From a global perspective, various methods have been employed for dealing with textile waste at different scales.
The name for the “old school” method of recycling textile waste is by producing a material called shoddy, where fabric mills sell unusable fabric by weight (aka “pound goods”) to manufacturers for the creation of rags, insulation, mattress padding, etc. Post-consumer garments can be used too…You may have heard of insulation made from denim? That’s basically shoddy!
Companies like H&M, Levi’s, and The North Face collect old garments and work with a company who sorts them and decides what can be resold vs. what is essentially shoddy.
Currently circular textile solutions like fibre-to-fibre recycling through mechanical, chemical, or thermal recycling methods are in the research and development phase. Where these technologies have been developed, they are not yet used at scale.
Numerous brands are starting to create “monomaterial” products, which are made completely of one fibre, such as polyester. This would make the item easier to recycle as the components (fabrics, zippers, buttons, etc.) wouldn’t have to be separated prior to processing. One exciting example of this is the Helly Hansen Lifa Infinity Pro material, which is a waterproof, laminated fabric made entirely of polypropylene!
Several mills around the world have programs to use pre-consumer (production waste) and post-consumer (used items) textiles as inputs for their recycled content. Examples include Teijin Fabrics eco-circle (polyester), Infinited Fiber (cellulose fibres), and Worn Again (polyester, cotton, and poly/cotton blends). While they don’t usually interact directly with the general public, they would partner with brands and other textile manufacturers to process the input materials and turn them back into usable fibres.