INTRODUCTION

The transition toward a green economy has become a central pillar of economic policy in the European Union, reflecting the need to reconcile economic growth with environmental sustainability. As defined by international frameworks, a green economy is one that is low-carbon, resource-efficient, and socially inclusive, aiming to reduce environmental risks while generating new economic opportunities. Achieving this objective requires not only the expansion of environmentally sustainable sectors, but also the transformation of traditionally carbon-intensive (“brown”) sectors, where the bulk of emissions and resource use are concentrated.

Monitoring progress toward this transition therefore relies on a comprehensive set of indicators capturing environmental pressures and resource efficiency. This research note contributes to this growing body of work by examining the dynamics of selected indicators of green economy development in the European Union (EU) as a whole, focusing also on the integration of green activities within conventional brown sectors.  This analysis provides insight into how existing environmental objectives translate into actual economic restructuring, labor market adjustments, and value creation within the economy.

The analysis draws on Eurostat data, with a particular focus on indicators related to green jobs and the expansion of the Environmental Goods and Services Sector (EGSS). Apart from these indicators, we observe dynamics of core indicators commonly used in the literature, including greenhouse gas emissions, energy intensity, the share of renewable energy, and measures of resource productivity and circular material use. Due to data limitations, for some indicators, the analysis focuses on a group of six EU countries  (EU 6), for which consistent time-series data are available over the period 2016-2023. 

The analysis indicates that the green transition is characterized by a gradual shift toward a greener economic structure. There is a clear expansion of environmentally sustainable activities (captured within the Environmental Goods and Services Sector), reflected in rising employment, value added, and investment. This growth is accompanied by the increasing integration of green activities into traditionally carbon-intensive sectors. However, progress remains uneven across indicators and sectors, and the data points to significant cross-country differences. In particular, a relatively small group of countries accounts for a large share of green economic activity: the EU 6 countries represent nearly half of total EGSS employment and value added within the European Union. Notably, as of 2023, Italy, Germany, and France account for the largest shares in both dimensions.

While the analysis shows that the green economy in the EU is expanding, its scale remains limited relative to the overall economy. Specifically, value added in the Environmental Goods and Services Sector reaches €488 billion for the EU 25 group as of 2023, accounting for only about 3.1% of total value added. In terms of exports, the share of environmental goods and services remains relatively small (around 1.7%), indicating limited integration into trade. At the same time, investments in climate change mitigation amount to approximately 0.8% of GDP, while environmental protection investments account for about 0.4%, suggesting that, despite growth, their overall scale remains modest.

At the same time, progress is observed in environmental outcomes, indicating that the development of the green economy is beginning to translate into tangible environmental improvements. Energy intensity in the EU has declined significantly, resource productivity has increased (to around €3 per kg), and greenhouse gas emissions show a downward trend. The share of renewable energy (25.2%) and the circular material use rate (12.2%) remain below the 2030 targets.

Overall, these trends suggest that, despite the progress achieved, further acceleration of the green transition will be necessary to meet the European Union’s 2030 targets and long-term climate objectives.