Statement
European Commission consultation on the Circular Economy Act
Long title, example:Act (Arial, 20 pt, bold) Circular Economy Draft bill/government bill Act on the modernisation of the network charge structure
Federation of German Industries
17 December 2025
Status: DD.MM.YYYY
1. Introduction The Federation of German Industries (BDI) welcomes the European Commission's initiative to create a legal framework with the planned Circular Economy Act, which is intended to accelerate the transition to circular value creation in Europe. German industry sees the circular economy as a key lever for resource conservation, climate protection and competitiveness. Decisive factors here are the durability, reusability, reparability and recyclability of products. At the same time, it should be noted that a stable and resilient supply of raw materials for German and European industry will require domestic (EU-wide) and imported raw materials as well as raw materials from the circular economy1 . These sources of supply must not be played off against each other. The respective intra-European potential for increasing the supply of raw materials from the circular economy must then be assessed on a material flow-specific basis. In order for the circular economy to become a success factor for industrial policy in Germany and Europe, the political framework must be designed in such a way that companies can offer circular raw materials, products and business models in a functioning internal market. This requires, in particular, innovation and technology, the removal of regulatory barriers, targeted research funding, consistency between the various legal acts, investment security and demand stimulation. The BDI calls for ambitious and coherent policies that enable circularity and clearly define the interfaces between product, waste and materials law in a legally secure manner. Federal Association of German Industry
Lobby register number R000534 Postal address Breite Straße 29 10178 Berlin Postal address 11053 Berlin 1
Raw materials in the circular economy include recycled materials and waste for material recycling in general, which are returned to the cycle, but also by-products, renewable raw materials and CO2 extracted from processes and the air, when treated in accordance with the waste hierarchy under Section 6 of the German Waste Management Act (KrWG).
Contact Dr Claas Oehlmann T +49 30 20281606
Email: c.oehlmann@bdi.eu Website www.bdi.eu
2. Internal market barriers 2.1 Fragmentation of the internal market due to inconsistent regulations
The applicable waste legislation requirements are characterised by a multitude of European, national and local regulations. Since the EU Green Deal, the regulatory environment has also been shaped by numerous directly applicable European regulations that place greater emphasis on product design and the entire cycle in terms of circular value creation and contain direct obligations for companies. This change in perspective is fundamentally correct. However, it now presents companies with increased challenges in terms of when waste ceases to be waste and thus the applicability of the various areas of law. When waste ceases to be waste, it must be made clear in future that business activities relating to strategies above recycling in the waste hierarchy (e.g. repair, reuse, refurbishment, reuse) are not subject to the requirements of waste law. At the same time, the criteria for the end of waste status and the status as a by-product are not harmonised across the EU for all waste streams and are interpreted differently in the Member States. This leads to legal uncertainty and can hinder intra-European trade in raw materials for the circular economy, especially if the highest level of protection applicable in a Member State of the Union is regularly used as the benchmark for exemption from waste legislation. A clear and uniform definition is also crucial for intraEuropean transport: the transport of non-waste is significantly easier than that of waste, which greatly simplifies the logistics of the former. In order to avoid role shifts and improve traceability, it must be clearly regulated that the notifier is the responsible entity in the Member State of dispatch and that logistics service providers only act as transport or service providers. The EU Commission should therefore ensure consistency in all definitions in the various legal acts (including the Ecodesign Regulation, Battery Regulation, Packaging Regulation, Critical Raw Materials Act) and, in particular, address ambiguities regarding the status of waste or non-waste and by-products. It is also important to take material flow-specific measures to enable the end of waste status or by-product status to be determined easily and unambiguously. The aim must be to enable the safe use of raw materials in the circular economy ( ) and to establish a risk-based approach at the interface with chemicals legislation. This should also include the mutual recognition of national regulations. The Waste Framework Directive must be further developed accordingly.
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The ECHA's SCIP database must be abolished, as foreseen in the EU's Omnibus Environment Package of December 2025, due to its disproportionately high bureaucratic burden. Instead, the discussion on traceable data cycles should be continued in the context of the introduction of digital product passports and the industry's data rooms, which are already being scaled up. Due to strict regulatory and quality requirements for circular products and materials, remanufactured goods are often not price-competitive with imported new spare parts. Spare parts imports often come from regions with less costly regulatory frameworks for manufacturing. Recycling supports production sites in the EU. However, the market currently disadvantages nonprice-related criteria. Due to the high complexity of material changes in spare parts, the Commission should consider a general REACH exemption for spare parts. 2.2 Barriers to cross-border waste shipments
The shipment of waste for recovery within the EU is hampered by complex information and notification requirements, inconsistent administrative practices and cash deposits/guarantees that must be provided. This applies, on the one hand, to non-hazardous waste on the "green list", the transport of which is burdened by information requirements. This often results in a direct competitive disadvantage compared to primary raw materials. The Commission should therefore introduce predefined criteria and standardised conditions for certain categories of cross-border waste shipments, rather than requiring new individual notifications for identical or recurring shipments. The shipment of hazardous waste within the EU is generally subject to stricter legal requirements for understandable reasons. However, in the interests of promoting the circular economy, a strategic review should be carried out to determine for which materials, in particular those containing critical raw materials, the rules could be adapted. In doing so, the hazardous nature of the material and its strategic importance for European circular economies must be taken into account, as is the case, for example, with the shipment of waste electrical and electronic equipment from 2027 onwards. The EU must leverage the power of the internal market to build and scale the politically desired structures for European raw material cycles. Conflicts of interest with transport law must be resolved. Tax incentives should be used to encourage companies to stockpile critical and strategic raw materials.
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The outflow of metal scrap to countries outside Europe, especially China, intensifies international competition for valuable raw materials in the circular economy and jeopardises the availability of scrap in Germany and Europe. Consistent enforcement of the EU Waste Shipment Regulation and a strategic perspective on imports and exports of raw materials are therefore essential. A free internal market for raw materials in the circular economy must also be supported by uniform, digitised procedures and a central EU system for electronic documentation. The procedures of the authorities should be simplified and accelerated, especially for recycling facilities that have been pre-certified in accordance with the Waste Shipment Regulation. 3. Demand and supply of raw materials for the circular economy 3.1 Strengthening demand and lack of market incentives
Raw materials from the circular economy often compete directly with primary raw materials, which may be cheaper depending on the global market situation. In its Packaging and Battery Regulations, the EU has set recycling quotas for plastics and metals, and in its End-of-Life Vehicles Regulation, it has so far only set quotas for plastics, in order to increase resilience in the EU. For such instruments to work, the right conditions must also be in place at international level. Raw materials for the circular economy produced in the EU compete with imported materials, the origin and underlying environmental standards of which are sometimes unclear. Correctly declared products and the authenticity and traceability of certificates for recycled materials from non-EU countries must be guaranteed. It must be ensured that there are clear requirements for certificates for imported recycled materials and that these are also complied with. At the same time, measures to guarantee the authenticity of recycled materials must not lead to new trade barriers. Further quota targets should only be established in the EU internal market if they have a positive effect on the quantity and quality of raw materials of the circular economy and, at the same time, contribute to greater resilience in line with market principles and support existing material cycles. The EU should therefore establish internationally harmonised standards for the quality and traceability of raw materials in the circular economy and strengthen market surveillance. For example, it is unacceptable that industrial by-products such as slag are entering the internal market from third countries in an uncontrolled manner and threatening European recycling structures. At the same time, access to critical and strategic raw materials for the circular
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economy must be secured for German industry, and the export of corresponding product and waste streams must be considered as part of raw materials and trade policy. The Circular Economy Act should be closely linked to the announced EU Product Act and the existing EU action plans for steel and metals and for the automotive industry. Overall, it is necessary for the EU and its member states to actively promote circular lead markets through public procurement opportunities, thereby contributing to greater resilience in the EU and supporting the use of circular economy products and raw materials with economic instruments where necessary. 3.2 Supply-side challenges
The quality and availability of raw materials in the circular economy depends largely on the separate collection, sorting and treatment of waste. The capacity for collection, sorting and recycling is not yet sufficient everywhere in the European Union. The EU should invest specifically in the expansion of recycling capacities and promote the development of processes for balancing recycled content that are compatible with the basic materials industry. These investments will only have sustainable and positive effects if they are made within the framework of circular business models. The recognition of such processes is essential for verification and integration into industrial processes. For waste that can no longer be recycled, an adequate network of thermal waste treatment capacities with energy recovery is needed throughout the EU. In addition to expanding recycling capacities, the investment and financing conditions for capital-intensive and innovative plants must also be improved. The Circular Economy Act should clearly address reliable, combinable financing instruments for the transition from pilot to industrial plants in order to overcome scaling barriers caused by lengthy approval processes and restrictive lending practices. The landfilling of organic waste must be phased out rapidly across the EU.
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4. Standardisation as a tool for circular markets In recent years, the European Commission has increasingly used standardisation mandates to CEN and CENELEC to further develop the regulatory environment for the circular economy (e.g. M/543 (12/15) "Material Efficiency" or M/584 (08/22) "Plastics recycling & recycled plastics"). The experience and organisational insights gained there should be used for future mandates. The aim should be to systematically and effectively anchor future standardisation mandates across the Commission's directorates-general in order to bring together the perspectives of harmonised product specifications for the functioning of the internal market and the environmental perspective of waste legislation. In order to further establish the European understanding of circular value creation as an export model, companies are dependent on the compatibility of European regulations with international processes. The EU should therefore promote the involvement of companies in international standardisation bodies and at the same time take an active role in international standardisation policy. To this end, the European standardisation strategy must focus more strongly on the circular economy. In addition, EU-wide strategies for enforcement and market surveillance are needed, particularly for imported goods, whereby the integration of DPP data should be considered as an enforcement tool. Overall, there must be no contradictions between the planned Circular Economy Act and the European Product Act, which is being developed in parallel. New product standards must not hinder the use of recycled materials and byproducts, but should be based on performance criteria to enable the use of climate-friendly materials such as iron silicate or steel slag. 5. Extended producer responsibility (EPR) In recent decades, a wide range of EPR systems and effective structures for individual producer responsibility for a wide variety of product and material flows have emerged in the EU. Today, European law often provides a framework (Articles 8 and 8a of the Waste Framework Directive, EU Packaging Directive, EU Battery Directive, etc.) that can be implemented at national level. In addition, Member States are free to establish further national EPR systems. EPR systems can therefore mean that manufacturers in the Member
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States have to comply with a wide variety of separate regimes. Furthermore, difficulties may arise when products covered by an EPR system are traded across borders. It is also essential to distinguish between whether an EPR system is established for products in the "business-to-consumer" or "business-to-business" sector. In addition to EPR systems, individual producer responsibility without system constraints must also be permitted. The EU Commission must therefore continue to take a differentiated approach to EPR options in the future. The usefulness of harmonised European systems must be based on whether they actually benefit companies in the circular economy and thus contribute to closing loops. It is also important to ensure that companies can operate as freely as possible in the EU internal market. Fundamental changes to European approaches to producer responsibility must therefore be discussed in depth with those affected. The measures on EPR systems announced in the December 2025 environmental omnibus must be well coordinated with the activities under the Circular Economy Act. 6. Conclusion The BDI welcomes the European Commission's initiative to create a simple and user-friendly framework for the circular economy with the Circular Economy Act. The removal of internal market barriers and the targeted promotion of demand and supply for raw materials in the circular economy are crucial to its success. Industry is ready to play an active role in shaping this change – provided that the political framework conditions enable innovation, investment and competition.
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About the BDI The BDI represents the interests of German industry to political decisionmakers. In doing so, it supports companies in global competition. It has an extensive network in Germany and Europe, in all important markets and in international organisations. The BDI provides political support for international market development. It also offers information and economic policy advice on all industry-related topics. The BDI is the umbrella organisation for German industry and industry-related service providers. It represents 39 industry associations and more than 100,000 companies with around eight million employees. Membership is voluntary. Fifteen regional offices represent the interests of industry at regional level. Imprint Federation of German Industries (BDI) Breite Straße 29, 10178 Berlin www.bdi.eu T: +49 30 2028-0 German Lobbying Register Number R000534 EU Transparency Register: 1771817758-48
Contact Dr Claas Oehlmann Managing Director, BDI Circular Economy Initiative Deputy Head of Department, Environment, Technology and Sustainability T: +49 30 20281606 c.oehlmann@bdi.eu Viktoria Otte Senior Project Manager, BDI Circular Economy Initiative T: +49 30 20281725 v.otte@bdi.eu BDI document Number: D 2212
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