PREMA - Profitable Environmental Management

1. PREMA - Profitable Environmental Management

2. Introduction or: Lessons learned • Over 30 Years of „saving the environment“ tells us that the topic„Environment“ should not handled isolatedandtheoretical

3. Introduction or: Lessons learned • Over 30 Years of „saving the environment“ tells us that the topic„Environment“ should not handled isolatedcombinedandbut andtheoretical practical

4. developed by : GIZ - Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH - German International Cooperation - PREMAProfitable Environmental Management implemented by: PREMAnet - Association of licensed trainers financed by: BMZ - German Ministry for Economic Cooperation and Development

5. Countries where PREMA has been implemented Europe:Germany, Rumania, Montenegro, Croatia, Bulgaria, Macedonia Centralamerica:Mexico, Costa Rica, El Salvador, Jamaica, Cuba, Guatemala, Nicaragua Asia:Philippines, Indonesia, China, Vietnam, Thailand, India, Sri Lanka Latin America:Brazil, Bolivia, Chile, Ecuador, Peru, Venezuela, Uruguay Africa/ Middle East:Zimbabwe, Zambia, Republic South Africa, Kenya, Nigeria, Algeria, Tunisia, Morocco, Ghana, Jordan, Egypt in total: > 40 countries

6. PREMA = triple win PREMA means a triple win for companies Costsavings and increase in productivity Economic efficiency Lesswaste, air emissions and effluents Environmental performance Enhanced capacity to implement changes Organisational Learning

7. Non-Product Output (NPO) Input-costs of NPO Processing- Costs of NPO Disposal- Costs of NPO + + = Input Process Output desired final product Raw material Energy generation of NPO Water disposal of NPO Non-product output (NPO) 10-30% of total cost of production Total NPO-costs NPO = all material, energy and waterwhichisused in theproduction processbutdoesnot end up in the final product.

8. Raw materials not up to requested quality standards Auxiliaries Rejects/ defects and costs for reprocessing Wastes (solid, liquid, toxic, non-toxic) (Waste) water Energy Emissions (including noise and odours) Losses in stock (due to storage conditions) Losses during manipulation and transportation (intern, extern) Packaging materials (with little exceptions) Client reclamation and client retours Losses due to insufficient maintenance Losses due to accidents Virtual NPO (opportunity costs = missed production) Production capacities used for reprocessing Machinery standstill times Examples for Non-Product Outputs (NPO)

9. water..................m³ energy ...............kWh auxiliaries .........kg waste water …..m³ atmospheric….m³/kg emissions waste energy …kWh solid waste ...... kg water ................ m³ energy ............kWh auxiliaries .........kg kg ............................. Model NPO Flow Chart The main input appears on the top (in blue) Raw Material Non-Product Output (NPO) is shown on the right (in red) Additional inputs are shown on the left (in blue) waste water …… m³ atmospheric ... m³/kg emissions waste energy.....kWh solid waste .... kg ............ Production step 1 water energy m³ ................... ................... kWh auxiliaries....... .kg Intermediate Product 1 Production step 2 Intermediate Product 2 etc. waste water ......... m³ atmospheric.....m³/kg emissions waste energy......kWh solid waste .....kg Production step 3 kg ............................. The final product is shown at the bottom of the process (in green) Final Product 3

10. Flow analysis 6 2 Analysis of costs / environmental impact Integration in company structure 5 3 Implementation of measures Analysis of Causes 4 Developmentof measures PREMA Cycle of Implementation 1

11. Good Housekeeping(GHK) What are the elements of a PREMA programme? PREMA is a 6 to 8-month programme for innovation teams from medium-sized companies. Networkmeeting ~8 weeks Evaluation & Integration Networkmeeting Implementation of measures ~8 weeks Cost Management(EoCM 2) Development of measures Networkmeeting company visits by trainers ~8 weeks Cost Management(EoCM 1) company visits by trainers Analysis and first measures company visits by trainers

12. Metal industry China - Substitution of raw materials achieves significant savings Procedure in the company • Economic savings • Annual net savings: approx. 2.5 Mio. € • Additional costs: 250,000 € From low quality raw materials… The problem: Low quality raw materials required three additional preprocessing steps, which lead to high rejects rate, energy losses and wastewater discharges • Environmental impacts • Acid wastewater discharges are reduced by approx. 30% • The measures: • NPO calculation helped the company to realize that it is better to pay higher for better quality raw materials than to pay more for the three pre-processing stages ..to high quality steel • Organisational development • Establishment of an internal PREMA team • Stimulation of PREMA-oriented re-assessment of additional processes

13. Carpentry Germany -Reorganisation of product range offered Achieved environmental benefit • reduction of timber waste by 4-5% • reduced resource (wood) use Procedure in the Company The problem: Cut according to customer requirements High amount of waste, since the timber cannot be optimally cut. Economic benefit • investment costs: 1,000 € for the extension of the storage room • annual saving: 15,000-30,000 € through the reduction of raw material costs by 4-5% • payback period: < 1 month The measure: Production of various pre-defined cut sizes for standard parts (steps and banister bars), which are stored in clear arrangement Organisational improvements • Increased awareness of the significance of the raw material wood and its costs among the staff Optimised use of timber

14. Food manufacturer China – Temperature control for full production during all seasons Action taken within the company • Economic benefits • Investment costs: 113,636 € • Annual net savings: 39.770 €(during the 1st winter = 0,5 year) • Payback period: app. 17 months • The Problem and its Causes • High energy losses due to lack of insulation • Unreliable system for temperature control made use of main production unit during summer or winter impossible • Environmental benefits • Decreased energy losses • Less air pollution per amount of product • The Idea • Thermal isolation of all operating parts and of the factory building • Refurbishment of the production unit, installation of effective tem-perature control • Organisational benefits • Improvement of overall manage-ment capability and of professional level throughout the company • Occupational Health & Safety Improvements • Improvement of health standards in order to comply with HACCP requirements

15. Food manufacturer China – Reduction of solid waste through incentive system 2 % loss ofglass bottles accepted by standard Application of a new policy Action taken within the company The Problem The Idea 3 % of bottles brokenduring filling process 2 % or more losses 2 % or less bottles broken additional costs, if more than 2 % costs benefit Filling unit absorbs additional costs 50 % filling unit staff 50 % company whole company absorbs costs • Economic benefits • Investment costs: None • Annual net savings: 972 €(if loss is reduced from 3 % to 2 %) • Payback period: immediate • Organisational benefits • Enhanced responsibility of the work unit and better self-management • Environmental benefits • Reduction of solid waste (broken bottles)

16. Chemical manufacturer China -Recycling of water for steam production (closed circuit) Action taken within the company The Problem and its Causes The Idea 15 % of the water used for steam production was directly released as waste water into the water-treatment plant Installation of a closed water circuit by rehabilitating existing tubes and pumps The new system of water re-cycling • Economic benefits • Investment costs: 477 € • Annual saving: 7,070 € • Payback period: 0.8 months • Organisational benefits • Staff learned to manage water in a closed circuit • Environmental benefits • Less water consumption

17. PREMA® implementation in China Tianjin Changzhou/Yangzhou Hangzhou Guiyang

18. Results achieved through PREMA® in China • 11 training programs implemented in 5 cities • local partners: Environmental agencies, Productivity Promotion Centres, Consulting firms • 64 enterprises: with about 12 - 1,300 employees • implemented measures: 840 • investments: 57.7 Mio.CNY ≈ 5.77 Mio. € • net economies per year: 123.7 Mio. CNY ≈ 12.37 Mio. € • average payback period: 5.2 months

19. Realised economies Energy Water Steal • Potential economies in Chinese enterprises through PREMA * billion - 30% - 20% - 8%

20. Which results could be achieved with PREMA®? Type of measure: Analysed Case Studies: 296 from 22 countries and 53 sectors

21. Which results could be achieved with PREMA®? Investment costs (US $) Analysed Case Studies: 296 from 22 countries and 53 sectors

22. Which results could be achieved with PREMA®? Payback period Analysed Case Studies: 296 from 22 countries and 53 sectors

23. Which results could be achieved with PREMA®? Environmental benefits (n = 348 effects)

24. Instruments belonging to the ‘PREMA family’ Good Housekeeping (GHK)(with different check lists: ….) Environmental oriented Cost Management (EoCM) PREMAplus Sustainable Management of industrial Areas (SMIA) Profitable Social Management (PSM) Chemical Management (CM)