EU Circular Economy Act: what the new legislation means for fashion and textiles

The Circular Economy Act (CEA) is a legislative proposal by the European Commission (EC) designed to accelerate the transition towards a circular economy within the European Union (EU).

It aims to achieve this by promoting recycling, reuse, waste recovery and the development of the secondary raw materials market.

For the fashion sector, this initiative is not solely about making products more environmentally friendly. It also seeks to establish circularity as an economically viable and competitive industrial model.

The objective is to ensure that raw materials, products and waste are increasingly reused, repaired and recycled. This moves away from a traditional linear model based on extraction, production, consumption and disposal. This objective includes:

– Creating a European market for secondary raw materials, meaning recycled materials that can replace virgin resources.

– Facilitating the movement of recoverable waste between member states to prioritise its reuse and recycling.

– Stimulating demand for recycled materials, particularly within industrial processes.

– Strengthening European competitiveness by reducing reliance on imported raw materials.

– Removing regulatory barriers that hinder the growth of circular business models.

Textile sector is a priority for European circular economy

Originally scheduled for November 11, 2026, the presentation of the CEA by the EC has been postponed to November 18, as of the date of publication.

Within the fashion industry, the sector is already subject to two European regulations focusing on end-of-life product management and eco-design. These are implemented through the revision of the Waste Framework Directive and the Ecodesign for Sustainable Products Regulation (ESPR).

The CEA could facilitate the industrialisation of textile recycling and encourage the use of recycled fibres. Consequently, it is expected to improve the profitability of collection, sorting, repair and reuse operations.

It could also go further in harmonising Extended Producer Responsibility (EPR) rules and fibre recycling standards across member states.