Potential effects of Dutch circular economy strategies on low- and middle-income countries
Cotton production and post-consumer textiles

18-11-2021 | Rapport

The Netherlands has the ambition to achieve a fully circular economy by 2050. At the request of the Dutch Ministry of Foreign Affairs, we explore what such a transition could mean for low- and middle-income countries that are connected to the Netherlands through international value chains. In this report, we focus on textiles. More specifically, we examine cotton production in West Africa and post-consumer textiles processing in Pakistan.

Trade data was used to visualise trade in cotton, garments and post-consumer textiles to and from the Netherlands. Literature review and expert interviews were used to qualitatively assess socio-economic and environmental impacts in low- and middle-income countries. The study is part of a broader project that analyses transboundary effects of the circular economy transition in the Netherlands.

Current impacts

In 2018, more than 50% of Dutch clothing was made from cotton, with Bangladesh being the largest supplier. Cotton is an important cash crop for West African farmers, providing a source of income for many smallholders. Export from the top-5 cotton producing countries in West Africa account for around 40% of Bangladeshi imports of cotton. Nonetheless, local value addition in West Africa is negligible and cotton production is linked to a range of sustainability issues, including land degradation, pollution, and health and safety risks. In 2018, more than 50% of Dutch post-consumer textiles was incinerated, while around 60% of total collected volumes (both domestically and imported) was exported for reuse and recycling abroad. Pakistan is an important destination for post-consumer textiles, where they are sorted, graded, and resold or recycled. Still, little specific information is available on post-consumer textiles processing in Pakistan and related impacts.

Effects of a circular economy transition

The Dutch circular economy transition is likely to affect the amount and composition of new clothing imported, as well as of post-consumer textiles exported. The effects on low- and middle-income countries depend on 1) the type of circular economy strategies implemented; 2) whether or not and, if so, how low- and middle-income countries will become part of the Dutch circular economy; for instance, by implementing specific sustainability standards or using Dutch discarded textiles in new clothing; and 3) the local conditions of the countries in question. To avoid negative impacts in cotton production, policies with minimum requirements or exclusions in production standards need to take in account challenges and opportunities within the local context. For post-consumer textiles, it is important to implement labour rights standards and monitoring and reporting policies throughout the value chain.

Preconditions for a just transition

With the right preconditions, the circular economy transition can contribute to achievement of the Sustainable Development Goals. This requires monitoring beyond environmental impacts, understanding global networks of trade in discarded garments for reuse, recycling or refurbishment, alignment of circularity targets with impact targets abroad, coordinated efforts across the various stages in the global supply chain, and inclusion of stakeholders from the Global South in policy discussions.