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:

Housing and food are particular hotspots for resource consumption, accounting for 72% of the EU’s material footprint.
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 to 10.5% of the utilised agricultural area, in 2022.
In 2022, energy supply accounted for more than 27% 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 show a weak downward trend since 2005. The most significant drop occurred in 2020 due to effects of the Covid-19 pandemic. Emissions rebounded again in 2021 and 2022, before preliminary estimates indicate a slight decrease of 0.8% 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

Now is the time to accelerate the shift to a more circular Europe

With a circularity rate of 11.5% in 2022, Europe consumes a higher proportion of recycled materials than other world regions. However, progress in the EU has been slow and we are still far from the ambition to double the Union’s circularity rate by 2030.

Assessing progress towards current circular ambitions, the EEA report states that there is a low or moderate likelihood for them to be achieved in the coming years.

The report explains, however, that many circular economy policies are still relatively new and some have not yet been fully put in place at national level.

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

Is Europe making progress towards a circular economy?

Explore the EEA’s Circularity Metrics Lab

Image Stephen Mynhardt, Environment & Me /EEA

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

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Economy and resources

Now is the time to accelerate the shift to a more circular Europe

How long should your smart phone last?

Is Europe making progress towards a circular economy?

Reducing buildings' emissions through circularity

Monitoring Europe’s Circular Economy

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