INTERNATIONAL: Western European Environmental Businesses Boom Booming in Western

Ann Kulik

On par with North America, Western Europe has become a hub for environmental technology.

According to a study by German business consultant Helmut Kaiser, Western Europe and North America now have equally large worldwide expenditure shares in environmental technology, for a combined total of more than 70 percent of the world market.

Approximately one-third of Western Europe's market volume is in the solid waste sector (see figure). Kaiser forecasts that this segment will grow through the year 2005, even as the total volume expands by 70 percent.

Currently, Germany is leading the Western European environmental market. Approximately 40 percent of the country's export business is in the environmental sector, according to the journal Korrespondenz Abwasser. Further, Kaiser estimates Germany's environmental technology market share in Western Europe to be 31 percent. Runners-up are France, Great Britain and Italy, with about 14, 12 and 11 percent of the market value, respectively.

The Federal Environmental Agency in Berlin reports that Germany's strongest lead is in waste management. Advances in recent years have occurred in the instrumentation and controls field (I&C).

The Netherlands also has been experiencing explosive growth in environmental business, the Dutch Association of Environmental Equipment and Technology Suppliers reports. Areas of specialization include water treatment, waste management and soil remediation.

Firms active in the Dutch market numbered 525 in 1992, up from 245 in 1990, providing 35,000 jobs in 1993. For continued growth, the environmental product sector invests two times as much money in research and development (R&D) as other industrial sectors.

Exports to other European Union countries account for half of the Dutch environmental firms' business, with 20 percent of sales going to Germany alone and 10 percent each to France and England. Another 10 percent of sales are to the U.S. and Canada, and more than 6 percent to eastern Europe.

In Switzerland, the Federal Laboratories for Materials Testing and Research provides R&D and knowledge transfer to promote technological advancements. Areas of focus include plastics recycling and disposal, paper and packaging, environmental product compatibility and safety technology.

Another specialty is communication - to bring science, industry, government and the general public together; build a legislative framework for applying new technology; counteract misinformation that would hinder acceptance; and optimize marketing techniques.

Central and eastern Europe are an immense market. The OECD Observer reports that, "on the whole, the provision of [environmental] services is not worse than, for example, in the Mediterranean countries."

However, the concentration of heavy industry and neglect of public environmental infrastructure by former socialist regimes caused significant pollution and health problems that are no longer tolerated.

Germany's government estimates that its eastern states require an investment of more than 200 billion marks (roughly $140 billion) in modern pollution control and clean-up technology for water, sewerage, waste, air and contaminated sites by 2005.

Municipal waste quantities have shot upward since the transition from centrally planned economies, where minimal consumer goods were available, to a western-style market-based system. Collection, hauling, recycling and landfill technologies are now in high demand.

A decisive factor in Western Europe's prominence in environmental technology is legislation that sets high environmental standards, thereby driving innovation and investment. In this respect, Germany has had a pioneering role in the European Union, where laws continue to be harmonized.

Another key factor is heightened pubic interest in waste management policy, which has fueled the demand for technological innovation. Former German Environment Minister Klaus Topfer praised public involvement for keeping German industry in the lead. In Central and Eastern Europe, citizens' new freedom to protest environmental infringements is spurring improvements, as are closer coordination of environmental and economic policies and enforcement mechanisms.

Increasingly, the environmental industry is consolidating in a climate of fierce competition. Although new firms continue to enter the market, today's demand for universal rather than partial solutions to complex problems calls for the resources of large companies. Mergers and buy-outs reportedly are done by a limited number of predominantly British, German and French firms.

The latest developments in a full range of areas, including waste avoidance, will be on display at the seventh international ENTSORGA environmental trade fair in Cologne, Germany, March 19 to 23.