Circular Valley sees innovation boost for the circular economy
14.07.2026Starting July 19, 2026, manufacturers in the European Union will no longer be allowed to destroy unsold textiles and footwear. For the Circular Valley Foundation, this is an important step – while also making clear that innovative solutions are needed for the entire life cycle of textiles.
The clothing collected by AWG is cleaned, repaired where necessary, and then offered for sale in GESA's second-hand store
© Jan Turek/Circular Valley
With the entry into force of the ban on the destruction of textiles under the EU Ecodesign Regulation, unsold clothing, clothing accessories, and footwear may no longer be incinerated, shredded, or otherwise permanently rendered unusable. Companies must instead organize alternatives such as resale, repair, donation, or recycling and document their measures.
“The ban on destruction is an important step. It sends a clear signal against the waste of valuable resources and creates incentives to approach products differently from the very beginning,” says Dr. Carsten Gerhardt, Chairman of the Circular Valley Foundation.
The new regulation particularly addresses the destruction of excess inventory, returns, and seasonal goods. At the same time, it ensures that companies will have to establish new processes for reuse, return flows, and recycling in the future. This increases the demand for innovative solutions – for example, resale concepts, repair services, take-back logistics, or digital systems for traceability and documentation.
Fast fashion remains a major challenge
While the new regulation prevents the destruction of unsold new goods, a large proportion of textile waste is generated only after purchase. Short usage periods, fast fashion, and low reuse rates result in millions of tons of textiles being discarded worldwide every year. “If we truly want to keep textiles in the loop, we must consider the entire life cycle – from design through use and reuse to high-quality recycling. Numerous innovations are currently emerging in this area,” says Dr. Carsten Gerhardt.
What such solutions can look like is demonstrated by alumni of the Circular Economy Accelerator of the Circular Valley Foundation. The German startup Circularity (Batch 1) develops closed-loop material cycles for workwear. New yarns and textiles are created from discarded work clothing – entirely from recycled material and within a closed production process. Poliverde (Batch 2) from Brazil recycles nylon residues from textile production and processes them into high-quality raw material for new textiles and other industrial applications.
The Colombian company Gescol (Batch 3) transforms discarded shoes and polyurethane waste into new materials for construction and industrial applications. Using biotechnological processes, BioFashionTech (Batch 7) separates blended fabrics and recovers new bio-based materials from them – an important approach for textiles that have so far been difficult to recycle. PaperEarth (Batch 8), in turn, uses textile waste as a raw material for packaging paper, thereby replacing virgin wood fibers.
Circular economy requires innovation along the entire value chain
These examples show that the circular economy goes far beyond traditional recycling. What is needed are solutions for reuse, refurbishment, high-quality material recovery, and new business models that keep resources in circulation for as long as possible.
Textiles will also play an important role in the upcoming funding round of the Circular Valley Foundation’s accelerator program. One focus of the eleventh batch, for which applications are currently open, is on cost-efficient solutions that keep textiles and fiber materials in circulation for as long as possible through design, take-back systems, reverse logistics, and recycling.
Circular economy also works locally
In addition to technological innovations, new approaches are also emerging at the municipal level. For example, the waste management company Wuppertal (AWG) and the GESA Group have expanded their cooperation to include textiles. Collected clothing is cleaned using refurbished washing machines, repaired when necessary, and then offered locally again. In addition, AWG relies on household-based collection systems in which textiles are picked up clean and directly from households. Such models increase the quality of collected clothing and significantly facilitate its reuse.
The ban on destruction does not mark the end, but rather the beginning of a comprehensive transformation of the textile industry. For this transformation to succeed, regulatory requirements alone will not be enough; innovative companies, new business models, and close cooperation between industry, startups, research institutions, and municipalities will be essential.
