Together with his brothers Arndt and Wolfgang, Johannes Kirchhoff, 64, runs the Iserlohn-based group of companies of the same name, specializing in body and chassis construction, car conversions and disposal logistics. As classic representatives of that industrial middle class that forms the backbone of the German economy, the Kirchhoffs enjoy high esteem in the guild. The “Handelsblatt” included the brothers in its so-called “Hall of Fame” in 2021.
In addition to his work in the family business (sales: 2.2 billion euros), Johannes Kirchhoff has recently become involved with the Federation of German Industries (BDI), where he has taken over the chairmanship of the “Circular Economy” initiative.
WORLD: Mr. Kirchhoff, you run the Kirchhoff Group together with your brothers, and, as one hears and reads, in an almost suspiciously harmonious way.
Johannes Kirchhoff: (laughs) Yes, my parents managed it well. While they always raised us to be competitive, they also took care of the losers, so there was always balancing justice.
WORLD: What kind of competitions were they?
Kirchhoff: Whoever swims the fastest, runs the fastest, skis the fastest, or completes a cycling course. Football, tennis, sailing and golf were also part of it.
WORLD: Your group of companies suitably consists of three departments. You manage the Ecotec division, which produces garbage trucks and road sweepers, among other things. Disposal and recycling are your profession. Was it given to you by family, or do you have a special soft spot for it?
Kirchhoff: The division did not exist. I organized the acquisition for the family in 1994 and then gave up my position on the board of the metal processing company Edelhoff and “moved” the division into the family business. I am an engineer and later received my doctorate in business administration. The topic of recycling materials has been a matter close to my heart ever since. That’s why I come up with sayings from time to time, for example: Materials are not consumed, but needed. The law of conservation of mass applies, according to which the masses do not change in a closed system – such as the circular economy. That’s why I also advocate that we no longer call consumers consumers, but users. A change in language can increase awareness of the circular economy.
WORLD: In your industry you work a lot with steel, aluminum and plastic. For paper, glass and scrap, the recycling rates are very high at 60 to 80 percent. The situation is different when it comes to plastic: six million tons of plastic waste are generated every year in Germany alone, but less than five percent of this is recycled, mainly burned in cement factories. Why is the rate so bad here?
Kirchhoff: This is a core topic of the BDI Circular Economy initiative, which I have chaired. When it comes to plastic, all players in the value chain must work more closely together. Today we have every opportunity to get the plastic into the cycle, be it through thermal, mechanical or chemical process engineering.
WORLD: Why aren’t these opportunities used?
Kirchhoff: Chemists, sorters and processors must be better networked so that one knows what the other can best use. We also need to connect material suppliers and product manufacturers more closely and ensure that used hair dryer casings, to give just one example, can be regranulated and made into new casings. But that can only work if we keep these plastics in the country. This means that we definitely have to think about an export ban on plastic waste, unless it is for processing and recycling, and above all about bans on landfilling. Germany has had such a ban since 2005, but elsewhere in Europe valuable material is still thrown into landfills. But what is essential is the still missing “design for circularity”, which is why the efforts of the sorters and processors to close cycles have had little success. Products and their materials must be geared towards dismantling and reusability as early as the development phase.
WORLD: Which companies are involved in the BDI initiative? Are the two largest waste producers in the republic also included: BMW and Daimler?
Kirchhoff: We have gypsum manufacturers like Knauf, chemical companies like Covestro, waste disposal companies like Remondis. Our initiative is cross-sectoral, because the circular economy encompasses all sectors. A household appliance not only contains plastic, but also paint, hoses, electronic circuit boards, etc. BMW is there. The people of Munich show a very strong interest in this task. We still have to recruit Daimler. But there are also trading houses, which is particularly important. Because they bring all goods into circulation, and we have to make it as easy as possible for the products from the consumption process to return to the cycle.
WORLD: What does that mean specifically?
Kirchhoff: Think, for example, of how Langnese ice cream is delivered. You load the refrigerated trucks, and the last thing that goes into the truck is the first thing unpacked at the kiosk. There is sophisticated logistics software, artificial intelligence determines the most efficient routes – everything at its finest. But if we look at the disposal side, it looks relatively poor. It’s like this: Everything that goes into the production process comes out again with a time lag. Ergo, I assume that in 30 or maybe 20 years the processing industry will be as big as the utility industry. I claim that in a few years there will be a plant next to the Daimler plant in Sindelfingen that may be even larger and does nothing other than disassemble old Mercedes-Benz again.
WORLD: Why is the circular economy suddenly so important to the BDI, or why is it only now discovering its importance?
Kirchhoff: The realization that we cannot meet the challenges of globalization with a linear economy may certainly have played a role here. If everyone wants the same standard of living as we do in Western Europe, then we need a functioning circular economy, otherwise we will soon reach the limits of material availability. I do not accept the accusation that the industry recognizes the importance of the circular economy too late. On the contrary, German companies were among the first in the world to think in cycles when it came to steel, aluminium, paper and glass. That works perfectly today. The recycling rates, you mentioned it, are very high. If we now get the carbon and plastics into the cycle, electronics, circuit boards and also batteries, then we are already a few meters further.
WORLD: As an industry lobbyist, you mainly do political work in Berlin and Brussels. Companies need planning security and demand from the legislator a regulatory framework for the circular economy, concrete goals, standards and norms. Are these also your key requirements?
Kirchhoff: We tend to be a bit more reserved. Above all, what we do not want is for politicians to set rules without the involvement of industry and science and without social consensus, which afterwards hardly anyone can comply with. Above all, science and politics must work more closely together, and openness to technology must of course be guaranteed so that all market players use the most efficient technologies to serve the circular economy. Another point is the digital product pass …
WORLD: According to the Federal Environment Ministry, it should summarize information about components, materials and chemical substances as well as repairability, spare parts or professional disposal in a data record.
Kirchhoff: Right, and here there is of course the problem that companies that have invented certain material combinations, for example, may find themselves forced to publish them and thus provide the competition with valuable information. On the other hand, a digital product passport is necessary so that the processor can find out what a product is made of and how it can be recycled.
WORLD: How can this conflict of interest be resolved?
Kirchhoff: You could add something like a time delay, for example. If you want to give an industrial company a competitive advantage, you can temporarily block the information that is accessible. If the product is then used for processing after a few years, the necessary information is released.
WORLD: Klaus Töpfer was the last environment minister who fought for higher recycling rates and the yellow bin. Relatively little is remembered about the merits of the eight environment ministers who succeeded him, including well-known names such as Merkel, Trittin, Gabriel, Röttgen and Altmaier. What is the relationship between industry and the current Environment Minister Steffi Lemke and vice versa?
Kirchhoff: Since she only recently took office, I can’t really assess this yet. She visited our Kirchhoff Group booth at IFAT, the world’s leading trade fair for recycling management and environmental technology, in Munich. We introduced her to our hydrogen-powered waste collector and discussed it with her. And I found that factually and professionally very pleasant. I can only urgently recommend those responsible in the companies to enter into dialogue with the Ministry of the Environment and the Federal Environment Agency and to voice their concerns so that the exchange there really gets going. Yes, of course, Klaus Töpfer did a lot of things right, and his successors didn’t dare to do so much, whether it was about the end-of-life vehicle or plastics ordinance, recycling quotas or the obligation of government agencies to give preference to products with a high proportion of recycled material . But that’s old news. We now have to make up for lost time and, above all, set the same framework and guidelines throughout Europe: rules for design for circularity, recycling labels, usage quotas, public sector obligation to give preference to recycling materials, digital product passport…
WORLD: The competitiveness of German companies is already being hampered by unrivaled high energy prices. High recycling requirements would have a similar effect.
Kirchhoff: If we don’t guarantee equal opportunities in Europe, then the German economy will have a problem, indeed. This is the difficult part of our mission. But I also don’t want us to use demarcation lines around the EU to deny entry to any foreign competitors who don’t meet certain criteria. On the contrary, we have to ensure that the Chinese or Indians hopefully adapt our norms.
WORLD: The dream that China or any other country would emulate Germany burst with the energy transition.
Kirchhoff: Economies that ultimately do not accept our standards can no longer supply us. That is the ultima ratio.
WORLD: When it comes to dictating to car manufacturers that a BMW must be made from twelve percent recycled waste products in the future, then Economics Minister Robert Habeck is responsible for that. How close are the contacts, if they exist?
Kirchhoff: Too few, we have to say, and that’s really regrettable. We have tried again and again, but the top German politicians have obviously not yet recognized how important this topic is. I hardly dare to say it, but Scholz and Habeck were very present at the Hanover Fair – but they didn’t make an appearance at the IFAT, which is not only much bigger and better attended. As I said, Steffi Lemke was there, big compliment! But: The circular economy must be anchored in the Ministry of Economic Affairs and set up its own strong department with a state secretary.
WORLD: The circular economy is considered an important tool in the fight against the shortage of raw materials. In practice, however, the industry is struggling with many challenges: the collection volumes are small, the profits are small, and so even the industry, which is suffering from supply bottlenecks, is only slowly daring to approach the circular economy. The Circular Economy Act stipulates that 65 percent of all waste will be recycled by 2035, and the EU wants to introduce minimum quotas in the next few years. What incentives do you think should be put in place to achieve these goals? Couldn’t one simply oblige industry to collect the raw materials it uses and to recycle them?
Kirchhoff: First of all, as I said, we have to ensure that the material that flows into the consumption processes in Germany and Europe also stays in Germany and Europe and that our very well developed mechanical, thermal and chemical processing technologies bring it back into the cycle becomes.
WORLD: From the export nation Germany, many goods go all over the world. Wanting to bring them all back is illusory.
Kirchhoff: Companies that sell their products abroad – I’ll stay with the hair dryer – also have to ensure that they come back later. I don’t see a problem with that either. If a hair dryer manufacturer ships tens of thousands of hair dryers to Africa in a 40-foot container, these hair dryers can be brought back with a small surcharge on the sales price. A different way of thinking is needed. Of course we need a new understanding of commodity pricing. As long as the price does not take into account all so-called external costs, for example such re-imports, I have a possible bias and exploit these raw material deposits in the wrong places on earth. As long as raw materials from the earth are cheaper than circular materials, the circular need has a problem. International European politics must sit down with these countries that have these raw materials, so that all external costs are included in pricing.
WORLD: That sounds like a planned economy and interference in the price sovereignty of companies. Do you really think this is feasible?
Kirchhoff: It’s not a planned economy if the legislator demands that all follow-up costs, including renaturation, have to be factored in when extracting raw materials.
WORLD: There is no law in Germany that obliges companies to publish figures on waste volumes and recycling rates. Even what exactly recycling means is a question of definition. Many companies advertise recyclable packaging, even though it can only be reused under laboratory conditions. As is well known, opportunism is part of being an entrepreneur. People hoist the rainbow flag for image reasons or declare themselves to be environmentalists.
Kirchhoff: Those are two important points. Our initiative is working on a definition of terms, a glossary, so that we really mean the same thing when we talk about recycling. The second point is measurability. We need microeconomic measurability at company level and macroeconomic measurability: When is something actually ready for material processing or repair? Or when can I say that I have a re-use? We will define all of this in our glossary.
“Everything on shares” is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with the financial journalists from WELT. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.
