Recently, the Swedish fast-fashion giant H&M Group and investment firm Vargas Holding joined forces to establish a joint venture company called Syre, aimed at reducing carbon emissions and waste in the textile industry through large-scale recycling from textile to textile. TPG Rise Climate, a climate fund managed by TPG, is also one of the founding investors of Syre.
The name "Syre" means "oxygen" in Swedish, and the company is pioneering the production of recycled polyester fibers with sustainability performance comparable to virgin polyester. Currently, the textile industry accounts for 7%-10% of global CO2 emissions, with polyester fibers being the largest and fastest-growing contributor. Both virgin polyester fibers derived from crude oil and recycled polyester (rPET) from plastic bottles are linear, meaning most of these products end up in landfills or incineration after disposal. Compared to producing virgin polyester fibers from oil, recycled polyester can reduce CO2 emissions by 85%, yet less than 1% of global textiles are currently made from recycled fibers.
H&M Group has signed a procurement agreement with Syre to purchase products worth $600 million over the next seven years. Currently, H&M Group's demand for recycled polyester fibers mainly comes from recycled PET bottles, and the collaboration with Syre will cover a significant portion of the group's demand for recycled polyester fibers.
Syre is constructing a factory in North Carolina, USA, expected to start operation this year. The company plans to expand production globally, aiming to open 12 factories worldwide within 10 years, capable of producing over 3 million tons of polyester fibers at full capacity. In the future, Syre's business may also expand to other fibers and technologies.
Syre's ultimate goal is to achieve 100% material usage of recycled materials or sustainably sourced materials by 2030, with recycled materials accounting for 50%. Syre claims to be close to this goal, aiming to have 30% of materials sourced from recycled or sustainable means by next year.
One of Syre's owners, Vargas Holding, is a company specializing in creating influential companies, established in Sweden in 2014. Vargas Holding collaborates with other enterprises to create companies from scratch, aiming to "realize ideas that break boundaries for a sustainable future." The company currently owns influential companies such as Polarium, Northvolt, H2 Green Steel, and Aira, all striving to establish their leadership positions regionally or globally.
TPG Rise Climate is the dedicated climate investment arm of international alternative asset management company TPG, with extensive experience in promoting climate solutions in global and circular economy-focused companies.
H&M Group stated that this initiative aims to "drive the industry towards alternatives that achieve closed-loop solutions from virgin polyester fibers and existing standards." Daniel Evrér, CEO of H&M Group, expressed the group's hope to "encourage more industry peers to join in achieving closed-loop solutions and accelerate the transition to a sustainable future."
