Goals of the German NCES

The NCES is intended to help make Germany climate-neutral, more competitive and economically more resilient by 2045. The NCES is also intended to help achieve the goals of the German sustainability strategy for the protection of natural resources. The circular economy is not only seen as a key building block for achieving climate and environmental policy goals, but also offers potential for economic growth, employment and competitiveness

The NCES also takes into account European requirements and initiatives, such as the EU Circular Economy Package of 2018 or the EU Circular Economy Action Plan (CEAP) of 2020. However, the NCES is intended to go one step further and make Germany a pioneer in the circular economy. The aim is to set new standards for the further development of the EU-wide framework in the spirit of "Circularity Made in Germany"

The NCES aims to significantly reduce the consumption of primary raw materials in Germany by 2045. To this end, the NCES is pursuing three overarching goals: 

• Increasing the use of secondary raw materials, whereby (at least) the EU target of doubling the share of secondary raw materials in the total amount of raw materials used by 2030 is to be achieved.
• Promoting raw material supply security and raw material sovereignty, with the aim of covering at least 25% of the demand for strategic raw materials through recycling.
• Avoiding waste with the aim of reducing the per capita volume of municipal waste (compared to 2020) by 10% by 2030 and by 20% by 2040.

Measures

The NCES comprises a wide-ranging package of measures covering the entire product life cycle: from product design, material selection and the use of recyclates to production, use life, reparability and recycling. Economic and market-oriented instruments are used to create targeted incentives to promote closed material cycles in production and consumption.

• Statutory amendments and new regulations, such as the amendment of the Electrical and Electronic Equipment Act, the Commercial Waste Ordinance and the Waste Wood Ordinance, the planned new EU Packaging Ordinance and a new Waste End-of-Life Ordinance at national level, are intended to further develop and strengthen the instruments of circular economy legislation.
• Technological innovations and investments are promoted in order to drive forward the circular economy. This includes funding programs for research and development as well as measures for the use of digital technologies and biotechnology. Digital technologies are considered a key success factor for the circular economy. They increase transparency, improve control and enable new business models such as platforms and product-as-a-service approaches.
• Measures to promote repairs, strengthen eco-labels and reduce the environmental impact of online retail are to be introduced.
• The strategy also focuses on strengthening circular consumption patterns through approaches such as "reduce, refuse, rethink".
• Another focus is on the development of norms and standards to improve the credibility and transparency of labels and products as part of the "Circular Economy" standardization roadmap.
• The NCES aims to significantly increase the use of recyclates in key material flows and product groups. This is to be achieved through EU-wide recyclate usage quotas and the improvement of sorting and recycling capacities.
• In addition, the European Emissions Trading System (ETS) should explicitly take account of closed-loop management in order to create incentives to use CO2 in an economically sensible way.
• Finally, public procurement should be used as an instrument to consistently support the circular economy. By 2030, all legal requirements should be consistently geared towards circular procurement.

Economic sectors in focus

The NCES has identified certain fields of action on which measures should initially focus as a priority. These are areas where a particularly high potential for the circular economy is seen due to the high consumption of raw materials and the production of waste and significant mass flows.

• Digital circular economy: The introduction of the digital product passport (DPP) and the development of data ecosystems should create transparency and enable the system-wide analysis of material and goods flows.
• Design and production: Digital design and construction tools are intended to facilitate the evaluation of various supply chain options and materials. The aim is to develop resource-saving and circular products.
• Circular business models: NCES promotes the development and application of circular business models based on a uniform and consistent database.
• Sustainable consumption: The NCES emphasizes the importance of digitalization in promoting sustainable consumption by promoting the provision of information on the circularity of products in online retail and sharing and second-hand models.
• Waste management, recycling and circular production: The optimization of waste separation and the development of new recycling technologies will be promoted. The digitalization of waste separation and the development of digital evidence and certificates for recyclate quality are to be strengthened.
• Vehicles, batteries and electrical/electronic devices: Platforms for the design for circularity of vehicles, batteries and electrical/electronic devices are to be established in order to improve reuse and establish comprehensive recycling strategies.
• Construction industry: The NCES promotes the preservation of existing buildings before new construction and the creation of demolishable buildings. To this end, a digital resource passport for buildings is to be introduced and the separate collection of construction waste optimized.
• Metal and plastic: The raw material footprint is to be reduced, the proportion of recycled materials increased and recycling promoted. To this end, framework conditions are to be created for the development of ship dismantling facilities and research in the field of plastics recycling technologies is to be supported.
• Public procurement: The NCES emphasizes the importance of circular procurement by the public sector. To this end, indicators for circular procurement are to be developed and procurement processes are to be further digitalized.

Opportunity and challenge for companies

The transformation towards a comprehensive circular economy opens up a wide range of opportunities for companies to exploit their potential and position themselves for the future.

Companies should review and adapt their business models and operations to reap the benefits of the circular economy. Digital solutions should be critically analyzed to assess whether they can contribute to the development of resource-efficient and circular products that meet modern sustainability requirements. Companies should prepare for the implementation of the DPP in order to meet the requirements of EU regulations and benefit from the new possibilities of data processing. Recycling processes should be evaluated and optimized where necessary in order to remain competitive in the long term and integrate innovations. Finally, partnerships with international players can be considered to make the most of opportunities through global material flows and expanded recycling opportunities. Funding programs offer additional support and can be used to finance the transition to circular production processes.

Against this background, companies should consider the following measures:

• Investing in digital solutions to develop resource-saving and circular products.
• Review of waste management processes and introduction of innovative recycling solutions.
• Use of support programs to make production processes more circular.
• In the automotive industry: adapting product designs to increase recyclability and durability.
• Designing products to be repairable and reusable.
• Optimization of recycling processes and investment in new technologies.
• Entering into partnerships with international players in order to benefit from global material flows and recycling opportunities.

Companies are called upon to establish sustainable approaches and strategic partnerships at an early stage in order to successfully implement the transformation towards sustainable value creation and the circular economy.

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