Resource Efficient and Cleaner Production RECPBarriers UNIDO Environment

Resource Efficient and Cleaner Production (RECP)Barriers UNIDO Environment Department Industrial Resource Efficiency Division Barcelona, 13 th November 2018

Why: • Identify the top management perceptions of reasons which limit the adoption of RECP techniques and technologies in their production before and after the implementation of MED TEST II (20162018). How: • Questionnaires sent to all MED TEST II companies. • Almost all the companies that replied before did so after. • Responses: 76 Companies (61% of total) Before the implementation of MEDT TEST II and 77 after (62%). 2

How important would you say are these reasons in deciding not to implement RECP practices and technologies? ‘ 1’ is not very, and ‘ 4’ is very important reason Legal How important? 1 2 3 Lack of pressure to comply with environmental regulations High cost of / difficulty in borrowing investment capital Small percentage of production costs is for material/energy input. Finance related reasons Equipment is still efficient and replacement is not cost effective No information on existing reward/recognition premium for improving environmental performance of the production process in the supply chain No available data on existing local/international market premium and market opportunities for green products No metering of material/energy flows and no measuring of the real cost of losses (low ability to determine efficiency of production inputs use) Know-how related reasons Insufficient available capacity for identifying more sound environmental alternative (raw materials inputs or technology) to current production processes Difficulty to access detailed technical information on appropriate RECP options or external specialized consultancy services No free internal resources and technical skills for the implementation of the known RECP options Production related Priority is given to production expansion rather than resource efficiency Possibility of production interruption and/or potential negative impact on product quality reasons Experience based reasons No known first-hand experience from other companies of successful resource efficient measures implementation Uncertainty about the impact on production performance and costs No or insufficient available positive feedback from previous resource efficient measures Other – please, specify For Companies only Change in total number of employees in the Company between September 2015 and September 2017 3 4

Top Barriers to RECP Based on the average responses following interviewing campaign before and after the implementation of MED TEST II, the top 5 barriers perceived by industries to implement RECP stayed the same: • Finance related barriers: • High costs of/ difficulty in borrowing investment capital • No information on local/international market premium or recognition for RECP or green products • Know-How related barriers: • Difficulty to access technical information or external consultancy providers specialized in RECP • No metering or cost accounting system to measure real cost of inefficiency in the use of production inputs • Lack of internal resources and technical know how for implementing RECP 4

Results (Median) 4 Equipment efficiency Information on existing premium Production Quality Importance 3 After Before 2 1 1 Legal 2 3 4 5 Finance related reasons 6 7 8 9 10 Know-how related reasons Question 11 12 Production 13 14 15 Experience based reasons 5

Change in Perceptions • Positive Change (after MED TEST II, not an obstacle anymore) ü Equipment will be replace to reduce loss even if it is still within its lifetime. LCC (Life Cycle Costing) demonstrate the economic benefits of factoring running costs of technology into feasibility of RECP solutions. ü Implementing RECP won’t affect production or have a negative impact on product quality. • Negative Change (after MED TEST II, perceived as more important obstacle) ü No information on existing reward/recognition premium for improving environmental performance of the production process in the supply chain. Companies realize not only the benefits but also the effort behind implementing RECP, and value recognition scheme. 6

Thank you! Rasha Abdrabu Technical Associate Industrial Resource Efficiency Division, Department of Environment (UNIDO) r. abdrabu@unido. org 7