1. D. Drouet - RDIWTO Workshop October 11 - 20041 WTO Workshop on Environmental Goods Trends in the Environmental Goods Industry. October 11, 2004 Dominique DROUET RDI – Recherche Développement International drouet@rdi-consultant.com www.rdi-consultant.com

2. D. Drouet - RDIWTO Workshop October 11 - 20042 Key Environment Industry Activities ENGINEERING SERVICES FINAL CLIENTS Businesses Public Authorities Households OPERATION OF ENVIRONMENTAL SERVICES CONSTRUCTION OF ENVIRONMENTAL INFRASTRUCTURE & FACILITIES ENVIRONMENTAL PRODUCTS & EQUIPMENT MANUFACTURING ENVIRONMENTAL TECHNOLOGIES PRODUCTION NON – SPECIFIC ACTIVITIES

3. D. Drouet - RDIWTO Workshop October 11 - 20043 Value Added (or Employment) Breakdown ENGINEERING SERVICES 5 – 10 % FINAL CLIENTS Businesses Public Authorities Households OPERATION OF ENVIRONMENTAL SERVICES 40 – 50 % CONSTRUCTION OF ENVIRONMENTAL INFRASTRUCTURE & FACILITIES 15 – 25 % ENVIRONMENTAL PRODUCTS & EQUIPMENT MANUFACTURING ENVIRONMENTAL TECHNOLOGIES PRODUCTION 25 – 35 % NON – SPECIFIC ACTIVITIES

4. D. Drouet - RDIWTO Workshop October 11 - 20044 Key Market Segments  Air Pollution Control  Water & WW Management  Solid Wastes Management  Remediation & Clean up (soil, etc)  Noise & Vibration Abatement  Environmental Monitoring & Analysis  Process Optimization  Energy Saving & Management  Renewable Energy Facilities  Environmentally Preferable Products

5. D. Drouet - RDIWTO Workshop October 11 - 20045 Market Maturity 1 Public Awareness and Pressure 2 Government Policy Stated 3 Legislation Enacted 4 Regulations Promulgated and Agency Empowered 5 Enforcement Creates Market Pollution Control, Cleanup & Waste Management 6 Proactive Effort to Circumvent Regulation & Liability Pollution Prevention 7 Internalization and Integration of Environmental Efforts Sustainable Development Source : EBI, San Diego

6. D. Drouet - RDIWTO Workshop October 11 - 20046 Industry Structure  Many SME’s  niche players (most of them in a 1 to 50 Millions € revenue range)  Many large Non-Specialized Players  often with a dedicated environmental division  A few Specialized Groups  with revenues over 1 Billion €  Limited overall sector consolidation

7. D. Drouet - RDIWTO Workshop October 11 - 20047 Examples of Large Players Environmental Activities Environmental Revenue (Billion €) SUEZ Environnement (F) RWE (G) Services, diversified 12.9 11.0 WASTE MANAGEMENT (US) BECHTEL (US) Solid Wastes Eng&Constr., Remediation 9.3 3.1 EBARA (Jap.) MITSUBISHI HEAVY IND. (Jap.) Equipment, diversified 2.8 2.2

8. D. Drouet - RDIWTO Workshop October 11 - 20048 Trends in the Global Environment Market 1996199820002002 Billion €462494517550 1996 – Base 100100107114119 Source : EU and EBI Data Average Annual Growth Rate 1996 – 2002 3.0 %

9. D. Drouet - RDIWTO Workshop October 11 - 20049 Fast Growth Segments (Examples) 199619982000 Annual growth (98-00) Projected Annual growth (00-06) Photovoltaic modules 10017131231 % Wind energy installations 10019630625 % Source : EU Data

10. D. Drouet - RDIWTO Workshop October 11 - 200410 Regional Market Trends Estimated Annual % growth rate 2000 – 2010 North America EU 15 Japan, Australia, NZ 1 % Middle East / Africa Central & Eastern Europe Latin America Asia (excluding Japan) 7 % 9 % 10 % 12 % Source : EU Data

11. D. Drouet - RDIWTO Workshop October 11 - 200411 Shares of Environmental Markets held by Exporters TOTAL EU Exporters US Exporters Japan Exporters Other Exporters North America4 %2 %1 % EU 154 %2 %1 % Japan/Australia/NZ3 %1 % Middle East/Africa62 %22 %35 %2 %3 % Cent. & East. Europe73 %45 %20 %3 %5 % Latin America56 %18 %30 %5 %3 % Asia (excl. Japan)50 %15 %20 %14 %1 % Source : EU Data, 1999 estimates

12. D. Drouet - RDIWTO Workshop October 11 - 200412 Environmental Export Market Shares Main Country of Origin – 70 HS Codes (1) Global Export Market ShareExport growth 199519991995 - 1999 Grand Total+ 10 % USA22 %26 %+ 31 % Germany19 % + 9 % Japan18 %15 %- 10 % Italy9 %8 %- 3 % UK7 % + 14 % France6 % + 7 % Netherlands4 %3 %- 7 % Source : US - AEP

13. D. Drouet - RDIWTO Workshop October 11 - 200413 Environmental Export Market Shares Main Country of Origin – 70 HS Codes (2) Global Export Market ShareExport growth 199519991995 - 1999 Canada2 %3 %+ 50 % Sweden3 %2 %+ 4 % China2 % + 26 % Taiwan2 % + 3 % Denmark2 % + 2 % Austria2 % + 8 % Korea2 % + 10 % Australia1 % + 3 % Source : US - AEP

14. D. Drouet - RDIWTO Workshop October 11 - 200414 Developing Countries’ Export to Import Ratios Environmental goods Export to Import Ratio (Year 2000 data) All goods in the combined OECD/APEC list0.48 Renewable and Energy Efficiency goods in the combined OECD/APEC list (11 product categories) 1.04 Products which may qualify as Environmentally Preferable Products (consumption and disposal characteristics 39 categories listed by UNCTAD) 1.27 Source : UNCTAD

15. D. Drouet - RDIWTO Workshop October 11 - 200415 Additional Issues  The risk of primarily focusing trade liberalization on products integrated in “end of pipe” equipment  Pollution prevention and trade liberalization ; links with technology transfers  Links with trade liberalization in environmental services  Environmental technologies export plans  New market drivers