Cumbersome regulatory hurdles and a lack of access to finance, among others, are the policy gaps that bar Bangladesh's transition to a circular economy.
Informality of waste collection, lack of quality of collected post-industrial waste, limited technological capacity and infrastructure are also the challenges facing the country now.
Bangladesh needs to craft a national circular economy strategy with a clear roadmap for the transition with a focus on ready-made garment (RMG) to reduce material waste and enhance recycling.
Providing financial incentives is also crucial to draw investments in recycling, and research and development.
These observations and recommendations were made at a stakeholder consultation styled 'Advancing a circular textile policy in Bangladesh' co-hosted by Chatham House and Policy Exchange Bangladesh on Tuesday.
BGMEA director Vidiya A Khan moderated the event.
Chatham House senior research fellow Patrick Schroder and Policy Exchange economist and senior manager Hasnat Alam made two presentations on 'policy package for circular textiles' and 'international circular textile policy developments' respectively.
UNIDO country representative Zaki Uz Zaman, European Union delegation team leader for green inclusive development Edwin Koekkoek and Shasha Denims managing director Shams Mahmud, among others, spoke there.
There was no guideline for sorting and collection of jhut (garment offcut) within and from factories that lead to contamination, loss of quality, non-transparent pricing structure, said Mr Schroder.
He recommended developing a specific guideline to sort, collect and reuse/recycle post-industrial waste in the RMG sector covering all aspects of waste management.
Mr Schroder also emphasised transparency and traceability of jhut through a mandatory disclosure system for garment factories, ensuring access to finance for informal sector to upgrade operations in line with new government requirements and guidelines of circularity for collection and sorting.
Explaining international policies promoting circularity in textiles and policy developments in major RMG and textile-producing countries, Mr Hasnat suggested that Bangladesh pay a close attention to global developments and requirements.
Bangladesh should also adapt its design and production method to that of a circular economy, make durable products, which are easy to reuse and recycle, he said.
According to Mr Hasnat, reprocessed materials should be used as much as possible to remain competitive and compliant.
He sought a multi-agency collaborative approach to ensure sectors work together in achieving sustainable consumption and production goals and financial incentives such as tax break, subsidy, grant and loan to private investors in the recycling industry.
Addressing the event, additional commerce secretary Abdur Rahim Khan called for using latest technology in the recycling sector.
The new export policy, which will be finalised in January, is going to include circular economy initially for the RMG sector with intent to desegregate cotton and non-cotton wastes.
"We won't encourage export of waste of textile rather will provide some policy supports to those using textile wastes," cited Mr Rahim.
Citing the 'Switch to Circular Economy Value Chains' project, Policy Exchange chairman and CEO Masrur Reaz said Chatham House and Policy Exchange Bangladesh undertook an analytical work to find policy priorities needed to help expedite effective transitional Bangladesh textile and RMG sector to circular economy.
It also aimed to identify opportunities and challenges of circular economy, strengths of informality, regulatory barriers and coordination among stakeholders like BGMEA, makers, buyers and government.
Mr Koekkoek said the project was important for the EU for three reasons - circular economy, garment and Bangladesh.
Circular economy is important as it helps fight and prevent pollution, and address production and consumption issues.
Bangladesh is the second-largest exporter and also the largest beneficiary of the EU's EBA (everything but arms) facility.
Explaining the EU green deal and its target, Mr Koekkoek said they needed more sustainable sectors, adding that the RMG sector should not be overlooked.
According to Ms Vidiya, Bangladesh has the capacity to become a leader in circular economy as it produces best waste.
She called for defining the responsibility of each stakeholder for recycling and reusing waste produced in Bangladesh as money was involved.
At the event, Mr Mahmud recognised the need for introducing a separate HS code for waste and financing through the central bank with a grace period.
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