Agriculture as the primary sector has gained increased attention in terms of its environmental implications. Based on the reform of Common Agricultural Policy, there is a link of direct payments to requirements that farmers maintain land in good agricultural and environmental condition and obey the relevant environment legislation since 2003. The aim of our work is the evaluation of agri-environmental performance of 27 European Union member states (we do not consider Croatia as it is the newest member state and there are missing data). We employ data envelopment analysis to calculate environmental efficiency, and Malmquist index for quantification of productivity change with respect of environmental performance. The results show that in terms of agri-environmental efficiency scores Hungary, Malta, Luxembourg and Netherland are the only efficient countries over the whole observed period (2008-2012). The average output-oriented environmental efficiency is found to be 2.4 over the five observed years. The resulting productivity change is an average decrease of TFP (9%) over the period 2008-2012.