COMMISSION STAFF WORKING PAPER IMPACT ASSESSMENT
Date: 2011-12-15
Institutions: European Commission
Subjects: EU financing, EU programme, clean technology, co-financing, competitiveness, environmental protection, innovation, management of resources, productivity, small and medium-sized enterprises, sustainable development

EUROPEAN COMMISSION 

Brussels, 15.12.2011 
SEC(2011) 1599 final 

COMMISSION STAFF WORKING PAPER 

IMPACT ASSESSMENT 

Accompanying the document 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL 
COMMITTEE AND THE COMMITTEE OF THE REGIONS  

Innovation for a sustainable Future - The Eco-innovation Action Plan (Eco-AP) 

{COM(2011) 899 final} 
{SEC(2011) 1598 final} 
{SEC(2011) 1600 final} 

EN 

   EN 

 
 
 
 
  
 
Disclaimer: This Impact Assessment commits only the Commission's services involved in its 
preparation  and  does  not  prejudge  the  final  form  of  any  decision  to  be  taken  by  the 
Commission. 

EN 

   EN 

 
 
 
 
EXECUTIVE SUMMARY .......................................................................................... 1 

1.  BACKGROUND .................................................................................................. 3 

2.  PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES . 3 

2.1 

2.2 

Consultations – Main conclusions.......................................................................................................... 4 

View of the Impact Assessment Board.................................................................................................. 5 

3.  PROBLEM DEFINITION.................................................................................... 6 

3.1 

3.2 

3.3 

3.4 

3.5 

3.6 

3.7 

The problem – insufficient eco-innovation ........................................................................................... 6 

The eco-innovation policy landscape..................................................................................................... 6 

Implementing eco-innovation policies – Lessons learnt....................................................................... 9 

Underlying drivers of the problem...................................................................................................... 11 

Are eco-innovation specific policy interventions at the EU level still needed? ................................ 17 

Who is affected, in what ways, and to what extent? .......................................................................... 18 

Does the EU have the right to act? The EU added-value .................................................................. 18 

4.  OBJECTIVES.................................................................................................... 18 

4.1 

4.2 

General objectives................................................................................................................................. 19 

Specific and operational objectives ..................................................................................................... 19 

5.  POLICY OPTIONS ........................................................................................... 19 

5.1 

5.2 

5.3 

5.4 

5.5 

Option 1: Discontinuation of ETAP (no specific EU action)............................................................. 19 

Option 2: Continuation of ETAP......................................................................................................... 20 

Option 3: Taking forward the Europe 2020 Flagships ...................................................................... 20 

Option 4: SME-targeted actions .......................................................................................................... 23 

Option 5: Wide EU eco-innovation policy .......................................................................................... 25 

6.  ANALYSIS OF THE IMPACTS......................................................................... 26 

6.1 

6.2 

6.3 

6.4 

6.5 

Option 1: Discontinuation of ETAP (no EU specific action on eco-innovation).............................. 26 

Option 2: Continuation of ETAP......................................................................................................... 27 

Option 3: Taking forward the Europe 2020 flagships ....................................................................... 30 

Option 4: SME-targeted actions .......................................................................................................... 34 

Option 5: Wide EU eco-innovation policy .......................................................................................... 36 

7.  COMPARING THE OPTIONS .......................................................................... 38 

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7.1 

7.2 

Approach ............................................................................................................................................... 38 

Findings ................................................................................................................................................. 38 

8.  MONITORING AND EVALUATION ................................................................ 42 

8.1 

8.2 

8.3 

Context................................................................................................................................................... 42 

Organisation and scope of monitoring and evaluation process ........................................................ 42 

Parameters and indicators ................................................................................................................... 43 

ANNEX I – LIST OF RELEVANT DEFINITIONS.................................................... 44 

ANNEX II – COMPETITIVENESS, RESOURCE EFFICIENCY AND ECO-
INNOVATION.......................................................................................................... 48 

ANNEX III – THE ECO-INDUSTRIES – IN THE EU AND GLOBALLY ................. 53 

ANNEX IV – ENVIRONMENTAL POLICY AND ETAP FOR ECO-INNOVATION –
LESSONS LEARNT.................................................................................................. 62 

ANNEX V – RATIONALE AND SPECIFIC ACTIONS IN OPTION 5: WIDE ECO-
INNOVATION POLICY ........................................................................................... 69 

ANNEX VI – INITIATIVE ON ENVIRONMENTAL TECHNOLOGY 
VERIFICATION (ETV) ............................................................................................ 72 

ANNEX VII – DETAILED ASSESSMENT OF OPTION 1 AND EXAMPLES OF 
ETAP'S INDIRECT CONTRIBUTIONS ................................................................... 76 

ANNEX VIII – DETAILED ASSESSMENT OF OPTION 2 ACTIONS...................... 78 

ANNEX IX – DETAILED ASSESSMENT OF OPTION 3 ACTIONS ........................ 84 

ANNEX X – DETAILED ASSESSMENT OF OPTION 4 ACTIONS.......................... 90 

ANNEX XI – DETAILED ASSESSMENT OF OPTION 5 ACTIONS ........................ 94 

ANNEX XII – SUMMARY ASSESSMENTS OF THE OPTIONS .............................. 97 

ANNEX XIII – SUGGESTED PARAMETERS USED FOR MEASURING 
CONTRIBUTION TOWARDS ACHIEVEMENT OF OBJECTIVES .......................105 

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EXECUTIVE SUMMARY 

resources  more  productively 

for  environmental  protection  and 
is  crucial 
Using 
competitiveness, but progress is slower than it should be. Eco-innovation will help to improve 
resource productivity, especially in the long term, with all the positive effects this will bring. 
But we need to design coherent and effective eco-innovation policies. 

Specific reasons for the slow uptake of eco-innovation are: 
•  on  the  supply  side:  (1)  Inadequate  levels  of  research  on  eco-innovation,  (2)  Need  for 
coordination  of  research  programs,  (3)  Weak  linkages  between  research  and  market,  (4) 
Inadequate skills base; 

•  on the demand side: (5) Market prices do not adequately reflect environmental costs, (6) 
Demand side measures are too weak, (7) Lack of appropriate and credible information on 
the performance of new environmental technologies; 

•  on  both  sides:  (8)  Governance  problems  related  to  EU  eco-innovation  support,  (9) 

Difficulty in accessing finance, (10) Difficulty in providing finance; 

•  and for the global dimension: (11) Unfavourable global conditions for eco-innovation, (12) 
Unused  potential  for  eco-innovation  in  developed  and  developing  countries,  (13) 
Indigenous eco-innovation capability amongst developing countries is scarce. 

The  Innovation  Union  Flagship  Initiative  is  setting  the  future  framework  for  EU  innovation 
policy.  But  problem  analysis  suggests  the  need  for  a  dedicated  eco-innovation  policy 
initiative.  The  Action  Plan  will  build  upon  the  Innovation  Union  in  respect  of  the 
"environmental"  dimension  of  innovation.  As  such  its  role  is  where  general  innovation 
policies are insufficient to promote eco-innovation.  An eco-innovation policy should – while 
respecting  the  limitations  of  Community  competence  and  in  cooperation  with  the  Member 
States - pursue overall strategic objectives:  

Increasing  the  rate  of  eco-innovation  and  its  uptake  in  Europe  and  in  so  doing 
deliver efficient solutions for environmental problems, boost the resource efficiency 
of Europe and its competitiveness.  

With this strategic objective and operational objectives in mind, five policy options have been 
identified.  Four  of  them  specifically  target  the  problems  outlined  above.  However,  one  of 
them - Option 1 where there is no Environmental Technologies Action Plan (ETAP) - is the 
baseline  scenario  where  existing  EU  policies  linked  to  eco-innovation  are  implemented  but 
there is no specific comprehensive policy on maximising eco-innovation.  

Option  2  -  Continuation  of  the  ETAP  –  consists  of  measures  in  four  main  areas  (research, 
markets,  global  action  and,  lastly,  governance  and  coordination)  in  line  with  the 
communication  of  2004.  It  continues  the  nine  priority  actions  of  ETAP,  and  includes  some 
measures on governance and coordination. 

Option  3  –  Taking  forward  the  Europe  2020  Flagships  -  Would  involve  doing  what  is 
promised  in  the  context  of  the  Europe  2020  Flagships  (i.e.  Innovation  Union,  Industrial 
Policy, New Skills and Resource Efficiency) for the area of the environment, in particular the 
review of environmental policy in terms of its eco-innovation potential and inclusion of eco-
innovation  aspects  into  the  Innovation  Partnerships.  This  option  stems  in  particular  from 
lessons learnt with the implementation of ETAP and environmental policy for eco-innovation, 

1 

 
 
 
 
 
 
 
 
 
and from the need to adapt and react to the recent changes that have occurred in the political 
and economic context surrounding eco-innovation.  

Option  4  –  SME-targeted  actions  –  Would  include  actions  to  support  SMEs  in  becoming 
active developers and users of eco-innovation as well as open eco-innovative SMEs to global 
trade  opportunities  for  green  goods  and  services.  It  is  characterized  by  increased  ambition, 
expanded scope of intervention to also include non-technological innovation, a real focus on 
global  dimension  and  increased  attention  to  networking.  It  builds  upon  the  ETAP  lessons 
learnt and issues identified in the problem definition section.   

Option  5  –  A  wide  eco-innovation  policy  -  Responds  to  the  call  for  policies  that  create  the 
economic  conditions  to  reduce  demand  for  natural  resources  and  thus  stimulate  appropriate 
eco-innovations. This would include working on price signals and boosting demand for green 
products and greener production technologies through public procurement, clear labelling of 
green products, and waste prevention and recycling. 

This impact assessment considers the various aspects of these options, the urgency of a 
focused  and  improved  eco-innovation  policy,  and  the  feasibility  of  reasonably  rapid 
implementation. It concludes that Option 3 in combination with Option 4 seems to have 
a  better  balance  than  the  other  options  and  responds  best  to  the  strategic  and 
operational objectives. Option 5 could serve as a long-term vision for achieving a radical 
transition to a more resource-efficient, competitive and sustainable economy.  

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1.  BACKGROUND 

The Europe 2020 Flagship Initiative "Innovation Union"1 (IU) announces an Eco-innovation 
Action  Plan  (EcoAP)  to  focus  on  specific  bottlenecks,  challenges  and  opportunities  for 
achieving  environmental  objectives  through  eco-innovation.  The  IU  also  announced  that 
EcoAP  will  promote  eco-innovation  in  technologies,  business  processes  and  organizational 
change  to  address  the  challenges  of  resource2  scarcity,  air,  water  and  soil  pollution,  water 
efficiency and also provide growth and jobs. The Action Plan will build upon the Innovation 
Union  in  respect  of  the  "environmental"  dimension  of  innovation.  As  such  its  role  is  where 
general  innovation  policies  are  insufficient  to  promote  eco-innovation.  It  will  take  forward 
existing experiences in promoting the development and uptake of eco-innovation, in particular 
the  Environmental  Technologies  Action  Plan3  (ETAP).  The  ETAP  was  adopted  by  the 
Commission in 2004 to cover a wide range of activities promoting the development and use of 
environmental technologies in the EU and globally.  

EcoAP will also help to deliver the objectives set out in the Europe 2020 Flagship Initiative 
on "A resource-efficient Europe"4, that established resource efficiency as the guiding principle 
for  EU  policies  on  energy,  transport,  climate  change,  industry,  commodities,  agriculture, 
fisheries,  biodiversity  and  regional  development.  The  Flagship  creates  a  framework  for 
policies  to  support  the  shift  towards  a  resource-efficient  and  low-carbon  economy.  Eco-
innovation is one way of improving the resource efficiency of the economy. 

Definitions5: 
Eco-Innovation  is  any  form  of  innovation  resulting  in  or  aiming  at  significant  and 
demonstrable progress towards the goal of sustainable development, through reducing impacts 
on  the  environment,  enhancing  resilience  to  environmental  pressures,  or  achieving  a  more 
efficient and responsible use of natural resources. 

2.  PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES  

Considerable  effort  went  into  consultation  of  stakeholders.  The  public  at  large  has  been 
consulted. Extensive use has also been made of the existing ETAP communication channels. 
The main elements of this consultation exercise include: 

-  open stakeholder consultation  
-  consultation  of  the  regular  ETAP  High  Level  Working  Group  (HLWG)  with  the 
Member States, mostly representatives of Ministries of Environment and Economy.  
targeted  consultations  (Member  States  and  representatives  from  research,  business, 
financial, non-governmental organisations) on the impact assessment.   

- 

-  bi-annual  ETAP  Forums  on  Eco-innovation,  attended  by  1,010  participants,  30%  of 

them from the private sector, which made targeted recommendations6. 

-  Within the European Commission, an Impact Assessment Steering Group (IASG) met 

repeatedly allowing different Services to input.  

1  COM (2010) 546 final, Europe 2020 Flagship Initiative "Innovation Union" 
2 Resources include raw materials such as fuels, minerals and metals but also food, soil, water, air, biomass and ecosystems. 
3  COM  (2004)  38  final,  Communication  from  the  Commission  to  the Council  and  the  European  Parliament,  Stimulating  technologies  for 
sustainable development: An Environmental Technologies Acton Plan for the European Union 
4 COM(2011) 21, "A resource-efficient Europe" 
5 For a list of all definitions relevant to this report please refer to Annex I. 
6 Forum recommendations are to be found at: http://ec.europa.eu/environment/etap/events/ecoinnovation_en.html 

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-  Eurobarometer  survey7  on  the  "Attitudes  of  European  entrepreneurs  towards  eco-

innovation" 

2.1 

Consultations8 – Main conclusions  

Overall, Member States felt the ETAP had been successful in mobilizing stakeholders and the 
Commission  in  supporting  eco-innovation.  There  is  broad  support  to  take  forward  the 
framework, but key areas where stakeholders wanted change were: 

• 

• 
• 

the  need  to  cover  not  just  traditional  environmental  technologies  but  also  eco-
innovation (innovations in processes, systems and services) more widely.  
the need to better target SMEs was highlighted as a clear priority9.  
the need to make better use of public funding to attract and leverage private investors, 
in particular venture capital funds. 

•  a  renewed  focus  on  export  promotion  activities  and  networking  of  eco-innovative 

European SMEs.  

•  The role of the Eco-AP within the new Innovation Union (IU) framework. 

There  was  consensus  on  the  need  to  define  better  the  goal  of  intervention:  the  focus  on 
resource efficiency was widely supported. However, there were remarks that this should not 
be considered an "all-inclusive" goal, as it could leave out other environmental priorities (e.g.: 
clean  air).  The  need  to  concentrate  on  non-energy  areas  was  highlighted,  to  avoid  overlap 
with  energy-specific  EU  policy  initiatives.  Priority  sectors  such  as  water,  waste,  recycling, 
and more sustainable materials were proposed.  

The  focus  on  business,  and  in  particular  SMEs,  was  questioned  by  some  academics  who 
would have liked to extend the scope more explicitly to consumers, particularly with regards 
to  the  theme  of  more  environmental  awareness.  The  EU  Sustainable  Consumption  and 
Production Action Plan and other initiatives deal with policies related to consumers. 

The  need  for  demand  side  policies  for  eco-innovation  was  prioritised,  particularly  by  MSs, 
underlining their potential as in the case of Green Public Procurement. 

Calls were made for a better division between strategic and operational objective as well as 
more clarity on the timing of different actions. 

MSs, business and financial stakeholders noted the need to support the development of skills 
for  green  and  greener  jobs  as  shortages  and  skills  mismatches  are  becoming  problematic, 
particularly for SMEs. 

The  need  to  mobilise  financial  resources  with  specific  incentives  for  eco-innovative 
businesses  was  widely  supported  by  business  and  financial  community.  The  ETAP  Forum 
"Financing  eco-innovators"10  concluded  that  more  flexible  and  favourable  risk-sharing 
conditions  are  needed  to  stimulate  access  to  finance  in  this  specific  and  sometimes 
'disadvantaged' investment area, especially in sectors such as waste and recycling and water. 
The  need  to  provide  better  support  to  businesses  was  raised  leading  to  focusing  on  actions 
related to SMEs, training and financing needs. 

7 Flash Eurobarometer 315: "The attitudes of European entrepreneurs towards eco-innovation" 
8 For a list and minutes of all consultation meetings see: http://etap.pracsis.be/etap/Minutes%20-%20Consultation%20meetings.pdf 
9 See Bilbao Declaration "Fostering eco-innovation in SMEs", June 2010 
10 For details see: http://ec.europa.eu/environment/ecoinnovation2010/2nd_forum/ 

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There  were  some  concerns  amongst  the  MSs  over  eco-innovation  governance  in  particular 
with regards to widening the group of stakeholders to include the business community. There 
was, however, general support to relying more on business and expert advice. The table below 
summarises the feedback received from the various groups of stakeholders11. 

MS representatives
HLWG

Financial/Business
/Academic 
community

IASG

General issues
Coordination with Innovation Union
Need to reinforce ETAP
From env. tech to wider eco-innovation 
Definition of eco-innovation and more sectoral focus (e.g.: exclusion of ener
SME focus
Demand policies
Need to reinforce global actions
Strategic and Operational actions
Clarity regarding timing of actions
Evidence in the IA

Main actions
Action on Green skills
Ad hoc funding for eco-innovation
Business models
ETV pilot
GPP of eco-innovation
Support to eco-industry
Global actions
Reinforcing eco-innovation governance
Gathering of info on eco-innovation (also at global level)
Policy learning and roadmaps
Tax on natural resources
Ambitious "green" procurement standards
Legally binding framework for labelling
Phasing out of worst performing products
Waste prevention and recycling standards along value chain
Cardif process (integration of env policies in others)

+/-
+

+

++

+

+/-

+/-

+

-

+/-

+/-
+
+
+/-
+/-
+
+/-
-
-

++
++
+

++
+/-
+
+
+
+
+/-

+

++
+
+/-
-
--

Very positive feedback
Positive feedback
Contrasting feedback
Negative feedback
Very negative feedback
No specific feedback

While  the  possibility  to  introduce  a  tax  on  natural  resources  was  regarded  as  attractive  by 
some stakeholders, concerns were raised regarding the feasibility and political 'sensitivity' of 
such actions. These comments have been taken into account in the analysis of the impacts and 
in the long time horizon foreseen for the action. 

More  focussed  and  in-depth  cooperation  was  requested  by  stakeholders  in  terms  of  global 
actions  as  compared  to  ETAP.  This  has  been  taken  into  account  in  the  development  of  the 
options and of specific actions with relevant partners such as UNEP and OECD. 

The Eurobarometer survey shows that eco-innovation is part of the business responses to the 
resource  scarcity  challenge.  The  survey  also  identified  the  key  barriers  and  drivers  to  eco-
innovation development and uptake.  

2.2 

View of the Impact Assessment Board 

11  In  some  cases  no  specific  feedback  was  received  and  that  is  why  the  table  is  not  comprehensive  in  terms  of  actions  of  the  different 
options. For the sake of brevity only contrasting feedback (+/-), negative feedback (-) and very positive feedback (++) is commented below 
as the rest is quite self explanatory.  

5 

 
 
 
 
 
 
 
 
 
                                                 
This Impact Assessment (IA) is re-submitted to take account of the opinions presented by the 
Impact  Assessment  Board  in  its  opinion  of  December  2010.  In  particular  a  more  focused 
problem definition has been inserted, and specific objectives as well as their hierarchy have 
been  proposed.  The  IA  details  the  particular  drivers  for  eco-innovation  and  analyses  how 
these drivers are tackled by the current EU and national policies. The report has expanded on 
the number of options it evaluates, linking them to the problem drivers and providing a clear 
baseline scenario. In the analysis of impacts of options much greater care has been taken to 
specify expected costs and benefits of the proposals.  

3.  PROBLEM DEFINITION 

Eco-innovation  is  one  way  of  improving  environmental  protection  and  of  improving  the 
resource efficiency of the economy and so contributing to competitiveness (see Annex II).  

3.1 

The problem – insufficient eco-innovation 

Delivering  on  environmental  objectives  requires  change  in  the  way  we  use,  re-use  and 
manage  materials,  and  resources  at  large.  This  change  can  be  made  by  developing  new 
technological and non-technological solutions, new approaches to the way we run business or 
the way we consume and use goods and services. However, the current rate of change is sub-
optimal,  and  there  is  the  potential  to  increase  eco-innovation  in  a  way  that  boosts  resource 
productivity, competitiveness and helps to safeguard the environment.  

At  the  same  time  implementation  of  EU  environmental  legislation  is  incoherent  across  the 
Member  States.  In  the  period  2003  –  2009  (the  latest  available  data)  the  European 
Commission  has  launched  app.  500  environmental  infringement  cases  annually12.  Increased 
development and uptake of eco-innovation will also help in the better implementation of the 
environmental acquis throughout the European Union. 

Achieving a safe and healthy global natural environment necessitates significant involvement 
of  partners  outside  the  EU.  However,  eco-innovations  and  environmental  technologies  are 
currently developed, for the most part, in developed countries, and they are not being diffused 
in the world economy at sufficient speed and scale.  

3.2 

The eco-innovation policy landscape 

Eco-innovation  is  a  broad  concept  that  is  related  to  many  policies.  Although  environmental 
policies  are  the  main  driver  for  eco-innovation  development  and  uptake  other  ongoing 
policies in innovation, energy, cohesion also help shape the eco-innovation landscape. 

Environmental policies  

EU Environmental legislation and policy plays a central role in motivating13 eco-innovation 
and  have  created  new  markets,  incentivising  business  to  innovate  towards  best  and  more 
efficient solutions. The Sustainable Consumption and Production Action Plan (SCP-AP) 
outlines an integrated approach to sustainable production and consumption patterns, primarily 

12 See for details: http://ec.europa.eu/environment/legal/law/statistics.htm 
13  Belin,  J,  Horbach,  J  &  Oltra,  V,  2009,  Determinants  and  specificities  of  eco-innovations  –  An  econometric  analysis  for  France  and 
Germany based on the Community Innovation Survey, Article submitted to the EAEPE Conference, Amsterdam, November 6-8, 2009 

6 

 
 
 
 
 
 
 
 
 
 
 
                                                 
via  regulatory  and  support  measures  aimed  at  enhancing  the  energy  and  environmental 
performance of products and encouraging their uptake by consumers.  

As means to better coordinate and ensure consistency of eco-innovation policy the European 
Commission launched the Environmental Technologies Action Plan as a complement to the 
regulatory  approaches.  The  Plan  aims  to  integrate  EC  objectives  in  terms  of  EU 
competitiveness,  economic  growth,  employment  and  the  environment  into  research, 
investment  and  purchasing  decisions,  concerning  environmental  technologies.  As  such  the 
Plan  promotes  research,  development  and  deployment,  mobilizes  funds,  helps  to  drive 
demand and to remove barriers to market developments for environmental technologies, and 
eco-innovation in general. 

For  a  detailed  description  of  the  lessons  learnt  of  ETAP  and  environmental  policy  for  eco-
innovation see chapter 3.3 and Annex IV.  

Financial Support 

CIP  supports  eco-innovation  activities  in  SMEs,  primarily,  under  the  Entrepreneurship  and 
Innovation operational programme (EIP). It allocates €433 million (out of EIP’s total budget 
of over €2.0 billion). EIP facilitates the commercialisation of innovative production processes, 
products  or  services  and  new  management  and  business  practices  seeking  to  reduce 
environmental  impacts  and  to  promote  an  efficient  and  responsible  use  of  resources  and 
encouraging  the  competitiveness  of  European  enterprises.  EIP-eco-innovation  addresses 
almost  the  entire  range  of  sectors/areas  with  the  exception  of  renewables  and  energy 
efficiency covered by the Intelligent Energy Europe sub-programme of EIP. 

Eco-innovation  and  environmental  technologies  are  part  of  the  Environment  Policy  and 
Governance  component  of  LIFE+.  In  2009,  projects  related  to  innovation,  in  general, 
including the development  of innovative policy  ideas,  technologies and processes amounted 
to about €21 million. 

With  regard  to  Cohesion  Policy  sustainable  development  and  environmental  protection  are 
among the overarching policy aims with about 30% of the total available funding over 2007-
13 directly and indirectly invested in those areas. The ERDF regulation14 explicitly mentions 
priorities  related  to  environmental  technologies.  Over  the  period  2000  –  2006  the  ERDF 
allocated €25.5 and the Cohesion Fund €15.8 billion to environment-related interventions and 
€1.4 billion has been spent on environmentally friendly technologies (three quarters of this in 
support  of  SMEs).  An  assessment  of  the  Regional  Programmes  for  Innovative  Actions 
(RPIA)15 highlights some examples  related to environmental technologies. However there is 
little evidence16 that  it  has been  used  to  develop or diffuse eco-innovative technologies  at a 
larger  scale.  Between  2007-2013  the  Structural  Funds  (SF)  allocations  to  the  promotion  of 
environmentally  friendly  products  and  production  processes  in  SMEs  increased  to  €2.4 
billion. This shows a significant absolute increase in comparison to the previous period. 

Over  the  last  two  programming  periods  support  for  investments  in  e.g.  energy  efficiency 
(notably housing sector), clean technologies and environmental services increased. However 
in  certain  cases,  depending  on  the  split  of  the  Operational  Programmes  at  national  and/or 

14 Regulation (EC) No 1080/2006, OJ L 210 
15 Technopolis, October 2010, Policy lessons from experimentation with regional programmes of innovative actions 
16  Technopolis,  2006,  Strategic  Evaluation  on  Innovation  and  the  knowledge  based  economy  in  relation  to  the  Structural  and  Cohesion 
Funds, for the programming period 2007-2013 

7 

 
 
 
 
 
 
 
 
                                                 
regional level the related SF investments can be fragmented, as environment and innovation 
are sometimes dealt with via separate operational programmes. A recent Communication17 on 
'Regional  Policy  contributing  to  sustainable  growth  in  Europe  2020'  underlines  eco-
innovations as a key investment area and encourages the Member States and regions to make 
further  use  of  the  SF  to  boost  eco-innovations.  In  addition  the  development  of  'Smart 
Specialisation  Strategies'18  at  regional  level  and  the  launch  of  the  'smart  specialisation 
platform' will help the regions and their authorities to address the cross-sectoral nature of eco-
innovation  and  the  need  for  an  overarching  strategy.  Data  on  eco-innovation  are  not  really 
available: the available analysis of SF effects did not explicitly focus on eco-innovations or 
environmental  innovations  but  analyse  innovation-related  effects  or  environmental  effects, 
and as such provide limited evidence related to eco-innovation.  

Although  subsequent  EU  reforms  of  the  Common  Agricultural  Policy  (CAP)  reflect  a 
growing  commitment  to  environmental  issues,  the  principal  focus  has  been  on  land  use  / 
management  and  the  diffusion  of  good  practice.  The  longer-term  goals  of  CAP  reflect  the 
Lisbon and Gothenburg discourse on innovation and sustainability. However the complexity 
of the CAP, the need to manage its financial reform and ensure food supply within a global 
market place while promoting cohesion amongst rural communities are not likely to allow a 
dedicated  attention  to  eco-innovation  in  this  area.  Agricultural  policy  might  thus  be 
overlooking an important challenge or opportunity for doing more to support eco-innovation. 

Research and innovation policy 

Within  RTDI  policy  innovation  is  a  core  issue.  In  FP6  €1.4  billion  was  spent  on 
environmental  technologies  and  eco-innovations.  Most  of  it  in  the  NMP  thematic  priority 
(Nanotechnology, multifunctional knowledge-based materials; new production processes and 
devices; and integration of technologies for industrial applications) and priority 6: sustainable 
development, global change and ecosystems. Within FP7 app. €10 billion has been allocated 
to environmental technologies. Furthermore, in the context of both  FP 6 and 7 a  number of 
ERA-NETs and  ETPs were established, many of them related to environmental technologies 
(Hydrogen and fuel  cells,  Water  supply and sanitation, Steel, Chemistry, Construction etc.). 
Both FP6 and FP7 show a ‘greening’ of sub-themes after 2004, the starting year of ETAP, and 
it is explicitly mentioned as driver for some of the sub-themes.  

Energy 

Energy is well covered by other policies, apart from ETV. The political importance attributed 
to  climate  change  mitigation  and  adaptation  efforts  have  focused  efforts  on  technological 
areas,  like  renewables  and  energy  efficiency,  which  directly  contribute  to  the  reduction  of 
green  house  gases.  The  Climate  Change  and  Energy  Package  sets  targets  for  renewable 
energy and energy efficiency and provided the framework for targeted initiatives.   

The SET-Plan, launched in 2007, is a policy initiative linked to the current ETAP. The overall 
purpose of the SET-Plan “is to focus, strengthen and give coherence to the overall effort in 
Europe,  with  the  objective  of  accelerating  innovation  in  cutting  edge  European  low 
carbon  technologies”.  This  will  be  achieved  through  joint  strategic  planning,  European 
Industrial Initiatives and an increase in financial resources and international cooperation. 

17 COM(2011) 17 final and SEC(2011) 92 final 
18 COM(2010) 553, Communication from the Commission, "Regional Policy contributing to smart growth in Europe 2020" 

8 

 
 
 
 
 
 
 
 
                                                 
A  follow  up  communication19  addressees  the  need  for  additional  public/private  funding 
(€50bn  by  2020)  for  low  carbon  technologies  to  cover  basic  and  applied  research, 
demonstration and market take up. The initiative includes technology 'roadmaps' for key low 
carbon  technologies:  wind,  solar,  electricity  grids,  bioenergy,  carbon  capture  and  storage 
(CCS)  and  sustainable  nuclear  fission.  The  communication  also  proposed  to  reinforce 
financial  instruments  (RSFF,  GIF,  Marguerite  Fund)  to  support  large  demonstrations  and 
replication projects in the identified areas. 

The SET-Plan will have a direct impact on eco-innovation rates, however limited only to the 
energy  sector.    The  focused  SET-Plan  will  not  provide  a  coordinating  aspect  and  overview 
over  the  wide  eco-innovation  field  and  risks  missing  out  on  the  opportunities  provided  by 
emerging "non- energy" technologies. ETAP would thus complement the SET-Plan. There is 
also a potential for synergies for example with regard to the financial instruments providing 
funding to the uptake of eco-innovation.  

In  practice,  energy  is  thus  well  covered  by  other  policies.  The  exception  would  be  ETV,  a 
focus area for ETAP, not covered by other energy-related policies. Accordingly, there seems 
to  be  little  value-added  in  covering  energy,  so  excluding  energy  from  any  eco-innovation 
policy initiative (ie Options 3 to 5) provides the best value added. 

3.2.1  Emerging policy landscape for eco-innovation – Europe 2020 Flagships 

Any  future  eco-innovation  initiative  must  take  account  of  the  new  policy  framework  set  by 
the  Europe  2020  Flagship  Initiatives  “Innovation  Union”,  "A  resource-efficient  Europe", 
"Industrial policy for a globalized Era"20 and "Agenda for new skills and jobs"21.  

The "Innovation Union" sets the future framework for innovation policy in the EU. Any new 
eco-innovation  initiative  needs  to  build  on  the  "Innovation  Union"  and  take  it  forward  in  a 
way  that  specifically  supports  eco-innovation.  At  times,  this  is  explicit  such  as  creating 
European Innovation Partnerships (IPs) to address specific societal challenges or the review 
of  environmental  legislation  with  regards  to  their  eco-innovation  potential.  A  long–term 
vision for the direction of the green transition is provided in the "Resource Efficient Europe" 
to increase certainty for investment and eco-innovation.   

Additionally the Industrial Policy Flagship explicitly states that the EcoAP will put in place 
the  tools  to  identify  the  deployment  requirements  for  key  environmental  technologies, 
enhance  coordination  and  cooperation  between  the  EU  and  Member  States  and  generate 
awareness of the potential of new technologies. The New Skills and Jobs Flagship calls for an 
Eco-innovation  Action  Plan  to  support  competences  for  sustainable  development,  and 
promote appropriate skills development and tackle skills mismatches. 

3.3 

Implementing eco-innovation policies – Lessons learnt 

The  first  attempt  at  a  systemic  approach  to  eco-innovation  policy  was  the  Environmental 
Technologies Action Plan (ETAP) launched in 200422. Its aim was to harness the potential of 

19 COM (2009) 519, Investing in the development of low carbon technologies (SET-Plan) 
20 COM (2010) 614 Communication from the Commission: "An integrated industrial policy for the industrial era" 
21 COM (2010) 682 Communication from the Commission: "An agenda for new skills and jobs" 
22 COM (2004) 38 final, Communication from the Commission, Stimulating technologies for sustainable development: An Environmental 
Technologies Acton Plan for the European Union 

9 

 
 
 
 
 
 
 
 
 
 
                                                 
technologies 

environmental 
to 
competitiveness  and  growth.  It  was  the  first  attempt  at  coordinating  heterogeneous  policies 
and mobilizing stakeholders. It has been reviewed once and two progress reports have been 
issued23, and also two reviews of the ETAP National Roadmaps have been conducted.24  

the  environment  and  contribute 

to  better  protect 

The key lessons for promoting eco-innovation are (see Annex IV for detailed analysis): 

•  Eco-innovation will not emerge without an innovation-friendly environmental policy. 
•  Eco-innovation  is  also  conditioned  by  the  wider  framework  conditions,  outside  the 
realm of environmental policy. A case for integrated policy approaches can be made25.  
•  Need to consider unintended negative environmental consequences (e.g. growing crops 

to produce biofuels can lead to deforestation and increase greenhouse gas emissions).  

•  Need  to  focus  on  demand-side  actions  to  ensure  uptake  and  EU-wide  technology 
spillovers. Benefits only materialize when the eco-innovation is taken up and delivers.  
•  The ETAP report of 2007 specified priority sectors (sustainable construction, waste & 
recycling, food & drink), and this resulted in a more coordinated approach as seen in 
the launch of Lead Markets in sustainable construction and waste & recycling.    

•  EU Member States devote a lot of attention to the creation and development of new, 
eco-innovative  firms  and  ventures.  National  strategies  to  support  eco-innovation 
provide  opportunities  to  coordinate  policy  dialogue.  In  Europe,  ETAP  has  been  a 
vehicle  to  systematize  and  reorganize  existing  measures.  In  particular  in  the  New 
Member States ETAP helped launch policy debates on eco-innovation.  

The  ETAP-specific  experiences  related  to  eco-innovation  policy  are  described  below, 
organized according to ETAP intervention areas.  

3.3.1 Getting from research to markets 

ETAP  has  been  successful  in  influencing  the  research  priorities  in  the  Framework 
Programmes  (FPs)  and  supporting  infrastructure  (European  Technology  Platforms  (ETPs), 
Joint Technology Initiatives (JTIs)). However research efforts could still be better coordinated 
and are not always aligned with emerging environmental and market needs.  

3.3.2 Improving market conditions 

ETAP  was  successful  in  mobilising  public  and  private  sources  of  funding  to  accelerate  the 
market uptake of eco-innovative technologies. The main results are: 

• 

• 

• 

the creation of the new Competitiveness and Innovation Programme, with specific 
support  actions  for  eco-innovation  and  an  indicative  budget  of  €433  million  (2007-
2013) including participation in venture capital (VC) investment funds and support of 
market replication and pilot projects;  
the revision of the environmental State Aid guidelines, with a specific 10% bonus on 
the maximum aid intensity for eco-innovation investments;  
the  agreement  on  a  target  for  Green  Public  Procurement  (GPP)  of  50%  of  general 
public procurement as from 2010, and development of related tools.  

23  CEC  2005,  Report  on  the  implementation  of  the  Environmental  Technologies  Action  Plan  in  2004,  COM(2005)  16  final;  CEC  2007, 
Report  on  the  Environmental  Technologies  Action  Plan  (2005-2006),  COM(2007)  162  final;  Ecorys  2009,  The  implementation  of  the 
Environmental Technologies Action Plan, Rotterdam 
24 CEC 2007, Commission Staff Working Document Accompanying Report of the Environmental Technologies Action Plan (2005-2006) 
{COM(2007) 162 final}; WIFO 2009, Assessment of ETAP roadmaps with regard to their eco-innovation potential, Vienna 
25 European Commission, Directorate-General Environment (2007), "Designing environmental policy to be innovation friendly" 

10 

 
 
 
 
 
 
 
 
                                                 
With respect to mobilizing EU financing, ETAP was not so successful in ensuring a greater 
role for cohesion policy in eco-innovation development and uptake. Experience shows that the 
design of future EU financial instruments for eco-innovation should be better linked to policy 
objectives,  national  instruments  and  market  needs.  Finally,  ETAP  shows  that  if  financial 
instrument  for  eco-innovation  are  to  have  an  impact  they  must  be  part  of  a  package  of 
financial and non-financial measures designed to address a specific policy objective. 

The 2007 ETAP report points to the role of innovation initiatives in emerging sectors, where 
established communication channels do not exist (see Lead Market for bio-based products26).  

Finally, the lack of uniform implementation in the MSs of the environmental acquis creates an 
uncertain business environment. A stable policy framework with greater harmonization or co-
ordination, together with simplification of complex national regulations would help. 

3.3.3 Acting globally 

ETAP has not been successful in putting eco-innovation on the international agenda. Progress 
in removing trade tariffs for environmental goods and services was slow due to the delays in 
the  general  WTO  trade  negotiations.  However,  international  cooperation  on  the  'green 
economy' creates new opportunities.   

ETAP  experiences  show  that  a  “one-size-fits  all”  solution  does  not  work.    Entrepreneurs  in 
the  EU  face  different  challenges  and  opportunities  from  those  in  developing  and  rapidly 
industrialized  countries.  Finally,  for  technology  transfer27  (TT)  to  happen,  indigenous  eco-
innovation  capabilities  need  to  be  developed  to  facilitate  the  adoption,  adaptation  and 
development of technologies that fit the specific conditions of recipient countries.  

3.3.4 Governance of ETAP 

The ETAP High Level Working Group and the ETAP National Roadmaps are the main EU 
instruments for stimulating eco-innovation policies at the EU and MS level. However the lack 
of a clear leadership role for ETAP meant that the impact was sometimes incoherent. A high 
level  of  MS  engagement  was  achieved,  but  insufficient  networking  (ie  weak  links  across 
policy areas, actors and sectors) was the key obstacle to a coherent approach.  

Considerable  experience  has  been  accumulated  through  the  ETAP  National  Roadmaps. 
However,  the  voluntary  nature  of  the  Roadmaps,  their  retrospective  nature  and  the  lack  of 
appropriate  follow-up,  risks  an  uneven  impact  of  ETAP  across  the  Member  States.  This  is 
further  aggravated  by  the  lack  of  qualitative  information  on  the  status,  design,  target  and 
budget of eco-innovation instruments to further assess their potential impact. 

3.4 

Underlying drivers of the problem 

The drivers affecting eco-innovation uptake in the EU can be grouped into four classes. Some 
of these drivers are specific to eco-innovation, but many are not. The current policy measures 
take account of this specificity, but in some cases a targeted policy response is needed.  

26 SEC (2009) 1198, Commission Staff Working Document, "Lead Market Initiative for Europe – Mid-term progress report" 
27 See Berlin ETAP Forum (April 2nd – 3rd, 2011): http://ec.europa.eu/environment/ecoinnovation2009/1st_forum 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.4.1 Research leading to eco-innovation and to market applications 

•  Inadequate  level  of  research  on  eco-innovation  –  Not  specific  for  eco-innovation, 
but  more  severe  than  in  other  policy  areas.  Companies  do  not  by  themselves  invest 
enough  in  innovative  solutions  to  reduce  pollution  or  the  resource  intensity  of  their 
activities. Available financing and support is inadequate especially for SMEs.  

The  current  policy  response  is  adequate.  European  funding  for  environmental 
technologies  increased  from  €1.4  billion  in  the  6th  Framework  Programme  for 
Research and Technological Development (FP6) to €10 billion in the 7th FP. As such, 
policy is already tackling the problem of lack of research. 

•  Need for better coordination of research programmes – Generic innovation issue. 
National research efforts do not reflect national strengths and often overlap preventing 
the achievement critical mass and smart specialization at a European level. 

The current policy response is adequate. An ERA-Net on eco-innovation (part of FP7) 
has  been  launched,  as  a  first  attempt  to  coordinate  MS  eco-innovation  research 
activities. Commission is promoting joint programming. Furthermore IPs, granted they 
take account of eco-innovation, will coordinate research efforts in key areas. 

•  Weak linkages between research and market – Not specific for eco-innovation, but 
more severe than in other policy areas. Particularly true for environmental technology 
transfer and early-stage financing to turn research results into market applications.  

Environmental innovations evolve with the social, legal and economic settings. They 
mutually influence each other and therefore successful transfer to the market depends 
on the path of its development. Increasing returns to adoption exist, (i.e. economies of 
scale and scope, etc.) lead to ‘lock-in’ of incumbent technologies, preventing the take 
up of less environmentally harmful alternatives. Industrial economies are locked-in to 
carbon  intensive  fossil  fuel  based  energy  systems,  which  consequently  lock-out  the 
development  of  new,  more  sustainable  technologies28  that  are  yet  to  benefit  from 
economies scale and scope. Coordinating policies29 must overcome these lock-ins.  

The  current  policy  response  is  inadequate.  The  IPs  will  address  these  issues  in  the 
targeted, high-potential areas, going further than the existing Lead Market Initiative30 
(LMI). For eco-innovation to benefit they should be integrated into this approach. 

•  Inadequate “skills” base – Not specific for eco-innovation, but more severe than in 
other policy areas. Specific skills and knowledge is required for greening industries. 
However,  skills  gaps  and  mismatches  for  green  and  greener  jobs  are  expected  to 
worsen unless tackled31.  

The  current  policy  response  is  inadequate.  The  New  Skills,  New  Jobs  initiative  will 
focus  on  skills  anticipation  and  provision,  but  it  calls  upon  an  EcoAP  to  support 

28   Unruh, G C (2000), ‘Understanding carbon lock in’, Energy Policy 28, 817-830; Unruh, G C (2002), ‘Escaping carbon lock in’, Energy 
Policy 30, 317-325 
29  Foxon  (2002).  Technological  and  institutional  ‘lock-in’  as  a  barrier  to  sustainable  innovation.  ICCEPT  working  paper.  Available  at 
http://www.iccept.ic.ac.uk/public.html 
30 COM (2007) 860, Communication from the Commission, "A Lead Market Initiative for Europe" 
31 CEDEFOP (2010), "Skills for green jobs" 

12 

 
 
 
 
 
 
 
 
 
 
                                                 
appropriate skills development. The value added of EcoAP will be to indicate priority 
sectors and facilitate policy learning between MS. 

3.4.2 Market demand for eco-innovation  

•  Market  prices  do  not  adequately  reflect  environmental  costs  –  Eco-innovation 
specific.  Failure  to  price  environmental  externalities  -  or  providing  environmentally 
harmful  subsidies  -  puts  eco-innovation  at  a  disadvantage  with  cheaper,  but  more 
polluting and less efficient technologies. For instance the Hungarian ETAP Roadmap32 
states  that  the  economy  is  “…characterised  by  poor  energy  efficiency…  resulting  in 
reduced competitiveness due to the higher specific costs [of eco-innovations] … also 
strengthened  by  the  fact  that  market  prices  do  not  take  into  account  environmental 
externalities, or do so but at an insignificant level, the actors … are not environment-
conscious and resources are wastefully used in both material and energy terms…”. 

The  current  policy  response  is  adequate.  The  issue  is  dealt  within  individual 
environmental policies and under the aegis of the Resource Efficiency Roadmap. 

•  Demand side measures are weak – Not specific for eco-innovation, but more severe 
than  in  other  policy  areas.  Current  EU  and  Member  State  innovation  policies  and 
instruments seem biased towards supply-side innovation policies33.  The analysis34 of 
policy  measures  listed  in  the  ETAP  roadmaps  shows  (see  Figure  1)  that  Member 
States  rarely  design  and  implement  demand  side  policies  for  eco-innovation.  Also 
private  sector  expect  governments  to  create  markets  for  environmentally  better 
performing products and solutions, for instance through green public procurement35.  

Figure 1: Balance of policy instrument across ETAP countries 

32 See: http://ec.europa.eu/environment/etap/policy/pdfs/roadmaps/hu_en.pdf 
33 OECD (2008), "National approaches for promoting eco-innovation: Policy issues" 
34  "Assessment  of  ETAP  roadmaps  with  regard  to  their  eco-innovation  potential"  http://ec.europa.eu/environment/etap/files/env-
map_projektt2_finalreport_maindocument_final_030910.pdf 
35 Innovative environmental growth markets from a company perspective, Research project on behalf of the Federal Environment Agency 
by Roland Berger Strategy Consultants, 2007 

13 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Source: OECD (2008), "National approaches for promoting eco-innovation: Policy issues" 

The  current  policy  response  is  inadequate.  Public  policy  must  compensate  for  the 
disadvantage eco-innovations face in the market (failure to price the env. externality). 
On  the  policy  side  the  SCP  AP  will  drive  the  change.  The  EcoAP  will  launch 
demonstration projects showing the value added of procurement of green products and 
services. Also the IP approach must be exploited towards this objective. 

•  Lack  of  appropriate  and  credible  information  on  the  performance  of  new 
environmental technologies – Not specific for eco-innovation, but more severe than 
in  other  policy  areas.  The  performance  data  from  tests  of  emerging  eco-innovation 
and demonstration plants are not always sufficiently robust for the market and do not 
adequately  address  the  information  needs  of  technology  purchasers.  Improving  the 
quality and reliability of performance data on innovative environmental technologies, 
and  the  information  on  their  environmental  and  health  effects,  would  significantly 
facilitate market access. 

This  may  be  illustrated  by  the  specific  case  of  measurement  instruments.  Three 
associations of industrial users of measurement instruments (Evaluation International 
in  the  UK,  EXERA  in  France  and  WIB  in  the  Netherlands)  regularly  undertake 
comparative  tests  and  evaluation  of  measurement,  control  and  monitoring  systems. 
They  published  joint  statistics  based  on  107  evaluations  performed  in  five  years,  in 
which they stressed that, for 80% of evaluated systems, adequate documentation was 
not  available  for  users.  In  39%  of  cases,  the  technologies  were  not  complying  with 
announced  specifications  under  normal  conditions  of  use,  this  proportion  rising  to 
74% under influence conditions. 

The current policy response is inadequate. Environmental Technology Verification is 
one way of increasing the market credibility of new technologies. An initial phase, on 
an experimental basis, should enable the testing and evaluation of the concept in near-
real conditions. 

3.4.3. The interplay between supply and demand 

•  Governance  problems  related  to  EU  innovation  support  –  Not  specific  for  eco-

14 

 
 
 
 
 
 
 
 
innovation,  but  more  severe  than  in  other  policy  areas.  The  policy  mix  for  eco-
innovation  support  ranges  from  environmental  legislation  and  the  "knowledge 
triangle"  (research,  education  and  innovation)  to  policy  areas  such  as  state  aid, 
procurement,  intellectual  property  rights  and  employment.  The  policy  mix  also 
depends  on  co-ordination  at  national,  regional  and  local  levels.  Eco-innovation 
however has not been a main objective of either environmental or innovation policy, 
while it could contribute to objectives of both policies. Further changes36 in the range 
of  EU  instruments  and  policies  used  to  support  eco-innovation  seems  necessary, 
notably to promote coherence between instruments, critical mass and to complement 
or extend them to cover also demand-led innovation measures.    

The  current  policy  response  is  inadequate.  The  measures  to  improve  governance 
between areas and national, regional and local levels is currently one of the strengths 
of ETAP, and will not be properly tackled by the Europe 2020 flagships. 

•  Difficulty  in  accessing  finance  -  Not  specific  for  eco-innovation,  but  more  severe 
than in other policy areas. Access to financial resources is one of the major difficulties 
for firms37, the main barriers are:  
o  Competency  issues  related  to  the  small  size  of  companies,  such  as  lack  of  the 
organizational  capacity  to  support  research  and  commercialisation,  lack  of 
resources to protect IPRs, and lack of business skills; 

o  Over-reliance on the public sector for financing;  
o  Industry-specific  issues  including:  divergent  goals  between  eco-innovators  and 
investors, limited knowledge of the eco-innovation market due to its rapid growth 
and embryonic development, and lack of cooperation within the industry.  

Case-study: LODOred38 
WASTEred  is  a  project  financed  under  CIP  eco-innovation  market  replication  grant 
programme. The consortium lead by BIOAZUL, a Spanish enterprise, develops and markets 
its own eco-innovative product LODOred (Sludge Reducer for Wastewater Treatment Plants) 
offering  a  15%-40%  reduction  of  the  surplus  sludge  generated  in  wastewater  treatment. 
Potential markets are the municipal and industrial treatment plants. The consortium was faced 
with  many  market  barriers.  For  example  reluctance  of  plant  owners  towards  innovative 
solutions as well as the misconception that wastewater and sludge treatment is considered as a 
cost rather than an opportunity for increasing efficiency (and profits). Those hurdles have not 
allowed  them  to  access  "normal"  financing  at  market  conditions  but  they  had  to  recur  to 
European  financing.  The  replication  of  the  project  in  Europe  is  advancing  and  the 
achievement of 30% market share in the targeted markets is well on track.   

•  Difficulty  in  providing  finance  -  Not  specific  for  eco-innovation,  but  more  severe 
than  in  other  policy  areas.  Investors  are  showing  an  increasing  interest  in  green 
investment,39 but there are still barriers to investment in eco-innovation, namely: 
o  the longer profitability horizons, the higher amounts needed, and hence the higher 

risks compared to investing in other sectors; 

o  problems  understanding  the  projects  presented  by  eco-innovative  start-ups,  which 

makes it hard to evaluate their potential and risks; 

36 OECD(2009), Eco-innovation in industry, enabling green growth, Paris, 2009. 
37    Henzelmann,  T,  Mehner,  S,  &  Zelt,  T,  2007,  Umweltpolitische  Innovations-  und  Wachstumsmärkte  aus  Sicht  der  Unternehmen 
(Innovative environmental growth markets from a company perspective), Berlin  
38 http://images.itt.camcom.it/f/Materialeconvegni/65/653_ITTUCCP_1542011.pdf   
39 Deloitte (2009): 2009 Global Trends in Venture Capital Report 

15 

 
 
 
 
 
                                                 
o  the  legislation  and  regulations  governing  eco-innovation  are  complicated,  so 

investors need a high degree of specialization;  

o  finally,  some  investors  argue,  there  is  a  real  need  to  develop  the  managerial  and 

business skills of entrepreneurs since business plans are often not good. 

Case-study: SOT Biotech GmbH40 
SOT  has  developed  a  proprietary  industrial  scale  fully  integrated  microalgae  production 
process  which  is  more  efficient  and  less  capital  intensive  than  existing  alternatives.  The 
company  is  currently  financed  with  venture  capital  money  as  well  as  with  grants.  Although 
the  company  would  have  been  interested  in  debt  financing  in  the  start-up  financing  round, 
commercial banks have declined to participate as it was too risky in their opinion. Have seen 
the  potential  of  such  technology  those  same  banks  are  currently  rather  interested  to  act  as 
financiers in such a promising company. 

In  the  case  of  providing  and  accessing  finance  the  current  policy  response  is 
inadequate.  Whilst  the  IU  will  provide  support,  there  will  be  scope  for  additional 
action  reflecting  the  eco-innovation  specific  problems  and  the  need  for  targeted 
actions. Also the networking and support of investors and financiers specific for eco-
innovation needs attention. 

3.4.4 The global uptake of eco-innovations 

•  Unfavourable  global  conditions  for  eco-innovation  -  Not  specific  for  eco-
innovation,  but  more  severe  than  in  other  policy  areas.  The  perceived  view  is  that 
there has been limited progress in the internationalisation of European eco-innovation, 
partly because of lack of demand in potential partner countries and emphasis on low-
carbon technologies. Secondly since environmental goods and services are part of the 
Doha Trade Round the opening up of global markets has been stalled. 

•  Unused potential for eco-innovation in developed and developing countries – Not 
specific for eco-innovation, but more severe than in other policy areas. Eco-innovators 
face different set of opportunities and challenges when entering markets in developing 
countries  to  those  in  rapidly  industrializing.  Secondly  a  pure  “competitiveness” 
approach  to  trade  in  eco-innovations  is  not  always  appropriate  when  looking  for 
solution to global environmental challenges. For instance certain technologies that are 
specific to the needs of developing countries are not being developed at all, because 
the  developing  countries  lack  the  innovation  capacity  to  do  so,  while  the  developed 
countries lack incentives to develop such ‘neglected’ technologies in the first place. 

•  Indigenous eco-innovation capability amongst developing countries is scarce - Not 
specific  for  eco-innovation,  but  more  severe  than  in  other  policy  areas.  Developing 
countries often lack the capacity to absorb eco-innovation and the capabilities to adopt 
and  disseminate  environmental  technologies.  Moreover,  the  governance  systems  to 
manage  eco-innovation  are  often  weak.41  Research  shows  that  "softer"  approaches 

40 http://ec.europa.eu/environment/ecoinnovation2010/2nd_forum/presentations_en.htm 

41  Popp,  D.  (2009)  Policies  for  the  Development  and  Transfer  of  Eco-Innovations:  lessons  from  the  literature.  OECD  Global  Forum  on 
Environment on eco-innovation. 

16 

 
 
 
 
 
 
 
                                                 
(like  training  or  the  transfer  of  "tacit  knowledge")  are  crucial  for  effective  eco-
innovation uptake42. 

In  the  case  of  global  uptake  of  eco-innovation  the  current  policy  response  is 
inadequate. This problem will be partially addressed by EU trade policy43. However, 
there is a gap to be tackled by the EcoAP in the form of multilateral cooperation. 

Case-study: Drying process of cash crops (coffee, tea, rice) 44 
The production and the export by developing countries of cash crops is considerable in terms 
of volume. The drying process of cash crops contributes considerably to the carbon footprint 
of  the  consumer  products  (coffee,  tea,  rice).  It  is  clear  that  the  economical,  social  and 
environmental impact of using appropriate drying technology for cash crops is high and often 
underestimated.  The  use  of  solar  dryers  allows  addressing  environmental  concerns  and 
simultaneously  being  profitable.  Barriers  to  higher  uptake  include  the  need  for  capacity-
building  (therefore  partnership  at  international  level  and  technology  transfer)  and  ad  hoc 
financial  support  to  accommodate  the  lack  of  information  and  of  initial  investment  capital. 
Brazil, India, Sri Lanka and Viet Nam are potential candidates for technology transfer.  

3.5 

Are eco-innovation specific policy interventions at the EU level still needed?   

Current policies and actions, such as those in the "Innovation Union" or "Resource Efficient 
Europe"  will  promote  eco-innovation.  However,  there  are  gaps  or  issues  specific  to  eco-
innovation,  where  EcoAP  can  provide  value-added  over  and  above  the  Europe  2020 
Flagships. Looking at the problem drivers these are:  

Inadequate “skills” base  

•  Weak linkages between research and market 
• 
•  Demand side policy measures are weak  
•  Lack  of  appropriate  and  credible 

information  on 

the  performance  of  new 

environmental technologies 

•  Governance problems related to EU innovation support 
•  Problems related to environmental acquis 
•  Difficulties in accessing and providing finance  
•  Unfavourable global conditions for eco-innovation  

To  sum  up,  whilst  the  Europe  2020  Flagships  will  help  tackle  the  problems  related  to  eco-
innovation,  there  is  scope  for  additional  policies  targeted  on  the  specific  bottlenecks  and 
market  failures  that  exist  for  eco-innovation.  A  targeted  eco-innovation  policy  would 
complement and build on the Innovation Union and other policies in two ways: 

1.  Taking forward some elements of the Innovation Union such as the screening of the 

regulatory framework for eco-innovation.  

2.  Putting  in  place  eco-innovation  measures  that  target  specific  environmental  drivers 
that  would  only  be  partially  responded  to  by  the  more  generic  actions  set  out  in  the 
Europe 2020 Flagships. 

42 Ockwell (2009) Scoping Note on the difficulties developing countries face in accessing markets for eco-innovation. Final report for the 
OECD Environment Directorate.  
43 COM (2010) 612, "Trade, growth and world affairs. Trade policy as a core component of the EU's 2020 strategy" 
44    "Technology  Transfer  for  reducing  the  carbon  footprint.  The  example  of  cleaner  technologies  for  food  processing".  Cassia  Maria  Lie 

Ugaya (Brazil) and Bernard Mazijn (Belgium) 

17 

 
 
 
 
 
 
 
 
                                                 
3.6  Who is affected, in what ways, and to what extent? 

The slow pace of eco-innovation adoption means lost benefits for a range of stakeholders. The 
most obvious loss is slower growth in production and commercial activities for eco-industries. 
For a description of Europe's eco-industry turnover, composition, employment and its future 
potential see Annex III.  

There is widespread consensus that increasing eco-industry activities can spur the creation of 
‘green jobs’ and help outweigh the job losses in other industrial sectors45. Global wind power 
employment projections, 2010 – 2050 by Global Wind Energy Outlook46 estimate a potential 
of 2.1 – 2.8 million jobs. EPIA and Greenpeace project that by 2030, 6.3 million jobs47 could 
be created in solar energy generation. The European Renewable Energy Council argues that 
by increasing the share of renewable energy in Europe to 20% by 2020, there is a potential for 
the creation of more than 2 million jobs.48  

Moving  towards  cleaner  and  more  energy-  and  resource-efficient  products  and  processes 
should  give  all  European  industry  -  not  just  the  eco-industries  -  a  competitive  advantage49. 
Finally, eco-innovation is also good for the environment, allowing environmental objectives 
to be more ambitious and / or achieved at lower cost.  

3.7 

Does the EU have the right to act? The EU added-value 

Eco-innovation is at the crossroads of articles 173 and 191 of the Lisbon Treaty, and so is a 
shared  responsibility  between  MS  and  EU.  In  the  field  of  innovation  the  EU  coordinates, 
supports  and  supplements  the  innovation  policies  of  the  Member  States,  but  cannot  replace 
them. The need for a coordinated policy approach able to address eco-innovation failures and 
to create favourable conditions requires intervention at the EU level and cannot be achieved 
by individual EU Member States alone.  

EU  level  innovation  policy  action  is  also  necessary  to  respond  to  the  increasing  geographic 
complexity of innovation that requires increasing cooperation with innovation actors outside 
the territory of an individual Member State. Therefore the European added value of an eco-
innovation initiative is evident.  

4.  OBJECTIVES  

The  problem  analysis  has  underlined  that  improving  Europe’s  eco-innovation  performance 
must  be  tackled  from  both  the  supply  and  the  demand  side  in  an  integrated  approach.  The 
objectives below focus on the problem drivers left unaddressed or where the measures in IU 
or other policy initiatives need to be taken forward (as specified in chapter 3.5)  and so where 
there is potential to add value.  

45 ILO (2010), "Green jobs: Towards decent work in a sustainable, low carbon world" 
46 Greenpeace and Global Wind Energy Council (GWEC), Global Wind Energy Outlook, 2006 
47 EPIA and Greenpeace International, "Solar generation: Solar electricity for over one billion people and two billion jobs by 2020, 2006. 
These projections are under an "Advanced" scenario positing additional support and dynamic growth.  
48 Renner, M., M. Ghani-Eneland, and A. Chawla, 2009, Low-Carbon Jobs for Europe: Current Opportunities and Future Prospects, June 
2009, World Wide Fund for Nature, Brussels 
49.  OECD,  2010,  Greening  Jobs  and  Skills:  labour  market  implications  of  addressing  climate  change,  Local  Employment  and  Economic 
Development Programme Working Paper 

18 

 
 
 
 
 
 
 
 
 
 
 
                                                 
4.1  General objectives 

EcoAP  will  contribute  to  attaining  the  objectives  of  the  Europe  2020  Strategy  and  in 
particular  the  "Innovation  Union".  It  will  accelerate  the  development  and  uptake  of  eco-
innovation by tackling eco-innovation specific barriers, with an overall objective of: 

• 

Increasing the rate of eco-innovation and its uptake in Europe and in so doing deliver 
efficient  solutions  for  environmental  problems,  and  boost  the  resource  efficiency  of 
Europe and its competitiveness. 

4.2 

Specific and operational objectives 

Specific  objective  1:  to  apply  the  principles  of  the  Innovation  Union  Initiative  to  eco-
innovation. This will be done through the following operational objectives: 

-  Putting in place an eco-innovation friendly environmental regulatory framework  
- 

Integrate eco-innovation concerns into relevant policies and initiative, in particular in 
the innovation policy field  

-  The  European  Commission  will  in  2012  make  proposals  for  better  targeting  of  EU 

funds on eco-innovation as part of the next EU financial perspectives. 

Specific  objective  2:  to  promote  eco-innovation  in  Europe.  This  will  be  done  through  the 
following operational objectives: 

-  Strengthen eco-innovation capacities of SMEs through increased networking and the 

- 

spread of best practice  (2011 onwards) 
Increase the market credibility and investment readiness of emerging eco-innovations 
(2011 onwards). 

Specific objective 3: to improve global markets for eco-innovation. This will be done through 
the following operational objectives: 

-  Open up global markets to eco-innovation 
- 

Improve global capacities for eco-innovation, in particular in developing countries 

5.  POLICY OPTIONS 

Option 1 is a baseline option whereby EU policies that already exist or are under development 
are  implemented  but  there  are  no  additional  policies  on  eco-innovation.  It  provides  the 
baseline against which the other options are compared. Option 2 is the simple continuation of 
ETAP.  Option  3  looks  at  a  basket  of  actions  to  take  forward  the  Europe  2020  Flagships. 
Option 4 looks at a number of SME eco-innovation specific actions, while Option 5 sets out 
more wide ranging regulatory intervention in support of eco-innovation.  

5.1  Option 1: Discontinuation of ETAP (no specific EU action) 

Under  this  option,  several  instruments  and  policy  directions  will  continue,  at  least  for  a 
limited period – but the focus on eco-innovation may be limited or abandoned. In particular, 
eco-innovation would be taken forward through: 

- 

the  Europe  2020  flagships,  including  the  Innovation  Union,  Industrial  Policy  for  a 
Globalized Era, A Resource-Efficient Europe and the Agenda for New Skills and Jobs, 

19 

 
 
 
 
 
 
 
 
 
 
 
-  environment  policy  will  continue  to  create  markets  and  set  incentives  for  eco-

innovation, 
funding for innovation from CIP and LIFE+. 

- 

Although  during  stakeholder  consultations  both  positive  and  negative  opinions  about  ETAP 
were voiced, the discontinuation of ETAP was never deemed to be beneficial.   

5.2  Option 2: Continuation of ETAP 

The current Action Plan consists of 29 actions, including 9 priority actions (PA) (see Figure ). 
The  option  would  see  a  continuation  of  the  current  four  main  domains.  Firstly,  promoting 
"green"  research  while  attracting  private  and  public  investment.  Secondly,  tackling  the 
unfavourable  conditions  faced  by  eco-innovators  in  the  market  (by  facilitating  access  to 
finance). Thirdly, promotion of environmental technologies abroad. Finally, governance and 
networking of stakeholders (public institutions, enterprises, researchers, financial institutions, 
etc.) to increase the knowledge base for eco-innovation. Continuation of ETAP would have a 
strong focus on technology (excluding social and organisational eco-innovation), and a "light" 
governance (through the HLWG).  

Figure 2: Actions under the ETAP option 

A1 

A2 

A3 

A4 

A5 

A6 

A7 

A8 

A9 

Increasing and focusing research, demonstration and dissemination. Improving co-ordination of relevant programmes 

Establishing technology platforms 

Establishing European Networks for technology testing, performance verification and standardisation  

Developing and agreeing on performance targets for key products, processes and services  

Mobilising financial instruments to share the risk of investing in environmental technologies  

Encouraging systematic internalisation of costs through market-based instruments 

Encouraging procurement of environmental technologies 

Raising business and consumer awareness 

Supporting eco-technologies in developing countries, and promoting foreign investment 

All stakeholders, including the Member States, have shown continuing support for ETAP. It 
was  stressed  that  any  continuation  of  ETAP  should  take  stock  of  the  lessons  learned  and 
reflect the latest policy developments in order to reinforce the ETAP approach. 

5.3  Option 3: Taking forward the Europe 2020 Flagships 

Option 3 would involve doing what is promised in the context of the Europe 2020 for the area 
of  eco-innovation,  in  particular  the  review  of  environmental  legislation,  inclusion  of  eco-
innovation aspects in the Innovation Partnerships or supporting the development of skills for 
green  and  greener  jobs.  Whilst  there  is  a  commitment  to  these  actions  already,  this  option 
would  provide  firm  ownership  for  them,  and  put  them  in  the  context  of  an  EcoAP  that  has 
clear governance and so ensure a clear follow-up. 

In addition Option 3 builds on ETAP lessons learnt, by expanding from green technologies to 
eco-innovation. The improved governance framework responds to the identified ETAP gaps. 
This is evident in the emphasis on policy learning between the MS as well as transformation 
of  the  Roadmaps  from  summaries  of  (past)  national  actions  towards  pro-active,  forward 
looking documents (i.e. ensuring a coherent impact of the measures across the EU).  

20 

 
 
 
 
 
 
 
 
 
 
During  the  consultation  stakeholders  stressed  the  need  for  the  Action  Plan  to  link  and 
complement associated Europe 2020 Flagships (in particular Innovation Union and Resource 
Efficiency).  

Action 1: 

Screening the environmental regulatory framework for eco-innovation 

ETAP  has  shown  that  eco-innovation  will  not  emerge  without  an  eco-innovation  friendly 
environmental  policy.  Forthcoming  initiatives  will  thus  be  designed  so  that  they  drive  and 
support eco-innovation. This means that future proposals and policy reviews will consider the 
following  assessment  criteria50:  a)  promote  innovation  for  achieving  best  the  defined 
environmental objectives, b) avoid technology lock-in and stimulate competition, c) remove 
barriers  to  research  and  development  activities,  d)  facilitate  the  emergence  of  commercially 
viable new products or practices, e) accelerate the uptake of eco-innovation. 

The screening will be carried out by the European Commission with the help of stakeholders, 
based  on  guidance  to  be  developed  with  the  HLWG.  It  will  begin  with  the  revised  Waste 
Framework  Directive,  the  2012  Water  Blueprint,  the  2013  clean  air  legislation  review,  the 
reviews of the Thematic Strategies under the 6th Environmental Action Programme.  

Action 2: 

Partnerships for eco-innovation 

The  Commission  has  launched  a  pilot  Innovation  Partnership  (IP)  on  active  and  healthy 
ageing, with the expectation of more to follow (in particular Partnerships for water-efficiency 
or  secondary  raw  materials).  The  partnership  approach  will  bring  together  the  right 
stakeholders along the value chain, identifying bottlenecks and applying the right instruments.  
Eco-innovation  is  conditioned  by  wider  framework  conditions  and  EcoAP  will  support  the 
integration of eco-innovation considerations into new IPs as they are developed and where it 
has something to offer. 

EcoAP will also build the foundations for IPs in areas more directly related to eco-innovation: 
sectors like methane from bio-waste, eco-system services for flood and droughts protection or 
green chemicals have the potential to become new Partnership areas. EcoAP, through the Eco-
innovation  Observatory51  (EIO),  will  provide  support  in  the  form  of  market  intelligence  on 
emerging  eco-innovation  sectors,  opportunities  and  mobilizing  stakeholders.  Also,  pilot 
schemes  will  be  implemented  to  bundle  public  and  private  procurement  for  promoting  eco-
innovation  in  emerging  partnership  areas.  Tender  specifications  and  documents  will  be 
developed for wider public and private sector use.  

Action 3:  Mobilising financial resources, both public and private, for investment in 
eco-innovation  

Finance  for  innovation  comes  mainly  from  the  LIFE  programme,  the  Competitiveness  and 
Innovation  Framework  Programme  (CIP),  and  cohesion  policy.  These  efforts  are  not 
sufficient  to  support  green  SMEs.  Faster  pace  of  eco-innovation  and  market  penetration  is 
hampered  by  the  lack  of  risk  finance  and  support  for  demonstration.    Only  15%-20%  of 
applications  for  eco-innovation  demonstration  have  been  supported  under  CIP  programme. 
Financiers  tend  to  use  the  same  investment  rationale  for  eco-innovative  enterprises  as  for 

50 Criteria based on: EC, DG Environment, 2007 "Designing environmental policy to be innovation friendly"; OECD, 2011, "Better policies 
to support eco-innovation" 
51 A DG Environment funded network monitoring eco-innovation trends and opportunities and gathering market intelligence on key green 
sectors. The network is funded through the CIP program and operational till end 2012. For details see: http://www.eco-innovation.eu/ 

21 

 
 
 
 
 
 
 
 
 
                                                 
investments  in  “traditional”  sectors  (i.e.  same  expected  return,  same  level  of  accepted  risk) 
and the social and environmental challenges do not play a role in investment decisions52. 

As  part  of  the  next  EU  financial  perspectives  the  Commission  will  consider  whether  to 
propose: 
•  Reinforced and focused support for eco-innovation demonstration projects in SMEs 
•  Risk  capital  support  for  eco-innovation  in  SMEs  including  equity  and  loan  financing 
schemes with flexible risk sharing and guarantee schemes for mobilising private finance 
•  Technical  assistance  for  SMEs  and  financial  sector  in  developing  bankable  projects,  for 
appraising their bankability and for implementing projects benefitting from risk financing. 

Representatives  of  business  and  financial  community  have  debated53  the  issue  of  eco-
innovation  financing  in  the  context  of  the  9th  ETAP  Forum  in  2010.  Its  specificity  was 
recognised and there was support regarding the above mentioned proposals. Also the HLWG 
has supported the approach and in particular the need to reinforce financial support to SMEs. 

Action 4: 
processes and services to reduce their environmental footprint 

Developing  standards  and  performance  targets  for  key  products, 

The Commission and the Member States will work together with European and international 
standardisation bodies to ensure that new and revised standards are performance-related and 
better accommodate environmental technologies and eco-innovation.  Industrial stakeholders 
will be mobilised to work on standardization and to drive the process of introducing the new 
standards to the market. As part of the review of the Sustainable Consumption and Production 
and  Sustainable  Industrial  Policy  Action  Plan  in  2012,  it  will  be  assessed  whether  it  is 
possible to expand the scope of the Eco-design directive to non-energy related products. 

Action 5: 
industry  

Developing  new  skills  for  new  jobs  in  environmental  goods  and  services 

The “New skills for new jobs” initiative will promote the set of skills needed for the transition 
to  a  low  carbon  and  resource  efficient  economy.  A    European  Sector  Council  on  skills  for 
green and greener jobs could build on this by facilitating the exchange of information between 
Member  States  on  skills  profiles,  training  programmes  and  emerging  skills  gaps  and  skills 
mismatches  related  to  occupational  needs  for  the  growing  demand  of  energy  efficient 
economy.  Skills  and  employment  strategies  will  be  developed  for  promising  areas,  i.e.  bio-
energy  skills  roadmaps  and  the  construction  of  zero-carbon  homes.  This  Sector  Council  on 
skills  for  green  and  greener  jobs  would  have  to  be  closely  associated  to  the  upcoming  EU 
Skills  Panorama  which  will  collect  forecast  and  foresight  information  from  Member  States 
and international organisations on future skills needs, supply and mismatch possibly having a 
'green' dimension. 

Action 6: 

Governance of eco-innovation policy 

This  action  would  strengthen  the  governance  of  the  Action  Plan,  both  at  a  national  and  EU 
level.  The  Eco-innovation  National  Roadmaps  would  track  and  highlight  upcoming  eco-
innovation policy initiatives in the Member States. The HLWG would become the focal point 
for  eco-innovation  policy  development  at  the  EU  level  and  the  venue  for  peer  reviews  and 

52 EIM & Oxford Research for DG Environment (2011), Financing eco-innovation 
53 For Forum conclusions see: http://ec.europa.eu/environment/ecoinnovation2010/2nd_forum/index_en.htm 

22 

 
 
 
 
 
 
 
 
 
                                                 
policy  exchange  between  the  Member  States.  Pilots  would  be  launched54  to  prepare  the 
ground  for  implementation  of  the  most  promising  policy  practice  in  other  MS.  The  Eco-
innovation  Forum  would  be  used  for  regular  consultation  of  stakeholders  on  the  available 
policy options, mobilization and networking of eco-innovators.   

Following  on  from  ETAP  lessons  learnt,  the  new  governance  structure  will  help  set  the 
agenda  for  eco-innovation  outside  the  environmental  domain.  As  eco-innovation  is 
conditioned  by  wider  framework  conditions  the  Action  Plan  and  the  HLWG,  will  act  as 
agenda  setters  for  eco-innovation  integrating  it  into  other  policies  through  regular  contacts 
and exchanges between relevant Commission services and Member States.  

During the consultations there were concerns, especially from the Member States, about the 
participation of business entities as permanent members of the new governance structure. As a 
result  this  action  excludes  private  members  from  the  HLWG,  but  foresees  extensive  and 
regular consultations in the framework of the new governance structure.   

5.4  Option 4: SME-targeted actions  

In order to seize the emerging opportunities SMEs must become active developers and users 
of  eco-innovation55.  This  option  focuses  on  the  eco-innovation  needs  of  SMEs,  expanded 
scope  of  intervention  from  environmental  technologies  to  also  include  non-technical  eco-
innovation, a real focus on the global dimension and increased attention to networking. The 
actions are in two broad areas: additional actions specific to eco-innovation and going beyond 
the Europe 2020 flagships and global actions.  

Considering the significant impact of SMEs on the environment Option 4 aims to facilitate the 
development  and  uptake  of  eco-innovation  within  this  sector.  SMEs  face  specific  barriers 
hindering  the  adoption  of  eco-innovations  and  specific  measures  should  be  developed  to 
promote their adoption by SMEs56. 

The  stakeholder  consultation  showed  wide  support  for  focusing  efforts  on  SMEs.  Some 
stakeholders  (particularly  the  academic  representatives)  objected  to  the  exclusion  of 
consumers from the planned policy initiative. This was justified by the need to avoid overlaps 
with other initiatives, such as the SCP-AP.  

Action 1: 
business networks    

Targeted  eco-innovation  support  for  SMEs  through  enterprise  and 

The Enterprise Europe Network57 offers support and advice to businesses across Europe and 
other  participating  countries.  In  order  to  improve  investment  readiness  for  eco-innovative 
SMEs  and  help  them  devise  and  implement  eco-innovative  solutions  for  their  businesses, 
further SME support should be mobilized. 

54 Policy pilots are part of the work programme of the DG Environment funded network "Instruments and policies for eco-innovation" and 
part of the ProInno Europe. The network is operational till end 2013.  
55 The 8th ETAP Forum Declaration, June 2010, "Fostering eco-innovation in SMEs" 
56 JRC IPTS, 2007, "Promoting environmental technologies in SMEs: Barriers and measures" 
57 For details see: http://www.enterprise-europe-network.ec.europa.eu/index_en.htm 

23 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
•  The European Commission, in cooperation with the Enterprise Europe Network, will 
expand  the  activities  of  the  “Environmental  Assistants  for  SMEs”.  The  scheme  will 
enhance and consolidate ecological approaches in SMEs and provide the SMEs with 
the necessary skills and awareness to stimulate eco-innovation.  

•  The Action Plan will work towards the establishment in 2012 of a European network 
of  eco-innovation  financiers  by  providing  advice  and  knowledge-building  on  eco-
efficient  technologies,  green  procurement,  green  business  models  and  services, 
business plan preparation and connecting entrepreneurs with finance providers. 

Action 2: 
Environmental Technology Verification initiative, to test an EU ETV pilot 
programme  and  evaluate  its  potential  in  facilitating  market  access  for  innovative 
environmental technologies 

The Environmental Technology Verification initiative (ETV) – involving Member States and 
participants  on  a  voluntary  basis  –  aims  to  generate  independent  and  highly  credible 
information  about  new  environmental  technologies.  It  will  do  this  by  verifying  that 
performance  claims  by  technology  developers  and  vendors  are  accurate,  complete,  fair  and 
based on reliable test results. The objective of ETV is three-fold: 

•  To  help  developers  and  vendors,  especially  SMEs,  provide  objective  and  reliable 
evidence on the performance of new eco-technologies they are bringing to the market, 
in  order  to  convince  investors  and  potential  customers  about  the  merits  of  the 
technologies; 

•  To support technology purchasers (public or private), who  need to  base  their buying 
decisions  on  sound  information,  widely  recognised  as  scientifically  valid  and 
acceptable as proof of evidence in tendering and purchasing procedures; 

•  To  facilitate  the  implementation  of  public  policies  and  regulations  by  providing 
citizens,  regulators  and  decision-makers  with  solid  information  on  the  level  of 
performance achievable by new eco-technologies ready for the market. 

The  ETV  pilot  programme  will  be  implemented  by  Verification  Bodies,  which  are  existing 
independent  organisations  specifically  accredited  for  this  purpose  by  the  existing  national 
accreditation bodies. As of May 2011, seven Member States have volunteered to try out ETV 
through  the  pilot  programme  and  the  three  initial  technology  areas  selected  are:  water 
treatment and monitoring; energy technologies; waste, materials and resources. 

The results of the ETV pilot programme will be evaluated after two to three years of actual 
operation.  On  the  basis  of  this  evaluation  and  a  study  on  the  market  potential  of  ETV  now 
underway, the Commission will draw conclusions on the potential of ETV in Europe and on 
the best way to realise it. Choices could range from discontinuing the initiative to transferring 
its  implementation  to  private  actors,  or  proposing  a  legislative  instrument,  if  there  is  clear 
evidence of its potential added value as an EU-wide measure. 

To facilitate the launch of the ETV pilot programme, a call for proposals will be launched in 
2011  under  the  EU  Competitiveness  and  Innovation  Programme  (CIP)  with  a  budget  of  €1 
million58. Amounts of €1 million are also programmed under CIP for ETV in 2012 and 2013, 
subject  to  the  approval  procedure  of  annual  work  programmes  for  these  years.  The  grants 
awarded should enable accredited Verification Bodies to implement the ETV pilot programme 

58  2011  Work  Programme  for  CIP  –  Entrepreneurship  and  Innovation  sub-Programme  –  adopted  on  18  January  2011  by  Commission 
Decision C(2011) 91. 

24 

 
 
 
 
 
 
                                                 
efficiently, to facilitate access for SMEs and to report to the Commission in view of the future 
evaluation of the pilot programme. 

The Member States, through the HLWG, have followed from the start and provided input to 
the development of the ETV initiative. There is wide agreement on the role that such initiative 
can play to help the uptake of environmental technologies. Member States having volunteered 
to participate in the ETV pilot programme are now part of the ETV Steering Group (generally 
the  same  representatives  participate  in  the  HLWG  and  ETV  Steering  Group  meetings)  and 
contribute actively to the preparation and setting-up of the pilot programme. 

Action 3: 
regions 

Setting up Eco-innovation Partnerships with major partner countries and 

The European Commission will step up its efforts to work with other countries and to ensure 
the development and dissemination of environmental technologies. In particular: 

•  Green technologies and eco-innovation will be included in relevant regional initiatives 
with  third  countries.  Examples  that  will  be  built  on  will  include  the  EU-China 
Sustainable Trade Task Force and the EU-China IPR2 project. In particular practical 
and concrete co-operation initiatives between Brazil, US, China, India and the EU will 
be developed in the field of eco-innovation with a clear focus on networking between 
and innovative venture capital funding schemes for SMEs.  

•  Benchmarking  and  harmonisation  of  the  eco-design  requirements  of  products  in  key 
emerging markets. The approach of the SWITCH Asia programme will be expanded 
to other developing countries, particularly in Africa and Latin America.  

Action 4: 

Promotion of environmental technologies in developing countries  

This will be done through global networks in partnership with UNEP and using the EU and 
UN technology centres, to support capacity-building, demonstration projects and financing for 
resource-efficiency  projects  in  developing  countries.  In  cooperation  with  the  OECD  the 
EcoAP  will  investigate  the  incentives  for  the  development  and  diffusion  of  "mature" 
environmental  technologies.  Furthermore,  the  European  Commission  will  support  UNEP  in 
expanding  its  work  on  the  Green  Economy  Initiative  by  participating  in  knowledge  sharing 
and providing advisory services. It will also take stock of past international activities for eco-
innovation and investigate directions for future global cooperation. In particular in 2011 the 
European Commission will present the Communication on Rio+20 on global policies towards 
green economy including policies and measures to promote eco-innovation.  

The  need  to  reinforce  the  international  dimension  of  ETAP  was  a  strong  messages  coming 
from  the  consultations.  Particularly,  the  need  to  avoid  setting  up  new  structures  for  this 
purpose,  but  rather  building  upon  existing  initiatives  and  international  organisations  was 
raised. This resulted in propositions for Actions 3 and Action 4.  

5.5  Option 5: Wide EU eco-innovation policy  

This option consists of actions that can be implemented in addition to (and not only instead 
of)  the  other  options.  It  is  characterised  by  a  higher  level  of  ambition,  more  regulatory 
approach  and  a  more  long-term  view.  However,  it  is  also  of  a  'general  principles'  nature, 
rather than of the operational bent of options 3 and 4. Reflecting this, the measures involved 
in delivering this option would be the responsibility of a wide range of levels of government 
and a wide range of actors.  

25 

 
 
 
 
 
 
 
 
  
Action  1:  Promoting  a  faster  shift  of  the  burden  of  taxation  to  resources:  this  would 
involve  more  systematic  use  of  taxes  and  other  market-based  instruments  to  reflect  the  true 
environmental  benefits  of  eco-innovation.  Currently,  only  one  out  of  every  fifteen  Euros  of 
government  revenue  comes  from  environment  taxes  (although  Denmark,  at  one-in-eight 
shows they can be used more widely) and this share has even declined slightly in recent years.  

Stakeholders stressed the "courage" and controversies that the implementation of this action 
would require a from the Member States. Due to thus the action was deemed problematic. 

Action 2:  Introduction  of  ambitious  standards  for  green  public  procurement:  more 
focused and stringent demand-side policies (e.g. public procurement standards and targets on 
resource efficiency and environmental performance) aimed at fostering eco-innovation. This 
will  be  assessed  as  part  of  the  review  of  public  procurement  policies  scheduled  for  the 
beginning of 2012.  

Action 3:  Introducing  a  legally  binding  framework  for  labelling  of  all  manufactured 
goods: building on the successful examples of labelling eg for electrical appliances, to fully 
inform  purchasers  and  ensure  informed  competition  by  providing  information  on  the 
environmental impacts of goods. 

Action 4:  Introducing waste prevention and recycling standards along the whole value 
chain:  Implementing  this  principle  will  accelerate  the  eco-innovation  rate  by  making  the 
production of non-recyclable products more costly. 

6.  ANALYSIS OF THE IMPACTS  

Many of the actions foreseen under EcoAP are indirect and, especially for the more strategic 
actions,  impacts  cannot  be  quantitatively  assessed.  Whenever  possible,  attempts  to  quantify 
effects  are  made,  but  given  the  complex  relation  between  policy  actions,  final  impacts, 
associated  problems  of  attribution  and  additionality  (as  well  as  lack  of  evidence  in  some 
cases) it can be difficult to quantify effects59.  

6.1  Option 1: Discontinuation of ETAP (no EU specific action on eco-innovation) 

This option assumes the termination of ETAP. Ongoing policies in innovation, environment 
and  other  areas  continue  without  specific  inputs  from  the  eco-innovation  point  of  view. 
Chapter 3.2 describes the impact of current policies on eco-innovation. See Annex VII for a 
detailed description of additional ETAP contributions.  

Additionally  it  is  worth  nothing  that  with  the  suspension  of  ETAP  current  activities  on  the 
definition  of  an  EU  framework  for  the  verification  of  environmental  technologies, 
developed under the ETV pilot programme and associated research and pilot activities, would 
no longer be supported at EU level. National programmes would probably be developed and 
tested  in  those  Member  States  most  interested  in  the  approach,  potentially  resulting  in 
divergent  programmes  without  mutual  recognition  and  with  practically  no  impact  on  the 
promotion  of  green  technologies  outside  national  markets.  International  co-operation  would 
likely  lead  to  an  international  standard  on  ETV  procedures,  but  without  involvement  at  EU 
level.  There  is  a  risk  that  EU  policy  and  industry  characteristics  would  not  be  taken  into 

59 See Annex VIII – XI for a detailed analysis of the actions 

26 

 
 
 
 
 
 
 
 
 
 
 
                                                 
account.  The  overall  impact  would  be  missed  opportunities  for  the  marketing  of  EU 
environmental technologies both within the EU and on international markets. 

Also in terms of financial support to eco-innovation, although it is expected to continue in the 
next financial perspective, the discontinuation of ETAP would probably result in less focussed 
financial  support  due  to  a  lack  of  a  deep  understanding  of  the  European  eco-innovation 
system, which is one of the priorities of ETAP.  

Overall,  the  rate  of  eco-innovation  and  the  degree  of  policy  integration  of  eco-innovation 
would  fall  as  compared  to  the  existing  situation.  This  option  is  the  baseline  against  which 
other options are compared. 

6.2  Option 2: Continuation of ETAP 

6.2.1. 

Impact of actions 

The ETAP option consists of 9 PAs. Impacts of each action are assessed in this section. 

Action  1.  Increase  and  focus  research,  demonstration  and  dissemination.  Improve  co-
ordination of relevant programmes (strategic) 

Increased  R&D  demonstration  and  dissemination,  and  better  coordination  of  eco-innovation 
R&D programs results in increased funding for research60. This action  will continue to have a 
positive impact on the eco-innovation system by steering networks and collaboration among 
various  stakeholders,  addressing  market  failures  (through  attracting  more  funding  for  R&D 
and  commercialisation),  solving  organizational  problems,  capacity  building  in  firms  and 
steering a more favourable regulatory framework. 

The  activities  under  PA1  had  a  stronger  focus  on  energy  technologies  and  carbon  emission 
reduction, and somewhat weaker emphasis on wider problems of resource efficiency and even 
less focus on other nature protection problems. The EU value added seems to be quite high 
and  evaluations  show  the  main  effect  to  be  organising  international  networks  and  adding 
additional funding to national sources61. Due to the specific agenda setting processes for each 
programme the role of ETAP has been limited.  

Action 2. Establishing European Technology Platforms (ETP) (operational) 

Technology Platforms are a direct and concrete contribution of ETAP towards promotion of 
environmental  technologies.  The  contribution  of  ETPs  to  addressing  system  failures  and 
increasing  competitiveness  is  positive,  especially  by  mobilizing  funds  and  building  dialog 
between research community, authorities and business community, and this should continue62. 
EU added value is evident and there is scope for launching additional and focussed ETPs, but  
the influence of ETAP on ETPs has been limited and indirect. 

Action  3.  Establishing  European  Networks  of  technology  testing,  performance 
verification and standardisation (operational) 

60 Ecorys (2009). The implementation of the Environmental Technologies Action Plan. Draft final report. August 2009 
61 Technopolis 2008, Evaluation of FP5 and FP6 research in the sub-priority Global Change and Ecosystems; Technopolis 2009, Evalluation 
of Non Nuclear Energy research activities in FP5 and FP6  
62 Ecorys (2009). The implementation of the Environmental Technologies Action Plan. Draft final report. August 2009 

27 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Environmental  technology  testing  and  verification  can  play  a  role  in  addressing  systemic 
market failures (e.g.: lack of sound information and trust in environmental technologies). EU 
added  value  and  impacts  on  competitiveness  are  considered  to  be  positive.  This  has  been 
shown through a number of research and pilot actions, at EU and MS levels. A summary of 
these actions and market and cost estimates is available in Annex VI.  

Based on the preparatory actions developed under ETAP, seven Member States have formally 
volunteered  to  participate  in  an  ETV  pilot  programme,  co-ordinated  by  the  Commission 
services on an experimental basis and testing the ETV approach in three technology fields: (1) 
water treatment and monitoring, (2) energy technologies, (3) materials, waste and resources.  

Based  on  the  results  of  the  ETV  pilot  programme  and  on  a  market  study  commissioned  in 
parallel,  a  thorough  evaluation  and  assessment  will  be  undertaken  in  2-3  years  time,  after 
which the Commission will decide on the appropriate way forward for ETV. No options are 
excluded at this stage.  

By facilitating the provision of scientifically-sound information on technology performance, 
an EU ETV scheme could potentially have a positive impact extending beyond simply support 
for  market  access.  It  would  also  send  out  a  signal  that  the  development  of  innovative 
technologies,  and  competition  between  technological  solutions,  must  be  built  on  proven 
performance rather than regulatory obligations and cost considerations alone.  

Action  4.  Develop  and  agree  on  performance  targets  for  key  products,  processes  and 
services (strategic) 

Due to legislative constraints and the difficulty to deal with a broad set of industries, products 
and  processes63,  ETAP  has  not  been  successful  in  developing  standards  for  products  and 
processes. ETAP would find it even more difficult to play a leading role in the development 
of performance targets for resource use. Literature on their effectiveness and impacts is scarce 
though  standards  and  targets  for  energy  savings  show  a  positive  environmental  effect  (e.g.: 
Japan’s  Top  Runner  scheme),  implying  potential  for  performance  targets  for  eco-efficiency. 
The  need  for  EU  coordination  is  evident  as  positive  environmental  and  competitiveness 
impacts depend on uniform application throughout the EU and globally64.  

Action  5.  Mobilising  financial  instruments  to  share  the  risks  of  investing  in 
environmental technologies (strategic) 

The  CIP  and  the  Environment  and  Governance  component  of  LIFE+  are  the  key  EU 
instruments  supporting  the  transition  of  eco-innovations  from  research  to  market.  With 
regards  to  CIP  it  is  yet  impossible  to  assess  the  impact  on  eco-innovation65  (specifically  on 
resource savings). However it is argued that its continuation under the influence of ETAP 
will  bring  positive  impacts.  The  additionality  of  the  EU  in  these  actions  is  high.  Eco-
innovation  is  a  key  pillar  of  the  CIP.  The  role  of  ETAP  has  been  significant,  without  it 
specific funding "windows" for eco-innovation could dissappear.  

63 Problems that can be encountered are the entrance of alternative products that are not taken up in the standard, shortening of the economic 
lifetime of products, as well as difficulties to set the standards due to difficulties in defining targeted industries. 
64 Popp 2006, International innovation and diffusion of air pollution control technologies: the effects of NOx and SO2 regulation in the US, 
Japan and Germany. 
65 GHK & Technopolis 2009. Interim evaluation of the Entrepreneurship and Innovation Programme (EIP). 

28 

 
 
 
 
 
 
 
 
 
                                                 
Action 6. Review State Aid Guidelines and review of environmentally harmful subsidies 
(strategic) 

The impacts of improving the demand for eco-innovation of these actions are hard to assess. 
Since the amount of money involved is large, potential effects on the market uptake of (eco-) 
innovations can be considered large. This measure did not have a specific focus on resource 
efficiency, but impacts on resource savings, biodiversity, water and energy are considerable. 
The  additionality  of  EU  action  is  evident:  subsidies  are  largest  in  sectors  with  a  strong  EU 
role (e.g.: fisheries or agriculture), and in areas where MS are responsible for subsidies then 
the EU has a strong controlling role present due to the ‘single market’ perspective.  

Action 7. Green public procurement (strategic) 

Public  procurement  of  goods  and  services  amounts  to  17%  of  EU  GDP66  and  could  have  a 
significant  contribution  to67,68  eco-innovation,  including  by  creating  markets  for  resource-
efficient products and services. The effect on competitiveness is evident. Buying ‘green’ has 
led to an average decrease in costs of 1%, when the life cycle costing is taken into account.  
EU added value and additionality of EU action is significant. 

Action  8.  Raise  business  and  consumer  awareness,  and  provision  of  targeted  training 
(operational) 

This action has had a major and positive role69. It embeds a powerful networking aspect with 
(indirect)  benefits  to  the  European  eco-innovation  system.  Impacts  of  this  action  on 
environmental protection and competitiveness are positive. The additionality of EU action is 
intermediate, and the EU added value is clear. Its continuation, without being more clear and 
defined,  will  remain  beneficial  for  networking,  but  without  concrete  feedback  into  eco-
innovation policy. 

Action  9.  Promoting  responsible  investments  and  use  of  environmental  technologies  in 
developing countries and countries in economic transition (strategic) 

Investment  in  environmental  technologies,  especially  in  developing  countries,  has  the 
potential for positive impacts on innovation, environmental protection (e.g.: resource savings) 
and  competitiveness.  The  EU  could  have  added  value  in  stimulating  S&T  agreements70, 
stimulating  technology  transfer  through  institutions  such  as  Global  Energy  Efficiency  and 
Renewable Fund (GEEREF) and by strengthening facilities such as the Global Environment 
Facility (GEF). Continuation of this action along past lines is likely to bring modest positive 
results as it is too dependent on the discussions for liberalizing global trade. 

6.2.2 

Overall impact of option 

66 Schmidt-Bleek, F. (2010): Innovation for a sustainable future. Paper prepared for the Stakeholders Consultation on Eco-AP, 11 February, 
2010 in Bruxelles. Carnoules 
67 Öko-institut & ICLEI, 2007. Costs and Benefits of Green Public Procurement in Europe. 
68 2007, PricewaterhouseCoopers, Significant, Ecofys, Collection of statistical information on Greeen Public Procurement in the EU. 
69 Ecorys (2009). The implementation of the Environmental Technologies Action Plan. Draft final report. August 2009 
70 Technopolis / Manchester Institute of Innovation Research 2009, Drivers of international 
collaboration in research, Luxembourg, European Commission 

29 

 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
The  impacts  ETAP  are  indirect:  ETAP  is  not  a  distinct  programme  with  a  budget.  It  is  an 
umbrella pulling together different intervention instruments and influencing the direction and 
size of other, often broader and non-environment specific programmes and schemes.  

The continuation of ETAP will lead to continued attention for environmental technologies and 
will  have  positive  effects  on  innovation  in  the  area  of  environmental  technologies, 
competitiveness  of  the  eco-industry  (and  related  employment)  and  positive  impacts  on  the 
environment and on health. Direct administrative burden, as ETAP actions are voluntary and 
reporting requirements minimal, would be limited and mainly consists of human resources to 
carry  out  the  actions.  As  ETAP  operates  since  2004  both  the  Member  States  and  the 
Commission are efficient at carrying out the actions in the ETAP Framework.  

Option  2  covers  most  of  the  specific  objectives,  however,  the  adequacy  of  response  is 
relatively  low  notably  due  to  the  scope  being  limited  to  environmental  technologies, 
failure to refocus action in line with the lessons learnt and not corresponding to the new 
political landscape. 

6.3  Option 3: Taking forward the Europe 2020 flagships 

6.3.1 Impact of actions 

Action  1:  Screening  the  environmental  regulatory  framework  for  eco-innovation 
(strategic) 

Many  of  the  enabling  conditions  for  innovation  are  the  same  ones  as  for  eco-innovation. 
However,  the  rate  and  pattern  of  eco-innovation  is  influenced  by  the  environmental  policy 
framework.  A  study71  on  eco-innovation  in  the  French  and  German  industry  concluded  that 
government  regulation  plays  a  central  role  in  motivating  eco-innovation.  Policy  corrects  for 
market  failures  and  helps  address  the  eco-innovation  specific  barriers.  The  perceived 
importance of regulations for eco-innovation is high and overwhelmingly positive72. Various 
empirical studies73,74 confirmed that complying with environmental regulation was one of the 
key motivations to innovate among eco-innovation companies. 

Impacts  are  indirect  and  hard  to  assess.  The  costs  of  undertaking  the  screening  will  be 
minimal, as it will be done within the context of already planned reviews. The benefits will 
come  from  increased  innovation  because  public  policies  play  a  key  role  in  determining 
framework  conditions  for  eco-innovations,  which  in  the  past  are  seen  as  not  innovation 
friendly. Whilst it is clear that to some extent the existing reviews would have covered this 
issue,  with  explicit  guidance  a  clear  political  focus,  it  should  be  much  better  covered. 
Improved  innovation  should  make  environmental  policy  more  effective,  more  efficient  or 
both. For instance the REACH75 regulation directs research and development efforts and sets 
the pace of technological change. It lists substances of very high concern (SVHC) for which 
substitution is required when safer alternative substances or technologies become technically 

71  Belin,  J,  Horbach,  J  &  Oltra,  V,  2009,  Determinants  and  specificities  of  eco-innovations  –  An  econometric  analysis  for  France  and 
Germany based on the Community Innovation Survey, Article submitted to the EAEPE Conference, Amsterdam, November 6-8, 2009. 
72    ZEW  (2007)  Analysis  of  regulatory  and  policy  issues  influencing  sectoral  innovation  patterns,  Sector  report  eco-innovation,  Interim 
paper  
73 ZEW (2001) The Impact of Clean Production on Employment in Europe – An Analysis using Surveys and Case Studies (IMPRESS),  
74 Rehfeld K.M., Rennings K., Ziegler A. (2006) Integrated Product Policy and Environmental Product Innovations - An Empirical Analysis 
75 Regulation (EC) No 1907/2006 of the European Parliament and the Council on the Registration, Evaluation, Authorisation and Restriction 
of Chemicals (REACH) 

30 

 
 
 
 
 
 
 
 
                                                 
and  economically  feasible.  This  active  search  for  alternatives  stimulate  R&D  activities 
towards delivering competing and safer substitutes, thus in turn replacing SVHCs. 

Overall impacts for this action will vary between and within sectors and countries, depending 
on the policy initiative being assessed. The additionality of EU action is large. 

Action 2: Partnerships for eco-innovation (strategic) 

Eco-innovation is a too broad field to be covered by a single partnership, but the IP approach 
would benefit  from integration of  eco-innovation considerations into existing and upcoming 
IPs.  The  action  would  also  investigate  the  potential  for  Innovation  Partnerships  in  sectors 
relevant  for  eco-innovation.  ETAP  Fora  on  Eco-innovation  have  identified  strong  market 
potential  and  stakeholder  commitment,  in  particular  for  water  efficiency,  bio-gas  for  bio-
waste and eco-system services for draughts. IPs are characterized by greater levels of policy 
coordination  and  underpinned  by  a  high  level  of  stakeholder  commitment.  The  Eco-
innovation Action Plan can assess the market potential for an emerging Partnership sector, its 
maturity, key drivers and barriers. The High Level Working Group will coordinate Member 
State policies governing these sectors and ensure Member State buy-in. The pilot procurement 
schemes would signal market demand in the (eco-) IP areas.  

The  EU  added  value  and  additionality  is  considerable.  The  direct  costs  of  action  will  be 
relatively small as it will build on existing fora to create and harness stakeholder commitment. 
The pilot schemes76 would bundle private and public demand for green goods or services thus 
enlarging  the  market  (and  thus  certainty)  for  technology  developers.  The  procurement  pilot 
would cost app. 600.000 Euro per product group/ service type. Financing is available through 
the  support  measures  under  the  CIP  eco-innovation  strand.  The  analytical  work  for  the  IPs 
would be carried out through the EIO which is operational and funded through the CIP.   

Action 3: Mobilising financial instruments, both public and private, for investments in 
eco-innovation (strategic) 

The impact of this Action is similar to PA5 of option 2. The focus on further integration of 
eco-innovation  in  future  EU  programmes  in  partnership  with  the  EIB  Group  or  other 
international financial intermediaries has relatively identical mechanisms of impacts as those 
described in the ETAP option – but if Eco-AP succeeds in mobilising additional resources and 
better adapting financial instruments to existing gaps in eco-innovation financing, the impacts 
would  be  stronger  from  all  points  of  view.  Based  on  the  information  available  it  is  not 
possible to have quantitative estimates of additional funds needed to stimulate eco-innovation 
uptake, anyhow evidence shows that in the eco-innovation area there is a clear dominance of 
energy as opposed to non-energy related investments (e.g.: water, waste etc.). 

Action  4:  Developing  standards  and  performance  targets  for  key  products,  processes 
and services to reduce their environmental footprint (strategic) 

76  As  described  in:  COWI  A/S  for  DG  Environment,  2009,  "Bridging  the  valley  of  death:  Public  support  for  commercialization  of  eco-
innovation"  

31 

 
 
  
 
 
 
 
 
 
 
 
 
                                                 
Standardisation can enable the uptake of eco-innovation and facilitate their dissemination in 
the  Single  Market  and  access  to  global  markets.  It  is  expected77  that  standards  and 
performance  targets  can  make  an  important  contribution  to  'sustainable  industrial  policy', 
improving  the  energy  and  resource  efficiency  of  products,  processes  and  services  and  the 
competitiveness  of  European  industry.  Broadening  the  scope  of  the  Eco-design  Directive 
(EuP)78 to non-energy related products would have a positive impact on resource efficiency 
(that could be a priority for this widening process) and lead to additional impacts considering 
that the EuP now only addresses energy use of products, which only accounts for about one-
third of the environmental impacts of products79. The impacts of this action will be discussed 
in  the  Impact  Assessment  accompanying  the  review  of  the  Sustainable  Consumption  and 
Production and Sustainable Industrial Policy Action Plan. 

Action  5:  Developing  new  skills  for  new  jobs  in  environmental  goods  and  services 
industry (strategic) 

Managing  the  transition  to  a  green  economy  means  anticipating  change,  and  identifying  the 
skills that will be required. There is already a mismatch between current skills and the future 
skills needed and this is a threat to green growth. For example, according to several national 
trade  unions,  a  shortage  of  skilled  people  exists  to  implement  the  Directive  on  Energy 
Performance  of  Buildings.    To  better  prepare  the  current  and  future  workforce,  this  action 
includes action at sectoral level, for example through a focus on 'skills for green and greener 
jobs'  in  the  upcoming  EU-level  sectoral  Councils  for  skills  and  employment.  A  specific 
section  on  skills  for  green  and  greener  jobs    will  also  be  introduced  in  the  EU  Skills 
Panorama,  to  be  launched  by  the  end  of  2012,  which  will  collect  from  Member  States  and 
international organisations information on skills needs, supply and mismatch in  the short and 
medium-term.  The  role  of  an  Eco-AP  contribution  can  be  very  important  although  impacts 
very limited and indirect.  

The costs and benefits of a European Sector Council on skills for green and greener jobs are 
unclear  at  this  stage.  Preparatory  work  will  investigate  how  such  a  mechanism  should  be 
designed, and how it can concretely complement the “New skills for new jobs” initiative. In 
the  first  stages,  the  costs  will  be  rather  minor,  as  the  exploratory  work  will  be  undertaken 
through the HLWG, which has expressed80 a desire for this action.  

Action 6:  

Governance of eco-innovation policy 

Regularly  updated  Eco-innovation  National  Roadmaps  can  represent  a  significant  body  of 
knowledge  and  have  positive,  even  if  indirect  impacts  (through  policy  learning),  on  the 
innovation system and the competitiveness. These would be voluntary, and only undertaken if 
Member States saw value-added in them: the Commission would provide guidance to ensure 
their usefulness. In particular the Eco-innovation Roadmaps would provide information as to 
future  planned  actions  and  being  regularly  updated  would  allow  mapping  the  efforts  and 
impacts  of  the  Member  State  actions  ensuring  a  coherent  impact  throughout  the  EU.  Bi-
annual  Fora  on  eco-innovation  will  be  organized  on  issues  of  key  importance  for  eco-
innovation.  The  event  will  be  used  for  regular  consultation  of  stakeholders  on  the  available 
policy options, mobilization and networking of eco-innovators. 

77 COM(2008) 133 final Towards an increased contribution from standardisation to innovation in Europe 
78 Directive 2005/32/EC of the European Parliament and of the Council establishing a framework for the setting of ecodesign requirements 
for energy-using products (OJ L 101, 22.7.2005, p. 29). 
79 Staff Working Paper SEC(2008) 2110 Impact assessment for recast of Directive 2005/32/EC, 
80 See conclusion to the 2010 ETAP Forum in Bilbao: http://ec.europa.eu/environment/ecoinnovation2010/1st_forum/pdf/declaration.pdf 

32 

 
 
 
 
 
 
                                                 
6.3.2 Overall impact of option 

The  shift  from  environmental  technologies  to  eco-innovation,  as  announced  in  the 
EcoAP, will contribute to a competitive advantage for industry across sectors and can lead to 
positive  environmental,  economic  and  employment  impacts.  A  German  study  found  that  
improving resource efficiency by 20% would boost economic growth by 1% and could create 
up  to  1  million  new  jobs  in  Germany  alone81.  Improving  resource  efficiency  will  also  help 
combat  climate  change  and  boost  economic  growth.  Furthermore  an  EcoAP  with  a  strong 
focus  on  resource  efficiency  would  be  strongly  consistent  with  the  strategy  set  out  by  the 
Europe 2020 initiative. As for social impacts, in addition to the expected positive impacts on 
health  (i.e.:  less  environmental  impacts  generated  by  more  sustainable  solutions)  positive 
impacts are expected in terms of employment.  

Administrative  burden  may  increase  marginally,  for  example  if  voluntary  Roadmaps  are 
provided.  

Option  3  provides  a  comprehensive  policy  response  to  specific  objectives  and 
complements well the Innovation Union initiative. The adequacy of response is high. 

6.3.2.1 Subsidiarity, additionality, European value added – Eco-innovation Action Plan 

This option is compatible with the principles of subsidiarity and proportionality. The initiative 
falls  within  the  scope  of  competences  of  the  EU  under  its  environmental  and  innovation 
policies.  It  is  also  compatible  with  the  EU’s  2020  strategy  for  growth,  placing  emphasis  on 
innovation, sustainable growth, competitiveness and resource efficiency.  

The  additionality  of  this  option  is  the  highest  compared  to  the  other  options.  EU-level 
interventions  are  either  key  or  significant.  The  additionality  of  increased  coordination  of 
national eco-innovation policies is high. Accumulation of EU-wide expertise and networking, 
in particular when assessing new areas for IPs will contribute to improved eco-innovation in 
the Member States and the competitive position of the relevant sectors.  

Also the proposed  governance  structure will allow better management and targeting of eco-
innovation policies and through support networks will facilitate peer reviews of policy.  

6.3.2.2 Downsides, administrative impact and reality check – Eco-innovation Action Plan 

Public spending 

•  Effects under this option would also include the conclusions listed under option 1 

Employment 

A number of actions would generate new job opportunities by alleviating current bottlenecks.  

Administrative burden 

81 See before for reference to the study. 

33 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Looking at the actions of the Eco-AP, one could highlight a number of initiatives where added 
consideration for administrative burdens might be necessary.  These would include: 

•  Develop  and  agree  on  standards  and  performance  targets  for  key  products,  processes 
and services. Although standardisation on products generally function to a satisfactory 
level, standards development in the areas of environment and services are possibly less 
well developed.  In addition, the research and design of standards need both time, and 
extensive input by relevant stakeholders. 
•  Encourage  Procurement  of  environmental 

technologies  and  eco-innovations.  
Developments have been made in GPP under ETAP, the shear size of the GPP scheme 
– encompassing 15 to 20% of final consumption – would most likely mean continued 
administrative  burdens  in  Member  State  public  authorities,  and  on  businesses  and 
organisations bidding for contracts. 

•  Administrative  burden  may  increase,  in  particular  with  regards  to  the  greater 
involvement  of  Member  States  in  setting  the  agenda  for  eco-innovation  (through  the 
voluntary National Roadmaps).  

6.4  Option 4: SME-targeted actions 

6.4.1 

Impact of actions 

Action 1: 
business networks    

Targeted  eco-innovation  support  for  SMEs  through  enterprise  and 

The  support  to  eco-industries  through  the  Enterprise  Europe  Network  primarily  aims  at 
increasing  network  activities  focussed  on  capacity  building  and  communication.  It  aims  to 
exploit key drivers for eco-innovation82, i.e. good business partners and access to technology 
support services. Although impacts are indirect they are expected to have positive effects on 
innovation, environment as well as competitiveness. This action will particularly favour eco-
innovative companies within the eco-industries, where networking and support structures are 
only  emerging.  The  EU  can  play  an  important  role  in  this  type  of  networking,  which  is 
already financed through the CIP.  

Additionally,  a  dedicated  network  of  financiers  would  be  beneficial  to  mobilise  them, 
accelerate investment and finance for eco-innovation. As SMEs, also eco-innovators, largely 
rely  on  bank  credit  to  finance  their  development  the  network  would  he  instrumental  in 
decreasing  risk  aversion  of  banks  towards  the  sector  and  spread  best  practice  for  the 
evaluation  of  such  investment  prepositions83.  The  financing  for  this  network  would  come 
from the CIP "eco-innovation strand" with an indicative budget of 2 million Euro.  

Action 2: 
Environmental Technology Verification initiative, to test an EU ETV pilot 
programme  and  evaluate  its  potential  in  facilitating  market  access  for  innovative 
environmental technologies 

The  assessment  of  the  continuation  of  the  action  under  ETAP  related  to  ETV  (Option  2, 
Action 3) is also valid here. See Annex VI for more details on the assessment of this action. 

Based  on  the  results  of  the  ETV  pilot  programme  and  on  a  market  study  commissioned  in 
parallel,  a  thorough  evaluation  and  assessment  will  be  undertaken  in  2-3  years  time,  after 

82 As highlighted in the Flash Eurobarometer 315 on the "Attitudes of European entrepreneurs to eco-innovation" 
83 EIM & Oxford Research for DG Environment, 2011, "Financing eco-innovation" 

34 

 
 
 
 
 
 
 
 
 
                                                 
which the Commission will decide on the appropriate way forward for ETV. No options are 
excluded at this stage. 

If successful, the ETV approach could also be applied to other technological fields where the 
EU  has  a  (potential)  competitive  advantage,  within  or  beyond  the  field  of  environmental 
technologies, possibly integrating other aspects than environment, for example in the health 
and social fields. As long as these aspects can be quantified and verified through testing, they 
could  be  accommodated.  This  would  lead  to  new  types  of  technical  information,  alongside 
technical standards and labelling, for the benefit of technology developers and purchasers and 
policy-makers.  Better-informed choices will be more cost-beneficial. Any wider application 
of ETV would however to be specifically assessed. 

Action 3: 
regions   

Setting up Eco-innovation Partnerships with major partner countries and 

In this case different sub-actions are envisaged (i.e.: trade liberalisation, harmonisation of the 
eco-design requirements, bilateral cooperation with third and partner countries also at regional 
level). Similarly to the previous initiative impacts might be very positive but implementation 
and complexity represents a challenge to overall impact of this action. Costs will be minimal, 
as this will be done through or building upon existing structures, and the role will be primarily 
one of guidance. 

Action 4: 

Promotion of environmental technologies in developing countries  

Different  sub-actions  are  envisaged  (i.e.:  use  of  Enterprise  Europe  Network  to  favour  eco-
innovative SMEs in export, support to the expansion of UNEP National Cleaner Production 
Centres,  EU-public-private  partnerships  for  environmental  technology  demonstrations  in 
majors markets). The costs for the Commission will be around €4 million over 3 years. With 
the  right  and  favourable  global  conditions  for  eco-innovations  the  potential  for  resource 
savings  within  and  outside  the  EU  is  considerable,  but  previous  implementation  of  similar 
efforts has been challenging (action 9 of the ETAP scenario, option 1) and subject to budget 
availability.   

6.4.2 Overall impact of option 

The  Option  will  adequately  target  the  needs  of  eco-innovative  SMEs  by  highlighting 
networking  and  better  preparing  them  for  exploiting  the  available  market  opportunities  (by, 
for instance, increasing their market readiness).  

Option  4  provides  a  policy  response  targeting  well  the  needs  of  eco-innovative  SMEs. 
The adequacy of response is high. 

6.4.2.1 Subsidiarity, additionality, European value added – Eco-innovation Action Plan 

The  initiative  falls  within  the  scope  of  competences  of  the  EU  under  its  environmental  and 
innovation policies. It exploits EU added value in facilitating an EU wide level playing field, 
creation of trade ties and provision of SME support services.  

35 

 
 
 
 
 
 
 
 
 
 
 
 
 
This  option  although  not  tackling  directly  the  framework  conditions  for  eco-innovation 
responds  well  to  the  eco-innovation  specific  needs  of  the  SMEs.  Value  of  EU-level 
intervention is thus significant.  

6.4.2.2 Downsides, administrative impact and reality check – Eco-innovation Action Plan 

Public spending 

•  Effects under this option would also include the conclusions listed under option 1 

Employment 

A number of actions would generate new job opportunities by alleviating current bottlenecks.  

Administrative burden 

Additional  administrative  costs  are  likely  to  be  small,  and  would  relate  to  the  increased 
networking both within the EU and globally.  

6.5  Option 5: Wide EU eco-innovation policy 

Option  5  includes  strategic  and  long  term  actions  off-setting  the  framework  conditions  for 
resource efficient eco-innovation.  

6.5.1 Impact of actions 

Action 1: Promotion of a faster shift of the burden of taxation to resources (strategic) 

Taxation,  and  better  pricing,  can  influence  technological  change84.  In  the  case  of  energy 
efficiency,  more  energy-efficient  solutions  (and  emissions  reduction)  were  generated  by 
modifications  of  energy  prices85.  Similar  impact  can  be  expected  for  natural  resources 
consumption86.  Impact  on  competitiveness  is  expected  to  be  positive,  but  an  element  of 
uncertainty  is  represented  by  potential  mismatch  between  EU  and  non  EU  countries.  EU 
added value would be provided by the influencing and coordinating role of the Commission. 
Long-term, measurable social, economic and environmental impacts are expected.  

Action 2: Introduction of ambitious standards for green public procurement (strategic) 

This  action  exploits  the  potential  of  public  procurement  to  favour  resource-efficiency  top-
runners  (this  is  the  main  difference  versus  similar  GPP  actions  described  previously).  This 
would  enhance  the  role  of  eco-innovation  in  driving  the  transition  towards  green  growth. 
Economic, social and environmental impacts could be reinforced by periodically revising the 
criteria for public procurement to reflect innovation and development of markets.  

Action 3: Introduction of a legally binding framework for labelling of all manufactured 
goods (strategic) 

84 OECD (2009): Green Growth: Overcoming the crisis and beyond. Paris 
85 OECD 2007: Impacts of environmental policy instruments on technological change. Paris 
86 Bahn-Walkowiak, B. (2008): Resource taxation beyond energy and climate issues [Japan.]. In: Nikkei ecology, 2008, 2, p. 129 

36 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Labelling  would  extend  public  procurement  criteria  for  resource  efficiency  to  the  private 
sector.  EU  added  value  would  be  provided  by  the  European  Union  Eco-labelling  Board 
(EUEB)87  through  negotiation  and  coordination.  This  would  support  demand  for  resource-
efficient  products  and  services,  enlarging  markets  and  improving  competitiveness  of  eco-
innovators. Long-term measurable social and environmental impacts are expected. However, 
there would also be very significant economic costs associated with any such action.  

Action  4:  Introduction  of  waste  prevention  and  recycling  standards  along  the  value 
chain (strategic) 

More regulation in favour of eco-design and eco-efficiency can reduce material requirement 
of  production  processes  and  products88.  This  would  encourage  eco-innovation  related  to  the 
use  of  materials  along  the  value  chain.  Evidence  exists  that  stringent  waste  regulation  has 
induced significant "cycles" of innovations89. Environmental and competitiveness impacts the 
expected, consequent increase in resource efficiency would lead to positive impacts. 

6.5.2 Overall impact of option 

Systemic  eco-innovation  requires  coordinated  action  by  research  actors,  economic 
stakeholders  and  political  decision-makers.  This  option  strives  for  establishing  prices, 
which  reflect  environmental  impacts.  On  the  other  hand,  it  improves  market  conditions  for 
demand  and  the  supply  of  eco-innovations.  Option  5  addresses  underlying  drivers  for  high 
consumption  of  resources  and  energy  and  high  levels  of  emissions  and  waste.  It  takes  a 
radical  approach  directed  at  root  causes  expanding  beyond  traditional  environmental 
policy.  The  necessity  of  the  described  actions  have  neither  been  contested  in  literature  nor 
during the stakeholder consultation connected to this Impact Assessment.  

The  Option  will  carry  significant  long-term  effects.  Social  impacts  will  be  considerable: 
industry structure may change with related shifts in employment, effects on competition may 
be large (when EU is not taking possible trade effects into account).  

6.5.2.1 Subsidiarity, additionality and European value added 

The high additionality of Option 5 owes to the scale of the initiative and its expected effects. 
This  option  includes  a  good  mix  of  measures,  fiscal,  regulatory  and  normative  which 
complement each other and seek to enhance efficiency in different policy areas.  

6.5.2.2 Downsides, administrative impact and reality check 

Public spending 

•  Accelerated eco-innovation in the EU poses a threat to resource-inefficient and high-
carbon  EU  industries.  They  will  need  to  reinvest  and  develop  new  capacities.  The 
downsides  should  be  outweighed  by  new  industries  and  new  jobs,  but  additional 
support for structural adjustments may be needed.  

87 http://ec.europa.eu/environment/ecolabel/index_en.htm 
88 Bleischwitz, R., B. Bahn-Walkowiak, W. Irrek, Ph. Schepelmann, F. Schmidt-Bleek, S. Giljum, S. Lutter, L. Bohunovski, F. 
Hinterberger, E. Hawkins, M. Kuhndt, N. Pratt, et al. (2009): Eco-innovation - Putting the EU on the path to a resource and energy efficient 
economy. Wuppertal-Spezial 38. Wuppertal. Download: 
http://www.wupperinst.org/uploads/tx_wibeitrag/ws38.pdf 
89 OECD (2010): Diverting Waste: The Role of Innovation (ENV/EPOC/WPNEP(2010)5). Paris 

37 

 
 
 
 
 
 
 
 
 
 
 
                                                 
•  Within  a  set  EU  budget,  investing  in  eco-innovation  might  reduce  funds  for  other 
important issues, from health to security. Consideration should be given to financially 
less intensive approaches (coordination, information, horizontal support) 

Employment 

This  option  will  aid  the  transition  of  the  employment  structure  –  from  traditional 
environmental jobs, to employment positions in new or growing eco-innovation sectors.  

Administrative burden 

An ambitious eco-innovation policy will add to the administrative burden of public authorities 
in Member States – specifically Actions 1 to 4 – but also European businesses – specifically 
Actions 3 and 4. Action 1 will need to accommodate for existing Member State fiscal policy.  

7.  COMPARING THE OPTIONS 

7.1  Approach 

The  comparison  of  options  is  carried  out  according  to  the  adequacy  of  policy  options, 
expected impacts, and the feasibility of implementation. 

•  Adequacy  indicates  the  extent  to  which  a  policy  response  will  deliver  specific 

objectives: i.e. its effectiveness.  

•  Expected  impacts  assess  the  likely  impact  of  policy  options  on  innovation, 
environment and competitiveness as well as overall EU value added: i.e. its efficiency.  
•  Feasibility  expresses  the  likelihood  of  achieving  the  impacts  within  the  existing 
organisational,  governance  and  political  constraints  of  the  European  Commission.  It 
also considers the optimal timing for implementation to highlight practical challenges: 
i.e. its coherence. 

Each  criteria  is  scored  as  ---  (very  strong  negative)  to  +++  (very  strong  positive)  or  N/A 
where there is no evidence or the impact is unclear. Scores are given in relation to the baseline 
scenario (no ETAP). Due to the diverse character of actions included in the policy options the 
overall scores at option-level are based on the scores on the action level, but are not simple 
arithmetic averages. 

7.2 

Findings 

7.2.1. Overview 

The figure below presents an overview of overall scores for policy options taking into account 
their expected wider impacts and the feasibility of their implementation. 

38 

 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 3. Comparison of policy options against Option 1 

Overall table and ranking criteria

Option 1*

Option 2

Option 3

Option 4

Option 5

Adequacy

Impact

Feasibility

Adequacy in terms of 
meeting specific 
objectives
Impact on innovation 
system
Impact on environment
Impact on 
competitiveness
EU value added

Contribution to the 
achievement of wider 
impacts

N/A

N/A
N/A

N/A
N/A

N/a

medium

+
+

+
++

++

high

+++
++

++
+++

medium/ high high**

++
++

+++
+++

++
+++

-/++ ***
+++

+++

++

+

Timing of actions (mean) N/A

< 2 years

< 2-5 years

< 2-5 years

> 5 years

* The exact degree of negative impacts of discontinuation of ETAP depends on other EU interventions that may subsititute ETAPactions
** Option 5 is assessed as highly adequate notably in the field of improving market conditions in a long term
*** Effects on competitiveness may be negative in the short term (e.g. resource taxes may hamper competitive position of resource-
intensive industries)

7.2.2. Focus on adequacy of policy response 

Taking  into  account  the  specific  objectives,  Option  5  offers  the  most  adequate  policy 
response  when  compared  to  policy  options  (notably  in  terms  of  improving  market 
conditions). Option 3 & 4 are considered as second best. Option 3, focusing on exploiting the 
potential  of  environmental  policy  to  support  eco-innovation  and  policy  learning  between 
Member  States  creates  appropriate  framework  conditions  for  eco-innovation.  Option  4, 
targeting  SMEs,  responds  better  to  the  practical  challenges  faced  by  eco-innovators,  by 
raising their credibility, focusing on networking and opening up global markets.  

The adequacy of “Continuation of ETAP” has been considered average. First of all, Options 
3,  4  and  5  have  a  broader  scope  of  intervention  addressing  eco-innovation  (with  its  non-
technical  and  organisation  issues).  Option  3  offers  a  coherent  approach  to  eco-innovation 
policy-making, fitting well with the new political realities and allows achieving the objectives 
through  the  emerging  structures  and  measures.  In  particular  it  ensures  integration  of  eco-
innovation  into  the  Innovation  Partnerships,  a  key  vehicle  for  the  new  innovation  policy. 
Option  3  is  also  expected  to  better  target  financial  resources  to  support  the  planned  policy 
interventions and have a more coherent impact of eco-innovation across the EU. On the other 
hand  Option  4  better  responds  to  SME  needs  in  terms  of  networking  and  opening  up  trade 
opportunities for eco-innovation.  

7.2.3. Focus on expected impacts 

The overall impact of the options on the functioning of innovation systems is positive, notably 
on framework conditions. However concrete impacts differ across options. 

Once  again  Options  3,  4  and  5  improve  on  Option  1  and  Option  2  in  terms  of  impact  on 
innovation  system  due  to  greater  emphasis  on  minimising  market  failure  (i.e.  strengthened 
focus  on  financial  instruments),  further  improvement  of  framework  conditions  and 
coordination  of  eco-innovation  policies.  Furthermore,  due  to  a  pervasive  approach  to  eco-

39 

 
 
 
 
 
 
  
 
 
innovation,  options  3  &  5  can  have  a  systemic  impact  on  the  innovation  process  placing 
resource productivity among the key determinants regardless of sector. 

In  terms  of  potential  impacts  on  the  environment  Option  5  promises  the  greatest  positive 
impact.  The  impact  is  however  expected  in  the  long  term  (effects  on  the  resource  tax  are 
expected only in 10-15 years assuming immediate action). The impact of Option 3 is expected 
to be larger than Option 2 foremost due to the enlarged scope to eco-innovation and better fit 
to the new policy framework.   

The report argues that resource productivity is positively correlated with competitive potential 
of economies. Option 3, with its focus on eco-innovation for resource productivity, is deemed 
to  deliver  a  larger  positive  impact  on  competitiveness  than  Option  1.  At  the  same  time 
Option 4 will also have a positive impact ensuring integration of eco-innovation into SMEs, 
focus  on  creating  new  foreign  markets  and  creation  of  business  partnerships  and  improving 
investment readiness of eco-innovators. The actions with the financial community (Option 4) 
will help increase investment flowing to the sector.   

Option 5 might have a net positive impact on competitiveness, but it more difficult to assess 
and  is  drawn  out  in  time.  In  the  short  term  taxation  may  have  negative  effects  on 
competitiveness  of  resource-intensive  industries,  while  unilateral  EU  action  on  standards  or 
labelling may have significant costs.  

In general, all options are characterised by high EU value added. No action has been classified 
as “unjustified” apart from Option 1. The discontinuation of ETAP is not justified if it is not 
to be substituted by comparable action ensuring continuous attention on eco-innovation. 

7.2.4. Focus on feasibility 

Feasibility  assessment  is  a  necessary  “filter”  to  put  the  wider  impacts  of  planned  action  in 
context and to understand the actual contribution of the assessed plan towards achieving the 
overall  objectives.  The  contribution  of  assessed  options  to  achieving  the  overall  goals  has 
been  considered  positive.  Except  for  Option  3,  the  contribution  has  not  been  assessed  as 
strong. The other options, just like the “old” ETAP, will not have a strong direct impact (or an 
exclusive “ownership”) of the majority of actions. The instruments at the disposal of ETAP 
(ie inter-service consultations, communication tools, analytical activities) make it particularly 
well adapted to inform EU policies and communicate with stakeholders as well as gain a role 
in EU policy coordination. Option 3 builds upon the ETAP governance structure by providing 
eco-innovation  policy  with  ownership  of  the  review  of  framework  conditions  as  well  as 
ensures its key role in integrating eco-innovation into emerging policy approaches.  

With  this  in  mind,  the  contribution  to  achieving  overall  impacts  is  considered  stronger  for 
Options 3 and 4. In case of Option 3 these include notably expanding Innovation Partnerships 
to cover eco-innovation. In case of Option 5, the potential contribution is assessed as lower 
since several actions are beyond the (policy) reach of Commission, at least when considered 
in the short to medium term. 

With regards to timing both Option 1 and Option 3 require an intense work in the coming two 
years. Option 3 offers more implementation flexibility in terms of timing as it includes several 
actions  where  optimal  timing  was  deemed  to  2-5  years.  As  expected,  the  most  ambitious 
option requires more time to gain political support and to be ready for implementation, with 
impacts to be expected in 5 to 10 years  

40 

 
 
 
 
 
 
 
 
 
7.2.5. Recommendation 

Considering the urgency for a focussed and improved eco-innovation policy initiative, as well 
as  the  feasibility  of  its  implementation  in  a  reasonable  range  of  time,  Option  3  appears  to 
respond better to the new political environment. Option 4 on the other hand targets directly 
SME-specific  problem  drivers.  After  all  SMEs  are  critical  developers  and  users  of  eco-
innovation.  Option  5  represents  a  longer  term  vision  to  achieve  a  radical  transition  to  a 
resource-efficient, competitive and sustainable economy. Thus a combination of Option 3 & 
4 is deemed to be most appropriate by shaping the policy agenda for eco-innovation in 
the  medium  term  and  responding  directly  to  the  eco-innovation  needs  of  the  SMEs. 
Options  3  and  4  also  combine  well,  complementing  each  other  and  there  are  no  negative 
trade-offs between them. The combined actions respond best to the identified objectives and 
problem drivers as shown in Figure 4.  

In  addition  combining  Option  3  &  4  corresponds  well  to  the  arguments  raised  during  the 
broad  public  consultation,  for  instance  by  focusing  on  SME  needs,  in  terms  of  financing, 
training and  networking  (Option  4). The  business  sector and  the Member States call for  the 
need to act on the framework conditions for eco-innovation and design policies that stimulate 
demand  in  emerging  eco-innovation  sectors  (Option  3).  A  reinforced  governance  structure 
(Option  3)  with  greater  emphasis  on  policy  learning,  coordination,  and  agenda  setting  has 
received broad support both during the HLWG meetings and wider stakeholder consultations.  
Stakeholders  have  endorsed  a  targeted  approach  in  relation  to  foreign  partners  for  eco-
innovation (Option 4) and acting through established networks and channels to avoid overlap 
(i.e. UNEP Cleaner Production Centres for global SME networking).  

Figure 4: The link between objectives, problem drivers and actions (Option 3 & 4) 

Specific 
Objective 

to 
the 
apply 
principles of the 
Innovation 
Union  Initiative 
eco-
to 

Operational Objective 

Driver targeted 

Action 

Putting  in  place  an  eco-innovation 
friendly  environmental  regulatory 
framework  

Problems 
environmental acquis 

related 

to 

Option 3, action 1 

Governance  problems  related  to 
EU innovation support 

Option 3, action 6 

41 

 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
innovation 

to  promote  eco-
innovation 
in 
Europe 

to 
improve 
global  markets 
for 
eco-
innovation 

Integrate  eco-innovation  concerns 
into relevant policies and initiative, 
in  particular 
innovation 
in 
policy field  

the 

As above 

make  proposals  for  better  targeting 
of  EU  funds  on  eco-innovation  as 
part  of 
the  next  EU  financial 
perspectives 

Strengthen 
capacities 
increased  networking  and 
spread of best practice   

eco-innovation 
through 
the 

of  SMEs 

Weak linkages between research 
and market 

Inadequate “skills” base  

Option 3, action 2 

Option 3, action 4 

Option 3, action 5 

Difficulties 
providing finance  

in  accessing  and 

Option 3, action 3 

Demand  side  policy  measures 
are weak  

Option 4, action 1 

Increase  the  market  credibility  and 
investment  readiness  of  emerging 
eco-innovations  

Lack of appropriate and credible 
information  on  the  performance 
of 
environmental 
new 
technologies 

Option 4, action 2 

Open  up  global  markets  to  eco-
innovation 

Unfavourable  global  conditions 
for eco-innovation  

Option 4, action 3 

Improve  global  capacities  for  eco-
in 
innovation, 
developing countries 

particular 

in 

for 

eco-
Unused  potential 
innovations  in  developed  and 
developing countries 
Unused  potential 
eco-
innovations  in  developed  and 
developing countries 
Indigenous 
eco-innovation 
capability  amongst  developing 
countries is scarce 

for 

Option 4, action 4 

8.  MONITORING AND EVALUATION 

8.1  Context 

EcoAP,  being  a  broad  “policy  framework”,  presents  a  challenge  for  monitoring  and 
evaluation. Furthermore, the selection of indicators will need to recognise its enlarged scope. 
Therefore,  especially  evaluation  of  wider  effects  will  rely  on  proxy  indicators  (due  to  the 
limited access or lack of suitable data) or qualitative assessments.  

8.2  Organisation and scope of monitoring and evaluation process 

The monitoring activity can be performed on two levels: 
–  reporting  on  activities  performed  by  EcoAP,  such  as  Eco-innovation  fora,  the  HLWG, 

participation in inter-service consultations, specific studies (“internal reporting”), and 

–  collection  of  key  monitoring  indictors  on  the  implementation  of  all  EcoAP  actions  in 

collaboration with implanting bodies (“external reporting”). 

The evaluation activity will encompass: 

42 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
•  collection  of  quantitative  and  qualitative  evidence  of  the  progress  towards  achieving 
goals of all individual actions of Eco-AP (whenever possible, the evaluation of Eco-
AP will rely on dedicated evaluations performed for individual actions); 

•  analysis  results  and  effects  of  activities  performed  by  Eco-AP  team  (attribution 

analysis of the value added of Eco-AP in achieving the goals). 

In order to improve the quality of evaluation it is proposed that the EcoAP will be evaluated 
both  internally  and  externally.  The  previous  experience  of  ETAP  showed  difficulties  in 
attributing  effects  to  ETAP  actions.  An  ongoing  internal  evaluation  will  gather  useful 
evidence; it could have a form of preparing regular self-evaluation notes. Furthermore, they 
will become one of key documents to be used by external evaluators. In this regard the Eco-
innovation Observatory will be highly useful, by gathering data on markets and trends.  

8.3  Parameters and indicators 

Particular  attention  will  be  given  to  selecting  adequate,  accessible  and  reliable  indicators. 
Suggested  performance  indicators  for  each  action  are  proposed  in  Annex  XIV.  To  this  end, 
the  final  selection  of  monitoring  indicators  as  well  as  data  collection  process  will  be 
preformed  in  a  close  collaboration  with  the  relevant  Commission  services  as  well  as  (if 
relevant) with the representatives of the MS. In both monitoring and evaluation activities, the 
particular emphasis will be given to monitoring and evaluation of the most important actions 
of EcoAP, the monitoring and evaluation will be performed for all proposed action.  

43 

 
 
 
 
ANNEX I – LIST OF RELEVANT DEFINITIONS 

Definitions 

Competitiveness 

Competitiveness  is  the  collection  of  factors,  policies  and  institutions  which  determine  the 
level  of  productivity  of  a  country  and  that  determine  the  level  of  prosperity  that  can  be 
attained by an economy90. It means a sustained rise in the standards of living of a nation or 
region and as low a level of involuntary unemployment as possible91. 

Eco-industry:  

The eco-industry consists of activities which produce goods and services to measure, prevent, 
limit, minimize or correct environmental damage to water, air, and soil, as well as problems 
related  to  waste,  noise  and  eco-systems.  These  include  cleaner  technologies,  products  and 
services, which reduce environmental risk and minimize pollution and resource use92. 

Eco-innovation 

Eco-innovation  is  any  form  of  innovation  resulting  in  or  aiming  at  significant  and 
demonstrable progress towards the goal of sustainable development, through reducing impacts 
on  the  environment,  enhancing  resilience  to  environmental  pressures,  or  achieving  a  more 
efficient  and  responsible  use  of  natural  resources.  This  is  a  broad  definition,  including  both 
intended  and  unintended  environmental  effects  from  innovation  as  well  as  social  and 
behavioural innovation93. 

Environmental technologies 

An  environmental  technology  is  a  technology  that  advances  sustainable  development  by 
reducing  risk,  enhancing  cost  effectiveness,  improving  process  efficiency,  and  creating 
products and processes that are environmentally beneficial or benign94.  

ERA-NET Scheme 

The  ERA-NET  scheme,  in  the  framework  of  FP7  funded  activities,  aims  at  developing  and 
strengthening  the  coordination  of  national  and  regional  research  programmes  through  two 
specific actions: 

• 

• 

'ERA-NET actions' - providing a framework for actors implementing public research 
programmes  to  coordinate  their  activities  e.g.  by  developing  joint  activities  or  by 
mutually supporting joint calls for trans-national proposals. 

'ERA-NET Plus actions'- providing, in a limited number of cases with high European 
added  value,  additional  EU  financial  support  to  facilitate  joint  calls  for  proposals 
between national and/or regional programmes. 

90 Definition by the World Economic Forum, Global Competitiveness report 2007. 
91 European Commission, European Competitiveness report 2008 
92 OECD/Eurostat (1999) 
93 As defined in Community Guidelines On State Aid For Environmental Protection ((2008/C 82/01).  
94 NSTC (1997), The road to sustainable development 

44 

 
                                                 
Under the ERA-NET scheme, national and regional authorities identify research programmes 
they wish to coordinate or open up mutually. The participants in these actions are therefore 
programme 
'owners'  (typically  ministries  or  regional  authorities  defining  research 
programmes) or programme 'managers' (such as research councils or other research funding 
agencies managing research programmes). 

European Technology Platforms 

European  Technology  Platforms  (ETPs)  are  a  mechanism  to  bring  together  all  interested 
stakeholders  to  build  a  long-term  vision  to  develop  and  promote  a  specific  technology  or 
solve particular issues. 

Green skill 

There  is  no  clear  definition  of  what  is  meant  by  "green  skills"  or  "skills  for  the  green 
economy".  The  research  is  still  ongoing  and  trying  to  clarify  concepts.  However,  analysis 
shows that the green economy reinforces the trend towards a new skills paradigm where the 
importance of ‘generic’ skills is recognised to complement ‘specific’ skills. The analysis from 
European  Centre  for  the  Development  of  Vocational  Training  (CEDEFOP)  on  Skills  for 
Green Jobs95  shows that fundamental weakness in the EU's skills base could matter more to 
its  capacity  for  green  growth  than  shortages  in  specialist  "green  tech"  know-how.  A 
systematic  deficit  in  technical  skills  related  to  science,  technology,  engineering  and 
mathematics (STEM) was also identified. 

Joint Technology Initiative 

Joint  Technology  Initiatives  (JTIs)  are  “public-private  partnerships  in  key  areas  where 
research  and  technological  development  could  contribute  to  Europe's  wider  competitiveness 
goals and where the traditional instruments of the Framework Programme (e.g. collaborative 
research)  are  not  adequate”96.  JTIs  are  to  constitute  an  efficient  implementation  mechanism 
“enabling the necessary leadership and coordination to achieve the research objectives”97. 

Innovation 

Scientific  and  technological  innovation  may  be  considered  as  the  transformation  of  an  idea 
into a new or improved product introduced on the market, into a new or improved operational 
process used I industry and commerce or into a new approach to a social service98. 

Market failure 

Generally speaking a market failure implies an inefficient allocation of goods and services in 
a market. In relation to innovation this is due to the fact that market mechanisms are unable to 
secure  long-term  investments  in  innovation  due  to  uncertainty,  indivisibility  and  non-
appropriability  of  innovation  process99.  Typically,  a  market  failure  manifests  itself  in  an 
insufficient  allocation  of  funding  by  enterprises  for  risky  and  innovative  investments  or 
information  asymmetries,  and  hence  the  market  failure  approach  leads  to  instruments  that 

95  "Skills for green jobs: A European synthesis report", CEDEFOP, 2010 
96  CEC  (2007)  Joint  Technology  Initiatives:  Background,  State-of-Play  and  Main  Features,  Commission  Staff  Working  Document, 
SEC(2007)692 
97 CEC (2005) Report on European Technology Platforms and Joint Technology Initiatives: Fostering Public-Private R&D Partnerships to 
Boost Europe’s Industrial Competitiveness, Commission Staff Working Document, SEC(2005)800 
98 OECD (1993), Frascati Manual 
99 Arrow 1962 

45 

 
                                                 
allocate resources to firms (R&D grants or tax incentives) or provide them with information, 
e.g.  on  IPR,  market  opportunities,  collaboration  partners,  etc.  This  is  the  so-called  "supply 
side" innovation policy. 

Proportionality 

Article  5  (3)  of  the  Treaty  on  European  Union  also  stipulates  "under  the  principle  of 
proportionality,  the  content  and  form  of  Union  action  shall  not  exceed  what  is  necessary  to 
achieve the objectives of the Treaties". 

Subsidiarity 

Article 5 (3) of the Treaty on European Union further states that subsidiarity means in such 
case of shared competence that "the Union shall act only if and in so far as the objectives of 
the  proposed  action  cannot  be  sufficiently  achieved  by  the  MS,  either  at  central  level  or  at 
regional  and  local  level,  but  can  rather,  by  reason  of  the  scale  or  effects  of  the  proposed 
action, be better achieved at Union level". 

System failures 

System  failures  are  connected  to  "missing  links"  among  the  different  elements  of  the 
innovation  system  (network,  co-ordination,  institutional,  framework  or  regulatory,  etc.)  and 
not  only  to  problems  related  to  the  market.  They  are  now  taken  into  account  in  innovation 
policy  because  even  if  the  ‘market’  signals  induce  enterprises  to  invest  in  innovation,  other 
factors  such  as  financial  rules  and  regulations  or  weak  incentives  for  higher  education 
institutes  to  develop  collaborative  research  or  graduate  courses  in  partnership  with  industry 
may  nevertheless  prevent  innovation  performance  from  being  improved.  Innovation  policy-
makers  have  increasingly  begun  to  adopt  the  language  of  ‘national  innovation  systems’ 
(OECD,  2003)  theory  that  stresses  that  the  flows  of  technology  and  information  among 
people, enterprises and institutions are at the core of the innovation process.  

Resource productivity/efficiency 

Resource  productivity  describes  the  relation  between  economic  outputs  usually  in  monetary 
terms  (Y  –  numerator)  and  a  physical  indicator  (M  –  denominator)  for  material  or  resource 
input in physical terms. According to the OECD, the term ‘resource productivity’ is put in a 
welfare perspective. It sets the quantity of economic output in relation to the input of natural 
resources100. In other word it asks: How much welfare can be generated from resource use? 

Resource  use  can  be  measured  by  means  of  material  flow  indicators  of  an  economy-wide 
material flow analysis (EW-MFA). Different indicators can be used, such as Direct Material 
Input (DMI), Domestic Material Consumption (DMC), Total Material Requirement (TMR) or 
Total Material Consumption (TMC).  

100 Wuppertal Institute (2007), the relation between resource productivity and competitiveness  and OECD (2008) Recommendation of the 
Council on Resource Productivity. Meeting of the Environment Policy Committee (EPOC) at Ministerial Level. March/April 2008.  

46 

 
                                                 
 
 
 
 
 
Table 1: Macro-indicators for material flows 

Indicator 

Formula 

Subject 

Total Material Requirement 
(TMR) 

DMI + indirect flows 

Total Material Consumption 
(TMC) 

TMR  –  (exports  +  indirect  flows  of 
exports) 

Domestic Material Input 
(DMI) 

domestic material used + imports 

Domestic Material 
Consumption (DMC) 

DMI - exports 

Domestic and imported resources 
including their ecological rucksacks, 
which are required for domestic 
production and consumption. 

Domestic and imported resources 
including their ecological rucksacks, 
which are required for domestic 
consumption only (excluding exports). 

Domestic and imported resources 
without ecological rucksacks, which 
are used for domestic production and 
consumption. 

Domestic and imported resources 
without ecological rucksacks, which 
are used for domestic consumption 
only (excluding exports). 

Eurostat uses the indicator “resource productivity” (GDP/DMC) as headline indicator for the 
policy  area  “sustainable  consumption  and  production”  (SCP)  in  the  monitoring  of  the  EU 
Sustainable Development Strategy101. Analogical the indicator for resource efficiency would 
be DMC/GDP.  

101 Eurostat (2009): Sustainable Development in the European Union. 2009 monitoring report of the EU sustainable development strategy. 
Eurostat Statistical Books. Luxemburg 

47 

 
 
 
 
 
 
                                                 
ANNEX II – COMPETITIVENESS, RESOURCE EFFICIENCY AND ECO-INNOVATION 

Apart from being a solution to environmental problems, eco-innovation covers a big market 
and is considered of strategic importance by many industries. Eco-innovation is found in all 
sectors and encompasses al kinds of different innovations, including technical innovations and 
non-technical  innovations.  As  eco-innovation  is  not  systematically  monitored  in  national  or 
EU statistics measurement is difficult.  

The  economic  importance  of  eco-innovation  can  be  illustrated  by  available  figures  on  the 
market  for  environmental  technology,  though  smaller  than  the  total  eco-innovation  market. 
For a definition of eco-industries see Annex I. 

The eco-industry is already one of Europe's biggest industrial sectors102. Its estimated annual 
turnover  of  319  billion  euro  is  about  2,5%  of  Europe's  Gross  Domestic  Product  (GDP). 
Currently  app.  3.4  million  people  are  directly  employed  in  the  EU  eco-industry,  which  is 
about  1,5%  of  all  Europeans  in  employment.  The  largest  sub-sectors  deal  with  waste 
management  (30%),  water  supply  (21%),  wastewater  management  (13%)  and  recycled 
materials  (13%).  The  eco-industry  in  Europe  has  in  recent  years  grown  by  around  8% 
annually  making  it  one  of  Europe's  most  dynamic  sectors.  Most  recently,  growth  has  been 
concentrated in resource management (esp. energy) where new technologies such as solar and 
wind  energy  have  made  remarkable  progress.  Approximately  600,000  additional  jobs  were 
created  between  2004  and  2008.  For  a  composition  of  basic  information  on  the  size, 
composition and turnover of eco-industries in the EU and globally see Annex III. 

Current experience suggests that the primary focus of current eco-innovations tends to rest on 
technological developments and advancements. Nevertheless, a number of non-technological 
innovations, such as establishing separate environmental divisions or creating inter-sectoral or 
multi-stakeholder  research  networks,  have  spurred  technological  developments.  Some 
industry leaders have even begun to explore systemic innovations that are changing the way 
their  businesses  fulfil  consumer  demands103.  Here  are  opportunities  for  the  EU  to  take  the 
lead.  An example is e.g. a copying machine manufacturer performing research on business-
models that allow them to make a profit when they help their clients in reducing the number 
of photocopies and printouts (and thus reducing costs and environmental impacts) instead of 
their traditional focus on reducing the environmental impacts per photocopy.  

In  a  study  in  2008  the  Wuppertal  Institute  tested  the  relationship  between  material 
productivity  and  competitiveness  for 
the  Global 
Competitiveness  Report  of  the  World  Economic  Forum  were  plotted  against  the  values  on 
resource  productivity  (DMI)  of  2000  and  applied  in  a  correlation  analysis.  The  Wuppertal 
Institute concluded, that the results delivered “good reasons to believe that there is a positive 
relationship between the resource productivity of economies (measured in GDP in PPP U.S. $ 
per kg DMC) and the score value104 of the GCI105”.  

the  year  2000.  Score  values  of 

In order to further validate the conclusions a regression analyses for the years 2004 to 2007 
was  carried  out  similar  to  the  analyses  for  the  year  2000.  More  sophisticated  time  series 

102 All figures on EU and worldmarkets from  Ecorys et al., Study on the competitiveness of the EU eco-industry,  Final Report – Part 1, 
Brussels, 2009 (Ecorys, 2009A) 
103 OECD 2009, Policy Brief, Sustainable Manufacturing and Eco‐innovation: Towards a Green Economy  
104 We used the score values instead of ranking positions for the regression analyses. The score values provide us with information about the 
relative  distance  of  the  individual  countries.  For  rank  correlations,  we  would  lose  this  information.  For  this  reason  we  did  not  make 
regression analyses with the Business Competitiveness Index, as this index only existed as a ranking. 
105 Bleischwitz et al. 2008, p. 39 

48 

 
                                                 
analysis could not be performed due to the lack of corresponding time series. Therefore, it has 
been analysed whether the statistical correlation still exists with a larger number of countries 
and in every single year from 2004 to 2007. 

It is still unclear whether high material productivity results in an improved competitiveness or 
if high competitiveness is a precondition for higher material productivity. Or maybe a third, 
not  analysed  variable,  which  is  a  driver  for  both  the  competitiveness  and  the  resource 
productivity,  is  the  explanatory  variable.  4-year-data  is  still  not  sufficient  to  answer  the 
causality by means of the Granger Causality Test. However, a visual analysis of scatter plots 
provides a first assumption about causality. 

As  seen  from  the  scatter  plots  for  each  year,  Malta  is  consistently  an  outlier,  which  results 
from  the  enormous  material  productivity  of  Malta.  This  seems  to  be  caused  by  the  lack  of 
(depletion of) local raw materials. Therefore, all regressions were performed with Malta and 
once again without Malta. As expected, the coefficient of determination has improved when 
using the data without Malta.  

Based on a visual analysis of the Fig 1 to 4, we can derive that in all analysed years, a positive 
relationship  exists  between  material  productivity  and  competitiveness  (measured  as  the 
Global  Competitiveness  Index).  However,  the  variance  of  material  productivity  in  countries 
with high competitiveness is very high. If non-European OECD countries are included in the 
analyses (2004 and 2005), the results are in principle identical, but with a further spread of the 
countries in the top of the figures. The scatter plots (Fig. 1-4) show that a very high level of 
competitiveness  could  be  associated  with  low  material  productivity.  On  the  other  hand, 
countries with low competitiveness are also characterized by low material productivity - with 
the exception of the outlier Malta. These results allow the interpretation that a high level of 
competitiveness  is  a  precondition  to  achieve  a  high  material  productivity.  However,  other 
factors also determine whether economies have a higher or lower material productivity. Thus, 
for  example  the  Scandinavian  economies  are  still  characterised  by  the  use  of  their  natural 
resource endowments (Norway: oil & gas, Sweden & Finland: mining and forestry, Denmark: 
animal  biomass)  compared  to  more  service-oriented  economies  e.g.  UK  or  Switzerland.  In 
interpreting  the  causality  of  the  relationship  between  competitiveness  and  material 
productivity there is need for further research and an improved database.  

49 

 
Fig: 1: Scatter plot material productivity and Global Competitiveness Index 2004 

Fig: 2: Scatter plot material productivity and Global Competitiveness Index 2005 

50 

 
 
 
 
Fig: 3: Scatter plot material productivity and Global Competitiveness Index 2006  

Fig: 4: Scatter plot material productivity and Global Competitiveness Index 2007 

At  first  glance,  the  four  different  regressions  from  2004  to  2007  show  quite  similar  results. 
The  coefficient  of  determination  improved  significantly  when  using  the  data  without  Malta 

51 

 
 
 
 
 
 
(from  an  average  adjusted  R2=  0,15  to  an  average  adjusted  R2=  0,35).  Only  in  2007,  the 
difference between the regressions with and without Malta is not so pronounced (with Malta: 
adjusted R2= 0,10, without Malta: adjusted R2= 0,17). In all tested models, both the t-values 
and  the  F-values  of  the  models  were  within  the  level  of  significance.  However,  some 
regressions suffer from a violation of the assumptions of OLS estimation, so these results are 
not statistically significant. Only the regressions for the year 2006, both the regressions with 
and without Malta, are statistically significant and normally distributed in their residuals. 

Interpretation of results 

Based  on  an  analysis  of  the  figures  in  Annex  II  we  can  derive  that  in  all  analysed  years,  a 
positive relationship exists between material productivity and competitiveness (measured by 
the Global Competitiveness Index). These results allow the interpretation that a high level of 
competitiveness  is  a  precondition  to  achieve  a  high  material  productivity.  Based  on  the 
present  sample,  we  cannot  conclude,  however,  that  a  high  material  productivity  leads 
automatically to higher competitiveness. Thus it can be seen as a necessary, but not sufficient 
factor for high competitiveness.  

Although the visual analyses of scatter plots point to a positive relationship between material 
productivity  and  competitiveness,  the  results  of  our  regression  analysis  are  not  statistically 
significant  in  three  of  four  years.  One  reason  could  be  the  large  variance  of  material 
productivity  in  the  countries  with  a  high  score  value  in  the  Global  Competitiveness  Index. 
Since the Global Competitiveness Index is combined by dozens of different indicators, a wide 
range  of  different  parameters  influences  the  Global  Competitiveness  Index.  Based  on  the 
present  sample,  we  cannot  conclude,  however,  that  a  high  material  productivity  leads 
automatically to higher competitiveness.  Thus it can be seen as a necessary, but not sufficient 
factor for high competitiveness. 

52 

 
ANNEX III – THE ECO-INDUSTRIES – IN THE EU AND GLOBALLY 

Defining eco-industries 

The OECD and Eurostat define eco-industries as “those [identifiable] sectors within which the 
main  –  or  a  substantial  part  of  –  activities  are  undertaken  with  the  primary  purpose  of  the 
production  of  goods  and  services  to  measure,  prevent,  limit,  minimize  or  correct 
environmental damage to water, air and soil, as well as problems related to waste, noise and 
eco-systems”106. Based on this definition, a distinction can also be made between ‘core’ and 
‘non-core’  or  ‘connected  industries’  based  on  the  relevance  of  the  industry’s  activity  to  the 
previously  mentioned  purpose.  For  example  ‘core’  industries  include  sectors  such  as 
wastewater treatment and renewable energy sources. Connected industries on the other hand 
include sectors such as ICT, chemicals or automotive.  

Most  of  the  data  on  eco-industries  and  the  eco-innovation  market  refer  to  the  ‘core’  set  of 
industries.  These  refer to the 36  activities listed by the OECD107. The table bellow presents 
these activities according to three different groups108. 

Pollution  Management 
Group 

Cleaner  Technologies 
and Products Group 

Resource  Management 
Group 

o  Indoor air pollution control. 
o  Water supply. 
o  Recycled materials (manufacture 
of new materials or products from 
waste or scrap, separately 
identified as recycled). 

o  Renewable energy plant. 
o  Heat/energy saving and 

management. 

o  Sustainable agriculture and 

fisheries. 

o  Sustainable forestry. 

o  Natural risk management. 
o  Eco-tourism. 
o  Other (e.g. nature conservation, 

habitats and biodiversity). 

Equipment and materials for: 

o  Cleaner/resource-efficient 

technologies and processes. 

o  Cleaner/resource-efficient 

products. 

o  Air pollution control. 
o  Wastewater management. 

o  Solid waste management: 

–  Hazardous waste collection, 
treatment and disposal; 

–  Waste collection, treatment 

and disposal; 

–  Waste recovery and recycling 
(excludes manufacture of new 
materials or products from 
waste and scrap). 

o  Remediation and clean-up of soil, 
surface water and groundwater. 
o  Noise and vibration abatement. 

o  Environmental monitoring, 
analysis and assessment. 

o  Other. 

Provision of services for: 

o  Air pollution control. 

o  Wastewater management. 
o  Solid waste management: 

–  Hazardous waste collection, 
treatment and disposal; 

–  Waste collection, treatment 

and disposal; 

–  Waste recovery and recycling 
(excludes manufacture of new 
materials or products from 
waste and scrap). 

o  Remediation and clean-up of soil, 
surface water and groundwater. 

106 ECORYS, 2009, Study on the competitiveness of the EU eco-industry, Study produced for the DG Enterprise and Industry, European 
Commission, Rotterdam. 
107 Please refer to OECD “Environment Goods and Services Industry: Manual for Data Collection and Analysis” 
108 The link between these activities and the NACE classification of industrial activities has not been completely developed. Eurostat has 
defined a ‘core’ industry group (NACE 25.12, 37, 41, 51.57 and 90).  

53 

 
 
 
 
                                                 
o  Noise and vibration abatement. 
o  Environmental R&D. 
o  Environmental contracting and 

engineering. 

o  Analytical services, data 
collection, analysis and 
assessment. 

o  Education, training, information. 
o  Other. 

Source: OECD, 1999.  

It  must  be  kept  in  mind  however  that  “eco-innovation  occurs  in  the  whole  economy:  any 
company adopting a good, service, production process management or business method with 
environmental benefit is an eco-innovator”109.  

General figures on the eco-industry in the EU 

The eco-industry in the EU27 had a turnover of €232 billion in 2004 and €319 billion in 2008. 
In 2008, this equalled 2.5% of GDP with an annual growth rate of 8.3%110.  

The four largest sub-sectors account for roughly three-quarters of the total eco-industry with 
waste management (30%), followed by water supply (21%), wastewater management (13%), 
and  recycled  materials  (13%).  Recycled  materials  is  the  sector  showing  the  highest  growth 
rate among the four previously mentioned sub-sectors.  

The New Member States display a very high percentage of eco-industry turnover in relation to 
GDP, reflecting the increasing role these industries have begun to play in their economies. In 
Bulgaria  and  Slovenia,  eco-industry  turnover  represents  10.6%  and  9.75%  of  GDP 
respectively,  compared  to  2.55%  for  EU27111.  Eco-industries  are  an  equally  important 
economic sector across the European Union.  

The following table shows the distribution of the total turnover of eco-industries in EU25 in 
2004, both by sector (pollution management vs. resource management), and country.  

Table 1 Total turnover in EU25, Pollution Management and Resource Management Expenditures by 
Country, 2004 

Country 

Germany 

France 

UK 

Italy 

Netherlands 

Austria 

Spain  

Total Turnover 
(€million) 

% of EU-25

Pollution management 
(€million) 

% of EU-25

Resource management 
(€million) 

% of EU-25

66114 

45851 

21224 

19269 

14039 

10091 

9044 

29% 

20% 

9% 

8% 

6% 

4% 

4% 

44597 

28264 

12103 

8946 

10953 

9092 

6047 

31% 

20% 

8% 

6% 

8% 

6% 

4% 

21517 

17587 

9121 

10323 

3086 

999 

2997 

26% 

22% 

11% 

13% 

4% 

1% 

4% 

109 Kemp, R & Pearson, P, 2007, Final report MEI project about measuring eco-innovation, project carried out in the framework of FP6. 
110  Most  of  the  figures  regarding  turnover  of  eco-industries  are  calculated  based  on  the  Environmental  Protection  Expenditure  used  by 
Eurostat. This indicator is defined as, the money spent on all purposeful activities directly aimed at the prevention, reduction and elimination 
of pollution or nuisances resulting from the production processes or consumption of goods and services. 
111 ECORYS, 2009, Study on the competitiveness of the EU eco-industry, Study produced for the DG Enterprise and Industry, European 
Commission, Rotterdam.  

54 

 
 
 
 
 
 
 
 
 
                                                 
Denmark 

Poland 

Belgium 

Sweden 

Finland 

Portugal 

Hungary 

Greece 

Czech Republic 

Ireland 

Slovenia 

Slovakia 

Lithuania 

Luxembourg 

Estonia 

Latvia 

Cyprus 

8794 

6557 

5806 

3968 

3543 

2356 

2193 

2054 

1726 

1211 

872 

740 

371 

319 

256 

159 

139 

4% 

3% 

3% 

2% 

2% 

1% 

1% 

1% 

1% 

1% 

0,38% 

0,33% 

0,16% 

0,14% 

0,11% 

0,07% 

0,06% 

6542 

4444 

2785 

3090 

1414 

1069 

1493 

1266 

399 

818 

507 

409 

187 

198 

159 

92 

39 

5% 

3% 

2% 

2% 

1% 

1% 

1% 

1% 

0,28% 

0,56% 

0,35% 

0,28% 

0,13% 

0,14% 

0,11% 

0,06% 

0,03% 

2252 

2113 

3021 

878 

2129 

1287 

700 

788 

1327 

393 

365 

331 

184 

121 

97 

67 

100 

3% 

3% 

4% 

1% 

3% 

2% 

1% 

1% 

2% 

0,48% 

0,45% 

0,40% 

0,22% 

0,15% 

0,12% 

0,08% 

0,12% 

Total 
 Source: EY, 2006. 

226696 

144913 

81783 

As seen in the following figure, Denmark, Austria and Poland were the three countries with 
the largest eco-industry turnover as a percentage of GDP (2004).   

Figure 1 Turnover as Percentage of GDP in EU25, 2004 

Source: EY, 2006. 

In  terms  of  employment,  the  eco-industry  in  EU27  was  estimated  to  employ  3.4  million  in 
2005, compared to 2.7 million in the car manufacturing industry and 3.4 in chemicals112. This 
represents 1.7% of total paid employment in Europe. The annual growth rate of employment 
in all subsectors between 2000 and 2008 is estimated at 6.98%, with recycled materials and 
renewable energy showing the strongest growth (10.5% and 16.3% respectively). 

112 European Commission, 2007, Facts and Figures: the links between EU's economy and environment, Belgium. 

55 

 
  
  
  
 
 
 
                                                 
Employment in the pollution management sector alone accounts for 2.35 million full time job 
equivalents.  In  Austria,  employment  in  this  sector  represents  3%  of  the  total  workforce 
making it the country  with the highest  share  in Europe. It is followed by Denmark, Estonia 
and Slovenia113.  

Eco-industry  exports  for  the  EU25  (2004)  represented  approximately  €13  billion  while 
imports rose to €11.1 billion. 57% of trade (both imports and exports) took place within the 
European Union, mainly between Germany, France and the UK. These countries are both the 
largest  exporters  and  importers  despite  them  being  net  exporters  of  eco-industry.  Together, 
they represent approximately 55% of trade carried out by EU countries. The first exporter in 
Europe  is  Germany,  exporting  €4.8  billion  in  2004.  This  is  more  than  twice  the  amount  of 
French (€1.5 billion) and nearly three times the amount of British exports (€1.5 billion)114.  

Size of eco-industry firms 

The  structural  make-up  of  eco-industries  varies  strongly  from  one  sector  to  another.  The 
heterogeneous nature of the industry along with the strong lack of statistical information make 
it  difficult  to  provide  a  precise  overview  regarding  the  exact  number,  type  and  size  of 
companies  in  eco-industries.  In  spite  of  this,  taking  a  closer  look  at  a  number  of  specific 
sectors allows to draw some general conclusions. 

Firstly, concentration is a notable trend in the eco-industry in the EU, particularly in the waste 
management sector, soil remediation, wind power and renewable energy. The ECORYS study 
shows that approximately 10% of companies are responsible for almost 80% of the turnover. 
The  particular  drivers  behind  this  concentration  trend  are  intentions  to  increase  their 
geographic  coverage  and  along  with  it,  increase  business  activities  to  build  a  critical  mass 
allowing lessening the burden of costs linked to R&D115.  

With regards to firm size, firms tend to be larger and display a more international profile in 
long-standing eco-industry markets such as waste management and water supply. On the other 
hand,  new  regulation-driven  markets116  such  as  the  eco-construction  sector  and  the 
renewable  energy  sector  are  characterised  by  a  stronger  presence  of  smaller  firms.  Their 
growing  maturity  as  well  as  the  ongoing  economic  downturn  is  likely  to  lead  to  the 
consolidation  of  the  sectors.  The  following  table  summarises  the  key  profiles  of  companies 
belonging to different eco-industry subsectors. 

Sub-sector 

Industry structure 

Air pollution 

Waste management 

Flue gas treatment: small and medium-sized e.g. LAB 
(France) and large international e.g. Lurgi (Germany), 
Alstom (France) Catalytic converters: Big groups e.g. 
Coming GmbH (Germany), Delphi (Luxembourg), 
Rhodia (France) and special medium-size e.g. Ibiden 
(Germany) and Johnson Matthey PLC (UK) 
EU15 has a mature market and EU (27-15) is 
developing. An oligopoly with the large actors 
accounting for 80% and the remaining 20% is for the 
local companies 

113 Ibid. 
114  EY,  2006,  Eco-industry,  its  size,  employment,  perspectives  and  barriers  to  growth  in  an  enlarged  EU,  a  study  for  the  European 
Commission, DG Environment 
115 ECORYS, 2009, Study on the competitiveness of the EU eco-industry, Study produced for the DG Enterprise and Industry, European 
Commission, Rotterdam.  
116  EY,  2006,  Eco-industry,  its  size,  employment,  perspectives  and  barriers  to  growth  in  an  enlarged  EU,  a  study  for  the  European 
Commission, DG Environment. 

56 

 
 
 
 
 
 
 
 
                                                 
Soil & Groundwater 

Wastewater management & Water supply 

Renewable Energy 

Others 

Biodiversity 

Source: EY, 2006.  

Two types: small specialized firms and construction 
companies 
Wastewater management & water supply are often done 
by the same actors who are usually local small 
specialized companies who are often part of a few major 
actors e.g. Veolia (France), RWE (Germany), Thames 
Water (RWE) (UK) 
o  Hydropower: 90-100 small and large companies 
o  Photovoltaic energy: 40-50 large companies 
o  Geothermal: hundreds of small companies 

o  Solar thermal energy: small sector dominated by 

SMEs 

o  Wind power: a fast growing market all sort of actors 

o  Public administration: each country has at least one 

department or ministry  

o  Private environmental management: activities are part 

of total activities within a company 

Eco-tourism: plenty of national parks, eco-museums, 
etc… 

Despite  eco-industries’  overarching 
these  sectors  are 
characterised  by  the  presence  of  an  important  number  of  small  and  medium  enterprises 
(SME). Out of a micro-economic sample of firms from eco-industries, ECORYS found that 
97% were SMEs117,  however accounting only for approximately half of total employment. 

towards  concentration, 

trend 

Eco-innovation financing in the EU 

Indicators  on  the  cleantech  industry  are  often  used  to  measure  the  eco-industry.  The  term 
cleantech  is  generally  used  to  describe  companies  that  produce  technologies  that  are 
environmentally  friendly.  The  emphasis  is  often  on  new  or  established  technologies. 
Cleantech and eco-innovation are thus closely related. However, the focus of eco-innovation 
is broader than only technology and also encompasses for example process innovation. 

Data on the venture capital (VC) market trends in the cleantech sector offer an insight on the 
current trends of the capital market for eco-innovation.  

The  total  venture  investments  worldwide  in  2009  amounted  to  about  29.6  billion  dollars118. 
Investments  in  cleantech  companies  at  that  time  represented  nearly  11%.  However,  VC 
investments in cleantech declined in 2009 by 33%. Until 2008 the industry recorded six years 
of growth at an average annual rate of 45% and VC investments reaching 8.5 billion USD.  

117 As defined by the European Union (1 to 250 employees).  
118 Dow Jones Venture Source. Available at: www.venturesource.com 

57 

 
 
 
 
 
 
                                                 
 
Figure 2 Global Cleantech Venture Capital Investments 

Source: Cleantech Group, 2009 

The  Cleantech  Venture  Capital  report  for  2010  shows  the  state  of  VC  investments  in 
European  companies.  According  to  the  report,  in  Europe  the  VC  capital  market  is 
significantly  smaller  than  in  North  America  (64%  of  VC  funding  raised  in  the  US  in  2009 
compared  to  28%  in  Europe  and  Israel).  However  in  Europe,  a  larger  share  of  the  total 
investments goes to cleantech. In the EU as much as 39% of VC invested in cleantech while 
in the US it is estimated between 17-20%.  

According to the European Private Equity & Venture Capital Association, all private equity 
investments in the energy and environmental sectors in Europe represent approximately 7% of 
all investments. This is comparable to investments carried out in the consumer services, and 
the financial services sectors.  

Figure 3 Investments by sector focuses in 2009 – all private equity 

Source: EVCA/PEREP Analytics 

58 

 
 
 
 
 
 
 
Most  of  this  funding  goes  to  energy  generation  followed  by  energy  efficiency.  These  two 
sectors alone make up 71% of the capital invested in the fourth quarter of 2009. 

Moreover,  VC  capital  investments  in  Europe  have  exploded  over  the  last  decade.  In  2009, 
investments  amounted  to  1.6  billion  dollars  spread  over  221,  while  in  2004  only  0.4  billion 
dollars were invested in 144 deals. The largest cleantech venture capital marked in Europe is 
found in the UK followed by Germany, Norway and France. By far the most VC in Europe is 
invested in energy generation followed by energy efficiency.  

Figure 4: Capital raised by European cleantech firms 

Source: Cleantech Group, 2010 

During  the  first  quarter  of  2010,  VC  investments  en  Europe  were  distributed  as  follows 
among the top seven countries: 

Figure 5: Distribution of VC investments among the top 7 European countries for the first quarter of 
2010 

Source: EY in Club Cleantech AFIC, 2010.  

European market share and competitiveness 

59 

 
 
 
 
 
 
 
 
 
When it comes to European industrial competitiveness data119 indicating world trade shares of 
potential  environmental  goods  of  OECD  countries  (1993  up  to  2004)  indicates  that, 
internationally there are three strong OECD members – Germany, the USA and Japan (China 
is  not  an  OECD  country),  with  South  Korea  performing  more  average.    Generally,  the  UK, 
Spain, Ireland, and Sweden are also considered to be competitive.  

A  2007  Roland  Berger  analysis  of  the  European  environmental  industry  looked  at  market 
volumes and competitive positions – mainly Germany – in Europe.  One of the study’s key 
findings  was  that  “environmental  technology  already  represents  an  important  economic 
factor”120.    The  report  further  estimated  that  overall  market  volume  (2007)  was  €1  trillion 
globally,  with  energy  efficient  technologies  playing  a  large  part  (€450bn).    The  average 
market share of European companies was above 30% – in waste management and recycling, 
power generation, sustainable mobility, energy efficiency, and sustainable water management.  
The European market share was lower – 10% – for material efficiency.  

Global  market  shares  in  European  hands  fluctuate  between  the  different  fields  of 
environmental  technologies.    For  example,  for  automatic  separation  of  materials  and  solar 
power  stations,  Europe  accounts  for  more  than  70%  of  the  total  market.  And  in  synthetic 
biofuels, solar cooling systems and energy storage technology, European industry are leading 
in R&D, although there are no market shares to speak of, as there are not yet any established 
markets.  On  the  other  hand  for  hybrid  vehicles,  there  are  no  European  companies  that 
currently  have  a  product  on  the  market.  For  the  remaining  markets,  the  share  of  European 
companies ranges from 20% to 80%.  

On  an  aggregate  level,  the  Roland  Berger  study  concluded  that  the  most  competitive  EU 
countries,  in  terms  of  innovation  and  market  share,  are  Germany,  Spain,  Scandinavia,  the 
Netherlands, Great Britain, France and Italy.  

119 DG Research sponsored project (Measurement of competitiveness of eco-innovation) 
120 Innovative environmental growth markets from a company perspective, Research Project on behalf of the Federal Environment Agency 
by Roland Berger Strategy Consultants, 2007 

60 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Table 1 World trade shares of potential environmental goods of OECD countries, 1993-2004 

61 

 
 
 
ANNEX IV – ENVIRONMENTAL POLICY AND ETAP FOR ECO-INNOVATION –LESSONS LEARNT  

The  EU  Sustainable  Development  Strategy,  launched  in  2001,  recognized  the  linkages 
between  growth  and  sustainable  development.  This  has  been  further  reinforced  by  the 
Council121,  which  recognized  the  potential  of  technologies  to  create  synergies  between 
economic  growth  and  environmental  protection.  Eco-innovation  is  a  natural  junction  of  the 
pursuit  towards  sustainability,  competitiveness  and  job  creation.  It  merges  technological, 
process and business innovation with environmental benefits. 

The EU approach to eco-innovation has developed over time. The EU's environmental policy 
and legislation has evolved from promoting "end-of-pipe" solutions to setting environmental 
performance requirements and targets for products, industrial processes and resource use and 
moving further to address environmental management and consumer behavior. These policies 
and regulations have been and remain a main driver for eco-innovation.  

Environmental  policy  supporting  eco-innovation  complements  other  EU  policies  supporting 
innovation, which do not have environmental outcomes as their main objective. In particular 
this refers to innovation and industrial policies, cohesion policy, research. As means to better 
coordinate  and  ensure  consistency  of  eco-innovation  policy  in  2004  the  European 
Commission launched the Environmental Technologies Action Plan (ETAP) as a complement 
to  the  EC  regulatory  approaches.  As  such  the  Plan  promotes  research,  development  and 
deployment,  mobilizes  funds,  helps  to  drive  demand  and  to  remove  barriers  to  market 
developments for environmental technologies, and eco-innovation in general.   

The  integration  of  environmental,  competitiveness  and  employment  aspects  has  received  a 
further  boost  with  the  launch  of  the  Europe  2020  strategy122.  It  aims  to  turn  the  EU  into  a 
smart,  sustainable  and  inclusive  economy  by  putting  in  place  policies  to  secure  economic 
development and social cohesion in circumstances where environmental challenges, including 
natural resource scarcity, are growing. 

Environmental policy for eco-innovation 

Evidence suggests that, by modifying relative incentive structures and production constraints, 
environmental regulation can act as a powerful stimulus to innovation and economic growth. 
The EU environmental policies have created new markets, incentivising business to innovate 
towards best and more efficient solutions. Eco-innovation provides thereby the key means to 
reconcile economic growth and environmental protection. The objective of this part is to give 
an  overview  of  the  key  lessons  learned  with  respect  to  eco-innovation  support  gathered 
through the development and design of EU environmental policy.  

Literature123  exists  that  looks  at  the  contribution  of  specific  environmental  legislation  with 
respect to its contribution to eco-innovation support. The points below summarize key lessons 
learnt regarding the relationship between environmental policy and eco-innovation: 

•  Eco-innovation will not emerge in the absence of innovation-conducive environmental 
policy. At its early stage eco-innovations tend to be more costly and uncompetitive vis-

121  In particular refer to European Council conclusions of: 22&23 March 2005, 23&24 March 2006, 8&9 March 2007, 13&14 March 2008 
122  COM (2010) 2020 Communication from the Commission, Europe 2020: A strategy for smart, sustainable and inclusive growth 
123  In  particular  refer  to  Ecorys  (2009)  "The  implementation  of  the  Environmental  Technologies  Action  Plan"  and  European  Parliament 
(2009) "Eco-innovation – Putting the EU on the path to a resource and energy efficiency economy" 

62 

 
                                                 
 
à-vis  conventional  technologies  or  practices  –  so  often  lack  a  commercial  rationale, 
particularly early in its life.  

•  Eco-innovation is not only dependent on environmental policy, but is also conditioned 
by  the  wider  framework  conditions  as  well  as  the  corresponding  innovation  barriers. 
The measures necessary to overcoming these barriers fall often outside the domain of 
environmental  policy,  however  their  complementarity  is  such  that  a  strong  case  for 
integrated policy approaches can be made124.  

•  Due to increasing technological interdependency,  successful technology development 
frequently  requires  corresponding  advancements  in  various  related  technology  areas. 
Support mechanisms must be put in place alongside environmental regulation in order 
to  stimulate  R&D  activities.  Environmental  policy  should  create  the  right  conditions 
for  green  innovations  to  emerge  and  flourish,  without  knowing  exactly  in  advance 
what these innovations will look like. Stimulating diversity is essential. 

instance 

•  Due  to  this  diversity  it  is  crucial  to  eliminate  regulatory  bias  towards  established 
technologies,  for 
technology-forcing  standards  and 
the  form  of 
corresponding  support  mechanisms  that  “price  out”  alternative  solutions.  A  better 
approach is to concentrate efforts on creating demands for green products and services 
by  for  instance  pricing  the  environmental  externality.  Policymakers  should  leave 
individual products to emerge from the market125. 

in 

•  Diffusion  of  eco-innovation  can  be  induced.  The  environmental  benefit  of  eco-
innovation will depend on the pace and level of diffusion. Policymakers can mobilize a 
broad  array  of  instruments  to  induce  eco-innovation  diffusion.  Empirical  evidence126 
suggests  that  command  and  control  instruments  may  be  just  as  effective  as  market 
based instruments.  

The Environmental Technologies Action Plan 

The  EU  Environmental  Technologies  Action  Plan  (ETAP)127  was  launched  to  harness  the 
potential of environmental technologies and eco-innovation to better protect the environment 
and, at the same time, contribute to competitiveness and growth. Since its inception ETAP has 
contributed to removing market barriers to the uptake of eco-innovation, to turning research 
results into business opportunities and to opening up global markets to eco-innovations.  

The  Plan  contains  25  measures  in  three  priority  areas:  Getting  from  research  to  market; 
Improving market conditions; Acting globally. These measures are to be implemented by the 
EC,  national  and  regional  authorities,  industries  and  research  organizations.  A  High  Level 
Working Group composed of representatives from Member States and the EC services was set 
up in 2004 to facilitate the implementation of measures and cooperation among participants. 
Member  States  formalize  their  national  transposition  of  strategies  and  action  plans  towards 
environmental  technologies  in  the  ETAP  National  Roadmaps.  The  ETAP  is  not  a  typical 
Action Plan, but rather an umbrella that brings together efforts and actions across policy areas 
with the aim to coordinate eco-innovation support at the EU and national level. 

Two reports on ETAP implementation have been produced in 2005128 and 2007129.  

124 European Commission, Directorate-General Environment (2007), "Designing environmental policy to be innovation friendly" 
125 McKinsey Global Institutue (2010), "How to compete and grow: A sector guide to policy" 
126 Diaz-Rainey, I. (2009), Induced diffusion: Definition, review and suggestions for further research, Robert Schuman Center for Advanced 
Studies, European University Institute, Firenze 
127 COM (2004) 38 final, Communication from the Commission to the Council and the European Parliament, Stimulating technologies for 
sustainable development: An Environmental Technologies Acton Plan for the European Union 
128 COM (2005) 16 Report on the implementation of the Environmental Technologies Action Plan in 2004 

63 

 
 
                                                 
Getting from Research to Markets 

During  the  implementation  of  ETAP,  the  overall  effort  of  research  in  environmental 
technologies has increased, both at EU and Member States levels. At EU level, a total of €1.4 
billion has been mobilised for the development of environmental technologies through the 6th 
Framework-Programme (FP) and up to €10 billion under the 7th FP. The Member States have 
also  stepped  up  their  eco-innovation  R&D  efforts.  The  increase  in  R&D  funding  for  eco-
innovation may not be directly linked to ETAP, but it provides some insights on the growing 
importance  of  environmental  technologies,  which  would  not  have  been  possible  without  a 
proper coordination of existing programmes, as provided by the ETAP framework.  

Industry  has  been  engaged  in  developing  eco-innovation  through  Technology  Platforms 
(ETPs),  and  new  instruments  were  created  to  link  research  institutions,  businesses  and 
investors. Such instruments include the Risk-Sharing Finance Facility or new forms of Public-
Private Partnerships (e.g. Joint-Technology Initiatives).  

Research efforts however remain somewhat uncoordinated and do not always meet emerging 
environmental  and  market  needs.  Coordination  of  and  synergy  between  programmes 
supporting eco-innovation in Europe should be reinforced to address barriers to market uptake 
of promising research results. The ERA-net on Eco-Innovation, launched in 2009, should be 
useful  to  pool  Europe's  national  research  and  innovation  programmes  to  promote  eco-
innovation  and  to  create  a  networking  platform  for  information  exchange  among  Member 
States  and  beyond.  Looking  into  the  future  more  advanced  governance  structures  for  eco-
innovation  research  should  be  explored  to  build  on  Member  State-specific  strengths  and 
specialization, assure EU-wide coherence and commitment of critical mass of resources.  

Improving market conditions 

During  ETAP  implementation  actions  aimed  at  mobilising  public  and  private  sources  of 
funding to accelerate the market uptake of eco-innovation have progressed. These include: 

•  The Competitiveness and Innovation Framework Programme supports actions for eco-
innovation with an indicative budget of €433 million for 2007-2013 period. A number 
of risk capital funds investing into clean-tech companies have emerged, energizing the 
European venture capital market. The market replication projects offer direct funding 
for eco-innovative SMEs reducing the gap between research and market: 

•  An  increasing  number  of  projects  funded  through  the  LIFE+  programme  deal  with 
innovative management or business methods being introduced both by public entities 
and the private sector. Already app. 65% of projects funded under the objective LIFE+ 
Environment have an eco-innovation component; 

•  The  revised  environmental  State  Aid  Guidelines,  offer  a  specific  10%  bonus  on  the 

maximum aid intensity on eco-innovation investments; 

•  The  target  for  Green  Public  Procurement  is  50%  for  the  priority  product  groups  and 

services as of 2010, and the necessary tools are being developed; 

The eco-innovation focus of other EU funding programmes such as the Structural Funds has 
also  been  reinforced.  Experience  shows  that  LIFE+  and  CIP  provide  funding  for  projects 
more directed at market-oriented demand. Structural Funds promote large-scale promotion of 
eco-innovation best practices at the regional level. 

129 COM (2007) 162 Report on the implementation of the Environmental Technologies Action Plan (2005 – 2006) 

64 

 
                                                                                                                                                         
Despite  progress  difficulties  in  accessing  risk  capital  remain.  Procedures  for  eco-innovation 
funding instruments are complex. Furthermore, the regulatory barriers to the emergence of a 
European venture capital market seem to slow down and limit financing for eco-innovation, 
especially early-stage.  

A  main  lesson  from  the  2007  ETAP  report  is  the  need  to  focus  innovation  initiatives  on 
demand  side  actions.  This  has  been  taken  up  in  the  Lead  Market  Initiative  (LMI),  which 
created new networks and bilateral contacts across policy areas, actors and sectors, as well as 
across the Commission services. The implementation of Lead Markets mobilised for example 
public  procurers,  professional  public  procurement  expertise  centres,  standardisation 
organisations  and  professional  bodies.  This  approach  has  proved  especially  useful  in 
emerging sectors, where established communication channels do not exist, as the case of the 
bio-based  products  shows.  Secondly  a  sectoral  approach  to  eco-innovation  has  proved 
particularly  useful.  Conditions  that  promote  competitiveness  differ  across  sectors  and  so 
therefore do the most effective potential regulations and policies.  

Looking at the framework conditions, one of the major hurdles the eco-industries has to deal 
with  (especially  some  of  its  sub-  sectors  such  as  air  pollution  control  and  recycling),  is  the 
absence  of  a  well  functioning  single  European  market.  For  example,  the  Waste  Framework 
Directive  provides  a  sound  framework  to  drive  waste  management  practices  in  the  EU. 
However, the lack of a uniform implementation and enforcement at the level of the Member 
States  creates  an  uncertain  and  non-transparent  business  environment.  A  long-term  stable 
policy  framework  with  greater  harmonization  or  co-ordination  across  the  Member  States, 
together  with  simplification  of  the  often  highly  complex  national  regulations  is  therefore  a 
crucial element for the future development of the sector. 

Evidence  points  to  the  role  market-based  instruments  (MBIs)  can  play  to  overcome  the 
disadvantage  environmental  technologies  face  with  respect  to  established  technologies.  The 
role of ETAP in this respect should be further enhanced for the establishment of new MBIs or 
for  the  review  of  existing  ones.  The  information  gathered  through  the  Action  Plan  on  the 
involved  markets  and  actors,  especially  in  the  Member  States,  could  be  vital  for  a  better 
design  of  new  MBIs.  Use  of  ETAPs  framework  and  network  should  be  made  to  monitor 
existing MBIs and to assess and provide evidence of their effectiveness.  

The dialogue with stakeholders, including business and financial actors, was enhanced by the 
Forum  on  Eco-innovation.  Together  with  other  initiatives  in  the  Member  States  this  helped 
raise awareness and share strategies and tools for eco-innovation.  

Looking into the future cohesion policy should make a greater contribution to eco-innovation 
development  and  uptake,  in  particular  complementing  existing  regional  capabilities  through 
smart  specialization.  Secondly  experience  shows  that  the  design  of  future  EU  financial 
instruments  for  eco-innovation  should  be  better  linked  to  policy  objectives,  national 
instruments and market needs.  

Acting globally 

ETAP has not been successful in putting eco-innovation on the international agenda. Progress 
in removing trade tariffs for environmental goods and services was slow due to the delays in 
the  general  WTO  trade  negotiations.  There  was  some  progress  on  the  funding  side,  i.e.  the 
Global  Energy  Efficiency  and  Renewable  Energy  Fund  (GEEREF)  and  the  EU  Energy 
Facility.  These  instruments  provide  funding  for  energy  and  energy  efficiency  projects  in 
developing countries. These initiatives however were initiated outside the ETAP framework. 

65 

 
However,  perspectives  are  improving.  The  international  cooperation  on  climate  change 
creates  new  opportunities  for  cooperation  on  eco-innovation,  related  in  particular  to 
technology transfer. Additionally eco-innovation policies are now key elements of the green 
growth agenda and are part of bilateral environmental dialogues with external EU partners. 

With respect to technology transfer (TT) ETAP experiences in the field show that a “one-size-
fits all” solution has proved misguided. TT is industry and country specific. Also a high grade 
of  industry  specificity  has  been  identified  with  respect  to  the  barriers/  blockages,  making 
technology transfer of green technologies particularly challenging.  

ETAP  has  also  shown  that  there  is  room  for  international  cooperation  in  the  field  of  public 
research.  Joint  investment  in  pre-competitive research,  mapping  of  R&D  needs,  multilateral 
science  and  technology  cooperation,  common  pools  of  knowledge  can  share  costs  and 
effectively and efficiently stimulate eco-innovation at a global scale: it potentially facilitates 
outreach,  facilitates  access  to  funding,  contributes  to  technology  transfer  and  capacity 
building. It might be useful to identify principles and best practice for further cooperation.  

However TT efforts will not prove effective unless indigenous eco-innovation capabilities are 
developed.  They  are  essential  to  facilitating  both  the  diffusion  of  existing  eco-innovation 
within  developing  countries,  and  sustainable  economic  development  based  on  the  adoption, 
adaptation and development of environmentally sound technologies that fit with the bespoke 
conditions  faced  by  these  countries.  OECD  analyses  demonstrate  that  high  technological 
capacity in the recipient country is a key factor in encouraging transfers.  

Governance of eco-innovation 

The ETAP High Level Working Group and the ETAP National Roadmaps have both emerged 
as the main EU instruments for stimulating eco-innovation policies. A high level of Member 
State  engagement  in  the  ETAP  process  has  been  achieved.  Insufficient  networking,  weak 
links  across  policy  areas,  actors  and  sectors,  both  at  the  EU  level  and  Member  State  level, 
remain the key obstacles to a coherent eco-innovation policy approach.  

The challenge ahead is how to better coordinate national eco-innovation policy measures, and 
facilitate  policy  learning.  A  lot  of  experience  has  been  accumulated  through  the  ETAP 
National Roadmaps  on the  development and  use of eco-innovation. The voluntary nature of 
the Roadmaps and the lack of appropriate follow-up risks an uneven impact of ETAP across 
the Member States. To benefit further from this experience there may be a need for: 

•  More systematic information on governance and responsibilities, 
•  More systemic information and instruments, 
•  Analytical work to identify lessons. Knowledge accumulated in the roadmaps can be 
used to identify good practice relating to: the roadmaps themselves, the role they can 
play;  how  eco-innovation  policies  can  be  governed;  the  combination  of  instruments; 
the design of specific instruments. 

Eco-innovation policy in the Member States 

66 

 
 
 
 
The Environmental Technologies Action Plan has invited EU Member States to develop eco-
innovation  roadmaps  to  account  for  initiatives  taken  at  national  level  to  support  eco-
innovation. The analysis of the Roadmaps shows that countries differ in many respects with 
regards to governance aspects. This reflects the dual character of the ETAP roadmaps as an 
instrument  of  industrial  policy  embedded  in  the  Lisbon  agenda,  and  as  an  instrument  to 
address environmental policy issues.  

The Roadmaps have not spurred new policies, they have been a vehicle to gather and share 
information, to reorganize measures. For the new EU Member States, they have also been a 
way to initiate a policy dialogue on eco-innovation policies.  

There  balance  of  instruments  reported  in  ETAP  Roadmaps  indicates  a  bias  towards  supply 
side  instruments.  Prevalence  is  given  to  R&D  support,  the  support  of  networks  and 
partnerships,  demonstration  and  commercialization;  among  demand  side  measures, 
information services are most common.  

The  systemic  review  of  ETAP  Roadmaps  indicates  that  environmental  policy  priorities  are 
well reflected in eco-innovation priorities reflected in the Roadmaps. Nevertheless, there is a 
strong bias towards climate change mitigation and renewable energy generation. The review 
indicates that the choice of instruments to support eco-innovation is related to the innovation 
potential  and  the  development  state  of  a  country.  Finally  the  review  suggests  that  countries 
with  the  most  stringent,  most  flexible  and  most  transparent  environmental  regulations  rely 
more  heavily  on  the  supply  side  measures,  whereas  countries  with  less  stringent 
environmental policy regimes and less developed financial markets, on average, on average, 
more frequently use information services, the provision of infrastructures, and regulations and 
standards to support eco-innovation.  

ETAP lessons learned 

The  EU  experience  and  the  ETAP  National  Roadmaps,  confirm  that  countries  implement  a 
variety of policies to stimulate eco-innovation. At the European  level  the  key  lessons  learnt 
for eco-innovation policy include: 

•  The  need  to  coordinate  eco-innovation  policies  is  evident.  As  implicit  assumption 
made  in  much  of  innovation  literature  is  that  more  innovation-related  activities  is 
always better than less. ETAP experience shows that this does not need to be the case. 
More  eco-innovation  does  not  necessarily 
improved  environmental 
performance.  Eco-innovation  can  have  unintended  negative  environmental 
consequences  (e.g.  growing  crops  to  produce  biofuels  can  lead  to  deforestation  and 
increase greenhouse gas emissions).  

lead 

to 

•  The  most  efficient  policies  to  spur  a  green  economy  combine  a  portfolio  of 
instruments, involving carbon pricing, R&D support for green innovations, removing 
non-market  barriers  to  ease  the  substitution  from  dirty  to  green  technologies,  and 
subsidies  to  clean  technology  transfers  to  developing  countries130.  Typically,  pricing 
the externality ought to be combined with long-term investments by governments and 
firms  if  technological  change  is  too  costly,  too  risky,  too  long  term,  or  cannot  be 
appropriated by firms. 
It is not clear whether and to what extent the internalization of costs through market-
based  instruments  (MBIs)  has  taken  place.  MBIs  have  been  put  in  place,  on  a 

• 

130 Acemoglu D., Ph. Aghion, L. Bursztyn, D. Hemous (2009), The environment and directed technological change, MIT/ Harvard/ NBER 
Working Paper 

67 

 
                                                 
European  and  national  level,  but  information  as  to  their  effects  specifically  with 
respect to environmental technologies is lacking131. 

•  More qualitative information on the status and design of instruments would be needed 
to  characterize  them  further  and  assess  their  potential  impact  on  eco-innovation: 
additional information on target, budget would be useful as well.  

•  The objective of eco-innovation is not to spur new technologies, but to accelerate the 
improvement  of  environmental  performance.  The  benefits  of  innovation  for  the 
environment only materialize when the innovation is taken up by users and delivers the 
expected performance. This emphasizes the need to focus on demand side actions for 
eco-innovation  and  better  coordination  of  demand  measures  across  the  EU  to  ensure 
technology spill-overs.   

•  ETAP  must  become  more  focused  on  priority  sectors  linked  to  the  growing 
environmental challenges. The current wide focus on green technologies has not been 
helpful in developing targeted and efficient sectoral policies.  

•  Solving persistent environmental problems needs the involvement of other sectors, but 
environmental policy will have to play a key role. Implementation will require better 
cooperation and negotiation with other sectors and with industry.  

At the Member State level the key lessons learnt include: 

•  National  strategies  to  support  eco-innovation  provide  opportunities  to  coordinate  a 
policy  dialogue  on  this  complex  and  multifaceted  issue  in  a  whole-of-government 
approach. In Europe, ETAP has been a vehicle to systematize and reorganize existing 
measures  in  the  participating  countries.  In  addition,  it  would  be  useful  if  Member 
States would report on policies that were successful and lessons that have been learned 
with the use of particular policies. 

•  EU  Member  States  devote  a  lot  of  attention  to  the  creation  and  development  of  new 
firms. In particular, a variety of initiatives are taken to encourage venture capital and 
direct  it  towards  green  tech  and  eco-innovation  investments.  New  firms  and  new 
comers  play  a  role  in  the  development  and  deployment  of  eco-innovation.  Data 
developed  by  the  OECD  on  patent-based  indicators  for  eco-innovation  shows  that 
green young firms are more inventive than non green young firms.  

131 Ecorys (2009), The implementation of the Environmental Technologies Action Plan 

68 

 
 
 
                                                 
ANNEX V – RATIONALE AND SPECIFIC ACTIONS IN OPTION 5: WIDE ECO-INNOVATION POLICY 

Economic instruments 

No adequate economic incentives or policies exist currently for creating a resource-efficient 
economy.  “Adjusting  the  economic  and  fiscal  framework  is  therefore  the  most  fundamental 
and urgent policy prerequisite for moving toward sustainability”132. The central role of price 
signals for eco-innovation has been highlighted by numerous publications and most recently 
confirmed  by  OECD  analysis133.  For  achieving  the  right  price  signal  the  development  and 
introduction of environmental taxes is pivotal. In 2005 the weighted average of the revenue 
generated  with  environmental  taxes  in  the  EU-27  constitutes  2.6%  of  GDP.  There  are  four 
categories environmental taxes used in the European Union134:  

–  Energy,  
–  Transport,  
–  Pollution and  
–  Resource taxes.  

The overwhelming part of environmental taxes is usually generated by energy taxes, but this 
will  not  be  sufficient  to  address  other  aspects  of  eco-innovation.  For  example,  price  signals 
for a sustainable use of natural resources are not well developed. Only 4.1% of the total of the 
environmental  taxes  are  related  to  resources,  for  instance  in  the  UK,  Sweden,  Italy  and  the 
Czech  Republic135.  The  taxes  can  cause  resource  reducing  and  material  substitution  effects 
with positive effects on eco-innovation, e.g. in material extraction, processing and recycling. 
The extent to which this would have effects along the value chain would depend on the tax 
bases, levy forms, recipients and administrative procedures136. 

Consumption and Production Policies (SCP)   

With the adoption a 10-Year Framework of Programs (10YWFP) on sustainable consumption 
and production, as called for by the WSSD Johannesburg Plan of Action the European Union 
supports global efforts for eco-innovation by 

•  assisting countries in their efforts to green their economies 
•  helping corporations develop greener business models 
•  encouraging consumers to adopt more sustainable lifestyles. 

Within the SCP framework number of legislative measures could be taken in order to improve 
eco-innovation  in  the  European  Union  by  improving  the  interplay  between  eco-innovation 
supply of and demand as outlined in the problem defition. 

132  Schmidt-Bleek,  F.  (2010):  Innovation  for  a  sustainable  future.  Paper  prepared  for  the  Stakeholders  Consultation  on  Eco-AP,  11 
February, 2010 in Bruxelles. Carnoules 
133 OECD (2009): Green Growth: Overcoming the crisis and beyond. Paris 
134 Eco-innovation - Putting the EU on the path to a resource and energy efficient economy. Wuppertal-Spezial 38. Wuppertal. Download: 
http://www.wupperinst.org/uploads/tx_wibeitrag/ws38.pdf 
135 Eurostat (2007): Taxation trends in the European Union: Data for the EU Member States and Norway, Luxembourg 
136  Bleischwitz,  R.,  B.  Bahn-Walkowiak,  W.  Irrek,  Ph.  Schepelmann,  F.  Schmidt-Bleek,  S.  Giljum,  S.  Lutter,  L.  Bohunovski,  F. 
Hinterberger, E. Hawkins, M. Kuhndt, N. Pratt, et al. (2009): Eco-innovation - Putting the EU on the path to a resource and energy efficient 
economy. 
Download: 
http://www.wupperinst.org/uploads/tx_wibeitrag/ws38.pdf 

Wuppertal-Spezial 

Wuppertal. 

38. 

69 

 
 
 
                                                 
–  Public procurement 

Public procurement of goods and services amounts to 15% - 20% of final consumption137. A 
greening of public demand could be would create a powerful pull for eco-innovation, but as 
outlined in the problem definition the interest of procurement in eco-innovation is limited. For 
using  the  full  potential  of  public  procurement  of  the  European  Union  the  European 
Commission would introduce ambitious standards for public procurement reaching from EU 
institutions,  over  EU  MS  down  to  the  regional  authorities  and  municipalities.  Beyond  the 
already  existing  plans  of  the  SCP  Action  Plan,  which  focuses  primarily  on  energy-related 
aspects, more comprehensive eco-innovation standards for public procurement would include 
reference to best available technology (BAT) not only in relation to energy consumption, but 
to  a  number  of  different  eco-innovation  aspects  including  the  resource  efficiency  along  the 
life-cycle of procured goods. 

–  Clear labelling of green products  

The  use  of  labels  exposing  the  energy-use  of  products  positively  influences  consumer 
decision-making. Thus they have a direct impact on the demand and indirectly on the supply 
of  energy-efficient  products.  Labelling  of  products  for  eco-innovation  would  have  to  go 
beyond the current energy-related labelling as required by the eco-design directive to include 
all  aspects  of  resource  consumption  along  the  life  cycle.  Positive  effects  on  supply  of  and 
demand for eco-innovation similar to the energy domain could be expected. In this context it 
would  be  desirable  to  reduce  the  multitude  of  existing  eco-labels.  For  this  purpose  the 
European labelling would have to be based on the vision of greening products all over Europe 
in  a  joint  and  common  approach.  Such  an  approach  would  have  to  be  supported  by  all 
governmental and non-governmental stakeholders issuing and using green product labels. 

The  European  Union  Eco-labelling  Board  (EUEB)  could  support  this  process  by  involving 
stakeholders and setting up joint working plans, key objectives and plans for joint action. This 
would also promote key objectives of the EU Eco Label Scheme including: 

–  Developing, publishing and promoting life-cycle criteria for eco-labelling; 
–  Raising the credibility of the award by effective administration and criteria, 
–  Encouraging manufacturers, retailers and service providers to apply for labels, to publicise 
their  own  participation  in  labelling  schemes,  and  to  promote  the  availability  of  eco-
labelled products and information about them; 

–  Encouraging purchasers to buy labelled products and services; 
– 

Improving consumer awareness and behaviour regarding optimal use of labelled products 
and services. 

–  Substitution of the worst performing products on the market  

Based  on  the  life-cycle  analysis  of  products  new  instruments  for  selecting  and  banning  of 
products (including imported goods) would have to be developed and introduced. 

The combination of public procurement with stricter labelling would create an environment in 
which  the  demand-pull  for  well-performing  products  could  grow.  Especially  during  the 
absence  of  economic  instruments  these  efforts  could  be  undermined  by  “eco-dumping”, 
because production with little care for the environment would in most cases still be cheaper 
than  responsibly  produced  goods.  Therefore,  the  European  Union  would  have  to  protect 
producers  with  higher  standards  by  actively  discriminating  against  products  and  production 

137  Schmidt-Bleek,  F.  (2010):  Innovation  for  a  sustainable  future.  Paper  prepared  for  the  Stakeholders  Consultation  on  Eco-AP,  11 
February, 2010 in Bruxelles. Carnoules 

70 

 
                                                 
processes with negative environmental impacts. This would mean that the worst performing 
products  would  be  phased-out  of  the  market  by  enforcing  gradually  stricter  standards.  The 
effect  on  the  supply  side  within  and  among  trade  partners  outside  of  the  EU  could  be 
amplified, if strict long-term targets would indicate the direction of eco-innovation and market 
discrimination. 

–  Waste prevention and recycling  

Principles of waste prevention and recycling would have to be introduced along all stages of 
the  value  chain  to  foster  eco-innovation  not  only  in  production  and  consumption  but  also 
during  resource  extraction  and  design  phase.  As  outlined  in  the  Thematic  Strategy  on  the 
Prevention and Recycling of Waste, prevention and recycling of waste can depend very much 
on  a  successful  Integrated  Product  Policy  (IPP),  which  provides  for  the  possibility  of 
maintenance, repair, remanufacturing and dismantling of products during the use and end-of-
life  phase.  This  implies  much  more  regulation  in  favour  of  eco-design,  but  also  the 
development  of  new  business  models  for  the  manufacturing  industry,  which  encompass  not 
only  the  selling  of  material  goods,  but  also  maintenance  and  end-of-life  services.  Such  an 
approach would foster eco-innovation along the value chain from cradle to cradle. Numerous 
innovations  in  areas  such  as  raw  material  extraction,  material  processing,  selection  and 
production  of  new  materials,  product  design,  use  and  end-of-life  treatment  could  be 
expected138. 

138 Braungart, M., McDonough, W. (2009): Cradle to Cradle. Rethinking the way we make things. London: Random House 

71 

 
                                                 
ANNEX VI – INITIATIVE ON ENVIRONMENTAL TECHNOLOGY VERIFICATION (ETV) 

1. 

What is ETV? Main objective and rationale 

ETV  provides  independent  verification  of  information  on  the  performance  of  new  eco-
technologies, so that worthwhile innovations can establish a market foot-hold. By providing 
that  verification,  risks  for  new  purchasers  are  reduced,  such  that  they  can  purchase  the 
innovative technology with the confidence that it delivers as specified. 

New eco-technologies do not have a track record of solid industrial references showing results 
obtained from the innovation being used under real conditions. Innovators typically base their 
performance claims on demonstration projects and test results, which may not be enough to 
convince technology buyers and investors to make informed choices. Since purchasers tend to 
favour the 'safe' option of well-proven technologies, rather than going for a new technology 
even though it might offer significantly improved performance, lower costs etc. Opportunities 
are missed and further investment is more difficult to obtain. 

ETV  addresses  this  market-access  obstacle  through  a  framework  which  provides  for 
independent,  qualified,  third-party  investigation  of  the  technology  performance.  Providing 
that  the  innovation  is  indeed  able  to  deliver  as  it  promises,  ETV  delivers  a  Statement  of 
Verification, showing that the performance claims are based on complete, fair and reliable 
test data. As a result: 

•  The technology developer can show reliable data proving the value of the innovative 

technology. 

•  Technology  buyers  and  investors  have  reliable  information  on  which  to  base  their 

purchasing decisions and management of technological risk. 

•  Other stakeholders (including public policy-makers and regulators) have indications 

of the performance achievable by new technologies. 

Verifying  a  technology  under  ETV  is  generally  one  step  in  the  chain  leading  from  research 
and development to marketing. ETV is appropriate: 

•  When  the  technology  is  ready  for  the  market:  no  further  major  developments 

affecting the performance are planned; and 

•  When  there  is  no  technical  standard  or  certification  system  available  to  prove  the 
performance of the product, or where the innovative features of the new technology 
are not correctly (or adequately) reflected by the available standards. 

When there is a demonstration project or testing process planned, ETV could be an integral 
part  of  it.    Verification  under  ETV  would  then  add  only  marginally  to  overall  costs,  while 
adding significantly to the value, in terms of eventual market credibility. 

Under ETV, test data of good quality may be taken into account, to help save time and cost. 
The  added  value  of  ETV  lies  in  the  credibility  and  comparability  of  the  'Statement  of 
Verification', which is the result of a successful verification process. 

ETV  is  intended  for  use  in  business-to-business  relations.  It  can  thus  be  distinguished  from 
product  certification,  in  that  there  is  no  control  that  a  series  of  product  conform  to  given 

72 

 
specifications;  and  from  product  labelling,  since  each  ETV  Statement  of  Verification  is 
specific to one technology, i.e. there are no pre-defined criteria. 

2. 

Development of ETV 

The  ETV  initiative  builds  on  a  number  of  studies,  as  well  as  research  and  pilot  projects, 
exploring  the  benefits,  obstacles  and  testing  verification  protocols  in  specific  technology 
fields139. In total, some 35 technologies have been verified during this preparatory phase. For 
example, the pilot project TRITECH, funded under the LIFE instrument in 2006-2009, tested 
an operational verification procedure in real conditions. It coverered 15 innovations in three 
technology  areas  -  water,  soil  and  energy  -  and  produced  a  business  plan  for  an  EU  ETV 
scheme. 

Some  EU  Member  States  have  already  implemented  ETV  pilot  projects:  the  Nordic 
Innovation Council project on Water Technology Verification Centres (NOWATECH)140; the 
Danish ETV Centre (DanETV) on 5 different technology areas141; and the VERA project on 
Verification  of  environmental  technologies  for  agricultural  production142.  Some  private 
initiatives have also provided inspiration for ETV, such as the programmes of evaluation for 
instruments run by associations of industrial users143. 

In 2007-2008, a proposal for a Regulation establishing an EU ETV scheme was prepared, to 
address the issues of access to markets by innovative environmental technologies. An Impact 
Assessment report concluded that a legislative instrument was the preferable option to achieve 
the  necessary  break-through.  However,  the  Inter-service  consultation  failed  to  reach  a 
reasonable  consensus  among  Commission  services,  as  a  Regulation  was  considered 
disproportionate and the scheme as then proposed too burdensome and resource-intensive for 
the Commission. The evidence of potential uptake and on the added-value of the scheme was 
also questioned during the ISC. 

Acknowledging the need for further evidence to make an informed decision on the need and 
structure  of  an  ETV  scheme,  DG  Environment  engaged  a  new  approach  on  ETV  in  2009, 
combining a pilot programme without legislative instrument, on a purely voluntary basis for 
participating  countries  and  organisations,  and  a  detailed  study  on  the  potential  market  and 
demand for ETV in the EU. 

3. 

Implementation of the ETV pilot programme 

The  ETV  pilot  programme  has  been  designed  progressively  in  2009-2010,  with  interested 
Member  States  and  stakeholders  in  a  public-private  partnership  setting.  The  selection  and 
monitoring  of  organisations  implementing  ETV  as  'Verification  Bodies'  is  done  by  national 
accreditation  bodies,  using  the  existing  procedures  applied  for  example  to  product 
certification.  Relations  between  Verification  Bodies,  test  bodies  and  technology  developers 
follow normal commercial practice, while in addition, Verification Bodies are co-ordinated by 
thematic technical groups to ensure the consistency and comparability of ETV procedures and 
products. 

139 The results of all ETV research and pilot projects are accessible through the common website: 
http://www.eu-etv-strategy.eu/ 
140 See http://www.nordicinnovation.net/ 
141 See http://www.etv-denmark.com/danetv/ 
142 See http://www.ecoinnovation.dk/English/Topics/Verification_of_ecoefficient_agro_technologies/ 
143 See http://www.exera.com/, http://www.evaluation-international.com/ and http://www.wib.nl/ 

73 

 
                                                 
The  verification  of  technologies  submitted  to  ETV  is  performed  by  a  Verification  Body, 
acting  as  a  one-stop  shop  for  technology  developers.  This  includes  defining  the  technical 
parameters to be used in the verification process; and also assessing the quality of existing test 
data. When further tests are needed – e.g. when the Verification Body finds that the test data 
in  support  of  the  claims  are  not  sufficiently  robust  –  a  testing  body  and/or  an  analytical 
laboratory144  are  designated  by  the  technology  manufacturer  to  carry  out  further  tests  / 
analyses. 

Verification Bodies, testing bodies and analytical laboratories follow the provisions laid out in 
the ETV General Verification Protocol ('GVP'), which is in fact a set of general instructions 
for the verification of individual technologies. The GVP sets out the required qualifications of 
organisations  implementing  ETV  procedures  and  the  quality  of  test  data  acceptable  under 
ETV.  The  GVP  ensures  that  the  procedures  followed  and  the  outcomes  from  the  pilot 
programme will be of adequate quality and are both credible and reliable. 

To facilitate the launch of the ETV pilot programme, a call for proposals will be launched in 
2011  under  the  EU  Competitiveness  and  Innovation  Programme  (CIP)  with  a  budget  of  €1 
million145. Amounts of €1 million are also programmed under CIP for ETV in 2012 and 2013, 
subject to the approval procedure of annual work programmes for these years. The 2011 call 
should  be  open  to  Verification  Bodies  accredited  to  implement  ETV  and  it  should  enable 
Verification Bodies to:  

•  Participate actively in the setting-up of the ETV pre-programme by participating in 
relevant  technical  groups  and  implementing  ETV  procedures  within  their  technical 
area; 

•  Set  up  and  maintain  a  Quality  Management  System,  thus  ensuring  a  high  level  of 

quality and reliability for ETV procedures and products; 

•  Facilitate access to verification procedures under ETV for Small and Medium-sized 

Enterprises by providing specific technical assistance during ETV processes; 

•  Report  on  the  implementation  of  ETV,  on  results  and  indicators  to  help  the 

evaluation of the ETV pre-programme and to recommend any further steps. 

4. 

Market assessment and cost estimates 

The 4th Community Innovation Survey estimated the number of EU innovative companies at 
around 300 000. Of these, 107 000 introduce new products to the market each year, just under 
half  of  which  are  aimed  at  the  industrial  sector  (excluding  construction).  The  share  of 
environmental investment of industry out of total investment can be estimated around 3%. If 
this share is applied to the number of innovations discussed above, it results in a total of 1350 
environmental  innovations  being  introduced  by  EU  industry  every  year.  This  figure 
should be considered as the potential maximum number of clients for ETV. As an innovation 
itself,  and  to  explore  realistically  whether  early  indications  of  a  market  need  for  ETV  are 
borne out in the medium-term, ETV will need time to prove its value and it is for that reason 
that the pilot programme was devised. 

144 Analytical laboratories are distinguished from other test bodies when they carry out analytical work, for example to measure chemical 
compounds in water or air samples, because such activities follows highly standardised and quality-controlled procedures, independent from 
the products or processes at the origin of the analysed samples, whereas technology tests are by nature dependent on the technologies tested. 
145  2011  Work  Programme  for  CIP  –  Entrepreneurship  and  Innovation  sub-Programme  –  adopted  on  18  January  2011  by  Commission 
Decision C(2011) 91. 

74 

 
                                                 
The  costs  of  verification  under  ETV  can  vary  considerably  depending  on  the  technology 
concerned  and  the  quality  of  existing  data.  The  DanETV  verification  centre  is  a  pilot  ETV 
scheme,  active  in  Denmark  in  5  technology  areas  since  2009.  Based  on  21  verifications 
finalised in 2009-2010, the average cost for the testing and verification of technologies was 
€53,000146, of which €28,000 was attributable to the verification procedures per se. 

Feedback from public consultations and stakeholder workshops indicated that these costs may 
be an obstacle to participation, particularly in the case of small and medium-sized technology 
companies.  In  order  to  facilitate  SME's  access  to  the  scheme,  the  fixed  costs  of  the  pilot 
programme are to be indirectly supported by the EU budget during an initial phase, the aim 
being  to  limit  the  average  total  contribution  by  participating  Small  and  Medium-size 
Enterprises to no more than around €20 000. 

To refine the ETV marketing and cost estimates, DG Environment commissioned a study on a 
'detailed  assessment  of  the  market  potential  and  demand  for  an  EU  ETV  scheme',  whose 
results  are  expected  by  mid-2011.  The  study  will  identify  technology  areas  where  ETV  is 
expected to generate the greatest added value, exploring the business cases for ETV in a series 
of  technological  applications.  It  will  provide  solid  estimates  of  the  market  potential  for  an 
ETV  scheme,  covering  likely  uptake  by  technology  developers,  validated  estimates  of  the 
costs  of  verification  under  ETV,  insights  into  the  willingness  of  potential  applicants  to 
contribute financially and an assessment of the cost-effectiveness of an ETV scheme. 

5. 

Conclusion 

By  providing  objective  comparability  between  technologies  for  purchasers,  ETV  should 
facilitate the emergence of an eco-innovation market place in the EU, boosting  partnerships 
between technology developers and users. It should create confidence in the eco-innovations 
verified  under  ETV,  promoting  healthy  competition  –  based  on  performance  –  between 
technologies  and  between  test  bodies.  ETV  should  also  facilitate  the  greening  of  public 
procurement: public purchasers are typically very careful and ETV will provide them with the 
kind  of  assurance  that  they  need  to  make  a  purchase  of  a  significantly  better-performing 
innovative environmental technology. 

The results of the ETV pilot programme will be evaluated by the Commission services after 
two  to  three  years  of  actual  operation.  On  the  basis  of  this  evaluation  and  the  study  on  the 
market potential of ETV, the Commission will draw conclusions on the potential for ETV in 
Europe and on the best way to mobilise it. A range of options will be drawn up, based on the 
evidence available at the time. If there is clear evidence of its potential added value as an EU-
wide measure, offering the scheme and its implementation to the private sector would likely 
be  one  option,  and/or  proposing  a  legislative  instrument  and/or  a  guidance  document  to 
underpin key objectives and requirements.  

146 Costs for testing and verification ranged from €22,000 to €94,000. 

75 

 
 
                                                 
ANNEX VII – DETAILED ASSESSMENT OF OPTION 1 AND EXAMPLES OF ETAP'S INDIRECT CONTRIBUTIONS  

In the main text implications and impacts of policies directly related to eco-innovation were 
discussed, here effects of the removal of specific ETAP actions are qualitatively assessed. 

Getting research to markets 

Since  ETAP  mainly  supported  and  strengthened  existing  research  areas,  in  this  ‘no-action’ 
option  the  research  focus  will  likely  continue  as  it  is  currently.  Funding  and  coordination 
activities by ERA-Net projects, FP7 and its successor will continue. It is however likely that 
less  concerted  effort  will  be  put  into  attracting  private  and  public  investment  for  the 
development and demonstration of environmental technologies. Actions aimed at improving 
the eco-innovation process and to take inventions out of laboratories and onto the market will 
be taken (as part of the Innovation Union and the European Innovation Partnerships), but in a 
more  scattered  and  uncoordinated  way  with  no  specific  focus  on  eco-innovation.  
Furthermore,  dialogue  with  stakeholders  on  specific  issues  relating  to  the  development  and 
deployment of eco-technologies won’t be organized in a central manner, which could imply 
that  important  actors  will  not  be  involved  in  vision-building  on  the  development  of  eco-
innovations.  Trends  towards  public-private  partnerships,  the  establishment  of  technology 
platforms  and  an  increase  in  attention  for  research  and  dissemination  of  eco-innovation 
indicate that in the case of the absence of an EU eco-innovation action plan, still actions will 
be taken on a smaller scale, for instance within and between the Member States. Finally, the 
EURODEMO, PROMOTE, Testnet and AIRTV initiatives have been promoted in support of 
ETAP  to  establish  European  networks  of  technology  testing,  but,  according  to  national 
stakeholders,  international  cooperation  initiatives  mainly  take  place  through  established 
networks, so the absence of ETAP will possibly not be of great influence.  

Improve market conditions 

ETAP  has  tried  to  bridge  gaps  in  this  area  in  the  past  few  years  by  financial  stimulation 
measures  and  the  development  of  regulation  to  improve  market  conditions.  If  ETAP 
disappears many of the achieved concerted actions towards mobilising financial instruments 
will  continue,  but  it  is  questionable  whether  the  instruments  would  still  focus  on  eco-
innovation.  Stopping  ETAP  would  be  seen  as  a  signal  that  eco-innovation  is  not  a  central 
theme of European policies. A discontinuation of ETAP for sure won't mean a disappearance 
of  national  instruments  for  eco-innovation,  but  surely  the  analysis  of  roadmaps  has 
highlighted the coordinating and networking role that ETAP played with regard to those. 

In  the  area  of  State  Aid  Guidelines  ETAP  has  been  successful  in  adapting  the  state  aid 
framework to favour eco-innovations, but  in the  area of harmful subsidies only the analysis 
stage has been reached. Collectively reviewing harmful subsidies will be more difficult if this 
is coordinated and  specifically targeted by an ETAP-like action plan.  Raising business and 
consumer  awareness  by  ETAP  aimed  at  creating  a  network  among  interest  groups  and 
increase  the  current  knowledge  related  to  environmental  technologies. A  few  activities  took 
place,  such  as  the  European  Forum  on  Eco-innovation.  In  this  ‘no-action  option’,  these 
network and communication activities would likely decrease: there would be no website, no 
High Level Working Group, no ETAP forum nor newsletters. Training in the environmental 
domain  supported  by  the  Marie  Curie  and  ESF  funds  will  however  likely  continue  even 
without the existence of ETAP (but was limited with ETAP anyway).  

76 

 
 
Acting globally 

ETAP’s  activities  in  this  field  have  been  quite  indirect  (e.g:  cooperation  with  international 
organisations)  and  limited  in  terms  of  budget,  and  therefore  it  is  particularly  hard  to  assess 
consequences  of  stopping  such  actions.  It  is  anyhow  assumed  that  the  promotion  of 
responsible investments will continue without an ETAP, maybe in a less focussed way (i.e.: 
environmental good and services in general rather than eco-innovative ones). 

EXAMPLES OF ETAP CONTRIBUTION 

•  The  integration  of  eco-innovation  in  CIP.  The  focus  on  eco-innovation  was  (at  least 
partially) a result of the implementation of ETAP. To accomplish this, ETAP officials 
participated in a number of meetings on the design of CIP. This resulted amongst others 
in a fenced-off budget for eco-innovation for Venture Capital in CIP and the creation of 
the EACI instrument for pilot and market replication projects  

•  With  regard  to  the  State-Aid  guidelines  ETAP  officials  were  integrated  in  a  team  that 
guided  the  implementation  of  the guidelines. The participation of ETAP supported the 
integration  of  eco-innovation  in  the  guidelines.  ETAP  officials  have  participated  by 
taking part in consultations, writing of and commenting on notes, etc.  

•  The attention for GPP already arose around 2003. Since 2005, ETAP was involved in a 
mixed group created of members of the working group and a group of DG Markt. The 
group was to discuss between MS and representatives that the word of procurement and 
the GPP. This is the meeting were the objective of 50% GPP was introduced.  

•  The signalling effect to the Framework Programmes. ETAP has drawn attention to the 
relevance of eco-innovation and by this mean influenced the Framework Programmes to 
pay attention to development towards more sustainable directions. 

•  Supporting the launch of the Environmental Technology Verification (ETV) legislative 
proposal  and  prototype  scheme  in  2010.  The  ETV  has  been  set  up  by  the  EC  in  the 
Framework of ETAP. 

Source: Interviews with Commission's officials, Technopolis Group 2010 

77 

 
ANNEX VIII – DETAILED ASSESSMENT OF OPTION 2 ACTIONS 

Action  1.  Increase  and  focus  research,  demonstration  and  dissemination.  Improve  co-
ordination of relevant programmes 

From FP6 to FP7 the funding devoted to environmental technologies increased from around 
EUR 1.4 bln to EUR 10 bln. Although this increase in funding cannot be attributed directly to 
ETAP, it indicates the growing importance of environmental technologies, which would not 
have  been  possible  without  a  proper  coordination  of  existing  programmes.  This  signal,  at 
least, some influence from ETAP.  

Also  many  other  instruments  have  been  put  in  place  to  increase  R&D,  demonstration  and 
dissemination activities and they help to reach a large number of different stakeholders. This 
ERA-NET  aiming  specifically  at  SME  based  innovations.  A  large  contribution  to  the 
coordination  of  the  MS’  R&D  programs  has  been  expected  from  the  ERA-NET  network 
launched in 2009 under the FP7. Besides, a few other EU level programs and initiative can 
potentially be relevant to PA1 of ETAP such as Structural Funds or the European Institute of 
Innovation and Technology.   

ETAP  has  also  proved  to  be  helpful  in  addressing  market  failures  faced  by  early  stage 
innovative projects. Addressing the funding problem was one of the focuses of the research to 
market  component,  and  it  seems  that  ETAP  initiatives  managed  to  some  extent  to  either 
through  mobilization  of  funding.  ETAP  influence  on  direction  of  funding  in  environmental 
technologies on national level varies from country to country from neutral to positive.     

The  activities  under  PA1  had  a  stronger  focus  on  energy  technologies  and  carbon  emission 
reduction,  and  somewhat  weaker  emphasis  on  wider  problems  of  resource  efficiency  issues 
and even less focus on other nature protection problems. With a specific focus of new ETAP 
on resource efficiency outside the renewable energies area there might be a shift in focus in 
research and therefore a shift in environmental impact. Since markets in this area are also less 
developed than renewable energy markets uptake of research results may be slower.  

Action 2. Establishing ETPs 

Establishing  Technology  Platforms  can  be  considered  as  one  of  the  direct  and  concrete 
contribution  of  ETAP.  These  mechanisms  contribute  to  the  objective  to  promote  further 
investments in research and innovation and 36 platforms have been established since 2004.  

The literature and the interviews point to a strong impact of ETPs in boosting R&D in specific 
technology areas. Additionally they provide a range of positive externalities such as positive 
contribution  to  other  research  programmes  and  helping  to  identify  research  infrastructures. 
Because of the importance of ETPs in setting right research and innovation policies, they have 
received extensive support of the national authorities. So called “Mirror Groups” represented 
by  the  state-nominated  specialists  facilitate  cooperation  and  communication  between  ETPs, 
national activities and national stakeholders.  

Action  3.  Establishing  European  Networks  of  technology  testing,  performance 
verification and standardization 

In order to be able to objectively validate the performance of environmental technologies, and 
improve  the  consumer  confidence  it  was  deemed  necessary  in  ETAP  to  establish  a  special 
mechanism  to  address  these  issues  related  to  environmental  technologies  verification  and 

78 

 
testing. There have been a number of initiatives and pilot projects on this topic; these are RTD 
FP6 initiatives EURODEMO, PROMOTE, Test net, and AIRTV which involved a total of 47 
organizations from 18 MS147. In this regards ETAP has put the bases for the establishment of 
a  European  Environmental  Technology  Verification  System  using  the  experience  of  US 
Environmental  Protection  Agency’s  Environmental  Technology  Verification.  The  results  of 
the  Ecorys  survey  of  MS  showed  that  international  networks  of  standardisation  seem  to  be 
fairly active and ETVs play some role in this. It is difficult to judge whether ETVs can have 
any  impact  in  addressing  capability,  organizational  and  network  failures,  as  this  instrument 
targets  first  of  all  the  product,  rather  then  the  process  of  innovation.  In  creating  any 
environmental  impact  this  instrument  can  have  indirect  positive  effect  on  a  large  range  of 
problems  depending  on  the  program/  technology  type,  its  purpose,  etc.  For  example 
EURODEMO programs explicitly targets technologies targeting soil remediation and ground 
water  problems,  and  have  a  direct  effect  on  soil  and  water  pollution  problems  and  indirect 
effect on resource or energy consumption.  

Action  4.  Develop  and  agree  on  performance  targets  for  key  products,  processes  and 
services 

Performance  targets  hold  a  potential  for  eco-innovation  because  a  certain  requirement  to 
products,  processes  or  services  can  be  set  with  regard  to  resource  use.  Literature  on  the 
effectiveness  and  impacts  of  performance  targets  with  regard  to  resource  use  is  scarce.  Up 
until  now  evaluations  of  standards  and  targets  aim  at  standards  for  energy  savings.  A 
benchmark  for  the  effectiveness  of  performance  standards  is  Japan’s  Top  Runner  scheme. 
Estimates show that the Top Runner scheme will have an effect of 16-25% of national energy 
savings.  This  shows  the  potential  of  performance  targets  for  eco-efficiency.  Standards  on 
specific  substances  seem  to  have  a  positive  effect  on  technological  development  and 
technology transfer148. 

According to the 2007 study of the JRC, performance targets could be defined as long-term 
objectives for the environmental performance of product, process or service and they should 
not be technology prescriptive. With regard to the type of performance targets, a survey149 of 
the MS’ officers showed that a variety of instruments are perceived to be effective, especially 
when aimed at market uptake. The softer types or instruments (i.e. voluntary agreements and 
awareness  campaigns)  are  however  perceived  to  be  least  effective.  The  EU  can  play  a  role, 
especially in coordinating and stimulation of the development of more forceful targets.  

Action  5.  Mobilising  financial  instruments  to  share  the  risks  of  investing  in 
environmental technologies 

Financial  instruments  aim  to  improve  the  capability  of  the  industry  to  integrate  eco-
innovation. Eco-innovative companies face an alleged drawback in competitiveness compared 
to  more  traditional  innovations.  This  competitive  disadvantage  is  due  to  the  fact  that 
environmental costs are not taken up in market prices; eco-innovations are thus more costly 
and  seen  as  more  risky150.  Therefore,  general  innovation  barriers  are  applicable  to  eco-
innovations.  Generally,  the  literature  suggests  that  there  is  a  lack  of  capital  investment 

147  Interview  Technopolis  with  commission  officials,  Environmental  Technologies  and  Pollution  Prevention,  April  22,  2010  .  and 
http://www.eu-etv-strategy.eu 
148 Such as SO2 and NOx (Popp 2006, International innovation and diffusion of air pollution control technologies: the effects of NOx and 
SO2 regulation in the US, Japan and Germany) and NOx (Popp 2006, Exploring links between innovation and diffusion: adoption of NOx 
control technologies at US coal-fired power plants). 
149 ECORYS evaluation of ETAP, see previous reference. 
150  Literature  suggests  that  if  environmental  costs  are  taken  into  account,  eco-innovations  are  less  costly  on  the  longer  term.  However, 
individual companies are not the problem-owner of environmental costs.  

79 

 
                                                 
flexibility  due  to  low  (initial)  profit  margins  and  a  lack  of  resources  in  the  start-up  and  the 
post start-up phase of SMEs. Instruments with a clear focus on this problem in eco-innovation 
related to ETAP are the instruments High Growth and Innovation SME Facility (GIF, with a 
fenced of window for participating in eco-innovation VC funds) and the “first application and 
market replication projects” in the CIP.  

Within GIF the EIF participates in VC funds with a minority participation, which may induce 
commercial parties to participate as well. The VC funds then invest in companies in early and 
expansion stages. For cleantech early and expansion stage funds in total €228m is available 
for  participation  in  the  period  2007-2013.  The  applying  funds  for  the  eco-innovation  are 
assessed  on  two  cumulative  criteria:  (i)  innovation  and  (ii)  prevention  or  reduction  of 
environmental  impacts151.  For  the  ex-post  impacts,  no  specific  assessment  criteria  exist  to 
assess  the  eco-innovation  as  well  as  the  environmental  impacts  of  funded  SMEs.  Up  until 
now, funds aiming at eco-innovation are typically larger than the conventional funds in GIF; 
moreover,  there  appears  to  be  a  large  number  of  funds  chasing  the  eco-innovation  budget. 
There is a relatively high level of rejection because the quality threshold is not met in many 
applications. The availability of additional resources (apart from the EIF participation) is less 
important152.  

Increasing available budgets to participate in VC may increase effects to a certain extent, but 
when available budgets become too large, availability of capital might not be the problem but 
the availability of viable investment opportunities. It can well be that there is no lack of VC, 
but a shortage of economically viable ideas and inventions to invest in. This issue can only be 
increased by other measures both supply (generation of viable ideas and inventions) as well as 
demand  side  (dealing  with  the  lock-in  of  conventional  not  green  technologies  and  services, 
primarily  “getting  the  prices  right”).  The  effect  of  the  eco-innovation  GIF  is  therefore 
significant in relation to the purely commercial funding available. Effect on competitiveness 
for the firms involved is large, but it concerns only a limited number of (however high-growth 
potential) firms.  This also  limits the  environmental impacts effect enhanced by  the  fact that 
not all companies are aiming at substantially improving resource efficiency either. 

The “first application and market replication projects” programme in the CIP-EIP holds larger 
potential  for  resources  savings.  However,  since  the  projects  started  in  May  2009,  it  is  too 
early  to  appraise  the  effects.  Feedback  gathered  from  the  EACI  shows  that  good  results  are 
expected  with  regard  to  eco-innovation,  because  the  instrument  is  aimed  at  market 
introduction  of  eco-innovations  specifically153.  The  beneficiaries  of  the  instrument  show  a 
strong drive to bring eco-innovation to the markets. This makes this instrument of added value 
to the traditional R&D instruments, especially because 68% of surveyed industry associations 
perceive  there  are  adequate  opportunities  for  receiving  RD&I  funding  for  eco-innovations. 
Focus on the market penetration might thus be of added value to the innovativeness.  

The potential for improvement of competitiveness is shown by the interest in the instrument. 
At the time of the deadline for the Call 2010, 287 proposals were submitted. This represents 
an increase of almost a half as compared to the 202 proposals submitted in the Call 2009, and 
more  than  a  doubling  compared  to  the  134  application  received  in  2008.  The  total  funding 
requested in the 2009 call was more than €150m154, an increase of almost 40% compared to 

151 Guiding Paper for Investors on Eco-innovation in CIP Financial Instruments.  
Surce: http://www.eif.europa.eu/ attachments/venture/resources/Paper-for-investors_on_Ecoinnovation_in_CIP_Financial_Instruments.pdf 
152 Interviews Technopolis Group with EIF, April 2010 
153 Interview with EACI, April 2010 
154 This is about 0.05% of the estimated size of eco-industry in 2008  in the EU27. According to the Study on the Competitiveness of the 
EU the total size of eco-industry was €319bn (turnover) 

80 

 
                                                 
the  2008  call.  The  manager  of  the  facility  pointed  out  that  with  relatively  little  activities  to 
draw attention to the facility there was already more response from the field than budget was 
available155.  It  is  expected  that  the  instrument  will  have  a  positive  impact  on  the  ability  of 
particularly SMEs to penetrate the market with innovation. Almost 70% of the participants are 
SMEs,  83%  are  from  the  private  sector.  Moreover,  an  expected  impact  is  increased 
cooperation,  65%  of  the  proposals  are  submitted  by  consortia  where  two  thirds  of  these 
consortia involve participants from different countries. An expected impact of the instrument 
is  an  increase  of  the  capability  to  innovate,  and  thus  to  growth.  Here  budgets  may  be  a 
constraint. With present means the effect is expected to be modest to large. 

A  related  programme  also  in  the  range  of,  indirect,  influence  of  ETAP  and  linked  to  eco-
innovation  grants  is  the  Environment  and  governance  component  of  LIFE+.  Grants  are 
awarded  on  the  basis  of  thematic  priorities  and  so  far  waste  and  natural  resources,  climate 
change and water have represented around 71% of all funded projects. Differently from the 
CIP  grants  for  eco-innovation  the  instrument  is  not  specifically  targeting  SMEs,  but 
significant  results  have  been  produced  and  are  expected  for  the  future.  Ongoing  projects 
foresee  the  "production"  of  a  total  27  new  technologies,  85  methodologies  and  approaches 
and 10 process and products in fields like climate change, waste and water. 

The additionality of the EU in these actions is high.  

Action 6 Review State Aid Guidelines and Review environmentally harmful subsidies 

As a consequence of the State Aid review, since 2008 a 10% higher intensity is allowed for 
environmental  state  aid  investment  support  when  the  investment  results  in  a  substantially 
improved  asset  compared  to  the  existing  state-of-the-art,  the  eco-innovation  is  leading  to  a 
large  leap  forward  in  terms  of  environmental  benefits  and  when  the  innovative  character  of 
the  project  clearly  involves  higher  risks  compared  to  non-innovative  projects.  Further  more 
various other forms of state aid are now allowed for environment related activities (e.g. early 
adaptation  to  future  Community  standards,  waste  management,  renewable  energies,  energy 
saving, relocation of undertakings)156. The effect of this action has not been evaluated because 
of it is a recent development. Under this action in a new ETAP is suggested to evaluate the 
effects in due time (2012) and re-assess state guidelines in this respect.  

The  OECD  concluded157  that  much  of  USD  400  billion  subsidies158  in  the  OECD  can  be 
potentially  environmentally  harmful,  meaning  that  efficient  State  Aid  implementation  can 
give  advantages  to  sound  environmental  practices.  However,  untangling  and  assessing  the 
effects of subsidies on the environment is a complex task. A systematic approach, consisting 
of  determining  the  effects  of  subsidy  removal  on  the  decisions  of  consumers  and  producers 
and  identifying  the  linkages  between  those  decisions  and  the  environment,  is  required  to 
ensure that appropriate policies are developed and the benefits of reform fully realised. The 
OECD  proposes  various  subsidy  reform  strategies.  Follow  up  action  under  a  new  ETAP 
would be implementation of these strategies at EU level and promotion of these strategies at 
MS level by assessing the harmful subsidies in each MS by an OMC type of process. 

155 Interview with EACI , April 2010. 
156 GHK: State Aid for Eco-innovation. Guidance on the application of the Bonus for Eco-innovation under the Environmental Guidelines 
for State Aid (2008) 
157 OECD (2005). Environmentally harmful subsidies-Challenges for reform 
158  Estimates  per  sector  are  USD  318 billion  in  agriculture,  USD  6 billion in  fisheries,  40 billion in  EU  road&rail  transport,  USD  20-30 
billion to the energy sector and some 40-50 billion the manufacturing sector  

81 

 
                                                 
Impacts  of  these  combined  actions  are  hard  to  assess.  This  measure  did  not  have  (nor  will 
have)  a  specific  focus  on  resources  efficiency.  However,  in  terms  of  resource  savings 
biodiversity (e.g. in the case of fisheries, where biodiversity is a serious issue and subsidies 
compose  20%  of  landings),  water  and  energy  may  be  affected  heavily,  other  resources  less 
directly. Competitiveness effects will also be large but will be very different over sectors and 
countries, and for some (parts of) sectors and countries positive and for others negative.  

Action 7. Green public procurement 

Given  the  economic  significance  of  public  procurement  of  goods  and  services  directing  it 
towards  green  purchases  would  contribute  to  a  greener  economy  considering  that  higher 
purchasing  prices  of  green  products  are  in  many  cases  compensated  for  by  lower  operating 
costs, for instance due to lower energy consumption and increased resource efficiency159. A 
greening  of  public  demand  could  thus  be  a  powerful  incentive  to  increase  eco-innovation  – 
especially  when  resource  efficiency  is  taken  into  account.  The  effect  of  green  public 
procurement  (GPP)  is  twofold.  As  a  direct  effect,  potentially  15-20%  of  the  GDP  may  be 
spent  on  environmentally  sustainable  products  and  services.  A  secondary  effect  of  green 
public procurement would be the stimulating effect on the development of resource-efficient 
products,  because  of  creating  markets  for  them  (esp.  when  there  is  a  dynamic  system  of 
determining  what  is  ‘green’).  As  an  after-effect  GPP  can  influence  the  private  demand160. 
Effects  may  be  significant.  A  2008  study161  on  GPP  shows  that  GPP  has  led  to  a  CO2-
emission reduction of 25% (for the procured items).  

The effect on competitiveness is indicated in the financial impact of GPP. Buying ‘green’ has 
led to an average decrease in costs of 1%, when the life cycle costing is taken into account.  

In GPP, the EU has shown to have a direct effect on its own procurement, and a coordinating 
effect  on  implementing  procurement  rules  at  MS  level.  Implementation  of  the  50%  GPP 
threshold at MS level is a clear example of this. Additionality of EU is therefore significant 
and  can  be  further  increased  (without  significant  extra  budgetary  needs)  by  increasing  the 
threshold  to  for  instance  100%,  and  to  make  GPP  itself  more  ambitious,  by  introducing  a 
threshold  to  the  significance  of  how  green  the  procurement  is.  This  requires  however  more 
complicated assessment criteria.  

Action 8. Raise business and consumer awareness, and provision of targeted training 

Main activity is the ETAP forum (held twice every year). Participation was about 250 persons 
per forum, coming each time from at least 25 different countries (and 40 different countries in 
total), approximately 50% from industry and associations, 35% from public organisations and 
the  remainder  from  academia.  Potential  impacts  on  the  innovation  system  relate  to  the  fact 
that  stakeholders  are  made  more  aware  of  other  relevant  players  and  may  find  it  easier  and 
more effective to connect with them. ETAP has benefited from this activity, but would obtain 
higher  importance  and  visibility  to  its  goals  if  closer  co-operation  between  the  Commission 
and  the  relevant  Member  State  officers  for  co-ordinating  further  activities  could  be 
established stronger links with national programmes strengthened.  

159 Öko-institut & ICLEI, 2007. Costs and Benefits of Green Public Procurement in Europe. 
160 Öko-institut & ICLEI, 2007. Costs and Benefits of Green Public Procurement in Europe. 
161 2007, PricewaterhouseCoopers, Significant, Ecofys, Collection of statistical information on Greeen Public Procurement in the EU. 

82 

 
                                                 
With  respect  to  training  eco-innovation  is  a  training  subject  brought  into  other  EU 
programmes like ESF and Marie Curie. There are however no figures available on the success 
of this under ETAP. 

Impacts  of  this  action  on  resource  efficiency  and  competitiveness  are  very  indirect. 
Attribution  of  any  effects  in  these  domains  to  this  action  is  therefore  very  speculative. 
Adequate networks are however of great importance for well functioning markets, and as has 
been  stated  in  the  problem  definition  a  clear  network  failure  exist  between  research  and 
industry communities as well as with public authorities, hampering market uptake of research 
results.  The  additionality  of  EU  action  is  intermediate:  there  are  many  national  networking 
initiatives, however in providing transnational dimension the added value of the EU is clear 
and  needed,  and  the  mixing  of  private  and  public  sector is also of added value. The role of 
ETAP can be large, but should be stronger focusing on using and linking national networks 
than before. The role of ETAP in providing training of procurers is low, and will remain low 
when not more specifically targeted.    

Action 9. Promoting responsible investments in and use of environmental technologies in 
developing countries and countries in economic transition 

A study by McKinsey shows that capital investment of 150 billion euro can reduce demand 
for imported oil by 30-40 per cent and stabilise coal demand at current level162. The potential 
for  improvement  of  competitiveness  is  also  significant.  Currently,  developing  countries  are 
responsible  for  nearly  all  of  the  increase  in  emissions.  In  the  end,  the  availability  of  more 
efficient  technologies  enables  a  country  to  achieve  greater  economic  output  from  a  given 
amount  of  energy163.  2/3rd  of  the  energy  efficiency  investment  opportunities  lie  in  de 
developing countries164, which could potentially give an impetus to both the local as well as 
the European economy. The potential for the use of recycling technologies, in particular for e-
waste is huge, specifically taking into account the growing demand for rare metals165. Possible 
impacts of the uptake of recycling technologies for instance are the high collection rates, the 
recovery of valuable components, the recovery of material fractions, and job creation, which 
is a socio-economic impact166. At the moment China and South Africa are amongst the most 
promising countries for the introduction of sustainable e-waste recycling technologies.  

The  Global  Energy  Efficiency  and  Renewable  Fund  (GEEREF)  launched  in  2007  is 
operational. The European Commission will contribute €80 million over 4 years, starting with 
€15 million in 2007 providing equity finance to a broad mix of energy efficiency /renewable 
energy  technologies  in  global  public-private  partnership  supporting  renewable  energy  and 
energy  efficiency  project  developers  and  SMEs,  mainly  in  ACP  countries,  Africa,  Eastern 
Europe, Middle East and South America. Although not intended to pursue innovation but to 
implement tested environmental technologies the GEEREF had a budget of € 110 million for 
the  2007  –  2011  period  and  offers  support  for  the  development  and  transfer  of 
environmentally sound technologies and know-how167. 

162 McKinsey 2009,  China’s green opportunity 
163  Popp,  D.  (2009)  Policies  for  the  Development  and  Transfer  of  Eco-Innovations:  lessons  from  the  literature.  OECD  Global  Forum  on 
Environment on eco-innovation. 
164 McKinsey Global Institute 2008, How the world should invest in energy efficiency 
165 UNEP 2009: Recycling, from e-waste to resources.  
166 UNEP 2009: Recycling, from e-waste to resources. 
167 European Commission: “Mobilising public and private finance towards global access to climate-friendly, affordable and secure energy 
services”  –  COM(2006)  583  final.  Announcement  by  European  Environment  Commissioner  Stavros  Dimas  at  the  UN  Climate  Change 
Conference in Poznań, Poland, 2008. 

83 

 
                                                 
ANNEX IX – DETAILED ASSESSMENT OF OPTION 3 ACTIONS 

Action 1. Screening of environmental regulatory framework for eco-innovation  

EU  environmental  policies  promote  eco-innovation  by  setting  environmental  objectives  for 
the  economic  operators  to  achieve,  thus  bringing  predictability  and  certainty  to  the  markets 
and  establishing  a  level  playing  field.  The  Commission  will  pay  particular  attention  on 
promoting eco-innovation when designing and revising environmental policy and legislation.  
More specifically, following actions will be taken: 

•  When  developing  implementing  measures  of  the  recently  revised  Waste  Framework 

Directive and other waste legislation the Commission will: 

o  promote  eco-design  in  the  implementation  of  the  ELV  (End  of  life  vehicles), 
WEEE  (Waste  electrical  and  electronic  equipment),  RoHS  (Restriction  of 
hazardous substances), batteries and accumulators, and packaging directives; 
o  mobilise  Member  States  to  promote  eco-innovation  in  the  preparation  of 
national  Waste  Prevention  Programmes  with  guidance  and  exchange  of  best 
practices  for  improving  resource  efficiency,  reusability,  recyclability  and 
recoverability of products. 

o  develop  end-of-waste  criteria  under  Art  6  of  the  Waste  Framework  Directive 
for  copper,  paper,  glass,  plastics,  compost,  and  possibly  other  waste  streams. 
These  criteria  will  designed  to  support  and  drive  innovative  waste  collection, 
separation and treatment technologies for high quality secondary materials; 
o  develop  minimum  standards  for  waste  treatment  activities  on  the  EU  level 
pursuant to Art 27 of the Waste Framework Directive based on best available 
techniques and innovative solutions; 

o  promote  the  full  implementation  of  the  EU  waste  legislation,  such  as  the 
diversion targets of the Landfill Directive and the waste hierarchy of the Waste 
Framework Directive, also stimulating innovation in ecological and economic 
optimisation of waste management schemes. 

•  As  part  of  the  Fitness  Tests  the  Commission  will  review  the  Water  Policy  (Water 
Framework Directive and complementary Directives, including Groundwater, Priority 
Substances,  Flood,  Urban  Waste  Water  and  Nitrates  Directives  and  non-legislative 
instruments.  Any  policy, 
for  cost-effective 
implementation  and  innovative  ways  of  improving  the  implementation  will  be  at  the 
heart of the Fitness Test. 

legislative  and  other  barriers 

•  The  forthcoming  review  of  air  policies  will  identify  urban  areas  in  Europe  that  are 
faced with particular air quality challenges and chosen pilot areas will be part of the 
implementation of relevant Innovation Partnerships for testing innovative approaches 
for air pollution abatement.   

EU policies with dual goals in economy and environment would be identified; and the bridges 
strengthened  so  that  the  aims  will  be  obtained  better  and  faster.  Impacts  of  this  action  are 
indirect and hard to assess because the action in itself is very indirect while the effects should 
come  from  very  specific  changes  in  policies.  The  impacts  are  largely  depending  on  the 
success of a set of actors. Influencing these actors is a role that can be taken up by the Eco-
AP,  similar  to  the  often-indirect  chain  effect  ETAP  had  (see  discussion  of  Option  1).  The 
effect  however  may  be  significant  because  public  policies  play  a  strong  role  in  determining 
markets for eco-innovations. When not done properly effects may however also be negative 
the  environment,  e.g.  prescribing  modular  design  for  all  products  may  be 
for 
counterproductive when seen from a life cycle point of view (e.g. for some products it may be 
better  to  prescribe  biodegradability  than  modularity).  Impacts  can  vary  greatly  between 

84 

 
 
sectors  and  countries  and  within  sectors  and  countries,  depending  on  the  policy  initiatives 
tackled.  The additionality of EU action is large because the EU has a leading role with MS in 
defining  environmental  policies.  Possible  role  of  ETAP  is  depending  on  ambition  to  really 
promote  eco-innovation  and  the  effort  done  to  develop  methods  to  assess  policies 
systematically  and  use  these  methods  to  analyse  (new  and  existing)  policy  initiatives. 
Administrative burden may be an issue here. 

Action 2. Partnerships for eco-innovation 

The  Innovation  Partnerships  (IPs),  as  described  in  the  Innovation  Union,  will  mobilize  all 
actors  from  the  innovation  chain  towards  addressing  grand  societal  challenges.  To 
simultaneously achieve positive economic, environmental and social outcomes there is a need 
to  integrate  environmental  and  sustainability  aspects  into  all  spheres  of  the  economy  and 
value  creation  and  pursue  a  broad  concept  of  eco-innovation.  Eco-innovation  is  part  of  the 
solution  to  many  of  the  societal  challenges  (cutting  CO2  emissions  and  other  sources  of 
pollution  or  substituting  scare  raw  materials).  The  European  Innovation  Partnerships,  by 
pooling  stakeholders  and  achieving  critical  mass  of  commitment  are  the  right  vehicle  to 
mainstream  eco-innovation  into technological development,  business models, supply chains, 
consumption patterns and policies outside the environmental realm. 

Eco-innovation  and  the  IPs  can  be  mutually  reinforcing.  Environmental  aspects  are 
interlinked with the grand societal challenges, i.e. cleaner air objectives are a necessity for a 
healthy  and  active  aging  or  for  the  smart  cities  of  the  future.  Eco-innovation  will  provide 
innovative  and  efficient  means  to  address  these  challenges,  i.e.  using  floodplains  to  protect 
against floods or draughts and exploit eco-system towards these objectives.  

The  Eco-innovation  Action  Plan  will  identify  eco-innovation  areas  and  solutions  to  be 
transferred  or  integrated  into  Innovation  Partnerships.  This  will  be  done  through  analytical 
and forecasting work by the Eco-innovation Observatory. The ETAP HLWG will coordinate 
Member State policies in the emerging areas, identify best practice and ensure Member State 
commitment.  The  ETAP  Forum  will  mobilize  stakeholders  and  discuss  issues  of  key 
importance for the emergence of the sector.  

The impacts of the addition of the two pilot schemes for the bundling of private and public 
procurement for green products and services would increase the scope of GPP. It could be a 
first  step  to  open  the  way  to  private  green  procurement.  Firstly  it  would  increase  the  direct 
effect  of  purchasing  green.  Secondly,  it  would  strengthen  the  role  of  eco-innovation  in 
Innovation Partnership areas and show the potential of eco-innovation in non-environmental 
fields.  

Action 3. Mobilizing financial resources, both public and private, for investment in eco-
innovation 

Increasing available budgets to participate in VC may increase effects to a certain extent, but 
when available budgets become too large, availability of capital might not be the problem but 
the  availability  of  viable  investment  opportunities  based  purely  on  market  criteria.  Supply 
(generation of viable ideas and inventions) as well as demand side (dealing with the lock-in of 
conventional  not  green  technologies  and  services,  primarily  “getting  the  prices  right”)  and 
demand  side  measures  would  need  to  accompany  specific  efforts  related  to  marked  based 
financial instruments.  

The  total  amount  of  "leveraged"  eco-innovation  GIF  funding  is  €528.5  Mln  so  far.  The 
expected  leverage  is  around  7,5  and  under  current  CIP  framework  programme  around  €225 
Mln  are  earmarked  for  eco-innovation.  This  means  a  total  expected  leveraged  amount  of 
€1,687  Mln  over  the  framework  period  2007/2013  or  around  €241  Mln  annually.  The 

85 

 
Cleantech  Group  reports168  that  about  €1,5  was  invested  in  cleantech  in  Europe  (including 
Israel). With a rough calculation this would mean that current "leveraged" budget would cover 
around  17%  of  yearly  cleantech  investments  (€241/€1,456).  Based  on  the  information 
available it is hard to say if this covers sufficiently financial needs in order to stimulate uptake 
of environmental technologies. Anyhow evidence shows that of the total 2009 VC cleantech 
investments non-energy technologies investments account for only €324m169. 

The  difference  between  clean  technology  and  eco-innovation,  however,  has  to  be  kept  in 
mind:  the  first  only  includes  technological  innovation  with  sustainable  aims  and  not  other, 
necessary forms, of eco-innovations. 

The effect of the  eco-innovation GIF seems significant in relation to the purely commercial 
funding  available.  Effect  on  competitiveness  for  the  firms  involved  is  large,  but  it  concerns 
only  a  limited  number  of  (however  high-growth  potential)  firms.  This  also  limits  the 
environmental  impacts  effect  enhanced  by  the  fact  that  not  all  companies  are  aiming  at 
substantially improving resource efficiency either. 

The “first application and market replication projects” programme in the CIP-EIP holds larger 
potential  for  resources  savings.  The  total  funding  requested  in  the  2010  call  was  more  than 
€287m170, an increase of more than 40% compared to the 2009 call.  

CIP Market replication projects – Results 2008 - 2010 

2008 
134 

Call 
Proposals received 
Yearly increase 
Projects funded 
Available budget 
Source: Executive Agency for Competitiveness and Innovation 

43 
27m EUR 

2009 
202 
+50% 
47 
32m EUR 

2010 
287 
+42% 
40-50 
35m EUR 

The manager of the facility pointed out that with relativly little activities to draw attention to 
the facility there was already more response from the field than budget was available171. The 
programme seems to be a rather small instrument when compared to the full potential of the 
eco-industry.  Additional  resources  are  needed  to  up-scale  the  impact  of  this  instrument  (or 
similar instruments) in order to support eco-innovations to overcome the first financing gap in 
the innovation chain (i.e. the phase of full-scale piloting).  

The opportunity to enhance synergies, strenghten links and possibly combine this programme 
with  the  Environment  and  governance  component  of  LIFE+  might  bring  additional  positive 
impacts as well as efficiency in terms of administrative burden. 

Moreover, additional instruments are needed to provide the industry (such as SMEs) with the 
financial  resources  to  gear  potential  eco-innovations  to  the  market  (i.e.  the  market 
development  phase).  Instruments  that  help  bridging  the  financing  gap  between  VC  and  the 
phases  where  companies  are  able  to  source  financing  from  banks  are  currently  not  covered 
with  an  instrument.  Such  an  instrument  aiming  at  SMEs  is  the  SME  Guarantee  Facility 
(SMEG), which is part of the CIP. It targets start-up and growth of SMEs and investment in 

168 Cleantech Group, Realdeals and TaylorWessing, 2009. The future of cleantech in Europe, Special Report 2009. 
169 Cleantech Group, Realdeals and TaylorWessing, 2009. The future of cleantech in Europe, Special Report 2009. 
170 This is about 0.1% of the estimated size of eco-industry in 2008  in the EU27. According to the Study on the Competitiveness of the EU 
the total size of eco-industry was €319bn (turnover) 
171 Interview with EACI, 2010. 

86 

 
 
 
 
 
                                                 
(all)  innovation  activities.  SMEG  provides  counter-  or  co-guarantees  to  guarantee  schemes, 
and  direct  guarantees  to  financial  intermediaries,  in  order  to  increase  the  supply  of  debt 
finance  to  SMEs.  SMEG  appears  not  to  be  very  appealing  to  actors  that  specifically  aim  at 
eco-innovation.  Up  until  now,  there  is  one  financial  intermediary  fully  engaged  in  eco-
innovation.  Moreover,  there  is  one  SMEG  contract  supporting  an  eco-innovation  loan 
product.  This  is  a  guarantee  agreement  where  application  of  eco-innovations  is  financed  on 
the  pull  side.  It  is  offered  by  Credit  Cooperatif:  it  targets  companies  investing  in  eco-
innovation.  The  Guarantee  covers  loans  and  leases  for  environment  related  investments. 
Eligible loans are for investments by SMEs active in environment protection, waste recycling, 
water  management,  renewable  energy  areas  as  well  as  SMEs  producing  environment 
protection  goods.  Investments  into  renewable  energy  capacities  and  eco-friendly  equipment 
(clean vehicles and energy saving facilities) are also eligible. For the rest, there are no specific 
features on the guarantee for eco-innovations172. 

In  order  to  ensure  a  large  impact  of  financial  instruments,  an  integrative  approach  could  be 
taken into consideration173. An interesting aspect of this consideration would be the balance 
between  push  and  pull  facilities.  The  supply  side  of  the  financial  instruments  is  currently 
covered by a risk sharing facility such as GIF. Demand side measures could be additionally 
interesting  to  overcome  the  valley  of  death  for  companies;  loans  or  other  debt  oriented 
instruments could be used to help eco-innovators to overcome the "valley of death" and also 
by helping their cutomers finance their investments. Up until now, there is no instrument in 
place that addresses debt funding specifically for eco-innovation. For example, a german bank 
KFW  has  set  up  an  instrument  to  support  SMEs  investing  in  acquiring  ecoinnovations 
allowing for an interest reduction.  

More  generally  more  flexible  and  not  necessarily  marked  based  (but  rather  policy  driven) 
financial instruments would have to be explored under this action. 

The  potential  for  improvement  of  competitiveness  in  this  scenario  is  similar  to  that  of  the 
ETAP scenario – but with increased focus, the impacts are expected to be stronger. 

Action  4.  Develop  standards  and  performance  targets  for  key  products,  processes, 
services for reducing their environmental footprint 

The  Eco-design  Directive  (EuP)174  now  only  addresses  energy  use  of  products,  which  only 
accounts  for  about  one-third  of  the  environmental  impacts  of  products175.  Broadening  the 
scope  to  non-energy  related  products  would  thus  have  a  positive  impact  on  resource 
efficiency. The impact on competitiveness is expected to be marginal. Targets may foster the 
innovativeness of  a  sector as a whole, which could lead to increased competitive advantage 
over non-EU actors. However, when in other countries standards are not applied, conventional 
alternatives are likely to be just as competitive. The EU can play a pivotal role in broadening 
the  scope  of  the  Eco-design  directive  to  non-energy  related  products  especially  in 
coordinating  and  stimulation  of  the  development  of  more  forceful  targets.  The  Eco-design 
directive  prevents  disparate  national  legislations  on  the  environmental  performance  of 
products from becoming obstacles to the intra-EU trade. EcoAP can play an important role in 

172 Interview with EIF and ECFIN 
173  For  an  example  of  such  an  integrative  approach,  see  the  example  of  Technology  Canada  for  sustainable  technologies: 
http://www.sdtc.ca/en/funding/index.htm 
174 Directive 2005/32/EC of the European Parliament and of the Council establishing a framework for the setting of ecodesign requirements 
for energy-using products (OJ L 101, 22.7.2005, p. 29). 
175 Staff Working Paper SEC(2008) 2110 Impact assessment for recast of Directive 2005/32/EC 

87 

 
                                                 
problem signalling, drawing attention to the need of broadening the scope of the Eco-design 
directive and assistance in developing the broader focus.  

Action  5.  Developing  new  skills  for  new  jobs  in  environmental  goods  and  services 
industry 

Firstly,  the  green  industries  and  services  sectors  suffer  from  a  skills  gap.  Secondly,  skills 
profiles of more traditional occupations will have to be expanded to include green skills, for 
instance in the areas of assessing the environmental impacts of industry and business activities 
and daily actions to reduce them. The added value of the EU relies on its ability to put this 
relevant  issue  on  the  political  agenda,  to  coordinate  with  and  link  to  existing  initiatives  in 
order build information base needed as well as to promote good practices. The role of an Eco-
AP initiating this can be very important, for instance by investigating how skills requirements 
are affected by EU environmental policies and what impact this has on systems of education 
and training across the Member States. A more formal system for exchange of information on 
training  approaches  and  needs  would  also  be  very  beneficial  at  this  early  stage.  A  clearing 
house role could be included in the remit of the HLWG, and it could then be investigated how 
to further take this on. 

Direct  effects  on  resource  efficiency  are  limited  (although  for  certain  sectors  (e.g.  mining) 
implementation  of  existing  skills  from  elsewhere  may  have  impact).  Direct  effects  on 
competitiveness may be larger. The main added value of the Eco-AP in this action lies in a 
signalling and communication effect. Several training initiatives already exist – the inclusion 
of the issues related to eco-innovation would lead to the largest effect with limited resources. 
Therefore,  co-operation  and  alignment  with  existing  initiatives  is  of  great  importance;  the 
Agenda  for  New  Skills  and  Jobs'  initiative176,  the  upcoming  EU-level  sectoral  Councils  for 
skills  and  employment,  the  EU  Skills  Panorama,  as  well  as  activities  carried  out  by  the 
European Centre for the Development of Vocational training are all important starting points. 

Action 6. Governance of eco-innovation policy  

The eco-innovation national roadmaps are the follow up of the ETAP national roadmaps. The 
regularly  updated  Eco-innovation  National  Roadmaps  represent  a  significant  body  of 
knowledge  on  programmes,  schemes,  and  examples  of  promising  practice  in  the  MS177  and 
will  specify  framework  conditions,  national  environmental  policy  approaches,  funding 
schemes  and  partnerships  for  national  eco-innovation  support.  The  Roadmaps  under  ETAP 
have  increased  mutual  learning  between  MS  but  have,  in  most  countries,  not  initiated  new 
actions: the Roadmaps were mainly a wrap-up of existing policy.  Impacts were therefore low. 
The impacts of the Eco-innovation Roadmaps will only be larger when these Roadmaps will 
sparkle new policy thinking and policy-development in the MS. Effects will be very indirect, 
distributed and probably long term but may be large. 

To reap the full benefits of the Action Plan active involvement of the MS is necessary. The 
Eco-innovation  (ETAP)  High  Level  Working  Group  has  proved  to  be  an  important  tool  for 
networking, policy learning and coordination between the MS on policies in support of eco-
innovation. A new coordinating structure must now take a more prominent role in driving the 
eco-innovation  agenda  in  the  EU  to  deliver  growth  opportunities  and  jobs  to  the  European 

176 A joint policy initiative carried out in cooperation between the European Commission and the EU Member States, New Skills for New 
Jobs aims to address some of these issues by supporting EU countries and regions in developing more effective ways to analyse and predict 
which skills will be required in tomorrow's labour markets and, with this knowledge, developing and adapting education and training so that 
the workers gain the skills required. http://ec.europa.eu/social/main.jsp?catId=568&langId=en.  
177 ec.europa.eu/environment/etap/roadmaps_en.htm 

88 

 
                                                 
economy  and  mobilizing  stakeholders  for  this  task.  The  role  of  the  Working  Group  in 
delivering  cross-sectoral  policy  recommendations  and  ensuring  the  business  focus  of  the 
Action Plan will be strengthened. This action is more a structural action than a specific action 
with  possible  impacts.  Most  likely  impact  are  good  guidance  of  the  whole  Eco-AP  and 
development and implementation of the National Roadmaps.  

Targets and indicators are useful to translate a vision into concrete objectives setting levels of 
ambition,  to  mobilise  different  actors  in  implementing  these  objectives  and  to  monitor  the 
progress of policies and their impact. In this  action also  the  feasibility and usefulness of an 
Eco-innovation  Scoreboard  to  track,  benchmark  and  review  Member  State  and  EU 
performance will be tested and an evaluation of the results of on-going monitoring initiatives, 
(i.e.  the  module  on  eco-innovation  in  the  5th  Community  Innovation  Survey  (CIS)  or  the 
patent-based  indicators  for  eco-innovation)  will  be  carried  out.  Although  improving 
measurement  has  very  indirect  and  long  term  effects  the  impact  may  be  large  (esp.  on 
environment and competitiveness) since it can influence polis making heavily.  

To reap the full benefits of the Action Plan active involvement of the MS is necessary. The 
Eco-innovation  (ETAP)  High  Level  Working  Group  has  proved  to  be  an  important  tool  for 
networking, policy learning and coordination between the MS on policies in support of eco-
innovation. A new coordinating structure must now take a more prominent role in driving the 
eco-innovation  agenda  in  the  EU  to  deliver  growth  opportunities  and  jobs  to  the  European 
economy  and  mobilizing  stakeholders  for  this  task.  The  role  of  the  Working  Group  in 
delivering  cross-sectoral  policy  recommendations  and  ensuring  the  business  focus  of  the 
Action Plan will be strengthened. This action is more a structural action than a specific action 
with  possible  impacts.  Most  likely  impact  are  good  guidance  of  the  whole  Eco-AP  and 
development and implementation of the National Roadmaps.  

89 

 
  
ANNEX X – DETAILED ASSESSMENT OF OPTION 4 ACTIONS 

Action  1.  Targeted  eco-innovation  support  for  SMEs  through  enterprise  and  business 
networks 

The support to eco-industries primarily aims at  increasing  network  activities that strengthen 
other  actions  in  the  Eco-AP.  Concrete  issues  are  to  establish  a  dialogue  with  the  financial 
communities  to  support  the  evaluation  of  eco-innovation  projects.  The  impacts  of  such  an 
intervention are closely linked to the impact assessment of Action 5 in this section. The first 
goal  of  this  action  is  to  connect  and  align  different  stakeholders.  Secondly,  to  generate 
impacts, these stakeholders should develop activities related to eco-innovation. The impact of 
these  activities  is  largely  depending  on  the  ambitiousness  of  the  eco-industry.  Assessment 
criteria  are  needed  to  assess  how  ambitious  eco-industries  are.  The  ambitiousness  of  eco-
innovations can have a wide variety; for this instrument it is crucial select the industries that 
foster  innovation  with  the  highest  potential  for  resource  efficiency.  Therefore,  it  will  be 
necessary to develop an assessment method that is able to assess how ambitious the potential 
of the eco-innovations are. This would enable all players involved to select the best projects 
with regard to eco-innovation. This can have a large impact on resource efficiency, if resource 
efficiency  is  taken  up  as  a  determinant  for  selection  criterion,  the  projects  with  the  largest 
impact  on  eco-innovation  can  be  selected.  Moreover,  in  evaluation  processes,  the  best 
working projects can be selected.  

The other actions in support to eco-industries would increase the awareness of eco-innovation 
in  both  companies  (SMEs  and  larger  companies)  but  also  in  for  policy  makers  on  regional, 
national and EU level. The impact of such an instrument is not easy to measure because the 
attribution  to  this  instrument  only  would  be  hard.  However,  the  expected  impact  would  be 
prevention of scattering of the policies and a better uptake of eco-innovation by companies, 
especially SMEs.  

The EU can play an important role in this type of networking. The added value is especially 
high for SMEs, because they tend to have a strong regional focus, while a large potential of 
learning  on  eco-innovation  has  an  international  dimension.  Adoption  of  concepts  can  be  an 
innovation  in  itself.  Eco-AP  can  play  an  important  role  in  the  establishing  dialogues  and 
creation of forums.  

Action  2.  Environmental  Technology  Verification  initiative,  to  test  an  EU  ETV  pilot 
programme  and  evaluate  its  potential  in  facilitating  market  access  for  innovative 
environmental technologies 

New  environmental  technologies  face  difficulties  in  convincing  the  first  customers  and 
investors  of  their  merits;  their  difficulty  to  be diffused  to  potential  customers  is  a  barrier  to 
eco-innovative companies in coming up with new technologies, to users in tapping into new 
technological  solutions  and  to  policy-makers  in  achieving  policy  goals  rapidly  and  cost-
efficiently.  EU-Environmental  Technologies  Verification  (ETV)  can  help  by  providing 
independent  and  credible  information  on  new  environmental  technologies,  by  verifying  that 
performance claims put forward by technology developers and vendors are complete, fair and 
based on reliable test results. With regard to addressing systemic failures the impact of ETV 
can  undoubtedly  play  a  role  in  addressing  framework  failures,  which  in  turn  can  improve 
marketability of the technology.  

The EU ETV pilot programme is expected to show the principles and added value of the EU 
ETV scheme. It has been proposed that the pilot programme will be tested in a limited number 
of technology areas and based in volunteer MS.   Among the recommendations highlighted in 

90 

 
the literature, simple and robust procedures, product and application in the focus of the system 
rather  then  technologies,  ensuring  verification  of  innovation  and  improvement,  voluntary 
feature  of  the  process,  combination  of  verification  with  demonstration/reference  projects, 
flexibility and complementary to existing labels, using technical standards (ISO, IEC, CEN, 
Cenelec)  where  available,  avoid  language  and  access  barriers  by  national  contact  points  178, 
179. Additionally the international acceptance & harmonization on the EU level is pointed to 
be addressed.  

Action 3. Eco-innovation Partnerships with major partner countries and regions 

The ultimate effectiveness of the Eco-AP will very much depend on its level of influence on 
the global  supply  chain  since the material  and product flow is highly globalized. Moreover, 
the  cost-effectiveness  and  impact  of  eco-innovation  is  much  higher  in  developing  and 
transition economies as compared to what could be achieved in the EU countries. However, 
the EU and its Member countries could have a critical role in shaping the global conditions 
for  eco-innovation  and  thereby  supporting  the  transition  towards  a  green  economy.  In 
addition, this could lead to new market opportunities for the products and services from the 
MS countries180.  

The  reduction  or  elimination  of  import  tariffs  and  non-tariff  barriers  on  environmental 
technologies has been part of the broader negotiations on the liberalisation of world trade in 
the World Trade Organisation’s Doha Round for the past five years181. This measure would 
boost  trade  with  eco-innovative  products  and  technologies  and  would  bring  significant 
environmental benefits but has been delayed due to objections from developing countries. The 
liberalisation  bears  the  risk  for  developing  countries  of  being  outdistanced  by  trade  with 
highly competitive economies. The issue also applies to some economically weak EU MS182. 
In addition, scale effects associated with trade liberalisation, and structural effects such as the 
concentration of polluting and precarious industries in emerging and developing countries, are 
subverting  the  environmental  benefits  attained  by  improved  efficiency183.  In  this  respect,  it 
has  to  be  assured  that  the  conditions  strived  for  by  the  EU  unfold  win-win  effects  for 
developing,  emerging  countries  and  developed  countries.  Impact  assessments  (prospectively 
together  with  DG  Trade)  could  support  the  investigation  whether  and  in  what  way  a  policy 
mechanism is able to mobilise endogenous eco-innovation capabilities184. The debate of IPR 
protection  in  key  emerging  markets  is  an  essential  element  in  this  context  because  a  strong 
IPR  regime  will  ensure  revenues  for  innovators,  but  it  may  slow  the  diffusion  of  eco-
innovation. International collaboration on this issue will be encouraged by projects such as the 
EU-China IPR2 project. 

In  response  to  the  economic  crisis  2008/2009  many  countries  have  expanded  their  green 
investments  within  the  scope  of  economic  recovery  packages185.  The  promotion  of  the 
harmonisation of the eco-design requirements and benchmarking can play a major role in this 
context. Here, the eco-design directive has a great potential to contribute to these efforts by 
defining and disseminating eco-design requirements. As eco-innovation can also be measured 

178  “European  perspectives  and  initiatives”,  presented  by  Elena  Domínguez  ,  EC  DG  Research,    at  the  ETV  Conference  "Boosting 
Environmental Technologies by Verification", 15th September 2008 
179 for example see “Recommendations for a EU Verification System’ and ‘Environmental Technology Verification: Whatand why?’ by Dr. 
Thomas  Track  ,  DECHEMA  e.V.  presented  at  ETV  Conference  "Accelerating  Eco-innovation  through  Environmental  Technology 
Verification", 12-13 October 2009, available on http://www.eu-etv-strategy.eu/  
180 Based on discussions held during the stakeholder workshop held on April 28. Brussels. By the UNEP representative.  
181  ICTSD  /  GMF  /  iisd  2008,  Liberalization  of  Trade  in  Environmental  Goods  for  Climate  Change  Mitigation:  The  Sustainable 
Development Context; Switzerland. 
182 EVCA 2009 , EVCA Special Paper on Central and Eastern Europe Statistics 2008 
183 OECD 2008, Environment and Globalisation, Background Report for Ministers, Meeting of the Environment Policy Committee (EPOC) 
at Ministerial Level Environment and Global Competitiveness, 28-29 April 2008 
184 Ockwell, David 2009, Scoping note on the difficulties developing countries face in accessing markets for eco-innovation 
185 OECD 2009, Green Growth: Overcoming the Crisis and Beyond and UNEP 2009, A Global Green New Deal 

91 

 
                                                 
indirectly  from  changes  in  resource  efficiency  and  productivity186,  OECD  endeavours  to 
harmonise  the  measurement  of  material  flows  and  resource  productivity  which  are  able  to 
gain country benchmarks in material use and improvements187.  

The  SWITCH  Asia  Programme  for  sustainable  consumption  and  production  with  a  fund  of 
approx.  €90  million  for  the  period  2007-2010  will  evolve  large  environmental  and  social 
benefits188 in particular when expanded to other developing countries like Latin America. The 
Eastern Partnership (EaP) launched a new environmental flagship project with an EU funding 
of around €13 million in March 2010. The potency of networking effects depend on the the 
strength of cooperation among and between the countries within, for example, the Black Sea 
Synergy  initiative  (including  the  countries  Romania,  Bulgaria,  Turkey,  Georgia,  Russia  and 
Ukraine).  A  number  of  successful  initiatives  and  programmes  covering  transatlantic 
cooperation activities between the EU and other countries have been established in research 
and technology which are relevant for innovation but do not explicitly cover eco-innovation 
yet189.  An  enhancement  of  the  Transatlatlantic  Economic  Dialogue  with  the  USA  to  eco-
innovation  (beyond  biotechnology),  like  the  S&T  policy  dialogue  with  the  Environmental 
Protection Agency (EPA) or the EU-China Sustainable Trade Task Force, will give impetus to 
the other bilateral dialogues with Brazil, Canada, India, Russia and Japan. In addition, a closer 
connection  of  the  G8  3R-iniative  and  Europe’s  efforts  for  eco-innovation  can  have 
exceptional influence190  and  thus  support  demand  for  eco-innovative products. Bilateral  and 
regional  cooperations  expanded  to  eco-innovation  will  contribute  to  the  effective  use  of 
resources, the improved environmental performance and the diffusion of cleaner technologies 
by providing improved conditions191.  

Action 4. Promotion of environmental technologies in developing countries 

Under  favourable  global  conditions  for  eco-innovations  the  potential  for  resource  savings 
within and outside the EU is considerable. According to a McKinsey projection192, two thirds 
of  the  energy  efficiency  investment  opportunities  lie  in  the  developing  countries  and,  if 
properly  placed,  could  halve  the  projected  growth  in  global  energy  demand  until  2020  and 
deliver  half  of  the  emission  abatement  required  to  cap  the  long-term  concentration  of 
atmospheric greenhouse gases193. 

As  described  in  action  9  of  the  ETAP  scenario  (option  1),  promotion  of  environmental 
technologies  in  developing  countries  has  the  potential  to  both  increase  employment  and 
economic  growth  in  the  EU,  as  well  as  promote  sustainable  development  and  resource 
efficiency  on  a  global  level.  The  eco-innovations  developed  in  the  developed  world  are 
however not always applicable in the developing countries and therefore an important element 
of  promoting  environmental  technologies  in  developing  countries  is  the  ability  to  adapt 
proven  technologies  to  local  conditions.  Expanding  the  network  of  the  National  Cleaner 

186 Arundel and Kemp, 2009, Measuring eco-innovation, UNU-MERIT 
187 OECD 2008, Measuring Material Flows and Resource Productivity, Volume I-III, Paris 
188 UNEP/Wuppertal Institute Collaborating Centre on Sustainable Consumption and Production 2010, SWITCH Asia Projects Fact Sheets, 
http://www.switch-asia.eu/switch-projects/fact-sheets-of-projects.html 
189 Horvat, M. and K.A. Harrap, 2009 Review of the Science and Technology Cooperation between 
the European Community and the United States of America 2003 – 2008, Brussels, 
European Commission, Directorate General for Research 
190 Bahn-Walkowiak; Bleischwitz 2008, Resource efficiency - Japan and Europe at the forefront : synopsis of the project and conference 
results and outlook on a Japanese-German cooperation. - Dessau-Roßlau [u.a.] : Federal Environment Agency [u.a.] 
191 OECD 2008, Environment and Globalisation, Background Report for Ministers, Meeting of the Environment Policy Committee (EPOC) 
at Ministerial Level Environment and Global Competitiveness, 28-29 April 2008 
192 McKinsey 2009,  China’s green opportunity 
193 McKinsey Global Institute 2008, How the world should invest in energy efficiency & McKinsey 2009,  China’s green opportunity 

92 

 
                                                 
Production  Centres  to  support  capacity  building  can  lead  to  increased  awareness, 
understanding and ultimately, greater demand for Cleaner Production194. 

Furthermore, promoting and developing EU-public-private partnerships for the demonstration 
of key environmental and clean energy technologies in major markets has a strong economic 
and  environmental  potential,  and  it  embeds  a  strong  networking  aspect.  They  could  lead  to 
reduction in technology risks and costs because of joint collection and dissemination of data 
for instance195.  

194 http://www.uncrd.or.jp/env/spc/docs/1st_3r_forum_presentation/Session5-1-
3_UNIDO.pdfhttp://www.unep.fr/scp/cp/network/declaration.htm 
195 Ockwell (2009) Scoping Note on the difficulties developing countries face in accessing markets for eco-innovation. Final report for the 
OECD Environment Directorate. 

93 

 
                                                 
ANNEX XI – DETAILED ASSESSMENT OF OPTION 5 ACTIONS 

Action 1. Promotion of a faster shift of the burden of taxation to resources 

“OECD  analysis  clearly  shows  that  better  pricing  will  be  one  of  the  best  triggers  for  the 
development  and  diffusion  of  greener  technologies”196.  Taxation  policies  have  an  impact  at 
least on the direction of technological change, but the direct causal link between tax policies 
and  eco-innovation  is  not  always  clear197.  Social,  economic  and  ecological  impacts  depend 
very  much  on  the  tax  base,  levy  forms,  recipients  and  administrative  procedures. 
Nevertheless, there is sufficient evidence that “changes in energy prices had strong impacts on 
invention, innovation and diffusion of more energy-efficient technologies which, in turn, has 
lowered  emission  levels  as  well”198.  A  similar  impact  may  be  assumed  in  other  areas  of 
natural resources consumption199. If the EU was able to generate a joint proposal on resources 
taxes, the tax revenue would be very small at the start with the dynamic element that would 
lead to a slow increase over the succeeding years. This would offer the opportunity of positive 
economic, social and environmental effects by gradually shifting the tax burden from labour 
to  resources200,201.    As  we  have  experienced  in  the  context  of  past  attempts  to  introduce 
ecological taxation in the European Union, resistance from a number of stakeholders and EU 
MS would have to be overcome. Several rounds of discussion and impact assessments could 
be expected. Therefore, this action would have measurable social, economic or environmental 
impact on in the long term.  

Action 2. Introduction of ambitious standards for green public procurement  

The leverage would be higher the more levels of public procurement are involved (from the 
local  to  the  European  level).  This  could  influence  a  demand  equivalent  to  about  15-20%  of 
final consumption. Current practice of green public procurement (GPP) among EU MS is very 
diverse202. Therefore, the Commission is engaged in a number of activities to raise awareness 
and diffusion of good practice203,204, 205.  

Social, economic and environmental impacts would very much depend on the Commission’s 
ability  to  convince  national,  regional  and  local  authorities  to  apply  criteria  for  their 
procurement  not  only  in  relation  to  energy  consumption,  but  to  a  number  of  different 
environmental impacts and resource efficiency along the life-cycle of procured goods. Further 
research  on  criteria  for  green  public  procurement  in  combination  with  assessments  of 
economic, social and environmental impacts in different public demand sectors would have to 
be generated along the way. Once set in motion this action could have considerable effects on 
demand for and supply of eco-innovation. On the demand side criteria development for eco-
innovation  would  improve.  This  would  probably  have  an  impact  not  only  in  the  public 
domain, but could spread to corporate supply chain management as well. On the supply side 

196 OECD (2009): Green Growth: Overcoming the crisis and beyond. Paris 
197 OECD 2007: Impacts of environmental policy instruments on technological change. Paris 
198 ibid 
199 Bahn-Walkowiak, B. (2008): Resource taxation beyond energy and climate issues [Japan.]. In: Nikkei ecology, 2008, 2, p. 129 
200  Kohlhaas,  M.  (2000):  Ecological  Tax  Reform  in  Germany.  From  Theory  to  Policy.  Economic  Studies  Program  Series  Volume  6, 
American Institute for Contemporary German Studies. Washington: The Hopkins University. 
201 Goerres, A. (2006): The Tragic Paradox: Germany’s very successful but not very popular Green Budget Reform. Lessons from seven 
years of courageous turnaround (1999 to 2005). Green Budget Paper 2006/12. Berlin: Green Budget Germany 
202 Bouwer, M., de Jong, K., Jonk, M., Szuppinger, P., Lusser, H., Berman, T., Bersani, R., Nissinen, A., Parikka, K. (2005): Green Public 
Procurement in Europe. Status overview. Haarlem: Virage 
203 EC (2004): Buying Green! A Handbook on Environmental Public Procurement. Brussels: European Commission 
204 EC (2008):  Green Public Procurement Training Toolkit. Construction Background Product Report. Brussels: European Commission 
205 EC Communication (2008): On the functioning of public procurement markets in the EU: benefits from the application of EU directives 
and challenges for the future, COM(2008) 400/2 

94 

 
                                                 
increased invention and innovation activities related to the refined procurement criteria could 
be expected as a reaction to changing preferences on the demand side. 

Action 3. Introduction of a legally binding framework for labelling of all manufactured 
goods 

The  “public  vanguard”  should  be  followed  private  consumers.  After  the  establishment  of 
public procurement criteria related to different environmental impacts and resource efficiency 
along  the  life-cycle  of  procured  goods  similar  criteria  should  be  applied  for  private 
consumption  of  households.  This  would  require  a  transfer  of  extended  GPP  criteria  into  a 
labelling system which is on the one hand easy to understand and on the other hand captures 
sufficiently  environmental  objectives  of  the  European  Union.  The  necessary  negotiation 
process  could  be  supported  by  the  European  Union  Eco-labeling  Board  (EUEB)206.    If  the 
objectives  of  the  EUEB  would  be  adapted  to  the  requirements  of  resource  efficiency  and  if 
they would be successful, the process could eventually promote considerably the demand for 
resource-efficient  products  and  services.  It  would  thus  increase  the  market  and  improve 
competitiveness  of  eco-innovative  industries,  which  will  be  able  to  meet  these  criteria. 
Positive  impacts  beyond  the  European  Unions  are  likely  as  producers  outside  the  European 
Union would be interested in complying with EU standards. Impacts on the public standard 
setting  in  other  regions  of  the  world  are  also  likely.    Activities  would  primarily  require 
research and  development  of  labelling criteria in combination with stakeholder participation 
and  negotiation  processes  related  to  all  major  areas  of  private  consumption  and  production. 
Measurable social, economic and environmental impacts of this action are unlikely during the 
current Commission’s term of office. 

Action  4.  Introduction  of  waste  prevention  and  recycling  standards  along  the  value 
chain 

An  important  step  towards  resource  efficiency  is  the  reduction  of  the  demand  for  primary 
resources,  by  reducing  the  use  of  materials  (dematerialization)  and  improving  conditions  to 
use secondary material as outlined in the Thematic Strategy for the Prevention and Recycling 
of  Waste207.  This  can  be  achieved  with  more  regulation  in  favour  of  eco-design  and  eco-
efficient supply, which reduces material requirement of production processes and products208. 
Findings of the OECD working party on national environmental policies suggest that also in 
the  waste  sector  regulation  plays  an  important  role  in  the  promotion  and  diffusion  of 
innovation209.  Nevertheless,  patent  trends  across  the  different  waste  streams  have  reached   
technological maturity in the 1990s, and are now in a phase of decline. New regulation and 
standards  could  encourage  eco-innovation  related  to  the  use  of  materials  along  the  value 
chain.  For  example,  standards  could  promote  innovation  related  to  the  use  of  less  and/or 
different materials, durability of products, more maintenance services, product responsibility 
and recycling. The economic, social and environmental impact would be different depending 
on the material, the economic sector, and the different value-chains including the supplying 
industries210,211. The overall economic and employment effects will be positive as the capital 

206 http://ec.europa.eu/environment/ecolabel/index_en.htm 
207 COM (2005) 666 
208  Bleischwitz,  R.,  B.  Bahn-Walkowiak,  W.  Irrek,  Ph.  Schepelmann,  F.  Schmidt-Bleek,  S.  Giljum,  S.  Lutter,  L.  Bohunovski,  F. 
Hinterberger, E. Hawkins, M. Kuhndt, N. Pratt, et al. (2009): Eco-innovation - Putting the EU on the path to a resource and energy efficient 
economy. 
Download: 
http://www.wupperinst.org/uploads/tx_wibeitrag/ws38.pdf 
209 OECD (2010): Working Party on National Environmental Policies. Diverting Waste: The Role of Innovation. Paris 
210 Braungart, M., McDonough, W. (2009): Cradle to Cradle. Rethinking the way we make things. London: Random House 
211 UNEP, UNU 2009: Recycling – From E-Waste to Resources. Sustainable Innovation and Technology Transfer Industrial Sector Studies. 
Paris 

Wuppertal-Spezial 

Wuppertal. 

38. 

95 

 
                                                 
required for the acquisition, the processing, recycling and waste disposal of material would be 
reduced212.  The  saved  capital  can  stay  in  the  European  economy  and  can  be  used  for 
innovation  and  consumption.  Positive  impacts  on  eco-innovation  would  increase,  if  the 
regulation  would  be  supported  by  resource  taxation213.  It  is  likely  that  with  increasing 
environmental  pressure  and  resource  scarcity  the  worldwide  demand  for  the  know-how  and 
skills  related  to  eco-design  and  product  maintenance  services  would  significantly  increase. 
This  can  have  positive  effects  on  the  European  research,  consultancy  and  service  industry. 
The  connected  diffusion  and  market  penetration  would  also  improve  resource  efficiency  in 
other parts of the world. 

212  Bahn-Walkowiak,  B.;  R-  Bleischwitz  (2008):  Resource  efficiency  -  Japan  and  Europe  at  the  forefront:  synopsis  of  the  project  and 
conference results and outlook on a Japanese-German cooperation. - Dessau-Roßlau: German Federal Environment Agency 
213  Bleischwitz,  R.,  R.  Bahn-Walkowiak  (2007):  Aggregates  and  construction  markets  in  Europe  :  towards  a  sectoral  action  plan  on 
sustainable resource management. In: Minerals & energy, 22 (2007), 3-4, p. 159-176 

96 

 
 
 
 
 
                                                 
ANNEX XII – SUMMARY ASSESSMENTS OF THE OPTIONS 

Option 2 ETAP 

Assessment of Option 2 in terms of its response to specific objectives 

General objective  Specific objective 

Actions addressing the 
objective 

Assessing potential contribution of actions to 
achieving the objectives 

Adequacy 
of 
actions: 

high, 
medium,    
low,   
N/A - no 
specific 
action 

Low 

Contributi
on to the 
achievem
ent of the 
objectives 
positive  
+, ++, 
+++ 
negative 
 -, --, ---     
no 
evidence 
or 
evidence 
unclear - 
N/A 
+ 

Optimal 
timing 
of  
action 

Order of impact Estimat
ed time 
of  
impact 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years 

1st order - 
action achieves 
impacts 
directly 
(operational); 
2nd order - 
action achieves 
impacts 
indirectly(polic
y). 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years, > 
15 years

< 2-5 
years 

2nd order 

2-5 and 
5-10 
years 

high 

++ 

<2 and 
2-5 
years 

1st and 2nd 
order 

2-5 and 
5-10 
years 

medium  ++ 

<2 

2nd order 

2-5 
years 

the 
Increasing 
rate 
eco-
of 
innovation  and  its 
uptake  in  Europe 
and  in  so  doing 
efficient 
deliver 
solutions 
for 
environmental 
problems, 
and 
boost the resource 
of 
efficiency 
Europe  and 
its 
competitiveness 

To apply the principles of the 
Innovation Union to eco-
innovation 

To promote eco-innovation in 
Europe 

To improve global markets for 
eco-innovation 

PA1. Increasing and focusing 
research, demonstration and 
dissemination. Improving co-
ordination of relevant programs 
PA2. Establishing technology 
platforms 
PA5. Mobilizing financial 
instruments to share the risk of 
investing in environmental 
technologies 
PA3. Establishing European 
Networks for technology 
testing, performance verification 
and standardization 
PA4. Developing and agreeing 
on performance targets for key 
products, processes and services
PA6. Encouraging systematic 
internalization of costs through 
market-based instruments 
PA7. Encourage procurement of 
environmental technologies 
PA8. Raising business and 
consumer awareness 
PA9. Supporting eco-
technologies in developing 
countries and promoting foreign 
investment  

97 

 
 
 
 
 
 
 
 
 
Assessment of actions in option 2 

Relevant actions 

Potential 
[W1]impact 
on 
innovation 
system 

Potential 
environme
ntal 
impact 

Potential 
impact 
on 
competiti
ve-ness 

EU value added 

Assessing 
contribution 

potential 

positive 
+,++,+++ 
negative  -,  --, 
---                          
no evidence or 
evidence 
unclear - N/A 

positive 
+,++,+++ 
negative  -,  --
, 
no  evidence 
or  evidence 
unclear 
- 
N/A 

---    

--, 

positive 
+,++,+++ 
negative          
-, 
---    
no 
evidence 
or 
evidence 
unclear 
N/A 

- 

unjustified 
supplementary+ 
significant 
leading +++ 

- 

++ 

L
o
c
a
l
/

R
e
g
i
o
n
a
l

N
a
t
i
o
n
a
l

E
U

Gl
o
b
a
l

2 

< 
years,   
2 
-  5 
years,  5 
- 
10 
years, 
10-15 
years 

2 
< 
years,      2 
-  5  years, 
5 
10 
- 
years, 
10-15 
years,  > 
15 years 

positive      
+, 
++, 
+++ 
negative       
-,  --,  ---    
no 
evidence 
or 
evidence 
unclear  - 
N/A 

+
+ 

+
+ 

+
+ 

+
+
+ 

+
+
+ 

+ 

+
+ 

+
+
+ 

+
+
+ 

+
+
+ 

+
+ 

+
+
+ 

+
+
+ 

+
+ 

+
+
+ 

+
+ 

+
+
+ 

+
+
+ 

+
+ 

 + 

 ++  

2-5 
years 

5-10 
years 

 +++ 

<2 
years 

2-5 
years 

+
+ 

 + 

 ++ 

< 
years 

2 

2-5 
years 

+
+ 

+ 

<2 
years 

5-10 
years 

- 

++ 

<2 
years 

5-10 
years 

- 

+ 

- 

+ 

<2 
years 

2  -  5 
years 

<2 
years 

2  -  5 
years 

- 

++ 

<2 
years 

2  -  5 
years 

+ 

- 

+++ 

<2 
years 

2  -  5 
years 

+ 

- 

++ 

<2 
years 

2  -  5 
years 

+
+ 

+
+
+ 

++ 

<2 
years 

2-5 
years 

PA1.  Increase  and  focus  research, 
demonstration  and  dissemination. 
Improve  co-ordination  of  relevant 
programmes 

 ++ 

PA2. Establish Technology Platforms 

 +++ 

PA3. 
Networks  of 
performance 
standardisation 

Establishing 

technology 

verification 

European 
testing, 
and 

 ++ 

 + 

 + 

 + 

 ++ 

N/
A 

 + 

 +++ 

 + 

 + 

 +++ 

N/
A 

 + 

PA 4: Performance Targets 

+ 

++ 

n/a 

- 

- 

PA 5: Financial Instruments 

+++ 

+++ 

+++ 

+ 

++ 

PA6a: Review State Aid Guidelines  

++ 

++ 

++ 

- 

- 

PA6b:  Review 
harmful subsidies 

environmentally 

++ 

+++ 

++ 

- 

+ 

PA7:  Encourage  procurement  of 
environmental technologies 

++ 

PA8a:  Raise  business  and  consumer 
awareness 

+ 

PA8b: Provision of targeted training 

++ 

++ 

+ 

+ 

Promoting 

PA9. 
investments 
environmental 
developing countries 

in 

use 
technologies 

responsible 
of 
in 

and 

++ 

++ 

+ 

+ 

+ 

+ 

++
+ 

++
+ 

+ 

++ 

++
+ 

++
+ 

+ 

+ 

98 

 
 
 
 
 
 
  
 
 
 
 
 
Option 3 Taking forward the Europe 2020 flagships 

Assessment of Option 3 in terms of its response to specific objectives 

General objective  Specific objective 

Actions addressing the 
objective 

Assessing potential contribution of actions to 
achieving the objectives 

Adequacy 
of 
actions: 

high, 
medium,    
low,   
N/A - no 
specific 
action 

High 

Contributi
on to the 
achievem
ent of the 
objectives 
positive  
+, ++, 
+++ 
negative 
 -, --, ---     
no 
evidence 
or 
evidence 
unclear - 
N/A 
+++ 

Optimal 
timing 
of  
action 

Order of impact Estimat
ed time 
of  
impact 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years 

1st order - 
action achieves 
impacts 
directly 
(operational); 
2nd order - 
action achieves 
impacts 
indirectly(polic
y). 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years, > 
15 years

1st order 

< 2 
years 
and 2-5 
years 

2-5 and 
5-10 
years 

High 

+++ 

<2 
years 

1st and 2nd 
order 

2-5 and 
5-10 
years 

Low 

+ 

2nd order 

2-5 
years 

< 2 
years 
and 2-5 
years 

the 
Increasing 
rate 
eco-
of 
innovation  and  its 
uptake  in  Europe 
and  in  so  doing 
efficient 
deliver 
solutions 
for 
environmental 
problems, 
and 
boost the resource 
of 
efficiency 
Europe  and 
its 
competitiveness 

To apply the principles of the 
Innovation Union to eco-
innovation 

To promote eco-innovation in 
Europe 

To improve global markets for 
eco-innovation 

A1. Screening the 
environmental regulatory 
framework for eco-innovation 
A2. Partnerships for eco-
innovation 
A3. Developing new skills for 
new jobs in environmental 
goods and services industry  

A1. Screening the 
environmental regulatory 
framework for eco-innovation 
A2. Partnerships for eco-
innovation 
A3. Mobilising financial 
resources, both public and 
private, for investment in eco-
innovation 
A4. Developing standards and 
performance targets for key 
products, processes and services 
to reduce their environmental 
footprint 
A6. Governance of eco-
innovation policy 
A2. Partnerships for eco-
innovation 
A4. Developing standards and 
performance targets for key 
products, processes and services 
to reduce their environmental 
footprint 

99 

 
 
 
 
 
 
 
 
 
Assessment of actions in option 3 

Relevant actions 

on 

Potential 
impact 
innovation 
system 
positive 
+,++,+++ 
negative  -,  --, 
---                    
evidence 
no 
or 
evidence 
unclear - N/A 

Potential 
environment
al impact 

positive 
+,++,+++ 
negative  -,  --, 
---                     
no evidence or 
evidence 
unclear - N/A 

on 

Potential 
impact 
competitive-
ness 
+, 
positive 
++, 
+++ 
negative  -,  --, 
---                    
evidence 
no 
or 
evidence 
unclear - N/A

EU value added 

Assessing potential contribution 

unjustified 
supplementary+ 
significant 
leading +++ 

<  2  years, 
2 
5 
- 
years,  5  - 
10  years, 
10-15 
years 

< 2 years,   2 - 5 
years,  5  - 10 
10-15 
years, 
years, 
15 
years 

> 

-

++

positive 
+,++,  +++ 
negative      
-, 
--- 
--, 
no 
evidence or 
evidence 
unclear 
N/A 

- 

Screening 

the 
A1. 
environmental 
regulatory 
framework for eco-innovation  
A2.  Partnerships 
for  eco-
innovation 
A3.  Mobilising 
financial 
resources,  both  public  and 
private,  for  investment  in  eco-
innovation  
A4.  Developing standards and 
performance  targets  for  key 
and 
processes 
products, 
services 
their 
reduce 
to 
environmental footprint 
A5.  Developing  new  skills  for 
new 
in  environmental 
goods and services industry 
A6. Governance of eco-
innovation policy 

jobs 

l

a
l

u
r
b
a
n

L
o
c
a
l
/

R
e
g
i
o
n

N
a
t
i
o
n
a

E
U

G
l
o
b
a
l

+++ 

+++ 

++ 

+ 

+ 

+++ +++ ++ 

 +++ 

+++ 

 ++ 

+++ 

 +++ 

+++ 

N/A  + 

++ 

++ 
 ++  ++ 

+++
++  +++ ++ 

- 

+ 

+++ 

<2 years  2-5 years 
 2- 
5 
years 
<2 years 

5-10 years 

5-10 years 

+ 

++ 

n/a 

- 

- 

+++ +++ ++ 

+ 

2-5 years 

5-10 years 

++ 

+ 

+ 

n/a 

+ 

+ 

- 

+ 

+++ +++ + 

++ 

 ++  +++ +++ + 

++ 
+++ 

<2 years  2 - 5 years 
 On-going   < 2 years 

100 

 
 
 
 
 
 
 
 
 
 
 
Option 4 SME-targeted actions 

Assessment of Option 4 in terms of its response to specific objectives 

General objective  Specific objective 

Actions addressing the 
objective 

Assessing potential contribution of actions to 
achieving the objectives 

the 
Increasing 
rate 
eco-
of 
innovation  and  its 
uptake  in  Europe 
and  in  so  doing 
efficient 
deliver 
solutions 
for 
environmental 
problems, 
and 
boost the resource 
of 
efficiency 
Europe  and 
its 
competitiveness 

Adequacy 
of 
actions: 

high, 
medium,    
low,   
N/A - no 
specific 
action 

Contributi
on to the 
achievem
ent of the 
objectives 
positive  
+, ++, 
+++ 
negative 
 -, --, ---     
no 
evidence 
or 
evidence 
unclear - 
N/A 

To apply the principles of the 
Innovation Union to eco-
innovation 

A1. A1. Targeted eco-
innovation support for SMEs 
through enterprise and business 
networks 

Medium  ++ 

Optimal 
timing 
of  
action 

Order of impact Estimat
ed time 
of  
impact 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years 

1st order - 
action achieves 
impacts 
directly 
(operational); 
2nd order - 
action achieves 
impacts 
indirectly(polic
y). 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years, > 
15 years

2nd order 
impact 

< 2 
years, 
2- 5 
years 

2 – 5 
years, 5 
– 10 
years 

To promote eco-innovation in 
Europe 

To improve global markets for 
eco-innovation 

A1. Targeted eco-innovation 
support for SMEs through 
enterprise and business 
networks 
A2. Environmental Technology 
Verification initiative, to test an 
EU ETV pilot program and 
evaluate its potential in 
facilitating market access for 
innovative environmental 
technologies 
A3. Setting up Eco-innovation 
Partnerships with major partner 
countries and regions 
A4. Promotion of environmental 
technologies in developing 
countries 

High 

+++ 

< 2 
years 

1st order 
impacts 

2 – 5 
years 

High 

+++ 

< 2 
years 

1st and 2nd order 
impacts 

2 – 5 
years 

101 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assessment of actions in Option 4 

Relevant actions 

A1.  Targeted  eco-innovation 
through 
for  SMEs 
support 
business 
and 
enterprise 
networks 
Environmental 
A2. 
Technology 
Verification 
initiative,  to  test  an  EU  ETV 
pilot  programme  and  evaluate 
facilitating 
its  potential 
market  access  for  innovative 
environmental technologies  
A3.  Setting  up  Eco-innovation 
Partnerships 
with  major 
partner countries and regions 

in 

on 

Potential 
impact 
innovation 
system 
positive 
+,++,+++ 
negative  -,  --, 
---                    
evidence 
no 
or 
evidence 
unclear - N/A 

Potential 
environment
al impact 

positive 
+,++,+++ 
negative  -,  --, 
---                     
no evidence or 
evidence 
unclear - N/A 

on 

Potential 
impact 
competitive-
ness 
+, 
positive 
++, 
+++ 
negative  -,  --, 
---                    
evidence 
no 
or 
evidence 
unclear - N/A

EU value added 

Assessing potential contribution 

unjustified 
supplementary+ 
significant 
leading +++ 

<  2  years, 
2 
5 
- 
years,  5  - 
10  years, 
10-15 
years 

< 2 years,   2 - 5 
years,  5  - 10 
10-15 
years, 
years, 
15 
years 

> 

-

++

positive 
+,++,  +++ 
negative      
-, 
--- 
--, 
no 
evidence or 
evidence 
unclear 
N/A 

- 

++ 

++ 

++ 

+ 

+++ +++ ++  + 

l

a
l

u
r
b
a
n

L
o
c
a
l
/

R
e
g
i
o
n

N
a
t
i
o
n
a

E
U

G
l
o
b
a
l

 ++ 

 ++ 

 ++ 

 + 

 + 

++ 

++ 
 ++  ++ 

<2 years  2-5 years 
2-5 years  5-10 years 

+++

++ 

n/a 

+ 

+ 

+ 

+ 

+++ +++

+ 

+ 

< 2 years  2-5 years 

<2 years  5-10 years 

A4. 
of 
Promotion 
environmental  technologies  in 
developing countries 

++ 

+++ 

++ 

+ 

+ 

++  ++  +++

102 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Option 5 – Wide eco-innovation policy 

Assessment of Option 5 in terms of its response to specific objectives 

General objective  Specific objective 

Actions addressing the 
objective 

Assessing potential contribution of actions to 
achieving the objectives 

the 
Increasing 
rate 
eco-
of 
innovation  and  its 
uptake  in  Europe 
and  in  so  doing 
efficient 
deliver 
solutions 
for 
environmental 
problems, 
and 
boost the resource 
of 
efficiency 
Europe  and 
its 
competitiveness 

Adequacy 
of 
actions: 

high, 
medium,    
low,   
N/A - no 
specific 
action 

Contributi
on to the 
achievem
ent of the 
objectives 
positive  
+, ++, 
+++ 
negative 
 -, --, ---     
no 
evidence 
or 
evidence 
unclear - 
N/A 
N/A 

Optimal 
timing 
of  
action 

Order of impact Estimat
ed time 
of  
impact 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years 

1st order - 
action achieves 
impacts 
directly 
(operational); 
2nd order - 
action achieves 
impacts 
indirectly(polic
y). 

< 2 
years,   
2 - 5 
years, 5 
- 10 
years, 
10-15 
years, > 
15 years

N/A 

N/A 

N/A 

To apply the principles of the 
Innovation Union to eco-
innovation 

N/A 

To promote eco-innovation in 
Europe 

To improve global markets for 
eco-innovation 

A1. Promoting a faster shift of 
the burden of taxation to 
resources 
A2. Introduction of ambitious 
standards for green public 
procurement 
A3. Introduction of legally 
binding framework for all 
manufactured goods 
A4. Introducing waste 
prevention and recycling 
standards along the whole value 
chain 
A4. Introducing waste 
prevention and recycling 
standards along the whole value 
chain 

High 

+++ 

1st and 2nd order 
impacts 

< 2 
years 
and 2 – 
5 years 

5 – 10 
years 
and 10 
– 15 
years 

Low 

+ 

2nd order 
impacts 

< 2 
years 
and 2 – 
5 years 

5 – 10 
years 
and 10 
– 15 
years 

103 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assessment of actions in Option 5 

Relevant actions 

on 

Potential 
impact 
innovation 
system 
positive 
+,++,+++ 
negative  -,  --, 
---                    
evidence 
no 
or 
evidence 
unclear - N/A 

Potential 
environment
al impact 

positive 
+,++,+++ 
negative  -,  --, 
---                    
evidence 
no 
or 
evidence 
unclear - N/A

on 

Potential 
impact 
competitiven
ess 
positive 
+,++,+++ 
negative  -,  --, 
---                    
evidence 
no 
or 
evidence 
unclear - N/A

EU value added 

Assessing potential contribution 

unjustified 
supplementary+ 
significant 
leading +++ 

-

++

<  2  years, 
2 
5 
- 
years,  5  - 
10  years, 
10-15 
years 

< 2 years,   2 - 5 
years,  5  - 10 
10-15 
years, 
years, 
15 
years 

> 

positive 
+,++,+++ 
negative      
-,--,---          
no 
evidence or 
evidence 
unclear 
N/A 

- 

u
r
b
a
n

L
o
c
a
l
/

R
e
g
i
o
n
a
l

N
a
t
i
o
n
a
l

E
U

G
l
o
b
a
l

taxation 

A1.  Promoting a faster shift of 
to 
the  burden  of 
resources 
A2. Introduction of ambitious 
standards for green public 
procurement 
A3. Introduction of legally 
binding framework for all 
manufactured goods 
A4. 
Introducing 
prevention 
and 
standards  along 
value chain 

waste 
recycling 
the  whole 

+++ 

+++ 

++ 

++ 

+++ 

++ 

++ 

++ 

+ 

+ 

++ 

++ 

- 

- 

++  +++ - 

+ 

5 - 10 

10 - 15 

++  ++  ++  +++ ++  + 

2 - 5 

5 - 10 

- 

- 

- 

- 

++  +++ + 

+ 

2 - 5 

5 - 10 

++  +++ + 

+++ 

<2 

5 - 10 

104 

 
 
 
 
 
 
 
 
 
 
ANNEX XIII – SUGGESTED PARAMETERS USED FOR MEASURING CONTRIBUTION TOWARDS ACHIEVEMENT OF 
OBJECTIVES 

Option 2: 

Relevant action 

PA1. Increasing and focusing research, demonstration and 
dissemination. Improving co-ordination of relevant programs 

PA2. Establishing technology platforms 

PA3. Establishing European Networks for technology testing, 
performance verification and standardization 
PA4. Developing and agreeing on performance targets for key 
products, processes and services 
PA5. Mobilizing financial instruments to share the risk of investing 
in environmental technologies 
PA6. Encouraging systematic internalization of costs through 
market-based instruments 
PA7. Encourage procurement of environmental technologies 

PA8. Raising business and consumer awareness 

PA9.  Supporting  eco-technologies  in  developing  countries  and 
promoting foreign investment 

Option 3: 

Relevant action 

A1. Screening the environmental regulatory framework for eco-
innovation 

A2. Partnerships for eco-innovation 

A3. Mobilising financial resources, both public and private, for 
investment in eco-innovation 

A4.  Developing standards and performance targets for key products, 
processes and services to reduce their environmental footprint 
A5. Developing new skills for new jobs in environmental goods and 
services industry 
A6. Governance of eco-innovation policy 

Option 4: 

Relevant action 

A1. Targeted eco-innovation support for SMEs through enterprise 
and business networks 
A2. Environmental Technology Verification initiative, to test an EU 
ETV pilot programme and evaluate its potential in facilitating 
market access for innovative environmental technologies 
A3. Setting up Eco-innovation Partnerships with major partner 
countries and regions 
A4. Promotion of environmental technologies in developing 
countries 

Option 5: 

Relevant action 

A1.  Promoting a faster shift of the burden of taxation to resources 
A2. Introduction of ambitious standards for green public 
procurement 
A3. Introduction of legally binding framework for all manufactured 
goods 
A4. Introducing waste prevention and recycling standards along the 
whole value chain 

Suggested parameter 
Number  of  initiatives/  networks/  programmes  created  on  EU  and 
national levels; Amount of funds attracted for R&D, demonstration, 
etc.; numbers of spinouts and new projects initiated 
Number  TPs,  number  of  projects  under  the  TPs;  quantitative  & 
qualitative:(influence  on)  creation  a  of  national  policies  on 
promotion of certain environmental technology(ies) 
Certification  /  verification  framework  is  established  for  certain 
environmental technologies/products on national EU level 
Qualitative: influence of ETAP on the setting of the agenda and the 
development of standards 
Leveraging  effect,  combined  with  an  assessment  of 
'ambitiousness' of the eco-innovations 
Assess the changes in StateAid guidelines: qualitative assessment of 
ETAP contribution 
Qualitative  Assessment  of  influence of  ETAP  in  agenda  setting  for 
GPP; combined with analysis of GPP levels 
Qualitative Assessment of influence of ETAP on communication on 
eco-innovation 
Patents, FDI, partnerships, participation in FP of dev. countries 

the 

Suggested parameter 
Qualitative  assessment  of  the  influencing  effect  of  the  action  - 
combined  with  analysing  the  change  towards  more  and  better 
integration of eco-innovation 
Number  of  initiatives/networks/  prorammes  created  on  EU  and 
national  levels;  scope  of  the  activities  this  initiatives  implement 
(advising,  funding,  providing  space  for  between  various  research 
organizations, firms, investors)   
in 
Qualitative  assessment  of 
integrating  eco-innovation  in  schemes  &  leveraging  effect,  patent 
analysis, case studies of instruments 
Qualitative: influence of the action on the setting of the agenda and 
the development of standards 
Qualitative  Assessment  of  influence  of  the  action  on  the  uptake  of 
eco-innovation in courses 
Number  of  national  roadmaps  approved;  Number  of  good practices 
identified; number of good practices shared 

the  contribution  of 

the  action 

Network activities organised (forum, /meetings, etc. 

Suggested parameter 

Functioning  ETV  pilot 
for  certain  areas/technologies,  clear 
indications on usefulness and added-value for marketing innovative 
environmental technologies 
Qualitative,  increased  'green'  trade,  increased  green  investments, 
increased networking and int. cooperation 
FDI, partnerships, patents, participation in FP, nr. Of NCP centers 

Suggested parameter 
Share of taxation coming from resource taxes 
GPP as part of Total Public Procurement/ GPP as part of GDP 

Quantitative 

Qualitative 

105