INTRODUCTION TO CLEANER PRODUCTION (CP) CONCEPTS AND PRACTICE

For UNEP, Division of Technology, Industry, and

Economics

Prepared by the Institute of Environmental Engineering (APINI) Kaunas University of Technology,

Lithuania

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Contents

1. How did environmental strategies evolve?

2. What is CP?

3. How CP is applied in practice:CP practicesBenefits and barriersProcedures

4. What is CP contribution to main stakeholders?Governments

Financial institutions

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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

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Passive environmental strategies

Dilute & disperse

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Reactive environmental strategies

end-of-pipe approaches

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Reactive environmental strategies

On - site recycling

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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 by-product- Product modification

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What is waste?

There are literally hundreds words for different types of waste:

• greenhouse loss• hidden losses• leakage• non-conforming material• overfill• packaging• process loss• rework• second quality• stock loss• washingsand etc.

• allowance• BOD• broke• contaminated solids• core loss• customer returns• damage• draining• dust• effluent• evaporation• furnace loss

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Waste is waste what ever you call it : take the opportunity to cut waste and increase profits!

!!!

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Cleaner Production Financing The “Cost of Waste” Iceberg

THE HIDDEN COSTOF WASTE

Company Im

age

Liab

ility

Regulatory Compliance

Treatm

ent &

Disposa

l

Lost Raw

Materials,

Energy,

Labor

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.

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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

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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)

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Continuous

Preventive

Integrated

STRATEGY for

Products Processes

Services

Risk Reduction

Humans

Environment

Cleaner Production Definition

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always

• reduces long-term liabilities which companies can face many years after pollution has been generated or disposed at a given site

Properly implemented CP :

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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

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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

Properly implemented CP :

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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

Properly implemented CP :

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Cleaner Production principles

• precaution principle

• preventive principle

• integration principle

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How CP could be applied in practice?

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Cleaner Production practices

1. Good housekeeping

take appropriate managerial and

operational actions to prevent:

- leaks

- spills

- to enforce existing operational instructions

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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

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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

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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

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Cleaner Production practices

5. Technology change

replacement of:

- the technology

- processing sequence

- synthesis pathway

in order to minimise waste and emission generation during production

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Cleaner Production practices

6. On-site recovery/reuse

- reuse of the wasted materials in the same process for another useful application within the company

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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.

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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

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CP versus End-of-Pipe approach

Cleaner Production

Continuous improvement

Progress towards use of closed loop or continuous cycle processes

Everyone in the community has a role to play; partnerships are essential

Active anticipation and avoidance of pollution and waste

Elimination of environmental problems at their source

Involves new practices, attitudes and management techniques and stimulates technical advances

Pollution Control and Waste Management

One-off solutions to individual problems

Processes result in waste materials for disposal a pipeline with resources in and wastes outSolutions are developed by experts often in isolation

Reactive responses to pollution and waste after they are createdPollutants are controlled by waste treatment equipment and methods

Relies mainly on technical improvements to existing technologies

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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

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What are the benefits of Cleaner Production?

Improving environmental situation

Increasing economical benefits

Increasing productivity

Gaining competitive advantage

Continuous

environmental

improvement

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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

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-Difficulty in accessing cleaner technologies

-Difficulty in accessing external finance

CP barriers

External to the companies:

The failure of existing regulatory approaches

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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

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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

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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)

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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

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Cleaner Production proceduresThe recognized need

to minimise waste

Planning and Organization

Assessment Phase

Feasibility AnalysisPhase

Implementation

Successfully implemented CP projects

The first step

The second step

The third step

The fourth step

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1. Planning & Organization

• Obtain management commitment

• Identify potential barriers and solutions

• Set plant-wide goals

• Organize a project team

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2. Assessment

• Identify sources

• Identify waste/ pollution causes

• Generate possible options

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Material and energy balances

The Industrial Process

Heat Power The Energy Balance

Cooling

Raw Materials

Products & Waste

TheMass

Balance

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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

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Possible causes for waste generation

Process

ManagementPlanning &Information

Systems

Personnel Skills &

Motivation

Wastes &Emissions

Choice & Quality of

Input Materials

Technical Status of

Equipment

Choice of Production Technology

ProcessEfficiency

Product Specifications

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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?

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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

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CP assessment practices

Process

On-siteRecovery/Reuse

Production ofUseful By-Product

ProductModification

Equipment Modification

Input Substitution

Good Housekeeping

Technology Change

Better Process Control

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3. Feasibility Studies

• Preliminary evaluation • Technical evaluation • Economic evaluation • Environmental evaluation • Selection of feasible options

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Capital investmentAnnual operating cost savings

Payback Period

- period of time (years) needed to generate enough cash flow to recover the initial investment

Payback period = _____________________________

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4. Implementation & Continuation

• Prepare a CP plan • Implement feasible CP measures • Monitor CP progress • Sustain Cleaner Production

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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

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Marketing

Top management commitment

Pre-assessment

CP policy declaration

The continuous CP loop

Assessment

Start CP project

Project organization

CP options

Feasibility analysis

Assessment report

Project implementation

Measure progress

Final report

Top Management reviews

CP management system

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CP and main stakeholders

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How can governments promote CP?

Applying regulations

Using economic instruments

Providing support measures

Obtaining external assistance

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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

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CP and financial institutionsEnvironmental 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

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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

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Overall Risk Profile

RISKSRISKS

ENVIRONMENTAL ENVIRONMENTAL ACCIDENTSACCIDENTS

WORKERS’ WORKERS’

HEALTHHEALTH

CONSUMERS’ CONSUMERS’

HEALTHHEALTH

NEW NEW REGULATIONSREGULATIONS

REPUTATIONREPUTATION

BUSINESS VALUEBUSINESS VALUE

INSURANCEINSURANCE

CLAIMSCLAIMS

LIABILITYLIABILITY

CLEAN-UP CLEAN-UP

PRODUCT SALESPRODUCT SALES

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Main factors affecting exposure to environmentally-derived 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

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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

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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 providing environmental goods and services

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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

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Broader Application of CP

CP is closely linked to:

•Environmental Management Systems

•Total Quality Management

•Health and Safety Management

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Cleaner Production and Sustainable Development

Responsible Entrepreneurship

Eco-efficiency

Cleaner Production

Compliance

Government Agenda

Business Agenda

ICC

CharterEMS

EHS

Auditing

Sustainable development

Agenda 21

Factor X

Environmental space

Time

Sustainability

Economic Instruments

Co-regulatory agreements

Command & control

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!!!

CP is a journey not a destination

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“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)