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Driving Market Penetration of Energy Efficient Appliances Henrik Sundström Vice President Environmental Affairs AB Electrolux.

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Presentation on theme: "Driving Market Penetration of Energy Efficient Appliances Henrik Sundström Vice President Environmental Affairs AB Electrolux."— Presentation transcript:

1 Driving Market Penetration of Energy Efficient Appliances Henrik Sundström Vice President Environmental Affairs AB Electrolux

2 The Electrolux Group in brief Year 2004 Sales EURm 13,200 - Europe 47% - North America39% - RoW 14% Approx. 72,300 team members 55 million products sold every year Products in over 400 million homes (for details see

3 Electrolux environmental strategy Lead the development of environmentally sound products and processes Actively develop demand for these products ER 8100B, winner of the European competition Energy+ the most energy-efficient refrigerator/freezer in Europe 2001

4 Large saving potential by replacing old appliances Total CO 2 emissions in Europe Decided CO 2 emissions savings by EU at the Kyoto Conference 8% Total CO 2 emissions caused by electricity used in white goods 4% 20-25% If the old white goods were changed into new energy efficient products the savings would represent 20 to 25%

5 Cold appliances Labeling Council Directive 92/75 EEC of 22 September 1992 on the indication by labelling & standard product information on the consumption of energy & other resources by Household Appliances Energy Efficiency (Sept. 1997) Directive 96/57/EC of the European Parliament and of the Council of 3 September 1996 on energy efficiency requirements for household electric refrigerators, freezers and combinations thereof Unilateral Industrial Commitments (2002) CECED voluntary commitment on reducing energy consumption of household refrigerators, freezers and their combinations Unilateral Industrial Commitments (2002) Code of Conduct for using A+ / A++ declaration Labeling (2003) Directive 2003/66 EC to divide the existing energy efficiency class A into three new categories A, A+ and A++

6 Cold appliances energy class development A B C D A+ Market Penetration [%] Year A++ A+ A B C D E EEI 2006

7 Electrolux fleet average Reference year 1998 = 100% DishwasherLaundryRefrigeratorFreezerRef/freez.Chest freez %/year3.8%/year4.2%/year4.3%/year4.9%/year1.7%/year

8 Life cycle cost optimisation Life Cycle Cost - LCC Energy Efficiency Index - EEI [%] Average refrigerator performance Consumer benefits DEFABCA+A++ 2 Lowest Lifecycle Cost product Lowest Life Cycle Cost - LLCC 2 3 ERB 3105, Energy+ program (EEI = 32%) 3 Product Development

9 The Energy+ ( ) A promotion program by the European Commission and 13 national energy and environmental agencies. Helping retailers and consumers to identify most efficient products - at least 25% better that energy class A Promoting the development of ultra efficient appliances - competition to develop most efficient products About 40% of the 866 products were produced by Electrolux Electrolux winning four of the five Energy+ awards

10 Market mechanisms Information campaigns Labeling Reduced VAT on energy efficient products Green procurement Rebate schemes for energy efficient products White certificates Tax incentives for producers

11 Energy class distribution - by country 0% 20% 40% 60% 80% 100% EU(9)ATBEDEESFRNLGBITPTDMFISWE A B C A+ Cold appliances Q1 – Q >A 66% >A+ 8%

12 The untapped potential - outdated appliances Large household appliances Total 634 m units 188 m Annual market 58 m units 88 m Products older than 10 years Washing machines 163 m units Refrigerators 265 m units 40 m

13 Environmental saving potential with best available product 0 1,000 2,000 3,000 4,000 5,000 ProductionUseEnd of LifeTotal GWP [kg CO 2 -eq.] 10 year old product, 582 kWh/year ERB 3105, 194 kWh/year Electrolux ERB 3105 Comparison between refrigerator/freezer over 15 years Energy winner  = -63%

14 Cold appliances scenario EU(15) 15 years life time Energy Consumption [TWh/year] Zero Progress Realistic Scenario Ambitious Scenario MEEuP Report, Van Holsteijn en Kemna 2005 ~ 22 TWh ~ 6 TWh

15 Environmental break-even CED fridge-freezers CED - Cumulative Energy Demand 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90, CED [MJ] ”Environmental and economic evaluation of the accelerated replacement of domestic appliances”, June 2005

16 Economic break-even points Cumulated cost fridge-freezers ,000 1,200 1,400 1,600 1, Cost [Euro] ”Environmental and economic evaluation of the accelerated replacement of domestic appliances”, June 2005

17 Electrolux sales of green range products Electrolux Green Range % 5% 10% 15% 20% 25% QuantityGross Profit Note! The Green Range is defined to include 10-20% of the Electrolux products with the best environmental performance. It is revised annually.

18 To conclude The European household appliance industry has been successful with market transformation programs, i.e. the CECED Unilateral Industrial Programs (UIC) UICs have had the objective to achieve a productions weighted average of the Lowest Life Cycle Cost (LLCC) Necessary to involve all actors to promote energy efficient products Incentives are necessary to promote products higher efficiency than LLCC The largest environmental savings would be accomplished by replacing old, inefficient products with new, efficient products

19 For more information ….


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