Ep 152: Pushing the boundaries of EPR policy for textiles

Lou Waldegrave 00:03

Welcome to the Circular Economy Show. I'm Lou. And today's hot topic is centred around the massive challenge of global used textile waste. We're exploring how through collaborative efforts, we can secure international agreements for policy and infrastructures that allow EPR, that's Extended Producer Responsibility, to work fairly and effectively across all geographies, and open up opportunities to create a circular economy for the collection, sorting, reuse, and recycling of used textiles. I'm very pleased to introduce Anjali Krishnan, the Programme Manager for IDH Alternate Materials in India, and Tomás Saieg, Head of the Circular Economy Office in the Ministry of the Environment for Chile, and Matteo Magnani, co-author of the Foundation's report "Pushing the Boundaries of EPR Policy For Textiles". We're going to talk about this invaluable tool in the powerhouse kit of the circular economies arsenal. Hi, Anjali.

Anjali Krishnan 01:10

Hi, Lou.

Lou Waldegrave 01:11

Hi, Tomás.

Tomás Saieg 01:12

Hello, nice to meet you. Happy to be here.

Lou Waldegrave 01:17

And then of course last but not least, my buddy and colleague, Matteo Magnani, who's a Senior Policy Analyst here at the Foundation. So without any further ado, let's cut to the chase. Matteo, what is EPR? And why do we so desperately needed?

Matteo Magnani 01:34

Hi, Lou. So the vast majority of textiles and by that I mean clothing, shoes, and also household textiles are wasted after they get discarded. So that means they're either landfilled or incinerated, or even sometimes leaking into the environment. And why does that happen? That happens because they are delivered with single sale linear business models that don't keep them in use at all happens because they're not durable enough. So people discard them very soon. But also it happens because we don't have the infrastructure to collect, sort, reuse and recycle these textiles. So EPR, or extended producer responsibility is a policy that helps build that infrastructure where it is missing. So basically, how are we building that infrastructure, it takes money to build the infrastructure. And instead of taking the money from governments, municipalities or citizens with EPR policies, it is the producers, which in this case are brands or retailers, it is the producers that are responsible for that financial contribution towards the infrastructure. And in practice, what that means is that every single product that is placed on a country's market is also attached to a fee, that the producer so the brands and the retailers are paying in order to manage those tax cells after they're discarded.

Lou Waldegrave 03:09

Tomás, I'll come to you if I may. What could be the circular economy opportunities if we established DPR for the reuse and recycling of fabrics in Chile?

Tomás Saieg 03:21

Well, the first thing I would say is that I think this is an issue that must be solved internationally. And I think that's that's kind of happening, I have been in contact with different groups working on the issue of textiles. And for Chile it will be very important that although we're not a producing country, in terms of most of our textiles, we import them, we generate a lot and our consumption has really increased in recent years in a lot of the inputs that come into Chile are used clothing, of which more than half is discarded. So we have a range of issues to control, the importation to lower the consumption rates, and of course, to recycle more and reuse more. And I think EPR is a tool that enables you to do all of those. EPR is often thought of as a policy to just increase recycling and that's that's how it was born. And but I think EPR for textiles should really go to the upper levels of the waste hierarchy and focus on reducing consumption and also focus on promoting reels promoting better quality clothing, and also recycling but it's really important, I think, to understand that, at least currently, recycling of textiles is not really easy. So I think I think really reuse is important.

Lou Waldegrave 04:48

I asked Anjali what she thought the circular economy opportunities could be if we established EPR for reuse and recycling in India, which was a big importer of you to textiles also has strong exports.

Anjali Krishnan 05:03

Thanks, Lou. So you're right about one thing that India is an importer. Yes, but we are a huge producer of textiles and apparels in the country. We also are one of the leading now consumers, and that's going to grow over the coming years. So the way we are looking at it here is there is, of course, a strong environmental agenda, because you have production in the realm of about 2% of the total GDP of the country of exports and about 12% in the country. So what you're looking at is in terms of sheer numbers, you have 45 million people who work in textiles, and you have 4 million who work only in the waste textiles. So with these numbers, anything we do with EPR is going to have a massive impact. Yes, there's an environmental impact, you're going to have a lot in terms of reduction in GHG (Green House Gas) footprint, carbon reduction, process efficiencies, that's all going to be there. But it's also going to be a huge impact in terms of job creation in terms of business opportunity, in terms of compliance, because the way it's set up in this country, though, we have a history of recycling, we have a history of production, we have a very informal, we have a very semi formal, fragmented supply chain. So what that means is that you have no transparency, you have no traceability, compliance, on a lot of parameters are not up to standard. So anything we bringing in terms of regulations, whether it's through EPR, is going to have a huge impact in decent work, it's going to have a huge impact when it comes to equity. And it's going to have a huge impact from a governance angle. So a lot of the burden which used to be sitting on municipalities for quasi waste management will now be shifted to the producer. So that means that there is more funding and finances for like community development. So for India, there is a strong environmental footprint, which is clear just based on numbers, there is a strong social footprint, and there's a strong governance angle. So I would say that it kind of covers the entire plethora.

Lou Waldegrave 07:11

Those were some figures 45 million working in the textile industry and 4 million and waste alone. It's... I wasn't prepared for that. But I'm sorry, I'm not the expert on EPR. Wow. Now, you mentioned the informal sector. And Tomás,I know in Chile, the informal sector is already doing a lot of circular economy things such as people collecting waste selling hands on and you know, preventing it leaking out into the environment. How can we ensure equity for these people and include EPR in those markets?

Tomás Saieg 07:46

That's a good question. Well, for starters, I think it's really important to include them in the design of the regulation in the face of design in Chile, or EPR. Law is a framework law. But when we as Minister of Environment want to establish shipyard for a given product, we have to do a process participatory process and then dictator degree with goals and then EPR starts for this. And for textiles, this is the role that we want to work. We're in the studies phase now we don't yet have EPR for textiles, but we plan to an end if we want to include bass recyclers and informal workers, I think including them in the process is key. And in for this specific sector, I think really, who I think should be included in what where are the opportunities in terms of social impact of EPR for textiles? I think it's it's not really or not, especially waste pickers. I think it's more people who repair clothing with artisanal means in, you know, as a self employed people, and this is, of course, this happens in every country, but it's not so formal in Chile, and I think this is an opportunity to formalise it and to incentivise it with things such as establishing a rule in EPR that says that clothing repaired by someone, for example, with a certification of clothing repair counts as a piece of clothing, which has been valorise and therefore counts for your goals, or that's one example. But it could be others. But I think that that's a very good opportunity in in this specific EPR.

Lou Waldegrave 09:38

Matteo, did the report pick up on any of the slight the key barriers to success and how we might be able to implement that sort of equity?

Matteo Magnani 09:47

Well, firstly, we are really strong in saying that EPR shouldn't be seen, as it's been seen in the past purely as, as a mechanism to improve recycling. Of course it is. is very important to improve things like separate collection rates, we need to make sure that textiles are treated by countries and by municipalities a bit like we're currently used to treating plastic packaging, or electronic products. That means separately collecting them. So be like we have a bin for for plastic products, we're going to have ways to return textiles to operators that are going to collect them. That's very important. And then we need to ensure that these textiles are sorted. And now we have some sorting infrastructure. globally. In our report, we dive into a few countries that have some of it. And it can be of many different kinds. In Europe, or in the US, we have not nearly enough sorting centres specialised in separating, for example, reusable textiles, from recyclable textiles, from waste textiles. And in countries, such as India and Chile, we have systems that are a bit more informal, as Tomás was saying. And EPR is an opportunity to bring these informal operators that are already enabling the circular economy into a more formalised and efficient effective system. But of course, EPR is not only about creating a collection, sorting infrastructure, we also wants to use EPR, as a way to incentivise the circular economy at large, we know that in a circular economy, it's very important to keep clothing in circulation for as long as possible. And it's very important to design clothes that last for longer. And because the producers or the brands and retailers in this case, are going to have to pay in order to put products on the market. Actually EPR can be designed in such a way that producers can pay a little bit less or not at all, if their products are designed according to circular economy principles. That's what in jargon we call eco modulation. And even more than that, we could incentivise circular business models such as repair, as Tomás was saying, but also reuse or rental with EPR fees. So producers are going to pay less if they put, for example, less products on the market in a linear way. But with circular business models, so absolutely.

Lou Waldegrave 12:24

So what are the biggest barriers to the successful implementation of these measures?

Anjali Krishnan 12:30

Um, that's a good question loom very honestly. I mean, there are the big pieces like like Tomás and Matteo mentioned, you have your informal structures, lack of infrastructure, that's all there. But the way I see it in India, the biggest bottleneck is honestly the collection and sorting, because there is a demand and there is a growing demand. That's clear, you know, consumption, we want more fast fashion in the sense of more and more clothes, more textiles more peril, but the land is not capable of delivering when it comes to virgin. So there's a huge supply and demand gap, which is not going to go away anytime soon. So what ends up happening is that there has to be an alternative source, where I feel this is where EPR will play a big role in making sure that is that alternate source that comes in. And when that does come in without good sorting mechanism and aggregation mechanism, it's not going to go anywhere, because technology has not developed enough to handle all types of compositions, there is nothing at scale that can tackle it. So if you want to build something at scale, you need feedstock, but you need feedstock can only go if there is technology at scale. So you see it's a bit of a catch 22 that we are at an at this moment. So the way I see it, if we can control the bottleneck, which is the raw material access and sorting, then it will have a market and it can... technology can evolve. It can scale because there is raw material, which then can of course enable greater access to organic materials to cover the shortfall of demand. So that for me, this moment is our biggest bottleneck.

Matteo Magnani 14:15

And Anjali, you mentioned ultimate materials as a bottleneck. But, for example, in our analysis in the report, we've seen how much textiles are imported into India and by this I mean use textiles. But of course India also has a huge population that generates also textile waste themselves. How do you see India's forward textile industry relying on both these sources of recycled feedstock?

Anjali Krishnan 14:51

So I will say that it's actually going to change currently there is no system to handle postconsumer domestic waste, mainly because it is considered there is also a behavioural angle where it's considered a contaminated or not good quality, which may be the case in some cases. But with imported waste, there are certain policies, we cannot import the waste and then use 100% of the waste, a good portion of the waste good 50% at least is re exported to a lot of other countries, including a lot of countries in Africa. So, the challenge that we face is we use that 50% that gets into reuse market in India. But there is little to no usage of post consumer domestic material that gets recycled, that usually gets landfilled or incinerated. So, that is the big issue. And I see foresee at least that there are attempts to rectify that, at least in terms of trying to build some processes to bring in post consumer waste back into production, which again, is starting at that collection stage. And it's starting at the aggregation stage.

Lou Waldegrave 15:58

Tomás, use you facing the same challenges as Anjali in India? Or is it a different set of challenges for Chile?

Tomás Saieg 16:08

I think it's a different set of challenges. Some are common, but definitely India has the whole value chain of textiles present in its economy. And it's a large part historically. So in in Chile, we used to have a very vibrant textiles producing sector. But with the opening of, of trade, really the local industry dwindled. And now it's, I would say more than 90% of the textiles we use, we import them. But we still have a common problems, of course, are the problem of reducing consumption. At least, I think I think that's a worldwide problem really come to all and of course, increase increasing recycling rates. In for us Chile, maybe maybe one problem that is very particular to us is to have a better control of the importation of use clothing. This is a big issue. That is really it's been difficult to control. There's been efforts in the last years. But I think, really, the key here is to have stricter norms of what can be imported and what cannot be put it into work with international partners. And we're doing that. And I think the basic idea is to make sure that whatever you import must have some sort of sort of sorting at the source and then be sent just don't try to stop this, just collect clothing. And then without any sorting, or any anything, just ship it. I think that's that's what's problematic, at least for Chile. And that's what we want to really control.

Lou Waldegrave 17:54

So, I was gonna ask you, what do you need to overcome these challenges? But st you need international collaboration, don't you and a ground set of rules that evens the playing field? To be honest.

Matteo Magnani 18:05

Yeah, and I would say you need to start with EPR. Because Tomás mentioned, the current fact that countries like Chile are importing a lot of used textiles. Those textiles come from countries that right now don't have extended producer responsibility for textiles in place. Actually, we've got only a handful of countries with such a policy in place. There's France, the Netherlands, Hungary right now. And there's some that are implementing it as we speak. And why is it very important to implement EPR to solve the problems that Tomás said. EPR, even just by being there, it creates a lot of transparency over all the clothing and household textiles that are placed on a country's market and on what happens to these textiles after they are collected. So for example, if we have absolute clarity about what happens to this clothing, and how much of it is exported, we can also ensure that the appropriate amount of funding and which is going to be taken from from the fees effectively, is directed to the operations that are going that are going to make sure these tax cells are recirculated. And here I would actually mention the fact that in the report, we're also saying that today, actually PR schemes are not very good at doing that. They're not very good at accounting for this scenario in which some taxes are exported. What we need instead is a way to sort of make sure that the funds that are collected in a given country are used to manage the textiles regardless of where they need to be managed, regardless of where they need to be collected, sorted, recycled, which may also mean implementing some sort of way to transfer funds between countries.

Anjali Krishnan 20:02

You brouhgt a very interesting point material, one of the biggest challenges that we always face is the financial constraint. Because the amount it would cost for us to store the waste, and then transport it across the country as large as India is not worth the price. And it's cheaper to consider forgotten landfill, incinerate, get rid of it, and keep that warehouse space for something else. So when these financial constraints are there from one side, and on the other side, they're in an informal setup, you don't have access to formal capital. And that is a reality. So what organisations do in the value chain is if you're informal, you rely on informal loans. And those come with high interest rates. Those come with a lot of other caveats, which causes a lot of impact on livelihoods. So EPR, coming in, from a financial angle will be beneficial, not just for those which are formally set up, but for the informal to become professional, and then formal, it will be extremely beneficial from that angle.

Matteo Magnani 21:07

Yeah. And actually, if I may, lou, this is my point. I may. This is a point that in the in the report, we call making the economics work, because I think the market usually makes things happen. If the economics work, if something is profitable, then investors are going to invest on it, actors are going to want to be in that business. But as Anjali said, in India, this is not the case. Currently, it is much cheaper to do the wrong thing than to do the right thing, which is collecting, sorting, reusing, recycling textiles, and EPR is a tool that can help those economics be more in favour of the right thing rather than the wrong thing.

Lou Waldegrave 21:50

Tomás, if I could just come back to you, because you in Chile you do have a framework for EPR. Could you tell us more about that, and how far away it is from the implementation of us textiles?

Tomás Saieg 22:05

Sure. Yeah, we have a framework, a law for EPR, that was published in 2016. In the law mandated the creation of EPR for six priority products, right, and these are packaging, tires, batteries... actually, we have two words for for batteries: "pilas y baterias". So it's actually just batteries in English. So in English, we would be fine and then other electronic equipment and lubricating oils. We always have EPR functioning for packaging. And for tires. It actually started last year, last year was the first year with working EPR with goal with EPR rules functioning and so on so forth. In for the other products, lubricating oils, and all the electronic and batteries world, we have started regulatory processes. And for all of these actually we have published like not not final versions of the decrees but proposed versions of the degrees for public consultation. In the case of textiles. We are in an earlier phase, right. So we have not officially started our regulatory process. But we have conducted our premium study, which actually finished last month. And I hope we will be able to start a regulatory process next year. And then that means that maybe in perhaps two years, we can have an EPR degree published. And then this means EPR actually starting, we're thinking something like 2028 or I would make a guess.

Lou Waldegrave 23:52

So on this very positive note of progression, or went for the biggie and concluded our conversation by asking our guests how we get international buying, while ensuring equity infrastructures across all global borders.

Matteo Magnani 24:08

That's a million dollar question, Lou. I can I can maybe start by mentioning the fact that it's great to see some countries stepping up and starting to put EPR into legislation. We have the European Union, that is probably going to end up with a new Revised Waste Framework Directive that includes EPR as mandatory provision for all 27 EU member states. It is very important that countries don't do this in in isolation. Well, of course, we hope that our report will be read by as many policymakers and policy stakeholders as possible so that these countries can start to implement tax EPR for textiles in a similar and coordinated way. But also learning from the mechanisms that are starting to sprout for plastic packaging, we're seeing the UN Global plastics treaty. And the fact that in these rounds of negotiations, we're seeing EPR being mentioned as a potential tool to govern the use of plastics all over the world. In a similar way, we need to see something happening for textiles, perhaps even as part of the treaty. Why not? Because after all, more than 60% of textiles are made of plastics.

Lou Waldegrave 25:29

Wow, yeah. We forget that. What do you think we need Anjali.

Anjali Krishnan 25:35

So for me, the immediate thought that came to mind is it is a balancing act of local priorities with these global standards that are coming in. Because the socio economic cultural framework that a lot of the Global South manufacturing cob countries sit in is very, very different from what it is where it will go to buying countries like like the US or the EU. So if you're looking at anything from international buying, that has to be that dialogue between various EU states also with the Global South to understand that it aligns with what works for the global south in manufacturing as well. So let me give you an example. If we say in the coming ESP or any policy that is there, there has to be X percent recycled material that is put into the garment that is completed. And in order to access that you need the infrastructure. And tomorrow, Global South countries are not equipped to set up that level of infrastructure, technical capacity building, going from informal to formal, it is a long drawn process. So I feel it's very important that knowledge sharing dialogue happens. Because no EPR system, EPR policy can be built in isolation and can succeed, given the global trade that occurs on textiles.

Tomás Saieg 27:03

And I was thinking, we should think of barriers for a circular economy and textiles and then barriers of EPR protects us because I think we cannot lose ourselves in in this whole thing. Like, the goal is not EPR protects us the goal is circular economy for textiles and EPR is a tool that can accomplish a lot of the this goal. But I think if if the tool becomes the end, then it hides very important things such as a cultural shift that needs to occur really, in how we relate to clothing and how much clothing we consume, and how often we think we need to change clothing and in which quality our clothing is when I make the decision. This is no longer good for use. And I think this is really the base change, because we just have too much clothing now. And I think it needs to diminish. Having said this, I think the main barrier for EPR. I think what one big barrier, but which is reciting is lack of prior experiences, I guess it's much easier to do an EPR when you have 20 countries, that you can look at their experience and their legislation and then copied if but for Texas, it is so new that the countries that are doing it are really pioneering the work. So I think that's that's one but it's residing. And I think another big one is the difficulty of recycling textiles is is really a difficult material, right? It's not like metals, is easier to down cycle. And there are many applications in that. So I think it's a problem that you have to tackle from from the design and the recycling ends. At the same time. EPR for textiles should promote easier to recycle clothing as well as make sure that the infrastructure for the recycling is is there. But again, I think EPR for textiles and so let me add this because Matteo said it and I think it's important, should not mainly be about recycling should mainly be also about reusing this case, large opportunities for reuse in textiles and repair.

Lou Waldegrave 29:23

And the very important point you made at the start of that that is a tool within the circular economy for textiles.

Matteo Magnani 29:32

I mean, it's one tool within a set of tools. I would say we're not saying EPR is the silver bullet or is the solution to all evil of this industry. We also need product policies that complement EPR product policies or policies that mandate every brands to comply with minimum design criteria. For example, minimum durability, recyclability, material health criteria. We also need to simplify some of the regulations that are currently in place on the definition of what is waste, and what is a US tax sale, a lot of the issues that we're seeing now is are due to the lack of, or the confusions around such definition. So we need to be clearly able to distinguish what is a used textile that is reusable? And what is the use textile of that is recyclable. And what is something that can only be wasted because there is no use. So EPR is a tool within a tool box. And we need to meet do several things. Of course, EPR can be the starting point for many governments around the world.

Lou Waldegrave 30:41

Thank you so much to all three of you for joining me today. Anjali Tomás, it's been a pleasure discussing the challenges and successes India and Chile are navigating as both countries drive towards a circular economy for textiles. Matteo, thank you so much for sharing these invaluable insights from the Foundations report pushing the boundaries of EPR policies for textiles, which is out now and must read. And thank you for joining us today for the Circular Economy Show. Don't forget to like and subscribe wherever you listen to your podcasts. See you all soon.