Circular Economy in the Finnish Textile and Fashion Industry

For the textile and fashion industry, the transition to a circular economy requires changes throughout the value chain – from product design and material choices to production, consumption, reuse, repair and recycling. Finnish textile and fashion companies are developing new solutions, technologies and business models to support this transition.

From linear to circular – keeping products and materials in use

The traditional linear economy is based on extracting resources, manufacturing products, using them and eventually discarding them. This model consumes large amounts of natural resources and generates waste.

A circular economy aims to break this pattern. Products are designed to remain in use for longer, and their value is maintained through durability, reuse, repair, refurbishment and new business models such as resale, rental and product-as-a-service. When a product can no longer be used, its materials should be recovered and recycled into new products whenever possible.

Circularity therefore requires cooperation across the entire textile ecosystem, including brands and manufacturers, retailers, consumers, service providers, collectors, sorters, recyclers and technology companies.

The goal is to use resources more efficiently, extend the lifetime of products and materials, and create new value from resources that are already in circulation.

Image: In a circular economy, products and materials are kept in use for as long as possible through durable design, reuse, repair, new business models and recycling.

A changing regulatory environment

Circularity is increasingly becoming part of the regulatory framework for products placed on the EU market.

The EU Ecodesign for Sustainable Products Regulation (ESPR) enables product-specific requirements related to areas such as durability, repairability, recyclability, recycled content and product information. Textiles are among the priority product groups under the ESPR Working Plan 2025–2030.

The regulation will also introduce Digital Product Passports for textiles. The passport will make relevant product information more accessible throughout the value chain and can support repair, reuse, recycling and regulatory compliance.

The European Commission currently plans to adopt textile-specific ecodesign and Digital Product Passport requirements in 2027. The detailed requirements and their application dates will be defined in the forthcoming delegated act.

Textile Extended Producer Responsibility

Extended Producer Responsibility (EPR) will significantly change the way used and discarded textiles are managed in Europe.

The revised EU Waste Framework Directive introduces mandatory and harmonised EPR schemes for textiles, textile-related products and footwear in all EU Member States. Under the new rules, producers placing products on the market will contribute financially to the collection and management of used and waste textiles.

The producer fees will finance activities such as collection, transport and sorting, preparation for reuse and recycling. The fees will also be linked to sustainability and circularity criteria, creating incentives for products that are more durable, repairable and recyclable.

For companies, the new system will mean new responsibilities related to producer registration, reporting and financing the end-of-life management of products. At the same time, it can strengthen the infrastructure for textile reuse and recycling and support the development of a more circular textile economy.

EU Member States must transpose the new rules into national legislation by June 2027 and establish textile and footwear EPR schemes by April 2028. The detailed implementation of the system in Finland is therefore currently being developed.