KMU-innovativ: resources and the circular economy

Up to 70% funding for high-risk research into recycling, the circular economy and resource efficiency, for SMEs with genuine research ambition.

KMU-innovativ: resources and the circular economy is the BMFTR's research funding for small and medium-sized companies carrying out leading-edge research into resource efficiency, recycling, urban mining, material substitution and sustainable water management. The programme implements the national circular economy strategy (NKWS) and the German raw materials strategy. It funds high-risk R&D as single or joint projects in a two-stage procedure (outline then full application) with deadlines on 15 April and 15 October.

Eligibility

SME status under the EU definition (GBER Annex I): fewer than 250 employees and annual turnover of no more than €50m or a balance sheet total of no more than €43m; linked and partner companies are counted pro rata
The project has to fall substantively within the technology field of resource efficiency, the circular economy, recycling, urban mining, material substitution or sustainable water management
Leading-edge character: the project qualifies as industrial research or experimental development (Art. 25 GBER); merely applying established recycling technology or pure market launch is not eligible
A quantifiable resource or circularity effect has to be evidenced (material savings in tonnes a year, recycling rate in %, degree of substitution of critical raw materials, extension of product life or water savings in m³ a year)
An operating site in Germany
Not an undertaking in difficulty under Art. 2 no. 18 GBER
No outstanding EU recovery order for unlawful aid (Art. 1 (4) (a) GBER)
Evidenced R&D capability in resources, recycling or process engineering, or cooperation with a relevant research institution
No early start: the project may only begin after the funding decision is received (§ 44 BHO, Art. 6 GBER)

Eligible costs

Staff costs: gross pay including the employer's social security contribution, apportioned by R&D involvement (typically process engineers, recycling engineers, materials scientists, processing technicians, chemists)
Materials and consumables: secondary raw materials and residual streams as test material, reagents, solvents for chemical recycling, sensors, small components, consumables for materials analysis
Equipment and plant (depreciation share): pro rata depreciation on sorting plant (NIR, X-ray, sensor-based), shredders, mills, reactors (pyrolysis, solvolysis), separation technology (flotation, magnetic separation), analytics (XRF, ICP-MS, SEM-EDX); for pilot plants above €200,000, coordinate with PtJ early
Travel: project-related business travel under the BRKG (consortium meetings, pilot user visits, specialist conferences, external test campaigns)
External services: accredited materials analysis (DIN EN ISO 17025), material flow analyses (MFA), life cycle assessments (LCA), external sorting and processing trials, patent searches, process simulations, environmental footprinting
IP costs: a pro rata share of patent searches and filings during the project period (project-related)
Project flat rate: 20% on the total grant, exclusively for universities as consortium partners

Common pitfalls

Missing the deadline

Outlines are only assessed on 15 April or 15 October. Miss a deadline and you wait 6 months for the next. easy-Online can be overloaded on the deadline day, so plan to submit 2 to 3 weeks earlier.

Material savings not quantified

Failing to quantify the resource or circularity effect is the most common ground for rejection. The recycling rate, material savings in tonnes a year, the degree of substitution of critical raw materials and a market ramp-up scenario have to be evidenced with comprehensible assumptions (UBA material flow data, Destatis waste statistics, ecoinvent).

The wrong project management agency

Water management projects are submitted not to PtJ Jülich but to PTKA Karlsruhe (contact: Dr Carsten Jobelius, +49 721 608-22358). AI projects belong to the ICT-SWS line (VDI/VDE-IT), climate projects to the KMU-innovativ climate line (DLR-PT). The wrong agency means rejection or delay.

Starting the work early

No project start, no orders for pilot plant, no hiring and no material stream off-take contracts before the funding decision. Breaches can lead to full clawback. Submitting the outline doesn't count as a start.

No BAT or BREF comparison

Outlines without a comparison to best available technology (BAT) and to BREF reference documents are assessed as not meeting the leading-edge standard. The leap in innovation over the state of the art has to be evidenced in quantified terms.

LCA and MFA missing

A missing life cycle and material flow analysis costs points. Trade-offs between the energy required by the recycling process and the material saved have to be addressed openly; even a qualitative LCA concept is better than saying nothing.

SME status not checked

Holdings above 25% by recycling groups, raw materials companies or industrial groups can remove SME status (GBER Annex I). Linked and partner companies are counted pro rata. The wrong SME status means at best large-company rates, or exclusion altogether.

The application process

1 — Clarify the thematic field and the agency. Check whether the project belongs to the resources and circular economy line. If unsure, contact the PtJ hotline (Tilo Rauchhaus, +49 30 20199-3216, t.rauchhaus@ptj.de) or the BMFTR helpline (lotsendienst@bmbf.bund.de). Water management projects belong to PTKA Karlsruhe.
2 — Check SME status and eligibility. Calculate SME status under GBER Annex I (< 250 employees, turnover ≤ €50m or a balance sheet total ≤ €43m), including holdings above 25%. Quantify the resource and circularity effect initially (tonnes a year of material saved, recycling rate, substitution of critical raw materials).
3 — Write and submit the project outline (stage 1). Produce the outline in line with PtJ's outline guidance (normally 10–15 A4 pages). Mandatory elements: the quantified resource and circularity effect, a BAT/BREF comparison, an LCA/MFA concept, a work plan with measurable milestones, and an exploitation plan with market ramp-up. Submit through easy-Online (https://foerderportal.bund.de/easyonline/). Next deadline: 15 October 2026.
4 — Wait for the assessment. A review panel at PtJ (the raw material efficiency and circular economy department) assesses the outline. It takes around 2 to 3 months after the deadline. Positively assessed outlines receive an invitation to submit a full application.
5 — Submit the full application (stage 2). Submit through easy-Online, typically 2 to 3 months after the invitation. Required: the form AZK (companies) or AZA (universities), a detailed project description, an SME declaration (GBER Annex I), an exploitation plan, a resource and circularity impact concept, the last 2 sets of annual accounts, a commercial register extract and CVs of the project leadership. For a consortium: a cooperation agreement with IP provisions and exploitation rights to secondary raw materials.
6 — Receive approval and start the project. Approval takes around 2 to 3 months after the full application. The project may only begin once the funding decision has been received: no purchase of pilot plant, no hiring, no off-take contracts beforehand.

How upsmart helps

We match your project against more than 2,000 programmes and show whether KMU-innovativ resources is the right instrument or whether ZIM, the Forschungszulage or the BMWK's EEW programme fits better. We handle the SME status check (GBER Annex I including chains of holdings), the GBER funding rate calculation and the cumulation boundary with the Forschungszulage. We keep an eye on the 15 April and 15 October deadlines and work out a draft outline ready for assessment; your team decides.

Combining it with other programmes

Combination with the Forschungszulage (FZulG) is possible, but only for different cost blocks: your own contribution and staff costs not covered by KMU-innovativ can be claimed in the FZulG assessment base. No cumulation with ZIM, Horizon Europe cluster 6, the LIFE programme or the BMWK's EEW programme for the same costs. The EEW programme and KfW environmental programmes are intended for the market launch and investment phase; KMU-innovativ resources covers the R&D phase only.

Frequently asked questions

SMEs as defined by the EU can apply: fewer than 250 employees and annual turnover of no more than €50m or a balance sheet total of no more than €43m, with an operating site in Germany. The project has to address resource efficiency, recycling, the circular economy, urban mining, material substitution or sustainable water management, and have leading-edge character. Universities and research institutions can take part as consortium partners.

The grant is up to €500,000 per project (a guide figure). The funding rate for small SMEs is up to 70% for industrial research and up to 45% for experimental development; for medium-sized SMEs up to 60% and 35% respectively. With an effective cooperation with a research institution the rate rises by 15 percentage points. Universities receive up to 100% plus a 20% project flat rate.

The procedure has two stages. First a project outline (normally 10–15 pages) is submitted through the easy-Online portal to Project Management Jülich (PtJ). The deadlines are 15 April and 15 October each year. After a positive assessment (around 2–3 months), selected applicants are invited to submit a full application, also through easy-Online.

KMU-innovativ resources demands a leading-edge research standard and is limited to resource efficiency and the circular economy. ZIM (the central innovation programme for the Mittelstand) is open to all topics and also accepts applied development without a leading-edge claim. KMU-innovativ has two stages with fixed deadlines; ZIM is single-stage with rolling submission. The two programmes cannot be combined for the same costs.

Yes, but only for different cost blocks. Costs funded by KMU-innovativ may not be claimed in the Forschungszulage (FZulG) assessment base. Your own contribution and unfunded staff costs can be used for the Forschungszulage. Careful cost delimitation is mandatory.

Read on in the blog

Funding strategy across the innovation process

Primary sources

BMFTR funding guideline (notice of 2 May 2024)— Federal Ministry of Research, Technology and Space (BMFTR)
PtJ project page — KMU-innovativ resources and the circular economy— Project Management Jülich (PtJ)
FONA topic portal, KMU-innovativ resources— FONA — research for sustainability (BMFTR)
Federal Ministry of Research, Technology and Space — programme page— Federal Ministry of Research, Technology and Space (BMFTR)
Förderdatenbank des Bundes — programme sheet— Federal Ministry for Economic Affairs and Climate Action / Förderdatenbank
easy-Online application portal— Federal Ministry of Education and Research / VDI/VDE Innovation + Technik GmbH

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