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 41 % between 2000 and 2016, 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 onwards is characterised by absolute decoupling, as material use declined while GDP increased.

Overall, Europe 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).

Since 2008, a very important factor in the resource productivity improvement was the 2008 economic downturn that followed the global economic crisis. The economic downturn affected the material-intensive industries of manufacturing and construction more than it affected services, which typically are less material intensive (Eurostat, 2017a).

The 20 % drop in total material use between 2008 and 2016 was largely due to a 29 % decline in the demand for non-metallic minerals (Figure 2). This was mainly caused by a slump in the construction sector where gross value added (in chain-linked volumes, reference year 2010) fell by about 17 % over the same period (Eurostat, 2017b).

Figure 2. Domestic Material Consumption (DMC) by type of material, EU

A slowdown in construction activity can have significant implications for the resource productivity of the economy as a whole. In 2007, the construction sector was responsible for more than one third of total material use in the EU (Eurostat, 2017c) but contributed only 5.7 % of its total economic output (Eurostat, 2017b). Therefore, this sector had a relatively low resource productivity, compared with the economy as a whole. The shrinkage in this sector, as occurred between 2007 and 2016, therefore led to an increase in the resource productivity of the whole economy.

Another factor contributing to the resource productivity improvements is the decline in the consumption of fossil fuels since 2004. 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, 2017d).

Regarding the possible impact on resource productivity by outsourcing material-intensive production to other parts of the world, at present there is no sufficient information to determine this and further investigation would be necessary to find out its effects (Eurostat, 2017a).  

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 nearly 20. This variation does not only reflect how 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 2000-2016 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 (EEA calculation based on Eurostat, 2017a).

Figure 3. Resource productivity by country

The countries with the highest resource productivity in the EU are the Netherlands, Luxembourg, Italy and the United Kingdom, with values more than 75 % higher than the EU-28 average. Resource productivity improved in all but two Member States between 2000 and 2016. The exceptions were Malta and Romania.

For many countries, gains in resource productivity have been most prominent since 2008. These have again 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 2016 were: Italy, Spain, Cyprus, Ireland, Netherlands and Greece, ranging from a 69 % reduction in the case of Italy to a 54 % reduction in the case of Greece.

It is hard to determine whether policy has had an effect or not. As of 2016, only three countries (Austria, Finland and Germany) and two sub-national regions (Flanders and Scotland) have 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 to 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) and, in the last couple of years, a national circular economy action plan or roadmap.

Moreover, nine EU Member States (Austria, Estonia [1], France, Germany, Hungary, Latvia, Poland, Portugal and Slovenia) have adopted resource productivity targets (as of December 2015). These vary somewhat in their scope, format and timeframes, 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). With the exception of Germany, all countries’ targets were adopted after the economic downturn and most since 2012. The effects of Member State targets and policies may become evident only during the second half of the decade.

Improving resource productivity has not necessarily led to reduced overall material use. Of the 26 EU Member States whose resource productivity improved between 2000 and 2016, eight (Bulgaria, Estonia, Lithuania, Sweden, Latvia, Croatia, Slovakia and Poland) have, nevertheless, experienced an increase in demand for materials of between 17 % (Poland) and 46 % (Bulgaria) over the same period. The two countries that did not achieve improvements in resource productivity saw even higher increases in material use — material use rose by 181 % in Romania and 64 % in Malta (Eurostat, 2017c). 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.

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 % would also have a positive impact on job creation and GDP growth (EC, 2014b).

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).

Of the nine countries that have adopted resource productivity targets, five include targets beyond 2020: Austria, France, Latvia, Portugal and Slovenia (EEA, 2016). Austria aims to achieve a four- to ten-fold increase in resource productivity over 2008 levels by 2050. 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, 2015a) 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.