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.

Europe's economy depends heavily on natural resources and the way we produce and consume goods and services continues to put pressure on the environment.

The EU's material footprint - the raw materials needed to produce the goods and services we consume - has remained broadly stable over the past decade.
In 2024, recycled materials accounted for just 12.2% of all materials used in the EU economy, up from 10.7% in 2010. Despite this increase, Europe's economy remains largely linear, relying mainly on new raw materials rather than recycled ones.
Our consumption continues to put pressure on the environment. The environmental impacts of EU consumption increased by around 4% between 2010 and 2024, despite improvements in resource efficiency and production methods.
Food, housing and mobility account for most of the environmental impacts of conumsption. Together, these three areas were responsible for 85% of the EU's consumption footprint in 2023.

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

How can Europe remain competitive and resilient towards 2040?

Europe faces growing competition, technological change and increasing climate and environmental risks. The choices made today will help shape its future prosperity and resilience.

The report explores the forces shaping Europe's future and idenitifies six strategic options that could help strengthen its long-term competitivenesss.

How can Europe accelerate the shift to a circular economy?

Moving towards a circular economy could help Europe reduce its environmental impacts, use resources more efficiently and create new economic opportunities. But making this shift requires overcoming barriers that prevent circular businesses from growing and ensuring that the benefits are shared fairly.

Our latest briefings explore what is needed to help circular business models expand and make the transition fair and inclusive.

Explore the opportunities and challenges

Is Europe making progress towards a circular economy?

Explore data on how Europe uses resources, manages waste and keeps materials in use, and see how much progress is being made towards a circular economy.

Explore the EEA’s Circularity Metrics Lab

Image Stephen Mynhardt, Environment & Me /EEA

Clean energy technologies are creating jobs, but skills shortages could slow growth

Clean energy technologies are creating employment opportunities across the EU. However, shortages of skilled workers and the underrepresentation of women and young people could slow further growth.

Our report explores the jobs and skills needed to support Europe's transition towards cleaner energy.

How are artificial intelligence and digitalisation changing the way Europe produces and consumes?

Digital technologies and artificial intelligence could help Europe use resources more efficiently, from manufacturing and agriculture to recycling. However, they could also encourage greater consumption and increase demand for energy and water.

A new EEA-Eionet briefing explores seven emerging trends and what they could mean for Europe's environment and sustainability.

Read the briefing

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Economy and resources

How can Europe remain competitive and resilient towards 2040?

How can Europe accelerate the shift to a circular economy?

Is Europe making progress towards a circular economy?

Clean energy technologies are creating jobs, but skills shortages could slow growth

How are artificial intelligence and digitalisation changing the way Europe produces and consumes?

Dive deeper

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