Current status on German circular economy
As anticipation builds for IFAT Munich 2024, the world’s leading trade fair for environmental technologies, a new publication has emerged that offers a revealing and in-depth look at Germany’s progress in building a sustainable future. At the end of January 2024, the third edition of the “Status Report of the German Circular Economy” was released—a comprehensive document prepared by Prognos AG that provides both a snapshot of current performance and a roadmap of the challenges that lie ahead.
Running over 200 densely packed pages, this publication is more than a data dump—it’s a vital instrument for policymakers, industry leaders, and environmental professionals. Drawing on a wide pool of data sources, the report combines official statistics, sector studies, and insights from experts embedded in various industry associations, scientific institutions, and environmental organizations. The result is a clear and timely reflection of where Germany’s circular economy stands—and where it needs to go.
Published in close alignment with IFAT Munich, which takes place from May 13 to 17, 2024, at the Munich Exhibition Center, the report sets the stage for a deeper dialogue. Circular economy has become one of the defining themes at IFAT, and as Messe München CEO Stefan Rummel puts it, this report offers the perfect foundation for the discussions and debates that will unfold at the event. Whether it's informal conversations at exhibition stands or structured debates on panels and keynote stages, this document will help focus the conversation on facts, strategies, and possibilities.
The report highlights a sector of immense scale and importance. As of 2021, approximately 10,000 public and private entities are actively involved in circular economy work across Germany. Together, these companies process more than 400 million tons of waste each year. It’s a monumental effort—sorting, treating, transporting, and in many cases transforming waste into new resources, all while adhering to environmental safety standards. This sector is not only central to environmental progress—it’s also an economic powerhouse. With roughly 315,000 employees, it ranks among the most significant employers in Germany’s green economy.
The circular economy also contributes substantially to national wealth. In 2022 alone, activities related to waste collection, transport, and street cleaning created a gross value added of €11.6 billion. Employment in this segment has been growing steadily, reflecting increased demand and the expanding responsibilities of the sector. Exports tell another story of success: in 2022, Germany exported circular economy-related goods and technologies worth over €18 billion. At the same time, it imported materials and products valued at around €16 billion—signaling not just trade, but active global participation in the resource loop.
But the report is not merely a celebration of achievements. It’s also a candid reflection on the hurdles Germany must overcome to maintain and expand its leadership in sustainability. One of the biggest drivers of change in recent years has been European legislation. The European Union is now shaping many of the policy contours that guide national strategies. For example, the EU’s 2023 Critical Raw Materials Act has set out an essential list of materials—primarily rare earth elements and certain metals—that are crucial for Europe’s technological future. These must now be recovered and reused on a much broader scale, putting more pressure on recycling systems to meet specific material targets.
Even more pressing are the new expectations for commonly recycled materials. The European Commission has proposed a new regulation on packaging waste, calling for a dramatic increase in the recycled content of plastic beverage bottles—from the current 30% to a bold 65% by 2040. These targets are reshaping production and waste treatment industries across the continent, and Germany is no exception. To meet such ambitious goals, everything from manufacturing processes to material traceability systems must be upgraded.
At the national level, Germany is preparing its own Circular Economy Strategy, intended to align with broader EU directives while also responding to specific domestic challenges. This strategy will define long-term targets, guiding principles, and measures to reduce the use of primary raw materials—part of the climate and resource-saving commitments embedded in the federal government’s coalition agreement.
The report doesn’t shy away from economic realities either. It notes that the international market for waste treatment and recycling technology is booming, with exports in this sector growing from just under $29 billion in 2010 to nearly $50 billion by 2021. While German engineering continues to enjoy strong global respect, its lead is narrowing. Over the last decade, Germany’s global market share in these technologies has declined by about three percent, now sitting at just 12 percent. The pressure is on to maintain innovation and competitive strength in a rapidly evolving international landscape.
Labor, too, is emerging as a serious concern. The sector is on the brink of a generational shift. Many professionals who joined the industry in the 1980s, when Germany’s modern circular economy was taking shape, are nearing retirement. Replacing their expertise is no easy task. The ongoing shortage of skilled workers threatens to undermine the stability of the sector at a time when demand is only increasing. Without a concerted effort to train and attract a new generation of circular economy specialists, the entire system could face disruption.
Innovation capacity is another focal point. Once considered an undisputed leader in plant and mechanical engineering for the recycling industry, Germany now finds itself competing against new centers of innovation around the globe. Patent activity is rising sharply in countries that import German waste technologies—suggesting that future competition may come from clients-turned-rivals. To stay ahead, Germany must continue to invest in cutting-edge research and development, especially in areas such as digitalization, smart separation systems, and circular product design.
Behavioral change is just as important as technological evolution. The transition from a linear to a truly circular economy requires a holistic rethinking of the entire value chain—from how products are designed and manufactured to how they are consumed, reused, and finally recycled. Germany is investing in systems like digital product passports, recycling labels, and smart watermarks to enable better material tracking and separation. There’s also growing interest in chemical tracing, building information modeling (BIM) for the construction sector, and advanced quota-monitoring systems to measure progress in real time.
One particularly visible issue that’s touched on in the report is the challenge of keeping cities clean. As outdoor lifestyles and public gatherings have surged—whether for concerts, sports events, or casual street dining—the problem of littering has worsened. Disposable packaging, plastic containers, and general waste are increasingly dumped in public spaces. Municipal cleaning services are responding with new scheduling models, targeted cleaning operations, and public awareness campaigns, but long-term solutions will likely require a stronger legal and cultural shift toward responsibility and waste prevention.
Behind this report stands a formidable alliance. Fifteen organizations and associations, including leading industry bodies like the Federal Association of the German Waste, Water and Circular Economy Management Industry (BDE), the Mechanical Engineering Industry Association (VDMA), and the Association of Municipal Enterprises (VKU), played a role in shaping the report’s content and direction. The expertise of renowned sustainability scientist Professor Martin Faulstich further deepens its authority, making it a must-read for anyone involved in environmental policy or green industry.
In the end, this report serves not only as a record of progress but as a wake-up call. Germany’s circular economy is well established, but it cannot afford to coast on past achievements. Global competition is fierce, expectations are rising, and the stakes—environmentally and economically—are higher than ever. What the country does next will determine whether it continues to lead or begins to follow.
As IFAT Munich opens its doors, these conversations will be front and center. And thanks to the “Status Report on the German Circular Economy 2024,” those conversations will be grounded in facts, guided by data, and—hopefully—inspired by the potential for meaningful change.
