The German textile recycling system is at a turning point. The separate collection requirement for used clothing, which has been in force across the EU since 2025, and the changes to the Waste Framework Directive in September 2025 for the mandatory introduction of extended producer responsibility (EPR) have created important prerequisites for textile recycling – but the infrastructure, markets and technologies are lagging behind. That has consequences.
Actually, Germany is already doing a lot right when it comes to recycling old clothes. “On average, there is a used clothing container every 300 meters in Germany,” explains Thomas Fischer, speaker at the Textile Recycling Association of the Federal Association of Secondary Raw Materials and Disposal (bvse). The system is designed to be low-threshold; the containers are located in places where many people pass by regularly, such as supermarket parking lots, sports facilities or train stations. They are emptied by recycling companies that sort and resell the goods. What cannot be resold is either recycled – although so far only rarely into new textiles – or thermally recycled, i.e. burned to generate energy. This system worked for decades: people threw their clothes into the containers for free, the textile recyclers picked up the goods free of charge and made money from reselling them.
In other EU countries such as Portugal, Spain and some Eastern European countries there has not yet been any separate collection. There, old clothes ended up in the trash. However, with the separate collection requirement in force from 2025, used clothing will be collected, sorted, resold and ideally recycled separately in all EU countries. However, what should actually be seen as progress is currently causing considerable difficulties. More and more textile recyclers are reducing the number of containers they have or even giving up entirely. Why?
Prices for used clothes are falling on the international market
“Europeans produce an average of around 16 kilograms of textile waste per person per year,” writes the European clothing and textile association Euratex at the request of FashionUnited. “In 2023, the EU exported around 1.4 million tonnes of used textiles, a number that has been steadily increasing in recent years.” Since other countries have entered the trade in used textiles and only a fraction of the collected used clothes are sold in their respective home countries, while the majority of goods leave the European continent in kilograms to be resold in Africa or Asia, the range of goods on the international market is constantly growing. The consequences are falling prices and lower income for the collecting companies. In addition, exports of used textiles are increasingly in the focus of politics and the public – especially if they end up as waste abroad. “These figures highlight both the scale of the challenge and the urgency of building capacity for reuse and fiber-to-fiber recycling in Europe,” Euratex continued.
Cheap fashion is flooding the market
At the same time, cheap fashion from Temu and Shein is flooding the European markets. The Chinese online platforms deliver hundreds of thousands of packages to Germany and millions of packages to Europe every day. This is a headache not only for the fashion suppliers based here, but also for used clothing collectors. This mass-produced item often ends up in used clothing collections much earlier than other clothing. “But it is not suitable for further use because the quality is not sufficient,” explains Fischer. It has to be disposed of expensively. This means that the existing business model of the used clothing industry is overturned. “We are dealing with a combination of oversupply, decline in value and regulatory overload,” Fischer continues. “Our system has been stable for decades. But now it is at a tipping point.”
Separate collection without recycling path
The situation in Germany was made even worse by a political faux pas. At the beginning of the year they announced that textiles were no longer allowed to be thrown into the trash. What was well-intentioned led to massive problems in practice. Many citizens then threw dirty or damaged clothing into used clothing containers – in the good faith that the recyclers were interested in the raw material and would recycle the textiles. However, since the system is designed for resale and not further processing due to a lack of recycling solutions, the mountains of waste and thus the disposal costs in the recycling plants continued to rise. The result: overfilled containers and declining collection activities. “We are currently seeing that the first players are withdrawing from the market,” said the association representative. “Where there used to be 20 containers, there are now often only ten – with the same amount collected.” The Ministry of the Environment has since corrected the information on how to deal with soiled and damaged clothing, but the consequences are still noticeable, says Fischer.
Market disruptions and bankruptcies
Large sorting companies such as Soex and Texaid have already had to file for bankruptcy this year. This means that central recycling structures have broken down, which has resulted in chain reactions throughout the entire industry. Fischer: “If a collector can no longer find buyers, he can no longer collect. This affects the entire supply chain.” Many smaller collectors have now stopped their business or significantly downsized – often without attracting public attention. Charitable collectors such as the Red Cross, which finances its charitable activities through collections of used clothing, are also affected by the crisis.
Many companies are currently negotiating with municipalities to obtain better conditions. However, given that budgets are tight in many places, this is no easy task. At the same time, the municipalities also have an interest in continuing the current cooperation, because the legal obligation to collect separately means they are also responsible: If the collectors’ containers disappear, they have to organize, implement and finance the textile collection themselves.
Recycling technologies are not yet available in the required quantities
The desire to convert textiles into new clothing in the spirit of the circular economy is currently theoretical. Textile-to-textile recycling is currently only possible in pilot plants. “Large-scale technical processes like those we know from plastic recycling do not yet exist,” says Fischer. There are also economic reasons for this: new fibers are often even cheaper than recycled ones, which slows down the market success of recycled fibers and slows down the necessary investments in new systems. In addition, far too many textiles still consist of complex blended fabrics that are heavier and therefore more expensive to recycle. Even the most modern, fully automated sorting technologies do little to change this. Fischer: “You will never be able to recycle a T-shirt for 1.99 euros into a T-shirt for 1.99 euros again.”
Inconsistent EU policies cause uncertainty
Just like Germany, other EU countries are also struggling with the new framework conditions of the separate collection requirement. “France has strengthened its Extended Producer Responsibility (EPR) system with higher producer fees, eco-modulation to reward better designs and a “repair bonus” to support consumers. Sweden, on the other hand, had to temporarily relax the regulations and allow some low-quality textiles back into the residual waste because the infrastructure was overwhelmed with the volumes,” writes Euratex and calls for a harmonized European approach: “These contrasting examples show why harmonization at EU level is crucial: without it, there is a risk of fragmentation of the internal market and uneven progress towards a circular economy.”
Demand: Bridge financing to maintain the industry
In view of the urgent challenges, the bsve calls for quick action in a position paper. One of the central demands is a kind of bridge financing for the industry for collection, recycling and disposal until extended producer responsibility (EPR) takes effect. The EPR stipulates that manufacturers, importers or retailers will in future have to pay for the collection, sorting and recycling of the products they place on the market at the end of the use phase. Although the EU paved the way for the introduction of the EPR in the textile sector in September of this year by amending the Waste Framework Directive, it is still unclear how exactly this will be designed because that is a matter for the states. Secondly, if the EPR comes into force in 2026, it will take until 2028 to be implemented. According to the association, this implementation period is too long and endangers the existing collection and recycling system for used textiles. He therefore also calls for the legislative process to introduce the EPR to be prioritized and ultimately for the setting of minimum quotas for the use of recycled fibers in new goods so that the system can finally run smoothly through fixed purchase quantities.