EIB signs SEK 311million loan with fashion innovator Renewcell in Sweden

In the coming decade, the global middle class is expected to continue to grow, which will cause an increase in fashion consumption.

The European Investment Bank (EIB) has signed a loan agreement of up to SEK 311 million with Renewcell from Sweden. The loan was extended under “InnovFin – EU Finance for Innovators”, with the financial backing of the European Union under Horizon 2020, the EU’s programme for research and innovation.

The Sweden-based fashion innovator has devised a way to turn discarded clothing into Circulose®, a pulp of which new fabric can be made, thus boosting the circular economy as a concept in the fashion industry. After proving their concept, Renewcell will use the EIB-loan to build their first full commercial-scale textile recycling plant, able to produce 60,000 tonnes per year, at the Ortviken industrial site near Sundsvall.

In the coming decade, the global middle class is expected to continue to grow, which will cause an increase in fashion consumption. Thus, and with an eye to climate change, the fashion industry needs to shift to circularity. In its bid to make the fashion industry more circular, Renewcell’s technology can be an important factor in reaching the EU’s target for waste reduction, as well as setting the tone for the development of the European recycling industry. The company is able to supply commercial volumes of 100% textile-to-textile recycled materials and is now scaling up to meet the growing demand for its product Circulose® with backing from Europe.

“When it comes to revolutionising existing industries, this really is cutting-edge," said EIB Vice-President Thomas Östros. “As the EU’s climate bank, it is definitely a priority for us to support projects that can turn around current business models, to make them more sustainable or even circular. After financing Northvolt and Nilar’s new battery concepts, this is yet another innovative Swedish company we are very proud to get behind. Renewcell has the potential to seriously reduce the climate impact of the fashion industry, something we are happy to assist with.”

Mariya Gabriel, European Commissioner for Innovation, Research, Culture, Education and Youth, said: “I am delighted to announce our first circular economy project supported under InnovFin Energy Demonstration Projects. Not only it will be a crucial addition to our portfolio, I expect it to pave the way for several new projects in this domain, which we need to accelerate in order to reduce waste and pollution.”

Renewcell CEO, Patrik Lundström, added: “We see the investment at Ortviken, Sundsvall as part of an Industrial Evolution to sustainability, in which we put existing skills, infrastructure and know-how of Swedish industry into a new circular context. We are proud to have the backing of the EIB in our effort to make fashion circular at scale.”