Hot Button Report / undefined
Hot Button Report
Executive Summary
Ten editions of Hot Button shows that Green is a trend that’s here to stay
Ten editions of Hot Button show that Green is a trend that’s here to stay
Over the past nine years, the Man-Made Cellulosic Fibre (MMCF) supply chain has shown that change can happen in years rather than decades — and the Hot Button has been an integral part of that change.
Ninety-eight per cent of the world’s Man-Made Cellulosic Fibre (MMCF) producers are rated using shirt colours in the Hot Button Report, with contributions from 30 producers globally. Of these 30 producers 70% — consistent with 2023 and 2024 — have earned ratings of Green, Partial Dark Green, or Dark Green shirts. This represents nearly 54% of the global MMCF fibre capacity, indicating a commitment to CanopyStyle and the elimination of the use of Ancient and Endangered Forests. The trend has shown a steady increase in the percentage of production from green shirt producers, rising from 0% in 2016 to 54% in 2025.
This year, Lenzing and Tangshan Sanyou are tied for the top spot, with Aditya Birla coming in a close second. These top performers are followed by Jilin Chemical Fiber, Yibin Grace, and Xinxiang Chemical Fiber Co. (Bailu). Each of these leading producers has unique strengths but all have shown a commitment to the development and scale-up of Next Gen fibre.
A Decade of Progress: Next Generation Fibre Solutions
When the CanopyStyle initiative launched in 2013, Canopy's goal of Next Gen fibre inputs for MMCFs was met with scepticism. Even when Next Gen fibres first did appear on the market in 2017, they were niche products. Now, in 2025, their presence in MMCFs has moved from the margins to a point of real innovation, from research to a broad commercial focus. Once only small-scale lab experiments, we now see a widespread movement towards scaling and, in several cases, the building of commercial production capacity. Particularly encouraging is the number of fibre producers that have set themselves targets for progressively increasing Next Gen production capacity by 2030, some of which aim to concurrently reduce wood consumption by 10-50%. Early adopters, such as Aditya Birla, Lenzing, and Tangshan Sanyou, along with the many brands who have encouraged them, have paved the way for the sector wide adoption of circularity targets.
In the last five years, we have welcomed the rapid development of Next Gen fibre use in China, and 2025 was no exception. This year, Yibin Grace opened the first recycled dissolving pulp mill in China. Xinxiang Chemical Fibre (Bailu) opened a direct textile-to-textile MMCF facility, and Tangshan Sanyou opened a testing facility for the same technology. Meanwhile, Jilin Chemical Fiber launched a recycled bamboo pulp line named REBOOCEL. These MMCF producers are building for the future knowing that circularity will be a focus for fashion textiles.
Other notable developments in 2025 Next Gen include:
- Sixteen individual Next Gen MMCF product lines are commercially available, an increase over last year.
- Development of Next Gen lyocell by Tangshan Sanyou.
- The opening of Xinxiang Chemical Fiber’s juncao grass MMCF facility in China.
- Widespread testing and use of CIRCULOSE®, OnceMore® by Södra, and Circ Next Gen fibres.
- The announcement of a commercial-scale plant for Circ (lyocell quality recycled pulp) in France.
- The launch of CIRCULOSE® Forward and Circ Fiber Club to promote collaboration across the supply chain.
Despite these promising developments, there are still challenges that constrain the scaling of Next Gen in MMCFs, such as, higher costs of Next Gen pulp at current production levels, insufficient order volumes to support continuous runs, and inconsistent feedstock supply and quality. Canopy is working in different levels of the supply chain to overcome these challenges. In particular, we are actively encouraging and working to enable greater brand uptake of Next Gen, as numerous producers are ready to scale Next Gen production to meet brand demand. Now fashion brands have a critical role to play in scaling up the solutions that will build supply chain resiliency, reduce pressure on critical forests, protect biodiversity, and mitigate climate change impacts.
FSC
This year saw an increase in the use of Forest Stewardship Council (FSC)-certified fibre (FSC 100% and FSC Mix) across the board although a slight decrease in the number of producers who reported a year over year increase. This has been influenced by trade tensions, as well as constrained FSC supply due to the closure of dissolving pulp mills that supplied FSC. Nonetheless, there are notable examples of continued leadership in the use of FSC inputs:
- ENKA and E Miroglio only use FSC-certified inputs (FSC Mix).
- Xinxiang Chemical Fiber and Yibin Grace use approximately 90% FSC certified inputs (FSC Mix or FSC 100%).
- Lenzing has doubled its use of FSC Mix and FSC 100%, to approximately 50%, and over 60% of Birla’s wood inputs are now FSC-certified.
Canopy recognizes the importance of using FSC Mix for MMCF, although we continue to push for an increase in the use of FSC 100%, which is fibre that meets all of FSC’s principles and criteria. Since 2022, FSC 100% dissolving pulp has been available from LD Cellulose S.A, owned by Lenzing.
Further Growth and Consolidation
Based on information disclosed to Canopy, MMCF production capacity has increased by just under 100,000 tonnes over last year. Annual production capacity at is approximately 8.8 million tonnes, and analysts predict the sector will continue to grow over 6% annually in the next four years, with the apparel sector as the biggest user of MMCFs. Unfortunately, in the last year, several small MMCF producers rated Green Shirt have struggled to stay afloat. German-based Kelheim Fibres went into bankruptcy protection in late 2024, and ENKA announced it would have to close in 2025 (this decision was later reversed). In addition, Formosa Chemicals & Fibre Corp. has informed Canopy it will be closing, and Nanjing Chemical Fiber has announced a temporary halt to MMCF production.
The closure of Green Shirt-rated MMCF producers, as well as some key dissolving pulp producers, points to further consolidation of the market, which creates challenges but also opportunities for further engagement of the supply chain by brands.
When assessing supply chains, it will also be important for brands to ensure they are aware of any conflicts between the Dissolving Pulp producers supplying the MMCF sector and forest-dependent traditional and/or indigenous communities. These social issues are outside of Canopy’s area of expertise, but we are nonetheless aware conflicts exist and that some have escalated to violence. We encourage our brand partners to always evaluate social issues of their chosen MMCF providers using formal and public sources to avoid controversy.
Traceability
As brands and producers grapple with the requirements of the EU Deforestation Regulation (EUDR) for full product traceability, there has been an uptick in producers investing in traceability systems. In 2025, 59% of producers have either an internal traceability system (such as DNA markers) or use an external traceability platform. While most producers have focused on traceability from MMCF fibre to garment, some have indicated that they are also able to trace back to the wood source. Technology for complete forest-to-garment traceability isn’t yet mature, so although the trend is growing, significant work is remaining to ensure full traceability in the MMCF sector.
The Next 10 Years of CanopyStyle
We have seen tremendous progress over the ten editions that the Hot Button Report has been providing guidance to brands and mobilizing producers towards improved production practices.
The majority of the MMCF sector has embraced the elimination of Ancient and Endangered Forests from supply chains, increased its knowledge about forests and support for conservation, and there has been a massive increase in the MMCF supply chain’s transparency. However, with a combined 24% growth in the next four years, and the legitimate desire of the clothing sector to limit their use of synthetics and water-intensive cotton fibres, means an increase in the pressure on forests and require the loss more land and trees to meet that demand.
So, now a second phase of transformational change is needed within the MMCF sector — the accelerated transition to circular Next Gen production. This will require:
- a substantial reduction in the use of virgin forest inputs for the production of MMCF with replacement by Next Gen materials like discarded textiles and agricultural residues;
- scaled production of Next Gen MMCF to build greater resilience in the sector and deliver low-risk and low-carbon products to brands; and
- increased the protection of forests in line with global commitments to protect 30% of the world’s forests by 2030.
Only a decade ago, there were no commercial Next Gen MMCF products. Today, numerous Next Gen lines are on the market — but the shift must accelerate. The sector is currently growing on a wood-based model, which means more forests are being cut to meet rising demand. With intensifying forest fires, conventional MMCF supply chain disruptions are predicted.
2025 has been a turn-around year for conventional MMCF producers building early-stage in-house Next Gen production capacity. Now brands need to lean in to use Next Gen materials and be help drive this essential scale-up. At Canopy, we’ve seen that it takes a full ‘fashion village’ to scale Next Gen Solutions to market in a system dominated by legacy infrastructure. We’re excited to work with our brand, producer, innovator, and investment partners to unlock this next stage.
We have seen the MMCF sector evolve over the past decade and more that 50% of the sector by capacity is currently Green Shirt rated. As this evolution continues, the Hot Button Report must also change to recognize progress across the sector as well as reflect the growing urgency of the current climate and biodiversity crises and associated supply chain volatility. To keep pace, Canopy is updating the Hot Button Report criteria for 2026.
