FAQ

The extraction of raw materials imposes high costs on the environment, people, and the economy. An economic model that relies increasingly on new (primary) raw materials is unsustainable in the long term—economically, ecologically, and socially. Transitioning to a circular economy is therefore essential for achieving Germany’s climate and environmental policy goals while simultaneously unlocking substantial economic opportunities.

Raw material extraction and processing significantly harm the environment and climate. The consequences include destroyed ecosystems, polluted soil and water, excessive water consumption, and high CO2 emissions. In key sectors of the economy, most emissions are indirectly caused by the volume of raw materials used. By conserving raw materials through circular economy practices, we can achieve our climate targets faster and more reliably, while preserving vital natural resources.

The circular economy is a market of the future and a proactive approach to risk management for businesses. Raw materials are frequently scarce and expensive, with supply chains often disrupted or interrupted. Moreover, Germany’s dependence on imports from a few, often unstable countries makes the economy vulnerable. A circular economy fosters the potential for innovative, circular business models, reduces the need for primary raw materials, enhances competitiveness, and strengthens independence from imports.

The NCES outlines the path toward a circular economy in Germany. The Federal Government is working closely with businesses and civil society to improve the conditions for this transition.

Adopted in December 2024, the strategy consolidates the Federal Government’s goals and measures on the journey to a circular economy. It considers all stages of the cycle: product design, material selection, production, maximizing the product’s lifecycle, and ultimately reuse and recycling. The NCES aims to reduce waste by promoting smarter product design, efficient manufacturing, longer product lifespans, ease of repair, and the recycling of all raw materials—ranging from building materials to textiles and industrial metals. This is technically feasible and economically viable.

The strategy lays the foundation for Germany to seize the opportunities of the circular economy and become a global leader in circular economy technologies.

The circular economy and resource conservation are crucial drivers of climate neutrality and decarbonisation. In industries such as steel, aluminium, plastics and cement production, significant greenhouse gas (GHG) emissions can be reduced through increased recycling and the use of secondary raw materials. In key sectors of the economy, the majority of GHG emissions are not caused by the production of end products but by the extraction of raw materials and the manufacture of primary goods. A ‘true’ circular economy can make a substantial contribution to achieving national climate protection targets in a cost-effective manner.

In times of scarce resources, disrupted supply chains, and high raw material prices, it is becoming increasingly important to keep raw materials in circulation—and in Germany—for as long as possible, rather than disposing of them after a short period of use. This has now become a matter of competitiveness and risk management for businesses. A circular economy that makes a greater use of secondary raw materials can therefore contribute significantly to the resilience of German companies, while also opening up opportunities for new business models and markets.

In the 2021 coalition agreement, the German government committed to developing a National Circular Economy Strategy. The process for creating the strategy started with internal discussions within the Federal Government in 2022. In April 2023, a coordinated basic paper emerged from these discussions, outlining the issues the Federal Government had identified as the foundation for the development of the Circular Economy Strategy. Goals and measures were gradually formulated in 2023 and 2024, following the action areas defined in the policy paper, and accompanied by a broad dialogue process with relevant stakeholder groups. Businesses, civil society, academia, the Länder, and local authorities were also given an opportunity to provide feedback on the draft NCES published in June 2024. The development of the Circular Economy Strategy was also supported by scientific expertise.