German industry bemoans lack of progress towards circular economy
Clean Energy Wire / Frankfurter Allgemeine Zeitung
German industry is growing increasingly frustrated with the government’s lack of headway towards a circular economy that it considers crucial for improving competitiveness, lowering import dependencies, and reducing emissions. “The government has so far failed to provide any significant impetus to give the expansion of the circular economy in Germany the necessary momentum,” said DIHK energy and industry expert Sebastian Bolay at the start of the world’s largest trade fair for environmental technologies IFAT in Munich.
Circular economy concepts have increasingly shifted into focus as a necessary corollary of Germany’s energy transition to increase supply security, reduce costs, and make processes in the economy truly sustainable. The previous government agreed a circular economy strategy in late 2024 that includes overarching 2030 and 2045 targets for lowering primary raw material use, increasing the uptake of secondary raw materials, reducing raw material import dependencies, and cutting waste.
Germany leads the world in environmental technologies, but the business community has been waiting in vain for a government action plan to implement the circular economy strategy, Bolay said. “That creates insecurity and prevents valuable investments,” he added.
The action plan has been repeatedly delayed because of differences between the economy and transport ministries run by chancellor Friedrich Merz’s conservative CDU and the environment ministry, which is run by Social Democrats (SPD) and is in charge of coordinating the action plan. Environment minister Carsten Schneider said during his IFAT opening speech that environmental technologies are not just “nice to have”, but key preconditions for achieving “sovereignty, security, and prosperity”.
The government also missed a key opportunity to boost the circular economy in last month’s reform of procurement law, according to environmentalists.
The country’s most important industry association BDI said the entire government must tackle the issue. “There is a lack of momentum,” BDI deputy managing director Holger Lösch told a press briefing at the trade fair, reported Frankfurter Allgemeine Zeitung.
The BDI published a 170-page report underlining the importance of a circular economy approach for Europe’s largest economy, saying the sector is “a strategic driver of growth for Germany as an industrial hub.”
Gross value added from the circular economy could more than double from the current 60 billion euros to as much as 125 billion euros by 2045 within existing industrial and value-chain structures, according to the report. The BDI estimates that the additional value added could add up to as much as 880 billion euros by 2045. The report also found that the approach would reduce greenhouse gas emissions by a further 11 million tonnes and cut the cumulative cost of the energy transition by almost 40 billion euros by 2045.