Resource efficiency

Briefing Published 29 Nov 2018 Last modified 07 Dec 2018
16 min read
Resource efficiency

Indicator

EU indicator past trend

 

Selected objective to be met by 2020

Indicative outlook
for the EU meeting
the selected
objective by 2020

 

Resource productivity


Green triangle: improving trend

 

Improve economic performance while reducing pressure on natural resources — Roadmap to a resource efficient Europe


Green circle: it is likely that the objective will be met by 2020

 

Resource productivity — economic output per unit of material used — increased in the period between 2000 and 2017. The rate of increase of resource productivity has slowed down since 2013. Resource productivity is expected to continue to increase in the coming years albeit at a reduced rate of just below 1 % per year.

For further information on the scoreboard methodology please see Box I.3 in the EEA Environmental indicator report 2018

The Seventh Environment Action Programme (7th EAP) includes the objective to improve resource efficiency by 2020. Increasing resource efficiency can lower environmental burdens by reducing the overall consumption of materials; at the same time it helps to sustain economic development by securing the supply of resources. Resource productivity is a proxy for overall resource efficiency in the economy. Between 2000 and 2017, resource productivity in the EU increased by 39 %. This is a positive development. Some of the increase was the result of a structural decline in the use of fossil fuels. However, most of the resource productivity gain occurred since 2008 and resulted mainly from a decline in the use of non-metallic minerals, primarily because of the reduced activity in the material-intensive construction industry, which was strongly affected by the 2008 economic downturn. With the return of economic growth and a rise in the use of materials mostly for construction purposes, the rate of improvement in resource productivity has slowed since 2013. The longer term improving trend in resource productivity is expected to continue until 2020.

Setting the scene

The 7th EAP priority objective 2 (EU, 2013) includes the objective that by 2020 the resource efficiency of the EU has to improve. Improvements in resource efficiency can result in lower pressures on the environment by reducing the overall consumption of materials in the economy. It can also help to sustain economic development by securing the appropriate supply of resources and investments in innovation, while increasing global competitiveness (OECD, 2015). This briefing presents trends in resource productivity. Since resource productivity measures the quantity of economic output produced using a certain amount of material resources, it is used as a proxy for resource efficiency by the European Commission. It effectively measures the decoupling of material use from economic growth. However, under conditions of relative decoupling, overall material use can increase despite an increase in resource productivity. Absolute decoupling means that resource use declines or remains stable under conditions of economic growth.

Policy targets and progress

The ‘Resource-efficient Europe’ flagship initiative (EC, 2011a) of the Europe 2020 Strategy is aimed at promoting the decoupling of economic growth from resource use.

The broad objectives of the ‘Resource-efficient Europe’ flagship initiative become operational in the Roadmap to a Resource Efficient Europe (EC, 2011 b), the goal of which is to ensure increasing economic performance while reducing pressure on natural resources. Resource efficiency is viewed as the means to achieve this objective and resource productivity is the lead indicator for monitoring the progress of the actions in the roadmap. Neither the roadmap nor any other EU policy or strategy sets quantitative targets for improvements in resource productivity, although some Member States have adopted national targets (see country-level information section).

The Roadmap to a Resource Efficient Europe committed the European Commission to discussing and agreeing on resource efficiency indicators and targets. The 7th EAP recognised that ‘Resource efficiency indicators and targets ... would provide the necessary guidance for public and private decision-makers in transforming the economy. Once agreed at Union level, such indicators and targets will become an integral part of the 7th EAP.’ While targets have not been defined to date, a set of indicators has been published since 2013 in the form of the Resource Efficiency Scoreboard (EC, 2015a). Additional insights on raw material supply are provided in the Raw Materials Scoreboard (EC, 2018).

Figure 1. Trends in resource productivity, domestic material consumption (DMC) and gross domestic product (GDP) in the EU

Note: Resource productivity is measured in euros (chain-linked volumes, reference year 2010) per kilogram of domestic material consumption (euroCLV2010/kg DMC).

Figure 1 shows that resource productivity increased by 39 % between 2000 and 2017, with most of the improvement occurring after 2008. Although there were some fluctuations, 2000-2007 was a period during which material use (domestic material consumption, DMC) saw relative decoupling from economic growth (gross domestic product, GDP). In other words, material use grew but at a slower rate than that of the economy. The period from 2007 to 2013 is characterised by absolute decoupling, as material use declined while GDP increased. Finally, since 2013 there has been a relative decoupling again, as material use slowly increased.

Overall, the EU appears to be extracting more value from the material resources it uses. While this is indeed a positive development, it would not be justified to attribute this entirely to the success of environmental policies. Other economic and technical factors seem to have played a role, including the impact of the 2008 economic downturn, the changing structure of countries’ economies, globalisation and increasing reliance on imports, and even the nature of the indicator itself (EEA, 2016).

From 2008 to 2013, a very important factor in resource productivity improvement was the 2008 economic downturn that followed the 2007/2008 global financial and economic crisis and lasted mainly until 2013. The economic downturn affected the material-intensive manufacturing and construction industries more than it affected services, which typically are less material intensive (Eurostat, 2018a).

While total material use (DMC) fell by 9 % between 2000 and 2017, it fell by 19 % between 2008 and 2013. This drop in the 2008-2013 period was largely due to a 29 % decline in the demand for non-metallic minerals over the same period (Figure 2), which was mainly caused by a slump in the construction sector where gross value added (in chain-linked volumes,referenceyear2010) fell by about 13 % over the same period (Eurostat, 2018b).

Figure 2. Domestic Material Consumption (DMC) by type of material in the EU

 

A slowdown in construction activity can have significant implications for the resource productivity of the economy as a whole. In 2008, the construction sector was responsible for more than one third of total material use in the EU (Eurostat, 2018c) but contributed only 6.3 % of its total economic output (and 5.3% in 2013) (Eurostat, 2018b). Therefore, this sector had a relatively low resource productivity, compared with the economy as a whole. The shrinkage in this sector that occurred between 2008 and 2013, therefore led to an increase in the resource productivity of the economy as a whole.

Another factor contributing to the resource productivity improvements is the 21 % decline in the consumption of fossil fuels between 2004 and 2017. While this decline accelerated immediately after the economic downturn, it is also the result of an increasing shift from fossil fuels to renewable energy and of overall improvements in energy efficiency in the economy as a whole (EEA, 2016). These latter developments can be expected to continue to 2020 and beyond in response to EU and national climate and energy policies.

A further cause of the underlying increase in resource productivity may be the long-term shift of the EU towards a service economy. For example, services increased their contribution to the EU economy from 71.8 % in 2006 to 73.9 % in 2016 (Eurostat, 2017).

There is currently insufficient information to determine the possible impact on resource productivity from the outsourcing of material-intensive production to other parts of the world. Further investigation is necessary to determine its effects (Eurostat, 2018a).

Finally, it should be noted that the rate of increase in resource productivity has slowed since 2013. This is because total material use increased between 2013 and 2017 as a result of an increase in non-metalic minerals for construction purposes that was triggered by the return of economic growth.

Detailed projections of material use within the four main material groups from 2012 to 2030 have been carried out for the European Commission, to explore possible developments of EU resource productivity. A wide range of factors was modelled, including technological developments, policy in energy and climate, agriculture, transport and the manufacturing sector, and demographic and economic trends. The modelling analysis projects a 0.7 % rise in material use per year but a higher rate of growth in GDP, resulting in a 0.9 % increase in resource productivity per year (Cambridge Econometrics, 2014). This is similar to the rate observed between 2000 and 2008. The projections would suggest that the 7th EAP 2020 objective of increasing resource efficiency should be met.

 Country level information

Resource productivity varies between countries by a factor of about 14 within the EU (and by a factor of 18 if other European countries are taken into the account). This variation not only reflects how resource-efficient an economy of one country is compared with another, but is also influenced by the types of material resources available in the country and the structure of its economy. Countries with service-based economies will tend to have higher resource productivity than economies with a high proportion of heavy industry, since service industries typically have a lower demand for material inputs (EEA, 2013). It is nevertheless noteworthy that over the 2000-2017 period, the five countries with the highest resource productivity levels since 2000 demonstrated much higher resource productivity improvement rates compared with the five countries with the lowest resource productivity levels since 2000, which resulted in the increasing gap between the two groups (EEA calculation based on Eurostat, 2018a).

Figure 3. Resource productivity by country

Note: 
1. Resource productivity is measured in Euros (chain-linked volumes, reference year 2010) per kilogram of domestic material consumption (euroCLV2010/kg DMC). Differences between individual countries would be smaller if resource productivity was measured using GDP in purchasing power standards. However, for the sake of consistency with the rest of the briefing, which primarily focuses on trends over time, Figure 3 shows resource productivity in Euro CLV2010.
2. 2015 is the latest data year for Switzerland and Turkey, and 2016 is the latest year for the former Yugoslav Republic of Macedonia, Norway, and Serbia; 2000 is missing for the former Yugoslav Republic of Macedonia, Norway and Serbia.

Switzerland has long held the top position for resource productivity in Europe. Within the EU, the country with the highest resource productivity is the Netherlands, followed by United Kingdom, Luxembourg and Italy, with values more than 50 % higher than the EU-28 average. Resource productivity improved in all countries but Romania between 2000 and 2017. Ireland and Spain recorded the biggest improvement over the period, (140 % and 122 % respectively), while Estonia and Malta recorded the lowest improvement (4 % each).

For many countries, gains in resource productivity have been most prominent since 2008. These have largely been caused by a drop in demand for non-metallic minerals, as a result of a post-downturn slump in the construction sector, and in part are also due to long-term reductions in the consumption of fossil fuel carriers. The countries that experienced the sharpest decline in material use for non-metallic minerals between 2008 and 2017 were: Spain, Greece, Italy, Cyprus, Croatia Portugal, Ireland and Slovenia, ranging from a 68 % reduction in the case of Spain to a 43 % reduction in the case of Ireland and Slovenia.

It is difficult to assess the impact of current policies on increasing resource productivity, because of a variety of other factors at play (e.g. geography, climate, structure of the economy, energy mix, trade patterns, etc.).

As of 2016, only three countries (Austria, Finland and Germany) and two sub-national regions (Flanders and Scotland) adopted dedicated strategies for resource efficiency. A number of other countries incorporate resource productivity concepts into other strategies and policies, including those on waste, energy and industrial development, or national reform programmes (EEA, 2016). National efforts to improve resource productivity are based on a mixture of economic and environmental considerations. The most prominent factors are the need to increase competitiveness and secure access to raw materials and energy (or reduce reliance on imports), while lowering pressures on the environment. In addition, a number of European countries have already developed, or are planning to develop, national raw material strategies (EEA, 2016). Notable in the last couple of years is the drive in several EU Member States to develop a national circular economy action plan or roadmap, following to the European Commission adoption of the action plan on circular economy (EC, 2015b). As of summer 2018, several Member States had already adopted various national action plans or roadmaps for developing the circular economy, including Belgium/Flanders, Finland, France, Italy, the Netherlands,  Portugal, and the United Kingdom, while others, including Denmark, Poland and Spain, were in the process of formulating such documents  (EEA communication with the Environment Information Observation Network).

Moreover, several EU Member States have adopted national resource productivity targets. These vary somewhat in their scope, format and time frames, but all aim to achieve improvements in resource productivity. It is difficult to compare the ambitions of these targets between countries because of the varying time periods over which they have to be achieved and the different starting levels in terms of resource productivity (Figure 3).

It is worth noting that improving resource productivity does not necessarily lead to reduced overall material use. Of the 27 EU Member States whose resource productivity improved between 2000 and 2017, 12 have experienced an increase in demand for materials over the same period. In some cases, the increase was substantial: Malta 71 %, Estonia 70 %, Lithuania 63 %, Bulgaria 46 %, Luxembourg 34 %, Poland 33 %, Slovakia 32 % and Sweden 31 %. In general, policies and targets for reducing overall material use are far less common than those aimed at increasing resource productivity.

Outlook beyond 2020

The long-term vision of the 7th EAP includes the goal that Europe’s growth should be decoupled from resource use. This means not only improvements in resource productivity but also absolute reductions in material use.

Achieving efficient use and sustainable management of natural resources by 2030 are amongst the targets of the 2030 Agenda for Sustainable Development (Sustainable Development Goal 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation(…) andSDG 12.2: By 2030, achieve the sustainable management and efficient use of natural resources) (UN, 2015). The resource productivity indicator is used to measure progress towards these targets at the global and EU level.

The EU has been forecast, under certain conditions, to increase its resource productivity by 14 % between 2014 and 2030 (Cambridge Econometrics, 2014). Through specific policies to promote the transition to a more circular economy, this rate could possibly double. While contributing significantly to the sustainability dimension of growth, increasing resource productivity by 30 % could also have a positive impact on job creation and GDP growth (EC, 2014).

Industry already recognises the strong business case for improving resource productivity. It is estimated that resource efficiency improvements along the whole value chain could reduce the need for material inputs by 17-24 % by 2030 (Cambridge Econometrics, 2014). Better use of resources could represent an overall savings potential of EUR 630 billion per year for the European manufacturing industry (INNOVA, 2012).

Among those countries that have adopted resource productivity targets, five included targets beyond 2020: Austria, France, Latvia, Portugal and Slovenia (EEA, 2016). Austria aims to achieve a four- to ten-fold increase in resource productivity above 2008 levels by 2050. Germany, in its revised ProgRess II strategy, adopted a target to maintain until 2030 an average annual increase of 1.5% in total raw material productivity, defined as (GDP+ monetary value of imports)/raw material input. More recently, the Dutch Government Programme for a Circular Economy included an (interim) objective of a 50% reduction in the use of primary raw materials (minerals, fossil materials and metals) compared with 2014 by the year 2030.

Such ambitious targets and a more resource-efficient EU will require further fundamental changes in production and consumption patterns. The adoption of the Circular Economy Package (EC, 2015b) and recent efforts by some countries to analyse their material resource availability and needs, and to develop raw material strategies, demonstrate that Member States are strengthening their approach to the use of materials. 

About the indicator

Resource productivity is measured here as the economic output (GDP) in euros (chain-linked volumes, reference year 2010) per unit weight (kilograms) of material used, expressed as domestic material consumption (DMC). DMC comprises the consumption of fossil energy carriers, biomass, metal ores and non-metallic minerals, such as sand and gravel used in construction. DMC is measured as the used weight of domestically extracted material, plus the direct weight of imports, minus the direct weight of exports.

A potential weakness of using DMC in a resource productivity indicator is that DMC excludes the raw materials extracted in non-EU countries and embedded in imported goods. An alternative to DMC as a resource productivity indicator is raw material consumption (RMC). RMC presents the import and export flows expressed in their raw material equivalents. These are currently estimated with models and are still under development. RMC has been developed by Eurostat for the EU but is not yet available for individual Member States. Some European countries, including Austria, Belgium, Denmark, Finland, France, Germany, Switzerland and United Kingdom, compile, however, national RMC indicators on a pilot basis, and/or include RMC in official statistics.

DMC is available for all Member States, has a long time series and is disaggregated into material components. Moreover, DMC and RMC have exhibited similar trends since at least 2002, and therefore the choice of one or the other will have had little effect on trends to date in resource productivity (EEA, 2015; Figure 2).

Last but not least, it should be kept in mind that economy-wide material flow indicators do not fully capture environmental pressures caused by material use. Both in DMC and RMC, all material types are given equal significance and are measured in tonnes, even though there are large differences in their scarcity or in the impacts related to their extraction and use. Different tools can be used for specific analysis of impacts or pressures of individual materials.

Footnotes and references

Cambridge Econometrics, 2014, Modelling the economic and environmental impacts of change in raw material consumption, Technical report 2014 - 2478, Publications Office of the European Union, Luxembourg.

EC, 2011a, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘A resource-efficient Europe — Flagship initiative under the Europe 2020 Strategy’ (COM(2011) 21 final of 26 January 2011).

EC, 2011b, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘Roadmap to a Resource Efficient Europe’ (COM(2011) 571 final of 20 September 2011).

EC, 2014, Analysis of an EU target for resource productivity, accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the regions ‘Towards a circular economy: A zero waste programme for Europe’, Commission Staff Working Document SWD(2014)211/F1 ENV (DG Environment).

EC, 2015a, ‘EU Resource Efficiency Scoreboard 2015’  (http://ec.europa.eu/env¡ronment/resource_eff¡c¡ency/targets_¡nd¡cators/scoreboard/pdf/EU%20 Resource%20Efficiency%20Scoreboard%202015.pdf) accessed 20 August 2018.

EC, 2015b, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions ‘Closing the loop — An EU action plan for the circular economy’ (COM(2015) 614/2 final of 2 December 2015).

EC, 2018, Raw Materials Scoreboard 2018 — European Innovation Partnership on Raw Materials (https://publications.europa.eu/en/publication-detail/-/publication/117c8d9b-e3d3-11e8-b690-01aa75ed71a1/language-en/format-PDF/source-79996638) accessed 22 November 2018.

EEA, 2013, Environmental pressures from European consumption and production, EEA Technical Report No 2/2013, European Environment Agency (http://www.eea.europa.eu/publications/environmental-pressures-from-european-consumption) accessed 20 August 2018.

EEA, 2015, Resource efficiency, SOER 2015 briefing, European Environment Agency (http://www.eea.europa.eu/soer-2015/europe/resource-efficiency) accessed 20 August 2018.

EEA, 2016, More from less — Material resource efficiency in Europe. 2015 overview of policies, instruments and targets in 32 countries, EEA report No 10/2016, European Environment Agency (http://www.eea.europa.eu/publications/more-from-less) accessed 20 August 2018.

EU, 2013, Decision No 1386/2013/EU of the European Parliament and of the Council of 20 November 2013 on a General Union Environment Action Programme to 2020 ‘Living well, within the limits of our planet’ (OJ L 354, 28.12.2013, p. 171-200).

Eurostat, 2017, ‘Statistics explained — National accounts and GDP’ (http://ec.europa.eu/eurostat/statistics-explained/index.php/National_accounts_and_GDP ) accessed 20 August 2018.

Eurostat, 2018a, ‘Resource productivity statistics’ (http://ec.europa.eu/eurostat/statistics- explained/index.php/Resource_productivity_statistics) accessed 19 August 2018.

Eurostat, 2018b, ‘Gross value added and income by A*10 industry breakdowns’ (http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_10_a10&lang=en) accessed 19 August 2018.

Eurostat, 2018c, Sustainable Development Goals – Overview (https://ec.europa.eu/eurostat/web/sdi/overview) accessed 10 October 2018.

INNOVA, 2012, Guide to resource efficiency in manufacturing: Experiences from improving resource efficiency in manufacturing companies (https://www.greenovate- europe.eu/sites/default/files/publications/REMake_Greenovate%21Europe%20- %20Guide%20to%20resource%20efficient%20manufacturing%20%282012%29.pdf) accessed 20 August 2018.

OECD, 2015, Material resources, productivity and the environment, OECD Green Growth Studies, OECD Publishing, Paris.

United Nations, 2015, Transforming our world: the 2030 Agenda for Sustainable Development, A/RES/70/1, United Nations, New York.

Environmental indicator report 2018 – In support to the monitoring of the 7th Environment Action Programme, EEA report No19/2018, European Environment Agency

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