The global wool industry is at a crossroads of rule-making. On June 24, the 95th IWTO Congress opened in Dalang Town, Dongguan, Guangdong, sending a clear signal that competition in the wool sector has shifted from volume and price to carbon footprint accounting, full-chain traceability, and narrative control.
The Data Backdrop of an Industrial Powerhouse
Dalang, as the core of China's knitwear industry, has a scale that sets the pace for global markets. Public data shows the town produces over 900 million garments annually, with a total industrial chain transaction value exceeding 72 billion yuan. One out of every five sweaters worldwide comes from Dalang. This scale reflects a complete ecosystem built over 40 years, spanning raw material processing, design, manufacturing, and trade. The industrial cluster is deeply embedded in global supply chains: China imports large quantities of wool each year while exporting finished products, supporting the inventory and sourcing needs of international brands.
What does Dalang's transformation mean for buyers? The local government has explicitly committed to upgrading from OEM to branding, smart manufacturing, and green production. This implies that future output from Dalang will not just be capacity but products meeting international environmental standards. Buyers who fail to align with this shift risk facing higher compliance costs down the line.
The Green Paper: From Reactive Compliance to Proactive Standard-Setting
The congress's centerpiece was the global launch of the IWTO Wool Green Paper. This is not a routine industry report but a strategic tool aimed at reclaiming the narrative. The organizers pointed out a core challenge: existing data exaggerates wool's negative environmental impact, and a generation of young consumers, influenced by one-sided messaging, views animal husbandry as environmentally harmful. The Green Paper aims to establish a unified full-chain traceability data system and develop customized carbon footprint accounting standards for wool by production region.
This move is directly driven by EU regulations. The EU's Carbon Border Adjustment Mechanism and Ecodesign for Sustainable Products Regulation require imported textiles to provide full lifecycle environmental impact data. If the wool industry does not proactively set standards, it will be defined by external rules, raising export costs for Chinese companies. The Green Paper represents the industry's attempt to shift from passive compliance to active standard-setting.
The Deeper Game of Supply Chain Collaboration
The congress repeatedly emphasized "open cooperation," but real challenges remain. Trade protectionism is disrupting global supply chains. While China's wool industry has shown resilience, exporters face fragmented orders, shorter delivery cycles, and complex compliance requirements. Meanwhile, raw material uncertainty persists: wool prices fluctuate due to climate change, geopolitical tensions, and competition from synthetic and man-made fibers.
A noteworthy detail is the FAO representative's speech highlighting the human and pastoral story behind each wool fiber. This is not mere sentiment but a pragmatic logic: if wool cannot be proven as a sustainable natural fiber, it will lose market share to synthetics and cellulosic fibers. The Green Paper's subsequent projects—developing wool durability standards and building a natural fiber industry alliance—are technical moves to lock in wool's differentiated advantage.
Practical Recommendations
For Buyers - Prioritize Dalang suppliers already piloting the Green Paper's carbon footprint accounting; their products are more likely to pass EU compliance checks. - Monitor progress on wool durability standards; include product lifespan in procurement evaluations, not just unit price. - Request full-chain traceability data from suppliers, especially raw material origin and processing energy consumption, to meet downstream brand ESG audits.
For Exporters - Invest early in carbon footprint management software or third-party certification; after the Green Paper release, carbon data will become a hard requirement for EU exports. - Join the natural fiber industry alliance to share standard-setting costs with peers and avoid marginalization by large conglomerates. - Actively cite Green Paper data in overseas marketing to counter the biased "wool is not sustainable" narrative and enhance brand premium.
The rules of the wool industry are being rewritten. Those who master data narrative first will take the lead in the next phase of global division of labor.