Communication from the Commission - Report on the implementation of the Environmental Technologies Action Plan in 2004 {SEC(2005)100}
Date: 2005-01-27
Institutions: European Commission
Subjects: EU environmental policy, economic growth, environmental protection, new technology, report, research and development, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.1.2005 
COM(2005) 16 final 

COMMUNICATION FROM THE COMMISSION 

Report on the implementation of the Environmental Technologies Action Plan in 2004 

{SEC(2005)100} 

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COMMUNICATION FROM THE COMMISSION 

Report on the implementation of the Environmental Technologies Action Plan in 2004 

(text with EEA relevance) 

The Environmental Technologies Action Plan1 (ETAP) was endorsed at the European Spring 
Council on 25-26 March 2004. Positive reactions to ETAP were subsequently received from a 
wide  variety  of  stakeholders  including  business  organisations,  financial  actors,  the  research 
community, non-governmental organisations.  

The  conclusions2  adopted  by  the  Environment  Council  on  14  October  2004  call  for  rapid 
implementation  of  ETAP  to  give  eco-efficient  innovations  a  fair  and  competitive  market 
perspective and to provide for the internalisation of external costs through an effective mix of 
instruments.  These  include  performance-based  green  public  procurement,  fiscal  incentives, 
reform  of  subsidies  that  have  considerable  negative  effects  on  the  environment  and  are 
inconsistent with sustainable development, and risk-sharing facilities, especially for SMEs.  

The report by the High Level Group chaired by Wim Kok on the Lisbon strategy ‘Facing the 
Challenge’  provides  additional  momentum  for  the  implementation  of  ETAP  and  calls  for 
Member States to establish roadmaps for specific measures and deadlines. 

The Commission, with the support of the Member States and the European Investment Bank, 
has made good progress in implementing the Action Plan. The present report summarizes the 
main achievements, outlines some actions by Member States on which the implementation of 
ETAP  can  build  and  highlights  areas  where  efforts  could  be  stepped  up  to  make  faster 
progress towards tapping the full potential of environmental technologies. 

1. 

ETAP AND EU COMPETITIVENESS 

More  evidence  is  emerging  on  the  contribution  of  environmental  protection  to  the 
competitiveness of EU business and enterprises as a whole. When considering eco-
industries  alone,  the  world  market  for  environmental  goods  and  services  was 
estimated  at  over  €500  billion  in  2003  –  comparable  to  the  aerospace  and 
pharmaceutical industries – and continues to grow at around 5% per year.3 

In  this  global  market,  Europe  can  gain  first  mover  advantage  by  focussing  on 
environmental technologies that other countries will turn to. Europe is already leader 
in  some  environmental  technologies  such  as  wind  energy,  but  the  competition  is 
growing with major competitors designing their own strategy: Japan for example has 
given  itself  the  aim  of  becoming  a  world  leader  in  energy-saving  technologies, 
supported in particular by the “top-runner programme”; Canada has also announced 

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Commission’s  Communication  on  ‘Stimulating  technologies  for  Sustainable  Development:  an 
Environmental Technologies Action Plan for the European Union’ (COM(2004) 38 final, 28.1.2004) 
Clean, Clever, Competitive: the opportunities of eco-efficient innovations within the Lisbon process 
Adrian  Wilkes  of  the  European  Committee  of  Environmental  Technologies  Suppliers  Associations, 
presentation to 2004 Green Week, June 2004. 

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an ambitious strategy on environmental technologies, backed with a budget of CAD 
1 billion. 

At the global level, the sharp increase and fluctuation in oil prices in recent months 
has  re-launched  the  debate  on  the  need  to  reduce  EU  dependence  on  oil  and  boost 
support to policies aiming at energy efficiency, renewable energies and low carbon 
energies.  Energy  efficiency  can  reduce  the  energy  demand  in  a  cost-effective 
manner.  It  should  be  noted  that  investments  in  such  technologies,  by  reducing  the 
dependency on oil, also protects the economy against GDP losses because of the oil-
GDP  effect:  recent  calculations4  suggest  that  an  increase  of  10%  in  the  share  of 
renewable sources in electricity production can avoid oil-induced GDP losses in the 
range of $29–$53 billion in the US and the EU ($49–$90 billion for OECD). These 
avoided losses offset one-fifth of the investment needs in renewable energy projected 
by  the  European  Renewables  Energy  Council  and  half  the  OECD  investment 
projected  by  a  G-8  Task  Force.  The  Commission  Communication  on  the  share  of 
renewable energy in the EU5 assesses the state of development of renewable energy 
and  proposes  concrete  actions  at  national  and  Community  level  to  ensure  the 
achievement  of  EU  renewable  energy  targets  for  2010.  Investments  in  both  energy 
efficiency and renewable energy will thus increase the security of supply of energy 
for Europe.  

Technological  developments  in  the  energy  sector,  especially  regarding  energy 
efficiency and renewable energies, are also, but not only, steered by the EU Climate 
Change  policy.  The  launch  of  the  Emission  Trading  System,  on  1st  January  2005, 
should  be  instrumental  in this respect. Technological  developments  are  also  crucial 
for  the  preparation  of  the  next  steps  of  the  fight  against  climate  change,  after  the 
deadlines  fixed  in  Kyoto.  The  Commission’s  Communication  relating  to  the  costs 
and  benefits  of  medium  and  long  term  strategies  on  climate  change  ("post-2012") 
will give elements to guide the EU on the way forward.  

2. 

THE IMPLEMENTATION OF ETAP IN 2004 

The  implementation  of  the  key  priorities  in  the  Action  Plan  is  well  underway. 
Progress has been made in giving more priority to environmental technologies in the 
EU  Framework-Programme  for  Research  and  Development.  Technology  platforms 
have  been  established  in  technological  areas  relevant  for  eco-innovation.  Networks 
of testing centres are being established and should prepare the ground for a possible 
EU-wide environmental technology verification system.  

The  proposed  Regulations  for  the  future  period  of  the  Cohesion  policy  should 
facilitate  regional  investments  in  sustainable  techniques  and  solutions,  and  the 
preparation  of  a  future  framework-programme  for  Competitiveness  and  Innovation 
should extend the range of EU instruments supporting environmental technologies.  

In order to improve market conditions for the uptake of environmental technologies, 
an  EIB  facility  supporting  private  investments  related  to  the  EU  Emission  Trading 

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Shimon Awerbuch, Exploiting the oil-GDP effect to support renewables deployment, forthcoming. 
COM(2004) 366 final 

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Scheme  has  been  established,  while  preparatory  work  under  the  Dutch  Presidency 
paves the way for further action regarding risk funding schemes.  

The  finalisation  of  key  orientation  documents  on  Green  Public  Procurement6,  on 
standardisation7, and on environmentally-harmful subsidies8 should catalyse action at 
both EU and Member States levels in these areas. In particular, co-operation between 
the Commission and Member States is taking place on the basis of the Handbook on 
Green  Public  Procurement,  in  order  to  facilitate  the  preparation  of  national  Action 
Plans,  measure progress and possibly set common targets. Preparatory work is also 
pursued on the design and implementation of performance targets for key products, 
services and processes. 

Progress  has  also  been  made  with  respect  to  the  global  dimension,  with  the 
preparation  of  a  Patient  Capital  Initiative  supporting  investments  in  renewable 
energy and energy efficiency, and discussions at international level on export credits 
and  trade  agreements.  The  implementation  of  the  water  and  energy  ACP-EU 
facilities,  in  the  framework  of  the  development  aid  policy,  also  creates  significant 
opportunities for environmental technologies. 

The development of information tools and the mobilisation of relevant stakeholders 
should pave the way for further initiatives regarding awareness-raising and targeted 
training. 

The  annexes  to  this  document  give  more  information  on  the  progress  in 
implementing  ETAP  (Annex  I)  and  on  the  experience  and  initiatives  in  Member 
States on which the implementation of ETAP can build (Annex II). 

3. 

NEXT STEPS IN ETAP IMPLEMENTATION 

EU action nevertheless needs to be intensified in order to achieve a decisive impact 
on the wider use of environmental technologies: 

•  Community  financial  instruments  should  better  promote  the  mobilisation  of  risk 
finance  for  knowledge  related  activities  and  innovation  such  as  eco-innovation. 
This  would  reinforce  the  availability  of  venture  capital  for  SMEs  with  a  high 
growth potential willing to develop such innovations in the Member States and in 
the  whole  EU.  The  EIB  group  should  step  up  its  efforts  in  designing  new 
instruments  leveraging  investments  in  eco-innovation  and  the  wider  use  of 
environmental technologies, especially by SMEs. 

•  Environmental  performance  targets  for  products,  processes  and  services  need  to 
be developed by the Commission as a matter of priority. Such performance targets 
should  address  major  environmental  challenges  such  as  climate  change,  air  and 
water  pollution,  efficient  energy  consumption  and  the  reduction  of  waste.  They 

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European Commission, Buying green! A handbook on environmental public procurement, Luxembourg 
2004. 
Commission Communication on the integration of environmental aspects into European standardisation 
(COM(2004) 130 final), of 25.02.2004. 
OECD, Environmentally-harmful subsidies – policy issues and challenge, Paris 2003. 

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should  establish  benchmarks  for  environmental  performance  of  key  product 
groups, processes and services complementing the more traditional standards with 
ambitious targets for markets to respond. The system of establishing performance 
targets  should  be  practical  and  operational  with  periodic  review  mechanism  to 
offer  operational  tool  for  consumers,  businesses,  administrations,  procurers  and 
financiers  to  inform,  to  make  choices  and  to  promote  eco-innovations,  both  at 
national and Community levels.  

•  Efforts  to  establish  an  EU  wide  system  for  testing  and  verifying  environmental 
technologies should be intensified. Such a system should allow producers to get a 
certificate  for  the  environmental  performance  of  new  innovations  and  other 
technologies  in  line  with  the  established  environmental  performance  targets. 
Verification  system  should  also  aim  at  increasing  the  confidence  of  consumers 
and businesses for new technologies introduced in the market.  

•  The  state  aid  rules  already  allow  for 

incentives  for 
environmentally friendly investments and aim at securing a level playing field for 
eco-innovations  and  environmentally  sound  technologies  in  the  marketplace. 
Work to  revise the Guidelines for environmental state aids will start in 2005. In 
this  context,  it  will  be  examined  whether  such  rules  should  further  facilitate  the 
development of eco-innovations and their introduction to the markets.  

the  provision  of 

•  In  the  context  of  the  Environmental  Technologies  Action  Plan,  appropriate 
indicators should be developed in order to better analyse the development of eco-
innovation  and  evolution  of  environmental  technologies’  markets.  They  should 
measure  both  market  developments  and  the  performance  of  EU  industry  in  the 
market. They should also measure the progress made in implementing the Action 
Plan as well as the eco-efficiency of the EU economy. They should build on the 
work done by the Commission (Eurostat) in the field of environmental accounting 
and of eco-efficiency indicators. 

Member States have also developed actions relevant for eco-innovation. In addition 
to  national  strategies  or  action  plans,  best  practices  in  national  programmes  or 
instruments  offer  a  good  basis  for  the  exchange  of  experience,  joint  actions  or 
benchmarking in support to the EU action plan. Decisive steps should now be taken 
in order to take full advantage of existing best practices: 

•  By  the  end  of  2005,  Member  States  should  set  national  roadmaps  for  the 
implementation of ETAP. Such roadmaps should build on existing strategies and 
action plans, and indicate concrete measures and deadlines. The identification of 
best  practices  in  Member  States  could  lead  to  benchmarks  and  appropriate 
indicators on the development and market uptake of environmental technologies. 
The roadmaps could then be consolidated at EU level, providing a basis to further 
develop co-operation between Member States on the implementation of ETAP. 

•  Member  States  should  take  steps  to  mobilise  additional  risk  funding  for  eco-
innovations  and  environmental  technologies.  This  could  be  done  by  establishing 
investment funds dedicated to eco-innovation or environmental technologies. The 
Green  Investment  Fund  in  the  Netherlands  and  the  Investment  Fund  for 
Environment and Energy Management (FIDEME) in France are good examples of 

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efficient  instruments  for  mobilising  risk  financing  for  eco-innovations  in  Small 
and Medium-Sized Enterprises.  

•  National  action  plans  for  green  public  procurement  should  be  drawn  up.  Such 
plans  should  establish  objectives  and  benchmarks  for  enhancing  green  public 
procurement  as  well  as  guidance  and  practical  tools  for  public  procurers.  Good 
examples  for  developing  such  action  plans  can  be  found  in  the  EU  green  public 
procurement  handbook  as  well  as  in  the  green  purchasing  policies  and  actions 
plans developed  in Austria, Denmark, Finland, the Netherlands, Sweden and the 
United  Kingdom.  Appropriate  links  should  be  considered  between  the  national 
actions plans and the performance targets for key product, services and processes, 
and with the envisaged EU-wide system for testing and evaluating environmental 
technologies. 

•  In  line  with  the  prioritization  efforts  made  under  the  6th  Framework-Programme 
for  Research  and  Development  (FP6),  national  and  regional  R&D  programmes 
concerned  by  ETAP  should  begin  to  coordinate  their  activities  to  avoid 
fragmentation and efficiency losses, for example through an ERA-NET project. In 
2005, the Commission will  gather  the managers of national and regional ETAP-
relevant R&D programmes to initiate such coordination. 

The European Commission will report on the implementation of ETAP to the 2007 
Spring  European  Council,  including  on  the  first  results  of  the  co-operation  with 
Member States. 

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