Dusseldorf The car is sparkling and sleek, like many other car models. But in the small electric car that BMW presented at this year’s IAA motor show, the concentrated future lies: In a few years, the Munich-based manufacturer could manufacture its cars – from waste.
Of course, nobody should call the car a garbage truck. The official name sounds a lot better. “I Vision Circular” is it. BMW has created a car that consists almost entirely of materials that are easily recyclable or that have already been reused. It will be the group’s first fully circular car. For comparison: in conventional models, only around a third of the materials are reused. The rest must be incinerated or disposed of.
It is an ecologically and economically nonsensical phenomenon in the global economy: every year, humans extract more than 100 billion tons of raw materials such as oil, gas and metals from the earth. According to this year’s “Circularity Gap Report”, only 8.6 percent of this is reused. If it were possible to recover the original materials from the waste, problems such as environmental pollution or delivery bottlenecks could be eliminated at the same time and the climate protected.
Germany is known as the nation of waste separators. But the Federal Republic of Germany is far from a real circular economy (CE). While neighboring countries like the Netherlands are developing entire circular strategies, setting quotas and setting targets, Germany runs the risk of missing out on a billion-dollar market.
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The circular economy could reach a market volume of up to 200 billion euros in Germany alone by 2030. For Europe it is even up to 800 billion euros. This is the result of exclusive calculations by the management consultancy company BCG for the Handelsblatt.
Sustainable raw materials have so far not been profitable enough
Why is this potential not being used? The simple answer: because it hasn’t been worth it so far. For decades, the global economic model has been trimmed to extract raw materials from the earth. That is efficient and comparatively inexpensive.
“Up to now, a circular economy was often not attractive for reasons of cost and was therefore rarely relevant. The companies are currently mostly working with the cheapest material in the short term, ”says BCG expert Alexander Meyer zum Felde.
But that’s changing right now. Because availability and access to resources are becoming one of the greatest business risks for industry. This is clearly shown by the current shortage economy after the pandemic. Companies have to shoulder enormous additional costs for urgently needed raw materials because their prices skyrocket.
Suddenly it becomes clear again what is actually a truism: Germany has hardly any raw material deposits. With the energy transition, the dependency on raw material imports increases again enormously. Be it lithium, cobalt and nickel for the production of electric car batteries, rare earths for wind turbine motors or copper and aluminum for the expansion of the power grid – a climate-neutral Germany needs vast amounts of these metals.
75 percent recycling is possible
The raw materials have long been in the country – they are in plastic, batteries, packaging and even in the air. Circular economy could give companies permanent access to important materials.
According to the BCG, this will require investments of 50 to 60 billion euros by 2040. “This would enable an actual recycling economy of up to 75 percent for many materials in Germany,” says Meyer zum Felde. In addition, over a million additional jobs would be created.
Securing raw materials and protecting the climate go hand in hand. According to calculations by the Ellen McArthur Foundation, the circular economy has the potential to reduce CO2 consumption by 45 percent. For example, if the chemical industry no longer obtained carbon from oil and gas, but from old plastics, plants or even from CO2 itself. “With the circular economy, we can decouple growth and resource consumption,” says BASF boss Martin Brudermüller.
But one is far from that. Currently, the share of the actual recycling economy in Germany is just around twelve percent of the total raw materials used – and that only thanks to returnable bottles and waste paper. “Germany is the world champion in recycling and has the best waste management infrastructure. When it comes to the circular economy, however, we are only average, ”says Henning Wilts from the Wuppertal Institute for Climate, Environment and Energy.
More and more products are recyclable, but still end up in the incinerator or are turned from beverage bottles to shampoo containers that end up on the landfill after being used once. Progress? Nothing. The growth of the circular economy in Germany is just 0.1 percent per year.
A rising CO2 price, stricter climate targets and the current crisis on the raw materials market could change that now. “This is a big shock for many companies right now,” says Wilts.
Chemical industry facing change
Chemistry, Germany’s third largest branch of industry, faces particular challenges. For years, little happened in the development of circular material flows that could end the old world of “conveying, processing, throwing away”. But it is clear to the managers: “The chemistry has to change considerably – away from oil and towards green raw materials and eco-energy,” says Markus Steilemann, CEO of the plastics manufacturer Covestro.
Steilemann wants Covestro to switch completely to circular economy and completely away from oil and gas. This is theoretically simple: Chemistry actually only needs the carbon that is the basis for further processing into plastic and other chemical products. It has been extracted from oil and gas for decades.
It is present in abundance elsewhere. For example in carbon dioxide, which is practically free. Covestro is already marketing the first plastic products in which the required carbon was obtained from the climate killer gas. The material is sold to manufacturers of sports floors, mattresses and car seats.
But these are still narrow niches: Covestro used 10,000 tonnes of certified renewable raw materials last year – out of a total of four million tonnes, most of which come from crude oil. Covestro now wants to gradually ramp up production with green raw materials.
A stumbling block in the recycling of plastics is their nature: Because they usually consist of a mix, you need complex and energy-intensive chemical recycling. But technology is making great strides in this area. Steilemann therefore sees completely different brakes in the circular economy: “The greatest challenge is that we are dealing with an overall transformation, a paradigm shift,” says the manager. “Business and society have to change their behavior, and there is still a lot of persuading to be done that this is necessary and that it pays off.”
Electric car batteries are the new mine
How useful a functioning circular economy can be is not only evident when it comes to plastic waste. Electromobility is a prime example – and especially its heart, the battery. For them, raw materials such as metals are extracted from the earth under sometimes questionable conditions and transported to the production centers in Europe, China and the USA.
It would be much easier and more economical to recover the substances from the used batteries. The head of the European battery cell conglomerate Automotive Cell Company, Yann Vincent, proclaims that recycling is “the new mine”. More than 95 percent of the key raw materials could be recycled from cells that have already been produced.
BASF is currently developing a chemical process with which battery raw materials can be recovered in a very high degree of purity. Right next to BASF’s new battery production site in Schwarzheide in eastern Germany, the group is also building a recycling plant for used battery cells.
Hardly a battery factory is built without a corresponding reprocessing plant. This applies to both Volkswagen in Salzgitter and the gigafactory of the Swedish start-up Northvolt. The Swedes want to extract half of the material in new cells from old material by 2030.
Circular economy drives almost every branch of the economy. Consumer goods companies such as Nestlé and Danone are now joining forces with disposal systems such as Grüner Punkt in order to implement a circular packaging economy on a large scale. Unilever will align its supply chain in such a way that from 2030 all detergents contain no fossil but only renewable raw materials.
There is enough innovative strength in the German economy, of that BCG expert Meyer zum Felde is convinced. Nevertheless, Germany threatens to lose touch. The warning also goes in the direction of politics: Especially in Berlin and Brussels, experts see the topic far too low on the agenda. Henning Wilts from the Wuppertal Institute is disappointed: “We have programs for everything possible, to avoid waste, to increase resource efficiency, to avoid food waste. But nowhere is responsibility for the circular economy regulated. “
More: The raw material problem of the electric car – and what VW, BMW and Daimler want to do about it.