New Circular Economy Act: Trades see room for improvement

The amendment to the Circular Economy Act brings progress in recycling and securing raw materials, but leaves key concerns of the skilled trades unaddressed.

The Federal Ministry for the Environment has presented a draft bill to amend the Circular Economy Act (KrWG) , thereby implementing EU directives. The German Confederation of Skilled Crafts (ZDH) sees promising approaches to securing raw materials, but also significant risks to small and medium-sized enterprises (SMEs) market structures and new bureaucratic burdens at critical interfaces.

The legislature is placing greater emphasis on recycling and waste prevention. The German Confederation of Skilled Crafts (ZDH) particularly welcomes the fact that the draft legislation considers more than just critical raw materials. A key element is the principle of "comprehensive recycling before disposal." According to the ZDH, preliminary planning and responsibility for construction projects must clearly lie with the building owners or clients – especially regarding site investigation, sampling, and deconstruction planning.

Criticism and demands from the trades

The ZDH kritisiert The draft addresses several issues: It primarily regulates municipal waste, ignore however Construction and demolition waste as Germany's largest waste stream, largely and treats the Skilled trades only as Disposal addressee instead of acting as an active implementation partner. Furthermore, the ZDH sees risks for small and medium-sized enterprises (SMEs) due to market interventions by municipalities.

For this reason fordert the Central Association of German Crafts Improvements in the following areas:

• Competitive neutrality of municipalities (§ 20a),
• appropriate penalty provisions (§ 69),
• clear waste prevention targets (§ 7b) as well as
• Control mechanisms (§ 10) that do not unduly burden small and medium-sized enterprises.
• The role of skilled trades as implementing actors in reuse and repair should be enshrined in law.

Missing topics

According to the German Confederation of Skilled Crafts (ZDH), key topics are completely missing from the draft. These include a legally sound end-of-waste status for recycled building materials and reused components, as well as perspectives for repair and upgrading, and integration with other legal areas such as procurement law, state building codes, and funding instruments.

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Right to repair and spare parts availability

The law strengthens recycling and waste prevention, but fails to address repair as a separate lever – it contains no provisions regarding spare parts availability, product repairability, or financial incentives (such as repair bonuses or reduced VAT on repair services). Yet, in the legal waste hierarchy, repair ranks even higher than recycling – and is also a core area of ​​expertise for skilled trades. The German Confederation of Skilled Crafts (ZDH) advocates for minimum requirements regarding spare parts availability and tax incentives for repair services. This aligns with current EU law, but is not implemented concretely in the legislation.

Craft infrastructure remains invisible

The existing private take-back and processing infrastructure of the trades – from scrap dealers and vehicle dismantlers to repair shops – is not recognized in the law . The draft addresses only public waste management authorities, even though EU law explicitly grants equal rights to private actors.

Lack of integration with procurement and construction law

The draft legislation addresses circular economy law in isolation. Practical hurdles, such as those related to recycled building materials in procurement law, building regulations, or the substitute building materials ordinance, are omitted. According to the German Confederation of Skilled Crafts (ZDH), however, integration of these regulations is crucial for the effective functioning of the circular economy.

No legal framework for funding instruments

The draft legislation creates new obligations but contains no binding funding instruments, according to the German Confederation of Skilled Crafts (ZDH). While an action program exists, the law lacks a direct link to it. The catalog of economic incentives provided for in EU law is not being utilized.

Definition of waste and weighting in the law

The draft legislation focuses on recycling and waste management. The actual circular economy, meaning avoidance and reuse before waste classification, is only addressed peripherally. The German Confederation of Skilled Crafts believes that clarifying the law to define when an item actually becomes waste could promote reuse.

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