IFAT Industry Insights

Status Report on Germany’s Closed-Loop Economy 2020

Find out about the services, structures, goals and future prospects of the German closed-loop economy. The whole list of topics ranges from “A” as in “Abfallaufkommen” (waste amounts) to “Z” as in “Zirkuläre Wirtschaft” (circular economy). Here, you will find an overview of the most important facts. Please visit www.statusbericht-kreislaufwirtschaft.de to read the complete status report.

The last “Status Report on Germany’s Closed-Loop Economy” was published more than two years ago in 2018. In this short period of time, however, important developments have started. For example, the national and international discussion around circular economy as a new economic form for reducing the consumption of resources make it clear that the closed-loop economy will play a much stronger role in the future in the provision of recycling raw materials for the economic cycle. In the coming years, the recycling economy will become a key player in the circulatory economy in Germany and Europe.

The conditions of the closed-loop economy for this development are favorable:

  • High investments in personnel and technology continuously improve the standards of material and energy recycling.
  • More than 310,000 qualified and motivated employees work in around 10,700 private and municipal companies at all stages of the value added, generating sales of around 84 billion euros and gross value of around 28 billion euros.

One of the important changes is the corona pandemic, which has proven not only the industry's ability to perform and adapt, but also its systemic relevance for the functioning of social and economic life in Germany.

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Achievements of the closed-loop economy

In 2017, a total of 409 million tons of waste (2015 = 399 million tons) were disposed of 14,600 waste treatment plants. With 221 million tons, construction, and demolition waste (= 53%) accounts for the largest share of the total volume. In relation to the total volume, this amounts to around 5 tons of waste per inhabitant.

The proportion of waste generated by private households was 38 million tons in 2017 (2015 = 37 million tons). This corresponds to a waste generation of around 460 kilograms per inhabitant. Waste from private households consists of the following main fractions:

  • 13.1 million tons of household waste (158 kilograms per inhabitant)
  • 2.5 million tons of bulky waste (30 kilograms per inhabitant)
  • 10.3 million tons of separately collected bio- and green waste (125 kilograms per inhabitant), and
  • 12.2 million tons of separately collected recyclable materials such as paper, cardboard and cartons, glass, light packaging, metals, waste wood, textiles, and other recyclables (148 kilograms per inhabitant).

The total amount of waste generation from households increased by 7 kilograms per inhabitant compared to 2015 and is mainly due to the intensification of the separate collection of organic and green waste.

Economic significance of the closed-loop economy

In 2017, the closed-loop economy achieved a revenue of around 84.1 billion euros (+ 18% compared to 2010) and employed over 310,000 people in 2019 (+ 12% compared to 2010). The number of people employed in the closed-loop economy is almost as high as in the energy industry and almost four times as high as in the water and wastewater management. The increasing number of start-ups represents the technical challenges that still exist and the attractiveness of the closed-loop economy. With a gross value added of around 28.1 billion euros in 2017 (+ 31 % compared to 2010), the sector is an important economic factor in Germany and continues to develop dynamically.

Today, the closed-loop economy comprises much more than the collection, transport and disposal of waste - the analyses show the economic significance of the upstream and downstream value-added stages of technology and trade for a functioning closed-loop economy. Of the 10,700 enterprises approximately 6,100 enterprises with a revenue of about 57.60 billion euro belong to the "classical" market segments "waste collection, transport and street cleaning" and "waste treatment and utilization”. Almost 1,300 companies with a revenue of around 12.15 billion euros belong to the market segment "technology for waste management" and another 3,300 companies with a revenue of around 14.34 billion euros ensure the important cycle of collected and recycled materials from waste management in the “wholesale of waste materials" segment. On average, every person employed in the environmental service branch will have achieved a turnover of 285,000 euros and a gross value added of 95,000 euros in 2017.

The global closed-loop economy

The German closed-loop economy has been a key player in the worldwide trade with plants, machines and secondary raw materials for many years: On the one hand, there is a great need for modern technologies in many countries of the world in order to build up their own disposal structures. On the other hand, more and more secondary raw materials are required for the development of national economies, especially in the emerging markets, not least again for the manufacture and export of products to Europe. The market segment "technology for waste management" by itself had an export volume of 5.1 billion euros in 2018. The most important target markets in this area are still the United States, China and France. However, important secondary raw materials, such as copper, iron and aluminum scrap are primarily shipped to Belgium, Italy and the Netherlands with a total volume of 9.5 billion euros.

Priority theme “plastic recycling”

According to the "Conversio study" , a total of around 6.30 million tons of plastic waste was generated in Germany in 2019. About 85% (= 5.35 million tons) of this waste comes from the post-consumer sector. The plastic waste is collected by various systems, then sorted and pre-treated. More than 99% of the plastic waste is subsequently recycled to energy (53% = 3.31 million tons) in waste incineration plants or in waste-to-energy plant or materially (47% = 2.93 million tons). A part of the material recycling (0.58 million tons) takes place abroad.

For the implementation of the Circular Economy in the field of plastics, the availability and use of established collection, sorting and processing technologies is one of the essential requirements for achieving high-quality recyclates. In order to meet global challenges such as littering and the increasing discharge of plastic waste into the environment and the oceans, access to modern recycling technologies must not be limited to the industrialized countries, but must be made available to all countries. One of the main challenges for industrial nations in the coming years is to support the development of these disposal structures.

Products & innovations

The technologically advanced and innovative industrial goods from the sector of closed-loop economy "Made in Germany" are still in great demand on the world market. A few years ago, Germany was ranked third behind the USA and Japan in terms of patent applications. In the meantime, China has passed Germany by - a clear sign that Chinese competitors are catching up in terms of innovative strength and quality. Hence, global competition is increasing. If German suppliers want to maintain their leading global market position, they will have to make even greater efforts to meet the challenges in the global competition in innovation. This will be even more important as increasingly complex products require more and more complex recycling technologies.

High acceptance for actors, low acceptance for plants: Surveys on the most respected professions in Germany and the reaction of citizens during the Corona crisis have been confirmed: The waste collector, who are responsible for the collection and transport of the waste, enjoy an increasingly high reputation among the population. Private households in Germany asses that waste separation is one of the most important contributions that they can make to environmental protection. Therefore, the recycling of waste is seen as extremely valuable among the population. However, there is less acceptance among the population for the infrastructure that is necessary for the functioning of the recycling of raw materials or for the disposal of contaminated residual waste. Be it sorting and processing plants, thermal waste treatment plants or even landfills: Without the upgrading, expansion or new planning of plants, the growing demands that the closed-loop economy has to face cannot be met.

Secure jobs towards the digital age

With around 310,000 employees in Germany, the closed-loop economy is one of the most important employers in the environmental economy, with a continuously growing demand for skilled workers. The jobs are systemically relevant, secure and are becoming more and more versatile due to the increasing technologization and digitalization of the industry. Nevertheless, the environmental service branch can continue to offer employment for people without professional qualifications, for whom there are hardly any opportunities in other branches. The corporate structures are currently developing dynamically: Compared to other technically oriented industries, the "classic" companies in the circular economy are joined by an above-average number of start-ups, which in turn have a high degree of relevance to digitization.

Costs of waste management

The scope of services of the recycling management is very extensive due to the high standards for the treatment of waste and the recycling of raw materials. Given the high level of effort, the average cost of waste disposal in private households is around 70 euros–120 euros per inhabitant and year, which is probably significantly lower than what citizens would expect: According to surveys by INFA, the municipal waste disposal fees are estimated by citizens to be up to 5 times higher than the actual costs occurred in the respective municipalities.

Municipal waste fees cover the costs of collection, transport and environmentally sound disposal, especially of residual waste, bulky waste and the recycling of biowaste and paper. The costs for the recycling of packaging waste (yellow bag or container) are covered by license fees, which are to be paid to the Dual Systems by the manufacturer for each individual package and which consumers pay when they purchase the product/packaging. In addition to the waste fees, citizens incur further costs of around 14.90 euros per year or around 1.24 euros per month and resident. The average monthly expenditure is divided into the recycling of glass of 7 cents, the recycling of paper, cardboard, carton of 27 cents and light packaging of 90 cents.

Conservation of resources

Natural resources are the basis for the manufacture of products for the producing of energy and the provision of services. Many natural resources are limited, so their protection for present and future generations is of special importance. Current raw material prices do not reflect the future scarcity of raw materials and the environmental impact of their extraction, therefore further important incentives for the conservation of primary resources are lacking. The common goal must be to significantly reduce resource consumption and decouple it from population and economic growth. The increasing recycling of resources will make an important and sustainable contribution to this.

Climate protection through the closed-loop economy

According to the national greenhouse gas inventory, emissions in the waste management sector have fallen by 75% since 1990 from 38 million tons of CO2eq to just under 10 million tons of CO2eq in 2018. The main reason for this was the closure of landfills for the dumping of untreated municipal waste in 2005.

The closed-loop economy can still realize considerable climate protection potential both in its immediate area of responsibility and across sectors. This will require to account the entire value chain from collection to sorting and recycling: The use of selected secondary raw materials is currently already saving around 50 million tons of CO2eq. In addition to this, there is a further 30 million tons CO2eq from the termination of the landfill of pre-treated household waste and currently another 5.2 million tons CO2eq from the thermal treatment of waste in waste incineration plants and waste-to-energy plant. A further 8 million tonnes of CO2eq could be avoided in the future by making greater use of secondary raw materials. The UBA expects a further 8 million tonnes of CO2eq from treatment processes, especially from the reduction in CO2 emissions from landfills. These fractions and processes alone add up to a total of around 100 million tons of CO2eq. The actual contribution would be even higher if all relevant recyclable material emissions were to be included in the balance.

In addition, several million tons of CO2eq can still be realized in the closed-loop economy through more in-depth processing and of, for example, waste incineration slag, the production of biodiesel or the expansion of the energetic use of biomass.

Contribution to the energy transition

Through the energetic use of waste, the closed-loop economy makes a significant contribution to decentralized energy production and supply in the form of electricity, heat and process steam and thus also takes over the supply of industrial sites, among other things.

In 2015, around 48 million tons of waste were thermally recycled in around 300 waste incineration plants, waste-to-energy-plants, cement, coal and industrial power plants, as well as in biomass thermal power plants, fermentation plants, sewage sludge incineration plants and hazardous waste incineration plants, producing a total of 62 TWh of heat and 25 TWh of electricity. The electricity generated from waste recycling alone corresponds to the average annual consumption of around 8.5 million households in Germany.

By increasing energy efficiency, the substitution of primary energy sources and the use of sun and wind on waste management areas, important contributions are made not only to the energy transition, but also to the further reduction of greenhouse gas emissions.

The goal: circular economy

The sphere of activity of the circular economy is the recycling of waste, which aims to decouple economic growth from resource consumption by changing consumption and usage habits, on the one hand, and the circulation of resources, on the other. The intelligent design of products is an important prerequisite to ensure that they can be repaired and later recycled. However, recycling has technical, ecological and economic limits that must be taken into account: 100% recycling of separately collected recyclable materials is neither possible nor economically viable for many materials. It is also necessary to remove harmful substances from the product or material cycles. Without high-quality recycling, the goals of the Circular Economy cannot be achieved. However, it must be ensured that the increasing amount of recyclates is matched by an equally growing sales market or use in the manufacture of new products. In order to ensure this balance in the long term, the introduction of a "substitution rate" or the implementation of the "minimal content" concept is necessary to guarantee the minimum use of secondary raw materials in the manufacture of new products in the future.

Status Report on Germany’s Closed-Loop Economy 2020 was initiated and supported by 15 associations, societies and companies:

  • Working Group for Material-Specific Waste Treatment (ASA)
  • Federal Association of the German Waste, Water and Raw Materials Management Industry (BDE)
  • Federal Association of German Hazardous Waste Incineration Plants (BDSAV)
  • Federal Association of German Steel Recycling and Disposal Companies (BDSV)
  • Federal Association for Secondary Raw Materials and Waste management (bvse)
  • German Association for Waste management (DGAW)
  • IFAT—World's Leading Trade Fair for Water, Sewage, Waste and Raw Materials Management
  • Community of German Landfill Operators (InwesD)
  • Association of Thermal Waste Treatment Plants in Germany (ITAD)
  • German association “Klimaschutz durch Kreislaufwirtschaft e.V.” (climate protection through circular economy)
  • PlasticsEurope Deutschland
  • Mechanical Engineering Industry Association (VDMA)
  • Association of the German Wood-Based Panel Industry (VHI)
  • Association of German Metal Traders (VDM)
  • German Association of Local Utilities (VKU)

The "Status Report on Germany’s Closed-Loop Economy" was prepared by Prognos AG and INFA GmbH with scientific advice by Prof. Martin Faulstich.

The figures, information and assessments presented in the report thus provide a currently coordinated picture of all services and facets of the recycling economy from the perspective of 2020.

Please follow the link to read the complete status report.

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