Europe needs more growth and jobs but these cannot come at the expense of the environment. That is why an effective industrial policy needs to embrace resource efficiency. Two recent studies provide a valuable insight into the progress that has been made in Europe, and the opportunities that exist for future sustainable growth and job creation.
The EU aims to encourage European industries to continually improve their environmental performance and to deliver innovative solutions to environmental challenges. To that end, a great deal of effort has been spent on ensuring not only that Europe is on its way towards a resource-efficient future, but also that businesses are in a position to take full advantage of the opportunities presented by the ongoing transition to a more sustainable, resource-efficient and low-carbon economy.
Two recent research studies funded by the European Commission under the Competitiveness and Innovation Framework Programme (CIP) provide valuable insights on the overall environmental performance of European industry in recent years, and highlight the potential for further improvement. The Study on the Competitiveness of European Companies and Resource Efficiency looked at resource-efficiency performance, the obstacles businesses encounter and the opportunities that exist. The Report on EU industry in a sustainable growth context meanwhile focused on the overall eco-performance of EU industry over the last 10 to 20 years.
Both studies confirm that European industries have substantially increased their resource-efficiency and environmental performance over the past few years. Significant decoupling of economic growth and environmental impact has already been achieved and is continuing. Industrial energy intensity, for example, has improved by more than 20% since 1995, while industrial greenhouse gas emissions and waste generation are also much reduced.
Compliance with environmental regulations is perceived as being a strong driver towards achieving resource efficiency, but it is not the only one: industry representatives consulted in the studies also acknowledged that resource efficiency is an important and valid strategy for cost reduction, for being less vulnerable to imports of scarce resources and potentially for increasing competitiveness.
Indeed, industry is a core driving force behind the technical and technological innovation required for greater sustainability and resource efficiency. Although eco-innovation remains under-exploited, public and private investment in this area in the EU has continuously increased over the last 10 to 20 years. So has environmental protection expenditure, which totalled over €50 billion in 2006.
Furthermore, the eco-industries sector has grown to become a sector equivalent (in terms of employment) to chemicals or electrical and optical equipment. Annual employment growth between 1999 and 2008 has averaged approximately 180 000 jobs per year in this sector, representing over 7% annual growth, and in 2008 it was estimated to employ 3.4 million people across the EU.
Ways of further improving resource efficiency are also discussed in the reports. The potential to develop new sustainable products and use alternative materials is identified, as is the possibility of developing new business models such as chemical leasing. This business model ensures that the producer not only provides the chemical materials, but also the know-how and expertise on how to reduce chemical consumption and how to optimise the conditions of use. Encouraging the use of waste as a potential resource through better information, product design and the sharing of good practice is highlighted, too.
However, it is also recognised that resource-efficiency measures usually require large upfront investments, which may not be affordable to companies, particularly SMEs. The problem is even more acute in the currently difficult economic situation, which makes access to finance more difficult. Both reports call for more action to be taken at the EU level in this regard.
The reports are closely linked to the objectives laid out in the Europe 2020 Flagship Industrial Policy Communication, which set out a new framework to promote the modernisation of Europe’s industrial base and the transition to a low-carbon resource-efficient economy. The Resource Efficiency flagship also falls within the Europe 2020 strategy for sustainable, smart and inclusive growth.
The Industrial Policy Communication aims to mobilise the full range of EU and Member State policies to ensure that the EU remains an attractive place for business investment and job creation, not least in the green economy. It outlines a more focused industrial innovation policy to promote the wide deployment of new key enabling and environmental technologies and addresses access to essential raw materials. The EU is also working to promote growth and resource efficiency through the full co-operation and input of stakeholders.
Both reports underline the point that improved sustainability and resource efficiency are not only crucial to protecting the environment, but also beneficial to industry, given the fact that they open up new market opportunities. The reports highlight a series of challenges that need to be tackled in order to harness further potential for growth and resource efficiency. As long as businesses are able to perceive and realise these benefits, and policy-making supports them with appropriate framework conditions, then Europe’s resource-efficient future looks bright. A forthcoming revision of the sustainable consumption, production and industrial policy action plan will address many of these issues.
Glass-making is a high-temperature, energy- intensive process. The energy used in production is provided either directly by the combustion of fossil fuels, or by electrical heating or by a combination of both techniques.
Recycled glass can lead to substantial reductions in energy consumption. For every 10% of recycled glass used in the production process, a producer can save between 2 to 3% energy, compared to using raw materials. Furthermore, glass can be 100% recycled, without any impact on the quality of the material.
The Netherlands has set the standard for glass recycling, reaching 92% in 2009. The positive attitude of Dutch citizens towards recycling, and stimulating marketing campaigns to increase awareness are just two of the reasons behind this success. There are also incentives for companies and citizens to recycle.
Cement is one of the most important building materials. Some 3 billion tonnes were produced globally in 2009, of which approximately 7% were produced in the EU. Cement is also a resource-intensive industry, and is responsible for significant CO2 emissions. In fact, energy costs and CO2 emissions permit costs amount to 40% of the cost of cement production.
However, the industry is working towards more sustainable methods of production. Waste is increasingly being used as a substitute for primary materials and as fuel for energy generation, ensuring that both natural primary materials and fuels are preserved and CO2 emissions are reduced.
These changes are producing results. In 2006, an estimated 5 million tonnes of coal were saved by using alternative fuels as fossil fuel substitutes, accounting for 18% of the energy requirements of the EU cement industry. This substitution rate is much higher than in other parts of the world.
‘Sustainable Industrial Policy’ Unit
Directorate-General for Enterprise and Industry