Eco-innovation is crucial for achieving the European Green Deal objective of transitioning to a carbon-neutral and sustainable economy. The European Commission’s eco-innovation index shows that from 2013 to 2022 eco-innovation increased in the EU. This was mainly driven by improvements in resource efficiency. This steady increase in recent years is expected to continue, as the European Green Deal has set ambitious environment- and climate-related objectives, and its associated initiatives are very likely to create favourable conditions for more eco-innovation.

Figure 1. Eco-innovation index, EU-27, 2013-2022 (EU-27=100 in 2013)

Eco-innovation index, EU-27, 2013-2022 (EU-27=100 in 2013)

Eco-innovation refers to any innovation that reduces impacts on the environment, increases resilience to environmental pressures or uses natural resources more efficiently . Eco-innovation is essential for achieving the objectives of the European Green Deal, such as the transition to a climate-neutral, circular economy .

The European Commission’s eco-innovation index is a composite indicator based on five dimensions: eco-innovation inputs, eco-innovation activities, eco-innovation outputs, resource efficiency outcomes and socio-economic outcomes. Performance in each of these dimensions is measured using relevant indicators, which are published by, for instance, Eurostat, the EEA and the Organisation for Economic Co-operation and Development (OECD).

The EU’s performance between 2013 and 2021 was positive, as shown by the steady increasing trend in the eco-innovation index score . Increases were seen in all five dimensions . Most of the increase was due to improvements in the resource efficiency outcomes dimension, particularly in greenhouse gas (GHG) emission productivity (i.e. decreases in GHG emissions generated per unit of gross domestic product (GDP)). However, the greatest improvement was seen in the number of eco-innovation publications, which is included in the eco-innovation outputs dimension

The steady increase in the eco-innovation index score between 2013 and 2021 is expected to continue in the future. This is because the improvements in resource efficiency and other contributing indicators are likely to persist due to the highly ambitious environment- and climate-related objectives of the European Green Deal and its associated initiatives .

Figure 2. Eco-innovation index by EU Member State, 2013-2022 (relative to EU-27=100 in 2013)

In terms of the eco-innovation performance of the individual EU Member States in 2013 and 2022 , the Nordic countries, Luxembourg and Austria were the best performers. Except for Finland, all of these countries performed well in resource efficiency outcomes. Luxembourg, Finland and Austria scored particularly highly on socio-economic outcomes .

Index scores improved between 2013 and 2022 for all EU Member States except Romania. Moreover, 18 EU Member States achieved increases of above the EU-27 average, with Greece achieving the largest increase, followed by Lithuania, Austria, Ireland, Bulgaria and Germany. The main reason for Greece’s improved performance was increases in government environmental and energy research and development (R&D) appropriations and outlays. Improvements in various resource efficiency-related indicators account for the relatively large increases in Lithuania, Austria, Ireland, Bulgaria and Germany.