Insights on Textile Waste Opportunities in Vietnam

Key insights from the ‘Textile Waste Opportunities for Circular Textiles, Garments, and Footwear in Vietnam’ webinar.

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On 13 November, Global Fashion Agenda (GFA) and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) hosted the webinar ‘Textile Waste Opportunities for Circular Textiles, Garments, and Footwear in Vietnam’.

During the event, expert speakers shared insights on the multifaceted aspects of circular fashion, focusing on the present situation in Vietnam and contextualising and connecting it with best practice case studies from around the globe. Speakers delved into the latest trends, technologies, and strategies driving sustainable practices within the industry.

Fostering Circular Systems Globally 

Through the event, GFA and GIZ provided a comprehensive understanding of the Global Circular Fashion Forum’s (GCFF) vision and potential impact in establishing a Circular Fashion Partnership (CFP) in Vietnam to achieve a long-term, scalable, and just transition to a circular fashion industry. The intention behind these projects is to establish an ecosystem and infrastructure that can continue long after the project has been initiated.

During the webinar, Holly Syrett, Impact Programmes & Sustainability Director, GFA, said: “Circularity has to be a global value chain approach and it’s imperative that manufacturing regions are a part of that.”

Syrett reiterated the need for a two-pronged approach:

  1. Encouraging circular commercial collaborations between brands, manufacturers, and recyclers so that textile waste can be collected, segregated at source, recycled, and reintroduced into new textile products. This must be collaborative to ensure that textile waste feedstock aligns with available recycling technologies and that the recycled material output can create a product that is valuable for the brand.
  2. Engaging local stakeholders and policy partners to create a conducive environment for circularity, whilst also engaging the investor and financial community to ensure that there’s access to finance to support the scaling of recycling technologies and manufacturers who are looking for integrated solutions.

Together, these actions can contribute to the formulation of a blueprint for upstream circularity that can be replicated across other manufacturing regions.

The Global Outlook and Increasing Demand for Circular Textiles

Legislation

Parallel to any industrial transformation comes the requirement of appropriate policy changes to support and incentivise investment and make sure there are no antiquated legal barriers obstructing the new industrial process. Policy will be crucial in creating a conducive environment for enabling the full potential of circularity.

Legislations around textile waste are gaining momentum, through which brands are expected to make more recycled products and in turn are carefully considering sourcing decisions. Likewise, EPR regulations are set to push brands to consider the entire lifecycle of their products.

Just some of the regulations on the table across the EU and Americas include: French Anti-waste and Circularity Law (2020), Dutch EPR for Textiles (2020), EU Strategy for Sustainable and Circular Textiles (2022), California Responsible Textile Recovery Act of 2023 – SB- 707, Chilean Circular Economy Strategy for Textiles (2023, currently under development), and Brazilian law Project 270/22 (revision of Law 105/2010) for the creation of national reverse logistics systems for textile waste.

During the panel discussion, James Phillips, Partner, Gherzi, indicated that regulation coming from all over the world is set to drive the practices down through the supply chain. Brands will need to coordinate and work with their supply base to ensure the suppliers are doing what’s necessary for the brands themselves to be compliant with this legislation. As such, brands will be a key lever of driving circularity in Vietnam.

 

Global Fibre Production and Brand Demand for Recycled Materials

According to Textile Exchange, in the last 20 years, global fibre production has almost doubled from 58 million tonnes in 2000 to 113 million tonnes in 2021 and is expected to grow to 149 million tonnes in 2030 if business as usual continues. We are also seeing a trend in demand for recycled materials, Textile Exchange has found that the market share of recycled fibres increased from 8.1% in 2020 to 8.5% in 2021, and the percentage of virgin fibres decreased from 91.9% in 2020 to 91.5% in 2021.

Anastacia Howe, Sustainability Manager, Vietnam, and Environmental Programme Manager Cambodia and Myanmar, H&M Group, outlined some of the Group’s key targets relating to circularity. Namely, the ambition that 100% of its materials in commercial goods will be either recycled or sourced in a more sustainable way by 2030 and that 30% of materials in commercial goods will be certified recycled by 2025.

With increasing brand commitments creating a gap in demand and supply for recycled materials, circular systems present a currently underutilised opportunity. Developing a strong domestic recycling industry offers a multiplicity of benefits for countries such as Vietnam.

Ana Rodes, Head of Sustainability, RECOVER, shared that there is not enough supply of preferred materials to meet that demand, however, RECOVER is working to increase recycling capacities globally. Shamiul Hoque, Impact Programme Manager, GFA reiterated the importance of quality and quantity of feedstock.

Circular Fashion Partnership: a Bangladesh Case Study

The CFP Bangladesh project was launched in 2020 and showcases the potential of national CFP projects. The project is made possible in collaboration with its Supporting Partners H&M Group, BESTSELLER, C&A, Primark, Teddy Group, Benetton, and OVS and Implementing Partners BGMEA and Reverse Resources.

Since 2021, 179 facilities have registered into the Reverse Resources platform, 10,685 tonnes textile waste have been segregated for recycling and entered the Reverse Resources platform, 22 recyclers are receiving waste, 15 waste handlers are receiving waste, 5,671 tonnes of waste have been sent to recyclers, and 216 supply chain partners have been engaged.

The project has also provided some crucial considerations for future projects, including potential barriers to scaling domestic recycling:

  • Formalising the informal waste management sector
  • Establishing a common understanding of waste ownership
  • Adopting traceability tools to present waste value and flows.
  • Addressing waste generation limits and related taxation in Bangladesh
  • Increasing awareness among policy development in Bangladesh
  • Harnessing the potential of Export Processing Zones in Bangladesh
  • Facilitating cross-sectoral collaboration in Bangladesh and beyond

The Apparel and Footwear Manufacturing and Recycling Landscape in Vietnam

Saskia Anders, Team Lead Vietnam – Initiative for Global Solidarity (IGS) and FABRIC, GIZ, provided a snapshot into the existing apparel industry in Vietnam. Anders outlined that the textiles sector is the second largest export sector in Vietnam (after electronics) and Vietnam is the third largest textile exporter in the world (after China and Bangladesh). Moreover, textiles manufacturing is responsible for a quarter of manufacturing jobs in Vietnam. As such, a positive change in the apparel industry and a just transition to circularity could offer an abundance of economic and social benefits for Vietnam.

However, at present Vietnam primarily produces final products reliant on imported fabrics. Whilst the overall production of yarn and fabric has increased in Vietnam, much of the fabric is still imported. The Vietnamese government has set a target for more material production to increase local value creation and according to Anders, the high demand for recycled material made in Vietnam is evident.

GFA and GIZ are working to create the missing links and facilitate collective action between relevant actors, based on shared responsibilities. By adopting a Due Diligence approach, risks can be minimised for recyclers and waste handlers and real change and measurable impact can be fostered.

Ambitions and Solutions: Establishing Commitment for Collective Action to Advance Local Textile Recycling Capacities in Vietnam

Chi Phan Thi Quynh, Senior Project Officer, FABRIC Asia (GIZ), reiterated the point that: “Recycling textiles is no longer a trend; it is a necessity”.

A GIZ poll of over 98 factories found that when asked whether post-industrial waste is sorted at their facility 80% said that they are sorting partially with 20% not sorting at all. When asked whether they have observed a change or trend in activity in recent years in post-industrial waste recycling, 23% said they are increasing recycling and 71% said they are maintaining the status quo. Circularity is currently an underutilised tool for the Vietnamese textiles industry.

However, the circularity landscape is indeed evident and gaining momentum. GIZ shared a non-exhaustive overview of the ecosystem of waste collectors and recyclers in Vietnam linked with the textiles and footwear supply chain, including over 230 waste collectors and pre-processors and over 40 recyclers.

GIZ observed that whilst training on waste management and sorting is needed; training alone does not bring significant enough impact in isolation. This sentiment was echoed by Do Thi Thuy Huong, Sustainability Team Leader, Maxport Limited Vietnam, who said that whilst training is not a solution for waste management, it is a very important lever.

Based on evaluation and learnings, GIZ have formulated three essential components for circularity in Vietnam:

  • Collective action for facility waste improvement
  • Fostering innovation through recycling pilots
  • Advancing decent work at waste recyclers and collectors

Looking Ahead

With increasing momentum in brand demand and legislations materialising globally, Vietnam can cultivate an ecosystem for circular systems. GFA and GIZ are now engaging stakeholders and there are a number of opportunities for those looking to get involved:

  • Manufacturers – Participate in textile sorting and digital traceability
  • Brands – Support manufacturing partners and commit to recycled material uptake
  • Recyclers – Receive and recycle textile waste to highest potential output
  • Waste Collectors – Facilitate logistics to recyclers
  • Government – Supportive policy and national roadmap
  • Investors – Fund (vertically integrated) manufacturers and recyclers

To learn more about the work underway and the plans for the establishment of a CFP Vietnam project, please contact Chi Phan Thi Quynh at chi.phanthi@giz.de and Shamiul Hoque at shamiul@globalfashionagenda.org

Find out more about the Global Circular Fashion Forum and Circular Fashion Partnership.

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