In an enormous warehouse in Banksmeadow, New South Wales, rows and rows of boxes are stacked so high they almost reach the nine-metre ceiling. The 1600-square-metre facility is the headquarters of Thread Together. The boxes are full of brand-new clothes that didn’t sell and have been donated to the non-profit by Australian fashion brands.

Thread Together was set up to help people in need by giving them new wardrobes, but after a decade of operating, chief executive Anthony Chesler has identified another problem: too many clothes are being produced, resulting in excessive garment waste.

Every day they receive between 10 and 20 pallets of excess stock from fashion brands. Every year, they send out 1.5 million garments to communities affected by floods and fires, families fleeing domestic violence and people reintegrating into society after incarceration. But they receive roughly two million more garments a year than they can distribute – leaving the charity with an enormous amount of T-shirts, jeans, jumpers and suits in storage.

The issue is so pressing that Chesler is considering expanding Thread Together’s role into textile recycling. But since the problem is an oversupply of new goods, it could also be dealt with at the other end of the supply chain.

“People don’t realise that retailers are ordering a buffer … often as much as 30 per cent more than they think they’re going to sell,” says Aleasha McCallion of the Monash Sustainable Development Institute.

In Australia there is no requirement for fashion brands and stores to disclose their unsold inventory, so there is no data on how many clothes they create, store and destroy. “No one communicates the percentage of preconsumer textile waste they haven’t sold,” Chesler says. He believes as much as one-third of all stock produced is being sent to landfill before it has been worn.

Unlike in the European Union, where the destruction of unsold goods is the target of regulation, in Australia “there are no bans to prevent anyone destroying unsold goods”, says McCallion. “If unsold stock couldn’t
just be thrown in a storage locker or bin, I don’t think they would produce as much.”

On February 15, the National Clothing Product Stewardship Scheme, which is led by the Australian Fashion Council (AFC), announced the final stage of its plan to address textile waste with a commitment to achieve circularity by 2030. The industry-led scheme is designed to incentivise brands to create garments from recycled materials that are more durable, reparable and recyclable, alongside a proposal to build the infrastructure for textile collecting, sorting and recycling.

Under the scheme, which will be operational from July 2024, fashion businesses opt in to pay a four-cent levy for every garment they put on the market – these proceeds go towards funding the initiative. Brands can get a discounted rate if their garments meet certain criteria, which is intended to encourage the creation of more-sustainable clothes. Alice Payne, one of the scheme’s lead contributors, says “if you’ve got a garment that is inherently more durable or more recyclable, there are payoffs”.

The fashion industry is responsible for about 4 per cent of global greenhouse gas emissions. For some experts in the space, the emphasis on recycling does not tackle the two forces at the heart of fashion’s carbon footprint: overproduction and overconsumption. “We can’t recycle our way out of this because we are absolutely not investing in the same level of infrastructure for recycling as we are for production. It’s not an equal balance,” says McCallion.

Currently, only 7000 tonnes of textiles are recycled in Australia annually, a tiny fraction of the 1.5 billion units of clothes that are imported into the country every year. A recent report from the AFC revealed that in Australia, 227,000 tonnes of clothing is sent to landfill annually, which equates to about 10 kilograms of textile waste per person.

While there are a few Australian companies operating in the space, infrastructure for textile recycling in Australia is relatively nascent. Capacity is limited and no one is operating at scale – the most established company, Queensland-based BlockTexx, focuses on recycling bedsheets made from polyester–cotton blends.

Clothes are a particularly complex part of the waste stream and are difficult to recycle. First, unlike metal, paper and glass, which are collected by local councils regularly, the infrastructure for textile collection is largely dropoff points: kerbside donations bins and charity stores. Second, the intricate nature of clothes further complicates the process. Buttons, zips and other hardware must be removed and, unless garments are being shredded and downcycled into insulation or carpets, they have to be sorted depending on fibre type – to do this accurately, infrared scanners are needed. Garments made of fibre blends such as polyester and cotton are even harder to recycle as the fibres must be separated first.

In response to a question on overproduction during the AFC’s community roundtable, Peter Allan, one of the architects of the scheme, said: “We do recognise elements of overproduction and overconsumption and will be seeking change in these aspects.”

AFC chief executive Leila Naja Hibri says “the funding mechanism for the scheme itself will help reduce excess stock. If brands are paying a fee for every unit of clothing they commission, this adds a further incentive to make sure they are not overproducing and paying a fee for what they don’t sell.”

One problem with any voluntary scheme is getting enough participation. The AFC’s project manager, Danielle Kent, couldn’t say how many brands and retailers might join – but that the target was to recruit “Australia’s top 30 clothing brands and retailers [who] bring in at least 60 per cent of the 1.5 billion units of clothing that is imported into our market each year”.

Another challenge is ensuring that brands aren’t simply advertising their participation to appeal to consumers, while falling short of their commitments – another form of greenwashing. Kent says the tools for ensuring compliance are yet to be determined but “participating brands will have their own circular action plan to track and measure their progress”.

But the industry needs also to recognise that all companies already have the power to reduce their environmental impact. Rosanna Iacono, the managing director of consultancy firm The Growth Activists, says there are strategies brands can implement now to reduce the amount of unsold inventory, including made-to-order models, artificial intelligence to create better algorithms from customer data and switching to local production where the turnaround time can be shorter so orders are better informed by consumer demand.

In Europe, which is considered the global benchmark for clothing circularity, voluntary schemes have been abandoned in favour of regulations to address textile waste. European Commissioner for the Environment Virginijus Sinkevičius tells The Saturday Paper that proposed regulation in the EU “aims to disincentivise companies from destroying unsold products, and significantly increase transparency in the sector. This will allow us to gather a detailed overview of the actual number of unsold textile products being destroyed in the EU and then take further action.”

“We are taking steps to reduce the negative effects of overproduction and overconsumption of clothing and to move away from fast fashion,” he says. “To do this, we will create rules to stop excessive garment production and promote sustainability and circularity in the textiles industry.”

When asked if there were plans for Australia to follow suit, Naja Hibri said the kind of regulation being passed in the EU is not “within the authority of the scheme we are designing but rests with government”.

The Australian scheme is the product of a $1 million grant that was awarded to the AFC after clothing textiles were added to the minister for the Environment’s priority list for product stewardship in 2021, under the Morrison government. The addition suggests that regulatory measures may be brought to bear if the industry fails to act.

In response to a question from The Saturday Paper about implementing regulations similar to the EU for clothing and textiles, the office of the Environment minister responded with a statement from Tanya Plibersek stating “if industries don’t step up I’m not afraid to take stronger action”.

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