Germany’s industrial economy, built on a largely linear production model, consumes vast amounts of resources – with significant consequences for both people and the environment. At the same time, its heavy reliance on imported critical raw materials leaves key sectors exposed to global supply chain disruptions. Although these vulnerabilities have been recognized for years, progress toward structural change has been slow. Transitioning to a comprehensive circular economy is widely regarded as essential to curbing the environmental impact of resource use – domestically and abroad – and to reducing dependence on raw material imports. Yet Germany remains far from achieving circular value chains. In 2023, only 13.9% of the materials used came from recycled sources. Expanding the share of secondary raw materials will require redesigning products from the outset, overhauling supply and waste systems, and shifting consumer behavior.
These challenges also carry potential for economic renewal. With innovative approaches, German firms could consolidate their market position or gain footholds in new ones. The country remains a center for advanced research and innovation, but the conditions for a full transition are not yet in place. Shortfalls include enabling legislation, robust digital infrastructure, industry capabilities, and a coherent ecosystem for the circular economy in Germany and across Europe. Our project works to develop evidence-based solutions and policy recommendations to advance the circular economy, build capacity and help establish a nationwide ecosystem.
