The European Commission is drawing up new rules on textile waste that will make companies responsible for managing the waste their products create.

“There is pressure building up from regulators on the fast fashion model which is premised on high volumes and affordable prices,” said Valerie Boiten, senior policy officer at the Ellen MacArthur Foundation, a non-governmental organization that works with H&MInditexZalando

Consumers in the European Union throw away about 5.8 million tonnes of textiles every year, according to the European Environment Agency.

“The current model is set up for failure if you take into account climate change and resource scarcity,” said Boiten.

There is a business case for making the fashion industry more circular, she added, but it will rely on creating multiple revenue streams from existing products. The EU is trying to shift towards a “circular” economy, or one where industries reuse and recycle materials rather than using up finite resources to make new products.

With companies like Zara

Brands like H&M, Zara and Uniqlo

This month Zara launched its first women’s collection made from recycled textiles supplied by Circ, a U.S. company in which Inditex and Bill Gates have invested. Circ owns technology that separates cotton from polyester in old garments to create new fabric.

Decathlon

“The equation we are trying to solve is how to keep growing, while reducing our carbon footprint,” Fouad Latrech, chief technology officer at Decathlon, told Reuters.

Retailers are working with local authorities ahead of an EU law that will require member states to separately collect textile waste by Jan. 1, 2025. Firms including Decathlon, Mango, Inditex, and IKEA recently created an association in Spain for the management of textile waste.

“Any retailer that is not thinking about sustainability and how that plays out in all aspects of its brand, and across the entire value chain, is asleep at the wheel,” said Emma Beckmann, EMEA president at brand consultancy Landor & Fitch.