[pic] | COMMISSION OF THE EUROPEAN COMMUNITIES |

Brussels, 22.10.2007

SEC(2007) 1416

COMMISSION STAFF WORKING DOCUMENT Accompanying document to the

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT Progress Report on the European Union Sustainable Development Strategy 2007 {COM(2007) 642 final}

1. INTRODUCTION

This Staff Working Document sets out a detailed analysis of the progress made towards the objectives set in the challenges of the European Union Sustainable Development Strategy 2006 (EU SDS). It provides technical background information to the first progress report on the EU SDS. The EU SDS is an ambitious long term strategy that grew out of the broader global Rio process. The first EU strategy was agreed in Göteborg 2001 and reviewed by the Commission in 2005[1]. The 2006 strategy[2] addresses unsustainable trends within 7 key policy areas and sets objectives and targets for the EU to achieve sustainability, depending on the policy area, within the next 10, 20 or 50 plus years.

For a strategy that aims to achieve results in the long-term, it is relatively soon to take stock after one year. However, Eurostat[3] has set year 2000 as a baseline against which to measure progress, which means that the 2007 monitoring report does give a first snapshot of the state of play for a broad range of policies, although these strictly speaking have different timelines. The picture is one of relatively modest progress on the ground whilst policy development in many cases is more encouraging thus promising more significant impact on the ground in years to come. Both the EU and Member States are increasingly putting in place the policies needed to address the unsustainable trends particularly on climate change and clean energy, the first theme of this strategy. There is also evidence of increasing convergence between the different actors and for many of the challenges the EU, Member States, citizen groups, NGOs and business are focusing on the same priorities and objectives. This first progress report is an opportunity to take stock, adjust the course and speed, where needed, and confirm and refocus on the key objectives and targets of the strategy.

Sustainable Development sets out a vision for how society should evolve. The EU's vision is set out in the Sustainable Development Principles adopted by the European Council in 2005. That is – of a society that protects and improves the quality of the environment in which we live; a society that promotes equity and social cohesion in Europe in solidarity with the rest of the world and works for democracy, peace, security and freedom; and a society, that strives towards economic prosperity based on a an innovative, competitive and eco-efficient economy. The two strategies - Sustainable Development and Lisbon - complement each other and work together to create a sustainable European society. Increasingly, and particularly with the renewed focus on climate change and clean energy, there are real synergies between the two strategies that can be further explored.

The first Progress report marks the start of the new Governance process set out in the Council conclusions of June 2006. The analysis of progress on the EU SDS is, as requested by the Council, based on different sources including: the 2007 Eurostat Monitoring Report based on the Sustainable Development Indicators (SDIs); the Member State Progress reports on the implementation of the EU SDS; internal Commission analysis and an independent Consultancy report analysing the progress made on the EU SDS. This information provides the basis for the Communication and the Staff Working Document. Attached to this Staff Working Document is also an annex on the reviewed SDI list in reference to Council Conclusions of June 2006.

2. CLIMATE CHANGE AND CLEAN ENERGY

2.1. Objectives

Overall Objective: To limit climate change and its costs and negative effects to society and the environment.

- Kyoto Protocol commitments of the EU-15 and most EU-25 to targets for reducing greenhouse gas (GHG) emissions by 2008 – 2012, whereby the EU-15 target is for an 8% reduction in emissions compared to 1990 levels. Aiming for a global surface average temperature not to rise by more than 2ºC compared to the pre-industrial level.

- Energy policy should be consistent with the objectives of security of supply, competitiveness and environmental sustainability, in the spirit of the Energy Policy for Europe launched in March 2006 by the European Council. Energy policy is crucial when tackling the challenge of climate change.

- Adaptation to, and mitigation of, climate change should be integrated in all relevant European policies.

- By 2010 12% of energy consumption, on average, and 21% of electricity consumption, as a common but differentiated target, should be met by renewable sources, considering raising their share to 15% by 2015.

- By 2010 5.75% of transport fuel should consist of biofuels, as an indicative target, (Directive 2003/30/EC), considering raising their proportion to 8% by 2015.

- Reaching an overall saving of 9% of final energy consumption over 9 years until 2017 as indicated by the Energy End-use Efficiency and Energy Services Directive.

Refer to the 2006 Strategy for specific actions.

2.2. State of Play

Eurostat reports that in 2005, EU-15 emissions of GHG had decreased by 2% compared to their Kyoto base year value. This is still far from the target of reducing emissions by 8% by 2008-2012, and the emissions trend has been moving away from the target path since 2000. However, projections indicate that it is still possible to reach the Kyoto target provided that Member States accelerate implementation of all planned policies and measures including the use of carbon sinks and so-called Kyoto mechanisms. Of the twelve remaining countries outside the EU-15 burden sharing arrangement, nine have already reduced their emissions significantly below their target levels.

Progress towards the target that the global surface average temperature not rise by more than 2ºC compared to the pre-industrial level cannot be assessed directly, by the existing indicator, which only monitors change since 1850. However, the overall warming from the average of the first 50-year period 1850 to 1899 to the one of 2001-2005 is 0.76°C ± 0.19°C. In addition, there has been a fairly linear upward trend in temperatures since the 1970s.

All the indicators on energy consumption show that the EU is off track to reach the targets set in the strategy. Consumption of renewable energy sources as a whole for the EU-27 increased at an average rate of 3.2% per year during the 1990s, growing to 4.1% between 2000 and 2005. In spite of this increase, because of the relatively high growth rate of gross inland consumption, the overall share of renewables only reached a level of 6.6% in 2005. The average annual growth of 0.18 percentage points since 2000 is insufficient to reach the 2010 target of 12%.

The share of renewables in electricity consumption reached 14% in 2005, having gained a mere 1.6 percentage points since 1990. Achieving the 2010 target of 21% would require growth of 1.4 percentage points per year, when the growth rate since 2000 has been 0.04 percentage points. In 2005, the share of biofuels represented only 1.08% for the EU-27, which is far from the 5.75% 2010 target. Nevertheless, the growth rate is rising.

The quantitative objective set in the Energy End-use Efficiency and Energy Services Directive, and recalled in the EU SDS, of reaching an overall saving of 9% of final energy consumption, cannot be measured at EU level through Gross Inland Energy Consumption, as savings are defined as measures and/or estimates of consumption before and after implementation of one or more energy efficiency improvement measures. Under the Directive, Member States are to report their estimates of energy savings according to a harmonised method.

Other more qualitative objectives, for example the objective of an energy policy consistent with the objectives of security of supply, competitiveness and environmental sustainability, or even objectives referring to new areas which cannot be adequately measured with current information, such as adaptation to climate change, are not addressed by the current set of indicators.

2.3. Key EU Policies

Objective 1 - Kyoto Protocol commitments of the EU-15 and most EU-25 to targets for reducing greenhouse gas emissions by 2008 – 2012, whereby the EU-15 target is for an 8% reduction in emissions compared to 1990 levels. Aiming for a global surface average temperature not to rise by more than 2ºC compared to the pre-industrial level.

Objective 2 - Energy policy should be consistent with the objectives of security of supply, competitiveness and environmental sustainability, in the spirit of the Energy Policy for Europe launched in March 2006 by the European Council. Energy policy is crucial when tackling the challenge of climate change.

International Cooperation on Climate Change

Over the past years, the EU has considerably strengthened its international leadership on climate change. This leadership is based on three pillars: ensuring the EU’s credibility through meeting its 8% emission reduction target under the Kyoto Protocol; strengthened cooperation with third countries on climate change; and new proposals to reinforce global action on climate change in the context of the UN climate negotiations.

The Commission outlined key elements of its international climate change strategy in the Communication “Winning the Battle against Global Climate Change” in February 2005[4]. Following this Communication, the EU has significantly stepped up its cooperation with third countries through actions such as regular high-level policy dialogues, strengthened cooperation in the area of science and technology, cooperation on adaptation to the impacts of climate change, and the implementation of the Kyoto Protocol's Joint Implementation (JI) and Clean Development Mechanism (CDM).

Examples of these efforts include the climate change partnerships that were agreed with India and China in 2005. Similar partnerships were agreed with other countries and regions and complemented by efforts to increase third country participation in the 6th and 7th Community Framework Programme for research. The EU’s Green Diplomacy Network, was set up in 2003 to improve exchange of information between diplomats dealing with environment files. Recently the network has played an important role in coordinating positions in advance of major international climate meetings. It is currently building up exchange of information and is consulting environment specialists of the EU delegations, embassies and missions to explore what joint activities may be possible in third countries. On the basis of the Johannesburg Renewable Energy Coalition (JREC) and the EU Energy Initiative the Commission launched the EU Energy Facility and the Global Energy Efficiency and Renewable Energy Fund (GEEREF). The GEEREF is designed to boost the Community’s capability to support the implementation of partner countries’ sustainable development and poverty eradication programmes and accelerate the transfer, development and deployment of environmentally sound technologies. Once operational the fund is predicted to generate additional capital of between EUR 300 million and EUR 1 billion.

The EU significantly strengthened its leadership with the new climate change and energy strategy, agreed at the European Council in March 2007. It sets out the building blocks for an agreement on further international action on climate change, to enter into force in 2013, when the first commitment period of the Kyoto Protocol ends. The strategy is largely based on the Commission’s Communication “Limiting Global Climate Change to 2 degrees Celsius: The way ahead for 2020 and beyond”[5]. It establishes a new Integrated Climate Change and Energy Policy to combat climate change and to boost the EU's energy security and competitiveness, in line with the renewed EU SDS strategy. Key features include:

- 20% reduction of GHG emissions by 2020 below 1990 levels

- 30% reduction of GHG emissions by 2020 below 1990 levels if other developed countries join under an international agreement

- Improving energy efficiency by 20% by 2020

- Raising the share of renewable energy in consumption to 20% by 2020

- Increasing the level of biofuels in transport (petrol and diesel) fuel consumption to 10% by 2020.

The legislative proposals for implementation of the package are expected for the end of 2007. They include EU-wide burden sharing; Renewables targets burden sharing, a Carbon Capture Storage Directive , Carbon Dioxide (CO2) from cars and review of the EU Emissions Trading Directive.

The EU emissions Trading Scheme is the EU’s flagship in the combat against climate change. This new carbon market is designed to help EU countries comply with the Kyoto Protocol targets and effectively reduce emissions. The first trading period of 2005-2007 has been a trial phase where "learning-by-doing" has been of great benefit to all parties involved. The volume of allowances traded has grown steadily and the market is gradually maturing. One of the important lessons learned was the significance of getting the allocation of CO2 quotas right. For the next phase, the Commission will impose strict standards and a common methodology to ensure the necessary scarcity for appropriate pricing. The Commission is currently carrying out a revision for the 3rd trading period. This review is designed to streamline the current scheme, to make it more effective and efficient and to sort out main shortcomings and distortions experienced so far. Some of the ideas considered are extended scope, more harmonisation and increased predictability as well as linking the EU ETS with emissions trading systems in non-EU countries as set out in the Communication "Building a Global Carbon Market". The review looks at expanding the EU ETS to other sectors and other GHGs beside CO2. This could cover nitrous oxide (N2O) from ammonia production and methane from coalmines. In the light of divergent interpretations by Member States, the review will also consider ways to give greater clarity on which types of combustion installations should be covered.

Planned ERDF and Cohesion Fund support in 2007-2013 programmes of around €9 billion for measures such as renewable energy, efficiency and management of energy, air quality and other measures of mitigation and adaptation to climate change.

The technology of carbon capture and storage has the potential to contribute both to the EU's climate goals and to its security of energy supply. All indications are that we cannot make the significant global reductions in GHG emissions by 2050 needed to meet the necessary climate change objectives using energy efficiency and renewables alone. In its Communication and supporting documents "Limiting Climate Change to 2°C" of January 2007, it is proposed that carbon capture and storage (CCS) could contribute around 14% of all reductions needed by 2030. Also some 60% of emissions from the power sector could be captured by 2050, compared with none today. The forecasts suggest that after an initial deployment in developed countries, rapid uptake in developing countries will follow. By 2050, more than 90% of all coal-fired electricity generation would be from plants equipped with CCS. The Commission is working to create the regulatory framework for CCS for 2007. This would include: the main framework for managing the risks from capture, transport and storage; removing barriers in existing legislation, in particular in the area of water and waste as well as managing liability issues for leakage from the storage site.

Regulation (EC) No 842/2006 on certain fluorinated greenhouse gases was adopted on the 17 May 2006. In the absence of this regulation, fluorinated GHG emissions in EU-15 were to increase by around 50% by 2010 compared to 1995 (from 65 to 98 million tonnes of CO2 equivalent). The Regulation aims to control the emissions of so called F-gases which are potent GHG controlled by the Kyoto Protocol. Hence it helps the EU to meet its climate change objectives. The Regulation includes, inter alia, provisions on containment, recovery and labelling of F-gases in a number of applications (eg refrigeration, air conditioning and heat pumps) and, for a limited number of products and equipment containing these gases, it bans their use and/or placing on the market. The Commission is currently preparing the implementing provisions, including labelling, reporting, and minimum qualifications of personnel dealing with F-gas applications.

In addition, a new Directive (2006/40/EC) was adopted which provides for the phase-out of mobile air conditioning systems using fluorinated gases with a global warming potential above 150 by 1 January 2011 for new models and from 1 January 2017 for all new cars. The combined emission reductions that can be achieved by 2010 from the Regulation and Directive on mobile air conditioning are estimated to amount to 21 million tonnes of CO2 equivalent. By 2020, once measures are fully implemented, these savings are expected to reach 40 – 50 million tons of CO2 equivalents per annum.

Objective 3 - Adaptation to and Mitigation of Climate Change should be Integrated in all Relevant European Policies.

With climate change already happening, societies worldwide face the parallel challenge of having to mitigate and adapt to its adverse impacts as a certain degree of climate change is inevitable throughout this century and beyond, even if global mitigation efforts over the next decades prove successful. Adaptation action has therefore become an unavoidable and indispensable complement to reducing GHG emissions. Once certain temperature thresholds are exceeded, certain climate impacts (e.g. major displacement of populations) are expected to become severe and irreversible.

The European Union is taking on the challenge of adaptation, working in partnership with its Member States and globally with partner countries. A European approach is necessary to ensure proper co-ordination and the efficiency of policies that address the impacts of climate change. Adaptation actions must be consistent with GHG reduction action and vice versa.

In June 2007, the Commission adopted a Green Paper on Adaptation[6] that includes proposals for strengthening the EU’s external actions with respect to adaptation to climate change. Following this, the Commission has recently proposed a Global Climate Change Alliance (GCCA)[7] that will provide a platform for dialogue and exchange among the EU and poor developing countries most vulnerable to climate change, in particular the Least Developed Countries and Small Island Developing States, on practical approaches to realising the integration of development strategies and climate change. In addition, to these initiatives, the 2008 Spring European Council will address the pressing issue of the consequences of the increasing impacts of climate change for international security. The discussions will be based on a report currently being prepared by the Commission and the High Level Representative.

Objective 4 - By 2010 12% of energy consumption, on average, and 21% of electricity consumption, as a common but differentiated target, should be met by renewable sources, considering raising their share to 15% by 2015.

Objective 5 - By 2010 5, 75% of transport fuel should consist of biofuels, as an indicative target, (Directive 2003/30/EC), considering raising their proportion to 8% by 2015 and

Objective 6 - Reaching an overall saving of 9% of final energy consumption over 9 years until 2017 as indicated by the Energy End-use Efficiency and Energy Services Directive.

In terms of energy, much of the basic legislation is in place. For renewables, Directives 2003/30/EC and 2001/77/EC require Member States to attain national targets in the share of renewable electricity and bio fuel consumption. The European Commission adopted a Renewable Energy Road Map [8] on 10 January 2007, setting out a long-term vision for renewable energy sources in the EU and proposing that the EU establish a mandatory (legally binding) target of 20% for renewable energy's share of energy consumption in the EU by 2020. In addition, a binding minimum target of 10% has been endorsed for the share of biofuels in the overall EU transport and diesel consumption by 2020.

On energy efficiency, Member States are required by Directive 2006/32/EC to develop National Energy Efficiency Action Plans with a strategy to save 9% by 2016. The national plans were to be submitted by June 2007 and are currently being analysed.

The Action Plan for Energy Efficiency identified that the largest cost-effective savings potential lies in the residential (households) and commercial buildings sector (tertiary sector), where the full potential is now estimated to be around 27% and 30% of energy use, respectively. For manufacturing industry, the overall potential is estimated to be around 25% and for transport, a similar full savings potential of 26% is estimated. Realising the 20% potential 2020, equivalent to some 390Mtoe (million tonnes oil equivalent), will result in large energy and environmental benefits. CO2 emissions should be reduced by 780 Mt CO2 with respect to the baseline scenario, more than twice the EU reductions needed under the Kyoto Protocol by 2012. Additional investment expenditure in more efficient and innovative technologies will be more than compensated by the more than €100 billions annual fuel savings.

2.4. Member State Actions

Objective 1 - The Kyoto Commitments and

Objective 2 - Sustainable Energy Policy

Climate change and energy are widely covered in Member State reports and it is clear that EU policy in this field steers activities in Member States. This demonstrates that EU policy can provide an effective framework for action in a relatively short span of time. Almost all Member States have now adopted national climate change strategies, either as a separate strategy or as a part of energy policy packages.

However, only Sweden, Germany and the United Kingdom of the EU-15 are currently projected to be on track to achieve their Kyoto targets by 2010 using existing domestic policies and measures. In addition, 10 Member States are projected to reach their targets using additional domestic policies and measures already in planning including the effect of the EU ETS, Kyoto mechanisms and carbon sinks. Three MSs (AT, DK[9], and ES[10]) project that they will not reach their targets even when accounting for additional measures, Kyoto mechanisms, sinks, and the effect of the EU ETS. These Member States will have to intensify the implementation of existing policies and measures, to identify further emission reduction policies and measures as well as increase the use of the Kyoto mechanisms. Spain states in the progress report that even with adoption of their Urgent Measures Plan supplementing the national climate change strategy, additional measures would be necessary to reduce emissions by over 15 million tonnes of CO2 equivalent per annum. Portugal’s CO2 reduction deficit of approximately 7.4 million tonnes of CO2 eg/annum will be covered by additional domestic measures, government investment of the Portuguese Carbon Fund and by the implementation of Clean Development Mechanism projects.

In line with the Emissions Trading Directive, 23 National allocation plans were adopted in 2007 allocating 1903.43 Mt annually instead of the initially proposed 2101.64. The Commission insisted on substantial cuts in allocations and decisions ranged from cuts in the order of 65.5% (eg LV) to 0.3% (eg ES). Only three Member States (eg UK, SI and FR) had their proposed caps approved.

Further initiatives worth mentioning include: In 2006, the UK government established a Climate Change Office for analysis and policy development; the Swedish government appointed a Scientific Council on climate issues. Almost all Member States adopted national Climate Change Strategies, either as a separate strategy or as a part of energy policy package. For instance, the Dutch policy package "Clean and Efficient" aim at an energy efficiency improvement of 2% per year, a share of renewable energy of 20% by 2020 and a reduction of 30% by 2020 (as compared with 1990). Ireland recently adopted a National Climate Change Strategy 2007-2012. Austria adjusted its National Climate Strategy.

Very few Member States, however, address the issue of energy policy and its consistency with security of supply. Equally limited reporting is apparent on Energy policy and its consistency with competitiveness policies. Certain countries report on restructuring of the energy sector, including liberalisation of electricity and gas markets as well as expansion of infrastructure such as transmission systems. Apart from the GHG emissions, addressed by all countries under objective 1, there are other elements of environmental sustainability such as airborne emissions of SO2, NOx and Volatile Organic Compounds (VOCs), issues related to nuclear energy and environmental sustainability in connection with the production of biomass and biofuels. Few countries (eg CZ, EE, and ES) refer to the linkage to air quality as a priority issue, whereas others do not address the issues at all.

Objective3 – Adaptation to Climate Change

Adaptation policies are an integral part of climate change strategies in several countries (eg SE, FR, ES, and HU) even so, adaptation to climate change is largely ignored in most Member State reports and where it is mentioned there are often no details on measures and progress. The Member States that do refer to adaptation often stay at a very general level, indicating that strategies are in place but give no details on measures and progress. For example, in Denmark the Government will in 2007 submit a proposal for a Danish Climate adjustment strategy. In Finland the Climate Change Adaptation Research Programme has been launched as part of the National Strategy for Adaptation to Climate Change. No details are given. In France a national strategy on adaptation to the consequences of climate change was drawn up in June 2006. Some Member States (eg ES) provide more detailed reporting on measures taken at regional and local level reflecting the priority given to adaptation. The adaptation plan was approved in July 2006. It aims to generate an ongoing flow of knowledge building capacities for applying that knowledge in decision making. This includes activities such as generation of regional climate scenarios and assessment of the impact of climate change on water resources, biodiversity and coastal regions. Importantly, work is planned for assessing impacts in certain economic sectors of relevance – tourism, agriculture, health and forestry.

Objective 4 - Renewables

Several Member States have set national targets for renewables (eg FR, NL, ES, AU) and in some cases the level of ambition exceeds the ambition of the EU climate change and energy package to raise the share of renewable energy to 20% by 2020. ie Austria set the goal to raise the share of renewable energies to 45% by 2020. Several EU countries also introduced incentives to stimulate production of renewable energies. They include investment aid, tax reductions, obligation on energy producers to produce part of energy from renewable sources and feed-in tariff to buy green electricity above market price.

In terms of share of the renewable electricity the reports show that some Member States (eg DK, D, ES, IR, HU, NL and LUX) are on track to meet the targets they have accepted under the Directive and that it is mainly due to the efforts of these few countries that the EU possibly could achieve a share of 19% of renewable electricity by 2010. The reports confirm the vast differences in the role that renewable energy is playing in different Member State countries, reflecting different national targets and circumstances.

Objective 5 – Biofuels

Only a few countries are set to meet the target for biofuels by 2010. However, Member States are putting in places effective policies to this end including tax exemptions measures (at least 8 EU countries); 13 Member States have received state aid approval for new biofuels tax exemptions and a number of countries integrate support for biofuels in rural development programmes. France and Austria established an ambitious biofuels plan, with goals of 5.75% by 2008 (two years earlier than the EU target), with 7% and 10% respectively by 2010, and 10% and 20% by 2015. Germany mandated biofuels blending for the first time, requiring 4.4% bio-diesel blending and 2% ethanol blending starting in 2007, increasing bio diesel blending to 5.75% by 2010. Member States have also been enacting biofuels tax exemptions. Such exemptions now exist in at least 8 EU countries, most of these enacted during 2005–06, (FR, DE, EL, IE, IT, ES, SE, UK). Ireland announced €265 million in extra subsides to support renewables over the next five years, including €200 million in excise tax relief for biofuels. The Biofuels progress report shows that since 2005, 13 Member States have received state aid approval for new biofuels tax exemptions and at least 8 Member States have brought biofuels obligations into force or announced plans to do so. 19 Member States have already set targets for 2010. A number of countries integrate support for biofuels in rural development programmes and provide support in addition to the energy crop support under the EU common agricultural policy. Sustainability of the production of biomass for biofuels is addressed most directly by the United Kingdom and the Netherlands, otherwise little attention is paid to it in the reports. It is crucial to develop sustainability criteria for biofuel production and use.

Objective 6 – Energy Efficiency

Member States were asked to submit their energy efficiency plans by 30 June 2007. To date, 17 Member States have done so and a final analysis of these plans is still underway.

Many Member States have made significant efforts to implement the Energy Performance of Buildings Directive[11] which have resulted in improving the energy performance requirements, by an average of 25% for all Member States, on new buildings with additional energy performance improvements for older buildings when these buildings undergo major renovation[12]. Existing buildings are covered by the implementation of the Buildings Directive, which includes energy performance requirements on components when these buildings undergo major renovation. The most advanced Member States on the implementation of the Buildings Directive are Denmark, Germany, Ireland, Portugal and the Netherlands. However 21 infringement cases are presently ongoing for not having implemented (completely) the Buildings Directive. Inter alia Denmark, Finland, Sweden, Germany, the Netherlands and Austria already had national regulations which implement core parts of the Buildings Directive (eg by strict minimum energy performance requirements on the buildings shell and mandatory inspection of boilers) before the Directive was adopted in December 2002. Some Member States offer subsidies for new buildings or the refurbishment of existing buildings where the final energy performance is better than regulatory required. Germany has, with its promotion program of the non-private KfW bank, established the most advanced financing approach in this sector which has been copied by international non-private banks like EBRD, EIB and CIB. Due to the complexity of the buildings stock and the difficulties to meter (the reduction of) the energy consumption of the whole buildings sector, no overall energy saving targets are available at present. This lack of information could be improved by the above mentioned national energy efficiency action plans as of July 2007. Inter alia the Netherlands, the United Kingdom, Portugal, Germany, Belgium and Denmark started or announced information campaigns (on improvement measures and on economic behaviour) to raise the awareness of citizens on energy aspects in the buildings sector.

2.5. Conclusions

Both the EU and Member States have made good progress on developing the policy framework for the theme. The EU-15 managed to reduce their GHG emissions in 2005 by 0.7% compared to base year bringing overall emissions down to 2%. This is a step in the right direction although significant efforts still have to be made to reach the Kyoto target of reducing emissions by 8% by 2008-2012 compared to 1990. The share of renewables only reached a level of 6.6% in 2005. The average annual growth of 0.18 percentage points since 2000 is insufficient to reach the 2010 target of 12%. The share of renewables in electricity consumption reached 14% in 2005, having gained a mere 1.6 percentage points since 1990. Achieving the 2010 target of 21% would require growth of 1.4 percentage points per year which is much higher than the present growth rate.

There have been significant policy developments at EU level and it is apparent that EU policy in this field is steering activities in Member States on this theme. In March 2007, EU Heads of State agreed on a comprehensive package to establish a new Integrated Climate Change and Energy policy with emission reductions of at least 20% by 2020, and the further promise of a 30% reduction commitment by 2020. If an adequate post 2012 multilateral framework is agreed to, the European Community is set to take bold legislative steps within the next two years inducing the necessary structural changes in their economies. The EU emissions Trading Scheme continues to be the EU’s flagship in the combat against climate change and in the review of the scheme expansion of EU ETS to other sectors and GHG beside CO2 (CO2 is considered. In the Communication "Limiting Climate Change to 2°C" of January 2007, the Commission proposes that carbon capture and storage (CCS) could contribute by around 14% of all reductions needed by 2030; In June 2007, the Commission launched a Green Paper on Adaptation to Climate Change.

For energy policy, much of the basic legislation is in place. Directives 2003/30/EC and 2001/77/EC require Member States to attain national targets in the share of renewable electricity and biofuels consumption. On energy efficiency, Member States are required by Directive 2006/32/EC to develop national energy efficiency action plans.

Overall, Member States give high importance to climate change and clean energy in their reporting, and there is considerable evidence of a large number of diverse initiatives being taken. Current projections indicate that Member States will be accelerating the implementation of their planned policies and measures. In this respect, a significant step has been made with the recent decisions on the National Allocation Plans (NAP) under the EU Emissions Trading Scheme (ETS) for the period 2008-2012.

The coverage and level of detail in reporting varies significantly, making it difficult to assess progress on the basis of these reports alone. Most attention is paid to compliance with Kyoto, renewable energy, biofuels and energy efficiency. However, much less attention is paid to post-2012 emission reductions, the consistency between energy policy and competitiveness, security and broader environmental targets. Little attention is paid to sustainability criteria for biofuels. Finally, reporting on adaptation to climate change is scarce, while integration of mitigation measures is addressed by some, but rather randomly. It remains clear that to reach its Kyoto and energy targets, Member States will have to intensify their efforts to implement all additional measures planned especially in the areas of road transport and use of renewables.

3. SUSTAINABLE TRANSPORT

3.1. Objectives

Overall Objective: To ensure that our transport systems meet society’s economic, social and environmental needs whilst minimising their undesirable impacts on the economy, society and the environment.

- Decoupling economic growth and the demand for transport with the aim of reducing environmental impacts.

- Achieving sustainable levels of transport energy use and reducing transport GHG emissions.

- Reducing pollutant emissions from transport to levels that minimise effects on human health and/or the environment.

- Achieving a balanced shift towards environment friendly transport modes to bring about a sustainable transport and mobility system.

- Reducing transport noise both at source and through mitigation measures to ensure overall exposure levels minimise impacts on health.

- Modernising the EU framework for public passenger transport services to encourage better efficiency and performance by 2010.

- In line with the EU strategy on CO2 emissions from light duty vehicles, the average new car fleet should achieve CO2 emissions of 140g/km (2008/09) and 120g/km (2012).

- Halving road transport deaths by 2010 compared to 2000.

Refer to the 2006 Strategy for specific actions.

3.2. State of Play

Energy consumption by transport, used as a proxy for transport demand, grew at an average rate of 1.3% per year between 2000 and 2005 in the EU-27, only slightly less than the 1.7% average for GDP over the same period, showing no real signs of decoupling, and raising concerns about the related objective of achieving sustainable levels of transport energy. Transport GHG emissions are still growing, with an average annual growth rate of 1.2% between 2000 and 2005 in the EU-27. In 2004, domestic transport was responsible for 21% of total GHG emissions in EU-15. It grew by 26% between 1990 and 2004 whereas emissions from most other sectors decreased during the same period.

Transport accounts for 30% of total energy consumption in the EU, with 98% dependency on oil. It represents 21% of the GHG emissions in the EU. These emissions have gone up by around 23% since 1990. Urban transport accounts for 40% of CO2 emissions of road transport. Road transport remains the biggest source of transport emissions. In 2004, it emitted 93% of overall domestic transport CO2 emissions. Emissions from road transport have continuously increased both for passenger transport (+27% over 1990-2004) and freight transport emissions (+51% over 1990-2003).

This contrasts with progress towards the objective of reducing pollutant emissions from transport, with emissions falling by 4.4% per year on average between 2000 and 2004 for ozone precursors, and by 4.2% for particulates.

Harmful emissions from transport – ozone precursors, acidifying substances and fine particles – declined between 1990 and 2004 mainly due to stricter standards imposed on new road vehicles (Euro standards) and transport fuels. According to the baseline scenario presented in the Commission's Thematic Strategy on Air Pollution[13], the share of land transport emissions would be 51% of the NOX, 17.5% of the VOCs and 20.3% of the ultra fine particles emitted by overall land based sources in 2020. Emissions of SO2 and NOX from maritime transport remain a serious concern, as they are expected to exceed those of all land-based sources in the EU by 2020.

Average CO2 emissions emitted per kilometre from new passenger cars have decreased steadily from 2000 to 2004 in the EU-15, at an average annual rate of 1.3%, but this rate of change is slower than in the previous decade, and is not sufficient to reach the 2008/09 target of 140 grams per kilometre, or the 2012 target of 120 grams per kilometre.

Despite the increase in road traffic, there has been a steady reduction in the number of deaths in accidents in both the EU-27 and the EU-15. The EU-15 is well on track to meet the proposed target of halving the number of deaths by 2010 compared to 2000, but the EU-27 lags slightly behind.

Progress within this key challenge is uneven: for a number of targets, there has been no real progress since 2000, as reflected by the headline indicator. For other objectives, developments have been unfavourable, as for the increase in energy consumption and emissions of GHGs by transport, but also favourable, regarding the decrease of emissions of other pollutants, and the number of road deaths. Statistics currently available for transport noise, and public passenger transport services do not allow an evaluation of progress towards related objectives.

The objective of achieving a balanced shift towards environmentally friendly transport modes has not yet been achieved. The EU-27 share of road in inland freight transport has continued to increase relatively slowly since 2000 to reach 76.5% in 2005, while for inland passenger transport, passenger-kilometres by car showed a relative stabilisation in the EU-15, but still reached 84.8% of total inland passenger transport in 2004.

Road congestion has been increasing, due to the growth of road transport use and general economic growth. Cars remain by far the dominant mode of passenger transport. The increase of car modal share to the detriment of rail mode is more acute in Member States that acceded to the EU since 2004. These trends are encouraged by unbalanced transport plans and programmes and detrimental transport charging and taxation policies. For example, the European Environment Agency[14] identified that road transport receives more than 43% (€125 billion) of annual transport subsidies in the EU, whereas aviation receives 10 to 12% (€27 to 35 billion) via preferential tax treatment, rail receives 25 to 27% (€73 billion) and water-borne transport receives 5 to 10% (€14 to 30 billion).

3.3. Key EU Policies Adopted

Objective 1 - Decoupling Economic Growth from Demand for Transport

The 7th framework programme for Community activities in the area of research and technological development[15] became operational on 1 January 2007. Under its specific programme on cooperation[16], activities on transport (around €36 billion), including aeronautics, are intended to develop integrated, safer, greener and smarter pan-European transport systems for the benefit of all citizens, and society at large. It also contributes towards climate policy, respecting the environment and natural resources as well as securing and further developing the competitiveness of industry. Activities supporting cross-cutting thematic topics will focus on specific transport issues, for example, the use of alternative energy sources in transport applications; intelligent transport systems; and monitoring of environmental effects of transport, including climate change. Environmental research should cover ways of reducing the adverse impact of transport and optimising traffic and should include boosting transport efficiency. The same specific programme's activities on energy also address issues directly related to sustainable transport, such as the development of hydrogen and fuel cell technologies and renewable fuel production. These activities continue from the work programme under FP6, which addressed the objectives of new technologies and concepts for all surface transport modes (road, rail and waterborne), advanced design and production techniques, rebalancing and integrating different transport modes, increasing road, rail and waterborne safety and avoiding traffic congestion.

On 28 June 2006, the Commission adopted a Communication on freight transport logistics[17]. The Communication highlighted the need for an overall approach to the improvement of transport logistics in preparation for an action plan that is planned for adoption in October 2007.

The ERDF and Cohesion Fund support in 2007-1013 programmes will amount to around €36 billion for sustainable transport measures, such as investment in sustainable urban transport, railways and inland waterways, intelligent transport systems and multimodal transport.

Objective 2 - Sustainable Energy Use and Reducing Greenhouse Gas Emissions

On 22 June 2006, the European Commission adopted a Communication[18] on the mid-term review of the 2001 transport White Paper. The Communication noted that the negative impact of mobility in terms of energy use and environmental quality must be reduced and that additional instruments would be needed to achieve these objectives. These measures include a freight logistics action plan; intelligent transport systems to make mobility more sustainable and more efficient; a debate on how to change mobility of people in urban areas; an action plan to boost inland waterways; and a programme for green power in trucks and cars. The review announced a methodology as a basis for smart infrastructure charging by 2008.

The Commission adopted an energy efficiency action plan [19] on 19 October 2006. The action plan identified the pressing need to realise the potential for energy efficiency gains in the transport sector, in particular by ensuring fuel efficiency of cars, developing markets for cleaner vehicles, ensuring the maintenance of proper tyre pressure, and by improving the efficiency of urban, rail, maritime and aviation transport systems, as well as changing transportation behaviour.

On 20th December 2006, the Commission adopted a proposal[20] to include aviation in the EU Emissions Trading Scheme (ETS). The proposal provides for aviation to be brought into the EU ETS in two steps. From the start of 2011, emissions from all domestic and international flights between EU airports would be covered. One year later, at the start of 2012, the scope would be expanded to cover emissions from all international flights. This proposal is estimated to cut GHG emissions by 183 million tonnes of CO2 annually by 2020 compared to business-as-usual. It is an express objective of this proposal to provide a model for aviation emissions trading that can be a point of reference in the EU's contacts with key international partners and to promote the development of similar systems worldwide.

Objective 3 - Reducing Pollutant Emissions to Minimise Effects on Health

In its conclusions[21] of 9 March 2007, the Council Presidency highlighted the need to address emissions from international aviation and maritime transport . The Council also invited the Commission to review the EU Emissions Trading Scheme and to consider a possible extension of its scope to surface transport.

In May 2006, the Commission adopted a recommendation on the promotion of shore-side electricity for use by ships at berth in EU ports. It will eliminate local air and noise emissions from ships' engines while at berths in port. The recommendation provides information on practicalities, benefits and costs, calls for harmonized international standards and highlights possible ways of promoting the use shore-side electricity.

The Marine Fuel Sulphur Directive [22] entered into force in 2005 and is starting to deliver improvements with regard to the emissions of SOx from maritime transport in Sulphur Emission Control Areas. The Commission is pursuing additional measures at international level (IMO, International Maritime Organization).

On 31 January 2007 the European Commission proposed an amendment to the fuel quality Directive[23], intended to reduce the contribution of transport fuels to climate change and air pollution by setting continuously improving CO2 reduction standards. A key measure is that, to encourage the development of lower-carbon fuels and biofuels, suppliers would have to reduce the GHG emissions caused by the production, transport and use of their fuels by 10% between 2011 and 2020. This proposal will also bring about an improvement in the quality of transport fuels, the promotion of "second generation" biofuels that will bring bigger emission savings and better public health through a reduction in harmful pollutants.

Objective 4 - Balanced Shift towards Environmentally Friendly Transport Modes

In September 2007, the Commission announced the publication of a Green Paper on Urban Transport to identify potential European added value to action that is taken at the local level. Furthermore, as foreseen by the Thematic Strategy on the urban environment[24], it delivers technical guidance to Member States in 2007 on the main aspects of sustainable urban transport plans while taking account of the most recent experts' works, good practice and consultations carried out in 2007 to prepare its Green Paper on urban transport .

Objective 5 - Reduce Transport Noise

As required by the EU legislation on environmental noise[25], Member States are now preparing first sets of strategic noise maps (due by June 2007) and action plans (due by July 2008) with a view to preventing and reducing transport noise. The review on the implementation of this legislation is foreseen in 2009. It should take account of the updated information on exposure to transport noise from the noise maps that Member States will have to communicate to the Commission by the end of 2007 and assess the need for further Community actions and implementing strategies on transport sources.

Objective 6 - Improve Efficiency and Performance of Public Transport

Some activities that were announced in the mid-term review have already been taken forward. For example, on 24 January 2007, the Commission adopted an airport package, which included both a proposal for a Directive on airport charges and a Communication on airport capacity, efficiency and safety. The proposed Directive re-defines the relationship between airport operators and airport users by requiring total transparency, user-consultation and the application of the principle of non-discrimination when calculating charges levied on users. The Communication provides a comprehensive action plan detailing a coherent strategy for responsibly tackling congestion at European airports.

Objective 7 - Average Car Fleet Emissions of 140g/km in 2008 and 120 g/km in 2012

On 7 February 2007, the Commission adopted a revised strategy [26] to reduce CO 2 emissions from new cars and vans sold in the European Union. The Commission will propose a legislative framework, if possible in 2007 and at the latest by mid 2008, to achieve the objective of 120 g/km CO2 (a public hearing was organised by the Commission on 11 July 2007). The strategy also foresees measures to promote the purchase of fuel efficient vehicles, notably through an amendment to the car labelling Directive to make it more effective and by encouraging Member States that levy road tax to base it on cars' CO2 emissions. It also invites car manufacturers to develop and sign up to an EU code of good practice on car marketing and advertising to promote more sustainable consumption patterns. In total, the strategy would cut transport emissions by a cumulative total of over 400 million tonnes of CO2 over the 2010-2020 period.

The European Parliament and the Council agreed in December 2006 on new regulations[27] (known as Euro 5 and 6 standards ) setting stricter standards for cars and light commercial vehicles. These standards will apply from 1 September 2009, setting tighter emission limits of particles and of NOx for new cars and vans sold in the EU market. Euro 6 will set significantly lower emission limits for NOx emissions from diesel cars and will enter into force in 2014. Both regulations would contribute to meeting the objectives of both the Sustainable Development Strategy and the Thematic Strategy on Air Pollution while cutting annual transport emissions by 314 thousand tonnes of nitrogen oxides, 27 thousand tonnes of fine particles and 33 thousand tonnes of hydrocarbons in 2020. The Commission is now preparing new standards (Euro 6) on the emissions of heavy duty vehicles.

Objective 8 - Halving Road Transport Fatalities by 2010 Compared to 2000

It is still too early to evaluate the impact of efforts on road safety, undertaken after the adoption of the mid-term review of the transport White Paper in June 2006. The number of road deaths in EU-25 has been steadily declining in recent years. A 22% reduction in the number of the fatalities in the EU between 2001 and 2006 was achieved. Compared to 2001 (50 000 fatalities), around 12 000 lives were saved in 2006.

The Directive 2004/54/EC on minimum safety requirements for tunnels has been in force since May 2006. This Directive sets down a set of harmonised minimum safety standards dealing with the various organisational, structural, technical and operational aspects. The recast Directive 2006/126/EC on driving licenses[28] will fully enter in force in 2013. Among its provisions, it sets down minimum requirements for driving tests and driver training and minimum standards for physical and mental fitness for driving and for persons who conduct practical driving tests.

In October 2006 the Commission adopted a proposal for a Directive on road infrastructure safety management [29], the objective of which is to ensure that safety is integrated in all phases of planning, design and operation of road infrastructure in the Trans-European Network (TEN-T). On the same day, the Commission also adopted a proposal for a Directive on the retrofitting of mirrors to heavy goods vehicles[30], which seeks to improve the safety of road users, in particular vulnerable road users such as pedestrians, cyclists and motorcyclists through the extension of requirements to the existing fleet of heavy goods vehicles.

Work on accompanying measures, particularly on awareness raising is also continuing. For example, the European Road Safety Observatory has been further developed. The observatory will support all aspects of road and vehicle safety policy development at European and national levels. It will make new proposals for common European approaches in several areas including exposure data and safety performance indicators. The European Road Safety Charter now has more than 750 signatories (stakeholders willing to improve road safety). The first European Road Safety Day, organised on 27 April 2007, including a conference in Brussels, which focused on alcohol and drug use whilst driving, and training and education.

3.4. Member State Actions

Objective 1 - Decoupling Economic Growth from Demand for Transport

Some key initiatives under this objective are focused on transport policy, such as the lorry tolls (AT) or the toll system on highways (CZ). Others have reported modernisation of road infrastructure and taxes, (eg BG). Some Member States have written transport strategies (eg FI) and ensured that sustainable transport is written into other strategies such as national spatial planning and finance acts (eg IE, IT).

Objective 2 - Sustainable Energy Use and Reducing Greenhouse Gas Emissions

Most Member States report on this objective via fiscal measures to stimulate the reduction in GHG emissions, such as the purchase of smaller, more fuel efficient vehicles (eg DK), promotion of alternative fuels (eg RO) and specifically promotion of bio-fuels (eg AT, BG).

Objective 3 - Reducing Pollutant Emissions to Minimise Effects on Health

Member States have generally tied this in with objective 2, although some have cited specific tax-subsidies for purchasing energy efficient cars (eg BE), exemptions from excise duty (eg DK), tax subsidies (eg HU) and financial incentives (eg IT) and congestion charges (UK). Some states have implemented local speed limits and introduced park-and-ride schemes (eg AT, MA).

Objective 4 - Balanced Shift Towards Environmentally Friendly Transport Modes

Many countries report on a wide range of actions to promote a shift towards environmentally friendly multimodal transport modes (eg DK, HU), both for passengers (eg CZ) and for freight (eg NL). Public transport initiatives include investment schemes in rail (both national, regional and suburban), road charges and specific initiatives to promote bicycling (eg AT, BR, DK, FR, IT, UK).

Objective 5 - Reduce Transport Noise

A limited number of Member States have reported on this issue, with many initiatives taking place as part of a National Noise Strategy. Within their strategies, Member States aim to reduce road and railway noise (eg AT, DK), silent road surfaces (eg NL), mapping noise sources (eg UK) and noise partnerships between home owners and public authorities (eg DK).

Objective 6 - Improve Efficiency and Performance of Public Transport

Some Member States have stated investment in public transport (eg AT, HU, UK), including investment in regional airports. This will allow a strategic overview of transport on a regional level and will include establishing relegations regarding public transport associations (eg HU), harmonisation of timetables, regional organisation of transport (eg CY) and dedicated public transport lanes (eg EE)

Objective 7 - Average Car Fleet Emissions of 140g/km in 2008 and 120 g/km in 2012

Real progress towards this initiative is limited within the EU[31] and therefore Member States tend to report this within other objectives of the theme. A few specific initiatives include the Austrian Advanced Automotive Technology Programme and the German National Fuel Strategy which includes a quota for biofuels.

Objective 8 - Halving Road Transport Fatalities by 2010 Compared to 2000

Member State reports remain broadly optimistic even though the objective of halving transport deaths by 2010 compared to 2000 remains a challenging goal[32]. Many initiatives are reported under this heading, including National Road Safety Strategy (eg CZ, GR), allocation of funds to road management (eg EE), improved inspections of vehicles (eg BG) and stringent speed control systems (eg FR).

3.5. Conclusions

Progress within this key challenge is uneven, with some targets seeing no real improvement since 2000. The indicators show that some areas such as the increase in energy consumption and emissions of GHGs by transport have been unfavourable, transport GHG emissions are still growing, with an average annual growth rate of 1.2% between 2000 and 2005 in the EU-27. Energy consumption by transport grew at an average rate of 1.3% per year between 2000 and 2005 in the EU-27. However, the statistics do not indicate a shift towards more environmentally friendly transport, as is required by this theme. Cars remain dominant and road congestion and therefore pollution has been increasing. The objective of achieving a balanced shift towards environmentally friendly transport modes has not been achieved. The EU-27 share of road in inland freight transport has continued to increase relatively slowly since 2000 to reach 76.5% in 2005, while for inland passenger transport, passenger-kilometres by car showed a relative stabilisation in the EU-15, but still reached 84.8% of total inland passenger transport in 2004.

Some areas such as reduction in the number of road deaths have seen more favourable statistics. Despite the increase in road traffic, there has been a steady reduction in the numbers killed in accidents in both the EU-27 and the EU-15. The EU-15 is well on track to meet the proposed target of halving the number of deaths by 2010 compared to 2000, but the EU-27 lags slightly behind.

In general, the EU has gone some way to mitigating the issues relevant to these objectives, including adopting legislation and policy initiatives such as those on airport and freight logistics. In addition, they have discussed appropriate measures and incentives which would help the economic, social and environmental sustainability in Europe, such as an amendment to the fuel quality directive intended to reduce the contribution of transport fuels to climate change and air pollution and new regulations setting stricter standards for cars and light commercial vehicles. In addition, the 7th Framework programme for Community activities has specific research and development areas related to transport. However, it should be noted that the implementation of these policies has, to date, not had the desired effect on statistics such as emissions of GHGs, etc. The environmental impacts of international air and maritime transport are also a priority for the EU.

Member states have difficulty reporting these objectives separately as many of them are interlinked with other challenges. A number of Member States have implemented policies, such as promotion of bio-fuels, national fuel strategies and integrated spatial planning. However, these only give limited proof of objectives being effectively realised, with the links between objectives and actions not being sufficiently clear. Further work is required to integrate sustainable transport policies with other relevant initiatives such as spatial planning and energy use. A European sustainable mobility policy needs to build on a broader range of policy tools achieving shifts to more environmentally friendly modes where appropriate, especially on long distance, in urban areas and on congested corridors. At the same time, all transport modes must become more environmentally friendly, safe and energy efficient.

4. SUSTAINABLE CONSUMPTION AND PRODUCTION

4.1. Objectives

Overall Objective: To promote sustainable consumption and production patterns.

- Promoting sustainable consumption and production by addressing social and economic development within the carrying capacity of ecosystems and decoupling economic growth from environmental degradation.

- Improving the environmental and social performance for products and processes and encouraging their uptake by business and consumers.

- Aiming to achieve by 2010 an EU average level of Green Public Procurement (GPP) equal to that currently achieved by the best performing Member States.

- The EU should seek to increase its global market share in the field of environmental technologies and eco-innovations.

Refer to the 2006 Strategy for specific actions.

4.2. State of Play

Trends within this key challenge measured by statistical indicators are positive, but the indicators can only give a partial picture of progress made on this complex issue. The headline indicator for this theme is Resource Productivity, which compares Domestic Material Consumption (DMC) to GDP. Whilst no single indicator within the current SDI set allows an adequate assessment of the carrying capacity of ecosystems, the indicator on resource productivity is used as a proxy to evaluate the extent of decoupling. Whilst DMC had remained relatively stable from 1990 to 2000 in the EU-15, it actually decreased between 2000 and 2004, while GDP carried on increasing (albeit at a slower rate), revealing an absolute decoupling of material consumption from economic growth during that period, and an increase in resource productivity by 2.3% per year on average. However, there has been an effect of substitution by imports, which transfers some of the impact elsewhere.

The positive message given by the headline indicator about decoupling economic growth of resource use is reinforced by progress in terms of environmental performance of products and processes. However, these objectives are imperfectly monitored, as for example environmental impact of resource use is not considered, nor the social dimension of products and processes. Two out of four objectives cannot yet be monitored, as current available data and knowledge are insufficient to measure GPP at EU level or the EU global market share of eco-innovations. However, the EC is developing indicators and methods for calculating GPP and aims at monitoring the situation by end 2008.

The Strategy also seeks to improve the environmental and social performance for products and processes and to encourage their uptake by businesses and consumers. More and more businesses have chosen to report on their environmental performance through environmental management schemes such as EMAS, with the number of certified sites having grown at an annual average rate of 7.4% in the EU-15 from 2000 to 2006. Nevertheless, the overall interest of companies in EMAS scheme remains limited: the number of registered EMAS companies is estimated at 5000, as compared to some 29 million companies existing in the EU. In addition, a rapidly increasing number of sustainable products and services are put on the market, with EU eco-label awards growing on average by 37.1% per year (2000-2006), with 326 flower awards in 2006 in the EU-15, and 338 in the EU-25. There is currently no EU wide certification scheme for the social performance of products and processes.

The current global market for eco-technologies is worth €600bn a year. The EU alone holds about one third of the world market in environmental goods[33]. The eco-industry has grown to become one of Europe's biggest industrial sectors. It has an annual turnover of over €227 billion (around 2.2% of the EU GDP) and accounts for 1.7% of paid employment in the EU (around 3.4 million full-time job equivalents)[34]..

Environmentally-friendly production could represent a much wider market trend than the sole eco-industry in the future. Eco-innovations (enabling groundbreaking resource-efficient production techniques) and eco-products (cleaner cars, energy-efficient light bulbs and products that stem from organic farming or that are awarded eco-labels) correspond to the European citizens' current wishes for a more sustainable society and thus could become a prevalent market.

Inspite of positive developments in recent years, the total global use of natural resources remains higher than the planet’s capacity to regenerate them. For instance, in 2005, average European use of biological capacity was estimated at 4.9 global hectares per person, much greater than our capacity of 2.2 global hectares per head. This overexploitation of resources causes increasing environmental damage and resource depletion in the EU and worldwide. One challenge for the EU is to sustain its social and economic development within the carrying capacity of the ecosystems.

4.3. Key EU Policies

In July 2007, the Commission launched a joint internet-based public consultation on actions the EU could undertake to meet the challenges of Sustainable Consumption and Production and Sustainable Industrial Policy [35] and improve the way we produce, design and consume available products. Stakeholders' input to the consultation will help the Commission prepare Action Plans on SCP and SIP to address these three main challenges:

- Better products: improving environmental performance of products offered for sale through promotion of innovation.

- Leaner production: increasing the efficiency of EU's production by assisting producers to earn greater profits by meeting market demand for better performing products.

- Smarter consumption - changing consumption behaviours.

The approach of the SCP Action Plan will be:

- Focusing on key environmental issues, such as climate change and a low-carbon economy, sustainable and efficient use of natural resources, energy and materials, and the further phasing out of hazardous substances and endangered materials[36] from production processes and products

- Taking a product-based approach, by focusing on "priority products" – product types which cause the greatest environmental damage or have the greatest potential for increased resource efficiency, also using outcomes from Commission research to strengthen the evidence-base of policy making

- Building on existing policy instruments, such as the Integrated Product Policy, the Sustainable Use of Natural Resources strategy, the Eco-design of Energy-Using Products, and other product legislation and labelling schemes;

- Ensuring policy coherence, by strengthening existing and developing new policy instruments, identifying gaps and avoiding overlaps.

- The Action Plan will aim to focus on a limited number of actions, mainly building on and strengthening existing policy instruments (eg EU Eco-design legislation, EMAS, Eco-Label, Green Procurement). A selected number of new instruments could be considered in parallel so as to achieve the objectives of the Plan and reinforce the impacts of existing policy instruments.

The EU is also very active on SCP internationally. It cooperates with partners to develop a 10 year framework of programmes (Marrakech Process) supporting the already existing national and regional sustainable consumption and production practices and strategies. It supports the UN in setting up an international scientific panel on natural resources and promotes SCP in key emerging economies through national roundtables in China, India, Brazil and South-Africa.

Objective 1 - Addressing Social and Economic Development

The 1996 Integrated Pollution Prevention and Control Directive[37] has three main objectives: contributing to decoupling economic growth from environmental degradation; improving the environmental performance for processes; and promoting and disseminating environmental technologies. A key implementation deadline for the IPPC Directive is October 2007 , by which date Member States have to issue permits in accordance with the Directive for all installations covered. During the past year the Commission and the Member States have worked actively towards this deadline to ensure the proper implementation of the Directive.

At the end of 2005 the Commission started a process to review the IPPC Directive and related legislation on industrial emissions. The review aims at simplification and better regulation, and is evaluating the scope to improve the functioning of the Directive, its relation with other industrial emission-related legislation and the effectiveness of market-based instruments, whilst not altering the main underlying principles and level of ambition. Promotion of eco-innovation and dissemination of environmental techniques is looked at in the process. A proposal for an amended Directive is planned for adoption by the end of 2007.

Objective 2 - Improving Performance for Products and Processes

The Commission has started detailed reviews to simplify and improve the EMAS (EU Eco-Management and Auditing System) and Ecolabel (product) schemes by exploring links with other legislation and making them more attractive to smaller firms. The Ecolabel scheme is being revised to be easier to use and to fit better with other instruments, thus forming an integral part of the SCP Action Plan.

In addition, the following initiatives are relevant:

- The European Consumer Diary is an EU-wide effort to inform young people of their rights, increase their awareness and to enable them to make more informed decisions as consumers. The 2006/2007 and 2007/2008 editions include texts on sustainable and ethical consumption as well as on sustainable development.[38]

- DOLCETA [39] is a web-based consumer education tool that SANCO has developed in co-operation with higher education institutions. A teacher training module on consumer education will be developed at the end of 2008 and will include a part on sustainable and ethical consumption as well as on sustainable development.

- Implementation of the Eco-Design of Energy Using Products Directive which imposes energy efficiency requirements on products from early in the design phase.

Objective 3 - Green Public Procurement (GPP)

Considering the enormous purchasing power and example setting function of public authorities, GPP can be considered as a valuable instrument for greening consumption and production patterns and stimulating eco-innovation. Commonly agreed (voluntary) GPP criteria and targets should allow increased GPP practise in the EU, whilst at the same time improving eco-efficiency and compliance with public procurement legislation .

Commission will adopt early 2008 a Communication on GPP, providing operational and legal guidance to facilitate GPP, proposing targets and setting the framework for increased co-operation with the Member States to establish harmonised GPP criteria and spread GPP across the EU. A web based toolbox will be provided by Commission to public authorities early 2008 containing detailed tender specifications in order to help them to achieve the GPP targets set by the Council in 2006.

The Commission has also been active in promoting GPP. The extensive and constantly updated GPP website[40] provides comprehensive information on GPP and lists past and forthcoming promotional events. A handbook " Buying Green "[41] prepared by the Commission explains in concrete terms how environmental considerations can be integrated into tendering procedures. It clarifies the legal possibilities as introduced by recent directives of integrating environmental considerations in public procurement and includes concrete examples of environmental tendering by local authorities in Europe.

Objective 4 - Environmental Technologies and Eco-Innovations

The EU Environmental Technologies Action Plan (ETAP)[42] which aims to stimulate eco-innovation and the take-up of environmental technologies on a broad scale, was launched in 2004. The ultimate aim of ETAP is that eco-innovation becomes pervasive across all industries. In this way EU can meet many of the environmental challenges facing us today. Through appropriate measures, eg financial support or regulation it is possible to support eco-innovation and steer market forces towards a world-leading economy that is both competitive and green.

A second report on ETAP was published in 2007[43]. The report shows that European eco-industries are a significant and quickly growing portion of the EU economy representing 2.1% of EU GDP. Eco-industries and services sustain 3.5 million full-time jobs. There is strong growth in a number of sectors Europe and worldwide. Wind power installation has grown 20-25% in the last five years. The worldwide photovoltaic market is expected to grow at 25-35% in the future, and water management is expected to grow 6% annually in the next ten years. European businesses involved in eco-industries are in a strong position worldwide. However, these positive indications contrast with those of the state of the environment which give rise to serious concern.

A lot of progress has been made on implementing ETAP. In the field of research, about €1.4 billion has been awarded to environmental technology projects under the 6th Framework Programme, and it is estimated that up to 30% of the €32 billion budget of the 7th Framework Programme will address environmental technologies. More than 30 Technology Platforms have been launched; many of them include environmental technologies as part of their agendas. Work on an Environmental Technologies Verification System is progressing. With regard to improving market conditions for environmental technologies, the existing or currently developed financial instruments to promote eco-innovation include the Competitiveness and Innovation Programme (CIP €433 million for eco-innovation), the EIF's Growth and Innovation Facility which will co-invest money into risk capital funds in eco-innovation, the EIB and the Commission's Risk Sharing Finance Facility (€2 billion for projects falling within the FP7 themes plus EIB loans up to €10 billion). Structural funds where eco-innovation, renewable energy, energy efficiency and clean urban transport are priorities in the 2007-13 programming period, the LIFE environment programme where around two-thirds of the investment supported projects promoting environmental technologies. Studies have also been carried out to set up a performance target scheme in the EU. As for global actions, the EIB and the Commission's Global Energy Efficiency and Renewable Energy Fund (GEEREF)[44] will provide seed capital for renewable energy projects in various regions. The EIB Climate Change Financing Facility (CCFF)[45] enables some financing for projects globally. In the context of the WTO negotiations on multilateral trade liberalisation, the Commission has been at the forefront of pushing for the reduction or elimination of tariffs, as well as the abolition of non-tariff barriers, on trade in environmental goods, technologies and services.

In order to make eco-innovation yield large scale environmental and economic benefits, ETAP activities have be stepped up and carried out on a new scale, with much more emphasis on demand. Large environmental gains can be made by taking-up environmental technologies that already exist on the market, but the problem is that many remain in niche markets. One example is that energy efficient light bulbs still only account for less than 3% of European market share of light bulbs.

In order to encourage the diffusion and take up of eco-innovations on a broad scale, systematic and coordinated activity on the demand-side is needed. ETAP report proposes 5 actions that increase demand. They include furthering Green Procurement, both in public and private sector; mobilising greater financial investments, with a greater role of the financial sector in leveraging businesses and industry to take-up environmental technologies; establishing Technology Verification and Performance Targets systems; building on promising practice of Member States for promoting eco-innovation; focusing on sectors where large environmental yields can be made quickly, such as buildings, food and drink, private transport, recycling and waste water industries. In addition, proposed support measures include ensuring a strategic knowledge resource on eco-innovation for European public organisations, relevant business and financers; promoting awareness and active participation with consumers and businesses; harnessing research on eco-innovations.

The Commission has adopted an Action Plan on the Protection and Welfare of Animals 2006-2010embodies the Commission's commitment to EU citizens, stakeholders, the European Parliament and the Council for a clear map of the Commission’s planned animal welfare initiatives for the coming years. The plan highlights the important role of consumers to improve animal welfare standards by informing purchasing decisions and, in the same time, to enable producers applying high standards to capitalise on their efforts.

4.4. Member State Actions

Objective 1 - Addressing Social and Economic Development

Public authorities and consumers representations in Member States run publicity campaigns and provide information aimed at promoting sustainable consumption. The objective is to promote sustainable consumption patterns by strengthening the awareness of the citizens and to encourage them to change their non-sustainable consumption patterns. Initiatives included information on the website of the consumer agency on sustainable consumption options (eg SE), the Government guide to greener living (eg UK), the 'Every Action Counts' campaign to encourage Community Groups to take simple actions such as "travel wisely" and "shop ethically" (eg UK); competitions for schools aimed at promoting sustainable consumption (eg AT); “Green Responsibility” campaign focused on citizens responsibility for the future and on advices about how to live in an environmentally correct way (eg DK). Finland funded research projects that investigated the environmental impacts of consumption. The objective was to develop methods and illustrative tools to improve the eco-efficiency of households and to refine the responsibility of the food chain in co-operation with industry and commerce.

Consumers' awareness of sustainable consumption patterns is particularly strong regarding food products. In Austria, bio-products account already for 6% of the market, and 15% of the national farmland is already being managed organically. This can be attributed to a mixture of measures, ranging from marketing initiatives and subsidies for organic farmers and, to public relations and research. In Denmark, up to DKK 300 million for grade labelling, innovation, information and support to farmers. At the same time the government supports research in and marketing of organic farming.

Member States support national and European eco-labels by running information campaigns and websites aimed at making consumers aware of environment-friendly alternatives in terms of products and services. Nevertheless, the number of companies and products which have an eco-label remains limited; for instance, in France there are 65 companies with a French label and 50 with a European label. Portugal has six companies with European eco-labels.

This broad-ranging objective includes the fundamental target to decouple economic growth from environmental degradation. Although the majority of Member States report on progress in this field, there appears to be only limited consistency in the approach to be taken. Actions are dominated by energy efficiency and waste management initiatives. Only few countries have mentioned participation in the Marrakesh process (eg the UK provides funding of UNEP to develop a manual to help countries draft national SCP strategies) or development of an SCP action plan. However, some Member States have granted priority to sustainable consumption and production in their national sustainable development strategies.

Objective 2 - Improving Performance for Products and Processes

Many Member States report on initiatives aimed at improving environmental and social performance of companies, usually under the name of Corporate Social Responsibility (CSR). Public authorities frequently stimulate and support these corporate initiatives, especially with regard to small and medium enterprises. In the Netherlands, the authorities established CSR Netherlands, a foundation which is a platform for the exchange of knowledge and experience on CSR within firms, with a special focus on small and medium sized enterprises (SMEs). To date the organisation collected over 180 practical examples and 130 instruments to improve sustainable corporate behaviour, submitted by over 250 partners. In France companies listed on French stock exchange are obliged by law to include social and environmental information in their annual reports. The value of socially responsible investment increased in France between 2003 and 2005 from €3.5 billion to €8.8 billion. Voluntary commitments with professional organisations cover a wide range of areas including such as greenhouse effect, social and environmental responsibility, industrial and health risks, controlling energy and water consumption, sewage, waste etc.

In addition, most Member States are particularly active in promoting sustainable products. This is often done through information campaigns, aiming to achieve a behavioural change and to raise citizens' awareness, in particular of the benefits of fair trade for both developed and developing countries. An important instrument in these campaigns is the promotion of eco or fair trade labels. Some states have focused more deeply on how the environmental impacts associated with the lifecycle impacts of key products can be addressed. Member States also try to make better use of the potential of innovative technologies for encouraging sustainable development.

Member States report on implementation of Eco-Management and Audit Scheme (EMAS)[46] and other schemes improving environmental performance of processes, implemented on voluntary market-oriented basis, sometimes financially supported from public funds. For instance Austria grants an EMAS Prize for the best environmental declarations and finances workshops for EMAS organisations and municipalities. Italy allocated grants to reimburse costs of activating Environmental Management Systems in SMEs. The Flemish government in Belgium developed the Presti programme that stimulates SMEs to integrate environmental management and prevention in their policy. Nevertheless, the overall interest of companies in EMAS scheme remains limited, the other less demanding eco-management schemes are more popular. The number of registered EMAS companies is estimated at 5000, as compared to some 29 million companies existing in the EU. In Austria, which heads the EU list in terms of the number of EMAS registrations per population, there are 263 registered EMAS organisations, rising by on average 20 per year. In Czech Republic there were 1,400 undertakings with ISO 14001 registered, 18 with EMAS. In Slovenia only one company introduced the EMAS system, while over 320 companies have obtained the ISO 14001 certificate and approximately 50 companies the OHSAS 18001 certificate, which relates to protection of health and safety at work. However, none of the countries has specifically mentioned environmental or social targets for products and processes as is one of the actions in the EU SDS for SCP. Most Member States report about some initiatives to promote consumer awareness and some are also engaged in the business dialogue.

Objective 3 - Green Public Procurement (GPP)

GPP stands out as an issue where public authorities can easily contribute to sustainable development. 10 Member States have adopted national action plans on GPP, 5 more have adopted draft national action plans and 7 more are moving towards the adoption of such plans. Some Member States set national GPP targets. In the Netherlands, public procurement by the central government and its agencies is to be 100% sustainable by 2010. As government agencies spend €40 billion on procurement and investment each year, their purchasing power has a major influence on the market. As far as provinces, municipalities and water boards are concerned, 50% of their procurement contracts will be sustainable by 2010. They are supported by a government programme, Sustainable Operational Management.

The interaction, dialogue and information between business and government is an important element of successful GPP schemes. The UK Government Sustainable Procurement Action Plan followed the recommendations of a business-lead Sustainable Procurement Task Force. In Sweden, the Swedish Environmental Management Council, a company co-owned by the central and local government and by the Confederation of Swedish Enterprises, provides expertise, training and a web-based tool to public purchasers that want to include environmental requirements in technical specifications.

However, in many Member States, GPP does not yet play an active enough role, especially considering the purchasing power and example setting function of these bodies.

Objective 4 - Environmental Technologies and Eco-Innovations

Member States reported on a number of activities to help utilise the potential of innovative technologies for encouraging sustainable development. Examples include establishment of joint government and business bodies aimed at strengthening business opportunities and combating barriers to development of environmental technologies (eg SE, UK); improving access to finance for environmental technologies, including financial incentives (UK); awarding prices to companies which implement innovations important for sustainable development and social responsibility (IT); creation of environmental technologies excellence centres, which merge the research capacities of the research institutes and universities with the needs of the economy in order to provide integrated solution to the environmental problems (eg SI).

In the context of the ETAP, twenty-one Member States and Norway have completed in 2007 roadmaps for implementing ETAP. An analysis of the roadmaps made by the Commission shows that a number of promising schemes are being put into place by Member States, and there is an opportunity to build on and learn from these across the EU. Examples include:

- Germany's feed-in tariff scheme has been instrumental in boosting use of renewable energy – a number of Member States have adopted similar schemes.

- Italy's national decree requires that at least 30% of goods purchased by public authorities be of recycled origin.

- Spain's national and regional policies have spurred the deployment of solar energy, through a number of coordinated measures.

- The UK's National Industrial Symbiosis Programme, aims to save 1 million tonnes of waste per region per year, through a brokerage scheme for companies.

- A range of financial schemes to promote eco-innovation, for example those established in the Netherlands, Denmark, Finland and Sweden.

The Commission's analysis indicates that almost all Member States put emphasis on the supply side of environmental technologies, namely research and development. Encouraging more activity on the demand side and better coordination of demand side actions is key to enabling the rapid take-up and diffusion of technologies. Examples of demand creating activities include: GPP, promoting investments, effective subsidies and incentives, raising awareness and training in business. Member States are encouraged to share and build on best practices in this respect and on the most effective schemes for promoting eco-innovation being put into place by Member States.

4.5. Conclusions

Over the last few decades, Europeans have been enjoying higher standards of living with more and more people making use of goods and services not available to them in the past. But at the same time, the way we consume and produce is the main source of the pressure that is put on the environment. Current consumption and production patterns threaten to significantly exceed Earth's carrying capacity, on which our prosperity and well-being is ultimately based.

Years of intensive public communication on environmental sound and sustainable consumption behaviour have informed citizens about their own options to bring around a cleaner environment, but results in terms of changing consumption patterns have been very limited. The use of subsidies on certain products like isolation material for houses, hybrid cars or energy efficient lighting has left its mark, but frequently did not sustain after the withdrawal of the subsidy scheme. Under public scrutiny and government pressure producers changed their production processes (less product loss, improved energy or water use, waste minimization) or input of natural resources (changing to sustainable products, assisting suppliers in crop management, pesticides management, harvesting techniques, etc.). The growing success of CSR, increasingly also with SMEs, provides a window of opportunities for further voluntary measures towards sustainable production.

Achieving more sustainable consumption and production patterns has also a strong link to Europe's economy. On the one hand, it calls for structural changes in the economy of the EU in order to decouple economic growth from resources' use. On the other hand, SCP in itself represents a new market opportunities for European companies:

On the whole, there is certainly a lot of room for improvement to make consumption and production patterns more sustainable. For example, in the EU, the average material intensity is approximately 1 kg/EUR, which is slightly less than in the United States, but twice as high as in Japan[47]. Although the energy intensity of the European economy has been slightly but steadily decreasing for the last 10 years, it is still near twice as high as the one of the Japan economy[48]. The EU could save at least 20% of its present energy consumption in a cost-effective manner, equivalent to €60 billion per year, or the present combined energy consumption of Germany and Finland. An average EU household could save between €200 and €1000 per year in a cost-effective manner, depending on its energy consumption[49]. Although strategies exist to assist this process, seemingly very little action has actually taken place. There is no room for complacency and an accelerated rollout of the "knowledge intensive" economy increasingly replacing the "resource intensive" model will be required if our ambitious energy efficiency and GHG targets are to be achieved.

Considering the enormous purchasing power and example setting function of public authorities, GPP plays a very important role for greening consumption and production patterns and stimulating eco-innovation. The Commission works on a GPP Communication to give further guidance and set indicative targets in order to increase both the amount of GPP (as compared to "neutral" procurement) and the quality of GPP (in terms of environmental ambition level and compliance with public procurement legislation). Almost all Member States have adopted or prepare national action plans on GPP. The interaction, dialogue and information between business and government is an important element of successful GPP scheme. Good practice in this respect includes business-led recommendations on GPP as well as providing expertise, training and information to public purchasers and business interested in GPP. Nevertheless in many Member States GPP implementation is only in a initial phase and substantial efforts are needed in coming years.

Environmental technologies provide solutions to meet environmental challenges and at the same time to improve competitiveness of EU industry and create new jobs. The EU Environmental Technologies Action Plan (ETAP) aims at stimulating eco-innovation across all industries and the take-up of environmental technologies on a broad scale. A lot of progress has been made on implementing ETAP in getting research to market, improving market conditions for environmental technologies and acting globally. In order to make eco-innovation yield large scale environmental and economic benefits, ETAP activities have be stepped up and carried out on a new scale, with much more emphasis on increasing demand for eco-innovations. Priority actions for the future include: stimulating demand through furthering Green Procurement, both in public and private sector; mobilising greater financial investments, with a greater role of the financial sector in leveraging businesses and industry to take-up environmental technologies; establishing Technology Verification and Performance Targets systems; building on promising practice of Member States for promoting eco-innovation; focusing on sectors where large environmental yields can be made quickly, such as buildings, food and drink, private transport, recycling and waste water industries. In addition, proposed support measures include: ensuring a strategic knowledge resource on eco-innovation for European public organisations, relevant business and financers; promoting awareness and active participation with consumers and business; harnessing research on eco-innovations.

Some promising orientations in the field of SCP in the years to come could also include: further implementation of the Integrated Product Policy approach; creation of incentives to allow eco-innovations and eco-products markets to grow; development of market-based instruments to ensure that policy goals are reached cost-effectively; and last but not least, a better recognition of the challenges that sustainable consumption and production patterns represent at the global level.

Although a wide range of actions are being initiated by Member States in this area, there appears to be a lack of direction, particularly concerning objectives 1, 2 and 4. Some Member States have a broad range of action plans and strategies, although there is little action in several countries. A specific observation concerns the various national labelling schemes that have been created, as these could possibly fragment the internal market and serve as a barrier for cross border trade, confuse consumers and not free of quality assurance concerns. A wider and more fundamental concern is that the current level of activities under this heading is limited in the light of the deep-seated habits of producers and consumers.

5. CONSERVATION AND MANAGEMENT OF NATURAL RESOURCES

5.1. Objectives

Overall Objective: Improve management and avoid overexploitation of natural resources, recognising the value of ecosystem services.

- Improving resource efficiency to reduce the overall use of non renewable natural resources and the related environmental impacts of raw materials use, thereby using renewable natural resources at a rate that does not exceed their regeneration capacity.

- Gaining and maintaining a competitive advantage by improving resource efficiency, inter alia through the promotion of eco-efficient innovations.

- Improving management and avoiding overexploitation of renewable natural resources such as fisheries, biodiversity, water, air, soil and atmosphere, restoring degraded marine ecosystems by 2015 in line with the Johannesburg Plan (2002) including achievement of the Maximum Yield in Fisheries by 2015.

- Halting the loss of biodiversity and contributing to a significant reduction in the worldwide rate of biodiversity loss by 2010.

- Contributing effectively to achieving the four United Nations global objectives on forests by 2015.

- Avoiding the generation of waste and enhancing efficient use of natural resources by applying the concept of life-cycle thinking and promoting reuse and recycling.

Refer to the 2006 Strategy for specific actions.

5.2. State of Play

Some significant measures have been taken for halting the loss of biodiversity in Europe. For instance, the Natura 2000 network of protected areas now consists of about 30,000 sites and covers an area of the size of Germany. Nevertheless, in many areas, integration of biodiversity in policies is still weak and it is clear that business as usual will not deliver. Whilst there is a certain degree of statistical stability within most elements of this theme, including areas such as forestry, waste generation and resource efficiency, the indicators for bio-diversity loss including indicators such as trends in fish stocks are still of major concern.

Progress towards the first objective of reducing the overall use of non renewable natural resources is measured through Domestic Material Consumption (DMC). DMC has decreased by 0.8% per year on average between 2000 and 2004, reversing the trend of a slow average growth of 0.1% per year from 1990 to 2000[50]. DMC only gives an approximation of the environmental impacts related to resource use as it does not reflect the range of impacts of different types of material use on the environment. However, there has been an effect of substitution of resources by imports, which transfers some of the impacts elsewhere.

The Strategy also aims to improve resource efficiency, which can be defined in terms of resource productivity. Resource productivity has increased by 2.3% between 2000 and 2004. One of the means specified for improving resource efficiency is the promotion of eco-efficient innovations. Data collection on eco-innovations is too recent to evaluate changes over time, however the latest data show that, at the EU-27 level, innovation seemed to have little effect on consumption of materials and energy since only 8.4% of enterprises cited this effect as highly important in 2004 when asked to classify the effects of their innovation.

The general objective related to renewable natural resources is to improve management and avoid overexploitation of resources. A considerable proportion of fish catches in EU-managed waters is taken from stocks that are already below their safe biological limits, particularly for highly valued species (white fish). Whilst the population of hake appears to have recovered, trends in demersal and benthic fish stocks, such as cod, plaice and sole, remain of concern. Existing data do not allow the assessment of the related objective of restoring degraded marine ecosystems by 2015. Data on water abstraction does not allow an assessment at EU level. From 2000 to 2003, most of the Member States for which data is available appear to have reduced the pressure on water resources by reducing their