As the fashion industry reckons with its environmental footprint, a growing spotlight is falling on one of its most carbon-intensive nodes: the textile mill. While brands often focus on material sourcing or end-of-life recycling, it is textile manufacturing, especially dyeing, finishing, and fabric production that contributes a significant share of global fashion emissions. If the industry is serious about meeting net-zero targets, textile mills must become ground zero for transformation.

Why Textile Mills Matter in the Race to Net-Zero
Textile mills sit at the heart of fashion’s value chain, transforming raw fibres into finished fabrics. This stage alone accounts for over 50 per cent of the industry’s total carbon emissions, according to McKinsey. Here is why:

  • Energy Usage: Mills are heavily reliant on coal, natural gas, and diesel for heating and electricity, particularly in major production hubs like China, India, and Bangladesh.
  • Process Heat: Dyeing and finishing require process heat at temperatures of 60–130°C, typically generated by fossil-fuel-powered boilers.
  • Water Use and Wastewater Treatment: Water heating and treatment processes add further energy burdens.
  • Chemical Inputs: Many synthetic dyes and finishing agents contribute not just to toxicity but to emissions through energy-intensive synthesis.

To meet science-based targets, mills must undergo both energy transition and process redesign, shifting to renewables and adopting cleaner, less resource-intensive methods.

Key Strategies to Decarbonise Textile Mills

1. Transitioning to Renewable Energy: One of the most direct paths to decarbonisation is switching mill operations from fossil fuels to renewable sources such as solar, wind, or biogas.

  • Solar Thermal Heating: Technologies like parabolic troughs or flat-plate collectors can generate the required heat for dyeing and drying processes. For example, Arvind Limited in India has installed solar concentrators to replace coal-fired boilers.
  • On-site Solar PV: Generating electricity for mill operations, lighting, and ventilation.
  • Biogas from Effluents: Anaerobic digesters can convert organic waste into usable biogas.

Challenges

  • High capital expenditure
  • Intermittency of renewable sources
  • Integration with legacy infrastructure

2. Heat Recovery and Energy Efficiency: Before transitioning to new energy sources, mills must optimise existing processes:

  • Heat Recovery Systems: Capturing and reusing heat from exhaust or wastewater.
  • Variable Frequency Drives (VFDs): For pumps and fans, reducing unnecessary power consumption.
  • Insulation Upgrades: Minimising heat losses in dye vats and pipes.

Example: Levi Strauss partnered with the Apparel Impact Institute (Aii) and implemented thermal insulation and boiler efficiency measures, reducing emissions by over 20 per cent across several supplier mills.

3. Waterless and Low-Impact Dyeing Technologies: Dyeing is among the most polluting and energy-consuming processes. Several new technologies offer low-emission alternatives:

  • Supercritical CO2 Dyeing: Uses pressurised CO2 instead of water and heat. DyeCoo technology, used by Adidas and Nike is a great example of this.
  • Digital and Inkjet Printing: Applies dye with precision, reducing energy and water use.
  • Cold Pad Batch (CPB) Dyeing: Eliminates the need for heated dye baths.

These innovations not only reduce emissions but also cut water use, making them a win-win for climate and environmental goals.

4. Chemical Substitution and Detoxification: Decarbonisation is incomplete without addressing harmful chemical use:

  • Low-Impact Dyes and Finishes: Require less energy and shorter curing times.
  • Bio-based Auxiliaries: Derived from renewable feedstocks with lower embodied emissions.
  • Certifications and Monitoring: Tools like ZDHC’s MRSL guide suppliers in chemical management.

Example: H&M’s Conscious Collection uses fabrics dyed with Archroma’s EarthColors, derived from agricultural waste.

5. Onsite Renewable Infrastructure and Green Building Design: Building new green mills or retrofitting old ones with passive design strategies enhances long-term sustainability:

  • Daylighting and Natural Ventilation: Cuts electricity use.
  • Rainwater Harvesting: Reduces demand for treated water.
  • Green Roofs and Thermal Mass Materials: Improve insulation and indoor climate control.

Example: The World’s first LEED-certified textile mill, Rajlakshmi Cotton Mills in India, integrates solar PV and efficient HVAC systems.

The Role of Brands and Retailers
Decarbonising mills requires strong collaboration and leadership from brands. While most mills operate independently, the brands sourcing from them hold significant influence over sustainability practices.

1. Setting Clear Decarbonisation Targets: Brands can set science-based targets (SBTs) that include Scope 3 emissions, covering the upstream production process. These targets send a strong signal to suppliers that emissions reduction is non-negotiable.

Example: H&M Group and Levi’s have both committed to achieving net-zero emissions by 2040, including Scope 3 emissions.

2. Supporting Supplier Investments: Upgrading mills is expensive. Brands can support mills through:

  • Co-investment models or green financing partnerships
  • Long-term sourcing commitments that justify mill capital expenditure
  • Incentives tied to emission reductions (e.g., preferential order volumes or pricing)

Example: VF Corporation launched the Supplier Finance Program, offering lower interest rates for suppliers that show sustainability improvements.

3. Transparency and Accountability: Retailers can require mills to disclose emissions data via platforms like Higg Index, CDP, or Textile Exchange. Brands should reward suppliers that demonstrate measurable carbon reductions.

4. Aggregating Demand for Green Energy: Individual mills may lack bargaining power or scale to transition to renewable energy independently. Brands can collaborate to aggregate energy demand across suppliers and create collective green power purchasing agreements (PPAs).

Mill-Level Carbon Footprinting Tools and Methodologies
Accurate carbon measurement is foundational to decarbonisation. Mills must adopt standardised tools to track, report, and reduce emissions effectively. Robust carbon accounting also ensures credibility with brands, regulators, and investors seeking verified sustainability progress.

Common Tools and Frameworks

  • Higg Facility Environmental Module (FEM): Widely used by apparel brands and suppliers to assess environmental performance across multiple indicators, including energy and GHG emissions.
  • GHG Protocol for Manufacturing: Offers detailed methodologies for measuring Scope 1 (direct emissions from mill operations) and Scope 2 (indirect emissions from purchased energy).
  • ISO 14064: An international standard providing principles and guidance for quantifying and reporting GHG emissions.
  • Life Cycle Assessment (LCA) tools: Evaluate a product’s emissions impact across its full life cycle, offering insights from raw materials to finished goods.
  • Textile Exchange’s Climate+ Strategy Tools: Provide standardised emissions factors for different fibre and processing types.

Best Practices for Implementation

  • Baseline Mapping: Establish a verifiable baseline using historical energy and production data. This becomes the benchmark for measuring emissions reductions.
  • Third-Party Verification: Engage independent auditors or certification bodies to review data inputs and methodologies, improving credibility and enabling carbon credit participation.
  • Dynamic Dashboards: Adopt real-time data platforms and IoT-connected sensors that monitor emissions by process, machine, or material batch.
  • Granular Data Collection: Break emissions data down by dyeing, drying, finishing, and waste treatment to pinpoint high-impact opportunities.
  • Supplier Collaboration: Ensure upstream and downstream partners also contribute emissions data, especially for wet processing and transportation phases.
  • Integration With ESG Reporting Platforms: Feed data into brand-level ESG systems or sustainability reports to streamline corporate disclosures and compliance with the EU Corporate Sustainability Reporting Directive (CSRD) or the US Securities and Exchange Commission (SEC) rules.

Benefits of Robust Carbon Footprinting

  • Enables eligibility for sustainability-linked loans or climate finance.
  • Provides the data foundation for science-based target setting.
  • Increases competitiveness with carbon-conscious brands and retailers.
  • Positions mills to participate in carbon credit markets or offsetting schemes in the future.

Comprehensive carbon tracking transforms sustainability from an aspiration to an accountable performance metric and positions mills as proactive players in the global shift to low-carbon fashion.

Policy and Regulatory Drivers
Regulatory pressure is growing on both brands and suppliers to curb emissions.

1. Carbon Disclosure Mandates

  • EU CSRD requires brands to disclose Scope 3 emissions, incentivising mill decarbonisation.
  • California SB 253 mandates carbon disclosures from companies operating in California, including their supply chains.

These mandates create indirect compliance obligations for mills.

2. Trade and Import Restrictions: Countries may soon link trade privileges or import eligibility to carbon intensity or energy sourcing. For example, The EU Carbon Border Adjustment Mechanism (CBAM) will impose carbon tariffs on imported goods, including textiles, based on their embedded emissions.

3. Subsidies and Incentives: Governments are beginning to support decarbonisation through subsidies.

Here are two examples:

  • India’s Production-Linked Incentive (PLI) scheme for technical textiles and sustainability-focused manufacturing.
  • China’s Green Manufacturing Initiative, promoting clean energy in textile industrial parks.

4. Environmental Permits and Zoning: In some regions, mills may face stricter permitting requirements based on their emissions profile. Forward-looking mills that invest in clean tech may gain faster approvals or access to industrial zones with cleaner infrastructure.

Barriers to Decarbonisation
Despite the availability of solutions, several challenges slow progress:

1. Fragmentation of Supply Chains: Mills are often independently owned and operate in a highly fragmented ecosystem, making coordinated action difficult.

Solution: Brands can work through industry coalitions like ZDHC or Aii to standardise expectations and provide technical support.

2. Lack of Capital for Upgrades: Small- and medium-sized mills often operate on thin margins, making it hard to finance new boilers, solar panels, or efficient dyeing machines.

Solution: Blended finance models, with brand-backed loan guarantees or development finance, can help de-risk mill investments.

3. Data and Measurement Gaps: Many mills lack the tools to measure baseline emissions or assess ROI from decarbonisation.

Solution: Offer digital tools and training to standardise energy and emissions tracking.

4. Cultural and Knowledge Barriers: Resistance to change can stem from limited awareness, language barriers, or fear of disrupting production schedules.

Solution: Brands can fund peer-led training programmes in local languages, highlighting case studies of successful mill transitions.

5. Volatility in Energy Markets: Fluctuating fossil fuel and renewable energy prices can make ROI calculations for clean energy upgrades uncertain.

Solution: Encourage long-term PPAs and government policy advocacy for stable green energy pricing.

6. Weak Policy Enforcement: Even where regulations exist, enforcement is often weak, allowing carbon-intensive mills to continue operating unchecked.

Solution: Brands and NGOs can partner with governments to co-develop monitoring tools and align procurement incentives with policy goals.

Cost-Benefit Analysis of Decarbonising Textile Mills
Decarbonisation requires upfront investment, but the long-term financial and operational benefits can outweigh the costs when strategically implemented. For mills navigating uncertain economic conditions, the key is understanding the real returns on energy efficiency, resilience, and market access.

Short-Term Costs

  • Capital Expenditure: Retrofitting outdated boilers, upgrading to solar thermal systems, and deploying automated dyeing machines demand significant initial investment.
  • Training and Technical Support: Operational teams may need new skills to manage complex energy systems or digital monitoring tools, requiring third-party experts or internal capacity-building.
  • Operational Disruptions: System installation and transition phases may reduce output temporarily, especially if mills operate on tight production schedules.
  • Certification and Audit Costs: To meet buyer or regulatory expectations, mills may also need to pay for third-party verification or environmental certifications.

Long-Term Benefits

  • Energy Savings: Optimising steam systems, heat recovery, and renewable energy usage can reduce utility bills by 15–40 per cent annually, improving margins.
  • Reduced Carbon Liability: As carbon pricing becomes more common, low-emission mills will avoid future taxes, import tariffs, or compliance penalties.
  • Access to Finance: Decarbonisation opens doors to sustainability-linked loans, green bonds, or impact investments with lower interest rates.
  • Buyer Preference and Volume Guarantees: Brands increasingly reward sustainable mills with preferred supplier status, long-term contracts, and volume guarantees.
  • Improved Marketability: Carbon-conscious end consumers and retailers seek products with lower embedded emissions, improving demand and visibility.

Quantitative Insights

  • Payback Periods: Energy efficiency projects (like heat insulation and VFDs) often yield payback in under two years.
  • Return on Investment (ROI): According to Aii and IFC, integrated mill-level programmes can deliver a 20–30 per cent ROI when combining energy, water, and chemical savings.
  • Cost Avoidance: The future cost of inaction may include exclusion from preferred buyer programmes, carbon tariffs under CBAM, or reputational damage from greenwashing scrutiny.

Strategic Implications

  • Resilience: Reduced dependency on volatile fossil fuel markets offers price stability and energy security.
  • Compliance Readiness: Mills with proactive sustainability strategies are better prepared for evolving environmental regulation.
  • Reputation and Talent: A strong sustainability profile helps attract top-tier buyers and skilled labour seeking ethical workplaces.

When viewed through a total value lens, decarbonisation is not just a cost centre, but a strategic investment with broad environmental, financial, and competitive returns.