Resource efficiency

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.