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In the Loop

Adidas is latest fashion company hoping to weave recycled plastic into garments

The growing demand for recycled polyester, coupled with a limited supply, signals scarcity and competition ahead.

This article is adapted from GreenBiz's weekly newsletter, Circular Weekly, running Fridays. Subscribe here.

Last week, German sportswear company adidas announced a commitment to increase the content of recycled polyester (rPET) in its garments to 50 percent before the end of the year, and to use only recycled polyester across its supply chain by 2024.

The company joins the likes of H&M, Patagonia, Everlane and other apparel companies that are beginning to tout garments made from recycled bottles — a feedstock used to manufacture recycled polyester — and advertise associated sustainability claims and climate leadership. At first blush, this is a promising step forward. 

Polyester is the most widely used fiber in the world, accounting for roughly half of the overall global fiber market and about 80 percent of all synthetics, according to the Textile Exchange. Accordingly, swapping petroleum-based polyester for fabrics made from recycled plastic bottles at scale could bring a significant positive impact. The production of recycled polyester requires 59 percent less energy than its virgin counterparts, while maintaining the same performance, aesthetic and durability standards. And broadly speaking, decoupling non-renewable resource extraction from textiles production is, of course, a central pillar of circularity.  

However, unraveling polyester’s growing appeal offers a helpful glimpse into the complex and sometimes counterintuitive web of circular supply chains for plastics. Often, the interplay between packaging and textiles is overlooked. 

Let’s start with the bottle. Once collected, most PET plastics are mechanically recycled by chopping, washing, flaking and melting the material, which can be turned back into a bottle, or formed into a fiber or filament to make shirts, sneakers and swimsuits, or woven into carpets, automotive interiors or other textiles. 

Broadly speaking, textile manufacturers and packaging manufacturers compete over the same materials
So why not turn bottles back into bottles? I’m oversimplifying a complex system that includes additional factors such as recovery rates, contamination and material blends, bio-based alternatives, policy and new technologies on the horizon, among others. But at its root, the growing demand for rPET across industry applications paired with the limited supply of recycled materials means scarcity and competition.

I spoke with Bridget Croke, managing director of the circular economy investment firm Closed Loop Partners, to learn more. "Broadly speaking, textile manufacturers and packaging manufacturers compete over the same materials," Croke explained. "However, we have to treat recycled plastics like any other commodity; it's dictated by supply, demand and geography." 

Beyond economics, understanding the highest and best use of rPET isn’t exactly straightforward. Today, the life of textiles may be extended by one additional use, typically at a lower quality, or downcycling, before going to a landfill or incinerator. Plastic bottles can be recycled seven to 10 times, although the individual lifespan of a single-use bottle can be brief. 

To meet ambitious recycled packaging targets by 2025, brands and their packaging suppliers will have to put their money where their mouth is if they’re going to compete with adidas and other apparel makers.

Alison Shapiro, executive director of Closed Loop Partners, explained, "To compete, bottlers will need to offer long-term purchase orders whose average price per ton (or pound) exceeds the purchases offered by textile companies." Shapiro continued, "Building concepts like price floors and price collars into contracts can help; these mechanisms have the added benefit of building in a minimum margin that allows [materials recovery facilities] to make capital improvements to improve yield and output, creating a virtuous loop." 

Ultimately, competition for recycled plastics isn’t a bad thing. These demand signals contribute to the (slowly) growing market for recycled materials, which could help drive increased collection rates for plastics, another critical element for any circular system.

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