The US has a major textile waste problem. Every year, millions of tons of discarded clothing and household fabrics end up buried in landfills or burned in incinerators. Yet less than 1 per cent of those discarded textiles find their way back into the system as new fibers. A new report, ‘Rags to Revenue: Unlocking Post-Consumer Textile Recycling in the US’, jointly published by Accelerating Circularity and Accenture, is highlighting what many experts consider one of the most pressing and overlooked sustainability challenges in America. Beyond sounding an environmental alarm, the report makes a bold case for textiles as a significant, untapped economic opportunity.

The scale of the challenge

The US Environmental Protection Agency (EPA) estimates that textiles are one of the fastest-growing waste categories, increasing by nearly 80 per cent between 2000 and 2018. In that year alone, roughly 11.3 million tons of textiles were sent to landfills. Synthetic fabrics like polyester may take centuries to break down, while natural fibers such as cotton release methane a potent greenhouse gas when decomposing. This is not just about reducing waste—it’s about reimagining textiles as valuable resources rather than disposable products, say industry expert familiar with the study. The report’s data paints a grim picture of where used textiles currently go.

Table: Snapshot of current textile waste in the US

The system is a patchwork of inconsistent collection programs, limited sorting capacity, and scattered recycling technology. For recyclers, the lack of large, clean, and uniform material streams creates major bottlenecks. Complicating matters further, blended fibers like poly-cotton, along with zippers, buttons, and dyes, make recycling both technically and economically challenging.

The economic case for circularity

Despite growing consumer demand for sustainable fashion, producing recycled fibers remains more expensive than sourcing virgin materials. This cost gap has slowed adoption, leaving brands reluctant to invest in circular supply chains. As per Rags to Revenue report, the economic calculus could shift if the US develops a nationwide textile recycling infrastructure. The report argues that textiles could become a new revenue stream, driving innovation, job creation, and competitiveness in a global market increasingly focused on sustainability. “Think of it as a domestic manufacturing opportunity hiding in plain sight,” said a sustainability consultant. “We have the waste. We just need the systems to transform it into value.”

Emerging models of circularity

While the barriers are steep, the report highlights companies and initiatives already charting a new course. One case study centers on SuperCircle, a start-up building take-back programs and logistics networks to connect fashion brands with textile recycling facilities. By helping brands sort garments by fiber type, SuperCircle is tackling one of the toughest obstacles in scaling fiber-to-fiber recycling: the need for clean, separated material streams.

Policy innovation is also gaining traction. Extended Producer Responsibility (EPR) laws, already being debated in states like California and New York, would require fashion brands to take financial responsibility for the end-of-life of their products. If enacted, these laws could fund take-back programs, incentivize investment in recycling technologies, and shift accountability from consumers to producers. EPR could be the turning point, say policy analyst. Without that push, voluntary action alone won’t get us to scale.

From Rags to Revenue

For the fashion industry, which accounts for an outsized share of global carbon emissions comparable to aviation investing in textile recycling is not just a reputational imperative but a business necessity. If the US builds the infrastructure now, the report suggests, it could transform a costly waste stream into a profitable industry.

The message from the report is clear: scaling textile recycling in the US is no longer a choice but an opportunity waiting to be seized. Success will depend on collaboration across brands, recyclers, technology innovators, and policymakers. As the report concludes, the challenge is daunting, but the potential payoff environmental, economic, and social is immense. Turning discarded fabrics into valuable fibers could redefine the future of American textiles, proving that yesterday’s rags may indeed be tomorrow’s revenue.