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Speech - "The Imperative for, and Progress towards an Inclusive Green Economy"

European Commission - SPEECH/12/931   10/12/2012

Other available languages: none

European Commission

Janez Potočnik

European Commissioner for Environment

"The Imperative for, and Progress towards an Inclusive Green Economy"

A.I.S.E 60th Anniversary - Panel Discussion: How ambitious must we be and how do we ensure the whole sector moves?

Brussels, 6 December 2012

Ladies and Gentlemen,

Thank you for inviting me to talk to you about the imperative to move towards a Green Economy. When you hear the word "imperative" you think of constraints, boundaries, shocks… not the kind of positive vision for the future one wishes to paint when it's your 60th birthday.

But I want to focus today on the benefits that an inclusive green economy can bring for Europe and its people. We need to take a positive and pro-active attitude to the challenges we face, and I know that businesses like yours are willing and able to do that, if the conditions are right.

One of the key ambitions of my mandate as Environment Commissioner is to put Europe on track to deliver the vision set out in our Resource Efficiency Roadmap which was adopted a year ago. Today, I would like to invite you to be part of this vision and to be part of the transition.

A green economy is a resource-efficient economy. Green growth through resource efficiency responds to the challenges of resource scarcity and environmental degradation. It provides a long-term perspective on which companies can rely to invest in their future competitiveness, while at the same providing clear potential for short term growth and jobs.

The combination of increasing global demands and pressures on resources, Europe's import-dependency for many resources, and the increasing relative cost of resources such as materials and energy in companies' cost structures mean that for Europe resource efficiency is central to our future competitiveness. In the past five years, 75 % of European businesses have experienced an increase in material costs. 87 % of companies said they expected the costs of their material inputs to increase in the medium term. Using resources more efficiently can help reduce costs and adjust to rising and less predictable commodity-prices, and the fierce competition for access to them. A recent UK study identified £ 23 billion per year potential savings for British companies, through efficiency measures without any or little investment.

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Ladies and gentlemen,

This year, in its conclusions on economic governance, the Spring European Council, asked for the rapid implementation of the EU resource efficiency and low-carbon roadmaps. This is a clear affirmation at the highest political level to an EU-wide commitment to pursue green growth and the importance of the resource efficiency agenda for a sustainable exit from the crisis.

We have created the momentum – now our policy needs to start delivering. To guide and accompany our efforts, we have set up the "European Resource Efficiency Platform", which includes business representatives who provide valuable input, alongside ministers, international organisations, researchers, social partners and NGOs. The Platform focuses on the promotion of a circular economy, the setting-up of conductive framework conditions for investments and indicators and targets for resource efficiency. We expect specific recommendations for first priority measures in summer 2013.

The transition to a resource-efficient economy and society requires new levels of innovation, breaking out of locked-in systems and technologies. It will be led by forward-looking countries, companies, researchers, inventors and investors – and this is our strength here in Europe. The private sector can and should be in the driver's seat, but it needs the right framework conditions and well-functioning markets. Good regulation and its effective implementation are there to provide a level playing-field and the right incentives and rewards. We will only get it right by working in partnership and by dealing with present and future problems from both the environmental and business perspectives. I am convinced that your sector has all that is needed to contribute. I hope I can count on your support for actions at all levels, to facilitate and speed up on the transition.

The EU has clear strengths in eco-industries, an expanding sector with a high proportion of SMEs and expanding international markets. Employment in the sector in the EU has been growing by around 3 % a year in recent years. The global market for eco-industries is estimated to be at least a trillion Euros, and is expected to almost double over the next 10 years. We are doing particularly well in certain subsectors, for example, we hold a 50 % share globally in recycling, and 35 % in energy efficiency, so we are well-placed to benefit from the growth in global demand. And eco-industries are enablers for the rest of the economy to perform better.

For example, there is huge potential for growth and jobs in waste and water management. The waste sector alone grew more than 20 % between 2000 and 2008. Similarly, jobs in recycling grew by almost 80 %. It is estimated that full implementation of EU waste legislation would increase the annual turnover of the EU waste management and recycling sector by € 42 billion and create over 400,000 jobs by 2020.

SMEs are already responding to the challenge. Today 26 % of SMEs are active in green markets, another 8 % plan to be active in the next few years. This is a trend we need to stimulate and support. We realise that many SMEs lack the information, expertise and resources to take this challenge on. Therefore, it is essential that we continue to include SMEs and support them, both those that wish to be active in green markets and those that would simply benefit from resource efficiency measures.

Resource efficiency is not about producing less, but it’s about producing more with less: more added value with less stuff. We want companies to provide what consumers need, but we also want to enable and encourage them both to reduce the associated resource use and minimise environmental impacts. And let me be clear; that doesn't mean deindustrialisation.
It means dematerialisation.

Innovation is crucial if European companies are to maintain the competitive position they hold in the eco-industry sector. So is access to finance. And more innovative and responsive public policies. All 3 elements are brought together in the EU Innovation Partnerships which we have recently launched – on water, raw materials and agriculture. These will also bring researchers, business and policy-makers together to develop policies and stimulate financing to bring solutions to the market.

The transformation to a Green Economy asks not just business (including producers and retailers), but also consumers, to change behaviour.

Consumers have the right to be informed about products and they are increasingly asking for more information. However, recent surveys show some worrying trends: half of EU citizens do not trust environmental claims, while 1/3 of them encountered misleading environmental claims. Consumers need to be better informed on how they can contribute to reduce their footprint on the planet and its resources.

The Resource Efficiency Roadmap sets an important milestone for product policy:

"By 2020, citizens and public authorities have the right incentives to choose the most resource efficient products and services, through appropriate price signals and clear environmental information. Their purchasing choices will stimulate companies to innovate and to supply more resource efficient goods and services. Minimum environmental performance standards are set to remove the least resource efficient and most polluting products from the market. Consumer demand is high for more sustainable products and services."

But to stimulate supply and demand for more resource-efficient goods and services and encourage companies to improve their environmental performance and reduce resource-use, we need to have robust, science-based but practical tools. We need to be able to identify the genuine green products and companies on the market. Both business and consumers are asking us to take action in this domain. This is why the Commission will soon present ideas for common methods to calculate the environmental sustainability of products and of organisations based on life-cycle assessment. This will allow businesses operating across the Single Market to be able to cut costs by applying a single EU method instead of a multitude of national ones.

If we want to be serious about developing an effective single market for green products and companies, we need to create the conditions to ensure that the genuine green performers are rewarded for their efforts and free-riders and green-washers are exposed and dissuaded.

We are already going in the right direction. Today environmental considerations have become a central part of marketing strategies for industries and an element of consideration for investors. Companies are more and more using Life Cycle Assessments (LCA) as a green sourcing tool, which is a way to improve their overall performance along the value chain. They are using these approaches to identify and to select the best performing suppliers, especially with reference to SMEs. Industrial sectors such as electronics, automotive, heavy manufacturing and building and construction are already evaluating the environmental attributes of materials as part of selection processes.

In some cases, companies are proactively seeking out materials that will contribute to the environmental performance of their products or projects through the entire life cycle. I am aware that your sector has put some serious thought into this and I am aware of the progress that has been shared among your members at all levels of the supply chain. The result is the high number of EU Ecolabel licences that detergents hold. I very much welcome your efforts.

Ladies and gentlemen, 2013 will be a major milestone for putting us on track in delivering on these aspirations. Early next year we will put forwards ideas on how we can move towards a single market for green products. We hope that these – what we consider to be realistic solutions to tackling our environmental and economic problems – will resonate positively within the business community.

Thank you for your attention.


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