The Proposals of the German Association for Waste Management and circular economy (Deutsche Gesellschaft für Abfall und Kreislaufwirtschaft e.V.) -DGAW -

on the topics of - critical raw materials and - EU 2030 -

European Comission

Who is the DGAW?

The DGAW is one of the largest expert NGOs in the field of circular economy in Germany. It offers the opportunity to participate in regional and national specialist events and working groups. Members receive first-hand information about market-relevant events and developments: Members can participate in the current waste management discourse with specialist knowledge. At the DGAW, corporate members meet cooperation partners and decision-makers. Every year, the DGAW offers the Science Congress as a platform for students and representatives from science and research to transfer current research results to industry. The DGAW works closely with all important organizations and players in the extractive industry and has reciprocal memberships. The DGAW is a national member of the International Solid Waste Association (ISWA) and offers international contacts and professional exchange.

1) Critical Raw Materials

     A) Black Mass and Lithium

In Europe, various companies have already invested around 200 million euros in the recycling of lithium-ion batteries. However, these investments concerned almost exclusively the mechanical pre-processing of batteries for the production of a so-called intermediate product, the so-called "black mass" (BM). However, the BM production process only accounts for about 20% of the total recycling process and less than 7% of the investment required to turn it into battery-grade products.

From a scientific point of view, the demanding task of recovering raw materials begins only after this preparation for the production of BM. The know-how required for further processing, which is necessary for further processing, is mastered by Asian players, who have already built up enormous overcapacities. As a result, almost 100% of this BM with all its critical raw materials is now exported to Asia, and this loss of raw materials is further supported by the permanently low logistics costs to Asia. Even the introduction of the code numbers for hazardous waste for recycling intermediates specified by the EU will not fundamentally change this situation, but will only increase transport costs.

Policy recommendations

• Immediate action needed to stop the export of black mass by law enforcement agencies

     B) Rare earths

The European Union's current approach under the Critical Raw Materials Act (CRMA) is a good step in the right direction, but it falls short of what is needed to ensure a stable and resilient supply of rare earths (REEs), especially neodymium-based permanent magnets, which are crucial for both the green and electrical transitions.

The postponement of crucial measures until 2030 risks the collapse of Europe's emerging REE industry, which is already under extreme pressure from uncompetitive global prices – especially from China.
If China were to impose a permanent export ban before Europe has established an autonomous and robust supply chain, the EU would be dangerously unprepared. Strategic autonomy in key enabling technologies requires immediate political action – not only to expand production capacity, but also to ensure that European rare earth metals can be sold competitively. It is about our key industries, which are the basis of our prosperity and security – the arms industry is also highly dependent.
Product and component manufacturers urgently need to recognize and address their responsibility. It is imperative that companies invest in the resilience of their own supply chain by switching - at least partially - to European secondary REE sources. If they don't, their present and future dependencies will only be exacerbated. Nevertheless, industry alone will hardly be able to respond effectively to state-controlled measures.

Policy recommendations

Immediate action required
The EU must neutralise the cost disadvantage of local REE supply. Policy options include:

• Binding substitution quotas for the use of rare earth metals in Europe, with the aim of replacing primary raw materials. This should be implemented with immediate effect for every rare earth product sold in the EU. Recycled material imported from China must not be used to meet EU substitution quotas. Otherwise, there is a risk that quotas will become a loophole that further entrenches Europe's dependence on Chinese material flows. 

• Financial incentives:
• Direct subsidies on the content of European rare earth elements in final products
• Tax breaks for companies purchasing European REE material in China
• Import duties or CBAM-like levies on non-European rare earth metals (?) – this prevents the purchase of rare earth metals in China, which are then to be circulated in Europe!
  

• Recycling infrastructure support:
• Invest in small appliance collection systems
• Ban/limit the export of waste magnets, this specifies the material on the supply side and allows for a more competitive recycling market.
  

Circular economy is considered for all sectors of the economy. It can make an important contribution to reducing CO2 emissions. This also applies to the carbon economy. To illustrate this, the EU think tank of the DGAW has looked at the most important carbon suppliers in waste management: plastics and biomass.

Ten demands by the DGAW

1. Waste prevention: Reducing resource consumption can only be regulated internationally. Unilateral national measures would disadvantage individual economies. We therefore propose that the planned global plastics agreement (UN plastic treaty) be adopted as quickly as possible and that a decision be made within this framework on a cap for global plastics production ("restriction of plastic production"). Addressee: UN, EU, and EU member states

2. Ending the disposal of municipal waste: Landfilling of untreated municipal waste is one of the biggest climate sins. Terminating this practice in the EU could save over 120 million tons of greenhouse gas emissions per year. The EU Landfill Directive must include a binding complete ban on the landfilling of untreated waste from 2035. In addition, this must be combined with a general ban on the export of carbon-rich municipal waste to non-OECD countries. Addressee: OECD, EU (and member states)

3. Ensuring a climate-neutral supply of raw materials: The multitude of plastic quotas and recycling targets that lead to downcycling is not efficient. In addition, polymer-specific regulations are being discussed. Instead, the substitution quotas agreed at EU level should be established by 2030, which use recycled materials really as a substitute for virgin plastic – e.g., product-related regulations, such as disposable items, packaging, motor vehicles, and textiles. Addressee: EU and member states

4. Carbon supply to the chemical industry: A binding substitution quota is to replace the previously non-binding target of 20% defossilization of the chemical industry by 2030. This can be achieved in particular through waste biomass, recycling of carbon carriers, and carbon capture and utilization (CCU). Defossilization should be included in emissions trading. At the same time, subsidies for the fossil raw material base (tax exemptions) of the chemical industry should be gradually phased out and the resulting revenues for government used to financially support defossilization. Addressee: EU and member states

5. For the equivalence of recycling technologies: Defossilization of the chemical industry requires permanent carbon cycles. Material recycling contributes to this – but only to the extent that new materials are actually substituted (recyclates replace virgin plastic). Material and chemical recycling should be treated as equivalent. Waste-to-energy (WtE) can also be considered equivalent to chemical recycling, provided that CO2 is captured and used chemically (CCU). More than 50% of the CO2 emitted from WtE plants is of biogenic origin, which means that such plants can even deliver negative emissions. An amendment to the Waste Framework Directive and the Taxonomy Regulation is therefore necessary. Addressee: EU and Member States

6. No 'toxic' plastic recycling: According to current legislation, only recycled materials from closed, secure product cycles may be used for plastic food packaging (food contact materials, FCM). In our opinion, it should also be ensured that recycled materials used for other contact-sensitive products (children's toys, kitchen utensils, textiles, and indoor items) are "free from substances of concern".1 This requires action on the part of regulators and enforcement authorities. Addressee: EU, member states, ECHA
_{1 "Free from substances of concern": This refers in particular to SVHC or POP substances above the standardized levels. The introduction of recycled materials into products is considered "use" under REACH.}

7. Transparency of formulations: The digital product passport in accordance with the Ecodesign Regulation should be designed in such a way that it contains the complete polymer and additive composition of the recycled plastics. Existing declaration and information requirements should be combined to eliminate bureaucratic duplication of work for companies. Addressee: EU

8. Degradability of plastic products in the environment: Products containing microplastics that end up in the environment must be withdrawn from the market or be biodegradable in the future, according to EU law. Non-degradable plastics will be banned. In the opinion of the DGAW, this regulation should be extended to comparable products that end up in the environment as intended, such as mulch films, fishing nets, etc., as waste management cannot offer a solution. Addressee: EU, member states, ECHA

9. Customizing extended producer responsibility (EPR) systems: In the future, substitution quotas for fossil raw materials, for example, should not be met by individual member states or the chemical industry as a whole, but rather by individual companies, for example through regulations on end-of-life vehicles, packaging, or batteries. Compensation mechanisms between companies should be provided for this purpose. Addressee: EU and member states

10. Conclusion: 'Carbon package' for 2030: For the coming legislative period in Germany and the EU, we therefore recommend a 'carbon package' with a complete ban on landfilling untreated municipal waste, a ban on exports of carbon-containing municipal waste, and a binding gradual defossilization quota for the chemical industry. In return, unnecessary regulations, in particular divergent national recycling quotas that lead to downcycling, should be phased out. Only a few, but targeted, regulations should remain. In addition, the DGAW calls for targeted financial assistance for the transformation of the chemical industry's raw material base from tax revenues by reducing subsidies for fossil raw materials, as well as credits from emissions trading at the EU level or, for the more distant future, the introduction of Scope 4 credits (avoided emissions). Addressee: EU and member states

The list of references is available on request from the DGAW (info@dgaw.de). A full version of the position paper will be published in issue 5-2025 of the journal Müll und Abfall (in German).