COUNTRY PROFILE
Renewables at the heart of clothing production in Portugal
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The rich history of clothing products manufacturing in Portugal spans over 150 years and is characterised by strong family traditions. With every segment of the clothing production value chain covered, Portugal's clothing manufacturers maintain a fierce competitive advantage that distinguishes them from their European counterparts. Portugal's clothing manufacturers, comprised of mostly small and medium-sized enterprises (SMEs), are increasingly recognised for their high-quality production and dedication to social and environmental responsibility.
Despite globalisation-fuelled competition from low-cost clothing manufacturers and industry shrinkage across Europe since the 1970s, clothing production has remained an important sector in the Portuguese economy.
Despite globalisation-fuelled competition from low-cost clothing manufacturers and industry shrinkage across Europe since the 1970s, clothing production has remained an important sector in the Portuguese economy.
Portugal is taking advantage of its geographical diversity.
Amid high inflation and reduced growth globally, Portuguese clothing manufacturers' exports of clothing products totalled 6,122 million € in 2022, a new record. Given the clothing sector's size, the environmental impact linked to production is significant. It has been estimated that clothing manufacturers generate 17 tons of CO2 for each ton of clothing products.
Government policy and support are key factors driving the transition to renewables in clothing production. Portugal has been investing in wind and solar energy, taking advantage of its geographical diversity.
Portugal has become a world leader in clean renewables to bolster domestic energy production, decrease dependence on energy imports, and reduce usage of fossil fuels. This leadership is particularly visible in the northern region of the country, home to the majority of clothing product manufacturers. While the power capacity of renewables totals 16.6 gigawatts across Portugal, the northern region alone hosts 8.4.
Government policy and support are key factors driving the transition to renewables in clothing production. Portugal has been investing in wind and solar energy, taking advantage of its geographical diversity.
Portugal has become a world leader in clean renewables to bolster domestic energy production, decrease dependence on energy imports, and reduce usage of fossil fuels. This leadership is particularly visible in the northern region of the country, home to the majority of clothing product manufacturers. While the power capacity of renewables totals 16.6 gigawatts across Portugal, the northern region alone hosts 8.4.
Clothing manufacturers are transitioning from energy consumption to energy production.
As summarized in a recent report published by the Clothing and Textile Association of Portugal, the country is not just aiming to meet European initiatives but to exceed them, with a lofty goal to make clothing products manufacturers 100% reliant on renewables by 2030.
In order to make these ambitious plans a reality, Portugal's clothing manufacturers are committing to a significant transition of production. The Portuguese industrial sector requires 30% of total energy consumption, 6% of which powers clothing products manufacturing. Processes like finishing, printing, and dyeing clothing products constitute the most energy-intensive processes in production for clothing manufacturers.
While many clothing manufacturers consider biomass a viable production alternative to fossil fuels, given its neutral CO2 emissions and increasing prices of traditional energy sources, solar energy production remains at the forefront of renewables. Other alternatives being explored include green hydrogen, wind energy, and biogas.
Clothing manufacturers in Portugal are transitioning from energy consumption to energy production, with an increasing number of clothing products manufacturers developing or adapting renewable energy infrastructure, such as rooftop solar farms.
Many other exciting innovations are underway, including the replacement of boilers powered by natural gas with those run by steam generated through renewable energy. Some manufacturers of clothing products are even aiming for 100% reliance on renewables by 2027, 3 years before the nationwide deadline. Clothing manufacturers are also making efforts to recycle renewable energy across several production processes.
In order to make these ambitious plans a reality, Portugal's clothing manufacturers are committing to a significant transition of production. The Portuguese industrial sector requires 30% of total energy consumption, 6% of which powers clothing products manufacturing. Processes like finishing, printing, and dyeing clothing products constitute the most energy-intensive processes in production for clothing manufacturers.
While many clothing manufacturers consider biomass a viable production alternative to fossil fuels, given its neutral CO2 emissions and increasing prices of traditional energy sources, solar energy production remains at the forefront of renewables. Other alternatives being explored include green hydrogen, wind energy, and biogas.
Clothing manufacturers in Portugal are transitioning from energy consumption to energy production, with an increasing number of clothing products manufacturers developing or adapting renewable energy infrastructure, such as rooftop solar farms.
Many other exciting innovations are underway, including the replacement of boilers powered by natural gas with those run by steam generated through renewable energy. Some manufacturers of clothing products are even aiming for 100% reliance on renewables by 2027, 3 years before the nationwide deadline. Clothing manufacturers are also making efforts to recycle renewable energy across several production processes.
Renewables translate to increased quality and sustainability.
The transition to renewable energy sources by Portugal's clothing manufacturers has had a profound impact on the quality and sustainability of clothing products. Sustainable clothing brands prioritizing renewables and eco-friendly materials are often associated with higher-quality clothing products designed for long-term use. Renewables can be understood to satisfy the "ethical production system" criteria for clothing products vis-à-vis ethical-minded consumers and clothing brands.
Recently cited as "the strongest [clothing industry] in all of Europe due to exquisite craftsmanship and high quality", it is clear that Portugal's position as a leader and change-maker in the clothing products industry is leading to considerable reputational benefits. Improved quality of clothing products means Portugal's clothing manufacturers are collaborating with a smaller number of emerging designers and brands, making for a diversified client list and improved clothing sector resilience (B2B).
While a diversified client list translates to more autonomy for clothing manufacturers, commitments to sustainability also lead to higher price points for clothing products, insulating manufacturers from market volatility. Furthermore, increased reliance on renewables offers security to Portuguese clothing manufacturers with regard to fluctuations in the global energy market in particular.
Still, Portugal relies heavily on fossil fuel imports, prices of which have increased more than 170% across Europe since January 2021. Clothing manufacturers' adoption of more affordable renewables to make clothing products can thus serve as an industry blueprint to accelerate the green transition in not only Portuguese production but European production as a whole. Renewables are also the main driver behind the reduction of energy dependency in Portugal from about 88.6% in 2005 to 74% in 2019.
Recently cited as "the strongest [clothing industry] in all of Europe due to exquisite craftsmanship and high quality", it is clear that Portugal's position as a leader and change-maker in the clothing products industry is leading to considerable reputational benefits. Improved quality of clothing products means Portugal's clothing manufacturers are collaborating with a smaller number of emerging designers and brands, making for a diversified client list and improved clothing sector resilience (B2B).
While a diversified client list translates to more autonomy for clothing manufacturers, commitments to sustainability also lead to higher price points for clothing products, insulating manufacturers from market volatility. Furthermore, increased reliance on renewables offers security to Portuguese clothing manufacturers with regard to fluctuations in the global energy market in particular.
Still, Portugal relies heavily on fossil fuel imports, prices of which have increased more than 170% across Europe since January 2021. Clothing manufacturers' adoption of more affordable renewables to make clothing products can thus serve as an industry blueprint to accelerate the green transition in not only Portuguese production but European production as a whole. Renewables are also the main driver behind the reduction of energy dependency in Portugal from about 88.6% in 2005 to 74% in 2019.
Future prospects and potential implications for clothing production industry.
While the concentration of the entire clothing production value chain in northern Portugal is facilitating the transition, the capital required to upgrade systems represents a significant barrier for many clothing manufacturers. Due to the substantial initial investment required for installation and integration, some SMEs in Portugal might struggle to adapt. Additionally, high variability for certain renewable energy sources, like solar and wind, can impact production. Therefore, clothing manufacturers need to develop effective energy storage solutions to ensure a stable energy supply, requiring ongoing investment and specialised labour.
Current energy-demand levels will quickly be eclipsed, with 2021 levels outpaced by an estimated 62 to 185% by 2030. If the Portuguese clothing products manufacturing industry stays on course to achieve its goal of 100% renewables by 2030, clothing manufacturers in Portugal will maintain a strong market position as leaders in sustainable and ethical production of clothing products by outperforming peers reliant on a fossil fuel-heavy energy mix.
With continued government support and incentivisation, barriers to access can be overcome for clothing manufacturers yet to invest in cleaner production, helping the sector stay consistent in its values and its promotion of artisanal and family-oriented practices while still placing it at the forefront of the global clothing manufacturing market.
Current energy-demand levels will quickly be eclipsed, with 2021 levels outpaced by an estimated 62 to 185% by 2030. If the Portuguese clothing products manufacturing industry stays on course to achieve its goal of 100% renewables by 2030, clothing manufacturers in Portugal will maintain a strong market position as leaders in sustainable and ethical production of clothing products by outperforming peers reliant on a fossil fuel-heavy energy mix.
With continued government support and incentivisation, barriers to access can be overcome for clothing manufacturers yet to invest in cleaner production, helping the sector stay consistent in its values and its promotion of artisanal and family-oriented practices while still placing it at the forefront of the global clothing manufacturing market.
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