This blog will cover some news items related to Sustainability: Corporate Social Responsibility, Stewardship, Environmental management, etc.


Defra in storm over discredited EU carbon plan

Defra in storm over discredited EU carbon plan

By Fiona Harvey and Chris Bryant

Published: April 27 2007 03:00 | Last updated: April 27 2007 03:00

The government department spearheading Britain's effort to reduce carbon output is driving companies and individuals towards paying for emissions cuts that do not take place.

The Department for Environment, Food and Rural Affairs is also about to publish final details of a trading scheme that was set up to encourage companies to reduce their greenhouse gas emissions which led to only four taking £111m of taxpayers' money between them.

The first charge against Defra is that under a proposed code of practice, it has been advising businesses and consumers wishing to offset their emissions to buy carbon credits through the European Union or UN carbon trading scheme. However, phase one of the scheme was discredited last May for flooding the market with too many permits to achieve any emissions cuts.

With so many carbon trading schemes on the market, many British companies were keen to follow official advice. However, the result is that many were persuaded to buy environmentally worthless carbon credits.

Reflecting the surplus in ETS permits, the market price has plunged to less than €0.50 (£0.34) per tonne, but offsetting companies are selling permits for more.

John Henley, chief executive of MyCarbonWorld, which offers EU phase one permits for sale at £6.40 per tonne told the Financial Times: "It's not a simple case of a gross margin there. There's obviously set-up costs, admin costs, dealing costs, wholesale costs."

Since the FT contacted Mr Henley, the price per tonne has changed to £4.11.

Defra said yesterday: "We believe that businesses and consumers are looking for increased clarity in the offsetting market, which is why we have proposed a code of practice."

The department defended its actions, saying the code, though published in January, would not come into force until 2008, when EU phase one permits would no longer be sold. But companies selling offsets based on EU permits have seen their businesses expand as a result of the Defra code. Equiclimate, used by Calor Gas to offer offsets to its customers, sells a mixture of two-thirds of permits from phase one of the scheme and a third of permits from phase two. It said it had seen much more demand for offsets since Defra issued its code.

Lord Turner, the former CBI director-general and the man who headed the government's Pensions Commission, was one of those who bought the offsets recommended by Defra - albeit before the code was published.

He told the FT: "The price was considerably higher [than today]."

He added that the Defra-backed scheme would be a good one - "once the [EU] emissions trading scheme is in full working order".

Defra is also set to publish soon details of the UK Emissions Trading Scheme, which was set up with £215m government funding to encourage 34 participating companies to cut their emissions.

But more than half the funding went to only four companies - Ineos Fluor, Invista UK, Rhodia Organique Fine and BP - even though the National Audit Office found only 66 per cent of the companies' reductions in the first year could be directly attributed to the scheme. Ineos Fluor was paid £43m after ICI, the previous owner of its Cheshire works, had installed an incinerator for £6m in 1999 to reduce greehouse gas emissions. The company told the FT it had spent about half the government money it received on clean-up technology.

Norway sets ambitious 'carbon neutral' climate target

From Norbert... "A contrasting view that lifestyle changes will be required.  A Japanese report also calls for 40-45% reductions in energy use. "

Norway sets ambitious 'carbon neutral' climate target
AFP, 1 May 2007 -  Fewer roses on a wintry Valentine's Day, less room for kids in smaller cars and costlier holidays in the tropics: life in Norway will become less glamorous but more climate-friendly as the country aims to be "carbon neutral" by 2050.

Norway sets ambitious 'carbon neutral' climate target

AFP, 1 May 2007 - Fewer roses on a wintry Valentine's Day, less room for kids in smaller cars and costlier holidays in the tropics: life in Norway will become less glamorous but more climate-friendly as the country aims to be "carbon neutral" by 2050.

As the world's leading climate change experts meet in Bangkok, from where they are due to issue a key report Friday, Norway is providing an example of the kind of direction some countries are heading.

When Prime Minister Jens Stoltenberg on April 19 announced Norway's pledge to reduce CO2 emissions to zero, the Scandinavian nation set the most ambitious climate target in the world.

The government has yet to detail the concrete measures it will undertake to achieve the goal, but experts say changing lifestyles are inevitable.

Norway already covers almost all of its energy needs with hydroelectricity, a "clean" energy source, so its CO2 reductions will have to be made elsewhere, notably in the transport sector.

Perishable foods flown around the world by airplane -- a highly pollutant form of transportation -- could be among the first to go in climate-conscious Norway.

"The price tags on products will have to reflect the distance they have travelled," said Helge Drange, a scientist at the Nansen environmental research centre.

"Roses from Africa and the Netherlands will be less affordable. We will buy an increasing amount of local products," he said.

Because transportation is so inexpensive these days, more than half of the fish caught off Norway in the Barents Sea and sold in the country is sent to China to be filleted before being sent back here for sale.

"Neither the manufacturer nor the consumer pay the true cost of energy today," said Pierre Perbos, head of the French environmental activist group Reseau Action Climat-France.

"The climate is paying the price. It's completely absurd that kerosene is not taxed," he said.

Low-cost flights could also be a thing of the past, as ticket prices will have to be increased to compensate for the CO2 emissions of each flight.

Financial incentives will encourage owners of SUVs and other large vehicles to buy smaller, energy-efficient cars run on hybrid engines and, eventually, hydrogen power, pending major technological advances in the field.

Residential areas and offices will also be concentrated in the same area for more efficient energy use and to optimize public transport.

It remains to be seen how much of Norway's CO2 reductions will come from measures taken within the country, how much will come from the purchase of emission rights, and how much will come from investments in "clean" energy projects abroad as allowed under the Kyoto Protocol.

"The climate keeps a tally of the greenhouse gas molecules that enter the atmosphere. It doesn't care about the sender's address," said Helge Drange.

But the issue is sensitive -- symbolically, politically and economically -- as attempts to reduce emissions within Norway's borders are much costlier than financing cuts abroad.

The country is expected to emit 60 million tonnes of carbon dioxide in 2012. At current prices -- generally seen by experts as too low -- Norway could buy CO2 quotas to cover its emissions for a billion euros (1.36 billion dollars) a year, according to the European research and analysis organisation Point Carbon.

That is a drop in the bucket compared to the hundreds of billions of dollars that Norway, one of the world's biggest oil and gas exporters, has yielded so far from its lucrative offshore fields.

According to Frederic Hauge, the head of the Norwegian environmental organisation Bellona, Norway has a "moral responsibility" to develop new technologies that are out-of-reach for other countries precisely because it has built its immense wealth on the climate-unfriendly oil industry.

And, he notes, "there's a lot of money to be made in this sector."

This article is reproduced with kind permission of Agence France-Presse (AFP) For more news and articles visit the AFP website.

Please note:
This article is for information purposes only. The WBCSD does not represent or endorse the accuracy or reliability of any information provided.

Author Pierre-Henry Deshayes
Publication Date 1 May 2007
Document Type News articles
Issue/Topic Energy & Climate
Energy Efficiency in Buildings
Region Europe
Country Norway
Source AFP
ExpiryDate 01.08.2007
Include In RSS Energy & Climate News


A simple plan: Diana Farrell of the McKinsey Global Institute argues a commitment to energy efficiency can help avert a global climate crisis.

A Simple Plan to Cut Energy Demand Growth and Carbon Emissions

By Diana Farrell
June 7, 2007

Diana Farrell of the McKinsey Global Institute argues a commitment to energy efficiency can help avert a global climate crisis.

G8 leaders meeting in Germany this week will debate the merits of rival European Union and U.S. approaches to global warming. Amid all the jockeying, there's a clear way forward that could cut both carbon emissions and global energy-demand growth without damaging the economy of the U.S. or any other country. Research by the McKinsey Global Institute (MGI) and McKinsey's global energy and materials practice finds that a concerted global effort to boost energy productivity—the output we achieve from the energy we consume—would have spectacular results.

Using existing technologies, we could cut global energy-demand growth by more than half over the next 15 years. By 2020, that could save the equivalent of one and a half times total U.S. energy consumption today—getting us about halfway toward emission levels needed to keep global warming in check. And, far from being costly, these initiatives would pay for themselves. This makes them an obvious first step in efforts to address energy-related environmental or supply security issues.

So what are these opportunities? Five top priorities would collectively deliver a third of the total improvement to energy productivity. And because the sectors entailed are so carbon-intensive, they would represent 45% of the overall carbon dioxide reduction potential from energy productivity improvements.

It Starts With China

The single largest opportunity is Chinese industry. Because China is at a relatively early stage in its industrial development, the country has a golden opportunity to leapfrog more established industrialized economies in energy productivity. China will account for one-third of global energy-demand growth between now and 2020, nearly half of which will come from its industrial sector.

So it's crucial that China incorporate cutting-edge energy-efficiency technologies, such as the recovery of heat generated in the production of electricity, into new factories and power plants. The economics of doing so are attractive and would reduce projected global energy demand in 2020 by the equivalent of 6 million barrels of oil a day.

The second opportunity is replacing the world's least efficient power stations with new high-efficiency plants. Energy losses in the generation and distribution of electricity alone represent close to 25% of global energy demand today. This waste could be significantly cut with new technologies such as advanced combined-cycle gas turbines. Globally, replacing the least efficient power plants could cut 2020 demand by another 6 million barrels of oil per day. For instance, Russia could replace its entire gas-fired capacity, and see a payback in two years.

China's residential and commercial buildings are third in our top five priorities. With the explosion of China's middle class, energy consumption by households and nonindustrial businesses will grow at close to 5% annually, more than doubling by 2020. However, constructing new buildings with world-class insulation standards and installing energy-efficient heating and cooling equipment would help reduce demand by the equivalent of 4 million barrels of oil daily.

U.S. Homes Are Lagging

The fourth area of rich potential is U.S. homes, the single largest consumer of energy in the world. If the energy efficiency of all U.S. households were to increase to the levels of California or Europe, global residential energy demand in 2020 could decline by more than a third—the equivalent of nearly 4 million barrels of oil a day.

A typical U.S. family can retrofit incandescent bulbs with compact fluorescent lighting fixtures and get a payback in less than a year; or replace obsolete heating and cooling equipment with a state-of-the-art heat pump and save 25% of the annual heating and cooling bill for less than $1,000 extra cost. The opportunity is even larger in new homes, where the most efficient heating and cooling package saves 50% of the energy consumption required by current standards, or $400 annually for an average household.

Today, high prices for many energy-efficient ovens, refrigerators, and the like are a turnoff for many consumers. However, if policy makers tightened standards, production of such appliances would rise, cutting their cost.

Reducing Subsidies

The fifth priority is to reduce fuel subsidies that shield consumers from the true price of energy they use—and therefore encourage over consumption. We estimate that reducing fuel subsidies by 80% globally (largely in the Middle East, Venezuela, and Mexico) would reduce global demand for road transportation fuel by 5% of the global sector's demand in 2020.

The challenges of climate change and the security of energy supply often appear insurmountable. However, we already have the ability to make deep cuts in energy-demand growth, and in a practical, relatively painless way. This, surely, is an agenda around which we can build a global political consensus.

Diana Farrell is the director of the McKinsey Global Institute, McKinsey & Company's economics think tank.

A cool concept -- Energy: Hydrothermal cooling is a novel approach that uses cold water from lakes and oceans to run air-conditioning systems

A cool concept

Jun 7th 2007
From The Economist print edition

Energy: Hydrothermal cooling is a novel approach that uses cold water from lakes and oceans to run air-conditioning systems

GEOTHERMAL heating—using the warmth of the Earth's interior to heat water—is an old idea. Using the planet's natural coolness, though, is something of a novelty. Nevertheless, as cooling and heating are merely two ends of the same process, it could save money and reduce carbon-dioxide emissions. As long, that is, as you can find a suitable source of cold. Fortunately for Toronto, it sits next to a very large supply of the stuff, in the form of Lake Ontario. Canada's largest city has been pioneering the idea that instead of using electricity to power air conditioning, a useful supply of cold can be directly extracted from the environment.

Three large pipes have been run five kilometres (three miles) into Lake Ontario, to a depth of 83 metres. The water at that depth is a constant 4°C, its temperature protected by a layer of water above it called a thermocline. The water is piped to a filtration plant and then to a heat-transfer station on the mainland. Here the chill is "transferred" to another closed loop consisting of smaller pipes that supply the towers of the city's financial district. Built at a cost of C$230m ($200m) over four years, the system is run by the Enwave Energy Corporation.


One of the first buildings to be connected was the Toronto Dominion Centre, a distinctive set of office towers. Three of the five black buildings were designed by Ludwig Mies van der Rohe and were built in the late 1960s and early 1970s. So was their air conditioning. Connecting them to the deep-water cooling project saves 7.5 megawatts of electricity. The two newer towers, modelled on Van der Rohe's designs, were also recently connected and this summer all five will be air conditioned by water from Lake Ontario. That will save another 2.5 megawatts.

Another 12 megawatts will be saved by connecting up the Royal Bank Plaza and the Metro Centre, seat of the local government. Some 36 buildings in the central business district have now been connected and a further 16 have signed on to join the system. The project is expected to reduce the city's energy needs by 61 megawatts.

Toronto's project is the largest of its kind in the world, and the only one that combines cooling with drinking water. (The water taken from the lake goes on to drinking-water reservoirs and provides about 15% of the city's drinking water.) Other cities use similar cooling projects. The one in Stockholm uses seawater and is about two-thirds the size of Toronto's. A much smaller system at Cornell University uses Lake Cayuga as a source.

Geneva would be an ideal candidate for the system, as Lake Geneva is both cold and deep. The city is investigating a scheme. Tokyo also has deep water, but has not yet done anything about using it. But not all cities can benefit. Chicago, for example, initially appeared promising as it has harsher winters than Toronto and sits beside frigid Lake Michigan. But close to the city, Lake Michigan is shallower than Lake Ontario. To get cold water, engineers would have to lay pipelines that were six times as long as Toronto's. Officials in New York have also explored using such a system, but they ran into a similar problem: the neighbouring ocean is too shallow.

Using cold water for air conditioning saves more than just energy. Most office and apartment towers put the cooling units on the roof. Removing them means the space can be used for other things, such as running tracks or gardens. The three original Van der Rohe towers in Toronto have the cooling units built-in between floors, so they appear as black, windowless bands from the outside. The owner of the buildings is now working out how to convert the area previously occupied by the cooling units into office space—which in downtown Toronto is as precious as electricity.

Getting wind farms off the ground: If people object to wind farms cluttering up the countryside, one answer might be to put them in the air instead

Getting wind farms off the ground

Jun 7th 2007
From The Economist print edition

Energy: If people object to wind farms cluttering up the countryside, one answer might be to put them in the air instead

IF IT ever seems windy where you live, be thankful that you do not live ten kilometres (six miles) up in the air. At that height the jet-stream winds are stronger and blow more consistently than ground-level winds, and they carry up to a hundred times more energy. So just as oil companies are drilling deeper and in more remote locations in search of new reserves, pioneer wind-power engineers are looking higher in the sky for new sources of energy. Conventional turbines will not take them there—the tallest to date is just over 200 metres tall. Instead they are trying to invent a whole new technology for harvesting wind: electricity generators that fly.

One of the most ambitious ideas has been developed by Sky WindPower, a company based in San Diego and led by Dave Shepard. He began his career cracking Japanese military codes during the second world war, then developed machines for reading written text. His work led to the squared-off numbers still seen on bank cards today.


Mr Shepard's flying generator looks like a cross between a kite and a helicopter. It has four rotors at the points of an H-shaped frame that is tethered to the ground by a long cable. The rotors act as the surface of a kite does, providing the lift needed to keep the platform in the air. As they do so, they also turn dynamos that generate electricity. This power is transmitted to the ground through aluminium cables. Should there be a lull in the wind, the dynamos can be used in reverse as electric motors, to keep the generator airborne.

Mr Shepard estimates these rigs could produce power for as little as two cents per kilowatt hour (kWh). That is cheaper than the three to five cents conventional energy generation costs. It is an attractive idea, but a flying generator is a difficult thing to build—and there is a limit to how helpful existing helicopter technology will be. Aircraft require maintenance after a few days of operation, if not sooner. To operate cost-effectively, wind turbines will need to keep turning for many months without upkeep.

Mr Shepard, however, thinks he has a way out. Stabilising and directing a conventional helicopter requires that the pitch of the individual blades be adjusted with every rotation—up to a thousand times a minute. That puts massive stress on the turning mechanism and wears it out rapidly. With a four-rotor arrangement, you can achieve the same effect by changing the pitch of one or two whole rotors, rather than adjusting the pitch of individual blades. Mr Shepard reckons this will make a big difference and will increase the periods between maintenance enough to make the project viable.

Exploiting the jet stream represents the zenith (literally and figuratively) of aerial wind-engineers' ambitions. Ken Caldeira, a climate scientist at the Carnegie Institution who has worked with Sky WindPower, estimates that harvesting just 1% of its energy would produce enough power for everybody on the planet. But even at lower altitudes, the winds are stronger than they are at the surface, and that has attracted the attention of other inventors.

In Canada a company called Magenn Power has developed a proposal for a wind generator filled with helium. It turns around a horizontal axis, rather like a water mill, and could fly at an altitude of up to 1km. The firm sees its system as an alternative to diesel generators in remote locations where ground-level wind is insufficient for a normal windmill.

Meanwhile, Wubbo Ockels of the Delft University of Technology in the Netherlands has been developing another approach to airborne wind generation at lower altitude, with backing from Royal Dutch Shell, an oil giant, and Nederlandse Gasunie, a natural-gas company. Dr Ockels's idea is to launch a kite (without rotor blades) from a ground station, turning a generator as it rises to an altitude of several hundred metres. When it reaches its maximum altitude the kite alters its shape to catch less wind, and can thus be reeled back in using much less energy than it produced when it was being paid out.

An arrangement of two or more of these kites could act together to produce a steady supply of power. While one kite was being released, some of the electricity produced would be used to reel another kite back in, and vice versa. This system has the advantage that it requires only simple parts—generators, kites and cables—and should therefore be much cheaper to build than a conventional wind turbine.

Controlling it, however, would be a different matter. Dr Ockels is working on kites with wings and rudders, which look much more like planes than anything you might see flying in the park. The wings and rudders themselves would be under computer control—the technology is already well established for flying aircraft without a human pilot. To test the idea Dr Ockels's team is building a 100-kilowatt prototype. He hopes to start testing a full-scale device, which would generate 10 megawatts, within five years. That would be enough to power around 6,000 homes. He believes it should be possible to generate electricity at a cost of just 1 cent per kWh.

Any promise of such cheap energy has to be treated with scepticism and all these projects are still a long way from the full-scale test rigs needed to prove they will succeed. No one denies that it will be hard to build a flying generator that can make money. However, the political impetus behind renewable energy is growing and space is limited at ground level. Perhaps it is time for the wind-power industry to reach for the sky.

The truth about recycling: How to get people recycling more—even if they do not particularly want to... As the importance of recycling becomes more apparent, questions about it linger. Is it worth the effort? How does it work? Is recycling waste just going into a landfill in China? Here are some answers

The price of virtue

Jun 7th 2007
From The Economist print edition

How to get people recycling more—even if they do not particularly want to

PLASTIC here, newspapers there, bottles in that pile, tin cans over there. Across the rich world tonight a small army of worthy householders will pick through their rubbish to ready it for the recyclers. It is hardly pleasant work, but at least recyclers bear the mark of civic virtue—unlike those ghastly, unrecycling planet-wreckers next door.

That mix of indignation and righteousness is an odd attitude to hold towards a week's yellowing copies of the Times and a few empty wine bottles. But it is what Ken Livingstone, London's mayor, taps into when he condemns expensive four-by-four "Chelsea tractors" for the petrol they consume and the fumes they emit (even if sports cars are more extravagant). When free-riders, unrestrained and undertaxed, are thought to trample over the diligence of others, the others soon become peeved. Why should you recycle if the extra room in the landfill is taken up by the rubbish of those too selfish or lazy to care? It is the moral expression of a market failure.


Unfortunately, it is also an invitation to bureaucracy to do its worst. Recycling is too often too complex—paper but not cardboard, plastic or no plastic, and so on. It is littered with targets and directives, requiring this and mandating that, without much sign that the thresholds are well-founded. Indeed, plenty of people suspect that lorry-loads of stuff collected for recycling end up in landfill instead. That is a pity, because it discourages a useful practice.

Selling rubbish

It should not be taken for granted that recycling is more efficient than chucking something away. Comparing all the costs, including collection, landfill, disposal, pollution and the value of new materials is difficult. But the signs are that recycling usually does make sense. A study by the Technical University of Denmark looked at 55 products and compared the effects of burying, burning or recycling them. More than 80% of the time, the researchers found, recycling was the most efficient thing to do with household rubbish. There were exceptions—Britain imports too much green glass (all that wine), which is wastefully ground into aggregates and sand for building; it would be more economically efficient and environmentally friendly to throw the bottles away. But the savings are mostly worthwhile. Recycling aluminium requires 95% less energy that making it from scratch; the figure is 70% for plastics and 40% for paper (see article).

So what is the best way to get more people to recycle more? The first step is to use new technologies that allow for a "single stream" of recyclable waste which is sorted on a conveyor belt using an arsenal of hands, "spinning disc" screens and sorting machines. People are more inclined to recycle things if they do not have to sort them into different bins. San Francisco switched to single-stream recycling a few years ago and now boasts one of the highest recycling rates in America.

The second step is to acknowledge that the best way of recycling waste may well be to sell it, often to emerging markets. That is controversial, because of the suspicion that the waste will be dumped, or that workers and the environment will be poorly protected. Yet recycling has economies of scale and the transport can be virtually free—filling up the containers that came to the West full of clothes and electronics and would otherwise return empty to China. What's more, those who are prepared to buy waste are likely to make good use of it.

The last step is to make people pay for their unrecyclable waste and reward them for what they recycle. Electronic tags fixed to bins can weigh each household's waste and bill for it accordingly. Recycling, even if cheaper than outright disposal, will not usually pay for itself, but local authorities can share the savings with households. There are limits to this approach: you do not want people fly-tipping or putting unrecyclable rubbish into the recycling bin just to earn credits. But a system that relies more on self-interest than on virtue should both increase recycling and decrease neighbourly ill will.

The truth about recycling

Jun 7th 2007
From The Economist print edition

As the importance of recycling becomes more apparent, questions about it linger. Is it worth the effort? How does it work? Is recycling waste just going into a landfill in China? Here are some answers


IT IS an awful lot of rubbish. Since 1960 the amount of municipal waste being collected in America has nearly tripled, reaching 245m tonnes in 2005. According to European Union statistics, the amount of municipal waste produced in western Europe increased by 23% between 1995 and 2003, to reach 577kg per person. (So much for the plan to reduce waste per person to 300kg by 2000.) As the volume of waste has increased, so have recycling efforts. In 1980 America recycled only 9.6% of its municipal rubbish; today the rate stands at 32%. A similar trend can be seen in Europe, where some countries, such as Austria and the Netherlands, now recycle 60% or more of their municipal waste. Britain's recycling rate, at 27%, is low, but it is improving fast, having nearly doubled in the past three years.

Even so, when a city introduces a kerbside recycling programme, the sight of all those recycling lorries trundling around can raise doubts about whether the collection and transportation of waste materials requires more energy than it saves. "We are constantly being asked: Is recycling worth doing on environmental grounds?" says Julian Parfitt, principal analyst at Waste & Resources Action Programme (WRAP), a non-profit British company that encourages recycling and develops markets for recycled materials.


Studies that look at the entire life cycle of a particular material can shed light on this question in a particular case, but WRAP decided to take a broader look. It asked the Technical University of Denmark and the Danish Topic Centre on Waste to conduct a review of 55 life-cycle analyses, all of which were selected because of their rigorous methodology. The researchers then looked at more than 200 scenarios, comparing the impact of recycling with that of burying or burning particular types of waste material. They found that in 83% of all scenarios that included recycling, it was indeed better for the environment.

Based on this study, WRAP calculated that Britain's recycling efforts reduce its carbon-dioxide emissions by 10m-15m tonnes per year. That is equivalent to a 10% reduction in Britain's annual carbon-dioxide emissions from transport, or roughly equivalent to taking 3.5m cars off the roads. Similarly, America's Environmental Protection Agency estimates that recycling reduced the country's carbon emissions by 49m tonnes in 2005.

Recycling has many other benefits, too. It conserves natural resources. It also reduces the amount of waste that is buried or burnt, hardly ideal ways to get rid of the stuff. (Landfills take up valuable space and emit methane, a potent greenhouse gas; and although incinerators are not as polluting as they once were, they still produce noxious emissions, so people dislike having them around.) But perhaps the most valuable benefit of recycling is the saving in energy and the reduction in greenhouse gases and pollution that result when scrap materials are substituted for virgin feedstock. "If you can use recycled materials, you don't have to mine ores, cut trees and drill for oil as much," says Jeffrey Morris of Sound Resource Management, a consulting firm based in Olympia, Washington.

Extracting metals from ore, in particular, is extremely energy-intensive. Recycling aluminium, for example, can reduce energy consumption by as much as 95%. Savings for other materials are lower but still substantial: about 70% for plastics, 60% for steel, 40% for paper and 30% for glass. Recycling also reduces emissions of pollutants that can cause smog, acid rain and the contamination of waterways.

A brief history of recycling

The virtue of recycling has been appreciated for centuries. For thousands of years metal items have been recycled by melting and reforming them into new weapons or tools. It is said that the broken pieces of the Colossus of Rhodes, a statue deemed one of the seven wonders of the ancient world, were recycled for scrap. During the industrial revolution, recyclers began to form businesses and later trade associations, dealing in the collection, trade and processing of metals and paper. America's Institute of Scrap Recycling Industries (ISRI), a trade association with more than 1,400 member companies, traces its roots back to one such organisation founded in 1913. In the 1930s many people survived the Great Depression by peddling scraps of metal, rags and other items. In those days reuse and recycling were often economic necessities. Recycling also played an important role during the second world war, when scrap metal was turned into weapons.

As industrial societies began to produce ever-growing quantities of garbage, recycling took on a new meaning. Rather than recycling materials for purely economic reasons, communities began to think about how to reduce the waste flow to landfills and incinerators. Around 1970 the environmental movement sparked the creation of America's first kerbside collection schemes, though it was another 20 years before such programmes really took off.

In 1991 Germany made history when it passed an ordinance shifting responsibility for the entire life cycle of packaging to producers. In response, the industry created Duales System Deutschland (DSD), a company that organises a separate waste-management system that exists alongside public rubbish-collection. By charging a licensing fee for its "green dot" trademark, DSD pays for the collection, sorting and recycling of packaging materials. Although the system turned out to be expensive, it has been highly influential. Many European countries later adopted their own recycling initiatives incorporating some degree of producer responsibility.

In 1987 a rubbish-laden barge cruised up and down America's East Coast looking for a place to unload, sparking a public discussion about waste management and serving as a catalyst for the country's growing recycling movement. By the early 1990s so many American cities had established recycling programmes that the resulting glut of materials caused the market price for kerbside recyclables to fall from around $50 per ton to about $30, says Dr Morris, who has been tracking prices for recyclables in the Pacific Northwest since the mid-1980s. As with all commodities, costs for recyclables fluctuate. But the average price for kerbside materials has since slowly increased to about $90 per ton.

Even so, most kerbside recycling programmes are not financially self-sustaining. The cost of collecting, transporting and sorting materials generally exceeds the revenues generated by selling the recyclables, and is also greater than the disposal costs. Exceptions do exist, says Dr Morris, largely near ports in dense urban areas that charge high fees for landfill disposal and enjoy good market conditions for the sale of recyclables.

Sorting things out

Originally kerbside programmes asked people to put paper, glass and cans into separate bins. But now the trend is toward co-mingled or "single stream" collection. About 700 of America's 10,000 kerbside programmes now use this approach, says Kate Krebs, executive director of America's National Recycling Coalition. But the switch can make people suspicious: if there is no longer any need to separate different materials, people may conclude that the waste is simply being buried or burned. In fact, the switch towards single-stream collection is being driven by new technologies that can identify and sort the various materials with little or no human intervention. Single-stream collection makes it more convenient for householders to recycle, and means that more materials are diverted from the waste stream.

San Francisco, which changed from multi to single-stream collection a few years ago, now boasts a recycling rate of 69%—one of the highest in America. With the exception of garden and food waste, all the city's kerbside recyclables are sorted in a 200,000-square-foot facility that combines machines with the manpower of 155 employees. The $38m plant, next to the San Francisco Bay, opened in 2003. Operated by Norcal Waste Systems, it processes an average of 750 tons of paper, plastic, glass and metals a day.

The process begins when a truck arrives and dumps its load of recyclables at one end of the building. The materials are then piled on to large conveyer belts that transport them to a manual sorting station. There, workers sift through everything, taking out plastic bags, large pieces of cardboard and other items that could damage or obstruct the sorting machines. Plastic bags are especially troublesome as they tend to get caught in the spinning-disk screens that send weightier materials, such as bottles and cans, down in one direction and the paper up in another.

Corrugated cardboard is separated from mixed paper, both of which are then baled and sold. Plastic bottles and cartons are plucked out by hand. The most common types, PET (type 1) and HDPE (type 2), are collected separately; the rest go into a mixed-plastics bin.

Next, a magnet pulls out any ferrous metals, typically tin-plated or steel cans, while the non-ferrous metals, mostly aluminium cans, are ejected by eddy current. Eddy-current separators, in use since the early 1990s, consist of a rapidly revolving magnetic rotor inside a long, cylindrical drum that rotates at a slower speed. As the aluminium cans are carried over this drum by a conveyer belt, the magnetic field from the rotor induces circulating electric currents, called eddy currents, within them. This creates a secondary magnetic field around the cans that is repelled by the magnetic field of the rotor, literally ejecting the aluminium cans from the other waste materials.

Finally, the glass is separated by hand into clear, brown, amber and green glass. For each load, the entire sorting process from start to finish takes about an hour, says Bob Besso, Norcal's recycling-programme manager for San Francisco.

Although all recycling facilities still employ people, investment is increasing in optical sorting technologies that can separate different types of paper and plastic. Development of the first near-infra-red-based waste-sorting systems began in the early 1990s. At the time Elopak, a Norwegian producer of drink cartons made of plastic-laminated cardboard, worried that it would have to pay a considerable fee to meet its producer responsibilities in Germany and other European countries. To reduce the overall life-cycle costs associated with its products, Elopak set out to find a way to automate the sorting of its cartons. The company teamed up with SINTEF, a Norwegian research centre, and in 1996 sold its first unit in Germany. The technology was later spun off into a company now called TiTech.

TiTech's systems—more than 1,000 of which are now installed worldwide—rely on spectroscopy to identify different materials. Paper and plastic items are spread out on a conveyor belt in a single layer. When illuminated by a halogen lamp, each type of material reflects a unique combination of wavelengths in the infra-red spectrum that can be identified, much like a fingerprint. By analysing data from a sensor that detects light in both the visible and the near-infra-red spectrum, a computer is able to determine the colour, type, shape and position of each item. Air jets are then activated to push particular items from one conveyor belt to another, or into a bin. Numerous types of paper, plastic or combinations thereof can thus be sorted with up to 98% accuracy.

For many materials the process of turning them back into useful raw materials is straightforward: metals are shredded into pieces, paper is reduced to pulp and glass is crushed into cullet. Metals and glass can be remelted almost indefinitely without any loss in quality, while paper can be recycled up to six times. (As it goes through the process, its fibres get shorter and the quality deteriorates.)

Plastics, which are made from fossil fuels, are somewhat different. Although they have many useful properties—they are flexible, lightweight and can be shaped into any form—there are many different types, most of which need to be processed separately. In 2005 less than 6% of the plastic from America's municipal waste stream was recovered. And of that small fraction, the only two types recycled in significant quantities were PET and HDPE. For PET, food-grade bottle-to-bottle recycling exists. But plastic is often "down-cycled" into other products such as plastic lumber (used in place of wood), drain pipes and carpet fibres, which tend to end up in landfills or incinerators at the end of their useful lives.

Even so, plastics are being used more and more, not just for packaging, but also in consumer goods such as cars, televisions and personal computers. Because such products are made of a variety of materials and can contain multiple types of plastic, metals (some of them toxic), and glass, they are especially difficult and expensive to dismantle and recycle.

Europe and Japan have initiated "take back" laws that require electronics manufacturers to recycle their products. But in America only a handful of states have passed such legislation. That has caused problems for companies that specialise in recycling plastics from complex waste streams and depend on take-back laws for getting the necessary feedstock. Michael Biddle, the boss of MBA Polymers, says the lack of such laws is one of the reasons why his company operates only a pilot plant in America and has its main facilities in China and Austria.

Much recyclable material can be processed locally, but ever more is being shipped to developing nations, especially China. The country has a large appetite for raw materials and that includes scrap metals, waste paper and plastics, all of which can be cheaper than virgin materials. In most cases, these waste materials are recycled into consumer goods or packaging and returned to Europe and America via container ships. With its hunger for resources and the availability of cheap labour, China has become the largest importer of recyclable materials in the world.

The China question

But the practice of shipping recyclables to China is controversial. Especially in Britain, politicians have voiced the concern that some of those exports may end up in landfills. Many experts disagree. According to Pieter van Beukering, an economist who has studied the trade of waste paper to India and waste plastics to China: "as soon as somebody is paying for the material, you bet it will be recycled."

In fact, Dr van Beukering argues that by importing waste materials, recycling firms in developing countries are able to build larger factories and achieve economies of scale, recycling materials more efficiently and at lower environmental cost. He has witnessed as much in India, he says, where dozens of inefficient, polluting paper mills near Mumbai were transformed into a smaller number of far more productive and environmentally friendly factories within a few years.

Still, compared with Western countries, factories in developing nations may be less tightly regulated, and the recycling industry is no exception. China especially has been plagued by countless illegal-waste imports, many of which are processed by poor migrants in China's coastal regions. They dismantle and recycle anything from plastic to electronic waste without any protection for themselves or the environment.

The Chinese government has banned such practices, but migrant workers have spawned a mobile cottage industry that is difficult to wipe out, says Aya Yoshida, a researcher at Japan's National Institute for Environmental Studies who has studied Chinese waste imports and recycling practices. Because this type of industry operates largely under the radar, it is difficult to assess its overall impact. But it is clear that processing plastic and electronic waste in a crude manner releases toxic chemicals, harming people and the environment—the opposite of what recycling is supposed to achieve.

Under pressure from environmental groups, such as the Silicon Valley Toxics Coalition, some computer-makers have established rules to ensure that their products are recycled in a responsible way. Hewlett-Packard has been a leader in this and even operates its own recycling factories in California and Tennessee. Dell, which was once criticised for using prison labour to recycle its machines, now takes back its old computers for no charge. And last month Steve Jobs detailed Apple's plans to eliminate the use of toxic substances in its products.

Far less controversial is the recycling of glass—except, that is, in places where there is no market for it. Britain, for example, is struggling with a mountain of green glass. It is the largest importer of wine in the world, bringing in more than 1 billion litres every year, much of it in green glass bottles. But with only a tiny wine industry of its own, there is little demand for the resulting glass. Instead what is needed is clear glass, which is turned into bottles for spirits, and often exported to other countries. As a result, says Andy Dawe, WRAP's glass-technology manager, Britain is in the "peculiar situation" of having more green glass than it has production capacity for.

Britain's bottle-makers already use as much recycled green glass as they can in their furnaces to produce new bottles. So some of the surplus glass is down-cycled into construction aggregates or sand for filtration systems. But WRAP's own analysis reveals that the energy savings for both appear to be "marginal or even disadvantageous". Working with industry, WRAP has started a new programme called GlassRite Wine, in an effort to right the imbalance. Instead of being bottled at source, some wine is now imported in 24,000-litre containers and then bottled in Britain. This may dismay some wine connoisseurs, but it solves two problems, says Mr Dawe: it reduces the amount of green glass that is imported and puts what is imported to good use. It can also cut shipping costs by up to 40%.

The future of recycling

This is an unusual case, however. More generally, one of the biggest barriers to more efficient recycling is that most products were not designed with recycling in mind. Remedying this problem may require a complete rethinking of industrial processes, says William McDonough, an architect and the co-author of a book published in 2002 called "Cradle to Cradle: Remaking the Way We Make Things". Along with Michael Braungart, his fellow author and a chemist, he lays out a vision for establishing "closed-loop" cycles where there is no waste. Recycling should be taken into account at the design stage, they argue, and all materials should either be able to return to the soil safely or be recycled indefinitely. This may sound like wishful thinking, but Mr McDonough has a good pedigree. Over the years he has worked with companies including Ford and Google.

An outgrowth of "Cradle to Cradle" is the Sustainable Packaging Coalition, a non-profit working group that has developed guidelines that look beyond the traditional benchmarks of packaging design to emphasise the use of renewable, recycled and non-toxic source materials, among other things. Founded in 2003 with just nine members, the group now boasts nearly 100 members, including Target, Starbucks and Estée Lauder, some of which have already begun to change the design of their packaging.

Sustainable packaging not only benefits the environment but can also cut costs. Last year Wal-Mart, the world's biggest retailer, announced that it wanted to reduce the amount of packaging it uses by 5% by 2013, which could save the company as much as $3.4 billion and reduce carbon-dioxide emissions by 667,000 tonnes. As well as trying to reduce the amount of packaging, Wal-Mart also wants to recycle more of it. Two years ago the company began to use an unusual process, called the "sandwich bale", to collect waste material at its stores and distribution centres for recycling. It involves putting a layer of cardboard at the bottom of a rubbish compactor before filling it with waste material, and then putting another layer of cardboard on top. The compactor then produces a "sandwich" which is easier to handle and transport, says Jeff Ashby of Rocky Mountain Recycling, who invented the process for Wal-Mart. As well as avoiding disposal costs for materials it previously sent to landfill, the company now makes money by selling waste at market prices.

EPA It does get recycled, honest

Evidently there is plenty of scope for further innovation in recycling. New ideas and approaches will be needed, since many communities and organisations have set high targets for recycling. Europe's packaging directive requires member states to recycle 60% of their glass and paper, 50% of metals and 22.5% of plastic packaging by the end of 2008. Earlier this year the European Parliament voted to increase recycling rates by 2020 to 50% of municipal waste and 70% of industrial waste. Recycling rates can be boosted by charging households and businesses more if they produce more rubbish, and by reducing the frequency of rubbish collections while increasing that of recycling collections.

Meanwhile a number of cities and firms (including Wal-Mart, Toyota and Nike) have adopted zero-waste targets. This may be unrealistic but Matt Hale, director of the office of solid waste at America's Environmental Protection Agency, says it is a worthy goal and can help companies think about better ways to manage materials. It forces people to look at the entire life-cycle of a product, says Dr Hale, and ask questions: Can you reduce the amount of material to begin with? Can you design the product to make recycling easier?

If done right, there is no doubt that recycling saves energy and raw materials, and reduces pollution. But as well as trying to recycle more, it is also important to try to recycle better. As technologies and materials evolve, there is room for improvement and cause for optimism. In the end, says Ms Krebs, "waste is really a design flaw."

A gathering storm: Drugs companies' patents are under attack. Will this really help the poor?

A gathering storm

Jun 7th 2007 | NEW YORK
From The Economist print edition

Drugs companies' patents are under attack. Will this really help the poor?


NOBODY could fault Thailand for want of ambition. At the recent Bio conference, the largest annual gathering of the biotechnology industry, it pitched itself hard as an emerging pharmaceutical power, with a dazzling pavilion, visiting luminaries and free drinks for all. Instead, the arguments with Thailand are over means, not ends.

At the end of last year the Thai government stunned the drugs industry when it said it would overrule international patents for Efavirenz, an anti-retroviral drug made by Merck, an American firm, and switch to a Thai-made generic copy at half the price. The country had signed the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which protects drugs patents. But that deal allows "compulsory licensing" only under special conditions—conditions that some complained Thailand did not fulfil.


In the months since then, Thailand has said it would overrule the patents on two more drugs, and it may soon add a further pair to the list. Moreover, other countries have followed its lead. Brazil declared last month that Merck was charging too much for Efavirenz. In recent weeks the health ministers of India, Malaysia and Kenya have also muttered about pursuing compulsory licensing.

All this has sparked an almighty row. Many global-health advocates—including Bill Clinton, whose foundation works on HIV—have applauded the trend, arguing that access to cheap generic drugs will greatly help the poor. Last month the World Health Organisation passed a resolution supporting compulsory licensing. America objected vociferously, but other rich countries supported the motion.

Drug executives are furious. Jon Pender of GlaxoSmithKline, a British drugs giant, insists that compulsory licensing was meant to be used only "as a last resort". He argues that although compulsory licensing is legal, TRIPS rules allow it only under limited circumstances, such as national health emergencies, and only after lengthy efforts to negotiate prices with firms.

"It is easy to see Big Pharma as a source of evil," laments Daniel Vasella, chairman of Novartis, a Swiss drugs giant. His firm is involved in a closely watched patent case in India that involves Gleevec, a cancer drug. Without innovation, he insists, future generations will have fewer life-saving drugs—"which is equally unethical as lack of access now." And as Fred Hassan, the boss of America's Schering-Plough and head of the international pharmaceutical lobby, warns, "without intellectual property there is no innovation."

At first sight, this row reflects an old dilemma that pits today's patients against tomorrow's. Compulsory licensing means that more Thais will get HIV drugs now, but it also means that drugs firms will be less keen to invest in drugs for Thailand in the future. Yet look closer and this is more than a fight between the poor-country sick and rich-world drugs companies. What makes it different is the role of two new actors: muscular middle-income countries and the rising generics industry.

This controversy has been sparked not by the poorest countries, which already get most of their drugs at low cost, but by middle-income ones. They have long used the threat of compulsory licensing to win discounts, but by actually imposing such licensing they shift the balance of power. Rudolf Van Puymbroeck, a former senior lawyer at the World Bank, likens compulsory licensing to other sorts of compulsory state purchases: "Firms are upset not because this is illegal, but because they are in a very weak position to negotiate compensation after expropriation."

Follow the money

A perverse result of this trend is that middle-income countries are getting cheaper drugs, whereas quieter and perhaps more deserving neighbours are not. Thailand's poor no doubt need treatment, but the military regime is wealthy enough to spend more on health care. Richard Epstein of the University of Chicago law school has observed that there is nothing to stop AIDS organisations or foreign governments from buying these products at a negotiated price and then giving them away free. "Charity can come from anywhere, not just drug companies," he notes.

Even experts devoted to the cause of helping the poor get access to drugs see the trend as worrying. "Brazil is not Rwanda, which cannot afford to pay," says Tadataka Yamada of the Gates Foundation, a giant charity. Victoria Hale, head of OneWorld Health, an innovative non-profit pharmaceutical firm, reckons that compulsory licensing could prove "the last blow" that pushes the drug industry away from looking for cures for diseases of the poor world, which are already woefully neglected.

Whether or not the poor end up suffering in the long run from diminished innovation, a sure winner from the trend towards compulsory licensing is the generic-drugs industry. Under a provision of the TRIPS treaty, countries that invoke compulsory licensing but lack domestic manufacturing are allowed to import generic drugs from another country.

This promises a gold rush for generics firms. Canada encourages domestic firms to produce copycat drugs for precisely this reason. But their costs are so high that such exports cannot hope to compete with the cheaper pills produced by India, argues Amir Attaran of the University of Ottawa. Small wonder that executives at Cipla, one of the Indian firms already making generic versions of HIV drugs, warmly applaud the trend and welcome Brazil's support for compulsory licensing, which they say "helps protect the rights of citizens".

Does the future therefore belong to compulsory licensing? If so, there may be trouble ahead for both pillmakers and punters. Dr Yamada fears that compulsory licensing could prove "lethal" for the industry. He suggests that drugs firms and middle-income countries ought instead to use a sliding scale, based on GDP per head, to determine prices. Bruce Lehman, a lawyer who worked on the TRIPS accord in the Clinton administration, thinks it is cynical for middle-income countries "to avoid paying their fair share of drug-discovery costs". In doing so, he fears, they risk provoking a backlash from Americans who will, in effect, have to pay more as a result.

But things may not get that ugly, thanks to the growing influence of innovators in developing countries themselves. Even in India drugs patents have their defenders. Ranbaxy is a local firm that made its name by manufacturing knock-off drugs. But ask Ramesh Adige, a member of its board, about the current trend and he is quick with his reply: "We do not encourage compulsory licensing." He explains that his firm has 1,100 researchers and invests 7% of its turnover in research and development. It already has process patents, and within two years hopes to have patents for novel drugs (for malaria, possibly). "We are very supportive of intellectual-property rights, as innovations must be given their reward," he says.

The reason Ranbaxy has gone from ignoring patents to defending them is that it now has inventions of its own that it wishes to protect. Even Yongyuth Yuthavong, Thailand's science and technology minister, seems to acknowledge the risk his country is taking. "As a scientist myself, I know the value of intellectual property," he says. "In future, we should develop our own drugs industry."

(Passenger) Train operators urged to consider biofuels

Train operators urged to consider biofuels

By Robert Wright, Transport Correspondent

Published: June 8 2007 03:00 | Last updated: June 8 2007 03:00

Gordon Brown has called on every British train operator to consider using biofuels for diesel trains after Virgin Trains brought into service Europe's first train to run partly on fuels derived from crops.

However, the prime minister in waiting said he would wait for the conclusion of trials with the train before making a decision on level of duty on biofuel, currently so heavily taxed that widespread introduction of the technology would make no sense for operators.

Mr Brown was speaking after inspecting the new train - a voyager unit used on Cross-Country services and services between London and north Wales - at London's Euston station. The train subsequently set off on its first public journey powered by biofuel, to Llandudno.

The train, which generates electricity for its motors with a diesel engine, has undergone minor modifications to burn a mixture of 80 per cent conventional diesel and 20 per cent biofuel. The operators are confident the mix can be increased to at least 50-50 diesel and biofuel and it should eventually be possible to run trains on fuels entirely from non-carbon sources. The new fuel should reduce the train's carbon emissions by 14 per cent.

Mr Brown said he was delighted biodiesel was a possibility for trains and hoped it would soon find wider applications, including in buses.

However, he was challenged by Sir Richard Branson, whose Virgin Group owns 51 per cent of Virgin Trains, about biofuels' tax disadvantages. Train operators have to pay 54.68p duty a litre on biofuel but only 7.69p a litre for diesel. The trial has been made possible only by a waiver allowing Virgin Trains to pay the normal diesel duty rate for biofuel used in the trial.

If the trial worked, the government was prepared to look at taxation in the future, Mr Brown said.

"If it works, we want every train company to consider using biodiesel," he said.

Sir Richard defended the use of controversial corn-based biofuel for the study, saying it was only a start and within a few years alternative fuels would be made from other substances offering still greater environmental benefits.

Chocoholics may be funding war in Africa

Chocoholics may be funding war in Africa
By Claire Soares
Published: 08 June 2007

British chocoholics may have unwittingly helped fund an African conflict, with an estimated $120m (£60m) from the cocoa trade being siphoned off into war chests in Ivory Coast, according to a report released today.

"There is a high chance that your chocolate bar contains cocoa from Ivory Coast and may have funded the conflict there, which leaves a bitter taste in the mouth," said Patrick Alley, the director of Global Witness, the London-based group behind the report.

Companies such as Nestlé and Mars source some of their cocoa from the troubled west African nation.

While much has been written about child labour on African cocoa plantations, the Global Witness report, Hot Chocolate, is the first to catalogue how cocoa has fuelled conflict on the west coast of the continent.

Ivory Coast supplies 40 per cent of global cocoa, making it the number one producer in the world. On the back of this natural resource, the country has built itself up into the so-called "Paris of Africa", with a downtown of gleaming skyscrapers and leafy suburbs where residents can enjoy an exquisite fillet steak washed down with a glass of expensive claret.

But in September 2002, what began as a troop mutiny became a full-scale civil war and the country divided into a rebel-held north and a government-controlled south with UN peacekeepers patrolling a buffer zone in between. Before long Ivorians were fighting with poverty and expatriates and aid workers were scurrying to relocate elsewhere in the region.

Global Witness says that among the many abuses of cocoa revenues during the "no war, no peace" stand-off, about $20m was embezzled by Ivorian national cocoa institutions and diverted to the government. Another $40m were funnelled into the president's war effort.

On the rebel side, militants extorted $30m each year from companies trucking cocoa through their half of the country - a illegal tax that "enabled them to survive as a movement", the report says.

Campaigners want the intermediary cocoa-exporting companies to be transparent about exactly what payments they make, and want big confectioners to be upfront about where their cocoa comes from.

"The chocolate industry is so secretive about their recipes that they don't tell you what's in the mix," said one of the report's researchers, who has assumed the alias Maria Lopez. "The consumer can pressure chocolate companies to put that information on the label so they know they are buying conflict-free chocolate."

The researcher has been forced to adopt an alias because of the danger of investigating the Ivorian cocoa sector. Three years ago a French-Canadian journalist, Guy-André Kieffer, who had been investigating the industry, was kidnapped in Abidjan, never to be seen again. Local media reported that he had been tortured to death.

With most confectioners simply listing "cocoa" on their chocolate bar packaging, it can be tricky for the consumer to make an informed choice.

When contacted by The Independent, spokespeople from Mars and Nestlé said their companies sourced cocoa from a number of countries, including Ivory Coast. A Cadbury spokesman said its cocoa came from Ghana.

Campaigners say that with a wobbly peace process just about staying on track in Ivory Coast, there is an opportunity for making changes to the cocoa industry practices.

The Ivorian President, Laurent Gbagbo, and the rebel leader, Guillaume Soro, signed a deal three months ago, mapping out the path to peace that would end with the country being reunified and elections in January 2008. But UN officials have already publicly said that the timetable has slipped behind schedule.

"We really do not know what's going to happen," Ms Lopez said. "There's no guarantee that the peace process will keep moving forward. We have seen it all unravel before."


[CSR newsclip] We need to bring climate idealism down to earth: The truth about climate change policy is that developing countries are where most of the future action has to be. They will account for 75 per cent of the increase in emissions over the next quarter century

We need to bring climate idealism down to earth

By Lawrence Summers

Published: April 30 2007 03:00 | Last updated: April 30 2007 03:00

With the accumulation of scientific evidence and its persuasive presentation to the public, the global warming debate has reached a new stage. Those who still deny that human activity is warming the planet, or claim that "business as usual" can continue indefinitely without profoundly adverse consequences, are increasingly seen as the moral and intellectual equivalent of those who deny that tobacco has adverse consequences for human health.

While there is probably excessive euphoria in some quarters over the economic benefit of green policies, it is now beyond debate that there are huge opportunities to reduce emissions with economic benefit or negligible economic cost. It has been estimated that worldwide subsidies to energy use approach $250bn (£125bn).

The real question for debate is not whether something should be done - that debate is over among the rational. The crucial question now is what should be done so as to leave our descendants with the highest possible quality of life. Answering it effectively requires vision and ambition. But, as the example of Woodrow Wilson's League of Nations teaches painfully, utopian vision and ambition unmoored from political, economic and social reality can be counterproductive.

There is a very real danger that the global cap and trade approach directed at achieving the rapid emissions reductions enshrined in the Kyoto protocol - now favoured by most European governments - could be ineffective or even counterpoductive by substituting for more realistic approaches to the problem. Kyoto is now the only game in town for those who do not want to be ostriches with respect to global climate change and so one has to hope for its ultimate success. But it is surely useful to try to be clear about the potential pitfalls, as I am in this column, and as a matter of prudence to consider alternative approaches if the Kyoto approach does not succeed, as I will in my next column.

First, the Kyoto approach depends on the questionable premise that nations will, in fact, be bound by binding targets or penalties for not meeting them. It is instructive in this regard to consider the history of the Maastricht Treaty within the European Union. It addressed fiscal targets directly under the control of governments over the relatively short term within a group of countries that had already achieved a high degree of cohesion. It broke down almost immediately when it looked like the targets would not be binding for big countries, with the goals abandoned and no payment of even the modest penalties.

There is to date little evidence that Kyoto is driving behaviour. Whatever evidence there is of impressive emissions reductions comes from countries such as the UK, Germany and the former communist states, where coal use was being phased out for other reasons. The limited impact of Kyoto is evinced by the fact that carbon permits are now selling in the range of a negligible one euro a ton.

Second, carbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale. If greenhouse gas emissions are to be substantially reduced, the value of the associated emissions rights will be in the tens of billions of dollars. While in principle emission permits could be auctioned, in practice they are always allocated administratively. It should not be surprising that businesses that can pass on carbon costs to their consumers are excited about schemes that compensate for these costs by allocating them permits related to their existing emissions levels. As investigations by this newspaper have highlighted, the clean development mechanism has resulted in substantial payments for emissions reductions that would have occurred anyway or could have been achieved at negligible cost. There is even reason to think that certain industrial gas emissions may have been increased so that credit could be claimed for their abatement.

Third, the most serious problem with the Kyoto framework is that it is unlikely to generate substantial changes in developing country policies. As my Indian hosts explained on a recent visit, developing country policymakers are not likely to accept binding targets on their energy use or greenhouse gas emissions that fall way short on a per-capita basis of emissions levels in the industrial world.

Nor is it reasonable to expect them on the basis of dubious projections of economic trends and future technological developments to commit toenergy use goals that fall short ofpatterns observed in the rich countries.

The truth about climate change policy is that developing countries are where most of the future action has to be. They will account for 75 per cent of the increase in emissions over the next quarter century and are now making the infrastructure investments that will shape their future economies. Moreover, any international regime that does not include them will not work because emissions reductions in the industrial world will be offset as energy intensive activities relocate to the developing world. The 1997 vote cast by all the Democrats in the Senate suggests that approaches that do not involve the developing world are unlikely to command political support in at least some parts of the industrialised world.

Perhaps these problems and others, like the difficulty of establishing emissions targets given the magnitude of economic uncertainties, can be overcome with goodwill and extensive thought. But next month I shall suggest approaches that, while less dramatic in their immediate claims for emissions reductions, may over time provide a more secure foundation for the progress that the world must have.

The writer is Charles W. Eliot university professor at Harvard

[CSR newsclip] US regulator tried to smear scientist in fight for Glaxo drug: The head of the US food and drug administration has admitted his staff attempted to smear a scientist who raised doubts about Avandia - the GlaxoSmithKline diabetes drug that has been linked with a high incidence of heart attacks.

US regulator tried to smear scientist in fight for Glaxo drug

Andrew Clark in New York
Thursday June 7, 2007

The Guardian

The head of the US food and drug administration has admitted his staff attempted to smear a scientist who raised doubts about Avandia - the GlaxoSmithKline diabetes drug that has been linked with a high incidence of heart attacks.

Senior executives from the FDA and Glaxo faced a gruelling morning of questioning by members of Congress at a hearing convened by the House oversight committee in Washington yesterday.

Members of the committee attacked "negligence" and systemic failures in a lack of warnings to patients about the risks of Avandia, which generated £1.4bn in revenue for Glaxo last year.

Henry Waxman, a Democrat who chairs the committee, said the FDA had "dropped the ball" in its scrutiny of the drug: "The millions of diabetics who have taken Avandia have not been well served by our regulatory system."

The FDA's commissioner, Andrew von Eschenbach, came under particular pressure over his organisation's treatment of Steven Nissen - a respected cardiologist who raised the alarm last month about the risks of Avandia.

Under questioning by a Maryland congressman, Elijah Cummings, the FDA boss admitted his staff had attacked Dr Nissen's motives by sending emails to reporters containing links to a website,, and to a blog containing baseless allegations that the cardiologist was biased against companies that did not fund his clinic.

"I completely concur with you that it was inappropriate and unacceptable," said Dr von Eschenbach. "It was an inappropriate and unfortunate act on the part of an individual, which has been addressed through disciplinary procedures." Dr Nissen's study analysed historical clinical trial results and concluded that patients on Avandia suffered 43% more coronary problems than other diabetics. It has caused a slump in Avandia prescriptions and Glaxo's share price has fallen 10% in two weeks. The shares fell another 9p yesterday to a two-year low of £12.72.

Glaxo has run a vigorous campaign defending its drug, including full-page adverts in US newspapers. It has published two studies - one of 33,000 patients and the other of 4,400 - which suggest patients on Avandia suffer no more heart problems than those on rival medicines.

Glaxo's chief executive, Jean-Pierre Garnier, said the risk identified by Dr Nissen's study was based on a difference of seven patients out of 14,000. "There have been very large, well-controlled clinical trials which have not replicated the signal - and the signal was very faint," he said.

[CSR newsclip] Nigeria sues drugs giant Pfizer

Nigeria sues drugs giant Pfizer
Pfizer logo
Pfizer says Nigeria's government was aware of the trial

Nigeria has filed charges against the pharmaceutical company Pfizer, accusing it of carrying out improper trials for an anti-meningitis drug.

The government is seeking $7bn (£3.5bn) in damages for the families of children who allegedly died or suffered side-effects after being given Trovan.

Kano state government has filed separate charges against Pfizer.

The firm denies any wrongdoing, saying the trials were conducted according to Nigerian and international law.

Pfizer - the world's largest pharmaceutical company - tested the experimental antibiotic Trovan in Kano during an outbreak of meningitis which had affected thousands in 1996.

Some 200 children died and others developed mental and physical deformities.

These allegations... are highly inflammatory and not based on all the facts


Q&A: Nigeria sues Pfizer

The government says the deaths and deformities were caused by Trovan and that the children were injected with the drug without approval from Nigerian regulatory agencies.

A Pfizer spokesman in New York, Bryant Haskins, reiterated the company's position that its trial of Trovan was conducted with the full knowledge of the Nigerian government and in a responsible way.

"These allegations against Pfizer, which are not new, are highly inflammatory and not based on all the facts," he told Reuters news agency.

He also said the trial had helped save lives.

The company has previously said that "verbal consent" had been obtained from the parents of the children concerned and that the exercise was "sound from medical, scientific, regulatory and ethical standpoints".


This is the first time Nigeria's federal government has filed charges against Pfizer but individual families have previously taken legal action.

The separate case in Kano - in which the state is seeking $2.7bn in compensation - has been running for more than two years.

On Monday, judges postponed that trial by a month, to allow the firm to appear before the Kano court.

Trovan has been approved for use by adults, but not children, in the US.

The BBC's Alex Last in Nigeria says the case has added to suspicion of western medicine and drug trials in northern Nigeria and that has had a damaging effect on attempts to get the whole population to accept polio immunisation.

Kano was one of the Nigerian states which refused to take part in a World Health Organization vaccination programme, leading to a re-emergence of polio in Nigeria and neighbouring countries.

[CSR newsclip] BP chief executive vows to stick to green agenda ahead of G8 summit

BP chief executive vows to stick to green agenda ahead of G8 summit
By Nic Fildes
Published: 04 June 2007

Tony Hayward, the chief executive of BP, will reinforce the oil giant's commitment to its alternative energy strategy in a speech in Berlin today ahead of the G8 summit, quelling fears that the recently anointed head of the company was set to abandon the "Beyond Petroleum" strategy of his predecessor.

Speculation has been mounting that Mr Hayward was less keen than his predecessor on making BP a green energy company in the wake of its decision to scrap plans to build a carbon capture centre in Scotland in late May. There have been suggestions that he might also look to dispense with the "Beyond Petroleum" slogan that is closely associated with Lord Browne of Madingley, who quit the company last month.

It is understood that Mr Hayward will look to quell that speculation when addressing world and business leaders, including Prime Minister Tony Blair, in Berlin. It will be the first time Mr Hayward has addressed a major public event since he took over from Lord Browne and he is expected to reiterate the company's intention to invest £4bn in alternative energy.

He will call on governments to provide short-term transitional incentives for companies to invest in technology to limit carbon emissions and move away from relying on subsidies to encourage companies to reduce their environmental impact.

Mr Hayward favours a market-driven approach to emissions trading in contrast to Gordon Brown's plan to establish a global carbon trading authority. The BP chief will argue that local or regional trading platforms should be set up and over time, those agencies will link up globally, mirroring recent merger activity amongst stock exchanges.

Mark Moody-Stuart, the chairman of mining giant Anglo American, will share the podium with Mr Hayward and is expected to echo the BP chief's call for a market-driven carbon trading system.

BP's environmental credentials have taken a knock over the past few years after scandals in the US related to its Alaskan pipeline and an explosion at its Texas refinery in 2005 that killed 15 people.

The company said its decision to pull out of the carbon capture project in Peterhead, Scotland last month was a result of the UK government's decision to delay a decision on how to subsidise such projects.

BP had already invested £25m in the plant and said that it remained committed to carbon capture, pointing to similar investments in Australia and California.

[CSR newsclip] Green Leaders: A guide to the world's greenest companies -- As companies fall over themselves to parade their green credentials to customers and investors, The Independent, in conjunction with Eiris (Ethical Investment Research Services) presents a guide to the greenest companies in the UK and the world.

Green Leaders: A guide to the world's greenest companies
As companies fall over themselves to parade their green credentials to customers and investors, The Independent, in conjunction with Eiris (Ethical Investment Research Services) presents a guide to the greenest companies in the UK and the world.
By Karen Attwood
Published: 01 June 2007

Britain's Top Ten

1. Kingfisher

The owner of the DIY-chain B&Q takes the number-one spot due to its ambitious targets for zero waste at stores and exceptional rates of Forest Stewardship Council (FSC) certification of timber. B&Q UK currently sources over 70 per cent of its timber from FSC sources. Europe's largest home-improvement retailer works with WWF and the Tropical Forest Trust on timber sourcing issues. It also has a proactive stance on chemicals. All of Kingfisher's operating companies are required to have an action plan in place by 2008 to identify products containing certain chemicals and work with vendors to investigate opportunities for removal or substitution.

2. BT Group

The telecoms group signed a three-year electricity supply contract in 2005 that provides nearly all of BT's UK electricity from renewable sources and combines heat and power (CHP) plants. In addition, through energy efficiency, BT has exceeded its targets for reducing the use of electricity within its wholesale estate. It also scores highly on green procurement, water minimisation and waste minimisation strategies.

3. Biffa

The only company in the top 10 that is not in the FTSE 100 Index, Biffa provides waste collection, treatment and recycling and disposal services across the UK. It has a strong carbon management strategy in place. This involves capturing methane from landfill and sewage plants for electricity generation in order to achieve an overall capture rate of 80 per cent by 2007/2008. The company aims to continue to increase its self-sufficiency in electricity generation using renewable resources. There are also plans to increase the use of biofuels for its transport vehicles.

4. BP

Despite coming under fire for oil leaks and the Texas City oil refinery blast, the energy giant comes in at fourth place. BP's first target, set in 1997, was to reduce greenhouse gas (GHG) emissions by 10 per cent below its 1990 emissions by 2010. BP achieved its target at the end of 2001. BP was an early critic of the oil industry lobby group, the Global Climate Coalition, which had sought to dispute the evidence of global warming and undermine the Kyoto Protocol. In 2005, BP Alternative Energy was launched to provide low-carbon power generation solutions and, in 2006, BP launched a biofuels business to provide low carbon solutions for transport.

5. Unilever

The consumer goods giant incorporates environmental sustainability into its overall business strategy. It pioneered a zero industrial waste policy, initiated a project to develop an approach towards zero-effluent factories and is rolling out globally applicable agricultural practice guidelines. It participates in a project to develop common approaches to sustainability and is implementing a Sustainable Water Initiative.

6. Severn Trent

The utility company aims to minimise carbon emissions from operational processes and is increasing its self sufficiency in electricity generation by using renewable resources. Severn Trent Water converts the methane from the digestion of sewage sludge into electricity, using combined heat and power (CHP) units, and it has an ongoing programme to increase the number of sewage treatment works with these units.

7. J Sainsbury

The supermarket chain is implementing a number of policies, including on agricultural sourcing, with standards applied worldwide. The retailer also aims to increase its organic products and has policies on local sourcing and on refrigeration and logistics. It also has targets to increase the amount of Marine Stewardship Council (MSC) certified fish on sale in store. The MSC promotes responsible fishing practices.

8. BSkyB Group

The media group encourages the use of environmentally friendly materials, is a member of the Climate Group and was the first major media company to make a commitment to becoming carbon neutral. It aims to achieve this through energy efficiency, energy reduction and carbon offsets. Sky already purchases 100 per cent renewable energy in England and Wales. Its product includes research into an automatic standby facility for set-top boxes.

9. BHP Billiton

The mining group BHP Billiton makes the top 10 due to the fact that, since 2004, it has required full Lifecycle Assessments (LCAs) for all its mineral products. An LCA evaluates the environmental burdens associated with a product, process or activity. The company also participates in major LCA studies of nickel and chrome products.

10. M&S Group

The retailer is committed to taking a lead to use sustainable raw materials for its products. This includes sustainable agricultural sourcing and setting of its own standards, and a commitment to retail-certified organic products. It sources sustainable fish certified to the MSC standard, FSC certified timber for garden furniture and has a policy on packaging, refrigeration and logistics. It recently launched an Ethical Fund.

Global Top Ten

1. Vestas Wind Systems

Vestas is the leading manufacturer of wind turbines in the world. The Danish company has more than 30,000 wind turbines generating electricity globally and its high-tech systems are 80 per cent recyclable. But it has not come top in the global ranking just because of the products it makes. It is also that Vestas sources 68 per cent of its energy requirements from renewable sources. Furthermore, the turbines generate in six to eight months the equivalent energy required to manufacture, transport and take the products down. This makes the turbines carbon neutral within that timeframe.

2. Svenska Cellulosa

The Swedish company SCA makes everything from nappies, sanitary towels and tissues to packaging, papers and pulp. It is Europe's largest private forest owner, all of which is managed to FSC standard and all wood supplied to its mills to produce papers must meet FSC criteria. In addition, the company has a commitment to use a high proportion of recycled fibre in its tissue products. It has clear policies on avoiding illegal logging and others covering water emissions, it is replacing oil and coal with some carbon neutral fuels, such as wood residue and biofuels. SCA also has high rates of waste recovery.

3. ABN-Amro

The Dutch banking group takes the number three spot in the world rankings. A key objective of the company is to integrate environmental issues into all business decisions to ensure its contribution to a sustainable society. The firm's external policy is aimed at predicting environmental developments related to its commercial activities. ABN has developed environmental and social risk policies covering the oil and gas sector, mining, forestry industries, dams and nuclear power.

4. MTR

This Hong Kong-based railway company is a founding signatory of the HK Corporate Social Responsibility (CSR) Charter. It is committed to providing leadership in CSR practices and promoting the principles of responsibility by managing its environmental impacts. The company, which carries an average 2.5 million passengers every weekday, considers the lifecycle of its products through a "cradle-to-grave" approach.

5. Ericsson

The Swedish telecoms group is involved in a Design for Environment programme, which gives product designers guidelines on environmental design with an emphasis on reducing energy consumption. Ericsson also addresses the Waste Electrical and Electronic Equipment (WEEE) initiative, which aims to minimise the impact of electronic goods on the environment by increasing recycling. It has carried out in-depth lifecycle analysis (LCA) assessments in its 3G system which, in independent reviews, have shown a positive environmental outcome can be achieved.

6. Westpac Banking

Sustainability is integral to the Australian bank's values and core business strategy. The company has adopted the Equator Principles, a framework for managing environmental and social risk in project finance. Through BT Financial Group, the bank offers a range of Socially Responsible Investment products.

7. Kingfisher

The highest-ranked British company (see above).

8. Phillps

The Dutch electronics company has a policy of embedding sustainability into its organisation and culture, product design, manufacturing processes and business strategy. Specific sustainability issues addressed include the energy efficiency of buildings, with a goal of zero net energy buildings, energy efficiency and chemical content of products, recycling schemes and lifecycle analysis.

9. BT Group

The second highest-ranked British company (see left).

=10. Matsushita

The Japanese electronics company designs products with improved environmental efficiency and with minimal impact on the environment in mind. It also creates products that solve or address environmental problems.

=10. Sanyo

Another Japanese electronics company, Sanyo incorporates sustainability into its business. It assesses the impact of products by using a product certification system. It has zero emission targets in the areas of greenhouse gases, waste and chemical substance emissions, and evidence that progress is being made towards these targets. The company currently recycles 99.8 per cent of its waste.

=10. ABB

The Swiss electronics company ABB aims to become a carbon-neutral organisation. The company carries out a lifecycle assessment study, including its contributions to global warming and ozone depletion, on all major products. The company aims to increase its use of recycled or reuseable materials.

How the companies were rated

The Independent and EIRIS ranking is based on a wide range of objective criteria. Researchers looked at practices, such as management systems, waste production and water use, and improvements related to climate change. Individual companies' involvement in positive technologies, such as renewable energy, or incidents of serious environmental damage were also studied. Issues specifically related to certain sectors have also been taken into account.

Stephanie Maier, strategic research development manager at EIRIS, which specialises in researching the social, environmental and ethical performance of companies, said: "Drawing on our research of almost 3,000 companies we chose a selection of our environmental sustainability criteria to highlight some of the leaders in the field. These criteria, covering issues such as climate change, reflect some of the key concerns of investors."

The ranking is based on companies in the FTSE All World Developed Index and information is taken from a variety of sources including publicly available company documents and survey responses.

[CSR newsclip] All UK goods may be labelled with 'carbon footprint' / Carbon labels to help shoppers save planet

All goods may be labelled with 'carbon footprint'
By Martin Hickman, Consumer Affairs Correspondent
Published: 31 May 2007

A new eco label may show the environmental damage done goods and services in shops. The Government has begun a "carbon footprint" project to work out how to count emissions from everything from crisps to flights.

The scheme, which could be the first step towards an international standard for measuring the greenhouse effect, will be used on packaging to allow consumers to weigh up the climate change impact of different products.

The Carbon Trust, a government body briefed to create a low carbon economy, is developing the scheme with companies such as Tesco, Boots, B&Q, Marks & Spencer and BT. A panel of technical experts will take around 18 months to finalise the measurement of stages such as production and transport.

Announcing the plan yesterday, the Environment minister, Ian Pearson, said: "Businesses are looking for ways to reduce their impact on the environment. To help them achieve that we need a consistent way to measure these impacts that businesses recognise, trust and understand."

Carbon labels to help shoppers save planet

Government to develop measurement standards
Air freight may not always be worst for environment

Tania Branigan and Helen Carter
Thursday May 31, 2007

The Guardian

Shoppers will be able to tell how much damage their purchases do to the environment, under a government plan unveiled yesterday.

Products will display labels showing the greenhouse gas emissions created by their production, transport and eventual disposal, similar to the calorie or salt content figures on food packaging.

Consumers have little way of judging the environmental impact of goods and services, often relying on the miles such products have travelled from their country of origin.

But vegetables grown in Africa and imported by air may have a lower carbon footprint than those grown in heated greenhouses in the UK, said experts developing the scheme.

Ian Pearson, the environment minister, said ministers would work with the Carbon Trust and BSI British Standards to develop a benchmark for measurements over the next 18 months, allowing businesses to calculate the impact of their goods and label them accordingly.

"More and more, businesses are looking for ways to reduce their impact on the environment. To help them achieve that we need a reliable, consistent way to measure these impacts that businesses recognise, trust and understand," said Mr Pearson. "This will be fundamental in our efforts to move Britain towards a low-carbon economy in the decades ahead."

The scheme will be voluntary but major companies including Tesco and Marks & Spencer are working with experts on the project and the Carbon Trust is running a pilot project with Boots, Walkers and the smoothie-makers Innocent.

Walkers cheese and onion crisps now bear a label warning buyers that their carbon footprint is 75g a packet.

"We've already been approached by more than 120 companies from a range of sectors," said Euan Murray, strategy manager at the Carbon Trust.

"Anything you can do to reduce emissions normally means reduced energy consumption, which means you save costs. The newer element is that companies say their consumers are asking what they are doing to reduce their carbon footprint."

He added: "The best way consumers currently understand that products have an impact on the environment is through the distance they have travelled, but just as important are the raw materials, processing in the factory and how they are disposed of.

"Looking at all those stages is really telling and that's where you get real insight and surprises - in some cases bringing in a product from overseas could well be better than producing it in the UK."

Major retail chains have been fighting to establish themselves as green retailers and cut energy costs.

Tesco, the UK's biggest retailer, promised earlier this year to put carbon labels on every one of its 70,000 products. It is also cutting the average energy use of all its buildings and believes it can reach its target by next year.

Marks & Spencer announced earlier this year that it aims to become carbon neutral within five years, and to use offsetting as a last resort.

In March, it introduced labels on some foods which had been imported by air. The label, a small aeroplane symbol with the words "air freighted", appeared on 20 products and will be extended to another 130 by the end of the year.

[CSR newsclip] Executives warm to carbon reductions

Executives warm to carbon reductions

By John Willman, Business Editor

Published: May 31 2007 03:00 | Last updated: May 31 2007 03:00

WWhen BSkyB decided in January 2006 to become the first media company to become carbon neutral, it went about implementing the policy with typical single-mindedness. Within five months, it had hit the target - the satellite broadcaster now uses 100 per cent renewable electricity for all BSkyB-owned UK sites and has involved all its departments, staff and suppliers in reducing carbon emissions.

James Murdoch, chief executive, saw the policy as part of a push to educate customers about ways of reducing their impact on the environment, as well as showing its values were in tune with their concerns. The importance of this leadership role has been recognised with a "big tick" for BSkyB in this year's Business in the Community (BITC) awards for excellence where the leading theme is climate change.

The consequences of the satellite broadcaster's move went much further, however, when Rupert Murdoch, the 75-year-old chairman and chief executive of News Corporation, announced that the rest of his media empire would follow the example set by his son and heir apparent at BSkyB.

The fact that Mr Murdoch was previously seen as a sceptic on global warming was a telling indicator of the degree to which business now accepts that the argument over whether climate change is happening is over - even if there is still debate over its exact causes and the appropriate remedies.

Peter Newman, the BITC awards director, describes this as the climate change effect: "Business is surging into an area that for decades was the worthy but distinctly unsexy preserve of compliance, risk management and environmental management systems, in a search for new products, new markets and new ways of doing things."

Nine other companies have been recognised by BITC this year in the new Man Group International Climate Change Award for strategic, comprehensive and innovative approaches to tackling climate change. They include Tesco, Barclays and B&Q, but also companies such as Lafarge Cement for whom the reduction of carbon emissions presents a great challenge.

In the Eco-efficiency Award category, big ticks have gone to Toyota for reducing water use by 72 per cent (after reducing waste to landfill to zero), Ford, which has massively reduced use of oils and cooling fluids and production of waste sludges at Dagenham and GEDA, a Northern Ireland construction company building high quality homes with energy saving built in.

Elsewhere in the house-building industry, Redrow has introduced a new-style home for first-time buyers with high environmental specification that sells for just £60,000.

ScotAsh, a joint venture between ScottishPower and Lafarge, has developed a way of processing the waste from coal-fired power generation so it can be used in concretes and aggregates rather than poured into landfill.

Both have been awarded big ticks in the TCS Marketplace Innovation category for products and services that meet social or environmental needs.

This year is the 10th year of the awards, which have been gathering strength over the years with entries rising from 141 in 2002 to 425 this year.

For Julia Cleverdon, BITC chief executive, the improved quality and sophistication of this year's awards entries shows the growing maturity of corporate responsibility as a central and integral aspect of modern business practice. "Companies are getting smarter and bolder in the way they operate as responsible businesses," she says.

To mark the 25th anniversary of the founding of BITC, a Jubilee Award has been introduced for companies whose corporate social responsibility programmes have made a long-term impact on communities over the decade of the awards. Big ticks have gone to 42 businesses, ranging from Manchester City football club and Red Dragon FM to corporate giants such as BT and Royal Mail.

The most popular category this year is the Merrill Lynch Raising Achievement of Young People Award with 60 new entries.

Ticks have been awarded to 27, with 21 more re-accredited. This reflects the long involvement of companies in supporting education and schools - in poll after poll, business puts education at the top of the list of priorities for corporate community investment.

Eleven companies have been commended for their impact on society, which recognises leadership integration of responsible business practices.

Nancy Turrell, corporate responsibility manager for J. Sainsbury, which also has big ticks in two other categories, says the benchmarking offered by the BITC awards is helpful in focusing big businesses on what the outside world is demanding of them.

"Our community programmes have become stronger every year, despite the tough trading conditions Sainsbury's has been experiencing," she says. "That's a real source of pride for the business and our colleagues who live in the communities we serve."

Perhaps counter to popular views of the industry, the mining sector is one of the top-performing ones in BITC's annual corporate responsibility index. Andrew Vickerman of Rio Tinto says his company - also a recipient of a big tick for its impact on society - says investors are increasingly interested in such indices.

"We operate in communities in sensitive locations and handling these issues is central to our business success. If we did not do so sensitively, we would risk losing the licence we have to work in those communities - which are also where our employees live."

However, private equity remains the notable exception to the growing recognition of the importance of the corporate social responsibility agenda, according to Ms Cleverdon.

"Despite encouraging signs that the private equity houses and their portfolio companies are beginning to engage meaningfully in the responsible business agenda, they are most conspicuous by their absence from our awards and other indices."

[CSR newsclip] Container makers finding ways to cut: Companies reduce plastic packaging for clients that want to help the environment and their bottom line.

Container makers finding ways to cut
Companies reduce plastic packaging for clients that want to help the environment and their bottom line.
From the Associated Press
May 29, 2007

With earthshaking thuds, a stamping machine hammers a sheet of hot plastic into king-size drinking cups destined to quench thirsts for soda at the nation's convenience stores.

The blank white cups aren't just flexible and resistant to splitting — they're also made from less plastic than cups produced by Berry Plastics Corp.'s competitors through a manufacturing process the company guards so closely that it forbids photographs of those machines.

As retailers such as Wal-Mart Stores Inc. push for greener packaging, Berry Plastics is handling a growing number of redesign projects for customers eager to make their products less bulky to help both their bottom lines and the environment.

"It's not a fad anymore — it's really turning into a trend," said Curt Begle, the Evansville, Ind., company's vice president of container sales.

Last year alone, the company — which counts among its customers Kraft Foods Inc., Nestle, Hershey Co. and Sherwin-Williams Paints — retooled about 30 customers' cups, tubs and other plastic containers, shaving away more than a million pounds of plastic per year in one instance.

With more companies following suit, Berry Plastics has even hired an engineer devoted to repackaging projects.

"It's continuing to gain momentum," Begle said of efforts to pare packaging.

Wal-Mart is helping push the trend along by encouraging its 66,000 suppliers to reduce their packaging starting next year as part of the retailer's goal of cutting overall packaging 5% by 2013.

In March, Wal-Mart unveiled an online database called a "packaging scorecard" to help its suppliers calculate the net environmental effect of factors such as the fuel needed to make and ship packaging materials and whether they use recycled components.

Since then, more than 3,100 vendors have used the online packaging scorecard system, Wal-Mart spokesman Kevin Thornton said.

Participation is voluntary, but Thornton said Wal-Mart would begin using the scorecard's results in February to make decisions on purchasing merchandise.

Eventually, the retail chain operator hopes to create "zero waste" by recycling, reusing or otherwise breaking down product waste.

"There's a ripple effect that starts with just reducing the size of the package," Thornton said. It also reduces the need for shipping containers and puts more products on each truckload and shelf, he said.

Ruiz Food Products, the nation's largest producer of frozen Mexican foods, is using the packaging scorecard. Bryce Ruiz, the Dinuba, Calif.-based company's president and chief operating officer, said the database had revealed ways it could reduce the packaging for its 300 products, which include El Monterey brand burritos and taquitos.

Ruiz declined to give specifics, but said the lessons learned build on efforts by his family's business to satisfy customers with foods — not an oversized package.

"It's common sense. Put less air in the box and the consumer gets a box full of something, versus a box full of air," Ruiz said.

It's hard to say how much money any particular company might save in packaging because of the different types of materials used, and companies are reluctant to say for competitive reasons, said Jim Peters, director of education for the Institute of Packaging Professionals.

But the savings can reach into the millions of dollars, said Peters, whose Naperville, Ill.-based group's membership includes about 5,200 packaging experts who work for companies spanning the full spectrum of American industry.

Wal-Mart's initiative offers a real opportunity to expand the push for waste reduction, thanks to its 60,000-plus suppliers and millions of customers, said Kyle Cahill, manager of corporate partnerships for Environmental Defense, a New York-based advocacy group.

In 1991, the nonprofit helped persuade McDonald's Corp. to give up its plastic foam clamshell packages for recycled paper materials. McDonald's now claims to be the largest user of recycled paper in the fast-food industry.

Cahill said people concerned about global warming were becoming more aware of packaging that ends up in landfills — and the manufacturing process that adds to greenhouse gases.

"This goes backward into the supply chain, where the materials are being sourced, made and packaged, and in the opposite direction looking at how the products are being used and certainly how they are being disposed of," Cahill said.

Indianapolis resident Ray Wilson always looks for products with less packaging, but said he still ended up with bulky items in his cart.

The 64-year-old engineer recently bought three compact fluorescent light bulbs encased in a large plastic package. "I'm looking at the packaging around the bulbs and it's probably 14 inches by 18 inches of heavy duty plastic. It sure would be nice if you didn't have to buy all that because it just goes in the trash."

Companies such as Procter & Gamble Co. are paying attention. The world's largest consumer product company recently announced it would begin rolling out in September liquid detergents such as Tide and Cheer in double-strength concentrations. That will give shoppers a bottle half the former size but with the same number of loads.

Even changes that aren't noticed by consumers can go a long way toward reducing a company's need for costly resources.

Nestle Waters North America, one of the nation's biggest sellers of bottled water, has saved about 20 million pounds of paper over the last decade by using narrower labels on its bottles, said company spokeswoman Jane Lazgin.

And this spring, the maker of Poland Spring, Arrowhead, Deer Park and other brands began rolling out half-liter plastic bottles weighing 12.5 grams, about 15% lighter than those of competitors.

"It makes the bottle feel a little crunchy, but it's the same amount of water," Lazgin said.

Nestle Waters expects the new bottle to reduce its use of plastic resin by 65 million pounds during 2008, the first full year of the bottle's availability.

Anne Johnson, director of the Sustainable Packaging Coalition — an industry working group with about 105 corporate members — said such success stories would help more companies look at how they package goods.

"If you're not optimizing the use of the materials you've purchased and the energy you've purchased, if you're paying for your waste to be hauled off, then you're not running your business very well," Johnson said.

[CSR newsclip] The race to save Mother Earth in 8 years: nothing so concentrates the mind as the sight of the gallows. In other words, to get stuff done, we humans need a deadline.

The race to save Mother Earth in 8 years
We have until 2015 to reverse global warming, experts warn. Business 2.0 Magazine's Chris Taylor looks at which business opportunities will meet that deadline -- and which ones won't.
By Chris Taylor, Business 2.0 Magazine senior editor

(Business 2.0 Magazine) -- Dr. Samuel Johnson said it best: nothing so concentrates the mind as the sight of the gallows. In other words, to get stuff done, we humans need a deadline.

Today we're facing the mother of all time constraints: it seems we have no more than eight years to avoid a major planetary catastrophe.

Earlier this month, scientists on the United Nations Intergovernmental Panel on Climate Change released the third of their devastating reports on greenhouse gas emissions. We have until 2015, it said, to roll back emissions and limit global warming's effects to a relatively manageable 4-degree rise.

Believe it or not, there's a silver lining to that grim prediction. The fight against climate change has, until now, lacked a firm timetable to spur businesses and governments into thinking smarter about solutions.

As Jim Connaughton, chairman of the White House's Council on Environmental Quality, told reporters after the UN report came out: Americans need deadlines. "[They] say 'tell me how much I need to achieve in a specific sector by when," he said.

Well, now we know: eight years. A short time? Perhaps. But a lot can be done in eight years if we set our minds to it. Consider that the Internet had 16 million users in 1995, and three quarters of a billion users in 2003..

There is every sign that a similar growth spurt is about to take place in the world of clean energy. Today, wind power, solar power, and biofuels are all sizable sectors, with yearly revenue ranging from $16 billion to $21 billion.

In the next decade, all of them will pass the $60 billion mark, according to research firm Clean Edge. Biofuels alone may be an $80 billion industry by the time we reach the UN scientists' deadline in 2015.

The momentum to take action is gathering fast. In a CBS/New York Times poll before the UN report came out, a record 78% of respondents said steps should be taken "right away" to combat global warming -- and the topic could easily become a hot button issue in the 2008 presidential race.

One likely outcome: a cap-and-trade system whereby polluters are granted tradeable permits to emit carbon. The United States doesn't have such a system yet, but Congress is likely to consider soon whether the time has come to create one. Oil giant Chevron (Charts, Fortune 500) and automaker GM (Charts, Fortune 500) signed on to the cap-and-trade idea two weeks ago.

Carbon trade systems in other countries were worth a total of $30 billion last year. That's double the 2005 number and half what it is expected to be by year's end. This benefits companies that are actually doing something to reduce the amount of carbon in the atmosphere.

But there are plenty of other opportunities that businesses are just starting to exploit.

In the June issue of Business 2.0, for instance, we wrote about Planktos and Climos, two startups that are planning to seed the oceans with iron, which helps carbon-dioxide-sucking algae bloom. The companies were able to turn a healthy profit before they began their experiments simply by selling the promise of future riches to large carbon polluters.

Perhaps Planktos, Climos and other startups like them will turn into cash cows. But all that matters now is that do it before 2015.

The recent UN report was surprisingly specific about the easy opportunities to reduce carbon emissions in established industries. A process called carbon capture and storage (CCS), for example, is useful not only in coal power plants, but also the businesses of making cement, iron and ammonia.

Interestingly, one new technology that the deadline may rule out is hydrogen fuel-cell cars. Their production is simply not feasible in the next eight years. Electric cars, however, are a different story. Tesla Motors, the Silicon Valley electric-car startup funded by PayPal founder Elon Musk, has already sold out its first run of the $100,000 Tesla Roadster, out this summer.

Not only that, but this week Tesla launched a side business making electric-car batteries -- and instantly received a $43 million order. Tesla expects to ramp up to a $50,000, 4-door sedan in 2008, and a $30,000 car by 2010.

By the time we reach the UN deadline, Musk expects to have more than 100,000 Tesla cars on the road. That's the kind of achievable change that the deadline on climate change should promote.

Give us few thousand more entrepreneurs with that kind of zeal (not to mention that kind of funding), and we should have global warming licked -- just in time.

Chris Taylor, a senior editor at Business 2.0 Magazine, blogs about the next big business opportunity

[Energy newsclip] Solar cells wait for their day in the sun: Australian Prime Minister John Howard hinted on Friday that next week's budget could lift the rebate for Australians to install solar panels for generating electricity

Solar cells wait for their day in the sun Tim Colebatch
April 30, 2007

Professor Andrew Blakers reflecting on a bright future.

Professor Andrew Blakers reflecting on a bright future.
Photo: Andrew Taylor

Other related coverage


AS A solution to global warming, solar energy has everything going for it — except cost. But a new government move and little slivers of silicon invented in Australia might soon change that.

Prime Minister John Howard hinted on Friday that next week's budget could lift the rebate for Australians to install solar panels for generating electricity — seizing the initiative after Labor's Kevin Rudd pledged only to keep the rebate at its current level.

And if so, Origin Energy is ready to go. A decade ago it took a punt on the Australian National University's team of solar energy researchers, and was richly rewarded when they invented sliver cells — a technology that promises to cut the cost of solar panels in half.

ANU researchers Andrew Blakers and Klaus Weber have given cutting-edge technology a literal meaning, with a breakthrough they thought up on a train to Edinburgh in 2000. The biggest cost in solar cells is the silicon wafer. But slice the wafer into 10-centimetre slivers of silicon, array them in a panel, and you could increase the solar energy conversion tenfold.

Origin's general manager, public and government affairs, Tony Wood, predicts that sliver technology will ultimately cut the cost of solar panels "by in excess of 50 per cent". Already the largest supplier of solar panels in Australia, Origin plans to start marketing sliver cell panels from its Adelaide plant.

"We are hopeful of moving forward with an international partner to take this technology to commercial scale," Mr Wood says. "We need to work with someone who has deep connectivity with the international solar market, is already in the industry, and has sources of silica."

Professor Blakers, who heads the ANU's centre for sustainable energy systems, is waiting impatiently to see sliver technology reach the market. Within a decade, he argues, solar panels will be commercially viable as a way of generating electricity.

That might sound a big ask, when electricity now costs 4¢ per kilowatt hour to generate from coal, but 35¢ to 40¢ from solar. But the threshold of viability for solar panels, Professor Blakers points out, is not the price at the power station but the retail price for households.

That is now 15¢ per kwh, and emissions trading and time-of-use pricing will lift that, while sliver cells and other breakthroughs slash the cost of solar panels. "Within 10 years, it will be cheaper to put a solar panel on the roof than to buy from the grid," he says. "And when we get under the retail price, we can expect vertical growth rates. Sales will double every six months."

In the long term, Mr Wood says, sliver technology could revolutionise windows, turning them into solar panels that could power the buildings inside.

But first, he says, the Government must remove the $4000 limit on rebates, opening the market for large-scale use. In Germany's solar capital of Freiburg, the city's soccer stadium now runs off solar panels lining its roof. Imagine the MCG with solar panels all the way along the top of its stands.


The Energy-Efficient Supply Chain: Marks and Spencer, for example, has a specific initiative under way to reduce “food miles”

The Energy-Efficient Supply Chain
by Peter Parry, Joseph Martha, and Georgina Grenon

As concerns mount about fuel prices, long-term energy availability, and climate change, companies' attention is finally turning toward one of the most pervasive places where energy can be conserved: the industrial supply chain. Simply put, the supply chain is the production and distribution network that encompasses the sourcing, manufacturing, transportation, commercialization, distribution, consumption, and disposal of goods, from the ore mine to the trash can.

Four primary factors drive businesses' interest in the energy-efficient supply chain. First is the desire to cut energy costs. Second is concern about regulation — through trading permits, mandated caps, and other means, governments will increasingly press businesses to limit the amount of carbon they release. Third, a growing segment of customers favor companies that credibly demonstrate reduction of carbon impact. The fourth driver is productivity: The economies that a company like Wal-Mart or Tesco puts in place to reduce emissions can reduce other costs and improve operations as well.

On January 18, 2007, Tesco CEO Terry Leahy announced that the retail chain would reduce the carbon footprint of all stores and distribution centers by 50 percent over the next 15 years. That kind of target cannot be realized by placing unilateral pressure on suppliers. It requires efforts that build trust and transparency along the value chain. When suppliers and customers understand one another's contributions to carbon emissions, they can identify ecological and economic waste that would otherwise be hard to see.

For example, in 2006, the Carbon Trust, a United Kingdom–based research and advisory group, discovered a "perverse incentive" in the sourcing of raw potatoes for manufacturing snack foods. (The analysis appeared in the group's report, "Carbon Footprints in the Supply Chain: The Next Step for Business.") Charged with studying the carbon footprint of potato chips, the Trust's researchers found that because prices are set by weight, farmers typically control humidification to produce moister and therefore heavier potatoes. Even within the strictly limited specifications of moisture content set by the food manufacturers, these few grams of extra water are significant. The extra cooking needed to burn them off accounted for an unexpectedly high percentage of the chips' energy consumption.

An obvious solution, wrote the Carbon Trust, would be to change the procurement contract — to provide farmers with an incentive to produce potatoes with less moisture. This would better position the manufacturers to take advantage of carbon trading credits and other regulations for greenhouse gas reduction. And it would set a precedent for further collaboration between food makers and their agricultural suppliers.

Similar approaches have been used to study the energy footprints of a range of products, from the United Kingdom's Mirror newspaper chain, to Unilever's Vaseline hand lotion, to cameras made by Kodak and Hewlett-Packard. Even though it has been 15 years since the pioneer packaging-reduction incentives of Germany's "Green Dot"  labeling program were put into effect, there is still much to learn about the waste of energy and materials in the typical supply chain.

In the potato chip case, for example, production-related greenhouse gases dwarfed the emissions from transportation. In other cases, transportation and logistics are much bigger factors, with enormous potential gains. A 1993 study of Landliebe Yogurt (a local brand made and sold in Stuttgart, Germany) revealed that the ingredients in a single container — including milk, strawberries, wheat, cultures, glass for the jar, paper for the label, and aluminum for the lid — had traveled a total of more than 9,100 kilometers (about 5,600 miles) before reaching the consumer's hands.

Some of the innovations of the next five years will focus on reducing this type of inefficiency. Marks and Spencer, for example, has a specific initiative under way to reduce "food miles," sourcing its wares from nearby locales and working with local farmers to increase the growing season. Other initiatives will increase transportation efficiencies: A truck that once carried 150 items will now carry 300, or carry the same volume of goods with less fuel. Other projects will reduce and simplify packaging, closely track the joules consumed, or switch to less carbon-intensive materials and energy sources (such as renewable energy and more efficient lighting sources). Already, some business-to-business producers and service providers, including gasoline retailers and airlines, are using government-mandated pollution credits to offer climate change–conscious services for customers ("buy our product and help offset your own greenhouse gas impact").

As businesses become more and more serious about this, managers will increasingly find themselves asking, What is it about the way we operate that causes our entire supply chain to waste energy? There will be many surprises. One should not conclude that all lightweight snacks, nearby farms, or recycled materials are preferable from a climate change perspective. Every supply chain is different, with unique opportunities for using information technology, management practice, incentives, and sheer common sense to reduce the carbon footprint.

The first step is thus understanding the specific carbon footprint of your business's supply chain, in the context of overall strategy and operations. The second step is discerning the extent to which emissions are related to your specific needs, versus those inherent in supply chain management. The third is defining your approach. It is likely to be a combination of three types of measures: reducing your footprint through demand reductions and energy efficiency in design, construction, and operation; replacing conventional energy sources and materials with low- or zero-carbon alternatives, including materials and equipment with low-embodied carbon; and offsetting unavoidable carbon emissions through a program of credit trading and other verified means. 

Author Profiles:

Peter Parry ( is a vice president with Booz Allen Hamilton in London. He specializes in global energy and has 25 years of experience in corporate strategy development, technology management, and commercial negotiations. He has worked extensively with governments, national and international oil companies, and independent oil and service companies.

Joseph Martha (, a vice president with Booz Allen Hamilton in McLean, Va., is the coauthor, with David Bovet, of Value Nets: Breaking the Supply Chain to Unlock Hidden Profits (Wiley, 2000). He has worked with numerous manufacturing, distribution, and retail companies in the areas of supply chain management, logistics strategy, distribution operations, and information systems.

Georgina Grenon ( is a senior associate with Booz Allen Hamilton based in Paris. She is the director of the firm's business development and intellectual capital efforts involving manufacturing and cross-industry supply chain issues.

Also contributing to this article were Booz Allen Vice President Nick Pennell and Senior Consultant Timothy Gange.


This paper looks at more efficient UI designs to improve the life expectancy of batteries in hand held devices...

Thanks to Susan for this one

This paper looks at more efficient UI designs to improve the life expectancy of batteries in hand held devices...

Carbon Footprint Labels for UK Produce

Carbon Footprint Labels for UK Produce
Matthew Sparkes, London, UK on 05.31.07
Food & Health

food_label.jpgThe Government unveiled a scheme yesterday, where produce will carry a label indicating the size of its carbon footprint. It will take into account the production, distribution and even disposal of the packaging after use.

It's not an easy task though, because the footprint of an item in a supermarket is not always obvious. For example, a vegetable grown in Africa and shipped to the UK may have a smaller footprint than the same vegetable grown in the UK, if the greenhouse required heating.

"More and more, businesses are looking for ways to reduce their impact on the environment. To help them achieve that we need a reliable, consistent way to measure these impacts that businesses recognise, trust and understand," said environment minister, Ian Pearson. "This will be fundamental in our efforts to move Britain towards a low-carbon economy in the decades ahead."

Although the scheme is voluntary, Tesco has promised to place the labels on all the goods it sells, which will inevitably place pressure on other companies to do the same. :: The Guardian

See also :: The Home Depot Introduces New "Eco Options" Label :: European Eco-label for Footwear, ::The Carbon Footprint of a Burger

Comments (4)

Robust independent auditing is definitely needed. I believe Tesco has funded the Environmental Change Institute ( to carry out its labelling scheme.

June 1, 2007 5:09 AM | click here to report abuseflag a problem
jump to topScatter [TypeKey Profile Page]says:

when will they realise that it is not just carbon that is the problem. how about methane - 20x better at being a greenhouse gas? and agriculture (livestock) responsible for 18% of greenhouse gasses whereas ALL transport is 13.5%. basically i am saying the focus must be widen beyond these buzz words like carbon -

(though good labeling is a start)

June 1, 2007 5:31 AM | click here to report abuseflag a problem
jump to topjak says:

Betting on biofuels: The industry is still in its infancy but evolving rapidly. Companies that hope to compete must devise their entry strategy now.

Thanks to Lloyd for this one

Betting on biofuels

The industry is still in its infancy but evolving rapidly. Companies that hope to compete must devise their entry strategy now.

William K. Caesar, Jens Riese, and Thomas Seitz

2007 Number 2

Billions of dollars, euros, pounds, and reais are pouring into biofuels. High fuel prices and generous regulatory support have given the industry healthy margins and relatively short investment payback times. Meanwhile, the triumphs of the first movers and dreams of future growth are enticing companies in industries from petroleum and agribusiness to biotechnology, chemicals, engineering, and financial services. And of course, the allure of a greener future has raised the expectations of investors and bystanders who hope that biofuels will help meet the world's energy needs while lowering greenhouse gas emissions.

Can biofuels deliver? The answer appears contingent on fuel prices as well as three other variables that directly influence the profitability and environmental impact of biofuels: the cost and availability of feedstock, government regulation, and conversion technologies. All are in flux, so an investment today is a bet on how these interrelated factors will evolve. Feedstock costs vary tremendously by region and could change significantly in the years ahead. Governments may alter the industry's ground rules to match changing priorities in climate change, energy security, and economic development. The energy, cost, and carbon efficiency of various biofuels are already quite different,1 and new conversion technologies could make them even more so—at different rates in different regions. Decisions about where to produce and distribute biofuels could have dramatic implications for the feasibility of the business.

Amid all this uncertainty, why enter now? In many commodity industries, the winners are the latest entrants, at the bottom of the cost curve—wielding the newest, most efficient technologies. But waiting may be a costly strategy in the nascent biofuel industry because land and other essential resources are at a premium.

Biofuel players should consider different ways to mitigate the risks, but every strategy will require trade-offs. Betting on a number of geographies and technologies will make things more complex, for example, but helps balance risk. Vertical integration, though both complex and costly, may be essential in helping to establish this young industry. Companies that want to play should try to get a head start on the difficult task of reducing the seemingly infinite number of options to a feasible set of solutions.

A world of uncertainty

Not long ago, the biofuel industry was relatively straightforward. Producers mostly used mature technologies and local feedstock to supply domestic markets with a single biofuel: bioethanol from cornstarch (in the United States) and sugarcane (in Brazil) or biodiesel from rapeseed oil (in Europe). Now, as global demand increases, companies are beginning to produce and sell biofuels in a number of geographies—and that's when things start to get tricky.

In many industries, the factors affecting returns vary geographically, and companies combine locations accordingly. With biofuels, these factors are particularly dynamic, often interconnected, and mostly uncertain. Two of them—feedstock costs and government regulation—are critical to any geographic strategy today, and conversion technologies will increasingly affect production costs as next-generation processes become commercialized. (Capital expenditures vary tremendously across regions, but no more so in biofuels than in any other industry.)

Feedstock costs and consequences

Feedstock accounts for 50 to 80 percent of biofuel production costs, so its price has a huge effect on the producers' returns. In the United States, for example, every dollar increase in the price of a bushel of corn raises the production cost of bioethanol by $0.35 a gallon and reduces the producer's operating margin by 20 percent.2 Many different forms of biomass can be used as feedstock, and costs vary hugely by region. Fermentable sugars from Brazil's sugarcane, for example, are less than half as expensive as those from European sugar beets. Government subsidies and alternative uses of feedstocks also affect feedstock costs.

In many regions, rising demand threatens both the cost and availability of feedstock. From 2003 to 2006, the percentage of the total US corn harvest used to produce biofuels rose to 16 percent, from 12 percent. But now that the federal government has adopted a goal of 35 billion gallons of alternative fuels a year by 2017, the use of domestic corn-based bioethanol to meet even half of this target would require 40 percent of that year's expected harvest. Not surprisingly, the cost of corn has soared: average wholesale prices rose from $1.90 a bushel in 2005 to $2.41 in 2006, and corn has regularly surpassed $4 a bushel on the spot market since late 2006.

Other unintended consequences of greater demand could bring a consumer backlash like the one that broke out in Mexico when tortilla prices skyrocketed because of bioethanol-related corn shortages. Environmental concerns were also raised after last autumn's burning of Indonesian forestland to make space for palm oil crops that were linked to increasing demand for biodiesel. The environmental impact of other aspects of biofuel production, including the widespread cultivation of fast-growing jatropha (a plant that produces a toxic vegetable oil), are unknown.

Government regulations

Whether through subsidies, import tariffs, or research grants, government regulation has helped drive both demand and profitability in the industry. Because the energy policies of most nations are still evolving, regulation is perhaps the greatest uncertainty of all. Lower subsidies, for example, could diminish profits. A production cost of about $2.90 a gallon and a government subsidy of $1.81 a gallon helped German producers to earn $0.42 for every gallon of biodiesel in 2006. The role of taxpayer money in creating new millionaires hardly went unnoticed, and the government decided to eliminate these subsidies, gradually, by 2012, replacing them with a mandated blend rate (the percentage of conventional fuel that blenders must replace with biofuel). Blend rates guarantee producers a certain level of sales, but the elimination of subsidies and the fact that supply will likely exceed mandated demand in the short term should depress margins. In such a market, companies generate attractive returns only when the cost curve is steep and lower-cost producers operate under the price umbrella established by marginal, high-cost producers. Since vegetable oil, itself a globally traded commodity, accounts for 80 percent of the production cost of biodiesel, the biodiesel cost curve isn't steep. Analogies with industries that have similar cost structures suggest that biodiesel margins could fall by 80 percent from 2006 levels.

The impact of mandated blend rates is also unclear. US regulators could set any ethanol blend rate from 10 percent (the maximum suitable for current vehicles) to 85 percent (the maximum suitable for most flex-fuel vehicles).3 Minnesota, for example, has mandated a 20 percent ethanol blend rate to take effect in 2013. What's more, mandated blend rates below 85 percent could be met either with the uniform blending of biofuels at the mandated rate or with a disproportionately high share of high-biofuel blends. All of these regimes would increase overall demand, but they could have vastly different effects on bioethanol companies and on other businesses, particularly car manufacturers. For now, car companies can keep selling vehicles with current engine designs, but some already plan to offer more flex-fuel vehicles, which use high-concentration biofuels, conventional fuels, or a mix of the two. Of course, the way carmakers deal with these issues will influence their other product-development decisions, especially for different low-carbon approaches, such as hybrid or hydrogen-fuel-cell cars.

Other policies are also in flux. With some exceptions,4 current biofuel regulations in the European Union and the United States protect domestic producers, but these policies—especially import tariffs—may change. Regulators increasingly recognize that current trade policy, which taxes imports of ethanol but not of petroleum, may not serve the goal of energy security. As evidence amasses confirming sugarcane ethanol's importance for reducing carbon emissions,5 regulators may ease restrictions on its importation.

The impact of new conversion technologies

New conversion technologies are going to cut overall production costs. Regional variations will either validate geographic strategies for biofuels—or turn them on their heads.

New conversion technologies are going to cut overall production costs; regional variations will either validate geo-graphic strategies for biofuels or turn them on their heads

Take, for example, bioethanol, produced when microorganisms such as yeast ferment sugars into ethanol. Next-generation technology will allow producers to use the sugars that make up cellulose (the main structural component of plants). Cellulose is found in all manner of vegetation, so cheap feedstocks—such as corn stover, sugarcane stalks (bagasse), and high-yield "energy crops" like switch-grass, energy cane (a relative of sugar cane), and wood—will become important feedstocks. The technology involves "pretreating" feedstocks physically or chemically and then using enzymes to digest the cellulosic components to release the fermentable sugars. For every step, competing technologies are under development.6 Each could lead to different production processes, biorefinery designs, and costs.

When this "lignocellulosic" technology becomes commercially viable—as early as 2010, by some estimates—the savings in costs and carbon emissions will vary by feedstock. Since feedstocks vary by region, their costs could change a region's attractiveness to producers. Consider these examples:

  • Today biofuel production in China is uncompetitive, because feedstock costs are relatively high. Cellulosic technology, however, could lower production costs to as little as $0.60 a gallon, from about $1.80, making Chinese bioethanol one of the world's cheapest biofuels.
  • In the United States and Brazil cellulosic ethanol production costs won't be much lower than today's corn- and sugarcane-based ethanol costs. Facilities processing cellulosic material thus will likely supplement rather than replace older ones, though cellulosic technology would have a significantly better energy balance when compared with the corn ethanol currently produced in the United States.
  • In Europe cellulosic technology could lower production costs enough to threaten companies producing beet (or wheat) ethanol with current methods.
Governments can help to advance technologies, but not without risk. In 2006 the government of Spain allocated $29 million to finance a joint Spanish-Argentine biodiesel research project. Likewise, the US Department of Energy recently announced $385 million in grants to six different cellulosic ethanol research projects. Technology could make it practical to use biobutanol, a molecule that outperforms ethanol as a premium gasoline replacement. Biodiesel, though far from cost competitive with regular diesel today, could in time be produced from jatropha, which provides a low-cost vegetable oil and can be cultivated on marginal land. Biomass-to-liquid (BTL) technology, a gasification process long used to convert coal into fuels, could eventually make it possible to produce high-quality synthetic diesel and gasoline. Most of these new technologies have yet to prove that they can be cost competitive. However, farsighted governments should avoid policies that favor today's technologies at the expense of tomorrow's.

Placing the right bets to manage risk

Companies that enter the market now can mitigate uncertainty by hedging their bets and forming relationships that may help them reduce volatility and influence regulation.

The argument against waiting

Understandably, some companies will wait for technology to advance and the regulatory landscape to evolve before entering. After all, in commodity industries, early entrants often lose out to latecomers using larger-scale, more modern technologies. Such leapfrogging has occurred time and again—for example, in the steel industry.7

Nonetheless, in any complex industry, early entrants can gain a valuable lead in understanding its technologies, operations, and economics, as well as through influencing local regulation. When companies face high levels of uncertainty in variables they can influence, taking steps to shape outcomes can make sense.8 Some companies and investors will enter now to capitalize on today's high prices, but market conditions could easily change before new factories begin operation. Prices of biofuels, unlike those of pure commodities, are greatly influenced by the cost of competing products, such as gasoline and diesel fuel (see sidebar, "Modeling supply and demand in the biofuel industry").

For companies with long-term aspirations in biofuels, the strongest argument against waiting is that certain vital resources are in short supply. Biofuel companies will need partners, for instance, and the best may soon be taken. Similarly, the cultivation of feedstocks, like many agricultural undertakings, is most efficient on large expanses of land. Even in the absence of deforestation, hundreds of thousands of hectares for growing feedstock are available, but large swaths in the choicest areas are not. Land in Brazil's highly developed São Paulo region, for example, is expensive, in part because it is close to urban demand centers. More land is available in the country's untapped, relatively inexpensive northeast and interior, but building an infrastructure to reach it would be pricey.

How to play now

The way companies determine their strategy will depend on the subsector of biofuels where they play. Three distinct segments have emerged.

  • Asset owners (including agribusinesses, petroleum companies, chemical companies, plant operators, and small farmers) are heavily invested in producing and marketing biofuels. They grapple with uncertainties in the long-term attractiveness of geographies, as well as with technological change.
  • Product and service providers (including seed companies, engineering and equipment companies, and biotechnology firms developing enzymes and fermentation organisms) tailor their technologies and processes to the needs of the biofuel industry. Their strategies are mostly not specific to geography, and they face technological and commercial risk.
  • Market participants (including gasoline blenders, farmers, agricultural-equipment companies, suppliers of inputs such as fertilizers, and logistics providers) benefit when the growth of the biofuel industry increases demand in their core businesses.
All of these players, whatever their subsector, need to make smart bets in a few key areas:

Betting on geographies and technologies. Asset owners and, to a lesser degree, market participants have increasingly entered the international biofuel trade, mixing and matching geographies for production and distribution to balance risk and investment. In the United States, for example, demand is all but guaranteed thanks to the world's most ambitious biofuel targets, a well-developed infrastructure, and generous subsidies, but feedstock constraints could continue to put most of the profits in the pockets of farmers or landowners. Undeveloped tropical regions in Africa, Asia, and Central America—especially those that have free-trade agreements with the European Union or the United States—seem appealing, but they pose political and economic risks of their own and require significant investments in infrastructure.

Companies can mitigate some geographic risk (and reduce payback periods) if they acquire producers operating under known conditions. By acquiring older ethanol plants and introducing modern management practices, Cosan, for example, improves its plants' operating performance and recovers its acquisition premiums. Many smaller, undermanaged plants in Brazil and the United States could also flourish under new owners—either large multinational industrials or private-equity firms.

To deal with technological risk, asset owners should invest in a number of options. BP, for example, founded the Energy Biosciences Institute (EBI), in California, which hosts leading industry research groups and gave it $500 million in sponsorship funds. In return, the company gains early knowledge of—and the right of first refusal for—much of the intellectual property developed there. Shell, by contrast, has invested in companies researching both lignocellulosic and gasification processes (including BTL) for biomass conversion. While BP's approach gives it broader exposure to breakthroughs in fundamental science and technology, Shell's offers a more intimate relationship with companies closer to the commercial application of technologies.

For product and service providers, mitigating technological risk means commercializing intellectual property. They can partner with major (future) asset owners for access to a sizable captive market (as DuPont did in a joint venture with BP to develop biobutanol) or collaborate with other product and service providers. One biotechnology company, Novozymes, is working with Broin, a leading engineering firm that will use the Novozymes enzymes technology in every new ethanol plant it constructs.

Building relationships. The establishment of young industries often calls for coordinated efforts all along the value chain. Building a biofuel industry in a new geography, for example, requires the simultaneous application of skills in agronomics, feedstock and fuel procurement, storage, distribution, refinery operations, commodities trading, and the influencing of local regulation. No asset owner can claim all these skills, so most companies would benefit from true or virtual integration (for example, through partnerships) along the value chain.

Even in more developed markets, integrating along the value chain can diminish risk and volatility. In the United States from January 2005 to November 2006, for example, changes in some state regulations of fuel—the shift from MTBE (methyl tert-butyl ether) to ethanol as an antiknocking additive—and the increase in prices of gasoline and gasoline components created substantial fluctuations in the demand for and price of corn ethanol. Simultaneously, a shortage of corn and the resulting high prices triggered large swings in the allocation of profits between farmers and asset owners (exhibit). Integrating the cultivation and production of feedstocks removes the latter source of uncertainty.

Biofuel companies must also build relationships with the government agencies that regulate biofuels and the nongovernmental organizations that influence public opinion. Proponents of biofuels can identify potential areas of cooperation and conflict by analyzing these players' concerns (including consumer advocacy, environmental protection, and fair trade) as well as the economic interests of groups such as farmers, petroleum companies, auto manufacturers, and food companies.9

Biofuels have a tremendous potential to give the world efficient and sustainable energy, but much about the industry remains uncertain. Those who enter it today must bet carefully on geographies and technologies and establish the right relationships at critical points along the value chain.

Modeling supply and demand in the biofuel industry

McKinsey recently brought a fact-based perspective to the future of the global biofuel industry. After interviewing more than 80 current and potential industry participants and leading academics, we created a database on the availability and cost of feedstocks, as well as a bioethanol supply-demand model that incorporates the impact of crude oil prices, government regulation, and new technologies.

We make three important assumptions: only land that does not have to be deforested will be available for feedstock production, cellulosic technology and high-density ranching practices will be used extensively, and agricultural products will be devoted to biofuels only after demand for food and animal feed is met. Our model suggests that there is sufficient land to cultivate almost four billion tons (that is, one thousand million tons) of feedstock a year—in theory, enough to produce bioethanol providing more than 50 percent of total transportation fuels by 2020.

The availability of feedstock is critical, but the economic viability of bioethanol also depends on its cost effectiveness vis-à-vis gasoline. The higher the price of crude oil, the wider the gap between gasoline prices and bioethanol production costs. Crude oil at $40 a barrel (our base-case scenario) would provide for the economical production of 70 billion gallons of bioethanol a year by 2020—about seven times current production and 10 percent of the total demand for transportation fuel. At up to $50 a barrel, bioethanol could replace as much as 30 percent of all transportation fuel economically (exhibit). At $70 to $80 a barrel, the replacement of up to 50 percent of all transportation fuel would in theory be economically viable, and the availability of feedstock would limit the industry's further growth. Subsidies, which were not considered in this model, could also trigger higher penetration rates.

Return to reference

About the Authors

Nicolas Denis is an associate principal in McKinsey's Brussels office; Andreas Meiser is a consultant in the Stuttgart office; Alexander Schwartz is a consultant in the Chicago office.

About the Authors

Bill Caesar is a principal in McKinsey's Atlanta office, Jens Riese is a principal in the Munich office, and Thomas Seitz is a principal in the Houston office.

The authors wish to thank Loula Merkel and Vitaly Negulayev for their contributions to this article.


1 Corn ethanol, for instance, generates only 30 percent more energy than is required to make it, whereas sugarcane ethanol generates 8.3 times more energy, according to the International Energy Agency.

2 This analysis assumes that crude oil costs $40 a barrel.

3 Maximum ethanol blend rates also vary geographically. Current regulations in Europe allow up to only 5 percent ethanol in gasoline blends, whereas in Brazil the government encourages higher ethanol blend rates and flex-fuel vehicles already account for 85 percent of new-car sales.

4 The Caribbean Basin Initiative, for example, allows Caribbean producers to avoid tariffs on up to 7 percent of total US biofuel consumption. The proposed free-trade agreements between the United States and Latin American nations such as Peru provide for the duty-free import of sugar. Likewise, the European Union's "Everything but Arms" agreement provides for duty-free imports of all products (other than armaments) from developing countries.

5 Per-Anders Enkvist, Tomas Nauclér, and Jerker Rosander, "A cost curve for greenhouse gas reduction," The McKinsey Quarterly, 2007 Number 1, pp. 34–45.

6 Enzymes, for example, can be made separately and added exogenously to the pretreated biomass, expressed directly in a genetically modified feedstock plant, or produced by the fermentation organisms.

7 Andrew Carnegie, August Thyssen, and Alfried Krupp used large, integrated works to eclipse British steelmakers in the late 19th century. Kawasaki Steel and Nippon overtook US steelmakers following World War II. More recently, South Korea's Pohang Iron and Steel became a formidable competitor, with efficient, low-cost steelworks.

8 Hugh Courtney, "Making the most of uncertainty," The McKinsey Quarterly, 2001 Number 4, pp. 38–47.

9 Scott C. Beardsley, Denis Bugrov, and Luis Enriquez, "The role of regulation in strategy," The McKinsey Quarterly, 2005 Number 4, pp. 92–102.

New process generates hydrogen from aluminum alloy to run engines, fuel cells

Thanks to David for this one

May 15, 2007

New process generates hydrogen from aluminum alloy to run engines, fuel cells

Researchers demonstrate method for producing hydrogen
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caption below

A Purdue University engineer has developed a method that uses an aluminum alloy to extract hydrogen from water for running fuel cells or internal combustion engines, and the technique could be used to replace gasoline.

The method makes it unnecessary to store or transport hydrogen - two major challenges in creating a hydrogen economy, said Jerry Woodall, a distinguished professor of electrical and computer engineering at Purdue who invented the process.

"The hydrogen is generated on demand, so you only produce as much as you need when you need it," said Woodall, who presented research findings detailing how the system works during a recent energy symposium at Purdue.

The technology could be used to drive small internal combustion engines in various applications, including portable emergency generators, lawn mowers and chain saws. The process could, in theory, also be used to replace gasoline for cars and trucks, he said.

Hydrogen is generated spontaneously when water is added to pellets of the alloy, which is made of aluminum and a metal called gallium. The researchers have shown how hydrogen is produced when water is added to a small tank containing the pellets. Hydrogen produced in such a system could be fed directly to an engine, such as those on lawn mowers.

"When water is added to the pellets, the aluminum in the solid alloy reacts because it has a strong attraction to the oxygen in the water," Woodall said.

This reaction splits the oxygen and hydrogen contained in water, releasing hydrogen in the process.

The gallium is critical to the process because it hinders the formation of a skin normally created on aluminum's surface after oxidation. This skin usually prevents oxygen from reacting with aluminum, acting as a barrier. Preventing the skin's formation allows the reaction to continue until all of the aluminum is used.

The Purdue Research Foundation holds title to the primary patent, which has been filed with the U.S. Patent and Trademark Office and is pending. An Indiana startup company, AlGalCo LLC., has received a license for the exclusive right to commercialize the process.

The research has been supported by the Energy Center at Purdue's Discovery Park, the university's hub for interdisciplinary research.

"This is exactly the kind of project that suits Discovery Park. It's exciting science that has great potential to be commercialized," said Jay Gore, associate dean of engineering for research, the Energy Center's interim director and the Vincent P. Reilly Professor of Mechanical Engineering.

The research team is made up of electrical, mechanical, chemical and aeronautical engineers, including doctoral students.

Woodall discovered that liquid alloys of aluminum and gallium spontaneously produce hydrogen if mixed with water while he was working as a researcher in the semiconductor industry in 1967. The research, which focused on developing new semiconductors for computers and electronics, led to advances in optical-fiber communications and light-emitting diodes, making them practical for everything from DVD players to automotive dashboard displays. That work also led to development of advanced transistors for cell phones and components in solar cells powering space modules like those used on the Mars rover, earning Woodall the 2001 National Medal of Technology from President George W. Bush.

"I was cleaning a crucible containing liquid alloys of gallium and aluminum," Woodall said. "When I added water to this alloy - talk about a discovery - there was a violent poof. I went to my office and worked out the reaction in a couple of hours to figure out what had happened. When aluminum atoms in the liquid alloy come into contact with water, they react, splitting the water and producing hydrogen and aluminum oxide.

"Gallium is critical because it melts at low temperature and readily dissolves aluminum, and it renders the aluminum in the solid pellets reactive with water. This was a totally surprising discovery, since it is well known that pure solid aluminum does not readily react with water."

The waste products are gallium and aluminum oxide, also called alumina. Combusting hydrogen in an engine produces only water as waste.

"No toxic fumes are produced," Woodall said. "It's important to note that the gallium doesn't react, so it doesn't get used up and can be recycled over and over again. The reason this is so important is because gallium is currently a lot more expensive than aluminum. Hopefully, if this process is widely adopted, the gallium industry will respond by producing large quantities of the low-grade gallium required for our process. Currently, nearly all gallium is of high purity and used almost exclusively by the semiconductor industry."

Woodall said that because the technology makes it possible to use hydrogen instead of gasoline to run internal combustion engines it could be used for cars and trucks. In order for the technology to be economically competitive with gasoline, however, the cost of recycling aluminum oxide must be reduced, he said.

"Right now it costs more than $1 a pound to buy aluminum, and, at that price, you can't deliver a product at the equivalent of $3 per gallon of gasoline," Woodall said.

However, the cost of aluminum could be reduced by recycling it from the alumina using a process called fused salt electrolysis. The aluminum could be produced at competitive prices if the recycling process were carried out with electricity generated by a nuclear power plant or windmills. Because the electricity would not need to be distributed on the power grid, it would be less costly than power produced by plants connected to the grid, and the generators could be located in remote locations, which would be particularly important for a nuclear reactor to ease political and social concerns, Woodall said.

"The cost of making on-site electricity is much lower if you don't have to distribute it," Woodall said.

The approach could enable the United States to replace gasoline for transportation purposes, reducing pollution and the nation's dependence on foreign oil. If hydrogen fuel cells are perfected for cars and trucks in the future, the same hydrogen-producing method could be used to power them, he said.

"We call this the aluminum-enabling hydrogen economy," Woodall said. "It's a simple matter to convert ordinary internal combustion engines to run on hydrogen. All you have to do is replace the gasoline fuel injector with a hydrogen injector."

Even at the current cost of aluminum, however, the method would be economically competitive with gasoline if the hydrogen were used to run future fuel cells.

"Using pure hydrogen, fuel cell systems run at an overall efficiency of 75 percent, compared to 40 percent using hydrogen extracted from fossil fuels and with 25 percent for internal combustion engines," Woodall said. "Therefore, when and if fuel cells become economically viable, our method would compete with gasoline at $3 per gallon even if aluminum costs more than a dollar per pound."

The hydrogen-generating technology paired with advanced fuel cells also represents a potential future method for replacing lead-acid batteries in applications such as golf carts, electric wheel chairs and hybrid cars, he said.

The technology underscores aluminum's value for energy production.

"Most people don't realize how energy intensive aluminum is," Woodall said. "For every pound of aluminum you get more than two kilowatt hours of energy in the form of hydrogen combustion and more than two kilowatt hours of heat from the reaction of aluminum with water. A midsize car with a full tank of aluminum-gallium pellets, which amounts to about 350 pounds of aluminum, could take a 350-mile trip and it would cost $60, assuming the alumina is converted back to aluminum on-site at a nuclear power plant.

"How does this compare with conventional technology? Well, if I put gasoline in a tank, I get six kilowatt hours per pound, or about two and a half times the energy than I get for a pound of aluminum. So I need about two and a half times the weight of aluminum to get the same energy output, but I eliminate gasoline entirely, and I am using a resource that is cheap and abundant in the United States. If only the energy of the generated hydrogen is used, then the aluminum-gallium alloy would require about the same space as a tank of gasoline, so no extra room would be needed, and the added weight would be the equivalent of an extra passenger, albeit a pretty large extra passenger."

The concept could eliminate major hurdles related to developing a hydrogen economy. Replacing gasoline with hydrogen for transportation purposes would require the production of huge quantities of hydrogen, and the hydrogen gas would then have to be transported to filling stations. Transporting hydrogen is expensive because it is a "non-ideal gas," meaning storage tanks contain less hydrogen than other gases.

"If I can economically make hydrogen on demand, however, I don't have to store and transport it, which solves a significant problem," Woodall said.

Writer: Emil Venere, (765) 494-4709,

Sources: Jerry M. Woodall,  (765) 494-3479,

Jay Gore, (765) 494-2122,

AlGalCo LLC contact,

Purdue News Service: (765) 494-2096;

Note to Journalists: A video describing how the hydrogen-producing technology works is available online at

Purdue researchers demonstrate their method for producing hydrogen by adding water to an alloy of aluminum and gallium. The hydrogen could then be used to run an internal combustion engine. The reaction was discovered by Jerry Woodall, center, a distinguished professor of electrical and computer engineering. Charles Allen, holding test tube, and Jeffrey Ziebarth, both doctoral students in the School of Electrical and Computer Engineering, are working with Woodall to perfect the process. (Purdue News Service photo/David Umberger)

A publication-quality photo is available at

Air-Car Ready for Mass Production

Thanks Norbert! There is something weird about using the exhaust from your car to cool it...

Air-Car Ready for Mass Production

Written by Bob Ewing    
Saturday, 26 May 2007

The world's first commercial compressed air-powered vehicle is rolling towards the production line. The Air Car, developed by ex-Formula One engineer Guy Nègre, will be built by India's largest automaker, Tata Motors.

The Air Car uses compressed air to push its engine's pistons. It is anticipated that approximately 6000 Air Cars will be cruising the streets of India by 2008. If the manufacturers have no surprises up their exhaust pipes the car will be practical and reasonably priced. The CityCat model will clock out at 68 mph with a driving range of 125 miles.

Refueling is simple and will only take a few minutes. That is, if you live nearby a gas station with custom air compressor units. The cost of a fill up is approximately $2.00. If a driver doesn't have access to a compressor station, they will be able to plug into the electrical grid and use the car's built-in compressor to refill the tank in about 4 hours.

The compressed air technology is basically just a way of storing electrical energy without the need for costly, heavy, and occasionally toxic batteries. So, in a sense, this is an electric car. It just doesn't have an electric motor.

But don't let anyone tell you this is an "emissions free" vehicle. Sure, the only thing coming out of the tailpipe is air. But, chances are, fossil fuels were burned to create the electricity. In India, that mostly means coal. But the carbon emissions per mile of these things still far outdoes any gasoline car on the market.

Unfortunately, the streets of North America may never see the Air Car, though; it's light-weight, glued-together fiberglass construction might not do so well in our crash tests. However, that does not mean the Air car is confined to the sub-continent. Nègre has signed deals to bring its design to 12 more countries, including Germany, Israel and South Africa.

And this isn't the last we'll hear of the technology. The folks making the Air Car are already working on a hybrid version that would use an on-board, gasoline-powered compressor to refill the air tanks when they run low. Negre says that technology could easily squeeze a cross country trip out of one tank of gasoline.

A variety of videos (of varying quality) on this technology can be found on YouTube, or after the jump.

Via: Popular Mechanics

Clean Coal: The Myth Ends Today [NYT: Lawmakers Push for Big Subsidies for Coal Process]

Thanks Norbert!

Clean Coal: The Myth Ends Today

Written by Hank Green    Tuesday, 29 May 2007

We publish an astonishing amount of good news here at When I started this all up a year ago, good news was pretty hard to come by. But now it just flows in. The future's so bright, I've got to wear photovoltaic clothing.

But there are some dark spots. One in particular looks like it could undo a lot of the work done in the last few years. It's a dark spot that I've seen jaunting merrily across the screen on Grist and TreeHugger, a smudge supported by Barack Obama and myriad congressional Democrats: Coal.

For the last few years energy independence and the green movement have almost become synonymous. But coal threatens to break down that synergy. While recent forward progress that has been astonishing, coal is providing an opportunity for the United States to stagnate once again.

The technology to convert coal to liquid fuel has existed since the 1920s. If congress were to mandate and fund its implementation America would begin to slowly gain energy independence, Peabody Coal's net worth would increase tenfold to roughly $3.6 trillion, the Appalachian Mountains would be destroyed and U.S. carbon emissions would double. This is a bad idea.

Unfortunately, there's a bill working through congress right now that would give coal companies billions of dollars to help them build coal-to-liquid plants. It would guarantee coal companies government contracts, including a $40-billion, 25-year deal with the air force. Peabody coal is literally fighting for trillions of dollars here.

At the same time, there are also bills in congress that would cap CO2 emissions and make coal-to-liquid technologies instantly obsolete. But there's not a lot of money behind the carbon neutral lobby, while Coal has millions to spend on congress. The unfortunate truth is, this bill has a chance of passing. For more in depth analysis, you can refer to the New York Times, as they've just done a
marvelous write-up of the situation.

This could be bad news. This could be very bad news. We have been making some marvelous steps forward in the last few years. A large-scale conversion to liquid coal would a reversion, the exact opposite of what we need to be doing.

I invite everyone to check out, and to consider Illinois Senator Obama's position on "clean coal." Hillary may not be an EcoGeek, but at least she doesn't go around pretending like Coal can be good for the environment.

The New York Times
May 29, 2007

Lawmakers Push for Big Subsidies for Coal Process


Correction Appended

WASHINGTON, May 28 — Even as Congressional leaders draft legislation to reduce greenhouse gases linked to global warming, a powerful roster of Democrats and Republicans is pushing to subsidize coal as the king of alternative fuels.

Prodded by intense lobbying from the coal industry, lawmakers from coal states are proposing that taxpayers guarantee billions of dollars in construction loans for coal-to-liquid production plants, guarantee minimum prices for the new fuel, and guarantee big government purchases for the next 25 years.

With both House and Senate Democrats hoping to pass "energy independence" bills by mid-July, coal supporters argue that coal-based fuels are more American than gasoline and potentially greener than ethanol.

"For so many, filthy coal is a dirty four-letter word," said Representative Nick V. Rahall, Democrat of West Virginia and chairman of the House Natural Resources Committee. "These individuals, I tell you, have their heads buried in the sand."

Environmental groups are adamantly opposed, warning that coal-based diesel fuels would at best do little to slow global warming and at worst would produce almost twice as much of the greenhouse gases tied to global warming as petroleum.

Coal companies are hardly alone in asking taxpayers to underwrite alternative fuels in the name of energy independence and reduced global warming. But the scale of proposed subsidies for coal could exceed those for any alternative fuel, including corn-based ethanol.

Among the proposed inducements winding through House and Senate committees: loan guarantees for six to 10 major coal-to-liquid plants, each likely to cost at least $3 billion; a tax credit of 51 cents for every gallon of coal-based fuel sold through 2020; automatic subsidies if oil prices drop below $40 a barrel; and permission for the Air Force to sign 25-year contracts for almost a billion gallons a year of coal-based jet fuel.

Coal companies have spent millions of dollars lobbying on the issue, and have marshaled allies in organized labor, the Air Force and fuel-burning industries like the airlines. Peabody Energy, the world's biggest coal company, urged in a recent advertising campaign that people "imagine a world where our country runs on energy from Middle America instead of the Middle East."

Representative Rick Boucher, a Virginia Democrat whose district is dominated by coal mining, is writing key sections of the House energy bill. In the Senate, champions of coal-to-liquid fuels include Barack Obama, the Illinois Democrat, and Jim Bunning of Kentucky and Larry Craig of Idaho, both Republicans.

President Bush has not weighed in on specific incentives, but he has often stressed the importance of coal as an alternative to foreign oil. In calling for a 20 percent cut in projected gasoline consumption by 2017, he has carefully referred to the need for "alternative" fuels rather than "renewable" fuels. Administration officials say that was specifically to make room for coal.

The political momentum to subsidize coal fuels is in odd juxtaposition to simultaneous efforts by Democrats to draft global-warming bills that would place new restrictions on coal-fired electric power plants.

The move reflects a tension, which many lawmakers gloss over, between slowing global warming and reducing dependence on foreign oil.

Many analysts say the huge coal reserves of the United States could indeed provide a substitute for foreign oil.

The technology to convert coal into liquid fuel is well-established, and the fuel can be used in conventional diesel cars and trucks, as well as jet engines, boats and ships. Industry executives contend that the fuels can compete against gasoline if oil prices are about $50 a barrel or higher.

But coal-to-liquid fuels produce almost twice the volume of greenhouse gases as ordinary diesel. In addition to the carbon dioxide emitted while using the fuel, the production process creates almost a ton of carbon dioxide for every barrel of liquid fuel.

Coal industry executives insist their fuel can actually be cleaner than oil, because they would capture the gas produced as the liquid fuel is being made and store it underground. Some could be injected into oil fields to push oil to the surface.

Several aspiring coal-to-liquid companies say that they would reduce greenhouse emissions even further by using renewable fuels for part of the process. But none of that has been done at commercial volumes, and many analysts say the economic issues are far from settled.

"There are many uncertainties," said James T. Bartis, a senior policy researcher at the RAND Corporation, who testified last week before the Senate Energy Committee. "We don't even know what the costs are yet."

The clash between "energy independence" and global warming will break into the open next month. The Senate energy bill, being drafted by Senator Jeff Bingaman, Democrat of New Mexico, would promote renewable fuels — but not coal-to-liquid fuels — and would require electric utilities to produce 15 percent of their power with renewable fuels by 2020.

But coal-state Republicans have vowed to resume their push for coal incentives when the bill reaches the Senate floor, and many Democrats are likely to support them. In the House, Democrats like Mr. Boucher and Mr. Rahall will be pushing in the same direction.

But some energy experts, as well as some lawmakers, worry that the scale of the coal-to-liquid incentives could lead to a repeat of a disastrous effort 30 years ago to underwrite a synthetic fuels industry from scratch.

When oil prices plunged in the 1980s, the government-owned Synthetic Fuels Corporation became a giant government albatross that lost billions and remains a symbol of misguided industrial policy more than 25 years later.

"This is the snake oil of energy alternatives," said Peter Altman, a policy analyst at the National Environmental Trust, an environmental advocacy group. "The promises are just as lofty and the substance is just as absent as the first snake oil salesmen who plied their trade in the 1800s."

Coal executives contend that the technology for converting coal to "ultraclean" diesel fuel for use in cars and trucks has been around for decades. Known as the Fischer-Tropsch process, the technology dates to the 1920s. It was used by Germany during World War II and by South Africa during the apartheid era, in both cases because the countries were blocked by international embargoes from buying oil.

SASOL, a South African chemical conglomerate, is the world's largest producer of coal-based liquids and operates a plant that produces 150,000 barrels a day.

"Greener and cleaner — we can do it, and we will do it," said John Baardson, president of Baard Energy, a firm in Vancouver, Wash., that is trying to build a $4 billion coal-to-liquid plant in Ohio.

But no company has built a commercial-scale plant that also captures carbon, and experts caution that many obstacles lie ahead.

"At best, you're going to tread water on the carbon issue, and you're probably going to do worse," said Howard Herzog, a principal research engineer at the Massachusetts Institute of Technology and a co-author of "The Future of Coal," a voluminous study published in March by M.I.T. "It goes against the whole grain of reducing carbon."

The M.I.T. team expressed even more skepticism about the economic risks. It estimated that it would cost $70 billion to build enough plants to replace 10 percent of American gasoline consumption.

The study estimates that the construction costs for coal-to-liquid plants are almost four times higher than the costs for comparable petroleum refineries, and it argues that cost estimates for synthetic fuel plants in the past turned out to be "wildly optimistic."

In a new report last week, the Energy Department estimated that a plant capable of making 50,000 barrels of liquefied coal a day — a tiny fraction of the nearly 9 million barrels in gasoline burned daily in the United States — would cost $4.5 billion.

But the Energy Department also estimated that such a plant could produce a 20 percent annual return if oil prices remain about $60 a barrel.

Coal executives say that they need government help primarily because oil prices are so volatile and the upfront construction costs are so high. "We're not asking for everything. All we're asking for is something," said Hunt Ramsbottom, chief executive of Rentech Inc., which is trying to build two plants at mines owned by Peabody Energy.

But coal executives anticipate potentially huge profits. Gregory H. Boyce, chief executive of Peabody Energy, based in St. Louis, which has $5.3 billion in sales, told an industry conference nearly two years ago that the value of Peabody's coal reserves would skyrocket almost tenfold, to $3.6 trillion, if it sold all its coal in the form of liquid fuels.

Coal industry lobbying has reached a fever pitch. The industry spent $6 million on federal lobbying in 2005 and 2006, three times what it spent each year from 2000 through 2004, according to calculations by

Peabody, which has quadrupled its annual lobbying budget to about $2 million since 2004, recently hired Richard A. Gephardt, the Missouri Democrat who was House majority leader from 1989 to 1995 and a candidate for the Democratic presidential nomination in 1988 and 2004, to help make its case in Congress.

One of the most vociferous champions of coal-to-liquid fuels is the Southern States Energy Board, a group organized by governors from 16 states. Last year, the group published a study, which cost $500,000, that concluded that coal-to-liquid fuel could and should replace almost one-third of imported oil by 2030.

As it happens, the coal industry supplied much of the financing for the study and subsequent marketing. Peabody Energy contributed about $150,000 and the National Mining Association added $50,000, officials at the Southern States Energy Board said.

The inducements under discussion would not only subsidize up to 10 coal-to-liquid plants, but also guarantee a minimum market through long-term contracts with the Air Force and minimum prices for at least some producers.

"There is financial uncertainty, which is inhibiting the flow of private capital into the construction of coal-to-liquid facilities," said Mr. Boucher, who supports most of the proposals and is drafting portions of the energy bill.

In addition to construction loan guarantees, Mr. Boucher would protect the first six liquid plants from drops in energy prices. If oil prices fell below about $40 a barrel, the government would automatically grant loans to the first six plants that make coal-based fuels. If oil prices climbed to $80 a barrel, companies would have to pay a surcharge to the government.

But the most important guarantee, many coal producers said, is the prospect of signing 25-year purchase contracts with the Air Force.

The Air Force consumes about 2.6 billion gallons a year of jet fuel, and Air Force officials would like to switch as much as 780 million gallons a year to coal-based fuels. Air Force officials strongly support the idea of extremely long contracts, but others at the Defense Department worry that the military could be left holding the bag for years if oil prices dropped significantly.

For Mr. Boyce, chief executive of Peabody Energy, there is no reason to be timid.

"If America has the will to be one of the great energy centers of the world," he told an industry conference last year, "we have the resources right under our feet."

Correction: May 31, 2007

A front-page article on Tuesday about a push by lawmakers to pass subsidies for coal misidentified the state represented by the Republican Senator Larry E. Craig, who is a supporter of the coal-to-liquid fuel concept. It is Idaho, not Wyoming.