External cost of industrial air emissions (Indicator)

Key messages: The external costs of industrial air pollution amounted to EUR 2,684 billion between 2012 and 2021. During the same period, annual external costs decreased by 33% in the EU, from EUR 327 billion in 2012 to EUR 219 billion in 2021. The energy sector is the largest contributor to these costs (45%) and is also the sector for which external costs have decreased the most (46% decrease between 2012 and 2021).

Total external costs of industrial air pollution from E-PRTR facilities per sector (2012-2021)

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Notes: For the main air pollutants, damage to health caused by the main air pollutants has been quantified using the Value of a life year (VOLY). This is an estimate of damage costs based on the potential years of life lost (YOLL) which accounts for the age at which deaths occur (with a higher weighting for younger people). There are other methods to quantify mortality such as the value of a statistical life (VSL) which leads to different costs per tonne. EUR price base: 2021

Data gaps: Czechia (2021), Malta (2020-2021), Lithuania (2020-2021) and Slovakia (2018-2021). These data have been projected using the latest reported year for this summary, at sector level. Adapted from EEA, 2024

European industry generates jobs and tax revenue but also contributes to air pollution and climate change, leading to adverse impacts on health and the environment. The indicator uses the impact pathway approach (IPA) methodology to monetise these impacts, aggregating the emissions from various pollutants as well as various types of impacts.

Figure shows the total external costs of air pollution from facilities which are reporting to the European Pollutant Release and Transfer Register (E-PRTR) regulation in the decade from 2012 to 2021, split by sector. Annual external costs of industrial air pollution decreased from EUR 327 billion to EUR 219 billion (a 33% decrease). However, there was a small rebound effect from 2020 to 2021 due to the economic recovery after the first year of the COVID-19 pandemic.

In 2021, the energy sector contributed most to external costs (45%), followed by heavy industry (31%), fuel production and processing (10%), light industry and waste management (both with 6% of the total), livestock (2%) and wastewater (0.1%).

Although the proportional contribution of each sector has remained practically constant throughout the decade, the decrease in external costs per sector has not been the same in all sectors. The largest decrease occurred in the wastewater sector (66%). However, this sector primarily emits to water, which makes it the smallest contributor to the external costs of air emissions. For the energy sector, the decrease has been 46%, followed by fuel production and processing (26%), heavy industry (16%), waste management (13%), livestock (6%) and light industry 3%). Given that the energy sector has been the largest contributor to external costs during the last decade but has experienced a large emissions reduction, 80% of the overall decrease of external costs across all sectors has occurred in this sector.

Please consult the relevant indicators and signals below for a more comprehensive overview on the topic.

The impacts from industrial air emissions have been quantified using the Impact Pathway Approach (IPA), which calculates the marginal damage cost per tonne per country for selected key air pollutants and greenhouse gases (GHG). Monetised impacts include damage to health (mortality and morbidity), ecosystems, forests, crops and buildings. For air pollutants, the IPA uses dispersion modelling and impact incidence data to estimate pollution spread, and its impact on humans and the environment.

The methodology for GHG is different, as the cost per tonne is based on the abatement costs of meeting the Paris Agreement. The monetisation allows the aggregation of emissions from various pollutants and types of impacts. The external costs per industrial facility are calculated by multiplying these costs per tonne per country estimates by the emissions reported to the European Release and Transfers Register (E-PRTR).

The pollutants and greenhouse gases in the scope are: main air pollutants:

NH₃, NO_X, PM₁₀, SO₂, NMVOCs;

greenhouse gases: CO₂, CH₄, N₂O;

heavy metals: As, Cd, Cr_VI, Hg, Ni, Pb; and

organic pollutants: benzene, dioxins and furans, B(a)P.

Note that as of May 2024, the E-PRTR Regulation was repealed by the Industrial Emissions Portal Regulation (EU, 2024). Data requirements from the new regulation will start to apply from 01 January 2028.

References and footnotes

EEA, 2024, ‘The costs to health and the environment from industrial air pollution in Europe – 2024 update’, Briefing no. 24/2023, European Environment Agency (The costs to health and the environment from industrial air pollution in Europe – 2024 update — European Environment Agency) accessed 16 August 2024.
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EU, 2024, ‘Regulation (EU) 2024/1244 of the European Parliament and of the Council of 24 April 2024 on reporting of environmental data from industrial installations, establishing an Industrial Emissions Portal and repealing Regulation (EC) No 166/2006 (Text with EEA relevance)’, OJ L, 2024/1244, accessed 5 May 2024.
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EU, 2010, Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control) (Recast) (Text with EEA relevance) (OJ L 334 17.12.2010, p. 17).
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External cost of industrial air emissions (Indicator)

Total external costs of industrial air pollution from E-PRTR facilities per sector (2012-2021)

Zero Pollution Action Plan 2030 target or policy objectives

Other relevant indicators and signals

References and footnotes