Material flow accounts and resource productivity


Data extracted in July 2021.

Planned article update: March 2022.

Highlights

Since 2000, the resource productivity of the EU economy increased by about 35 %.

[[File:Material flow accounts and resource productivity July 2021.xlsx]]

Development of resource productivity in comparison with GDP and DMC, EU, 2000-2020

This article presents statistics concerning the European Union’s (EU’s) resource productivity as well as information on the extraction of natural resources consumed by the EU economy. The article is based on domestic material consumption and its components, as defined in material flow accounts. Eurostat’s material flow accounts are a comprehensive data framework that systematically records the inputs of materials to European economies.

To complement this overview article, there are articles to highlight the following specific topics from material flow accounts: resource productivity statistics and physical imports and exports. In addition, the article on material footprints presents material use from a consumption viewpoint.

Resource productivity quantifies the relation between economic activity and the consumption of natural resources, and sheds light on whether they go hand-in-hand or the extent to which they are decoupled (see definitions in the section on data sources and availability). Natural resources include biomass, metal ores, non-metallic minerals and fossil energy materials. Resource productivity is an important indicator of the sustainable development goal 12 ‘responsible consumption and production’.

Full article

Resource productivity

Resource productivity is measured as gross domestic product (GDP) over domestic material consumption (DMC). The latter measures the total amount of materials directly consumed in an economy by businesses for economic production and by households. The former is a basic measure of the overall size of a country's economy.

Since 2000, the resource productivity of the EU economy increased by about 35 %. This growth happened mainly with and after the global financial crisis 2007-2008, while before resource productivity had remained rather stable. The COVID-19 recession caused a moderate decrease between 2019 and 2020 (see Figure 1).

Figure 1: Development of resource productivity in comparison with GDP and DMC, EU
Source: Eurostat (nama_10_gdp) and (env_ac_mfa)

An analysis of the resource productivity components, namely GDP and DMC, helps to explain these developments. Before 2007-2008, GDP and DMC had been growing almost in parallel resulting in a more or less stable resource productivity. Between 2008 and 2016, the two components decoupled, i.e. developed in reverse directions. Since 2016, both components seem to re-couple again, i.e. show rather parallel annual change patterns.

The global financial crisis 2007-2008 had a very different impact on the resource productivity of the EU than the COVID-19 recession. While the former triggered a significant growth in resource productivity, the latter caused a moderate decrease, which however, remained less pronounced than the GDP fall between 2019 and 2020. During the global financial crisis and the following years, the consumption of materials – in particular for construction, i.e. gross capital formation – dropped much more than the GDP and stayed at low levels until 2016. On the other hand, the COVID-19 pandemic caused a much more significant shrinking of the EU economy compared to the global financial crisis, while material consumption decreased moderately in particular because the consumption of construction material and biomass almost remained unchanged.

Further information about resource productivity by country can be found in an article on resource productivity statistics. Eurostat also provides information on labour productivity in an article on national accounts and GDP.

Domestic extraction and physical trade

The material resources that enter an economy (domestic extraction and physical imports) may be directly used within the economy (domestic material consumption) or exported and used abroad. Correspondingly, DMC can be broken down into domestic extraction and the physical trade balance (imports minus exports). Physical imports and exports indicate the international role of economies in terms of resource extraction.

Figure 2 shows the development between 2000 and 2020 in the extraction of materials within the EU economy (domestic extraction), as well as physical imports and exports and the resulting physical trade balance. Notably, imports and exports are measured in the weight of products crossing the border, regardless of how much the traded goods have been processed.

Figure 2: Development of domestic extraction and physical trade, EU
Source: Eurostat (env_ac_mfa)

The EU’s physical exports — mainly semi-manufactured and finished products — increased almost every year throughout the period 2000–2020, overall a growth by around 62 %. Physical imports were coupled to domestic extraction and domestic consumption over the whole 2000–2020 period. After high levels were reached in 2007 and 2008, domestic extraction and imports simultaneously turned downwards, reflecting the impact of the financial and economic crisis. By 2020, physical imports had returned to their pre-crisis levels and domestic extraction was around 7 % lower than in 2000. In the last two years, the imports and exports decreased, the imports went down much more than the exports.These patterns indicate that the EU has moved towards a more export-oriented economy whilst being more and more involved in globalisation.

For more information, see the article on physical imports and exports.

Consumption by material category

An analysis of DMC by material category conveys the relative significance of various materials and their potential for reuse, recovery or recycling. Materials are classified in four main categories: biomass, metal ores, non-metallic minerals and fossil energy materials. The total DMC of the EU economy is estimated at 13 tonnes per capita in 2020. The EU’s DMC is dominated by non-metallic minerals (see Figure 3), making up more than half of the total. Biomass makes up approximately a quarter of DMC and fossil fuels less than a fifth. Metal ores constitute the smallest of the four main material categories.

Figure 3: Domestic material consumption by main material category, EU
Source: Eurostat (env_ac_mfa) and (demo_gind)

The consumption patterns over time of these four main categories were different (see Figure 4). The consumption of biomass has been on a rather stable level over the long term, but with frequent smaller annual changes. The consumption of metal ores shows a more pronounced development obviously determined by the financial and economic crisis and by the recent COVID-19 recession. The consumption of fossil energy materials shows a smooth development with a long-term downward trend – mirroring reduced CO2-emissions – and a significant drop in 2020 due to the COVID-19 recession. Consumption of non-metallic minerals – quantitatively the most important component of DMC – showed a significant decline with the global financial crisis 2007-2008; since 2016, it is distinctively increasing again; notably, it is less affected by the COVID-19 recession.

Figure 4: Development of domestic material consumption by main material category, EU
Source: Eurostat (env_ac_mfa)

Material consumption by EU Member State

The level of DMC differs significantly across the EU, ranging from around 7-9 tonnes per capita (Italy, Spain, the Netherlands and Greece) to around 30 tonnes per capita (Finland and Romania). Furthermore, the structure of DMC — by main material category — varies across countries, as can be seen from Figure 5. The composition of DMC in each country is influenced by natural endowments with material resources, and the latter may form an important structural element of each economy.

Figure 5: Domestic material consumption by main material category
Source: Eurostat (env_ac_mfa) and (demo_gind)

The consumption of non-metallic minerals varies most across countries from around 2 tonnes per capita to more than 22 tonnes per capita. The differences between countries are influenced amongst others by levels of construction activities (investments), population densities, and size of infrastructures, such as road networks. Biomass consumption also varies greatly across countries ranging between 2 and around 8 tonnes per capita. Economies with high biomass consumption are specialised in timber production (Finland) or certain livestock production (Ireland, Denmark). Consumption of fossil energy material is around 2.5-3 tonnes per capita for the EU and more even across countries.

Besides the structure of the economy and climatic conditions, population density may explain — at least in part — differences between European countries in relation to consumption patterns. More densely populated Member States such as the Netherlands and Belgium tend to consume somewhat lower amounts per capita than the EU average whereas higher per capita consumption may be observed for low population density Member States like Finland, Estonia and Sweden.

The EU’s domestic material consumption compared with the world's material extraction

Overall, the DMC of the EU decreased from more than 15 tonnes per capita to around 13 tonnes per capita.

Worldwide material extraction — which equals the world’s DMC as the global trade balance is zero — increased to slightly above 12 tonnes per capita in recent years. It has been steadily increasing since the year 2000 when it was at 8.8 tonnes per capita.

Figure 6: Development of material consumption
Source: Eurostat (env_ac_mfa) and (demo_gind), UN Environment & International Resource Panel Global Material Flows Database (https://www.resourcepanel.org/global-material-flows-database/) and World Bank (http://data.worldbank.org/)

Raw material equivalents — towards a global perspective

DMC, the main material flow indicator, can be complemented with supplementary estimates of the amount of raw materials needed to produce traded products. This element is particularly important when considering the material extractions of open economies and the effects of international trade. The amount of raw materials needed to produce traded products can be estimated by converting them into ‘raw material equivalents’. The total weight of raw material extractions needed to produce manufactured products is usually several times greater than the weight of the products themselves. Eurostat has developed a model to estimate the raw material equivalents of imports and exports for the aggregated EU economy and the results are presented in an article on material flow accounts statistics - material footprints.

Data sources

This article uses data from economy-wide material flow accounts (EW-MFA), which are one of the European environmental economic accounts (see Regulation (EU) No 691/2011 on European environmental economic accounts).

Economy-wide material flow accounts (EW-MFA) provide an aggregate overview, in thousand tonnes per year, of the material flows into and out of an economy. EW-MFA cover solid, gaseous, and liquid materials, except for bulk flows of water and air. Material inputs into national economies include domestic extraction of material originating from the domestic environment and physical imports originating from other economies. Material outputs from national economies include materials released to the domestic environment (e.g. emissions to air, water and soil) and physical exports to other economies. Material flows within the economy are not represented in EW-MFA.

A variety of material flow-based indicators are derived from EW-MFA amongst which the following:

Domestic material consumption (DMC) measures the total amount, in tonnes, of material directly used in an economy, i.e. by resident businesses, governments and other institutions for economic production or by households. DMC equals the domestic extractions of materials plus imports minus exports. At the same time, DMC is the amount of materials that become part of the material stock within the economy or are released back to the environment in form of e.g. emissions to air.

Resource productivity is defined here as GDP divided by DMC. It is important to note that GDP is expressed in different measurement units, of which the following are used to calculate three different resource productivity ratios. The appropriate choice depends on the context of the analysis:

  • euro per kilogram using chain-linked volume data for GDP, to be used for analysing developments in real terms over time;
  • PPS per kilogram using current price data for GDP expressed in purchasing power standards (PPS); PPS are artificial currency units that remove differences in purchasing power between economies by taking account of price level differences; these can be used when comparing across different economies at one point in time (for one particular year);
  • euro per kilogram using current price data for GDP, which could be used when analysing a single economy at one point in time (for one particular year).

See also MFA metadata.

Decoupling

The term decoupling refers to breaking the link between an environmental and an economic variable. As defined by the Organisation for Economic Co-operation and Development (OECD), decoupling occurs when the growth rate of an environmental pressure (for example, DMC) is less than that of its economic driving force (for example, GDP) over a given period. Decoupling can be either absolute or relative. Absolute decoupling is said to occur when the environmental variable is stable or decreases while the economic driving force grows. Decoupling is said to be relative when the rate of change of the environmental variable is less than the rate of change of the economic variable.

Context

Eurostat’s environmental accounts and statistics inform policy making under the European Green Deal. The European Green Deal is the first of six priorities of the European Commission for the period 2019-2024. It is a growth strategy that will transform the Union into a modern, resource-efficient and competitive economy, where there are no net emissions of greenhouse gases by 2050, economic growth is decoupled from resource use, and no person and no place is left behind. The European Green Deal boosts the efficient use of resources by moving to a clean, circular economy, restore biodiversity and cut pollution. The European Green Deal is the plan to make the EU's economy sustainable.

Further reading:

A European Green Deal – EC website

Communication and roadmap on the European Green Deal

Publication: A new Circular Economy Action Plan for a Cleaner and More Competitive Europe

Communication: A new Circular Economy Action Plan for a Cleaner and More Competitive Europe

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