Europe's Raw Materials Paradox

 

"One billion euros in trade deficit – per day." Europe is debating tariffs to protect itself from growing dependence on China for raw materials, intermediate goods, and increasingly also finished products. The figures are clear: in 2025, the EU exported goods worth around 200 billion euros to China, while imports exceeded 559 billion euros – a trade deficit of approximately 360 billion euros. Europe is no longer just buying raw materials; it is systematically relinquishing industrial value creation.

 

China is no longer a classic low-wage country. Wages have been rising for years and already reach 10–12 USD per hour in industrial centers. The difference no longer lies primarily in costs, but in the speed and consistency of implementation.

 

This is particularly evident in the energy sector. China is expanding renewable energy on a scale that is unique globally. This expansion not only covers growing electricity demand but is increasingly beginning to displace fossil fuels. Transformation here occurs not through sacrifice, but through scaling.

 

The differences are also visible in waste management. While Europe has been politically pushing back thermal waste treatment since around 2010, China has expanded the number of waste incineration plants from a few dozen to more than 1,100 within two decades. Today, China processes more than 1.1 million tonnes of waste per day and has an installed waste-to-energy capacity of more than 27 gigawatts – more than half of the global capacity. At the same time, the landfilling of municipal waste has been reduced from over 85% to around 5%.

 

China has thus systematically replaced landfilling with energy recovery and turned waste into a scalable source of energy and raw materials.

 

Critics argue that this expansion came at the expense of recycling. In the short term, this cannot be denied. Strategically, however, China follows a clear logic: without a functioning waste management infrastructure, there can be no stable recycling system. Similar experiences have already been made in the DACH countries. China therefore first built up treatment capacities and is optimizing recycling afterward. The immediate climate effect – avoiding methane emissions from landfills and replacing fossil energy sources – was given greater weight than short-term recycling rates.

 

Europe, on the other hand, is increasingly losing itself in visions and targets. Political attention is focused on long-term zero-waste ideals, while existing instruments – such as producer responsibility – are only inadequately enforced.

 

The real irony is that Europe is by no means lagging behind technologically. On the contrary: the key technologies of the circular economy originate predominantly from Europe.

 

This is precisely where the central paradox arises: the fact that Europe still exports considerable quantities for recycling (currently around 1.5 million tonnes of plastic waste per year) is due less to lower labor costs in third countries than to the fact that "the capacities and standards for sustainable management are lacking" there. A significant portion of Europe's "recycling rate" is generated outside the continent.

 

At the same time, studies by the European recycling industry show declining utilization of facilities, accompanied by plant closures and the loss of up to one million tonnes of recycling capacity. This trend is linked to weak demand, rising imports, and the continued practice of exporting plastic waste.

 

Under the new EU Waste Shipment Regulation, this practice has been definitively banned since 21 May 2026. Yet even under the now stricter rules, raw materials are lost every year that Europe simultaneously buys back at high cost. There are also countries and regions within Europe where the capacities and standards for sustainable management of residual waste are lacking.

 

The problem is therefore not a lack of knowledge, nor a lack of technology, but rather that recycling rates "generated" abroad are valued more highly than secondary raw materials within one's own country.

 

So is Europe's raw materials problem, to a significant extent, self-inflicted?

 

As long as recoverable waste is landfilled, any debate about strategic dependence on raw materials remains incomplete. Because every tonne of waste sent to landfill is not only an environmental problem – it is also a lost raw material, lost value creation, and a silent contribution to the economic dependence that Europe officially seeks to combat. If Europe were to manage its goods and the resulting residues sustainably, the daily trade deficit of one billion euros mentioned at the introduction could also be seen as a huge source of raw materials that China leaves to us. We simply have to handle it properly.

 

Yours sincerely,

 

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