This is normal for new towels made from 100% organic cotton and isn't a sign of a fault. Loose fibres remain on the surface from manufacturing and work their way free during the first few washes.
To help, wash the towel separately (or with similar colours) for the first few washes, and clean your machine and dryer lint filters before and after each cycle. Shedding usually settles significantly within three to five washes.
If shedding continues heavily beyond the first several washes, please get in touch with our customer care team so we can take a closer look.