Circular economy could halve industry's decarbonisation costs – think tank

Improving circular economy principles for the use of steel, cement and plastics could help Germany’s energy-intensive industries reduce their greenhouse gas emissions much faster and more efficiently, while at the same hedging against spikes in energy and raw material prices, think tank Agora Industrie found in an analysis. Compared to the linear procedures currently dominating most of the industry, circularity concepts could help reduce transformation costs by up to 45 percent and energy consumption by 20 percent, the think tank said. At the same time, about one quarter of cumulative emissions could be saved by 2045 if more energy-intensive basic materials are reused in a systematic manner. Moreover, circular economy principles could also help reduce industry’s demand for hydrogen and the need to offset emissions through planned carbon capture and storage (CCS) procedures, Agora Industrie added.

“The benefits of increased circularity are immense and should be taken advantage of,” the think tank’s director, Frank Peter, said. Circular economy principles could help Germany reach its climate targets, while also making it more resilient to supply chain problems and energy cost hikes. The car industry, for example, could reduce its material offcuts by about half if design is optimised. The systematic introduction of circular solutions could also position Germany at the forefront of this budding field of industrial production. Expertise in recycling built up over several decades and a strong backing of sustainable solutions in society are assets for the country “to enable innovative business models and technologies,” Peter said, citing 3D printing, digital product passports, design optimisation or smart sorting and recycling technology as possible areas of intensified research and development.  

Researchers have lamented that Germany still lacks a comprehensive vision for establishing a more circular economy, despite the many benefits such a strategy would entail. Better recycling and circularity procedures have also been identified as a key aspect for a truly sustainable rollout of renewable energy sources, batteries and other transformation technologies. A climate neutral economy is going to heavily rely on a wide range of raw materials that must be sourced, processed and recycled in a way that minimises the ecological impact, emissions and waste.