Circular economy: the construction sector needs a new legal framework

The construction sector is ready for the circular economy, but without a practicable legal framework, its commitment remains at a standstill. What is missing are clear and practicable rules, for example in the Substitute Building Materials Ordinance, the tendering process for secondary raw materials and the long overdue procedure for ending the waste status of mineral construction and demolition waste.

If Germany wants to achieve the goal of climate neutrality by 2045, the construction industry also needs to undergo a consistent transformation towards a sustainable circular economy. And even beyond the climate targets, action is unavoidable: resources are becoming scarce and the use of secondary raw materials is becoming a prerequisite for the future viability of construction.

Two areas of regulation in particular are currently presenting the construction industry with considerable and almost insurmountable challenges in practice. They therefore urgently need to be adapted.

Inconsistent enforcement of the Substitute Building Materials Ordinance prevents recycling

For example, the Substitute Building Materials Ordinance (EBV) was intended to create uniform and legally binding requirements for the use of substitute building materials throughout Germany. In practice, however, it can be seen that the regulations are implemented differently in some cases in the 16 federal states, especially as several federal states have published enforcement recommendations and decrees on the EBV that differ considerably. Even the FAQs on the Federal-Länder Working Group on Waste (LAGA) cannot hide the fact that there is room for interpretation, which is also used differently in the application in the federal states. In addition, the new analysis methods should be mentioned, which deviate considerably from those recognized in practice according to LAGA Communication M 20 and present companies with considerable challenges in practice, especially since LAGA M 20 has been replaced by the introduction of the EBV. In practice, this also leads to mineral construction and demolition waste being disposed of in landfills and not being recycled into secondary raw materials, as is the objective of the EBV.

End-of-waste regulation should regulate the classification of mineral secondary raw materials

For mineral secondary raw materials, the question of whether they are considered waste or can be classified as products continues to be of great importance for acceptance. Product status can counteract existing prejudices and obstacles on the part of clients and the elimination of specific obligations under waste legislation can simplify use, for example during transportation or interim storage. Among other things, the current coalition agreement announces the long-planned introduction of an end-of-waste regulation in the Substitute Building Materials Ordinance for the construction sector. This is also imperative and necessary in the near future in order to implement the objectives associated with the EBV. When drafting the ordinance, all mineral construction and demolition waste should be discussed with an open mind as to whether and, if so, under what conditions it can reach the end of its waste status. Numerous procedures for classifying waste as a by-product and not as waste, as well as the conditions for the end of waste status, have shown that it is not only the material properties per se that are important in the abstract, but also the specific type of use. In this respect, it is recognized in practice and also in case law, for example by the European Court of Justice, that substances or objects can be classified as by-products or reach the end of waste status even if they would be hazardous waste under waste legislation due to abstract material properties. As a result, a substance or object can be hazardous waste, but under certain conditions it can also be classified as a by-product or reach the end of its waste status. And this open-ended approach must now be implemented as part of the swift adoption of an end-of-waste ordinance for mineral construction and demolition waste.

Tendering practice for secondary raw materials in the construction sector needs to be adapted

Mineral secondary raw materials are still excluded from public tenders. This is despite the fact that Section 45 (1) of the Closed Substance Cycle Waste Management Act (KrWG) contains the basic obligation of the aforementioned federal agencies to contribute to the promotion of the circular economy and the conservation of natural resources and to ensure the environmentally sound disposal of waste through their conduct. In this respect, the federal agencies and the corporations, institutions and foundations under public law subject to federal supervision are assigned a role model function for achieving the objectives of the KrWG. In addition, § 45 Para. 2 KrWG contains a special regulation that specifies this very general obligation to promote. According to this, the obligated parties pursuant to § 45 Para. 1 KrWG must give preference to certain products in the design of work processes, in the procurement or use of materials and consumer goods, in construction projects and other contracts, taking into account §§ 6 and 8 KrWG in particular.

Prioritization obligation only applies under certain conditions

However, this does not give rise to legal claims by third parties. The obligation to prioritize also only applies if the products are suitable for the intended purpose, their procurement or use does not result in unreasonable additional costs, sufficient competition is ensured and no other legal provisions conflict with this. Insofar as provisions of public procurement law are applicable, these must be observed. According to the explanatory memorandum to the law, the term “product” is intended to cover all materials and objects that are not or are no longer waste. It therefore covers not only intentionally manufactured products, but also by-products that meet the requirements of Section 4 KrWG and substances and objects whose waste status has ended in accordance with Section 5 KrWG.

As a result, the regulations, which require interpretation, mean that mineral secondary raw materials are not accepted in the context of tenders. In addition to amendments to Section 45 KrWG, the creation of a uniform national regulation on the end of waste status would be more than expedient here in order to create the conditions for the existence of a product, which is a cornerstone of the applicability of Section 45 (2) KrWG.

Legal changes would enable a circular economy in the construction sector

A circular economy can only succeed in the construction sector if a practicable legal framework is created. The regulations in Section 45 KrWG are particularly suitable for this. In addition, the procedure to end the waste status of mineral construction and demolition waste, which has been announced for some time, should be initiated in a timely manner in order to create a clear, uniform national regulation for the classification of materials as secondary raw materials. These should then be given mandatory preference as a product in tenders. When drafting such a regulation, all possible waste fractions should be discussed urgently and openly in order to seize the opportunity to put the regulation on a broad basis. In addition to the abstract material properties, the type of use must also be taken into account in order not to exclude sensible and legally permissible uses from the outset. And time is of the essence here, as the current regulations, for example in the EBV, are in urgent and compelling need of reform. Without such prompt changes to the existing framework conditions, the goal of climate neutrality cannot be achieved.