Natural resources

Natural resources

A waste-free economy

If we want to live in a future where the environment remains intact, we will need to drastically reduce the amount of waste we produce. This is why KfW and other partners are now investing billions in a European circular economy.

About Ms Kiehl and Mr Denzer-Speck
portrait of Denzer-Speck and Kiehl

Kerstin Kiehl is Head of the Energy, Environment and Municipalities Team at KfW Research. David Denzer-Speck is the Director of the KfW office in Brussels.

KfW wants to raise public awareness of the circular economy as a topic. How, specifically, is it going about that?

DAVID DENZER-SPECK: By making promotion of the circular economy a priority in Europe. We founded the Joint Initiative on Circular Economy (JICE) together with promotional banks from Poland, France, Italy and Spain and the European Investment Bank. Together over the next five years, we will be providing financing to the tune of EUR 10 billion to support the switch to a waste-free economy, where existing resources are continually reused. This concept focuses on more than just recycling.

What else does it entail?

KERSTIN KIEHL: The concept of the circular economy moves away from the linear “take, make, waste” economic model that is currently prevalent around the world and moves towards a closed-loop approach. Momentous changes will have to be made throughout the value chain for that to happen.

Circular Economy holds the key
Infographic on circular economy

KfW expert Anke Brüggemann sums up how the transition to a circular economy can be achieved.

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Is the EU really still such a long way behind?

KIEHL: The EU provided some important impetus in December 2015. The EU commission published the EU Action Plan for the Circular Economy, which is intended to support the transition to a more circular economy in the EU. The following statistic makes it clear that Europe is only at the starting point of a long-term process: on average in 2016, only 12% of material used in the EU came from recyclable products and recovered material.

What is preventing the EU from progressing further?

KIEHL: Some of the significant barriers to moving in the direction of a circular economy are waste disposal options that are cheaper than recycling (such as waste incineration), lower prices for primary raw materials and an insufficient level of demand so far for recycled products.

Made from water and waste

The German company Bio-Lutions pays Indian farmers for their agricultural waste which they use to produce tableware and packaging material.

Where in the value chain could KfW make a real contribution?

DENZER-SPECK: Everywhere, from circular design to production, consumption and recycling. KfW is already well-positioned in the sanitation and waste sectors with our environmental programme and the Federal Environment Ministry’s Environmental Innovation Programme. In addition, we want to better show companies and municipalities the options for how they can finance circular economic activity through KfW programmes right from the first stages of the value chain. For instance, there’s the Entrepreneur Loan for Digitalisation and Innovation if the plan is to invest in innovative product solutions and the Energy Efficiency Programme if the goal is to use waste heat.

Read more under the infographic.

Infographic circular economy
Cover Chancen

This article was published in the autumn/winter 2019 issue of CHANCEN magazine “Wendezeiten”.

To German edition

Is promoting innovation also an important aspect?

DENZER-SPECK: By investing in product and process design, companies boost their competitiveness. And a more circular economy decreases our dependency on imports of raw materials while facilitating growth without additional resource consumption. However, the most important objective is to safeguard our livelihoods.

How realistic is it that the initiative will bear fruit in the near future?

KIEHL: The initiative is backing and helping to implement the EU’s push for a more circular economy. Pooling our promotional activities under the umbrella of JICE should lead to a further change in thinking and greater demand for these types of products. And we hope that through our efforts to achieve a circular economy, we manage to facilitate technology transfer to countries outside the EU.

Published on KfW Stories: 3 December 2019.