Textile Recycling Market Expands Across APAC, Europe, USA, and Saudi Arabia as Global Circular Economy Takes Center Stage, FMI Forecasts USD 7 Billion Valuation by 2035

According to Future Market Insights (FMI), the global textile recycling market is projected to grow from USD 5.1 billion in 2025 to USD 7.0 billion by 2035, reflecting a CAGR of 3.2%. This steady expansion underscores a global shift toward circular fashion models, sustainable waste management, and carbon-neutral textile production. FMI’s new study identifies Europe and North America as leading markets, with Asia-Pacific and the Middle East—particularly India, China, Japan, South Korea, and Saudi Arabia—emerging as next growth frontiers.

Circular Fashion and Policy Reforms Power Global Growth

Across mature and emerging economies alike, stringent regulations and evolving consumer attitudes are reshaping how textiles are produced, consumed, and disposed of. Global policies such as Extended Producer Responsibility (EPR) frameworks and mandatory textile waste collection systems have accelerated recycling adoption.

In Europe, textile waste is being rechanneled through structured EPR schemes in Germany, France, Italy, and the United Kingdom—all prioritizing low-waste, high-value reuse. Meanwhile, North American initiatives, including state-led take-back programs and fiber recovery investments, have helped position the United States as a vital player in textile circularity.

According to FMI, these developments are driving brands to incorporate higher volumes of recycled fibers, ensuring compliance with sustainability mandates and meeting rising consumer expectations for ethical apparel.

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Apparel Waste and Cotton Recycling Lead Market Share

Apparel waste—including post-consumer clothing, manufacturing offcuts, and unsold inventory—will continue to dominate the global recycling input stream, accounting for 56% of the market share in 2025 and projected to grow at 3.3% CAGR through 2035. Fast fashion trends and low garment utilization have made apparel a significant source of recyclable materials.

Meanwhile, recycled cotton remains the most widely reused fiber, projected to represent 38% of market share in 2025. Cotton recycling benefits from high availability in both pre- and post-consumer waste, as well as its compatibility with mechanical and chemical regeneration processes. Recent advances in fiber-to-fiber recycling and chemical depolymerization have enhanced material quality, reducing dependency on virgin fibers.

FMI notes that the evolution of wet spinning, hydrothermal, and enzyme-assisted regeneration technologies will play a defining role in scaling circular textile production globally.

Regional Insights: Market Growth Momentum Across APAC, Europe, USA, and Saudi Arabia

United States

FMI projects U.S. textile recycling revenue to reach USD 1.29 billion by 2035, expanding at 2.8% CAGR. The surge is driven by 5G-enabled smart sorting facilities, increasing corporate sustainability commitments, and expanding take-back programs across major fashion retailers. Rising investment in automated material recovery systems is expected to improve process efficiency and quality consistency.

Europe

Europe remains the epicenter of textile circularity, with a combined CAGR of around 3.3% across the region.

• Germany leads with 3.5% CAGR, backed by AI-enabled sorting and advanced chemical recycling.
• France, growing at 3.4% CAGR, benefits from EPR enforcement and bans on textile destruction.
• Italy’s 3.1% CAGR growth is supported by luxury fashion embracing closed-loop materials.
• The United Kingdom continues to strengthen partnerships between brands and recyclers to support nationwide collection systems.

Asia-Pacific

Asia-Pacific is emerging as the fastest-growing regional hub, supported by industrial-scale fiber recovery and innovation-led policy.

• China is projected to reach USD 1.49 billion by 2035, with 3.8% CAGR, as it integrates recycled fibers into large-scale manufacturing.
• India, expanding at 4.0% CAGR, is prioritizing textile waste segregation and fiber-to-fiber recycling under national EPR frameworks.
• Japan (2.9% CAGR) and South Korea (3.6% CAGR) are advancing smart recycling technologies through robotics and AI-based material recognition.
• Australia & New Zealand, though smaller in scale, are advancing regional collaboration for sustainable apparel sourcing, expected to reach USD 0.32 billion by 2035.

Middle East (with Focus on Saudi Arabia)

The Middle East textile recycling market, led by Saudi Arabia, is gaining momentum as part of Vision 2030 sustainability goals.

Government initiatives promoting industrial waste valorization, coupled with foreign investment in circular economy infrastructure, are catalyzing demand.

Saudi Arabia’s growing apparel manufacturing base and focus on eco-friendly materials are expected to accelerate domestic textile waste recovery through 2035.

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Challenges: Cost, Infrastructure, and Material Traceability

Despite clear momentum, FMI emphasizes key challenges restraining scalability:

• High processing costs linked to collection logistics and sorting inefficiencies
• Lack of unified recycling infrastructure across developing economies
• Quality inconsistency of recovered materials
• Limited consumer participation in take-back programs

Addressing these issues requires public–private collaboration, digital traceability platforms, and investment in localized processing clusters to reduce dependence on exports for waste handling.

Opportunities: Automation, AI, and Bio-Based Recycling

Technological innovation remains the cornerstone of next-decade growth. FMI projects significant value creation through:

• AI-based sorting and robotic classification of mixed textile waste
• Chemical regeneration processes capable of recovering polyester–cotton blends
• Blockchain-integrated tracking for transparent fiber provenance
• Bio-based solvents and enzymatic depolymerization for low-carbon recycling

These advancements will enable brands and recyclers to meet net-zero goals while ensuring traceable, scalable recycling across diverse textile types.

Global Industry Outlook: Partnerships and Circular Value Chains

Industry collaborations are accelerating transition toward full circularity.

• In July 2024, a pilot fiber recovery line was launched in China using wet spinning and chemical regeneration to industrialize textile-to-textile recycling.
• In August 2024, new recycled product lines featuring traceable post-consumer polyester were introduced to the global corporate apparel sector, reflecting growing brand accountability.
• In April 2024, U.S.-based partnerships advanced hydrothermal fiber separation technology for large-scale blended fabric recycling.

Such efforts underline the industry’s collective movement toward traceable, high-performance recycled textiles that reduce landfill dependency.

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About Future Market Insights (FMI)

Future Market Insights, Inc. (FMI) is an ESOMAR-certified, ISO 9001:2015 market research and consulting organization, trusted by Fortune 500 clients and global enterprises. With operations in the U.S., UK, India, and Dubai, FMI provides data-backed insights and strategic intelligence across 30+ industries and 1200 markets worldwide.

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