Cellulosic Textile Recycling: A Tailored Solution For Canadian Paper & Pulp
Can fashion’s race to sustainability and supply gap in recycled textile be strengthened by Canada’s declining paper and pulp manufacturing sector?
Fashion‘s Race to Operate More Sustainably
The fashion industry is the world’s third-largest manufacturing sector, contributing $2.4 trillion to the global economy and employing a sixth of the world’s workforce.
However, it is no secret that fashion is also one of the most polluting industries. Between 80 and 150 million articles of clothing are produced each year, while each garment is typically worn only seven times before being thrown away. Combined with the globalization of fast fashion, textile waste is expected to increase from the current 92 million tonnes per year, to 134 million tonnes annually by 2030. The fashion industry’s raw material extraction and product end-of-life are the most environmentally harmful stages of its value chain, creating over 10 percent of global carbon emissions and contributing to both microplastic pollution and soil degradation.
The demand for fashion products is only expected to grow, as 700 million more people are expected to move out of poverty and join the global middle class by 2030, contributing to a 3x increase in global consumer spending — and an inevitable increase in demand for daily clothing. However, the fashion industry is experiencing external pressure to improve the circularity of their supply chain because of the rising consumer demand for sustainable practices; in other words, sustainability is becoming a key success factor for fashion companies. Consumer preference for brands who are environmentally sustainable has deepened with time as 75% of millennials and a growing percentage of Gen-Z consumers are willing to favour sustainable products when making purchasing decisions. With growing consumer consciousness around environmentalism, the $150 billion global sustainable garment market is expected to grow at an 8% CAGR over the next eight years.
As demand increases, sustainable garment manufacturers will need to innovate and expand the supply of environmentally-friendly raw materials — notably through recycling. By 2030, there will be over 134 million tons of global textile waste in landfill. While 95 percent of discarded textiles have the potential to be recycled or reused, less than 12 percent are ever recycled into new products with less than 1 percent recycled into new fashion products. Textile-to-textile recycling, the process of mechanically and/or chemically breaking down used textile waste to create new fashion products, is acknowledged as a critical component transitioning the fashion industry from linearity to circularity, but has not been achieved at commercial scale to-date. The failure to recycle textiles contributes to a $500B economic opportunity loss from the lack of capitalization of circular methods, presenting a major opportunity for new entrants.
Targeting Waste Streams: Man Made Cellulosic Fibres
As the circular economy becomes more prevalent, notable industries like food and agriculture have identified scalable revenue streams by diverting waste such as biological substances into new products. Unlike food waste, the complex chemical compositions of synthetic, cellulosic, cotton, and bio-based fibres in textile waste can complicate the recycling process. This makes it important to identify specific fibre compositions for textile-to-textile recycling with high demand.
Man-Made Cellulosic Fibers (MMCFs) — which are fibres made from wood pulp — are growing in consumption at a faster rate than its two largest competitors, polyester and cotton fibres. MMCF make up 6 percent of inputs for the global fabric supply chain, with demand expected to increase from $18B in 2022 to exceeding $28B by 2027.
Because MMCFs are made using plant-based fibres, rather than fossil-fuel-derived ones, manufacturers and consumers will often assume this fibre is a more sustainable alternative. However, the manufacturing process for MMCF uses chemicals, large amounts of water, and often wood pulped sourced using unsustainable forestry practices. Therefore, the assumption that these wood-based fibres are sustainable — and do not need to be recycled — is far from accurate. MMCF textiles, similar to synthetic and other forms of textile waste, currently lack an established, scalable recycling process, leaving a gap where new entrants can create a truly circular input in the garment manufacturing supply chain.
Innovative companies are leveraging pre-existing capital assets and processes to capitalize on the circular economy
The Decline of Paper and Pulp Manufacturing
Canada’s paper and pulp (P&P) manufacturing industry employs over 34,000 people, generating approximately 22 billion dollars in revenue annually. P&P manufacturers produce a wide range of paper products, including printing paper, tissue paper, packaging materials, and cellulosic pulp — which is the raw material used to make paper.
With an overall transition to digital formats for information sharing, the P&P industry has seen a significant decline in recent years. Amidst varying trade policies, concentrated competition in the domestic market and increasing competition from global players, the Canadian P&P industry has seen revenues decline by 6 percent annually from 2018 to 2023, while industry profits have declined by 13 percent over the same period. Though industry profits are expected to stabilize at around 10 percent, revenues are expected to continue declining at 4 percent annually through 2028. Overall, this continued decline is driven by a secular decline in demand, the downstream impacts of slowing demand in the newsprint industry, and expected declines in exports to the United States.
Existing paper and pulp manufacturing companies are uniquely equipped with capital-intensive assets as well as land, cash, and low debt to invest in future innovation. Facing decline, major forestry companies have sought opportunities for revenue diversification, notably through bio-based materials.
An industry that was previously focused on meeting demand through capacity maximization and cost cutting is now in a race to create new revenue channels; the textile industry, which is seeking sustainable fibers, could represent a fitting opportunity. Given Canada’s extremely small fiber and textile manufacturing industry, there is low direct North American competition for new entrants.
Case Study 1: Renewcell takes over abandoned SCA manufacturing plant to make fashion circular
We are already seeing comparable innovation in fibre recycling, for example, with the Swedish sustaintech company, Renewcell. In 2016, Renewcell, opened their first industrial scale plant and laboratory used for extracting and recycling cellulose from discarded clothing. Their dissolving pulp, Circulose® is a 100 percent recycled, plug-and-play input for viscose fibre producers and has been piloted in products for H&M, Zara, Ganni, and Tommy Hilfiger.
In 2021, the company acquired their second factory for a commercial-scale site for textile-to-textile recycled cellulose pulp. The facility Renewcell acquired was SCA’s abandoned paper printing facility, which ceased operations due to the declining demand for paper products. Renewcell was able to adapt the plant’s capabilities for cellulose pulp processing to transition the facility into the largest chemical textile recycling plant of its kind.
The SCA plant was described as an “ideal site” to build textile-to-textile recycling by CEO Patrick Lundstrom: “Sundsvall and Ortviken are an ideal place for us to establish our new plant. Since our recycling process is based on traditional pulp technology, almost all the infrastructure we need is already in place. The most important thing, however, is that there is a lot of great expertise in the area”.
Renewcell’s story showcases how commercializing large-scale circular solutions is less about groundbreaking science, but more about sourcing and leveraging existing resources.
A Strikingly Similar Process: Chemical Recycling for MMCF
Chemical recycling is a promising and emerging field in textiles, being on the brink of commercialization for materials like polyester and cellulose. For cellulosic fibres, the process involves extracting the cellulose from textile waste and supplying the fibres as a raw material for textile manufacturing or dissolving pulp as a raw material for fibre production. The paper making and waste recycling processes are similar in their chemical and mechanical breakdown processes, demonstrating the ability for existing P&P factories to redistribute capacity within the struggling industry.
Get Rubainasingla’s stories in your inbox
Join Medium for free to get updates from this writer.
Main steps of paper and pulp:
- Preconditioning (breaking down of wood into smaller parts)
- Addition of pulping chemicals
- Use of a digester to create pulp
- Use of chemicals to separate paper pulp from residual chemicals
- Drying the pulp to create sheets of paper
Main steps of cellulose recycling:
- Sorting textiles (done by textile recycling facilities)
- Mechanical removal of buttons, zippers and shredding into small peices
- Solvents (chemicals) added to remove contaminants and create pulp
- Dry the pulp to create sheets of dissolving pulp and then fibers/yarn
Large players in P&P and textile manufacturing are exploring textile waste as a new input for pulp and dissolving pulp, particularly in Europe. Sodra, a global forestry group leader, recently launched OnceMore®, a pulp made of blended cellulose from textile waste and trees, which leading global cellulose fibre manufacturer, Lenzing, is using to launch a new version of its best-selling Tencel™ material. This collaboration showcases how the P&P industry supporting the textile industry creates value for both parties: P&P manufacturers diversify revenue streams by repurposing existing facilities while creating a more sustainable raw material to reduce the fashion industry’s growing environmental impact.
Key Challenges
1.Scale continues to be a challenge as it involves long-term commitment from suppliers and buyers and requires lofty capacity enhancements. Notably, while over 42M annual tons of cellulosic waste are expected to enter landfill by 2030, companies like Renewcell are working to service 250,000 tons of annual capacity or less. With over 6 millon tons of estimated demand annual demand for recycled MMCF, Renewcell will service less than 0.5% by 2030, in a best case scenario.
2. Further, sorting facilities are struggling to automate their manual processes to meet the demand for textile waste as an input in the garment recycling process. In 2022 in Euope, sorters were only able to process 560,000 tonnes of waste, less than half of the 1.3 million ton capacity of textile recyclers and less than 30 percent of total textile waste collected. Data is not available for North America, but likely to follow similar capacity trends and bottlenecks due to sorting. Currently, the supply of textile waste is improving through technological investments in sensor-based technology, RFID and blockchain lifecycle tracking, and legislation for textile sorting.
3. Quality is a large concern given the lack of homogeny within the garment waste stream. Textile sorting is not only a manual and inefficient process, but the chemical recycling process bares complications due to the inconsistencies in feedstock composition. The quality of the output is directly harmed by garment inputs that contain traces of non-cellulosic or synthetic material. Without at-par or higher quality than virgin, recycled alternatives will not be adopted in the fashion market at-scale. For this reason, innovation will be key to scaling up circularity in fashion. New entrants can differentiate through improved sorting mechanisms or chemical processes that do not compromise on quality.
4. The availability of renewable energy and low-impact, low-cost processes present a challenge for at-scale textile recycling. Companies in Sweden, such as Renewcell, function on 100% renewable energy and de-contaminate water before returning it back to nature. New entrants must examine their energy inputs and process by-products to avoid harmful impacts, and this will require upfront and long-term investment. Luckily, there are many current advancements in technology for low-impact cellulosic processing.
Canadian P&P Manufacturing Can Make Strategic Investments in Textiles
The Canadian government has implemented initiatives to support innovation toward a circular economy, including research and development funding. Notably, the Canadian government is implementing the Clean Growth Program, which provides $150 million to businesses contributing to more sustainable supply chains. The government is keen to support Canada’s large P&P industry, as seen with the government’s Pulp and Paper Green Transformation Program. The availability of these grants combined with the Canadian government’s commitment to supporting this industry uniquely positions Canadian P&P manufacturers for innovation in recycling processes.
The following implementation aspects can help large P&P leaders find revenue streams in textile-to-textile recycling. Paper Excellence, Canfor Corporation, West Fraser Timber Co. Ltd. and Domtar Corporation are examples of large Canadian players who can benefit from these plans. Instead of relying on startups like Renewcell to recycle the fibres to reconfigure discontinued P&P plants, the manufacturers in Canada should directly make investments in new technology and perhaps even partner with these startups to scale their technologies.
1. Establish client relationships
The customers for recycled textile inputs are yarn and fibre producers, fabric manufacturers, and brands. These stakeholders are located across the world, but centralized in Asia and Europe and particularly China. These top players control over 60 percent of the viscose staple fibre market share, and any producer of fibre pulp should focus on appealing to these top companies’ sustainability commitments to establish long-term agreements for cellulose fibre prototyping.
2. Source waste streams
In order for a manufacturer to establish a sustainable recycling process, a sustainable waste stream supply is essential. Similar to establishing client relations, new recyclers would need to establish long-term agreements with sourcing and sorting facilities. Underdeveloped and fragmented textile collection streams limit the supply of textile to sorters. Through consolidated long-term contracts with collectors of textile waste from hospitality companies or garment manufacturers themselves, P&P companies can create economies of scale at the sorting stage and increase capacity utilization.
3. Finding compatible chemical processes and revamping plant space
A new textile recycling entrant would need to adapt existing equipment and processes while taking environmental impact into consideration. Having existing R&D teams and engineers partner with chemical engineers, a large P&P player could feasibly reconfigure their current operations for fibre recycling.
Additionally, there are currently a vast amount of textile-tech companies entering the market who lack human and physical capital to commercialize their ideas at-scale. On the other hand, large P&P manufacturing players have excess capital, but limited knowledge or expertise in textiles. Finding appropriate startups for partnerships can be easily done through the hubs for information exchange and non-profit organizations that have emerged. Some of these organizations include the Sustainable Apparel Coalition, Textile Exchange, Fashion For Good, Fashion Takes Action, Fashion Revolution, and Global Fashion Agenda. In Circular Economy, the Ellen Macarthur Foundation takes the lead and in sustainable forestry practices, with Canopy being a leading non-profit initiative. Canopy provides guidance to various forestry-connected industries on sustainable innovation and has insights on cellulosic recycling.
Conclusion
The crushing volume of textile waste, the increasing demand for viscose fibers, and the lack of existing large-scale circular processes in the fashion industry present a large value creation opportunity for Canada’s declining P&P manufacturing sector. Textile recycling as a commercially viable and diversified revenue stream for P&P manufacturers is exemplified through the success of innovators such as Renewcell. The similarity of the cellulosic recycling process and paper pulping process means that P&P manufacturers can leverage their strong pre-existing operations, excess capacity, and strong cash position to invest in textile-to-textile recycling. Given their established at-scale processes to transform raw materials like wood into pulp, P&P manufacturers can achieve cost advantages over newer start-ups to source textile waste as a raw material for their pulping processes. The demand and supply of textiles and textile waste is only growing, ultimately creating an opportunity for the Canadian P&P manufacturing sector to allocate their capital resources toward more sustainable and long term growth.
**This article was originally written for the Ivey Business Review in Spring 2023. Asima Hudani, Raymond Wang, Zoe Trottier, and Ariana Ghavami helped me edit & bring it to life!
More about me: My passion for circular economy began during my high school years, working as a floor associate at some of Canada’s top retail brands. This led me to not only change my consumption habits, but move to Sweden to work in sustain-tech, start a company (SINGLA), and support sustainability related research projects at my business school (Centre For Building Sustainable Value). I write here to share my learnings and maybe spark some new ideas. Thank you, for taking the time to read!!
— Rubaina
