INTRODUCTION TO CLEANER PRODUCTION (CP) CONCEPTS AND PRACTICE Prepared by the Institute of Environmental Engineering (APINI) Kaunas University of Technology, Lithuania For UNEP, Division of Technology, Industry, and Economics Contents 1. How did environmental strategies evolve? 2. What is CP? 3. How CP is applied in practice: CP practices Benefits and barriers Procedures 4. What is CP contribution to main stakeholders? Governments Financial institutions 2 Course Objective At the completion of this course the participants will have understanding of : - Evolution of environmental strategies, concept of sustainable development - Basic concepts of preventive environmental approaches - Methodology of CP implementation in industrial enterprises - How to develop and implement CP project 3 Passive environmental strategies Dilute & disperse 4 Reactive environmental strategies end-of-pipe approaches 5 Reactive environmental strategies On - site recycling 6 Proactive environmental strategies: Cleaner Production Prevention of Waste generation: - Good housekeeping - Input substitution - Better process control - Equipment modification - Technology change - On-site recovery/reuse - Production of a useful byproduct - Product modification 7 What is waste? There are literally hundreds words for different types of waste: • allowance • greenhouse loss • BOD • broke • contaminated solids • core loss • customer returns • damage • draining • dust • effluent • evaporation • furnace loss • hidden losses • leakage • non-conforming material • overfill • packaging • process loss • rework • second quality • stock loss • washings and etc. 8 !!! Waste is waste what ever you call it : take the opportunity to cut waste and increase profits! 9 Cleaner Production Financing The “Cost of Waste” Iceberg THE HIDDEN COST OF WASTE Adapted from: Bierma, TJ., F.L. Waterstaraat, and J. Ostrosky. 1998. “Chapter 13: Shared Savings and Environmental Management Accounting,” from The Green Bottom Line. Greenleaf Publishing:England. 10 Where are you now? • Only a change in technology would eliminate waste completely • We are optimising our processes and achieving big cost reductions • Waste is coming down as we change the way we work • We have identified our waste and monitoring it • We plan to reduce waste • Waste is cost and regulatory issue • Waste is only disposal issue • Waste is not an issue 11 Cleaner Production Definition “The continuous application of an integrated preventive environmental strategy applied to processes, products, and services to increase overall efficiency and reduce risks to humans and the environment.” (United Nations Environment Programme) 12 Cleaner Production Definition Continuous Products Preventive Integrated Processes STRATEGY for Services Humans Risk Reduction Environment 13 Properly implemented CP : always • reduces long-term liabilities which companies can face many years after pollution has been generated or disposed at a given site 14 Properly implemented CP : usually     increases profitability lowers production costs enhances productivity provides a rapid return on any capital or operating investments required  increases product yield  leads to the more efficient use of energy and raw materials 15 Properly implemented CP : usually (continuation)  results in improved product quality  increases staff motivation  relies on active worker participation in idea generation and implementation  reduces consumer risks  reduces the risk of environmental accidents  is supported by employees, local communities, customers and the public 16 Properly implemented CP : often  avoids regulatory compliance costs  leads to insurance savings  provides enhanced access to capital from financial institutions and lenders  is fast and easy to implement  requires little capital investment 17 Cleaner Production principles • precaution principle • preventive principle • integration principle 18 How CP could be applied in practice? 19 Cleaner Production practices 1. Good housekeeping take appropriate managerial and operational actions to prevent: - leaks - spills - to enforce existing operational instructions 20 Cleaner Production practices 2. Input substitution substitute input materials - by less toxic - or by renewable materials - or by adjunct materials which have a longer service life-time in production 21 Cleaner Production practices 3. Better process control modify: - operational procedures - equipment instructions and process record keeping in order to run the processes more efficiently and at lower waste and emission generation rates 22 Cleaner Production practices 4. Equipment modification modify the existing production equipment and utilities in order: - run the processes at higher efficiency - lower waste and emission generation rates 23 Cleaner Production practices 5. Technology change replacement of: - the technology - processing sequence - synthesis pathway in order to minimise waste and emission generation during production 24 Cleaner Production practices 6. On-site recovery/reuse - reuse of the wasted materials in the same process for another useful application within the company 25 Cleaner Production practices 7. Production of a useful by- product consider transforming waste into a useful by-product, to be sold as input for companies in different business sectors. 26 Cleaner Production practices 8. Product modification modify the product characteristics in order: - to minimise the environmental impacts of the product during or after its use (disposal) - to minimise the environmental impacts of its production 27 CP versus End-of-Pipe approach Cleaner Production Pollution Control and Waste Management Continuous improvement One-off solutions to individual problems Progress towards use of closed loop or continuous cycle processes Processes result in waste materials for disposal a pipeline with resources in and wastes out Everyone in the community has a role to play; partnerships are essential Solutions are developed by experts often in isolation Active anticipation and avoidance of pollution and waste Reactive responses to pollution and waste after they are created Elimination of environmental problems at their source Pollutants are controlled by waste treatment equipment and methods Involves new practices, attitudes and management techniques and stimulates technical advances Relies mainly on technical improvements to existing technologies 28 What is not CP? • Off-site recycling • Transferring hazardous wastes • Waste treatment • Concentrating hazardous or toxic constituents to reduce volume • Diluting constituents to reduce hazard or toxicity 29 What are the benefits of Cleaner Production? Improving environmental situation Increasing economical benefits Increasing productivity Continuous environmental improvement Gaining competitive advantage 30 CP barriers Internal to the companies: - - Lack of information and expertise Low environmental awareness Competing business priorities, in particular, the pressure for a short term profits Financial obstacles Lack of communication in firms Middle management inertia Labour force obstacles 31 CP barriers External to the companies: -Difficulty in The failure of existing regulatory approaches accessing cleaner technologies -Difficulty in accessing external finance 32 CP motivators and drivers Internal to the companies: - Improvements in productivity and competitiveness - Environmental management systems and continuous improvement - Environmental leadership - Corporate environmental reports - Environmental accounting 33 CP motivators and drivers External to the companies: - Innovative regulation - Economic incentives - Education and training - Buyer – supplier relations - Soft loans from Financial institutions - Community involvement - International trade incentives 34 The role of international organizations in CP development • United Nations Environment Programme (UNEP) • United Nations Industrial Development Organisation (UNIDO) • Organisation for Economic Co-operation and Development (OECD) • World Business Council for Sustainable Development (WBCSD) • Development Finance Institutions (DFIs) 35 Team for CP success • Managers, engineers and finance people in industry and commerce, in particular those responsible for business strategy, product development, plant operations and finance • Government officials, both central and regional, who play an important role in promoting CP • Media representatives who play an important role in disseminating information on good environmental practice 36 Cleaner Production procedures The recognized need to minimise waste The first step The second step The third step The fourth step Planning and Organization Assessment Phase Feasibility Analysis Phase Implementation Successfully implemented CP projects 37 1. Planning & Organization • Obtain management commitment • Identify potential barriers and solutions • Set plant-wide goals • Organize a project team 38 2. Assessment • Identify sources • Identify waste/ pollution causes • Generate possible options 39 Material and energy balances Heat Raw Materials Power The Industrial Process Cooling The Energy Balance Products & Waste The Mass Balance 40 Why are material and energy balances so important? The material and energy balances are not only used to identify the inputs and outputs of mass and energy but their economic significance is related to costs, such as: • cost of raw material in waste • cost of final product in waste • cost of energy losses • cost of handling waste • cost of handling waste • cost of transporting waste • cost of solid wastes disposal • cost of pollution charges and penalties 41 Possible causes for waste generation Choice of Production Technology Choice & Quality of Input Materials Management Planning & Information Systems Technical Status of Equipment Process Personnel Skills & Motivation Product Specifications Process Efficiency Wastes & Emissions 42 Option generation (1) • Creative Problem Solving (CPS): - • Find facts Identify the problem Generate ideas to solve the problems Define criteria to be used to select solutions/ideas Screening of ideas / options: - Select all ideas/options that may be implemented immediately The remaining options/ideas should then be divided into three boxes: - • Good housekeeping Interesting options but more analysis is needed Waiting box + Rejected Weighted sum method to prioritise options in second group: - What are the main benefits to be gained by implementing this option? Does the necessary technology exist to implement the option? How much does it cost? Does it appear to be cost effective, meriting in depth economic feasibility assessment? Can the option be implemented within a reasonable timeframe without disrupting production? 43 Option generation (2) Traditional brainstorming • Formulate problem (problem identification) • Define objective of the brainstorming session • Follow the rules of brainstorming: - Select a secretary to write down all ideas (The secretary can't take part in the idea generation) - Select a group leader (the group leader shall control that the four main rules are followed) • Close the idea generation after 30-40 minutes 44 CP assessment practices Good Housekeeping Equipment Modification On-site Recovery/ Reuse Input Substitution Process Production of Useful By-Product Better Process Control Technology Change Product Modification 45 3. Feasibility Studies • • • • • Preliminary evaluation Technical evaluation Economic evaluation Environmental evaluation Selection of feasible options 46 Payback Period Capital investment _____________________________ Payback period = Annual operating cost savings - period of time (years) needed to generate enough cash flow to recover the initial investment 47 4. Implementation & Continuation • • • • Prepare a CP plan Implement feasible CP measures Monitor CP progress Sustain Cleaner Production 48 CP attacks the problem at several levels at once. The implementation of an industry/plant level programme requires, - the commitment of top management - a systematic approach to CP in all aspects of the production processes 49 CP management system Marketing Top management commitment Pre-assessment CP policy declaration Start CP project Top Management reviews Final report The continuous CP loop Measure progress Project organization Assessment CP options Project implementation Feasibility analysis 50 Assessment report CP and main stakeholders 51 How can governments promote CP?  Applying regulations  Using economic instruments  Providing support measures  Obtaining external assistance 52 CP applicability for local governments  Corporate decision-making  Local environmental management strategies  Community and industry partnerships  Sustainable economic development  Public environmental education  Specific local environmental problems  Local environmental monitoring 53 CP and financial institutions Environmental evaluation can help: •Establish an exclusion list •Identify environmental risks in every project •Understand the financial institution’s exposure to environmental risks and liabilities •Monitor the environmental risks of transactions and respond •Evaluate risks and liabilities in foreclosure or re-structuring activities 54 What are the benefits of Cleaner Production? Financial advantages: Usually a short Payback Period of only months Many low-cost options Quick to implement Improved cash flows Greater shareholder value Better access to capital and appeal to financial institutions • Inherent preventive approach leads to insurance savings • • • • • • 55 Overall Risk Profile CONSUMERS’ WORKERS’ HEALTH NEW REGULATIONS ENVIRONMENTAL ACCIDENTS HEALTH RISKS REPUTATION LIABILITY CLEAN-UP BUSINESS VALUE INSURANCE PRODUCT SALES CLAIMS 56 Main factors affecting exposure to environmentallyderived risks  The nature of environmental risks inherent in business activity of the client  The size and term of, and the security for, the transaction  The client’s ability and commitment to adequately manage these risks 57 If a CP project is presented to a financial institution, it should be clear that the company already undertook voluntary actions aimed at:  rationalising the use of raw materials, water and energy inputs, reducing the loss of valuable material inputs and therefore reducing operational costs  reducing the volume and/or toxicity of waste, wastewater and emissions related to production  improving working conditions and occupational safety in a company  making organisational improvements  improving environmental performance by the implementation of no-cost and low-cost measures from the company’s funds  reusing and/or recycling the maximum of primary inputs and packaging materials 58 Environmental investment opportunities  loans to enterprises to finance required or desired investments in technologies resulting in direct and indirect environmental benefits  loans to municipalities to finance investments in environmental infrastructure  loan guarantees to both enterprises and municipalities for “soft” credits from national or regional environmental funds for environmental investments  loans to finance businesses environmental goods and services providing 59 What have we learned?  The CP approach reduces pollutant generation at every stage of the production process  CP can be achieved through: - good operating practices process modification technology changes raw material substitution redesign and/or reformulation of product  The economic advantages of CP are: - cost effectiveness increased process efficiency improved product quality and enterprise competitiveness cost of final treatment and disposal is minimised  Effluent treatment, incineration, and waste recycling outside the production process are not regarded as CP 60 Broader Application of CP CP is closely linked to: • Environmental Management Systems • Total Quality Management • Health and Safety Management 61 Cleaner Production and Sustainable Development Sustainability Environmental space Economic Instruments Factor X Co-regulatory agreements Responsible Entrepreneurship Eco-efficiency Cleaner Production Command & control Compliance Agenda 21 Government Agenda Business Agenda Sustainable development EHS ICC Auditing Charter EMS Time 62 !!! CP is a journey not a destination 63 “An understanding of the business value to be gained from efficient use of natural resources is an important first step toward sustainability: toward building a world in which resources are managed to meet the needs of all people now and in the future.” (J. Lash, President of the World Resources Institute) 64