Basics of Cleaner Production ACME Applying CLEANER PRODUCTION to MULTILATERAL ENVIRONMENTAL AGREEMENTS Basics of Cleaner Production SESSION 2 United Nations Environment Program Division of Technology Industry and Economy Swedish International Development Agency

OUTLINE Objectives of this session 1/ Background 2/ Cleaner Production > What are the different type of response to pollution ? 2/ Cleaner Production > What are the principles of CP and its benefits ? 3/ Implementation > What kind of options can you normally identify with CP? 4/ Methodology > How do you carry out the CP assessment? 5/ CP centers > What are the activities of Cleaner Production Centers ? Slide 2 – Objectives of the session At the end of this session you should understand what Cleaner Production (CP) is, what sets it apart from other environmental management tools and how CP can be used as a hands-on tool for environmental improvement in industry. You should also understand the challenges and enabling measures associated with CP, as well as the motivation for industry to make use of CP. ACME - Session 2 - Basics of Cleaner Production - 2 / 21

BACKGROUND Responses of businesses to pollution 2 1 3 4 PASSIVE REACTIVE Dilution and dispersion PASSIVE Ignore pollution 2 1 CONSTRUCTIVE End-of-pipe treatment PROACTIVE Cleaner Production Slide 3 – The responses of businesses to pollution This slide shows the typical steps that people, companies and governments evolve through in their approach to dealing with pollution: 1. Ignoring the problem, which usually leads to disasters sooner or later. 2. Diluting pollutant concentrations by discharging to streams, rivers and oceans, which also leads to disasters, but often at a later stage and at a grander scale. Refer e.g. to “the black triangle” in central Europe; an area covering large parts of Poland, Germany, Czech republic, Slovakia and Hungary, wherein long term air pollution from coal fired power plants in the region has lowered the pH value in water and soil to a level where many plant species cannot survive 3. Treating pollution by end-of-pipe technology (i.e. after wastes have been generated). This is usually effective. And expensive. 4. Preventing pollution/waste generation at source itself; i.e. through preventive approaches such as Cleaner Production. This cannot always entirely replace the end-of-pipe solution but can in most cases drastically reduce the volume of waste/pollution that need treatment, and thereby also associated costs. This slide can be used for discussing the present status in the country on the prevailing approach to how to address environmental problems (at company level and at government level). Also make a reference to the MEAs. E.g. the Basel Convention took initially a reactive approach by focusing on how to handle waste that was already generated. In the last couple of years, the Basel convention has more and more emphasized for also a more preventive approach, minimizing waste generation at the source. 3 4 ACME - Session 2 - Basics of Cleaner Production - 3 / 21

ENVIRONMENTAL STRATEGY CLEANER PRODUCTION Definition by UNEP “ Cleaner Production is the continuous application of an integrated, preventive environmental strategy towards processes, products and services in order to increase overall efficiency and reduce damage and risks for humans and the environment.” Continuous Processes Humans RISK REDUCTION Preventive Slide 4 – Definition This is the formal definition of CP, as defined by UNEP and UNIDO. Key features are: Continuous: CP is not a one-time project. It is a continuous environmental management approach. Preventive: CP seeks to prevent pollution from being generated, rather than cleaning it up after it is generated. The simple reason is that this saves costs. Integrated: To be effective, CP should be integrated into the daily operations of a company. In the same manner as companies do not do economic management only one time, but are doing this as an on-going integrated part of operations. Processes, products and services: Opportunities to improve the environmental (and social and economic) performance of a company can be identified through CP, not only by adjusting HOW things are done (processes) but also WHAT is done (products) and WHAT SYSTEMS (services) are applied. The end result of CP not only benefits the environment, but also the safety and health of staff, neighbours and customers. Although not included in the definition, CP usually also generates significant economic savings for the company. CP is the name that UN and many other organizations use. However, in some parts of the world CP is known under other names, such as: Eco-efficiency; Waste minimization; Pollution prevention; Green productivity; These are all by and large different names for the same approach. ENVIRONMENTAL STRATEGY Products Integrated Services Environment ACME - Session 2 - Basics of Cleaner Production - 4 / 21

CLEANER PRODUCTION CP is… In other words, CP is a tool to answer 3 questions: CP is a method and tool to identify where and why a company are losing resources in the form of waste and pollution, and how these losses can be minimized. CP assessment CP options CP options Less waste Less waste Improved productivity Slide 5 – CP is… If we for a moment forget the formal definition of CP and just think about what it really is: CP is a practical tool for improving the production efficiency. For the environmentalist this is the same as reducing the environmental impact. For the company man, this is a way to improve the economics of the company. By carrying our a CP assessment in a company we generate CP options (opportunities for improving the efficiency) By implementing these CP opportunities the company will generate less waste (prevent that waste and pollution is generated) By generating less waste, we make better use of the resources that are managed in the process, which makes the productivity better. ACME - Session 2 - Basics of Cleaner Production - 5 / 21

CLEANER PRODUCTION Key elements Cleaner Production in 7 points: 1. CP adds value to the EMS: it places emphasis on pollution prevention rather than control, with clear improvement in environmental performance. 2. CP does not deny or impede growth but insists that growth can be ecologically sustainable. 3. CP is not limited only to manufacturing industries of a certain type or size, it can be applied towards the provision of services also. 4. CP includes safety and protection of health. 5. CP emphasizes risk reduction. 6. CP improves immediate efficiency as well as long-term efficacy. 7. CP is Win-Win-Win factor: it benefits the environment, communities and businesses. Slide 6 – Key elements This slides summarizes some additional key features of CP. In this context it may be timely to explain the relation between CP and Environmental Management Systems (EMS): CP is a practical tool to achieve efficiency improvements (environmnetal and economic) in a company. It does however not define where the company is now or where is will go (goals) in terms of environmental performance. It does not need external certification or approval and can often be implemented at virtually no cost. An EMS on the other hand is a navigational instrument for a company. It defines wehere the company is now (how it performs environmentally in relation to legislation and stakeholder expectations), what the environmental policy is of the company, and where the company wishes to go in the future (e.g. to achieve certain environmental standards or goals). An EMS can also be certified (e.g. through the ISO 14.001 standard), which requires external certification and is often time consuming and costly. CP can however be used as a tool to realize the goals that are set up in an EMS, and is also many times a first step for a company to get an understanding of how it is performing environmentally, and thereby adopting an EMS (certified or not). However, many companies, especially smaller ones, have found that while an EMS is often difficult to establish, CP is a comparatively simpler tool that does not provide all the advantages of an EMS, but neverthelss generates substantial advantages for the company, both from an environmental and economic perspective. ACME - Session 2 - Basics of Cleaner Production - 6 / 21

CLEANER PRODUCTION Economics of Cleaner Production Slide 7 – Economics of Cleaner Production A key feature of CP that deserves to be highlighted: It is a common misunderstanding that environmental care always come with a cost. It is true that End of Pipe solutions (treatment) usually requires investments that will not generate and financial pay-back. CP on the other hand normally generates savings for the company, which means that CP investments usually have a pay-back. Often the pay-back time for CP investments is very short. However, as was mentioned in previous slides, CP cannot always eliminate pollution and waste generation, but at last minimize it. Therefore end-of-pipe solutions should not be discarded entirely but one should realize there is a hierarchy to pollution reduction: First prevention, and then treatment (and in that way the treatment costs are also reduced, as the amount of waste that requires treatment has already been minimized) ACME - Session 2 - Basics of Cleaner Production - 7 / 21

CLEANER PRODUCTION Operational improvements to business What are the benefits for industrials ? > CP improves products and services > CP lowers risks (liability) > CP improves company image > CP improves worker’s health and safety conditions > CP reduces waste treatment and disposal costs > CP can be integrated with the business EMS > CP saves costs on raw material, energy and water > CP makes companies more profitable and competitive > CP can help implementing MEAs Slide 8 – Operational improvements to business So CP has many advantages. From the company perspective, the items in this slide are often good reasons to start working with CP. CP can also be seen as a four-in-one tool: A management tool; An economic tool; An environmental tool; A quality improvement tool. ACME - Session 2 - Basics of Cleaner Production - 8 / 21

IMPLEMENTING CP Cleaner Production categories PRODUCTION PROCESS OPERATION TECHNOLOGY PRODUCTION PROCESS INPUT MATERIALS PRODUCTS Slide 9 – CP categories The next slides will explain in what areas CP options and measures can normally be identified, and how these can contribute to improved production efficiency and reduced environmental impact. These options can be divided into 5 categories: 1. Input substitution (changing raw material to e.g. less toxic or more suitable materials) 2. Technology change (better process control and new technologies); 3. Good operation practises (improved worker skills; good production management) 4. Product modification. 5. On site recovery/reuse. All losses, in productivity, risks and inefficiency can be categorised in one of these areas. And mention the clear relationship with the MEA’s !!!! Relationship with MEAs: WASTE & EMISSIONS 1- UNFCCC/Kyoto – Green House Gas emissions 2- Basel Convention – Waste minimisation 3- Stockholm Convention – Avoid unintentionally produced POP’s (PCB’s, dioxins and furans) ACME - Session 2 - Basics of Cleaner Production - 9 / 21

IMPLEMENTING CP Option 1: Input material substitution OPERATION TECHNOLOGY PRODUCTION PROCESS Change INPUT MATERIALS PRODUCTS Slide 10 – Option 1: Input materials substitution The first category consists of options related to changing the input materials to materials that are: less toxic; renewable; have a longer service life-time in production. Many times companies use low quality raw materials that they are purchasing at a lower price. However, a common CP option is to pay more for better quality materials that generates better yield, fewer production disturbances and sometimes also better product quality. This is often off-setting the higher costs for the better raw materials. 1/ Change inputs materials, water and energy: WASTES & EMISSIONS > Replacing toxic or harmful materials with less toxic > Use of renewable materials > Use materials with longer lifetime > Material purification ACME - Session 2 - Basics of Cleaner Production - 10 / 21

IMPLEMENTING CP Option 2: Technology change PRODUCTION PROCESS Improve equipment and process control New technology OPERATION TECHNOLOGY PRODUCTION PROCESS Change INPUT MATERIALS PRODUCTS 2/ Technology change: Slide 11 – Option 1: Technology change The second category is technology change, which can be divided into: New technology. This is often referred to as “Cleaner Technology” (CT). Note that CT is part of CP but that there are many more improvement options in CP than only technology change!!! (CT is often confused with CP!) Equipment modification: modify the existing production equipment and utilities in order to run the processes at higher efficiency and at lower waste and emission generation rates. Improved processing conditions: modify operational procedures (pH, T, Flow, Pressure, Dosing etc.); equipment instructions and/or process record keeping in order to run the processes more efficiently and at lower waste and emission generation rates. > Replacing > Equipment modification > Optimal process conditions > Increased automation > Improved process control > Improved equipment lay-out WASTES & EMISSIONS ACME - Session 2 - Basics of Cleaner Production - 11 / 21

IMPLEMENTING CP Option 3: Good operation practices PRODUCTION PROCESS Improve equipment and process control New technology OPERATION Improved management TECHNOLOGY Workers skills & process control PRODUCTION PROCESS Change INPUT MATERIALS PRODUCTS 3/ Improved operation practices: Slide 12 – Option 3: Improved operation practices The third category involves CP options that refers to managerial and operational actions to prevent leaks and spills and to enforce existing operational instructions. This is an important category because of it’s strong effects usually without any need for major investment. Human behaviour is often the main reason for inefficient production (but can also be difficult to change) Good operational practices start with an efficient production planning. E.g. in a dairy plant with multi-purpose production and bottling equipment, first producing the straight and colourless products (regular milk) and then the sweet, sour and coloured products (custards, yoghurt and chocolate or fruit desserts) to reduce the equipment cleaning needs in order to prevent cross-contamination of incompatible products; eventually create or assign separate production lines for incompatible products. Energy management is another important part of production management, especially avoiding high-peak energy consumption can save money in terms of tariffs and in terms of avoiding the need to install high load equipment. And of-course preventing the unnecessary power consumption by switching off equipment when not in use. A well planned maintenance programme for all equipment and facilities is the third leg in this category. Run down equipment is normally not able to operate at full efficiency. Regular review and maintenance of steam systems is a good example of measures that can save substantial energy use (and costs) in many operations. The staff themselves have to bring into practice the procedures and instructions at the work floor on a day-to-day basis. Proper maintenance and cleaning of equipment should be a day-to-day routine, resulting in a clean and tidy workplace. Finally management should develop proper working instructions and procedures with and for the staff and provide a proper training programme with incentives (the best are financial, but also praise and awards have appeal). > Production scheduling > Energy management (peak shaving) > Maintenance programmes > Working instructions and procedures > Training and incentives program > Adequate process control operations > Proper maintenance and cleaning WASTES & EMISSIONS ACME - Session 2 - Basics of Cleaner Production - 12 / 21

PRODUCTS modification IMPLEMENTING CP Option 4: Product modification Improve equipment and process control New technology OPERATION Improved management TECHNOLOGY Workers skills & process control PRODUCTION PROCESS Change INPUT MATERIALS PRODUCTS modification 4/ Product modification: Slide 13 – Option 4: Product modification The fourth category of CP option pertains to the modification of the product characteristics in order to minimise the environmental impacts of the product during or after its use (disposal) and/or to minimise the environmental impacts of its production. Examples may include paper products with lower degrees of whiteness (with lss need for chlorinated blaching agents) if not required by the customer, minimized packaging, or mobile phones designed to allow easier disassembly and recycling of different components. WASTES & EMISSIONS > Recycling friendly design > Product Life Extension > More efficient, less material intensive packaging > Reduction of harmful substances. ACME - Session 2 - Basics of Cleaner Production - 13 / 21

PRODUCTS modification IMPLEMENTING CP Option 5: reuse and recycling Improve equipment and process control New technology OPERATION Improved management TECHNOLOGY Workers skills & process control PRODUCTION PROCESS Change INPUT MATERIALS PRODUCTS modification 5/ On-site reuse and recycling: Slide 14 – Option 5: Reuse and recycling The fifth category of CP options are found in the reuse of the waste, either in the same process or for another useful application within the company. Opportunities for the Recycling of waste water, surplus energy and chemicals can often be identified. To this category also belongs CP options on transforming waste into useful by-products. What is considered as waste in one company is often a raw material in another company (e.g. low degree fibre waste from paper making can be used for manufacturing of egg boxes). WASTES & EMISSIONS > On site recovery and re-use of raw materials in the process, waste water, waste heat and cooling water > Transforming waste into useful by-products > Waste segregation and storage Re-use and recycling ACME - Session 2 - Basics of Cleaner Production - 14 / 21

METHODOLOGY Barriers to CP implementation INTERNAL BARRIERS > Traditional philosophy of CEOs (low awareness) > Internal organisation and communication (initial constraints) > Limited information, data and expertise on waste and emissions > Focus on end of pipe solutions and short term profits > Inadequate cost/profit calculations CP options > Missing, outdated or unreliable process instrumentation > No or limited support of middle management > No EMS to achieve continual improvement EXTERNAL BARRIERS > Availability of investment capital > Availability of CP technologies Slide 15 – Barriers to CP implementation This element is coming back later in the training package, but good to mention already here, to show the reality. Despite the fact that CP often is called the ‘win-win’ approach it is good to be clear about the problems / barriers that hamper proper acceptance and implementation of CP. The barriers that can hamper the CP process include: The business philosophy or environmental attitude of CEOs: that environment will only costs money; that there is a lack of finance, manpower and time; that special experts (and knowledge) are needed to organise and implement CP options in the company and; that only technical innovation reduces waste and emissions. Initial constraints due to internal organisation and communication: gaining management support (see above); setting up a project group; limited awareness on waste and emissions; limited authority for CP; indifference on the working floor etc. Limited adequate information, data and expertise on the waste and emissions and the related costs within a company: bookkeeping is financial figures oriented (credit/debit), not material flow oriented; financial figures are not related to environmental costs; material and financial data are purchase and sales oriented, not waste and emission oriented. Focus on end-of-pipe solutions: by the governmental laws and regulations; by the licensing and control authorities; within the compliance framework of ISO14000; by technology suppliers and developers. Inadequate cost/benefit accounting of CP options against end-of-pipe costs: no calculation of material saving benefits; no full calculation of product value losses in waste streams; no full calculation of waste and emission treatment and managment costs, apart from levies and fines; no calculation of externalized costs (burden on society) etc. Missing or unreliable process control: lack of information on pH, T, Flow, Pressure, Dosing etc.; no record keeping and monitoring systems; no equipment instructions. Lack of information and expertise and low environmental awareness in middle management; lack of communication in firms; labour force obstacles; competing business priorities, in particular, the pressure for a short term profits. No management system to formalise improvements and changes made in the production process and no internal policy framework or legal basis for continuation. Difficulty in accessing external finance; no availability of investment capital; a negative attitude of financial institutes, funds and banks and other financial obstacles. Difficulty in accessing cleaner technologies. To be solved by an organised approach ACME - Session 2 - Basics of Cleaner Production - 15 / 21

METHODOLOGY CP methodology The recognized need for Cleaner Production > Obtain management commitment > Organise project team > Identify barriers & solutions > Set objectives > Pre-assess The recognized need for Cleaner Production 1.Planning and Organization 2.Assessment 3.Feasibility Analysis 4.Implementation Successfully implemented Cleaner Production projects > Identify sources (WHERE) > Analyse causes (WHY) > Generate possible options (HOW) Sustain & Continue (EMS) > Evaluate options on: Technical, environmental and economic feasibility > Select best options Slide 16 – Cleaner Production methodology To avoid or to overcome barriers and to guarantee a succesful implementation, CP calls for an organised approach. The CP assessment can described as consisting of four basic steps: Planning and Organisation Obtain (further) management committment Identify assessment focus area. Often a limited assessment focus is useful to apply for each assessment (e.g. A section within the factory, or a raw material group, energy or water). Organise the project team, with mmbrs from all concerned parts of the company. Do not forget accounting! Identify possible barriers and solutions by a (time limited) pre-assessment Assessment This step consist of a more thorough analysis of materail flows and material balances within individual steps of the manufacturing process. It is through this control of reality vs theory that most sources for waste geneartion is revealed. Identify sources (where) Identify and analyse causes (why) Generate possible options (how) Feasibility Analysis Screen options technical, economic, environmental) Prioritise and select best options Implementation Option implementation Monitoring and evaluation Sustain and continue > Option implementation > Monitoring and evaluation > Sustain and continue ACME - Session 2 - Basics of Cleaner Production - 16 / 21

METHODOLOGY Continuity of Cleaner Production Continuous CP loop Reduction of material and energy use and of waste and emission generation 1- Start CP project 10- Top Management reviews 2- Project organization Continuous CP loop 9- Final report 3- Assessment 4- CP options 8- Measure progress Slide 17 – Continuity of Cleaner Production As was mentioned above, it deserves to be emphasized that CP is not a one-time operation, but a continuous strategy that should be integrated into daily management and operations. A long-term committed CP approach will have a lasting impact, while the benefits of one-time assessments are frequently lost over time. 7- Project implementation 5- Feasibility analysis 6- Assessment report Time ACME - Session 2 - Basics of Cleaner Production - 17 / 21

CP CENTERS The global CP-network Slide 18 – The global CP-network CP is now a well proven and established concept worldwide, being actively promoted by well over 100 CP centers, organizations, expert centers and authorities. UNEP and UNIDO has established a National CP Center (NCPC) network, currently consisting of over 30 NCPC’s worldwide. UNIDO / UNEP National Cleaner Production Centers (NCPC) Other CPC and network members (not exhaustive) ACME - Session 2 - Basics of Cleaner Production - 18 / 22

CP CENTERS Activities of NCPCs SECTORS CONCERNED SERVICES PROVIDED Advertising / Automobile manufacturing / Bakeries / Breweries / Cement production / Ceramics / Coffee sector / Chemicals / Edible oil processing / Electroplating / Fertilizers / Foundries / Hospitals / Leather processing / Meat processing / Mechanical manufacturing / Metallurgy / Mining / Municipality / Oil refineries / Pig farming / Plastics / Printing / Pulp and paper / Remanufacturing industries / Rubber processing / Steel manufacturing / Sugar sector / Telecom / Textile manufacturing and processing / Tourism SERVICES PROVIDED Environmental reporting / Impact assessment / Monitoring / Audits / EMS (ISO 14.001) / QMS (ISO 9001) / Environmental management accounting / Supply chain management / Implementation of MEAs / Financial analysis / Market analysis / CP Services Marketing / Top management trainings / Foreign investors-E-OHS-Q services / Manuals and Criteria for Deposit Bonds for Environmental projects / Eco-labeling / CSR / Solid waste management / Hazardous waste management / Integrated waste management / Materials exchange systems / Plastic waste management strategies for cities / Eco-industrial park projects / Energy efficiency / Renewable energy / Bio-fuels / Co-processing / Eco-design / National and regional CP and SCP roundtables / Industry sector reviews / Technology Transfer / Data base of CP finance sources, of CP experts, of CP cases / … Slide 19 – Activities of NCPC In a UNEP review of NCPC activities in early 2006, NCPC’s were asked to indicate in what areas they are active. The list ( not exhaustive) indicates sectors, areas and environmental management tools that are associated with CP in different forms, through the activities of NCPCs. ACME - Session 2 - Basics of Cleaner Production - 19 / 21

Environmental reporting CONCLUSION About CP trends UPWARD DIFFUSION National policies Legislation Action plans CP Funds   LATERAL DIFFUSION New Tools Financial incentives Environmental reporting Eco-labeling ISO 14000 Award scheme LATERAL DIFFUSION New Sectors Industrial estates Building design Tourism Eco-towns Slide 20 – About CP trends In more generic terms, CP is not only spreading geographically and into new areas of application, but CP is also evolving into new sectors and levels. This slide present some of the current trends of CP evolvement in developing countries. In many countries CP was originally introduced through projects in specific sectors, with capacity building taking place in a few centers of excellence at the national level. Over time also government is adjusting its policies and regulation to support CP (as an alternative or complementary approach to the end of pipe approach). CP is also becoming linked to other environmental management tools, such as EMS, so as to achieve mutual strengthening. While CP has traditionally been seen and applied as a tool for improving efficiency in manufacturing industry, the concept is also making in-roads into other sectors such as municipal services, transport and health care. In order to achieve efficiency improvements in larger industrial clusters (not only in the individual company, which is the traditional focus of CP), CP is also being promoted as a tool for environmental management of industrial estates and similar industry clusters. Finally, the wider diffusion of CP is not only taking place through large centrally coordinated efforts but are also more and more being promoted at the local level, through local industry associations, local authorities and other local stakeholders. DOWNWARD DIFFUSION Local authorities NGO’s CP Clubs Partnerships ACME - Session 2 - Basics of Cleaner Production - 20 / 21

Thank you for your attention… Any questions? CONCLUSION End of session 2 Thank you for your attention… Any questions? ACME - Session 2 - Basics of Cleaner Production - 21 / 21