The BioDesign Newsletter

Issue #018

Tightening Scrutiny on Sustainability Practices and Supply Chains

On 18 July, the European Union’s Ecodesign for Sustainable Products Regulation (ESPR) officially came into force. This regulation mandates sustainable design principles shifting the industries towards circular economy practices with products that are durable, repairable and recyclable. 

The pressure for the textiles industry to consider its environmental impacts is only compounded by the approaching European Union Deforestation Regulation (EUDR) coming into force, in December 2024. This regulation will require scrutiny of supply chains for materials such as viscose and lyocell to eliminate deforestation-linked sources from textile production. 

In the US, the tariffs imposed on Chinese manufacturers by the Biden Administration to address unfair trade practices have led brands to reconsider their global supply chain. This has shifted the US industry’s attention to more cost-effective and near-shore production options.

Coloreel Falters in Securing Funding and Business Volume

While regulations are steering the industry towards sustainability, companies continue to struggle to balance the financing of scaling. Coloreel Group AB, a Swedish pioneer known for its on-demand dyeing technology for threads, recently filed for bankruptcy. Anders Persson, chairman of the board for Coloreel Group, stated: “It is with a heavy heart that we announce the filing for bankruptcy today. We have been working very hard to introduce a new technology and new ways of working on the global textile market.” 

It is a similar story to Renewcell’s bankruptcy, in that despite the environmentally impactful technology, the company failed to secure sufficient business volume to obtain the necessary funding to continue. Persson addressed the struggles saying, “Despite relentless efforts to grow the business, minimise operational costs, and secure additional funding, the challenges are too great. The board and the management are incredibly proud of what our team has achieved, and we are grateful for the support we have received from our partners, customers, and investors”.

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Innovations in Chemical Recycling and 3D Weaving Secure Major Funding

However it is not all doom and gloom. Recent investments in innovative companies signal strong support for sustainable technologies including, chemical nylon recycling company, Syntetica; textiles coating innovator, Matereal; and developer of 3D weaving technology, Unspun. 

Syntetica is a French start-up that focuses on breaking down, separating and purifying nylon from fabric blends. Just nine months after launch, the startup landed €4.2M (£3.5M) in its seed round, led by EQT Ventures. This funding will support Syntetica’s plan to start scaling, beginning with a prototype production in a pilot lab before scaling across Europe. 

Another chemistry-driven company, Matereal has also secured funding closing their series A round with $4.5M (£3.5M). Although led by the Collaborative Fund, this equity round gained attention and investments from other notable backers, including Better Ventures and PDS Venture. With this support injection, Matereal will continue on its mission to replace polyurethane and disrupt the chemical plastic supply chain. 

Further along in their journey Unspun has closed its series B round with an significant $32M (£24.9M) led by DCVC. Unspun will use the investment to scale its production of Vega 3D weaving machines and focus on apparel partnerships. 

Asian Market to Welcome New Sustainable Textile Mill

Meanwhile, in Sri Lanka, the Hirdaramani Group, a sustainable apparel manufacturer, has announced a substantial LKR10B (£25.6M) investment into a new textiles mill, ‘Mihila Tex’. Partnering with Hengda Textiles, a textile manufacturer,  the Hirdaramani Group plans to bolster their production of sustainable textiles whilst supporting the local economy. Vinod Hirdaramani, Chairman of the Hirdaramani Group, stated, “We are committed to boosting Sri Lanka’s apparel industry and enriching the livelihoods of over 800 employees.” 

With much of the globe’s apparel large-scale production in Asia, this will be a development to keep an eye on as pressure from incoming legislation forces brands to be more considerate of their supply chains.

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