Current status report on the German circular economy published

In anticipation of this year’s edition of the environmental technology trade fair IFAT Munich, the “Status Report of the German Circular Economy” was published at the end of January 2024. The publication by the analysis and consulting company Prognos AG provides a comprehensive portrait of the current performance, framework conditions, and future challenges of the circular economy in Germany.

More than 200 pages of concentrated information – the third edition of the “Status Report on the German Circular Economy” is once again a comprehensive work for politics, industry, and the interested specialist public. It was drawn up by Prognos AG. In addition to publicly available statistics and studies, the well-known analysis and consulting company drew on the knowledge of insiders from numerous associations and organizations, and from industry and science.

Basis for expert discussions at IFAT Munich 2024

As with the 2018 and 2020 editions, the current industry report has been compiled for IFAT Munich. The world’s leading trade fair for environmental technologies will be held from May 13 to 17, 2024 at the Munich Exhibition Center. “The circular economy is one of the key topics at IFAT,” says Stefan Rummel. The CEO of Messe München continues: “The status report provides an excellent basis for discussing the political and technical issues of the circular economy in Germany – whether at the stands, on our panels, or at the corresponding events in our supporting program.”

A few highlights from the publication’s contents are presented below.

Diverse industry services

  • Around 10,000 (2021) private and municipal companies in Germany are responsible for the circular economy in Germany. Together, they ensure that more than 400 million tons of waste are collected, sorted, processed, treated, and disposed of each year in an environmentally friendly and resource-saving manner.
  • With around 315,000 employees, the circular economy is one of the most important employers in the German environmental sector.
  • The collection and transport of waste, and street cleaning generated a gross value added of 11.6 billion euros in Germany in 2022. The number of people employed in this market segment rose significantly in the last two years (2.1% p.a.) and stood at just under 100,000 in 2022.
  • In 2022, the German circular economy exported goods and products worth just over 18 billion euros. In return, products and secondary raw materials worth a good 16 billion euros were imported.
  • Existing processes have been and are being optimized, and new technologies implemented in all areas of the circular economy in Germany. The innovations range from the use of alternative drive systems for waste collection vehicles, digitalization solutions, and new separation processes to hydrogen production and carbon dioxide capture.
  • Thanks to the transformation process from waste disposal to a circular economy, the industry has already made a significant contribution over the last three decades to achieving Germany’s climate protection targets.

Political and economic framework conditions

The status report makes it clear that, from a political perspective, the circular economy in Germany is increasingly being shaped by European legislation. For example, the EU passed the Critical Raw Material Act (CRMA) in April 2023. The specification defines a list of elements – primarily metals and rare earths – as critical raw materials for the further development of the European Union. This results not least in the complex challenge for all players in the circular economy to place a greater focus on recycling these materials.

However, the requirements for the reuse of “established” recycled raw materials are also increasing. For example, in the draft of the new EU regulation on packaging and packaging waste presented at the end of November 2022, the EU Commission proposes increasing the current recyclate content of 30% for single-use plastic beverage bottles to 65% by 2040.

A national circular economy strategy is currently being developed at federal level. Ultimately, targets, principles, and strategic measures are to be defined in order to achieve the reduction in primary raw material consumption envisaged in the coalition agreement.

The new publication also takes a detailed look at the economic conditions in the sector. For example, global trade in technology for waste management is developing very dynamically. The value of goods exported here worldwide increased from just under 29 billion US dollars in 2010 to almost 50 billion US dollars in 2021. German technology continues to enjoy an excellent international reputation in this market. However, local companies are under strong competitive pressure. In the last ten years, Germany has lost three percent of its global market share, which was only 12% in 2021.

Numerous challenges at various levels

In many places, the status report also highlights the current and future challenges facing the circular economy in Germany. Here are a few examples.

Labor market: The general shortage of skilled workers and managers in Germany will have a disproportionate impact on the circular economy in particular in the coming years, as many young professionals from the 1980s, when the circular economy was established in its current form, will leave the labor market in the coming years due to age.

Innovation leadership: Germany’s innovation leadership in plant and mechanical engineering, which was established in the 1990s, could not be maintained in its entirety. It can now be seen that the proportion of patents granted worldwide for technologies in the circular economy is increasing in the main export countries for German products and secondary raw materials. National efforts must therefore continue to be made in the area of research and development in order to survive in the international markets.

Increased efficiency: The successful path to a circular economy that works in the long term can only be achieved through optimization at all stages of the value chain – starting with product design, then moving on to production and use, and the recycling process. In addition to technical, regulatory, and organizational measures, that also implies the need to change behaviors. Among the main keywords in this context are design for recycling, recycling labels, digital product passports and watermarks, chemical trackers, building information modeling, and quota and monitoring solutions.

City cleaning: The increase in outdoor catering, barbecues in green spaces, and public viewing events, as well as to-go consumption leads to more littering and illegal dumping in public spaces. Approaches to tackling these problems in city cleaning include, for example, adapted working time models, demand-oriented cleaning, and prevention and repossession measures.

Who is behind the status report?

The Status Report on the German Circular Economy 2024 was initiated and supported in terms of content by a total of 15 associations, organizations and companies:

  • Working Group for Material-Specific Waste Treatment (ASA)
  • Federal Association of the German Waste, Water and Circular Economy Management Industry (BDE)
  • Federal Association of German Hazardous Waste Incineration Plants (BDSAV)
  • Federal Association of German Steel Recycling and Disposal Companies (BDSV)
  • German Federal Association of Recycling Building Materials (BRB)
  • German Association for Secondary Raw Materials and Waste Management (bvse)
  • German Association for Waste Management (DGAW)
  • World’s leading trade fair for water, sewage, waste and raw materials management (IFAT)
  • Interest Group of Waste Incineration Slag Processors and Recyclers (IGAM)
  • Interest Group of German Landfill Operators (InwesD)
  • Association of Thermal Waste Treatment Plants in Germany (ITAD)
  • Mechanical Engineering Industry Association e.V. (VDMA)
  • Association of the German Wood-Based Panel Industry (VHI)
  • Association of German Metal Traders (VDM)
  • Association of Municipal Enterprises (VKU)

Prognos AG and INFA GmbH were also advised by the renowned German engineering scientist Prof. Martin Faulstich in the preparation of the publication.

The complete status report can be accessed here: statusbericht-kreislaufwirtschaft.de

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