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Circular Economy needs innovation and clear concepts


11 Mar 2020


  • VDMA: EU action plan must not get lost in small-scale regulation
  • A boost for a functioning secondary raw materials market is necessary

Brussels/Frankfurt, 11th March 2020 – Durability, reuse, repair and recycling of products: The EU Commission's Action Plan on Circular Economy advocates the circular reuse and further processing of raw materials and products. The Commission's goal is the transformation towards a Circular Economy that applies to all kinds of products and industries: from batteries for e-mobility to plastic packaging to textiles and many more. The mechanical engineering sector is heavily involved through the inclusion of value chains.

In VDMA´s view, the concept of Circular Economy can become successful and initiate new business models. "However, to achieve this, the EU must not get lost in small-scale regulation, but has to create the right framework and needs to focus on boosting the secondary raw materials market," says Holger Kunze, head of the VDMA European Office. The market for secondary raw materials does not fully function yet, but it is the basis of a Circular Economy. As long as primary raw materials are significantly cheaper than secondary raw materials, there is no market incentive for their use. The right quality and quantity at competitive prices make their use attractive for companies. "Therefore, it is now important to develop quality standards for recycled materials and their reuse together with industry", demands Kunze.

No national solo efforts

VDMA supports the European approach of a Circular Economy instead of national solo efforts. For the transformation reliability and concepts from a single source are needed. “It is also clear that Circular Economy will not work without the innovative technologies from the mechanical engineering sector," says Kunze.

Mechanical engineering is affected by Circular Economy twice. Machines do not only produce products, they are also needed for their reuse, repair and recycling. At the same time, mechanical engineering itself is an important part of a Circular Economy. After all, machines can also be repaired, upgraded, often reused and have a service life of decades. The refurbishment of machines is therefore a long-standing business model in the capital goods sector.

(You can find further information on Circular Economy here.)

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VDMA represents more than 3300 companies in the medium-sized mechanical and plant engineering sector. With 1.3 million employees in Germany and a turnover of 232 billion euros (2018), the sector is the largest industrial employer and one of the leading German industrial sectors overall.