This article is part of a series examining Responsible Fashion, and innovative efforts to address issues facing the fashion industry.

A new textile recycling plant opened by the company Renewcell in the small coastal city of Sundsvall, Sweden, is so big that employees use bikes to get from one end of the production line to the other.

Large bales of cotton waste are dumped on conveyor belts, shredded, and then broken down into a wet slurry, with the help of chemicals. That slurry, known as dissolving pulp, is then bleached, dried, stamped into sheets of what looks like recycled craft paper, given the brand name Circulose, and shipped off to manufacturers to be made into textiles like viscose for clothes.

Up until now, most clothes marketed as made from recycled materials only contained a small percentage of recycled cotton or were made from water bottles, fishing nets and old carpets. (Technology exists to recycle polyester into polyester but is prohibitively expensive and rarely used.)

Renewcell’s factory is one of the first steps toward a system that turns old clothes into new high-quality clothes made entirely with recycled fabric. It also helps to address the mountains of textile waste accumulating worldwide and may help reduce the number of trees that are harvested from ecologically sensitive forests to produce fabrics for fashion. (More than 200 million trees are cut down every year to produce dissolving pulp for man-made cellulosic fabrics, including rayon, viscose, modal, and lyocell, according to Canopy, a Canadian nonprofit that works with the paper and fashion industries to reduce deforestation.)

About a half-dozen start-ups around the world are aimed at commercial textile recycling, and Renewcell is the first to open.

Many consumers seem to be increasingly uneasy about what happens to their old clothes, and fashion companies are searching for ways to continue expanding while simultaneously fulfilling promises to reduce their negative environmental impact and achieve a circular system in which clothes are looped back through instead of being sent to a landfill. The Europe Union has mandated expanded textile collection for all member states by 2025, which is expected to significantly increase the flow of fashion waste in need of a destination.

“It’s exciting,” Ashley Holding, a sustainable textile consultant and founder of Circuvate, said of the factory’s opening. “It’s great to see them get to such a stage.”

The Rise of Unwanted Goods

Fashion circularity wasn’t always this complicated. Before industrialization, most people made their own clothing from all-natural materials. The wealthy repurposed and passed their clothes down to servants, and then on to people in rural communities, who patched them until the garments were no longer wearable and then bartered them to rag collectors, according to a 2018 study from the University of Brighton. In Europe, these rags were collected in warehouses and then finally sent to be made into paper or wool shoddy for affordable blankets and coats.

With the industrialization of fashion at the end of the 19th century, people who previously sewed their clothes at home began to buy some of their garments, Adam Minter, the author of “Secondhand: Travels in the New Global Garage Sale,” wrote in an email.

“As garments fell in value, and women entered the industrial work force, consumers had fewer incentives and less time to mend and repair,” according to Mr. Minter.

There was an expanded flow of unwanted goods, and the Salvation Army, which opened in New York in the late 19th century, started raising money for charitable projects by taking in, repairing and reselling clothing and housewares, according to Mr. Minter. Goodwill was founded around the same time as a Boston church’s charitable program.

“By the 1910s, the volume of unwanted clothing and other consumer goods was so great that charities transitioned away from mending,” Mr. Minter said.

Today, most of our clothing ends up in the trash, said Maxine Bédat, the author of the 2021 book “Unraveled: The Life and Death of a Garment.” It is hard to get a reliable figure of how much is discarded, especially in the United States. But, she said, “We’re still primarily throwing it out.”

More data is available for Europe. On average, 62 percent of clothing that comes to market each year in six Western European countries ends up in landfills or incinerators, according to a recent study by Fashion for Good.

What isn’t thrown out mostly still flows to organizations like Goodwill, which pass on what can’t be sold to for-profit sorting companies, according to Ms. Bédat. Wearable clothes are sold to resale markets in developing countries, and unwearable textiles are turned into rags and lower-quality fibers for things like insulation. Clothes given to farmers’ market collections and fast fashion brands through take-back programs usually also end up with these for-profit sorting companies, Ms. Bédat said.

About 40 percent of what the Western world ships to one of the largest resale markets in Accra, Ghana, is considered trash, according to the Or Foundation, which advocates better clothing waste management. Mountains of old clothing have been photographed on beaches, in landfills and in deserts in Africa and Latin America.

“The resale market is being crushed under the weight of the amount of trash, basically, they’re receiving,” said Rachel Kibbe, the chief executive of the fashion consultancy Circular Services Group. “We have these businesses that are becoming de facto waste managers.”

Currently, very little textile waste becomes new clothing. In Western Europe, according to Fashion for Good, just 2 percent of collected textiles — pure wool, pure cotton and acrylic — are mechanically recycled into new textiles, mostly mud-colored wool shoddy blankets for disaster relief work, and low-quality cotton that must be mixed in with virgin cotton for new textiles. Combined with the low collection rates, that means less than 1 percent of clothing sold in Western Europe is recycled into new fibers.

“We have to wrap our heads around the fact that your clothes, if you should part with them, may land in someone’s desert, in someone’s waterways, in someone’s field, burning,” Ms. Kibbe said.

The Race to Recycle Textiles

The Renewcell new factory accepts only pure cotton textile waste, and many clothes are made from synthetic blends. But it will be able to take in a lot of it — more than 120,000 metric tons a year. Around 163,000 metric tons of low-value cotton waste, ripe for chemical recycling, flows annually out of six Western European countries, according to a recent study by Fashion for Good.

Using fabric sourced globally from denim factories and secondhand retailers, the factory produces sheets of dried dissolving pulp, called Circulose, which it sells as the main ingredient for man-made cellulosic fabrics like viscose, rayon and modal.

“We are creating circularity within the fashion industry,” said Patrik Lundström, the chief executive officer of Renewcell. “Today circularity in the fashion industry doesn’t really exist. We have been talking about this environmental impact for the last 20 years. We have very, very little progress so far.”

Renewcell’s founding researchers, ​​Mikael Lindstrom and Gunnar Henriksson at the Royal Institute of Technology in Stockholm, first developed the technology to process cotton waste in 2012.

The company produced enough recycled fabric for a dress in 2014 and built a demonstration plant in 2017. It attracted the interest of brands like Stella McCartney, which funded a life cycle analysis showing Circulose had the lowest climate impact of 10 different synthetic cellulosic fibers. H&M became a minority shareholder in the company in 2017.

The company went public and was listed in Sweden on the Nasdaq First North Premier Growth Market in 2020. H&M, Levi Strauss and Bestseller, an international clothing chain based in Denmark, have committed to incorporating Circulose into their clothes. (In 2021, Levi’s debuted a capsule collection of jeans that were 16 percent Circulose.)

“The Circulose that comes out is very valuable because it’s a recycled fabric, but it behaves like virgin,” said Paul Foulkes-Arellano, the founder of Circuthon, a circular economy management consultancy.

A handful of other companies are also racing to produce recycled fabrics on a commercial scale. Two Finnish start-ups, Spinnova and Infinited Fiber Company, have patented technologies to turn plant-based waste into fabrics that mimic the feel of cotton. Spinnova said its commercial-scale plant will be operating by 2024. Infinited hopes to open in 2026. The U.S. start-up Evrnu has raised $31 million for its recycling technology, the company said, and expects to be open by 2024.

The technology to process polyester-cotton blends is a little further behind, and those blends make up a large chunk of the old clothing that is discarded. An Australian start-up, BlockTexx, said it is building the first commercial-scale recycling plant that can process poly-cotton blends and hopes to open in 2023.

The British start-up Worn Again Technologies said in October that it had received more than $30 million in funding and is constructing a plant in Switzerland to separate and recycle blended textiles. The U.S. start-up Circ announced in July that it had received more than $30 million, through a funding round led by Bill Gates’s Breakthrough Energy Ventures, and which included investment from Inditex, the parent company of Zara.

“All of a sudden, there’s been a sweep,” said Ms. Rademan, of Fashion for Good. “But I think we’re still at the beginning. They’re still fighting for money at this stage.”

The consulting firm McKinsey estimated in a 2022 report that six to seven billion euros would need to be invested by 2030 to handle at least 18 percent of the textile waste generated in Europe.

Critics point out that the most sustainable thing to do would be to rewear, repair and upcycle fabrics into new clothing, like people did in the 19th century.

Even Renewcell, which runs on hydropower, is not quite closing the loop, because it is not turning cotton into cotton. (Though some brands like Levi’s have used Circulose to partially replace cotton in some products, and lab tests show it can be run through this process up to seven times, similar to paper recycling.)

“Recycling stuff is energy-intensive,” Mr. Foulkes-Arellano said. “If we were sensible, we would just cut all the denim up, all the T-shirts up, and just upcycle them into new garments. I mean, there’s a lot of really good upcycled denim companies out there. But big business wants new fabric.”

Ms. Rademan estimates it will be at least another decade before anyone will be able to recycle a worn-out sweatshirt the way they can recycle a soda can. She said there is a need for more capital investment in building recycling plants, more commitment from brands to buy recycled fibers, and a commitment from clothing manufacturers to integrate recycled products into the supply chain.

Ms. Rademan said in the next 10 years she “would feel comfortable that when I put this sweater in that recycling bin, it is not going to some bad place.” But in the United States, she said, progress depends on the political landscape: “It’s driven by whoever’s in charge.”

Mr. Holding predicts it will be 2050 before we have a global textile-to-textile recycling infrastructure.

Although Renewcell is an important development, “it’s still a drop in the bucket,” he said, “compared to the amount of textile feedstock that exists and the amount of materials which are produced every year.”