After months of wrangling, the black-red coalition has apparently reached an agreement on the planned action program for the circular economy, which business and waste disposal associations are impatiently waiting for. The FAZ has a draft for an “Action Program of the Federal Government to Implement the National Circular Economy Strategy” dated May 21, 2026. The cabinet will reportedly decide on the action program next Wednesday.
The program is a list of priorities with the aim of accelerating the transformation from a linear to a circular economy. In concrete terms, this means using materials sparingly, preserving the value of raw materials and products for as long as possible and avoiding waste.
The federal government wants to set priorities in twelve areas: These include economic development, public procurement, a digitalization initiative to close material cycles, securing critical raw materials and the increased use of plastic recyclates. The measures are to be implemented by the end of 2027.
Funding of more than half a billion euros
To promote investments and innovations, the federal government wants to launch a “Future Circular Economy” program in the Climate and Transformation Fund. A total of 260 million euros will be made available for this “in the coming years,” according to the draft.
In addition, as part of the 2026 climate protection program, additional funds totaling 305 million euros are to be made available for the financial years 2027 to 2030 in order to reduce greenhouse gas emissions through economical use of materials and reuse.
The Federal Environment Minister had the “Future Circular Economy” funding program Carsten Schneider (SPD) announced last autumn. The cabinet decision on the circular economy action program was originally planned for the turn of the year.
However, differences of opinion stood in the way of the schedule. Resistance to Schneider’s plans reportedly came primarily from the CDU-led houses of Katherina Reiche (economics) and Patrick Schnieder (transport).
Bone of contention public procurement
At the beginning of May, Environment Minister Schneider commented on the controversy in his opening speech at the trade fair for environmental technologies in Munich. The question is how much the public sector will act on the demand side for recycled products.
“I would like the lead market to receive greater support and for the public sector to give priority to recycling products and give them preferential treatment in tenders than before – especially when it comes to large companies,” said the minister, setting out his goals for the action program.
Regarding public procurement, the draft now states that the annual order volume for circular products will be “continuously increased” across all companies with majority federal participation and that regulatory obstacles will be reduced in a timely manner. The respective company size and the principle of proportionality should be taken into account. The principle of economic efficiency will also be adhered to. No specific numbers are given.
The federal government wants to use its shareholder status and influence in the supervisory bodies of companies with majority federal participation so that public procurement is used more for the circular economy. In addition, public administration should increasingly purchase used and refurbished products, such as furniture and IT equipment. Guidelines should be developed for this purpose.
Green politician Gesenhues: Missed opportunity
According to the Ministry of the Environment, the public procurement volume is in the three-digit billion range per year. The Federation of German Industries (BDI) as well as waste disposal and environmental associations have called on the federal government to establish binding recyclate quotas and circularity criteria for public procurement in order to increase the potential of the circular economy.
According to Jan-Niclas Gesenhues, environmental policy spokesman for the Greens in the Bundestag, the draft action program does not meet expectations.
“It is particularly bitter that clear guidelines for public procurement have been watered down and cut down,” Gesenhues told the FAZ. This is a missed opportunity and weakens the effectiveness of the program. The public sector has enormous market power. The state could use it to specifically strengthen companies that consistently rely on a circular economy: “Instead, the wording remains vague. With this course, the federal government is leaving sustainable business models out in the cold,” complained the Green politician. The action program as a whole is a “PR show without substance”.
More raw material sovereignty for the German economy
From Gesenhues’ perspective, the federal government should also set priorities for reusable goods, repairs and sustainable consumption, which are also part of the national circular economy strategy of 2024. Unlike the first draft of the action program, the topic of “Making online retail more sustainable” is now no longer listed as one of the twelve prioritized measures.
The new goal is to strengthen the “raw materials sovereignty” of the German economy. The federal government wants to combine measures to save new raw materials with those for increased recycling in order to achieve the European target of covering at least 25 percent of the annual consumption of critical raw materials through recycling by 2030.
