Communication from the Commission to the Council and the European Parliament - 2004 Environmental Policy Review {SEC(2005)97}
Date: 2005-01-27
Institutions: European Commission
Subjects: EU environmental policy, enlargement of the Union, sustainable development

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 27.01.2005 
COM(2005) 17 final 

COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL AND THE EUROPEAN PARLIAMENT 

2004 Environmental Policy Review 

{SEC(2005)97} 

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1. 

INTRODUCTION 

This Environment Policy Review (EPR) reports the developments in EU environmental policy 
in 2004 and gives indications on the year to come (see annex for more details). The EPR feeds 
into  the  Lisbon  process  and  given  the  current  focus  on  the  mid-term  review  of  the  Lisbon 
process, this year’s review puts particular emphasis on the relationship between environment 
and  the  economy.  It  also  reviews  progress  under  the  6th  Environmental  Action  Plan  (6th 
EAP), which continues to set the overall framework for EU environmental policy. It builds on 
the  recent  stocktaking  of  the  Cardiff  Process  of  environmental  integration1  and  reports  on 
implementation of existing environmental legislation in the Member States.  

The past year has seen: 

•  EU  enlargement,  which  has  an  impact  on  future  policy  as  new  Member  States  must 

implement existing EU environment legislation;  

•  intense debate on environment policy and competitiveness in view of the Lisbon Strategy; 

•  debate on the review and implementation of the EU Sustainable Development Strategy;  

•  action  to  promote  more  sustainable  production  and  consumption  (SPC),  including  the 

Environmental Technologies Action Plan; 

•  preparation for emissions trading and post-2012 strategies on climate change; 

•  efforts to achieve the EU’s target of halting biodiversity loss by 2010; 

•  developments in the inter-institutional debate and preparatory work on REACH; 

•  consultation on the Thematic Strategies to be presented in 2005 to deliver on the 6th EAP; 

•  presentation  of  the  Environment  and  Health  Action  Plan  to  the  WHO  Ministerial 

Conference. 

2. 

ECO-EFFICIENT INNOVATIONS AND RESOURCE EFFICIENCY KEY TO 
INCREASED COMPETITIVENESS 

Highlights 

During the past year competitiveness concerns dominated the EU policy debate, in the course 
of  which  a  growing  consensus  has  now  developed  on  the  contribution  that  eco-innovations 
and  resource  efficiency  make  to  EU  competitiveness  and  on  the  market  opportunities  they 
offer. 

Work has been ongoing on better regulation both to improve use of impact assessment and to 
simplify environmental legislation so as to maximise the cost-efficiency of new legislation.  

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COM (2004)394 

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The Kok report emphasised the role of environmental sustainability and social cohesion in the 
growth  and  employment  creation  process,  and  how  Europe  could  gain  from  supplying 
innovative eco-efficient products and processes.  

Other developments have sought to maximise the environmental contribution to GDP growth 
and employment: 

•  good  progress  has  been  made  in  implementing  the  Commission’s  Environmental 

Technologies Action Plan;  

•  the Dutch Presidency emphasised the importance of eco-innovations for a “Clean, Clever, 

and Competitive” Europe; 

•  progress  was  made  with  consultation  of  stakeholders  on  the  Commission’s  thematic 
strategies  on  management  of  natural  resources  and  waste  prevention  and  recycling.  This 
will also contribute to better regulation; 

•  the  Commission  published  guidelines  for  national  and  local  authorities  on  green  public 

procurement. 

New Findings2 

There  are  growing  findings  that  environment  policy  and  eco-innovation  can  promote 
economic  growth  and  maintain  and  create  jobs,  contributing  to  competitiveness  and 
employment.  There  is  an  expanding  world  market  for  environmental  goods  and  services, 
estimated at over €500 billion in 2003. The eco-industries sector employs more than 2 million 
people in Europe, and continues to grow at around 5% per year. There are promising market 
opportunities  for  eco-efficient  products.  The  emergence  of  large  dynamic  economies  like 
Brazil, India or China puts growing pressure on natural resources and boosts global pollutant 
emissions,  calling  for  improved  energy  and  resource  efficiency  both  there  and  at  home. 
Environmental constraints to rapid economic growth are increasingly recognised by countries 
like  China,  leading  to  a  rising  awareness  of  the  need  for  sustainable  development  and  thus 
offering interesting market openings for environmental technologies.  

For example, recent reports show that:  

•  the net impact of environmental policy on jobs is neutral or slightly positive; 

•  eco-industries have been performing better than the rest of the economy; 

•  renewable  energy  and  energy  efficient  measures  increase  security  of  energy  supply  and 
reduce economic losses from oil price volatility, while reducing greenhouse gas emissions 
and waste of finite resources;  

•  the competitiveness effects of industrial air pollution expenditure are generally limited; 

•  a  growing  number  of  companies  and  investors  are  taking  a  proactive  interest  in 
that  good 

environmental  performance  and  a  number  of  recent  studies 

indicate 

2 

See SEC(2005) 97 for sources 

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environmental management is linked to greater efficiency, better financial performance and 
opens up new markets. 

Outlook for 2005 

A  number  of  measures  will  aim  to  help  the  EU  take  full  advantage  of  the  contribution  that 
environment policy can make to EU competitiveness. For example, 

•  EU and national commitments to implement the Environmental Technologies Action Plan;  

•  Reflect on how to make prices better integrate costs to society 

•  The thematic strategies on the sustainable use of natural resources and on waste prevention 

and recycling. 

The  Commission  will  continue  to  work  with  other  countries  to  promote  a  more  sustainable 
development. It will in particular develop a dialogue with emerging economies such as China, 
which  share  similar  views  on  sustainable  development,  to  take  forward  international  action 
necessary to address global environmental problems, to avoid competition based on reducing 
environmental standards and to promote the uptake of eco-innovations and more sustainable 
products and processes. 

Ongoing work to simplify and improve environmental regulation is also important. Tackling 
climate  change,  reducing  loss  of  biodiversity,  and  improving  our  understanding  of  the  links 
between environment and health can also help long-term economic growth while improving 
the environment and our quality of life. 

3. 

ACHIEVEMENTS, TRENDS AND OUTLOOK IN THREE PRIORITY AREAS  

Climate change, biodiversity loss, and environmental impacts on health are among the main 
priorities of the Sixth Environmental Action Programme. 

3.1. 

Climate change  

Highlights 

Russia’s ratification of the Kyoto protocol means it will enter into force in early 2005.  

The Commission has been preparing for the world’s largest greenhouse gas emissions trading 
scheme,  with  the  adoption  of  the  registry  regulation  and  of  monitoring  and  reporting 
guidelines and the approval of 21 National Allocation Plans to assign emission allowances to 
energy-intensive  installations.  The  scheme,  which  will  allow  greenhouse  gas  emissions 
reductions to be achieved at least cost, started on 1st January 2005.  

To help combat climate change the Commission has continued to promote the integration of 
environmental aspects into other policy areas, especially transport and development aid. It has 
also made three recent proposals to promote more efficient energy consumption.  

New Findings 2 

The  latest  information  on  greenhouse  gas  emissions  and  the  new  findings  available  on  the 
potential scale and impacts of climate change are cause for continued concern. There has been 

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a  small  downturn  in  emissions  of  greenhouse  gases,  but  not  enough  to  put  the  EU-15  on  a 
linear path to meet its Kyoto targets. Overall 12 of the 25 Member States had emissions above 
this linear path.  

Trends  in  a  number  of  sectors  remain  of  concern.  The  latest  statistics  indicate  that  the 
transport  sector’s  emissions  of  greenhouse  gases  continued  to  grow,  reaching  almost  22% 
above  1990  levels  in  the  EU-15  by  2002,  and  there  has  not  yet  been  a  decoupling  between 
transport emissions growth and economic growth.  

New findings has emerged during the year of the potential costs of failure to address climate 
change,  including  as  a  result  of  Community  funded  RTD.  Extreme  weather  events,  like  the 
2003 summer heat wave, are expected to become more frequent with climate change. By 2050 
climate change could lead to 15% to 37% of all species being on a path to extinction. Glaciers 
are  melting  fast,  which  will  affect  drinking  water  supply,  irrigation,  and  hydropower  across 
Europe, not to mention winter tourism in the Alps. This contributes to raising insurance costs 
and uninsured damage. Economic losses from extreme weather events, in part due to climate 
change, have risen from an annual average of less than US$5 billion to about $11 billion over 
the last 20 years.  

Outlook for 2005  

There are three broad goals for 2005 agenda: 

•  stepping up implementation of measures to meet Kyoto commitments; 

•  launching  the  international  discussion  on  global  emissions  reduction  measures  for  after 

2012; 

•  preparing to adapt to unavoidable climate change. 

3.2. 

Biodiversity 

Highlights 

•  Establishment  of  the  Natura  2000  network  of  protected  areas  in  the  EU-15  has 
substantially  advanced  with  the  adoption  of  the  lists  of  sites  for  the  Atlantic  and 
Continental  regions.  A  Commission  decision  on  one  remaining  bio-geographic  region 
(Mediterranean) is expected by early 2005. The sites, selected to cover habitats and species 
of EU conservation concern, cover about 17% of the EU15 territory. Enlargement brought 
new  biodiversity  challenges  and  assets, 
including  a  new  bio-geographic  region 
(Pannonian). Good progress was made with designation of sites in the new Member States 
during  2004.  A  Commission  Communication  on  financing  Natura  2000  has  been 
published. Substantial new co-financing opportunities have been included in the proposals 
for the Rural Development and Structural Fund Regulations for 2007-2013. 

•  The  Malahide  conference  in  May  2004  showed  that  there  is  a  clear  consensus  among 
stakeholders on measures which need to be taken to protect biodiversity at European level. 
The meeting produced priority objectives and targets for meeting the commitment to halt 
the decline of biodiversity in the EU by 2010.  

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•  The Bergen-op-Zoom conference in November 2004 further identified priority actions on 

bird conservation.  

•  Proposals for rural development policy post 2006 give higher priority to the environmental 

services of agriculture 

At  international  level,  2004  was  marked  by  several  important  decisions  on  global  action  to 
limit the decline in biodiversity:  

•  The 7th conference  of  the  parties (COP7) to  the  UN  Convention  on  Biological Diversity 
adopted a work programme to establish national and regional systems of protected areas on 
land by 2010 and at  sea  by  2012  and  on  indicators to assess progress towards the global 
target of significantly reducing the rate of biodiversity loss by 2010.  

•  The  first  meeting  of  parties  to  the  Cartagena  Protocol  on  Biosafety  decided  on 
documentation  requirements  and  compliance  mechanisms  for  Genetically  Modified 
Organisms (GMOs).  

•  The  parties  to  the  Convention  on  International  Trade  in  Endangered  Species  (CITES) 
agreed  to  strengthen  controls  on  trade  in  a  number  of  endangered  species,  including  an 
action plan on illegal trade in ivory.  

New Findings 2 

Newly  published  studies  in  2004  showed  that  half  of  the  planet’s  5,743  known  amphibian 
species  (amphibians  are  good  biodiversity  indicators)  are  in  decline  and  a  third  face 
extinction,  indicating  potentially  dramatic  species  loss.  They  also  show  some  43%  of 
Europe’s bird species are now of conservation concern. 

Integration  of  biodiversity  concerns  in  other  policy  areas  is  progressing.  Organic  farming 
continues to grow, albeit at a slower pace. The proportion of agricultural spending dedicated 
to  rural  development  and  agri-environment  schemes  is  also  rising.  Over-fishing  remains  a 
problem, and recovery of some stocks is proving more difficult than expected. 

Outlook for 2005 

•  The Commission will publish a Communication on Biodiversity policy in 2005, building 

on the recommendations from the Malahide and Bergen-op-Zoom conferences.  

•  The  Commission  will  continue  to  support  the  establishment  and  implementation  of  the 
Natura 2000 network including its extension to the new Member States and to the marine 
environment.  Within  the  overall  framework  of  the  Commission’s  proposals  for  the 
financial  perspectives  for  2007-2013  work  will  continue  to  consolidate  Community  co-
funding  of  the  Natura  2000  network  with  the aim  of  helping  to  mobilise  funding  needed 
within Member States.  

•  Implementation  of  the  Commission’s  Action  Plan  for  Organic  Food  and  Farming  will 

begin 

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•  The  Marine  Thematic  Strategy  will  propose  a  framework  for  the  elaboration  and 
implementation  of  an  ecosystem-based  approach  for  the  management  of  the  seas  and 
oceans. 

3.3. 

Environment and Health  

Highlights 

The Commission’s environment and health action plan was designed to fill knowledge gaps, 
identify  emerging  issues  and  improve  communication.  It  was  presented  to  the  WHO 
Conference  on  Environment  and  Health  in  Budapest,  where  Environment  and  Health 
Ministers from 52 countries adopted the Children’s Environment and Health Action Plan for 
Europe (CEHAPE), for which the Commission expressed its support.  

The  debate  on  REACH,  the  Commission  proposal  for  a  new  regulatory  framework  for 
chemicals  moved  on  in  Council  (Environment  and  Competitiveness)  and  in  Parliament.  A 
workshop  organised  by  the  Presidency  on  the  extended  impact  assessment  of  REACH 
concluded  that  the  cost  of  the  system  is  greatly  outweighed  by  the  benefits,  confirming  the 
overall  conclusion  of  the  Commission’s  impact  assessment.  The  debate  has  allowed  the 
identification of measures to facilitate implementation and thus reduce costs whilst achieving 
the  full  benefits  of  an  increased  level  of  protection  of  human  health  and  the  environment. 
Preparations  for  implementation  have  also  moved  including  partnerships  with  stakeholders 
working to establish workability and minimise the cost of the system, setting up the IT system 
and preparation for guidelines for industry and Member States.  

The  European  Pollutant  Emission  Register  (EPER),  the  first  Europe-wide  public  register  of 
emissions  into  air  and  water  from  industrial  facilities,  gave  the  public  better  access  to 
environmental information.  

The Community ratified a UN Europe-wide agreement and joined a second global convention 
to eliminate pollution by Persistent Organic Pollutants (POPs). These are toxic substances that 
can travel long distances, persist in the environment, and accumulate in the food chain.  

New Findings 2 

Approximately  2  to  8%  of  disease  in  the  EU-25  can  be  attributed  to  environmental  factors, 
especially air and noise pollution from transport.  

More needs to be done to address known health hazards, like over-exposure to air pollutants 
such as fine particulates and ozone, and to unsafe levels of mercury in seafood.  

EU Member States are already investing in research and surveys to improve understanding , 
including  human  biomonitoring  with  a  focus  on  heavy  metals,  dioxins,  PCBs,  endocrine 
disrupters,  and  asthma  and  allergies.  But  as  they  generally  do  not  use  the  same 
methodological approach, the outcomes are difficult to compare.  

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Outlook for 2005 

Work will continue to deliver the information needed to address threats by substances in the 
environment to human health: 

•  an agreement will be sought on the proposed REACH Regulation to allow more rigorous 

assessment and control of the chemicals used;  

•  implementation of the EU Environment and Health Action Plan, to put into place actions 

on human biomonitoring, research, information on environment and health.  

Meanwhile,  the  Commission  will  be  proposing  measures  to  limit  exposure  to  mercury, 
pesticides and air pollution, with strategies to be published in 2005.  

4. 

MEETING  THE  IMPLEMENTATION  AND  BETTER  REGULATION 
CHALLENGES  

Highlights 

Although  EU legislation  has  done much to improve environmental  quality, to create a  level 
playing  field  for  companies  across  the  EU,  and  to  help  promote  new  market  opportunities, 
there is still room for improvement. Full implementation of EU environmental legislation by 
Member States remains a challenge, including in the new Member States. Environment cases 
continue to account for a third of all open cases for non implementation of EU law for EU25. 
During 2004 the Commission has analysed the main areas of difficulty (waste, water, nature 
protection  and  environmental  impact  assessment)  and  is  now  drawing  up  action  plans 
designed to improve the rate of compliance. 

Proper implementation means both adopting the right national legislation on time, and putting 
the  necessary  infrastructure  in  place.  There  also  needs  to  be  inspection  and  action  against 
those acting illegally. Community funds must continue to act as a catalyst for the investment 
needed in Member States. 

The  Commission’s  ongoing  commitment  to  better  regulation  is  intended  to  lead  to  EU 
legislation  that  is  clearer  and  easier  to  implement,  and  which  encourages  the  most  cost-
effective  solutions.  The  Commission  continues  to  promote  voluntary  approaches  where 
appropriate and has launched an evaluation of the EMAS and Eco label schemes. 

When  designing  new  legislation  the  Commission  tries  to  anticipate  problems,  to  reduce 
administrative burdens, to minimise compliance costs and to maximise new opportunities. For 
this it uses impact assessments, public consultations and screening. 

The integration of environmental thinking into other policy areas and sectoral decisions needs 
to  be  pursued  to  achieve  the  many  environmental  and  wider  benefits,  which  cannot  be 
achieved  through  environmental  policy  alone.  The  stocktaking  of  the  Cardiff  process  of 
environmental integration puts forward recommendations for reviving the integration process, 
including  the  need  for  Member  States  to  ensure  full  implementation  of  the  Directive  on 
Strategic Environmental Assessment.  

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Outlook for 2005 

The  Member  States  must  implement  environmental  legislation  fully.  The  Commission  will 
focus on the main areas where most problems are encountered. Other issues to be considered 
are simplification of legislation, monitoring and reporting requirements.  

5. 

CONCLUSIONS 

Developments in environmental policy at the EU and national level over the past year confirm 
a number of trends identified in the 2003 Environment Policy Review:  

Lisbon and the environment: 

•  Environment,  including  eco-innovation,  is  an  essential  element  of  the  Lisbon  strategy, 
long-term 

to 
through 
competitiveness of the EU economy. This contribution involves especially: 

to  sustainable  economic  growth  and 

its  contribution 

the 

•  Improving further the eco-efficient use of energy and resources, resulting both in 

higher resource productivity and reduced pressure on the environment, ; 

•  Delivering the concrete targets already agreed for combating climate change and 
for  energy  efficiency  and  for  more  sustainable  transport  requires,  amongst  other 
measures:  

– 

– 

Better information for EU companies and citizens on products, processes 
and  services  that  help  us  tackle  climate  change  and  environmental 
threats, 

Better  reflection  and  pricing  of  the  full  costs  to  society  as  a  whole  of 
different  energy  sources  and  different  goods  and  services,  such  as 
transport and mobility services to meet the ever increasing demand in a 
more sustainable way,  

•  Promoting  eco-efficient  innovations  across  all  sectors  of  the  economy,  notably 
through  the  full  implementation  of  the  Environmental  Technologies  Action  Plan 
(ETAP).  Member  States  should  establish  roadmaps  for  the  implementation  of 
ETAP and be encouraged to develop action plans for green public procurement. In 
addition, a major effort throughout Europe is necessary to make real progress in 
energy efficiency. 

•  Keeping  pace  with  the  EU’s  competitors,  such  as  the  US  and  Japan,  on  eco-
innovation.  The  global  demand  for  eco-innovations  is  growing  as  emerging 
economies, such as China are increasingly aware that their rapid growth may soon 
be  constrained  by  environmental  limits.  Environmental  technologies  and  new 
innovations  are  needed  to  face  this  challenge.  Support  for  research  and  “risky” 
demonstration  activities  should  benefit  from  public  support  similar  to  that 
provided by the EU’s competitors.  

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Environment in the EU 

•  The 6th EAP provides a stable framework to 2012 for Community environmental policies 
as well as for the integration of environmental concerns into sector policies. Its four main 
priorities –climate change, biodiversity, resources and environment and health- will require 
action  over  the  long  term  perspective.  There  are  also  areas  where  short-term  action  is 
needed, as failure to act now may lead to higher future cost or irreversible damage and to 
lost opportunities for cost-effective solutions.  

And globally 

•  The  Commission  will  continue  to  promote  international  co-operation  in  pursuit  of 
sustainable  development,  seeking  to  address  global  and  trans-boundary  environmental 
problems, advancing EU environment policy on global issues and ensuring integration of 
environmental requirements into all external policy areas, including security, development, 
trade policy and neighbourhood policy. 

The coming year 

•  The Commission will issue a number of important environmental policy initiatives in 2005 

which will shape the EU environment policy over the next years: 

•  The  communications  on  EU  Climate  policy  post  2012  (February  2005)  and  on 

economic instruments to address the climate change impacts on aviation 

•  The Communication on Biodiversity Policy 

•  The  Thematic  Strategies  on  air  quality,  resource  use  and  waste  prevention  and 
recycling,  the  marine  environment,  the  use  of  pesticides,  the  urban  environment 
and on soil. 

Focus on better implementation 

•  The environmental policy framework is now well established, with a number of important 
pieces of environmental legislation in place. While new legislation will be proposed where 
appropriate,  much  greater  focus  needs  to  be  put  on  implementing  existing  policies  and 
legislation. Targets and binding rules have been set and agreed. It is up to Member States 
to implement these policies and deliver the benefits to society as a whole. The Commission 
will increase its efforts to work with Member States to achieve better implementation.  

and on continuing to improve environment policy making 

•  Environment policy is increasingly based on better knowledge and science. However, wide 
gaps  in  knowledge  and  uncertainties  remain,  calling  for  continued  efforts  to  develop  our 
knowledge base. Significant research and development efforts are needed to fill these gaps, 
both  in  the  Member  States  and  in  the  EU  as  a  whole.  The  Community  research 
programmes  should  reconsider  the  constantly  decreasing  relative  priority  given  to 
environmental and energy research.  

•  A more effective and transparent shared environment information system for the EU needs 
to be developed based on modern technologies. Such a system should serve both national 

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and  EU  wide  needs  as  well  as  the  needs  of  EU  citizens  across  the  enlarged  Union.  The 
European Environmental Agency with its extensive networks can play a useful role in this 
context.  

•  The  Commission  strives  to  continuously  improve  the  way  environmental  policy  is  being 
designed  and  implemented.  The  use  of  impact  assessments  and  extensive  stakeholder 
consultation is already common  practice. The more traditional regulatory instruments are 
being  complemented  with  market  based  instruments  and  other  means  to  maximise  the 
opportunities for full and cost-effective implementation. These mixed approaches need to 
be  continued  and  developed,  at  both  Community  and  Member  State  level.  Thematic 
Strategies  of  2005  will  pay  particular  attention  to  approaches  to  boost  environmental 
innovations, cost-effectiveness and integration.  

•  The  process  of  regulatory  simplification  needs  to  continue  to  reduce  the  administrative 
burden  on  the  public  sector  and  companies,  while  maintaining  high  environmental 
standards.  and  ensuring  a  level  playing  field  in  the  Internal  Market.  Actions  both  at 
Community and  at  Member State level are needed. The Thematic Strategies due in 2005 
offer a unique opportunity to make further progress towards regulatory simplification. 

To meet EU citizens’ expectations 

•  Environment  policy  is  also  about  quality  of  life.  It  is  directly  relevant  to  people’s  lives. 
Time after time Europe-wide opinion polls demonstrate that a large majority of EU citizens 
want  more  emphasis  placed  on  the  environment  and  expect  decisions  to  deliver  better 
environmental quality and services at EU level. Thus strong European environment policy 
is a priority to the EU citizens and brings Europe closer to them. 

•  Europe needs to take up the challenge of using environmental opportunities and constraints 
in the framework of its growth and job creation policies. This is an important condition for 
improving welfare and for a more equitable future. Europe needs to engage now, both in 
Europe and globally.  

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