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Eco-Innovation in Austria

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Eco-Innovation in Austria Eco-innovation in Austria EIO Country Profile 2018-2019 Eco-Innovation Observatory The Eco-Innovation Observatory functions as a platform for the structured collection and analysis of an extensive range of eco-innovation and circular economy information, gathered from across the European Union and key economic regions around the globe, providing a much-needed integrated information source on eco-innovation for companies and innovation service providers, as well as providing a solid decision-making basis for policy development. The Observatory approaches eco-innovation as a persuasive phenomenon present in all economic sectors and therefore relevant for all types of innovation, defining eco-innovation as: “Eco-innovation is any innovation that reduces the use of natural resources and decreases the release of harmful substances across the whole life-cycle”. To find out more, visit www.eco-innovation.eu and ec.europa.eu/environment/ecoap Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Commission. 1 Eco-Innovation Observatory Country Profile 2018-2019: Austria Author: Burcu Gözet Wuppertal Institute for Climate, Environment, Energy Coordinator of the work package: Technopolis Group Belgium 1 Acknowledgments This brief partly refers to the previous country profile 2016-2017 developed by Burcu Gözet and Stefan Giljum. A note to Readers Any views or opinions expressed in this report are solely those of the authors and do not necessarily reflect the position of the European Union. A number of companies are presented as illustrative examples of eco-innovation in this report. The EIO does not endorse these companies and is not an exhaustive source of information on innovation at the company level. This brief is available for download from https://ec.europa.eu/environment/ecoap/country_profiles_en 1 Table of contents Summary ………………………………………………………………………………………………………………… 2 Introduction .............................................................................................................. 3 1 | Eco-innovation performance ................................................................... 4 2 | Selected circular economy and eco-innovation areas and new trends ..... 7 3 | Barriers and drivers to circular economy and eco-innovation in Austria . 10 4 | Policy landscape in Austria .................................................................... 12 REFERENCES ............................................................................................................ 16 ANNEX: Policy strategies and instruments ............................................................... 17 1 Summary Austria is a highly developed country with a strong (export-oriented) economy. Aiming at an extended environmental performance, Austria particularly focuses on waste management and recycling practices, reaching one of the highest recycling rates across Europe. It thereby remains on a worldwide leading position for ecological construction and environmental technology. Austria is a favourable location for green clusters, in which companies have established a front- runner position on the global market of environmental technologies. At the same time, Austria faces environmental challenges such as air pollution and economic barriers with regard to eco-innovation activities and the circular economy. As its economy is dominated by a small-scale supplier structure, limited financial resources and restrained alternatives for development activities are provided. This also implies insufficient resources for eco-innovation research and development (R&D), which is a key driving force for eco-innovation acceleration. However, various steps towards eco-innovation and circular economy have been elaborated within the past few years. Based on the vision to become the leading supplier of environmental technology within the EU, policy measures have been launched scoping technological improvements in particular. The Master Plan Environmental Technology (MUT), for instance, put its focal point on ‘circular economy through digitalisation’ and demonstrates an Austrian best- practice initiative. Furthermore, a transformation towards circular economy has been listed as one of the prioritised targets in the Austrian government programme 2020-2024. With a total score of 130 in the Eco-Innovation Index 2019, Austria ranks fifth in the list of EU countries. Located between Finland and Germany, it belongs to the top performing countries. In four out of five components, Austria performs above the EU average, while its performance is below the EU average regarding eco-innovation inputs. 2 Introduction Austria has a strong economy that is dominated by a large service sector including trade and transport services, healthcare, social services and tourism. At the same time, Austria’s economy is strongly export oriented. In 2018, exports of products and services reached (with 55.76%) its highest share on the Austrian GDP, which is a result of a steadily increasing trend since 2016. Austria also has a stable industrial sector, including machinery and vehicles, metals, chemicals, and wood and paper products as main industries, and a small, but highly developed agricultural sector. Austria’s total environmental output shows a continuously increasing trend, reaching 36.5 billion Euro in 2017. In comparison, the turnover of the environmental sector in the previous country profile was at 32.1 billion Euro (2015). Hence, the share of environmental output on GDP also increased from 9.9% in 2015 to 10.6% in 2017. As already stated in the previous country profile, Austria has a high environmental performance, covering waste management and recycling, water quality, organic farming and sustainable forestry. In the ‘Sustainable Contest 2019‘, performed by the Austrian Federal Economic Chamber (WKÖ), in which 56 environmental indicators (mainly from EUROSTAT) were considered, Austria ranked 3rd among the EU countries (WKÖ, 2019). In the previous contest ‘Sustainable Contest 2017’, however, Austria was ranked 1st. This can be explained by the environmental challenges that Austria is facing. With regard to air pollution, for example, emissions in various areas are above the allowed EU regulations. Furthermore, weaknesses are observed towards the set of indicators that are used to measure energy and environment goals. The implementation of energy efficiency measures and the promotion of renewable energy sources therefore remain key requirements for Austria. Another major challenge is Austria’s structure of the business sector, as it predominantly consists of small and medium-sized enterprises (SMEs). This often implies insufficient financial and personnel resources for investments in eco-innovation-related research and development (R&D), which is a key driving force for eco-innovation acceleration. In general, however, it can be noted that enterprises in Austria are strongly engaged with circular economy and eco- innovation activities. Particularly high market chances and innovation possibilities for Austrian enterprises are expected in the mobility sector. Here, the legal framework for mobility services, with regard to payment methods and the pricing of those services, is seen as a challenge (IHS, 2014). 3 1 | Eco-innovation performance The analysis in this section is based on the EU-28 Eco-innovation Index for the year 2019. The Eco-innovation index demonstrates the eco-innovation performance of a country compared with the EU average. The Index is a composite index that is based on 16 indicators, which are aggregated into five components: eco-innovation inputs, eco-innovation activities and eco- innovation outputs as well as resource efficiency outcomes and socio-economic outcomes. In the Eco-Innovation Index 2019, published by the Eco-Innovation Observatory (EIO), Austria ranks fifth among all EU-28 countries and is located between Finland and Germany (see Figure 1). With the overall score of 130, Austria performs highly above the EU average. Figure 1 EU28 Eco-innovation Index 2019, composite index Source: EIO, 2019 Figure 2 breaks the aggregated index into its components, illustrating Austria’s performance for each component compared to the EU average. It can be seen that Austria performs below the EU average in one out of five components (in ‘eco-innovation inputs’). However, its scores higher in the components ‘eco-innovation activities’, ‘eco-innovation outputs’, ‘resource efficiency outcomes’, and ‘socio-economic outcomes’. The component ‘eco-innovation input’ consists of three indicators, while Austria performs particularly low with regard to its government R&D outlays in the area of environment and energy (0.02% of total GDP) and its green early stage investments, which were about 12 USD per capita in the period of 2016-2019. However, as almost 2% of Austrian employees account as personnel and researchers for R&D, the overall eco-innovation input reaches a score of 85. Austria’s performance slightly improves with regard to the component ‘eco-innovation activities’ (score of 105). Indicators accounting the implementation of resource efficiency actions and sustainable products among SMEs score above the EU average (with 1.98% and 4 0.31% of enterprises). As in previous indices, Austria’s performance on ISO 14001 certifications remains relatively low, reaching 122 registered organisations per million population in 2017 (EU average: 172/mln. population). This relates to the fact that Austrian organisations
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