Fashion and design brands company H&M Group and impact-focused venture investor Vargas announced the launch of Syre, a new company aimed at mass producing textile-to-textile recycled materials, enabling a closed loop solution for the clothing industry. The new venture is kicking off with a $600 million offtake agreement for recycled polyester over 7 years.

In addition to the launch of the new venture, H&M Group also announced a new goal to achieve 50% recycled material by 2030.

Syre aims to support the decarbonization and waste reduction efforts of the textile industry through textile-to-textile recycling, starting with Polyester, which accounts for up to 40% of the sector’s emissions. The company is currently building its first production plant in North Carolina, anticipated to be operational later this year, and aims to expand to twelve plants globally within ten years, targeting production of more than 3 million metric tons of recycled polyester.

According to Syre, less than 1% of the global textile fiber market comes from recycled textiles, and its circular polyester solution reduced CO2e emissions by up to 85% compared to oil-based virgin polyester.

Syre will be led by CEO Dennis Nobelius, who joins the company after serving as Chief Operating Officer for performance electric vehicle producer Polestar.

Nobelius said:

“Syre marks the start of the great textile shift. We envision a world where every textile fiber sees a new day. By implementing true textile-to-textile recycling at hyperscale, we want to drive the transition from a linear to a circular value chain by putting textile waste to use, over and over again.”

The companies also announced that TPG Rise Climate, the dedicated climate investing strategy of global alternative asset manager TPG, has joined Syre as a founding investor.

H&M Group’s new recycled materials goal forms part of the company’s ambition to have 100% of materials to be either recycled or sourced in a more sustainable way by 2030. The company had previously set a sub-target to reach 30% recycled materials by 2025, and unveiled the new goal as it approaches the achievement of this target.

According to H&M, the new venture will support an industry shift to move away from virgin polyester and the current industry standard bottle-to-textile recycling, and towards a closed-loop alternative.

Daniel Ervér, CEO of H&M Group, said:

“The new venture Syre is an important next step on H&M Group’s journey to integrate circularity across our business. With this solution to rapidly scale textile-to-textile recycling, we want to continue to drive and inspire more industry players to join us in closing the loop and accelerating the shift towards a more sustainable future.”

The launch of Syre marks the fifth venture for Vargas, with a portfolio that also includes battery manufacturer Northvolt, energy storage developer Polarium, low carbon steel manufacturer H2 Green Steel and heating electrification solutions startup Aira.

Carl-Erik Lagercrantz, CEO of Vargas, said:

“Syre represents a significant milestone on our journey to directly and indirectly decarbonize 1% of global emissions. By applying our proven model for creating impactful companies from the ground up we are now targeting a new industry vertical. In partnership with H&M Group and TPG – we aim to enable circularity, reduce textile waste, and substantially bring down emissions.”