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Environmental goods and services sector (env_egs)

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National Reference Metadata in Single Integrated Metadata Structure (SIMS)

Compiling agency: Federal Planning Bureau

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The environmental goods and services sector (EGSS) accounts report on an economic sector that generates goods and services produced for environmental protection or the management of natural resources.

Products for environmental protection prevent, reduce and eliminate pollution or any other degradation of the environment. Examples are electric vehicles, catalysts and filters to decrease pollutant emissions, wastewater and waste treatment services, noise insulation works or restoration of degraded habitats.

Products for resource management safeguard the stock of natural resources against depletion. Examples are renewable energy production, energy-efficient and passive buildings, seawater desalinization or rainwater recovery, and materials recovery.

EGSS accounts provide data on output and export of environmental goods and services and on the value added of and employment in the environmental goods and services sector.

EGSS data are compiled following the statistical concepts and definitions set out in the UN System of Environmental-Economic Accounting 2012 – Central Framework.

31 October 2024

EGSS has the same system boundaries as the European System of Accounts (ESA 2010) and consists of all environmental products within this production boundary. ESA defines production as the activity carried out under the control and responsibility of an institutional unit that uses input of labour, capital, goods and services to produce output of goods and services.

Only goods and services produced for environmental purposes are included in the scope of the environmental goods and services sector.

'Environmental purpose' means that a good or service helps either 1) preventing, reducing and eliminating pollution and any other degradation of the environment or 2) preserving and maintaining the stock of natural resources and hence safeguarding against depletion.

The EGSS statistics aim at compiling data for the following economic variables:

Output: consists of products that become available for use outside of the producer unit, any goods and services produced for own final use and goods that remain in the inventories at the end of the period in which they are produced. Apart from market output, output for own final use and non-market output, EGSS statistics also include ancillary output, comprising output intended for use within an enterprise.

Market output is to be valued at basic prices, that is, the prices receivable by the producer from the purchaser minus taxes and plus subsidies on products.
Output for own final use is to be valued at basic prices of similar products sold on the market or by the total costs of production.
Non-market output is to be estimated by the total costs of production.
Ancillary output is measured as a total of recurrent production costs (such as intermediate consumption, compensation of employees and consumption of fixed capital) incurred by enterprises to: 1) reduce environmental pressures arising from their production process or 2) produce environmental goods or services not intended for use outside the enterprise, but instead supporting other (non-environmental) activities undertaken within the enterprise (e.g. waste management services carried out in-house). For market producers, a mark-up for net operating surplus is added to the value of the EGSS ancillary output.
Gross Value Added: represents the contribution made by the production of environmental goods and services to GDP. It is the difference between the value of the output and intermediate consumption.

Employment: is measured in full-time equivalent jobs engaged in the production of output of environmental goods and services. Full-time equivalent is defined as total hours worked divided by the average annual working hours in a full-time job.

Exports: consist of sales, barter, gifts, or grants, of environmental goods and services from residents to non-residents

Council Regulation (EEC) No 696/93 of 15 March 1993 on the statistical units for the observation and analysis of the production system in the Community describes the different statistical units of the production system.

The recommended statistical unit for the collection and compilation of EGSS statistics (excluding general government) is the establishment. For general government, the recommendation is to use institutional units and groupings of units as defined in the European System of Accounts (ESA 2010).

The statistical population is the national economy as defined in SEEA CF 2012 and the European System of Accounts (ESA 2010). It includes all economic activities undertaken by resident units

Belgium

The reference period for EGSS data is the calendar year.

For the market activities, we make use of a specific EGSS survey, which took place in 2018. The results from this survey (with reference year 2016) are used to allocate economic variables to the different environmental domains for the entire 2014-2022 period. Allocation keys are calculated at different NACE levels on the basis of the answers to the survey. For NACEs for which only few answers were collected, this implies accuracy is probably lower.

During the initial set-up of the EGSS in the period 2014-2015, a vast array of membership/umbrella/government organisations with an environmental link were contacted in order to obtain lists of their members or clients. It is impossible to review these lists each year. The activities of organisations are in constant flux. It is impossible to review the activities of all organisations each year. Consequently, the possibility that some organisations considered to be part of the EGSS are no longer environmental, or have become secondary instead of specialist producers (or the other way around) cannot be excluded. We plan a review of the Belgian EGSS universe in the context of a Eurostat grant project on the application of the CEP (Classification of Environmental Purposes) at the 6-digit-level in 2025.

New organisations outside of the 100%-environmental NACEs (37-39, 43.291 and 91.042) are added on the basis of answers to the SBS. Only a limited number of organisations receives the SBS each year. It is thus quite possible that part of the new environmental organisations are not immediately detected.

All answers to the specific EGSS survey have been checked, as well as the organisations which were found to have an environmental production in the SBS. In order to improve the identification of Belgian EGS-producers and the allocation of their activities to environmental domains, the website of a wide range of organisations was examined. As far as the output of the EGSS compilation process is concerned, the outliers are individually checked on their plausibility.

As far as secondary producers are concerned, EGSS shares are calculated for each NACE at the 2-digit level on the basis of the organisations for which data are known. However, to increase precision, if there is information about the environmental share of an individual producer, we should apply this and not the average share calculated on the 2-digit NACE level.

The EGSS is an account that requires at least 1 FTE to keep the database of individual organisations up to date. We do not have the necessary resources to fulfill this condition. The introduction of the CEP seems to offer an opportunity to thoroughly review the Belgian EGSS universe. This will be a one shot review, though.

Output, gross value added, and exports are measured in million euro. Employment is measured in full time equivalents (i.e., full time equivalent jobs).

If output, gross value added or employment is lacking for a particular organisation in a particular year, but at least one of these variables is available for all years, an organisation specific average ratio is calculated and applied to the available variable in order to obtain a value for the unavailable variables. If output, gross value added or employment is lacking for a particular organisation over the entire period, but at least one of the variables is available for all years, a NACE specific ratio (calculated on the basis of all organisations belonging to the same NACE) is applied to the available variable in order to obtain a value for the unobserved variables.

Environmental shares are calculated for each NACE at the 2-digit level on the basis of the organisations for which data are known (based on specific EGSS survey, yearly SBS data, quiniquennial detailed SBS supply data and exports). For NACEs for which no data are available, we apply the (average) share of NACEs belonging to the same A64 category and if that does not suffice, the same A38 category.

The environmental NACE shares are normally recalculated each year. This has not been done in 2024 due to resource constraints.

The production of data for the output, gross value added, exports and employment regarding market activities consists of 2 distinct activities.

The first phase is the identification of the organisations producing environmental goods and services.

In order to determine the scope of EGSS four approaches are used: the activity approach, the product approach, the survey approach  and the business approach.

As far as the activity approach is concerned, we rely on the EGSS operational list provided by Eurostat. All organisations active in the industries indicated as 100% environmental in the operational list (NACE 37-39) are included in the scope. According to national relevance, all organisations active in NACE-BEL 43.291 (insulation works) and NACE-BEL 91.042 (nature reserve services) are also included in the scope. This selection is repeated annually.

As far as the product approach is concerned, all organisations producing products which are indicated as 100% environmental in the operational list are included in the EGSS scope. These have been selected on the basis of detailed supply data provided in the five-yearly extended SBS in order to construct the supply and use tables, as well as on the basis of exports data. However, the use of exports data is controversial, since the exporters of specific environmental products are not always the producers of these products. The use of data on exports of environmental products has therefore been discontinued.

As far as the survey approach is concerned, an additional question on environmental production in the SBS allows us to select EGS producers. Experience has shown that the survey approach needs to be combined with the business approach, in that a thorough check of the answers to this question is necessary. Due to a lack of resources, and the ensuing impossibility to perform this check, this source has not been used for the 2024 EGSS. Furthermore, a specific EGSS survey among all organisations part of the EGSS scope was performed in 2018 to check the scope as well as the primary or secondary nature of the environmental activities of the organisations included in the scope. This survey was supposed to become a quinquennial survey. However, running this survey proved to be very expensive and labour intensive, and therefore incompatible with the scarce resources available for the production of environmental economic accounts. Uptil this day, the EGSS survey has remained a one shot affair.

As for the business approach, existing databases/lists of organisations active in the environmental sector were used to complete the scope of EGSS at the initial set-up. Furthermore, for all organisations which answer to the SBS that they have an environmental output, and which are not yet part of the Belgian EGSS universe, a web investigation should take place in order to ascertain their answer. This is also the case for organisations which are part of the universe and answer they have no environmental output. For each of these organisations the website is investigated to check whether the organisation has or no longer has an environmental activity and in the case in which it has an environmental activity, whether it is their primary or secondary activity.

The second phase is the calculation of the economic variables for the organisations identified during phase 1. The source for these data is the enterprise database used by the Federal Planning Bureau for all calculations concerning the national accounts. This database contains a multitude of data at the enterprise level.

The non-market and ancillary activity data are calculated for the EPEA. In 2023 these calculations, which initially were limited to the CEPA domains, have been extended to the CReMA domains. Furthermore, the calculations on ancillary activities have also been extended to the NACE disaggregation level of the EGSS. This allowed us to obtain results for all NACE industries for each environmental domain in the 2024 EGSS accounts. However, since the EGSS delivery date has been advanced from December to October, while the EPEA can only be calculated after October, the 2023 EPEA had to be used as an input for the 2024 EGSS.

The EGSS are disseminated yearly. As of 2022 this happens at the end of October.

An average amount of 0.14 FTE were spent on the production of the EGSS in the 2017-2024 period.

EGSS accounts are compiled according to harmonised guidelines provided by Eurostat and hence comparable across European countries reporting EGSS accounts to Eurostat.

The entire time series is recalculated each year. Consequently, the data are comparable over time.