News | Insights on 4 key innovation challenges towards a circular textile sector

Insights on 4 key innovation challenges towards a circular textile sector

Balancing style with sustainability – can we do it? The fashion sector is at a critical crossroads, striving to find creative ways to integrate sustainability in its procurement processes and business models. Creating a textile and fashion sector that is circular is not easy. But it is essential if we are to change fashion’s role as one of the most polluting and wasteful industries in the world.
At Impact Hub Amsterdam we work to foster the innovations and business models needed to achieve the necessary change in the fashion sector. However, the necessary changes in this industry bring along unique challenges. Through our work with leading industry players, we’ve pinpointed four major innovation challenges that need addressing to move towards a circular economy. In this thought piece we will address these innovation challenges, and share innovators from our network whose solutions are ready to be implemented. 

Are you working on a solution to one of the following four challenges? Or are you looking for help in solving them? Reach out to our team!


Challenge 1: Predominance of Unsustainable Polyester

Despite increasing public and industry awareness, polyester remains widely used by producers/designers due to its versatility and low cost. As it is a form of plastic, its environmental impact is significant, contributing to pollution and recycling challenges. To address this first key challenge and shift towards a less polluting option, the industry needs to prioritize and accelerate the development of affordable, biobased polyester alternatives.

These alternatives should be next-generation materials that do not rely on plastics for production. At Impact Hub we have scouted and supported a range of startups and innovations that develop next-generation alternatives to polyester. Some interesting innovators to watch are: Kintra Fibers, OceanSafe, Werewool, Rubi Laboratories.

Challenge 2: Closed-Loop Textile Recycling

Closed loop circular value chains are highly challenging in the fashion and textile industry. Largely because industry is fragmented and operates in international supply chains. Hence, operating a closed-loop model of recycling, wherein recycled fabrics can be continually recycled without losing their value, proves to be a challenge. Textile production and use stages are geographically spread and therefore do not meet each other, making recycling textiles into new garments complex and often expensive, particularly for blended fabrics that require advanced forms of chemical recycling. 

To address this complex issue, we see innovations in smart sorting and scalable chemical recycling as crucial to promote a closed-loop system. Innovations such as Saxcell, CuRe, Infinited Fiber Company, Worn Again, Byewaste, Mangostone, and Resortecs provide insights into how we can do things differently. 

For example, Infinited Fiber Company creates a fiber 100% from textile waste, and Mangostone offers a Smart Tech method of optimizing textile waste collection for waste collectors. Resortecs makes heat dissolvable thread (SmartStich) for more straightforward recycling, and Circular Innovation Collective alumni Byewaste collects preloved textiles from your home and connect them to their network of sustainable partners to give the fabrics a second life. These innovations aim to stop textiles from ending up in landfills unrecycled, and to make their recycling process more resource efficient.

Challenge 3: Traceability and the Digital Product Passport (DPP)

With the EU’s Digital Product Passport set to be mandatory by 2027, the fashion industry faces significant traceability and transparency challenges. Data gaps in supply chains make it difficult to fully and accurately determine a garment/textile’s carbon footprint – the Digital Passport (DPP) aims to address this issue, and at the same time poses new challenges for companies to comply. 

The need to efficiently track product data across global supply chains requires robust tech solutions to meet these new regulations. Innovators like Tappr, Tex.Tracer, GreenStory, Trustrace are providing important tech solutions for companies to use to help trace the impact of their products. Through these apps and platforms it is possible to create (and get help creating) product passports with more insights, transparency and regulatory compliance. This technology is essential for companies to take the next needed steps in circularity and traceability.  

Challenge 4: Resource Stewardship

The textile and fashion industry’s extractive practices are causing severe environmental damage. To mitigate this, the sector must focus on resource-efficient materials, and collective stewardship initiatives such as Solidaridad Network. Sustainable use of renewable resources ensures that future generations benefit, and decouples value creation from resource extraction, while supporting environmental sustainability.

Technologies that encourage and support textile producers to incorporate waste and resource use minimization into their production process are key. Examples of companies making strides in this direction are Smartex, and Circotex. For example, Circotex “dyes yarns and cloths, among other things, without water, without added chemicals and with much less energy and CO2 emissions than classic dyeing technology”.


Are you facing these challenges as well? Reach out to to learn more about how you can collaborate with the most promising innovations!