Inside Fashion’s Race for Circular Polyester
Inditex has earmarked tens of millions of euros into securing a pipeline of textile waste-derived polyester from Ambercycle. H&M Group is snapping up capacity of Syre’s so-called “circular” polyester to the tune of $600 million. Patagonia and Zalando have placed million-dollar bets, with potential future dibs, on Circ’s ability to separate the fibers in polyester-cotton-blended clothing and transmute them into new garments. And Sanko Group, owner of one of the world’s largest denim producers, is sparing no expense on plans to turn 1 million tons of polyester-cotton waste into grist for “next-gen” fibers by 2030.
None of these material innovators are firing on all cylinders—at least when it comes to commercial-scale plants—yet a quiet race is shaping up, if not among the companies themselves then against time and the status quo of cheap, plenteous and disposable clothing maintained by virgin polyester’s ultralow cost, versatility and extensive, well-oiled infrastructure.
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The small, limited-time ranges that occasionally rear their heads are part of a test-and-iterate process to make sure the technologies not only work but can also adapt to existing supply chains without too many time-consuming tweaks. Critically, the results must also vie with incumbent synthetics’ price and performance.
“The race has very much started,” said Luke Henning, chief business officer at Circ, which is headquartered in Virginia. “I just don’t think everyone who’s in that race has realized that.”
As competition for castoff plastic bottles ramps up, so too is momentum for an alternative to bottle-to-textile recycling that has been turning one industry’s circular feedstock into another’s future landfill fodder. While used plastic bottles can be transformed into new ones almost indefinitely, they’re far less likely to get another lease on life once converted into textiles.
Even so, the overwhelming majority of recycled polyester available today originates from bottles made from polyethylene terephthalate, or PET. With even the buzziest startups still on the knife-edge of achieving maturity, textile-to-textile recycling accounted for less than 1 percent of the regenerated stuff in 2022, according to sustainability trade group Textile Exchange. Virgin polyester itself occupies 54 percent of the overall materials pie.
Changing this state of affairs has become increasingly urgent. Worsening climate change is fueling a growing backlash of fashion’s reliance on fossil-fuel-based materials such as virgin polyester, and legislation such as the European Union’s forthcoming green claims directive could ban unsubstantiated marketing-speak that bottle-to-textile recycled polyester is better for the planet.
At the same time, if brands with public recycled-content commitments make good on their pledges, the demand for rPET in the United States alone is poised to surpass supply by roughly three times by 2030, according to consulting giant McKinsey & Co.
The preponderance of textile waste inundating the global South is another existential problem. In countries like Ghana, Kenya and Chile, moldering piles of discarded clothing have become an indelible part of the landscape.
“We have relied too long on other organizations to manage, sort and build value into these items—and what has that turned into? An overload on the global system that shifts the burden to other places and communities of the world that also don’t know what to do with it and how to maintain value beyond waste,” said Krystle Moody Wood, founder and principal at Materevolve, a sustainable textile consultancy from California.
Wood, a former materials manager at The North Face, was an early proponent of bottle-to-textile recycling. Now, knowing what we know, she said, it no longer makes sense.
“It makes 100 percent sense for us to follow, take in, manage and own the process of the textile and clothing items at the end of its life,” Wood said. “We, the creators of textile goods, are the most experienced and knowledgeable about what goes in, what to do with it, and how to maintain the best value.”
The soul of fashion is also at stake, said Nemanthie Kooragamage, director of product creation and sustainable business at Sri Lankan clothing manufacturer MAS Holdings, which last month signed a three-year offtake agreement to clinch an initial 4,000 tons of Ambercycle’s Cycora—enough to make 15 million meters of recycled polyester fabric for clients such as Calvin Klein, Marks & Spencer and Victoria’s Secret that may not have the wherewithal or inclination to nab their own supply.
MAS is also a member of Circ-Ready, a community of mills with a demonstrated ability to produce premium products using Circ materials, including AGI Denim, Selenis, Soorty Denimkind, Tainan Spinning Co. and the Taiwan Textile Research Institute. But for every company that puts its money where its mouth is when promoting lower-impact materials, more hang back on the sidelines, Kooragamage said.
“In our industry, there’s a big gap between intention and action,” she said. “I think it’s time that we decide as an industry whether we actually want to make this transformation or not.”
Finding scale in a hopeless place
That these efforts are taking place amid rampant geopolitical tensions and massive economic uncertainty isn’t lost on anyone. Brands and retailers, whose buy-in is critical to next-generation materials’ success, are more price-sensitive than ever and less likely to take a chance on something new. It’s this harsh reality that experts say led, at least in part, to the downfall of Renewcell before the Swedish textile recycler was rescued from bankruptcy by private equity firm Altor and rechristened after its dissolving pulp, Circulose. H&M had also backed Renewcell until it said that it could no longer shoulder the brunt of the investment by itself. When Syre came online shortly after, accompanied by H&M’s announcement that it had signed a seven-year offtake agreement, the surprise from industry watchers was palpable.
But maybe it shouldn’t have been. Renewcell trafficked in man-made cellulosic fiber, which accounts for 6 percent of H&M’s materials basket, versus 23 percent for polyester. Other brands boast not only similar breakdowns but also similar public commitments to phase out virgin polyester, with some, like Inditex and Patagonia, gunning to do so as early as 2025.
“There’s definitely a higher demand and much greater panic around the supply of textile-to-textile polyester because [companies] are feeling the lack of access to circular polyester or even bottle-to-textile,” Henning said. “There are a lot of plants being developed now for bottle-to-bottle and there’s a real shortage of good flake available because now bottling companies need all of those bottles back. So there’s a shortfall between supply and demand already. And it’s going to grow significantly.”
Feedstock cost is another driver, one that could eventually outweigh the initial markup a novel material might bring, said Roman Park, performance leader at Hyosung TNC, a South Korean textile manufacturer that is helping Ambercycle integrate Cycora into its customers’ supply chains. Hyosung developed Regen, Korea’s first recycled polyester fiber, using plastic bottles. Now it’s anticipating another shift in the needs of the market it serves.
“Waste PET bottles are becoming more of a resource needed in the packaging industry through various new regulations, rather than a resource regenerated in the textile industry,” he said. “Recyclers now expect the feedstock cost of abandoned PET bottles will go up and will become more expensive than the cost of textile waste.”
The problem—and it’s a big one—is scale, or, rather, the lack thereof. Forging infrastructure where there is none is a heavy lift, requiring partnerships with textile collectors, sorters, reverse logistics providers and machinists. Most circular polyester purveyors are still working—at best—at the pilot level, with full-scale facilities still several years away, though Syre is hoping to have the bare bones of a “blueprint” plant in North Carolina by the close of 2024 and Sanko’s Re&Up venture plans to significantly increase its capacity with a factory capable of pumping out 200,000 tons of recycled polyester and cotton fibers in its native Turkey by next year.
Circ has been running what it calls “piloting assets” in Ohio and Virginia for the past three years, and Ambercycle churns out roughly 2 tons of fiber per day at a demonstration facility in Wisconsin. Henning expects Circ to build a factory toward the end of 2026, with operations starting up the following year. Shay Sethi, founder and CEO of Ambercycle, which is based in Los Angeles, told a reporter to ask him again in a couple of months.
“Right now we are looking at, if we needed to produce, you know, tens of thousands of tons a year, where can we do that? We are almost finalized with a plan,” Sethi said. “The goal is to build a first commercial-scale plant, deliver on the Inditex contract, deliver on a couple of other key contracts that we have initiated and then, if that all goes well, scale up beyond that.”
There’s a good reason why some material innovators are taking a more considered approach to expansion. Renewcell, some observers say, grew too fast and too quickly by establishing an industrial-level plant in Sweden before it had secured enough orders to keep its expensive machines running. Sethi has been keen to get “pieces of paper with signatures on them” that demonstrate a buyer’s procurement commitment first.
“Without that, it’s just extremely hard to build a facility, even though people have done so in the past,” he said. “You need a hard, binding commitment with price and volume lined up and you need to build a strong relationship with buyers. Without that, it’s kind of risky because you could wake up one day, you have the plant running, your technology is done, but where’s the product going to go?”
Syre, on the other hand, doesn’t see securing offtake agreements versus scaling production as mutually exclusive strategies. But then it’s moving fast—and vast. While it’s starting with North Carolina because that’s where Premirr Plastic, the company behind its patented technology, is from and where it expects its research and development to continue, Syre also has its eye on constructing facilities in Vietnam and the Iberian Peninsula in 2025. Eventually, it plans to operate a network of 12 setups worldwide that would collectively pump out more than 3 million metric tons of its circular polyester within the next decade.
“We’ll probably do it in parallel,” said CEO Dennis Nobelius. “We see a benefit of teaming up with the brands, but we will not limit ourselves to that. So we’ll secure capacity in the plants but also have some spare capacity for the spot market. Because it’s simply good business and we can make more customers use [the fiber] in the future.”
Circ is still evaluating sites, though it’s not looking to break ground in North Carolina as has been previously reported. Both Asia and Europe are “still in contention,” Henning said. And while the United States isn’t out as a candidate just yet, it has its downsides, chief of which is the lack of post-industrial waste streams that are cleaner, easier and faster to sort and process.
“All of these companies are starting on post-industrial [clothing] because it’s the lowest risk feedstock and if you want money to build your facility, you go with low risk,” he said. “The U.S. doesn’t have that much by way of access to post-industrial in the same way.”
Incentives for green businesses are also “much more advanced” in places like the European Union,” Henning said. “There’s a very strong will to get this done in Europe, where, in a lot of ways, regulation is much further progressed. That’s not to say the U.S. isn’t waking up and starting to play catch up. It’s just that with the development cycles, for most people, that is a challenge.”
Polyester by any other name
There’s no one way to make textile-to-textile recycled polyester. Some use a combination of chemical and thermomechanical recycling. Others use a depolymerization process to break components down to the monomer level. One decision everyone had to make early on, however, was what to call their output.
Syre has adopted the term “circular polyester,” or cPET, to distinguish it from conventional recycled polyester that is “used once and then you cannot use it anymore, so it’s a downgraded solution,” Nobelius said.
The moniker is also meant to signpost the fact that Syre’s alternative can be reused over and over again with the production of far less carbon dioxide—a savings of up to 85 percent—than petrochemical-based polyester. “Circular polyester” isn’t something Syre plans to trademark. As far as Nobelius is concerned, it’s easier for everyone to refer to textile-to-textile recycled polyester by the same shorthand.
Ambercycle also uses the term “circular polyester,” along with “regenerated textiles” to describe Cycora because “recycled” no longer carries the “right connotation,” Sethi said. Re&Up is sticking with “next-gen cotton” and “next-gen polyester” because its technologies enable to production of new recycled materials that “were not on the market before,” said Marco Lucietti, its head of global marketing and communications.
Henning said that Circ calls its fibers Circ lyocell and Circ polyester “to keep it as clean as possible.”
“It was kind of deliberate on our part in that functionally what is this? It’s polyester,” he said. “And so it’s recycled to the Circ process, but it’s still polyester. When we were looking at this, we did a bit of a naming exercise and we realized there were 400-odd names for man-made cellulosic fibers. And we were like, we want clarity to the customer.”
Circular polyester won’t solve all of virgin polyester’s ills. Microplastics, for instance, though more research is necessary to understand and determine shed rates from recycled as opposed to virgin materials.
“Circular polyester, like any form of polyester, can shed microplastics and microfibers during wear, and washing,” said Georgia Parker, innovation director at Fashion for Good, a sustainable innovation platform based in Amsterdam that works with Ambercycle, Circ and Syre. “While the focus on textile-to-textile is primarily on reducing waste, the concern of microplastic pollution is one we should consider.”
Design can play a large part in mitigating the issue, Lucietti said. Sanko subsidiary Isko, for instance, has already developed fabrics that place Re&Up’s next-gen polyester at the core of its yarn, a tack that “significantly” reduces microfiber shedding while improving durability and longevity.
It’s one of the benefits of being your own customer, he said. Sanko and Isko had high standards that Re&Up had to meet, even though they were, essentially, the same company. This included price competitiveness. Re&Up doesn’t “believe in the green premium,” Lucietti said. “If you want to make an impact, you have to make products available.”
But the fact is nothing is cheaper than virgin polyester, which is why it’s so widely employed. Syre expects a 50-cent per-garment premium on its product, at least in the beginning, when economies of scale haven’t set in. Sethi said that Cycora has a higher cost, albeit one that “isn’t crazy.” Circ’s Henning declined to reveal how much more Circ polyester might cost, though he noted that virgin prices were “really, really low” last year, which made circular polyester a harder sell.
“There is more work to do for our industry when it comes to optimizing the value chain for early-stage innovations, that will make it simpler for producers to scale their innovations and reduce pricing,” an H&M spokesperson said. “Furthermore, our industry needs to collaborate to enable the scaling of these innovations with the required investments. By driving demand, we also drive production efficiency and competitive pricing of new materials.”
Another way forward: Legislating extended producer responsibility for textiles the way the European Union’s waste framework directive and California’s textile recycling bill seek to do.
“I think we’re going to see taxes on virgin materials, not just for polyester but across the board,” Henning said. “I think we’re going to see people start to think about how you price in not just the financial cost of these materials, but everything else. There are tariffs on synthetics in a lot of countries. Could you remove the tariffs if there’s a certain amount of recycled content?”
Material innovators frequently talk about the “valley of death,” the precarious passage from lab-scale to commercial viability that not everyone can successfully traverse. It’s why several investors are hedging their bets with different startups. In addition to Ambercycle, Inditex has poured money into Circ, including by incorporating its fibers in a capsule collection for Zara. H&M’s Co:Lab was also part of a Series A financing for Ambercycle, a 2016 winner of H&M Foundation’s Global Change Award. Drive Catalyst, the venture capital arm of Taiwanese textile giant Far Eastern Group has funneled $5 million into Ambercycle and an undisclosed sum in Circ to get them off the ground. Proparco, which is partly owned by the French Development Agency, has invested in Circ through Circulate Capital and in Re&Up as the underwriter of a $75.9 million loan.
Having multiple material innovators is crucial for several reasons, said Priyanka Khana, innovation director for scaling at Fashion for Good. Different companies bring unique approaches to complex recycling challenges, “driving technological advancements and efficiency through competition and reducing reliance on a single solution,” she said. They can also target various markets and regions, making solutions more accessible and therefore scalable.
Henning pointed out that virgin synthetics have had 80 years to optimize, which means that challengers are fighting “deeply entrenched systems that are going to resist change.” It took solar decades, for instance, to overtake coal “solely on an economic basis,” he said.
Fashion may not be able to wait as long. If, for whatever reason, bottle-to-textile polyester no longer becomes an option, that’s 9.5 million tons of material that will need to be replaced, Henning said. Most textile-to-textile recycling facilities can manage only 30,000 tons of circular polyester at a time, if that. Even several 300,000-ton-per-year setups will barely scratch the surface. If fashion doesn’t make bolder moves now, it could find itself with a stark material deficit when regulation kicks in and it’s left with no other choice.
Henning returned to the race metaphor. “Like I said, some people are at the starting line but they’re asleep and dreaming,” he said.
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