The fashion and textile industry was valued at .84 trillion in 2025, accounting for 1.63% of the world’s GDP, but the industry has a massive problem: waste. According to the Ellen MacArthur Foundation, the equivalent of a rubbish truckload of clothes is burnt or buried in landfill every second. The European Environment Agency reports that 4-9% of textile products put on the European market are destroyed without even being used.
The environmental impact is not only in the end of life of a garment, the production, distribution, and use of a clothing item all have an impact on the environment. The fashion industry uses a linear economy structure also called a “take-make-trash” cycle in which raw materials are extracted, processed into products, and then thrown away at the end of their useful life. Each of these stages creates massive waste and hurts the environment. However, there is an alternative model on the rise, the circular economy.
What is the Circular Economy?
The circular economy is an alternative to the linear economy, in which products are created intentionally, with their life cycle in mind from the start.
The steps of the circular economy
Creating a closed loop economy requires systemic change across several steps of production, from product concept to planned end of life.
The circular economy has seven steps:
- Raw materials
- Sustainable Design
- Production
- Distribution/Retail
- Consumption/Use
- Collection
- Waste Management/Recycling
In this system the last step feeds back into the first, so the component parts that are recycled in step seven are used as raw materials back in step one. Getting rid of the need for so much raw material extraction, which can be a major source of environmental impact of any industry. Today we dive into the startups promoting a circular fashion economy at each step in the chain.
Raw Materials
Raw materials is one of the stages with the biggest environment footprint in the fashion industry. This stage is heavily water intensive, with textile production using 215 trillion liters of water per year. The fashion industry is responsible for approximately 8.3 million tons of methane each year, mostly from raising livestock for leather or wool products. As the preferred materials in the industry shifts, new impacts must be accounted for, the UN environment programme reports, 60% of the material made into clothing is plastic, such as nylon, polyester, and acrylic. These petroleum-based products are made from fossil fuels and crude oil, which require high energy and toxic chemical use to process.
But several startups are changing the game on raw materials, greatly reducing the footprint of the first step of the value chain.
Renature Attractive Materials
This French startup uses agricultural byproducts to create imitation leather with a much smaller carbon footprint. They use their patented Phyli® technology to create a wide range of materials that are highly customizable for their customers, they can alter thickness, color, texture and so much more. Beyond small leather goods their products can be used in packaging and design.
Peel Lab
A Japan based company that uses pineapple leaves, that are a byproduct of the pineapple industry and would otherwise be thrown away, to create a high quality leather replacement. This leather can be used like any traditional animal based leather, for creating clothing, purses, and furniture. They are now also expanding into Peel Labs Food, into vegetarian meat replacement products.
Alterskin After leather is produced it often needs a coating to add resilience, shine, and more. However this coating is nearly always made from petroleum-based plastics. So founder and CEO Pauline Weinmann, worked with researchers from AgroParisTech to create Alterskin, a patented bioresin, that is 100% bio based and 100% recyclable, greatly reducing the end of life carbon impact.
Sustainable Design
How the product is designed is incredibly important for the further stages of a product life cycle. Designing products with after sale end of life in mind is incredibly important. The circular economy emphasizes designs that reduce waste in production, will last a long time, can be repaired and reused, and be recycled or upcycled at the end of life.
Recreate Goods
German-based startup Recreate Goods, uses AI to create new designs from unused inventory. This software is a one stop tool to manage unsold goods, generate designs for repurposing them, including cost and carbon generation estimates. Innovations like this can greatly reduce destruction of unsold goods, which is a major issue in the fast fashion industry. For many large retailers, this is no longer optional with new EU regulations banning destruction, software like this can create major company value.
Holis
Companies can easily keep track of their footprint and manage suppliers and products in one centralized software. The French SaaS startup focuses on life cycle assessment, including traceability, regulation compliance, from raw material to finished product. Making it easy for companies to make information decisions early in the process and do life cycle analysis for any new products.
Production
The production of the materials is another high impact step, this is the step that takes raw materials into finished products; turning raw cotton into a finished cotton t-shirt. In the fashion industry, this is a high energy and water intensive process. In addition to resources needed, the footprint of this step is expanded by the waste generated. Fabric waste and waste water from the dying process are large contributors to the total environmental impact a garment will have. Improper disposal of wastewater is a major issue, around 20% of global clean water pollution is from the fashion industry.
PigmentOCO
This startup from Tunisia, uses CO2 in its supercritical state to create a dying method that greatly reduces water needs in dying, eliminating the need for chemicals harmful to humans and the planet, and much more energy efficient that traditional dying process.
Pili
Pili takes an alternative approach to making the dying process better for the planet. They create plant based colors and dyes to replace the 99% of colors that are made from fossil fuels. They use a hybrid process of industrial fermentation and organic chemistry to create high quality colors that can be used in textiles, inks, paints, and more.
Distribution/Retail
Once the product is designed and produced it has to get from the manufacturer to the end customer, this includes packaging, shipping, and delivery. The single use view of garments in the traditional take-make-trash model means that once an item is purchased by a consumer, they will be the only user until the item goes to the landfill, usually after only a few wears. But several startups are working on keeping clothes in production longer.
Z1ro
Ukrainian based startup Z1ro tackles the environmental impact of packaging. They replace the traditional wood and paper pulp packaging with molded fiber packaging made from fallen leaves and agricultural residues with premium quality. Their product serves premium brands and can lower carbon emissions by 70%.
FairCado
Shopping second hand first is made easy with berlin-based startup Faircado. The website aggregates fashion listings from a variety of sources into one searchable database, making it easy to find the perfect item second hand. It offers direct search on the website, adding as a chrome extension, or a downloadable app. In the app you can reverse image search to find second hand offers for exactly want you want.
Consumption
This is the first stage where the consumer takes more responsibility for the item and carbon effects than the manufacturer. This is how the product is used, maintained, and how long it lasts, many of those things are determined in the earlier stages of the cycle. Things that are designed well can last longer and those made with better materials have lower micro plastic shedding.
Oly
Oly reinvents second hand resale management allowing resellers to place listings across resale sites in one click. It can connect to your inventory management of choice, connect to your preferred marketplaces, and post your listings on several sites at once in one click to save time, energy, and expose your product to more potential customers. Making second hand inventory as easy to manage as the original process encourages users to keep their items circulation longer and makes second shopping easier for consumers.
Planet Care
Slovenian startup Planet Care has designed a filter to keep the micro plastics from your laundry out of the ocean. It is estimated that 9% of microplastics in the ocean are from our clothes. Each time you wash a synthetic fiber, such as acrylic, polyester, and Nylon thousands of micro plastics enter the water system. Planet care has designed a filter that catches up to 98% of the microplastics before they leave the house. This universal design can be added to any washing machine, they accept the used filters back to upcycle the fibers, and clean and reuse parts when possible, reducing waste at each step. They also offer commercial solutions for laundromats, cleaning services, hotels, and more.
Save Your Wardrobe
This service integrates with companies to manage their aftersale offerings such as repair, care, and alterations. This platform puts everything in place making it easy for companies to track and automate processes for customer requests from repair requests to warranty claims. This extends the product’s life and improves the customer experience.
Tersus Solutions
Terus Solutions offers a variety of solutions that straddle the line between the consumption and waste management steps. They offer a variety of services for extending textile life including, upcycling, repair, cleaning, and resale. With their patented liquid CO2 they are able to clean specialty PPE such as fire suits, military gear, and other industrial PPE, they can remove a variety of contaminants that accumulate over time greatly extending the life of the garment. Other services include down recycling and next best use, finding the best way to reuse or sustainably recycle items that cannot be repaired.
Collection
The collection step is crucial in making the curricular economy circular. If an item is made ethically and sustainably, bought, worn often, and then put in the trash with other mixed waste, it can end up in landfill and remove it from the circle. Many major brands have worked to implement this step with buy back programs, in house remade buying options, or discounts for returning garments.
SuperCircle
SuperCircle partners with brands to run their inventory recovery and trade in programs. They work with brands to set up take back or recycling programs and handle the details to assess the items and move them to the appropriate next stage of life, resale, upcycling, or recycling. They also can do this with internal systems with unsold, damaged, or returned goods. They are the power behind the J Crew swimsuit takeback program that gives a $10 in store credit for every swimsuit turned in.
ByeWaste
This Dutch startup goes door to door to collect unwanted items for free. Users can schedule a slot on the app for someone to pick up what might otherwise become trash, right at their door, no need for shipping or packaging. They then use AI scanning software to determine the best next use for the item. Those who donate can earn rewards for their contributions, creating an incentive for users to keep items from the landfill.
Waste Management and Recycling
After the clothing is collected it is ready to be sorted and recycled. This is the major step that changes from the take-make-dispose model, keeping things from landfills and instead putting them into use in other places. This step also can function as the raw materials step in many other product life cycles, as seen in the start of this article, the pineapple leaves that Peel Labs uses to create raw materials for this loop, is the recycling step of the pineapple juice and growing industry.
Fab-Brick
This Paris-based startup turns textile waste into building materials. They create wall claddings, small tables, seats, and custom spaces made from recycled fabric. This is a great use of textiles where the fabric as a whole cannot be used, it also does not require a minimum size, so it can include off cuts from the production stage.
Re-Fresh Global
Refresh Global turns fabric waste into three biodegradable raw materials, bio-ethanol, nanocellulose, and an unwoven textile pulp. Bio-ethanol can be used in biofuel, fragrances, and pharmaceuticals. Nanocellulose is used in packaging and laminations. The unwoven text pulp can be turned back into fabric or cars and furniture upholstery.
Circ
A textile-to-textile recycler, Circ turns poly-cotton blended fabrics back into their component parts to create recycled polyester, cotton, and semi synthetic fibers. This type of technology taking blended fibers back into two separate is increasingly needed as more and more producers add synthetic fibers to cut costs in their creation, but also makes them much harder to recycle. Their new recycled fabrics go right back into the circle as a raw material, reducing the need for virgin materials.
Where do we go from here?
The circular economy is the future and many startups are creating solutions to close the loop and improve production to benefit people and the planet. While the fashion industry still has a long way to go, this goes to show that even the most resource intensive industries can be transformed to a circular system with intention and innovation.
Interested in more articles like this, check out The Last Mile Problem: Challenges and Innovative Solutions. Find the startups that can transform your industry at VivaTech 2027.
