Whither exporting of RMG waste? 

Bangladesh is the second largest exporter of Readymade Garments (RMG) and importing cotton, yarns and also fabrics for exporting RMG in the global market. The traditional textile business model of making Textile from virgin materials and then waste in course of production, results in high consumption of raw materials and generation of waste, which contributes significantly to the large and negative environmental impact of the textile industry. For non-collected textile waste, currently there are neither viable re-use solutions, nor alternatives to incineration or landfill which is meant to be abandoned.

The waste recycled in 2019 was 0.42 million tons and these are downcycled: textiles are shredded into fibres which are used into low value applications in automotive, insulation materials, cleaning clothes, etc. Bangladesh is using the valuable waste cotton for land filling since the re-use of waste fabric in re-production is less than production. A relatively small part is successfully recycled into higher value applications as textile fibers to make new garments. But the recycled is must for optimum use of fabrics and also protect environment and waste  of valuable foreign currency.

Textile waste arises primarily in three waste generation streams: (1) pre-consumer, i.e. waste generated before the finished products reach the consumers and includes waste types such as spinning waste, fabric trimmings/cuttings, fabric deadstock, and unsold garment inventory; (2) domestic post-consumer, i.e. garments/ textiles discarded by domestic consumers; and (3) imported waste stream, which includes second-hand clothing and mutilated rags imported. Bangladesh has concern of pre-consumer generated waste.

Pre-consumer waste is generated during and post-manufacturing across Cut-Make-Trim (CMT) units, fabric mills and spinning. There are four options for the treatment of textile waste: Recycle, Reuse, Downcycle, and Landfill/Incineration.

Bangladesh is currently heavily reliant on the import of textile fibre. In 2019, the country imported 1.63 million tonnes of staple cotton fibre (with a value estimated to be 3.5 billion USD). Based on the Circular Fashion Partnership findings, if just the 100 per cent cotton waste was recycled within Bangladesh, imports could decrease by around 15 per cent, therefore saving half a billion USD that would have been spent on cotton imports.

The Circular Fashion Partnership is a cross-sectorial project led by Global Fashion Agenda, with partners Reverse Resources, the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) and is supported by P4G conducted a study and found that in 2019, Bangladesh produced approximately 577,000 tonnes of waste just from the ready-made garments (RMG) and fabrics mills of which almost half (250 thousand tonnes) was 100 per cent pure cotton waste. It is estimated that factories in Bangladesh could sell this 100 per cent cotton waste to the recycling market for up to 100 million USD.

The challenge is providing conditions for scaling. With sufficient investment, supportive policies, and by enabling pre-competitive collaborations. The concept of circularity advocates for a regenerative system wherein textile is used as long as it retains its value and is recycled to its full potential within the textile industry, minimising leakage, waste and pollution. A recent analysis conducted by the Circular Fashion Partnership says that textile waste from Bangladesh might be used more efficiently. 

The research has found out that in 2019, Bangladesh produced approximately 577,000 tonnes of waste from the Ready-Made Garment industry and fabrics mills of which 250,000 tonnes, counting for almost half of the total, was 100 per cent pure cotton waste. According to estimates, factories in Bangladesh could sell this 100 per cent cotton waste to the recycling market for up to US$100 million. Bangladesh is currently heavily reliant on the importation of textile fiber: in 2019, the country imported 1.63 million tonnes of staple cotton fiber for a value estimated to be US$3.5 billion.

BGMEA estimated that less than 5.0 per cent of the textile waste are recycled locally, while over 35 per cent are incinerated in boilers or landfills. The remaining 60 per cent of the textile waste are exported to India, Hong Kong, Sweden and other countries where they are recycled and sold back to the local readymade garment industry as recycled yarn, at a higher cost.

According to Bangladesh Textile Mill Association, there are some 20 recycled fibre factories across the country with the recycling capacity of 2,400,000 tonnes and they mostly use garment jhut or waste as raw materials. This waste is recycled to make fibre, which is then used to make cotton and yarn - fabrics and finished garments are produced from the recycled cotton. BGMEA has opine that this waste can be recycled to produce about 1.0 billion pieces of garment, which has the potential to generate revenue worth about US$3 billion per annum.

The country’s textile millers have urged the government to ban exports of all types of garment waste, with a plea of availability of the raw materials for local recycling units. On the other hand, BGMEA estimated that 400,000 tonnes of micro-fibres and scraps that are disposed of as waste every year.

Based on the Circular Fashion Partnership findings, if 100 per cent cotton waste was recycled within Bangladesh, imports could decrease by around 15 per cent, therefore saving half US$ one billion that would have been spent on cotton imports.

Since its launch in November 2020, more than 50 brands, manufacturers, recyclers and NGOs have signed up to take part in the Circular Fashion Partnership which supports the development of the textile recycling industry in Bangladesh by capturing and directing post-production fashion waste back into the production of new fashion products.

All manufacturers produce pre-consumer waste. But we never get to quantify which factory produces how much. We need to a proper database (with both the government and companies involved in it) so that we know what amount of pre-consumer waste is being produced. At this moment, only 5 per cent of pre-consumer waste is recycled—actually sorted and sent
for recycling. 

There are too many middles in the current system. Normally waste is collected and somebody sells it to the next party for sorting and on to the next to upgrade to bigger volumes, and then it is sold to a party who has an export licence, another party has an import licence—all these add cost to waste at every step. The exporters donot get any incentives.

Bangladesh is still lagging a bit in use of waste in production of yarn. Two things are need: first, manufacturers must produce the least amount of waste possible; and second, making that pre-consumer waste into something very useful.

There is no need of ban on export of waste and consumption of waste is less than production as study of different organization including BGMEA. The export of waste is not a challenge for local spinners as textile mills in other countries buying waste from Bangladesh for making yarns and again supply yarns to Bangladesh. The overseas textile spinners, who are importing waste from Bangladesh are paying freight for taking waste and exporting fished yarns to Bangladesh. Therefore, Bangladesh spinners is in a better position to buy waste at a competitive price and cost of products should be competitive than overseas spinners. 

Bangladesh Textile Mills Association (BTMA) has legitimated demand for withdrawal 7.5 per cent and 15 per cent VAT on procurement of waste for local production by local spinners is reasonable and should be withdrawn immediately. The tax should be withdrawn and export should be continue to allow getting optimum benefits from the waste fabrics out of efficient production in Bangladesh and continue to allow export of excess waste to earn foreign currency from export of waste and to avoid further waste of valuable foreign currency in filling lands, etc. 

The writer is Non-Government Adviser, Bangladesh Competition Commission. He can be contacted at [email protected]