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INTRODUCTION TOCLEANER PRODUCTION (CP)CONCEPTS AND PRACTICE

For UNEP, Division of Technology, Industry, andEconomics

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?GovernmentsFinancial institutions

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Course Objective

At the completion of this course the participantswill have understanding of :

- Evolution of environmental strategies, conceptof sustainable development

- Basic concepts of preventive environmentalapproaches

- Methodology of CP implementation in industrialenterprises

- How to develop and implement CP project

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Passive environmentalstrategies

Dilute & disperse

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Reactive environmental

strategiesend-of-pipe approaches

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Reactive environmental

strategiesOn - 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 losshidden losses

leakagenon-conforming materialoverfillpackagingprocess lossreworksecond qualitystock losswashings

and etc.

allowanceBOD

brokecontaminatedsolidscore losscustomer returnsdamage

drainingdusteffluentevaporationfurnace loss

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Waste is waste what

ever you call it : takethe opportunity to cutwaste and increaseprofits!

!!!

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Cleaner Production FinancingThe Cost of Waste Iceberg

THE HIDDEN COST

OF WASTE

Adapted from: Bierma, TJ., F.L. Waterstaraat, and J. Ostrosky. 1998. Chapter 13: Shared Savings andEnvironmental Management Accounting, from The Green Bottom Line. G reenleaf Publishing:England.

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Where are you now?

Only a changein technologywould eliminatewastecompletely

We areoptimising our processes andachieving bigcost reductions

Waste iscoming down aswe change theway we work

We haveidentified our waste andmonitoring it

We plan toreduce waste

Waste is cost

and regulatoryissue

Waste is onlydisposal issue

Waste is not anissue

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Cleaner Production Definition

The continuous application of an integratedpreventive environmental strategy applied toprocesses, products, and services to increaseoverall efficiency and reduce risks to humansand 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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alwa ys

reduces l ong-term l ia bi l ities w hichcomp a nies c a n f a ce m a ny ye a rsa fter po ll ution h a s been gener a tedor disposed a t a given site

Proper l y imp l emented CP :

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Properly implemented CP :

usu a llyy increases profitabilityy lowers production costsy enhances productivityy provides a rapid return on any capital or

operating investments requiredy increases product yieldy leads to the more efficient use of energy

and raw materials

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u s u all y (contin u a tion)y results in improved product qualityy increases staff motivationy relies on active worker participation in

idea generation and implementationy reduces consumer risksy reduces the risk of environmental

accidentsy is supported by employees, local

communities, customers and the public


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of ten

y avoids regulatory compliance costs

y leads to insurance savings

y provides enhanced access to capitalfrom financial institutions and lenders

y is fast and easy to implementy requires little capital investment


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Cleaner Production principles

precaution principle

preventive principle

integration principle

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How CP could be applied inpractice?

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Cleaner Production practices

1. Good housekeeping

take appropriate managerial andoperational actions to prevent:

- leaks

- spills

- to enforce existingoperationalinstructions

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2. Input substitution

substitute input materials

- by less toxic

- or by renewable materials

- or by adjunct materials which

have a longer service life-timein production

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3. Better process control

modify:- operational procedures

- equipment instructions

and process record keeping inorder to run the processes moreefficiently and at lower waste andemission generation rates

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4. Equipment modi f ication

modi f y the existing productionequipment and utilities in order:- run the processes at higher e ff iciency

- lower waste and emissiongeneration rates

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5. Technology change

replacement of:- the technology

- processing sequence

- synthesis pathway

in order to minimise wasteand emission generationduring production

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6. On-site recovery/reuse

- reuse of the wasted materialsin the same process for another useful application within thecompany

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7. Production o f a use f ul by-product

consider trans f orming waste intoa use f ul by-product, to be soldas input f or companies indi ff erent business sectors.

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8. Product modi f ication

modi f y the productcharacteristics in order:

- to minimise the environmentalimpacts o f the product duringor a f ter its use (disposal)

- to minimise the environmentalimpacts o f its production

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CP versus End-of-Pipeapproach

Cleaner Production

Continuous improvement

Progress to w ards use of closed loopor continuous cycle processes

Everyone in the community has arole to play; partnerships areessential

Active anticipation and avoidance of pollution and w aste

Elimination of environmentalproblems at their source

Involves ne w practices, attitudesand management techniques andstimulates technical advances

Pollution Control and WasteManagement

One-off solutions to individualproblems

Processes result in w aste materialsfor disposal a pipeline w ithresources in and w astes out

Solutions are developed by expertsoften in isolation

Reactive responses to pollution andw aste after they are created

Pollutants are controlled by w astetreatment equipment and methods

Relies mainly on technicalimprovements to existingtechnologies

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What is not CP?Off- site recyc l ing

Trans ferr ing haza rd o u sw ast e s

Wast e t re atm e nt

Conc e nt r ating haza rd o u so r toxic constit ue nts toredu c e vo l ume

Di l u ting constit ue nts toredu c e haza rd o r toxicity

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Wh a t a re t h e b enefi ts of C l e a ner P rodu ct ion?

Impro v ing en v ironmen t al s i t u a t ion

In c re a s ing e c onomi c al b enefi ts

In c re a s ing produ ct i v i ty

G a ining c ompe t i t i ve

a d v a n t a ge

Con t inuou s

en v ironmen t al impro v emen t

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CP barriers

In ter n a l t o t h e c omp a n ies:- Lack of info r m ati on a nd

ex p ertise- Lo w e n vir onm e n ta l

a w are n ess- C omp eti ng b u si n ess

p ri o rities, i n p artic u l ar, t h ep ress u re fo r a s h o rt ter m p r of its

- Fi n a n cia l o bstac l es- Lack of c ommun icati on in

f ir m s

- Mi dd l e m a n a g e m e n t i n ertia

- Lab ou r fo rce o bstac l es

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-Diffi c u l ty in

a cc e ss ing c l e a ner t e c h no l ogie s

-Diffi c u l ty in a cc e ss ing

e xt ern al fin a n c e

CP b a rrier s

Ext ern al t o t h e c omp a nie s:

T h e f a i l ure of e x i st ing regu la t or ya ppro a c h e s

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CP motivators and drivers

I nterna l to t h e com p anies:

- I m p rovements in p rod u ctivityand com p etitiveness

- Environmenta l mana g ementsystems and contin u o u sim p rovement

- Environmenta l l eaders h ip

- Cor p orate environmenta l re p orts

- Environmenta l acco u ntin g

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CP motivators and drivers

Externa l to t h e com p anies:

- I nnovativere gu l ation

- Economicincentives

- Ed u cationandtrainin g

- B u yer s upp l ier re l ations

- So f t l oansf romFinancia l instit u tions

- Comm u nityinvo l vement

- I nternationa l tradeincentives

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T h e ro l e of in t ern a t ion al org a ni z a t ion s in CP

de v e l opmen t

U ni t ed N a t ion s E n v ironmen t Progr a mme (U NEP)

U ni t ed N a t ion s Indu st ri al De v e l opmen tO rg a ni s a t ion (U NIDO)

Org a ni s a t ion for E c onomi c Co-oper a t ion a nd De v e l opmen t ( OECD)

W or l d B u s ine ss Coun c i l for S u st a in abl e De v e l opmen t ( WB CSD)

De v e l opmen t F in a n c e In st i t u t ion s ( DFI s )

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Team for CP success

Managers, engineers and finance people inindustry and commerce , in particular thoseresponsible for business strategy, productdevelopment, plant operations and finance

Government officials , both central andregional, who play an important role inpromoting CP

Media representatives who play animportant role in disseminating informationon good environmental practice

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C l e a ner Produ ct ion pro c edure sT h e re c ogni z ed need

t o minimi s e wa st e

P la nning a nd O rg a ni z a t ion

Ass e ss men tP h a s e

Fe a s i b i l i ty A n al ys i sP h a s e

Imp l emen t a t ion

Su cc e ss fu ll y imp l emen t ed CP proje cts

T h e fir stst ep

T h e s e c ond st ep

T h e t h ird st ep

T h e four t h st ep

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1 . P la nning & Org a ni z a t ion

O b t a in m a n a gemen tc ommi t men t

Iden t if y po t en t i al ba rrier sa nd s o l u t ion s

Se t p la n t - w ide go al s

Org a ni z e a proje ct t e a m

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2 . Ass e ss men t

Iden t if y s our c e s

Iden t if y wa st e /po ll u t ion c a u s e s

G ener a t e po ss i bl e

op t ion s

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M a t eri al a nd energ y bala n c e s

Th e Ind ust ri al P r oc e ss

H e a t Pow er Th e E nerg y

B ala n c e

Coo l ing

R a wM a t eri al s

P r o d ucts& W a st e

Th e M a ss

B ala n c e

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Wh y a re m a t eri al a nd energ ybala n c e s s o impor t a n t ? T h e m a t eri al a nd energ y bala n c e s a re no t on l yu s ed t o iden t if y t h e inpu ts a nd ou t pu ts of m a ssa nd energ y b u t t h eir e c onomi c s ignifi c a n c e i sre la t ed t o c o sts , s u c h a s:

c o st of r a w m a t eri al in w a st e

c o st of fin al produ ct in w a st e

c o st of energ y l o ss e s

c o st of h a nd l ing w a st e

c o st of h a nd l ing w a st e

c o st of t r a n s por t ing w a st e

c o st of s o l id w a st e s di s po s al

c o st of po ll u t ion c h a rge s a nd pen al t ie s

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Po ss i bl e c a u s e s for wa st e gener a t ion

Pro c e ss

M a n a ge m en tP la nning &Infor m a t ion

Syst e ms

Per s onne l Sk i ll s &

Mo t i v a t ion

Wa st e s &Em i ss ion s

Ch oi c e &Q u al i ty of

In p u t M a t eri al s

Te ch ni c al St a t u s of

Eq ui pm en t

Ch oi c e of Pro d u ct ion Te ch no l og y

Pro c e ssE ffi c ien cy

Pro d u ctSp e c ifi c a t ion s

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Op t ion gener a t ion (1 ) Cre a t i v e Pro bl em So l v ing (CPS):

- Find f a cts- Iden t if y t h e pro bl em - G ener a t e ide a s t o s o l v e t h e pro bl em s- Define c ri t eri a t o b e u s ed t o s e l e ct s o l u t ion s/ ide a s

S c reening of ide a s / op t ion s : - Se l e ct all ide a s/ op t ion s t h a t m a y b e imp l emen t ed immedi a t e l y- T h e rem a ining op t ion s/ ide a s s h ou l d t h en b e di v ided in t o t h ree b o x e s :

- G ood h ou s ekeeping - In t ere st ing op t ion s b u t more a n al ys i s i s needed - W a i t ing b o x + R eje ct ed

W eig h t ed s um me t h od t o priori t i s e op t ion s in s e c ond group: - Wh a t a re t h e m a in b enefi ts t o b e g a ined b y imp l emen t ing t h i s op t ion? - Doe s t h e ne c e ss a r y t e c h no l og y e x i st t o imp l emen t t h e op t ion? - H o w mu c h doe s i t c o st ? Doe s i t a ppe a r t o b e c o st effe ct i v e , meri t ing

in dep t h e c onomi c fe a s i b i l i ty a ss e ss men t ? - C a n t h e op t ion b e imp l emen t ed w i t h in a re a s on abl e t imefr a me w i t h ou t

di s rup t ing produ ct ion?

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Op t ion gener a t ion (2 ) T

r a

di t ion al

b

r a

in st orming

Formu la t e pro bl em (pro bl em iden t ifi c a t ion)

Define o b je ct i ve of t h e b

r a

in st orming s e ss ion Fo ll o w t h e ru l e s of b r a in st orming:

- Se l e ct a s e c re t a r y t o w ri t e do w n all ide a s ( T h e s e c re t a r y c a n' t t a ke p a r t in t h e ide a gener a t ion)

- Se l e ct a group l e a der (t h e group l e a der s h all c on t ro l t h a t t h e four m a in ru l e s a re fo ll o w ed)

C l o s e t h e ide a gener a t ion a f t er 30-40 minu t e s

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3 . Fe a s i b i l i ty S t udie s

Pre l imin a r y e v al u a t ion T e c h ni c al e v al u a t ion E c onomi c e v al u a t ion En v ironmen t al e v al u a t ion

Se l e ct ion of fe a s i bl e op t ion s

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C a pi t al in ve st men tAnnu al oper a t ing c o st s a v ing s

P a y ba c k Period

- period of t ime (y e a r s ) needed t o gener a t e enoug h

c a s h f l o w t o re c o v er t h e ini t i al in v e st men t

P a y ba c k period = _____________________________

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4. Imp l emen t a t ion &

Con t inu a t ion

Prep a re a CP p la n Imp l emen t fe a s i bl e CP me a s ure sM oni t or CP progre ssSu st a in C l e a ner Produ ct ion

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CP a tt a c k s t h e pro bl em a t s e ver al l e v e l s a t on c e . T h e imp l emen t a t ion of a n indu st r y/ p la n t l e ve l progr a mme require s,

- t h e c ommi t men t of t op m a n a gemen t

- a syst em a t i c a ppro a c h t o CP in all a s pe cts of t h e produ ct ion pro c e ss e s

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Marketing

Top managementcommitment

Pre-assessment

CP policy

declaration

The continuousCP loop

Assessment

S tart CP pro j ect

Pro j ect organization

CP options

F easi b ility analysis

Assessment report

Pro j ect implementation

Measure progress

F inal report

Top Management revie w s

CP management system

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CP and main stakeholders

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How can governments

promote CP?

y A pp l y ing regu la t ion s

y Us ing e c onomi c in st rumen ts

y Pro v iding s uppor t me a s ure s

y O b t a ining e xt ern al a ss i st a n c e

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CP applicability for local

governmentsy Corpor a t e de c i s ion-m a king y Lo c al en v ironmen t al m a n a gemen t st r a t egie sy Communi ty a nd indu st r y p a r t ner s h ip sy Su st a in abl e e c onomi c de v e l opmen ty Pu bl i c en v ironmen t al edu c a t ion y Spe c ifi c l o c al en v ironmen t al

pro bl em sy Lo c al en v ironmen t al

moni t oring

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CP and financial institutionsEnvironmental evaluation can help:

Establish an exclusion list

Identify environmentalrisks in every project

Understand the financialinstitutions exposure toenvironmental risks andliabilities

Monitor the environmentalrisks of transactions andrespond

Evaluate risks andliabilities in foreclosure or re-structuring activities

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Wh a t a re t h e b enefi ts of C l e a ner Produ ct ion?

F in a n c i al a d v a n t a g e s:

Us u all y a s h or t P a y ba c k Period of on l y mon t h s

M a n y l o w - c o st op t ion sQui c k t o imp l emen tImpro v ed c a s h f l o w sGre a t er s h a re h o l der v al ue B e tt er a cc e ss t o c a pi t al a nd a ppe al t o fin a n c i al in st i t u t ion sIn h eren t pre v en t i v e a ppro a c h l e a d s t o in s ur a n c e s a v in gs

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Main factors affectingexposure to environmentally-

derived risks

y The nature of environmental risksinherent in business activity of theclient

y The size and term of, and the securityfor, the transaction

y The clients ability and commitmentto adequately manage these risks

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If a CP project is presented to a financialinstitution, it should be clear that the

company already undertook voluntary actionsaimed at:y rationalising the use of raw materials, water and energy

inputs, reducing the loss of valuable material inputs andtherefore reducing operational costs

y reducing the volume and/or toxicity of waste, wastewater and emissions related to production

y improving working conditions and occupational safety ina company

y making organisational improvementsy improving environmental performance by the

implementation of no-cost and low-cost measures fromthe companys funds

y reusing and/or recycling the maximum of primary inputsand packaging materials

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Environmental investment

opportunitiesy l o a n s t o en t erpri s e s t o fin a n c e required or de s ired

in v e st men ts in t e c h no l ogie s re s u l t ing in dire ct a nd indire ct en v ironmen t al b enefi ts

y l o a n s t o muni c ip al i t ie s t o fin a n c e in v e st men ts in en v ironmen t al infr a st ru ct ure

y l o a n gu a r a n t ee s t o b o t h en t erpri s e s a nd muni c ip al i t ie s for s of t c redi ts from n a t ion al or region al en v ironmen t al fund s for en v ironmen t al

in v e st men tsy l o a n s t o fin a n c e b u s ine ss e s pro v iding

en v ironmen t al good s a nd s er v i c e s

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Wh a t h a v e w e l e a rned? y T h e CP a ppro a c h redu c e s po ll u t a n t gener a t ion a t e v er y

st a ge of t h e produ ct ion pro c e ss

y CP c a n b e a c h ie v ed t h roug h : - good oper a t ing pr a ct i c e s- pro c e ss modifi c a t ion

- t e ch

no l og y c

h a nge s- r aw m a t eri al s u b st i t u t ion

- rede s ign a nd /or reformu la t ion of produ ct

y T h e e c onomi c a d v a n t a ge s of CP a re: - c o st effe ct i v ene ss- in c re a s ed pro c e ss effi c ien cy

- impro v ed produ ct qu al i ty a nd en t erpri s e c ompe t i t i v ene ss- c o st of fin al t re a t men t a nd di s po s al i s minimi s ed

y Eff l uen t t re a t men t, in c iner a t ion , a nd wa st e re cyc l ing ou ts ide t h e produ ct ion pro c e ss a re no t reg a rded a s CP

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Broader Application of CP

CP is closely linked to:

Environmental ManagementSystems

Total Quality Management

Health and SafetyManagement

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Cleaner Production andSustainable Development

ResponsibleEntrepreneurship

Eco-efficiency

Cleaner Production

Compliance

GovernmentAgenda

BusinessAgenda

ICC

Charter EMSEHS

Auditing

Sustainabledevelopment

Agenda 21

Factor X

Environmentalspace

Time

Sustainability

Economic Instruments

Co-regulatory agreements

Command & control

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!!!

CP isa journey

not adestination

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An understanding of the business value to begained from efficient useof natural resources is an

important first steptoward sustainability:

toward building a world in which resourcesare managed to meet the needs of allpeople now and in the future.

(J. L ash, P resident of the W orld Resources I nstitute )

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