primarily driven by growing environmental concerns and the urgent need to reduce textile waste, which is one of the largest contributors to global landfill volume. The fashion industry alone generates an estimated 92 million tons of textile waste annually, much of which ends up in landfills or is incinerated. This has prompted governments and organizations worldwide to implement stricter waste management regulations, extended producer responsibility (EPR) programs, and sustainability initiatives. In response, many fashion brands are adopting closed-loop production systems and offering take-back schemes to support recycling and reduce their environmental footprint.

Another major driver is the increasing consumer demand for sustainable and eco-friendly products. Shoppers, particularly younger generations, are becoming more conscious of how their purchases impact the environment, pushing brands to adopt circular economy practices. Additionally, advancements in recycling technologies—such as chemical recycling capable of processing blended and synthetic fabrics—are making it more feasible to recover valuable fibers and reduce reliance on virgin materials. A notable recent development is the European Union’s adoption of mandatory textile waste sorting by 2025, which is expected to significantly boost recycling efforts across member states and set a global precedent for textile waste regulation.

Market Trends:

Growth of Textile-to-Textile Chemical Recycling

One of the most transformative trends in the textile recycling market is the rapid development of textile-to-textile chemical recycling technologies. Traditionally, textile recycling has relied on mechanical processes, which are limited in their ability to handle blended or synthetic fabrics. Chemical recycling, on the other hand, allows garments to be broken down to their molecular level, producing virgin-quality fibers that can be reused in manufacturing. This is especially important for addressing polyester and poly-cotton blends, which are common in fast fashion. Major investments are pouring into this space: Swedish company Syre, backed by H&M, recently partnered with Gap and Target and aims to produce over 3 million metric tons of recycled polyester by 2032. Startups like Ambercycle, Circ, and Eastman are also scaling pilot facilities, signaling a shift toward industrial-scale operations and long-term brand commitments to close the loop in textile production.

Advancements in Automated Sorting and AI Integration

Efficient and precise sorting of textile waste is critical for high-quality recycling, and this is where AI and automation are making significant strides. Traditional sorting methods struggle to identify fiber types, colors, and blends, resulting in contamination and low-quality recycled output. Emerging technologies now employ near-infrared (NIR) hyperspectral imaging combined with machine learning algorithms to automatically detect and sort textiles by material composition and color. Companies like Refiberd and Worn Again are leading this innovation, allowing recycling plants to handle large volumes of complex waste streams more efficiently. This not only improves the yield and quality of recycled fibers but also reduces labor costs and enhances scalability, making it a cornerstone of next-generation recycling infrastructure.

Regulatory Pressure and Extended Producer Responsibility (EPR)

Governments across the globe are implementing stricter regulations to manage textile waste. Extended Producer Responsibility (EPR) policies are being adopted in regions such as Europe, where fashion brands will soon be held accountable for the post-consumer life cycle of their products. The European Union is leading this effort, with a directive that mandates separate collection of textile waste by 2025, creating a surge in demand for textile recycling services and infrastructure. Countries like Chile, France, and South Korea are also implementing national EPR strategies. These regulatory frameworks not only help reduce landfill burden but also create long-term revenue predictability for recyclers and incentivize brands to design products with recyclability in mind.

Brand-Led Circular Fashion and Sustainability Initiatives

Another key trend is the strong push from global fashion brands to embrace circular economy models. Companies such as H&M, Zara (Inditex), Patagonia, and Adidas are committing to using recycled fibers in their collections, offering take-back programs, resale platforms, and repair services to extend product life cycles. Collaborations with textile recyclers and startups are becoming more common, with brands investing directly in new technologies and recycling infrastructure. For example, Inditex recently partnered with Ambercycle to integrate chemically recycled polyester into its product lines. These actions reflect a broader shift in consumer expectations, where transparency, sustainability, and accountability are becoming core brand values, especially among Gen Z and millennial shoppers.

Regional Expansion and Policy-Driven Growth

Geographic expansion of textile recycling is another significant trend. In the Asia-Pacific region, countries like China and India are investing heavily in recycling infrastructure and introducing national targets. China aims to recycle 25–30% of textiles by 2030, and India’s government is encouraging circular fashion through initiatives such as the MITRA Scheme. Europe continues to lead in terms of regulation and innovation, with pilot projects in chemical recycling, widespread EPR enforcement, and funding for circular economy initiatives. In North America, municipal-level recycling programs and brand-led sustainability commitments are contributing to a growing ecosystem. For example, Columbus, Ohio has recently piloted curbside clothing recycling in collaboration with local non-profits. These regional efforts are collectively pushing the global market forward.

Market Opportunities:

The global textile recycling market presents substantial opportunities as industries and governments accelerate their shift toward circular economy models. With mounting pressure to reduce textile waste, businesses can capitalize on rising demand for sustainable raw materials, especially in fashion, automotive, and home furnishings. Startups and established recyclers alike have the chance to develop innovative collection, sorting, and recycling solutions—particularly for hard-to-recycle blended fabrics. Growth opportunities also lie in offering recycling-as-a-service models to fashion brands seeking traceable, closed-loop systems. As regulations tighten—such as the European Union’s mandate for textile waste separation by 2025—recyclers that offer scalable, compliant infrastructure will be well-positioned to serve both public and private sector needs.

Moreover, as consumer demand grows for eco-conscious products, there is a rising opportunity to create premium recycled textile lines, including certified recycled cotton and polyester. Chemical recycling, in particular, offers a chance to unlock higher-value applications by turning post-consumer waste into virgin-grade fibers. There is also room for digital platforms that facilitate textile waste tracking, reverse logistics, and material traceability, supporting brands in meeting their ESG targets. A recent example is Eastman Chemical Company, which in 2024 announced the development of one of the world’s largest material-to-material polyester recycling facilities in the U.S., with a projected capacity of over 100,000 metric tons annually, highlighting the growing opportunity for large-scale, technology-driven textile recycling initiatives.

Market Insights:

By Material:

The global textile recycling market is bifurcated into material, source, process, end-use, and geography. On the basis of material, the polyester is the dominant material segment in the global market, and it continues to gain momentum due to its widespread use and the scalability of recycling technologies. Recycled polyester—often sourced from used plastic bottles and discarded polyester garments—is in high demand, particularly in the apparel industry. Leading global fashion brands are increasingly integrating recycled polyester (rPET) into their collections to meet sustainability targets and consumer expectations. Unlike cotton, which tends to degrade in quality during recycling, polyester retains its structural integrity better, especially when processed using chemical recycling techniques. This allows for the creation of high-quality, virgin-equivalent fibers that can be used repeatedly in closed-loop systems.

The rise of chemical recycling has further cemented polyester’s dominance in the market. Advanced processes like depolymerization enable the breakdown of polyester waste into its base monomers, which can be re-polymerized into new fibers with minimal performance loss. This makes polyester especially suited for recycling from complex or blended textile waste—a key advantage as blended fabrics are prevalent in modern fashion. Major industry players such as Eastman, Syre, and Ambercycle are investing heavily in polyester recycling infrastructure, and partnerships with brands like Gap, Target, and H&M highlight the growing commercial scale. As regulatory and consumer pressure intensifies, polyester’s recyclability, durability, and compatibility with emerging technologies position it as the leading segment in the global textile recycling landscape.

By Process:

On the basis of process, the global textile recycling market is further segmented into mechanical and chemical process. The mechanical recycling process is currently the dominant process segment in the market. It is the most established and widely adopted method due to its relatively low cost, simplicity, and existing infrastructure. This process involves physically shredding textile waste into fibers without altering their chemical structure, making it especially suitable for natural fibers like cotton and wool. Mechanical recycling is extensively used in developing regions such as South Asia, where labor costs are lower, and there is a steady supply of post-consumer and pre-consumer textile waste. Additionally, the process has a lower environmental impact in terms of energy consumption compared to chemical recycling, which further supports its widespread application.

Despite its limitations—such as reduced fiber strength after each recycling cycle and inefficiency in handling blended or synthetic fabrics—mechanical recycling remains dominant because of its scalability and compatibility with existing supply chains. The availability of large volumes of cotton waste and demand for low-cost recycled materials in applications like insulation, cleaning cloths, and low-grade textiles sustains this segment’s lead. While chemical recycling is growing quickly and offers higher-quality outputs, it is still in the early stages of commercialization and has higher operational costs. As a result, mechanical recycling continues to hold the largest share of the textile recycling market, though its dominance may gradually shift as chemical technologies mature.

The textile recycling market research report presents the analysis of each segment from 2020 to 2030 considering 2024 as the base year for the research. The compounded annual growth rate (CAGR) for each respective segment is calculated for the forecast period from 2025 to 2030.

Historical & Forecast Period

• 2020-23 – Historical Year
• 2024 – Base Year
• 2025-2030 – Forecast Period

Market Segmentation:

By Material:

• Cotton
• Polyester
• Wool
• Polyamide
• Others

By Source:

• Pre-consumer
• Post-consumer

By Process:

• Mechanical
• Chemical

By End-Use:

• Apparel
• Home Furnishing
• Industrial
• Others

By Region:

• North America
• Europe
• Asia Pacific
• Latin America
• Middle East & Africa

Regional Analysis:

Geographically, the Asia-Pacific is the dominant region in the global textile recycling market in 2024, primarily driven by its massive textile manufacturing base, high levels of textile waste generation, and growing awareness of sustainable practices. Countries like China, India, Bangladesh, and Pakistan are major contributors due to their roles as global hubs for textile production and export. These nations generate vast volumes of both pre-consumer (industrial scraps) and post-consumer textile waste, providing ample raw material for recycling. Additionally, the relatively low labor and operational costs in this region make mechanical recycling processes more economically viable. Governments in Asia-Pacific are increasingly supporting circular economy initiatives, and India’s MITRA scheme, for example, encourages sustainable textile practices, boosting investment in recycling infrastructure.

Moreover, China has announced plans to recycle 25–30% of its textile waste by 2030, reflecting strong policy direction toward sustainability. The region also benefits from growing domestic demand for recycled fibers, particularly in fast-fashion manufacturing and exports. While Europe leads in regulatory frameworks and advanced recycling technologies, Asia-Pacific surpasses it in terms of volume and processing capacity. The region’s dominance is further supported by the presence of large-scale sorting and recycling facilities, rising investments in chemical recycling innovations, and collaborations between local manufacturers and global fashion brands focused on responsible sourcing and closed-loop production. This combination of scale, supply, and policy momentum secures Asia-Pacific’s leading position in the global textile recycling market.

Competitive Landscape:

Some of the prominent market players operating in the global textile recycling market are Worn Again technologies, Lenzing Group, Birla Cellulose, BLS Ecotech, The Woolmark Company, and iinouiio Ltd. Companies are exploring markets by expansion, new investment, the introduction of new services, and collaboration as their preferred strategies. Players are exploring new geography through expansion and acquisition to gain a competitive advantage through joint synergy.

Key Companies:

• Worn Again technologies
• Lenzing Group
• Birla Cellulose
• BLS Ecotech
• The Woolmark Company
• iinouiio Ltd.
• Ecotex Group
• The Boer Group
• Unifi, Inc.
• Textile Recycling International
• Renewcell
• Pistoni S.r.l.
• REMONDIS SE & Co. KG

Key Questions Answered by Textile Recycling Market Report

• Global textile recycling market forecasts from 2025-2030
• Regional market forecasts from 2025-2030 covering Asia-Pacific, North America, Europe, Middle East & Africa, and Latin America
• Country-level forecasts from 2025-2030 covering 15 major countries from the regions as mentioned above
• Textile recycling submarket forecasts from 2025-2030 covering the market by material, source, process, end-use, and geography
• Various industry models such as SWOT analysis, Value Chain Analysis about the market
• Analysis of the key factors driving and restraining the growth of the global, regional, and country-level textile recycling markets from 2025-2030
• Competitive Landscape and market positioning of top 10 players operating in the market