The lack of a comprehensive policy framework for circular textiles in Bangladesh is causing the country to miss out on up to $5 billion in potential annual export revenues from recycled textile products, according to a recent study.

Titled ‘Regulatory Framework to Enable Recycling of Post-Industrial Waste (Jhut) for the RMG Industry in Bangladesh,’ the study highlights the need for formalizing the informal jhut sector to fully capitalize on the circular economy’s potential for innovation and industrial growth.

However, political and economic challenges have hindered a fair and inclusive transition.

The study estimates that Bangladesh’s current annual recycling capacity for apparel-grade yarns is between 18,000 and 24,000 tonnes, which accounts for only 5-7 per cent of the 330,000 to 500,000 tonnes of 100 per cent cotton and cotton-elastane waste produced each year.

Less than 5 per cent of this waste is upcycled into products like rag rugs, rag dolls, and blankets. More than 55 per cent is exported to recycling companies globally, while the remainder is downcycled into cushion and mattress stuffing, incinerated for energy recovery, or, in minor quantities, sent to landfills.

Jointly conducted by Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and H&M under the programme for sustainability in the textile and leather sector, the study outlines necessary measures and regulatory reforms to create an effective jhut management framework.

The goal is to maximize the economic, social, and environmental benefits within Bangladesh’s jhut supply chain.

The report recommended engaging stakeholders collaboratively, protecting workers’ rights and safety, promoting circular textile economy practices, and enhancing capacity building and technology adaptation for the jhut sector.

It also suggested several key policy solutions, including improving data availability through a national jhut database, establishing industry guidelines for jhut management and recycling standards, and revising VAT and tariff rules for jhut transactions.

The report advocated for economic incentives to formalize jhut collection, handling, and sorting, the establishment of central depository systems and cluster-based sorting hubs, and improving the investment environment for advanced recycling technologies.

The current disposal methods contribute to severe environmental issues, such as air pollution, resource depletion, and harmful chemical leaching, which pose significant threats to ecosystems and public health, it said.

The survey highlighted several key challenges facing Bangladesh’s recycling industry, including difficulties in sorting jhut, timely disposal, enhancing productivity, and minimizing waste through improved design.

It also identified potential risks if factory owners attempt to implement jhut recycling strategies independently.

These risks include political restrictions, increased scrutiny, internal recycling disruptions, and intimidation from those benefiting from the current system.

Faruque Hassan, former president of the Bangladesh Garment Manufacturers and Exporters Association, expressed optimism about the textile industry’s recycling efforts.

‘While we face a shortage of core raw materials like cotton and petrochemicals, strengthening our recycling industry could reduce import costs and foster a robust backward linkage industry for the country,’ he stated.

Faruque acknowledged that sorting jhut remains a significant challenge due to a lack of trained personnel, though he noted that many have received training with support from GIZ and H&M.

He also emphasized the need for establishing jhut collection points, a proposal from the BGMEA that has been stalled due to political issues.

The report underscored the global shift towards sustainability in the textile sector, driven by major brands and organizations such as H&M and GIZ. It noted that regulatory bodies, particularly in the European Union, are introducing stricter mandates and extended producer responsibility requirements.

The study suggested that this global trend presents an opportunity for Bangladesh to enhance trade through sustainability goals and create formal employment by formalizing the jhut sector and adopting circular economy models.

To achieve these goals, the report recommended increased collaboration among government bodies, manufacturers, non-governmental organizations, and recycling companies.

This collaboration is essential for developing sustainable infrastructure, adopting innovative technologies, and establishing efficient waste management systems, it said.

Report also highlighted the need for enforcing existing labor laws and introducing new regulations to protect workers’ rights and safety in the jhut recycling industry. This includes upholding health and safety standards, eliminating child labor, and addressing gender-based issues.

Furthermore, the study recommended that brands and suppliers adopt recycled materials in their products to set sustainability standards, reduce waste, boost consumer demand for eco-friendly goods, and drive innovation and market growth in recycled textiles.