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Eco-innovation Action Plan – Context

Rising to the eco-innovation challenge

Rising demand for a better environment has led to an expanding supply of environmentally friendly techniques, products and services in both the industrialised and developing countries. Europe’s first major drive to boost eco-innovation came with the Environmental Technologies Action Plan (ETAP). Adopted in 2004, this Action Plan focused on the further development and use of environmental technologies. Its goal was to tackle the financial, economic and institutional barriers hindering growth of these technologies, as well as to encourage their adoption by the market.

Under ETAP, Europe’s eco-industries have flourished. This sector today has an estimated annual turnover of €227 billion or around 2.2% of the EU’s gross domestic product – outperforming the European aerospace or pharmaceutical industries – and directly employs 3.4 million people. Close to half of European companies active in manufacturing, agriculture, water, and food services have recently eco-innovated and benefited as a result. Clearly there is great potential for eco-innovation to create new business opportunities, jobs and growth in Europe.

The Eco-innovation Action Plan (EcoAP) is a logical successor to the ETAP. Launched by the European Commission in December 2011, the new Action Plan will build on the valuable experience gained to date – especially in promoting eco-innovation’s development and uptake across Europe.

The EcoAP is a significant step forward for eco-innovation, moving the EU beyond green technologies and fostering a comprehensive range of eco-innovative processes, products and services. The ambitious plan will also focus on developing stronger and broader eco-innovation actions across and beyond Europe.

Building on valuable eco-innovation experience

The Europe 2020 strategy will set the course for the EU’s economy for at least the next decade. Focused on smart, sustainable and inclusive growth, this strategy aims to support the transition to a resource-efficient, low-carbon economy. Among its Flagship Initiatives is Innovation Union (IU), designed to turn innovative ideas into products and services that generate growth and jobs.

The EcoAP will build on the IU in three ways. Firstly it will expand the focus of innovation policies towards green technologies and eco-innovation. It will also target specific eco-innovation barriers and opportunities – especially those not covered by more general innovation policies. Lastly, it will highlight the role of environmental policy as a factor for economic growth.

EcoAP also complements three other Flagship Initiatives: Resource efficient Europe, Industrial policy for a globalised era, and Agenda for new skills and jobs. Taken together, these will help to put eco-innovation at the forefront of EU action to reduce pressure on the environment, bridge the gap between innovation and the market, and increase opportunities for the creation of green jobs.

Funding eco-innovation today and tomorrow

The EcoAP is a broad policy framework. It provides directions for eco-innovation policy and funding. Until 2013, the eco-innovative projects will be funded under the EU’s Seventh Framework Programme for Research and Technological Development; the Competitiveness and Innovation Framework Programme (CIP); and LIFE+, as well as structural and cohesion funds.

From 2014 to 2020, the main source of support will be Horizon 2020. This new research and innovation programme will strengthen the role of eco-innovation. It will also provide the financial means for implementing the EcoAP. It has for example set aside €3 160 million for climate action and resource efficiency initiatives, which include eco-innovation. To support eco-innovative businesses, the Commission will develop new financial instruments offering them targeted debt and equity facilities.

Eco-innovation, an opportunity for business

Eco-innovation in companies leads to reduced costs, improves capacity to capture new growth opportunities and enhances their reputation among customers. In recent years, eco-industries have emerged as an important segment of the European economy. This sector has an estimated turnover of around €227 billion, corresponding to 2.2% of EU GDP, and employs 3.4 million people directly. Eco-innovation is therefore a powerful instrument, combining reduced negative impact on the environment with a positive impact on the economy and society.