1. Sustainability in the Manufacturing and Service Sectors Investment Opportunities Framework and Technical Services Department Support Capability Garth Hedley Associate Director

2. Presentation Structure Introduction to sustainable manufacturing and services Areas of focus  Cleaner Production  Waste Management  Sustainability Products Investment opportunities Technical Group services Next stages Examples

3. The Brundtland statement: “Humanity has the ability to make development sustainable - to ensure that it meets the needs of the present without compromising the ability of future generations to meet their needs.” At IFC, sustainability addresses financial, economic, governmental, environmental and social components. Sustainable development projects:  prosper in the marketplace without relying on economic distortions for survival;  are environmentally beneficial;  contribute to the well-being of people in the host countries. Sustainable Manufacturing and Services

4. Governance and regulation Financial and economic Technical and technological Environment Social Sustainability - The Drivers

5. Besides a return on investment, sustainable projects deliver: new businesses and markets improved competitiveness of existing business lines new jobs with upgraded skills and new tacit knowledge contribution to a higher level of social well-being and stability better tools to comply with eco-efficiency standards new ideas which foster local enterprises a favorable culture of corporate responsibility Sustainability Outcomes

6. Cleaner Production (CP)  energy efficiency  waste avoidance and reduction  high efficiency manufacturing Waste management  re-use  recovery  treatment and disposal Sustainability products and services  helping others to be more sustainable Sustainable Development Components Sustainability Products WasteManagementCleanerProduction

7. Cleaner Production - Concept Final Products Energy Labor Water Materials Capital Emissions Solid and liquid wastes Improving conversion of input resources to product reduces quantity and cost of inputs and reduces emissions to land, water and air at source.

8. Cleaner Production is a cost reduction technique which delivers low cost, fast payback, manufacturing performance improvement projects. Manufacturers using CP well, in addition to better profitability, will have better environmental performance than their “conventional” competitors. Cleaner Production will fail if it is sold as environmental improvement Cleaner Production

9. Cleaner Production - Benefits Better process yield Reduced inputs for the same output:  energy, water, materials, labour  debottlenecking Product quality improvements Reduced waste Reduced waste disposal cost Reduced manufacturing cost through: Capital cost savings

10. Waste Management One person’s waste is the next person’s raw material. Techniques:  Recovery  Recycling  Conversion  Treatment  Disposal Technologies required create new industries, products and employment Sometimes driven by regulation and tariffs  “Polluter pays”

11. Investment Opportunities Cleaner Production investment areas: Green field manufacturing General manufacturing prospects Existing manufacturing clients CP service providers

12. Green Field Manufacturing - 1 Sustainability Product manufacturing:  Eco-efficient products: High efficiency motors, lights, domestic appliances, air conditioners, boilers, canned pumps, membranes  Instruments and controls combustion analyzers, variable speed drives, air or water monitoring, advanced process control, heating controllers, meters  Remediation equipment dust control, solvent stills, pigment recovery, ESPs

13. Green Field Manufacturing - 2 Resource-efficient manufacturing Integrated waste management:  waste recovery  waste to energy  manufacturing using recovered raw materials  waste conversion facilities  waste treatment and disposal

14. General Manufacturing Prospects manufacturing improvement projects  technology changes  efficient expansion  technical advice and assistance Technical Group’s input will increase project sustainability

15. Existing Manufacturing Clients project identification and financing routes:  direct CP marketing to large clients  portfolio review to identify CP opportunities.

16. Cleaner Production Service Providers Many possible models including: fee-based consultancy CP Service Company:  advice  implementation: engineering and/or funding  fee or results-based business model web-based products equipment leasing utility/service upgrades embedded power generation remote monitoring

17. Technical Group - Investment Support Provides industry and technology-specific knowledge through: Project identification  new technology or business opportunities  partnership brokering Engineering better projects:  project feasibility appraisal  market assessment  technical review and improvement Capacity building:  techniques and technologies advice and transfer  processes and procedures

18. Technical Group - Differentiators Promotes commercially viable technologies  willing to examine innovative technologies Analytical methodology:  based on sound understanding of the industry and technologies  not a prescriptive approach Process driven initiatives Projects must be financially viable  often they reduce operating cost Not driven by environmental compliance...  …but environmental outcomes are improved Work within industrial sites The group aims to demonstrate the benefits of technologies for sustainability and in the process overcome barriers to progress.

19. How Regional Departments can help Assist CP marketing  arrange visit schedule including: site meetings (key clients) presentations to industrial or regional groups Help in project identification:  new prospects and existing clients  be aware of the priority areas: Sustainability Products Cleaner Production Waste Management

20. Technical Services - next stages CP Promotion  visits  promotional materials  participate in meetings, presentations etc  explain the business opportunity Identify projects in priority areas eg:  sustainability product manufacturing  energy efficiency / Cleaner Production  waste management Quickly screen/advise potential projects Portfolio review Priority industries for review:  food and drink, general manufacturing, textiles, metals, chemicals

22. Sustainability in the Manufacturing and Service Sectors Techniques, examples and case studies John Graham Mike Brooks

23. Cleaner Production or end-of-pipe Final Products Energy Labor Water Materials Capital Emissions Solid and liquid wastes More Clean-up

24. Cleaner Production - Techniques better process control equipment or product changes on-site material and utilities recovery and reuse input substitution waste to by-product initiatives key questions for each raw material, product or by-product:  where does it come from?  and go?  must it be used at all?  must it be made at all?

25. The Energy Efficiency Approach Examine in order  end user of energy  utility distribution systems  utility conversion systems Identify overall system efficiency Projects and investment opportunities will be identified Capital and operating costs can be saved together

26. Capital and operating cost savings from CP New Process - Aluminum sheet  Speed casting continuous casting and cold rolling  technology reduced capital cost by almost 30% and operating costs by over 40%. Process change  A dairy couldn’t keep the milk cool.  How much more refrigeration to buy?  None. Increase pasteurizer regeneration instead.  Saved heating and cooling utility and reduced investment. Appropriate design  A production facility in a temperate country needs less cooling than the pilot plant in Alabama... ...but the client proposed to scale up the pilot with no other changes

27. Energy Efficiency Examples Housekeeping, control, monitoring  control operating hours of machines, lights, heating etc.  repair leaks of steam, water, compressed air  insulation  machine sequencing Utility improvements  temperature levels  decentralization  size and overall efficiency  heat recovery  system upgrades High efficiency products, e.g.  recuperative or regenerative burners  refrigeration devices  membranes for hot water recovery Process Changes  aluminum speed casting  steel plant refurbishment Cogeneration (CHP)  great variety of prime movers, fuel, size  e.g. in MDF production

28. Integrated Waste Management End of Life Materials Landfill Disposal Waste Processing Distribution & use Packaging Product Heat & Power Manufacture Manufacturing Waste Product Materials New materials New Uses Recycled & Recovered materials Sort Original Uses

29. Waste Recovery Examples: Metals recovery from slags and tailings  mineral processing Recovery from post-consumer wastes:  paper, metals, glass, wood products, packaging, plastics, batteries, lamps, electronics Waste to energy projects  replaces fossil fuels  and reduces waste disposal problem  particularly effective with process heat sink (eg waste to energy plant next to a paper mill)

30. Waste Recycling Industrial wastes  power station fly-ash in building products  use of slags in cement  organic waste to useful compost Construction and demolition waste  reduce extraction of primary materials  recover metals, wood, plastics  re-use stone, timber, tiling, steel, glass Cryogenic tire reprocessing  fiber  steel  rubber Examples:

31. Waste Conversion Examples Novel uses for glass:  filter medium  abrasive  paint filler Sports shoes to sports courts Agricultural wastes:  straw to pulp  MDF from mustard stalk Composting  green waste  domestic refuse

32. Waste Treatment and Disposal Treatment  stabilization of solids and sludges  solidification of liquid wastes  clinical waste sterilization Disposal  engineered landfills, tips and tailings ponds  gas and leachate collection and treatment  energy recovery from landfill gas  incineration of medical waste

33. Sustainability Products Products which helps others to be more sustainable Example:  Combustion analyzers used in USA to improve combustion efficiency but not universally available technology not well known imports and spare parts expensive  IFC could invest in their manufacture direct employment and outreach benefits and more efficient combustion systems Adapt to other products... …and services

34. Case Studies: Cleaner Production Energy Efficiency Waste Management

35. Aluminum Sheet Production Plant capacity increase used speed casting technology:  continuous casting  cold rolling Benefits.  Elimination of three hot rolling passes  Capital cost reduction  Greatly reduced energy cost  Reduced waste Financial summary  Investment saving, $620/ton, 27%  Operating cost saving $180/ton, 42%

36. Carpet Manufacturer Identified the source of waste:  All the dyeing machine tanks were emptied at product changeover. The solution.  Use smaller tanks  Re-shape for “cleanability”  New machine for samples The outcome  Reduced dye and water use  Less effluent produced  Financial: annual cost saving $220,000; cost $260,000

37. Wool Dyehouse Problem  high water and effluent charges  increasingly stringent effluent discharge consent. Solution  Reverse osmosis filtration plant  Removes color and chromium from dyehouse effluent  Permits water recovery  75% water savings  energy content of water also recovered Financial results:  Annual cost savings $150 k water & effluent, + energy

38. Pulp and paper making Plant expansion  new fiber obtained from waste paper Sustainability Projects  managed plantations  black liquor combustion  zero-emissions goal  cogeneration based on waste bagasse Benefits.  sustainable raw material supply  reduced energy costs  management of bagasse waste

39. Hot-rolled Steel Features:  continuous casting  first hot rolling  induction oven  further rolling Benefits.  Compact: production line 1400m to 150m  Greater processing speed  Materials saving  Greatly reduced energy use and scrap reduce costs by 40%  Investment cost 2/3 of conventional approach

40. Steel-making upgrade Before upgrade  traditional technologies: coke ovens, blast furnace, twin open hearth, ingot casting, rolling Modernization activities  continuous casting facility  mini-mill  environmental improvements Results:  8-10% reduction in production cost through yield and energy efficiency improvements  higher value product manufactured  competitive position improved

41. Sugar Beet Factory Sugar beet is washed before onwards processing One producer reduced washing intensity. Results:  reduced water use  less sugar in waste water  higher sugar yield  reduced load on water treatment plant  reduced electricity use in effluent aeration

42. Gas Range Manufacturer Cooling water recirculation:  water was used on a once-through basis  cooling tower added  Cost $15,000, annual savings $60,000 Component consumption  rechargeable batteries used in timer/programmer  far more battery sets bought than ranges produced  theft problem  component management system revised

43. Cleaner Production - Low cost examples Hotel - reduced use of toiletries  Individual shampoo and soap bars were discarded when only partly used  Change to refillable liquid dispensers  80% savings in soap purchases Food Canning  Can label adhesive reduced from five to four rows of glue.  20% savings

44. Energy Saving - Synthetic Rubber Producer Heat and electricity savings through:  steam leak repair & system rationalization  condensate return  turbine revisions  power house automation  control improvements  variable speed drives  waste as fuel. Annual savings $1.2 million, 1 year payback

45. Energy Saving in Brewing - 1 A South American brewer reduced specific electricity use by 20% over five years through:  installation of sub-metering  undertaking an energy review to benchmark performance by international standards  benchmarking breweries against each other, in absolute consumption and savings  implementing a series of no & low cost projects, e.g. control of refrigeration systems, leak repair etc.  continuous performance monitoring Other capital projects remain to be implemented. Savings worth $1 million per year.

46. Energy Savings in Brewing - 2  metering & reporting  refrigeration control  variable speed drives  water leak repair  hot water recovery  control of CO 2 use Savings PreparationImplementation Investment $200,000. First year savings $460,000 Projects:

47. Construction and demolition waste recycling A local authority annually spent $380,000 to landfill waste created in highway resurfacing. Trials on screening and crushing bituminous waste showed that over 80% could be recycled. Annual savings were estimated at over $1,000,000. Note that the cost savings are far more than the waste disposal cost, since raw material purchase is avoided.

48. Compost from dairy waste A Croatian dairy and cheesemaker had highly polluting wastewater. A water treatment plant was built. This improved waste water quality, but created a large quantity of sludge. This was disposed of at a landfill, but the costs were high. After research, a manufacturing facility was established to combine the sludge with manure, bark and sawdust to produce a compost which has commercial value. The total investment cost was repaid in around 20 months from reduced environmental charges and income from sale of compost.

49. Manufacture of particleboard The particle board industry is a large consumer of wood waste of various forms such as sawmill chips, sawdust, used packaging or end-of-life furniture or kitchen units, which after suitable processing are used as raw material. This provides a convenient disposal route for wood waste, avoids the felling of additional trees and reduces energy used in the drying stage of board production, since wood waste is dryer than chipped trees. Wood waste is also used within this industry as a source of fuel; waste-derived heat can provide virtually all of a board mill’s needs. Sawdust created within the board mill by cutting and shaping operations is used as a renewable energy source.

50. CleanerProductionWasteManagement SustainabilityProducts Client Services Partnerships Project Improvement Capacity Building Sustainable Outcomes Wealth Creation Human Capacity Cleaner Environment Technical Capability Social Improvement Knowledge Technical Group - Services Summary