Raluca Besliu, Helena Rodríguez Gómez, and Vittoria Torsello
14 December 2025
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Europe’s second-hand illusion
In a warehouse on the outskirts of Palma, Mallorca, workers at Fundació Deixalles race against an unrelenting tide. Cotton shirts, acrylic sweaters and polyester jeans flow through their hands in a continuous stream as the sorters frantically categorise them by quality, size, and condition. The goal seems simple: prepare these garments for resale to Europeans eager to embrace sustainable fashion. After all, 87% of Europeans say they buy second-hand clothing as a form of sustainable consumption.
But Maria Suau, who oversees operations at this small non-profit social enterprise, knows the truth behind the sorting tables. They are drowning.
“Three years ago, we were selectively collecting around 14-15% of textile waste being generated, and we were completely overwhelmed,” she says, surveying the mountains of fabric surrounding her. “Imagine what will happen when we have to start collecting the remaining 80% that currently ends up in landfills or incinerators. This mandatory textile collection really worries us.”
Maria is referring to the EU’s Waste Framework Directive (WFD), which, since early 2025, requires Member States to separately collect all textiles – a cornerstone of Brussels’ circular economy vision. On paper, the policy promises sustainability. In practice, it may be fueling something very different: a carbon-intensive detour that undermines the EU’s own climate goals.
Unable to cope with the avalanche of clothes, some sorters have started sending them on long, opaque journeys, travelling thousands of kilometres to Dubai’s free zones or Pakistan’s Export Processing Zones, where they are sorted and traded far from European oversight.
According to a 2023 Oxford Economics report, the United Arab Emirates (UAE) was the largest non-EU destination for second-hand clothing exports from the EU27+, followed by Pakistan. Much of this clothing is not reused locally – it is sorted and re-exported to African markets such as Kenya, Mozambique, and Tanzania.
Twenty-eight AirTags hidden in donated clothes across the EU traced these circuitous routes. Twelve resurfaced in the UAE, Pakistan, Morocco, Tunisia, Sri Lanka, and Eastern Europe – mapping the shadow supply chain that operates far from the circular economy Brussels envisioned.
Some of these exported garments find their way back to Europe, completing a warped kind of “circularity” that multiplies emissions rather than reducing them. According to an FTM-commissioned carbon footprint analysis, sorting in the UAE triples emissions compared to local processing – and twelvefold if flown.
“The whole point of the new rules is to improve sustainability and reduce the carbon footprint of the textile industry,” stressed Swedish Social Democratic MEP Helene Fritzon. “Shipping things in and out of Europe clearly risks undermining this purpose.”
As the EU prepares to flood an already saturated system with millions more tonnes of collected textiles, one question becomes unavoidable: Is Europe’s circular economy vision creating sustainability – or just a longer, dirtier supply chain wrapped in green rhetoric?
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Europe’s textile bottleneck
The crisis stems from a perfect storm that has turned the EU’s textile sorters into casualties of market forces they cannot control.
European behemoths such as Inditex and H&M, alongside fast-fashion giants like China’s Shein and Temu, have flooded the market with inexpensive garments designed to be worn briefly and then discarded.
The race to the bottom on prices comes at a cost: quality. To maintain ever-sinking prices, these brands have switched to cheaper, lower-grade synthetic materials, such as polyester.
Unlike the durable cotton and wool fabrics common in decades past, synthetics degrade quickly: they lose shape, tear easily, and fall apart after a few washes.
“Overly produced low-quality clothes are not good enough to ever be reused or recycled,” says Urška Trunk from Changing Markets Foundation.
Meanwhile, these low prices have undercut traditional export markets. African countries like Ghana, Kenya, and Uganda were once reliable outlets for Europe’s used textiles.
In 2019, around 46 percent of exported used clothes went to Africa. By 2023, that figure had dropped to 43.2 percent.
“Ultra-fast fashion brands sell new clothes so cheaply that they directly compete with second-hand European clothing in African markets,” explains Kristof Bogaert from Denuo, the Belgian federation for recycling and waste management.
The disconnect between collection volumes and market demand has created a logistics nightmare. Warehouses are overflowing with unsellable inventory. Everyone, from the smallest producer to the largest, is facing the same problems.
“At this moment, your goal is to survive in the industry,” says Zoltan Gundisch of Aretex, a Romanian association promoting innovation and sustainability in reuse and recycling practices. “Collection and sorting sectors are severely impacted, with prices dropping more than 50%. In some cases, costs even went negative.”
Gundisch explains that the minimum cost of collecting textile waste in Romania is around 20–22 cents per kilogram and, in Germany, slightly higher at 27–28 cents.To put this into perspective, for two tonnes of clothes, a Romanian collector would earn roughly €400–440, while a German one would make around €540–560.
Major for-profit sorters, including Germany’s SOEX and TEXAID and Spain’s Recuperalia, have already closed.
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Far from easing the burden on collectors and sorters, recent EU legislation has made their survival even harder.
While the Waste Shipment Regulation (2024), imposed stricter rules on exporting waste, including textiles, to non-EU countries to prevent illegal waste exports, the Waste Framework Directive (2025) mandated that all textiles be collected separately to distinguish reusable clothes from waste, likely multiplying the volume of clothing requiring processing.
The result? Collectors are legally obliged to handle more textiles than ever, even as their ability to move excess inventory abroad has been sharply curtailed.
In partial acknowledgement to this increasing pressure on sorters, the WFD introduced Extended Producer Responsibility (EPR), which entered into force in October 2025, but Member States have until 2028 to implement it.
The EPR requires clothing producers to take on financial and sometimes organisational responsibility for managing and recycling the waste from their products.
In theory, this shifts the cost burden away from collectors and municipalities onto the brands generating the waste in the first place.
“It’s a game changer,” said Swedish Social Democratic MEP Helene Fritzon.
She nevertheless warned about a critical timing gap: “We already have a ban on throwing used textiles in the trash, but we don’t yet have the EPR in place. This creates a massive capacity problem in waste management that is very difficult to deal with on the local level.”
This gap leaves small operators underfunded and struggling, lacking the funding to upgrade sorting infrastructure.
Organisations like Recycling Europe are calling for “short-term financial support, maybe an emergency fund at the EU-level that could support the sector during these 1-3 years.”
Even Member States, well aware of the situation, are not sure how to tackle this. “We are in a textile crisis, we need targeted measures, even a contribution from the government, but one that would make a meaningful difference for the sector,” said Francesco Masi of The Green and Left Alliance in the Italian Parliament in October 2025, talking about local sorters.
On the EPR front, some countries are moving faster than others. While Italy is just starting to acknowledge it, the Netherlands launched its textile EPR scheme in July 2023. Under the Dutch rules, producers must set up and fund systems for collection, reuse, and recycling.
As opposed to the EU’s EPR, the Dutch one sets clear and ambitious targets: by 2025, at least 50% of all textiles placed on the market must be prepared for reuse or recycled, rising to 75% by 2030.
“The Dutch are definitely ahead of the game, because the EU’s EPR rules don’t contain targets,” stressed Emily Mackintosh from the European Environmental Bureau. “There is a flexibility in the text for Member States, so you will have discrepancies in implementation,” she added. This could lead to imbalances in the target level, but also how much companies are required to pay for processing the waste.
Critics also fear that the EPR scheme remains too Eurocentric. Kiki Boreel, founder of the Sustainable Fashion Circle nonprofit, argues that producer responsibility must extend beyond European borders, since the EU will not be able to process all of its used clothes domestically, as several sources from the sector also confirmed.
“A lot of these products end up, for example, on beaches in Ghana,” Boreel points out. “The EPR system should be globally accountable. Part of the fees brands pay should go to organisations in places like Ghana to help improve their sorting and recycling techniques.”
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With EU warehouses overflowing and traditional export markets closing, shipments are moving to new hubs.
AirTags from Milan, Barcelona, Napoli, and Bucharest bins all ended up in Karachi’s Export Processing Zone, underscoring Pakistan’s rising role in Europe’s used textile trade.
This is no coincidence: Karachi’s Export Processing Zone is a special economic zone where goods can be imported, sorted, and re-exported under specific customs regulations, generally without customs duties.
Another free zone where our AirTags resurfaced is in Dubai. One AirTag placed in Lecce at Cannone srl facility is there. Another one placed at an H&M drop-off in Spain is now at a Soex facility. Soex declined interview requests.
“Dubai tends to be increasingly a global trade hub,” confirms Recycling Europe’s Doliger. “Used textiles are shipped there, then processed, sorted, and exported back to other markets in Africa, the Middle East, and Asia.” The AirTags’ travels were confirmed by data analysis.
“Spain’s example is telling: the volume of used garments sent abroad quadrupled between 2015 and 2023, according to U.N. Comtrade data. More than 27 percent of the used clothes that Spain declared exporting during that period went to the UAE, followed by Pakistan, with just over 12 percent of those exports.
But the flow isn’t just one-way: while Spain sends massive volumes of clothes to the UAE, trade data reveals something striking about what comes back.
The data shows that nearly 99.9 percent of the UAE’s exports to Spain are re-exports, or pass-throughs: clothes arrive, are processed, and then shipped onward without transformation – most often through Dubai’s free zones.”
Muhammad Virji, CEO of Unicloth, based in Dubai’s Jebel Ali Special Economic Zone, is not surprised: “When goods come into the free zone, we don’t pay any duties. When we re-export, it’s logged as export, but technically it never entered the country.”
The UAE and Pakistan companies that received the AirTags were contacted, but did not reply.
Beyond this trade growth, mirroring the data reveals huge reporting asymmetries.
While Spain reported exporting 192,000 tonnes of used clothes between 2015 and 2023, the UAE declared importing nearly 90,000 tonnes less.
In turn, the UAE declared re-exporting 93,086 tonnes to Spain, 47 times more than Spain acknowledges importing.
These asymmetries are so large that they cannot be simply explained by normal statistical discrepancies.
UN officials caution that mirror trade data rarely align perfectly, due to differences in rules of origin, HS codes, and free zones, which may record goods differently if in transit, re-exported, or processed. Used clothes can also be misclassified: HS 6309 for used clothing vs. HS 6310 for rags.
Yet financial crime experts warn such gaps match known trade-based money laundering (TBML) indicators, including large inconsistencies in declared values or quantities and the use of free zones to disguise the origin or nature of goods.
Graham Bailey, a financial crimes risk analyst at Quantifind, explained why second-hand clothes trading is vulnerable to TBML.
“When it comes to sea-container shipments of second-hand clothing, buyers often price entire bales – even whole containers – without a reliable unit of measure,” he stressed. “Banks, therefore, cannot determine a fair market value, and invoice amounts can be adjusted freely.”
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In the UAE’s case, these financial vulnerabilities are amplified by its regulatory landscape, where free zones operate under their own rules, largely shielded from scrutiny and notorious for their opacity.
“While we were in the meeting, we created a company in the Ras Al Khaimah free zone. It took twelve minutes – no checks, no verification, no questions asked,” said Gamal El Attar, head of the Brussels-based NGO International Federation for Rights and Development, who demonstrated the process live during a session with Members of the European Parliament.
Unlike in Dubai or Abu Dhabi, where anti-money laundering procedures apply, companies registered in free zones face no obligation to prove their funding’ source or the nature of their business. All that is required is a local ID number or a representative lawyer.
Jodi Vittori emphasised that this was not accidental: “As we looked at how different forms of financial and organized crime operate with remarkable ease in the UAE, we realized this isn’t just tolerated – it’s actually part of the system. Dubai, in particular, made deliberate decisions to allow these activities as a way to diversify its economy beyond oil.”
The lack of oversight makes free zones an ideal hub for rerouting Europe’s used clothing trade.
Exclusive documents from Romania’s National Environmental Guard suggest some businesses are already exploiting the loopholes.
In August 2023, Romanian customs inspectors intercepted a shipment of 84 bales – 26,220 kilograms – of clothing from Romanian company Ideal Magic Adnana SRL, bound for Usman International FZC, registered in Sharjah’s Saif Free Zone near the international airport.
The goods were declared under customs code HS 6309, reserved for second-hand garments “suitable for reuse.” The Romanian exporter had even submitted a certificate attesting that the clothes had been cleaned, washed, and disinfected. This is a requirement for any second-hand garments placed on the market, sold, or donated, under Romanian law.
In response to a Freedom of Information request, the authorities said that an inspection had been carried out at Ideal Magic Adnana’s facility in Uricani, Hunedoara, to verify that the company had the necessary authorisations and met the required legal conditions for “sorting, cleaning, disinsecting, and disinfecting” second-hand textiles.
The inspection concluded that the company complied with permitting requirements; however, it did not address earlier evidence that the bales had not been adequately cleaned: the clothing had not merely been deemed unsorted but visibly damaged and degraded. This effectively should have classified it as waste rather than reusable second-hand clothing.
Documents show that the bales had originally been imported into Romania as textile waste from the German company Baliz Textilrecycling. The trail appears far from coincidental: an AirTag placed in Baliz bins near Limburg later appeared in Romania, suggesting a recurring route rather than a one-off shipment.
The inspected clothes were destined for Garson & Shaw’s Slovakian branch, part of one of the largest global second-hand retailers headquartered in Atlanta, USA.
Pick up? Not in Romania, but in Sharjah from Usman.
Across Europe, Garson & Shaw supplies second-hand clothes to retailers, wholesalers, and grading companies.
On its website, the company portrays itself as a sustainability leader, fighting to reduce waste, lower carbon emissions, and build a greener world.
Yet its supply chain structure raises questions: why would a sustainability-focused company route goods thousands of kilometers through such opaque transparent jurisdictions?
Garson & Shaw Europe – the Slovak branch – maintains a steady flow of imports and exports with the companies in UAE and Pakistani free zones. According to Sayari data, in 2024, the firm received another shipment of second-hand clothing from Atlantic Exports LTD, a company also based in Sharjah Saif free zone.
The EU’s data protection rules make information on EU companies difficult to access, rendering the system remarkably opaque. Garson&Shaw Europe’s shipments mostly become visible through external port data.
Non-EU companies in Garson&Shaw Europe’s supply chain face no such opacity. Their trade information is more readily available.
According to ImportGenius data, shipments from US ports show Garson & Shaw Europe exporting goods with code 6309 more than a hundred times between 2024 and 2025 to the same buyer: Usman Global Trading. The shipments’ value? Over EUR710,000.
That company, in turn, is closely linked to Usman International FZS in Sharjah. Between January 2023 and September 2025, Usman International FZS sent roughly 30 shipments worth EUR230,000 of second-hand clothing – also labelled 6309 – from France to its Karachi affiliate.
Garson&Shaw’s corporate structure adds another layer of complexity. The company has multiple subsidiaries globally, including in tax havens, like Belize. It even had a subsidiary in the British Virgin Islands, another well-known tax haven, which it voluntarily liquidated in 2022. Quantifind’s preliminary analysis identified potential fraud risks for Garson&Shaw and Usman Global Trading.
Requests for comment from Garson & Shaw, Ideal Magic Adnana SRL, Usman International FZC, Usman Global Trading, and Baliz Textilrecycling went unanswered.
Behind Garson&Shaw’s green rhetoric lies the reality that sending the EU’s used clothing thousands of kilometres to Dubai – to return to European markets for resale – generates triple the emissions than processing it locally, according to the carbon footprint analysis from sustainability consultancy Inèdit.
While reuse remains less polluting than producing new garments, routing Europe’s textiles through the UAE undermines the EU’s circularity goal, diluting the very climate benefits it claims to deliver.
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On a street in Barcelona’s Gracia neighbourhood, Alberto stops by a textile container to browse through the piles of discarded clothes around the collection bins, which appear to be perpetually full. The 35-year-old Venezuelan translator and computer scientist often visits these spots, sometimes to drop off what he no longer wears, sometimes to collect them.
After hearing about the garments’ carbon-intensive journey, Antonio sighs, stressing that change lies with “the ones who have greater decision power.”
“These large companies and industries are the ones who ultimately have to make this decision.Even though we can do our bit, if they don’t do it, if they don’t realise that this is counterproductive for everyone, whatever we do will be somewhat in vain.”
The EU already has tools to address this crisis, if used effectively. The EPR scheme could force fashion brands to invest in the EU’s sorting infrastructure. But its promises must become reality.
“We need to build up the capacity for processing used textiles in Europe, both for reuse and for recycling,” said MEP Fritzon. “This is why the EPR is so important, because it will force industry to invest in this.”
Green MEP Rasmus Nordqvist adds: “Outsourcing the problem is not the solution. Taking full accountability for what happens to a product from the moment it is created is essential.”
Accountability must extend beyond traditional brands to all actors fuelling overproduction. “Online retailers like Shein must be fully brought into scope, as it’s often too easy for them to sidestep obligations,” emphasised Recycling Europe’s Doliger.
Yet, global realities remain harsh, especially if fast fashion and overproduction are not regulated. “I don’t think we’ll see the world succeed,” stressed Muhammad Virji in the UAE. “Fast fashion’s interests can hinder us at any time. We simply don’t have the capacity to compete.”
The EU’s textile circularity was meant to close the loop. Instead, it opened a new, dirty detour, measured in tonnes of carbon drifting across oceans, through opaque free zones. Will the EU turn the tide on its own waste before it drowns – and takes others with it?
Additional reporting by Emmanuelle Picaud, Benjamin Hindrichs, Anna Romandash and Hawwa Fazal. Paula Fray, Emma Thommason, Carolyn Thomson, and Andrei Ciurcanu contributed in mentoring the story at different stages of the investigation.
Marcus Lindemann and Claus Hesseling developed the scrapper and dashboard that enabled the team to monitor the tracking devices. The carbon footprint analysis was produced by Inèdit, a Barcelona-based strategic eco-innovation studio.
This investigation was supported by Journalismfund’s Earth Investigations Program, Free Press Unlimited, and the Dark Green programme, an initiative of the Centre for Investigative Journalism and JournalismFund.EU.
SOMO, ImportGenius, Quantifind, C4ADS and ARIJ provided support with access to trade databases.
