Textile recycling helps in the protection of the environment as well. Recycled clothes reduce landfill space. Landfill sites pose a threat to the environment and water supplies. When it rains, water drains through the discarded clothes and picks up hazardous chemicals and bleaches. This water turns out to be toxic. Textile made from synthetic fibres will not decompose quickly whereas fabrics like wool release methane, during decomposition and both fibres ultimately cause global warming. When these fabrics are recycled, this hazard will be reduced to a considerable extent. It saves on the consumption of energy, as recycled clothes need not be re-dyed or sourced. Reduced usage of dyes and chemicals minimizes their manufacture and ultimately the adverse effects of their manufacture. Of all the old clothing, 70 % is used as second-hand clothing, 6 % is waste bags and zips, 8 % is used for reclaiming fibres and making recycled products, 7 % is used as wiping material and the remaining 9 % is shredded and used as stuffing. It is a surprising fact that over 70 per cent of the world's population uses second-hand clothing. Raw materials acquired out of recycled fabrics cost less; making it an attractive feature for manufacturers.

In order to use the textile material to its full potential before it is finally sent to incineration, a variety of recycling techniques are required. Recycling of textiles is normally divided into mechanical and chemical recycling, which are two completely different processes that have different prerequisites and result in different materials.

Some materials can be recycled mechanically into new textiles, while others find better use as reinforcing materials. Other materials fractions can be chemically recycled to the high quality fiber of the same quality as virgin material and in some cases, if the textile contains toxic chemicals, it may be better and more efficient to incinerate.