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Market News

 September 20, 2007
The European Environmental Technologies Action Plan

 Eco-industries represent 2.1% of the EU's GDP, and the industry provides over 3.5 million full-time jobs. From 2003 to 2006, clean technologies represented 2 billion of investments, or 10% of the EU's total venture capital. The market is estimated to be worth over 1 trillion worldwide. In order to increase EU demand for environmental technologies and support the growth of the industry, the EU developed ETAP. Environmental technologies are defined as "technologies whose use is less environmentally harmful than relevant alternatives." The Commission first began discussions on the topic of environmental technologies in 2001, and in 2002 the Commission produced a report outlining the environmental technologies market and the barriers to the market's development.

A 2003 Communication from the Commission and four stakeholder groups that discussed environmental technologies were the basis for the 2004 formation of ETAP. ETAP was formed as a way to reduce pressure on natural resources, improve the quality of life for European citizens, and stimulate economic growth by improving the environment. In 2000 the European Council developed the Lisbon Strategy (the meeting had taken place in Lisbon), which has the stated goals of making the EU the "most competitive economy in the world" and achieving full employment by 2010. ETAP was developed as part of the Lisbon Strategy; as such it is also supposed to contribute to economic competitiveness and growth. More specifically, ETAP is working to promote eco-innovation and the take-up of environmental technologies. The Plan's main objectives include:

  • Removing obstacles in order to reach the full potential of environmental technologies;
  • Ensuring a leading role for the EU in developing and applying environmental technologies;
  • Mobilizing stakeholders in support of the Plan and its objectives.

ETAP sets forward nine specific actions to direct EU and Member State actions in the topic of environmental technologies (see below), and it called for the publication of National Roadmaps in 2005, which summarized some of the actions put into place in each member nation. These Roadmaps foster experience sharing on eco-innovations and good practices, by allowing countries to share their experiences with other Member States. The Commission monitors the implementation of the plan and reports to the European Council and the Parliament every two years (the last report was in May 2007).

Actions

ETAP's nine actions are part of three separate axes. These actions serve to direct the actions of EU bodies, member states and private players in the eco-tech and environmental innovation markets. The first set of actions focus on making the transition from research to markets by increasing and focusing research, establishing technology platforms and networks for technology testing. The second axis looks at improving market conditions by setting performance targets, leveraging investment, creating incentives and removing economic barriers, promoting environmental techniques via public procurement. Finally, the Plan focuses on actions that directly affect countries outside of the EU, encouraging the stakeholders to act globally by promoting environmental technologies in developing countries and promoting responsible foreign investment.

What follows is a list of the actions that make up each of these axes.

Transition from Research to Markets:

  • Increase and Focus Research, Demonstration: actions to get inventions out of the laboratories and into the markets and to attract private and public investment.
  • Technology Platforms: brings together interested stakeholders and establishes technology platforms and testing networks
  • Environmental Technology Verification: establishes a mechanism to validate the performance of products and increase purchasers' confidence in new techniques.
  • Improving Market Conditions
  • Performance Targets: encourage industry to develop and take up environmental technologies. A list of some existing EU performance targets is available here.
  • Mobilization of Financing (grants and loans): uses a broad mix of financial instruments in order to commercialize and use environmental technologies. There is currently a broad mix of instruments available at the EU level (FP7, Structural Funds, CIP, etc...).
  • Market-Based Instruments: develops economic incentives to promote the take-up of environmental technologies (for example: tradable permits or tax incentives).
  • Green Public Procurement: promotes public procurement (around 16% of EU GDP) of green technologies in order to increase demand for the products.
  • Awareness Raising and Training: promotes use of green technologies when used in conjunction with the development and take-up of environmentally friendly technologies.
Acting Globally
  • Supporting Eco-Technologies in Developing Countries, and Promoting Foreign Investment.

European Eco-Innovation Forum

The European Eco-Innovation Forum is part of ETAP that aims to bring together and increase the mobilization of relevant stakeholders from business, finance, and technology. The Forum explores strategic orientations for the future development of ETAP, emphasizing the business orientation. The Forum meets in Brussels once a year and then holds another yearly meeting in a different European city. The meetings focus on a theme of strategic importance to the development of ETAP. Some examples of themes are: "Financing Eco-Innovation" (Poznan, November 2006), "Markets for Sustainable Construction" (Brussels, June 2007), and "Boosting Eco-Technologies through Verification" (Paris, November 2007). The forum provides suggestions for future action aimed at business and finance, as well as National and European policy makers. Final reports and presentations from the conferences are available online through the specific conference's website (links available on the Forum website).

Results

ETAP has had great influence on the way the EU has developed its policies regarding eco-tech and environmental innovation. Under the FP6 research program, 1.4 billion were put into environmental technology projects. The Commission adopted the Green Paper on market-based instruments in March of 2007 in order to advance the discussion about using market-based instruments as policy tools in the EU. The Commission also published a Handbook on Green Procurement to serve as a guide to EU bodies and member states. The EU has pushed for global financing for environmental technology programs through mechanisms such as the Thematic Program on Environment and sustainable management of Natural Resources (funding for environment in development cooperation) and the Global Energy Efficiency and Renewable Energy Fund (GEEREF--- to mobilize private investment in projects in developing countries).

Finally, the objectives and priorities of ETAP were very influential in determining research themes for the 2007-2013 funding period in the EU.

The Future

In its 2007 review of ETAP, the European Commission made the following recommendations for future action:

  • A public consultation that will identify the best operational settings for performance target schemes by 2008
  • A legislative proposal for environmental technology verification by 2008
  • Continuing the review on the guidelines for state aid for environmental protection
  • Fast-tracking the issues of green investment and trade in the regional Free-Trade Agreements the EU will be negotiating in the upcoming years
  • A communication from the Commission on public procurement that would possibly set voluntary targets for eco-innovation and give guidelines on indicators and benchmarking
  • Proposals for environmental technology verification
  • Communication on performance target schemes by 2008
The Commission has also promised a review of the EU's Lisbon Strategy in Spring 2008 in order that the document better to reflect the environmental dimension of Europe's industrial policy.

Links

DG Environment's ETAP website

ETAP Newsletter

Report to DG ENV: Eco-industry, its size, employment, perspectives and barriers to growth

European Eco-Innovation Forum


Excerpts from European Union: Environmental Technologies Action Plan (ETAP) US Commercial Service, 2007