Why the circular textiles industry needs life cycle assessment
Author: Paul-Antoine Bontinck
The textile industry is a significant contributor to human-induced climate change, representing 5–10% of global greenhouse gas emissions (Climate Council, 2021; Leal Filho et al., 2022). Beyond carbon, the sector drives water depletion, eutrophication, fossil resource consumption and chemical pollution across complex, globalised supply chains.
It is also growing fast. Between 2000 and 2024, global fibre production more than doubled — from 58 million tonnes to 132 million tonnes (Textile Exchange, 2025). Supply patterns have increasingly favoured low-cost, short-term purchases, resulting in chronic overproduction and short product lifespans. An estimated 30% of garments produced go unsold annually (Circle Economy, 2024).
The regulatory shift
Governments are responding. The EU’s revised Waste Framework Directive, in force since October 2025, requires all Member States to establish national textile EPR schemes within 30 months, with mandatory eco-modulation linking fees to durability, recyclability and material composition (European Commission, 2025). A ban on destroying unsold apparel will take effect for large companies from July 2026 under the Ecodesign for Sustainable Products Regulation (European Commission, 2026).
At the same time, the ISSB’s IFRS S1 and S2 standards now provide a global baseline for sustainability- and climate-related disclosures, explicitly calling for Scope 3 emissions transparency across value chains (ISSB, 2023). The direction is clear: brands producing short-lived, hard-to-recycle garments will face higher fees under the EPR schemes, while mandatory disclosure requirements will make environmental performance visible to the market.
Circular economy needs life cycle assessment
One approach championed by the industry is the transition to a Circular Economy — maintaining materials in the economy at their highest value through strategies such as product design for longevity, reuse, remaking and recycling at end-of-life. In some frameworks, such as the Ellen MacArthur Foundation’s Vision for a Circular Economy (2020), the use of renewable fibres is favoured, though others recognise that synthetic fibres cannot be fully phased out (UNEP, 2023).
While Circular Economy initiatives can appear to move the industry in the right direction, it is critical to consider the actual environmental effects of any new initiative. Life Cycle Assessment (LCA) can be used to model the complex supply chain of textile products and allows modelling of the effects of a proposed change. Fully integrating LCA into decision-making avoids negative trade-offs, where solving one problem at one point in the supply chain inadvertently creates new ones elsewhere in the system.
Natural fibres can exhibit lower fossil resource use but demand large volumes of water and require land for agricultural activities; synthetic fibres often have lower water footprints but higher climate impacts but the processing impacts of natural fibres such as cotton into a textile product can be significantly greater than for synthetic fibres. A narrow carbon-only focus and restricted system boundary risks burden-shifting across impact categories and life cycle stages (Moazzem et al., 2021). The OECD has noted that LCA offers the best available methodology for eco-modulation, as it captures burden-shifting across the full product life cycle (OECD, 2024). As eco-modulation criteria and ecodesign requirements take effect, the brands best positioned will be those with reliable, product-level LCA data underpinning their claims.
The rebound effect: why evidence matters
One striking example is the so-called ‘rebound effect’ in second-hand clothing markets. The increased availability of affordable second-hand garments — intended to extend product lifespans and reduce demand for new production — can actually lead to an increase in overall consumption. Research has found that frequent shoppers of second-hand clothing tend to buy more new clothes as well, a phenomenon sometimes attributed to ‘moral licensing’: the sense that a virtuous purchase justifies additional spending (Yerushalmi and Saha, 2025). A recent study quantifying this effect across the textile sector found a 155% rebound backfire, suggesting that circular economy innovations can, without proper safeguards, exacerbate rather than mitigate environmental pressures (Yerushalmi and Saha, 2025).
For instances like the rebound effect, LCA can be used to identify the break-even point — the threshold at which a circular strategy delivers a genuine net environmental benefit. In our work with Charitable Reuse Australia, Lifecycles developed the Environmental Conversion Factors underpinning the National Reuse Impact Dataset and the Reuse Impact Calculator. Using LCA modelling, we were able to demonstrate that even with a conservative displacement rate of 60% — meaning not every second-hand purchase replaces a new one — Australia’s charitable reuse sector still prevents an estimated 1.4 million tonnes of CO₂ emissions annually, equivalent to removing 585,000 cars from the road, while saving Australians $2 billion (Charitable Reuse Australia, 2025). That is the kind of evidence that separates credible circular strategies from well-intentioned guesswork.
What Lifecycles does in textiles
Lifecycles works across the textile value chain — from fibre to end-of-life. Our work includes mapping the environmental footprint of Australian-grown cotton, supporting major Australian retailers in understanding the footprint of their full product range across all SKUs, and providing detailed environmental metrics on novel recycling processes and advanced recycling infrastructure entering the market.
We also work with brands and startups seeking to upcycle textile waste streams into higher-value products, applying life cycle thinking to validate environmental claims and guide material innovation decisions. As EPR schemes increasingly reward products designed for longevity and recyclability, the ability to demonstrate — through robust LCA evidence — that reuse, upcycling and recycling pathways deliver genuine environmental benefit will become a critical differentiator.
Reach out to one of our LCA specialists if you would like to better understand your supply chain and define an evidence-based pathway to reduce the environmental effects of your products.
References
Carbonfact (2025) Overview of all textile extended producer responsibility (EPR) laws. Available at: https://www.carbonfact.com/blog/policy/textile-epr-overview
Charitable Reuse Australia (2025) National Reuse Impact Dataset. Available at: https://www.charitablereuse.org.au/education/charitable-impact/
Circle Economy (2024) The Circularity Gap Report — Textile. Amsterdam: Circle Economy.
Climate Council (2021) Fast fashion needs to slow down for the climate. Sydney: Climate Council of Australia.
Ellen MacArthur Foundation (2020) Vision of a circular economy for fashion. Cowes: Ellen MacArthur Foundation.
European Commission (2025) ‘Revised Waste Framework Directive enters into force’, European Commission — Environment, 16 October. Available at: https://environment.ec.europa.eu/news/revised-waste-framework-directive-enters-force-2025-10-16_en
European Commission (2026) ‘New EU rules to stop destruction of unsold clothes and shoes’, European Commission — Environment, 9 February. Available at: https://environment.ec.europa.eu/news/new-eu-rules-stop-destruction-unsold-clothes-and-shoes-2026-02-09_en
ISSB (2023) IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information; IFRS S2 Climate-related Disclosures. London: IFRS Foundation.
Leal Filho, W., Perry, P., Heim, H., Dinis, M.A.P., Moda, H., Ebhuoma, E. and Paço, A. (2022) ‘An overview of the contribution of the textiles sector to climate change’, Frontiers in Environmental Science, 10. doi: 10.3389/fenvs.2022.973102.
Moazzem, S., Daver, F., Crossin, E. and Wang, L. (2021) ‘Assessing environmental impact of textile supply chain using life cycle assessment methodology’, The Journal of The Textile Institute, 112(10), pp. 1574–1585. doi: 10.1080/00405000.2020.1830462.
OECD (2024) Extended Producer Responsibility and Eco-modulation of Fees. Paris: OECD Publishing.
Refashion (2025) Eco-modulation des éco-contributions 2025. Paris: Refashion.
Textile Exchange (2025) Materials Market Report 2025. Lamesa, TX: Textile Exchange.
United Nations Environment Programme (2023) Sustainability and Circularity in the Textile Value Chain: A Global Roadmap. Paris: UNEP.
Yerushalmi, E. and Saha, A. (2025) ‘How circular economy innovation can backfire on the environment: quantifying the rebound effect of the textiles and clothing sector’, Business Strategy and the Environment, 34(8), pp. 10495–10512. doi: 10.1002/bse.70135.