Closing the loop in textile recycling

Edwina Huang, an Australian-Chinese entrepreneur, had run a sustainable fashion startup for several years when she realised how desperately the industry needed something more. Having previously worked for fast-moving consumer goods corporates, she launched a company in 2016 that provided recycled fabrics for the fashion industry, including fabric made from plastic bottle waste. “We have more than 90 million tons of textile waste every year,” she says. “My customers started saying to me, ‘Since you're already selling me recycled fabric, can you also take my fabric waste and recycle it into a material that I can use again?’”

At the time there were limitations with what could be done with old clothing itself. Most are a blend of fibres (usually polyester-cotton) and textile recyclers were unable to salvage one fibre without damaging the other. Some designers were producing stylish ‘upcycled’ clothing, but this remained a small-scale intervention in the face of the overwhelming scale of fashion waste. A lot of old fabric would be turned into material for products like wall insulation, stuffing or mops, which was ultimately a last-use option before being disposed of. “It was more downcycling, rather than recycling,” says Huang. “Considering the huge amount of annual textile waste, how can you turn this around unless you have a systematic process to channel this into a raw material again?”

For Huang, it presented a new challenge. She rallied a team of chemical engineers and polymer scientists and began to investigate, founding Phoenxt in 2019. The company has developed a chemical recycling process that can separate fibres and recycle them back into new fibre sources while maintaining the quality of the material. Old clothing goes in, new yarn comes out. The enterprise adds value by turning low- or no-value textile waste into raw recycled fibres, selling the finished product for about $3 per kg.

Securing the expertise for research and development was the first hurdle, and while the company has benefited from incubators and accelerators, the early phases were self-funded. If it was not for her prior industry experience, this would have been difficult to overcome. Phoenxt was initially based in Zurich, where it was incubated by Swiss startup accelerator SEIF, and won entrepreneurial support from Austrian-based Impact Hub. It currently has a team of five and is based in Australia with a research lab in the US, in Atlanta. Phoenxt is now in the pre-revenue pilot stage, working with a factory in China with a small capacity of producing 8kg per day. A 2-ton facility is set to open at the end of 2024 – then the scaling will begin. “Eventually we want to do 150,000 tons per year, per plant, when we open more in different countries,” says Huang.

Fashion has always been predicated on the seasonal consumption – and discarding – of clothes. Each year, 100 billion new garments are produced. The fashion industry has an annual global carbon footprint that matches the European Union. While fast fashion continues to dominate consumer culture, recent years have seen exponential interest in alternative approaches to production. The push for a circular economy, spearheaded by organisations such as the UK-based Ellen MacArthur Foundation, is driving more businesses to create supply chains in which old products can loop back into the manufacturing stage. The foundation has reported that a circular system could generate $560 billion in economic opportunities through new business models. As consumers become increasingly eco-conscious, circular supply chains can also benefit businesses through positive brand equity.

It is, however, a slow-moving industry. This is one reason why further innovation in chemical-recycling is much needed. As Huang explains, most manufacturers require fabric in a particular GSM (grams per square metre) and a specific fibre. A process that shreds fabric and creates a mixed blend would not suffice. “We cannot change how the textile industry has been operating for hundreds of years. But what we can change is ourselves, by accommodating the existing infrastructure within the technology and tackling the fabric compounds.”

Huang has spearheaded Phoenxt with a passion for sustainability, but it has not always been a straightforward journey. The pandemic created significant hurdles, however Phoenxt has since gained momentum. Huang feels that interest in ESG (environmental, social and governance) has become far stronger, providing opportunities to not only work with brands, but also with governments. The company has been able to grow organically, she says, and by word of mouth, benefiting from the burgeoning ecosystem of businesses and investors interested in sustainable fashion. The only thing holding Phoenxt back right now is its capacity, and Huang eagerly awaits the launch of its new factory in the APEC (Asia-Pacific Economic Cooperation) region.