EaP countries have progressively improved their carbon, energy, and material productivity. It has been achieved by implementing various policies and instruments to increase industry efficiency, greening SMEs, cleaning public transport, upgrading infrastructure, launching energy sector reforms, diversifying energy sources, and reducing energy subsidies.
Despite the progressive improvement in carbon, energy and material productivity within the EaP region since the 1990s, there is significant room for improvement compared to EU and OECD averages.
In terms of energy productivity, the three Caucasus countries—Armenia, Azerbaijan, and Georgia—are relatively close to the OECD average, while Moldova and Ukraine are lagging behind. The productivity gap in Ukraine is mostly due to its industrial base, and in Moldova, it is due to its significant agricultural sector (a traditionally low-productivity sector).
The transport sector uses the most energy in all five EaP countries, partly due to a lack of public transport.
Renewables are important in Georgia's (up to 80%), Armenia's (over 60%), and Azerbaijan's (about 50%) energy mix. However, regular droughts from climate change will likely affect the hydropower sector. In Moldova and Ukraine, biofuels and waste hold the largest share of the renewable energy mix. However, compared to EU and OECD averages, solar and wind energy remain underdeveloped.
The pre-independence development patterns in the EaP countries led to a lower material footprint per person compared to the EU and OECD averages. Moldova performs best, with the lowest material footprint of 3.41 tonnes per person.
On average, EaP countries generate about half municipal waste than a person living in the OECD. This partly reflects lower income and consumption levels. However, municipal waste is mostly deposited in landfills. There is room for improving municipal waste management through increased recycling and composting.
Environment at a Glance in the EU Eastern Partnership Countries
4. Environmental resource productivity
Key messages
Context and policy challenges
The EaP countries have a complex legacy from the Soviet era related to environmental resource productivity. A lack of public transport drives significant energy consumption in the transportation sector, but overall consumption by different sectors is not far off of the levels that the EU and OECD member states have. The exception to this rule is Ukraine, where a still significant industrial sector represents a higher-than-average portion of energy. Georgia, with its mountainous landscape, hydropower is already a major contributor to the electricity generation mix, while in Azerbaijan, renewables remain negligible, reflecting the domestic fossil fuel sector. Non-energy material productivity remains low compared to OECD averages. At the same time, while material footprints are also much lower than OECD averages, they will likely rise as economic development in the region continues. A major challenge will be ensuring that economic development is accompanied by more effective resource use and better waste disposal practices.
The indicators in this section capture the efficiency with which economic activities use energy, other natural resources, and environmental services and provide insight into the transition to a low-carbon, resource-efficient economy. This includes information on:
Carbon and energy productivity – economic output generated per unit of CO2 emitted or total primary energy supplied.
Resource productivity – economic output generated per unit of natural resources or materials used.
Multifactor productivity – is a macroeconomic indicator that informs on economy-wide productivity. It considers beneficial and harmful environmental outputs, such as using natural assets, ecosystem services, and air emissions. Enhanced productivity can create new markets and job opportunities.
Main trends and recent developments
Even though the EaP economies have made progress in increasing carbon, energy, and material productivity through various policies and instruments during the past decade, all five are lagging behind the EU and OECD averages in terms of CO2 productivity, generating more CO2 emissions per unit of output/economic value created due in part to a relative lack of energy efficiency measures for heating and industry, lack of efficient rail networks for public transit, relatively cold climates, and the stronger role for industry and agriculture compared to services in the economic mix.
Productivity varies among the EaP countries due to differences in their economic structures, energy sources, and abundance of natural resources. Some countries, such as Ukraine, face particular challenges due to their large industrial and extractive sectors, obsolete technologies, and dependence on fossil fuels. Moldova’s significant agricultural sector is also a source of lower resource productivity. However, Moldova performs best in terms of material footprint, with the lowest material footprint of 3.41 tonnes per person.
On average, EaP countries generate about half municipal waste than a person living in the OECD. This partly reflects lower income and consumption levels. There is, however, room for improving municipal waste treatment through recycling and composting, as currently, in the EaP countries, this waste is mostly deposited in landfills. The exception is Azerbaijan, which, despite having very little recycling, has a relatively high level of incineration – on par with OECD averages. In Armenia and Georgia, there is no recycling at all. Progress is expected as most countries in the region are exploring extended producer responsibility approaches.
Progress with the deployment of renewable energy is mixed in the region. While Moldova, Georgia and Armenia approach or surpass the EU average, Azerbaijan and Ukraine lag significantly behind. Though solar and wind are growing in importance in the region, and deployment has neared EU averages in a few countries in the region, hydropower remains the most important source in the renewable electricity mix, especially in Georgia (up to nearly 80%), in Armenia (over 60%) and Azerbaijan (about 50%). In Moldova and Ukraine, biofuels hold the largest share of renewables in overall energy production, with a significant amount used for heating.
Available indicators
Production-based CO2 productivity
Share of renewables
Renewable energy mix
Energy productivity
Energy consumption by sector
Non-energy material productivity
Material footprint
Municipal waste generated
Municipal waste treatment