Ingka Group, the largest global IKEA retailer, has announced a €1 billion ($1.03 billion) investment in recycling companies to enhance waste management for discarded IKEA products, including furniture, mattresses, and textiles. The initiative supports IKEA’s commitment to achieving a circular economy and aligns with the European Union’s upcoming recycling legislation.
This investment comes as the EU drafts Extended Producer Responsibility legislation, which would require retailers to pay a fee for every textile or clothing item sold. The funds aim to support sorting and recycling, addressing the growing waste burden on management services.
Of the total, €667 million ($686 million) will go toward new recycling ventures, with a significant focus on textiles. The remaining funds will further support existing partners, such as RetourMatras, a mattress recycling company and Morssinkhof Rymoplast, a plastics recycler.
Additionally, Ingka is exploring recycling solutions for wood, a primary material in IKEA furniture.
“The high carbon footprint of materials like textiles and wood, coupled with limited recycling capacity, has driven our decision to invest in these areas,” said Lukas Visser, Investment Director at Ingka Investments. “The circular economy is still in its infancy, and our efforts aim to narrow the focus for greater impact.”
Ingka Group, which operates IKEA stores in 31 countries and accounts for 90% of the retailer’s global sales, aims to recycle as many textiles, plastics, and mattresses as it sells by 2030. The initiative is part of its broader commitment to sustainability, which also includes investments in forests, renewable energy, and real estate.
Peter van der Poel, Managing Director of Ingka Investments, emphasised the urgency of scaling textile recycling efforts and said, “We plan to announce a new investment in textile recycling this year, focusing on creating scale and meeting both IKEA’s needs and broader market demands.”
Upcoming EU policies could play a pivotal role in driving companies toward sustainable waste management. The Extended Producer Responsibility legislation is expected to reduce reliance on incineration by leveling the cost difference between recycled and virgin materials, making recycling a more attractive option.
This €1 billion initiative reflects Ingka’s long-term strategy to lead the transition to a circular economy while addressing the environmental challenges of waste management. By 2030, IKEA aims to significantly reduce its carbon footprint and establish itself as a global leader in sustainability.
