Europe wanted a circular textile economy.

Instead, it is drowning in clothes.

Across Europe, the systems that collect and redistribute used clothing are under growing pressure. Governments are introducing new rules to prevent textile waste, increase textile collection and tighten control over used clothing exports. The aim is to build a circular textile economy. But together these changes are also reshaping the system that has long absorbed Europe’s surplus of clothing. In some cases, the pressure is now becoming visible across the entire chain that handles used textiles.

Summary

Europe is collecting more textiles than ever before, while several parts of the system designed to redistribute them are under increasing strain. New rules on textile collection, tighter export controls and limited recycling capacity are reshaping how clothing moves through the system. At the same time, production volumes remain high and new garments continue to enter the market. What emerges is a growing gap between policy ambition and system reality — raising a new question for Europe’s textile policy: what happens when more clothes enter the system than it can absorb?

Step 1: A market that absorbed the surplus

For decades, Europe’s second-hand clothing trade quietly absorbed part of the fashion industry’s growing surplus.

Garments collected through charity containers and commercial collectors were sorted, graded and resold across global markets. Wearable clothing was redistributed to buyers in Europe, Africa, the Middle East and other regions where demand for affordable garments remained strong.

This system was not originally designed as a waste management solution. It was a market system built around reuse.

But in recent years it has increasingly been expected to function as part of Europe’s waste management strategy.

Used clothes ready to be distributed.

Step 2: Market shocks weaken the system

Even before the latest wave of textile policy reforms, the sector had already begun experiencing significant market disruptions.

Several important export markets weakened or disappeared. The war in Ukraine effectively closed two major destinations for used clothing — Russia and Ukraine themselves — while other markets became more volatile. At the same time, new actors entered the global second-hand trade, increasing competition.

For sorting companies and collectors, margins tightened.

Prices for used clothing declined in several categories while labour-intensive sorting operations became more expensive. In many parts of Europe, the economic foundations of the reuse sector were already becoming more fragile.

Step 3: Export rules tighten

At the same time, policymakers began focusing more closely on the international trade in used textiles.

Authorities increasingly sought to distinguish between clothing intended for reuse and textiles considered waste. Under evolving interpretations of waste shipment rules, exporters in several countries faced stricter requirements to demonstrate that shipments contained reusable garments.

In practice, this made the trade in unsorted clothing more difficult in some parts of Europe.

Many collectors had historically sold mixed clothing to specialised sorting companies that processed and graded the garments after export. Where this practice became restricted, organisations faced pressure to sort textiles domestically instead.

Sorting, however, is expensive.

For charities and collection organisations that rely on clothing donations to fund social activities, the additional costs created new financial pressure.

Closed collection bins in Sweden.

Step 4: A sudden surge in collection

Another major shift came with new rules requiring households to separate textile waste from general household garbage.

The policy goal was clear: prevent textiles from being incinerated with other waste and instead channel them toward reuse or recycling.

But in many regions, the infrastructure for dedicated textile waste streams was not yet fully developed.

As a result, large volumes of textiles began entering existing clothing collection systems, many of which had originally been designed primarily for reusable garments.

Collectors in several countries reported sharp increases in the volume of textiles entering their systems. At the same time, the average quality of the collected material declined, as containers began receiving larger amounts of worn-out or damaged textiles.

Sorting costs increased significantly.

Some operators responded by reducing the number of collection containers. Others struggled to manage the growing volumes. Several sorting companies reported severe financial pressure, and at least one major operator entered bankruptcy proceedings.

Step 5: Recycling has not yet scaled

In the long term, policymakers expect textile recycling to absorb a larger share of Europe’s clothing surplus.

Significant investments are now being directed toward new textile-to-textile recycling technologies that could transform used garments back into new fibres.

But large-scale fibre-to-fibre recycling remains limited.

Most collected textiles today are still recycled into lower-value applications such as insulation materials, wiping cloths or industrial fibres. Only a relatively small share of textiles can currently be recycled back into new clothing.

For the foreseeable future, reuse markets therefore remain the primary outlet for wearable garments.

Step 6: The ban on destroying unsold clothes

Another policy change is now approaching.

Under the EU’s Ecodesign for Sustainable Products Regulation, companies will soon be required to disclose how they handle unsold clothing and footwear. Large companies will also face a ban on destroying unsold products.

The measure addresses one of the most controversial symbols of fashion’s waste problem: the destruction of new garments that never reach consumers.

Few policymakers dispute the intention behind the rule.

Yet the ban also raises a practical question.

If unsold clothing can no longer be destroyed, those garments will need to enter the same system that is already handling increasing volumes of used textiles.

Collected clothes is piling up in Europe.

A growing surplus inside Europe

Taken together, these developments are reshaping Europe’s textile system.

More textiles are being collected.Exports are subject to greater scrutiny.Recycling capacity remains limited.And the destruction of unsold garments is increasingly restricted.

Each measure addresses a specific problem. But together they increase the pressure on the systems responsible for sorting, redistributing and processing clothing after use.

In warehouses, sorting facilities and collection systems across Europe, operators are already reporting growing volumes of textiles moving through the system.

The surplus of clothing is becoming more visible within Europe itself.

The climate paradox

From a climate perspective, the situation contains an unresolved contradiction.

The majority of emissions in the textile sector occur at the beginning of the lifecycle — during fibre production, processing and manufacturing.

Yet many of the policies currently transforming the sector focus on the end of a garment’s life.

These policies may improve transparency and reduce certain forms of waste. But they do not directly limit the scale at which new garments continue to enter the market.

As long as production volumes remain high, large quantities of clothing will continue to flow into collection systems.

Does current policy adress the real negative impact on climate?

What happens next?

Europe is entering a new phase of textile governance.

Governments are building systems to collect more textiles, track clothing flows more closely and prevent the destruction of usable products. These measures aim to reduce waste and promote circular use of materials.

But circular systems require capacity.

If the mechanisms capable of redistributing or recycling clothing do not expand at the same pace as collection volumes, the pressure will increasingly shift elsewhere in the system.

For now, the question remains unresolved.

If Europe continues collecting more clothes than it can absorb, and fewer options exist to move those clothes elsewhere, the surplus will not disappear.

It will simply accumulate somewhere else in the system.