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Sustainable Industry: Going for Growth & Resource Efficiency Sustainable Industry: Going for Growth & Resource Efficiency European Commission Enterprise and Industry competitiveness and innovation framework programme 2007 - 2013 What is this brochure? This brochure presents a synthesis summary of two recent research studies produced by Ecorys for the European Commission. The first study, “EU industry in a sustainable growth context”, provided input for the forthcoming 2011 European Competitiveness Report, and focuses on the overall eco-performance of EU industry in the last 10-20 years. The second study, “Study on Competitiveness of European Companies and Resource Efficiency”, looks at resource efficiency performance, with much more focus on the company and sector level. The findings from both these studies are interesting and highly relevant to future EU competitiveness, growth and environmental performance. The full technical reports and annexes will be published soon on the DG Enterprise and Industry website http://ec.europa.eu/enterprise/index_en.htm Authors: Disclaimer: Koen Rademaekers The sole responsibility for the content of this brochure Sahar Samir Zaki lies with the authors. It does not necessarily Matthew Smith reflect the opinion of the European Communities. The ECORYS Nederland BV European Commission is not responsible for P.O. Box 4175 any use that may be made of the information 3006 AD Rotterdam contained therein. Watermanweg 44 3067 GG Rotterdam The Netherlands T +31 (0)10 453 88 00 F +31 (0)10 453 07 68 E [email protected] W www.ecorys.com Registration no. 24316726 ECORYS Macro & Sector Policies Based on studies commissioned by: T +31 (0)10 453 87 53 F +31 (0)10 452 36 60 European Commission Directorate General Enterprise and Industry Graphic Design: Unit B1 Sustainable Industrial Policy Daniel Rivera Codina Email : [email protected] Ático, estudio gráfico® - www.aticoestudio.com Unit B4 Economic Analysis and Impact Assessment Photographs: Ingram Publishing® / Goodshoot® Email: [email protected] Sustainable Industry: Going for Growth & Resource Efficiency Table of contents 1 Introduction 5 1.1 What is sustainable growth and resource efficiency? 5 1.2 Why is resource efficiency and sustainable industrial growth important? 6 1.3 Sustainable growth and resource efficiency are opportunities for EU industry 7 1.4 What is the EU doing to support this? 8 2 How sustainable and resource efficient is EU industry? 9 2.1 EU industrial growth trends 9 2.2 EU industry - sustainability and resource efficiency performance 13 3 How progress has been made 25 3.1 Strategy 1: Using the material “right” → efficiency 25 3.2 Strategy 2: Thinking outside the box… using the “right” material → effectiveness 29 4 Harnessing further potential 34 4.1 What are the challenges to further improve sustainability and resource efficiency? 34 4.2 Opportunities for improvement in industry and policy 37 3 European Commission Enterprise and Industry Sustainable Industry: Going for Growth & Resource Efficiency Introduction 1 Economic growth and resource efficiency are two sides of the same coin. They are both prerequisites for the sustainable growth of our modern societies and are essential to face the current environmental, social and economic challenges. Growing global scarcity and competition for resources has raised their importance on the EU development agenda. It has also highlighted the interdependency between economic growth, resource use and the environment. As such, Europe places substantial emphasis on the importance of natural resources and their efficient use. What is sustainable growth and resource 1.1 efficiency? Sustainable growth is embedded in the concept this way, progress, and its speed and direction, of sustainable development, which evolved from can be understood. It is necessary to measure environmental concerns, and is based around so that effective management can take place. development that “meets the needs of the present By having a clear understanding of progress, without compromising the ability of future appropriate strategies and measures can be generations to meet their own needs”. In industrial developed and implemented to continue to terms this means growing industry while keeping drive improvements. the environmental, and also the social and economic, impacts at a sustainable level. How is sustainability and resource efficiency measured? Resource efficiency is less well defined. Resources The key indicator of positive trends in in this context include all material resources, sustainability and resource efficiency is living and non-living, so in addition to materials decoupling. This represents a separation of this also includes land, soil, air, water, biodiversity the impacts from an activity, to remove the and ecosystems. Resource efficiency involves link and interrelationship between variables. improving the efficiency and effectiveness of Decoupling is an objective for sustainability how we use these resources, i.e. using less to in de-linking economic growth and activity do more, and causing less impact from those from environmental impacts. Examples include resources we do use. weakening the link between an increase in GDP (or GVA) and an increase in Greenhouse Gas Why do we measure sustainability and resource (GHG) emissions, or the link between increasing efficiency? industrial output and increasing resource inputs. The first goal of measurement is to understand Two types of decoupling are defined, based on where we are and where we have come from. In the extent to which this de-linking occurs. 5 Introduction Figure 1. Relative and Absolute Decoupling No decoupling GVA Amount Relative decoupling Environmental Impact Absolute decoupling Source: Ecorys Time Relative decoupling of impacts from economic Absolute decoupling of impacts from economic activity occurs when, relative to changes in economic activity occurs when not only does the intensity of activity, impacts change at a proportionally slower the use of resources fall relative to increasing output rate - the intensity of use falling, relative to the but, this fall is sufficient to reduce the overall quantity quantity of output produced. of resources used. 1.2 Why is resource efficiency and sustainable industrial growth important? Our economy and our quality of life depend on employment and wealth, enabling the people of sustainable growth and using resources the European Union to enjoy one of the highest One of the biggest societal challenges facing the EU standards of living in the world, and much better in currently is how to deliver needed growth and jobs almost every way than in previous generations. The while doing the right thing by the planet. There is most commonly used measures of economic activity an increasing need to do more with less and create are measures of consumption, with economic the optimal conditions for industry to improve its growth indicating an increase in consumption, and own performance – notably in terms of economic, increased consumption equated with higher quality environmental and social sustainability - and deliver of life. In all major economies, consumption is innovative solutions to environmental challenges. dependent on the use of natural resources to provide The EU needs to exploit the business opportunities the energy and raw materials for production. This resulting from the transition to a more sustainable, makes increasing resource consumption an inherent resource efficient and low carbon economy. To feature of economic growth. that end, policies need to provide the necessary coherence, consistency and certainty, creating the But many resources are finite and increasingly conditions for success. As only successful companies, demanded by industrialising economies developing eco-innovative products, will be able to The finite nature of many key resources presents a contribute to effective environmental protection challenge to continued increases in our standard and social progress. And the EU will only be able to of living. There is an increasing perception of the realise its potential in this field if it successfully shows scarcity of resources, driven by a variety of factors, that it is indeed realistic and feasible to combine not least the rapid expansion of developing optimal levels of resource efficiency with industrial economies such as the BRICS countries. This competitiveness. economic globalisation has increased the demand for resources and this has been reflected in price Economic growth brings many benefits, providing increases of many strategic resources. 6 Introduction Figure 2. Key resource price indices 1995-2011 600 500 Crude Oil 400 Gold 300 IMF All Commodities INDEX 200 Copper 100 Wheat Price index 1995=100 index Price 0 1995 2000 2005 2010 Source: Ecorys based on IMF data The IMF All Commodity index is maintained by the International Monetary Fund (IMF) and tracks prices of internationally traded primary commodities, including industrial metals, foodstuffs, beverages, agricultural raw materials and fuels. It reports benchmark prices that are representative of the global market, determined by the largest exporter of a given commodity. This is leading to increasing prices costs or lose market share. For consumers, increasing Prices of key resources such as oil, gold, copper and prices affect disposable incomes, leading to changed, wheat have all increased rapidly in the last 10 years, and typically reduced, consumption patterns. following (and triggered in part by) the growth and new demand from
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