Bangladesh risks losing $8b a year in RMG waste recycling

Bangladesh risks losing an annual $8 billion opportunity in recycling waste from its readymade garment sector as weak policy support and limited technological capacity continue to slow the transition to a circular economy, industry insiders said.

They warned that without urgent reforms, the country’s position as the world’s second-largest apparel exporter could come under pressure as key export markets move towards stricter environmental and traceability requirements.

The observations came at a seminar titled Accelerating Circular Transition in Bangladesh’s Textile Industry: Insights from SWITCH2CE Pilots, jointly organised by the Ministry of Commerce and the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) in Dhaka on Wednesday (6 May).

Speaking at the event, Sheikh HM Mustafiz, managing director of Cute Dress Industry Ltd and a director of BGMEA, said global legislative changes are reshaping the future of the apparel industry and pushing manufacturers towards circularity and sustainability-driven compliance.

He said initiatives such as the European Green Deal and the Digital Product Passport would require greater transparency, product traceability and environmentally friendly supply chains.

According to Mustafiz, Bangladesh now generates nearly 600,000 tonnes of textile waste annually. A large share of this waste is reused or processed through the informal sector, but it has yet to be brought under a formal framework.

He said bringing the sector into the formal economy would help reduce health and safety risks and create a more organised industrial base.

While 100% cotton waste can be recycled mechanically, Bangladesh’s chemical recycling capacity remains limited. Recycling is currently concentrated mainly on cotton, with significant gaps in handling blended fabrics and man-made fibres.

He also warned that rising global demand for resources and tighter raw material supply by 2030 would require the sector to reduce dependence on virgin cotton and move towards recyclable alternatives.

BGMEA Vice-President Vidiya Ammrit Khan said recycling the entire volume of RMG waste could generate a circular economy worth nearly $8 billion annually.

She said Bangladesh currently recycles up to 30% of cotton-based garment cutting waste, but a significant share is exported to India and Pakistan before being reimported as recycled yarn.

She added that around 17 factories in Bangladesh are now operating under pilot recycling projects.

Addressing the seminar, Michael Miller, Ambassador of the European Union to Bangladesh, said Bangladesh is approaching a critical stage ahead of its graduation from the least developed country category and needs to build a more balanced commercial relationship with the European Union.

He said the EU is assessing Bangladesh’s request for negotiations on a free trade agreement, adding that the country must strengthen competitiveness, circularity and eco-efficiency regardless of the graduation timeline.

Referring to the EU’s 2022 strategy for sustainable and circular textiles, Miller said new requirements such as eco-design standards, extended producer responsibility, digital product passports and stricter anti-greenwashing rules would directly affect Bangladesh, as Europe remains its largest export market for garment products.

He also said the EU is supporting Bangladesh’s circular transition through the SWITCH to Circular Economy initiative, with brands such as H&M and Bestseller leading pilot projects on recycling and waste traceability.

Commerce Minister Khandaker Abdul Muktadir and Mahmud Hasan Khan, among others, addressed the seminar, which was chaired by Md Abdur Rahim Khan, secretary (routine charge) of the Ministry of Commerce.