We conducted a survey in collaboration with GWI and found that larger enterprises invest more in waste management than their smaller counterparts.

However, this extra investment only sometimes increases recycling or circularity rates because waste is often incinerated. Commercial and industrial waste accounts for around 50% of incinerated material in the European Union (EU), where waste incineration has nearly doubled in the past three decades. The EU wants to change this trend and has removed Waste-to-Energy incineration from the list of sustainable activities because it interferes with the planned green transition to a circular economy.

Waste-to-energy and incineration programs don't support a fully circular economy, and new policies acknowledge that. In this article, you will learn:

• The standard waste management options that German enterprises use,
• How the recent regulations impact incineration costs, and
• The adverse environmental impact created by incineration.

Download our 2024 State of Circularity for Enterprises in Germany report and find out how Resourcify can strengthen your company's circularity efforts.

Waste-to-energy and incineration in Germany

The 3.6 million commercial organisations in Germany are responsible for managing their waste, as public services cover only households.

To guide business enterprises, the 2017 German Commercial Waste Ordinance (Gewerbeabfallverordnung - GewAbfV) introduced strict regulations for enterprises to follow:

• Waste must be sorted into defined categories, such as paper, cardboard, and board, plastics, glass, metals, wood, bio waste, textiles, construction, demolition, hazardous materials, and production-specific items.
• Producers must sort and segregate 90% of their waste to prepare for reuse and recycling.
• When sorting and segregation are technically or economically prohibitive, only 10% of waste can be incinerated or landfilled.
• If waste isn't sorted correctly, the mixed waste is pretreated by sorting plants, which must meet specific standards and targets—a sorting rate of 85% and a recycling rate of 30%.

The GewAbfV was enacted to enforce the five-level waste hierarchy established by the Circular Economy Act (KrWG):

• Waste prevention is the best method.
• Reuse of products or components.
• Recycling through mechanical, physical, and chemical methods.
• Energy recovery through incineration.
• Disposal or landfilling is the most disadvantageous option.

The two new German Acts acknowledge that recycling is superior to incineration. However, incineration is still promoted to reduce commercial residual waste, especially non-recyclable mixed plastic and wood.

According to a 2023 report, in 2017, Germany had:

• 68 incineration plants with 20 million tonnes of residual waste capacity.
• Around 45 mechanical biological treatment plants, where 4.5 million tonnes of biological waste was thermally treated,
• And 80 waste wood plants incinerating commercial wood waste.

Wood incineration is supported by the 2000 Renewable Energy Sources Act (EEG) and the Renewable Energies Heat Act (EEWärmeG). Wood recycling occurs only in the timber industry to make particle boards, but wood waste recycling could easily be extended to other enterprises to support the GewAbfV targets.

Recycling without incineration?

According to our research, the German commercial sector is far from meeting GewAbfV's 85% recycling goals. When asked to exclude incinerated or landfilled volumes, our research shows the following trends:

• The average recycling rate drops to 44% (40% lower than the  70% the national recycling average reported by the German government)
• Around 68% of enterprises say their recycling rate is below 50%
• Only 12% consider their recycling rate to be over 70%

We discovered that one reason for the lower recycling rates is that 47% of waste management investments are made for onsite waste-to-energy units, see Figure 1. Waste-to-energy and incineration remain popular waste management choices for enterprises in Germany, and 50% of waste is incinerated because materials aren't sorted correctly in commercial establishments.

Figure 1: Current waste management choices made by enterprises interested in joining the circular economy

Incineration destroys material that, in a true circular economy, could be recycled back into production—waste-to-energy limits recycling, which decreases sustainability and circularity rates. Recycling can play a pivotal role in achieving circularity by reintroducing materials back into the production cycle, thereby reducing the need for virgin resources. Incineration, on the other hand, requires further extraction of virgin resources, ultimately creating new waste.

Thus, waste-to-energy doesn't meet critical environmental objectives such as ensuring the transition to a circular economy, preventing waste, and recycling. Therefore, the EU no longer considers waste-to-energy incineration a sustainable activity and has excluded it from the EU Sustainable Finance Taxonomy Report.

Though incineration reduces waste volumes going to landfills, the amount of waste currently burnt can be reduced by more efficient sorting at the source in commercial organisations. Better sorting will ensure no recyclables are sent for incineration and increase recycling rates.  

Circularity without chemical recycling?

According to our research, the next most significant investment that German enterprises make is in chemical recycling, with 41% using this option.

It's better than incineration as the process involves breaking down waste into chemical building blocks that can be used again as raw materials. However, since the process is expensive, it is suitable only for waste treatment at certain scales.

Enterprises can contribute to a more sustainable and resource-efficient economy by choosing recycling over incineration. It is encouraging that enterprises also increase investments in other options like product redesign, reuse, refurbishment, and using recycled materials. German enterprises reuse 17.6% of recycled materials in new production. Though the circularity rate is low, it is double the global average.

Learn how Resourcify can help you manage waste and increase your recycling rate.

Germany is reconsidering incineration

Germany wants to increase its circularity rate further and is therefore reconsidering incineration. While it is suitable for treating hazardous materials, waste-to-energy plants are currently used to burn mixed waste as a substitute for fossil fuels to produce energy. Incineration is not a clean technology and is harmful to the environment in several ways:

• Depending on the waste composition, incineration releases 250–600 CO2 kg per tonne of waste, which is as much as that from burning coal, according to a 2020 Zero Waste Europe Report. The total emissions from incineration are also equal to those from landfilling.
• The amount of waste materials is not eradicated. After incineration, around 10% of the total waste remains as fly and bottom ash that must be treated as hazardous materials and disposed of in special landfills.
• The emissions from incinerating stacks contain air pollutants like heavy metals, dioxins, furans, acid gases, nitrogen oxides, and particulate matter that harm people's health and the environment.
• Emissions from incineration can pollute water, which has been found to impact marine animals far away. Other problems include noise pollution, vibrations, and objectionable smells, which are a nuisance if the waste-to-energy plants are close to residential and commercial areas.

"While enterprises may consider waste-to-energy conversion as a waste management investment, this is not a solution contributing to the circular economy."  

- Gary Lewis, co-founder and CEO at Resourcify

Incineration doesn't sustain responsible production and consumption. It is not a waste management choice that aligns with the circular economy. It removes materials from the production cycle and wastes resources that could be put back into the loop.

Better options for a sustainable future

Other waste management options are preferable.

Recycling and composting preserve the energy inherent in materials and provide secondary raw materials. Redesigning products for reuse and recycling can prevent or reduce incineration.

Enterprises planning to invest in onsite incineration to reduce waste should reconsider their decisions due to other regulations taking effect in 2024.

Historically, Germany has not included carbon emissions from incinerators under carbon trading. However, an amendment to the German Fuel Emissions Trading Act (EBeV 2030) has changed that. Now, carbon emissions from waste-to-energy plants include a carbon tax of €40/t, increasing to €50/t in 2025. Incinerators must pay this carbon tax on top of the existing incineration fee.

The new tax depends on the calorific value and the biogenic content of the waste. Commercial waste has been assigned a fixed biogenic content of 48.9% and 51.1% of fossil content. Fossil content has the highest tax, so enterprises should improve their sorting to reduce plastic sent to incineration.

The new amendment will affect 100 waste-to-energy plants in Germany, which is currently the only country in the EU taxing these carbon emissions.

Incineration doesn't promote circularity

While incineration can recover energy and is still incentivised by the REEG and the EEWärmeG, it fails to promote circularity.

Recycling is crucial for achieving true circularity by reintroducing materials into production cycles and reducing the need for virgin resources. Prioritising recycling will help German enterprises reduce ever-increasing incineration costs while supporting sustainability and minimising their environmental impact.

Download the "2024 State of Circularity for Enterprises in Germany" report to learn how Resourcify can help you improve circularity.

Your digital operating system for a circular future

We know that businesses see circularity as a major strategic investment and if they're serious about that, there are much better ways to truly embrace this mentality than through incineration. Recycle more, burn less, reuse materials, remanufacture goods.

These are all key aspects of a circular future. Resourcify helps large businesses manage all of these processes at scale.

Get started today by booking a demo with our team of experts.

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