The majority of European large grocery goods companies have now environmental policy statements on packaging. Reading through them, one has the impression that packaging is undergoing a process of change, aimed at the reduction of its environmental impact. The word "sustainability" ; is used in almost all of these statements. But is this impression correct? Does the European packaging industry innovate to reduce the environmental impact of packaging? How does it do it? Is the process generating "green" innovations any different from that generating innovations otherwise oriented? Which sort of stimuli set "green" innovative processes in motion? How do innovating activities respond to environmental regulation? These questions share a microeconomic focus. This paper reports the results of an empirical investigation into the microeconomics of environmental innovation in the European packaging industry. It does so by a rather unusual research methodology, consisting of a two-stage investigation of the innovation generating process in the packaging industry, and of the role played by environmental concerns in it. The first stage consists in round of talks with industry experts and firms' spokespersons in Germany, the UK, France and Italy, that highlighted innovation strategies and generated hypothesis regarding the microeconomics of environmental innovation, i.e. what explains the choice of a particular firm of steering its technical progress on what Giovanni Dosi would call an environmentally friendly technological trajectory. The second stage consists in the setting up of a database of innovative packings on which these hypothesis were tested. Chapter 1 provides background information on the European packaging filiére and data sources; Chapter 2 reports on the innovation strategies adopted by different groups of players within the filiére and spells out a set of microeconomic hypothesis; Chapter 3 presents an econometric model to test them.