The Eco-Innovation Challenge

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The Eco-Innovation Challenge

Executive Summary

eco-innovation

observatory

The Eco-Innovation Observatory (EIO) is a leading EU-funded initiative collecting and

analysing information on eco-innovation trends and markets in Europe and beyond. This

first annual report introduces the concept of eco-innovation, placing key findings on the

state and potential of eco-innovation in the EU into the context of the resource-efficiency

debate, in particular considering the flagship initiative “Resource-efficient Europe” of the

Europe 2020 strategy. Introducing the notion of the “eco-innovation challenge”, this report

also opens a discussion on the potential benefits of eco-innovation for companies, sectors

and entire economies.

What is eco-innovation

Eco-innovation is innovation that reduces the use of natural resources and decreases

the release of harmful substances across the whole life-cycle. The understanding of

eco-innovation has broadened from a traditional understanding of innovating to reduce

environmental impacts towards innovating to minimise the use of natural resources in the

design, production, use, re-use and recycling of products and materials. Technological

innovation alone is not sufficient to enable the transition of Europe into a sustainable

economy; the magnitude of the challenge also calls for systemic innovations in the way

services are delivered and organisations are run. Public acceptance and social changes are

key in this process.

Why focus on resources

This report focuses on material resources such as fossil fuels, minerals, metals, and biomass

for three reasons. First, it is the human use (and over-use) of material resources that are linked

to the most prominent environmental problems today, most notably climate change. Second,

Europe’s dependence on materials imported from abroad is increasing, raising concerns

over material security. European industries and consumers are increasingly vulnerable to

volatility, increasing scarcity as well as rising material prices. Third, reducing resource use

offers a significant business opportunity to reduce costs. At a time of increasing prices this

is particularly relevant. According to the recent Eurobarometer survey, 75% of businesses

in manufacturing, construction, agriculture, water and food services reported an increase

in the cost of materials in the past 5 years. Nine out of ten surveyed companies expect

material prices to increase in the future. Case studies on material efficiency improvements

in Germany have revealed that on average around EUR 200,000 can be saved per company

(from a pool of around 700 cases in the manufacturing sector) with investment costs under

EUR 10,000 for nearly half of the companies.

Resource efficiency and the eco-innovation challenge

Resource efficiency has become an “umbrella” issue included in various policy agendas

and contexts. The Europe 2020 strategy regards improved resource efficiency as key for

achieving both economic and environmental objectives. However, the resource-efficiency

gains made so far have not been enough to change the trend in the absolute consumption

of natural resources, which continues to increase in Europe and globally. The eco-innovation

challenge is two-fold: to further improve the resource-efficiency performance of Europe and

Annual Report 2010

VII

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