Eurostat, the statistical office of the European Union

E2: Environmental statistics and accounts; sustainable development

5 r. Alphonse Weicker - bâtim. Joseph Bech, 2721 Luxembourg

Environmental protection expenditure accounts (EPEA) describe, in a way consistent with the European System of Accounts (ESA), transactions related to prevention, reduction and elimination of pollution and of any other degradation of the environment.

The key aggregate produced based on the EPEA data is national expenditure on environmental protection (‘NEEP’). It measures the resources devoted by resident units to protecting the natural environment. It is calculated as a sum of uses of environmental protection (EP) services by resident units, gross fixed capital formation (GFCF) for EP activities, and net transfers to the rest of the world for EP.

Under Regulation (EU) 691/2011(Annex IV), as amended on 19 November 2021 by the Commission delegated regulation 2022/125, the reporting of EPEA data according to the new requirements is mandatory from 2018-onwards. EPEA data are collected on an annual basis. 

EPEA data are reported by the Member States, EFTA countries and candidate countries.

Eurostat estimates the missing values and calculates the EU aggregates.

The datasets use the following dimensions (not all dimensions are relevant in all tables):

1) Environmental economic characteristics: see section 3.4. below.

2) Geopolitical entity (GEO): EU Member States, EFTA Countries, Candidate Countries, Potential Candidate Countries.

3) Classification of environmental protection activities (CEPA). The following categories exist:

CEPA 1 — Protection of ambient air and climate

   CEPA 1.1.2 - 1.2.2 — (of which CEPA1) Protection of climate and ozone layer (climate change)

CEPA 2 — Wastewater management

CEPA 3 — Waste management

CEPA 4 — Protection and remediation of soil, groundwater and surface water

CEPA 5 — Noise and vibration abatement

CEPA 6 — Protection of biodiversity and landscapes

CEPA 7 — Protection against radiation

CEPA 8 — Environmental research and development

CEPA 9 — Other environmental protection activities.

Groupings of categories are also used according to EPEA mandatory data compilation and  reporting.

4) Classification of economic activities - NACE rev.2 (NACE_R2): Data are aggregated for publication with special groupings divisions (2-digits of the classification) relevant for EPEA.

5) Sector: Institutional sector as defined in SEEA CF 2012 and ESA2010, with the following groupings: corporations, general government and non-profit institutions serving households, households, rest of the world (as beneficiary, or origin, of transfers for environmental protection).

6) Period of time (TIME): Data are annual.

7) Unit (UNIT): Millions of euros, million units of national currency.

The data set covers the entire national economy as defined in National Accounts (ESA 2010, paragraph 2.04). The institutional sectors in ESA 2010 are non-financial corporations (sector S11), financial corporations (sector S12), general government (sector S13), households, NPISH (sector S15), and the rest of the world (sector S2). EPEA further groups these sectors for simplification. This is relevant because the groupings of sectors for EPEA determine the data compilation and reporting.

In EPEA the following sectors are distinguished:

• general government and NPISH (S13 and S15) as producers and consumers of EP services;
• corporations (S11 and S12) as producers and consumers of EP services. This sector includes in particular specialist and secondary market producers of EP services (i.e. the units of the corporations sector whose principal activity is the production of EP services, classified primarily to NACE Rev. 2 divisions 37, 38.1, 38.2 and 39, and units for which production of EP services is a secondary activity). EPEA accounts also provide information on the ancillary activities of corporations other than the specialist producers (see 3.4 below);
• households, as consumers of EP services. Households as producers of EP market goods and services or goods and services for exclusively own final use are classified together with corporations;
• the rest of the world as beneficiary, or origin, of transfers for environmental protection. The institutions of the EU and international organisations are included in EPEA as part of the rest of the world sector.

Environmental protection (EP) includes all activities and actions which have as their main purpose the prevention, reduction and elimination of pollution and of any other degradation of the environment. Those activities and actions include all measures taken in order to restore the environment after it has been degraded. Activities which, while beneficial to the environment, primarily satisfy the technical needs or the internal requirements for hygiene or safety and security of an enterprise or other institution are excluded from this definition.

The mandatory reporting  covers the following characteristics which are defined in accordance with ESA:

• output of environmental protection services. Market output, non-market output and output of ancillary activities are distinguished,
• intermediate consumption of environmental protection services,
• intermediate consumption of environmental protection services for production of environmental protection services,
• imports and exports of environmental protection services,
• valued added tax (VAT) and other taxes less subsidies on products on environmental protection services,
• gross fixed capital formation and acquisitions less disposals of non-financial non-produced assets for the production of environmental protection services,
• final consumption of environmental protection services,
• environmental protection transfers (received/paid).

A comprehensive methodological guidance is provided in the Eurostat's EPEA handbook as well as in ESA2010 and SEEA CF 2012 (chapter 4).

EPEA uses the same statistical units as national accounts.

The building block is the institutional unit which is defined as “an economic entity characterised by decision-making autonomy (ESA 2010, paragraph 2.12). Institutional units are grouped in institutional sectors.

Environmental protection expenditure encompasses the economic resources devoted by resident units to environmental protection. Resident units are defined as in ESA 2010.

EU member states.

Data are also available for some EFTA countries, EU candidate countries and potential candidates.

Under Commission delegated regulation 2022/125 data are collected from 2014 onwards.

Mandatory data reporting at the end of year n covers the reference period 2018 to n-2.

Voluntary data reporting covers early estimates for reference year n-1 and the period before 2018.

The EU time series are compiled by Eurostat each year (n), covering the period from year 2018 until year n-1. Back data are currently available for environmental protection investments, as a result of a time series reconciliation process, and covers the period from year 2006 until year n-1.

Not applicable.

Millions of euros, million units of national currency.

The data refer to the calendar year.

The scope of EPEA and obligation for the EU Member States to report the data are set out in Regulation (EU) N° 691/2011 on European environmental economic accounts (EEEA), amended by COMMISSION DELEGATED REGULATION (EU) 2022/125. EEEA currently cover six modules (air emissions accounts, environmentally related taxes by economic activity, economy-wide material flow accounts, environmental protection expenditure accounts, environmental goods and services sector accounts, and physical energy flow accounts).

EEEA follow the internationally agreed concepts and definitions set out in the System of Environmental Economic Accounting 2012 – Central Framework. The SEEA CF is the international standard for environmental-economic accounting. It provides a multi-purpose conceptual framework for a systematic description and measurement of interactions between the environment and the economy.

EEEA present environmental information in a way that is compatible with macroeconomic statistics (National Accounts).

Not applicable.

Regulation (EC) No 223/2009 on European statistics (recital 24 and Article 20(4)) of 11 March 2009 (OJ L 87, p. 164), stipulates the need to establish common principles and guidelines ensuring the confidentiality of data used for the production of European statistics and the access to those confidential data with due account for technical developments and the requirements of users in a democratic society.

The European Statistics Code of Practice provides further conditions to be respected by statistical offices in regard to statistical confidentiality (Principle 5).

Eurostat applies to EPEA data the confidentiality policy as described in Regulation (EC) No 223/2009. In case data are confidential but could be derived from the reported totals or sub-totals, Eurostat applies secondary confidentiality to ensure data remain confidential. Confidential data are not disclosed by Eurostat. Access to confidential data for scientific purposes may be granted (after requesting authorisation from the respective country) on basis of Commission Regulations 557/2013 and 223/2009.

Confidential data are flagged "confidential" (flag "c") and not published.

Aggregates compiled based on confidential data respect Eurostat's confidentiality rules.

Data are published once the validation procedure has been completed.

The release calendar can be consulted on Eurostat's website.

Not applicable.

In line with the Community legal framework and the European Statistics Code of Practice (Principle 6 on impartiality and objectivity, Principle 13 on timeliness and punctuality, and Principle 15 on accessibility and clarity), EPEA data that meet the quality standards, including relevant metadata, are made available to users. Eurostat disseminates European statistics, including EPEA data, on its website (see section 10.3 - 'Dissemination format') in an objective, professional, and transparent manner in which all users are treated equitably. Eurostat maintains professional independence.

The detailed arrangements are governed by the Eurostat protocol on impartial access to Eurostat data for users.

Data are disseminated at least once a year.

Eurostat publishes a News article once a year, after data for a new reference year and EU27 estimates have become available.

The News articles by statistical themes are available here

Eurostat publishes EPEA data in an online database and related analyses in Statistics Explained articles.

For further reference:

• Statistics Explained: Environmental protection expenditure accounts(update planned for May)
• Statistics Explained: Investments in environmental protection (update planned for September)
• Database on environmental protection expenditure

Eurostat's public online database is available free of charge at the following link: https://ec.europa.eu/eurostat/web/main/data/database

Data on EPEA can be found under the following identifiers: "Environment and energy", "Environment", "Environmental protection expenditure", "Environmental protection expenditure accounts" (env_ac_epea). 

Not applicable (Eurostat collects EPEA data from countries at an aggregated level).

In addition to News item (see section 10.1) and Statistics Explained articles and other publications (see section 10.2), information on EPEA may be posted on Facebook and Twitter.

Eurostat's Facebook messages can be accessed here: EurostatStatistics

Eurostat's Twitter messages can be accessed here: @EU_Eurostat

EPEA handbook and EPEA questionnaire can be downloaded from the Eurostat's website.

Guidance and documentation on the methodology, compilation and reporting of EPEA data can be found here:

1. Environmental protection expenditure accounts — Handbook, 2017 edition

2. CEPA and CReMA explanatory notes (version December 2020)

3. EPEA intermediate consumption – Webinar Sept 2023

4. 2023 EPEA data collection - National Expenditure on Environmental Protection: estimates by CEPA, methodological note, draft September 2023

5. Summary of EPEA quality report submitted annually by countries to Eurostat – available on CIRCABC

Concepts and recording rules for EPEA accounts follow internationally agreed definitions set out in the SEEA CF 2012 and present information in a way that is compatible with National Accounts (European System of Accounts, ESA 2010).

Further information (including the questionnaires for the data collection) is available on Eurostat's website: http://ec.europa.eu/eurostat/web/environment/methodology.

Under Regulation EU N° 691/2011, article 7, the Member States and EFTA countries are obliged to transmit Quality Reports alongside their returns to EPEA questionnaire.

Eurostat publishes the full EPEA quality reports and a summary for each reporting round on CIRCABC.

Quality assurance and documentation is a joint responsibility of Eurostat and each reporting country.

Eurostat published in 2017 the EPEA Handbook to assist countries in the compilation of EPEA data, ensuring the comparability of the concepts, compilation methods and reporting convention across the EU Member States.

To verify the quality of data sources and compilation methods, Eurostat requests that countries submit EPEA quality reports together with the data questionnaires. The EPEA quality reports include information about the main data sources, the exhaustiveness and coverage of data, data revisions policy, checks on the quality of the data collected to compile EPEA.

Apart from that, Eurostat has put in place an extensive procedure to validate the data received from countries. The validation tools examine the following aspects:

- completeness and formatting of data and footnotes;

- internal consistency of data (e.g. totals matching the sum of subcomponents, adherence to accounting rules);

- consistency over time of time series;

- the balance of supply side and demand side of environmental protection services;

- consistency with related statistics, mainly National Accounts.

Validation procedures, estimation of missing statistical data (gap-filling) are in place.

For each data reporting round, Eurostat compiles a progress report, which is presented to the Working Group on Monetary Environmental Statistics and Accounts (MESA WG), encompassing representatives of all Member States, other reporting countries, Eurostat and other stakeholders.

Specific quality issues detected during the validation process, follow-up actions to ensure further quality improvements, changes to the data reporting templates and methodological guidance are discussed by the MESA WG. Agreed improvement measures are implemented for the subsequent reporting rounds.

Environmental protection expenditure accounts framework has been designed to measure the effort made by the society for the prevention, reduction and elimination of pollution and of any other degradation of the environment. These accounts contribute directly or indirectly to the Union's policy priorities on environmental protection, resource management and green growth by providing important information on the production and the use of environmental protection services.

Environmental protection expenditure data are also used in the process of compilation the Environmental Goods and Services Sector (EGSS) accounts providing indicators relevant to policy initiatives about the green economy and green jobs.

The policy context is set here: http://ec.europa.eu/eurostat/web/environment/overview/policy-context

There are no systematic studies of user satisfaction. Eurostat has regular hearings with European policymakers and contacts with the research community and other stakeholders to monitor the relevance of the statistics produced and identify new priorities.

From 2018 onwards, the reporting of EPEA data is mandatory under Regulation (EU) N° 691/2011 as amended by Commission delegated regulation 2022/125.

Reporting for years prior to 2018 is voluntary and length of time series vary across countries.

The vast majority of Member States are in the position to report a complete set of mandatory data. If certain environmental activities are assumed to be negligible but precise data are not available yet, countries are encouraged to report '0' as the best estimate and flag the data accordingly. Missing mandatory data are gap-filled to estimate EU27 aggregates.

See point 11.1 above.

Eurostat assesses the accuracy of national data by systematically applying validation checks to all EPEA data reported by countries.

The overall accuracy is considered to be good. 

Not applicable.

Not applicable.

Deadline for the reporting of EPEA data and quality reports is the 31st December.

Eurostat publishes the data once the validation process has been completed.

Not applicable.

The comparability across countries of EPEA accounts is ensured by the common conceptual framework for environmental protection expenditure updated and published in 2017. The adoption of common statistical concepts and definitions, as defined in the Eurostat handbook, and the checks by Eurostat enhance the comparability between countries.

Moreover the new mandatory requirements established in the Commission delegated regulation 2022/125 enhanced the cross country comparability by introducing the full coverage in terms of environmental domains (CEPA) for all institutional sector. 

Almost all EU Member States are compliant with mandatory reporting requirements according to Commission delegated regulation 2022/125. This ensure a good comparability over time for mandatory years and mandatory characteristics.

Time-series checks applied during the validation aim to assure good time-series consistency of reporting data. The break-in-the-time series flag (b) indicates instances where time-series consistency could not be assured. Countries are encouraged to revise the data to achieve good consistency across time. 

Comparability over time at country level is still limited for years prior to 2014 and for voluntary reporting items.

Environmental protection expenditure accounts have the same system boundaries as European System of Accounts (ESA).

This ensures a high level of coherence with the core national accounts.

The data reported by countries are internally coherent (totals are equal to the sum of the breakdowns). Case where totals exceed the sum of their breakdowns can be explained by non-availability of data at a more detailed level.

Not available.

Revision policy is set at the level of national authorities. The complete time-series of EPEA data can be revised as consequence of changes in the methodology or updates of data sources used for the compilation or any other major benchmark revisions.

Every year Eurostat publishes the complete time series available for a given country.

Eurostat gap-filling procedure and estimates for the EU total are based on data provided by countries, consequently revisions of time series provided by countries lead also to revisions of EU estimates.

The published data should be regarded as final, unless otherwise stated.

In principle data are not revised in between annual releases; however, data revisions may occur at any time.

The compilation of monetary-environmental accounts builds in many countries upon statistics that are primarily collected for other purposes.

For the compilation of environmental protection expenditure accounts data sources used are  national accounts (production and generation of income accounts; GFCF by NACE, supply and use tables; data based on the classification of functions of government), structural business statistics, business register, balance of payments, household budget surveys.

In some cases, customised EPEA surveys have been put in place.

Data are collected on an annual basis.

The scope and frequency of EPEA data collection are set out under Regulation (EC) No. 691/2011 on European environmental economic accounts, as amended by the Commission delegated regulation 2022/125..

EPEA questionnaire seeks also more detailed information on breakdowns by environmental activity and a number of additional variables that are reported on a voluntary basis.

Eurostat undertakes a number of standard accuracy and plausibility checks and discusses the identified issues with the data compilers. The validation process is duly documented in country validation reports.

Eurostat carries out additional quality controls in its internal database when data are uploaded for dissemination.

For additional information on data validation please see: http://ec.europa.eu/eurostat/data/data-validation and point 11.1.

Data sources, methods and compilation techniques are country specific, but should be used in a way compliant with the definitions and accounting rules described in the EPEA handbook.

Mandatory variables are listed under point 3.4. For these characteristics, data shall be reported in a breakdown by type of producers/consumers of environmental protection services as defined in point 3.3, and by domains of the classification of environmental protection activities (CEPA).

Missing statistical information for mandatory data reporting is estimated by Eurostat through an ad hoc gap-filling procedure, based on different methods according to data availability. Data annually submitted by countries and validated by Eurostat are used in the gap-filling procedure. The main data sources to gap-fill missing data are data on General Government expenditure by function (COFOG - UNSD classification of functions of government, replicated in ESA201) and by type of transaction and national accounts data. Gap filled data are used to calculate EU27 estimates.  Eurostat also produce estimates for EU aggregates for two additional years after the last reference year.

Data are estimated by country and EU aggregates estimates are produced by summing up the transmitted or estimated country data.

Eurostat estimates the EU aggregates for the following variables:

    · Output (market and non-market) of EP services by general government and NPISH;
    · Market output of EP services by specialist producers;
    · Ancillary EP output by corporations other than specialist producers;
    · Gross fixed capital formation plus net acquisition of non-produced non-financial assets for
    · Final consumption of EP services by general government;
    · Final consumption of EP services by households;
    · Intermediate consumption of EP services;
    · Environmental protection transfers to / from Rest of the World.

Estimated country data are not disseminated but only included in the calculation of EU aggregates. Only country data provided in the EPEA questionnaire are disseminated, once the validation procedure has been completed.

Due to the estimated country data included in the calculation of EU aggregates, the sum of data published for Member States may not match with EU estimates.

EU-27 aggregates based on data collected according to the new mandatory requirements of the Commission delegated regulation 2022/125 are currently available from 2018, but for investments by institutional sector. Back data are available for environmental protection investments, as a result of a time series reconciliation process, and covers the period from year 2006 onwards.

Not applicable.

No further comment.