A new study has found Bangladesh is missing out on up to US$5bn a year in potential revenue from recycled textile products.

The report – entitled “Regulatory Framework to Enable recycling of Post-Industrial Waste (Jhut) for the RMG Industry in Bangladesh” – said, to harness its potential for innovation and industrial advancement through the circular economy, Bangladesh’s textile industry must formalise the informal Jhut sector. Political and economic challenges have impeded achieving an inclusive and just transition.

Swedish fashion company H&M and German development agency Gesellschaft für Internationale Zusammenarbeit (GIZ) are behind the study. It estimated that Bangladesh’s current annual recycling capacity for apparel-grade yarns was between 18,000 and 24,000 tonnes, representing 5-7% of the 330,000  to 500,000  tonnes of 100% cotton and cotton-elastane waste produced each year.

The report found less than 5% of this waste was upcycled into products and more than 55% was exported to recycling companies worldwide, while the remaining waste was downcycled into stuffing materials, incinerated or sent to landfills.

Faruque Hassan, former president of the Bangladesh Garment Manufacturers and Exporters Association, said the textile industry in Bangladesh had begun recycling and it would yield very positive results in the near future.