Business Resource Efficiency
24
Oakdene Hollins Further Benefits of Business Resource Efficiency Peter Willis, Economist 22 nd November 2011, UKNEE Seminar
Transcript of Business Resource Efficiency
Oakdene Hollins
Further Benefits of Business
Resource Efficiency
Peter Willis, Economist 22nd November 2011, UKNEE Seminar
Agenda
• About Oakdene Hollins
• Further benefits of business resource efficiency:
• Aims & objectives
• Barriers to resource efficiency
• Headline findings
• Waste hierarchy
• Ease of implementation
• Policies
• Further research
About Oakdene Hollins
Sectors:
• Food & Drink
• Textiles & Clothing
• Metals & Mining
• Wastes Management
• Chemicals & Materials
• Sustainable Innovation
• European & UK Policy
Services:
• Market Appraisal
• Technology Appraisal
• Protocol & Standards Development
• Economic Modelling
• Lean Manufacturing Projects
• Financial Impact Assessment
• Management of Research Projects
• Ecolabelling Advice
• Carbon Footprinting
• Critical Review of LCAs
• Consulting to business on sustainable
products, services and clean production:
Oakdene Hollins’ Published RE Research
• Further benefits of business resource efficiency, Defra
(2011)
• Quantification of the business benefits of resource
efficiency: further research, Defra (2009)
• Quantification of the business benefits of resource
efficiency, Defra (2007)
• Waste arisings in the supply of food and drink to
households in the UK, WRAP (2010)
• Study into the feasibility of protecting and recovering
critical raw materials, European Pathway to Zero
Waste (2011)
Defra Study Research Aims & Objectives
1. Estimate the low cost resource efficiency savings
2. Estimate resource efficiency opportunities requiring
capital investment (payback greater than 1 year)
3. Assess the impact of existing Government policies
4. Review the significance of the waste hierarchy
5. Identify barriers for uptake, by company size
6. Quantify the effect on the competitiveness
Previous Resource Efficiency Opportunity (2006)
£0
£500
£1,000
£1,500
£2,000
£2,500
Road freight Food & drink Retail et al Chemicals,rubber & plastics
Construction
£m p
er y
ear
Waste Energy Water
Barriers to Resource Efficiency
Genuine Constraints:
• Financial:
• Upfront cost
• Lack of capital
• ‘Hidden’ Costs:
• Management time
• Transaction costs
• Disruption
• Incompatibility
• Training
• Support / maintenance
Justification for Policy:
• Market Failures:
• Split incentives
• Information
• Externalities
• Behaviour/Motivation:
• Lack of prioritisation
• Inertia
• Rules of thumb
• Loss aversion
• Organisation
Methodology
• Previous study based on case studies & site audits
• Different approach taken due to lack of this data
• This study investigated the change in resource
efficiency since the 2006 baseline.
• Longer term potential savings calculated using
multiple and varied sources of existing data
• Analysis of barriers, waste hierarchy and policy
initiatives based on literature reviews
• Effect on competitiveness of the UK economy
measured as a proportion of a sector’s GVA
Current Resource Efficiency Opportunity (2009)
£0
£5,000
£10,000
£15,000
£20,000
£25,000
£30,000
£35,000
£40,000
£45,000
Energy Waste Water
£m p
er y
ear Payback
greaterthan 1 year
No cost /low cost
Headline Findings
• Low cost opportunities of £23bn for 2009
• Competitiveness: represents 15% of industrial sector
profits, 2% of service sectors profits
• Low cost opportunities to avert 29 Mt CO2e per year
• Greatest opportunities in waste and in 4 sectors
• Opportunities with payback >1 year of £33bn
• Overall carbon benefits of 90 million tonnes CO2e
(13% of UK’s annual GHG emissions)
Major Low Cost Opportunities
£0
£500
£1,000
£1,500
£2,000
£2,500
£3,000
£3,500
£4,000
£4,500
£5,000
Chemicals /minerals
Metals Power &utilities
RoadFreight
Construction Textiles /wood /paper
Transport &storage
£m p
er y
ear
Energy Waste
Significance of Waste Hierarchy
£500
£30 -£52 -£54
-£100
£0
£100
£200
£300
£400
£500
£600
Waste Reduction Animal feed Anaerobic Digestion Landfill Disposal
Co
st o
f fo
od
was
te m
anag
emen
t (
£/t)
Significant like-for-like Progress has been made
£0
£500
£1,000
£1,500
£2,000
£2,500
£3,000
£3,500
£4,000
Energy Waste Water
£m p
er y
ear
2006
2009
• £1.2bn or 12.3Mt CO2e of savings realised in 3 years
Sensitivities & Caveats
• Focus on cost neutral savings, poor accounting of
hidden costs and savings, could lead to error
• Long term forecasts differ in the methodology used
• Estimated that 70% of long term interventions are
achievable cost-effectively using current technologies
• Volatility in commodity prices means that GVA may
not accurately reflect physical output in some sectors
• Water consumption data the least robust dataset
• Tradeoffs may exist between some different types of
resource efficiency opportunities
Ease of Implementation
Domestic type water efficiency
Unavoidable waste diversion
Generic services energy efficiency
Industrial process water efficiency
Industrial process energy efficiency
Waste reduction
Mixed waste segregation
Road freight fuel efficiency
0
1
2
3
4
5
6
7
8
9
10
0 1 2 3 4 5 6 7 8 9 10
Eas
e o
f im
ple
men
tati
on
(0
=d
iffi
cult
, 10=
easy
)
Size of Opportunity (0=low, 10=high)
Environmental Engagement, by Company Size
small small-medium medium large
Lev
el o
f en
gag
emen
t
Corporate size
Policies
Type Name Resource
Policies
Landfill Tax Waste
Integrated Pollution Prevention and Control Waste
Carbon Reduction Commitment Energy
EU Emissions Trading System Energy
Climate Change Agreements Energy
Initiatives
Business Resource Efficiency & Waste Programme All
Freight Best Practice programme Energy
Enhanced Capital Allowance Scheme Energy
Voluntary
Agreements
Courtauld Commitment Waste
Halving Waste to Landfill Waste
FDF Five-fold Commitment All
BRC ‘Better Retailing Climate’ All
Policy: Landfill Tax
0
5
10
15
20
25
30
35
40
45
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
1998 2000 2002 2004 2006 2008
Sta
nd
ard
Rat
e (£
per
t)
Lan
dfi
ll V
olu
mes
(t)
Landfill Volumes Standard Rate
Source: Landfill tax bulletin, HMRC (2010)
Policy: Energy
• Analysis of the
complementarity of
major energy policies
• Overlap between EU
ETS and CCAs
• CRC with greatest
‘unique’ coverage
• Policy gap of 24%
EU ETS 13%
EU ETS / CCA 14%
CCA 14%
CRC 35%
Residual 24%
Policy Coverage
Source: Assessing the carbon dioxide emissions and cost effective carbon savings
potential for organisations not covered by EU ETS, CCAs or CRC, DECC (2010)
Policy: Dft Freight Best Practice
£0
£500
£1,000
£1,500
£2,000
£2,500
£3,000
£3,500
Small Medium Large Overall
Fleet Size
Average fuel efficiency savings per user
FBP user
Non-user
Source: Freight Best Practice Impact Assessment, DfT (2007)
Policy: WRAP Courtauld Commitment
7,700
7,800
7,900
8,000
8,100
8,200
8,300
8,400
2006/7 2007/8 2008/9 2009/10
Cumulative food waste savings (kt)
2007/8 saving
2008/9 saving
2009/10 saving
Baseline
Source: The Courtauld Commitment – Target Evaluation, WRAP (2010)
The way forward
• Resource efficiency could be seen as a potential
contributor to economic growth
• Emergence of resource security as a strategic issue
• Voluntary agreements – on the current policy agenda
as opposed to expensive programmes
• Sector specific studies on how to realise savings –
several under way (see next slide)
• How to target SMEs – a perennial issue
• EU Resource Efficiency Roadmap – the agenda is
moving to European level
Oakdene Hollins’ Current RE Research
• Review of business waste prevention, Defra
• Food, retail, hospitality, construction, automotive, offices
• Developing waste and water resource maps for the
UK drinks supply chains, WRAP
• Lean thinking in the food supply chain, Defra
• Food manufacturing, distribution, retail, foodservice
• Resource efficiency in clothing from a retailer/supplier
perspective, WRAP
• Research into waste generated by the cost sector of
the UK hospitality and food service industry, WRAP
