Confiscated counterfeit goods often end up in landfills or are incinerated. Even when done in an appropriate, environmentally safe manner, the ecological footprint of such activities is high. Recycling is seen as a solution by many administrations and entities, including React, which in early 2015 started studying the dismantling of counterfeit products and the harvesting of their components for recycling purposes as part of a project later called “React Sustains”.

The team in charge of the project first conducted an in-depth analysis of counterfeit good destruction processes and of existing recycling methods. It also identified potential buyers, studying how they operated, what they produced, and their requirements for accepting feedstocks.

Building a facility was not necessary as React participated in a social enterprise which could be used to store, sort and dismantle counterfeit goods, transforming them into valuable components and usable materials that could subsequently be sold or provided to businesses, ideally as resources for new product development. Located in the Netherlands, home of React’s headquarters, the facility operates under strict Customs supervision and is called “Demontage Werkplaats Zeeland” (DWZ) – “Dismantling Workshop Zeeland” in English.

Counterfeit goods are supplied to DWZ by React and other entities, such as independent law firms or investigators. Most of the products processed at DWZ, however, are products that have been detained at the border by Dutch Customs, particularly at large entry points like the Port of Rotterdam or Schiphol Airport.

The dismantling process is mainly done manually and is tailored to the specificities of each category of goods. For example, processing boxed counterfeit fragrances involves the separation of glass bottles, plastic caps and parts, paper packaging, foil, and liquid content. If possible, each material finds a new purpose: paper is used to create cardboard, glass is melted down for new bottles, and even the liquid content is sometimes repurposed for industrial cleaning. Textiles may undergo shredding and further processing, being transformed into new materials like felt or fillings. Synthetics from toys and other plastic products can be recycled into new plastic items like garbage bins. Electronics are fully disassembled, with components such as wires, plastics, circuit boards, and metals recycled into new industrial products or melted down to create newly useable metals.

Conducting such operations requires access to a trained workforce. React partnered with social institutions to recruit and train people who are disadvantaged in the labour market, enabling them to gain valuable skills and work experience, develop daily routines, and enjoy social interactions.

Counterfeit goods are first brought to DWZ’s secured facility, where they are separated into categories and undergo quick but definitive destruction before being put into storage. Once certain volumes of feedstock are reached, the dismantling process can start. A few years ago, React Sustains started expanding its activities to Spain, Bulgaria, Türkiye, Belgium and, more recently, South Africa. A facility like DWZ was established in 2023 in Madrid, but most of the dismantling of the goods is generally handled by external companies.

In the Netherlands, a partnership was established with Fast Feet Grinded (FFG), a company using advanced technology to disassemble and separate components of discarded footwear to transform them into reusable materials with various repurposing destinations, contributing directly to a more circular economy.

In Türkiye, React Sustains partnered with two companies providing sustainable disposal solutions for counterfeit textiles and electronics. The partner in charge of processing counterfeit clothing managed to shred and re-fibre a significant amount of the materials. The partner in charge of processing electronics unpacks and separates as best as possible the various components of the goods. Most plastic is used to produce clothing hooks, while all circuit boards, wiring, metals and batteries are offered to third parties for recycling.

In South Africa, React Sustains has teamed up with Allied Group to promote the sustainable recycling of counterfeit goods. Allied Storage, a facility dedicated to counterfeits storage, is expanding its operations to offer eco-friendly disposal options, focusing on zero waste through recycling.

React Sustains also works with researchers, entrepreneurs, and recycling companies to find innovative methods for transforming feedstock from the dismantlement of counterfeit products into new products. For example, in cooperation with the University of Utrecht, students have explored ways to use felt produced from recycled counterfeit textiles in interiors or corporate promotion items. Their proposals include functional products such as soundproofing panels and insulation walls.

In Alicante, Spain, React Sustains is cooperating with Inretex, a textile recycling company repurposing counterfeit textiles into materials for mattresses and felt for use in automotive interiors.

In South Africa, Allied Group has established a new entity called Allied Concrete, which utilizes granulated materials derived from counterfeit products in concrete mixes. This innovative approach results in stronger, more durable, and environmentally friendly building materials, including bricks, benches, windowsills, and pavers. Meanwhile, another entity called “Allied Home” recycles shredded fabrics and fibres into stuffing for cushions, footrests, beanbags, and more. These affordable, recycled products are sold to consumers in informal South African township markets, providing low-cost building and interior items that improve living conditions while minimizing waste and environmental impact.

Despite these achievements, several obstacles exist to recycling feedstock generated from counterfeit products.

One of the biggest challenges lies in regulatory barriers and the legal frameworks governing the disposal of seized goods. In some jurisdictions, the law mandates that the disposal of counterfeit items takes place in the territory where the goods are seized, even though the only option available in that territory is through incineration or landfill. In some countries where it is legal to move seized goods across borders for the explicit purpose of recycling, like the European Union (EU), some governments prohibit such movement. There are also jurisdictions in which courts prohibit the destruction of counterfeit goods, deeming it wasteful.

Another challenge is the poor quality of counterfeit goods. Counterfeit items are often made from substandard materials, frequently combining several components, such as textile fibres or plastics, which are difficult to separate. Some are also made from hazardous components and cannot be recycled.

Moreover, the high costs of recycling are a major concern in the process of handling counterfeit goods. Research conducted by students from Wageningen University concluded that the emissions from long-distance transport are irrelevant in view of the environmental savings achieved. However, transporting goods over long distances significantly increases the costs of recycling operations, making this option less attractive. Even without transportation costs, dismantling and recycling is often more expensive than incineration or landfill dumping. Brands, which must often pay for the disposal of counterfeit products although they did not produce them, pay more to have the goods recycled.

Finally, despite significant investment in recycling facilities in recent years, there has been little demand for recycled materials from manufacturers, particularly for recycled fibres and plastics. In the Netherlands alone, several plastic recycling companies have gone bankrupt, unable to compete with cheaper imported fossil-based virgin plastics, mainly from China and the USA. The textile recycling industry in Europe is facing similar challenges: the excessive costs of the production process, aggravated by rising energy prices, combined with often low-quality feedstock, create a relatively expensive end-product, leading to insufficient demand for recycled fibres.

Several measures should be taken by decision makers to facilitate and promote recycling operations.

According to most national regulations and to the “polluter pays” principle (PPP), which is central to the European Union’s environmental policy, the infringer should bear the costs of disposal. Unfortunately, the burden often falls on the right holder and/or the government.

The EU Commission Recommendation on measures to combat counterfeiting and enhance the enforcement of intellectual property rights states: “Cooperation and increased information sharing are essential and should be further promoted, at all levels […]. Good practices should be identified, and recommended to all actors, including e-commerce marketplaces, transport and logistic service providers, payment services providers, social media providers, providers of domain name services, etc.”

Transport and logistics companies should share information on their clients with Customs and rights holders if they are found to infringe IPR. However, they have been reluctant to do so on many occasions. Therefore, a stronger legal framework is needed.

Access to cheap storage facilities is crucial to making recycling counterfeit goods economically viable. Central warehouses, like the one set up by React in Madrid, enable the collection and storage of seized goods in one central location. Such a facility reduces storage costs and simplifies transportation logistics. Goods stored in it can be consolidated and transported in bulk to recycling facilities, reducing overall costs and environmental impact. Furthermore, React has proven that conducting simple (manual) dismantling activities at these centralized hubs further helps streamline the recycling process.

React Sustains illustrates how environmental responsibility, social impact, and intellectual property protection can intersect, and testifies that results are possible with creativity, perseverance, and an open mind.

However, challenges remain. Legal reforms are needed to standardize sustainable disposal practices across jurisdictions. A positive and constructive attitude is required from brand holders, law enforcement authorities, and lawmakers. Law enforcement – in Customs and market authorities alike – must contribute actively and positively to these efforts, creating an environment where choosing the sustainable option is always preferable.

If available, choosing sustainability should be the default setting, and opting out of sustainable disposal should be discouraged and frowned upon. At a minimum, law enforcement should facilitate the central storage and collection of confiscated counterfeit products, as the benefits of such central storage to sustainability are obvious. A more pragmatic interpretation of existing regulations to allow trans-border transportation to recycle the counterfeits would have a huge positive impact.

Beyond our IP community, significant investment in recycling infrastructure still needs to be made to overcome logistical and operational barriers. At the same time, innovative solutions and supportive policies must also address the economic pressures on the recycling industry.

React Sustains is also committed to driving change. By advocating for the PPP, developing centralized storage facilities, and cooperating with the transport and logistics sector to impose the costs on the actual infringer, React expects to expand React Sustains facilities. Its efforts underscore the importance of collaboration among brands, governments, and recycling companies to build a sustainable future.

As the fight against counterfeiting advances, the approaches to managing its consequences must also evolve. React Sustains exemplifies how bold, creative solutions can turn challenges into opportunities. By transforming counterfeit waste into valuable resources, React protects brands and contributes to a cleaner, more sustainable world.

More information
React.org
dwzbv.nl
The Footwear Recycling Company | FastFeetGrinded
INRETEX SL | Indústria de recuperació tèxtil