2.1 Europe’s dematerialization trajectory

Since 2008, the EU has made significant progress in increasing its resource

productivity. Europe’s economy depends on virgin materials for about 87 percent of its material consumption, but it is increasingly becoming more resource efficient. Its circular material use rate— the share of resources used derived from recycled waste—increased from 8.3 percent in 2004 to 12.8 percent in 2020. Domestic material consumption (DMC), the annual quantity of raw materials extracted in the EU plus all physical imports minus all physical exports, is also decreasing. DMC went down by 9.4 percent, from 6.6 billion tons in 2000 to 6.0 billion tons in 2020 (Figure 2.1). DMC increased consistently between 2000 and 2007, decreased sharply after 2008, and has since flattened out after 2012.26

Europe’s resource productivity is improving but

remains below peer countries. Between 2000 and 2020, Europe achieved absolute decoupling of economic growth from domestic resource use. DMC decreased by 9.4 percent while the economy grew by 22.5 percent (Figure 2.1). As a result, EU resource productivity improved by 35.2 percent, from €1.19 per kg of DMC in 2000 to €2.23 per kg in 2020. Despite such progress, the EU’s resource productivity remains slightly below comparator economies (Figure 2.2), although it is significantly higher than emerging economies such as China.

Reduced rates of DMC have been accompanied by increased waste generation.

Overall EU waste generation (excluding major mineral waste) continued to increase at an average annual rate of 4.2 percent between 2004 and 2018, reaching 812 million tons. Despite progress in recycling rates in key waste streams (Figure 2.4), the EU still recycles less than half its total waste generation (2016) and large differences remain across MSs (Figure 2.3).27

FIGURE 2.1: RESOURCE PRODUCTIVITY IN COMPARISON TO GDP AND DMC, EU (2000–2020)

(Index 2000 = 100) 140 135 130 125 120 115 110 105 100 95 90 85

2000 2003 2006 2009 2012 2015 2018

 Resource productivity  Domestic material consumption  Gross domestic products

Source: Eurostat.

26 Eurostat 2021b. 27 Eurostat 2021c; OECD 2022.

Since 2008, the EU has made important progress in its transition toward a more material-efficient economy. Dematerialization is caused by both endogenous and exogenous drivers and is differentiated within and across MSs. EU MSs, including the four countries of focus in this study, show different initial conditions in embarking on the CE transition, in terms of economic structure and capacities. Such heterogeneity will emerge as an opportunity for achieving further materials efficiency gains, but it is also a challenge for implementing the increasingly ambitious direction being set by the EU’s CE policy.