Economy and resources

The economy plays a vital role in our lives by providing access to employment, products and services that help us thrive. Unfortunately, with its key sectors like agriculture, energy and transport, our economy also harms the environment and causes climate change. Europe needs a circular, carbon-neutral and zero-pollution economy.

Our highly globalised economy provides us all sorts of products and services from local produce and tropical fruits to inexpensive clothing, from hi-tech gadgets to vacation packages across the planet. The European economy is active in many sectors, including industry, agriculture, energy, transport, construction, manufacturing, tourism and a wide range of services, offering millions of jobs in countless companies, stores and offices.

But unfortunately, these economic activities and the sectors that keep our economies running are also harming nature and causing climate change. The European economy, much like the rest of the world, needs resources — materials, energy, land and water, in addition to human capital and labour — to produce the products and services we enjoy.

Despite significant contributions to our living standards, our current production systems are not sustainable. They extract more resources than nature can replenish and release more pollutants than nature and people can tolerate without experiencing harmful effects.

We are consuming too much too. Goods and people are being transported further, piling on greenhouse gas emissions and causing even more pollution. When we are done with those goods, we throw them away, adding to waste and pollution. In our globalised world, Europe's consumption has impacts well beyond its borders.

To achieve true sustainability, Europe needs to transform key systems and their sectors, including agriculture, transport, energy, industry and construction, into a circular economy. Our success will also depend on our ability to finance sustainability.

Using resources for longer, preventing waste and using waste as a resource are core elements of a circular economy. Combined, these practices can help reduce environmental pressure both within Europe and outside our borders.

Resource use in all EU Member States declined over the last decade, while resource productivity improved.
Waste generation in Europe is still high, but is increasingly moving towards more recycling.

To fully realise the potential benefits of a circular economy, it will be crucial to design materials and products to focus on durability, reuse, and repair.

Some highlights from key economic sectors include:

Agriculture is the source of 11% of all greenhouse gases emitted in the EU, including over 54% of all methane emissions.
Organic farming in the EU has been continuously increasing since 2012 and extended over 9.1% of the utilised agricultural area.
In 2020, energy supply accounted for more than 25% of the EU’s greenhouse gas emissions (including international aviation).
Europe’s total share of renewable energy sources remained at 22% of gross final energy consumption.
The EU’s domestic transport GHG emissions increased steadily because of growth in passenger transport and inland freight volumes.

EU policies related to waste and resources are focused on improving resource efficiency, reducing waste generation and improving waste management. These initiatives will allow the EU to move towards a circular, low-carbon economy and overall carbon neutrality.

The EU’s circular economy action plan provides a framework for achieving these objectives across the life cycle of materials and products.

The Waste Framework Directive introduces a range of new provisions aiming at reducing waste, including bans on certain plastic items, targets for separation collection and recycled content for plastic bottles, and producer responsibility schemes for cigarette butts and fishing gear.

These policies are framed within and supported by wider EU policy initiatives, in particular the European Green Deal and the zero pollution action plan, and sectoral policies, such as the Common Agricultural Policy and the EU industrial strategy.

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Frequently asked questions

Source: EEA, 2020

How long should your smart phone last?

A product lifetime is the interval from when a product is sold to when it is discarded. There are three types of lifetimes used to describe products:

Actual lifetime is the interval from when a product is sold to when it is discarded or replaced.
Designed lifetime is the lifetime that a manufacturer defines its product to remain functional for.
Desired lifetime is the average time that consumers want products to last.

More on electronics in a circular economy

Reducing buildings' emissions through circularity

Buildings play a vital role in Europe’s environment and climate policy, given their significant use of resources and energy.

Avoiding the use of new materials helps reduce C02 emissions and save resources and resources.
Extending building lifespans through repairs and retrofitting helps reduce demand for new construction, which requires many more materials than renovations.
Applying circular renovation strategies, such as using materials that are recycled or designed for disassembly, could cumulatively reduce approximately 650 million tonnes of materials and save substantial amounts of CO₂ from 2022 to 2050 if the strategies are implemented through renovating the EU building stock.

Monitoring Europe’s Circular Economy

Transitioning to a circular economy is one of the EU’s key strategic ambitions and will improve sustainability, reduce pollution, and mitigate climate change. Measurement of progress towards Europe's circular ambitions is critical to understanding what actions are successful and what areas need more attention.

The EEA’s Circularity Metrics Lab (CML) is a monitoring platform that presents data to report on the initiatives and innovations that characterize a functioning circular economy.

The EEA’s CML complements other monitoring initiatives such as the European Commission’s Circular Economy Monitoring Framework by providing additional information on the growth of the circular economy from novel sources and across a wide range of perspectives.

Explore the EEA Circularity Metrics Lab

Dive deeper

Do you want to know more about climate emissions from energy and transport?

Explore the data on Climate and Energy in the EU website

ImageCharalampos Paschalidis, Well with Nature/EEA

The trouble with electronics

Over 20 kg of electronics is produced annually per person in the EU. Household appliances, computers, TVs and mobile phones are complex products with diverse materials, making them difficult to recycle. Still, some of these materials are scarce resources and recycling them is critical for the EU economy and environment.

Two EU initiatives explicitly target electronic recycling:

The right to repair: The EU Commission is planning several initiatives to improve the reparability of products. This includes the right to repair, a sustainable products initiative, improved design requirements, and measures that make repairing computers and other electronics more cost-effective.

The Ecodesign Directive provides EU rules for improving products’ environmental performance, including minimum energy efficiency requirements.

Combined, these initiatives can significantly reduce environmental impact and help the EU meet existing environmental, climate and circularity objectives.

Economy and resources

How long should your smart phone last?

Reducing buildings' emissions through circularity

Monitoring Europe’s Circular Economy

Dive deeper

Do you want to know more about climate emissions from energy and transport?

The trouble with electronics

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