1. ISPE NJ Supplier Showcase 2013 Meadowlands, NJ Walt Tunnessen US EPA ENERGY STAR Program ENERGY STAR Applications for Pharmaceutical & Health Science Companies

2. Agenda Introductions Context for energy efficiency Background on ENERGY STAR Specific Resources for Pharmaceutical plants Benchmarking Pharmaceutical facilities Earning ENERGY STAR Recognition Finding energy savings 2

3. Introductions Who are you? Where do you work? What are your responsibilities? 3

4. Context Sustainability & the Pharmaceutical Sector: Most companies have established goals. Most big pharma publish sustainability reports. Most big pharma disclose to: –GRI –CDP Pharma sector is now ranked and evaluated on sustainability 4

5. GHG Goal Examples BMS – 15% GHG reduction by 2015 from 2011 baseline. J&J - 20% CO2 reduction from facilities by 2020 from 2010 (no offsets or RECs) Merck – 10% GHG reduction by 2015 from 2011 baseline. (2 nd goal) Pfizer – 20% reduction from 2007 – 2012; commitment to continuous reduction of GHG emissions. (On 3 rd phase of reductions). 5

6. Challenges Internal Pressure for cost reductions Competition for limited capital Validation / GMP concerns External Creditability of environmental statements Public understanding of sustainability or GHG reductions 6

7. Opportunity for energy efficiency Energy savings are available. Energy efficiency goes to bottom line. Saving energy reduces GHG emissions. Energy efficiency is an easy aspect of sustainability to explain. EPA recognition for efficiency improvements provides creditability of sustainability efforts. 7

8. ENERGY STAR Voluntary government program –Established by EPA in 1992 –Helps companies achieve their best in energy efficiency –Provides a cost effective strategy to reduce GHG emissions THE national symbol for energy efficiency –Awareness exceeds 80% –Brand owned & managed by federal government Helps industry to build strong energy management programs and recognizes successes Industry participates –Over 700 industrial corporations are partners –Over 18 specialized industrial sectors address their energy management issues with the program 8

9. The ENERGY STAR Approach Effective Energy Mgmt Practices Strong Company Energy Programs + Organizational Culture Focused on Efficiency = Continuous Energy Performance Improvement + 9

10. ENERGY STAR for Buildings & Plants ENERGY STAR works with companies to develop stronger energy management programs by offering: Instructive Partnership Program Energy Management Guidance Energy Program Resources Benchmarking & Tracking Tools Recognition Opportunities for Achievements Sector Specific Tools & Resources ENERGY STAR helps companies build a culture focused on efficiency. 10 ENERGY STAR Guidelines for Energy Management

11. The ENERGY STAR Partnership Companies can partner with ENERGY STAR. Over 700 manufacturers have joined the ENERGY STAR partnership. Partnering offers more opportunities to leverage ENERGY STAR resources and helps a company. Companies join at the Corporate level. 11

12. Building an effective program ENERGY STAR’s Guidelines for Energy Management –A framework for how to develop an energy program –Based on best practices from successful ENERGY STAR partner companies. –Structured on a “plan-do-act-check” approach. Informed the ISO 50001 standard. –The foundation for the energy programs of thousands of organizations in the U.S. ENERGY STAR Guidelines for Energy Management 12

13. Benchmarking & Tracking Tools ENERGY STAR offers tools to help companies benchmark and track their energy performance: Energy Tracking Tool –Helps establish production based energy intensity metrics, set goals, and track performance. Can be used by any type of facility. Spread sheet platform. Portfolio Manager –Scores the energy performance of selected commercial buildings and warehouses. Web-based energy tracking system for buildings. Plant Energy Performance Indicators (EPIs) –Scores the energy performance of specific industrial sites against the sector nationally. Spread sheet platform www.energystar.gov/industrybenchmarkingtools 13

14. Assistance for specific industries For specific sectors, EPA convenes “Industrial Focuses” Key outcomes include: Energy Guide that identifies energy efficiency opportunities. Energy Performance Indicator (EPI) to benchmark performance of plants in the sector Sharing of best practices Networking among sector’s energy managers 14

15. Focus Peer Exchange Network Industrial Energy Guide Energy Performance Indicator Cement Manufacturing  Published2 nd Version Released  Concrete  PublishedIn development Commercial Baking Cookies & Crackers Breads & Baked Goods  Published Released In development  Corn Refining  Published2 nd Version Released  Dairy Processing  Fluid dairies  Cheesemaking  Ice Cream  PublishedDraft Food Processing  Juice  Potato Products  Tomato Products  Published Released Draft  Glass Manufacturing  Fiberglass  Flat glass  Container glass  Published Draft Released  ENERGY STAR Industrial Focuses 15

16. ENERGY STAR Industrial focuses – cont’d 16 Focus Peer Exchange Network Industrial Energy Guide Energy Performance Indicator Motor Vehicle Manufacturing  Automobile Assembly Plants  Power train Plants  Published 2 nd Version Released In development  Metal Casting  In processDraft (iron) Petrochemical Manufacturing  PublishedDraft Petroleum Refining  Published Private system recognized by EPA  Pharmaceuticals  PublishedReleased  Printing  In processExploring Options Pulp & Paper  Integrated Mills  Pulp Mills  Published Released  Steel  Primary Steel  Mini Mills  Published Draft

17. Specific Resources for Pharma API and Fill – Finish manufacturing sites –Plant Energy Performance Indicator (EPI) –ENERGY STAR Certification –ENERGY STAR Challenge for Industry –Pharmaceutical plant Energy Efficiency Savings Guide –Best Practice & Networking with ENERGY STAR Pharma Focus Administrative & Office Buildings, Warehouses –Portfolio Manager –ENERGY STAR Certification All Manufacturing Plants and Labs / R&D –ENERGY STAR Challenge for Industry –Energy Efficiency Savings Guide –Best Practice & Networking with ENERGY STAR Industrial Focus 17

18. Energy Guide Contents: Process energy flows and use Energy management strategies Electric and thermal systems Non-capital measures, short-payback measures, and capital projects Common plant systems (motors, lighting, boilers, compressors, etc. ) Ventilation & HVAC Clean room & Labs On-site generation www.energystar.gov/energyguides 18

19. Using the Energy Guide Identify potential projects & measures. Evaluate payback and savings estimates on proposed projects. Train new and existing employees engaged in energy management. Use to establish best practice standards. 19

20. Assessing Plant Energy Performance ENERGY STAR Energy Performance Indicators (EPIs): Sector-specific energy benchmarking tools for industrial sites. Compare the energy efficiency of a plant against the performance of the industry. Based on annual energy use and production (energy intensity). Normalized for product mix, size, location, and other factors. Establishes an energy performance scale for the industry. 20

21. The Pharma Plant EPI What it does: Compares your plant’s energy performance against the industries’. Rates your plants on scale of 1 to 100. Provides scenarios for average & efficient plants based on your production characteristics. 21

22. What do you mean by…? Pharmaceutical Manufacturing: 1)drugs in pharmaceutical preparations intended for internal and external consumption in dose forms such as ampoules, tablets, capsules, vials, ointments, powders, solutions, and suspensions; or 2)in-vivo diagnostic substances; or 3)combinations of the two. 22

23. EPI – Production & Energy Inputs 23

24. EPI – Results 24

25. Interpreting Results 1 100 7550 Invest Tune Reward & Learn 25 Invest & Tune High scoring sites provide lessons learned and label candidates RCx & O&M improvements yield savings and label candidates Best investment opportunities are in lower quartiles - greatest potential for improvement Energy Performance Score 25

26. ENERGY STAR Certification Requirements: Site must be in the United States (includes territories) 50% of square footage benchmarked must be part of manufacturing. Energy Performance Score of 75 or higher No major Clean Air Act violations within the past 3 years of application –High Priority Violation (HPV) + large fine No criminal conviction for an environmental crime within past 5 years 26

27. Verification Process Two Step verification process for applying for ENERGY STAR: Step 1 - Data Integrity & Accuracy Check Internal review conducted at the site or within the company by a Professional Engineer. Step 2 – EPI Integrity & Accuracy Check External review conducted off site. 27

28. Application materials Available on line at: www.energystar.gov/industry Look for link for “Earn Recognition” Click on link for “Plant Certification” 28

29. Award materials Once your application is approved, you receive: Certification certificate ENERGY STAR label decal Access to on-line store to purchase Flags, Banners, and Plaques. Letter to CEO Profile on ENERGY STAR web site Communication materials to help promote achievement. The ENERGY STAR is an annual award! 29

30. Certified Pharmaceutical Plants 30 ENERGY STAR Labeled Buildings as of August 26, 2013 Building NameBuilding OwnerCityStateLabel Year(s) Allergan Pharmaceuticals Waco Texas Allergan, Inc.WacoTX 2012, 2011, 2010, 2009, 2008 Boehringer Ingelheim Roxane, Inc. ColumbusOH2010, 2009 Intervet/Schering-Plough Animal Health MerckElkhornNE2012, 2011, 2010, 2009 Las Piedras MerckLas PiedrasPR2012, 2011, 2010, 2009 Merck Healthcare Products MerckClevelandTN2011, 2010, 2009, 2008 MMD Arecibo MerckAreciboPR2012 Newark AstraZeneca Pharmaceuticals LP and Astra Zeneca LPNewarkDE2011, 2010, 2009, 2008 Westborough AstraZeneca Pharmaceuticals LP and Astra Zeneca LPWestboroughMA2011, 2010, 2009, 2008

31. What if we don’t qualify? Set a goal to achieve the ENERGY STAR in the future. Take the ENERGY STAR Challenge for Industry: –Recognition for 10% reduction in energy intensity. www.energystar.gov/industrychallenge 31

32. Challenge for Industry What does it recognize? 10 % improvement in energy intensity within 5 years or less. Calculated against an internal baseline at an industrial site. 32

33. Who can participate? Any manufacturing site can take the Challenge. –No offices or warehouses. International sites of ENERGY STAR Partner companies can take the Challenge. To get official recognition, the site’s parent company must be (or become) an ENERGY STAR partner. –A site is permitted to take the Challenge first, and their company can become an ENERGY STAR partner at a later date. 33

34. How it works Sites participate by: Selecting an energy intensity metric Establishing a baseline. Setting a 10% improvement in 5 years goal. Registering for the Challenge. Verifying savings if goal is achieved. 34

35. What you get Certificate Communications materials Profile on energystar.gov Congratulations to CEO Bragging rights 35

36. Why take the Challenge? Creates an objective for your energy program and sites. Reinforces energy management best practices. Opportunity to link your energy efforts to ENERGY STAR and a broader campaign. Opportunity to leverage the ENERGY STAR brand in communicating your accomplishment. Opportunity to gain recognition for your achievements. Demonstrates leadership by setting a goal. 36

37. The Fine Print ENERGY STAR is a voluntary program; there are no legal commitments. Achievements are rewarded when you report them to us. No annual reporting is required. If a site does not achieve the Challenge, you are not penalized. To make your reduction credible, a professional engineer (PE) must verify it. To be recognized for achieving the Challenge, your company must join ENERGY STAR at the corporate level. 37

38. Health Sciences Participation Taking the Challenge for Industry: 50 Pharmaceutical and medical device sites participating. 75 Personal Care products 730+ sites overall have taken the Challenge Achieved the Challenge for Industry: 4 Pharmaceutical plants 33 Personal care product sites 200+ sites overall have achieved the Challenge –20% average reduction in 2 years. –50,135,000+ MMBTUs saved Enough energy to power 1,150,000 homes annually –10,340,000 metric tones of CO2e avoided * As of August 2013 38

39. Managing Building Performance Track & Benchmark: –Office & Admin buildings –Warehouses –Data Centers –Other non-industrial space types Reporting and goal setting tools Water benchmarking 39

40. Value of Benchmarking Consistent benchmarking in buildings results in energy savings and improved performance 40 Source: http://www.energystar.gov/ia/business/downloads/datatrends /DataTrends_Savings_20121002.pdf?8d81-8322 40

41. Certified Buildings In New Jersey: –380+ buildings have earned ENERGY STAR Certification NJ Pharma & Health Science Companies with ENERGY STAR Buildings: Johnson & Johnson (2) Merck (3) Pfizer (1) 41

42. Finding energy savings! Some steps to consider: Partner with ENERGY STAR Assess your energy management practices Engage employees Look for treasure! 42

43. Partner with ENERGY STAR Abbott* Allergan** AstraZeneca* Aventis Bayer * BD* Biogenidec Boehringer-Ingelheim Bristol-Myers Squibb* Covidien* Eli Lilly & Company* Genzyme* Glaxo Smith Kline * Johnson & Johnson* Mallinckrodt* Merck & Co., Inc.** Novartis Perrigo Pfizer Inc.* Roche* Companies participating in the ENERGY STAR Pharmaceutical Focus http://www.energystar.gov/industrialmeeting 43

44. Industrial Service & Product Providers Companies offering energy efficiency services or products can become ENERGY STAR partners. Case studies on successful projects are profiled in the iSPP Directory 44

45. Evaluate your energy program Does your company have an energy program? –At corporate? At sites? Whose the POC? Does your company have an energy policy? What are the corporate and site energy goals? What is the process for submitting projects? –Is there capital for energy projects? 45

46. Assess your energy practices Use the Energy Program & Facility Assessment Matrices Evaluate your energy program practices & identify gaps 46

47. Engage employees Use posters to raise awareness of plant energy spend, goals, etc. Show people how they can make a difference. Help people make the connection to saving energy and money at home. Use free ENERGY STAR resources. GET PEOPLE INTERESTED! 47

48. Energy Treasure Hunts Enlist employees to find energy savings. Focus on operational and low-cost upgrade opportunities. Builds internal capability and ownership of implementation of projects. Guidance from ENERGY STAR available this fall! 48

49. Common opportunities Air change rates – can they be lowered? Turning off fume hoods. Turning off un-necessary equipment. Find & fix compressed air and steam leaks. Lighting levels and controls HVAC set points Bigger projects: Air change rates Lighting upgrades HVAC retro-commissioning Motor upgrades Chiller optimization 49

50. Learn more at www.energystar.gov 50

51. Questions / Comments