1、Socioeconomic Impact of Second-Hand Clothes THE SOCIO-ECONOMIC IMPACT OF SECOND-HAND CLOTHES IN AFRICA AND THE EU27+REPORT FOR HUMANA PEOPLE TO PEOPLE AND SYMPANY+FINAL REPORT OCTOBER 2024 Socioeconomic Impact of Second-Hand Clothes ABOUT OXFORD ECONOMICS Oxford Economics was founded in 1981 as a co

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7、tional companies and financial institutions;key government bodies and trade associations;and top universities,consultancies,and think tanks.October 2024 All data shown in tables and charts are Oxford Economics own data,except where otherwise stated and cited in footnotes,and are copyright Oxford Eco

8、nomics Ltd.This report is confidential to Humana People to People and Sympany+and may not be published or distributed without their prior written permission.The modelling and results presented here are based on information provided by third parties,upon which Oxford Economics has relied in producing

9、 its report and forecasts in good faith.Any subsequent revision or update of those data will affect the assessments and projections shown.To discuss the report further please contact:Johanna Neuhoff: Oxford Economics 4 Millbank,London SW1P 3JA,UK Tel:+49 698 088 3016 Socioeconomic Impact of Second-H

10、and Clothes ii TABLE OF CONTENTS Glossary i Abbreviations iii Acknowledgments iv Executive Summary 1 1.Introduction 1 1.1.Motivation and Background 1 1.2.Methodological Overview 2 2.The SHC Value Chain 7 2.1.Overview of the typical SHC value chain 7 2.2.Collection of Textiles 9 2.3.Sorting and Class

11、ification of Textiles 13 2.4.Retail in the EU27+21 2.5.Import and Wholesale in Africa 23 2.6.Formal Retail in Africa 29 2.7.Informal Retail and Market Trade in Africa 32 3.SHC Trade between Africa and the EU27+37 3.1.Global trade in SHC 37 3.2.Exports from the EU27+38 3.3.Clothing imports in Ghana,K

12、enya,and Mozambique 40 3.4.Discussion of trade impacts on the local economy in the Global South 45 4.Socioeconomic Impact of SHC trade 50 4.1.Impact in the EU27+50 4.2.Impact in Three Selected African Countries 59 4.3.Environmental Impacts of SHC 80 5.Policy Space for SHC 85 5.1.Relevant Policies an

13、d Objectives in the Global North 85 5.2.Relevant Policies and Objectives in the Global South 91 5.3.Other Policy Goals in the International Arena 94 Socioeconomic Impact of Second-Hand Clothes iii 5.4.Summarised contributions of the SHC to overall policy goals 97 6.SWOT Analysis 99 6.1.SHC Industry

14、in the Global North 99 6.2.SHC Industry in the Global South 107 7.Policy Recommendations 115 7.1.Policymakers 115 7.2.Businesses/not-for-profit organisations 117 Bibliography 120 Appendix:Detailed Methodology 130 Socioeconomic Impact of Second-Hand Clothes|Glossary i GLOSSARY Circular economy:Model

15、of production and consumption which emphasises sharing,reusing,repairing,refurbishing,and recycling of existing materials and products.In this way,the life cycle of products is extended,waste is reduced,and the use of raw materials is minimised.The circular economy model can be contrasted with the t

16、raditional linear economic model,based on the take-make-consume-throw away pattern.Digital product passport:a digital representation of a products information throughout its lifecycle,from cradle to grave.Economic impact assessment:a study that measures/estimates the economic activity produced by a

17、single organisation/policy/program/project,and considers the impact on the overall economy,employment,and household income.Global North:The richest and most industrialised countries,which are mainly in the northern part of the world.In this report,the Global North often refers to the countries of th

18、e EU27+.Global South:The less economically advanced and industrialised countries,which are mainly in the southern part of the world.In this report,the Global South often refers to the studied African countries of Ghana,Kenya,and Mozambique.Green jobs:All jobs within a green industry,following the in

19、dustry-based definition of the UKs Office for National Statistics.Gross Domestic Product(GDP):GDP is the monetary value of all finished goods and services made within a country during a specific period;it differs from GVA in that it provides an overarching view of the whole economy.GDP is obtained b

20、y adjusting taxes and subtracting subsidies on products to GVA.Gross Value Added(GVA):GVA is a measure that quantifies the value created through value-adding activities.It is calculated as the difference between the value of output of goods and services and the value of inputs used in their producti

21、on.GVA can be measured at different levels,e.g.at the level of an individual producer,a particular industry,a country,etc.At country level,GVA plus taxes on products less subsidies on products equals GDP.“Kayayei”:a Ghanaian term for a female porter or bearer who transports goods to and from the mar

22、ket.Mechanical recycling of textiles:Process of breaking down used or discarded fabric into its fibrous form through physical methods such as shredding,tearing,or carding,without altering the chemical structure of the material.Not-for-profit organisations:Organisations whose activities are aimed at

23、a public or social benefit rather than generating profits for individuals or shareholders.Polluter Pays Principle:one of the key principles of the EUs environmental policy that states polluters should pay for the cost of their pollution.The principle is based on many international environmental laws

24、,and it contributes positively to reducing pollution.Socioeconomic Impact of Second-Hand Clothes|Glossary ii(Post-sorting)Textile waste:Disposed clothes or other textiles that have been deemed unsuitable for recycling or reuse by a professional sorter.Price elasticity:a measurement on how much consu

25、mers react to a change in prices of goods and services.Although there are two types of price elasticity(demand and supply),this report chiefly considers the price elasticity of demand.If demand is highly price-elastic,this means that a small change in prices corresponds to a large change in demand,a

26、nd vice versa.Second-round sorting/categorisation:Further categorisation of second-hand clothing in sorting centres in the Global South.This might include the breaking up of large import bales,the classification of clothing into designated,demand-specific categories(e.g.pants,womens t-shirts,etc.),a

27、nd the repackaging into smaller bales.SHC companies:Commercial and not-for-profit organisations whose primary business activities involve operations within the second-hand clothing industry,including the collection,sorting,wholesale distribution,or retail sale of second-hand clothes.Socioeconomic im

28、pact:The combination of social and economic impact.The economic impact includes the value-added impact,while the social impact concentrates on employment.Sorting:The multi-step process in which textile waste is assessed to determine its subsequent use(or final disposal).This process includes both th

29、e sorting of collected textile waste into one of three main categories(1)reusable textiles,(2)recyclable textiles,and(3)(post-sorting)textile wastecorresponding to the waste hierarchy,as well as subsequent more granular sorting steps within these main categories.Textile recycling:Process of recoveri

30、ng fibre,yarn,or fabric from textiles,and reprocessing material into new,useful products.Textile reuse:Reuse of discarded textiles(e.g.clothes)either in the condition in which they are,or after modification(repairments,restyling,etc.);second-hand clothes(SHC)are a result of textile reuse.(Unsorted)T

31、extile waste:All disposed clothes or other textiles(rags,blankets,cloths,etc.)that have not(yet)undergone a sorting operation by a professionally trained sorter count as textile waste.This definition follows the expected revision to the Waste Framework Directive which initially classifies all collec

32、ted used textiles as waste.Textile waste does not necessarily lack economic value nor end up in landfills/incineration plants,etc.Value-adding activity:A value-adding activity is an activity that increases the economic value of a product or service.For example,textile sorting is a value-adding activ

33、ity as sorted textiles have a higher economic value than non-sorted textiles/textile waste.Waste hierarchy:The foundation of EU waste management,established in the Waste Framework Directive.It establishes a five-step order of preference for waste management,namely(1)waste prevention,(2)preparing for

34、 re-use,(3)recycling,(4)recovery,and(5)disposal,with(1)being the most preferred and(5)the least preferred waste management option.Socioeconomic Impact of Second-Hand Clothes|Abbreviations iii ABBREVIATIONS ADPP Ajuda de Desenvolvimento de Povo para Povo AfCFTA African Continental Free Trade Area AGO

35、A African Growth and Opportunity Act AMCEN African Ministerial Conference on the Environment CEAP Circular Economy Action Plan CIF cost,insurance,and freight EAC East African Community EPR Extended Producer Responsibility ESPR Ecodesign for Sustainable Products Regulation EU27+European Union plus th

36、e United Kingdom FOB free on board GDP Gross Domestic Product GEAP Green Economy Action Plan GHS Ghana-Cedi GSM Global Sustainability Model GVA Gross value added KEBS Kenya Bureau of Standards KES Kenyan Shilling MDG Millenium Development Goals MZN Mozambican metical NDC Nationally Determined Contri

37、bution NGO Non-government organisation PPP Polluter Pays Principle SDG Sustainable Development Goals SHC Second-hand Clothes/Clothing SWOT Strengths,Weaknesses,Opportunities,and Threats UAE United Arab Emirates UN United Nations UNGA United Nations General Assembly VAT Value-added tax WSR Waste Ship

38、ments Regulation WTO World Trade Organization Socioeconomic Impact of Second-Hand Clothes|Acknowledgments iv ACKNOWLEDGMENTS We would like to express our sincere appreciation to all the experts and stakeholders who contributed their time and insights throughout the various stages of this research.Yo

39、ur participation in the exploratory interviews,expert interviews,data validation workshops,and on-site interviews has been instrumental in refining our analysis and enhancing the overall quality of this study.Socioeconomic Impact of Second-Hand Clothes|Executive Summary 1 EXECUTIVE SUMMARY The secon

40、d-hand clothing(SHC)industry does not only significantly reduce the environmental impact of textile production but also has an underexplored socioeconomic impact.By promoting garment reuse,extending apparel lifespans,and lowering the demand for new textiles,the SHC industry plays a pivotal role in r

41、educing the environmental impact of textile production.The industry significantly lessens the environmental footprint of clothing items,with reused textiles requiring just 0.01%of water and saving about 3 kg of CO2 per item compared to the production of new clothing(European Recycling Industries Con

42、federation,2023).Less explored,are the contributions of the SHC sector to economic value,employment,and a more sustainable and inclusive global economy.This report,commissioned by Humana People to People and Sympany+,aims to quantify the socioeconomic impacts of the SHC industry.More specifically,it

43、 analyses the socioeconomic impact of the SHC industry in the European Union and the United Kingdom(EU27+),as well as in three selected African countries:Ghana,Kenya,and Mozambique.Utilising a comprehensive multi-method approachincluding literature review,expert interviews,quantitative surveys,trade

44、 data analysis,and qualitative fieldworkthe study offers an in-depth understanding of the value chain,its socioeconomic impacts,and the policies shaping the industry.VALUE CHAIN OF THE SHC INDUSTRY The value chain of the SHC industry involves several key stages,starting with collection and moving th

45、rough sorting,wholesale,retail,and ultimately,consumer purchase.Initially,clothes are discarded by individuals in the Global North at various collection points managed by SHC companies,including commercial and not-for-profit organisations.These companies collect used textiles through different contr

46、acting mechanisms,which include economic transactions such as fees paid to municipalities,and ultimately sell the collected textiles to dedicated sorting companies.The collected clothing serves as the feedstock for the industry,fuelling all subsequent processes.In the following sorting stage,items u

47、ndergo meticulous categorisation based on their potential for reuse,recycling,or disposal aligning with the waste hierarchy.Sorting centres in the EU27+typically identify four main categories:clothes suitable for retail in Europe,those destined for markets in the Global South,textiles that are non-r

48、eusable and earmarked for recycling,and clothes that cannot be repurposed.Following the sorting stage,reusable clothes are either sold within the EU27+or shipped to the Global South.In the EU27+,second-hand items are retailed through various outlets,including commercial retail shops and not-for-prof

49、it organisations,catering to a diverse range of consumer preferences and price points.In the Global South,the sorted clothing is bought and imported by wholesalers,who may further categorise the items by type and quality to meet specific customer demands.Wholesalers play a crucial role in distributi

50、ng bales of clothes to both formal retail shops and informal market traders,who are ultimately responsible for ensuring that individual clothing items reach consumers.In contrast to common belief,every step involves financial transactions such as paying workers,buying,and selling clothes,and coverin

51、g shipment costs.Socioeconomic Impact of Second-Hand Clothes|Executive Summary 2 In many countries in the Global South,including Ghana,Kenya,and Mozambique,the informal retail market is particularly significant.It often sells substantially more clothes than its formal counterpart.Informal retailers

52、purchase clothing bales from wholesalers and individual pieces from formal retailers,and then conduct a wide array of business activities such as washing,ironing,and restyling clothes to enhance their market value.Other informal retailers also act as tailors and repairers,providing additional value

53、to lower-quality clothes.Additionally,informal traders play an important role in distributing clothes to remote areas,ensuring accessibility to affordable clothing for a broader population.SHC TRADE BETWEEN THE EU27+AND GHANA,KENYA,AND MOZAMBIQUE In 2023,the EU27+maintained a leading position in the

54、 global SHC trade,exporting 2.2 million tonnes valued at$2.2 billion.At the same time,the EU27+only imported 751,620 tonnes worth$923 million.The United Kingdom(UK)is the third-largest global exporter,following the United States(US)and China.Major European Union(EU)exporters include Germany,the Neth

55、erlands,Poland,and Italy.Notably,much of the SHC exported from the EU27+remains within the continental boundaries,with some countries functioning as intermediaries that sort and re-export SHC.The EU27+is an important source of SHC for the three African countries selected in this study.For instance,t

56、he EU27+directly supplied 47%of Ghanas SHC imports in 2023.Direct imports from the EU27+make up a smaller share of imports in Kenya(13%)and Mozambique(18%).However,the total EU27+impact on the countries SHCs imports might be higher.Intermediary countries,such as the United Arab Emirates(UAE)and Paki

57、stan,also sort and process SHC collected in the EU27+,and are some of the top supplying markets for the Global South.While SHC imports from the EU27+became increasingly important to Ghana,the volume of direct EU27+imports in Kenya and Mozambique declined.In 2023 alone,Ghana imported 53,970 tonnes of

58、 SHC valued at$44 million from the EU27+,with the volume of clothing imported having increased by 6%,and the value of imports growing by 28%over the last decade.In contrast,Kenyas imports of SHC from the EU27+declined significantly by 2023,dropping to$26 million or 25,430 tonnes,a decrease of 36%and

59、 40%,respectively,since 2013.Despite this,the overall volume of SHC imports into Kenya nearly doubled over the decade,driven by substantial increases in imports from China,Pakistan,the US,and the UAE.Meanwhile,Mozambique experienced a sharp decline in total SHC imports over the same period.By 2023,e

60、xports from the EU27+to Mozambique declined from 19,736 tonnes($21 million)to 7,600 tonnes,valued at$7.6 milliona 61%reduction in volume and a 64%reduction in value.Over 80%of second-hand clothes imported from the EU27+in Ghana,Kenya,and Mozambique were sold in informal markets in 2023 47%,13%,and 1

61、8%of SHC imports in Ghana,Kenya,and Mozambique originated directly from the EU27+in 2023 Socioeconomic Impact of Second-Hand Clothes|Executive Summary 3 SHC trade from the Global North to the Global South has spurred policy changes in African countries to protect local textile industries,yet these e

62、fforts have largely failed to benefit local textile manufacturing.The substantial SHC trade from the Global North to the Global South has raised concerns about its negative impact on local textile industries,prompting policy changes in African countries.For example,the East African Community(EAC)ini

63、tially agreed to ban all SHC imports by 2019 to protect and expand the local textile industry.However,Kenya withdrew from this initiative to protect its export-oriented clothing manufacturing industry,which benefits from the African Growth and Opportunity Act(AGOA)trade agreement.Other countries hav

64、e taken similar initiatives to restrict SHC imports.Overall,SHC import bans did not significantly benefit local textile manufacturing.With local production being more expensive,large parts of the population demanding affordable clothing may substitute second-hand items with cheap new clothing import

65、s rather than purchasing from the local industry.Moreover,factors such as relying on imported fabrics and lack of investment,combined with competition from cheap new clothing imports,make it difficult for the local industry to meet domestic market needs even in the absence of second-hand imports.SOC

66、IOECONOMIC IMPACT IN THE EU27+In the EU27+,the SHC industry has a substantial direct socioeconomic impact.In 2023,it contributed 3.0 billion to the regions Gross Domestic Product(GDP)in 2023.This contribution is split between profits(700 million)and compensation of employees(2.3 billion).The retail

67、sector accounts for 62%of this gross value added(GVA),followed by sorting and collection companies each contributing 19%.Key countries such as Germany and the UK benefit significantly,with the industry contributing 670 million and 420 million,respectively,to the GDPs of these nations alone.Additiona

68、lly,the industry generates significant employment in the EU27+,with an estimated 110,000 jobs.1 Most of these jobs,around 67,000,are provided by retail stores,while sorting facilities employ 35,000 individuals,and collection activities account for 11,000 jobs.Importantly,with the industry facilitati

69、ng the collection of textile waste and the sorting of recyclable and reusable materials from waste streams,the industry creates green jobs for its employees.The total economic contribution of the SHC industry in the EU27+far exceeds its direct impact.Beyond its direct operations in collection,sortin

70、g,and retail,the industry also stimulates considerable economic activity through its supply chain spending(indirect effect)and the wage-induced consumption spending of employees(induced effect).In 2023,the industry supported an estimated total contribution of 7.0 billion to GDP in the EU27+,equivale

71、nt to 10%of Lithuanias GDP that year.Similarly,the industry also supported another 40,000 jobs through the indirect and induced channels of impact.Thus,the total employment stimulated by the industry in the EU27+was around 150,000 jobs in 2023.1 Throughout this report,totals may not add up due to ro

72、unding.110,000 green jobs created by the SHC industry in the EU27+in 2023.Socioeconomic Impact of Second-Hand Clothes|Executive Summary 4 Moreover,the SHC industry generated considerably wider socioeconomic impacts in the EU27+.In EU countries,the average gross income of the industrys employees in e

73、ach country was,on average,around 12%higher than the respective national minimum wage.Moreover,the industry generated substantial job opportunities in less economically developed regions of the EU27+including Bulgaria,Romania,and Poland,where around 22,000 workers were employed in the SHC industry.T

74、he European SHC industry also fosters equal-paid female employment opportunities,with women making up around 79%of its workforce and no reported difference in pay between men and women.Moreover,77%of the industrys employees have a basic/intermediate educational background(e.g.lower secondary school,

75、higher secondary school),compared to 60%in the overall workforce of the EU27+.This highlights that the SHC industry provides accessible job opportunities for which the formal education requirements are rather modest.SOCIOECONOMIC IMPACT IN GHANA,KENYA,AND MOZAMBIQUE The socioeconomic impact of SHC t

76、rade between the EU27+and Ghana,Kenya,and Mozambique also generated substantial economic impacts in the three African countries.In Ghana,the direct economic impact of SHC imports from the EU27+was substantial,with an estimated contribution of$35 million to the countrys GDP in 2023.This impact is pri

77、marily driven by salaries and wages paid to employees,accounting for 71%of the direct GDP contribution.The industry also created approximately 14,000 formal jobs through the import of SHC from the EU27+.Similarly,the SHC trade between Kenya and the EU27+provided a direct GDP contribution of around$9

78、.2 million and supported approximately 3,600 formal jobs.In Mozambique,we estimate a direct GDP contribution of$2.7 million,driven largely by high salaries and wages paid to the industrys employees.The industry also created about 1,000 formal jobs within the SHC sector by importing used clothes from

79、 the EU27+.The total economic impact of EU27+SHC imports in the three African countries studied extends beyond direct contributions by stimulating economic activities through supply chain and wage-funded consumption spending.In Ghana,the total socioeconomic contribution of these imports across all t

80、hree channels of impact was approximately$76 million and 22,000 formal jobs.Consequently,the industry stimulated a GDP multiplier effect of 2.2,with each Dollar in GVA generating an additional$1.20 elsewhere in the economy.Similar patterns were observed in Kenya and Mozambique,where the SHC trade wi

81、th the EU27+stimulated GVA of$24 million and 6,300 formal jobs in Kenya,and 11 million in GVA and 5,700 formal jobs in Mozambique,through the industrys direct impact,procurement,and the wage-financed consumption spending of employees.The tax revenues from SHC trade with the EU27+in these countries w

82、ere also noteworthy,stimulating between 0.1%and 0.4%of the total national tax revenues across all channels of impact in 2023.This included substantial import duties and Value-added Tax(VAT)collections,highlighting the sectors critical role in supporting government revenues.$110 million combined tota

83、l gross value added contributions in Ghana,Kenya,and Mozambique sustained by SHC trade with the EU27+.Socioeconomic Impact of Second-Hand Clothes|Executive Summary 5 The SHC industry in the three African countries is strongly characterised by its informality,with most employment being created throug

84、h informal market traders and its employees.We estimate that the SHC trade with the EU27+generated jobs for 43,000,68,000,and 15,000 informal workers in the SHC industries in Ghana,Kenya,and Mozambique,respectively.Next to those working directly for SHC wholesalers and retailers,this includes employ

85、ment opportunities for ancillary workers such as unloaders or transporters working within the sector.Furthermore,the informal industry supports several opportunities for women and youth.For example,77%of the interviewed informal retailers in Ghana,Kenya,and Mozambique were women,and approximately 70

86、%younger than 45 years old.TABLE 1:ECONOMIC CONTRIBUTION OF THE SHC INDUSTRY RELATING TO SHC IMPORTS FROM THE EU27+ACROSS CHANNELS AND METRICS,2023 Ghana Kenya Mozambique Total SHC imports 111,000 tonnes 198,000 tonnes 50,000 tonnes SHC imports from EU27+54,000 tonnes 25,000 tonnes 7,600 tonnes Dire

87、ct GVA$35 million$9.2 million$2.7 million Total GVA$76 million$24 million$11 million Direct formal jobs 14,000 3,600 1,000 Total formal jobs 22,000 6,300 5,700 Direct informal jobs 43,000 68,000 15,000 Direct tax revenue(incl.VAT)$33 million$22 million$8.3 million Total tax revenue(incl.VAT)$38 mill

88、ion$23 million$11 million Source:Oxford Economics Note:Mozambique import figures are based on the exports to Mozambique reported by the EU27+.While substantial employment numbers are reported,the quality and consistency of jobs can vary depending on the formality of the employment and the country.Co

89、untries importing SHC such as Ghana,Kenya,and Mozambique generally have a highly informal workforce,with SHC imports from the EU27+supporting the livelihoods of the many tradersincluding informal onesin all three countries.Most of the interviewed traders reported relying on SHC trade as their sole s

90、ource of income.While the formal industry enables full-time workers to earn“living wages”within Ghana,Kenya,and Mozambique,the employment provided by informal traders is characterised by low wages,as several informal traders reported that their workers also rely on other sources of income.19,000 and

91、 130,000 formal and informal jobs,respectively,created through SHC trade with the EU27+within Ghanas,Kenyas,and Mozambiques SHC industries combined.Socioeconomic Impact of Second-Hand Clothes|Executive Summary 6 From a consumer perspective,one of the leading social benefits of the SHC industry is th

92、at it allows for affordable access to quality clothing.The affordability of SHC is the leading source of the growing demandespecially as quality is reported to be higher than of comparably cheap,newly produced clothing.However,the ultimate disposal of used clothing items after being worn in importin

93、g countries raises concerns regarding the environmental impact of the industry in importing countries.Even though recent studies(Circle Economy,2023)have revealed that only a relatively small fraction of SHC imports can be considered waste(around 4%),this still amounts to a non-negligible absolute a

94、mount of waste due to the high volume of overall imports.As a result,countries importing SHC are often not equipped to handle any accruing waste when relying on their inadequate waste management infrastructure.While this is largely an issue resulting from lacking infrastructureand does not only affe

95、ct SHC but all industries and waste streamsit does affect the SHC traders ability to properly dispose of possible textile waste.CONTRIBUTION TO EUROPEAN,AFRICAN,AND INTERNATIONAL POLICY OBJECTIVES The SHC industry is pivotal in achieving EU policy goals,especially concerning circularity.The European

96、 Green Deal,Circular Economy Action Plan(CEAP),and European Industrial Strategy,for instance,outline significant frameworks within which the industry operates.The industry contributes to the goals set out in these frameworks by promoting the reuse of textiles,reducing waste,and conserving resources.

97、For example,by separately collecting post-consumer textiles,the SHC industry prevents used textiles from ending up in landfills and therefore contributes to municipal waste reduction.Furthermore,the industry exemplifies sustainable development,as the collection and recycling of used textiles is dire

98、ctly aligned with the EUs goal to decouple economic growth from resource use.By significantly contributing to the reduction of greenhouse gas emissions and supporting climate action,the SHC industry also supports the overall objectives set out in the European Green Deal.The SHC industry contributes

99、to advancing circular and sustainable development in the Global South,complementing the key policy objectives in Ghana,Kenya,and Mozambique.The policy goals in the Global South place a stronger emphasis on effective waste management and sustainable development,including job creation.For example,the

100、Ghanaian CEAP and the National Solid Waste Management Strategy focus on managing textile waste and promoting recycling initiatives to support both environmental and economic resilience.Kenyas Sustainable Waste Management Act and Green Economy Strategy highlight the importance of building infrastruct

101、ure to prevent waste and improve recycling capacities.Similarly,Mozambiques Green Economy Action Plan(GEAP)aims to embed green growth within national development priorities,fostering a circular economy.The SHC industry supports these goals by creating formal and informal employment opportunities,fos

102、tering local entrepreneurship,and reducing the environmental impact of textile waste through reuse and recycling initiatives.By separately collecting post-consumer textiles,the SHC industry prevents used textiles from ending up in landfills and therefore contributes to municipal waste reduction.Soci

103、oeconomic Impact of Second-Hand Clothes|Executive Summary 7 The SHC industry also contributes substantially to the achievement of several UN Sustainable Development Goals(SDGs).For instance,by providing affordable clothing to low-income populations and creating income-generating opportunities in bot

104、h formal and informal sectors,the industry acts towards SDG 1(No Poverty)and SDG 8(Decent Work and Economic Growth).Moreover,with a large portion of the industrys workforce both in the EU27+and the three African countries consisting of women,the industry also contributes to SDG 5(Gender Equality).Fi

105、nally,the industrys core practices naturally align with SDGs 12(Responsible Consumption and Production)and 13(Climate Action)by promoting the reuse and recycling of textiles,reducing waste,and minimising the environmental footprint associated with new textile production.STRENGTHS,WEAKNESSES,OPPORTUN

106、ITIES,AND THREATS(SWOT)The SHC industry in the Global North has both strength and weaknesses.The SHC industrys strengths include its sustainable and circular nature,creating economic value without the use of new resources and extending the lifecycle of garments,offering options with a smaller enviro

107、nmental footprint than new clothes.The industry also provides substantial accessible employment opportunities across the EU27+,with little formal education requirements.With well-established networks,a broad customer base,and efficient collection,sorting,and transportation processes,the industry has

108、 been well-equipped to react to changes affecting the industry.Weaknesses,on the other hand,include the labour-intensive and therefore costly sorting stage.Whilst sorting is a key value-adding process,the high labour costs make it difficult for sorting centres to operate profitably.Another weakness

109、of the industry relates to small shares of waste included in SHC exports,creating environmental and social challenges in recipient countries,and causing reputational costs for the industry.Despite challenges,the industry is facing several opportunities in the Global North.Expected growing consumer d

110、emand driven by consumers considerations of sustainability,affordability,and perception of SHC as unique and fashionable.With the industrys inherent business model closely aligning with EU policy goals,future regulatory changes,such as Extended Producer Responsibility(EPR)schemes,could reduce operat

111、ional costs and therefore improve economic viability.Technological advancements in sorting and recycling could further increase profits by reducing operational costs or opening new revenue streams.Nevertheless,we also identify multiple threats to the industry in the Global North,with an overarching

112、threat of overregulation.Inaccurate or overly stringent regulations could create additional costs,burdens,and other difficulties.Competition in the form of cheap fast fashion,and demand shocks because of geopolitical tensions or economic downturns,constitute further threats to the industry.The SHC i

113、ndustry significantly contributes to achieving the Sustainable Development Goals.Socioeconomic Impact of Second-Hand Clothes|Executive Summary 8 TABLE 2:IMPORTANT STRENGTHS,WEAKNESSES,OPPORTUNITIES,AND THREATS IN THE GLOBAL NORTH Strengths Weaknesses Sustainable and circular business Value added wit

114、hout the use of additional resources Substantial employment opportunities in green jobs Proven adaptability to market or regulatory changes Labour-intensive sorting processes Risk for exports of poor-quality clothing ending up as waste Opportunities Threats Growing market for SHC expected Industry i

115、s in line with EU policy objectives and might further be strengthened by regulatory changes Advancing technologies in sorting or recycling Regulatory risks could hamper the industrys operations and create additional costs and burdens Increased consumption of fast fashion might disrupt both the deman

116、d and supply of SHC industry Economic volatility and geopolitical tensions;vulnerable given,for example,transport routes As in the Global North,the SHC industry in the Global South is characterised by both strengths and weaknesses.The SHC industrys strengths include its support of numerous jobs at v

117、arious stages of the value chain and its creation of low-threshold business opportunities for informal retailers.Moreover,the industry is an important and indispensable source of affordable,good-quality clothing for lower-income populations in the Global South.However,due to its import-dependent nat

118、ure,the industry in the Global South is also vulnerable to any supply chain disruptions,highlighting an important weakness of the industry.Moreover,many workers involved in the industry,especially informal market traders,also face high degrees of economic insecurity and have disproportionally little

119、 market and bargaining power.There are also major concerns relating to waste challenges created by the trade with SHC.While waste is not a specific challenge to the SHC industry but to the general economy in many countries,the trade with SHC leads to unsellable textiles being disposed of in inadequa

120、te ways,mostly because of an inadequate waste management infrastructure and too little knowledge of recycling opportunities.The SHC industry in the Global South faces a mix of opportunities and threats.Building up domestic facilities to categorise imports could help filter out waste textiles before

121、they enter the retail stage whilst also fostering local jobs and skill development.Similarly,improved product description and frequent communication between sorting centres(in the Global North)and traders in the Global South could reduce waste or unsellable items being imported in the Global South.L

122、everaging the currently underdeveloped recycling efforts,for instance,through direct cooperation between wholesalers and retailers with local recycling companies,constitutes a further opportunity.Supportive legislation,like lowering import tariffs,could further strengthen the industry.However,there

123、are also multiple threats present,often closely related to identified weaknesses.Supply chain disruptions Socioeconomic Impact of Second-Hand Clothes|Executive Summary 9 threaten the industry,whether they result from geopolitical conflicts,economic downturns,or increased import tariffs in the Global

124、 South or policy changes in the Global North.Among other things,the influx of inexpensive fast fashion also poses a significant competitive threat to the SHC industryat least for customers less responsive to the lower quality often associated with the fast fashion clothes.TABLE 3:IMPORTANT STRENGTHS

125、,WEAKNESSES,OPPORTUNITIES,AND THREATS IN THE GLOBAL SOUTH Strengths Weaknesses Properly paid employment opportunities,especially in formal part Low-threshold business opportunities for local entrepreneurs Provision of affordable quality clothing that meets local demands Highly import-dependent indus

126、try Asymmetries in market/bargaining power between different actors in the value chain lead to precarious employment in the informal sector Lack of widespread,adequate waste management infrastructure Opportunities Threats Introduction of domestic sorting centres can generate value-added contribution

127、s and reduce landfill waste Potential for growth-stimulating collaboration between the SHC industry and local textile recycling and manufacturing companies Supportive and adjusted legislation Influx of inexpensive fast fashion clothing imports Vulnerability towards economic fluctuations in the Globa

128、l North and Global South POLICY RECOMMENDATIONS Policymakers in the Global North should primarily focus on refining policies in a way that policy objectives align with the SHC industrys business reality.Policymakers in the Global North should implement and enforce EPR schemes for textiles.By holding

129、 producers financially responsible for the end-of-life management of their products,the costs for collection,recycling,or disposal of textiles will be borne by the original producer,incentivising the design of more sustainable and recyclable clothing.Properly assigning the EPR to producers of new cl

130、othesand not subjecting SHC to EPR feescan make collection and sorting of SHC financially sustainable,which may be necessary to ensure the economic viability of commercial and not-for-profit collectors and sorting companies.Additionally,developing clear end-of-waste criteria for textiles is crucial.

131、Establishing stringent guidelines on sorting and end-of-waste criteria that differentiate SHC from waste will enable SHC exports and prevent the export of textile waste to the Global South without hampering the industry.In the Global South,policymakers should better leverage the formal SHC industrys

132、 positive socioeconomic effects on GDP and employment while managing its overall environmental impact through the provision of a waste management infrastructure.Policymakers can support the SHC industry by supporting official SHC imports.Managing import taxes and SHC surcharges can make SHC more aff

133、ordable for lower-income demographics.Findings suggest that import tariffs and Socioeconomic Impact of Second-Hand Clothes|Executive Summary 10 bans on SHC do little to support local manufacturing and rather benefit fast fashion producers.Moreover,encouraging the establishment of local sorting and p

134、rocessing facilities is essential.Investing in local sorting and processing facilities will foster job creation,support skill development,and contribute to economic diversification.Local categorisation and processing of SHC can further ensure that textiles which cannot be resold domestically are not

135、 disposed of unsustainably.Sorting centres can sell textiles directly to recycling companies or transport them to properly managed landfills,also strengthening the local recycling industry.Moreover,lower labour costs in the Global South can reduce operational costs associated with sorting and increa

136、se the affordability of SHC for retailers and consumers.SHC businesses and not-for-profit organizations in the Global North can play an important role in the SHCs industry profitability and market expansion.They can enhance supply chain integration and develop e-commerce platforms to improve efficie

137、ncy,reduce waste,expand market reach,and increase public awareness of the environmental benefits of purchasing second-hand clothing.SHC businesses and not-for-profit organisations in the Global North should focus on developing integrated partnerships within the supply chain for streamlined operation

138、s.Improved coordination between collection companies,sorting facilities,and retail outlets can ensure efficient matching of supply and demand,reduce waste,and improve overall profitability.We further suggest that retail businesses should increasingly develop e-commerce platforms to make SHC accessib

139、le to a broader audience,including consumers in remote areas lacking developed physical retail networks.With a significant percentage of EU consumers making online purchases,e-commerce provides a large customer base for SHC.Public awareness campaigns underlining the environmental benefits of purchas

140、ing SHC could also increase consumer participation and support sustainability goals.Businesses and not-for-profit organizations in the Global South can help to increase the positive socioeconomic impacts of the SHC industry in the importing countries.As mentioned,businesses and not-for-profit organi

141、sations in the Global South could benefit from local sorting facilities enabling a better matching of supply and local demand,benefitting both wholesalers(who could charge higher prices)and retailers(who would have to deal with less unsellable textiles).Additionally,establishing associations for inf

142、ormal market retailers could help address power asymmetries in the market.Trade associations can provide a voice for advocacy,engage in collective bargaining,and offer vocational training programs.This can improve market power and economic security for informal traders,who play a pivotal role in the

143、 SHC value chain.Socioeconomic Impact of Second-Hand Clothes|Introduction 1 1.INTRODUCTION 1.1.MOTIVATION AND BACKGROUND Paving the way towards a sustainable and circular economy is at the centre of political action and public attention around the globe.While moving towards a circular economy is imp

144、ortant across industries,some sectors have the potential to play a particularly pivotal role in reaching this goal.Among these sectors is the textile and clothing industry,with textile production being responsible for an estimated 20%of global water pollution and 10%of global carbon emissions(Europe

145、an Parliament,2024).Consequently,the production of new clothes and their short life cycles impose pressure on natural resources and the environment.To counteract these impacts,the SHC industry is critical for achieving a sustainable economy.By promoting the reuse of garments,SHC not only extends the

146、 lifespan of apparel but also diminishes the demand for new textile production,thereby reducing textile waste.Moreover,reused textiles have a significantly lower environmental footprint than new clothes:the footprint of reused textiles is assumed to be up to 70 times lower than that of new clothing,

147、with reused clothes requiring only 0.01%water and saving about 3 kg of CO2 per item of new clothing(European Recycling Industries Confederation,2023).While the environmental potential is often the most discussed aspect of the SHC industry in the public discourse,the industrys contributions extend be

148、yond the environmental benefits.The SHC industry not only supports employment through the collection,sorting and retail of used clothes,for example,but also generates significant economic value within the countries involved in its global value chain.Furthermore,it plays a crucial role in providing a

149、ccess to affordable clothing for people,especially in lower-income countries.The SHC industry is therefore in a particularly promising position to contribute to the twin goals of protecting the environment and simultaneously building a strong and sustainable economy.This socioeconomic dimension of S

150、HC is less explored in the present literature.To address this gap,Oxford Economics has been commissioned by Humana People to People and Sympany+to analyse the socioeconomic impacts facilitated by the SHC trade between the Global North and the Global South.More specifically,this study analyses the so

151、cioeconomic impacts of the SHC industry in the EU and the UKreferred to as EU27+throughout and examines the impacts of SHC imports from the EU27+in three African countries:Ghana,Kenya,and Mozambique.Our study quantifies the socioeconomic impacts of second-hand trade between the EU27+and three select

152、ed African countries using a multi-method approach.Due to the high informal share of the industry in the Global South,existing estimations and studies have very mixed and sometimes internally inconsistent estimates.One reason is that the definition of market segments,key financial variables,and main

153、 stakeholders can vary significantly between countries.Validating the data input by using an expert survey,on-site observations,and discussing inconsistencies in validation workshops have been essential in overcoming these different understandings that have been contributing to the mixed information

154、 gathered on the sector in the literature.While the results are still estimations that depend on several assumptions elaborated on in detail in the appendix,the results are internally consistent,comparable between the three countries,and compatible with official trade datain Socioeconomic Impact of

155、Second-Hand Clothes|Introduction 2 contrast to other studies.Moreover,our estimates tend to be on the conservative side of the spectrum of findings from the literature.As a result,we believe that our results currently provide the most consistent estimations of second-hand trades socioeconomic impact

156、 in the EU27+as well as the corresponding imports into the three selected African countries.This report is structured as follows:Chapter 1 gives an overview of the methodology to assess the socioeconomic impact of the SHC trade between the EU27+and Ghana,Kenya,and Mozambique.Chapter 2 provides a sty

157、lised overview of the SHC value chain and describes the different steps along the value chain in detail.Chapter 3 addresses the extent of SHC trade between the selected African countries and the EU27+based on trade statistics.Chapter 4 comprises the socioeconomic impact analyses for the EU27+and the

158、 three relevant African countries,Ghana,Kenya,and Mozambique,respectively.In Chapter 5,the relevant regulatory frameworkboth in the Global North and the Global Southis presented.In addition,we discuss how the SHC industry contributes to these policies.In the SWOT analysis in Chapter 6,we identify st

159、rengths,weaknesses,opportunities,and threats to the SHC industry in the Global North and the Global South.Based on the previous chapters,Chapter 7 concludes by suggesting policy recommendations for different stakeholders.1.2.METHODOLOGICAL OVERVIEW In this chapter,we outline our methodology for asse

160、ssing the socioeconomic impact of the SHC trade in the EU27+as well as the imports from the EU27+to Ghana,Kenya,and Mozambique.Our approach was multi-dimensional,incorporating:a literature review;exploratory expert interviews;a quantitative survey of key stakeholders along the second-hand industrys

161、value chain;data validation workshops;a trade data analysis for sizing the trade between the EU27+and our three selected African countries;economic impact analyses;expert interviews with policymakers and stakeholders in Ghana,Kenya,and Mozambique;and qualitative fieldwork in these countries.This com

162、prehensive approach ensured we thoroughly understood the SHC value chain,the socioeconomic impact of SHC in the EU27+and the three African countries,and the relevant policies affecting this industry.The main steps are outlined below.More information of all the methodological steps implemented can be

163、 found in the appendix.DEFINING THE SHC VALUE CHAIN We conducted an extensive literature review to develop a stylised representation of the SHC value chain.We used the literature review to identify and understand the operations of the key actors in each stage of the value chain,from collection in th

164、e EU27+to retail in the Global South.Building on the literature review,we conducted 11 explorative interviews with actors at each stage of the SHC value chain.Participants were asked about their organisations role in the value chain,the nature of their operations relating to SHC,and the current stat

165、e of the SHC industry.These interviews informed our understanding of the value chain,contributing to a more accurate representation of the industrys Socioeconomic Impact of Second-Hand Clothes|Introduction 3 structure and dynamics,and highlighted current challenges and opportunities for the second-h

166、and industry in the Global North and the Global South.ANALYSING TRADE DATA TO SIZE THE INDUSTRY We further analysed the SHC trade between the EU27+and Ghana,Kenya,and Mozambique,focusing on the values and volumes.This involved collecting and evaluating export and import data from the United Nations

167、UN Comtrade database to analyse the size of the trade flows between the EU27+and Ghana,Kenya,and Mozambique.Firstly,inter-EU27+trade was considered to understand the flow of SHC across the EU and the UK,before they are distributed to African and other countries.To contextualise SHC imports in Ghana,

168、Kenya,and Mozambique,the value of SHC in these countries was compared to new clothing imports,before unpacking trade values,volumes,and leading trading partners.To understand how trade in SHC has changed over the last decade,the latest available data was compared with 2013 data.ESTIMATING THE SOCIOE

169、CONOMIC IMPACT OF THE INDUSTRY The assessment of the socioeconomic impact of SHC in the EU27+and the three selected African countries formed the core of the analysis.We assessed the impact of SHCs in the EU27+and the impact of SHC trade between the EU27+and Ghana,Kenya,and Mozambique using a standar

170、d analytical framework,known as an economic impact assessment.This involved quantifying the three economic impact channels,namely the direct,indirect(supply chain),and induced(wage-financed consumption expenditure)channels(see Figure 1):The direct impact relates to the operations of all organisation

171、s and businesses in the SHC industry,namely the collection,sorting,and retail of SHC in the EU27+,as well as the wholesale,formal retail,and informal retail of SHC in Ghana,Kenya,and Mozambique connected to the direct imports of SHC from the EU27+.The indirect impact is the economic activity and emp

172、loyment sustained in the industrys supply chain via the spending of SHC organisations and companies on goods and services in the EU27+,Ghana,Kenya,and Mozambique.The induced impact comprises the wider economic benefits that arise from the payment of wages by the industry and the businesses in its su

173、pply chain.Employees who receive wages spend their earnings as consumers in the economy of their country,stimulating further economic activity and jobs.The three channels of impact combined make up the second-hand industrys total core economic impact.We measured these impacts using three metrics:GVA

174、 contribution to GDP,employment,and tax revenue.Due to very different tax systems applied to commercial and not-for-profit organisations within different EU27+countries,we only estimated the tax revenue stimulated in the three African countries of interest.Socioeconomic Impact of Second-Hand Clothes

175、|Introduction 4 FIGURE 1:CHANNELS OF ECONOMIC IMPACT To model the economic activities along the SHC industrys value chain,we shared a survey with companies and associations along the value chain,including questions on the amount of clothing collected,sorted,and sold;financial and employment informat

176、ion;procurement expenditure;and working conditions.We used these data to model typical actors in each stage of the value chain,utilising the data obtained in the survey as a blueprint but also double-checking the results with existing literature to account for potential survey biases.To maximise con

177、fidence in our data inputs for the Global South and ensure comparability across countries,we conducted additional data validation workshops in Ghana,Kenya,and Mozambique,engaging local experts and stakeholders to review,discuss,and provide feedback on our estimates.The aim was to ensure the data was

178、 realistic,consistent,and comparable,which gave us the highest degree of confidence in modelling the socioeconomic impact of the SHC industry in these highly informal and fragmented markets.The data collected through the surveys informed our economic impact analysis through estimates of GVA,employme

179、nt,and procurement expenditure per kg of SHC handled at each stage of the value chain.We then used the information on the volume of direct SHC exports from the EU27+to the African continent(provided by the trade data analysis)to scale up these estimates to the SHC industry in the EU27+.By using info

180、rmation on the sorting and export of collected used clothing items in EU27+for reuse in different markets,we estimated how much clothing was collected,sorted,and sold in the EU27+to facilitate the volume of all clothing exports.Therefore,we could estimate the socioeconomic impacts of the entire form

181、al SHC industry in the EU27+.Socioeconomic Impact of Second-Hand Clothes|Introduction 5 Furthermore,we examined the socioeconomic impacts of SHC imported directly from the EU27+in Ghana,Kenya,and Mozambique to show how the EU27+second-hand trade affected the local economy.Notably,this created a lowe

182、r-bound estimate of the socioeconomic impacts of SHC trade between the EU27+and the respective African countries,as some of the clothes collected in the EU27+were first exported to other countries for further processing and then exported to Ghana,Kenya,or Mozambique.However,since the available data

183、did not allow us to track such“indirect”exports from the EU27+to the three African countries,we restricted our analysis to the direct trade of SHC between the EU27+and Ghana,Kenya,and Mozambique.As imports are typically recorded more accurately than exports,we based our analysis of the respective im

184、pacts in Ghana,Kenya,and Mozambique on the import data for these countries.One exception is Mozambique.Here,the quantity of clothes imported by the companies taking part in our survey and fieldwork already exceeded the quantity of imports reported in Mozambique.Since import taxes have been paid on t

185、hese imports,we believe the source is credible.Consequently,we estimated the impacts in Mozambique based on SHC exports to Mozambique reported by EU27+countries as these seem to align closer with reality.In the Global South,the informal sector also plays a critical role.Yet,official statistics used

186、for the modelling only capture the formal part of the economy.Thus,the main results refer to the socioeconomic impact of the EU27+imports to Ghana,Kenya,and Mozambique in the formal economy only.To account for the large share of informal employment in a consistent manner,we used data of the Internat

187、ional Labor Organization(ILO)on formal and informal employment in the broader wholesale and retail industry(ILO,2024a)to estimate the informal employment supported by SHC imports from the EU.With the SHC industry being described as highly informal during our interviews,and likely being informal to a

188、 higher degree than the overall wholesale and retail space,we predict the resulting estimates to be conservative.To summarise,there are a few things to note when interpreting the results:The estimates for the EU27+encompass the socioeconomic impact of the whole second-hand industry.Informal consumer

189、-to-consumer transactions are not included,because they do not constitute a large share of the overall industry yetas argued by the experts interviewed.Similarly,(consumer-to-consumer)sales through online platforms such as“Vinted”or“eBay”were not considered in this study.The estimates in Ghana,Kenya

190、,or Mozambique only capture the impact of direct imports from the EU27+to these countries.Imports channelled via other routes such as the Middle East are not captured in the analysis.Moreover,the modelled impacts refer to the formal economy only.We provide conservative estimates for the informal emp

191、loyment effects in these countries as wellalbeit these are less reliable than the formal estimates due to data availability and a consistent mapping of the informal sector.Socioeconomic Impact of Second-Hand Clothes|Introduction 6 ASSESSING THE WIDER SOCIOECONOMIC CONTRIBUTION OF SHC INDUSTRY By emp

192、loying a comprehensive methodology that combines data analysis,fieldwork,and stakeholder engagement,we aim to provide a detailed understanding of the SHC trades socioeconomic impacts in the EU27+and Ghana,Kenya,and Mozambique.This multifaceted approach ensures a holistic view of the industry.In addi

193、tion to the quantitative surveys,we carried out on-site qualitative interviews and observations in the three African countries.Through analysing the responses,we assess the wider socioeconomic implications of SHC from the perspective of local retailers,market traders,and customers in these countries

194、.This includes understanding motivations for buying and the local impacts of the trade.DISCUSSING THE CONTRIBUTION OF SHC TO POLICY GOALS We also assess the contribution of SHC trade between the EU and Africa to relevant policy goals and link the industry to relevant SDGs.After conducting a literatu

195、re review to research relevant policies in the EU and Africa and the explorative interviews,we conducted interviews with stakeholders in Ghana,Kenya,and Mozambique to better understand relevant policies and the local socioeconomic implications of the SHC trade,facilitating a nuanced analysis of its

196、benefits,challenges,and implications for sustainable development and economic policy.Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 7 2.THE SHC VALUE CHAIN 2.1.OVERVIEW OF THE TYPICAL SHC VALUE CHAIN The SHC industrys value chain involves several steps(see Figure 2).In contrast to c

197、ommon belief,every step involves financial transactions such as paying workers,buying,and selling clothes,and covering shipment costs.These transactions drive the economic engine of the second-hand industry,facilitating the movement of goods from collection points to end consumers.The following info

198、rmation and description of a stylised SHC value chain is based on the exploratory interviews,the quantitative survey with selected industry players,the literature review,and the on-site observations made in Ghana,Kenya,and Mozambique.Because the reported financial data in these countries exhibits co

199、nsiderable variance and is,at times,contradictory,workshops with local stakeholders and industry experts were conducted to maximise confidence in the data that was eventually used for modelling the socioeconomic impact.In the collection stage in the Global North,clothes are disposed of by individual

200、s to various collection points such as bring banks,charity shops,and containers,which are typically organised and managed by SHC companies,including both commercial and not-for-profit organisations.The collection of these clothes serves as the lifeblood of the industry,providing the feedstock for th

201、e subsequent stages of the value chain.The companies collecting used clothing typically pay municipalities a certain fee.This payment is a result of a public tender for a collection service,recognising the value of the collected post-consumer textiles.The fee compensates municipalities for providing

202、 the space necessary for setting up collection banks and offers municipalities an alternative revenue stream beyond conventional tax income.In the sorting stage,discarded clothes undergo a meticulous sorting process.Accordingly,clothes are sorted based on their potential for re-use and recycling,and

203、 clothes fit for repurposing are further categorised into three main groups:clothes suitable for retail in Europe,clothes destined for retail in other destinations including African countries,and non-reusable textiles earmarked for recycling.Textiles that are neither re-usable,recyclable,nor otherwi

204、se recoverable are instead sorted for disposal.This stage ensures the quality and suitability of the clothes for their intended markets.After sorting,the SHC in the stylised value chain are either shipped to the Global South or are sold in the Global North.The latter stage is called retail in the EU

205、27+.SHSs are sold in various places across the EU27+,catering to different preferences and shopping experiences.Both commercial and not-for-profit organisations sell second-hand items in retail shopsoften at budget friendly priceswith not-for-profits raising funds for social causes(e.g.,development,

206、health,and education projects).Typically demanding higher prices,vintage stores specialise in selling carefully selected collections of vintage clothing and accessories.They often cater to specific periods or styles and may offer higher-end,collectable pieces.Socioeconomic Impact of Second-Hand Clot

207、hes|The SHC Value Chain 8 FIGURE 2:STYLISED VALUE CHAIN IN THE SHC INDUSTRY Source:Oxford Economics,with icons from The Noun Project(Lola,DonBLC,Dwi Budiyanto,Wagiman,Soremba,Ahmad Ishaq,icon 5,Niklas Rosema)In the Global South,the sorted SHC packaged in bales are usually imported by a wholesaler to

208、 meet the domestic demand for SHC from the Global North.In some countries,the wholesale stage further includes a categorisation process,with wholesalers sorting the imported clothes into different product categories.However,this does not replace the previous sorting process,as used clothes must alre

209、ady be sorted according to country-specific criteria before being imported into the Global South to meet Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 9 market demands and country-specific import regulations.2 After importing the clothes from the EU27+and,in some cases,sorting the

210、clothes to a finer degree,wholesalers and/or sorting facilities sell the clothes to formal retail shops,informal market traders,and other wholesalers,sometimes even exporting clothes to other,often landlocked countries.Second to importing the clothes,wholesalers and sorting facilities therefore play

211、 a crucial role in distributing SHC across various regions in the Global South.Finally,retailers and market traders sell SHC to consumers in formal shops or at informal markets.This sale to the end-user of used clothes is represented by the formal and informal retail stages.While informal market tra

212、ders tend to sell clothes mostly to end-users,formal retailers also sell clothes to informal traders according to the on-site observations.3 Many retailers,particularly informal ones,specialise in the sale of a certain type of clothing,such as womens tops,jeans,or suits.Furthermore,some retailers(bo

213、th formal and informal)specialise in selling clothing sourced from specific countries,as consumers often prefer to purchase clothes from certain countries due to the perceived clothing quality.By catering to different market segments in terms of quality and fashion,as well as sales location,formal a

214、nd informal retailers in the studied countries guarantee that a demographic as wide as possible can buy SHC,including those who may not be able to afford new clothes.For example,while boutiques may only sell the most fashionable clothes in large cities,some informal retailers focus on the sale of mo

215、re affordable types of clothing in rural locations that would otherwise not receive any affordable clothing.In the following chapters,we will analyse each step of the value chain in more detail.2.2.COLLECTION OF TEXTILES OVERVIEW AND STAKEHOLDERS INVOLVED The collection of used clothing is essential

216、 for the value chain since the goods collected are the feedstock for the whole industry.Individuals in EU27+have numerous options for the disposal of used clothing items.These can include bring banks,collection bins,charity shops,and designated drop-off locations.Kerbside collection is an exemption

217、in European countries(JRC,2021).Municipal waste companies,not-for-profit,and commercial collectors are the main stakeholders involved in the collection of textiles in the Global North.While municipal waste companies in some European countries collect textile waste as part of their overall waste coll

218、ection efforts(see more information below),commercial and not-for-profit collectors specialise in the collection of reusable textiles,including both re-wearable and recyclable items.Municipal waste companies play an increasingly important role in used textile collection in many countriesespecially i

219、f they are required to collect textile waste by legal obligation(JRC,2021).2 While few countries have banned the import of second-hand clothing entirely,others have strict regulations on the type of clothing that can be imported and require that clothes have been extensively sorted before being impo

220、rted.Therefore,instead of replacing the first-round sorting in the Global North,wholesalers rely on the lower labour costs in the Global South to categorise the imported clothing mix into detailed product categories,such as mens jeans or womens blouses.3 In Ghana,for example,experts report that reta

221、il shops follow a“mixed market approach”selling both to end-customers as well as informal traderseven by the bale.Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 10 The operations of not-for-profit and commercial organisations do not differ significantlyat least in terms of collectio

222、n methodsas both have to work within the same conditions.The main difference is mostly that not-for-profit collectors channel their profits towards the funding of social causes.FIGURE 3:STYLISED OVERVIEW OF THE STEP“COLLECTION OF TEXTILES”IN THE VALUE CHAIN Source:Oxford Economics,with icons from Th

223、e Noun Project(Slamlabs,DonBLC,Dwi Budiyanto,Cecile Lanza Parker)VALUE-ADDING ACTIVITIES Individuals often perceive their discarded textiles as still holding some utility due to their inherent physical qualities,prompting them to“donate”their worn clothes.However,the act of discarding means that the

224、se garments lack exchange value for their owners.Within the global production networks of SHC,the transformation of unwanted garments into exchange value is central.This process ultimately converts disposed clothing into commodities with market worth(Brooks,2013).Collection systems are dominated by

225、bring banks.Although data availability is limited,around 80-90%of the clothes are collected via bring banks(JRC,2021).Over-the-counter collection in retailers,second-hand shops,and socioeconomic reuse organisations is also prevalent,albeit on a smaller scale(JRC,2021).If the EU Waste Directive(see a

226、lso Chapter 5.1)is implemented,the collection by municipalities and waste collectors will presumably gain importance,an interviewee argued.According to several interviewees,companies typically collect used clothes from their own containers or bins.Sometimes,these containers can be placed for free.In

227、 many cases,however,companies pay a fee to municipalitieseither per site or kg of clothes collected.Some clothes are handed in over the counter in(charitable)shops.The emptying and transport of the collected clothes to a warehouse is either done by the collection company itself or a contractoranothe

228、r collector or a transport Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 11 company.If containers are owned by the municipality,collection companies can also serve as contractors handling the clothes on behalf of the municipality.Once collected,SHC are either transported directly t

229、o sorting centresusually if the sorting centre is in the same countryor to transit warehouses from which they are transported to the specialised sorting centres.Public awareness and information campaigns are often conducted to promote the benefits of handing over used clothes to the industry,inform

230、on the usage of the collected clothes,and encourage participation in collection efforts.Moreover,the better educated the population is about the goal and the desired content for collection,the higher the quality of the collected textiles,and the higher the productivity of sorting centres,an intervie

231、wee explains.In some countries,new collection streams for textiles have developed because of new regulation.4 In Denmark,for example,municipalities must collect textile waste directly from households(see Box 1).Since the textiles collected have a different quality,collectors pre-sort this waste into

232、 reusable and recyclable content and dispose of the remaining waste.As this new collection stream will contain larger shares of textile waste with zero reuse value,collectors will probably need to get economically compensated for this service(JRC,2021).BOX 1:NEW TWO-STREAM TEXTILE COLLECTION IN DENM

233、ARK Since July 2023,textile waste has been one of the waste categories that municipalities need to collect in households.To comply with these regulations,Denmark uses a two-stream collection system,collecting used textiles through dedicated textile collection and through the collection of residual h

234、ousehold waste.The goal is to comprehensively collect reusable and recyclable textiles.To do so,the textile waste is pre-sorted by dedicated sorting companies.The results of a first analysis show the quality of the collection depends on households receiving accurate education and information on what

235、 needs to be collected.In contrast to the dedicated collection of clothes for reuse,textile waste meant for recycling contains much fewer quality items.The first months of implementation have shown that while approximately 78%of the clothes collected via containers,bring banks etc.can be reused and

236、16%recycled,the textile waste collected for recycling via the household collectionuntil nowonly contains 32%of clothes for reuse,16%textiles for recycling,and 47%of textile waste.Due to the systematic collection and education of Danish people for decades,the conventional collection of clothes has a

237、much higher share of non-waste items,i.e.,94%in contrast to 48%.Yet,these results are based on just half a year after introducing a new waste management system.It is far too early to pass a final judgment on the new system.4 The revised Waste Framework Directive requires Member States to establish s

238、ystems for the separate collection of textile waste by 1st January 2025(JRC,2021).Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 12 FIGURE 4:INDICATIVE SORTING RESULTS FOR TWO-STREAM COLLECTION OF UFF-HUMANA IN DENMARK,2022/23 Source:Oxford Economics based on UFF Humana Comparing th

239、ese numbers with an analysis carried out by Rijkswaterstaat in the Netherlands shows that the reusable share of textiles disposed of in residual household waste is slightly smaller(28%)than in the Danish example,but the recyclable share is considerably higher(30%in contrast to 16%).The share of non-

240、reusable and non-recyclable waste lies between 42%in the Dutch data and 47%in the Danish data(JRC,2021,p.51).SUPPLY,DEMAND,AND PRICES PAID Most of the clothing and household textiles are disposed of by citizens or end-users of commercial or industrial institutions within the EU27+.They discard cloth

241、ing and linens,footwear,handbags,furs,and duvets,as well as other household textiles like tablecloths,curtains,and hand towels after they are not used anymore.Depending on the collection system in place,the discarded clothing items are either labelled as waste or as reusable textiles(JRC,2021).The s

242、upply is driven by the consumption of new textiles in the Global North,with textile consumption in the EU27 amounting to 15 kg per person in 2020(European Environment Agency,2022).An analysis of the clothing and home textiles consumption in the EU in 2018 by JRC(2021,p.29)showed that 81%of total con

243、sumption comprised clothing and accessories and 19%of home textiles.Moreover,it is estimated that Europeans buy approximately 6 kg of suits,jackets,coats,trousers,shirts and blouses each year.In contrast to underwear,tights,stockings,and socks,these products have a high potential to be reused in the

244、 second-hand industry(JRC,2021,p.31).Another study reveals that the number of times that a new garment is worn has decreased by 36%worldwide between 2002 and 2017,contributing to the increased consumption of clothing and the constant supply of clothing that is no longer worn by the initial buyer(Ell

245、en MacArthur Foundation,2017).Clothes or reuseReuseRecyclingTextile wasteOther waste Te tile waste or recyclingReuseRecyclingTextile wasteOther wasteSocioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 13 Interviewees commonly agreed that that the collection volume and quality are highest

246、 in wealthier regions.Therefore,collection rates in Western European countries are much higher than in Eastern European countries.This also holds for different areas within a country.Where people can afford to buy new clothes and are fashionable,the supply of collected clothes is highest,the intervi

247、ewees explained.Another factor influencing the volume of clothes collected is the collection rate,which varied widely in 2018between 4.5%in Latvia and 45%in the Netherlands(JRC,2021,p.47).A tentative estimate by JRC(2021,p.49)indicated that the separate collection of used textiles across the EU27+in

248、 2020 roughly corresponded to around 1.7 to 2.1 million tonnes.The bulk of the remaining 3.3 to 3.7 million tonnes of consumed,newly produced textiles are believed to be disposed of in household waste,while a relatively smaller quantity is accumulated and stockpiled in households(JRC,2021,p.50).Nota

249、ble increases in collection volumes are expected leading up to 2025,driven by the initiation of individual textile waste collection systems to meet the requirements outlined in the EU Waste Framework Directive(see more information in Chapter 5.1)(JRC,2021).After the collection,the textiles are bough

250、t by sorting centres in the Global North.Moreover,sorting centres in the Middle East have developed in the past years.According to several interviews,these are often based in the UAE because of the available low-cost(often migrant)labour force,as well as the central location for shipping the sorted

251、clothes to both the Global North and Global South.For SHC exports to Kenya,Oman was also frequently named as an alternative location for sorting centres.Post-consumer clothes and textiles collected in the EU27+sold,on average,between 0.50 and 0.65($0.54$0.70)per kg in 2023as explained by most interv

252、iewed stakeholders.Similarly,average purchase prices reported by sorting centres during our quantitative survey were 0.53($0.57)per kg,on average.However,it is worth noting that prices can fluctuate considerably between years and even months,as mentioned by several interviewees.2.3.SORTING AND CLASS

253、IFICATION OF TEXTILES OVERVIEW AND STAKEHOLDERS INVOLVED The sorting process within the SHC industry holds a pivotal role in transforming what might be perceived as“waste”into a valuable,and sellable,product.Unlike conventional production processes where raw materials are transformed into finished g

254、oods,collected clothing represents a pre-existing pool of diverse items,each with its own characteristics,quality,and potential for reuse.Sorting serves as the bridge between the collection of used clothing and its redistribution for resale or recycling.By carefully categorising and evaluating each

255、item,sorting effectively identifies the inherent value in these goods,maximising their utility and extending their lifespan.Effective sorting contributes to the sustainability of the used textiles management by minimising waste and promoting resource conservation.Moreover,by subjecting used clothing

256、 to rigorous sorting criteria,the industry maintains a level of quality control that is essential for building consumer trust and satisfaction.This includes inspecting for defects,ensuring cleanliness,and adhering to safety standards,ultimately enhancing the perceived value of the products.Accurate

257、and profitable sorting therefore requires skilled and trained staff who adjust their sorting decisions with respect to different markets as accurately as possible,as explained by several sorting centres.Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 14 Sorting centres are either run

258、 by not-for-profit organisations or private companies.According to numerous interviewees,the main difference is that not-for-profit organisations are mostly integrated into operations covering the whole value chain while private sorting centres may specialise in sorting only.Since sorting is still a

259、 very manual and labour-intensive processespecially for determining the end market of reusable clothinglabour costs often determine the location of sorting centres.While sorting centres are commonly located across the EU27+,many of them are in countries with relatively lower labour costs,such as Eas

260、t Europe or even the Middle East.FIGURE 5:STYLISED OVERVIEW OF THE STEP“SORTING AND CLASSIFICATION OF TEXTILES”IN THE VALUE CHAIN Source:Oxford Economics,with icons from The Noun Project(Slamlabs,DonBLC,Wagiman)VALUE-ADDING ACTIVITIES Second-hand fashion operates within a dynamic realm,navigating th

261、rough various trends and seasons,all while adapting to the ever-changing demands of its clientele.Unlike the textile industry,which produces based on trend-based demand,second-hand fashion must contend with the inventory it accumulates over time.Creativity becomes key in finding suitable markets for

262、 these items.Therefore,the clothes bought during the collection stage include all sorts of categories,seasons,styles,fashion,and quality that need to be carefully sorted.Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 15 Depending on the sorting centre and the destination it sorts fo

263、r,between 90 and 500 different categories exist to account for different quality,value,appearance,purpose,seasonality,branding,fashion,novelty,particular customer needs,etc.In most cases,in the first stage,the collected textiles are sorted into three main categoriesreusable clothes that are sold in

264、retail shops,recyclable material that can be sold for industrial purposes(e.g.,wiper production)and waste that can be used for incineration in,for instance,cement factories and district heating systems.The order of these categories corresponds to the waste hierarchy5 and highlights their priority fo

265、r profitable operations since reusable clothes can be sold at a higher price than recycling textiles.After that,reusable items are sorted into product categories such as shoes,sweaters,trousers,etc.,quality grades,and seasons.In the last step,sorters“fine-tune”the pieces for the different markets th

266、ey are selling to.Interviewees affiliated with sorting centres explained that they have detailed conversations with their customers to sort their final mix.Conversations with customers in selected African countries,for example,result in a dedicated“tropical mix”that includes clothes suitable for war

267、mer,tropical regions.Sorting centres build on the expertise gained in their sales markets over the years and develop highly sophisticated sorting manuals per market and seasonespecially if they have their own retail shops and can hence better assess the demand.The fine sorting and granularity of sor

268、ting categories vary significantly because they need to account for a variety of factors that influence demand in the destination markets.For example,one interviewee explained that some very short womens shirts would not be bought by customers in Kenya due to local consumer preferences.Moreover,the

269、granularity of the sorting further depends on the destination countrys import restrictions as well as the availability of a second-round sorting(see Chapter 2.5).5 The waste hierarchy is the foundation of EU waste management,established in the Waste Framework Directive.It establishes a five-step ord

270、er of preference for waste management,namely(1)waste prevention,(2)preparing for re-use,(3)recycling,(4)recovery,(5)disposal,with(1)being the most preferred and(5)the least preferred waste management option.FIGURE 6:HUMANA SORTING CENTRE IN LITHUANIA Source:Humana Lithuania Socioeconomic Impact of S

271、econd-Hand Clothes|The SHC Value Chain 16 BOX 2:CATEGORIES IN HUMANA PEOPLE TO PEOPLE SORTING CENTRES A study by Nrup et al.(2019)looking at a sorting centre operated by Humana People to People in Vilnius(Lithuania)grouped the sorting categories as shown in Figure 7.It illustrates how granular and m

272、arket-segment-specific the sorting can be.Between 36,600 and 37,100 tonnes of textiles containing a wide range of items,including clothing,household textiles,shoes,bags,accessories,and soft toys,were processed annually by the centre during the studys reference years of 20152017.On average,this corre

273、sponds to a daily intake of 130 tonnes,although the facility can sort around 200 tonnes per day.Discussions with stakeholders revealed that the sorting process today is very similar to the referenced period of 20152017.FIGURE 7:OVERVIEW OF THE DIFFERENT MAIN AND SUB-CATEGORIES Source:Oxford Economic

274、s based on Nrup et al.(2019)Sorting is one of the central value-adding activities in the second-hand industry.It allows for the identification of items that are suitable for resale in various markets.Moreover,different markets have varying preferences and requirements regarding clothing styles,sizes

275、,and seasonal trends.Sorting allows for the customisation of inventory to cater to the specific needs of different consumer demographics.Thus,by selecting and sorting items correctly,sorting determines whether collected textiles are resalable or waste,the marketability of second-hand goods,and the o

276、verall profitability of the second-hand enterprise.Sorting is a highly technical activity that requires expertise,experience,and continuous learning.An interviewee called the work“mind intensive”.Sorting personnel must possess a deep understanding of fashion trends,textile materials,garment construc

277、tion,and market dynamics to make informed decisions about the disposition of each item.This knowledge is honed through training,experience,and ongoing adaptation to changing market conditions.One interviewee estimates that it takes around six months to become a good sorter.COLLECTED TEXTILESReuse or

278、 sorting sub categories Shop clothesShop household textilesTrend vintage mixShoes mixBag mix Reuse or pac ing sub categories Tropical mixWinter mixChildren winter clothesTrouser EWomen jackets EMen jackets EHome textiles EWinter clothing E Recyclable te tiles sub categories Coloured cottonWhite cott

279、onKnitted textilesOther recyclable textilesReusable non te tiles sub categories Soft toysHard toysBric bracRecyclable non te tiles sub categories PaperMixed plasticPolypropylene i ed wasteSocioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 17 SUPPLY,DEMAND,AND PRICES PAID Collectors of u

280、sed textiles items supply sorting facilities with the feedstock for sortingthe so-called original.Sorting facilities do not only sort clothes collected domestically,and hence,sorting and collection volumes can differ within a country.A representative survey in the Netherlands found that 63%of the cl

281、othes sorted in the Netherlands had been importedmainly from Germany,but also from Belgium and France(FFact,2018).A representative from one Humana sorting facility reports,for example,buying collected clothes from 70 different suppliers in Europe and the US.The composition of collected textiles sign

282、ificantly influences both the sales market and the business model of sorting centres,as only reusable and recyclable content can be sold profitably.A 2018 survey in the Netherlands showed that 53%of sorted clothes and shoes were reusable,33%recyclable,and 14%waste6(FFact,2018).Similarly,data from Fr

283、ance indicated 58%reusability,32%recyclability,and 10%waste(ReFashion,2021).In Lithuania,between 2015 and 2017,75%80%of textiles were reported as reusable by a domestic sorting centre,13%17%as recyclable,and 5%6%as waste(Nrup,et al.,2019).This distribution is supported by further interviews and our

284、quantitative survey,averaging 69%reusable,23%recyclable,and 8%waste across sorting centres in 2023.The share of reusable textiles further depends on the mode of collection.The overall share of reusable textiles is significantly higher in dedicated collection facilities than those identified for clot

285、hes collected via household waste(see also Chapter 2.22.2).In the Netherlands,for example,only about one-fourth of all textiles disposed of in household waste are suitable for reuse(JRC,2021).Although the differences cannot be directly compared due to country-specific factors,they likely reflect the

286、 impact of consumers pre-assessing and sorting their textiles,resulting in higher quality items being directed to dedicated collection facilities while lower-quality textiles end up in residual household waste.Moreover,the accuracy in handling collected clothes affects the share of reusable textiles

287、.To achieve a high share of reusable content,collectors need to avoid contamination of the collected textile waste by other types of waste and must assure that,for example,water does not infiltrate the collected textile mix during the collection process,as explained by stakeholders.Summing up,the su

288、pply of clothes that are suitable for the second-hand value chain is determined by a combination of various factors:the number of clothes that are disposed of,the share of these clothes that are gathered via collection facilities(see Chapter 2.22.2),and the share of collected clothes that can be reu

289、sed.The destination of the sorted textiles is mainly determined by the demand for certain goods and the qualities of textiles.Since the profitability of the sorting process lies in identifying the ideal future utilisation and market for each segment of clothing,the sorted clothes are either sold as

290、reusable clothes in different market segments or as recyclable material for industrial purposes while maximising the sellable value of the sorted textiles.While selling textiles as recyclable materials,for example,may not be profitable by itself,our survey responses show that these textiles are sold

291、 for between 0.04 6 The latter category consists of waste,but may also include materials such as paper,plastic,metal,and leather as well as textiles that are,for example,wet and no longer dryable,mouldy,or heavily soiled.Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 18($0.04)and 0.

292、27($0.29)per kg,and thus contribute to recovering the costs associated with the sorting process.In their policy brief on the exports of Nordic-used textiles,Watson&Palm(2016)described the typical textile flow from a truckload of textiles arriving at a sorting facility as“a cascade of quality”.Accord

293、ing to their research in the Nordics,around 10%of the original remains classified as top-grade textilesthe so-called“cream”in European countries.46%of the original consists of next-best quality textiles,and includes the tropical mix consisting of clothing better suited for warm climates.These are ex

294、ported to Africa,the Middle East,and Eastern Europe.15%of the original is of a lower quality and is mainly exported to Asia.10%are sold to the global wiper industry,8%are exported for mechanical recycling in Asia,3%are used for paper and plastic recycling in Eastern Europe,and 8%are landfilled or in

295、cinerated as mixed waste.As Figure 8 shows,and as is supported by other studies,the sorting process is very granular and there are multiple categories in which textiles can be used for other purposes even if they are not being reused in the original sense.FIGURE 8:TYPICAL COMPOSITION OF EXPORTED NOR

296、DIC TEXTILES AFTER SORTING,2014 Source:Oxford Economics based on Watson&Palm(2016)The recyclable textiles are sold to the industry by material and bale.The raw materials are then repurposed for applications such as interior car linings,paint substrates,insulation,and roofing felt.Currently,the prima

297、ry focus of global recycling efforts lies in the cutting of cotton-based textiles for wipers/rags,shredding knitwear into non-woven materials,and to a lesser extent,repurposing them into new textile products(Nrup,et al.,2019).Additionally,some smaller share goes into fibre-to-fibre recycling accordi

298、ng to our interviews but the economic viability is still to be achieved.Another possibility is mechanical recycling.During mechanical recycling,the textiles are torn from big pieces to fibres of different lengths.The shorter ones can be used as raw material for the chemical recycling of cotton,which

299、 has developed in the past two years.The longer fibres can be used to spin yarns.According to several interviewees,spinners testing these yarns gave very positive feedback on the quality,but the demand by brands is still very low.Firstly,they may not trust these yarns yet.Secondly,the recycled mater

300、ial is more expensive than a comparable virgin material.10%46%15%10%8%3%8%Cream for reuse(Europe)ext best quality for reuse(Eastern Europe,Africa,Middle East)Lowest quality for reuse(Asia)Industrial wipes(global)Mechanical recycling(mostly Asia)Paper plastic recycling(Eastern Europe)Mixed waste(East

301、ern Europe)Weight share in original Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 19 Since recycling is harder with synthetic clothes and those with many layers,recycling is getting more and more difficult.As per the Textile Exchanges Materials Market Report,polyester constituted 5

302、4%of global fibre production in 2022(Textile Exchange,2024).Moreover,an estimated 7%of collected clothes contain multi-layered items that can be theoretically used for downcycling,wipers,or low-value re-wearable textiles(Circle Economy,EigenDraads&Fashion for Good,2022).However,there is no business

303、case to date for manually dissembling multi-layered items.This has the potential to change with automated sorting technologies(Circle Economy,EigenDraads&Fashion for Good,2022).The non-re-wearable portion of sorted textiles is expected to increase in the coming years due to several factors(Circle Ec

304、onomy,EigenDraads&Fashion for Good,2022).Consequently,it is crucial for recycling technologies to be prepared to handle these textiles effectively.While mechanical recycling technologies currently meet this demand,certain chemical recycling methods are still in the process of achieving the necessary

305、 readiness level to manage the anticipated volumes of low-value,post-consumer textiles(Circle Economy,EigenDraads&Fashion for Good,2022).Reusable clothes fit for retail in the EU27+markets are either sold in dedicated second-hand shops or between consumers on flea markets and online platforms.As exp

306、lained,we will focus on the formal SHC retail trade.In one of our interviews,it was estimated that 20%of the sorted clothes are sold in European retail shops.According to another study,an estimated 30%of SHC is retailed within the region(Brooks,2013).This is corroborated by our quantitative survey.O

307、n average,participating sorting centres reported that 30%of clothes are sorted for retail in Europein both Western and Eastern Europe.7 One reason for this comparatively low share of SHC that are sold on domestic markets compared to the global market is the lower demand(Ellen MacArthur Foundation,20

308、17).While the demand for SHC in the Global North is expected to increase,it will most likely continue to account for a smaller percentage than the retail of SHC in the Global South.Reusable clothing for Africa is sold to wholesale importers in African countries.These importers often place orders for

309、 SHC,which can be either fixed standard ordersespecially when a long-term trading relationship existsor flexible orders based on demand.The SHC is typically exported in sealed bales weighing 45 kg,55 kg,or 450 kg,which are loaded into shipping containers.Smaller bales,weighing 45 kg,are considered“r

310、eady products”for direct sale in Africa,while larger ones are categorised upon arrival.The level of categorisation varies depending on import regulations.For instance,in Ghana,only finely sorted second-hand textiles are permitted for import.The prices paid by the customers of the sorting centres dif

311、fer significantly.Therefore,the sorting system places significant emphasis on the proportion of wearable garments,as wearable fractions have the potential to generate more than 90%of a sorting centres income(JRC,2021).Premium wearables(i.e.,cream)account for over 50%of revenue,whilst wearables of th

312、e next best quality account for around 44%of revenue.This is illustrated in Figure 9.7 This numbers cannot be directly compared to Watson&Palm(2016)since they do not differentiate the cloths transported to Africa,the Middle East,and Eastern Europe.Socioeconomic Impact of Second-Hand Clothes|The SHC

313、Value Chain 20 FIGURE 9:WEIGHT VS.VALUE SHARE OF EXPORTED NORDIC TEXTILES AFTER SORTING Source:Oxford Economics based on Watson&Palm(2016)Cream can be sold for 4.50($4.87)per kg(Watson,et al.,2016).Non-cream wearables are reported to cost approximately 0.760.80($0.82$0.87)per kg(JRC,2021;Circle Econ

314、omy,EigenDraads&Fashion for Good,2022;Watson,et al.,2016).The end markets of non-re-wearable usually pays lower prices.Prices reported range between 0.08($0.09)per kg for downcycling to applications such as fibres for insulation,filling or non-woven for automotive and other industries,0.130.45($0.14

315、$0.49)per kg for wipers,and 0.020.14($0.02$0.15)for fibre-to-fibre recycling(Circle Economy,EigenDraads&Fashion for Good,2022).Landfilling or incinerating the mixed waste costs approximately 0.05($0.05)per kg(Watson,et al.,2016).These selling prices compare to the buying prices of 0.60($0.65)to 0.76

316、($0.82)per kg for collected clothes purported in the literature(see Chapter 2.2).Moreover,the numbers are roughly consistent with the information obtained from our quantitative survey.Table 4 presents the average sales prices reported by European sorting centres during our survey.Prices for SHC sold

317、 for reuse in Europe were reported at 2.42($2.62)per kg,on average.As these clothes include both cream and non-cream re-wearables,the average price fits well into the existing literature.Similarly,SHC sold for reuse in Africa and textiles designated for recycling also compare well to the existing li

318、terature:With non-cream re-wearables sold for reuse in Africa tend to be,on average,of lower quality than non-cream re-wearables sold in Europe,the average sales price of 0.67($0.73)per kg is slightly lower than the average price for non-cream SHC reported in the literature.Surveyed sorting centres

319、reported sales prices for textiles designated for recycling of 0.16($0.17)per kg,which is within the range of 0.02($0.02)and 0.45($0.49)per kg reported in the literature.With a cost of 0.19($0.19)per kg,the cost associated with textiles sent for incineration or destruction are moderately higher than

320、 in the literature.These sales prices compare to an average purchase price of 0.53($0.57)per kg.10%46%15%10%8%3%8%53%44%2%2%0%0%1%10%0%10%20%30%40%50%60%Weight shareSellable value shareShare of Original Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 21 TABLE 4:AVERAGE SALES PRICES O

321、F SURVEYED SORTING CENTRES IN THE EU27+,2023 Intended use of SHC/sorted textiles Price per kg SHC sold for reuse in Europe 2.42($2.62)SHC sold for reuse in Africa 0.67($0.73)Textiles sold for recycling 0.16($0.17)Textiles sent for incineration/destruction(cost)-0.18(-$0.19)Source:Oxford Economics 2.

322、4.RETAIL IN THE EU27+OVERVIEW AND STAKEHOLDERS INVOLVED Retailers across the EU27+act as the central link between sorting centres and consumers in the Global North.These retail operations are widespread,spanning cities in all countries in the EU27+.With second-hand clothesand vintage SHC in particul

323、arbecoming increasingly fashionable and popular,there has been a rise in demand even in high-income European countriesinterviewees explained.Many of the retail stores are directly connected to sorting centres.For example,Humana alone is running 550 shops in Europe which mainly procure from sorting c

324、entres connected to the Humana network.This ensures a steady supply chain and the availability of quality garments.The interlinkage of the sorting and retail stages in the value chain further allows for an effective assessment of the market dynamics and demand trends.Besides these integrated stores,

325、there are independent retail stores that obtain their inventory from external sorting centres.European retail stores offer a wide range of clothing suitable for Europes diverse climates and fashion preferences,including both lightweight summer apparel and heavier winter wear.Many SHC retail stores i

326、n the EU27+belong to not-for-profit organisations.Through the sale of SHC,these stores contribute to the social impact of the SHC industry,as parts of the profits are used to finance community projects or conduct global aid initiatives.Some not-for-profit retail stores in the Nordic region are run b

327、y volunteers,showcasing the respective organisations commitment to social causes.Moreover,there is an informal retail market in many European countries as well.Often operating on the many flea markets across the EU27+,some individuals might sell personal or family-owned clothes they do not need anym

328、ore.In addition,there is a large online-market place for used clothes sold by consumers to consumers.While these more informal retailers are an active part of the SHC industry,they do not constitute a large share of the overall industrythe experts interviewed argued.We therefore focus on the sale of

329、 SHC by formal retailers in the EU27+.Socioeconomic Impact of Second-Hand Clothes|The SHC Value Chain 22 FIGURE 10:STYLISED OVERVIEW OF THE STEP“RETAIL IN THE EU +”IN THE VALUE CHAIN Source:Oxford Economics,with icons from The Noun Project(Soremba,Ahmad Ishaq)VALUE-ADDING ACTIVITIES Retail stores in

330、 the EU27+are essential in ensuring that SHC are effectively distributed to consumers.Through attractive in-store displays and proactive sales efforts,these retailers ensure that a maximum number of items find appropriate buyers,enhancing the sustainability of fashion consumption.Upon receipt of clo

331、thing items from sorting centres,employees at retail stores are tasked with opening delivered bags and boxes of SHC and organising the store according to the available clothes.This also involves pricing,a critical activity at the retail level.While clothes typically arrive at an average price based

332、on the general quality,individual items are priced separately in-store.The pricing strategy requires an understanding of consumer preferences and allows for adjustments based on the items appeal and condition.Retail staff then arrange these in-store,creating an inviting and consumer-friendly environ

333、ment.Retail stores also engage in promotional activities,catering to the increasing demand for sustainable clothes by European customers.The operational cycle of retail stores selling SHC often follows a dynamic sales model.Initially,high-quality items are placed on sale at higher prices and are gradually discounted to ensure they are sold,promoting efficient inventory turnover.These cycles typica