Europe is betting its textile industry can lead on going green without losing its shirt. But pulling it off will be a high-wire act as it grapples with geopolitical shocks scrambling global supply chains, a stack of new legislative mandates and price pressure from rivals in Asia and the Americas.
That’s why finding the balance between competitiveness and climate ambition is central to the European Union’s evolving textile strategy, according to Dirk Vantyghem, director general of the European Apparel and Textile Confederation (Euratex), which represents about 200,000 companies and 1.3 million workers across the EU textile ecosystem.
“The textile industry used to be a fairly unregulated industry,” Vantyghem said during an April interview hosted by the University of Delaware’s Department of Fashion and Apparel Studies. “Tomorrow, it will become a very regulated sector, [and] that makes many companies nervous.”
Euratex has become one of the industry’s loudest voices in Brussels as policymakers reshape the regulatory environment around sustainability, traceability and circularity. And the stakes are high.
Europe is one of the world’s largest apparel consumer markets and home to some of fashion’s most influential luxury brands and design houses. But its manufacturers are vying with rising energy costs, weakening consumer confidence, intensifying global competition and a raft of complex compliance burdens at the same time the EU is attempting something nowhere else has pursued at grand scale: transforming its textile sector into a more transparent, circular and lower-impact industry while keeping its market open to global trade.
Competitive Pressure Meets Regulatory Transformation
Europe’s textile and apparel sector is deeply exposed to global competition, Vantyghem said. Textiles are the second-most globalized sector of the European economy, a reality that leaves manufacturers especially vulnerable to fluctuations in sourcing costs, geopolitical tensions and consumer demand.
Among the industry’s biggest challenges are rising production costs. The list starts with energy prices, which surged following the war in Ukraine and broader instability in global energy markets. Companies are also facing growing “costs of compliance” tied to the EU’s expanding sustainability agenda, he said, pointing to new requirements around transparency, chemical use, traceability and product durability.
“That’s a handicap on the demand side,” Vantyghem said.
Compounding the issue, European consumers are buying fewer garments and gravitating toward cheaper products sold via online channels.
The trend is putting pressure on manufacturers positioned in the premium and luxury segments, though the news is not all bad. Europe is leaning into the areas where it believes it maintains a competitive edge, including design, innovation and high-value manufacturing.
Yet new and upcoming EU sustainability regulations are likely to send compliance costs even higher and complicate global economic viability. Since January 2025, EU member states have been required to collect textile waste, and an Extended Producer Responsibility directive that took effect last October requires producers to fund collection, sorting and recycling systems, with higher fees for fast-fashion practices.
Starting this year, brands are banned from destroying unsold clothing, shoes and accessories, and new anti-greenwashing rules will restrict vague environmental marketing claims. France is going further, mandating eco-score labels on all garments by mid-year. Long term, the EU is developing Digital Product Passports that will require each item sold on the continent to carry a scannable identifier linking to detailed supply chain and sustainability data.
The regulation has sent brands scurrying for new sourcing strategies and imposing stricter standards on suppliers, Vantyghem said. Meanwhile, requirements tied to transparency, labor conditions, chemical restrictions and sustainability metrics are flowing downstream into global supply chains.
“You can see the brands anticipating [more] legislation,” he said, adding that preparation is happening alongside a diversification away from concentrated sourcing models.
Geopolitical tensions, supply chain disruptions and trade uncertainty are fueling efforts to reduce dependence on any single sourcing country, and Euratex has become an outspoken advocate for nearshoring production closer to home in countries like Turkey, Morocco, Tunisia and Egypt. Those nations offer shorter lead times, lower transportation emissions and less geopolitical risk. And industry groups and policymakers are increasingly treating them as an extension of Europe’s regional manufacturing ecosystem.
“It helps to reduce their footprint, it helps to diversify their sourcing, it helps to reduce our dependency,” Vantyghem said.
Trade Tensions Create Uncertainty Across the Industry
The industry’s focus on resilience has been sharpened further by escalating trade tensions, especially between the United States and major global trading partners.
European textile exports to the U.S. rack up nearly 8 billion euros annually, making the American market one of the sector’s most important export destinations. The possibility of shifting tariff regimes has created significant instability for companies trying to plan sourcing, production and investment.
“I don’t know what to do now,” Vantyghem recalled one German apparel manufacturer telling him during a recent conversation about the U.S. market.
That uncertainty extends beyond trade policy. Ongoing geopolitical instability, from wars to energy disruption, is undermining both corporate planning and consumer confidence.
“What we can only hope for is to bring back some common sense,” he said.
Europe has not retreated from trade, though. The tariff issue has prodded the EU to diversify its global relationships, advancing or concluding negotiations with Mercosur countries in South America, India, Indonesia and several ASEAN nations while also pursuing talks with the United Arab Emirates.
The strategy reflects what Vantyghem described as a commitment to “free but fair trade.” And while Europe is determined to keep markets open, it is also beginning to insist that imported products comply with the same sustainability and labor standards expected of European producers.
“If you’re pushing the European industry to be more sustainable, everybody else has to come along,” Vantyghem said.
That push for a “level playing field” has become central to the EU’s trade philosophy, although enforcement remains a major challenge as regulators debate how customs authorities can verify compliance across global supply chains.
One recurring concern is whether European companies will shoulder compliance costs while foreign competitors shirk them. EU rules technically apply to all products sold within the single market, regardless of origin, but making sure they are followed remains difficult.
“If you cannot measure the implementation of a law, don’t make the law,” Vantyghem said.
Textile-to-Textile Recycling Faces a Demand Problem
That tension is especially visible in debates around mandatory recycled content requirements, and few areas illustrate the complexity of Europe’s circularity ambitions more clearly than textile-to-textile recycling.
Less than 1% of textiles in Europe are currently recycled back into new textile products even as the EU generates an estimated 15 million tons of textile waste annually, according to Vantyghem.
To help address the gap, Euratex has launched ReHubs, an initiative designed to accelerate the development of a circular textile ecosystem by bringing together collectors, sorters, recyclers, brands and manufacturers.
The effort reflects growing recognition that scaling textile recycling will require far more than technology alone. According to Vantyghem, Europe has already seen substantial innovation in both mechanical and chemical recycling technologies, including a wave of startups developing new processing systems.
But the larger challenge is economics, and “the main bottleneck is demand,” he said.
Recycled fibers remain significantly more expensive than virgin materials, often twice as much or more. That means brands operating in more price-sensitive markets will struggle to absorb the expense without regulatory pressure or consumer willingness to pay more.
In a weaker economy, that’s a hard sell. The dynamic has intensified discussions around whether the EU should mandate recycled content requirements through ecodesign legislation or other policy tools. Without some form of external incentive, Vantyghem said large-scale circularity will remain out of reach.
“If you leave it to the market as it is today, we have a problem,” he said.
Consumer behavior is another major variable. Sustainability awareness has grown, but many shoppers still prioritize affordability. Digital product passports and increased transparency requirements may help consumers better understand the environmental footprint of garments.
Yet Vantyghem cautioned against assuming sustainability alone can overcome price sensitivity.
“For many people who have limited capacity to purchase, we can’t blame them,” he said.
What could change the game? Vantyghem said stronger collaboration between the EU and U.S. is critical to shaping global textile standards. Together, the two markets wield outsized influence over sourcing practices, sustainability expectations and regulatory norms, so greater alignment could one day push the industry toward consistent global rules.
“If we can have some kind of consensus to agree on what those sustainability standards would be between the EU and U.S., I’m quite sure the rest of the world will follow,” Vantyghem said.
For now, though, the EU’s textile industry remains caught between the urgent push toward sustainability and the realities of a fragmented, cost-driven global market.
“How can we make sure that if our companies, our 200,000 companies in Europe, comply, that the rest of the world will follow?” Vantyghem said. “Because if you’re the only one, waving the sustainability flag, and somebody else is not doing so, we’re in trouble.”
Photo caption: Clothes donation The woman throws in her clothes bag at the container for collecting old clothes Siegsdorf Chiemgau Bavaria Germany Copyright: xRolfxPossx
