A Summary on the Status Report on the German Circular Economy 2026

The circular economy is ready to take on more responsibility. However, it cannot simultaneously ensure system stability, make investments, and tap into new markets if political objectives, regulatory instruments, and economic realities are at odds with one another.

Fernanda Butron

Eight years after the first report, the sector operates in a significantly changed environment. Global crises, geopolitical conflicts, and unstable supply chains have made its systemic importance more visible. At the same time, performance, willingness to invest, and innovation dynamics are increasingly under pressure. There remains a significant gap between political expectations and actual economic and regulatory conditions.

The German circular economy treats and recovers approximately 400 million tonnes of waste per year. It secures material flows, recovers secondary raw materials, protects the environment and health, and ensures the safe disposal of non-recyclable waste. Thermal waste treatment is part of the disposal infrastructure and contributes to pollutant reduction, sanitation, volume reduction, and energy generation.

In times of crisis, a functioning circular economy is a prerequisite for public services, industrial resilience, and supply security. However, it is often still regarded politically as a downstream environmental sector. Its role as part of critical infrastructure and industrial value creation needs to be reflected in reliable political and economic conditions.

Germany has around 13,500 treatment and disposal facilities and a highly developed technical infrastructure for collection, sorting, processing, recycling, and recovery. At the same time, the situation in key segments is becoming more strained due to:

• Volatile prices for secondary raw materials
• Uncertain sales markets
• Rising energy, safety, and permitting costs
• Increasing regulatory requirements

These developments affect revenue, the number of facilities, and the number of companies, and make long-term investment decisions more difficult. Political demands for more circular economy are not matched by sufficient planning security and economic viability.

The report states that systems for the collection and treatment of waste are in place. However, materials are not always returned to higher-value cycles due to:

• Market conditions
• Regulatory obstacles
• Product design and complex material combinations
• Lack of demand for recyclates
• Unclear quality requirements
• Legal uncertainties

Technical innovation alone cannot resolve these issues. Political decisions are required along the entire value chain, from product design to recyclate use and market development.

Thermal waste treatment manages material flows that cannot be recycled and contributes to system stability. A functioning circular economy requires both more recycling and reliable treatment of residual waste.

The sector is investing in technologies such as:

• Digital material flow management
• AI-supported sorting
• Automated processing
• Data-based process optimization

Thermal treatment facilities are also being developed further through efficiency improvements, better energy recovery, metal recovery from residues, and potential CO₂ capture. However, high investment risks, long approval procedures, and insufficient market signals limit wider implementation.

The report describes the sector as being between high technical performance and economic uncertainty, and between political ambitions and limited implementation.

Thermal waste treatment is described as an indispensable part of the circular economy. It ensures waste disposal, reduces pollutants, recovers energy, and stabilizes material flows where recycling is not feasible.

The circular economy is prepared to take on more responsibility but requires:

• Realistic political targets
• Reliable regulatory frameworks
• Investment security

Additional points raised:

• Since the introduction of the Technical Instruction on Municipal Waste (TASi), untreated waste is no longer landfilled in Germany
• Pollutant destruction, including PFAS, takes place largely in thermal treatment facilities
• There is concern that CO₂ pricing could disadvantage Germany unless applied across Europe, including landfills
• Increasing bureaucracy and costs could negatively affect the economy and public acceptance
• Infrastructure must be protected, for example from damage caused by batteries or nitrous oxide containers in waste streams