Renewcell, the innovative Swedish textile recycling company, has now officially filed for bankruptcy. The company, which had the ambition to revolutionize the textile industry, has not been able to overcome the financial challenges that hindered their continued progress.
Renewcell was founded to transform the textile industry by recycling clothing and textile waste into new textile fibers. The company launched a large-scale chemical recycling initiative on an industrial scale in 2022 with the aim of recycling cellulose-based textile waste such as cotton clothing or production waste into a new material called circulose. Circulose can then become the basis for various kinds of artificial fibers such as viscose. With an innovative Circulose-technique they broke down cotton garments into cellulose solutions, which then became new textile fibers.
Despite its innovative idea and technology, Renewcell now announces that it has filed for bankruptcy. According to the press release the company has failed to secure the necessary funding for a strategic review they announced in November 2023.
During the review, Renewcell conducted advanced negotiations with its largest shareholders, H&M and Girindus, existing lenders such as BNP Paribas, the European Investment Bank, Finnvera (partial guarantor), Nordea, AB Svensk Exportkredit and potential new investors and other stakeholders regarding long-term financial solutions. Unfortunately, these negotiations did not lead to the necessary liquidity and capital that Renewcell needed to continue its operations.
This development is another setback for the textile industry, which is struggling to deal with its waste problems. At the same time, Swedes’ consumption of new textiles is increasing alarmingly fast. From the year 2000 to 2022, the net inflow of new textiles (imports minus exports) to Sweden increased by over 40 percent per person, which corresponds to an increase of approximately 4.5 kilograms per individual. Renewcell’s financial difficulties can be seen as an example of how difficult it is for individual actors to exploit the global and unsustainable textile and fashion industry.
