Implementation of the EU circular economy action plan is a strategy for regenerative growth with the aim of avoiding inefficient use of resources, reducing the footprint of consumption and creating new business opportunities within the planetary boundaries. In spite of many initiatives, the market for textile re-use has failed to succeed. Therefore, this applied research project, in collaboration with industry partner(s), aims to identify, and address institutional and market barriers to the implementation of sustainable circular business models and processes in the textile value chain. The goal is to propose implementable solutions to the identified barriers in the Swedish and European market and policy context.This is done by mapping and analyzing the EU and Swedish policy initiatives within Circular Economy and Extended Producer Responsibility (EPR). In addition, we will analyze the market barriers and opportunities as experienced by Swedish textile and clothing industry that intends to implement circular business models. The study will be carried out in close collaboration with a Swedish clothing brand to guarantee proximity to the industry´s challenges and possible solutions and then fed back to the Swedish textile industry and policymakers who work with the implementation of textile EPR and Circular Economy in Sweden and the EU.