1. Dr. Kicherer Eco-Efficiency 1 Validated Eco-Efficiency Analysis Method Eco-Efficiency Analysis- A Sustainability Decision Tool for BASF A. Kicherer (Ludwigshafen, Germany)

2. Dr. Kicherer Eco-Efficiency 2 The Ludwigshafen site BASF’s largest production site worldwide 8,000 sales products 2,000 buildings 70 miles of roads 150 miles of rail track 35,000 people (83,000 worldwide)

3. Dr. Kicherer Eco-Efficiency 3 SEEbalance ® - Analysis* * being developed Eco-Efficiency- Analysis Sustainable Development is based on three Pillars Society Ecology Economy Sustainable Development

4. Dr. Kicherer Eco-Efficiency 4 What is Eco-Efficiency Analysis?  Method for the comprehensive assessment of products and processes.  Ecological and economic aspects are given equal weight in assessments.  The products are analyzed from the angle of the end customer.  (Future) scenarios and effects of various action options are presented.  Eco-efficiency analysis is a standard tool in the BASF Group; more than 240 analyses have been carried out.

5. Dr. Kicherer Eco-Efficiency 5 Project Furniture Clear Coat

6. Dr. Kicherer Eco-Efficiency 6 Alternative Systems for Furniture Clear Coat Define comparable products Determine demand- specific benefit Coating of 1 m² furniture surface PUR-lacquer (market leader) UV-powder (new technology)UV-water (new technology) NC-lacquer (established technology)

7. Dr. Kicherer Eco-Efficiency 7 Further Development of UV-Water Technology Improves the Eco-Efficiency User spezific benefit: Coating of 1 m² furniture surface Circle size: Market share in Europe Total costs (normalized) Environ. Impact (normalized) 0,3 1,0 1,7 0,31,01,7 PUR- lacquer UV-powder UV-water NC-lacquer Further development Low eco-efficiency High eco-efficiency

8. Dr. Kicherer Eco-Efficiency 8 Communication BASF-Coatings develops new, environmentaly friendly lacquers, even if they are innitially somewhat more expensive. Together with customers improvements can be initiated which reduces the costs. The eco-efficiency analysis can easily communicate these future trends and improvements.

9. Dr. Kicherer Eco-Efficiency 9 Energy consumption Raw material consumption Area requirement 20% 20% 10% 20% 10% 20% Emissionen Toxicity potential Risk potential Emissions Assessment Factors of the society Emissions Water emissions 35% Wastes 15% Air emission 50% 50% 20% 20% 10% Air emissions 50% Greenhouse warming potential Ozone depletion potential Photochemical ozone creation potential Acidification potential

10. Dr. Kicherer Eco-Efficiency 10 Acceptance of the Method by Stakeholders, NGOs and Science... Dr. Reinhard Loske Mitglied des Deutschen Bundestages Umweltpolitischer Sprecher Bündnis 90/DIE GRÜNEN Öko-Institut e.V.; Bereiche Chemie und Umweltrecht...Basically, the large number of indicators used in eco-efficiency analysis make relatively reliable statements possible.........Politically, it is worth considering how this tool can find wider application...........The sensitivity considerations carried out in the eco-efficiency analysis make sense and provide good orientation as regards further ecological and economic optimizations....

11. Dr. Kicherer Eco-Efficiency 11... and the whole World. Pilot project with UNEP/UNIDO to improve the eco-efficiency of Moroccan dyehouses Assessed since 2002 as one of the world’s most sustainable chemical companies, partly as the result of the development of eco-efficient products

12. Dr. Kicherer Eco-Efficiency 12 What does BASF use Eco-Efficiency Analysis for? Internal External Politics Discussion with opinion makers in political decisions Strategy Decisions on investments Marketing External customers optimize their products and processes with eco- efficiency analyses Research/product development Prioritization of research projects

13. Dr. Kicherer Eco-Efficiency 13 Consequences of Eco-Efficiency Analyses costs (normalized) Environmental Impact (normalized) 1,0 1,0 highlow high low Depending on the position of the analysed product, different strategic recommen- dations are given. bring to market! reduce environmental impact! develop alternatives! reduce costs!

14. Dr. Kicherer Eco-Efficiency 14 Examples for More Profit Created Through Eco-Efficiency Analysis  The ROI is therefore much smaller than 1 year An eco-efficiency project with a coatings customer resulted in a additional business of about 400.000 € per year. An annual saving of 100.000 € could be obtained by an eco-efficiency analysis for transportation of chemicals. The eco-efficiency analysis with an American customer in the aggregate sector increased the annual sales of 2.200.000 US$ by about 10%

15. Dr. Kicherer Eco-Efficiency 15 Why is Eco-Efficiency Successful?  Quantitative results with a clear assessment  Simple and impressive illustration of the results  Scenario- and sensitivity analysis  Short timeframe (2 - 6 month)  Low costs for the analysis  Combination of LCA with LCC

16. Dr. Kicherer Eco-Efficiency 16 Our Homepage: http://www.oekoeffizienzanalyse.de The Eco-Efficiency Team:

17. Dr. Kicherer Eco-Efficiency 17 Back-up slides

18. Dr. Kicherer Eco-Efficiency 18 The detailed Results can be read off in the Ecological Fingerprint Energy consumption Toxicity potential Toxicity potential Risk potential Emissions Materialconsumption Powder from plants 0,0 0,5 1,0 Granules,biotechno-logically Granules, synthetically Solution, 40% Solution, electro- chemically

19. Dr. Kicherer Eco-Efficiency 19 Raw material costs are normally small compared to total costs 0 20 40 60 80 100 120 140 160 DM/m² thermal insulation system NeoporStyroporMineralfiber House Insulation Systems Disposal Transports Adhesive and plaster Aluminium edges handscrafts Insulation material

20. Dr. Kicherer Eco-Efficiency 20 Are you interested? How can you proceed?  Get in touch with us. (http://www.oekoeffizienzanalyse.de)  We will provide you with a tailor-made proposal.  Your own efforts to determine the input data are relatively low.  The total costs are between € 20,000 and 30,000 (depending on the complexity).

21. Dr. Kicherer Eco-Efficiency 21 Opportunities for Marketing and Sales  Direct comparison with your competitor  Show your customer the superiority of your product  Label, broschures, publications  Direct comparison with your competitor  Show your customer the superiority of your product  Label, broschures, publications  Comparison of your customers competitors  Demonstrate your customer the superiority of his product.  Common communication, label  Help your customer to optimize his processes Added value increases customer relation  Comparison of your customers competitors  Demonstrate your customer the superiority of his product.  Common communication, label  Help your customer to optimize his processes Added value increases customer relation

22. Dr. Kicherer Eco-Efficiency 22 Development of environmental protection in companies 80‘s90‘s00‘s End-of-pipe technology e.g. Waste water treatment plants, Production inte- grated environ- mental protection e.g.: Residual materials of a procedure are raw materials of another Product integrated environmental protection e.g.: Green Engineering Sustainable Development Social, economical and ecological aspects of products

23. Dr. Kicherer Eco-Efficiency 23 Production-related waste and emissions Per metric ton of BASF Aktiengesellschaft products 19912001 Air Water Landfill 3.6 kg 1.8 kg 22.8 kg Total: 28.2 kg 1.0 kg 1.8 kg 3.9 kg Total: 6.7 kg

24. Dr. Kicherer Eco-Efficiency 24 Jeans Dyeing Project

25. Dr. Kicherer Eco-Efficiency 25 Determine demand- specific benefit Dyeing of blue denim for the production of 1000 jeans Define comparable products Select BASF product synthetic indigo granules Indigo powder from plants Alternative Systems for Indigo dying biotechnological Indigo granules synthetical indigo solution,40%, synthetical lndigo solution, 40%, electro- chemical dyeing process

26. Dr. Kicherer Eco-Efficiency 26 In the Eco-Efficiency Portfolio, the Environ- mental Impact is plotted against the Costs Benefit: 1.000 jeans dyed with indigo Environ. Impact (normalized) Total costs (normalized) Low eco-efficiency High eco-efficiency 1,0 1,6 1,61,00,4 0,4 Plants Granules Biotechnological Solution Electrochemical The portfolio is based onto a principle idea of Schaltegger and Sturm 1992

27. Dr. Kicherer Eco-Efficiency 27 Consequences of the Analysis Construction of a plant for the production of 40% indigo solution (beginning production at the end of 1999) Increased R&D expenditure for the electrochemical process (construction of a pilot plant) Communication with customers and professional circles  Success of the measures: Increase of the market share from 2% (1999) to approximately 40% (2002)