1. Federal Planning Bureau Economic analyses and forecasts The Belgian environment industry (1995-2005) Lies Janssen & Guy Vandille 21 May 2008

2. Outline Definition Database (sources) Results Demography Economic impact Conclusion

3. Definition (1) OECD (1999), The Environmental Goods and Services Industry: Manual for Data Collection and Analysis

4. Definition (1) OECD (1999), The Environmental Goods and Services Industry: Manual for Data Collection and Analysis : Activities which produce goods and services to Measure Prevent Limit Minimise Correct

5. Definition (1) OECD (1999), The Environmental Goods and Services Industry: Manual for Data Collection and Analysis : Activities which produce goods and services to Measure, prevent, limit, minimise or correct Damage to Water Air soil Problems related to Waste Noise ecosystems

6. Definition (1) OECD (1999), The Environmental Goods and Services Industry: Manual for Data Collection and Analysis : Activities which produce goods and services to Measure, prevent, limit, minimise or correct Damage to water, air and soil Problems related to waste, noise and ecosystems Includes cleaner technologies, products and services that Reduce environmental risk Minimise pollution Minimise resource use

7. Definition (1) OECD (1999), The Environmental Goods and Services Industry: Manual for Data Collection and Analysis : Activities which produce goods and services to Measure, prevent, limit, minimise or correct Damage to water, air and soil Problems related to waste, noise and ecosystems Includes cleaner technologies, products and services that Reduce environmental risk, minimise pollution and resource use Includes Specialised producers Secondary producers Ancillary producers

8. Definition (2) 3 activity classification levels

9. Definition (2) 3 classification levels Level 1: type of environmental activity Level 2 : type of economic activity Level 3 : environmental domain

10. Definition (2) 3 classification levels Level 1: type of environmental activity Pollution management Cleaner technologies and products Resource management Level 2 : type of economic activity Level 3 : environmental domain

11. Definition (2) 3 classification levels Level 1: type of environmental activity Pollution management Cleaner technologies and products Resource management Level 2 : type of economic activity Production of equipment and specific materials Provision of services Construction and installation Level 3 : environmental domain

12. Database All environmental activities need to be classified according to this classification scheme => build database of environmental activities

13. Database All environmental activities need to be classified according to this classification scheme => build database of environmental activities Database organised according to organisations that conducted environmental activity in Belgium in period 1995-2005

14. Database All environmental activities need to be classified according to this classification scheme => build database of environmental activities Database organised according to organisations that conducted environmental activity in Belgium in period 1995-2005 For each organisation: Turnover (linked to environmental activity) Employment (linked to environmental activity) NACE Environmental activity according to classificiation

15. Database All environmental activities need to be classified according to this classification scheme => build database of environmental activities Database organised according to organisations that conducted environmental activity in Belgium in period 1995-2005 For each organisation: Turnover (linked to environmental activity) Employment (linked to environmental activity) NACE Environmental activity according to classificiation Objective = analyse Belgian environment industry Demography of environment industry Economic importance of the environment industry

16. Database All environmental activities need to be classified according to this classification scheme => build database of environmental activities Database organised according to organisations that conducted environmental activity in Belgium in period 1995-2005 For each organisation: Turnover (linked to environmental activity) Employment (linked to environmental activity) NACE Environmental activity according to classificiation Objective = analyse Belgian environment industry Demography of environment industry Number and size of firms share of NACE categories Share of environmental domains Economic importance of the environment industry

17. Database All environmental activities need to be classified according to this classification scheme => build database of environmental activities Database organised according to organisations that conducted environmental activity in Belgium in period 1995-2005 For each organisation: Turnover (linked to environmental activity) Employment (linked to environmental activity) NACE Environmental activity according to classificiation Objective = analyse Belgian environment industry Demography of environment industry Number and size of firms share of NACE categories Share of environmental domains Economic importance of the environment industry Share in output Share in employment

18. Database: sources environmental activity National sector accounts : NACE 37 and 90

19. Database: sources environmental activity National sector accounts : NACE 37 and 90 Regional government administrations and agencies publish lists of companies engaged in environmental activities

20. Database: sources environmental activity National sector accounts : NACE 37 and 90 Regional government administrations and agencies publish lists of companies engaged in environmental activities Umbrella organisations and sectoral employer federations Coberec : Belgian recycling federation FEBEM/FEGE : Federation of enterprises active in environmental management Agoria : Federation for the Technology industry (list of members performing environmental activities) FEBELAUTO : car recycling firms VVS : processors of building and dismantling debris

21. Database: sources environmental activity National sector accounts : NACE 37 and 90 Regional government administrations and agencies publish lists of companies engaged in environmental activities Umbrella organisations and sectoral employer federations Coberec : Belgian recycling federation FEBEM/FEGE : Federation of enterprises active in environmental management Agoria : Federation for the Technology industry (list of members performing environmental activities) FEBELAUTO : car recycling firms VVS : processors of building and dismantling debris For every firm activities were checked on basis of the Crossroad Bank of Enterprises of the FPS for Economic Affairs and the Central Enterprises Database of Flanders => assigned to environmental category

22. Database : sources economic data For every firm economic data were collected on:

23. Database : sources economic data For every firm economic data were collected on: NACE Turnover Employment in fulltime equivalents (used to categorize firms by size)

24. Database : sources economic data For every firm economic data were collected on: NACE : classification of enterprises of National Accounts Turnover Employment in fulltime equivalents (used to categorize firms by size)

25. Database : sources economic data For every firm economic data were collected on: NACE : classification of enterprises of National Accounts Turnover : Specialised producers: Central Balance Sheet Office or tax registers Employment in fulltime equivalents (used to categorize firms by size)

26. Database : sources economic data For every firm economic data were collected on: NACE : classification of enterprises of National Accounts Turnover : Specialised producers: Central Balance Sheet Office or tax registers Secondary producers: in detailed production data of the Structural Business Survey production of environmental goods and services was identified => for each NACE determine average share of environmental goods and services in total production => apply this share to total turnover of individual secondary producers not in the SBS Employment in fulltime equivalents (used to categorize firms by size)

27. Database : sources economic data For every firm economic data were collected on: NACE : classification of enterprises of National Accounts Turnover : Specialised producers: Central Balance Sheet Office or tax registers Secondary producers: in detailed production data of the Structural Business Survey production of environmental goods and services was identified => for each NACE determine average share of environmental goods and services in total production => apply this share to total turnover of individual secondary producers not in the SBS Employment in fulltime equivalents (used to categorize firms by size) Specialised producers: Central Balance Sheet Office Secondary producers: share of environmental employment in total = share of environmental production in total

28. Results : demography of Belgian environment industry (1) Number of firms Size of firms Share of NACE categories Share of environmental domains

29. Results : demography of Belgian environment industry (1) Number of firms Size of firms Share of NACE categories Share of environmental domains Number of firms : 2437 identified over period 1995-2005

30. Results : demography of Belgian environment industry (1) Number of firms Size of firms Share of NACE categories Share of environmental domains Number of firms : 2437 identified over period 1995-2005, of which 1820 specialized producers 617 secondary producers

31. Results : demography of Belgian environment industry (1) Number of firms Size of firms Share of NACE categories Share of environmental domains Number of firms : 2437 identified over period 1995-2005, of which 1820 specialized producers 617 secondary producers 1995: 1585 --  2005: 2340

32. Results : demography of Belgian environment industry (1) Number of firms Size of firms Share of NACE categories Share of environmental domains Number of firms : 2437 identified over period 1995-2005, of which 1820 specialized producers 617 secondary producers 1995: 1585 --  2005: 2340 average annual growth: 4% (higher than growth rate of total number of VAT contributors) => share of environmental firms in total increased from 0.27% to 0.33%.

33. Results : demography of Belgian environment industry (2) Size of firms (1995-2005 average) Specialised producers Secondary producers All firms

34. Results : demography of Belgian environment industry (2) Size of firms (1995-2005 average) Specialised producers Small firms (0-9 employees) : Medium-sized firms (10-99 employees): Large firms (100+ employees): Secondary producers Small firms (0-9 employees) : Medium-sized firms (10-99 employees): Large firms (100+ employees): All firms Small firms (0-9 employees) : Medium-sized firms (10-99 employees): Large firms (100+ employees):

35. Results : demography of Belgian environment industry (2) Size of firms (1995-2005 average) Specialised producers Small firms (0-9 employees) : 65 % Medium-sized firms (10-99 employees): Large firms (100+ employees): Secondary producers Small firms (0-9 employees) : 46 % Medium-sized firms (10-99 employees): Large firms (100+ employees): All firms Small firms (0-9 employees) : 60 % Medium-sized firms (10-99 employees): Large firms (100+ employees):

36. Results : demography of Belgian environment industry (2) Size of firms (1995-2005 average) Specialised producers Small firms (0-9 employees) : 65 % Medium-sized firms (10-99 employees): Large firms (100+ employees): 8 % Secondary producers Small firms (0-9 employees) : 46 % Medium-sized firms (10-99 employees): Large firms (100+ employees): 18 % All firms Small firms (0-9 employees) : 60 % Medium-sized firms (10-99 employees): Large firms (100+ employees): 10 %

37. Results : demography of Belgian environment industry (2) Size of firms (1995-2005 average) Specialised producers Small firms (0-9 employees) : 65 % Medium-sized firms (10-99 employees): 27 % Large firms (100+ employees): 8 % Secondary producers Small firms (0-9 employees) : 46 % Medium-sized firms (10-99 employees): 36 % Large firms (100+ employees): 18 % All firms Small firms (0-9 employees) : 60 % Medium-sized firms (10-99 employees): 30 % Large firms (100+ employees): 10 %

38. Results : demography of Belgian environment industry (3) Share by NACE (1995-2005 average)

39. Results : demography of Belgian environment industry (3) Share by NACE (1995-2005 average) Specialised producers

40. Results : demography of Belgian environment industry (3) Share by NACE (1995-2005 average) Specialised producers NACE 90 (sewage and refuse disposal, sanitation and similar activities): 25% (avg annual growth:7.6%)

41. Results : demography of Belgian environment industry (3) Share by NACE (1995-2005 average) Specialised producers NACE 90 (sewage and refuse disposal, sanitation and similar activities): 25% (avg annual growth:7.6%) NACE 74 (other business activities, among which environmental study bureaus): 23% (a.a.g.:6.9%)

42. Results : demography of Belgian environment industry (3) Share by NACE (1995-2005 average) Specialised producers NACE 90 (sewage and refuse disposal, sanitation and similar activities): 25% (avg annual growth:7.6%) NACE 74 (other business activities, among which environmental study bureaus): 23% (a.a.g.:6.9%) NACE 37 (recycling): 19% (a.a.g.:3.4%)

43. Results : demography of Belgian environment industry (3) Share by NACE (1995-2005 average) Specialised producers NACE 90 (sewage and refuse disposal, sanitation and similar activities): 25% (avg annual growth:7.6%) NACE 74 (other business activities, among which environmental study bureaus): 23% (a.a.g.:6.9%) NACE 37 (recycling): 19% (a.a.g.:3.4%) NACE 50-51 (mainly 51.57 sellers of second hand goods): 8% NACE 45 (mainly builders of waste treatment plants): 8%

44. Results : demography of Belgian environment industry (3) Share by NACE (1995-2005 average) Specialised producers NACE 90 (sewage and refuse disposal, sanitation and similar activities): 25% (avg annual growth:7.6%) NACE 74 (other business activities, among which environmental study bureaus): 23% (a.a.g.:6.9%) NACE 37 (recycling): 19% (a.a.g.:3.4%) NACE 50-51 (mainly 51.57 sellers of second hand goods): 8% NACE 45 (mainly builders of waste treatment plants): 8% Other 16% of primary producers spread over many different NACE categories => limiting study of environment industry to NACE categories considered in general as environmental categories (NACE 37 and 90) would lead to serious underestimate of environmental activities in the economy

45. Results : demography of Belgian environment industry (4) Secondary producers

46. Results : demography of Belgian environment industry (4) Secondary producers NACE 50-51 (wholesale and retail trade): 16% NACE 28-36 (among others fabricated metal products and machinery): 12% NACE 74 (other business activities): 11% NACE 45 (construction): 10%

47. Results : demography of Belgian environment industry (5) Share by environmental domain (1995-2005 average) Specialised producers Secondary producers

48. Results : demography of Belgian environment industry (5) Share by environmental domain (1995-2005 average) Specialised producers Solid waste: 45% (of which 92% services) Secondary producers Solid waste: 39% (of which 81% services)

49. Results : demography of Belgian environment industry (5) Share by environmental domain (1995-2005 average) Specialised producers Solid waste: 45% (of which 92% services) Wastewater management and water supply: 18% (70% services) Secondary producers Solid waste: 39% (of which 81% services) Wastewater management and water supply: 20% (52% services)

50. Results : demography of Belgian environment industry (5) Share by environmental domain (1995-2005 average) Specialised producers Solid waste: 45% (of which 92% services) Wastewater management and water supply: 18% (70% services) R&D, monitoring, engineering and analysis: 15% (92% services) Secondary producers Solid waste: 39% (of which 81% services) Wastewater management and water supply: 20% (52% services) R&D, monitoring, engineering and analysis: 17% (86% services)

51. Results : demography of Belgian environment industry (5) Share by environmental domain (1995-2005 average) Specialised producers Solid waste: 45% (of which 92% services) Wastewater management and water supply: 18% (70% services) R&D, monitoring, engineering and analysis: 15% (92% services) Air pollution control and noise and vibration abatement only 2 environmental domains for which production, construction and installation of equipment was almost as important as services Secondary producers Solid waste: 39% (of which 81% services) Wastewater management and water supply: 20% (52% services) R&D, monitoring, engineering and analysis: 17% (86% services) For air pollution control and noise and vibration abatement the share of production, construction and installation activities exceeded the share of services considerably

52. Results: economic impact of the Belgian environment industry (1) Number of firms involved in environmental activities has clearly increased => has environmental industry become more important to Belgian economy ?

53. Results: economic impact of the Belgian environment industry (1) Number of firms involved in environmental activities has clearly increased => has environmental industry become more important to Belgian economy ? Production Specialised producers Secondary producers

54. Results: economic impact of the Belgian environment industry (1) Number of firms involved in environmental activities has clearly increased => has environmental industry become more important to Belgian economy ? Production Specialised producers 1995: 6.5 billion euros -  2005: 9.6 billion euros Secondary producers 1995: 3.2 billion euros -  2005: 6.6 billion euros

55. Results: economic impact of the Belgian environment industry (1) Number of firms involved in environmental activities has clearly increased => has environmental industry become more important to Belgian economy ? Production Specialised producers 1995: 6.5 billion euros -  2005: 9.6 billion euros average yearly nominal output growth 4% share in total output dropped from 1.57 to 1.50 % Secondary producers 1995: 3.2 billion euros -  2005: 6.6 billion euros average yearly nominal output growth 7.5% > growth rate of total output => share in total output increased from 0.77 to 1.02 %

56. Results: economic impact of the Belgian environment industry (1) Number of firms involved in environmental activities has clearly increased => has environmental industry become more important to Belgian economy ? Production Specialised producers 1995: 6.5 billion euros -  2005: 9.6 billion euros average yearly nominal output growth 4% share in total output dropped from 1.57 to 1.50 % Secondary producers 1995: 3.2 billion euros -  2005: 6.6 billion euros average yearly nominal output growth 7.5% > growth rate of total output => share in total output increased from 0.77 to 1.02 % Share in total environmental output 1995: 33%  2005: 40%

57. Results: economic impact of the Belgian environment industry (1) Number of firms involved in environmental activities has clearly increased => has environmental industry become more important to Belgian economy ? Production Specialised producers 1995: 6.5 billion euros -  2005: 9.6 billion euros average yearly nominal output growth 4% share in total output dropped from 1.57 to 1.50 % Secondary producers 1995: 3.2 billion euros -  2005: 6.6 billion euros average yearly nominal output growth 7.5% > growth rate of total output => share in total output increased from 0.77 to 1.02 % Share in total environmental output 1995: 33%  2005: 40% Share in total number of environmental firms: 29%  27% => average output increased by 41% (  fall of 4% for specialised)

58. Results: economic impact of the Belgian environment industry (2) Specialised and secondary producers together

59. Results: economic impact of the Belgian environment industry (2) Specialised and secondary producers together Share in total output 1995 : 2.34 % 1999 : 2.20 % 2004 : 2.77 % 2005 : 2.52 %

60. Results: economic impact of the Belgian environment industry (2) Specialised and secondary producers together Share in total output 1995 : 2.34 % 1999 : 2.20 % 2004 : 2.77 % 2005 : 2.52 % Ancillary producers

61. Results: economic impact of the Belgian environment industry (2) Specialised and secondary producers together Share in total output 1995 : 2.34 % 1999 : 2.20 % 2004 : 2.77 % 2005 : 2.52 % Ancillary producers Data from EPEA on wage cost (intermediate consumption not taken into account in order to exclude double-counting)

62. Results: economic impact of the Belgian environment industry (2) Specialised and secondary producers together Share in total output 1995 : 2.34 % 1999 : 2.20 % 2004 : 2.77 % 2005 : 2.52 % Ancillary producers Data from EPEA on wage cost (intermediate consumption not taken into account in order to exclude double-counting) Only 1.23 % of environmental output by specialised and secondary producers on average in the period 1997-2002

63. Results: economic impact of the Belgian environment industry (3) Employment (fulltime equivalents)

64. Results: economic impact of the Belgian environment industry (3) Employment (fulltime equivalents) Specialised producers

65. Results: economic impact of the Belgian environment industry (3) Employment (fulltime equivalents) Specialised producers Number of employees 1995: 39108 Share in total employment 1995: 1.02 %

66. Results: economic impact of the Belgian environment industry (3) Employment (fulltime equivalents) Specialised producers Number of employees 1995: 39108 2005: 47371 Share in total employment 1995: 1.02 % 2005: 1.12 %

67. Results: economic impact of the Belgian environment industry (4) Secondary producers

68. Results: economic impact of the Belgian environment industry (4) Secondary producers Number of employees 1995: 23772 Share in total employment 1995: 0.61 %

69. Results: economic impact of the Belgian environment industry (4) Secondary producers Number of employees 1995: 23772 2005: 27176 Share in total employment 1995: 0.61 % 2005: 0.65 %

70. Results: economic impact of the Belgian environment industry (4) Secondary producers Number of employees 1995: 23772 2005: 27176 Share in total employment 1995: 0.61 % 2005: 0.65 % Share in environmental employment decreased from 38% in 1995 to 36% in 2005 (  share in environmental output)

71. Results: economic impact of the Belgian environment industry (4) Secondary producers Number of employees 1995: 23772 2005: 27176 Share in total employment 1995: 0.61 % 2005: 0.65 % Share in environmental employment decreased from 38% in 1995 to 36% in 2005 (  share in environmental output) Specialised and secondary producers together

72. Results: economic impact of the Belgian environment industry (4) Secondary producers Number of employees 1995: 23772 2005: 27176 Share in total employment 1995: 0.61 % 2005: 0.65 % Share in environmental employment decreased from 38% in 1995 to 36% in 2005 (  share in environmental output) Specialised and secondary producers together Number of employees 1995: 62880 Share in total employment 1995: 1.63 %

73. Results: economic impact of the Belgian environment industry (4) Secondary producers Number of employees 1995: 23772 2005: 27176 Share in total employment 1995: 0.61 % 2005: 0.65 % Share in environmental employment decreased from 38% in 1995 to 36% in 2005 (  share in environmental output) Specialised and secondary producers together Number of employees 1995: 62880 2005: 74547 Share in total employment 1995: 1.63 % 2005: 1.77 %

74. Conclusions Study of the environment industry is labour-intensive

75. Conclusions Study of the environment industry is labour-intensive firm level data need to be analysed in detail

76. Conclusions Study of the environment industry is labour-intensive firm level data need to be analysed in detail numerous sources need to be consulted and combined

77. Conclusions Study of the environment industry is labour-intensive firm level data need to be analysed in detail numerous sources need to be consulted and combined Results are instructive

78. Conclusions Study of the environment industry is labour-intensive firm level data need to be analysed in detail numerous sources need to be consulted and combined Results are instructive Environmental production in many NACE categories (also specialised producers)

79. Conclusions Study of the environment industry is labour-intensive firm level data need to be analysed in detail numerous sources need to be consulted and combined Results are instructive Environmental production in many NACE categories (also specialised producers) Could be used as input to complete EPEA (production of environmental services)

80. Conclusions Study of the environment industry is labour-intensive firm level data need to be analysed in detail numerous sources need to be consulted and combined Results are instructive Environmental production in many NACE categories (also specialised producers) Could be used as input to complete EPEA (production of environmental services) Can lead to detection of misclassification of enterprises in National Accounts enterprise register (secondary producers belonging to NACE 90 => double counting problem)