Mar 15, 2024
by Karl Smith
Forecasting the Future of Material Innovation: Next-Gen Leaders on What Comes Next
by Karl Smith
Mar 15, 2024

Back in February, Swedish textile-to-textile recycling outfit Renewcell filed for bankruptcy. The announcement followed a long string of negative news, from warehouse fires to crashing share prices to a shocking drop-to-zero in sales of its flagship Circulose pulp product – but still it came as a surprise, rocking the material innovation sector and triggering a raft of understandable questions from within and without.

Of course, it wasn’t a surprise to everyone. There were rumblings, as there always are, but for those on the inside there were other signs too – red flags beyond those waved officially by the company itself.

Shock or not, however, moments like this are pivotal: we have seen, far too many times, a single domino fall and take the others with it in a clattering wave. Housing, dot com, the stock market, crypto – even in just the last quarter of a century we have seen institutions thought too big to fail, well, fail.

The difference here, however, is that no bail-out is coming – if all the cards fall, they stay fallen. What happens next, in the immediate aftermath of Renewcell’s high-profile demise, will define the future of next-generation materials for the foreseeable.

And some noteworthy changes are already in motion.

That H&M has wasted little time in finding a replacement, investing $600 million USD in textile-to-textile polyester recycler Syre could be seen as the corporation doubling down and betting on the future. On the other, however, that investment and uptake commitments from H&M (and other marquee-name partners like Inditex) couldn’t keep Renewcell afloat also means that, barring some revelation of gross mismanagement at the Swedish outfit, the same thing could easily happen again. (And again, and again.)

And so, with this in mind, we spoke to (and cribbed some notes from) the other cards in play, to the still-standing dominos – to other material innovators, their practices, products, and financial stability now under heavy scrutiny – with a view to finding out not only what went wrong, but also what lessons we can learn and which assumptions we shouldn’t now be making.

So, what went wrong?

“In terms of ‘what went wrong’ (a funding-focused response), there is lack of accountability and acknowledgement of the ‘true costs’ of running global scale material economies.

“Humans have created economies that do not force brand who make products, nor synthetic/petrochemical companies who own and operate tens and hundreds of trillions of dollars of global infrastructure & assets, to set aside significant (enough) amount of their profits to decarbonize, detoxify, and delinearize the fashion, footwear, et cetera industries.” – Luke Haverhals, Founder and CEO of Natural Fiber Welding

“Bringing innovation to the market is a delicate balance between need, must, price and a matter of education. To time all these pieces together correnctly is demanding. Fashion industry’s complex value chains, long lead-times and currently limited resources on testing budgets combined with the geo-political situation, make the operational environment very challenging. At the end of the day, it’s about cash flow. The failure is not to be able to secure it.” – (Source at) Ananas Anam

“To break even, Renewcell needs to sell between 80,000 and 120,000 metric tons of fiber, which is a target that should have been within reach given their factory size, the commitments from early adopters like Ganni, H&M, and Inditex and all the (loudly spoken) industry enthusiasm about their technology.

According to a recent WWD article, Renewcell needed 20 brands to commit to 6,000 metric tons of Circulose fibre per year. Considering the ambitious net-zero, SBTi and preferred fibre/recycled fibre targets most brands have set for 2030 (and earlier!), committing to these volumes should have been a no-brainer.” – Irene Maffini, Next-Gen Materials Expert and Investor in NEFFA, BioFluff, Ponda, etc.

It’s tough to be the first to try something new. There’s a lot to learn, and early attempts might not be perfect—but that doesn’t mean they’re wrong. Building a new supply chain for an old industry takes time. Everyone involved needs to understand and agree on how to move the industry forward.  It requires a significant investment of time and effort to educate and align all stakeholders, ensuring that each participant is committed to advancing the industry in the envisioned direction.” – Nava Esmailizadeh, Head of Brand at Ambercycle

“It’s a strange moment in time. There is a handful of innovators, founders and environmentalists who are risking everything to turn things around. Everything. And then there are major corporations which could easily help to push them off the runway into the air. But then, leadership teams are not incentivized to take such risks, to truly implement change strategies. They actually get punished for taking a stand, if they do.” – Cyril Gutsch, Founder and CEO of Parley for the Oceans

“From our experience, we see brands that announce ambitious goals and have very motivated teams in material innovation or design… however, when it comes to the execution of a project with volume and impact, it’s often the corporate team that makes decisions based on their existing schemes and margin calculations. We need companies that are willing to go the extra mile or policy makers that will set the necessary rules for this to happen.” – Hannes Schoenegger, Founder and CEO of BANANATEX

And what lessons should we take from that?

“For us, as an innovator it would be extremely helpful to get meaningful commitments and off-take agreements from brands. This would lay the ground for real innovation and longer term developments, all of that is needed to cause positive change!” – Hannes Schoenegger

“Fluctuations in stock prices driven by panic, herd mentality and short-term thinking among investors, have only exacerbated these challenges. ‘Doing an IPO too early’ is easy to criticize in hindsight, but the truth is, that real disruptors like Renewcell face systemic obstacles in accessing the patient finance they need, highlighting broader issues within our financial ecosystem.” – Irene Maffini

“At global scale, the problems I am referencing of a toxic, high-carbon, linear synthetic materials economy are literally many trillions of dollars ‘large’ annually were humans to be truly committed to solve these problems in the next few decades.

“Humans have not yet fully committed to a combination of transparency over profits combined with regulatory oversight and corporate responsibility do deal with ‘the system’. As such, there is simply a vanishingly small window for recycling companies to fit through from a unit economic and market perspective.” – Luke Haverhals

“It’s crucial to understand that at Ambercycle, we’re not just developing technology; we’re constructing an entire supply chain. We’ve recognized from the outset that technology alone cannot solve problems—people do. Therefore, it’s essential to create something that people desire and understand. That’s why our team is devoted to both educating consumers directly and collaborating with the existing supply chain to expand our technology and product offerings.” – Nava Esmailizadeh

“Not knowing enough details, but my general feeling is that with new innovations in the fibre space, the focus is too strongly on brand partnerships. 

“We need to understand how to help the adaptation of these fibres on industrial scale. Who are the partners who will make the adoption for the industry possible? The importance of spinners and manufacturers is the key. We need to look at the process step by step. We can’t run before we can walk.

“So first industry and then brands- it should be like the honey to the bees. Otherwise all innovation stays in capsule collections and we expect long term commitments from stakeholders who cannot do it.” – (Source at) Ananas Anam

But what shouldn’t we necessarily assume?

“It’s difficult to assess this certain case, but one lesson in general is to be a little patient and not assume a transition from where we are now to a non toxic material world can happen within a few years.” – Hannes Schoenegger

“We can’t let obstacles discourage us from progressing. Similarly, we should not assume that we know what people want. Even if there is demand for something, it doesn’t guarantee that achieving it will be straightforward.” – Nava Esmailizadeh

“That Re:NewCell accomplished as much as they did with so little real industry commitment to help is not so much a stain on Re:NewCell, but an indictment of both corporate and regulatory/governance bodies that continue to ignore the true costs of the human materials economy operating at global scale & proportions. There must be more resources for those who are technically competent to address these types of technological challenges. Without resources, progress will be extremely slow and not globally impactful.” – Luke Haverhals

With the proliferation of plant-based and bio-based next-gen materials, has recycling become outdated?

“We are convinced we will need all available solutions desperately, from re-using to re-cycling to maximum efforts towards developing alternatives. it should be a common effort, and still needs a lot of new players coming to the game.” – Hannes Schoenegger

“Firstly, I would acknowledge that ‘plant-based’ and ‘recycling’ are ‘apples and oranges’…perhaps even ‘apples and flowers’. Due to greenwashing marketing, ‘plant-based’ most often does not actually mean ‘plants’ but rather ‘the bare minimum of plant matter mixed with synthetic plastics’. In the meantime, recycling has been hyped as ‘happening’, but the factual reality is that recycling is not actually happening at substantial global percentage of materials produced – outside of defining ‘recycling’ as ‘burning’ (aka ‘heat recovery’) plastics.

“What regulators and the industry need to be committed to do is write truthful summaries about what is happening (or what something ‘is’) and so that standout NONTOXIC, ZERO fossil oil, ZERO synthetic, ALL natural, FULLY circular solutions are celebrated and stand out.

“This goes back to the concept of ‘true costs’. ‘True costs’ cannot be tabulated, for example, when people define ‘recycling’ as ‘burning’ or when people do not acknowledge that a ‘plant-based’ solution contains toxic petrochemicals and/or performs by using synthetics that cannot economically ‘unmixed’ and recycled by low-energy/low-carbon means at least 10x times without significant degradation nor substantial loss.

“For those of us that are committed to truly nontoxic, natural material solutions that perform, there is a great opportunity to unify ‘plants’ and ‘recycling’ given that photosynthesis (nature) produces materials at epic scales far beyond human fashion and footwear needs while feeding us and in a solar-driven circular economy. Performance natural materials (better yet, entire products) that can safely go back to nature either by grinding (simple and inexpensive) or by composting (more expensive at industrial scale and requires materials compromise on durability) are the gold standard and are what we should be shifting discussions towards.” – Luke Haverhals

We have observed a consistent rise in demand for regenerated materials, especially in polyester, as brands strive to achieve their climate objectives.” – Nava Esmailizadeh

Recycling is not the problem. It’s a solution. And for many materials it’s a great solution. Plastic is the problem. It’s toxic. And it should be banned. But bashing plastic recycling is irresponsible. It only leads to the use of more virgin (new) plastic. Because why on earth should a company use expensive recycled material, if the reward is to be attacked for greenwashing.

“In my eyes, first governments should ban the use of virgin plastic and make it mandatory to use recycled materials. And then they should ban toxic plastic altogether. This would attract the billions of investment and grant dollars we need for the development and scale up of new materials. And even with the required funding available, it will take at least 10-12, probably even 20 years to phase out all toxic plastic. Until then, we need to recycle recycle recycle the toxic plastic we already made. Instead of making more of it.” – Cyril Gutsch

We haven’t even started! The right type of recyclingoffers huge potential for the future. But we need to think responsibly what should be recycled, into which end-applications. I am not sure that recycling plastic bottles into yarns for apparel is ultimately the right application. Is there a possibility to recycle them to a more permanent components, for example into technical textiles within the automotive industry.  Something that doesn’t require constant washing (to avoid microplastic pollution for example).” – (Source at) Ananas Anam

If the future isn’t Renewcell, what is it?

“We hope the future of materials will be super – versatile with many alternatives from natural, plant based fibres to bio-fabricated solutions, working recycling systems and many more.” – Hannes Schoenegger

“Ultimately, Renewcell’s story needs to serve as a call to action for the entire fashion industry. We must collectively work towards closing the innovation gap and fostering a business environment where sustainability is not just a moral imperative, but a strategic commercial imperative substantiated by clear, binding contracts with innovators for long-term success.” – Irene Maffini

“Plastic is a design failure and needs to be banned. Until then, we need to avoid and intercept this toxic material as best as we can. But the true solution is to invent new materials. To replace what created the ‘Toxic Age.’ [That’s why] Parley for the Oceans is gently launching its second chapter. One that is plastic free. Our partnership with Bananatex® shows the direction we are taking.” – Cyril Gutsch

Truly low-carbon, nontoxic, circular materials from technologies that scale in existing supply chain and do not have the burden of massive infrastructure costs are the only viable economic pathway forward. There are too many trillions of dollars invested into global infrastructure to build new/‘start over’ with infrastructure. Those natural technical approaches that can be optimized while CUTTING infrastructure requirements (e.g., cutting out need for oil and refined petrochemicals) are extra special in terms of delivering impact.

“The key gating litmus test is performance and performance will show up in markets. Anyone can have a website claiming to have a wonderful technological solution, but the real question is where can I buy or observes sales of a few million dollars’ worth of ‘a solution’ running in existing supply chains?” – Luke Haverhals

“We believe that a circular future where end-of-life textiles are regenerated back into the new materials of the future is the future of the industry. Our team is focused on building the infrastructure at scale to make this possible.” – Nava Esmailizadeh

The future is not defined by one failure. If you look at the world’s diminishing resources, scarcity of land and growing population, we all know that textile to textile recycling is necessary to keep the existing fibres in circulation while bringing natural fibres from agricultural waste streams into a scalable solution to the textile industry.

“I come from Finland where people have recycled on regular basis for decades. My grandparents would generate just barely a small trash bag a month of trash that they refused for the city to collect. Food was composted, old clothes recycled (occasionally burnt in the sauna) and nothing was bought in extra packaging. 

“With the speed that the society buys clothes, recycling and keeping the fibres in circulation is essential. We generate waste in half a day of the amount that my grandparents did in a month. 

“Renewcell’s story might sound like ‘the end’. Howeverit’s just the beginning of technology and solutions that we necessarily need. It’s just the beginning of textile-to-textile recycling, and I know that within the next few years we will see many necessary and exciting innovations scaled up in this field. The same applies to natural, underrepresented fibres such as pineapple leaf fibre. We need better materials for a better future.” – (Source at) Ananas Anam