Markets Germany Magazine 1/25 | Opportunities in the Circular Economy
The Value of Waste
The word ‘recycling’ conjures up color-coded community trash containers for glass, paper, clothes and electronic waste. But there’s a lot more to circular economy opportunities in Germany, as many international companies are finding out.
Mar 26, 2025
Where others see waste, we see value,” says Nicolai Prytz, Head of Sustainability at TOMRA. The Norwegian company is no newcomer to recycling: it has been in the circular economy business for more than 50 years — and operating in Germany for 20 of those — but it still has new tricks up its sleeve.
TOMRA made its name manufacturing the bottle collection machines that Prytz — a master of the snappy soundbite — calls “reverse vending machines” because they dispense money to shoppers in exchange for their empties in supermarkets all over the world.
The Bottom Line
Germany is vigorously promoting circular economies in all sectors, not only to save the planet, but also to expand business opportunities created by state-of-the-art digital technologies. Foreign direct investors can come to the party.
That was one of TOMRA’s first forays into the circular economy. But the company has been continually updating its technology, and its solutions now use advanced sensor technology, deep learning and AI to enable “resource circularity” in everything from waste management to mining and fresh food sorting. The benefit of circular solutions is that companies can minimize waste, extract value and reduce environmental impact to create a more sustainable future.
In Germany, TOMRA found the ideal environment for their circular business model to grow and thrive. The various technologies that TOMRA uses were developed in German research facilities. In fact, Germany was one of the first countries to adopt producer responsibility legislation that required separated collection of waste, a model that has since spread to many countries in Europe.
This article was published in issue 1-2025 of the Markets Germany Magazine. Read more articles of this issue here
A government priority
A new report commissioned by the Ministry for Economics, Industry, Climate Protection and Energy in the state of North Rhine-Westphalia (NRW) demonstrates just how seriously Germany is taking the opportunities presented by the digital circular economy.
Released in September 2024, the report examines a broad palette of strategies that companies can apply to circularize their business models, including upcycling raw materials, developing particularly durable products, supplementing or replacing conventional sales with rental models and refining product design to create resource-efficient products that are easy to repair and update.
It concludes by describing the unused potential in NRW’s digital circular economy and a series of recommendations for the government — including creating incentives and issuing tenders for public contracts. North Rhine-Westphalia was therefore the natural choice for TOMRA when choosing a site to construct its new facility. From the company’s TOMRA Feedstock subsidiary, the plant represents TOMRA’s exploration of what it calls the “adjacent opportunities” of the circular economy: extracting polymers from trash to enable production of high-grade recycled plastic.
“We’re building a plant that can do more granular sorting of plastics, as opposed to traditionally selling the technology to others,” says Prytz. “We’re developing a new position in the value chain. It’s very much linked to how the market is evolving with increased requirements for recycled content and higher recycling rates.”
The TOMRA Feedstock plant, which will go into operation in early 2026, will be able to process around 80,000 tons of mixed plastic annually from ordinary (unseparated) waste sourced from across Central Europe.
The new technology, which deploys sophisticated sensors supported by AI, allows users not just to remove plastics, but to distinguish between different types of plastics.
“If you want to achieve closed-loop recycling, you need to do even finer sorting of it, so you don’t end up mixing different types of plastic,” says Daniel Sundahl, TOMRA’s head of investor relations. “We use a combination of many technologies, and the key is interpreting all this data.”
Circles of Influence
Interview with GTAI’s Peggy Görlitz, Senior Manager for Mechanical & Electronic Technologies
What does creating a circular economy actually mean?
For me, the circular economy is about much more than recycling the end product. We have to think sustainably in the production phase, and I don’t just mean using recycled materials and conserving resources, I mean in the whole process, from conception and prototyping to the longevity of the finished products themselves.
How far along is Germany in promoting circular economies?
When I compare us to global markets, Germany is among the top industrial countries. Some smaller European countries might be a little further advanced in individual, newer industry sectors, but they don’t have the long-established industrial traditions that Germany has. Germany is one of the pioneers of waste management, and it has impressive recycling rates in various types of refuse and the re-use of different materials. But there is still a lot to do, as many of these technologies are among the most modern developed in recent years.
What advantages does Germany offer for foreign investors?
Germany has extremely sophisticated supply chains in many industries, from plastics production to the automobile industry, and that means a large pool of skilled labor. Not only that, ours is a market with very high standards, and Germany’s regional governments also provide incentives, such as funding the training of skilled labor. We’ve found that all this makes it very attractive for foreign companies, of whatever size, to bring their new products and technologies into the German market. As much of the technology is new, and because we have an excellent infrastructure of research facilities and industry clusters in Germany, we could be exploiting the opportunities even more than we already are
How does GTAI help international companies?
Germany is determined to stabilize and further expand industrial production using the latest sustainable technologies to achieve ecologically and economically viable circular economies, and to establish international standards. We want to attract high-quality foreign direct investments (FDI) to Germany. That’s one of the reasons we established, among other things, an FDI scoring system that assesses the sustainability and resilience of a given investment.
Recycling revolution
TOMRA’s case neatly illustrates three aspects of Germany’s drive toward a circular economy: the country’s strength as an industrial location, the involvement of different sectors (specifically robotics, sensor technology, AI, and recycling) and Germany’s research landscape.
Circular value creation is also extremely important for Germany’s resilience, making industry more sustainable and less dependent on raw material imports. Cutting-edge technologies like AI can make all the difference. “There are a lot of innovative initiatives in Germany,” says Asha-Maria Sharma, AI expert at Germany Trade and Invest (GTAI). “And there are industries here in which it is already profitable today to use AI to improve sustainability.”
A Holy Grail
The mere act of recycling — which German households are very familiar with — doesn’t begin to reflect the sophistication that goes into circular processes these days. HolyGrail 2.0, for example, is a technology that adds invisible digital watermarks to plastic packaging with information about the material, such as what it’s made of and what it’s been used to package. For safety reasons, for example,recycled food packaging must be kept separate from chemical packaging.
As plastic waste enters a recycling center, HolyGrail 2.0’s high-resolution cameras, installed at sorting units, decode the watermark to sort the waste into plastics that can be used to remake similar packaging and plastics that can be broken down for other uses.
HolyGrail 2.0, a joint German, Danish and French project, is supported by more than 160 major companies, including the food retailer ALDI, and is spearheaded by the European Brands Association (AIM) and the Alliance to End Plastic Waste, who are now trying to make it work on a large scale.
All these technologies follow one core principle: “The better you know what raw materials have been processed in a product, the better you can extract them and use them again,” says Sharma.
Another side benefit is an increase in company goodwill. “Companies are being given the opportunity to improve their corporate reputations,” Sharma adds. “Because their customers — not just consumers, also other businesses — care about sustainability. They all have compliance guidelines that they have to follow, and those also cover raw materials.”
Doing away with downcycling
The applications for this technology go far beyond food packaging. GTAI electronics expert Martin Mayer points out that German research centers are working on a multitude of applications for the lasers and sensors that make sorting more efficient these days.
One example is laser-induced breakdown spectroscopy (LIBS), a technology currently being developed at the Fraunhofer Institute for Laser Technology (ILT) in Aachen, which has a broad range of applications, including in the automobile industry.
“Germany is already doing quite well in recycling end-of-life vehicles, but there is still room for improvement,” Mayer explains. “For instance, a lot of aluminum used in cars is of relatively high quality, and at the moment some of it is being downcycled — meaning it is not being utilized to its full potential. This laser technology can recognize the exact chemical compositions to prevent these losses of material potential.”
Mayer sees plenty of investment potential for non-German companies involved in these processes. “Together with the use of other 3D sensor technologies and AI to process the data, there are completely new possibilities for the recycling industry that can lay the foundation for the automated separation of materials in the future,” he says. “Photonic companies that can analyze waste, for example, could certainly come and work together with German recycling companies.”
“Recycling is a huge issue in Germany,” Mayer adds. “Several initiatives show there is political support for projects in the circular economy, and their necessity is well recognized. The circumstances here are very advantageous.”
We are the cobots
One company that has a very good idea of what those advantages are is Doosan Robotics. The South Korean giant builds robots and cobots (robots that work directly together with humans) for a variety of industrial applications. In 2024, the company opened its European headquarters in Düsseldorf, where it profits from specialized clusters and research institutes. “Doosan Robotics offers solutions, such as palletizing, sorting and stacking of items, machine tending and welding,” says Katharina Viklenko, GTAI’s Korea Director. “The accuracy and reliability of robots play a major role in reducing waste materials, optimizing resource use, and contributing to greater environmental effectiveness.”
Cobots could be the key to circular processes in industrial settings: Doosan’s self-learning robots are able to capture and interpret immense amounts of sensory data and optimize their movements in cooperation with humans. In the event of environmental pollution or the handling of hazardous materials, for example, robots can support specialists and reduce their exposure to risk. “Germany is one of the five major markets for industrial robots and the largest user of robotics in Europe,” says Viklenko. “The robotics and automation industry is one of the most innovative in the German mechanical engineering sector.”
GTAI worked with the regional investment promotion agency NRW Global Business to advise Doosan on its German expansion. GTAI is particularly focused on expansion projects that promote sustainability.
A circular mindset
But the concept of the circular economy goes much deeper than working out how to recycle waste materials more efficiently; it means adopting a holistic attitude to the entire value chain, all the way to the end of a product’s life cycle. Many companies are now thinking about the final disassembly of a product even as they design it.
This paradigm shift is based on new strategies including modular architecture and smart fasteners that allow parts of machines to be replaced more easily. More and more products now have standardized, interchangeable and recyclable modules to facilitate disassembly.
GTAI’s Peggy Görlitz, senior manager for Mechanical & Electronic Technologies, sums it up neatly: “The concept of a circular economy is ancient, but so much of the technology that can make it happen is very new — and that means plenty of opportunity for investors and businesses alike.”
