The textile industry is a vital sector of China's national economy and a traditional cornerstone for industrial development and export earnings. In the just-concluded year of 2022, the export volume of China's textile industry reached a new high at $323.34 billion [1]. 2023 marks the beginning of comprehensive implementation of the spirit of the 20th Party Congress. Guided by the "14th Five-Year Plan for the Development of the Textile Industry," the textile sector is expected to actively promote sustainable development, adhere to the principles of new development, and contribute significantly to the nation's sustainable growth.
The climate issue is a global problem that requires collaborative efforts from multiple nations. Since the concept of "carbon neutrality" emerged in 1997 [2], various international organizations have taken measures to address the challenges of global climate change. These measures include signing international agreements like the Kyoto Protocol and organizing global climate conferences to reduce the emissions of greenhouse gases such as carbon dioxide on a global scale.
In recent years, countries and regions around the world have been actively promoting environmental conservation and emission reduction by enacting a series of related policies. For instance, the European Union has established the "Climate Neutrality Act" with the goal of achieving carbon neutrality by 2050 [2]. The United States has reentered the Paris Agreement, restarted climate dialogues, and plans to significantly reduce carbon emissions in the coming years [3]. In September 2020, China made a clear commitment at the 75th United Nations General Assembly, aiming to peak carbon dioxide emissions before 2030 and striving to achieve carbon neutrality by 2060.
The policies and actions gradually implemented on both the international and domestic fronts have sparked numerous industry transformations and presented significant challenges to the industrial transformation of the textile and apparel sector. Within such a globally interconnected industry, the supply chains of businesses often span across multiple countries and regions. According to data released by the International Energy Agency (IEA), the textile and apparel industry's carbon emissions account for 10% of the global total, making it the second-largest source of pollution after petroleum [4]. In order to better meet the demands of both the international and domestic markets, textile and apparel companies should proactively address global trends, initiate emission reduction plans, and reduce the adverse environmental impacts associated with product manufacturing and factory operations.
China is the world's largest producer and exporter of textile and apparel products, holding a share of 30% to 40% in global textile and apparel exports [5]. While making significant contributions to the national economy, the environmental issues arising from the prolonged period of rapid development, particularly carbon emissions, have become increasingly prominent. Currently, China's textile industry consumes a considerable amount of energy and generates substantial levels of pollution. Available data indicates that the textile industry's energy consumption, water consumption, and wastewater discharge account for 4.4%, 8.5%, and 10% of the country's total industrial energy consumption, total water consumption, and total wastewater discharge, respectively [6].
In response to challenges like climate change and environmental pollution, the Chinese government has already formulated a series of policies aimed at supporting the environmental protection industry. These policies encourage companies to adopt low-carbon and environmentally friendly production methods, fostering technological innovation and transformation. Simultaneously, the international market is placing increasing demands on environmental sustainability. Products that do not meet environmental standards will gradually be phased out of the market. Textile and apparel companies need to raise their environmental awareness and enhance the "green competitiveness" of their products to meet the international market's demand for low-carbon products [7].
The low-carbon transformation in the industry not only brings pressure to businesses but, with proper planning, implementing energy-saving and emission reduction measures, and adopting green production methods can also yield tangible economic benefits. By optimizing production processes and reducing energy consumption, companies can cut costs and enhance production efficiency [8].
For instance, reducing the costs associated with waste generation and disposal, saving on energy consumption, and obtaining environmental subsidies through green production methods can all result in a certain degree of economic returns for companies. Moreover, actively complying with environmental policies can help mitigate potential environmental risks and legal disputes, while providing a better business environment [9]. Low-carbon emission reduction initiatives can also help companies shape a positive social image, boost their brand value, and enhance their competitiveness in the market, gaining support from investors, partners, and end consumers who are concerned about sustainable development.
To maximize these benefits in the future, businesses need to further strengthen their environmental awareness, making environmental protection a crucial direction and development goal. Actively promoting the green economy and sustainable development process is essential for this transformation. Understanding international and domestic bilateral policies and staying attuned to market trends are of paramount importance.
Recent International and Domestic Policies and Their Impacts
(1) International Market
In a report released by the United Nations Environment Programme (UNEP) in 2019, various segments of the textile and apparel industry chain were analyzed. The findings revealed that China covers over half of the upstream production processes for clothing globally, with these garments and fabrics subsequently making their way into global markets, including Europe and North America [10]. In the context of global concern about climate change, China's textile industry's ability to respond promptly to changes in low-carbon policies in the international market and to propose effective strategies is of paramount importance. This section aims to provide interpretations of policies related to China's textile products in the international and domestic markets, offering multiple perspectives to stimulate insights.
To achieve climate neutrality as a top priority, the European Union has introduced a series of legislations, including specific strategies for textiles. In March 2022, the European Commission unveiled the "EU Sustainable and Circular Textiles Strategy" (hereafter referred to as the "Textiles Strategy") [11]. This strategy begins with eco-design at the forefront of the value chain and redefines the sustainability of textile products.
According to this legislation, textiles that do not meet the definition of sustainable products will be unable to be sold in Europe. The law introduces mandatory eco-design requirements, such as sustainable sourcing of textile fiber raw materials. Furthermore, the European Commission will establish eco-design requirements for specific products to enhance the durability and recyclability of textiles, thereby minimizing their adverse impact on climate and the environment.
The "Textile Strategy" also imposes mandatory information requirements on products, primarily including details about fabric composition and fiber content. The objective behind this is to regulate textile products as sustainable commodities. In further discussions, the European Commission may compel the disclosure of additional parameters, such as circularity indicators and the country of origin (i.e., "manufacturing country"). This implies that products exported from our country might need to confront challenges related to transparency and labeling.
Additionally, the European Union has established the Carbon Border Adjustment Mechanism (CBAM) and has identified the first batch of products it covers. This mechanism aims to impose additional taxes on imported goods to mitigate the risk of carbon leakage. For products covered by CBAM, its further implementation will increase the cost of our country's exports to the European Union. Presently, while textiles have not yet fallen under the scope of CBAM regulation, there is no guarantee that they won't be included in the future.
For another major export market of our country's textile products, the United States, the domestically proposed carbon tax legislation, the "Clean Competition Action" (CCA), will also require importers and domestic U.S. companies to pay a carbon tax for emissions exceeding industry averages. Similar to the European CBAM, even though the CCA has not included the textile and apparel industry in its tax list for now, the trend of its future development remains noteworthy for domestic companies. Initiating emission reduction efforts early to adapt to the market's conditions becomes a pressing concern.
The global expansion of carbon labeling systems has also heightened the textile industry's demand for carbon reduction. Carbon labeling serves as an environmental indicator, displaying specific metrics of a product's environmental impact, effectively showcasing a company's environmental efforts to consumers and raising awareness about sustainability. The application of carbon labels may potentially create new green trade barriers in specific markets. Furthermore, some countries' requirements for product labeling continuously raise the bar for export standards.
In the textile and clothing sector, a plethora of green certifications, such as Oeko-Tex, BCI (Better Cotton Initiative), GRS (Global Recycled Standard), RWS (Responsible Wool Standard), and organic cotton certifications, have gained widespread recognition worldwide. Failure to provide these certifications could result in the loss of procurement orders from various overseas brands, thereby increasing the challenges faced by domestic textile exports [5].
(II) Domestic Market
The textile and clothing industry in China represents a massive consumer market with extensive sales channels within the domestic market. As the "30-60" dual-carbon goal has been introduced, the domestic textile and clothing industry is facing increasing pressure to reduce emissions. To achieve the nation's emission reduction targets, the industry needs to adopt more proactive and effective measures, including enhancing energy efficiency, promoting clean energy, and reducing emissions of waste gases, wastewater, and solid waste generated during the manufacturing process.
The "Guidance on High-Quality Development of the Industrial Textile Industry" released in 2022 explicitly states that the textile industry needs to reach new levels of green development by the end of the 14th Five-Year Plan [14]. To achieve this goal, the textile and clothing industry must commit to green development, improving energy and water resource utilization efficiency, while simultaneously reducing energy consumption and carbon emissions per unit of industrial value-added. The industry should formulate energy-saving and carbon-reduction action plans centered around carbon peak and carbon neutrality strategic objectives. Additionally, it should establish an energy-saving and emission reduction assessment system for the non-woven fabric sector, lower energy consumption levels, increase the utilization of environmentally friendly raw materials, and promote eco-friendly products.
Furthermore, businesses can engage in the certification of biodegradable non-woven fabrics and products, intensify the promotion of eco-friendly products, encourage the recycling of used textiles, and increase the proportion of recycled fibers in various applications. With the trend towards a green and low-carbon economy, the domestic textile and clothing industry needs to accelerate its transformation from a traditional labor-intensive industry to a technology-intensive one. This transformation will help break through challenges, achieve sustainable development, and make a positive contribution to the country's economy and environmental protection.
Development Trends and Changing Dynamics
With the increasing global focus on climate change and environmental awareness, many countries and regions are adopting carbon neutrality and related policies, leading to a series of changes and adjustments in the textile and clothing industry's imports and exports.
(I) International Carbon Market Development Trends and Changing Dynamics
(1) Adapting to Risks and Preparing for the Future [15]
Changes in the global geopolitical landscape have introduced a level of uncertainty in the implementation of carbon neutrality policies. Events like the 2022 Russia-Ukraine conflict and Western sanctions against Russia, resulting in an energy crisis, disrupted the carbon neutrality plans of some European countries. Countries like the UK, Denmark, and Germany have announced delays in their carbon neutrality timelines and related plans to close or reopen coal-fired power plants. In this context, businesses with significant export volumes must enhance their ability to adapt to unforeseen circumstances, monitor policy changes in export countries, and prepare for uncertainties in the international market.
(2) Learning Advanced Technologies and Pioneering Future Development
It is expected that countries worldwide will further expand the scope of carbon markets to cover more industries, encouraging businesses to actively reduce carbon emissions. Many low-carbon policies have been implemented internationally before they reach China, and domestic regulatory bodies are considering foreign policy experiences while developing policies tailored to China's specific circumstances. Domestic businesses should proactively introduce advanced technologies, learn from best practices in management, and enhance their competitiveness. For instance, they can explore and adopt carbon capture and carbon sequestration technologies to reduce their carbon emissions. Conducting internal knowledge dissemination and discussions, analyzing successful international cases, and proposing various strategies for their emission reduction plans can provide more options for achieving their carbon neutrality goals.
(II) Domestic Carbon Market Development Trends and Changing Dynamics
(1) Clearer Emission Reduction Goals Require Reasonable Planning
The Chinese government has made a commitment in the international community to achieve carbon peaking by 2030 and carbon neutrality by 2060. In this context, the textile and clothing industry needs to gradually reduce its carbon emissions, working towards both the industry's carbon neutrality and contributing to the national "30-60" dual-carbon objectives. To achieve the ultimate goal, companies need to create more reasonable and comprehensive emission reduction plans. These plans should include activities like carbon audits and carbon accounting, regularly formulating emission reduction plans, periodic evaluations of the results of these plans, and ultimately achieving carbon neutrality.
(2) Expectations of Stronger Government Policies
In 2022, numerous provincial and municipal governments released "Carbon Peaking Implementation Plans." It is expected that nationwide, a series of policies will be introduced to enhance regulation, alongside incentives and financial support, to encourage businesses to accelerate their transformation, technological innovation, and environmentally-friendly production in line with low-carbon and environmental protection goals.
(3) Energy Transition Challenges Across Various Sectors
To meet dual-carbon goals, various industries must expedite their energy transition and adopt greener, more energy-efficient, and effective energy sources to reduce carbon emissions and the consumption of fossil fuels. Simultaneously, they should utilize auxiliary measures to enhance energy utilization efficiency, such as strengthening the application of smart control and digitalization. This will drive industries towards becoming more high-end, intelligent, and eco-friendly, thus boosting their core competitiveness. Upgrading equipment and processes to improve energy utilization efficiency, as well as introducing renewable energy sources like solar and wind power to replace traditional fossil fuels, are essential steps.
(4) Evolving Carbon Trading Markets Require Relevant Capabilities
Operating in carbon trading markets is a crucial means of achieving carbon neutrality. China is progressively establishing a sound carbon trading market. The current carbon asset trading system has drawn inspiration from the experiences of developed economies like Europe and the United States. Therefore, businesses can gain a head start by familiarizing themselves with international market policies, accumulating knowledge, and preparing for future asset trading and quota compliance requirements.
(5) Gradual Realization of Sustainable Supply Chain Development
To avoid shouldering upstream costs, companies need to establish sustainable development agreements with suppliers, optimizing supply chain structures and processes to facilitate resource sharing, cost reduction, and environmental benefits. This entails achieving objectives such as reducing carbon emissions in upstream raw materials, improving production processes, and applying green logistics. For more efficient achievement of these goals, companies can utilize smart equipment and systems to control functions like smart manufacturing, quality inspection, and intelligent logistics, thereby enhancing transparency throughout the entire supply chain.
As global dual-carbon policies are continually being implemented and improved, the textile and apparel industry faces significant opportunities and challenges. Governments play a pivotal role in enhancing the policy and regulatory framework for this sector. They should strengthen industry oversight, encourage businesses to reduce carbon emissions and achieve carbon neutrality, and promote the industry's sustainable development.
Under the legal framework of these policies, businesses should adapt to and respond to policy changes, boost technological innovation and green transformation, optimize production and management processes, and continually enhance their competitiveness and sustainability. Companies should invest in research and development and innovation, adopt more environmentally friendly and efficient production techniques and equipment, improve resource utilization, reduce energy consumption, and lower carbon emissions. Simultaneously, companies should actively engage in carbon offset initiatives, reducing their carbon footprint through emissions reduction and offsetting to achieve green and low-carbon development.
Furthermore, companies should strengthen supply chain management and encourage suppliers to adopt more environmentally friendly materials and production processes, jointly driving the sustainable development of the industry's supply chain. Ultimately, through the collaborative efforts of governments and businesses, the textile and apparel industry will enter a new phase of development, making a positive contribution to sustainable development and global climate change mitigation.
Reference：
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