EN    EN  
 EUROPEAN COMMISSION 
Brussels, 15.12.2011 
SEC(2011) 1599 final 
  
COMMISSION STAFF WORKING PAPER 
IMPACT ASSESSMENT 
Accompanying the document 
COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS  
Innovation for a sustainabl e Future - The Eco-innovatio n Action Plan (Eco-AP) 
{COM(2011) 899 final} 
{SEC(2011) 1598 final} {SEC(2011) 1600 final} 
 
 
EN    EN Disclaimer:  This Impact Assessment commits only the Commission's services involved in its 
preparation and does not prejudge the final fo rm of any decision to be taken by the 
Commission. 
 
 
 
2 EXECUTIVE SUMMARY .......................................................................................... 1  
1. BACKGROUND .................................................................................................. 3  
2. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES .3 
2.1 Consultations – Main conc lusions.......................................................................................................... 4  
2.2 View of the Impact Assessment Board............................................................................................ ...... 5  
3. PROBLEM DEFINITION .................................................................................... 6  
3.1 The problem – insuffi cient eco-i nnovation ...................................................................................... ..... 6 
3.2 The eco-innovation policy la ndscape............................................................................................ ......... 6  
3.3 Implementing eco-innovation po licies – Lessons  learnt....................................................................... 9  
3.4 Underlying drivers of the problem.............................................................................................. ........ 11  
3.5 Are eco-innovation specific policy interven tions at the EU le vel still n eeded? ................................ 17  
3.6 Who is affected, in what ways, and to what extent? .......................................................................... 18  
3.7 Does the EU have the right to  act? The EU added-value .................................................................. 18  
4. OBJECTIVES .................................................................................................... 18  
4.1 General ob jectives............................................................................................................. .................... 19  
4.2 Specific and operati onal objectives ............................................................................................ ......... 19  
5. POLICY OPTIONS ........................................................................................... 19  
5.1 Option 1: Discontinuation of ETAP (no specific EU action)............................................................. 19  
5.2 Option 2: Continuation of ETAP................................................................................................. ........ 20  
5.3 Option 3: Taking forward th e Europe 2020 Flagships ...................................................................... 20  
5.4 Option 4: SME-targeted actions................................................................................................. ......... 23  
5.5 Option 5: Wide EU eco-innovatio n policy ........................................................................................ .. 25 
6. ANALYSIS OF THE IMPACTS ......................................................................... 26  
6.1 Option 1: Discontinuation of ETAP (no EU  specific action on eco-innovation).............................. 26  
6.2 Option 2: Continuation of ETAP................................................................................................. ........ 27  
6.3 Option 3: Taking forward the Europe 202 0 flagships ....................................................................... 30  
6.4 Option 4: SME-targeted actions................................................................................................. ......... 34  
6.5 Option 5: Wide EU eco-innovatio n policy ........................................................................................ .. 36 
7. COMPARING THE OPTIONS .......................................................................... 38  
 
3 7.1 Approach ....................................................................................................................... ........................ 38  
7.2 Findings ....................................................................................................................... .......................... 38  
8. MONITORING AND EVALUATION ................................................................ 42  
8.1 Context........................................................................................................................ ........................... 42  
8.2 Organisation and scope of monito ring and evaluation process ........................................................ 42  
8.3 Parameters and indicators ...................................................................................................... ............. 43  
ANNEX I – LIST OF RELEVANT DEFINITIONS .................................................... 44  
ANNEX II – COMPETITIVENESS, RE SOURCE EFFICIENCY AND ECO-
INNOVATION .......................................................................................................... 48  
ANNEX III – THE ECO-INDUSTRIE S – IN THE EU AND GLOBALLY ................. 53  
ANNEX IV – ENVIRONMENTAL POLICY AND ETAP FOR ECO-INNOVATION –
LESSONS LEARNT .................................................................................................. 62  
ANNEX V – RATIONALE AND SPECIFIC ACT IONS IN OPTION 5: WIDE ECO-
INNOVATION POLICY ........................................................................................... 69  
ANNEX VI – INITIATIVE ON ENVIRONMENTAL TECHNOLOGY 
VERIFICATION (ETV) ............................................................................................ 72  
ANNEX VII – DETAILED ASSESSMENT OF OPTION 1 AND EXAMPLES OF 
ETAP'S INDIRECT CONTRIBUTIONS ................................................................... 76  
ANNEX VIII – DETAILED ASSESSM ENT OF OPTION 2 ACTIONS ...................... 78  
ANNEX IX – DETAILED ASSESSMENT OF OPTION 3 ACTIONS ........................ 84  
ANNEX X – DETAILED ASSESSMENT OF OPTION 4 ACTIONS .......................... 90  
ANNEX XI – DETAILED ASSESSMENT OF OPTION 5 ACTIONS ........................ 94  
ANNEX XII – SUMMARY ASSESSM ENTS OF THE OPTIONS .............................. 97  
ANNEX XIII – SUGGESTED PARAM ETERS USED FOR MEASURING 
CONTRIBUTION TOWARDS ACHIEVEMENT OF OBJECTIVES .......................105  
 
 
1  
EXECUTIVE  SUMMARY 
 
Using resources more productively is crucial for environmental protection and competitiveness, but progress is slower than it  should be. Eco-innovation will help to improve 
resource productivity, especially in the long term , with all the positive effects this will bring. 
But we need to design coherent and effective eco-innovation policies. 
 Specific reasons for the slow uptake of eco-innovation are: 
• on the supply side: (1) Inade quate levels of research on eco-innovation, (2) Need for 
coordination of research programs, (3) Weak  linkages between research and market, (4) 
Inadequate skills base; 
• on the demand side: (5) Market prices do not ad equately reflect environmental costs, (6) 
Demand side measures are too weak, (7) Lack of appropriate and credible information on 
the performance of new environmental technologies; 
• on both sides: (8) Governance problems rela ted to EU eco-innova tion support, (9) 
Difficulty in accessing finance, (10)  Difficulty in providing finance; 
• and for the global dimension: (11) Unfavourab le global conditions for eco-innovation, (12) 
Unused potential for eco-innov ation in developed and de veloping countries, (13) 
Indigenous eco-innovation capability amongs t developing countries is scarce. 
 The Innovation Union Flagship Initiative is se tting the future framework for EU innovation 
policy. But problem analysis suggests the need for a dedicated eco-innovation policy 
initiative. The Action Plan will build upon the Innovatio n Union in respect of the 
"environmental" dimension of innovation. As such its role is where general innovation policies are insufficient to promote eco-innov ation.  An eco-innovation policy should – while 
respecting the limitations of Community competence and in cooperation with the Member 
States - pursue overall strategic objectives:   
Increasing the rate of eco-innovation and its uptake in Europe and in so doing 
deliver efficient solutions for environmental problems, boost the resource efficiency 
of Europe and its competitiveness.  
 
With this strategic objective and operational obj ectives in mind, five policy options have been 
identified. Four of them specifically target the problems outlined above. However, one of them - Option 1 where there is no Environmenta l Technologies Action Plan (ETAP) - is the 
baseline scenario where existing EU policie s linked to eco-innovation are implemented but 
there is no specific comprehensive policy on maximising eco-innovation.  
 
Option 2 - Continuation of the ETAP – consists  of measures in four main areas (research, 
markets, global action and, lastly, governan ce and coordination) in line with the 
communication of 2004. It continues the nine prio rity actions of ETAP, and includes some 
measures on governance and coordination.  Option 3 – Taking forward the Europe 2020 Fl agships - Would involve doing what is 
promised in the context of the Europe 2020 Flagships (i.e. Innovation Union, Industrial Policy, New Skills and Resource Efficiency) for the area of the environment, in particular the 
review of environmental policy in terms of its  eco-innovation potential and inclusion of eco-
innovation aspects into the Innova tion Partnerships. This option stems in particular from 
lessons learnt with the implementation of ETA P and environmental policy for eco-innovation, 
 
2 and from the need to adapt and react to the rece nt changes that have occurred in the political 
and economic context surrounding eco-innovation.   Option 4 – SME-targeted actions – Would incl ude actions to support SMEs in becoming 
active developers and users of  eco-innovation as well as open  eco-innovative SMEs to global 
trade opportunities for green goods and services. It is characterized by increased ambition, 
expanded scope of intervention to also include  non-technological innov ation, a real focus on 
global dimension and increased attention to  networking. It builds upon the ETAP lessons 
learnt and issues identified in the problem definition section.   
 Option 5 – A wide eco-innovation po licy - Responds to the call fo r policies that create the 
economic conditions to reduce demand for natural resources and thus stimulate appropriate eco-innovations.  This would include working on pric e signals and boosting demand for green 
products and greener production te chnologies through public procur ement, clear labelling of 
green products, and waste prevention and recycling.  
This impact assessment considers the various aspects of these options, the urgency of a 
focused and improved eco-innovation policy, a nd the feasibility of reasonably rapid 
implementation. It concludes th at Option 3 in combination wi th Option 4 seems to have 
a better balance than the other options and responds best to the strategic and 
operational objectives. Option 5 could serve as a long-term vi sion for achieving a radical 
transition to a more resource-efficient,  competitive and sustainable economy.  
 
 
3  
1. BACKGROUND  
 
The Europe 2020 Flagship Initiative "Innovation Union"1 (IU) announces an Eco-innovation 
Action Plan (EcoAP) to focus on specific bottlenecks, challenges and opportunities for 
achieving environmental objectives through ec o-innovation. The IU also announced that 
EcoAP will promote eco-innovation in technologie s, business processes and organizational 
change to address the challenges of resource2 scarcity, air, water and soil pollution, water 
efficiency and also provide growth and jobs. The Action Plan will build upon the Innovation Union in respect of the "environmental" dimens ion of innovation. As su ch its role is where 
general innovation polic ies are insufficient to promote eco -innovation. It will take forward 
existing experiences in promoting the developmen t and uptake of eco-inn ovation, in particular 
the Environmental Technologies Action Plan
3 (ETAP). The ETAP was adopted by the 
Commission in 2004 to cover a wide range of act ivities promoting the development and use of 
environmental technologies in the EU and globally.   EcoAP will also help to deliver  the objectives set out in the Europe 2020 Flagship Initiative 
on "A resource-efficient Europe"
4, that established resource effi ciency as the guiding principle 
for EU policies on energy, transport, climate change, industry, commodities, agriculture, fisheries, biodiversity and regional development. The Fl agship creates a framework for 
policies to support the shift towards a re source-efficient and low-carbon economy. Eco-
innovation is one way of improving the resource efficiency of the economy. 
 
Definitions
5: 
Eco-Innovation  is any form of innovation resulti ng in or aiming at significant and 
demonstrable progress towards the goal of sustainable development, through reducing impacts 
on the environment, enhancing resilience to en vironmental pressures, or achieving a more 
efficient and responsible use of natural resources.  
 
2. PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  
 
Considerable effort went into consultation of  stakeholders. The public at large has been 
consulted. Extensive use has also been made  of the existing ETAP communication channels. 
The main elements of this consultation exercise include: 
- open stakeholder consultation  
- consultation of the regular ETAP High Level Working Group (HLWG) with the 
Member States, mostly representatives of  Ministries of Environment and Economy.  
- targeted consultations (Member States and representatives from research, business, 
financial, non-governmental organisations) on the impact assessment.   
- bi-annual ETAP Forums on Eco-innovation, attended by 1,010 part icipants, 30% of 
them from the private sector, which made targeted recommendations6. 
- Within the European Commission, an Imp act Assessment Steering Group (IASG) met 
repeatedly allowing different  Services to input.  
                                                 
1  COM (2010) 546 final, Europe 2020 Flagship Initiative "Innovation Union" 
2 Resources include raw materials such as fuels, minerals and me tals but also food, soil, water, air, biomass and ecosystems. 
3 COM (2004) 38 final, Communication from the Commission to the Council and the European Parliame nt, Stimulating technologies f or 
sustainable development: An Environmental Tec hnologies Acton Plan for the European Union 
4 COM(2011) 21, "A resource-efficient Europe" 
5 For a list of all definitions relevant to this report please refer to Annex I. 
6 Forum recommendations are to be found at: http://ec. europa.eu/environment/etap/ events/ecoinnovation_en.html 
 
4 - Eurobarometer survey7 on the "Attitudes of European entrepreneurs towards eco-
innovation" 
 
2.1 Consultations8 – Main conclusions  
 
Overall, Member States felt the ETAP had been successful in mobilizing stakeholders and the 
Commission in supporting eco-innovation. There is broad support to take forward the 
framework, but key areas where stak eholders wanted change were: 
• the need to cover not just  traditional environmental technologies but also eco-
innovation (innovations in processes, sy stems and services) more widely.  
• the need to better target SMEs wa s highlighted as a clear priority9.  
• the need to make better use of public funding to attract and leverage  private investors, 
in particular venture capital funds. 
• a renewed focus on export promotion act ivities and networ king of eco-innovative 
European SMEs.  
• The role of the Eco-AP within th e new Innovation Union (IU) framework. 
 
There was consensus on the need to define better the goal of intervention : the focus on 
resource efficiency was widely supported. Howeve r, there were remarks that this should not 
be considered an "all-inclusive" goal, as it could leave out othe r environmental priorities (e.g.: 
clean air). The need to concentrate on non-en ergy areas was highlight ed, to avoid overlap 
with energy-specific EU policy in itiatives. Priority sectors such as water, waste, recycling, 
and more sustainable ma terials were proposed.  
 The focus on business
, and in particular SMEs, was questioned by some academics who 
would have liked to extend the scope more explic itly to consumers, particularly with regards 
to the theme of more environmental awaren ess. The EU Sustainable Consumption and 
Production Action Plan and other initiatives d eal with policies rela ted to consumers. 
 The need for demand side policies
 for eco-innovation was priori tised, particularly by MSs, 
underlining their potential as in the case of Green Public Procurement. 
 Calls were made for a better divisi on between strategi c and operational
 objective as well as 
more clarity on the timing of different actions.  MSs, business and financial stakeholders noted the need to support the development of skills 
for green and greener jobs  as shortages and skills mismatches are becoming problematic, 
particularly for SMEs.  The need to mobilise financial resources
 with specific incentives for eco-innovative 
businesses was widely supported by busine ss and financial community. The ETAP Forum 
"Financing eco-innovators"10 concluded that more flexib le and favourable risk-sharing 
conditions are needed to stimulate access to finance in this specific and sometimes 'disadvantaged' investment area, especially in sectors such as waste and recycling and water. 
The need to provide better support to busines ses was raised leading to focusing on actions 
related to SMEs, training and financing needs. 
                                                
 
7 Flash Eurobarometer 315: "The attitudes of European entrepreneurs towards eco-innovation"  
8 For a list and minutes of all consultation meetings see: http://etap.pracsis.be/etap/Minutes %20-%20Consultation%20meetings.pdf  
9 See Bilbao Declaration "Fostering eco-innovation in SMEs", June 2010 10 For details see: http://ec.europa.e u/environment/ecoinnovation2010/2nd_forum/
 
 
5  
There were some concerns amongst th e MSs over eco-innovation governance  in particular 
with regards to widening the group of stakehol ders to include the business community. There 
was, however, general support to relying more on business and expert ad vice. The table below 
summarises the feedback received from  the various groups of stakeholders11. 
 
MS representatives
HLWGFinancial/Business
/Academic 
communit yIASG
General issues
Coordination with Innovation Union +/- +/- +/-
Need to reinforce ETAP + +
From env. tech to wider eco-innovation +
Definition of eco-innovation and more sectoral focus (e.g.: exclusion of ene r + +/- +
SME focus +/-
Demand policies +
Need to reinforce global actions +/-
Strategic and Operational actions --
Clarity regarding timing of actions -
Evidence in the IA +/-
Main actions
Action on Green skills ++ ++
Ad hoc funding for eco-innovation ++
Business models +
ETV pilot +
GPP of eco-innovation ++
Support to eco-industry +/-
Global actions +
Reinforcing eco-innovation governance +/- +
Gathering of info on eco-innovation (also at global level) +
Policy learning and roadmaps +
Tax on natural resources +/-
Ambitious "green" procurement standards
Legally binding fram ework for labelling
Phasing out of worst performing productsWaste prevention and recycling standards along value chain
Cardif process (integration of env policies in others) +
++
Very positive feedback
+ Positive feedback
+/- Contrasting feedback
- Negative feedback
-- Very negative feedback
No specific feedback  
 
While the possibility to introduce a tax on natural resources  was regarded as attractive by 
some stakeholders, concerns were raised regarding the feasibility and political 'sensitivity' of such actions. These comments have been taken in to account in the analysis of the impacts and 
in the long time horizon foreseen for the action.  More focussed and in-depth cooperation
 was requested by stakeholders in terms of global 
actions as compared to ETAP. This has been taken into account in the development of the 
options and of specific actions with rele vant partners such as UNEP and OECD. 
 The Eurobarometer survey shows that eco-innovati on is part of the business responses to the 
resource scarcity challenge. The survey also identified the key barriers and drivers to eco-
innovation development and uptake.   
2.2 View of the Impact Assessment Board 
 
                                                
 
11 In some cases no specific feedback was received and that is wh y the table is not comprehensive in terms of actions of the di fferent 
options. For the sake of brevity only contrasting feedback ( +/-), negative feedback (-) and very positive feedback ( ++) is commented below 
as the rest is quite self explanatory.  
 
6 This Impact Assessment (IA) is re-submitted to take account of  the opinions presented by the 
Impact Assessment Board in its opinion of December 2010. In particular a more focused problem definition has been inse rted, and specific objectives as well as their hierarchy have 
been proposed. The IA details the particular  drivers for eco-innovation and analyses how 
these drivers are tackled by the current EU a nd national policies. The report has expanded on 
the number of options it evaluates, linking them to the problem drivers and providing a clear 
baseline scenario. In the analysis of impacts of  options much greater care has been taken to 
specify expected costs and benefits of the proposals.   
3. P
ROBLEM DEFINITION  
 
Eco-innovation is one way of improving environmental prot ection and of improving the 
resource efficiency of the economy and so c ontributing to competitiveness (see Annex II).  
 
3.1 The problem – insufficient eco-innovation 
 
Delivering on environmental objectives requires  change in the way we use, re-use and 
manage materials, and resources at large. This change can be made by developing new 
technological and non-technologica l solutions, new approaches to  the way we run business or 
the way we consume and use goods and services. Ho wever, the current rate of change is sub-
optimal, and there is the poten tial to increase eco-innovation in  a way that boosts resource 
productivity, competitiveness and helps to safeguard the environment.   At the same time implementation of EU environmental legislation is incoherent across the Member States. In the period 2003 – 2009 (t he latest available data) the European 
Commission has launched app. 500 envi ronmental infringement cases annually
12. Increased 
development and uptake of eco-i nnovation will also he lp in the better implementation of the 
environmental acquis throughout the European Union.  Achieving a safe and healthy global natural environment necessitates significant involvement of partners outside the EU. However, eco-innovations and e nvironmental technologies are 
currently developed, for the most part, in deve loped countries, and they are not being diffused 
in the world economy at sufficient speed and scale.   
3.2 The eco-innovation policy landscape 
 
Eco-innovation is a broad concept that is re lated to many policies.  Although environmental 
policies are the main driver for eco-innova tion development and uptake other ongoing 
policies in innovation, energy, cohesion also help shape the eco- innovation landscape. 
 Environmental policies 
 
 EU Environmental legislation and polic y plays a central role in motivating
13 eco-innovation 
and have created new markets, incentivising business to innovate towards best and more 
efficient solutions. The Sustainable Consumption and Pro duction Action Plan (SCP-AP)  
outlines an integrated approach to sustainabl e production and consumption patterns, primarily 
                                                 
12 See for details: http://ec.europa.eu/environment/legal/law/statistics.htm  
13 Belin, J, Horbach, J & Oltra, V, 2009, De terminants and specificities of eco-innovati ons – An econometric analysis for Franc e and 
Germany based on the Community Innovation Survey, Article submi tted to the EAEPE Conference, Amsterdam, November 6-8, 2009 
 
7 via regulatory and support measures aimed at  enhancing the energy and environmental 
performance of products and encourag ing their uptake by consumers.  
 As means to better coordinate and ensure consistency of eco-innovati on policy the European 
Commission launched the Environmental Technologies Action Plan  as a complement to the 
regulatory approaches. The Plan aims to integrate EC objectives in terms of EU 
competitiveness, economic growth, employment and the environment into research, investment and purchasing decisions, concerni ng environmental technologies. As such the 
Plan promotes research, development and de ployment, mobilizes funds, helps to drive 
demand and to remove barriers to market deve lopments for environmen tal technologies, and 
eco-innovation in general.  For a detailed description of the lessons lear nt of ETAP and environmental policy for eco-
innovation see chapter 3.3 and Annex IV.   Financial Support
 
 
CIP supports eco-innovation activit ies in SMEs, primarily, under the Entrepreneurship and 
Innovation operational programme (E IP). It allocates €433 million (out of EIP’s total budget 
of over €2.0 billion). EIP facili tates the commercialisation of  innovative production processes, 
products or services and new management and business practices seeking to reduce 
environmental impacts and to promote an effi cient and responsible use of resources and 
encouraging the competitiveness of Europ ean enterprises. EIP-eco-innovation addresses 
almost the entire range of sectors/areas with the exception of renewables and energy 
efficiency covered by the Intelligent Energy Europe sub-programme of EIP. 
 Eco-innovation and environmental technologies are part of the Environment Policy and 
Governance component of LIFE+ . In 2009, projects related to  innovation, in general, 
including the development of  innovative policy ideas, technol ogies and processes amounted 
to about €21 million.  With regard to Cohesion Policy sustainable development and environmental protection are 
among the overarching policy aims with about  30% of the total available funding over 2007-
13 directly and indirectly invested in those areas. The ERDF regulation
14 explicitly mentions 
priorities related to environmental tec hnologies. Over the peri od 2000 – 2006 the ERDF 
allocated €25.5 and the Cohesion Fund €15.8 billion to environment-related interventions and 
€1.4 billion has been sp ent on environmentally friendly technologies (three quarters of this in 
support of SMEs). An assessment of the Regional Programmes for Innovative Actions 
(RPIA)15 highlights some examples related to envi ronmental technologies. However there is 
little evidence16 that it has been used to develop or diffuse eco-innovative technologies at a 
larger scale. Between 2007-2013 the Structural Funds (SF) allocations to the promotion of 
environmentally friendly products and produc tion processes in SMEs increased to €2.4 
billion. This shows a significan t absolute increase in comparison to the previous period. 
 Over the last two programming periods support  for investments in e.g. energy efficiency 
(notably housing sector), clean  technologies and environmental services increased. However 
in certain cases, depending on the split of th e Operational Programmes at national and/or 
                                                
 
14 Regulation (EC) No 1080/2006, OJ L 210 
15 Technopolis, October 2010, Policy lessons  from experimentation with regiona l programmes of innovative actions 
16 Technopolis, 2006, Strategic Evaluation on Innovation and the knowledge based economy in relation to the Structural and Cohe sion 
Funds, for the programming period 2007-2013 
 
8 regional level the related SF investments can be fragmented, as environment and innovation 
are sometimes dealt with via separate ope rational programmes. A recent Communication17 on 
'Regional Policy contributing to sustainabl e growth in Europe 2020' underlines eco-
innovations as a key investment area and encour ages the Member States and regions to make 
further use of the SF to boost eco-innovations . In addition the development of 'Smart 
Specialisation Strategies'18 at regional level and the launch of the 'smart specialisation 
platform' will help the regions and their authoritie s to address the cross-sectoral nature of eco-
innovation and the need for an overarching stra tegy. Data on eco-innovation are not really 
available: the available analys is of SF effects did not explic itly focus on eco-innovations or 
environmental innovations but analyse innovation -related effects or environmental effects, 
and as such provide limited evid ence related to eco-innovation.  
 Although subsequent EU reforms of the Common Agricultural Policy (CAP) reflect a 
growing commitment to environmental issues, the principal focus has been on land use / 
management and the diffusion of good practice.  The longer-term goals of CAP reflect the 
Lisbon and Gothenburg discourse on i nnovation and sustainability. However  the complexity 
of the CAP, the need to mana ge its financial reform and en sure food supply within a global 
market place while promoting cohesion amongst rural communities are not likely to allow a 
dedicated attention to eco-i nnovation in this area. Agricu ltural policy might thus be 
overlooking an important challe nge or opportunity for doing more to support eco-innovation.  
 
Research and innovation policy
 
 
Within RTDI policy innovation is a core  issue. In FP6 €1.4 billion was spent on 
environmental technologies and eco-innovations. Mo st of it in the NM P thematic priority 
(Nanotechnology, multifunctional knowledge-based materials; new production processes and devices; and integration of technol ogies for industrial applications ) and priority 6: sustainable 
development, global change and ecosystems. Wi thin FP7 app. €10 billio n has been allocated 
to environmental technologies. Furthermore, in  the context of both FP 6 and 7 a number of 
ERA-NETs and  ETPs were esta blished, many of them related to environmental technologies 
(Hydrogen and fuel cells, Water supply and san itation, Steel, Chemistry, Construction etc.). 
Both FP6 and FP7 show a ‘greening’ of sub-th emes after 2004, the startin g year of ETAP, and 
it is explicitly mentioned as driv er for some of the sub-themes.  
 
Energy
 
 
Energy is well covered by other policies, apart fr om ETV. The political importance attributed 
to climate change mitigation and adaptation efforts have focused efforts on technological areas, like renewables and energy efficiency, whic h directly contribute to the reduction of 
green house gases. The Climate Change and Energy Package sets targets for renewable energy and energy efficiency and provided th e framework for targeted initiatives.   
 The SET-Plan, launched in 2007, is a policy init iative linked to the current ETAP. The overall 
purpose of the SET-Plan “is to fo cus, strengthen and give cohere nce to the overall effort in 
Europe, with the objective of accelerating innovation in cutting edge European low 
carbon technologies” . This will be achieved through jo int strategic planning, European 
Industrial Initiativ es and an increase in financial re sources and intern ational cooperation. 
 
                                                
 
17 COM(2011) 17 final and SEC(2011) 92 final 
18 COM(2010) 553, Communication from the Commission, "Regiona l Policy contributing to smart growth in Europe 2020" 
 
9 A follow up communication19 addressees the need for additional public/private funding 
(€50bn by 2020) for low carbon technologies to  cover basic and applied research, 
demonstration and market take up. The initia tive includes technology 'roadmaps' for key low 
carbon technologies: wind, solar, el ectricity grids, bioenergy, carbon capture and storage 
(CCS) and sustainable nuclear fission. The communication also proposed to reinforce 
financial instruments (RSFF, GI F, Marguerite Fund) to support large demonstrations and 
replication projects in the identified areas.  The SET-Plan will have a direct impact on eco -innovation rates, however limited only to the 
energy sector.  The focused SET-Plan will not  provide a coordinati ng aspect and overview 
over the wide eco-innovation field and risk s missing out on the opp ortunities provided by 
emerging "non- energy" technolog ies. ETAP would thus compleme nt the SET-Plan. There is 
also a potential for synergies for example with regard to the financial instruments providing 
funding to the uptake of eco-innovation.   In practice, energy is thus well covered by other policies. The exception would be ETV, a 
focus area for ETAP, not covered by other ener gy-related policies. Accordingly, there seems 
to be little value-added in covering ener gy, so excluding energy from any eco-innovation 
policy initiative (ie Options 3 to 5) provides the best value added. 
 
3.2.1 Emerging policy landscape for eco -innovation – Europe 2020 Flagships 
 
Any future eco-innovation initiative must take  account of the new policy framework set by 
the Europe 2020 Flagship Ini tiatives “Innovation Union”, "A resource-efficient Europe", 
"Industrial policy for a globalized Era"
20 and "Agenda for new skills and jobs"21.  
 The "Innovation Union" sets the future framework for innovati on policy in the EU. Any new 
eco-innovation initiative needs to  build on the "Innovation Union"  and take it forward in a 
way that specifically supports eco-innovation. At times, this  is explicit such as creating 
European Innovation Partnerships (IPs) to addre ss specific societal challenges or the review 
of environmental legislation with regards to their eco-innovation potential. A long–term 
vision for the direction of the green transition is provided in the "Resource Efficient Europe" 
to increase certainty for inve stment and eco-innovation.   
 Additionally the Industrial Policy Flagship explic itly states that the EcoAP will put in place 
the tools to identify the deployment requir ements for key environmental technologies, 
enhance coordination and coope ration between the EU and Me mber States and generate 
awareness of the potential of new technologies. The New Skills and Jobs Flagship calls for an 
Eco-innovation Action Plan to support compet ences for sustainable development, and 
promote appropriate skills developm ent and tackle skills mismatches. 
  
3.3 Implementing eco-innovation policies – Lessons learnt 
 
The first attempt at a systemic approach to eco-innovation policy was the Environmental 
Technologies Action Plan (ETAP) launched in 2004
22. Its aim was to harn ess the potential of 
                                                 
19 COM (2009) 519, Investing in the develo pment of low carbon technologies (SET-Plan)  
20 COM (2010) 614 Communication from the Commission: "An integrated industrial policy for the industrial era" 
21 COM (2010) 682 Communication from the Commi ssion: "An agenda for new skills and jobs"  
22 COM (2004) 38 final, Communication from the Commission, Stimul ating technologies for sustainabl e development: An Environment al 
Technologies Acton Plan for the European Union  
 
10 environmental technologies to better prot ect the environment and contribute to 
competitiveness and growth. It was the first attempt at coordinating heterogeneous policies and mobilizing stakeholders. It has been reviewed once and two progress reports have been issued
23, and also two reviews of the ETAP National Roadmaps have been conducted.24  
 
The key lessons for promoting eco-innovation ar e (see Annex IV for detailed analysis): 
• Eco-innovation will not emerge without an innovation-friendly environmental policy. 
• Eco-innovation is also condi tioned by the wider framework conditions, outside the 
realm of environmental policy. A case for in tegrated policy approaches can be made25.  
• Need to consider unintended negative envi ronmental consequences (e.g. growing crops 
to produce biofuels can lead to deforesta tion and increase greenhouse gas emissions).  
• Need to focus on demand-side actions to  ensure uptake and EU-wide technology 
spillovers. Benefits only materialize when th e eco-innovation is taken up and delivers.  
• The ETAP report of 2007 specifi ed priority sectors (susta inable construction, waste & 
recycling, food & drink), and this resulted in  a more coordinated a pproach as seen in 
the launch of Lead Markets in sustainable construction and waste & recycling.    
• EU Member States devote a lot of attenti on to the creation and development of new, 
eco-innovative firms and ventures. Nationa l strategies to support eco-innovation 
provide opportunities to coordinate polic y dialogue. In Europe, ETAP has been a 
vehicle to systematize and reorganize exis ting measures. In particular in the New 
Member States ETAP helped launch  policy debates on eco-innovation.  
 
The ETAP-specific experiences related to eco-innovation policy are described below, 
organized according to ETAP intervention areas.  
 
3.3.1 Getting from research to markets 
 
ETAP has been successful in influencing th e research priorities  in the Framework 
Programmes (FPs) and supporting infrastructure  (European Technology Platforms (ETPs), 
Joint Technology Initiatives (JTIs )). However research efforts coul d still be better coordinated 
and are not always aligned with emerging environmental and market needs.   
3.3.2 Improving market conditions 
 
ETAP was successful in mobilising public and pr ivate sources of fundi ng to accelerate the 
market uptake of eco-innovative tec hnologies. The main results are: 
• the creation of the new Competitiveness and Innovation Programme , with specific 
support actions for eco-innovation and an indicative budget of €433 million (2007-2013) including participation in venture cap ital (VC) investment funds and support of 
market replication  and pilot projects;  
• the revision of the environmental State Aid guidelines , with a specific 10% bonus on 
the maximum aid intensity fo r eco-innovation investments;  
• the agreement on a target for Green Public Procurement  (GPP) of 50% of general 
public procurement as from 2010, and development of related tools.  
 
                                                
 
23 CEC 2005, Report on the implementation of the Environmental T echnologies Action Plan in 2004, COM(2005) 16 final; CEC 2007, 
Report on the Environmental Technologies Action Plan (2005-2006) , COM(2007) 162 final; Ecorys 2009, The implementation of the 
Environmental Technologies Action Plan, Rotterdam  
24 CEC 2007, Commission Staff Working Document Accompanying Repor t of the Environmental Technologies Action Plan (2005-2006) 
{COM(2007) 162 final}; WIFO 2009, Assessment of ETAP roadma ps with regard to their eco-innovation potential, Vienna  
25 European Commission, Directorate-General Environment ( 2007), "Designing environmental po licy to be innovation friendly"  
 
11 With respect to mobilizing EU financing , ETAP was not so successful  in ensuring a greater 
role for cohesion policy in eco-innovation develo pment and uptake. Experience shows that the 
design of future EU financial instruments fo r eco-innovation should be better linked to policy 
objectives, national instruments and market n eeds. Finally, ETAP shows that if financial 
instrument for eco-innovation are to have an impact they must be part of a package of 
financial and non-financial measures designe d to address a speci fic policy objective. 
 The 2007 ETAP report points to the role of innova tion initiatives in em erging sectors, where 
established communication channe ls do not exist (see Lead Market for bio-based products
26).  
 Finally, the lack of uniform implementation in the MSs of the environmental acquis creates an 
uncertain business environment. A stable polic y framework with greate r harmonization or co-
ordination, together with si mplification of complex national regulations would help. 
 
3.3.3 Acting globally 
 
ETAP has not been successful in  putting eco-innovation on the international agenda. Progress 
in removing trade tariffs for environmental goods and services was slow due to the delays in 
the general WTO trade negotiations. However,  international cooperation on the 'green 
economy' creates new opportunities.    ETAP experiences show that a “one-size-fits al l” solution does not work.  Entrepreneurs in 
the EU face different challenges and opportuniti es from those in developing and rapidly 
industrialized countries. Fina lly, for technology transfer
27 (TT) to happen, indigenous eco-
innovation capabilities need to be develope d to facilitate the adoption, adaptation and 
development of technologies that fit the sp ecific conditions of recipient countries.  
 
3.3.4 Governance of ETAP 
 
The ETAP High Level Working Group and the ETA P National Roadmaps are the main EU 
instruments for stimulating eco-i nnovation policies at the EU and MS level. However the lack 
of a clear leadership role fo r ETAP meant that the impact wa s sometimes incoherent. A high 
level of MS engagement was achieved, but in sufficient networking (ie weak links across 
policy areas, actors and sectors) was the key obstacle to a coherent approach.  
 Considerable experience has been accumulated through the ETAP National Roadmaps. However, the voluntary nature of the Roadmaps, their retrospective nature and the lack of 
appropriate follow-up, risks an uneven impact of  ETAP across the Member States. This is 
further aggravated by the lack of qualitative  information on the stat us, design, target and 
budget of eco-innovation instruments to fu rther assess their potential impact. 
 
3.4 Underlying drivers of the problem 
 
The drivers affecting eco-innovation uptake in the EU can be grouped into four classes. Some 
of these drivers are specific to eco-innovation, but many are not . The current policy measures 
take account of this specificit y, but in some cases a targeted  policy response is needed.  
  
                                                
 
26 SEC (2009) 1198, Commission Staff Worki ng Document, "Lead Market Initiative for Europe – Mid-term  progress report" 
27 See Berlin ETAP Forum (April 2nd – 3rd, 2011): http://ec.europa.eu/enviro nment/ecoinnovation2009/1st_forum  
 
12 3.4.1 Research leading to eco-innova tion and to market applications 
 
• Inadequate level of research on eco-innovation  – Not specific for eco-innovation, 
but more severe than in  other policy areas.  Companies do not by themselves invest 
enough in innovative solutions to reduce polluti on or the resource intensity of their 
activities. Available financing and support is inadequate especially for SMEs.  
 
The current policy response is adequate.  European funding for environmental 
technologies increased from €1.4 billion in the 6th Framework Programme for 
Research and Technological Development (FP6 ) to €10 billion in the 7th FP. As such, 
policy is already tack ling the problem of lack of research. 
 
• Need for better coordination of research programmes  – Generic innovation issue. 
National research efforts do not  reflect national strengths and often overlap preventing 
the achievement critical mass and smart specialization at a European level. 
 
The current policy response is adequate.  An ERA-Net on eco-innovation (part of FP7) 
has been launched, as a first attempt to  coordinate MS eco-innovation research 
activities. Commission is promoting joint programming. Furthermore IPs, granted they 
take account of eco-innova tion, will coordinate research efforts in key areas. 
 
• Weak linkages between research and market  – Not specific for eco-innovation, but 
more severe than in other policy areas . Particularly true fo r environmental technology 
transfer and early-stage financ ing to turn research results into market applications.  
 
Environmental innovations evolve with th e social, legal and economic settings. They 
mutually influence each other and therefore successful transfer to the market depends 
on the path of its development. Increasing re turns to adoption exist, (i.e. economies of 
scale and scope, etc.) lead to ‘lock-in’ of incumbent technologies, preventing the take 
up of less environmentally harmful alternat ives. Industrial economies are locked-in to 
carbon intensive fossil fuel based energy syst ems, which consequently lock-out the 
development of new, more sustainable technologies28 that are yet to benefit from 
economies scale and scope. Coordinating policies29 must overcome these lock-ins.  
 
The current policy response is inadequate.  The IPs will address these issues in the 
targeted, high-potential areas, going further than the existing Lead Market Initiative30 
(LMI). For eco-innovation to be nefit they should be integrated into this approach. 
 
• Inadequate “skills” base  – Not specific for eco-innovatio n, but more severe than in 
other policy areas. Specific skills and knowledge is required for greening industries. 
However, skills gaps and mismatches for green and greener jobs are expected to worsen unless tackled
31.  
 
The current policy resp onse is inadequate. The New Skills, New Jobs initiative will 
focus on skills anticipation and provision, but it calls upon an EcoAP to support 
                                                 
28   Unruh, G C (2000), ‘Understanding carbon lock in’, Energy Policy 28, 817-830; Unruh, G C (2002), ‘Escaping carbon lock in’ , Energy 
Policy 30, 317-325 29 Foxon (2002). Technological and in stitutional ‘lock-in’ as a barrier to sustaina ble innovation. ICCEPT working paper. Availa ble at 
http://www.iccept.ic.ac.uk/public.html 
30 COM (2007) 860, Communication from the Commissi on, "A Lead Market Initiative for Europe" 
31 CEDEFOP (2010), "Skills for green jobs" 
 
13 appropriate skills development. The value adde d of EcoAP will be to indicate priority 
sectors and facilitate po licy learning between MS. 
 
3.4.2 Market demand for eco-innovation  
 
• Market prices do not adequately reflect environmental costs  – Eco-innovation 
specific. Failure to price environmental extern alities - or providing environmentally 
harmful subsidies - puts eco-innovation at a disadvantage with cheaper, but more 
polluting and less efficient technologies. For instance the Hungarian ETAP Roadmap32 
states that the economy is “…characterise d by poor energy efficiency… resulting in 
reduced competitiveness due to the higher specific costs [of eco-innovations] … also strengthened by the fact that  market prices do not take into account environmental 
externalities, or do so but at an insignifi cant level, the actors … are not environment-
conscious and resources are wastefully used  in both material and energy terms…”. 
 
The current policy response is adequate.  The issue is dealt within individual 
environmental policies and under the aegis  of the Resource Efficiency Roadmap.  
 
• Demand side measures are weak  – Not specific for eco-innovation, but more severe 
than in other policy areas. Current EU and Member State innovation policies and 
instruments seem biased towards supply-side innovation policies
33.  The analysis34 of 
policy measures listed in the ETAP roadma ps shows (see Figure 1) that Member 
States rarely design and implement dema nd side policies for eco-innovation. Also 
private sector expect governments to cr eate markets for environmentally better 
performing products and solutions, for in stance through green public procurement35.  
            
Figure 1: Balance of policy instrument across ETAP countries 
                                                
 
32 See: http://ec.europa.eu/environmen t/etap/policy/pdfs/roadmaps/hu_en.pdf 
33 OECD (2008), "National approaches for promoting eco-innovation: Policy issues" 34 "Assessment of ETAP roadmaps with regard to their eco-innov ation potential" http://ec.europa .eu/environment/etap/files/env-
map_projektt2_finalreport_mai ndocument_final_030910.pdf 
35 Innovative environmental growth markets from a company perspec tive, Research project on behalf of the Federal Environment Ag ency 
by Roland Berger Strategy Consultants, 2007 
 
14 
 
Source: OECD (2008), "National approaches for promoting eco-innovation: Policy issues" 
 
The current policy response is inadequate. Public policy must compensate for the 
disadvantage eco-innovations face in the market  (failure to price the env. externality). 
On the policy side the SCP AP will dr ive the change. The EcoAP will launch 
demonstration projects showing the value a dded of procurement of  green products and 
services. Also the IP approach must be exploited towards this objective. 
 
• Lack of appropriate and credible info rmation on the performance of new 
environmental technologies –  Not specific for eco-innov ation, but more severe than 
in other policy areas. The performance data from tests of emerging eco-innovation 
and demonstration plants are not always su fficiently robust for the market and do not 
adequately address the information need s of technology purchasers. Improving the 
quality and reliability of performance data on innovative environmental technologies, and the information on their environmental and health effects, would significantly facilitate market access. 
 
This may be illustrated by the specific case of measurement instruments. Three associations of industrial users of measur ement instruments (Evaluation International 
in the UK, EXERA in France and WIB in  the Netherlands) regularly undertake 
comparative tests and evaluation of measur ement, control and monitoring systems. 
They published joint statistic s based on 107 evaluations performed in five years, in 
which they stressed that, for 80% of evaluated systems, adequate documentation was not available for users. In 39% of cases,  the technologies were not complying with 
announced specifications under normal conditi ons of use, this proportion rising to 
74% under influence conditions. 
 
The current policy response is inadequate. Environmental Technology Verification is 
one way of increasing the mark et credibility of new techno logies. An initial phase, on 
an experimental basis, should enable the te sting and evaluation of the concept in near-
real conditions. 
 
3.4.3. The interplay between supply and demand 
 
• Governance problems related to EU innovation support  – Not specific for eco-
 
15 innovation, but more severe than in other policy areas. The policy mix for eco-
innovation support ranges from environm ental legislation and the "knowledge 
triangle" (research, education and innovatio n) to policy areas such as state aid, 
procurement, intellectual property rights and employme nt. The policy mix also 
depends on co-ordination at national, regional and local levels. Eco-innovation 
however has not been a main objective of either environmental or innovation policy, 
while it could contribute to objectives  of both policies. Further changes36 in the range 
of EU instruments and policies used to  support eco-innovation seems necessary, 
notably to promote coherence between inst ruments, critical mass and to complement 
or extend them to cover also de mand-led innovation measures.    
 
The current policy response is inadequate. The measures to improve governance 
between areas and national, regional and local levels is currently one of the strengths 
of ETAP, and will not be properly ta ckled by the Europe 2020 flagships. 
 
• Difficulty in accessing finance  - Not specific for eco-innov ation, but more severe 
than in other policy areas. Access to financial resources is  one of the major difficulties 
for firms37, the main barriers are:  
o Competency issues related to the small si ze of companies, such as lack of the 
organizational capacity to support resear ch and commercialisation, lack of 
resources to protect IPRs, a nd lack of business skills; 
o Over-reliance on the public sector for financing;  
o Industry-specific issues including: dive rgent goals between eco-innovators and 
investors, limited knowledge of the eco-innov ation market due to its rapid growth 
and embryonic development, and lack of cooperation within the industry.  
 
Case-study: LODOred38 
WASTEred is a project financed under CI P eco-innovation market replication grant 
programme. The consortium lead by BIOAZUL, a Spanish enterprise, develops and markets 
its own eco-innovative product LODOred (Sludge Reducer for Wastewater Treatment Plants) 
offering a 15%-40% reduction of the surplus sl udge generated in wastewater treatment. 
Potential markets are the munici pal and industrial treatment pl ants. The consortium was faced 
with many market barriers. For example re luctance of plant owne rs towards innovative 
solutions as well as the misconcep tion that wastewater and sludge treatment is considered as a 
cost rather than an opportunity for increasing e fficiency (and profits). Those hurdles have not 
allowed them to access "normal" financing at market conditions but they had to recur to 
European financing. The replication of the project in Europe is advancing and the 
achievement of 30% market share in th e targeted markets is well on track.   
 
• Difficulty in providing finance  - Not specific for eco-innovation, but more severe 
than in other policy areas. Investors are showing an in creasing interest in green 
investment,39 but there are still barriers to i nvestment in eco-innovation, namely: 
o the longer profitability horizons, the hi gher amounts needed, and hence the higher 
risks compared to investing in other sectors; 
o problems understanding the projects presen ted by eco-innovative start-ups, which 
makes it hard to evaluate their potential and risks; 
                                                 
36 OECD(2009), Eco-innovation in industry, enabling green growth, Paris, 2009. 
37  Henzelmann, T, Mehner, S, & Zelt, T, 2007, Umweltpolitische Innovations- und Wach stumsmärkte aus Sicht der Unternehmen 
(Innovative environmental growth markets from a company perspective), Berlin  
38 http://images.itt.camcom.it/f/Materia leconvegni/65/653_I TTUCCP_1542011.pdf   
39 Deloitte (2009): 2009 Gl obal Trends in Venture Capital Report  
 
16 o the legislation and regulations govern ing eco-innovation are complicated, so 
investors need a high degree of specialization;  
o finally, some investors argue, there is a real need to develop the managerial and 
business skills of entrepreneurs si nce business plans are often not good. 
 
Case-study: SOT Biotech GmbH40 
SOT has developed a proprietary  industrial scale fully inte grated microalgae production 
process which is more efficient and less capital intensive than existing alternatives. The 
company is currently financed with venture ca pital money as well as with grants. Although 
the company would have been interested in de bt financing in the st art-up financing round, 
commercial banks have declined to participate as it was too risky in their opinion. Have seen 
the potential of such technology those same banks  are currently rather interested to act as 
financiers in such a promising company. 
 
In the case of providing and accessing finance the current policy response is 
inadequate. Whilst the IU will provide support, there will be scope for additional 
action reflecting the eco-innovation specifi c problems and the need for targeted 
actions. Also the networking and support of i nvestors and financiers specific for eco-
innovation needs attention. 
 
3.4.4 The global uptake of eco-innovations 
 
• Unfavourable global conditions for eco-innovation  - Not specific for eco-
innovation, but more severe t han in other policy areas.  The perceived view is that 
there has been limited progress in the inte rnationalisation of European eco-innovation, 
partly because of lack of demand in poten tial partner countries and emphasis on low-
carbon technologies. Secondly sinc e environmental goods and se rvices are part of the 
Doha Trade Round the opening up of global markets has been stalled. 
 
• Unused potential for eco-innovation in developed and developing countries  – Not 
specific for eco-innovation, but more severe than in other policy areas. Eco-innovators 
face different set of opportunities and challeng es when entering markets in developing 
countries to those in rapidly industri alizing. Secondly a pure “competitiveness” 
approach to trade in eco- innovations is not always a ppropriate when looking for 
solution to global environmental challenges. For instance certain te chnologies that are 
specific to the needs of developing countries  are not being developed at all, because 
the developing countries lack  the innovation capacity to do so, while the developed 
countries lack incentives to develop such ‘neglected’ technologie s in the first place. 
 
• Indigenous eco-innovation capability am ongst developing countries is scarce  - Not 
specific for eco-innovation, but more severe than in other policy areas. Developing 
countries often lack the capacity to absorb  eco-innovation and the capabilities to adopt 
and disseminate environmental technologi es. Moreover, the governance systems to 
manage eco-innovation are often weak.41 Research shows that "softer" approaches 
                                                 
40 http://ec.europa.eu/environment/ecoinnova tion2010/2nd_forum/presentations_en.htm 
41 Popp, D. (2009) Policies for th e Development and Transfer of Eco-Innovations : lessons from the literature. OECD Global Forum  on 
Environment on eco-innovation. 
 
17 (like training or the tran sfer of "tacit knowledge") ar e crucial for effective eco-
innovation uptake42. 
 
In the case of global uptake of eco-innov ation the current po licy response is 
inadequate. This problem will be partially addressed by EU trade policy43. However, 
there is a gap to be tackled by the EcoA P in the form of multilateral cooperation. 
 
Case-study: Drying process of cash crops (coffee, tea, rice)  44 
The production and the export by developing countries  of cash crops is considerable in terms 
of volume. The drying process of  cash crops contribu tes considerably to the carbon footprint 
of the consumer products (coffee, tea, rice).  It is clear that the economical, social and 
environmental impact of using appropriate dryi ng technology for cash crops is high and often 
underestimated. The use of solar dryers allo ws addressing environmental concerns and 
simultaneously being profitable. Barriers to higher uptake include the need for capacity-
building (therefore partnership at internati onal level and technology transfer) and ad hoc 
financial support to accommodate the lack of information and of initial investment capital. 
Brazil, India, Sri Lanka and Viet Nam are potential candida tes for technology transfer.  
 
3.5 Are eco-innovation specific policy interven tions at the EU level still needed?   
 
Current policies and actions, such as those in the "Innovation Union" or  "Resource Efficient 
Europe" will promote eco-innovation. However, th ere are gaps or issu es specific to eco-
innovation, where EcoAP can provide value- added over and above the Europe 2020 
Flagships. Looking at the problem drivers these are:   
 
• Weak linkages between research and market 
• Inadequate “skills” base  
• Demand side policy measures are weak  
• Lack of appropriate and credible in formation on the performance of new 
environmental technologies 
• Governance problems related to EU innovation support 
• Problems related to environmental acquis 
• Difficulties in accessing and providing finance  
• Unfavourable global conditions for eco-innovation  
 
To sum up, whilst the Europe 2020 Flagships will help tackle the problems related to eco-
innovation, there is scope for additional polic ies targeted on the sp ecific bottlenecks and 
market failures that exist for eco-innovation. A targeted  eco-innovation policy would 
complement and build on the Innovation Un ion and other polici es in two ways: 
 
1. Taking forward some elements of the Innovation Union such as the screening of the 
regulatory framework for eco-innovation.  
2. Putting in place eco-innovation measures that  target specific environmental drivers 
that would only be partially responded to by the more generic actions set out in the 
Europe 2020 Flagships. 
                                                 
42 Ockwell (2009) Scoping Note on the diff iculties developing countries face in acce ssing markets for eco-innovation. Final rep ort for the 
OECD Environment Directorate.  43 COM (2010) 612, "Trade, growth and world affairs. Trad e policy as a core component of the EU's 2020 strategy" 
44  "Technology Transfer for reducing the carbon footprint. The ex ample of cleaner technologies for food processing". Cassia Ma ria Lie 
Ugaya (Brazil) and Bernard Mazijn (Belgium) 
 
18  
3.6 Who is affected, in what ways, and to what extent? 
 
The slow pace of eco-innovation ad option means lost benefits for a range of stakeholders. The 
most obvious loss is slower growth in productio n and commercial activit ies for eco-industries. 
For a description of Europe's eco-industry tu rnover, composition, employment and its future 
potential see Annex III.   There is widespread consensus that increasing eco-industry activities can spur the creation of 
‘green jobs’ and help outweigh the job losses in other industrial sectors
45. Global wind power 
employment projections, 2010 – 205 0 by Global Wind Energy Outlook46 estimate a potential 
of 2.1 – 2.8 million jobs. EPIA and Greenpeace  project that by 2030, 6.3 million jobs47 could 
be created in solar energy generation. The Eu ropean Renewable Energy Council argues that 
by increasing the share of renewa ble energy in Europe to 20% by 2020, there is a potential for 
the creation of more than 2 million jobs.48  
 Moving towards cleaner and more energy- a nd resource-efficient products and processes 
should give all European industry - not just  the eco-industries - a competitive advantage
49. 
Finally, eco-innovation is also good for the envi ronment, allowing environmental objectives 
to be more ambitious and / or achieved at lower cost.  
 
3.7 Does the EU have the right to act? The EU added-value 
 
Eco-innovation is at the crossroa ds of articles 173 a nd 191 of the Lisbon Tr eaty, and so is a 
shared responsibility between MS and EU. In the field of innovation the EU coordinates, 
supports and supplements the innovation policie s of the Member States, but cannot replace 
them. The need for a coordinate d policy approach able to address eco-innovation failures and 
to create favourable conditions requires intervention at the EU level and cannot be achieved by individual EU Memb er States alone.  
 EU level innovation policy action is also necessary to respond to the increasing geographic 
complexity of innovation that requires increasi ng cooperation with innovation actors outside 
the territory of an individual Member State. Therefore the European added value of an eco-
innovation initiative is evident.  
 
4. O
BJECTIVES   
 
The problem analysis has underlined that im proving Europe’s eco-innovation performance 
must be tackled from both the supply and the demand side in an integrated approach. The objectives below focus on the problem drivers le ft unaddressed or where the measures in IU 
or other policy initiatives need to be taken forward (as specifie d in chapter 3.5)  and so where 
there is potential to add value.  
 
                                                
 
45 ILO (2010), "Green jobs: Towards decent wo rk in a sustainable, low carbon world" 
46 Greenpeace and Global Wind Energy Council (GWEC), Global Wind Energy Outlook, 2006 
47 EPIA and Greenpeace International, "Solar generation: Solar electricity for over one billion people and two b illion jobs by 2020, 2006. 
These projections are under an "Advanced" scenario  positing additional support and dynamic growth.  
48 Renner, M., M. Ghani-Eneland, and A. Chaw la, 2009, Low-Carbon Jobs fo r Europe: Current Opportunitie s and Future Prospects, J une 
2009, World Wide Fund for Nature, Brussels 
49. OECD, 2010, Greening Jobs and Skills: labour  market implications of addressing clim ate change, Local Employment and Economi c 
Development Programme Working Paper  
 
19 4.1 General objectives 
 
EcoAP will contribute to attaining the objectives of the Europe 2020 Strategy and in particular the "Innovation Union". It will ac celerate the development and uptake of eco-
innovation by tackling eco-innovation specific barriers, with an overall objective of: 
 
• Increasing the rate of eco-innovation and its uptake in Europe and in so doing deliver 
efficient solutions for environmental probl ems, and boost the resource efficiency of 
Europe and its competitiveness. 
 
4.2 Specific and operational objectives 
Specific objective 1: to apply the principles of the Innovation Union Initiative to eco-
innovation.  This will be done through the following operational objectives:  
- Putting in place an eco-innovation friendly environmental regulatory framework  
- Integrate eco-innovation concerns into relevant policies and in itiative, in pa rticular in 
the innovation policy field  
- The European Commission will in 2012 make proposals for better targeting of EU 
funds on eco-innovation as part of the next EU financial perspectives. 
 
Specific objective 2: to prom ote eco-innovation in Europe.  This will be done through the 
following operational objectives: 
- Strengthen eco-innovation capacities of SM Es through increased networking and the 
spread of best pr actice  (2011 onwards) 
- Increase the market credibility and invest ment readiness of emerging eco-innovations 
(2011 onwards). 
 
Specific objective 3: to improve global markets for eco-innovation . This will be done through 
the following operational objectives: 
- Open up global markets to eco-innovation 
- Improve global capacities for eco-innovation, in particular in developing countries 
 
5. P
OLICY OPTIONS  
 
Option 1 is a baseline option wher eby EU policies that  already exist or are under development 
are implemented but there are no additional policies on eco-innovati on. It provides the 
baseline against which the other options are co mpared. Option 2 is the simple continuation of 
ETAP. Option 3 looks at a bask et of actions to take forw ard the Europe 2020 Flagships. 
Option 4 looks at a number of  SME eco-innovation specific acti ons, while Option 5 sets out 
more wide ranging regulatory interv ention in support of eco-innovation.  
 
5.1 Option 1: Discontinuation of ETAP (no specific EU action) 
 
Under this option, several instruments and polic y directions will continue, at least for a 
limited period – but the focus on eco-innovation ma y be limited or abandoned. In particular, 
eco-innovation would be taken forward through:  
- the Europe 2020 flagships, including th e Innovation Union, Industrial Policy for a 
Globalized Era, A Resource-Efficient Europe  and the Agenda for New Skills and Jobs, 
 
20 - environment policy will continue to cr eate markets and set incentives for eco-
innovation, 
- funding for innovation fro m CIP and LIFE+. 
 
Although during stakeholder cons ultations both positive and ne gative opinions about ETAP 
were voiced, the discontinuation of ETAP wa s never deemed to be beneficial.   
 
5.2 Option 2: Continuation of ETAP 
 
The current Action Plan consists of 29 actions, including 9 priority  actions (PA) (see Figure ). 
The option would see a continuation of the cu rrent four main domains. Firstly, promoting 
"green" research while attracting private and public investment. Secondly, tackling the 
unfavourable conditions faced by eco-innovators in the market (by facilitating access to 
finance). Thirdly, promotion of environmenta l technologies abroad. Finally, governance and 
networking of stakeholders (public institutions, en terprises, researchers, financial institutions, 
etc.) to increase the knowle dge base for eco-innovation. Con tinuation of ETAP would have a 
strong focus on technology (excluding social a nd organisational eco-innov ation), and a "light" 
governance (through the HLWG).  
 
Figure 2: Actions under the ETAP option 
A1 Increasing and focusing research, demonstration and dissemi nation. Improving co-ordination of relevant programmes 
A2 Establishing technology platforms 
A3 Establishing European Networks for technology testi ng, performance verificati on and standardisation  
A4 Developing and agreeing on performance targets for key products, processes and services  
A5 Mobilising financial instruments to share the risk  of investing in environmental technologies  
A6 Encouraging systematic internalisation of  costs through market-based instruments 
A7 Encouraging procurement of environmental technologies 
A8 Raising business and consumer awareness 
A9 Supporting eco-technologies in developing countr ies, and promoting foreign investment 
 
All stakeholders, includ ing the Member States, have show n continuing support for ETAP. It 
was stressed that any continua tion of ETAP should take stoc k of the lessons learned and 
reflect the latest policy developments in  order to reinforce the ETAP approach. 
 
5.3 Option 3: Taking forward the Europe 2020 Flagships 
 
Option 3 would involve doing what is promised in the context of the Europe 2020 for the area 
of eco-innovation, in particular  the review of environmental legislation, inclusion of eco-
innovation aspects in the Innovati on Partnerships or supporting the development of skills for 
green and greener jobs. Whilst there is a comm itment to these actions already, this option 
would provide firm ownership for them, and put them in the context of an EcoAP that has 
clear governance and so en sure a clear follow-up. 
 
In addition Option 3 builds on ETAP lessons lear nt, by expanding from green technologies to 
eco-innovation. The improved governance framewor k responds to the identified ETAP gaps. 
This is evident in the emphasis on policy lear ning between the MS as well as transformation 
of the Roadmaps from summaries of (past) national actions towards pro-active, forward looking documents (i.e. ensuring a coherent im pact of the measures  across the EU).  
 
 
21 During the consultation stake holders stressed the need for the Action Plan to link and 
complement associated Europe 2020 Flagship s (in particular Innova tion Union and Resource 
Efficiency).  
 
Action 1: Screening the environmental re gulatory framework for eco-innovation 
 
ETAP has shown that eco-innova tion will not emerge wit hout an eco-innovation friendly 
environmental policy. Forthcoming initiatives w ill thus be designed so  that they drive and 
support eco-innovation. This means that future pr oposals and policy reviews will consider the 
following assessment criteria50: a) promote innovation for achieving best the defined 
environmental objectives, b) avoid technology lo ck-in and stimulate competition, c) remove 
barriers to research and developm ent activities, d) facilitate the emergence of commercially 
viable new products or practices, e) accelerate the uptake of eco-innovation. 
 The screening will be carried out by the European  Commission with the help of stakeholders, 
based on guidance to be developed with the HLWG. It will begin with the revised Waste Framework Directive, the 2012 Water Blueprint,  the 2013 clean air le gislation review, the 
reviews of the Thematic Strategies under the 6
th Environmental Action Programme.  
 
Action 2: Partnerships for eco-innovation 
 
The Commission has launched a pilot Innovati on Partnership (IP) on active and healthy 
ageing, with the expectati on of more to follow (in particular Partnerships for water-efficiency 
or secondary raw materials). The partnership approach will  bring together the right 
stakeholders along the value chain, identifying bo ttlenecks and applying the right instruments.  
Eco-innovation is conditioned by wider framew ork conditions and EcoAP will support the 
integration of eco-innovation cons iderations into new IPs as they are developed and where it 
has something to offer.  EcoAP will also build the foundations for IPs in ar eas more directly related to eco-innovation: 
sectors like methane from bio-waste, eco-sys tem services for flood a nd droughts protection or 
green chemicals have the potential to become  new Partnership areas. EcoAP, through the Eco-
innovation Observatory
51 (EIO), will provide support in th e form of market intelligence on 
emerging eco-innovation sectors, opportunities a nd mobilizing stakeholders. Also, pilot 
schemes will be implemented to bundle public and private procurement for promoting eco-
innovation in emerging partnership areas. Tend er specifications and documents will be 
developed for wider public and private sector use.  
 
Action 3: Mobilising financial resources, bo th public and private, for investment in 
eco-innovation  
 
Finance for innovation comes mainly from th e LIFE programme, the Competitiveness and 
Innovation Framework Programme (CIP), and cohesion policy. These efforts are not 
sufficient to support green SMEs. Faster pace of eco-innovation and ma rket penetration is 
hampered by the lack of risk finance and support for demonstration.  Only 15%-20% of 
applications for eco-innovati on demonstration have been supported under CIP programme. 
Financiers tend to use the same  investment rationale for ec o-innovative enterprises as for 
                                                 
50 Criteria based on: EC, DG Environment, 2007 "Designing environm ental policy to be innovation friendly"; OECD, 2011, "Better policies 
to support eco-innovation" 
51 A DG Environment funded network monito ring eco-innovation trends and opportunities and gathering market intelligence on key green 
sectors. The network is funded through the CIP pr ogram and operational till end 2012. For details see: http://www.eco-innovation.eu/  
 
22 investments in “traditional” sectors (i.e. same  expected return, same level of accepted risk) 
and the social and environmental challenges do not play a role in investment decisions52. 
 As part of the next EU financial perspec tives the Commission will consider whether to 
propose: 
• Reinforced and focused support for eco-i nnovation demonstration projects in SMEs 
• Risk capital support for eco-innovation in SMEs  including equity and loan financing 
schemes with flexible risk sharing and gua rantee schemes for mobilising private finance 
• Technical assistance for SMEs and financial se ctor in developing ba nkable projects, for 
appraising their bankability and for implementi ng projects benefitting from risk financing. 
 Representatives of business and fi nancial community have debated
53 the issue of eco-
innovation financing in the context of the 9th ETAP Forum in 2010. Its specificity was 
recognised and there was support regarding the above mentioned proposals. Also the HLWG 
has supported the approach and in particular th e need to reinforce financial support to SMEs. 
 
Action 4: Developing standards and performance targets for key products, 
processes and services to redu ce their environmental footprint 
 
The Commission and the Member States will work  together with European and international 
standardisation bodies to ensure that new and revised standards are performance-related and 
better accommodate environmenta l technologies and eco-innovati on.  Industrial stakeholders 
will be mobilised to work on standardization an d to drive the process of introducing the new 
standards to the market. As part of the revi ew of the Sustainable Consumption and Production 
and Sustainable Industrial Policy Action Plan in 2012, it will be assessed whether it is possible to expand the scope of the Eco-desi gn directive to non-en ergy related products.  
 
Action 5: Developing new skills for new jo bs in environmental goods and services 
industry  
 
The “New skills for new jobs” initiative will pr omote the set of skills needed for the transition 
to a low carbon and resource efficient economy. A  European Sector Council on skills for 
green and greener jobs c ould build on this by facilitating th e exchange of information between 
Member States on skills profiles, training pr ogrammes and emerging skills gaps and skills 
mismatches related to occupational needs fo r the growing demand of energy efficient 
economy. Skills and employment strategies will be developed for promising areas, i.e. bio-
energy skills roadmaps and the construction of  zero-carbon homes. This Sector Council on 
skills for green and greener jobs would have to  be closely associated  to the upcoming EU 
Skills Panorama which will collect forecast and foresight information from Member States 
and international organisations on future skills  needs, supply and mismatch possibly having a 
'green' dimension. 
 
Action 6: Governance of eco-innovation policy 
 
This action would strengthen the governance of  the Action Plan, both at a national and EU 
level. The Eco-innovation National Roadmaps  would track and highlight upcoming eco-
innovation policy initiatives in the Member Stat es. The HLWG would become the focal point 
for eco-innovation policy developm ent at the EU level and the venue for peer reviews and 
                                                
 
52 EIM & Oxford Research for DG Environment (2011), Financing eco-innovation 
53 For Forum conclusions see: http://ec.europa.eu/environment/eco innovation2010/2nd_forum/index_en.htm  
 
23 policy exchange between the Member States. Pilots would be launched54 to prepare the 
ground for implementation of the most promis ing policy practice in other MS. The Eco-
innovation Forum would be used for regular c onsultation of stakeholders on the available 
policy options, mobilization and networking of eco-innovators.   
 Following on from ETAP lessons learnt, the new governance structure will help set the 
agenda for eco-innovation outside the envi ronmental domain. As eco-innovation is 
conditioned by wider framework conditions the Action Plan and the HLWG, will act as 
agenda setters for eco-innovation integrating it into other policies through regular contacts 
and exchanges between relevant Commission services and Member States.  
 
During the consultations there were concerns, es pecially from the Member States, about the 
participation of business entitie s as permanent members of the new governance structure. As a 
result this action excludes private members from the HLWG, but foresees extensive and 
regular consultations in the framewor k of the new governance structure.   
 
5.4 Option 4: SME-targeted actions  
 
In order to seize the emergi ng opportunities SMEs must become  active developers and users 
of eco-innovation
55. This option focuses on the eco-innovation needs of SMEs, expanded 
scope of intervention from environmental tech nologies to also incl ude non-technical eco-
innovation, a real focus on the global dimensi on and increased attention to networking. The 
actions are in two broad areas : additional actions specific to  eco-innovation and going beyond 
the Europe 2020 flagships and global actions.   Considering the significant impact of SMEs on the environment Option 4 aims to facilitate the development and uptake of eco-innovation within  this sector. SMEs face specific barriers 
hindering the adoption of eco-inno vations and specific measures  should be developed to 
promote their adoption by SMEs56. 
 
The stakeholder consultation showed wide support for focusing efforts on SMEs. Some 
stakeholders (particularly the academic re presentatives) objected to the exclusion of 
consumers from the planned policy initiative. This  was justified by the need to avoid overlaps 
with other initiatives, such as the SCP-AP.  
 
    Action 1: Targeted eco-innovation support for SMEs through enterprise and business networks    
 
The Enterprise Europe Network
57 offers support and advice to  businesses across Europe and 
other participating countries. In order to im prove investment readiness for eco-innovative 
SMEs and help them devise and implement eco-innovative solutions for their businesses, 
further SME support should be mobilized. 
                                                 
54 Policy pilots are part of the work programme of the DG E nvironment funded network "Instrume nts and policies for eco-innovati on" and 
part of the ProInno Europe. The ne twork is operational till end 2013.  
55 The 8th ETAP Forum Declaration, June 2010, "Fostering eco-innovation in SMEs"  
56 JRC IPTS, 2007, "Promoting environmental tec hnologies in SMEs: Barriers and measures" 
57 For details see: http://www.enterprise-e urope-network.ec.eur opa.eu/index_en.htm 
 
24 • The European Commission, in cooperation w ith the Enterprise Europe Network, will 
expand the activities of the “Environmental Assistants for SMEs”. The scheme will 
enhance and consolidate ecological approach es in SMEs and provide the SMEs with 
the necessary skills and awaren ess to stimulate eco-innovation.  
• The Action Plan will work towards the esta blishment in 2012 of a European network 
of eco-innovation financiers by providi ng advice and knowledge-building on eco-
efficient technologies, green procurement,  green business models and services, 
business plan preparation and connecting entrepreneurs with finance providers. 
 
Action 2: Environmental Technology Verificati on initiative, to te st an EU ETV pilot 
programme and evaluate its potential in facilitating market access for innovative 
environmental technologies 
 
The Environmental Technology Verification initia tive (ETV) – involving Member States and 
participants on a voluntary basis – aims to  generate independent and highly credible 
information about new environmental technologies. It will do this by verifying that performance claims by technology developers and vendors are accurate, complete, fair and 
based on reliable test results. The objective of ETV is three-fold: 
• To help developers and vendors, especi ally SMEs, provide objective and reliable 
evidence on the performance of new eco-technol ogies they are bringing to the market, 
in order to convince invest ors and potential customers about the merits of the 
technologies; 
• To support technology purchasers (public or private), who need to base their buying 
decisions on sound information, widely re cognised as scientif ically valid and 
acceptable as proof of evidence in te ndering and purchasing procedures; 
• To facilitate the implementation of pub lic policies and regul ations by providing 
citizens, regulators and decision-makers with solid information on the level of 
performance achievable by new eco-t echnologies ready for the market. 
 
The ETV pilot programme will be implemented  by Verification Bodies, which are existing 
independent organisations specif ically accredited for this purpose by the existing national 
accreditation bodies. As of May 2011, seven Member  States have volunteer ed to try out ETV 
through the pilot programme and the three in itial technology areas selected are: water 
treatment and monitoring; energy technol ogies; waste, materials and resources. 
 The results of the ETV pilot programme will be evaluated after two to three years of actual 
operation. On the basis of this evaluation a nd a study on the market potential of ETV now 
underway, the Commission will draw conclusions on the potential of ETV  in Europe and on 
the best way to realise it. Choices could range from discontinuing the ini tiative to transferring 
its implementation to private actors, or proposi ng a legislative instrument, if there is clear 
evidence of its potential added value as an EU-wide measure. 
 To facilitate the launch of th e ETV pilot programme, a call for proposals will be launched in 
2011 under the EU Competitiveness and Innovati on Programme (CIP) with a budget of €1 
million
58. Amounts of €1 million are also progra mmed under CIP for ETV in 2012 and 2013, 
subject to the approval procedure of annual wo rk programmes for these years. The grants 
awarded should enable accredited Verification Bodies to implement the ETV pilot programme 
                                                 
58 2011 Work Programme for CIP – Entrepreneurship and Innova tion sub-Programme – adopted on 18 January 2011 by Commission 
Decision C(2011) 91. 
 
25 efficiently, to facilitate access for SMEs and to report to the Commission in view of the future 
evaluation of the pilot programme.  The Member States, through the HLWG, have fo llowed from the start and provided input to 
the development of the ETV initiative. There is wi de agreement on the role  that such initiative 
can play to help the uptake of environmental technologies. Me mber States having volunteered 
to participate in the ETV pilot programme are now part of the ETV Steering Group (generally the same representatives participate in th e HLWG and ETV Steeri ng Group meetings) and 
contribute actively to the preparation a nd setting-up of the pilot programme. 
 
Action 3: Setting up Eco-innovation Partne rships with major partner countries and 
regions 
 
The European Commission will step up its efforts to work with other countries and to ensure 
the development and dissemination of envi ronmental technologies. In particular: 
• Green technologies and eco-innov ation will be incl uded in relevant regional initiatives 
with third countries. Examples that will  be built on will in clude the EU-China 
Sustainable Trade Task Force and the EU-Chi na IPR2 project. In particular practical 
and concrete co-operation initi atives between Brazil, US, China, India and the EU will 
be developed in the field of eco-innovati on with a clear focus on networking between 
and innovative venture capital funding schemes for SMEs.  
• Benchmarking and harmonisation of the eco-d esign requirements of products in key 
emerging markets. The approach of the SWITCH Asia programme will be expanded 
to other developing countries, particul arly in Africa and Latin America.  
 
Action 4: Promotion of environmental t echnologies in developing countries  
 
This will be done through global networks in partnership with UNEP and using the EU and 
UN technology centres, to support capacity-buildi ng, demonstration project s and financing for 
resource-efficiency projects in  developing countries. In c ooperation with the OECD the 
EcoAP will investigate the incentives for the development and diffusion of "mature" environmental technologies. Furthermore, the European Commission will support UNEP in 
expanding its work on the Green Economy Initiati ve by participating in knowledge sharing 
and providing advisory services. It will also take  stock of past international activities for eco-
innovation and investigate directions for future  global cooperation. In pa rticular in 2011 the 
European Commission will present the Commu nication on Rio+20 on global policies towards 
green economy including policies and measures to promote eco-innovation.  
 The need to reinforce the international di mension of ETAP was a strong messages coming 
from the consultations. Particularly, the need to avoid setting up new structures for this 
purpose, but rather building upon existing initiatives and inte rnational organisations was 
raised. This resulted in proposit ions for Actions 3 and Action 4.  
 
5.5 Option 5: Wide EU eco-innovation policy  
  
This option consists of actions that can be implemented in addition to (and not only instead 
of) the other options. It is characterised by a higher level of ambition, more regulatory 
approach and a more long-term view. However, it is also of a 'general principles' nature, 
rather than of the operational bent of options 3 and 4. Reflec ting this, the measures involved 
in delivering this option would be the responsib ility of a wide range of levels of government 
and a wide range of actors.  
 
26  
Action 1: Promoting a faster shift of  the burden of taxation to resources: this would 
involve more systematic use of taxes and other market-based in struments to reflect the true 
environmental benefits of eco-innovation. Curren tly, only one out of every fifteen Euros of 
government revenue comes from environmen t taxes (although Denmar k, at one-in-eight 
shows they can be used more wide ly) and this share has even declin ed slightly in recent years.  
 Stakeholders stressed the "coura ge" and controversies that the implementation of this action 
would require a from the Member States. Due to thus the action was deemed problematic. 
 Action 2: Introduction of ambitious standards for green public procurement : more 
focused and stringent demand-side policies (e.g. public procurement standards and targets on 
resource efficiency and environmental perfor mance) aimed at fostering eco-innovation. This 
will be assessed as part of the review of public procurement policies scheduled for the beginning of 2012.   
Action 3: Introducing a legally binding fr amework for labelling of all manufactured 
goods : building on the successful  examples of labelling eg for electrical appliances, to fully 
inform purchasers and ensure informed co mpetition by providing information on the 
environmental impacts of goods.  
Action 4: Introducing waste prevention a nd recycling standards along the whole value 
chain : Implementing this principle will accel erate the eco-innovation rate by making the 
production of non-recyclable products more costly. 
 
6. A
NALYSIS OF THE IMPACTS   
 
Many of the actions foreseen under EcoAP are indi rect and, especially for the more strategic 
actions, impacts cannot be quant itatively assessed. Whenever pos sible, attempts to quantify 
effects are made, but given th e complex relation between po licy actions, final impacts, 
associated problems of attribution and additiona lity (as well as lack of evidence in some 
cases) it can be difficu lt to quantify effects59.  
 
6.1 Option 1: Discontinuation of ETAP (n o EU specific action on eco-innovation) 
 
This option assumes the termination of ETAP . Ongoing policies in innovation, environment 
and other areas continue without specific i nputs from the eco-innovation point of view. 
Chapter 3.2 describes the imp act of current policies on eco-innovation. See Annex VII for a 
detailed description of additional ETAP contributions.   Additionally it is worth nothing that with th e suspension of ETAP current activities on the 
definition of an EU framework for the verification of environmental technologies , 
developed under the ETV pilot pr ogramme and associated research  and pilot activities, would 
no longer be supported at EU level. National programmes would probably be developed and 
tested in those Member States most interested in the approach, potentially resulting in divergent programmes without mutual recognition and with practically no impact on the 
promotion of green technologies outside nationa l markets. Internati onal co-operation would 
likely lead to an international standard on ETV  procedures, but withou t involvement at EU 
level. There is a risk that EU policy and i ndustry characteristics w ould not be taken into 
                                                
 
59 See Annex VIII – XI for a deta iled analysis of the actions 
 
27 account. The overall impact would be misse d opportunities for the marketing of EU 
environmental technologies both within the EU and on intern ational markets. 
 Also in terms of financial support to eco-innovati on, although it is expected to continue in the 
next financial perspective, th e discontinuation of ETAP would probably result in less focussed 
financial support due to a lack of a deep  understanding of the European eco-innovation 
system, which is one of the priorities of ETAP.   Overall, the rate of eco-innovation and the degree of policy integr ation of eco-innovation 
would fall as compared to the existing situation. This option is the baseline against which other options are compared.  
6.2 Option 2: Continuation of ETAP 
 
6.2.1. Impact of actions 
 
The ETAP option consists of 9 PAs. Impacts of each action are asse ssed in this section.  
 
Action 1. Increase and focus research, demo nstration and dissemination. Improve co-
ordination of relevant programmes (strategic) 
 
Increased R&D demonstration and disseminatio n, and better coordination of eco-innovation 
R&D programs results in in creased funding for research
60. This action  will continue to have a 
positive impact on the eco-innovation system by steering networks and collaboration among 
various stakeholders, addressi ng market failures (through attracting more funding for R&D 
and commercialisation), solving organizational problems, capacity building in firms and steering a more favourable  regulatory framework. 
 The activities under PA1 had a stronger focus on energy technologies and carbon emission 
reduction, and somewhat weaker emphasis on wider problems of resource efficiency and even 
less focus on other nature prot ection problems. The EU value added seems to be quite high 
and evaluations show the main effect to be organising international networks and adding 
additional funding to  national sources
61. Due to the specific agenda  setting processes for each 
programme the role of ETAP has been limited.  
 
Action 2. Establishing European Tec hnology Platforms (ETP) (operational) 
 
Technology Platforms are a direct and concrete contribution of ETAP towards promotion of 
environmental technologies. Th e contribution of ETPs to addr essing system failures and 
increasing competitiveness is positive, especi ally by mobilizing funds and building dialog 
between research community, au thorities and business commun ity, and this should continue62. 
EU added value is evident and there is scope for launching additional and focussed ETPs, but  
the influence of ETAP on ETPs has been limited and indirect.  
Action 3. Establishing European Netw orks of technology testing, performance 
verification and standardisation (operational) 
 
                                                
 
60 Ecorys (2009). The implementation of the Environmenta l Technologies Action Plan. Draft final report. August 2009  
61 Technopolis 2008, Evaluation of FP5 and FP6 research in the s ub-priority Global Change and Ecosystems; Technopolis 2009, Eva lluation 
of Non Nuclear Energy resear ch activities in FP5 and FP6  
62 Ecorys (2009). The implementation of the Environmenta l Technologies Action Plan. Draft final report. August 2009  
 
28 Environmental technology testing and verification can play a ro le in addressing systemic 
market failures (e.g.: lack of sound information and trust in environmental technologies). EU 
added value and impacts on competitiveness are considered to be positive. This has been shown through a number of research and pilot actions, at EU and MS levels. A summary of 
these actions and market and cost estimates is available in Annex VI.   Based on the preparatory actions developed under  ETAP, seven Member States have formally 
volunteered to participate in an ETV pilo t programme, co-ordinated by the Commission 
services on an experimental basis and testing the ETV approach in three technology fields: (1) 
water treatment and monitoring, (2) energy techno logies, (3) materials, waste and resources.  
 Based on the results of the ETV pilot progr amme and on a market study commissioned in 
parallel, a thorough evaluation and assessment will be undertaken in 2-3 years time, after which the Commission will decide on the appropr iate way forward for ETV. No options are 
excluded at this stage.   By facilitating the provision of scientifically-sound information on technology performance, 
an EU ETV scheme could poten tially have a positive impact  extending beyond simply support 
for market access. It would also send out a signal that the development of innovative 
technologies, and competition between techno logical solutions, must be built on proven 
performance rather than regulatory obliga tions and cost considerations alone.  
 
Action 4. Develop and agree on performance targets for key products, processes and services (strategic) 
 
Due to legislative constraints and the difficulty to  deal with a broad set of industries, products 
and processes
63, ETAP has not been successful in de veloping standards for products and 
processes. ETAP would find it even more difficu lt to play a leading role in the development 
of performance targets for resource use. Litera ture on their effectiveness and impacts is scarce 
though standards and targets for energy savings show a positive environmental effect (e.g.: Japan’s Top Runner scheme), implying potential for performance targets for eco-efficiency. 
The need for EU coordination is evident as positive environmental and competitiveness 
impacts depend on uniform application throughout the EU and globally
64.  
 
Action 5. Mobilising financial instrume nts to share the risks of investing in 
environmental technologies (strategic) 
 
The CIP and the Environment and Governance component of LIFE+ are the key EU instruments supporting the transition of eco-i nnovations from research to market. With 
regards to CIP it is yet impossible to assess the impact on eco-innovation
65 (specifically on 
resource savings).  However it is argued that its co ntinuation under the influence of ETAP 
will bring positive impacts. The additionality of the EU in these actions is high. Eco-
innovation is a key pillar of the CIP. The role  of ETAP has been si gnificant, without it 
specific funding "windows" for eco-innovation could dissappear.  
 
                                                 
63 Problems that can be encountered are the entrance of alternative products that ar e not taken up in the standard, shortening of the economic 
lifetime of products, as well as difficulties to set the sta ndards due to difficulties in defining targeted industries.  
64 Popp 2006, International innovation and di ffusion of air pollution control technologies: the effects of NOx and SO2 regulati on in the US, 
Japan and Germany.  
65 GHK & Technopolis 2009. Interim evaluation of the Entrepreneurship and Innovation Programme (EIP).  
 
29 Action 6. Review State Aid Guidelines and review of environmentally harmful subsidies 
(strategic)  
The impacts of improving the demand for eco-innova tion of these actions are hard to assess. 
Since the amount of money involve d is large, potential effects on the market uptake of (eco-) 
innovations can be considered large. This meas ure did not have a specific focus on resource 
efficiency, but impacts on resource savings, biod iversity, water and energy are considerable. 
The additionality of EU action is  evident: subsidies are larges t in sectors with a strong EU 
role (e.g.: fisheries or agriculture), and in ar eas where MS are responsible for subsidies then 
the EU has a strong controlling role present due to the ‘single market’ perspective.   
 
Action 7. Green public procurement (strategic) 
 
Public procurement of goods and serv ices amounts to 17% of EU GDP
66 and could have a 
significant contribution to67,68 eco-innovation, including by creating markets for resource-
efficient products and services. The effect on competitiveness is evident. Buying ‘green’ has led to an average decrease in costs of 1%, when  the life cycle costing is taken into account.  
EU added value and additionality of EU action is significant. 
 
Action 8. Raise business and consumer awarene ss, and provision of targeted training 
(operational) 
 
This action has had a major and positive role
69. It embeds a powerful networking aspect with 
(indirect) benefits to the European eco-inno vation system. Impacts of this action on 
environmental protection and competitiveness are positive. The additionality of EU action is 
intermediate, and the EU added value is clear.  Its continuation, without  being more clear and 
defined, will remain beneficial for networki ng, but without concrete  feedback into eco-
innovation policy. 
 
   Action 9. Promoting responsible investments and use of environmental technologies in 
developing countries and countries in economic transition (strategic) 
 
Investment in environmental technologies, es pecially in developing countries, has the 
potential for positive impacts on  innovation, environmental prot ection (e.g.: resource savings) 
and competitiveness. The EU could have added value in stimulating S&T agreements
70, 
stimulating technology transfer through institutions such as Global Energy Efficiency and 
Renewable Fund (GEEREF) and by strengthening facilities such as the Global Environment 
Facility (GEF). Continuation of this action along past lines is likely to bring modest positive 
results as it is too dependent on the di scussions for libera lizing global trade. 
 
6.2.2 Overall impact of option 
 
                                                 
66 Schmidt-Bleek, F. (2010): Innovation for a sustainable future. Paper prepared for the Stakeholders Consultation on Eco-AP, 1 1 February, 
2010 in Bruxelles. Carnoules  
67 Öko-institut & ICLEI, 2007. Costs and Benefits  of Green Public Procurement in Europe.  
68 2007, PricewaterhouseCoopers, Significant, Ec ofys, Collection of statistical informa tion on Greeen Public Procurement in the  EU. 
69 Ecorys (2009). The implementation of the Environmenta l Technologies Action Plan. Draft final report. August 2009  
70 Technopolis / Manchester Institute of Innova tion Research 2009, Drivers of international 
collaboration in research, Luxembourg, European Commission  
 
30 The impacts ETAP are indirect: ETAP is not a di stinct programme with a budget. It is an 
umbrella pulling together different intervention instruments and influencing the direction and 
size of other, often broader and non-envir onment specific programmes and schemes.  
 The continuation of ETAP will lead to continued attention for environmental technologies and 
will have positive effects on innovation in th e area of environmental technologies, 
competitiveness of the eco-industry (and related employment) and positive impacts on the environment and on health. Dire ct administrative bur den, as ETAP actions are voluntary and 
reporting requirements minimal, would be limited and mainly consists of  human resources to 
carry out the actions. As ETAP operates since 2004 both the Member States and the 
Commission are efficient at  carrying out the actions in the ETAP Framework.  
 
Option 2 covers most of the specific objectives, however, the adequacy of response is 
relatively low notably due to the scope bein g limited to environm ental technologies, 
failure to refocus action in line with the le ssons learnt and not corresponding to the new 
political landscape. 
 
6.3 Option 3: Taking forward the Europe 2020 flagships 
 
6.3.1 Impact of actions  
Action 1: Screening the environmental re gulatory framework for eco-innovation 
(strategic) 
 
Many of the enabling conditions for innovation are the same ones as  for eco-innovation. 
However, the rate and pattern  of eco-innovation is influenced by the environmental policy 
framework. A study
71 on eco-innovation in the French a nd German industry concluded that 
government regulation plays a central role in  motivating eco-innovation. Policy corrects for 
market failures and helps address the eco -innovation specific barriers. The perceived 
importance of regulations for eco-innovation is high and overwhelmingly positive72. Various 
empirical studies73,74 confirmed that complying with environmental regulation was one of the 
key motivations to innovate among eco-innovation companies. 
 Impacts are indirect and hard to assess. The costs of undertaking the screening will be minimal, as it will be done within the contex t of already planned revi ews. The benefits will 
come from increased innovation because public policies play a key role in determining 
framework conditions for eco-innovations, whic h in the past are seen as not innovation 
friendly. Whilst it is clear that to some extent  the existing reviews wo uld have covered this 
issue, with explicit guidance a clear political focus, it s hould be much better covered. 
Improved innovation should make environmental pol icy more effective, more efficient or 
both. For instance the REACH
75 regulation directs research and development efforts and sets 
the pace of technological change . It lists substances of very  high concern (SVHC) for which 
substitution is required when sa fer alternative substances or technologies become technically 
                                                 
71 Belin, J, Horbach, J & Oltra, V, 2009, De terminants and specificities of eco-innovati ons – An econometric analysis for Franc e and 
Germany based on the Community Innovation Survey, Article submi tted to the EAEPE Conference, Amsterdam, November 6-8, 2009. 
72  ZEW (2007) Analysis of regulatory and policy issues influe ncing sectoral innovation patterns, Sector report eco-innovation,  Interim 
paper  73 ZEW (2001) The Impact of Clean Production on Employment in Eur ope – An Analysis using Surveys and Case Studies (IMPRESS),  
74 Rehfeld K.M., Rennings K., Ziegler A. (2006) Integrated Pr oduct Policy and Environmental Product Innovations - An Empirical Analysis 
75 Regulation (EC) No 1907/2006 of the European Parliament and the Council on the Registration, Evaluation, Authorisation and R estriction 
of Chemicals (REACH) 
 
31 and economically feasible. This active search  for alternatives stimulate R&D activities 
towards delivering competing and safer subst itutes, thus in turn replacing SVHCs. 
 Overall impacts for this action will vary between and within sectors and countries, depending 
on the policy initiative being assessed. The additionality of EU action is large. 
  
Action 2: Partnerships fo r eco-innovation (strategic) 
 
Eco-innovation is a too broad fiel d to be covered by a single partnership, but the IP approach 
would benefit from integration of eco-innovatio n considerations into  existing and upcoming 
IPs. The action would also investigate the pot ential for Innovation Partnerships in sectors 
relevant for eco-innovation. ETAP Fora on Eco- innovation have identif ied strong market 
potential and stakeholder commitment, in part icular for water effici ency, bio-gas for bio-
waste and eco-system services for draughts. IP s are characterized by greater levels of policy 
coordination and underpinned by a high level of stakeholder commitment. The Eco-innovation Action Plan can assess the market pote ntial for an emerging Pa rtnership sector, its 
maturity, key drivers and barriers. The High Level Working Group will coordinate Member 
State policies governing these se ctors and ensure Member State buy-in. The pilot procurement 
schemes would signal market demand in the (eco-) IP areas.   The EU added value and additionality is consid erable. The direct costs of action will be 
relatively small as it will build on existing fora to create and harness stakeholder commitment. 
The pilot schemes
76 would bundle private and public demand  for green goods or  services thus 
enlarging the market (and thus  certainty) for technology developers. The procurement pilot 
would cost app. 600.000 Euro per product group/ service type. Fi nancing is avai lable through 
the support measures under the CIP eco-innovation strand. The analytical work for the IPs 
would be carried out through th e EIO which is operational and funded through the CIP.   
 
   Action 3: Mobilising financial instruments, both public and private, for investments in 
eco-innovation (strategic) 
 
The impact of this Action is similar to PA5 of option 2. The focus on further integration of 
eco-innovation in future EU programmes in partnership with the EIB Group or other 
international financial intermediaries has relati vely identical mechanisms of impacts as those 
described in the ETAP option – but if Eco-AP succeeds in mobilising additional resources and better adapting financial instruments to existing gaps in eco-innovation financing, the impacts 
would be stronger from all poi nts of view. Based on the info rmation available it is not 
possible to have quantitative estimates of add itional funds needed to stimulate eco-innovation 
uptake, anyhow evidence shows that in the eco-innovation area th ere is a clear dominance of 
energy as opposed to non-energy related investments (e.g.: water, waste etc.). 
 
Action 4: Developing standards and perfor mance targets for key products, processes 
and services to reduce their environmental footprint (strategic) 
 
                                                
 
76 As described in: COWI A/S for DG Environment, 2009, "Bridging the valley of death: Public support for commercialization of e co-
innovation"  
 
32 Standardisation can enable the uptake of eco-i nnovation and facilitate their dissemination in 
the Single Market and access to global markets. It is expected77 that standards and 
performance targets can make an important co ntribution to 'sustainab le industrial policy', 
improving the energy and resource efficiency of products, processes and services and the 
competitiveness of European industry. Broadeni ng the scope of the Eco-design Directive 
(EuP)78 to non-energy related products would have  a positive impact on resource efficiency 
(that could be a priority for th is widening process) and lead to  additional impacts considering 
that the EuP now only addresses energy use of products, which only accounts for about one-
third of the environmental impacts of products79. The impacts of this action will be discussed 
in the Impact Assessment accompanying the review of the Sustai nable Consumption and 
Production and Sustainable I ndustrial Policy Action Plan. 
 
Action 5: Developing new skills for new jobs in environmental goods and services 
industry (strategic) 
 
Managing the transition to a green economy m eans anticipating change , and identifying the 
skills that will be required. There is already a mismatch between current skills and the future 
skills needed and this is a threat to green gr owth. For example, accord ing to several national 
trade unions, a shortage of sk illed people exists to implem ent the Directive on Energy 
Performance of Buildings.  To better prepare the current and future workforce, this action 
includes action at sectoral leve l, for example through a focus on 'skills for green and greener 
jobs' in the upcoming EU-level  sectoral Councils for skills and employment. A specific 
section on skills for green and greener jobs  will also be  introduced in the EU Skills 
Panorama, to be launched by the end of 2012, wh ich will collect from Member States and 
international organisations information on skills needs, supply and mismatch in  the short and 
medium-term. The role of an Eco-AP contri bution can be very impor tant although impacts 
very limited and indirect.   The costs and benefits of a European Sector Council on skills for green and greener jobs are 
unclear at this stage. Preparatory work w ill investigate how such a mechanism should be 
designed, and how it can concretely  complement the “New skills for new jobs” initiative. In 
the first stages, the costs will be rather minor, as the exploratory work will be undertaken through the HLWG, which has expressed
80 a desire for this action.  
 
Action 6:  Governance of eco-innovation policy 
 
Regularly updated Eco-innovation National Road maps can represent a significant body of 
knowledge and have positive, even if indire ct impacts (through policy learning), on the 
innovation system and the competitiveness. Thes e would be voluntary, and only undertaken if 
Member States saw value-added in them: th e Commission would provide guidance to ensure 
their usefulness. In particular the Eco-innovatio n Roadmaps would provide information as to 
future planned actions and being regularly  updated would allow mapping the efforts and 
impacts of the Member State actions ensuri ng a coherent impact throughout the EU. Bi-
annual Fora on eco-innovation will be organi zed on issues of key importance for eco-
innovation. The event will be used for regular c onsultation of stakeholders on the available 
policy options, mobilization a nd networking of eco-innovators. 
                                                 
77 COM(2008) 133 final Towards an increased contributi on from standardisation to innovation in Europe  
78 Directive 2005/32/EC of the European Par liament and of the Council establishing a fr amework for the setting of ecodesign req uirements 
for energy-using products (OJ L 101, 22.7.2005, p. 29).  
79 Staff Working Paper SEC(2008)  2110 Impact assessment for recast of Directive 2005/32/EC,  
80 See conclusion to the 2010 ETAP Forum in Bilbao: http://ec.europa.eu/environment/ ecoinnovation2010/1st_forum/pdf/declaration .pdf 
 
33  
6.3.2 Overall impact of option  
The shift from environmental technologies  to eco-innovation, as announced in the 
EcoAP, will contribute to a competitive advantage for industry across sectors and  can lead to 
positive environmental, economic and employment impacts.  A German study found that  
improving resource efficiency by 20% would boost economic growth by 1% and could create 
up to 1 million new jobs in Germany alone
81. Improving resource efficien cy will also help 
combat climate change and boost economic growth. Furthermore an EcoAP with a strong focus on resource efficiency w ould be strongly cons istent with the strategy set out by the 
Europe 2020 initiative. As for social impacts, in addition to the expect ed positive impacts on 
health (i.e.: less environmental impacts gene rated by more sustainable solutions) positive 
impacts are expected in terms of employment.  
 Administrative burden may increase marginall y, for example if voluntary Roadmaps are 
provided.  
 
Option 3 provides a comprehensive policy  response to specific objectives and 
complements well the Innovation Union initiati ve. The adequacy of response is high. 
 
6.3.2.1 Subsidiarity, additionality, European va lue added – Eco-innovation Action Plan 
 This option is compatible with the principles of subsidiarity and propor tionality. The initiative 
falls within the scope of co mpetences of the EU under its environmental and innovation 
policies. It is also compatible with the EU ’s 2020 strategy for growth, placing emphasis on 
innovation, sustainable grow th, competitiveness and resource efficiency.  
 The additionality of this option is the highe st compared to the other options. EU-level 
interventions are either key or significant. The additionality of increased coordination of 
national eco-innovation polic ies is high. Accumulation of EU -wide expertise and networking, 
in particular when assessing new areas for IPs will contribute to improved eco-innovation in the Member States and the competitive position of the relevant sectors.   Also the proposed governance structure will allo w better management and targeting of eco-
innovation policies and through support networks  will facilitate peer reviews of policy.  
 6.3.2.2 Downsides, administrative impact and r eality check – Eco-innovation Action Plan 
 
Public spending  
• Effects under this option would also incl ude the conclusions listed under option 1 
 
Employment  
A number of actions would gene rate new job opportunities by alle viating current bottlenecks.  
 
Administrative burden 
 
                                                
 
81 See before for reference to the study.  
 
34 Looking at the actions of the Eco-AP, one could highlight a number of initiatives where added 
consideration for administrative burdens mi ght be necessary.  These would include: 
• Develop and agree on standards and performa nce targets for key products, processes 
and services. Although standardisation on produ cts generally function to a satisfactory 
level, standards development in the areas of  environment and services are possibly less 
well developed.  In ad dition, the research and design of  standards need both time, and 
extensive input by relevant stakeholders. 
• Encourage Procurement of environmenta l technologies and eco-innovations.  
Developments have been made in GPP under ETAP, the shear size of the GPP scheme 
– encompassing 15 to 20% of final consump tion – would most likely mean continued 
administrative burdens in Member State public authorities, and on businesses and 
organisations bidding for contracts. 
• Administrative burden may increase, in pa rticular with regards to the greater 
involvement of Member States in setting the agenda for eco-innovation (through the voluntary National Roadmaps).  
 
6.4 Option 4: SME-targeted actions 
 
6.4.1 Impact of actions 
 
Action 1: Targeted eco-innovation support for SMEs through enterprise and 
business networks    
 
The support to eco-industries through the Ente rprise Europe Networ k primarily aims at 
increasing network activities focussed on capac ity building and communication. It aims to 
exploit key drivers for eco-innovation
82, i.e. good business partners  and access to technology 
support services. Although impacts are indirect th ey are expected to have positive effects on 
innovation, environment as well as competitiveness.  This action will particularly favour eco-
innovative companies within the eco-industries,  where networking and support structures are 
only emerging. The EU can play an important ro le in this type of networking, which is 
already financed through the CIP.   Additionally, a dedicated network of financie rs would be beneficial to mobilise them, 
accelerate investment and finance for eco-innova tion. As SMEs, also eco-innovators, largely 
rely on bank credit to finance their developm ent the network would he instrumental in 
decreasing risk aversion of banks towards th e sector and spread best practice for the 
evaluation of such investment prepositions
83. The financing for this network would come 
from the CIP "eco-innovation strand" with an indicative budget of 2 million Euro.  
 
Action 2: Environmental Technology Verificati on initiative, to te st an EU ETV pilot 
programme and evaluate its potential in facilitating market access for innovative 
environmental technologies  
 
The assessment of the conti nuation of the action under ETAP related to ETV (Option 2, 
Action 3) is also valid here. See Annex VI for more details on the assessment of this action. 
 Based on the results of the ETV pilot progr amme and on a market study commissioned in 
parallel, a thorough evaluation and assessment will be undertaken in 2-3 years time, after 
                                                
 
82 As highlighted in the Flash Eurobarometer 315 on the "Attitudes of European entr epreneurs to eco-innovation" 
83 EIM & Oxford Research for DG Environment, 2011, "Financing eco-innovation"  
 
35 which the Commission will decide on the appropr iate way forward for ETV. No options are 
excluded at this stage.  If successful, the ETV approach could also be a pplied to other technolog ical fields where the 
EU has a (potential) competitive advantage, within or beyond the field of environmental 
technologies, possibly integrating other aspects than environment, for example in the health 
and social fields. As long as these aspects ca n be quantified and verified through testing, they 
could be accommodated. This would lead to new types of technica l information, alongside 
technical standards and labelli ng, for the benefit of technology developers and purchasers and 
policy-makers.  Better-informed choices will be  more cost-beneficial. Any wider application 
of ETV would however to be specifically assessed. 
 
Action 3: Setting up Eco-innovation Partne rships with major partner countries and 
regions   
 
In this case different sub-actions  are envisaged (i.e.: trade liber alisation, harmonisation of the 
eco-design requirements, bilatera l cooperation with thir d and partner countrie s also at regional 
level). Similarly to the previous initiative im pacts might be very positive but implementation 
and complexity represents a challenge to overall impact of this action. Costs will be minimal, 
as this will be done through or  building upon existing structures, and the role will be primarily 
one of guidance.  
Action 4: Promotion of environmental t echnologies in developing countries  
 
Different sub-actions are envisaged (i.e.: use of Enterprise Europe Network to favour eco-
innovative SMEs in export, support to the ex pansion of UNEP Nati onal Cleaner Production 
Centres, EU-public-private partnerships for environmental technology demonstrations in 
majors markets). The costs for the Commissi on will be around €4 million over 3 years. With 
the right and favourable global conditions fo r eco-innovations the potential for resource 
savings within and outside the EU is consider able, but previous impl ementation of similar 
efforts has been challenging (a ction 9 of the ETAP scenario, option 1) and subject to budget 
availability.   
  
6.4.2 Overall impact of option  
The Option will adequately target the needs of eco-innovative SMEs by highlighting 
networking and better preparing them for e xploiting the available market opportunities (by, 
for instance, increasing their market readiness).  
 
Option 4 provides a policy response targetin g well the needs of eco-innovative SMEs. 
The adequacy of response is high. 
 
6.4.2.1 Subsidiarity, additionality, European va lue added – Eco-innovation Action Plan 
 The initiative falls within the scope of competences of the EU under its environmental and 
innovation policies. It exploits EU added value in  facilitating an EU wide level playing field, 
creation of trade ties and provision of SME support services.   
 
36 This option although not tackli ng directly the framework conditions for eco-innovation 
responds well to the eco-innovation specific needs of the SMEs. Value of EU-level 
intervention is thus significant.   6.4.2.2 Downsides, administrative impact and r eality check – Eco-innovation Action Plan 
 
Public spending  
• Effects under this option would also incl ude the conclusions listed under option 1 
 
Employment  
A number of actions would gene rate new job opportunities by alle viating current bottlenecks.  
 
Administrative burden 
 
Additional administrative costs are likely to be  small, and would relate to the increased 
networking both within the EU and globally.   
6.5 Option 5: Wide EU eco-innovation policy 
 
Option 5 includes strategic and long term acti ons off-setting the framework conditions for 
resource efficient eco-innovation.  
 
6.5.1 Impact of actions 
 
Action 1: Promotion of a faster shift of the burden of taxation to resources (strategic) 
 
Taxation, and better pricing, can  influence technological change
84. In the case of energy 
efficiency, more energy-efficient solutions (a nd emissions reduction) were generated by 
modifications of energy prices85. Similar impact can be expected for natural resources 
consumption86. Impact on competitiveness is expected to be positive, but an element of 
uncertainty is represented by potential mismatch between EU and non EU countries. EU 
added value would be provided by the influenc ing and coordinating ro le of the Commission. 
Long-term, measurable social, economic a nd environmental impacts are expected.  
 
Action 2: Introduction of ambitious standa rds for green public pr ocurement (strategic) 
 
This action exploits the poten tial of public procurement to favour resource-efficiency top-
runners (this is the main diffe rence versus similar GPP actions described previously). This 
would enhance the role of eco -innovation in driving the tran sition towards green growth. 
Economic, social and environmental impacts coul d be reinforced by periodically revising the 
criteria for public procurement to reflect  innovation and development of markets.  
 
Action 3: Introduction of a legally binding framework for labelling of all manufactured 
goods (strategic) 
 
                                                 
84 OECD (2009): Green Growth: Overcoming the crisis and beyond. Paris  
85 OECD 2007: Impacts of environmental policy instruments on technological change. Paris  
86 Bahn-Walkowiak, B. (2008): Resource taxa tion beyond energy and climate issues [J apan.]. In: Nikkei ecology, 2008, 2, p. 129  
 
37 Labelling would extend public procurement crite ria for resource efficiency to the private 
sector. EU added value would be provided by  the European Union Eco-labelling Board 
(EUEB)87 through negotiation and coordination. Th is would support demand for resource-
efficient products and services, enlarging markets and improving competitiveness of eco-innovators. Long-term measurable social and e nvironmental impacts are expected. However, 
there would also be very significant economic  costs associated with any such action.  
 
Action 4: Introduction of waste preventi on and recycling standards along the value 
chain (strategic) 
 
More regulation in favour of eco-design and eco -efficiency can reduce material requirement 
of production processes and products
88. This would encourage eco -innovation related to the 
use of materials along the value chain. Evidence exists that stringent  waste regulation has 
induced significant "cycles" of innovations89. Environmental and competitiveness impacts the 
expected, consequent increase in resource e fficiency would lead to positive impacts. 
 
6.5.2 Overall impact of option 
 Systemic eco-innovation requi res coordinated action by research actors, economic 
stakeholders and political decision-makers.  This option strives for establishing prices, 
which reflect environmental impacts. On the other hand, it improves market conditions for 
demand and the supply of eco-innovations. Op tion 5 addresses underl ying drivers for high 
consumption of resources and energy and high levels of emissions and waste. It takes a 
radical approach directed at root causes expanding beyond traditional environmental 
policy.  The necessity of the described actions have  neither been contested in literature nor 
during the stakeholder cons ultation connected to this Impact Assessment.  
 The Option will carry significant long-term eff ects. Social impacts will be considerable: 
industry structure may change with related shifts in employment, effects on competition may be large (when EU is not taking possi ble trade effects into account).  
 6.5.2.1 Subsidiarity, additionality and European value added  The high additionality of Option 5 owes to the s cale of the initiative and its expected effects. 
This option includes a good mix of measures , fiscal, regulatory and normative which 
complement each other and seek to enhan ce efficiency in different policy areas.  
 6.5.2.2 Downsides, administrative impact and reality check 
 
Public spending  
• Accelerated eco-innovation in the EU poses a threat to resource-inefficient and high-
carbon EU industries. They w ill need to reinvest and develop new capacities. The 
downsides should be outwei ghed by new industries and ne w jobs, but additional 
support for structural adjustments may be needed.  
                                                
 
87 http://ec.europa.eu/environment/ecolabel/index_en.htm  
88 Bleischwitz, R., B. Bahn-Walkow iak, W. Irrek, Ph. Schepelmann, F. Schmidt-Bl eek, S. Giljum, S. Lutter, L. Bohunovski, F. 
Hinterberger, E. Hawkins, M. Kuhndt, N. Pratt, et al. (2009): Eco-innovation - Putting the EU on the path to a resource and ene rgy efficient 
economy. Wuppertal-Spezial 38. Wuppertal. Download: 
http://www.wupperinst.org/upl oads/tx_wibeitrag/ws38.pdf  
89 OECD (2010): Diverting Waste: The Role of Innovation (ENV/EPOC/WPNEP(2010)5). Paris  
 
38 • Within a set EU budget, investing in eco -innovation might reduce funds for other 
important issues, from health to security. C onsideration should be given to financially 
less intensive approaches (coordina tion, information, horizontal support) 
 
Employment 
 
This option will aid the transition of the employment structure – from traditional 
environmental jobs, to employment positions in new or growing eco-innovation sectors.  
 
Administrative burden 
 
An ambitious eco-innovation policy will add to th e administrative burden of public authorities 
in Member States – specifically Actions 1 to 4 – but also European bus inesses – specifically 
Actions 3 and 4. Action 1 will need to accommodat e for existing Member State fiscal policy.  
 
7. C OMPARING THE OPTIONS  
 7.1 Approach 
 
The comparison of options is carried out acco rding to the adequacy  of policy options, 
expected impacts, and the feasibility of implementation . 
 
• Adequacy  indicates the extent to which a po licy response will deliver specific 
objectives: i.e. its effectiveness.  
• Expected impacts  assess the likely impact of policy options on innovation, 
environment and competitiveness as well as overall EU value added: i.e. its efficiency.  
• Feasibility  expresses the likelihood of achieving the impacts within the existing 
organisational, governance and political cons traints of the European Commission. It 
also considers the optimal timing for implem entation to highlight practical challenges: 
i.e. its coherence. 
 Each criteria is scored as --- (very strong negative) to +++ (very strong positive) or N/A 
where there is no evidence or the impact is unclear . Scores are given in relation to the baseline 
scenario (no ETAP). Due to the diverse character  of actions included in the policy options the 
overall scores at option-level are based on the scores on the action level, but are not simple 
arithmetic averages.  
 
7.2 Findings 
 
7.2.1. Overview 
 
The figure below presents an overview of overa ll scores for policy optio ns taking into account 
their expected wider impacts and the feasibility of their implementation. 
 
39  
Figure 3. Comparison of policy options against Option 1 
Overall table and rankin g criteria
Option 1* Option 2 Option 3 Option 4 Option 5
AdequacyAdequacy in terms of 
meeting specific 
objectives N/A medium high medium/ high high**
ImpactImpact on innovation 
system N/A + +++ ++ ++Impact on environment N/A + ++ ++ +++Impact on competitiveness N/A + ++ +++ -/++ ***
EU value added N/A ++ +++ +++ +++
FeasibilityContribution to the 
achievement of wider impacts N/a ++ +++ ++ +
Timing of actions (mean) N/A < 2 years < 2-5 years < 2-5 years > 5 years
* The exact degree of negative impacts of discontinuation of ETAP depends on other EU interventions that may subsititute ETAPac tions
** Option 5 is assessed as highly adequate notably in the field of improving market conditions in a long term
*** Effects on competitiveness may be negative in the short term (e.g. resource taxes may hamper competitive position of resour ce-
intensive industries)  
 
7.2.2. Focus on adequacy of policy response 
 
Taking into account the specific object ives, Option 5 offers the most adequate policy 
response  when compared to policy options ( notably in terms of  improving market 
conditions). Option 3 & 4 are considered as second best. Option 3, focusing on exploiting the 
potential of environmental policy to suppor t eco-innovation and policy learning between 
Member States creates appr opriate framework condition s for eco-innovation. Option 4, 
targeting SMEs, responds better to the prac tical challenges faced by eco-innovators, by 
raising their credibility, focusing on ne tworking and opening up global markets.  
 The adequacy of “Continuation of ETAP” has been  considered average. First of all, Options 
3, 4 and 5 have a broader scope of interven tion addressing eco-innovation (with its non-
technical and organisation issu es). Option 3 offers a coherent approach to eco-innovation 
policy-making, fitting well with the new political re alities and allows achieving the objectives 
through the emerging structures and measures. In  particular it ensure s integration of eco-
innovation into the Innovation Partnerships, a key vehicle for the new innovation policy. 
Option 3 is also expected to better target financial resour ces to support the planned policy 
interventions and have a more coherent impact  of eco-innovation across the EU. On the other 
hand Option 4 better responds to SME needs in terms of networking and opening up trade 
opportunities for eco-innovation.    
7.2.3. Focus on expected impacts 
 
The overall impact of the options  on the functioning of innovation systems is positive, notably 
on framework conditions. However conc rete impacts differ across options. 
 Once again Options 3, 4 and 5 improve on Opti on 1 and Option 2 in terms of impact on 
innovation system due to greater emphasis on mi nimising market failure (i.e. strengthened 
focus on financial instruments), further improvement of framework conditions and 
coordination of eco-innovation policies. Furtherm ore, due to a pervasive approach to eco-
 
40 innovation, options 3 & 5 can have a systemic  impact on the innovation process placing 
resource productivity among the key de terminants regardless of sector. 
 In terms of potential impacts on the environment  Option 5 promises the greatest positive 
impact. The impact is however expected in the long term (effects on the resource tax are 
expected only in 10-15 years assuming immediate action). The impact of Option 3 is expected 
to be larger than Option 2 foremost due to th e enlarged scope to eco-innovation and better fit 
to the new policy framework.    The report argues that resource productivity is po sitively correlated with competitive potential 
of economies. Option 3, with its focus on eco-i nnovation for resource pr oductivity, is deemed 
to deliver a larger positive impact on competitiveness  than Option 1. At  the same time 
Option 4 will also have a positive impact ensu ring integration of eco-innovation into SMEs, 
focus on creating new foreign markets and crea tion of business partne rships and improving 
investment readiness of eco-innovators. The acti ons with the financial community (Option 4) 
will help increase investment flowing to the sector.    
Option 5 might have a net positive impact on competitiveness, but it more difficult to assess 
and is drawn out in time. In  the short term taxation ma y have negative effects on 
competitiveness of resource-intensive industries,  while unilateral EU action on standards or 
labelling may have significant costs.   In general, all options are characterised by high EU value added. No action has been classified 
as “unjustified” apart from Option 1. The discontinuation of ETAP is not justified if it is not to be substituted by comparable action en suring continuous atte ntion on eco-innovation. 
 
7.2.4. Focus on feasibility 
 
Feasibility assessment is a necessary “filter” to  put the wider impacts of planned action in 
context and to understand the actual contributio n of the assessed plan towards achieving the 
overall objectives. The contribution of assesse d options to achieving the overall goals has 
been considered positive. Except for Option 3, the contribution has not been assessed as 
strong. The other options, just like the “old” ETAP,  will not have a strong direct impact (or an 
exclusive “ownership”) of the majority of actio ns. The instruments at the disposal of ETAP 
(ie inter-service consultations, co mmunication tools, analytical ac tivities) make it particularly 
well adapted to inform EU policies and communicat e with stakeholders as well as gain a role 
in EU policy coordination. Option 3 builds upon the ETAP governance structure by providing 
eco-innovation policy with owners hip of the review of fram ework conditions as well as 
ensures its key role in in tegrating eco-innovation into emerging policy approaches.  
 With this in mind, the contribution to achievi ng overall impacts is considered stronger for 
Options 3 and 4. In case of Option 3 these in clude notably expanding Innovation Partnerships 
to cover eco-innovation. In cas e of Option 5, the pot ential contribution is  assessed as lower 
since several actions are beyond the (policy) re ach of Commission, at least when considered 
in the short to medium term.  With regards to timing both Option 1 and Option 3 require an intense work in the coming two 
years. Option 3 offers more implementation flexib ility in terms of timing as it includes several 
actions where optimal timing was deemed to 2- 5 years. As expected, the most ambitious 
option requires more time to gain political su pport and to be ready for implementation, with 
impacts to be expected in 5 to 10 years  
 
41  
7.2.5. Recommendation 
 
Considering the urgency for a focussed and impr oved eco-innovation policy initiative, as well 
as the feasibility of its implementation in a reasonable range of time, Option 3 appears to respond better to the new political  environment. Option 4 on the other hand targets directly 
SME-specific problem drivers. After all SMEs are critical develope rs and users of eco-
innovation. Option 5 represents a longer term vi sion to achieve a radi cal transition to a 
resource-efficient, competitiv e and sustainable economy. Thus  a combination of Option 3 & 
4 is deemed to be most appropriate by sh aping the policy agenda for eco-innovation in 
the medium term and responding directly to the eco-innovation needs of the SMEs. 
Options 3 and 4 also combine well, compleme nting each other and there are no negative 
trade-offs between them. The combined actions respond best to the iden tified objectives and 
problem drivers as shown in Figure 4.   In addition combining Option 3 & 4 corresponds  well to the arguments raised during the 
broad public consultation, for in stance by focusing on SME need s, in terms of financing, 
training and networking (Option 4). The business sector and the Member States call for the 
need to act on the framework conditions for eco-innovation and design po licies that stimulate 
demand in emerging eco-innovation sectors (Opti on 3). A reinforced g overnance structure 
(Option 3) with greater emphasis on policy le arning, coordination, and agenda setting has 
received broad support both during the HLWG m eetings and wider stake holder consultations.  
Stakeholders have endorsed a targeted appro ach in relation to foreign partners for eco-
innovation (Option 4) and acting through establishe d networks and channels to avoid overlap 
(i.e. UNEP Cleaner Production Centre s for global SME networking).  
                  
Figure 4: The link between objectives, prob lem drivers and actions (Option 3 & 4) 
Specific 
Objective Operational Objective Driver targeted Action 
Problems related to 
environmental acquis 
 Option 3, action 1 
 to apply the 
principles of the Innovation 
Union Initiative 
to eco-Putting in place an eco-innovation 
friendly environmental regulatory framework  
 Governance problems related to 
EU innovation support Option 3, action 6 
 
42  
Weak linkages between research 
and market 
 Option 3, action 2 
Option 3, action 4 Integrate eco-innovation concerns 
into relevant policies and initiative, 
in particular in the innovation policy field  
As above Inadequate “skills” base  
 Option 3, action 5 innovation 
make proposals for better targeting 
of EU funds on eco-innovation as part of the next EU financial 
perspectives Difficulties in accessing and 
providing finance   Option 3, action 3 
Strengthen eco-innovation 
capacities of SMEs through increased networking and the 
spread of best practice   Demand side policy measures 
are weak   Option 4, action 1 
to promote eco-
innovation in Europe 
Increase the market credibility and 
investment readiness of emerging eco-innovations  Lack of appropriate and credible 
information on the performance of new environmental 
technologies 
 Option 4, action 2 
Unfavourable global conditions 
for eco-innovation  
 Open up global markets to eco-
innovation 
Unused potential for eco-
innovations in developed and 
developing countries Option 4, action 3 
 
Unused potential for eco-
innovations in developed and developing countries to improve 
global markets 
for eco-innovation 
Improve global capacities for eco-
innovation, in particular in developing countries Indigenous eco-innovation 
capability amongst developing 
countries is scarce Option 4, action 4 
 
8. M ONITORING AND EVALUATION  
 8.1 Context 
 
EcoAP, being a broad “policy framework”, presents a challenge for monitoring and 
evaluation. Furthermore, the selection of indicator s will need to recognise its enlarged scope. 
Therefore, especially evaluation of wider e ffects will rely on proxy in dicators (due to the 
limited access or lack of suitable da ta) or qualitative assessments.  
 
8.2 Organisation and scope of moni toring and evaluation process 
 
The monitoring activity can be performed on two levels: – reporting on activities performed by EcoAP,  such as Eco-innovation fora, the HLWG, 
participation in inter-service consultations, sp ecific studies (“internal reporting”), and 
– collection of key monitoring indictors on th e implementation of all EcoAP actions in 
collaboration with implanting bodies (“external reporting”). 
 The evaluation activity will encompass: 
 
43 • collection of quantitative and qualitative evidence of the progress towards achieving 
goals of all individual acti ons of Eco-AP (whenever possi ble, the evaluation of Eco-
AP will rely on dedicated evaluations performed for individual actions); 
• analysis results and effect s of activities performed by Eco-AP team (attribution 
analysis of the value added of Eco-AP in achieving the goals). 
 In order to improve the quality of evaluation it is proposed that the EcoAP will be evaluated 
both internally and externally. The previous experience of ETAP showed difficulties in 
attributing effects to ETAP ac tions. An ongoing internal evaluation will gather useful 
evidence; it could have a form of preparing re gular self-evaluation notes. Furthermore, they 
will become one of key documents to be used by  external evaluators. In this regard the Eco-
innovation Observatory will be highly useful, by gathering data on markets and trends.  
 
8.3 Parameters and indicators 
 
Particular attention will be gi ven to selecting adequate, acce ssible and reliab le indicators. 
Suggested performance indicators for each acti on are proposed in Annex XIV. To this end, 
the final selection of monitoring indicators as well as data collection process will be 
preformed in a close collaboration with the relevant Commission services as well as (if 
relevant) with the representatives of the MS. In  both monitoring and ev aluation activities, the 
particular emphasis will be give n to monitoring and evaluation of the most important actions 
of EcoAP, the monitoring and evaluation wi ll be performed for all proposed action.  
 
44 ANNEX  I – LIST OF RELEVANT DEFINITIONS  
Definitions 
Competitiveness 
Competitiveness is the collection of factors, policies and institutions which determine the 
level of productivity of a count ry and that determine the leve l of prosperity that can be 
attained by an economy90. It means a sustained rise in the standards of living of a nation or 
region and as low a level of i nvoluntary unemployment as possible91. 
Eco-industry:  The eco-industry consists of ac tivities which produce goods and serv ices to measur e, prevent, 
limit, minimize or correct environmental damage to  water, air, and soil,  as well as problems 
related to waste, noise and eco-systems. Thes e include cleaner technologies, products and 
services, which reduce environmental risk  and minimize pollution and resource use
92. 
Eco-innovation Eco-innovation is any form of innovation resu lting in or aiming at significant and 
demonstrable progress towards the goal of sustainable development, through reducing impacts 
on the environment, enhancing resilience to en vironmental pressures, or achieving a more 
efficient and responsible use of natural resources. This is a broad definition, including both intended and unintended environmental effect s from innovation as well as social and 
behavioural innovation
93. 
Environmental technologies An environmental technology is a technology that advances sustainable development by 
reducing risk, enhancing cost effectiveness, improving proc ess efficiency, and creating 
products and processes that are envi ronmentally beneficial or benign
94.  
ERA-NET Scheme The ERA-NET scheme, in the framework of FP 7 funded activities, aims at developing and 
strengthening the coordination of national and regional research programmes through two 
specific actions: 
• 'ERA-NET actions' - providing a framework for actors implementing public research 
programmes to coordinate their activities e.g. by developing join t activities or by 
mutually supporting joint calls for trans-national proposals. 
• 'ERA-NET Plus actions'- prov iding, in a limited number of  cases with high European 
added value, additional EU financial suppor t to facilitate joint calls for proposals 
between national and/or regional programmes. 
                                                
 
90 Definition by the World Economic Fo rum, Global Competitiveness report 2007. 
91 European Commission, Eur opean Competitiveness report 2008 
92 OECD/Eurostat (1999) 
93 As defined in Community Guidelines On Stat e Aid For Environmental Protection ((2008/C 82/01).  
94 NSTC (1997), The road to sustainable development  
 
45 Under the ERA-NET scheme, national and regional authorities identify research programmes 
they wish to coordinate or open up mutually. Th e participants in these actions are therefore 
programme 'owners' (typically ministries or regional authorities defining research 
programmes) or programme 'managers' (such as  research councils or other research funding 
agencies managing research programmes). 
European Technology Platforms European Technology Platforms (ETPs) are a m echanism to bring together all interested 
stakeholders to build a long-term vision to develop and promote a specific technology or 
solve particular issues. 
Green skill There is no clear definition of what is mean t by "green skills" or "skills for the green 
economy". The research is still ongoing and tryi ng to clarify concepts. However, analysis 
shows that the green economy re inforces the trend towards a new skills paradigm where the 
importance of ‘generic’ skills is recognised to co mplement ‘specific’ skills. The analysis from 
European Centre for the Development of Vocational Training (CEDEFOP) on Skills for Green Jobs
95  shows that fundamental weakness in the EU's skills base could matter more to 
its capacity for green growth than shortage s in specialist "gr een tech" know-how. A 
systematic deficit in technical skills related to science, technology, engineering and 
mathematics (STEM) was also identified. 
Joint Technology Initiative Joint Technology Initiatives (JTIs) are “public -private partnerships in key areas where 
research and technological development could contribute to Europe's wider competitiveness 
goals and where the traditional instruments of the Framework Programme (e.g. collaborative research) are not adequate”
96. JTIs are to constitute an efficient implementation mechanism 
“enabling the necessary leadership and coordination to achieve the research objectives”97. 
Innovation Scientific and technolo gical innovation may be considered as the transformation of an idea 
into a new or improved product introduced on the market, into a new or improved operational 
process used I industry and commerce or in to a new approach to a social service
98. 
Market failure Generally speaking a market failu re implies an inefficient allo cation of goods and services in 
a market. In relation to innovation this is due to the fact that market mechanisms are unable to 
secure long-term investments in innovation due to uncertainty, indivisibility and non-
appropriability of innovation pr ocess99. Typically, a market failu re manifests itself in an 
insufficient allocation of funding by enterprise s for risky and innovati ve investments or 
information asymmetries, and hence the market failure approach leads to instruments that 
                                                
 
95  "Skills for green jobs: A Europ ean synthesis report", CEDEFOP, 2010 
96 CEC (2007) Joint Technology Initiatives: B ackground, State-of-Play and Main Featur es, Commission Staff Working Document, 
SEC(2007)692 97 CEC (2005) Report on European Te chnology Platforms and Joint Technology Initiativ es: Fostering Public-Private R&D Partnershi ps to 
Boost Europe’s Industrial Competitiveness, Co mmission Staff Working Document, SEC(2005)800 
98 OECD (1993), Frascati Manual 99 Arrow 1962 
 
46 allocate resources to firms (R&D grants or ta x incentives) or provide them with information, 
e.g. on IPR, market opportunities,  collaboration partners, etc. This is the so-called "supply 
side" innovation policy. 
Proportionality Article 5 (3) of the Treaty on  European Union also stipul ates "under the principle of 
proportionality, the content and form of Union action shall not exceed wh at is necessary to 
achieve the objectives of the Treaties". 
Subsidiarity Article 5 (3) of the Treaty on European Union further states that subsidiarity means in such 
case of shared competence that "the Union shall act only if and in so far as the objectives of 
the proposed action cannot be suffi ciently achieved by the MS, eith er at central level or at 
regional and local level, but can rather, by re ason of the scale or effects of the proposed 
action, be better achieved at Union level". 
System failures System failures are connected to "missing links" among the different elements of the 
innovation system (network, co-ordination, instit utional, framework or  regulatory, etc.) and 
not only to problems related to the market. They are now take n into account in innovation 
policy because even if the ‘mar ket’ signals induce enterprises to invest in innovation, other 
factors such as financial rules and regulatio ns or weak incentives for higher education 
institutes to develop collaborative research or  graduate courses in pa rtnership with industry 
may nevertheless prevent i nnovation performance from be ing improved. Innovation policy-
makers have increasingly begun to adopt th e language of ‘national innovation systems’ 
(OECD, 2003) theory that stresses that the flows of technology and information among 
people, enterprises and institutions are at the core of the innovation process.  
Resource productivity/efficiency Resource productivity describes the relation between economic outputs usually in monetary 
terms (Y – numerator) and a physical indicator (M – denominator) for material or resource 
input in physical terms. According to the OECD , the term ‘resource pro ductivity’ is put in a 
welfare perspective. It sets the quantity of eco nomic output in relation to  the input of natural 
resources
100. In other word it asks: How much welfar e can be generated from resource use? 
Resource use can be measured by means of ma terial flow indicators of an economy-wide 
material flow analysis (EW-MFA) . Different indicators can be us ed, such as Direct Material 
Input (DMI), Domestic Material  Consumption (DMC), Total Material Requirement (TMR) or 
Total Material Consumption (TMC).  
                                                 
100 Wuppertal Institute (2007), the relation between resource productivity and competitiv eness  and OECD (2008) Recommendation of the 
Council on Resource Productivity. Meeting of the Environment Policy Committee (EPOC) at Ministeria l Level. March/April 2008.  
  
   
 
47 Table 1: Macro-indicators for material flows 
Indicator Formula Subject 
Total Material Requirement 
(TMR) DMI + indirect flows Domes tic and imported resources 
including their ecological rucksacks, 
which are required for domestic 
production and consumption. 
Total Material Consumption 
(TMC) TMR – (exports + indirect flows of 
exports) Domestic and imported resources 
including their ecological rucksacks, 
which are required for domestic 
consumption only (excluding exports). 
Domestic Material Input (DMI) domestic material used  + imports Domestic and imported resources 
without ecological rucksacks, which 
are used for domestic production and 
consumption. 
Domestic Material 
Consumption (DMC) DMI - exports Domestic and imported resources 
without ecological rucksacks, which 
are used for domes tic consumption 
only (excluding exports). 
 
Eurostat uses the indicator “resource productiv ity” (GDP/DMC) as headline indicator for the 
policy area “sustainable consumption and prod uction” (SCP) in the monitoring of the EU 
Sustainable Development Strategy101. Analogical the indicator for resource efficiency would 
be DMC/GDP.  
  
 
 
                                                
 
101 Eurostat (2009): Sustainable Development in  the European Union. 2009 monitoring re port of the EU sustainable development st rategy. 
Eurostat Statistical Books. Luxemburg 
 
48 ANNEX  II – COMPETITIVENESS , RESOURCE EFFICIENCY AND ECO -INNOVATION  
Apart from being a solution to environmenta l problems, eco-innovation covers a big market 
and is considered of strategic importance by many industries. Eco-inno vation is found in all 
sectors and encompasses al kinds of different  innovations, including tec hnical innovations and 
non-technical innovations. As eco -innovation is not systematically  monitored in national or 
EU statistics measurement is difficult.  
The economic importance of eco-innovation can be  illustrated by available figures on the 
market for environmental technology, though smaller than the tota l eco-innovation market. 
For a definition of eco-industries see Annex I. 
The eco-industry is already one of Europe's biggest industrial sectors102. Its estimated annual 
turnover of 319 billion euro is about 2,5% of  Europe's Gross Dome stic Product (GDP). 
Currently app. 3.4 million people  are directly employed in th e EU eco-industry, which is 
about 1,5% of all Europeans in employment. The largest sub-sectors deal with waste 
management (30%), water supply (21%), wa stewater management (13%) and recycled 
materials (13%). The eco-industry in Eur ope has in recent years grown by around 8% 
annually making it one of Europe's most dynami c sectors. Most recently, growth has been 
concentrated in resource management (esp. ener gy) where new technologies such as solar and 
wind energy have made remarkable progress.  Approximately 600,000 a dditional jobs were 
created between 2004 and 2008. For a composition of basic information on the size, composition and turnover of eco-industries in the EU and globally see Annex III. 
Current experience suggests that the primary fo cus of current eco-innovations tends to rest on 
technological developments and advancements . Nevertheless, a numb er of non-technological 
innovations, such as establishing separate environm ental divisions or creating inter-sectoral or 
multi-stakeholder research networks, have spurred technological developments. Some industry leaders have even begun to explore systemic innovations  that are changing the way 
their businesses fulfil consumer demands
103. Here are opportunities for the EU to take the 
lead.  An example is e.g. a copying machine manufacturer performing research on business-
models that allow them to make a profit when they help their clients in reducing the number 
of photocopies and printouts (and thus reducing costs and environmental impacts) instead of 
their traditional focus on reducing the environmental impacts per photocopy.  
In a study in 2008 the Wuppertal Institute tested the relationshi p between material 
productivity and competitiveness for the year 2000. Score values of the Global 
Competitiveness Report of the World Economic Fo rum were plotted against the values on 
resource productivity (DMI) of 2000 and applied in a correla tion analysis. The Wuppertal 
Institute concluded, that the results delivered “good reasons to believe that there is a positive relationship between the resour ce productivity of economies (m easured in GDP in PPP U.S. $ 
per kg DMC) and the score value
104 of the GCI105”.  
In order to further validate the conclusions a regression analyses fo r the years 2004 to 2007 
was carried out similar to the analyses for the year 2000. More soph isticated time series 
                                                 
102 All figures on EU and worldmarkets from Ecorys et al., Study  on the competitiveness of the EU eco-industry, Final Report – Part 1, 
Brussels, 2009 (Ecorys, 2009A) 
103 OECD 2009, Policy Brief, Sustainable Manufacturing and Eco ‐innovation: Towards a Green Economy  
104 We used the score values instead of ranking positions for the regression analyses. The score values provide us with informa tion about the 
relative distance of the individual countries. For rank correlations, we would lose this information. For this reason we did no t make 
regression analyses with the Business Competitivene ss Index, as this index only existed as a ranking. 
105 Bleischwitz et al. 2008, p. 39  
 
49 analysis could not be performed due to the l ack of corresponding time series. Therefore, it has 
been analysed whether the statistical correlation s till exists with a larger  number of countries 
and in every single year from 2004 to 2007. 
It is still unclear whet her high material productivity result s in an improved competitiveness or 
if high competitiveness is a pr econdition for higher material productivity. Or maybe a third, 
not analysed variable, which is a driver for both the competitiveness and the resource productivity, is the explanatory variable. 4-year-data is still not sufficient to answer the 
causality by means of the Granger Causality Test . However, a visual anal ysis of scatter plots 
provides a first assumption about causality. 
As seen from the scatter plots for each year, Malta is consistently an outlier, which results 
from the enormous material productivity of Ma lta. This seems to be caused by the lack of 
(depletion of) local raw materials. Therefore, all regressions were performed with Malta and once again without Malta. As expected, the co efficient of determination has improved when 
using the data without Malta.  
Based on a visual analysis of the Fig 1 to 4, we can derive that in  all analysed years, a positive 
relationship exists between material producti vity and competitiveness (measured as the 
Global Competitiveness Index). However, the va riance of material pro ductivity in countries 
with high competitiveness is very high. If non- European OECD countries are included in the 
analyses (2004 and 2005), the result s are in principle identical, but with a further spread of the 
countries in the top of the figures. The scatter pl ots (Fig. 1-4) show that a very high level of 
competitiveness could be associated with lo w material productivity. On the other hand, 
countries with low competitiveness are also char acterized by low materi al productivity - with 
the exception of the outlier Malta. These results allow the interpretation that a high level of competitiveness is a precondition to achieve a high material productivity. However, other 
factors also determine whether economies have a higher or lower material productivity. Thus, 
for example the Scandinavian economies are still  characterised by the use of their natural 
resource endowments (Norway: oil & gas, Swed en & Finland: mining and forestry, Denmark: 
animal biomass) compared to more service- oriented economies e .g. UK or Switzerland. In 
interpreting the causality of the relations hip between competitiveness and material 
productivity there is need for further research and an improved database.  
 
50 Fig: 1: Scatter plot material producti vity and Global Competitiveness Index 2004 
 
 
Fig: 2: Scatter plot material producti vity and Global Competitiveness Index 2005 
 
 
51  
Fig: 3: Scatter plot material productiv ity and Global Competitiveness Index 2006  
 
 
Fig: 4: Scatter plot material producti vity and Global Competitiveness Index 2007 
 
 
At first glance, the four different regressi ons from 2004 to 2007 show quite similar results. 
The coefficient of determination improved signi ficantly when using the data without Malta 
 
52 (from an average adjusted R2= 0,15 to an av erage adjusted R2= 0,35). Only in 2007, the 
difference between the regressions with and w ithout Malta is not so pronounced (with Malta: 
adjusted R2= 0,10, without Malta: adjusted R2= 0,17). In all tested models, both the t-values 
and the F-values of the models were within  the level of significance. However, some 
regressions suffer from a violation of the assu mptions of OLS estimation, so these results are 
not statistically significant. On ly the regressions for the year  2006, both the regressions with 
and without Malta, are statistic ally significant and normally di stributed in their residuals. 
Interpretation of results 
Based on an analysis of the figures in Annex II we can derive that in all analysed years, a 
positive relationship exists between material productivity and competitiveness (measured by 
the Global Competitiveness Index). These results a llow the interpretation that a high level of 
competitiveness is a precondition to achieve  a high material productivity. Based on the 
present sample, we cannot conclude, however , that a high material productivity leads 
automatically to higher competitiveness. Thus it can be seen as a necessary, but not sufficient 
factor for high competitiveness.  
Although the visual analys es of scatter plots point to a pos itive relationship between material 
productivity and competitiveness, the results of  our regression analysis  are not statistically 
significant in three of four years. One reas on could be the large variance of material 
productivity in the countries with a high sc ore value in the Global Competitiveness Index. 
Since the Global Competitiveness Index is combin ed by dozens of different indicators, a wide 
range of different parameters influences the Global Competitiveness Index. Based on the present sample, we cannot conclude, however , that a high material productivity leads 
automatically to higher competitiveness.  Thus it can be seen as a necessary, but not sufficient factor for high competitiveness. 
 
53 ANNEX III – THE ECO -INDUSTRIES – IN THE EU AND GLOBALLY  
Defining eco-industries 
 
The OECD and Eurostat define eco-industries as “those [identifiable] s ectors within which the 
main – or a substantial part of – activities are unde rtaken with the pr imary purpose of the 
production of goods and services to measure,  prevent, limit, minimize or correct 
environmental damage to water, air and soil, as well as problems related to waste, noise and eco-systems”
106. Based on this definition, a distinction can also be made between ‘core’ and 
‘non-core’ or ‘connected industrie s’ based on the relevance of th e industry’s activity to the 
previously mentioned purpose. For example ‘c ore’ industries include sectors such as 
wastewater treatment and renewable energy so urces. Connected industries on the other hand 
include sectors such as ICT,  chemicals or automotive.  
 Most of the data on eco-industr ies and the eco-innovation market refer to the ‘core’ set of 
industries. These refer to the 36 activities listed by the OECD
107. The table bellow presents 
these activities according to three different groups108. 
 
Pollution Management 
Group Cleaner Technologies 
and Products Group Resource Management 
Group 
Equipment and materials for : 
o Air pollution control. 
o Wastewater management. 
o Solid waste management: 
– Hazardous waste collection, 
treatment and disposal; 
– Waste collection, treatment 
and disposal; 
– Waste recovery and recycling 
(excludes manufacture of new 
materials or products from waste and scrap). 
o Remediation and clean-up of soil, 
surface water and groundwater. 
o Noise and vibration abatement. 
o Environmental monitoring, 
analysis and assessment. 
o Other
. 
Provision of services for : 
o Air pollution control. 
o Wastewater management. 
o Solid waste management: 
– Hazardous waste collection, 
treatment and disposal; 
– Waste collection, treatment 
and disposal; 
– Waste recovery and recycling 
(excludes manufacture of new 
materials or products from waste and scrap). 
o Remediation and clean-up of soil, 
surface water and groundwater. o Cleaner/resource-efficient 
technologies and processes. 
o Cleaner/resource-efficient 
products. o Indoor air pollution control. 
o Water supply. 
o Recycled materials (manufacture 
of new materials or products from 
waste or scrap, separately identified as recycled). 
o Renewable energy plant. 
o Heat/energy saving and 
management. 
o Sustainable agriculture and 
fisheries. 
o Sustainable forestry. 
o Natural risk management. 
o Eco-tourism. 
o Other (e.g. nature conservation, 
habitats and biodiversity). 
                                                 
106 ECORYS, 2009, Study on the competitiveness of the EU eco-industr y, Study produced for the DG Enterprise and Industry, Europ ean 
Commission, Rotterdam. 
107 Please refer to OECD “Environment Goods and Services  Industry: Manual for Data Collection and Analysis” 
108 The link between these activities and the NACE classification of industrial activities has not been completely developed. E urostat has 
defined a ‘core’ industry group (NACE 25.12, 37, 41, 51.57 and 90).   
 
54 o Noise and vibration abatement. 
o Environmental R&D. 
o Environmental contracting and 
engineering. 
o Analytical services, data 
collection, analysis and 
assessment. 
o Education, training, information. 
o Other. 
 
Source: OECD, 1999.  
 
It must be kept in mind how ever that “eco-innovation occurs in the whole economy: any 
company adopting a good, service, production pr ocess management or business method with 
environmental benefit is an eco-innovator”109.  
 
General figures on the eco-industry in the EU 
 
The eco-industry in the EU27 had a turnover of €232 billion in 2004 and €319 billion in 2008. 
In 2008, this equalled 2.5% of GDP w ith an annual growth rate of 8.3%110.  
 The four largest sub-sectors acc ount for roughly three- quarters of the tota l eco-industry with 
waste management (30%), followed by water s upply (21%), wastewater  management (13%), 
and recycled materials (13%). Recycled materi als is the sector show ing the highest growth 
rate among the four previous ly mentioned sub-sectors. 
 
 
The New Member States display a very high percentage of eco- industry turnover in relation to 
GDP, reflecting the increasing role these industrie s have begun to play in their economies. In 
Bulgaria and Slovenia, eco-industry tur nover represents 10.6% and 9.75% of GDP 
respectively, compared to 2.55% for EU27111. Eco-industries are an  equally important 
economic sector across the European Union.   The following table shows the dist ribution of the total turnover of eco-industries in EU25 in 
2004, both by sector (pollution management vs . resource management), and country.  
 
Table 1 Total turnover in EU25, Pollution Manage ment and Resource Management Expenditures by 
Country, 2004 
Country Total Turnover 
(€million) % of EU-25Pollution management 
(€million) % of EU-25Resource management 
(€million) % of EU-25
Germany 66114 29% 44597 31% 21517 26% 
France 45851 20% 28264 20% 17587 22% 
UK 21224 9% 12103 8% 9121 11% 
Italy 19269 8% 8946 6% 10323 13% 
Netherlands 14039 6% 10953 8% 3086 4% 
Austria 10091 4% 9092 6% 999 1% 
Spain  9044 4% 6047 4% 2997 4% 
                                                 
109 Kemp, R & Pearson, P, 2007, Final report MEI project about m easuring eco-innovation, project car ried out in the framework o f FP6. 
110 Most of the figures regarding turnover of eco-industries ar e calculated based on the Environmental Protection Expenditure u sed by 
Eurostat. This indicator is defined as, the money spent on all purposeful activities di rectly aimed at the prevention, reductio n and elimination 
of pollution or nuisances resulting from the producti on processes or consumption of goods and services. 
111 ECORYS, 2009, Study on the competitiveness of the EU eco-industr y, Study produced for the DG Enterprise and Industry, Europ ean 
Commission, Rotterdam.   
 
55 Denmark 8794 4% 6542 5% 2252 3% 
Poland 6557 3% 4444 3% 2113 3% 
Belgium 5806 3% 2785 2% 3021 4% 
Sweden 3968 2% 3090 2% 878 1% 
Finland 3543 2% 1414 1% 2129 3% 
Portugal 2356 1% 1069 1% 1287 2% 
Hungary 2193 1% 1493 1% 700 1% 
Greece 2054 1% 1266 1% 788 1% 
Czech Republic 1726 1% 399 0,28% 1327 2% 
Ireland 1211 1% 818 0,56% 393 0,48% 
Slovenia 872 0,38% 507 0,35% 365 0,45% 
Slovakia 740 0,33% 409 0,28% 331 0,40% 
Lithuania 371 0,16% 187 0,13% 184 0,22% 
Luxembourg 319 0,14% 198 0,14% 121 0,15% 
Estonia 256 0,11% 159 0,11% 97 0,12% 
Latvia 159 0,07% 92 0,06% 67 0,08% 
Cyprus 139 0,06% 39 0,03% 100 0,12% 
Total 226696   144913   81783   
 Source: EY, 2006. 
 
As seen in the following figure, Denmark, Aust ria and Poland were the three countries with 
the largest eco-industry turnover as  a percentage of  GDP (2004).   
Figure 1 Turnover as Percentage of GDP in EU25, 2004 
 
Source: EY, 2006. 
 
In terms of employment, the eco-industry in EU27 was estimated to employ 3.4 million in 
2005, compared to 2.7 million in the car manuf acturing industry and 3.4 in chemicals112. This 
represents 1.7% of total paid  employment in Europe. The annual growth rate of employment 
in all subsectors between 2000 and 2008 is esti mated at 6.98%, with recycled materials and 
renewable energy showing the strongest growth (10.5% and 16.3% respectively). 
                                                 
112 European Commission, 2007, Facts and Figures: the li nks between EU's economy and environment, Belgium. 
 
56  
Employment in the pollution management sect or alone accounts for 2.35 million full time job 
equivalents. In Austria, employ ment in this sector represents 3% of the total workforce 
making it the country with the highest share in  Europe. It is followed by Denmark, Estonia 
and Slovenia113.  
 Eco-industry exports for the EU25 (2004) re presented approximately €13 billion while 
imports rose to €11.1 billion. 57% of trade (both imports and exports) took place within the European Union, mainly between Germany, Fran ce and the UK. These countries are both the 
largest exporters and importers  despite them being net exporters of eco-industry. Together, 
they represent approximately 55 % of trade carried out by EU c ountries. The first exporter in 
Europe is Germany, exporting €4.8 billion in 2 004. This is more than twice the amount of 
French (€1.5 billion) and nearly three tim es the amount of British exports (€1.5 billion)
114.  
 
Size of eco-industry firms 
 
The structural make-up of eco-industries varies  strongly from one sector to another. The 
heterogeneous nature of the indus try along with the strong lack of  statistical information make 
it difficult to provide a precis e overview regarding the exact  number, type and size of 
companies in eco-industries. In spite of this, taking a closer look at a number of specific 
sectors allows to draw some general conclusions.  Firstly, concentration is a notable trend in the ec o-industry in the EU, particularly in the waste 
management sector, soil remediation, wind power and renewable energy. The ECORYS study 
shows that approximately 10% of  companies are responsible for almost 80% of the turnover. 
The particular drivers behind this concentra tion trend are intentions to increase their 
geographic coverage and along w ith it, increase business activiti es to build a critical mass 
allowing lessening the burden of costs linked to R&D
115.  
 With regards to firm size, firms tend to be larger and display a more international profile in long-standing eco-industry markets such as wast e management and water supply. On the other 
hand, new regulation-driven markets116 such as the eco-construction sector and the 
renewable energy sector are ch aracterised by a stronger presence of smaller firms. Their 
growing maturity as well as  the ongoing economic downturn is  likely to lead to the 
consolidation of the sectors. The following ta ble summarises the key profiles of companies 
belonging to different ec o-industry subsectors. 
 
Sub-sector Industry structure 
Air pollution Flue gas treatment: small and medium-sized e.g. LAB 
(France) and large international e.g. Lurgi (Germany), Alstom (France) Catalytic converters: Big groups e.g. 
Coming GmbH (Germany), Delphi (Luxembourg), 
Rhodia (France) and special medium-size e.g. Ibiden (Germany) and Johnson Matthey PLC (UK) 
Waste management EU15 has a mature market and EU (27-15) is 
developing. An oligopoly with the large actors 
accounting for 80% and the remaining 20% is for the 
local companies 
                                                 
113 Ibid. 
114 EY, 2006, Eco-industry, its size, employment, perspectives and barriers to growth in an enlarged EU, a study for the Europe an 
Commission, DG Environment 115 ECORYS, 2009, Study on the competitiveness of the EU eco-industr y, Study produced for the DG Enterprise and Industry, Europ ean 
Commission, Rotterdam.  
116 EY, 2006, Eco-industry, its size, employment, perspectives and barriers to growth in an enlarged EU, a study for the Europe an 
Commission, DG Environment. 
 
57 Soil & Groundwater Two types: small specialized firms and construction 
companies 
Wastewater management & Water supply Wastewat er management & wate r supply are often done 
by the same actors who are usually local small specialized companies who are often part of a few major 
actors e.g. Veolia (France), RWE (Germany), Thames 
Water (RWE) (UK) 
Renewable Energy o Hydropower: 90-100 small and large companies 
o Photovoltaic energy: 40-50 large companies 
o Geothermal: hundreds of small companies 
o Solar thermal energy: small sector dominated by 
SMEs 
o Wind power: a fast growing market all sort of actors 
Others o Public administration: each country has at least one 
department or ministry  
o Private environmental management: activities are part 
of total activities within a company 
Biodiversity Eco-tourism: plenty of national parks, eco-museums, 
etc… 
Source: EY, 2006.  
 
Despite eco-industries’ overa rching trend towards concentr ation, these sectors are 
characterised by the presence of an important number of small and medium enterprises (SME). Out of a micro-economic sample of fi rms from eco-industries, ECORYS found that 
97% were SMEs
117,  however accounting only for approximately half of total employment. 
 
Eco-innovation financing in the EU 
 
Indicators on the cleantech industry are often used to measure the eco-industry. The term 
cleantech is generally used to describe companies that produce technologies that are 
environmentally friendly. The emphasis is often on new or esta blished technologies. 
Cleantech and eco-innovation are thus closely related. However, the focus of eco-innovation 
is broader than only technol ogy and also encompasses for example process innovation. 
 Data on the venture capital  (VC) market trends in the cleant ech sector offer an insight on the 
current trends of the capita l market for eco-innovation.  
 The total venture investment s worldwide in 2009 amounted to about 29.6 billion dollars
118. 
Investments in cleantech companies at that  time represented nearly 11%. However, VC 
investments in cleantech declin ed in 2009 by 33%. Un til 2008 the industry recorded six years 
of growth at an average annua l rate of 45% and VC investme nts reaching 8.5 billion USD.  
                                                 
117 As defined by the European Union (1 to 250 employees).  
118 Dow Jones Venture Source. Available at: www.venturesource.com 
 
 
58 Figure 2 Global Cleantech Venture Capital Investments 
 
Source: Cleantech Group, 2009 
 
The Cleantech Venture Capital report for 2 010 shows the state of VC investments in 
European companies. According to the repo rt, in Europe the VC capital market is 
significantly smaller than in North America (6 4% of VC funding raised in the US in 2009 
compared to 28% in Europe and Israel). Howe ver in Europe, a larger share of the total 
investments goes to cleantech. In the EU as much as 39% of VC invested in cleantech while 
in the US it is estimated between 17-20%.   
According to the European Priv ate Equity & Venture Capital A ssociation, all private equity 
investments in the energy and environmental sect ors in Europe represen t approximately 7% of 
all investments. This is comparable to invest ments carried out in the consumer services, and 
the financial services sectors.   
Figure 3 Investments by sector focuses in 2009 – all private equity 
 
Source: EVCA/PEREP Analytics 
 
 
59 Most of this funding goes to energy genera tion followed by energy efficiency. These two 
sectors alone make up 71% of  the capital invested in the fourth quarter of 2009. 
 Moreover, VC capital investments in Europe have exploded over the last decade. In 2009, 
investments amounted to 1.6 billion dollars spre ad over 221, while in 2004 only 0.4 billion 
dollars were invested in 144 deals. The largest cleantech venture capital marked in Europe is 
found in the UK followed by Germany, Norway and Fr ance. By far the most VC in Europe is 
invested in energy generation followed by energy efficiency.  
Figure 4: Capital raised by European cleantech firms 
 
Source: Cleantech Group, 2010 
 
During the first quarter of 2010, VC investment s en Europe were distributed as follows 
among the top seven countries: 
Figure 5: Distribution of VC investments among the top 7 European countries for the first quarter of 
2010 
 
Source: EY in Club Cl eantech AFIC, 2010.  
 
 
  European market share and competitiveness 
 
60  
When it comes to European industrial competitiveness data119 indicating world trade shares of 
potential environmental goods of OECD co untries (1993 up to 2004) indicates that, 
internationally there are three strong OECD members – Germany, the USA and Japan (China 
is not an OECD country), with South Korea performing more average.  Generally, the UK, 
Spain, Ireland, and Sweden are also considered to be competitive.   A 2007 Roland Berger analysis of the European  environmental industry looked at market 
volumes and competitive positions – mainly Germany – in Europe.  One of the study’s key findings was that “environmental technology al ready represents an important economic 
factor”
120.  The report further estimated that ove rall market volume (2007) was €1 trillion 
globally, with energy efficient technologies playing a large part (€450bn).  The average 
market share of European companies was above  30% – in waste management and recycling, 
power generation, sustainable m obility, energy efficiency, and su stainable water management.  
The European market share was lower – 10% – for material efficiency.   
Global market shares in European hands fl uctuate between the different fields of 
environmental technologies.  Fo r example, for automatic sepa ration of materials and solar 
power stations, Europe accounts for more than 70% of the total market. And in synthetic 
biofuels, solar cooling systems and energy stor age technology, European industry are leading 
in R&D, although there are no market shares to speak of, as there are not yet any established 
markets. On the other hand for hybrid vehicl es, there are no Europ ean companies that 
currently have a product on the market. For the remaining markets, the share of European 
companies ranges from 20% to 80%.   On an aggregate level, the Roland Berger st udy concluded that the most competitive EU 
countries, in terms of innovation and market share, are Germany, Spain, Scandinavia, the 
Netherlands, Great Britain, France and Italy.   
            
                                                
 
119 DG Research sponsored project (Measure ment of competitiveness of eco-innovation) 
120 Innovative environmental growth markets from a company perspec tive, Research Project on behalf of the Federal Environment A gency 
by Roland Berger Strategy Consultants, 2007  
 
61  
Table 1 World trade shares of  potential environmental goods  of OECD countries, 1993-2004 
 
 
62 ANNEX IV – ENVIRONMENTAL POLICY AND ETAP  FOR ECO -INNOVATION –LESSONS LEARNT  
The EU Sustainable Development Strate gy, launched in 2001, recognized the linkages 
between growth and sustainable development.  This has been further reinforced by the 
Council121, which recognized the pote ntial of technologies to create synergies between 
economic growth and environmental protection. Eco-innovation is a natural junction of the 
pursuit towards sustainability, competitiveness and job creation. It merges technological, 
process and business innovation with environmental benefits. 
The EU approach to eco-innovation has develope d over time. The EU's environmental policy 
and legislation has evolved from promoting "end- of-pipe" solutions to setting environmental 
performance requirements and targets for products , industrial processes and resource use and 
moving further to address environmental manage ment and consumer behavior. These policies 
and regulations have been and remain a main driver for eco-innovation.  
Environmental policy supporting eco-innovation complements other EU policies supporting 
innovation, which do not have enviro nmental outcomes as their ma in objective. In particular 
this refers to innovation and i ndustrial policies, cohesion policy, research. As means to better 
coordinate and ensure consistency of  eco-innovation policy in 2004 the European 
Commission launched the Environmental Technol ogies Action Plan (ETAP) as a complement 
to the EC regulatory approaches. As such th e Plan promotes research, development and 
deployment, mobilizes funds, helps to drive demand and to remove barriers to market 
developments for environmental technologi es, and eco-innovation in general.   
The integration of environmental, competitiveness and employment aspects has received a 
further boost with the launch of the Europe 2020 strategy122. It aims to turn the EU into a 
smart, sustainable and inclusive economy by putting in place policies to secure economic 
development and social cohesion in circumstan ces where environmental challenges, including 
natural resource scar city, are growing. 
Environmental policy for eco-innovation 
Evidence suggests that, by modifying relative in centive structures and production constraints, 
environmental regulation can act as a powerfu l stimulus to innovation and economic growth. 
The EU environmental policies have created ne w markets, incentivising business to innovate 
towards best and more efficient solutions. Ec o-innovation provides thereby the key means to 
reconcile economic growth and environmental protec tion. The objective of this part is to give 
an overview of the key lessons learned with  respect to eco-innovation support gathered 
through the development and design of EU environmental policy.  
Literature123 exists that looks at the contribution of specific environmental legislation with 
respect to its contribution to eco-innovation support. The points below summarize key lessons 
learnt regarding the relationship between  environmental policy and eco-innovation: 
• Eco-innovation will not emerge in the abse nce of innovation-conducive environmental 
policy. At its early stage eco-innovations te nd to be more costly and uncompetitive vis-
                                                 
121  In particular refer to European C ouncil conclusions of: 22&23 March 2005, 23&24 March 2006, 8&9 March 2007, 13&14 March 20 08 
122  COM (2010) 2020 Communication from the Commission, Europe 2020:  A strategy for smart, sustainable and inclusive growth 
123 In particular refer to Ecorys (2009) "T he implementation of the Environmental Te chnologies Action Plan" and European Parlia ment 
(2009) "Eco-innovation – Putting the EU on the path to  a resource and energy efficiency economy"  
 
63 à-vis conventional technologies or practices – so often la ck a commercial rationale, 
particularly early in its life.  
• Eco-innovation is not only dependent on envi ronmental policy, but is also conditioned 
by the wider framework conditions as well as the corresponding innovation barriers. 
The measures necessary to overcoming thes e barriers fall often outside the domain of 
environmental policy, however their compleme ntarity is such that a strong case for 
integrated policy approaches can be made124.  
• Due to increasing technologi cal interdependency, succe ssful technology development 
frequently requires corresponding advancemen ts in various rela ted technology areas. 
Support mechanisms must be put in place alongside environmental regulation in order to stimulate R&D activities. Environmental policy should create the right conditions 
for green innovations to emerge and flour ish, without knowing exactly in advance 
what these innovations will look like. S timulating diversity is essential. 
• Due to this diversity it is crucial to el iminate regulatory bias towards established 
technologies, for instance in the form  of technology-forcing standards and 
corresponding support mechanisms that “pri ce out” alternative solutions. A better 
approach is to concentrate efforts on creat ing demands for green products and services 
by for instance pricing the environmenta l externality. Policymakers should leave 
individual products to emerge from the market
125. 
• Diffusion of eco-innovation can be induce d. The environmenta l benefit of eco-
innovation will depend on the pace and level of diffusion. Policymakers can mobilize a 
broad array of instruments to induce eco-innovation diffusion. Empirical evidence126 
suggests that command and control instrument s may be just as effective as market 
based instruments.  
 
The Environmental Technologies Action Plan 
The EU Environmental Technologies Action Plan (ETAP)127 was launched to harness the 
potential of environmental technologies and eco-innovation to better protect the environment 
and, at the same time, contribute to compe titiveness and growth. Since its inception ETAP has 
contributed to removing market barriers to th e uptake of eco-innovation,  to turning research 
results into business opportuni ties and to opening up global markets to eco-innovations.  
The Plan contains 25 measures in three prior ity areas: Getting from research to market; 
Improving market conditions; Acting globally. Thes e measures are to be implemented by the 
EC, national and regional authorities, industr ies and research orga nizations. A High Level 
Working Group composed of representatives from Member States and the EC services was set 
up in 2004 to facilitate the implementation of  measures and cooperation among participants. 
Member States formalize their national trans position of strategies and action plans towards 
environmental technologies in the ETAP Na tional Roadmaps. The ETAP is not a typical 
Action Plan, but rather an umbrella that brings  together efforts and actions across policy areas 
with the aim to coordinate eco-innovation support at the EU and national level. 
Two reports on ETAP implementatio n have been produced in 2005128 and 2007129.  
                                                 
124 European Commission, Directorate-General Environment (2007) , "Designing environmental polic y to be innovation friendly" 
125 McKinsey Global Institutue (2010), "How to co mpete and grow: A sector guide to policy" 
126 Diaz-Rainey, I. (2009), Induced diffusion: Definition, review a nd suggestions for further research, Robert Schuman Center f or Advanced 
Studies, European Univer sity Institute, Firenze 
127 COM (2004) 38 final, Communication from the Commission to the Council and the European Parlia ment, Stimulati ng technologies  for 
sustainable development: An Environmental Tec hnologies Acton Plan for the European Union  
128 COM (2005) 16 Report on the implementation of th e Environmental Technologies Action Plan in 2004 
 
64 Getting from Research to Markets 
During the implementation of ETAP, the overall  effort of research in environmental 
technologies has increased, both at EU and Member  States levels. At EU level, a total of €1.4 
billion has been mobilised for the development of environmental technologies through the 6th 
Framework-Programme (FP) and up to €10 billio n under the 7th FP. The Member States have 
also stepped up their eco-i nnovation R&D efforts. The incr ease in R&D funding for eco-
innovation may not be directly linked to ETAP,  but it provides some insights on the growing 
importance of environmental technologies, wh ich would not have been possible without a 
proper coordination of existing programm es, as provided by the ETAP framework.  
Industry has been engaged in developi ng eco-innovation through Technology Platforms 
(ETPs), and new instruments were created to link research institutions, businesses and investors. Such instruments include the Risk-Sha ring Finance Facility or new forms of Public-
Private Partnerships (e.g. Jo int-Technology Initiatives).  
Research efforts however remain somewhat uncoordinated and do not always meet emerging 
environmental and market needs. Coordina tion of and synergy between programmes 
supporting eco-innovation in Europe should be reinforced to addre ss barriers to market uptake 
of promising research results. The ERA-ne t on Eco-Innovation, launched in 2009, should be 
useful to pool Europe's national resear ch and innovation programmes to promote eco-
innovation and to create a ne tworking platform for information exchange among Member 
States and beyond. Looking into th e future more advanced governance structures for eco-
innovation research should be explored to bu ild on Member State-specific strengths and 
specialization, assure EU-wide coherence and commitment of critical mass of resources.  
Improving market conditions 
During ETAP implementation actions aimed at  mobilising public and private sources of 
funding to accelerate the market uptake of eco-innovation have progressed. These include: 
• The Competitiveness and Innovation Framewor k Programme supports actions for eco-
innovation with an indicative budget of  €433 million for 2007-2013 period. A number 
of risk capital funds investing into clean -tech companies have emerged, energizing the 
European venture capital market. The market  replication projects offer direct funding 
for eco-innovative SMEs reducing the gap between research and market: 
• An increasing number of projects funded through the LIFE+ programme deal with 
innovative management or business methods  being introduced both by public entities 
and the private sector. Already app. 65% of  projects funded under the objective LIFE+ 
Environment have an eco-innovation component; 
• The revised environmental State Aid Guid elines, offer a speci fic 10% bonus on the 
maximum aid intensity on eco-innovation investments; 
• The target for Green Public Procurement is  50% for the priority product groups and 
services as of 2010, and the necessary tools are being developed; 
The eco-innovation focus of other EU funding pr ogrammes such as the Structural Funds has 
also been reinforced. Experience shows that  LIFE+ and CIP provide funding for projects 
more directed at market-oriented demand. Struct ural Funds promote large-scale promotion of 
eco-innovation best practices  at the regional level. 
                                                                                                                                                        
 
129 COM (2007) 162 Report on the implementation of the Environmental Technologies Action Plan (2005 – 2006)  
 
65 Despite progress difficulties in accessing risk capital remain. Procedures for eco-innovation 
funding instruments are complex. Furthermore, the regulatory barriers to  the emergence of a 
European venture capital market seem to sl ow down and limit financing for eco-innovation, 
especially early-stage.  
A main lesson from the 2007 ETAP report is the need to focus innova tion initiatives on 
demand side actions. This has been taken up in the Lead Market Initiative  (LMI), which 
created new networks and bilatera l contacts across policy areas, act ors and sectors, as well as 
across the Commission services. The implementation of Lead Markets mobilised for example public procurers, professional public proc urement expertise centres, standardisation 
organisations and professional bodies. This approach has proved especially useful in 
emerging sectors, where establis hed communication channels do not exist, as the case of the 
bio-based products shows. Secondly a sector al approach to eco-innovation has proved 
particularly useful. Conditions that promot e competitiveness differ across sectors and so 
therefore do the most effective pot ential regulations and policies.  
Looking at the framework conditions, one of th e major hurdles the eco-industries has to deal 
with (especially some of its sub- sectors such  as air pollution control and recycling), is the 
absence of a well functioning single European market. For example, the Waste Framework 
Directive provides a sound framework to driv e waste management practices in the EU. 
However, the lack of a uniform implementation and enforcement at the level of the Member 
States creates an uncertain and non-transpar ent business environment. A long-term stable 
policy framework with greater harmonization or  co-ordination across the Member States, 
together with simplification of the often highl y complex national regulations is therefore a 
crucial element for the future development of the sector. 
Evidence points to the role market-based in struments (MBIs) can play to overcome the 
disadvantage environmental techno logies face with respect to established technologies. The 
role of ETAP in this respect should be further enhanced for the establishment of new MBIs or 
for the review of existing ones. The inform ation gathered through the Action Plan on the 
involved markets and actors, espe cially in the Member States , could be vital for a better 
design of new MBIs. Use of ETAPs framework and network should be made to monitor 
existing MBIs and to assess and provide evidence of their effectiveness.  
The dialogue with stakeholders , including business and financia l actors, was enhanced by the 
Forum on Eco-innovation. Together w ith other initiatives  in the Member States this helped 
raise awareness and share strategi es and tools for eco-innovation.  
Looking into the future cohesion policy should  make a greater contribution to eco-innovation 
development and uptake, in particular comple menting existing regional capabilities through 
smart specialization. Secondly ex perience shows that the desi gn of future EU financial 
instruments for eco-innovation should be be tter linked to policy objectives, national 
instruments and market needs.  
Acting globally 
ETAP has not been successful in  putting eco-innovation on the international agenda. Progress 
in removing trade tariffs for environmental goods and services was slow due to the delays in the general WTO trade negotiati ons. There was some progress on the funding side, i.e. the 
Global Energy Efficiency and Renewable Energy Fund (GEEREF) and the EU Energy 
Facility. These instruments pr ovide funding for energy and ener gy efficiency projects in 
developing countries. These initiatives however  were initiated outside the ETAP framework. 
 
66 However, perspectives are improving. The in ternational cooperation on climate change 
creates new opportunities for cooperation on eco-innovation, re lated in particular to 
technology transfer. Additionally eco-innovation po licies are now key elements of the green 
growth agenda and are part of bilateral envir onmental dialogues with external EU partners. 
With respect to technology transf er (TT) ETAP experiences in th e field show that a “one-size-
fits all” solution has proved misguided. TT is industry and country specific. Also a high grade 
of industry specificity has been  identified with resp ect to the barriers/ blockages, making 
technology transfer of green technolo gies particularly challenging.  
ETAP has also shown that there is room for international coope ration in the field of public 
research. Joint investment in pre-competitive research, mapping of R&D needs, multilateral 
science and technology cooperation, common  pools of knowledge can share costs and 
effectively and efficiently stimul ate eco-innovation at a global scal e: it potentially facilitates 
outreach, facilitates access to funding, contributes to tec hnology transfer and capacity 
building. It might be useful to identify principles and best practice for further cooperation.  
However TT efforts will not prove effective unless indigenous eco-innovation capabilities are 
developed. They are essential to facilitating both the diffu sion of existing eco-innovation 
within developing countries, and sustainable economic deve lopment based on the adoption, 
adaptation and development of environmentally sound technologies that fit with the bespoke 
conditions faced by these countries. OECD an alyses demonstrate th at high technological 
capacity in the recipient country is a ke y factor in encour aging transfers.  
Governance of eco-innovation 
The ETAP High Level Working Group and the ETA P National Roadmaps have both emerged 
as the main EU instruments for stimulating ec o-innovation policies. A high level of Member 
State engagement in the ETAP process has been achieved. Insuffici ent networking, weak 
links across policy areas, actors and sectors, bo th at the EU level and Member State level, 
remain the key obstacles to a cohe rent eco-innovation policy approach.  
The challenge ahead is how to better coordi nate national eco-innovation policy measures, and 
facilitate policy learning. A lot of expe rience has been accumu lated through the ETAP 
National Roadmaps on the development and use of eco-innovation. The voluntary nature of 
the Roadmaps and the lack of appropriate fo llow-up risks an uneven impact of ETAP across 
the Member States. To benefit further from this experience there may be a need for: 
• More systematic information on governance and re sponsibilities, 
• More systemic information and instruments, 
• Analytical work to identify lessons. Know ledge accumulated in the roadmaps can be 
used to identify good pr actice relating to: the roadmaps themselves, the role they can 
play; how eco-innovation policies can be govern ed; the combination of instruments; 
the design of specific instruments. 
 
 
 Eco-innovation policy in the Member States 
 
67 The Environmental Technologies Action Plan has invited EU Member States to develop eco-
innovation roadmaps to account for initiatives  taken at national level to support eco-
innovation. The analysis of the Roadmaps shows that countries differ in many respects with 
regards to governance aspects. This reflects the dual character of the ETAP roadmaps as an instrument of industrial policy embedded in th e Lisbon agenda, and as an instrument to 
address environmental policy issues.  
The Roadmaps have not spurred new policies, th ey have been a vehicle to gather and share 
information, to reorganize measures. For the new EU Member States, they have also been a 
way to initiate a policy dial ogue on eco-innovation policies.  
There balance of instruments reported in ETA P Roadmaps indicates a bias towards supply 
side instruments. Prevalence is given to R&D support, the support of networks and 
partnerships, demonstration and commerci alization; among demand side measures, 
information services are most common.  
The systemic review of ETAP Roadmaps indica tes that environmental policy priorities are 
well reflected in eco-innovation priorities reflec ted in the Roadmaps. Ne vertheless, there is a 
strong bias towards climate change mitigati on and renewable energy generation. The review 
indicates that the choi ce of instruments to support eco-innov ation is related to the innovation 
potential and the development st ate of a country. Finally the re view suggests that countries 
with the most stringent, most flexible and mo st transparent environmental regulations rely 
more heavily on the supply side measures, whereas countries w ith less stringent 
environmental policy regimes and less developed financial markets, on average, on average, 
more frequently use information services, the pr ovision of infrastructures, and regulations and 
standards to support eco-innovation.  
ETAP lessons learned 
The EU experience and the ETA P National Roadmaps, confirm that countries implement a 
variety of policies to stimulate eco-innovation. At  the European level the key lessons learnt 
for eco-innovation policy include: 
• The need to coordinate eco-innovation polici es is evident. As implicit assumption 
made in much of innovation literature is  that more innovation -related activities is 
always better than less. ETAP e xperience shows that this does  not need to be the case. 
More eco-innovation does not necessarily  lead to improved environmental 
performance. Eco-innovation can have  unintended negative environmental 
consequences (e.g. growing crops to produce biofuels can lead to deforestation and 
increase greenhouse gas emissions).  
• The most efficient policie s to spur a green economy combine a portfolio of 
instruments, involving carbon pricing, R&D support for green innovations, removing 
non-market barriers to ease the substituti on from dirty to green technologies, and 
subsidies to clean technology tr ansfers to developing countries
130. Typically, pricing 
the externality ought to be combined with  long-term investments by governments and 
firms if technological change is too costly, too risky, too long term, or cannot be 
appropriated by firms. 
• It is not clear whether and to  what extent the internaliz ation of costs through market-
based instruments (MBIs) has taken place. MBIs have been put in place, on a 
                                                 
130 Acemoglu D., Ph. Aghion, L. Bursztyn, D. Hemous (2009), The e nvironment and directed technological change, MIT/ Harvard/ NB ER 
Working Paper 
 
68 European and national level, but informati on as to their effects specifically with 
respect to environmental technologies is lacking131. 
• More qualitative information on the status a nd design of instruments would be needed 
to characterize them furthe r and assess their potential impact on eco-innovation: 
additional information on target, bud get would be useful as well.  
• The objective of eco-innovation is not to spur  new technologies, but to accelerate the 
improvement of environmental performance. The benefits of innovation for the 
environment only materialize when the innovati on is taken up by users and delivers the 
expected performance. This emphasizes the need to focus on demand side actions for 
eco-innovation and better coordination of de mand measures across the EU to ensure 
technology spill-overs.   
• ETAP must become more focused on prio rity sectors linked to the growing 
environmental challenges. The current wide  focus on green technol ogies has not been 
helpful in developing targeted a nd efficient sectoral policies.  
• Solving persistent environmental problems n eeds the involvement of other sectors, but 
environmental policy will have to play a ke y role. Implementation will require better 
cooperation and negotiation with ot her sectors and with industry.  
At the Member State level the key lessons learnt include: 
• National strategies to support eco-innovati on provide opportunities to coordinate a 
policy dialogue on this complex and multif aceted issue in a whole-of-government 
approach. In Europe, ETAP has been a vehi cle to systematize and reorganize existing 
measures in the participating countries. In  addition, it would be useful if Member 
States would report on policies that were successful and lessons that have been learned 
with the use of particular policies. 
• EU Member States devote a lot of atten tion to the creation and development of new 
firms. In particular, a variety of initiative s are taken to encourage venture capital and 
direct it towards green tech and eco-i nnovation investments. New firms and new 
comers play a role in the developm ent and deployment of eco-innovation. Data 
developed by the OECD on patent-based indicators for eco-innovation shows that green young firms are more inve ntive than non green young firms. 
 
 
 
                                                 
131 Ecorys (2009), The implementation of th e Environmental Technologies Action Plan  
 
69 ANNEX  V – RATIONALE AND SPECIFIC ACTIONS IN OPTION 5: WIDE ECO-INNOVATION POLICY  
Economic instruments 
No adequate economic incentives or policies ex ist currently for creating a resource-efficient 
economy. “Adjusting the economic and fiscal frame work is therefore th e most fundamental 
and urgent policy prerequisite fo r moving toward sustainability”132. The central role of price 
signals for eco-innovation has been highlighted  by numerous publications and most recently 
confirmed by OECD analysis133. For achieving the right pric e signal the development and 
introduction of environmental taxes is pivotal . In 2005 the weighted average of the revenue 
generated with environmental taxes in the EU-27 constitutes 2.6% of GDP. There are four categories environmental taxes used in the European Union
134:  
– Energy,  
– Transport,  
– Pollution and  
– Resource taxes.  
The overwhelming part of envir onmental taxes is usually genera ted by energy taxes, but this 
will not be sufficient to address other aspects of eco-innovation. For example, price signals for a sustainable use of natural resources are not well  developed. Only 4.1% of the total of the 
environmental taxes are related to resources, for instance in the UK, Sweden, Italy and the Czech Republic
135. The taxes can cause resource reducing and material substitution effects 
with positive effects on eco-innov ation, e.g. in material extract ion, processing and recycling. 
The extent to which this woul d have effects along the value chain would depend on the tax 
bases, levy forms, recipients  and administrative procedures136. 
Consumption and Production Policies (SCP)    
With the adoption a 10-Year Framework of Pr ograms (10YWFP) on sustainable consumption 
and production, as called for by the WSSD Johannesburg Plan of Action the European Union supports global efforts for eco-innovation by 
• assisting countries in  their efforts to green their economies 
• helping corporations develop greener business models 
• encouraging consumers to adopt more sustainable lifestyles. 
Within the SCP framework number of legislative measures could be taken in order to improve 
eco-innovation in the European Union by im proving the interplay between eco-innovation 
supply of and demand as outlined in the problem defition. 
  
                                                
 
132 Schmidt-Bleek, F. (2010): Innovation for a sustainable future. Paper prepared for the Stake holders Consultation on Eco-AP, 11 
February, 2010 in Bruxelles. Carnoules 
133 OECD (2009): Green Growth: Overcoming the crisis and beyond. Paris 134 Eco-innovation - Putting the EU on the path to a resource and energy efficient economy. Wuppertal-Spezial 38. Wuppertal. Do wnload: 
http://www.wupperinst.org/upl oads/tx_wibeitrag/ws38.pdf  
135 Eurostat (2007): Taxation trends in the European Union:  Data for the EU Member States and Norway, Luxembourg 
136 Bleischwitz, R., B. Bahn-Walkow iak, W. Irrek, Ph. Schepelmann, F. Schmidt- Bleek, S. Giljum, S. Lutter, L. Bohunovski, F. 
Hinterberger, E. Hawkins, M. Kuhndt, N. Pratt, et al. (2009): Eco-innovation - Putting the EU on the path to a resource and ene rgy efficient 
economy. Wuppertal-Spezial 38. Wuppertal. Download: http://www.wupperinst.org/upl oads/tx_wibeitrag/ws38.pdf
 
 
70 – Public procurement 
Public procurement of goods and services am ounts to 15% - 20% of final consumption137. A 
greening of public demand could be would crea te a powerful pull for eco-innovation, but as 
outlined in the problem definition the interest of procurement in eco-innovation is limited. For using the full potential of public procuremen t of the European Union the European 
Commission would introduce ambitious standa rds for public procurement reaching from EU 
institutions, over EU MS down to the regional authorities and municipalities. Beyond the 
already existing plans of the SCP Action Plan , which focuses primarily on energy-related 
aspects, more comprehensive eco-innovation st andards for public procurement would include 
reference to best available t echnology (BAT) not only in rela tion to energy consumption, but 
to a number of different eco-innovation aspects including the resource efficiency along the 
life-cycle of procured goods. 
– Clear labelling of green products  
The use of labels exposing the energy-use of products positively influences consumer 
decision-making. Thus they have a direct imp act on the demand and indirectly on the supply 
of energy-efficient products. Labelling of pr oducts for eco-innovation would have to go 
beyond the current energy-related labelling as re quired by the eco-design directive to include 
all aspects of resource consumption along the life cycle. Positive effects on supply of and 
demand for eco-innovation similar to  the energy domain could be expected. In this context it 
would be desirable to reduce the multitude of existing eco-labels. For this purpose the European labelling would have to be based on the vision of greening products all over Europe 
in a joint and common approach. Such an approach would have to be supported by all governmental and non-governmental stakeholde rs issuing and using green product labels. 
The European Union Eco-labelling Board (EUE B) could support this process by involving 
stakeholders and setting up joint working plans,  key objectives and plan s for joint action. This 
would also promote key objectives of the EU Eco Label Scheme including: 
– Developing, publishing and promoting lif e-cycle criteria for eco-labelling; 
– Raising the credibility of the award by effective administration and criteria, 
– Encouraging manufacturers, retailers and servic e providers to apply for labels, to publicise 
their own participation in labelling schemes,  and to promote the availability of eco-
labelled products and information about them; 
– Encouraging purchasers to buy la belled products and services; 
– Improving consumer awareness and behaviour re garding optimal use of  labelled products 
and services. 
– Substitution of the worst perfor ming products on the market  
Based on the life-cycle analysis of products new instrume nts for selecting and banning of 
products (including imported goods) would have to be developed and introduced. 
The combination of public procurement with strict er labelling would create an environment in 
which the demand-pull for well-performing pr oducts could grow. Especially during the 
absence of economic instruments these e fforts could be undermined by “eco-dumping”, 
because production with little care for the envi ronment would in most cases still be cheaper 
than responsibly produced goods. Therefore, the European Un ion would have to protect 
producers with higher standards by actively di scriminating against products and production 
                                                
 
137 Schmidt-Bleek, F. (2010): Innovation for a sustainable future. Paper prepared for the Stake holders Consultation on Eco-AP, 11 
February, 2010 in Bruxelles. Carnoules 
 
71 processes with negative environmental impacts. This would mean that the worst performing 
products would be phased-out of the market by enforcing gradually stri cter standards. The 
effect on the supply side within and among tr ade partners outside of the EU could be 
amplified, if strict long-term targets would indicate the dir ection of eco-innovation and market 
discrimination. 
– Waste prevention and recycling  
Principles of waste prevention and recycling w ould have to be introduced along all stages of 
the value chain to foster eco-innovation not only in production and consumption but also 
during resource extraction and design phase. As outlined in the Thematic Strategy on the Prevention and Recycling of Waste, prevention and recycling of waste can depend very much 
on a successful Integrated Product Policy (IPP) , which provides for the possibility of 
maintenance, repair, remanufacturing and disman tling of products during the use and end-of-
life phase. This implies much more regula tion in favour of eco-d esign, but also the 
development of new business models for th e manufacturing industry, which encompass not 
only the selling of material goods, but also ma intenance and end-of-lif e services. Such an 
approach would foster eco-innovation along the valu e chain from cradle to cradle. Numerous 
innovations in areas such as raw material extraction, material pr ocessing, selection and 
production of new materials, product design, use and end- of-life treatment could be 
expected
138. 
                                                 
138 Braungart, M., McDonough, W. (2009): Cradle to Cradle. Rethinking the way we make things. London: Random House 
 
72 ANNEX  VI – INITIATIVE ON ENVIRONMENTAL TECHNOLOGY VERIFICATION (ETV) 
1. What is ETV? Main objective and rationale 
ETV provides independent verification of informat ion on the performance of new eco-
technologies , so that worthwhile innovations can es tablish a market foot-hold. By providing 
that verification, risks for new purchasers ar e reduced, such that they can purchase the 
innovative technology with the confid ence that it delivers as specified. 
New eco-technologies do not have a track record of  solid industrial references showing results 
obtained from the innovation being used under real conditions. I nnovators typically base their 
performance claims on demonstration projects and test results, which may not be enough to 
convince technology buyers and inve stors to make informed choices. Since purchasers tend to 
favour the 'safe' option of well-proven technol ogies, rather than going for a new technology 
even though it might offer significantly improved performance, lower costs etc. Opportunities 
are missed and further investment  is more difficult to obtain. 
ETV addresses this market-access obstacle through a framework which provides for 
independent, qualified, third-party investigatio n of the technology performance. Providing 
that the innovation is indeed able to deliver  as it promises, ETV delivers a Statement of 
Verification, s howing that the performance claims are based on  complete, fair and reliable 
test data . As a result: 
• The technology developer can show reliable data proving the value of the innovative 
technology. 
• Technology buyers and investor s have reliable informati on on which to base their 
purchasing decisions and manage ment of technological risk. 
• Other stakeholders (includi ng public policy-makers and regulators) have indications 
of the performance achievable by new technologies. 
Verifying a technology under ETV is  generally one step in the chain leading from research 
and development to marketing. ETV is appropriate: 
• When the technology is ready for the market: no further major developments 
affecting the performance are planned; and 
• When there is no technical standard or cer tification system available to prove the 
performance of the product, or where the innovative features of  the new technology 
are not correctly (or adequately) reflected by the available standards. 
When there is a demonstration project or tes ting process planned, ETV could be an integral 
part of it.  Verification under ETV would then  add only marginally to overall costs, while 
adding significantly to the value, in terms of eventual market credibility. 
Under ETV, test data of good quality may be take n into account, to help save time and cost. 
The added value of ETV lies in the credibility and comparability of the 'Statement of 
Verification ', which is the result of a successful verification process. 
ETV is intended for use in business-to-business  relations. It can thus be distinguished from 
product certification, in that there is no control that a series of product conform to given 
 
73 specifications; and from product labelling, since each ETV Statement of Verification  is 
specific to one technology, i.e. th ere are no pre-defined criteria. 
2. Development of ETV 
The ETV initiative builds on a num ber of studies, as well as research and pilot projects, 
exploring the benefits, obstacles  and testing verification prot ocols in specific technology 
fields139. In total, some 35 technologies have b een verified during this  preparatory phase. For 
example, the pilot project TRITECH, funded under the LIFE instrument in 2006-2009, tested 
an operational verification proce dure in real conditions. It cove rered 15 innovations in three 
technology areas - wate r, soil and energy - and produced a business plan for an EU ETV 
scheme. 
Some EU Member States have already im plemented ETV pilot projects: the Nordic 
Innovation Council project on Water Technol ogy Verification Centres (NOWATECH)140; the 
Danish ETV Centre (DanETV) on 5 different technology areas141; and the VERA project on 
Verification of environmental tec hnologies for agricultural production142. Some private 
initiatives have also provided inspiration for ETV, such as the programmes of evaluation for instruments run by associat ions of industrial users
143. 
In 2007-2008, a proposal for a Regulation establis hing an EU ETV scheme was prepared, to 
address the issues of access to markets by i nnovative environmental technologies. An Impact 
Assessment report concluded that a legislative in strument was the preferable option to achieve 
the necessary break-through. However, the Inte r-service consultation failed to reach a 
reasonable consensus among Commission services, as a Regulation was considered 
disproportionate and the scheme as then propos ed too burdensome and resource-intensive for 
the Commission. The evidence of potential uptak e and on the added-value of the scheme was 
also questioned during the ISC. 
Acknowledging the need for further evidence to make an informed decision on the need and 
structure of an ETV scheme, DG Environm ent engaged a new approach on ETV in 2009, 
combining a pilot programme without legisla tive instrument, on a pur ely voluntary basis for 
participating countries and organisations, and a detailed study on the potential market and 
demand for ETV in the EU. 
3. Implementation of the ETV pilot programme 
The ETV pilot programme has been designed progressively in 2009-2010, with interested 
Member States and stakeholders in a public-pri vate partnership setti ng. The selection and 
monitoring of organisations implementing ETV as 'Verification Bodies' is done by national 
accreditation bodies, using the existing pro cedures applied for example to product 
certification. Relations between  Verification Bodies, test bod ies and technology developers 
follow normal commercial practice, while in add ition, Verification Bodies are co-ordinated by 
thematic technical groups to ensure the consis tency and comparability of ETV procedures and 
products. 
                                                 
139 The results of all ETV research and pilot projects are accessible through the common website: 
http://www.eu-etv -strategy.eu/  
140 See http://www.nordicinnovation.net/  
141 See http://www.etv-denmark.com/danetv/  
142 See http://www.ecoinnovation.dk/English/Topics/Ver ification_of_ecoefficient_agro_technologies/  
143 See http://www.exera.com/ , http://www.evaluation-international.com/  and http://www.wib.nl/  
 
74 The verification of technologies submitted to ETV is performed by a Verification Body , 
acting as a one-stop shop for technology devel opers. This includes defining the technical 
parameters to be used in the verification proces s; and also assessing the quality of existing test 
data. When further tests are needed – e.g. when the Verification Body finds that the test data 
in support of the claims are not sufficiently robust – a testing body  and/or an analytical 
laboratory144 are designated by the technology manufact urer to carry out  further tests / 
analyses. 
Verification Bodies, testing bodies  and analytical laboratories fo llow the provisions laid out in 
the ETV General Verification Protocol ('GVP'), which is in fact a set of general instructions 
for the verification of individual technologies. Th e GVP sets out the required qualifications of 
organisations implementing ETV procedures an d the quality of test data acceptable under 
ETV. The GVP ensures that the procedures followed and the outcomes from the pilot 
programme will be of adequate quality and are both credible and reliable. 
To facilitate the launch of th e ETV pilot programme, a call for proposals will be launched in 
2011 under the EU Competitiveness and Innovati on Programme (CIP) with a budget of €1 
million145. Amounts of €1 million are also progra mmed under CIP for ETV in 2012 and 2013, 
subject to the approval procedure of annual wo rk programmes for these years. The 2011 call 
should be open to Verification Bodies accredi ted to implement ETV and it should enable 
Verification Bodies to:  
• Participate actively in the setting-up of the ETV pre-programme by participating in 
relevant technical groups and implementi ng ETV procedures within their technical 
area; 
• Set up and maintain a Quality Management System, thus ensuring a high level of 
quality and reliability for ETV procedures and products; 
• Facilitate access to verification procedur es under ETV for Small and Medium-sized 
Enterprises by providing specific techni cal assistance during ETV processes; 
• Report on the implementation of ETV, on results and indicators to help the 
evaluation of the ETV pre-programme a nd to recommend any further steps. 
4. Market assessment and cost estimates 
The 4th Community Innovation Survey estimated  the number of EU innovative companies at 
around 300 000. Of these, 107 000 introduce new produc ts to the market each year, just under 
half of which are aimed at the industrial se ctor (excluding construction). The share of 
environmental investment of i ndustry out of total investment can be estimated around 3%. If 
this share is applied to the number of innova tions discussed above, it results in a total of 1350 
environmental innovations being intro duced by EU industry every year. This figure 
should be considered as the potential maximum number of c lients for ETV. As an innovation 
itself, and to explore realistically whether ear ly indications of a market need for ETV are 
borne out in the medium-term, ETV will need tim e to prove its value and it is for that reason 
that the pilot programme was devised. 
                                                 
144 Analytical laboratories are distinguished from other test bodies when they carry out  analytical work, fo r example to measur e chemical 
compounds in water or air samples, because such activities follo ws highly standardised and qua lity-controlled procedures, indep endent from 
the products or processes at the origin of the analysed sample s, whereas technology tests are by  nature dependent on the techno logies tested. 
145 2011 Work Programme for CIP – Entrepreneurship and Innovation sub-Programme – adopted on 18 January 2011 by Commission Decision C(2011) 91. 
 
75 The costs of verification under ETV can vary considerably depending on the technology 
concerned and the quality of existing data. The DanETV verification centre is a pilot ETV 
scheme, active in Denmark in 5 technology areas since 2009. Base d on 21 verifications 
finalised in 2009-2010, the average cost for the testing and verificati on of technologies was 
€53,000146, of which €28,000 was attributable to the verification procedures per se . 
Feedback from public consultations and stakehol der workshops indicated that these costs may 
be an obstacle to participation,  particularly in the case of sm all and medium-sized technology 
companies. In order to facilitate SME's access to the scheme, the fixed costs of the pilot 
programme are to be indirec tly supported by the EU budget dur ing an initial phase, the aim 
being to limit the average total contribut ion by participating Sm all and Medium-size 
Enterprises to no more than around €20 000. 
To refine the ETV marketing and cost estimates, DG Environment commissioned a study on a 
'detailed assessment of the market potential  and demand for an EU ETV scheme', whose 
results are expected by mid-2011. The study w ill identify technology areas where ETV is 
expected to generate the greatest added value, ex ploring the business cases for ETV in a series 
of technological applications. It  will provide solid estimates of  the market potential for an 
ETV scheme, covering likely upt ake by technology deve lopers, validated estimates of the 
costs of verification under ETV , insights into the willingness of potential applicants to 
contribute financially and an assessment of  the cost-effectiveness of an ETV scheme. 
5. Conclusion 
By providing objective comparability between  technologies for purchasers, ETV should 
facilitate the emergence of an  eco-innovation market place in the EU, boosting partnerships 
between technology developers and users. It should create c onfidence in the eco-innovations 
verified under ETV, promoting healthy competition – based on performance – between technologies and between test bodies. ETV sh ould also facilitate the greening of public 
procurement: public purchasers are typically very  careful and ETV will pr ovide them with the 
kind of assurance that they need to make a purchase of a significantly better-performing 
innovative environmental technology. 
The results of the ETV pilot programme will be  evaluated by the Commission services after 
two to three years of actual operation. On the basis of this evaluation and the study on the 
market potential of ETV, the Commission will dr aw conclusions on the potential for ETV in 
Europe and on the best way to mobilise it. A ra nge of options will be drawn up, based on the 
evidence available at the time. If there is clear evidence of its  potential added value as an EU-
wide measure, offering the scheme and its impl ementation to the private sector would likely 
be one option, and/or proposing a legislative instrument and/or a guidance document to 
underpin key objectives and requirements.  
 
                                                
 
146 Costs for testing and verifica tion ranged from €22,000 to €94,000. 
 
76 ANNEX  VII  – DETAILED ASSESSMENT OF OPTION 1 AND EXAMPLES OF ETAP' S INDIRECT CONTRIBUTIONS  
In the main text implications and impacts of policies directly relate d to eco-innovation were 
discussed, here effects of the removal of sp ecific ETAP actions are qualitatively assessed. 
Getting research to markets 
Since ETAP mainly supported and strengthened existing research areas, in this ‘no-action’ 
option the research focus will likely continue as it is curre ntly. Funding and coordination 
activities by ERA-Net projects, FP7 and its successor will continue. It is however likely that less concerted effort will be put into attr acting private and public  investment for the 
development and demonstration of environmenta l technologies. Actions aimed at improving 
the eco-innovation process and to take inventions  out of laboratories a nd onto the market will 
be taken (as part of the Innovation Union and th e European Innovation Partnerships), but in a 
more scattered and uncoordinated way w ith no specific focus on eco-innovation.  
Furthermore, dialogue with stak eholders on specific issues relating to the development and 
deployment of eco-technologies won’t be organi zed in a central manner, which could imply 
that important actors will not be involved in  vision-building on the development of eco-
innovations. Trends towards publ ic-private partnerships, th e establishment of technology 
platforms and an increase in attention fo r research and dissemi nation of eco-innovation 
indicate that in the case of th e absence of an EU eco-innovati on action plan, still actions will 
be taken on a smaller scale, for instance within  and between the Member States. Finally, the 
EURODEMO, PROMOTE, Testnet a nd AIRTV initiatives have been promoted in support of 
ETAP to establish European networks of t echnology testing, but, a ccording to national 
stakeholders, international cooperation initia tives mainly take place through established 
networks, so the absence of ETAP will pos sibly not be of great influence.  
Improve market conditions 
ETAP has tried to bridge gaps in this area in  the past few years by financial stimulation 
measures and the development of regulatio n to improve market  conditions. If ETAP 
disappears many of the achieved concerted acti ons towards mobilising financial instruments 
will continue, but it is questionable whethe r the instruments would still focus on eco-
innovation. Stopping ETAP would be seen as a si gnal that eco-innovati on is not a central 
theme of European policies. A discontinuation of ETAP for sure won't mean a disappearance 
of national instruments for eco-innovation, but surely the analysis of roadmaps has 
highlighted the coordinating and networking role  that ETAP played with regard to those. 
In the area of State Aid Guidelines ETAP ha s been successful in adapting the state aid 
framework to favour eco-innovations, but in the area of harmful subsidies only the analysis 
stage has been reached. Collectively reviewing ha rmful subsidies will be more difficult if this 
is coordinated and specifically targeted by an ETAP-like action plan.  Raising business and 
consumer awareness by ETAP aimed at crea ting a network among interest groups and 
increase the current knowledge related to en vironmental technologies. A few activities took 
place, such as the European Forum on Eco-innovation. In this ‘no-action option’, these network and communication activities would lik ely decrease: there would be no website, no 
High Level Working Group, no ETAP forum nor ne wsletters. Training in the environmental 
domain supported by the Marie Curie and ESF funds will however likely continue even 
without the existence of ETAP (but  was limited with ETAP anyway).  
 
 
77 Acting globally 
ETAP’s activities in this field have been quite indirect (e.g: cooperati on with international 
organisations) and limited in terms of budget, a nd therefore it is particularly hard to assess 
consequences of stopping such actions. It is anyhow assumed that the promotion of responsible investments will continue without an  ETAP, maybe in a less focussed way (i.e.: 
environmental good and services in gene ral rather than eco -innovative ones). 
EXAMPLES OF ETAP CONTRIBUTION 
• The integration of eco-innovation in CIP.  The focus on eco-innovation was (at least 
partially) a result of the implementation of ETAP. To accomplish this, ETAP officials 
participated in a number of meetings on the de sign of CIP. This resulted amongst others 
in a fenced-off budget for eco-innovation for Ve nture Capital in CIP and the creation of 
the EACI instrument for pilot a nd market replication projects  
• With regard to the State-Aid guidelines ETAP officials were integrated in a team that 
guided the implementation of the guidelines . The participation of ETAP supported the 
integration of eco-innovation in the guidelin es. ETAP officials ha ve participated by 
taking part in consultations, writing of and commenting on notes, etc.  
• The attention for GPP already arose ar ound 2003. Since 2005, ETAP was involved in a 
mixed group created of members of the working group and a group of DG Markt. The 
group was to discuss between MS and representatives that the word of procurement and the GPP. This is the meeting were th e objective of 50% GPP was introduced.  
• The signalling effect to the Framework Pr ogrammes. ETAP has drawn attention to the 
relevance of eco-innovation and by this mean influenced the Framework Programmes to 
pay attention to development towards more sustainable directions. 
• Supporting the launch of the Environmenta l Technology Verification (ETV) legislative 
proposal and prototype scheme in 2010. The ETV has been set up by the EC in the 
Framework of ETAP. 
Source: Interviews with Commission's officials, Technopolis Group 2010 
 
78 ANNEX  VIII  – DETAILED ASSESSMENT OF OPTION 2 ACTIONS  
Action 1. Increase and focus research, demo nstration and dissemination. Improve co-
ordination of relevant programmes 
From FP6 to FP7 the funding devoted to envi ronmental technologies increased from around 
EUR 1.4 bln to EUR 10 bln. Although this increase in funding cannot  be attributed directly to 
ETAP, it indicates the growing importance of environmental t echnologies, which would not 
have been possible without a pr oper coordination of existing programmes. This signal, at 
least, some influence from ETAP.  
Also many other instruments have been put in place to increase R&D, demonstration and 
dissemination activities and they help to reach a large number of different stakeholders. This 
ERA-NET aiming specifically at SME based innovations. A large contribution to the 
coordination of the MS’ R&D programs has b een expected from the ERA-NET network 
launched in 2009 under the FP7. Besides, a few other EU level programs and initiative can potentially be relevant to PA1 of ETAP such as  Structural Funds or the European Institute of 
Innovation and Technology.   
ETAP has also proved to be helpful in addr essing market failures faced by early stage 
innovative projects. Addressing th e funding problem was one of the focuses of the research to 
market component, and it seems that ETAP initi atives managed to some  extent to either 
through mobilization of funding. ETAP influence on direction of fundi ng in environmental 
technologies on national level varies  from country to country from  neutral to positive.     
The activities under PA1 had a stronger focus on energy technologies and carbon emission 
reduction, and somewhat weaker emphasis on wider problems of resource efficiency issues 
and even less focus on other nature protection problems. With a specif ic focus of new ETAP 
on resource efficiency outside th e renewable energies area there might be a shift in focus in 
research and therefore a shift in environmental impact. Since market s in this area are also less 
developed than renewable energy markets upta ke of research results may be slower.  
Action 2. Establishing ETPs 
Establishing Technology Platforms can be cons idered as one of the direct and concrete 
contribution of ETAP. These mechanisms cont ribute to the objective to promote further 
investments in research and i nnovation and 36 platforms have been established since 2004.  
The literature and the interviews point to a strong impact of ETPs in boosting R&D in specific 
technology areas. Additionally they  provide a range of positive externalities such as positive 
contribution to other research programmes and he lping to identify research infrastructures. 
Because of the importance of ETPs in setting righ t research and innovation  policies, they have 
received extensive support of the national authorities. So cal led “Mirror Groups” represented 
by the state-nominated specialists facilitate  cooperation and comm unication between ETPs, 
national activities and national stakeholders.  
Action 3. Establishing European Netw orks of technology testing, performance 
verification and standardization 
In order to be able to objectiv ely validate the performance of environmental technologies, and 
improve the consumer confidence it was deemed  necessary in ETAP to establish a special 
mechanism to address these issues related to  environmental technol ogies verification and 
 
79 testing. There have been a number of initiatives and p ilot projects on this t opic; these are RTD 
FP6 initiatives EURODEMO, PROMOTE, Test ne t, and AIRTV which i nvolved a total of 47 
organizations from 18 MS147. In this regards ETAP has put th e bases for the establishment of 
a European Environmental Technology Verifi cation System using the experience of US 
Environmental Protection Agency’s Environmen tal Technology Verification. The results of 
the Ecorys survey of MS showed  that international networks of standardisation seem to be 
fairly active and ETVs play some role in this. It is difficult to judge whether ETVs can have 
any impact in addressing capability, organizatio nal and network failures, as this instrument 
targets first of all the produc t, rather then the process of innovation. In creating any 
environmental impact this instrument can have  indirect positive eff ect on a large range of 
problems depending on the program/ technol ogy type, its purpose, etc. For example 
EURODEMO programs explicitly targets technol ogies targeting soil remediation and ground 
water problems, and have a direct effect on soil and water pollution problems and indirect 
effect on resource or energy consumption.  
Action 4. Develop and agree on performance targets for key products, processes and 
services 
Performance targets hold a poten tial for eco-innovation because  a certain requirement to 
products, processes or services can be set with regard to resource use. Literature on the 
effectiveness and impacts of performance targets with regard to resource use is scarce. Up 
until now evaluations of sta ndards and targets aim at sta ndards for energy savings. A 
benchmark for the effectivene ss of performance standards is Japan’s Top Runner scheme. 
Estimates show that the Top R unner scheme will have an effect  of 16-25% of national energy 
savings. This shows the potentia l of performance targets for eco-efficiency. Standards on 
specific substances seem to have a positiv e effect on technological development and 
technology transfer148. 
According to the 2007 study of th e JRC, performance targets co uld be defined as long-term 
objectives for the environmental performance of  product, process or service and they should 
not be technology prescriptive. With regard to  the type of performance targets, a survey149 of 
the MS’ officers showed that a va riety of instruments are perceive d to be effective, especially 
when aimed at market uptake. The softer types or instruments (i.e. voluntary agreements and awareness campaigns) are however perceived to be  least effective. The EU can play a role, 
especially in coordina ting and stimulation of the developm ent of more forceful targets.  
Action 5. Mobilising financial instrume nts to share the risks of investing in 
environmental technologies 
Financial instruments aim to improve the cap ability of the industr y to integrate eco-
innovation. Eco-innovative companies face an alle ged drawback in competitiveness compared 
to more traditional innovations. This competi tive disadvantage is due to the fact that 
environmental costs are not taken up in market  prices; eco-innovations ar e thus more costly 
and seen as more risky
150. Therefore, general innovation ba rriers are applicable to eco-
innovations. Generally, the literature suggests th at there is a lack of capital investment 
                                                 
147 Interview Technopolis with commission officials, Environmenta l Technologies and Pollution Prevention, April 22, 2010 . and 
http://www.eu-etv-strategy.eu  
148 Such as SO2 and NOx (Popp 2006, Interna tional innovation and diffusion of air pollu tion control technologies: the effects o f NOx and 
SO2 regulation in the US, Japan and German y) and NOx (Popp 2006, Exploring links betw een innovation and diffusion: adoption of NOx 
control technologies at US coal-fired power plants). 
149 ECORYS evaluation of ETAP, see previous reference.  
150 Literature suggests that if environm ental costs are taken into account, eco-innova tions are less costly on the longer term.  However, 
individual companies are not the probl em-owner of environmental costs.  
 
80 flexibility due to low (initial) profit margins and a l ack of resources in the start-up and the 
post start-up phase of SMEs. In struments with a clear focus on this problem in eco-innovation 
related to ETAP are the instruments High Growth and Innovation SME Facility  (GIF, with a 
fenced of window for participating in eco-innova tion VC funds) and the “first application and 
market replication projects” in the CIP.  
Within GIF the EIF participates in VC funds with a minority particip ation, which may induce 
commercial parties to participate as well. The VC  funds then invest in companies in early and 
expansion stages. For cleantech early and expa nsion stage funds in total €228m is available 
for participation in the pe riod 2007-2013. The applying f unds for the eco-innovation are 
assessed on two cumulative criteria: (i) inno vation and (ii) preven tion or reduction of 
environmental impacts151. For the ex-post impacts, no specific assessment criteria exist to 
assess the eco-innovation as well as  the environmental impacts of funded SMEs. Up until 
now, funds aiming at eco-innovation are typically la rger than the conventional funds in GIF; 
moreover, there appears to be a large numbe r of funds chasing the eco-innovation budget. 
There is a relatively high level of rejection b ecause the quality threshold is not met in many 
applications. The availability of additional reso urces (apart from the EIF participation) is less 
important152.  
Increasing available budgets to participate in VC  may increase effects to  a certain extent, but 
when available budgets become t oo large, availability  of capital might not be the problem but 
the availability of viable invest ment opportunities. It can well be that there is no  lack of VC, 
but a shortage of economically vi able ideas and inventions to i nvest in. This is sue can only be 
increased by other measures both supply (generation of viable id eas and inventions) as well as 
demand side (dealing with the lock-in of conve ntional not green tech nologies and services, 
primarily “getting the prices right”). The ef fect of the eco-innovation GIF is therefore 
significant in relation to the purely commercia l funding available. Effect on competitiveness 
for the firms involved is large, but it concerns only a limited number of  (however high-growth 
potential) firms. This also limits the environmental impacts effect enhanced by the fact that not all companies are aiming at substantia lly improving resource efficiency either. 
The “first application and market  replication projects” programme  in the CIP-EIP holds larger 
potential for resources savings. However, sinc e the projects started in May 2009, it is too 
early to appraise the effects. Feedback gather ed from the EACI show s that good results are 
expected with regard to eco -innovation, because the instru ment is aimed at market 
introduction of eco-i nnovations specifically
153. The beneficiaries of the instrument show a 
strong drive to bring eco-innovation to the markets.  This makes this instrument of added value 
to the traditional R&D instruments, especially because 68% of surveyed industry associations 
perceive there are adequate opportunities for receiving RD&I funding for eco-innovations. 
Focus on the market penetration might thus be  of added value to the innovativeness.  
The potential for improvement of competitiveness is shown by the interest in the instrument. 
At the time of the deadline for the Call 2010, 287 proposals were submitted. This represents an increase of almost a half as compared to the 202 proposals submitted in the Call 2009, and 
more than a doubling compared to the 134 app lication received in 2008. The total funding 
requested in the 2009 call was more than €150m
154, an increase of almost 40% compared to 
                                                 
151 Guiding Paper for Investors on Eco-innova tion in CIP Financial Instruments.  
Surce: http://www.eif.europa.eu/  attachments/venture/resources/Pap er-for-investors_on_Ecoinnovation_in_CIP_Financial_Instruments.pdf 
152 Interviews Technopolis Group with EIF, April 2010 
153 Interview with EACI, April 2010  
154 This is about 0.05% of the estimated size of eco-industry  in 2008  in the EU27. According to the Study on the Competitiveness of the 
EU the total size of eco-industry was €319bn (turnover) 
 
81 the 2008 call. The manager of the facility pointed out  that with relatively little activities to 
draw attention to the facility there was alrea dy more response from the field than budget was 
available155. It is expected that the instrument w ill have a positive impact on the ability of 
particularly SMEs to penetrate the market with innovation. Almost  70% of the pa rticipants are 
SMEs, 83% are from the private sector. More over, an expected impact is increased 
cooperation, 65% of the proposals are submitted by consortia where two thirds of these consortia involve participants fr om different countries. An expect ed impact of the instrument 
is an increase of the capability to innovate , and thus to growth. Here budgets may be a 
constraint. With present means the effect is expected to be modest to large. 
A related programme also in the range of, i ndirect, influence of ETAP and linked to eco-
innovation grants is the Envir onment and governance compone nt of LIFE+. Grants are 
awarded on the basis of thematic priorities and so far waste and natural resources, climate change and water have represented around 71% of  all funded projects. Differently from the 
CIP grants for eco-innovation the instrument is not specifically targeting SMEs, but 
significant results have been produced and ar e expected for the future. Ongoing projects 
foresee the "production" of a total 27 new t echnologies, 85 methodologies and approaches 
and 10 process and products in fields like climate change, waste and water. 
The additionality of the EU  in these actions is high.  
Action 6 Review State Aid Guidelines and Review environmentally harmful subsidies 
As a consequence of the State Aid review, si nce 2008 a 10% higher intensity is allowed for 
environmental state aid investment support when  the investment results in a substantially 
improved asset compared to the existing state- of-the-art, the eco-innova tion is leading to a 
large leap forward in terms of environmental benefits and when the innovative character of the project clearly involves hi gher risks compared to non-i nnovative projects. Further more 
various other forms of state aid are now allowe d for environment related activities (e.g. early 
adaptation to future Community standards, waste management, renewable energies, energy 
saving, relocation of undertakings)
156. The effect of this action has not been evaluated because 
of it is a recent development. Under this action in a new ETAP is suggested to evaluate the 
effects in due time (2012) and re-assess state guidelines in this respect.  
The OECD concluded157 that much of USD 400 billion subsidies158 in the OECD can be 
potentially environmentally harmful, meaning that efficient State Aid implementation can 
give advantages to sound environmental pr actices. However, untangling and assessing the 
effects of subsidies on the environment is a co mplex task. A systematic approach, consisting 
of determining the effects of subsidy removal on the decisions of consumers and producers and identifying the linkages between those decisi ons and the environment, is required to 
ensure that appropriate policies are developed a nd the benefits of reform fully realised. The 
OECD proposes various subsidy reform st rategies. Follow up action under a new ETAP 
would be implementation of these strategies at EU level and prom otion of these strategies at 
MS level by assessing the harmful subsidies in each MS by an OMC type of process. 
                                                
 
155 Interview with EACI , April 2010. 
156 GHK: State Aid for Eco-innovation. Guidance on the application of the Bonus for Eco-innovation under the Environmental Guid elines 
for State Aid (2008) 
157 OECD (2005). Environmentally harmful subsidies-Challenges for reform 
158 Estimates per sector are USD 318 billion in agriculture, USD 6 billion in fisheries, 40 billion in EU road&rail transport, USD 20-30 
billion to the energy sector and so me 40-50 billion the manufacturing sector   
 
82 Impacts of these combined actions are hard to assess. This measure did not have (nor will 
have) a specific focus on resources efficiency . However, in terms of resource savings 
biodiversity (e.g. in the case of fisheries, wher e biodiversity is a serious issue and subsidies 
compose 20% of landings), water and energy ma y be affected heavily, other resources less 
directly. Competitiveness effects will also be la rge but will be very different over sectors and 
countries, and for some (parts of) sectors and countries positive and for others negative.  
Action 7. Green public procurement 
Given the economic significance of public proc urement of goods and se rvices directing it 
towards green purchases would contribute to  a greener economy cons idering that higher 
purchasing prices of green products are in many cases compensated for by lower operating 
costs, for instance due to lower energy c onsumption and increased resource efficiency159. A 
greening of public demand could thus be a pow erful incentive to increase eco-innovation – 
especially when resource efficiency is take n into account. The effect of green public 
procurement (GPP) is twofold. As a direct e ffect, potentially 15-20% of the GDP may be 
spent on environmentally sustainable products and services. A secondary effect of green 
public procurement would be the stimulating eff ect on the development of resource-efficient 
products, because of creating markets for them  (esp. when there is a dynamic system of 
determining what is ‘green’). As an after-effect GPP can influence the private demand160. 
Effects may be significant. A 2008 study161 on GPP shows that GPP has led to a CO2-
emission reduction of 25% (for the procured items).  
The effect on competitiveness is indicated in th e financial impact of GPP. Buying ‘green’ has 
led to an average decrease in costs of 1%, when  the life cycle costing is taken into account.  
In GPP, the EU has shown to ha ve a direct effect on its own procurement,  and a coordinating 
effect on implementing procurem ent rules at MS level. Im plementation of the 50% GPP 
threshold at MS level is a clear example of th is. Additionality of EU is therefore significant 
and can be further increased (without signifi cant extra budgetary needs) by increasing the 
threshold to for instance 100%, and to make GPP itself more ambitious, by introducing a threshold to the significance of  how green the procurement is . This requires however more 
complicated assessment criteria.  
Action 8. Raise business and consumer awarene ss, and provision of targeted training 
Main activity is the ETAP forum (held twice ever y year). Participation was about 250 persons 
per forum, coming each time from at least 25 diffe rent countries (and 40 different countries in 
total), approximately 50% from industry and asso ciations, 35% from pub lic organisations and 
the remainder from academia. Potential impacts on the innovation system relate to the fact 
that stakeholders are made more aware of othe r relevant players and may find it easier and 
more effective to connect with them. ETAP ha s benefited from this activity, but would obtain 
higher importance and visibility  to its goals if closer co- operation between the Commission 
and the relevant Member State officers for co-ordinating further activities could be 
established stronger links with na tional programmes strengthened.  
                                                
 
159 Öko-institut & ICLEI, 2007. Costs and Benefits  of Green Public Procurement in Europe. 
160 Öko-institut & ICLEI, 2007. Costs and Benefits  of Green Public Procurement in Europe. 
161 2007, PricewaterhouseCoopers, Significant, Ecofys, Collection of statistical inform ation on Greeen Public Procurement in th e EU. 
 
83 With respect to training eco-innovation is a training subject brought into other EU 
programmes like ESF and Marie Curie. There are however no figures available on the success 
of this under ETAP. 
Impacts of this action on resource efficiency and competitiveness are very indirect. 
Attribution of any effects in these domains to  this action is therefore very speculative. 
Adequate networks are however of great importa nce for well functioning markets, and as has 
been stated in the problem definition a clea r network failure exist between research and 
industry communities as well as with public author ities, hampering market uptake of research 
results. The additionality of EU action is intermediate: there are many national networking initiatives, however in providing transnational dimension the added value of the EU is clear 
and needed, and the mixing of private and public s ector is also of added value. The role of 
ETAP can be large, but should be stronger fo cusing on using and linking national networks 
than before. The role of ETAP in providing training of procurers is low, and will remain low when not more specifically targeted.    
Action 9. Promoting responsible investments in  and use of environmental technologies in 
developing countries and count ries in economic transition 
A study by McKinsey shows that capital investme nt of 150 billion eu ro can reduce demand 
for imported oil by 30-40 pe r cent and stabilise coal demand at current level
162. The potential 
for improvement of competitiveness is also significant. Currently, developing countries are responsible for nearly all of th e increase in emissions. In the end, the availability of more 
efficient technologies enables a country to achiev e greater economic output from a given 
amount of energy
163. 2/3rd of the energy efficiency inve stment opportunities lie in de 
developing countries164, which could potentially give an impetus to both the local as well as 
the European economy. The potential for the use of  recycling technologies, in particular for e-
waste is huge, specifically taking into account the grow ing demand for rare metals165. Possible 
impacts of the uptake of recycling technologies for instance are the high  collection rates, the 
recovery of valuable components, the recovery  of material fractions , and job creation, which 
is a socio-economic impact166. At the moment China and South Africa are amongst the most 
promising countries for the introduction of su stainable e-waste recy cling technologies.  
The Global Energy Efficiency and Rene wable Fund (GEEREF) launched in 2007 is 
operational. The European Commission will cont ribute €80 million over 4 years, starting with 
€15 million in 2007 providing equity finance to a broad mix of energy efficiency /renewable 
energy technologies in global public-private partnership su pporting renewable energy and 
energy efficiency project developers and SMEs , mainly in ACP count ries, Africa, Eastern 
Europe, Middle East and South America. Although not intende d to pursue innovation but to 
implement tested environmental technologies  the GEEREF had a budge t of € 110 million for 
the 2007 – 2011 period and offers support fo r the development and transfer of 
environmentally sound technologies and know-how167. 
                                                 
162 McKinsey 2009,  China’s green opportunity 
163 Popp, D. (2009) Policies for the Development and Transfer of  Eco-Innovations: lessons from th e literature. OECD Global Foru m on 
Environment on eco-innovation. 
164 McKinsey Global Institute 2008, How the wo rld should invest in energy efficiency 
165 UNEP 2009: Recycling, from e-waste to resources.  166 UNEP 2009: Recycling, from e-waste to resources. 
167 European Commission: “Mobilising public and private finance to wards global access to climate-friendly, affordable and secur e energy 
services” – COM(2006) 583 final. Announcement by European Enviro nment Commissioner Stavros Dimas at the UN Climate Change 
Conference in Pozna ń, Poland, 2008. 
 
84 ANNEX  IX – DETAILED ASSESSMENT OF OPTION 3 ACTIONS  
Action 1. Screening of environmental reg ulatory framework for eco-innovation  
EU environmental policies promote eco-innova tion by setting environmental objectives for 
the economic operators to achieve, thus bringing  predictability and certainty to the markets 
and establishing a level playing field. The Commission will pay particular attention on promoting eco-innovation when designing and revi sing environmental policy and legislation.  
More specifically, followi ng actions will be taken: 
• When developing implementing measures of  the recently revised Waste Framework 
Directive and other waste legi slation the Commission will: 
o promote eco-design in the implementation of the ELV (End of  life vehicles), 
WEEE (Waste electrical and electroni c equipment), RoHS (Restriction of 
hazardous substances), batteries and accu mulators, and packaging directives; 
o mobilise Member States to promote eco-innovation in the preparation of 
national Waste Prevention Programmes w ith guidance and exchange of best 
practices for improving resource efficiency, reusability, recyclability and recoverability of products. 
o develop end-of-waste crite ria under Art 6 of the Waste Framework Directive 
for copper, paper, glass, plastics, compost,  and possibly other waste streams. 
These criteria will designed to suppor t and drive innovative waste collection, 
separation and treatment t echnologies for high quality  secondary materials; 
o develop minimum standards for waste treatment activities on the EU level 
pursuant to Art 27 of the Waste Framew ork Directive based on best available 
techniques and innovative solutions; 
o promote the full implementation of the EU waste legislation, such as the 
diversion targets of the Landfill Directive and the waste hierarchy of the Waste Framework Directive, also stimulati ng innovation in ecological and economic 
optimisation of waste management schemes. 
• As part of the Fitness Tests the Commission will review the Water Policy (Water 
Framework Directive and complementary Di rectives, including Groundwater, Priority 
Substances, Flood, Urban Wast e Water and Nitrates Dir ectives and non-legislative 
instruments. Any policy, legislative a nd other barriers for cost-effective 
implementation and innovative ways of im proving the implementation will be at the 
heart of the Fitness Test. 
• The forthcoming review of air policies will identify urban areas in Europe that are 
faced with particular air quali ty challenges and chosen pilot areas will be part of the 
implementation of relevant Innovation Partne rships for testing innovative approaches 
for air pollution abatement.   
 
EU policies with dual goals in economy and environment would be  identified; and the bridges 
strengthened so that the aims will be obtained better and faster. Impacts of this action are indirect and hard to assess because the action in itself is very indirect while the effects should 
come from very specific changes in policie s. The impacts are largely depending on the 
success of a set of actors. Influencing these act ors is a role that can be taken up by the Eco-
AP, similar to the often-indirect chain effect  ETAP had (see discussion of Option 1). The 
effect however may be significant because publi c policies play a strong role in determining 
markets for eco-innovations. When not done prope rly effects may however also be negative 
for the environment, e.g. prescribing mo dular design for all products may be 
counterproductive when seen from a life cycle point of view (e.g.  for some products it may be 
better to prescribe biodegradability than mo dularity). Impacts can vary greatly between 
 
85 sectors and countries and with in sectors and count ries, depending on th e policy initiatives 
tackled.  The additionality of EU action is large because the EU has a leading role with MS in 
defining environmental policies. Possible role  of ETAP is depending on ambition to really 
promote eco-innovation and the effort done to  develop methods to assess policies 
systematically and use these methods to anal yse (new and existing) policy initiatives. 
Administrative burden may be an issue here. 
Action 2. Partnerships for eco-innovation 
The Innovation Partnerships (IPs), as describe d in the Innovation Union, will mobilize all 
actors from the innovation chain towards a ddressing grand societal challenges. To 
simultaneously achieve positive economic, environmental and social outcomes there is a need to integrate environmental and sustainability aspects into all spheres of the economy and value creation and pursue a broad concept of eco-innovation. Eco-innovation is part of the 
solution to many of the societal challenges (cutting CO2 emissions and other sources of 
pollution or substituting scare raw materials). The European  Innovation Partnerships, by 
pooling stakeholders and achieving critical ma ss of commitment are the right vehicle to 
mainstream eco-innovation into technological development, busin ess models, supply chains, 
consumption patterns and policies ou tside the environmental realm. 
Eco-innovation and the IPs can be mutually  reinforcing. Enviro nmental aspects are 
interlinked with the grand societal challenges, i.e. cleaner air objectives are a necessity for a 
healthy and active aging or for the smart cities  of the future. Eco-innovation will provide 
innovative and efficient means to address these challenges, i.e. using floodplains to protect 
against floods or draughts and exploit eco-system towards these objectives.  
The Eco-innovation Action Plan will identify eco-innovation areas and solutions to be 
transferred or integrated into Innovation Part nerships. This will be done through analytical 
and forecasting work by the Eco-innovation Observatory. The ETAP HLWG will coordinate Member State policies in the emerging areas, id entify best practice and ensure Member State 
commitment. The ETAP Forum will mobilize stakeholders and discuss issues of key 
importance for the emergence of the sector.  
The impacts of the addition of the two pilot schemes for the bundling of private and public 
procurement for green products and services woul d increase the scope of  GPP. It could be a 
first step to open the way to private green procurement. Firs tly it would increase the direct 
effect of purchasing green. Secondly, it woul d strengthen the role  of eco-innovation in 
Innovation Partnership areas and show the pot ential of eco-innovation in non-environmental 
fields.  
Action 3. Mobilizing financial resources, both public and private, for investment in eco-
innovation 
Increasing available budgets to participate in VC  may increase effects to  a certain extent, but 
when available budgets become t oo large, availability  of capital might not be the problem but 
the availability of viable investment opportuni ties based purely on market criteria. Supply 
(generation of viable ideas and inventions) as well as demand si de (dealing with the lock-in of 
conventional not green technolog ies and services, primarily “getting the prices right”) and 
demand side measures would need to accompany specific efforts related to marked based financial instruments.  
The total amount of "leveraged" eco-innova tion GIF funding is €528.5 Mln so far. The 
expected leverage is around 7,5 and under current CIP framework programme around €225 Mln are earmarked for eco-innovation. This m eans a total expected leveraged amount of 
€1,687 Mln over the framework period 2007 /2013 or around €241 Mln annually. The 
 
86 Cleantech Group reports168 that about €1,5 was invested in cleantech in Europe (including 
Israel). With a rough calculati on this would mean that current  "leveraged" budge t would cover 
around 17% of yearly cleantech investme nts (€241/€1,456). Based on the information 
available it is hard to say if this covers suffici ently financial needs in order to stimulate uptake 
of environmental technologies . Anyhow evidence shows that of the total 2009 VC cleantech 
investments non-energy technologies  investments account for only €324m169. 
The difference between clean technology and eco-innovation, how ever, has to be kept in 
mind: the first only includes te chnological innovation with sustainable ai ms and not other, 
necessary forms, of eco-innovations. 
The effect of the eco-innovation GIF seems si gnificant in relation to  the purely commercial 
funding available. Effect on competitiveness for th e firms involved is large, but it concerns 
only a limited number of (however  high-growth potential) firms. This also limits the 
environmental impacts effect enhanced by the fact that not all companies are aiming at 
substantially improving res ource efficiency either. 
The “first application and market  replication projects” programme  in the CIP-EIP holds larger 
potential for resources savings. The total fundi ng requested in the 2010 call was more than 
€287m170, an increase of more than 40 % compared to the 2009 call.  
 
CIP Market replication projects – Results 2008 - 2010 
 
Call 2008 2009 2010 
Proposals received 134 202 287 
Yearly increase  +50% +42% 
Projects funded 43 47 40-50 
Available budget 27m EUR 32m EUR 35m EUR 
Source: Executive Agency for Competitiveness and Innovation 
 
The manager of the facil ity pointed out that with relativly li ttle activities to draw attention to 
the facility there was already more respons e from the field than budget was available171. The 
programme seems to be a rather small instrument  when compared to the full potential of the 
eco-industry. Additional resources are needed to up-scale the impact of this instrument (or 
similar instruments) in order to  support eco-innovations to over come the first financing gap in 
the innovation chain (i.e. the pha se of full-scale piloting).  
The opportunity to enhance syne rgies, strenghten links and possibly combine this programme 
with the Environment and governance component of LIFE+ might bring additional positive impacts as well as efficiency in  terms of administrative burden. 
Moreover, additional instruments are needed to provide the industry (such as SMEs) with the 
financial resources to gear potential eco-innovations to th e market (i.e. the market 
development phase). Instruments that help br idging the financing gap between VC and the 
phases where companies are able to source fina ncing from banks are currently not covered 
with an instrument. Such an instrument ai ming at SMEs is the SME Guarantee Facility 
(SMEG), which is part of the CI P. It targets start-up  and growth of SMEs and investment in 
                                                
 
168 Cleantech Group, Realdeals and TaylorWessing, 2009. The future of cleantech in Europe, Special Report 2009. 
169 Cleantech Group, Realdeals and TaylorWessing, 2009. The future of cleantech in Europe, Special Report 2009. 
170 This is about 0.1% of the estimated size of eco-industry  in 2008  in the EU27. According to th e Study on the Competitiveness of the EU 
the total size of eco-industry was €319bn (turnover) 171 Interview with EACI, 2010. 
 
87 (all) innovation activities. SMEG  provides counter- or co-guarantees to guarantee schemes, 
and direct guarantees to financial intermediari es, in order to increase the supply of debt 
finance to SMEs. SMEG appears not to be very appealing to actors that specifically aim at 
eco-innovation. Up until now, ther e is one financial intermediary fully engaged in eco-
innovation. Moreover, there is one SMEG contract supporting an  eco-innovation loan 
product. This is a guarantee agreement where a pplication of eco-innovations is financed on 
the pull side. It is offered by Credit Coopera tif: it targets companies investing in eco-
innovation. The Guarantee covers loans and leas es for environment related investments. 
Eligible loans are for investments by SMEs ac tive in environment protection, waste recycling, 
water management, renewable energy areas as well as SMEs producing environment 
protection goods. Investments into renewable energy capacities and eco-friendly equipment 
(clean vehicles and energy saving fa cilities) are also elig ible. For the rest, there are no specific 
features on the guarantee for eco-innovations172. 
In order to ensure a large impact of financial instruments, an integrat ive approach could be 
taken into consideration173. An interesting aspect of this consideration would be the balance 
between push and pull facilities. The supply side of the financial instruments is currently 
covered by a risk sharing facility such as GI F. Demand side measures could be additionally 
interesting to overcome the vall ey of death for companies; lo ans or other debt oriented 
instruments could be used to help eco-innovators to overcome the "valley of death" and also by helping their cutomers finance their investme nts. Up until now, there is no instrument in 
place that addresses debt funding specifically for eco-innovation. For exam ple, a german bank 
KFW has set up an instrument to support SM Es investing in acquiring ecoinnovations 
allowing for an interest reduction.  
More generally more flexible and not necessar ily marked based (but rather policy driven) 
financial instruments would have to be explored under this action. 
The potential for improvement of competitiveness in  this scenario is similar to that of the 
ETAP scenario – but with increased focus, the impacts are expect ed to be stronger.  
Action 4. Develop standards and performan ce targets for key products, processes, 
services for reducing thei r environmental footprint 
The Eco-design Directive (EuP)
174 now only addresses energy use of products, which only 
accounts for about one-third of the environm ental impacts of products175. Broadening the 
scope to non-energy related pr oducts would thus have a positive impact on resource 
efficiency. The impact on competitiveness is exp ected to be marginal. Targets may foster the 
innovativeness of a sector as a whole, which could lead to increased competitive advantage over non-EU actors. However, when in other co untries standards are no t applied, conventional 
alternatives are likely to be just as competitive.  The EU can play a pivotal role in broadening 
the scope of the Eco-design directive to n on-energy related products especially in 
coordinating and stimulation of the development of more forceful targets. The Eco-design 
directive prevents disparate national legisl ations on the environm ental performance of 
products from becoming obstacles to the intra-EU  trade. EcoAP can play an important role in 
                                                
 
172 Interview with EIF and ECFIN 
173 For an example of such an integra tive approach, see the example of Technol ogy Canada for sust ainable technologies: 
http://www.sdtc.ca/en/funding/index.htm 
174 Directive 2005/32/EC of the European Pa rliament and of the Council establishing a framework for the setting of ecodesign re quirements 
for energy-using products (OJ L 101, 22.7.2005, p. 29). 175 Staff Working Paper SEC(2008)  2110 Impact assessment for recast of Directive 2005/32/EC 
 
88 problem signalling, drawing attention to the need  of broadening the scope of the Eco-design 
directive and assistance in deve loping the broader focus.  
Action 5. Developing new skills for new jobs in environmental goods and services 
industry 
Firstly, the green industries a nd services sectors suffer from a skills gap. Secondly, skills 
profiles of more traditional occupations will have to be expanded to include green skills, for instance in the areas of assessi ng the environmental impacts of industry and business activities 
and daily actions to reduce them. The added value of the EU relies on its  ability to put this 
relevant issue on the political agenda, to coordinate with and link to existing initiatives in order build information base n eeded as well as to promote good practices. The role of an Eco-
AP initiating this can be very important, for instance by investigating how skills requirements 
are affected by EU environmental policies and wh at impact this has on systems of education 
and training across the Member St ates. A more formal system for exchange of information on 
training approaches and needs would also be very  beneficial at this early stage. A clearing 
house role could be included in the remit of th e HLWG, and it could then be investigated how 
to further take this on. 
Direct effects on resource efficiency are limite d (although for certain sectors (e.g. mining) 
implementation of existing skills from else where may have impact). Direct effects on 
competitiveness may be larger. The main added va lue of the Eco-AP in this action lies in a 
signalling and communication effect . Several training initiatives already exist – the inclusion 
of the issues related to eco-i nnovation would lead to the largest effect wi th limited resources. 
Therefore, co-operation and alignment with existing initiatives is of great importance; the Agenda for New Skills and Jobs' initiative
176, the upcoming EU-level sectoral Councils for 
skills and employment, the EU Skills Panorama, as well as activities carried out by the European Centre for the Development of Vocationa l training are all impor tant starting points. 
Action 6. Governance of eco-innovation policy   
The eco-innovation national roadmaps are the follow up of the ETAP national roadmaps. The 
regularly updated Eco-innovation National Roadmaps represent a significant body of 
knowledge on programmes, schemes, and exam ples of promising practice in the MS
177 and 
will specify framework conditions, national environmental policy approaches, funding 
schemes and partnerships for national eco-i nnovation support. The Roadmaps under ETAP 
have increased mutual learning between MS bu t have, in most countries, not initiated new 
actions: the Roadmaps were mainly a wrap-up of existing policy.  Impact s were therefore low. 
The impacts of the Eco-innovation Roadmaps will only be larger when these Roadmaps will 
sparkle new policy thinking and pol icy-development in the MS. Eff ects will be very indirect, 
distributed and probably long term but may be large. 
To reap the full benefits of the Action Plan active involvement of the MS is necessary. The 
Eco-innovation (ETAP) High Leve l Working Group has proved to be an important tool for 
networking, policy learning and coordination between the MS on policies in support of eco-
innovation. A new coordinating structure must now take a more prominent role in driving the 
eco-innovation agenda in the EU to deliver gr owth opportunities and jobs to the European 
                                                 
176 A joint policy initiative carried out in c ooperation between the European Commission and the EU Member States, New Skills f or New 
Jobs aims to address some of these issues by supporting EU count ries and regions in developing more effective ways to analyse a nd predict 
which skills will be required in tomorrow's labour markets and, with this knowledge, developing and adapting education and trai ning so that 
the workers gain the skills required. http://ec.europa.eu/social/main.jsp?catId=568&langId=en .  
177 ec.europa.eu/environment/etap/roadmaps_en.htm  
 
89 economy and mobilizing stakeholders for this  task. The role of the Working Group in 
delivering cross-sectoral policy recommendati ons and ensuring the business focus of the 
Action Plan will be strengthened. This action is more a structural action than a specific action with possible impacts. Most likely impact  are good guidance of the whole Eco-AP and 
development and implementation of the National Roadmaps.  
Targets and indicators are useful to translate a vision into concrete objectives setting levels of 
ambition, to mobilise different actors in impl ementing these objectives and to monitor the 
progress of policies and their impact. In this act ion also the feasibility and usefulness of an 
Eco-innovation Scoreboard to track, benchm ark and review Member State and EU 
performance will be tested a nd an evaluation of th e results of on-going m onitoring initiatives, 
(i.e. the module on eco-innovation in the 5th Community Innovation Survey (CIS) or the 
patent-based indicators for eco-innovatio n) will be carried out. Although improving 
measurement has very indirect and long term  effects the impact may be large (esp. on 
environment and competitiveness) since it can influence polis making heavily.  
To reap the full benefits of the Action Plan active involvement of the MS is necessary. The 
Eco-innovation (ETAP) High Leve l Working Group has proved to be an important tool for 
networking, policy learning and coordination between the MS on policies in support of eco-
innovation. A new coordinating structure must now take a more prominent role in driving the 
eco-innovation agenda in the EU to deliver gr owth opportunities and jobs to the European 
economy and mobilizing stakeholders for this  task. The role of the Working Group in 
delivering cross-sectoral policy recommendati ons and ensuring the business focus of the 
Action Plan will be strengthened. This action is more a structural action than a specific action with possible impacts. Most likely impact  are good guidance of the whole Eco-AP and 
development and implementation of the National Roadmaps.  
  
 
90 ANNEX  X – DETAILED ASSESSMENT OF OPTION 4 ACTIONS  
Action 1. Targeted eco-innovation support for SMEs through enterprise and business 
networks 
The support to eco-industries primarily aims at  increasing network activ ities that strengthen 
other actions in the Eco-AP. Concrete issues ar e to establish a dialogue with the financial 
communities to support the evaluation of eco-i nnovation projects. The impacts of such an 
intervention are closely linked to the impact a ssessment of Action 5 in this section. The first 
goal of this action is to connect and align different st akeholders. Secondly, to generate 
impacts, these stakeholders should develop ac tivities related to eco-i nnovation. The impact of 
these activities is largely depending on the ambitiousness of the eco-industry. Assessment 
criteria are needed to assess how ambitious eco-industries are. The ambitiousness of eco-
innovations can have a wide  variety; for this instrument it is crucial select the industries that 
foster innovation with the highe st potential for resource effici ency. Therefore, it will be 
necessary to develop an assessment method that is able to assess how ambitious the potential 
of the eco-innovations are. This w ould enable all players involved to select the best projects 
with regard to eco-innovation. This can have a la rge impact on resource efficiency, if resource 
efficiency is taken up as a determinant for se lection criterion, the projects with the largest 
impact on eco-innovation can be selected. More over, in evaluation processes, the best 
working projects can be selected.  
The other actions in support to eco-industries would increase the awareness of eco-innovation 
in both companies (SMEs and larger companies)  but also in for policy makers on regional, 
national and EU level. The impact of such an instrument is not easy to measure because the 
attribution to this instrument only would be hard. However, the expected impact would be 
prevention of scattering of th e policies and a be tter uptake of eco-inno vation by companies, 
especially SMEs.  
The EU can play an important role in this ty pe of networking. The added value is especially 
high for SMEs, because they tend to have a stro ng regional focus, while a large potential of 
learning on eco-innovation has an international di mension. Adoption of concepts can be an 
innovation in itself. Eco-AP can play an impor tant role in the esta blishing dialogues and 
creation of forums.  
Action 2. Environmental Technology Verificati on initiative, to test an EU ETV pilot 
programme and evaluate its potential in facilitating market access for innovative 
environmental technologies  
New environmental technologies face difficulti es in convincing the first customers and 
investors of their merits; their difficulty to be diffused to potential customers is a barrier to 
eco-innovative companies in coming up with new t echnologies, to users in tapping into new 
technological solutions and to  policy-makers in achieving policy goals rapidly and cost-
efficiently. EU-Environmental Technologies Verification (ETV) can help by providing 
independent and credible information on new e nvironmental technologies, by verifying that 
performance claims put forward by technology de velopers and vendors ar e complete, fair and 
based on reliable test results. With regard to addressing systemic failures the impact of ETV 
can undoubtedly play a role in addressing fram ework failures, which in turn can improve 
marketability of the technology.  
The EU ETV pilot programme is expected to sh ow the principles and added value of the EU 
ETV scheme. It has been proposed that the pilo t programme will be tested in a limited number 
of technology areas and based in  volunteer MS.   Among the r ecommendations highlighted in 
 
91 the literature, simple and robust procedures, product and applicati on in the focus of the system 
rather then technologies, ensuring verifica tion of innovation and improvement, voluntary 
feature of the process, combin ation of verification with dem onstration/reference projects, 
flexibility and complementary to existing labels , using technical standards (ISO, IEC, CEN, 
Cenelec) where available, avoid language and access barriers by national contact points 178, 
179. Additionally the internationa l acceptance & harmonization on the EU level is pointed to 
be addressed.  
Action 3. Eco-innovation Partnerships wi th major partner countries and regions 
The ultimate effectiveness of the Eco-AP will very much depend on its level of influence on 
the global supply chain since the material a nd product flow is highly  globalized. Moreover, 
the cost-effectiveness and impact of eco-i nnovation is much highe r in developing and 
transition economies as compared to what coul d be achieved in the EU countries. However, 
the EU and its Member countries could have a critical role in shaping the global conditions 
for eco-innovation and thereby supporting the transition towards a green economy. In addition, this could lead to new market opportun ities for the products and services from the 
MS countries
180.  
The reduction or elimination of import tariffs and non-tari ff barriers on environmental 
technologies has been part of the broader negotiations on the lib eralisation of world trade in 
the World Trade Organisation’s Doha Round for the past five years181. This measure would 
boost trade with eco-innovative products and t echnologies and would bring significant 
environmental benefits but has been delayed due  to objections from developing countries. The 
liberalisation bears the risk for developing co untries of being outdi stanced by trade with 
highly competitive economies. The issue also applies to some economically weak EU MS182. 
In addition, scale effects associated  with trade liberalisa tion, and structural effects such as the 
concentration of polluting and pr ecarious industries in emergi ng and developing countries, are 
subverting the environmental benefits attained by improved efficiency183. In this respect, it 
has to be assured that the conditions strived for by the EU  unfold win-win effects for 
developing, emerging countries and developed countries. Impact  assessments (prospectively 
together with DG Trade) could support the in vestigation whether and in what way a policy 
mechanism is able to mobilise endogenous eco-innovation capabilities184. The debate of IPR 
protection in key emerging markets is an essen tial element in this co ntext because a strong 
IPR regime will ensure revenues for innovato rs, but it may slow the diffusion of eco-
innovation. International collaboration  on this issue will be encour aged by projects such as the 
EU-China IPR2 project. 
In response to the economic crisis 2008/2009 many countries have expanded their green 
investments within the scope of economic recovery packages185. The promotion of the 
harmonisation of the eco-design requirements and benchmarking can play a major role in this 
context. Here, the eco-design dire ctive has a great potential to contribute to these efforts by 
defining and disseminating eco-design requirement s. As eco-innovation can also be measured 
                                                 
178 “European perspectives and initiatives”, presented by Elena Domínguez , EC DG Research,  at  the ETV Conference "Boosting 
Environmental Technologies  by Verification", 15th September 2008 
179 for example see “Recommendations for a EU Verification System’ and ‘ Environmental Technology Verification: Whatand why?’ by Dr. 
Thomas Track , DECHEMA e.V. presented at ETV Conference "Accelerating Eco-innovation through Environmental Technology 
Verification", 12-13 October 2009, available on http://www.eu-etv-strategy.eu/   
180 Based on discussions held during the st akeholder workshop held on April 28. Brussels. By the UNEP representative.  
181 ICTSD / GMF / iisd 2008, Liberalization of Trade in Environm ental Goods for Climate Change  Mitigation: The Sustainable 
Development Context; Switzerland.  
182 EVCA 2009 , EVCA Special Paper on Cent ral and Eastern Europe Statistics 2008 
183 OECD 2008, Environment and Globalisation,  Background Report for Ministers, Meeting of the Environment Policy Committee (EPO C) 
at Ministerial Level Environment a nd Global Competitive ness, 28-29 April 2008 
184 Ockwell, David 2009, Scoping note on th e difficulties developing countries face in accessing markets for eco-innovation 
185 OECD 2009, Green Growth: Overcoming the Crisis and Beyond and UNEP 2009, A Global Green New Deal 
 
92 indirectly from changes in resource efficiency and productivity186, OECD endeavours to 
harmonise the measurement of material flows and resource productivity which are able to 
gain country benchmarks in material use and improvements187.  
The SWITCH Asia Programme for sustainable consumption and production with a fund of 
approx. €90 million for the period 2007-2010 will ev olve large environmental and social 
benefits188 in particular when expanded to other de veloping countries like Latin America. The 
Eastern Partnership (EaP) launche d a new environmental flagship project with an EU funding 
of around €13 million in March 2010. The potency  of networking effects depend on the the 
strength of cooperation among a nd between the countries withi n, for example, the Black Sea 
Synergy initiative (including th e countries Romania, Bulgaria , Turkey, Georgia, Russia and 
Ukraine). A number of succes sful initiatives and program mes covering transatlantic 
cooperation activities betw een the EU and other countries have been established in research 
and technology which are relevant for innovation  but do not explicitly cover eco-innovation 
yet189. An enhancement of the Transatlatlantic  Economic Dialogue with the USA to eco-
innovation (beyond biotechnology), like the S&T policy dialogue with the Environmental 
Protection Agency (EPA) or the EU-China Sustai nable Trade Task Force, will give impetus to 
the other bilateral dialogues with Brazil, Canada, India, Russia and Japan.  In addition, a closer 
connection of the G8 3R-ini ative and Europe’s effort s for eco-innovation can have 
exceptional influence190 and thus support demand for eco-i nnovative products. Bilateral and 
regional cooperations expanded to eco-innovation will co ntribute to the effective use of 
resources, the improved environmental performa nce and the diffusion of  cleaner technologies 
by providing improved conditions191.  
Action 4. Promotion of environmental t echnologies in developing countries 
Under favourable global conditions for eco-innovations the potential for resource savings 
within and outside the EU is considerable. According to a McKinsey projection192, two thirds 
of the energy efficiency investment opportuniti es lie in the developing countries and, if 
properly placed, could halve the projected growth in global energy demand until 2020 and deliver half of the emission abatement requi red to cap the long-term concentration of 
atmospheric greenhouse gases
193. 
As described in action 9 of the ETAP scenar io (option 1), promotion of environmental 
technologies in developing countries has the potential to both incr ease employment and 
economic growth in the EU, as  well as promote sustainabl e development and resource 
efficiency on a global level. The eco-innovati ons developed in the developed world are 
however not always applicable in the developi ng countries and therefor e an important element 
of promoting environmental technologies in de veloping countries is the ability to adapt 
proven technologies to local conditions. Expanding the network of the National Cleaner 
                                                 
186 Arundel and Kemp, 2009, Meas uring eco-innovation, UNU-MERIT 
187 OECD 2008, Measuring Material Flows a nd Resource Productivity, Volume I-III, Paris 
188 UNEP/Wuppertal Institute Collaborating Ce ntre on Sustainable Consumption and Produc tion 2010, SWITCH Asia Projects Fact She ets, 
http://www.switch-asia.eu/switch-project s/fact-sheets-of-projects.html 
189 Horvat, M. and K.A. Harrap, 2009 Review of the Science and Technology Cooperation between 
the European Community and the United States of America 2003 – 2008, Brussels, European Commission, Directorate General for Research 
190 Bahn-Walkowiak; Bleischwitz 200 8, Resource efficiency - Japan and Europe at the forefront : synopsis of the project and con ference 
results and outlook on a Japanese-Germa n cooperation. - Dessau-Roßlau [u.a.] : Federal Environment Agency [u.a.] 
191 OECD 2008, Environment and Globalisation,  Background Report for Ministers, Meeting of the Environment Policy Committee (EPO C) 
at Ministerial Level Environment a nd Global Competitiveness, 28-29 April 2008
 
192 McKinsey 2009,  China’s green opportunity 
193 McKinsey Global Institute 2008, How the world should invest in  energy efficiency & McKinsey  2009,  China’s green opportunit y 
 
93 Production Centres to support capacity buildi ng can lead to increased awareness, 
understanding and ultimately, grea ter demand for Cleaner Production194. 
Furthermore, promoting and developing EU-public -private partnerships for the demonstration 
of key environmental and clean energy technologies in major markets has a strong economic and environmental potential, and it embeds a st rong networking aspect. They could lead to 
reduction in technology risks and costs because of jo int collection and dissemination of data 
for instance
195.  
                                                 
194 http://www.uncrd.or.jp/env/spc/docs/ 1st_3r_forum_pres entation/Session5-1-
3_UNIDO.pdfhttp://www.unep.fr/scp /cp/network/declaration.htm 
195 Ockwell (2009) Scoping Note on the difficulties developing countries face in  accessing markets for eco-innovation. Final re port for the 
OECD Environment Directorate. 
 
94 ANNEX  XI – DETAILED ASSESSMENT OF OPTION 5 ACTIONS  
Action 1. Promotion of a faster shift of  the burden of taxation to resources 
“OECD analysis clearly shows that better prici ng will be one of the best triggers for the 
development and diffusion of greener technologies”196. Taxation policies have an impact at 
least on the direction of technol ogical change, but the direct causal link between tax policies 
and eco-innovation is not always clear197. Social, economic and ecological impacts depend 
very much on the tax base, levy forms, re cipients and administrative procedures. 
Nevertheless, there is sufficien t evidence that “changes in energy prices  had strong impacts on 
invention, innovation and diffusion of more energy-efficient tec hnologies which, in turn, has 
lowered emission levels as well”198. A similar impact may be assumed in other areas of 
natural resources consumption199. If the EU was able to genera te a joint proposal on resources 
taxes, the tax revenue would be very small at  the start with the dynamic element that would 
lead to a slow increase over the succeeding year s. This would offer the opportunity of positive 
economic, social and environmental effects by gradually shifting the tax burden from labour 
to resources200,201.  As we have experienced in the context of past attempts to introduce 
ecological taxation in the Europ ean Union, resistance from a numb er of stakeholders and EU 
MS would have to be overcome. Several rounds of discussion and impact assessments could be expected. Therefore, this action would have  measurable social, economic or environmental 
impact on in the long term.  
Action 2. Introduction of ambitious st andards for green public procurement  
The leverage would be higher the more levels  of public procurement are involved (from the 
local to the European level). Th is could influence a demand e quivalent to about 15-20% of 
final consumption. Current practi ce of green pu blic procurement (GPP) among EU MS is very 
diverse
202. Therefore, the Commission is engaged in a number of activities to raise awareness 
and diffusion of good practice203,204, 205.  
Social, economic and environmental impacts w ould very much depend on the Commission’s 
ability to convince nati onal, regional and local authoriti es to apply criteria for their 
procurement not only in rela tion to energy consumption, but  to a number of different 
environmental impacts and resource efficiency along the life-cycle of procured goods. Further 
research on criteria for green public procurement in combination with assessments of economic, social and environmental impacts in different public demand s ectors would have to 
be generated along the way. Once set in motion th is action could have co nsiderable effects on 
demand for and supply of eco-innovation. On the demand side criteria development for eco-
innovation would improve. This would probably have an impact not only in the public 
domain, but could spread to corporate supply ch ain management as well. On the supply side 
                                                
 
196 OECD (2009): Green Growth: Overcoming the crisis and beyond. Paris 
197 OECD 2007: Impacts of environmental policy instruments on technological change. Paris 
198 ibid 199 Bahn-Walkowiak, B. (2008): Resource taxa tion beyond energy and climate issues [J apan.]. In: Nikkei ecology, 2008, 2, p. 129  
200 Kohlhaas, M. (2000): Ecological Tax Reform in Germany. From Th eory to Policy. Economic Studies Program Series Volume 6, 
American Institute for Contemporary German Studies. Washington: The Hopkins University. 
201 Goerres, A. (2006): The Tragic  Paradox: Germany’s very successful but not ve ry popular Green Budget Reform. Lessons from se ven 
years of courageous turnaround (1999 to 2005). Green Budget Paper 2006/12. Berlin: Green Budget Germany 
202 Bouwer, M., de Jong, K., Jonk, M., Szuppinger, P., Lusser, H., Berman, T., Bersani, R., Nissinen, A., Parikka, K. (2005): G reen Public 
Procurement in Europe. Status overview. Haarlem: Virage 203 EC (2004): Buying Green! A Handbook on Environmental Pub lic Procurement. Brussels: European Commission 
204 EC (2008):  Green Public Procurement Training Toolkit. Cons truction Background Product Report. Brussels: European Commissio n 
205 EC Communication (2008): On the functioning of public procurem ent markets in the EU: benefits from the application of EU di rectives 
and challenges for the future, COM(2008) 400/2
 
 
95 increased invention and innovation activities related to  the refined procurement criteria could 
be expected as a reaction to cha nging preferences on the demand side. 
Action 3. Introduction of a legally binding framework for labelling of all manufactured 
goods 
The “public vanguard” should be followed privat e consumers. After the establishment of 
public procurement criteria related to different environmental impacts and resource efficiency 
along the life-cycle of procured goods simila r criteria should be applied for private 
consumption of households. This would require a transfer of extende d GPP criteria into a 
labelling system which is on the one hand easy to understand and on the other hand captures 
sufficiently environmental objectives of th e European Union. The necessary negotiation 
process could be supported  by the European Union Eco-labeling Board (EUEB)206.  If the 
objectives of the EUEB would be adapted to th e requirements of resource efficiency and if 
they would be successful, the process could even tually promote considerably the demand for 
resource-efficient products and services. It would thus increase the market and improve 
competitiveness of eco-innovative industries, whic h will be able to meet these criteria. 
Positive impacts beyond the European Unions ar e likely as producers outside the European 
Union would be interested in complying with EU standards. Impacts on the public standard 
setting in other regions of the world are al so likely.  Activities would primarily require 
research and development of labelling criteria in combination with stakeholder participation 
and negotiation processes related to all major areas of private consumption and production. 
Measurable social, economic and environmental impacts of this action are unlikely during the 
current Commission’s term of office. 
Action 4. Introduction of waste preventi on and recycling standards along the value 
chain 
An important step towards resource efficiency  is the reduction of the demand for primary 
resources, by reducing the use of materials (dematerialization) and improving conditions to 
use secondary material as outlined in the Them atic Strategy for the Prevention and Recycling 
of Waste207. This can be achieved with more regul ation in favour of eco-design and eco-
efficient supply, which reduces material re quirement of production processes and products208. 
Findings of the OECD working party on national environmental policies suggest that also in 
the waste sector regulation pl ays an important role in th e promotion and diffusion of 
innovation209. Nevertheless, patent trends across the different waste streams have reached   
technological maturity in the 1990s, and are no w in a phase of declin e. New regulation and 
standards could encourage eco-i nnovation related to the use of materials along the value 
chain. For example, standards could promote innovation related to the use of less and/or 
different materials, durability of products, mo re maintenance services , product responsibility 
and recycling. The economic, social and enviro nmental impact would be different depending 
on the material, the economic sector, and the different value-chains  including the supplying 
industries210,211. The overall economic and employment e ffects will be positive as the capital 
                                                 
206 http://ec.europa.eu/enviro nment/ecolabel/index_en.htm 
207 COM (2005) 666 
208 Bleischwitz, R., B. Bahn-Walkow iak, W. Irrek, Ph. Schepelmann, F. Schmidt- Bleek, S. Giljum, S. Lutter, L. Bohunovski, F. 
Hinterberger, E. Hawkins, M. Kuhndt, N. Pratt, et al. (2009): Eco-innovation - Putting the EU on the path to a resource and ene rgy efficient 
economy. Wuppertal-Spezial 38. Wuppertal. Download: 
http://www.wupperinst.org/upl oads/tx_wibeitrag/ws38.pdf  
209 OECD (2010): Working Party on National Environmental Polic ies. Diverting Waste: The Role of Innovation. Paris 
210 Braungart, M., McDonough, W. (2009): Cradle to Cradle. Rethinking the way we make things. London: Random House 
211 UNEP, UNU 2009: Recycling – From E-Waste to Resources. Sustainable Innovation and T echnology Transfer I ndustrial Sector Stu dies. 
Paris 
 
96 required for the acquisition, the pr ocessing, recycling and waste dis posal of material would be 
reduced212. The saved capital can stay in the European economy and can be used for 
innovation and consumption. Positive impact s on eco-innovation woul d increase, if the 
regulation would be supported by resource taxation213. It is likely that with increasing 
environmental pressure and resource scarc ity the worldwide demand for the know-how and 
skills related to eco-design and product mainte nance services would significantly increase. 
This can have positive effects on the European  research, consultancy and service industry. 
The connected diffusion and market penetration would also improve resource efficiency in 
other parts of the world. 
    
                                                
 
212 Bahn-Walkowiak, B.; R- Bleischwitz (2008) : Resource efficiency - Japan and Europe at the forefront: synopsis of the project  and 
conference results and outlook on a Japanese-German cooperati on. - Dessau-Roßlau: German Federal Environment Agency 
213 Bleischwitz, R., R. Bahn-Walkow iak (2007): Aggregates and construction markets in  Europe : towards a sectoral action plan o n 
sustainable resource management. In: Mine rals & energy, 22 (2007), 3-4, p. 159-176 
 
97 ANNEX  XII  – SUMMARY ASSESSMENTS OF THE OPTIONS  
Option 2 ETAP 
Assessment of Option 2 in terms of it s response to specific objectives 
Assessing potential contribution of actions to 
achieving the objectives 
Adequacy 
of actions: Contributi
on to the achievem
ent of the 
objectives Optimal 
timing of  
action Order of impact Estimat
ed time of  
impact General objective Specific objective Actions addressing the 
objective 
high, 
medium,    
low,   
N/A - no specific 
action positive  
+, ++, 
+++ 
negative  -, --, ---     
no 
evidence or 
evidence 
unclear - N/A < 2 
years,   
2 - 5 
years, 5 - 10 
years, 
10-15 years 1st order - 
action achieves 
impacts 
directly (operational); 
2nd order - 
action achieves impacts 
indirectly(polic
y). < 2 
years,   
2 - 5 
years, 5 - 10 
years, 
10-15 years, > 
15 years
To apply the principles of the Innovation Union to eco-
innovation PA1. Increasing and focusing 
research, demonstration and 
dissemination. Improving co-ordination of relevant programs PA2. Establishing technology 
platforms 
PA5. Mobilizing financial instruments to sh are the risk of 
investing in environmental 
technologies Low + < 2-5 
years 2nd order 2-5 and 
5-10 
years 
To promote eco-innovation in Europe PA3. Establishing European 
Networks for technology 
testing, performance verification 
and standardization PA4. Developing and agreeing 
on performance targets for key 
products, processes and servicesPA6. Encouraging systematic 
internalization of costs through 
market-based instruments PA7. Encourage procurement of 
environmental technologies 
PA8. Raising business and consumer awareness high ++ <2 and 
2-5 
years 1st and 2nd 
order 2-5 and 
5-10 
years Increasing the rate of eco-
innovation and its uptake in Europe and in so doing 
deliver efficient 
solutions for environmental 
problems, and 
boost the resource efficiency of 
Europe and its 
competitiveness 
To improve global markets for 
eco-innovation PA9. Supporting eco-
technologies in developing 
countries and promoting foreign 
investment  medium ++ <2 2nd order 2-5 
years 
 
       
 
98  
  Assessment of actions in option 2 
 
Potential 
[W1] impact 
on 
innovation 
system Potential 
environme
ntal 
impact Potential 
impact 
on 
competiti
ve-ness EU value added Assessing potential 
contribution 
unjustified - supplementary+ significant ++ 
leading +++ Relevant actions 
positive 
+,++,+++ negative -, --, 
---                          
no evidence or 
evidence 
unclear - N/A positive 
+,++,+++ negative -, --
, ---    
no evidence 
or evidence 
unclear - 
N/A positive 
+,++,+++ negative          
-, --, ---    
no 
evidence 
or 
evidence 
unclear - N/A Local/ RegionalNationalEUGlobalpositive      
+, ++, +++ 
negative       
-, --, ---    
no 
evidence 
or 
evidence unclear - 
N/A < 2 
years,   2 - 5 
years, 5 
- 10 
years, 
10-15 
years < 2 
years,   2 - 5 years, 
5 - 10 
years, 
10-15 
years, > 
15 years 
PA1. Increase and focus research, 
demonstration and dissemination. 
Improve co-ordination of relevant 
programmes  ++  +  ++ N/
A  +   
+
+ +
+
+  +  ++  2-5 
years 5-10 
years 
PA2. Establish Technology Platforms  +++  +  +++  +  +  
+
+ +
+
+  
+
+  +++ <2 
years 2-5 
years 
PA3. Establishing European 
Networks of technology testing, 
performance verification and 
standardisation  ++  +  +++ N/
A  +  
+
+  
+
+  +  ++ < 2 
years 2-5 
years 
PA 4: Performance Targets + ++ n/a - - +
+
+ +
+
+ +
+ + <2 
years 5-10 
years 
PA 5: Financial Instruments +++ +++ +++ + ++ +
+
+ +
+ - ++ <2 
years 5-10 
years 
PA6a: Review State Aid Guidelines  ++ ++ ++ - - + +
+
+ - + <2 
years 2 - 5 
years 
PA6b: Review environmentally 
harmful subsidies ++ +++ ++ - + +
+ +
+
+ - + <2 
years 2 - 5 
years 
PA7: Encourage procurement of 
environmental technologies ++ ++ + ++
+ ++
+ +
+
+ +
+ - ++ <2 
years 2 - 5 
years 
PA8a: Raise business and consumer 
awareness + + + + ++
+ +
+
+ + - +++ <2 
years 2 - 5 
years 
PA8b: Provision of targeted training ++ + + ++ ++
+ +
+
+ + - ++ <2 
years 2 - 5 
years 
PA9. Promoting responsible 
investments in and use of 
environmental technologies in 
developing countries ++ ++ + + + +
+ +
+ +
+
+ ++ <2 
years 2-5 
years 
 
 
99 Option 3 Taking forward the Europe 2020 flagships 
Assessment of Option 3 in terms of it s response to specific objectives 
Assessing potential contribution of actions to 
achieving the objectives 
Adequacy of 
actions: Contributi
on to the 
achievem
ent of the objectives Optimal 
timing 
of  
action Order of impact Estimat
ed time 
of  
impact General objective Specific objective Actions addressing the 
objective 
high, 
medium,    
low,   N/A - no 
specific 
action positive  
+, ++, 
+++ negative 
 -, --, ---     
no evidence 
or 
evidence unclear - 
N/A < 2 
years,   
2 - 5 years, 5 
- 10 
years, 10-15 
years 1st order - 
action achieves 
impacts directly 
(operational); 
2nd order - action achieves 
impacts 
indirectly(policy). < 2 
years,   
2 - 5 years, 5 
- 10 
years, 10-15 
years, > 
15 years
To apply the principles of the Innovation Union to eco-innovation A1. Screening the 
environmental regulatory framework for eco-innovation 
A2. Partnerships for eco-
innovation A3. Developing new skills for new jobs in environmental 
goods and services industry  
 High +++ < 2 
years and 2-5 
years 1
st order 2-5 and 
5-10 years 
To promote eco-innovation in Europe A1. Screening the 
environmental regulatory 
framework for eco-innovation 
A2. Partnerships for eco-innovation 
A3. Mobilising financial 
resources, both public and private, for investment in eco-
innovation 
A4. Developing standards and performance targets for key 
products, processes and services 
to reduce their environmental footprint 
A6. Governance of eco-
innovation policy High +++ <2 
years 1st and 2nd 
order 2-5 and 
5-10 
years Increasing the 
rate of eco-innovation and its 
uptake in Europe 
and in so doing deliver efficient solutions for 
environmental 
problems, and boost the resource 
efficiency of 
Europe and its competitiveness 
To improve global markets for 
eco-innovation A2. Partnerships for eco-
innovation A4. Developing standards and 
performance targets for key 
products, processes and services to reduce their environmental footprint Low + < 2 
years and 2-5 
years 2nd order 2-5 
years 
 
      
 
100  
 
Assessment of actions in option 3 
 
Potential 
impact on innovation 
system Potential 
environmental impact Potential 
impact on competitive-
ness EU value added Assessing potential contribution 
unjustified -
supplementary+ 
significant ++
leading +++ Relevant actions 
positive 
+,++,+++ 
negative -, --, 
---                    no evidence 
or evidence 
unclear - N/A positive 
+,++,+++ 
negative -, --, 
---                     no evidence or 
evidence 
unclear - N/A positive +, 
++, +++ 
negative -, --, 
---                    no evidence 
or evidence 
unclear - N/ALocal/ 
urbanRegion
alNationa
lEU Global positive 
+,++, +++ 
negative      
-, --, --- no 
evidence or 
evidence unclear - 
N/A < 2 years, 
2 - 5 
years, 5 - 
10 years, 10-15 
years < 2 years,   2 - 5 
years, 5 - 10 
years, 10-15 
years, > 15 years 
A1. Screening the environmental regulatory 
framework for eco-innovation  +++ +++ ++ + + +++ +++ ++ 
++ <2 years 2-5 years 
A2. Partnerships for eco-
innovation  +++  ++  +++ N/A  + ++  
+++ ++ ++  2- 5 
years 5-10 years 
A3. Mobilising financial 
resources, both public and private, for investment in eco-
innovation  +++ +++ +++ + ++ +++ ++ - +++ <2 years 5-10 years 
A4.  Developing standards and 
performance targets for key products, processes and 
services to reduce their 
environmental footprint + ++ n/a - - +++ +++ ++ + 2-5 years 5-10 years 
A5. Developing new skills for new jobs in environmental 
goods and services industry ++ + + - + +++ +++ + 
++ <2 years 2 - 5 years 
A6. Governance of eco-
innovation policy + n/a + ++  ++ +++ +++ + +++  On-going  < 2 years 
 
 
 
 
101 Option 4 SME-targeted actions 
Assessment of Option 4 in terms of it s response to specific objectives 
Assessing potential contribution of actions to 
achieving the objectives 
Adequacy of 
actions: Contributi
on to the 
achievem
ent of the objectives Optimal 
timing 
of  
action Order of impact Estimat
ed time 
of  
impact General objective Specific objective Actions addressing the 
objective 
high, 
medium,    
low,   N/A - no 
specific 
action positive  
+, ++, 
+++ negative 
 -, --, ---     
no evidence 
or 
evidence unclear - 
N/A < 2 
years,   
2 - 5 years, 5 
- 10 
years, 10-15 
years 1st order - 
action achieves 
impacts directly 
(operational); 
2nd order - action achieves 
impacts 
indirectly(policy). < 2 
years,   
2 - 5 years, 5 
- 10 
years, 10-15 
years, > 
15 years
To apply the principles of the Innovation Union to eco-innovation A1. A1. Targeted eco-
innovation support for SMEs through enterprise and business 
networks 
 Medium ++ < 2 
years, 2- 5 
years 2
nd order 
impact 2 – 5 
years, 5 – 10 
years 
To promote eco-innovation in Europe A1. Targeted eco-innovation 
support for SMEs through 
enterprise and business networks 
A2. Environmental Technology 
Verification initiative, to test an EU ETV pilot program and 
evaluate its potential in 
facilitating market access for innovative environmental 
technologies High +++ < 2 
years 1
st order 
impacts 2 – 5 
years Increasing the 
rate of eco-innovation and its 
uptake in Europe 
and in so doing deliver efficient solutions for 
environmental 
problems, and boost the resource 
efficiency of 
Europe and its competitiveness 
To improve global markets for 
eco-innovation A3. Setting up Eco-innovation 
Partnerships with major partner 
countries and regions A4. Promotion of environmental 
technologies in developing 
countries High +++ < 2 
years 1
st and 2ndorder 
impacts 2 – 5 
years 
 
 
               
 
102  
Assessment of actions in Option 4  
Potential 
impact on innovation 
system Potential 
environmental impact Potential 
impact on competitive-
ness EU value added Assessing potential contribution 
unjustified -
supplementary+ 
significant ++
leading +++ Relevant actions 
positive 
+,++,+++ 
negative -, --, 
---                    no evidence 
or evidence 
unclear - N/A positive 
+,++,+++ 
negative -, --, 
---                     no evidence or 
evidence 
unclear - N/A positive +, 
++, +++ 
negative -, --, 
---                    no evidence 
or evidence 
unclear - N/ALocal/ 
urbanRegion
alNationa
lEU Global positive 
+,++, +++ 
negative      
-, --, --- no 
evidence or 
evidence unclear - 
N/A < 2 years, 
2 - 5 
years, 5 - 
10 years, 10-15 
years < 2 years,   2 - 5 
years, 5 - 10 
years, 10-15 
years, > 15 years 
A1. Targeted eco-innovation 
support for SMEs through 
enterprise and business networks ++ ++ ++ + +++ +++ ++ + 
++ <2 years 2-5 years 
A2. Environmental 
Technology Verification 
initiative, to test an EU ETV 
pilot programme and evaluate its potential in facilitating 
market access for innovative 
environmental technologies    ++  ++  ++  +  + ++  
+++ ++ ++ 2-5 years 5-10 years 
A3. Setting up Eco-innovation 
Partnerships with major 
partner countries and regions ++ n/a + + + + +++ +++
+ < 2 years 2-5 years 
A4. Promotion of 
environmental technologies in 
developing countries ++ +++ ++ + + ++ ++ +++
+ <2 years 5-10 years 
 
            
 
103  
   Option 5 – Wide eco-innovation policy 
Assessment of Option 5 in terms of it s response to specific objectives 
Assessing potential contribution of actions to 
achieving the objectives 
Adequacy of 
actions: Contributi
on to the 
achievem
ent of the objectives Optimal 
timing 
of  
action Order of impact Estimat
ed time 
of  
impact General objective Specific objective Actions addressing the 
objective 
high, 
medium,    
low,   N/A - no 
specific 
action positive  
+, ++, 
+++ negative 
 -, --, ---     
no evidence 
or 
evidence unclear - 
N/A < 2 
years,   
2 - 5 years, 5 
- 10 
years, 10-15 
years 1st order - 
action achieves 
impacts directly 
(operational); 
2nd order - action achieves 
impacts 
indirectly(policy). < 2 
years,   
2 - 5 years, 5 
- 10 
years, 10-15 
years, > 
15 years
To apply the principles of the 
Innovation Union to eco-
innovation  N/A N/A N/A N/A N/A 
To promote eco-innovation in 
Europe A1. Promoting a faster shift of 
the burden of taxation to 
resources A2. Introduction of ambitious 
standards for green public 
procurement A3. Introduction of legally 
binding framework for all 
manufactured goods A4. Introducing waste 
prevention and recycling 
standards along the whole value chain High +++ < 2 
years 
and 2 – 5 years 1
st and 2ndorder 
impacts 5 – 10 
years 
and 10 – 15 
years Increasing the rate of eco-
innovation and its uptake in Europe 
and in so doing 
deliver efficient solutions for 
environmental 
problems, and boost the resource 
efficiency of 
Europe and its competitiveness 
To improve global markets for 
eco-innovation A4. Introducing waste 
prevention and recycling standards along the whole value 
chain Low + < 2 
years and 2 – 
5 years 2
nd order 
impacts 5 – 10 
years and 10 
– 15 
years 
 
         
 
104  
 Assessment of actions in Option 5  
Potential 
impact on innovation 
system Potential 
environmental impact Potential 
impact on competitiven
ess EU value added Assessing potential contribution 
unjustified -
supplementary+ 
significant ++leading +++ Relevant actions 
positive 
+,++,+++ 
negative -, --, ---                    
no evidence 
or evidence unclear - N/A positive 
+,++,+++ 
negative -, --, ---                    
no evidence 
or evidence unclear - N/Apositive 
+,++,+++ 
negative -, --, ---                    
no evidence 
or evidence unclear - N/ALocal/ 
urbanRegional National EU Global positive 
+,++,+++ 
negative      -,--,---          
no 
evidence or evidence 
unclear - 
N/A < 2 years, 
2 - 5 
years, 5 - 10 years, 
10-15 
years < 2 years,   2 - 5 
years, 5 - 10 
years, 10-15 years, > 15 
years 
A1.  Promoting a faster shift of the burden of taxation to 
resources +++ +++ + - - ++ +++ - + 5 - 10 10 - 15 
A2. Introduction of ambitious standards for green public procurement ++ ++ + ++ ++ ++ +++ ++ + 2 - 5 5 - 10 
A3. Introduction of legally binding framework for all manufactured goods ++ ++ ++ - - ++ +++ + + 2 - 5 5 - 10 
A4. Introducing waste prevention and recycling standards along the whole 
value chain +++ ++ ++ - - ++ +++ + +++ <2 5 - 10 
 
 
105 ANNEX  XIII  – SUGGESTED PARAMETERS USED FOR MEASURING CONTRIBUTION TOWARDS ACHIEVEMENT OF 
OBJECTIVES  
Option 2: 
Relevant action Suggested parameter 
PA1. Increasing and focusing research, demonstration and 
dissemination. Improving co-ordin ation of relevant programs Number of initiatives/ networks/ programmes created on EU and 
national levels; Amount of funds attracted for R&D, demonstration, 
etc.; numbers of spinouts and new projects initiated 
PA2. Establishing technology platforms Number TP s, number of projects under the TPs; quantitative & 
qualitative:(influence on) creati on a of national policies on 
promotion of certain environmental technology(ies) 
PA3. Establishing European Netw orks for technology testing, 
performance verificati on and standardization Certification / verification framew ork is established for certain 
environmental technologies/pr oducts on national EU level 
PA4. Developing and agreeing on performance targets for key 
products, processes and services Qualitative: influence of ETAP on th e setting of the agenda and the 
development of standards 
PA5. Mobilizing financial instrument s to share the risk of investing 
in environmental technologies Leveraging effect, combined with an assessment of the 
'ambitiousness' of the eco-innovations 
PA6. Encouraging systematic in ternalization of costs through 
market-based instruments Assess the changes in StateAid gui delines: qualitative assessment of 
ETAP contribution 
PA7. Encourage procurement of environmen tal technologies Qualitative Assessment of influence of ETAP in agenda setting for 
GPP; combined with an alysis of GPP levels 
PA8. Raising business and consumer awareness Qualitative Assessment of influence of ETAP on communication on 
eco-innovation 
PA9. Supporting eco-technologies in  developing countries and 
promoting foreign investment Patents, FDI, partnerships, partic ipation in FP of dev. countries 
 
Option 3: 
Relevant action Suggested parameter 
A1. Screening the environmental regulatory framework for eco-
innovation Qualitative assessment of the infl uencing effect of the action - 
combined with analysing the change towards more and better 
integration of eco-innovation 
A2. Partnerships for eco-innovation Number of in itiatives/networks/ prorammes created on EU and 
national levels; scope of the activities this initiatives implement 
(advising, funding, providing space for between various research 
organizations, firms, investors)   
A3. Mobilising financial resources , both public and private, for 
investment in eco-innovation Qualitative assessment of the contribution of the action in 
integrating eco-innovation in scheme s & leveraging effect, patent 
analysis, case studies of instruments 
A4.  Developing standards and perf ormance targets for key products, 
processes and services to redu ce their environmental footprint Qualitative: influence of the action on the setting of the agenda and 
the development of standards 
A5. Developing new skills for new jobs in environmental goods and 
services industry Qualitative Assessment of influen ce of the action on the uptake of 
eco-innovation in courses 
A6. Governance of eco-innovation policy Number of national roadmaps approved; Number of good practices 
identified; number of good practices shared 
 
Option 4: 
Relevant action Suggested parameter 
A1. Targeted eco-innovation support for SMEs through enterprise 
and business networks Network activities organised (forum, /meetings, etc. 
A2. Environmental Technology Verifi cation initiative, to test an EU 
ETV pilot programme and evaluate its potential in facilitating 
market access for innovative environmental technologies Functioning ETV pilot for certain areas/technologies, clear 
indications on usefulness and adde d-value for marketing innovative 
environmental technologies 
A3. Setting up Eco-innovation Partne rships with major partner 
countries and regions Qualitative, increased 'green' trad e, increased green investments, 
increased networking and int. cooperation 
A4. Promotion of environmenta l technologies in developing 
countries FDI, partnerships, patents, partic ipation in FP, nr. Of NCP centers 
 
Option 5: 
Relevant action Suggested parameter 
A1.  Promoting a faster shift of the burden of taxation to resources Share of taxation coming from resource taxes 
A2. Introduction of ambitious standards for green public 
procurement GPP as part of Total Public Procurement/ GPP as part of GDP 
A3. Introduction of legally binding framework for all manufactured 
goods Quantitative 
A4. Introducing waste prevention a nd recycling standards along the 
whole value chain Qualitative