Closing Germany’s Circular Economy Gap

November 2021

According to the annual Circularity Gap Report, human beings extract more than 100 billion tons of raw materials from the planet but only reuse 8.6 percent of them. In the interest of climate protection, all countries, including Germany, should be doing more to create circular economies.

The problem thus far has been that acquiring new raw materials has been cheaper than recycling old ones, but current shortages and price hikes suggest that the situation could be changing. Calculations made by consultants BCG for business newspaper Handelsblatt suggest that the market volume for circular economies in Germany could amount to EUR 200 billion by 2030. By 2040, BCG says, up to 75 percent of many materials could be reused – provided that private and public players invest EUR 50-60 billion.

The potential is obvious from the gap between recycling and circular economy in Germany.

“Germany is a world champion in recycling and has the best infrastructure for the waste industry,” Henning Wilts, director of the circular economy division at the Wuppertal Institute for Climate, Environment and Energy, told Handelsblatt. “But we’re only average where the circular economy is concerned.”

Big companies in Germany are waking up to the need for change and the potential business opportunities that entails.

“The chemicals industry has to significantly transform itself, turning away from oil and toward green raw materials and ecological energy,” Markus Steilemann, CEO of the plastic manufacturer Covestro, told the newspaper.

Covestro says it wants to go over completely to circular economies. BASF is currently developing a new procedure for reusing electric vehicle batteries and has constructed a recycling facility directly adjacent to its battery factory in the eastern German town of Schwarzheide, and other battery makers are following suit. And at this September’s International MobilityShow Germany, BMW debuted a prototype, called the “i Vision Circular,” of a circular economy car made nearly entirely of recyclable or already used materials.

“The BMW i Vision Circular represents our ambition to be a pioneer in the development of a circular economy,” said BMW chairman Oliver Zipse in a statement. “We want to expand our leading position in the efficient use of resources in production to the entire life cycle of our vehicles. This is also a question of economic sustainability. Current developments in raw materials prices show the realities an industry dependent on finite resources has to reckon with.”

BMW i Vision Circular © BMW Group