Green Purchasing Asia :: September 2011 by Green Purchasing Asia

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PURCHASING

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Contents

ASIA  

From the managing editor’s desk

Buy into a green future

OPPORTUNITIES

China firm on rail expansion despite funding hiccup

Rail on the road to a more prominent future

9 The palm oil business V2.0

“Global demand for transport appears unlikely to decrease in the foreseeable future.”

(See pages 14–27)

Tribes of the roundtable

Sim Boon Kiat, president, ABB Malaysia

Smart grids seen as super engines for China’s growth Lobby for smart grid roadmap in Malaysia “Malaysia should adopt smart grid as part of its sustainable development agenda.”

“We pride ourselves in asking the hard questions, which will lead us to finding the hard solutions.”

Cargill: Helping brands green supply chains

“Sustainability is a critical factor to many of the brands we supply.”

Darrel Webber, secretarygeneral RSPO

The tough route to green palm oil

Fronds of a dilemma

Bruce Blakeman, vice-president for corporate aﬀairs, Cargill Asia Pacific

Fibrous kenaf could be Malaysia’s third big crop

Halim Osman, secretary, CIRED Malaysia

ASEAN’s biggest eco trade 32 show kicks oﬀ

   •   

EDITORIAL

The many faces of biodegradability

More push for Taiwan’s green building material industry

Algae for biofuels: A promise in waiting

 

Building with two gauges 49

The windmills of Bangui

Easy money-saving tips for business

(See page 34)

CASE STUDIES

PEOPLE

INFORMATION

India to build world’s largest solar power plant

Expanding ecomaginatively in South-east Asia

New global language of green

Nuclear-renewable debate heats up in India

Australia carbon tax unlikely to drive up renewables

China halves EV production, faces major challenges

ASEAN goes for regional certification

Malaysia’s feed-in tariﬀ scheme delayed to December

All hail the big green spender

News briefs

Homework

Energy from bumpy rides 33 The windmills of Bangui

Vast opportunities for wind in the Philippines, including typhoon power

First dual-certified dedicated oﬃce tower in KL

“We want to make money but we want to be green as well, and not at a cost to the business.” Azli Mohamed, GE Malaysia’s market development director

Singapore’s green innovator of the year

“I envision a future where nothing will go to waste.” Ho Nyok Yong, technical director, Samwoh Corporation

Managing agro-wastes with micro-organisms

“Innovation involves activities that facilitate the flow of business.” Suhaimi Masduki, CEO, BioFusion Sdn Bhd

    •  

The team Editorial Editor: Lim Siang Jin Managing editor: David Lee Boon Siew Assistant editor: Siaw Mei Li Contributing editors: Ann Teoh, Jason Tan Contributing writers: Eleanor Chen, G Danapal, Mallika Naguran, Stephen Ng, Ngam Su May, Nidhi Bhardwaj, Suvarna Beesetti, Tan Su-Yin, VK Shashikumar, Tejas Patel Columnists: Goh Ban Lee, Shel Horowitz, Khoo Hock Aun, Ning Yu, Prasad Modak Marketing & sales Manager: Yong Wang Ching +6012 205 7928 Sam Thong (Malaysia) +6012 361 0617 Lim Wan Tsau (Singapore) +65 9068 0184 Creative & design Khoo Kay Hong, Faye Phua Szeu Hwui Production & advertising traﬃc Eddy Yap Subscription & circulation Yap Eng Jin Finance & operations Kym Chong Corporate Managing director: Lim Siang Jin Publisher Briomedia Green Sdn Bhd (924679-H) 3-3 Jalan Solaris 2, Solaris Mont Kiara 50480 Kuala Lumpur, Malaysia Tel: +603 6203 7681 (Malaysia) Tel: +65 9068 0184 (Singapore) Fax: +603 6211 2681 Email: editor@greenpurchasingasia.com Printer KHL Printing Co Sdn Bhd (235060-A) Lot 10 & 12, Jalan Modal 23/2 Seksyen 23, Kawasan Miel Phase 8 40000 Shah Alam, Selangor, Malaysia Tel: +603 5541 3695 Fax: +603 5541 3712 © 2011: Briomedia Green Sdn Bhd Letters and articles are welcome, and should be addressed to: The Editor at Green Purchasing Asia 3-3 Jalan Solaris 2, Solaris Mont Kiara 50480 Kuala Lumpur, Malaysia Email: letters@greenpurchasingasia.com Endorsed by • Ministry of Energy, Green Technology and Water, Malaysia • International Green Purchasing Network

Disclaimer Briomedia Green Sdn Bhd (924679-H) believes that the information published at the time of printing is correct. The views expressed in the articles are not necessarily those of the publisher. While the publisher has taken reasonable care in compiling the magazine, it shall not be liable for any omission, error or inaccuracy. Editorial contributions are welcome but unsolicited materials are submitted at the sender’s risk. The publisher cannot accept responsibility for loss or damage. All rights reserved by Briomedia Green Sdn Bhd (924679-H). No part of this publication may be reproduced without the publisher’s written permission. Paper: Cover 180gsm Ningbo artcard PEFC; Text 80gsm Royal Express Silk PEFC/FSC

From the managing editor’s desk David Lee Boon Siew boonsiew@ greenpurchasingasia.com

Of all the commercially-planted oil crops, palm oil is king. It’s versatile, cost competitive and enjoys high yields. Indonesia and Malaysia lead as the biggest producers of the oil in the world. Unfortunately, they are also the target of some of the most aggressive lobbies against a commercial crop, based on a range of issues that include health, land use, orangutans and native rights. The answer, it would seem, lies in producing green palm oil, a trendy word for a sustainablyproduced product that is acceptable to the detractors, with all interest groups being represented to present arguments based on facts, not emotions. This was the premise on which the 656-member Roundtable on Sustainable Palm Oil (RSPO) was formed in 2004. Has it done the trick? Is the RSPO the answer to all the problems? Not really, as critics are still vociferous. And the RSPO-certified palm oil is not enjoying the level of consumer uptake anticipated by producing nations. Worse, growers are unhappy with the price premium despite being burdened with CSPO-inflated costs. And to top it all, Indonesia has set up its own certification body, with Malaysia now putting in motion plans to do the same. This issue of Green Purchasing Asia engages the RSPO and talks to four of its stakeholders, including an NGO, on their concerns and their commitment to the grouping that is now preparing for its 9th Annual Roundtable Meeting on Sustainable Palm Oil taking place November 22nd–24th in Kota Kinabalu in Sabah, Malaysia. The 8th General Assembly will be held simultaneously. The deliberations will be, to put it mildly, interesting.

The September issue admittedly looks “agricultural”, as we have also featured kenaf, a hardy crop cultivated for its ﬁbre and woody core that has many industrial applications, including for making jeans in China! There’s huge potential in this crop, and the challenge is to scale it up to bring costs down. A lot is happening this month in the green conference market. There are at least four in Kuala Lumpur and three in Singapore. The largest will be the second edition of IGEM 2011, billed as the region’s biggest greentech show. Green Purchasing Asia is a media partner for this event. Look out for our coverage of this event next issue. Coincidentally, GE, the company we engaged for our interview in the People section, is taking part in IGEM. We spoke to Azli Mohamed, its market development director for Malaysia, on the company’s ecomagination business and discovered that the man’s also a multi-instrumentalist who’s played at a jazz festival! We also interviewed Singapore Building & Construction Authority (BCA)’s Green Innovator of the Year Dr Ho Nyok Yong of Samwoh Corporation who pioneered the use of recycled concrete aggregate (RCA) in new buildings. For Case Studies, we bring you the Windmills of Bangui in the Philippines (along with the opportunities in a land where typhoons are a part of life) and the iconic Menara Binjai project in Kuala Lumpur that is going for green certiﬁcation. Happy reading!

Coming up next: Seven billion and counting The world’s population hits 7 billion in October, a growth rate exceeded only by the speed of urbanisation, especially in Asia. We discuss the impact of a dense planet, and the opportunities in the building of sustainable cities.    •   

PURCHASING

ASIA 

Buy into a green future Green Purchasing Asia’s main purpose is to provide a well-structured avenue of immediately-useful information to buyers and sellers of green products and services in major sectors, especially in Asia, and to buttress the development of a business community around it. The magazine will cover the following sectors, which have seen the greatest technological innovations and increasing economies of scale: • Renewable energy, including solar energy, wind power, geothermal and mobile applications • Biofuels from food and non-food sources, including palm oil, sugarcane corn and jatropha • Biomass from various organic, inorganic and mixed sources like oil palm, wood, sugar cane, corn and household waste • Green buildings and eco-cities covering, among others, green building certification programmes, environmentally sound building design and materials, retrofits, and resource-saving technology • Transportation, including plugin electric vehicles (EV), hybrid electric vehicles (HEV) and automobile alternatives like rail • Smart grids, which turn consumers into producers of energy, smart meters to track consumption and manage electrical flow and new interconnect standards     •  

• Water and waste management, focusing on desalination technology, reverse osmosis and wastewater and solid waste management • Energy eﬃciency, whereby technologies, processes, materials and design work together to maximise quality of life and industry output at minimal energy cost • Green finance, viz, venture capital and bank loans, grant programmes (NGOs and government) and government incentives.

To help readers navigate the magazine easily, we have divided it into five broad areas, each assigned a weightage to ensure consistent and adequate editorial space allocation. • Opportunities: These include project announcements, tenders and new eco products and services. This will be a section heavy on actionable information. Weightage: 30% • Case studies: We focus on projects that use green technolo-

gy, like eco-cities, solar farms and waste recovery projects in large plantations. In these articles, we will list out the names and contacts of developers, suppliers and contractors involved in those projects for networking. Weightage: 30% • People: This section focuses on interviews with thought leaders and captains of industry in green businesses. We will also cover small and medium enterprises involved in trailblazing projects. Weightage: 15% • Editorials: Opinion pieces, columns and feature stories on climate change, sustainable development and other relevant subject matters are the meat of this section. It is designed to provoke debate, so that by talking about issues, we think of new ways and approaches to solving problems. Weightage: 15% • Information: This includes news digest, events calendar, letters, reviews of books and reports on climate change, green technology or related topics, market entry conditions and new country regulations, policies and incentives. Weightage: 10% Target readership The government’s role is not only to set the policy environment to drive the green agenda. It is also a massive market player in the economy, accounting for up to 30% of purchases. Any decision by governments to procure green will have a major influence on the market. It is this dual role that makes governments important customers, which is why we are targeting 40% of our print and online circulation at senior government servants. The remaining 60% will be aimed at the business community, international agencies and non-government organisations.

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opportunities

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China firm on rail expansion despite funding hiccup Long-term benefits outweigh short-term setbacks including 3.8 billion yuan loss in Q1 To cut losses and boost occupancy on high-speed trains, regular train services stopped

To cut costs, China will start running its high speed trains at lower speeds. Maximum speeds will drop to 300 km/h for the sake of safety and energy eﬃciency

China’s Ministry of Railways has confirmed that its total investment this year will reach 745 billion yuan (US$115 billion), with 600 billion yuan going towards infrastructure construction, according to ministry spokesperson Wang Yongping. The official statement follows media reports saying the ministry could scale back investments by more than 200 billion yuan this year as the rapid expansion of the country’s high-speed railways had led to debt concerns. The ministry however says what was actually cut was investment in infrastructure construction, knocked down by 100 billion yuan from the 700 billion yuan announced at the beginning of this year. Wang says the changes made sense as it reflects the continued commitment to railway construction, and meets the capital demands of projects under construction. He says that during the country’s 12th Five-Year Plan Period spanning 2011 to 2015, the ministry will proceed with railway construction as it is needed to support the country’s economic and social development and to meet public demand, adding that investments during the period will hit 2.8 trillion yuan (US$435 billion), an increase of 41.5% from the previous five-year period (2006-2010).     •  

China rail updates • On July 23rd, 40 people were killed and about 200 injured when two high-speed trains collided in Wenzhou, Zhejiang in eastern China; the first train had stalled on the tracks following a lightning strike when another rear-ended it, sending two of its carriages oﬀ a bridge • Signalling failure was identified as the cause of the accident • On August 11th, China CNR Corp, the nation’s second-biggest trainmaker, recalled 54 high-speed trains operating between Beijing and Shanghai over safety concerns • Rail stocks in China have taken a huge dip; as of August 21st, China CNR was down by 29% in Shanghai trading since the crash Sources: Bloomberg, BBC

Nevertheless, investment ﬁnancing remains an issue, as the railways ministry disclosed earlier that it suffered a 3.8 billion yuan loss in the ﬁrst quarter, which, according to analysts, was caused by surging operational costs. China’s tightened controls on bank lending are expected to further squeeze the ministry’s cash position. At the end of March, the ministry had piled on 1.98 trillion yuan of debt,

while total assets amounted to 3.4 trillion yuan. Additionally, the funding of railways construction is evenly shared between the central government and governments at the local level, meaning that aside from the ministry’s roughly 2 trillion yuan debt, local government account for an additional 2 trillion yuan of debt, adding up to 4 trillion yuan for China’s railways, equivalent to one tenth of the country’s gross domestic product (GDP). To cut losses and raise occupancy rates on the high-speed trains, the ministry has halted the operation of a number of regular-speed trains, leading to complaints from the general public, as they are forced to pay more for the faster trains. Many analysts believe the infrastructure expansion in China was too aggressive and that tickets are too expensive for most people, potentially leading to under-utilisation of the service. As a result, it remains unclear whether the ministry can generate enough revenue to service and repay its debt. Although there has yet been cutbacks in investment, concerns over debt levels and train safety within the ministry have driven some of the more recent developments. Former railway minister, Liu Zhijun, removed in February on allegations of corruption, was known for spearheading fast-track development in railways infrastructure projects. Liu’s successor, Sheng Guangzu, took over the ministry in February, suggesting a cut in ticket prices and addressing concerns about the cost of running trains at high speeds. He says high-speed trains will begin operating at lower speeds. Maximum speeds on many of the country’s high-speed railways will drop to 300 km/h from the current 350 in a move to maximise operational safety and energy efficiency. Some luxury cars on the trains will be re-fitted with more densely packed seating arrangements, allowing for the introduction of economy class ticketing at a lower price point. China intends to stick to the plan of steadily expanding its high-speed rail network despite the setbacks, as the long-term economic benefits of the expansion far outweigh the current, yet short-term, losses, according to the Ministry of Railways. One of the

world’s longest single stretches of high-speed railway, linking Beijing and Shanghai, China’s two largest cities, went into ofﬁcial operation recently. One-way tickets for the 1,318-km trip range from 410 to 1,750 yuan (US$63 to US$271), with most of the seats on the 300 km/h trains costing 555 yuan,

half the price of an economy-class plane ticket. Fierce competition on timetable, price and service quality is in the ofﬁng between the high-speed trains and the airlines. China’s high-speed rail network had reached 8,358 km in length as at the end of 2010 and is expected to

Rail on the road to a more prominent future Peninsular Malaysia’s 960-km double-tracking railway line by 2016

exceed 13,000 km by 2012 and 16,000 km by 2020. Meanwhile, the railway across the country overall will grow to 120,000 km. Over the next ﬁve years, 30,000 km of new railway lines will come into operation, 87.5% more than for the 2006–2010 period. – Nanjing Shanglong Communications

he says. “Against this scenario, the impact on future generations could be catastrophic unless ﬁrm actions are taken today to invest in new mobility strategies and policies.”

Despite huge investments in road infrastructure in its long-term development plans, Malaysia continues to grapple with the problem of trafﬁc congestion. The Automobile Association of Malaysia reported that from 2000 to 2010, the number of private and commercial vehicles nearly doubled from 343,173 to 605,156 (see chart next page). This fact is not lost on the planners. Selvarajoo Manikam, deputy director of the Infrastructure and Utilities Section in the Economic Planning Unit of the Malaysian Prime Minister’s Department, acknowledges that huge allocations to construct roads and highways had failed to solve the worsening trafﬁc congestion in major

cities. “Under the Tenth Malaysia Plan, more allocation has been given for rail construction than road construction,” he says, indicating that the government is giving more attention to rail networks. President and country manager of ABB Malaysia Sdn Bhd Sim Boon Kiat says the International Energy Agency (IEA) “Report on CO² Emissions from Fuel Combustion 2010” indicated that the transport sector represented 22% of global CO² emissions in 2008. “This is mainly attributed to road vehicles. Global demand for transport appears unlikely to decrease in the foreseeable future with the World Energy Outlook 2009 projecting that the sector will grow by 45% by 2030,”

Double-tracking hopes Malaysia’s Minister of Transport Datuk Seri Kong Cho Ha says the rail sector will emerge as a catalyst in the country’s public transportation system. He places his hopes on the 960-km double-tracking railway line traversing the whole length of the Malaysian peninsula that will be completed by 2016. “The tender for the ﬁnal stretch of the 197-km Gemas–Johor Baru line will be done before year end, and completed by 2016,” he says. By then, Keretapi Tanah Melayu Berhad (KTMB) president Dr Aminuddin Adnan says, the entire railway line will run on electricity. These trains will go up to 160 km/h, and will cut travel time and carbon emissions. In the cargo division, KTMB has issued tenders for another 40 locomotives in line with its green campaign to buy electric trains. It is

“The rail sector will emerge as a catalyst in the country’s public transportation system.”

“The entire railway line will run on electricity, cutting travelling time and carbon emissions.”

“Global demand for transport appears unlikely to decrease in the foreseeable future.”

Transport minister Datuk Seri Kong Cho Ha

KTMB president Dr Aminuddin Adnan

ABB’s Sim Boon Kiat

Tender for final stretch, the 197-km Gemas–Johor Baru line, before end 2011

By Stephen Ng

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Efficient technology Globally, in the rail transport sector, says Sim, there is a fundamental shift towards using energy resources more efficiently in the safe movement of people and goods. ABB, he says, has expertise in consultancy, electrification, Flexible AC Transmission System (FACT), traction transformers, converters and motors as well as surge arresters, semiconductors, medium-voltage and low-voltage components for renowned rail vehicle manufacturers worldwide. “We hope to work hand-inhand with our partners to power the rails into the future,” he says. NOTE: The people quoted in this article took part in the recent ABB-sponsored forum themed “Powering the Rails in Malaysia”, held in Kuala Lumpur.     •  

Tapping energy from train’s frequent stops Trains perform multiple stops to pick up or drop oﬀ passengers and that’s where a lot of energy is wasted. But it need not be so, as there is a way to tap this energy through regenerative braking. Laurent Maillefer, ABB’s regional sales director – power electronics, says the energy recovered by one train slowing down can be re-used by another train on the same line. Alternatively, it can also be transferred back to the power grid, provided that DC substations are equipped with bi-directional power converters. With the latest developments, the energy recovered while the train is ABB’s regional sales director braking can be stored in batteries or super-capacitors installed on-board. The stored energy can then be reLaurent Maillefer used directly in the next acceleration phase. While manufacturers are striving to minimise losses when designing a system, each step requiring a power conversion comes with some loss. As such, the fewer steps one takes following the flow of energy from its source to the place it is used, the better. ABB has designed compact converter solutions where all elements are integrated close together so as to store and re-use the energy, literally in the same place. Using this method, up to 30% of energy savings can be achieved compared to more traditional designs.

Klang Valley’s LRT service will be lengthened by another 34 km with an extra 30 stations at a cost of US$225 million



also looking at buying another six train sets to cater to the increase in inter-city passengers. For the increasing number of intra-city commuters, the company will be commissioning its six-car trains in early 2012 to carry up to 200,000 commuters a day. To encourage use of rail transport for daily commutes in the Klang Valley, Kong says more multi-storey parking complexes will be built, adding 7,000 more parking lots to promote the parkn-ride concept. As for the Light Rail Transit service in the Klang Valley, both the Kelana Jaya Line and Ampang Line, which have reached their capacity of 440,000 commuters daily, will be lengthened by another 34 km, with 30 extra stations. According to Norlia Noah, general manager of Infrastructure Development, Prasarana Berhad, the government-linked company which manages the LRT, the extension project costing RM674 million (US$225 million) is part of efforts to improve public transportation efﬁciency in Greater Kuala Lumpur. The new Mass Rapid Transit line running from Sungai Buloh to Kajang will serve 1.2 million people. Once completed, it will cover a distance of 51 km (of which 9.5 km is underground) and substantially reduce travelling time into the city. Travelling from Sungai Buloh to Kajang, cutting through the Kuala Lumpur city centre, will take about 88 minutes, including stops.

Passenger and commercial vehicles registered in Malaysia, 2000 to 2010 600,000 61,562

500,000

300,000

50,563

44,291

135,624

400,000

50,656

124,030 61,070

200,000 100,000 0

282,103

416,492

366,788

442,885

497,459

486,342

543,594

2000

2005

2006

2007

2008

2009

2010

Passenger cars

Commercial & 4x4 vehicles

opportunities

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Smart grids seen as super engines for China’s growth State Grid Corp to invest US$46 bil a year on smart grid over next 10 years Smart grid investments to add at least 1% to China’s GDP annually

In the Chinese government’s working report for 2011, State Council Premier Wen Jiabao put forward a plan to develop a country-wide network of smart grids, widely considered by insiders to be part of a national energy strategy.

add at least one percentage point to the country’s gross domestic product (GDP) annually, Wu Jiandong, chief energy expert of Chinese Academy of Sciences (CAS), says in an interview. Jiangsu province issued the out-

Haier U-Home intelligent home appliance system Media entertainment system

Lighting and curtain system

Environment detection system

Video door phone system

Security and alarm system

Failure feedback system

Remote monitor system

Home appliances control system



Home gateway

The market for Chinese intelligent home appliance systems, such as the “Haier U-Home”, is expected to hit 124 billion yuan by 2015

The country’s largest power supplier, the State Grid Corporation of China, plans to enable the operational areas directly under its administration to achieve a power information collection coverage rate of up to 100% by 2015. A company executive reveals that the power supplier is on track to invest 3.45 trillion yuan (about US$533 billion) in the smart grid effort. A co-worker says in an interview that the company is forecast to invest about 300 billion yuan (about US$46.4 billion) annually over the next ten years. Insiders believe the investment will eventually stimulate the capitalisation of larger projects that might amount to ten or even 100 times the size of current investment. Smart grids are being looked upon as the super engine that will drive the country’s economic growth over the next ﬁve to ten years, and the investment in them is expected to

line of a four-year plan at the beginning of May this year to develop its smart grid sector, setting investment goals of 20 billion yuan annually and output value goals of up to 150 billion yuan and 300 billion yuan by 2012 and by 2015, respectively. Provincial officials, in concert with 16 companies and organisations who acted as co-sponsors, formed the Smart Grid Industry Association in September last year. The first meeting was attended by over 50 companies. The association now includes as members virtually every leading company across the smart grid industry chain in the province. Many other provinces and cities across the country, with the city of Shanghai and Shandong province taking the lead, are now also keen to develop the sector. The country’s many electronics and high-tech firms are optimistic

about the potential development of the smart grid industry over the next decade and are aggressively jumping on board as they expect the new industry to promote a revolution in the country’s consumer electronics and home appliances sectors. Qiu Gang, chief researcher at Samsung Economic Research Institute, believes the deployment of smart grids will accelerate the integration of telecom, TV and radio networks, and the integration will transform how businesses are conducted and how new products are developed across a wide range of sectors. Access to the smart grids will pave the way for the development of the full potential of intelligent home appliances. The Chinese intelligent home appliance market is expected to take off over the next three to five years, according to Zhu Xun, planning manager at Haier Intelligent Home Appliances Technology. The country’s home appliance manufacturers, including Haier and Hisense, started developing intelligent home appliances ten years ago. However, sales of these appliances remain limited to the earliest of the early adopters. As an example, Haier’s 520 million yuan in sales of intelligent home appliances in 2009 accounted for a mere 0.5% of the manufacturer’s total sales of 124 billion yuan for that year. A report reveals that the Chinese intelligent home market is expected to achieve 124 billion yuan by 2015. As home appliance makers of all stripes stake out their slice of the intelligent home appliance field, it is not difficult to foresee the market expanding five- or six-fold over the next three to five years, surmises Chen Gang, vice secretary-general of China Household Electrical Appliances Association. China’s smart grid market is expected to deliver a total output value of up to 40 trillion yuan (US$6.18 billion) in 30 years, said Xiao Liye, director of the Institute of Electrical Engineering, a research arm of CAS. He believes the establishment of smart grids will be a strategic opportunity for China to drive the transformation of its domestic demand system, promoting the innovative development of a wide swath of upstream and downstream sectors. – Nanjing Shanglong Communications    •   

opportunities

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Lobby for smart grid roadmap in Malaysia Country needs demo projects large enough to engage stakeholders Government recognition sought for smart grid deployment in sustainability agenda

“Limited funding and lack of incentives for investment in smart grid will result in limited pilot projects on a smallish scale, which have less impact on sustainability goals.” 

With its national power utility company having embarked on a small demonstration project on smart grid, Malaysia is now being lobbied to develop a roadmap and institutional framework to ensure coordinated efforts for the long-term. A recent national workshop on smart grid held in Kuala Lumpur recently has yielded a report that was sent to the Ministry of Energy, Green Technology and Water, and it is learnt, this will be followed up on by industry representatives. Although smart grid technology has been embraced in many countries, in tandem with developments in renewable energy and energyefﬁciency initiatives, industry circles lament that the Malaysian government has yet to come up with a policy covering this green technology to guide and support its growth in the years to come. Tenaga Nasional Berhad (TNB), Malaysia’s state-owned utility, is in the midst of implementing a demonstration project that will involve 5,000 consumers at three locations. This is among initiatives being taken as the

adopt smart grid as part of its sustainable development agenda. Halim was the chair of the technical committee for the national workshop, which saw presentations that covered policy areas, envisioning and road-mapping, smart grid deployment experiences, enabling capabilities and technologies and R&D efforts in Malaysia. [The workshop ended with a panel discussion on the possible issues and solutions for Malaysia to move forward in smart grid deployment. See box story below.]

Halim Osman, secretary for the Malaysian chapter of CIRED wants smart grid to be incorporated into Malaysia’s national sustainability development agenda

country heads towards total withdrawal of subsidy for electricity generation in four years. Halim Osman, secretary for the Malaysian chapter of CIRED (a French acronym for an international organisation dedicated to the advance of knowledge in electricity distribution), says Malaysia should

Each country is differently motivated when promoting the smart grid. Countries like China and India need to keep pace with their high economic growth and rapid urbanisation, while for the United Kingdom, Germany and Australia, the emphasis is more on pursuing a low-carbon agenda. In Korea, Japan, Singapore and the US, it is a part of an overall plan to integrate with other initiatives such as intelligent cities and electric vehicles. Studies by US-based Electric Power Research Institute (EPRI)

National workshop on smart grid 2011: Recommendations for Malaysian policymakers • Recognition by the government: The government has to recognise smart grid deployment as part of its sustainability programme. Clear linkages need to be established with the National Renewable Energy and National Energy Efficiency Master Plans. • Smart grid vision, policies & strategic deployment roadmap: The government must ensure efforts are wellcoordinated, and government agencies and the utilities do not duplicate efforts in R&D, and pilot and demonstration projects. • Government funding: The country needs demonstration projects large enough to convince stakeholders on the tangible benefits of smart grid.

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Such projects can be co-funded, but the government should bear most of the cost. • Government intervention: Some issues for the successful implementation of the smart grid are beyond utility companies. They include issues like dynamic pricing and a regulatory framework that incentivises investment in smart grid technologies. The government needs to help utility companies overcome these challenges; these include changes to grid capabilities towards more active management and optimisation, market and regulatory development and most importantly, customers’ role in managing eﬃciency.

Malaysia’s progress TNB chief engineer (system planning & development) Charanjit Singh Gill says TNB is testing the smart grid in Penang, Kuala Lumpur and Johor Baru and has ordered 1,000 meters for a start. In June, it completed Phase 1 of its smart grid development, that is improving the operational efﬁciency of the designated distribution system. “We are now at Phase 2 (until 2013); our emphasis is on improving network and energy efﬁciency as well as enabling and encouraging customer participation (in controlling energy usage),” he says. Concurrently, Phase 3 (20112015) will focus on reducing CO² emission and enable the integration of renewable energy (RE) onto the grid and the introduction of electric vehicles. TNB will look into issues that may arise related to the feed-in of RE (mainly solar photovoltaic) into the distribution system, the feasibility of distributed energy storage and developing a business model to support electric vehicle charging.

Factors that drive the TNB smart grid plan • Electricity demand growth needs large resources: Demand will double in the next 20 years (from 15 GW to 30 GW) • Energy security is constrained by costs: Government’s plan to restructure subsidy for energy sector by 2015 poses severe challenge to utilities • Implementation of feed-in tariﬀ (FiT) will generate growth of RE: Specific technologies is required to stabilise RE connections

• Introduction of incentive-based tariﬀ: Experience and know-how gained in the past may no longer be applicable in facing the future • Supporting government commitment to reduce emission by 40% by year 2020 Source: Charanjit Singh Gill, chief engineer (system planning & development) of TNB

1 billion smart meters globally by 2020 Pike Research forecasts that the world market for smart meters will peak at just over 100 million units in 2015, followed by a gradual decline in annual unit shipments. It says industry growth will be characterised by regional waves of adoption, starting with the North American market, which will peak in 2012, followed by a peak in Asia Pacific in 2015, in Europe in 2017, and more gradual long-term growth in Latin America, the Middle East, and Africa. By 2020, the global installed base is expected to reach 963 million smart meters, a penetration rate of 59% among all installed electric meters. Advanced metering infrastructure (AMI), which uses two-way communications networks and integrated intelligence enable transparency and management of electricity usage. It is envisioned by many utilities to be the foundation for a broad array of new energy eﬃciency and management services.

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show that a slight dip from 1% to less than 0.7% in annual growth of electricity consumption may mean savings of US$2 trillion for the US, over the 2010-2030 period, compared to the smart grid set-up costs of some US$476 billion. “Without smart grid (in the US), the average electricity bill will probably rise by 400% over the next 20 years; with smart grid, the increase will only be around 50%,” Halim says. He says Malaysia has yet to adopt smart grid as part of its national sustainable development agenda despite having ambitious goals of reducing its carbon emission by 40% from 2005 level, and jacking up its renewable energy mix to 2,080 MW by 2020 and 4,000 MW by 2030. “Transmission and distribution (T&D) network operators or utilities are doing their part in migrating to smarter grid but investments are driven mainly by other drivers, like capacity building, security and reliability and operational efﬁciency,” he says. “Limited funding and lack of incentives for investment in smart grid will result in limited pilot projects on a smallish scale, which have less impact on sustainability goals.”

Recent smart grid projects in South-east Asia Vietnam: Radio frequency (RF) electronic meter programme – around 300,000 more meters and 500 more Global system for mobile communications/GSM/ GPRS multi-tariﬀ meters to be deployed in 2010/11 Thailand: AMR phase II – install 50,000 meters for large customers and 5.52 Tbyte data storage Singapore: Intelligent energy system pilot project, electricity vending system pilot project and experimental power grid centre Source: Frost & Sullivan Asia-Pacific smart grids project tracker March 2011

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The palm oil business

v2.0

The cultivation and global trade of agricultural commodities come with well-documented costs and benefits for people, planet and profit, but palm oil cops the most flak.

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As the publicity against it threatens to become perennial, the Roundtable on Sustainable Palm Oil (RSPO) attempts to engage diverse stakeholder groups – some warring – for a just and sustainable solution. The success of the RSPO depends on the credibility and recognition of its processes, and its ability to ensure compliance with its principles, of which two are key: consensus, and free, prior and informed consent – a signal failure of lobbyists and governments. Four RSPO members share their views on driving the industry and saving the planet.

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Tribes of the roundtable Global certified sustainable palm oil (CSPO) production constitutes 9% of all palm oil production, but only has 52% uptake Communications campaign to whip up demand for products with CSPO label

By Su-May Tan The Roundtable on Sustainable Palm Oil will work because it has the free, prior and informed consent of its formerly warring members, says RSPO secretary-general Darrel Webber

Big oil gets a bad rap, but it’s not the black stuff we’re talking about. Palm oil is a ubiquitous ingredient in everything from cosmetics and ice-cream to animal feed and pharmaceuticals, and it has muscled out its rivals and sparked a decades-old trade war, beginning when the American Heart Association bought newspaper advertisements to say tropical oils caused heart disease. Now, growers whisper conspiracy theories about the hidden hand of well-oiled lobbyists in everything from World Bank policies and well-funded green NGOs to business programmes on the BBC and CNBC bought by the Malaysian government. More recently, the government of Malaysia, one of the two largest country producers of palm oil in the world, engaged with Australian lawmakers who want to push through a Bill that compels food producers to understand palm oil as an ingredient on food labels.

It’s complicated: as an agricultural commodity cultivated in the tropics, palm oil inevitably competes for land with the rainforest, local communities and indigenous peoples. The clearing of land for plantations by open burning in Indonesia – the cheapest way to do it – caused a “trans-boundary haze” for decades, some of it originating from oil palm plantations. Add to the list labour and native land rights, and brand boycotts begin to snowball. Against this backdrop of shifting consumer sentiment, the RSPO emerged in 2004 to proffer a solution to diverse issues facing the palm oil sector, depending on which seat of the roundtable you are on. Ultimately, says its secretary-general Darrel Webber, the question the RSPO seeks to answer is: can palm oil be produced sustainably? Palm oil leaves a large footprint in South-east Asia, with four million hectares in Malaysia and seven million

Supply and sales of certified sustainable palm oil

Growth of RSPO members

MT/month 400.000 Jan 2011

Number of members approved

Supply

Jan 2009

200.000

Jan 2010

Sales

300.000

100.000

in Indonesia. This places a big responsibility on industry players as the equatorial belt is high in biodiversity and inhabited by many poor communities whose ways of life are not necessarily served by the global marketplace. However, the palm oil industry is also a big provider of jobs that no nation can afford to ignore. Webber cites statistics of one employee for every ﬁve to seven hectares. Thus Indonesian plantations could provide jobs for up to a million people. “The RSPO is an attempt to say there are good things happening in this area,” says Webber. And to do that, the RSPO has to prove that you can produce palm oil without destroying valuable habitats and forests. In this belief, the RSPO and the multinational globalisation agenda are in congruence, which complicates the criticism that the RSPO is led by environmentalists. For the record, Webber once worked for the World Wildlife Fund,

656

600

Total Ordinary ƧKH@SD RRNBH@SD

300

498

95 63

0 2004

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2005

2006

2007

2008

2009

2010

2011

The circle of influence

The working group operates not by majority vote but by consensus. Every representative in a working group agrees 100% to a policy. Everyone in a working group has a veto right. The executive board operates similarly. Because consensus entails robust discussion and 100% agreement, the policies that emerge out of this approach tend to be strong. No stakeholder has an advantage because of greater numbers in any of the working groups or the executive board. The general assembly operates on the basis of one man, one vote. A proposal to change a policy can be put up and voted on in the general assembly. Malaysia and Indonesia make up the largest membership at the general assembly level; Malaysia has the most members in the RSPO. The RSPO assumes consensus is reached in the absence of serious and sustained objections. If no one objects, it is taken that consensus is reached. If there is an objection, negotiations are restarted.

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As a roundtable, the RSPO has to be led through consensus. It creates policies via: • technical working groups, • the executive board, and • the general assembly.

“We pride ourselves in asking the hard questions, which will lead us to finding the hard solutions.” – Darrel Webber which together with several multinationals, such as Unilever, were the prime movers of the RSPO.

Yanking the supplier chain The RSPO comprises seven stakeholders all along the supply chain, from plantation owners and manufacturers to purchasers and NGOs (see accompanying story). Without the presence of government or multi-lateral agencies, critics question the effectiveness of such an organisation. Webber, however, explains that self-regulating initiatives such as the RSPO often do not need the involvement of government.

The working group level has representatives from all the RSPO stakeholder categories of: 1 Plantation owners/producers 2 Consumer goods manufacturers 3 Processors and traders 4 Banks and investors 5 Retail 6 Social NGOs 7 Environmental NGOs

Members by category

Switzerland Belgium 4.4% Singapore 4.4% Consumer goods manufacturers 31.5%

United States France

38.6%

Keeping the bunch good The RSPO ensures compliance via third-party audits and is guided by agreed principles and criteria. In the event of a breach, the guilty party will be asked to leave the RSPO (in the worst case scenario), though this has not yet occurred. In most cases to date, an agreed resolution is achieved, which means the said company must be seen to

Members from top ten countries

Social or Banks and development investors organisations 2% 2% Retailers 6%

Palm oil processors and traders

free-market-like cycle, which the RSPO believes is possible. The policy-making process is what makes the RSPO tick (see “The circle of inﬂuence”, above).

Industry-led organisations move faster. The RSPO is voluntary; you opt-in rather than being co-opted. It is market-led – the consumer will determine the behaviour of the supplier chain. Webber asserts that the RSPO is a multi-stakeholder agency, as opposed to multi-lateral. “We pride ourselves in asking the hard questions, which will lead us to ﬁnding the hard solutions.” The RSPO is guided by global standards which it developed and endorsed in 2005. These standards are based on the RSPO shorthand known as the 3Ps: people, proﬁt and planet, in a virtuous

Environmental of nature 2.6% conservation organisations (NGOs) 17.3% Oil palm growers

5.1%

Malaysia

15.4%

6.5% 8.7% 16.8%

Germany

United Kingdom

9.5% 10.1%

15.4%

Indonesia

Netherlands

Source: All graphics from RSPO

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What is CSPO?

comply with the criteria. The RSPO looks to see if the company has a roadmap towards this end and resources for that roadmap. In other cases, the results are quite apparent. For example, Unilever no longer purchases from plantation company PT Sinar Mas which was found to have breached sustainability criteria. The RSPO certificate is given for a five-year period during which time annual audits and ad hoc visits are conducted along the supply chain to ensure the palm oil certified as sustainable at the end of the supply chain (for example, with the retailer) is genuine. Controversial cases are still under investigation, however, such as the allegations against Malaysia’s IOI Berhad, one of the RSPO’s larger producers of certified sustainable palm oil (CSPO). No conclusive judgement has been assigned to this case but Webber asserts that membership has opened the way for much more discussion and dialogue to happen. The grievance panel is still discussing the matter and the RSPO meets with the company regularly.

Certified Sustainable Palm Oil (CSPO) is palm oil that has been produced sustainably, whereby its production is traceable through the supply chain and each facility along the supply chain is certified. The RSPO, based in Zurich, Switzerland, is the only internationally-based palm oil certification body. Its secretariat is based in Kuala Lumpur.

Breaching the million tonnes mark Achieving the million-tonne mark in less than three years, Sime Darby Plantation Sdn Bhd is now expecting its production of CSPO to increase to three million tonnes in four years (2015).

3 million tonnes

184,000 tonnes

421,000 tonnes

1.5 million tonnes

(Source: Sime Darby, press reports)

2009

2010

2011

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2015

Certified futures Webber is careful about the RSPO specifying the cost of CSPO versus non-certified palm oil, as these are business-to-business transactions and would be in violation of competition laws. However, considering the cost of certification and the tangible and intangible benefits companies will get in return, he deems it a worthwhile venture. He claims that certification only appears to cost a lot but says that when divided over millions of hectares, it becomes nominal – for large growers. However, there are additional costs to comply with the standards. For example, building workers’ quarters that comply with agreed standards. “In terms of profit, it is commercially advantageous to become members. It also ensures longevity in the industry which

“We encourage opposing views, but come to the table with facts.” – Darrel Webber

is the whole basis of sustainability,” says Webber.

Branded goods With consumers demanding ever more justiﬁcation for the products they buy, it is not uncommon for a single product to carry a handful of labels. As a proliferation of labels penetrates the market, Webber says the ones of lasting value are those that can prove their credibility. As to how much traction the RSPO trademark has gained, Webber says: “Not far enough.” But it is the fastest growing certiﬁcation trademark in consumer goods manufacturing. Malaysia is now the largest supplier of CSPO, a testament to its increasing popularity amongst both suppliers and consumers. Its largest plantation company, Sime Darby Plantation Sdn Bhd, expects its production of CSPO to increase to three million tonnes in four

Delegates to the 8th Annual Roundtable Meeting on Sustainable Palm Oil (RT8) held in Jakarta last November. The RT is the world’s largest meeting on sustainable palm oil where stakeholders in developed and developing countries exchange views and experiences; and to strengthen their co-operation towards a unified vision. This year’s event will be held in Kota Kinabalu, on the theme “RSPO Certified. Transforming the Market. Together.”

Counting on the consumer While the RSPO has made good prog-

ress in terms of producing CSPO, there needs to be greater market acceptance of this product. Global CSPO production constitutes 9% of all palm oil production, and only has a 52% uptake. Webber believes the reason is due to a lack of awareness and the RSPO is tackling this matter via a communications campaign, working with partners in Hong Kong and India. The idea is to leverage on the CSPO trademark and for consumers to “pull it” through the supply chain by demanding for such certiﬁed products. Worldwide, corporations are beginning to value ethical production methods and the demand for it, even in China and India. Unilever, for example, now tracks where all its raw material comes from because the new consumer demands veriﬁcation of a product’s green provenance. Another concern for the RSPO is in achieving more instances of consen-

sus from its stakeholders. A roundtable is only as good as the members it attracts and the RSPO does face a problem of getting enough people to come to the table due to various factors such as funding and requisite experience and expertise. Webber believes in the power of a multi-stakeholder panel. “We encourage opposing views, but come to the table with facts,” he notes of the current lack. The roundtable is meant to stimulate discussion, to mediate the issues, and be where everyone has veto power. Conﬂicting views lead to a middle ground; at least, that is the theory. If Webber has a bee in his bonnet, it is this: “We want to kill the notion that it’s NGO-led (and hence too difﬁcult to subscribe to) or industry-led (greenwash).” To make it all work, he says, “is like herding cats”. All stakeholders, it seems, are in with a shout.

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years, after having breached the one million tonnes mark recently. Its managing director Franki Anthony Dass told a press conference that in 2009, the company produced only 184,000 tonnes of CSPO, rising markedly to 421,000 tonnes last year. The company is also increasing efforts to reduce its carbon footprint by implementing various green technologies. Webber believes palm oil is sustainable as many existing estates can improve their production efﬁciency and sustainability methods. Palm oil is also the world’s most efﬁcient edible oil by a factor of between four and ten, in terms of landuse. “The RSPO does not force people to stop palm oil production,” he says. “(Instead) it would like sustainable development to continue and unsustainable development to stop.”

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The tough route to green palm oil Mandatory imposition of national standards will impose operational and financial burden on growers, and create confusion Companies that embark on journey of RSPO certification should be given support as the process is onerous

By Jason Tan

In June this year, Malaysian multinational palm oil company Kuala Lumpur Kepong Berhad (KLK) made world headlines when it was accused by a London-based non-governmental organisation of breaking a twoyear ban on forest-clearing by the Indonesian government – the day after President Susilo Bambang Yudhoyono had signed it into law. In an emailed statement, KLK group plantations director Roy Lim told newswire Reuters: “Existing concessions with valid licences are exempted from the moratorium and be allowed to continue.” It was but one example of a clash of fundamental virtues – of business, and conservation – amidst the realities of the global economy and climate change, kissing cousins now perched together on the precipice of catastrophic failure. In the event, 731 ha of highconservation land, as deﬁned by the Roundtable on Sustainable Palm oil

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(RSPO), was set aside by KLK, “and remains untouched,” says Lim in response to Green Purchasing Asia. “We have briefed the RSPO secretariat and the coordinator of the RSPO grievance panel.” In a separate but related complaint, KLK responded by terminating the contract of a supplier that reportedly recruited workers into abusive labour conditions. “The matter was discussed in the presence of the social NGO [concerned] together with the aggrieved workers and amicably resolved at the [RSPO’s] Roundtable 8 conference,” says Lim. It would be inconceivable that more cases like the above do not exist (they do; see interview with Sawit Watch). The surprise is that multinationals see ﬁt to subject their operations to the scrutiny of NGOs, and even agree to be regulated by them under rules they both have had a hand in making. As the RSPO is a voluntary, multi-stakeholder platform for selfregulation, its legitimacy depends on the effectiveness and continued compliance with its comprehensive Principles and Criteria, which are not legally binding. Perhaps it should be no surprise then that there has been compliance, given the careful cost and beneﬁt analysis that goes into a decision to opt in. It is also pertinent to ask if governments, in cases of large land disputes, manage to enforce the law with as much care to due process and social justice. A multinational company frequently has the capacity to monitor and ensure the compliance of its suppliers that government enforcement agencies may lack, and

is by comparison relatively more transparent and easily held to account, due to being publicly listed, and to its visibility as a brand. The RSPO’s effectiveness, Lim implies, is because “it has so far gained recognition in the international community dealing with vegetable oils” and thus the fact that membership may be suspended or revoked in the event of a serious breach hurts a company’s reputation and, consequently, its market access to sustainable palm oil. As Lim’s frank answers to the questions emailed to KLK, below, make clear, an initiative such as the RSPO does not convert multinationals into born-again environmentalists (nor NGOs into market fundamentalists). It shows the need for a credible, level platform that facilitates clear, robust, transparent discussion by all stakeholders that is not concealed by national politics and lobbyists.

Recently, the Malaysian minister for commodities Tan Sri Bernard Dompok remarked that certification of sustainable palm oil involves significant additional costs, especially for the numerous smallholders of the government-run Felda scheme, and that consumers might be unwilling to pay for this through higher prices of goods. How does KLK view the competitiveness of RSPO-certified palm oil? The escalating cost of certiﬁcation and the issue of premiums for CSPO have posed a great challenge to palm oil producers. In the longer term though, there will be market access as consumers demand for CSPO produced under [RSPO] sustainability standards.

What has been KLK's experience of engaging with the NGOs, and other stakeholders on the RSPO, and the integrity and effectiveness of the facilitation processes involved? Is a level-playing field ensured for the different stakeholders, for example? We are ready to engage our stakeholders if they require explanations, clarification, testimony, to the extent that we are ready to arrange visits to our property so they can see for themselves, if required. On our part, we strive to do the right things guided by the 3Ps: People, Planet, then Profit, and in this respect [our operations] will cover the wide spectrum of our stakeholders. What is KLK's policy on engaging with NGOs on issues related to the industry, both within and without the RSPO? We do not have a specific policy on engaging the NGOs but recognising the fact that we are not perfect, we are open to accept positive and constructive comments to improve our operations. Is the RSPO led by NGOs, as alleged by some quarters? The composition of the board, its management and members reflect the stakeholder representation. Leadership should be neutral and strictly focus on the promotion of production and use of CSPO.

On the relevance of the RSPO to smallholders, minister Bernard Dompok has said: “Almost half of the industry doesn't know how it will benefit from RSPO certification. There is no motivation for the small farmers because none of the premium would trickle down to them.” How does KLK see the RSPO benefitting smallholders, and what is its incentive in helping to ensure this, given that it has its own plantations and mills over which it has control, and which are presumably more efficient? Smallholders should be further educated on the need for best practices and this can best be done by extension services provided by the authorities or the bigger parties who do business with them. In Indonesia, we extend this further to KKPA (a cooperative credit scheme for smallholders) where we help the local community to develop their land by providing competitive financing and management. Ultimately, they will be able to benefit in terms of market access if they can integrate [their operations] with supply chain certification. What is KLK's policy on the RSPO's Principles and Criteria, especially on land rights, workers’ rights, and a fair price for smallholders, and how it can realistically put these into effect while maintaining economic efficiency and its competitiveness? Our policy is to abide by the laws of the country in which we operate.

A key component of RSPO Principles and Criteria is transparency. In KLK's estimation, how well does the RSPO Supply Chain Certification System allow for traceability, and what can be done to improve business and consumer confidence in the provenance of palm oil supplies? We have no experience in the RSPO Supply Chain Certification System yet. We are in the process of preparing our refinery in Sabah for supply chain certification. As not all suppliers are RSPO-certified, this may require stringent and tedious procedures to segregate the oil for traceability purposes.

“Whilst producers are trying their very best to meet the standards set by the RSPO, further mandatory imposition of national standards would impose a burden both operationally and financially.”

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The RSPO has been described by the Malaysian government as moving the goalposts, with new requirements motivated by the NGO community. What does KLK think about this? We are of the view that RSPO should get as many parties as possible on board for the certification process under a common platform and parameters. The certification process is onerous and difficult enough without GHG (greenhouse gas) issues, indirect changes to land use criteria, etc; in fact, it is more stringent than the ISO certification process. Therefore, those who embark on this journey should be given support as, by doing so, more companies would come on board and the positive impact of this would be far more significant.

KLK committed to full certification A founding member of the RSPO, KLK is Malaysia’s third largest listed plantation company, with a plantation land bank of more than 250,000 hectares in Malaysia (in the Peninsula and Sabah) and Indonesia (Belitung, Sumatra and Kalimantan). The company is listed on the Main Board of Bursa Malaysia (Malaysia’s stock exchange) with a market capitalisation of RM18 billion (as at September 30th, 2010). It is also involved in manufacturing (oleochemicals and derivatives), property development and retail. It has over 25,000 employees worldwide and plantations

constitute 81% of its pre-tax profit. KLK believes RSPO-certification of oil palm growers will increase public acceptance of palm oil in food, fuel and feedstock, and help it to penetrate the global commodities market. To date, the company’s entire Sabah operations (in Lahad Datu and Tawau) has been RSPO-certified, and produces 180,000 tonnes of CSPO annually. Supply chain traceability via its refinery in Sabah is now being implemented. KLK is committed to full certification of all its operating centres in Malaysia by 2013, and in Indonesia by 2014.

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The governments of Malaysia and Indonesia have expressed an intention to set their own national standards for certified sustainable palm oil. Should the national standards be lower than the RSPO standard? Which does KLK follow? The frustration of producers is that whilst they are trying their very best to meet the standards set by the RSPO, which is currently the only one with multi-stakeholder acceptance internationally, further mandatory imposition of national standards would impose a burden both operationally and ﬁnancially. It may also lead to confusion as some producers may have to comply with up to three separate systems if they operate in Malaysia and Indonesia. How does KLK see the RSPO and governments working together? What conditions might it take for this to happen? Governments will act in the national

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interest and they have to take care of smallholders who may not have the resources to go for certiﬁcation or if conditions become too difﬁcult for them to do so. These are issues for the RSPO to consider and conditions set must be realistic, reasonable and achievable.

The Australian Food Standards Amendment (Truth in Labelling – Palm Oil) Bill 2010 is based on the premise that palm oil is an industrial commodity that results in extensive deforestation. How possible is it to sustain the growth of the palm oil industry by cultivating new plantations only on non- or low-conservation value forests, as currently defined by the RSPO? Malaysia will be sending representatives to Australia for a committee hearing before the Bill is debated in the Australian Parliament. We believe the misconceptions of Malaysia’s palm oil will be corrected. This (labelling) is an issue involving

governments. Individual producers are likely to make decisions [on new plantations] based on economic considerations.

How close is palm oil, as it is currently produced, with its intensive use of land, chemicals, energy and especially water, to being a “renewable resource”? Is it not already a “renewable resource”? Palm oil has a 37% GHG saving compared to the fossil fuel reference and this ﬁgure can be improved with methane capture. Asking producers to plant on degraded and less fertile soil is not the best business proposition. After all, being the most productive oil compared to its competitors, palm oil will need much less land to produce the same amount of oil. Also, being a perennial plantation forest, its sequestration of CO² is just as efﬁcient as the rainforest if not better and this is for about 25 years until it is due for replanting.

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Fronds of a dilemma 25,000 farmers in schemed smallholdings in three countries achieved RSPO certification last year Future of smallholder farmers is in question, due to lack of access to financial and other necessary services

By Jason Tan

The environmentalist’s dilemma, restated: what do you do with all the jobless people who once made a living off unsustainable oil palm plantations? The corporation’s dilemma, restated: where to plant, when the planet can no longer sustain consumer demand and economic growth? The point is this: while the palm oil sector underpins the economies of Indonesia and Malaysia, its industrialscale cultivation comes with farreaching social and environmental consequences that are not yet fully accounted for in its pricing. Research by the Londonbased Institute of International

    •  

Development and Environment (2006) notes the signiﬁcance of smallholders in Indonesia and Malaysia, who account for 35% to 40% of the total area of planted oil palm, and as much as 35% of output in Indonesia, according to the RSPO. “I was doing research in a town in Sumatra and I went to a local school and nine of the 13 teachers had oil palm plantations,” John McCarthy told BBC Radio 4’s Food Fights programme last year. An economist with the Australian National University and an industry expert, McCarthy thought that oil palm cultivation might be creating a new rural middle-class. As he went

deeper into the woods, he found that villagers with four hectares or more earned an average of US$12,000 a year. Those with two hectares earned much less, at US$2,000 a year, and those below the poverty line had no oil palm plantations. But the link between oil palm hectarage and poverty or afﬂuence is not straightforward. There are state-supported smallholders, and independent smallholders, and an alphabet soup of schemes in between. The former can have better yields, and the latter better earnings. Apart from ﬂuctuating commodity prices, there is the question of management; in

The link between oil palm hectarage and poverty or afﬂuence is not straightforward

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Malaysia, the government-run Federal Land Development Authority (Felda) smallholder scheme faces several class-action lawsuits by smallholders for undervaluation of yields. There is the question of control of nature. Because the fresh fruit bunches (FFB) of oil palm must be processed within 24 hours of harvesting, expensive mills have to be built within or near to plantation holdings, which affects the lives of local and indigenous communities around it in various dimensions – the earnings of smallholders, for one, depends on their relationship with the mills, while the industrial processing of palm oil demands extensive pollution mitigation measures if the local (and global) quality of life is not to be affected. The corporation’s dilemma is represented by Sawit Watch, an activist group set up in 1998, in the wake of the Asian financial crisis. It is part of a network of over 50 local organisations working with communities in Sumatra, Kalimantan and Sulawesi and has documented over 500 conflicts, mostly rooted in land disputes and compensation over smallholding arrangements. It points out that such conflicts might be reduced, if not avoided, if governments and corporations use the principle of Free, Prior and Informed Consent, which has been adopted by the RSPO, and that its members commit to. Sawit Watch says it seeks to promote the best deal for those communities that choose to live with oil palm plantations, and for those that choose otherwise, to secure their land rights and sustain their traditional community adat laws through conflict resolution. Its actions include taking land right cases to court, and the direct occupation of lands. A turning point in Indonesian history illustrates how what plays out between actors on the world stage affects ordinary lives. As Sawit Watch notes: “The Indonesian government stopped new foreign investment in oil palm plantation in early 1997, because 1.5 million hectares had already been allocated for oil palm plantation to Malaysian and other foreign investors. The IMF/World Bank’s 50-point programme for Indonesia to counter the economic crisis of 1997 was

conditional on the liberalisation of oil palm plantation, but was not based on any social or environmental studies carried out by the World Bank.” Following pressure from NGOs, the World Bank Group this year revised its engagement policy with the palm oil sector to reﬂect the triple-bottom line of people, planet and proﬁt. Couched in more consultant-speak, the management of the world’s forests has changed hands: from local communities to multinational companies; from catering for local economies to the global one; from mixed crops to agricultural commodities. The search for sustainability might entail a change of strategy, from mergers and acquisitions and joint ventures. Norman Jiwan of Sawit Watch responds to emailed questions from Green Purchasing Asia below.

Why did Sawit Watch choose to join the RSPO rather than use other means to achieve its objectives?

The RSPO adopts, promotes and encourages sustainability of the palm oil sector that is consistent with one of the social justice mandates (of Sawit Watch) for smallholders farmers, labourers, indigenous peoples and local communities severely affected by the palm oil sector. In 2004, Sawit Watch voluntarily decided to join RSPO as one of its strategies in promoting responsible sustainable palm oil.

What has been the response of the multinational companies in the RSPO to the proposals of the NGO members, in general, and to those of Sawit Watch, in particular? The responses of MNCs have been varied, but they have largely been reactive instead of proactive and constructive to NGO proposals; for example, on indicators for greenhouse gas emissions, new planting procedures, and grievance [mechanisms]. Sawit Watch has been critical about human rights violations, labour and social issues, but is seen as

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playing black and negative campaigns against the palm oil industry.

What kind of relationship exists between Sawit Watch and multinationals that have, among others, their own plantations? With the private sector, Sawit Watch takes an independent [stance] of transparent and responsible critical engagement, and open dialogue with RSPO ordinary members in promoting human rights and conflict resolution in the palm oil sector. Sawit Watch provides no consulting and professional services to the private sector. How many – and how well – are smallholders represented on the RSPO, versus the multinational plantation owners and mills? What have been the challenges? Smallholder oil palm farmers are represented under the grower category of membership. The smallholder seat is occupied by Felda, the national agency for Malaysian smallholders. An independent representative is much needed in bringing the voices and aspirations of independent smallholder groups. In 2010, RSPO grower members from Malaysia, Indonesia and Papua New Guinea had succeeded in bringing [some of] their schemed smallholders to achieve RSPO certification, which benefited 25,000 farmers. This is a breakthrough, but the RSPO needs to mobilise more smallholders for certification and inclusive empowerment programmes. In terms of economies of scale, smallholders cannot compete on price with large plantations. Is it possible for smallholders of cash     •  

Sawit Watch seeks to secure “land rights and sustain traditional community (adat) laws through conflict resolution and lobbying government at the national and local level for land reform and community sovereignty over natural resource management.” How is it possible to initiate land reform through the RSPO, which essentially relies on non-legally binding self-regulation? RSPO standards, if consistently implemented, will lead to best practices consistent with international norms and values [that can and] must uphold business activities that are culturally, socially and environmentally [sustainable]. These can be a useful

precedent for the development of domestic and national legislation.

How eﬀective can any dispute resolution mechanism be, in the absence of legal enforcement? It can be effective when a genuine commitment to recognise, resolve, and mitigate disputes is present. It is not about merely “do no harm” as required by law, but doing it right, whether or not legal enforcement exists. One of Sawit Watch’s goals is “to assist communities in developing or maintaining economically, socially and ecologically sustainable land/ forest management.” What does Sawit Watch see as the future for palm oil smallholders? The market for commodities is uncertain, and smallholder farmers do not have control to price and market their own FFB. Their participation in the market is used only to consolidate land and mobilise the labour force to produce FFB. Therefore, the future of smallholder farmers is in question – if not uncertain – not only at replanting periods, due to lack of access to ﬁnancial and necessary services. Also, in extreme cases, when agricultural land has been depleted by monoculture oil palm plantation, there is no more arable land left for food and alternative crops.

A boy in Indonesia guarding his family smallholding’s harvest of fresh fruit bunches

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 

Norman Jiwan of Sawit Watch believes the RSPO needs to mobilise more smallholders for certification and empowerment programmes

crops to be paid a fair price for their produce given this fact? Yes, it is possible. Large plantations and smallholders are both FFB (fresh fruit-bunch) producers but it is not fair for them to compete without dealing with the political economy and how it affects pricing; a fair price implies not only economic consideration but also a political commitment to change the existing pricing mechanism which discriminates against smallholders, because it is largely [set by palm oil producers rather than oil palm growers]. This includes government pricing regulations that are made unilaterally.

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Helping brands green supply chains 70% of Cargill’s crude palm oil bought from RSPO members By year 2050, palm oil will be a major part of the vegetable oil supply chain

By Jason Tan

Brand new expectations While Cargill is less well known to the consumer public, its customers are some of the biggest brand names in the world, who must respond to public campaigns run by environmental NGOs such as Greenpeace and the Rainforest Action Network. More frequently, these brands have to demonstrate that their supply chains are sustainable. As awareness of the environmental and social costs of the commodities sector rise, public opinion has reached right through the supply chain to demand “sustainable business practices”. “Sustainability is a critical factor to many of the brands we sup-

ply,” emphasises Bruce Blakeman, the company’s vice-president of corporate affairs for the Asia Paciﬁc, in an email to Green Purchasing Asia. “They look to us to help them develop their supply chains.”

Free trade and global food The RSPO, he says, shows that the industry can be sustainable without government intervention (“Philosophically, we [Cargill] believe the industry can self-regulate”) and that food production should continue to be globalised. The company’s point of view on “Agriculture and trade policy”, as found under the Corporate Responsibility section of its website, states it is “promoting open markets to help nourish people worldwide… Cargill’s support for open markets and free trade underpins our vision, to be the global leader in nourishing people.” It supports “investments in policies that allow food to ﬂow freely across borders” and trade adjustment schemes “for those whose jobs are displaced as a result of changing production patterns.” The following is Blakeman’s response to GPA’s questions, via email:

“The product [palm oil] itself is the most eﬃcient way to feed a growing world by having to use much less land to increase the supply of vegetable oil than any other oil [crop].”

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Privately-owned US multinational conglomerate Cargill is one of the largest companies in the world. It describes itself as “an international provider of food, agricultural and risk management products and services”. In a nutshell, from its original business of trading and processing agricultural commodities, it now offers a suite of related products and services for a multitude of industrial applications, from animal feed and pharmaceuticals, to food manufacturing, construction and steel. Cargill has presence in 63 countries, and 130,000 employees. Its stated revenues for its fiscal year of 2011 are US$119.5 billion. The scale and integrated nature of its business mean that it can, by default, influence the business practices of its suppliers, including for palm oil, as well as trade policy, changes to which would keenly affect its operations. It owns two oil palm plantations (PT Hindoli and Harapan Sawit Lestari in Indonesia) and 12 refineries worldwide that “buy, refine, process and market palm oil products from its own and other plantations”. The company gave itself two deadlines this year: by 2015, all its palm oil products (but not yet palm kernel oil) it supplies to customers in Europe, the US, Canada, Australia and New Zealand, will be RSPO-certified and/or originated from smallholder growers. By 2020, this commitment will be extended across all its oil and trading businesses to cover 100% of its palm oil products and all customers worldwide – including China and India. At the end of last year, 70% of Cargill’s total crude palm oil was purchased from RSPO members.

Bruce Blakeman, vice-president for corporate aﬀairs, Cargill Asia Pacific

What was the motivation for Cargill to become a member of the RSPO? What are the incentives or competitive advantages of membership? We saw the beneﬁts of a multi-stakeholder group that included all parts of the supply chain and the NGOs concerned about oil palm-related issues that came together in a forum to agree on some principles as the best way to move forward. We thought we    •   

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To what extent does ensuring the traceability and provenance of Cargill’s palm oil supply chain, according to the RSPO Principles and Criteria, add to the cost of doing business for Cargill? The palm oil supply chain is currently structured to provide a bulk commodity to the end-consumer in the most efﬁcient way and at the lowest cost possible. There will inevitably be costs in the supply chain to provide all four RSPO trading models (Identity Preserved, Segregated, Mass Balance

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A tractor transporting fresh fruit branches to an oil palm mill. 100% RSPO-certified products have the highest price premium due to the costs related to transport, storage, handling, processing, manufacturing and distributing of fullysegregated products

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had some good information to add to the dialogue. We also wanted to know what others thought about issues surrounding oil palm. If we are going to have to feed nine billion people by the year 2050, palm oil is going to be a major part of the vegetable oil supply chain. How oil palm is developed is a critical issue and it should have some established rules. The product itself is the most efﬁcient way to feed a growing world by having to use much less land to increase the supply of vegetable oil than any other oil [crop]. All these factors went into our decision to join the RSPO.

and Book & Claim, which differ in traceability; see www.rspo.org). There will be signiﬁcant investment needed for growers, traders and processors to meet the RSPO guidelines for each trading model. These investments will include additional storage facilities, and added costs for transportation, handling and certiﬁcation. Each part of the supply

chain will need to pay their share of the costs growers and processors will need to incur to meet RSPO guidelines. We would expect fully-segregated, identity-preserved, 100% RSPOcertified products to have the highest price premium. This is due to the complexity of the supply chain and the costs related to the transport, storage, handling, processing, manufacturing and distributing of fully-segregated products. It is expected that the lowest premium will be for the Book & Claim model. The major cost will be the charge that the sole RSPO-endorsed broker, GreenPalm, will make to manage the Book & Claim system. The GreenPalm fee is set at US$4 per metric ton or per certificate, plus US$1 per metric ton for RSPO [note: figures are at the time of writing; it is learnt the executive board is deliberating on this matter]. There may also be additional costs related to this trading system.

What has been the response of Cargill’s suppliers to its membership of the RSPO and of its adoption of RSPO Principles & Criteria so far? The response by our customers and our smallholder suppliers has

Many oil palm estates provide not only employment but also proper housing facilities for the workers

In practical terms, how effectively can Cargill ensure that its suppliers comply with the criteria for RSPOcertified palm oil? We collaborated with WWF last July to assess our suppliers in Indonesia to gauge the progress in implementing the RSPO standards. Independent assessors appointed by WWF are working with Cargill’s suppliers on specific RSPO criteria to identify any issues or gaps. WWF is designing the process, selecting the assessment teams and will supervise the work. Cargill then works with our suppliers to implement the criteria. We also work with our NGO partner, Fauna & Flora International, to help smallholders better understand the RSPO and its criteria for certification, as well as with Control Union Certification – an RSPO-

“Sustainability is a critical factor to many of the brands we supply.”

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Oil palm plantations provide shelter and food to animals as well; this pair of monkeys caught socialising on camera adds to the list of animals found in oil palm plantations

Barn owls are reared as biological pest control to reduce the population of rats in oil palm plantations

approved certiﬁcation body – to provide training to our crude palm oil suppliers in Malaysia.

Some environmental groups think that multinational conglomerates will only change their way of doing business in response to public pressure and government regulation. Is this true in Cargill’s case, with regard to palm oil? Even before the RSPO Principles and Criteria were ﬁnalised, Cargill had our own policies in place for responsible palm production on our own plantations. These include commitments to not plant on high conservation value forests (HCV); to not develop new plantations on deep peat land or land that would threaten biodiversity; and a strict no-burn policy for land preparation. We had strict policies on social issues as it relates to our plantation workers and communities around our plantations. For many years we have built schools, provided for teachers’ salaries to the government, funded medical clinics, used owls for pest control and other measures to promote sustainable oil palm production. We are also responding to the

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been overwhelmingly positive. Our customers are looking to Cargill for sustainable palm oil products to meet their own customers’ expectations; they are looking to us to help them navigate the palm oil supply chain to deliver sustainable products. Our Hindoli smallholders (in Indonesia) have beneﬁted from the good agricultural practices RSPO requires, that result in higher yields and increased safety, plus we share the price premiums with our smallholders in extra payments.

needs of our customers. Sustainability is a critical factor to many of the brands we supply. They look to us to help them develop their supply chains.

What is Cargill’s view on the RSPO engaging with multilateral agencies to create legally binding and enforceable standards of sustainable palm oil or commodity production, or can the industry self-regulate successfully? Philosophically, we believe the industry can self-regulate. The RSPO is a good example of how an industry can come together and develop a set of criteria that can be accepted by most of the stakeholders in the supply chain. There should be one set of criteria and production standards that all growers, traders, producers and end-users should adhere to for palm oil. The industry and its stakeholders are best positioned to set those standards. Should political donations by members be covered by RSPO Principles and Criteria? As a policy, Cargill does not give any political donations outside of the US, where they are strictly regulated and disclosure is mandatory. What is Cargill’s outlook on the sustainability of agricultural commodities, as they are currently grown, traded, processed, manufactured and sold globally? Sustainability is becoming a more critical issue for our customers. We expect to see more sustainability roundtables on many more commodities over the coming years. The RSPO has been a great example of how sustainability programmes can be put together to meet many [diverging interests] and needs.    •   

opportunities

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Fibrous kenaf could be Malaysia’s third big crop Versatile crop used for clothing, bumpers, walls, even soaking up oil spills Demand from Australia, Europe, Japan and Korea

By Eleanor Chen

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oil spill at the Gulf of Mexico last year and proved to be 100% effective. She adds: “Australia has demand for composite decking. In Europe, they want the ﬁbre to make textiles like linens that can be sold at value-added prices. You can even make rayon out of kenaf. It can also be turned into

 

Native to Sudan, Africa, kenaf is a hardy crop cultivated for its fibre and woody core; both have many industrial applications. The Malaysian Timber Industry Board (MTIB) director general Dr Jalaluddin Harun says they are used to make jeans in China; for pulp and paper in the US, Mexico and Thailand; indoor panels and other interior components for high-end cars like Mercedes Benz and BMW; as animal or cattle feed, in erosion control materials; and in composite material for the construction industry among others. The Armour Factory, a company in Malacca, south of Kuala Lumpur, is doing research on blending kenaf with Kevlar (a DuPont Co trademarked synthetic fibre that is said to be five times stronger than steel) to make lighter bullet-proof vests. Another company is trying to use kenaf to make geo textiles for erosion control. A factory in Sabah produces paper from oil palm fibre and now plans to blend kenaf with fibre from empty fruit bunches (EFB) for future production. A member of the Malaysian Kenaf Entrepreneur Association, Harusmas Agro Sdn Bhd (HASB) is currently developing kenaf fibres for use in exterior automotive parts such as bumpers. In partnership with Universiti Malaysia Sabah, their kenaf bumper project was shortlisted as a finalist at the JEC Composites Show Paris 2010 Innovation Awards. Says the association president Rusila Kamarulzaman, kenaf is a lot more flexible than wood or even oil palm’s EFB. “On the crude side, it can be used for horse bedding. The core has got very good absorbent properties and can be used like straw. It can also be used to clean up oil spills.” Oilabsorbent booms made of kenaf were used to contain the Deepwater Horizon

Malaysian Timber Industry Board (MTIB) director general Dr Jalaluddin Harun

“Demand exceeds supply in Malaysia. For example, 90% of PEWKM needs comes from Bangladesh, with the remainder from Myanmar, Vietnam and Malaysia.” carbon to absorb smells from the fridge. Acceptance of kenaf products is mostly from outside Malaysia but more and more people want to venture into kenaf production. For example, a local furniture company wants to make garden furniture out of kenaf as it is suitable for outdoor use.” The main value of kenaf lies in its ﬁbre, which sells very well. Industry

sources say the highest grade of fibre can fetch US$600 per tonne. The price of kenaf products depends on the process and specifications. The beauty of kenaf is that it is eco-friendly, strong and very light. Jalaluddin believes that kenaf is an important crop as it is fast growing, can yield two harvests per year and can yield 15–20 tonnes per hectare (dry weight basis) with the right seeds and seedlings. Depending on the yield, 3–5 tonnes (20%) is made up of fibre. Maturity is about four to four-anda-half months. Currently, Malaysia produces only 200 tonnes of kenaf monthly. In comparison, Panasonic Electric Works Kenaf (Malaysia) Sdn Bhd (PEWKM) consumes about 600 tonnes of fibre monthly at its Kuantan plant in Pahang. Established in 2004, more than 90% of its supply comes from Bangladesh with the remainder from Myanmar, Vietnam and Malaysia. According to industry sources, the factory currently produces 60,000 pieces of kenaf fibreboard per month to make wall panels and doors, all of which are exported to Japan for the housing and building materials industries. Kenaf fibreboard is increasing in popularity among housing developers for its light weight, high strength and eco-friendly characteristics. PEWKM signed a memorandum of understanding with the National Kenaf and Tobacco Board (NKTB) last April to promote the development of the kenaf industry in Malaysia and to enhance cooperation in the supply of kenaf. As the largest company that uses kenaf in Malaysia, PEWKM needs large quantities of fibre. Their challenge is to improve local supply to their plant. The Malaysian National Timber Industry Policy (NATIP) recognises kenaf as a potential raw material, although it is cultivated as an agricultural crop. The use of kenaf in composite materials explains its promotion by MTIB, which considers it important not to rely on conventional sources of material such as timber for products like plywood. Rusila sees kenaf as a big market. “Even before planting yields are maximised, many people from

ive

Kenaf applications:

Diverse and multifold uses of kenaf across industries

    

overseas have come looking not only for our end-products but also kenaf core and powder. LG and Samsung wanted kenaf powder from Malaysia for research on substitutes for mobile phone and laptop covers. The challenge now is to get the yield to bring down production costs,” she says. She adds: “An international aviation company is looking at developing new materials from kenaf in collaboration with local Malaysian universities. Malaysian researchers at Universiti Putra Malaysia (UPM), University of Technologi Malaysia (UTM) and University of Kuala Lumpur (UniKL) are looking at the inherent properties of kenaf in their research on advanced material technology for the aviation industry and its suitability for aeroplane parts.” “All these things can be done; only the volume is not there yet for commercial scale production. Economies of scale is the challenge we are trying to overcome,” says Rusila. Datuk Leong Kin Mun of Biomass-SP, a European Union funded

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Kenaf is also used as animal feed because of its high protein content. At its peak, kenaf has something like 22% protein content compared to oil palm frond which has only 4% protein content

project which nurtures biomass small and medium enterprises in Malaysia, says: “Kenaf is a new commodity in Malaysia, the new kid on the block. Demand is very much dependent on how the NKTB innovates. A plus point for kenaf is that it can be harvested in four months. However, there is still a need to deal with issues such as mould

or mildew if the kenaf is exposed to high humidity. These practical operational issues need to be tackled.” “It’s a matter of ﬁne tuning. The lightness is there, the strength is also there. It’s a matter of getting the R&D right so that kenaf products meet aviation or building standards” adds Rusila.    •   

It was a fortuitous day for kenaf in Malaysia and Universiti Putra Malaysia (UPM) researcher Dr Jalaluddin Harun when, on September 1st 1999, the latter had the opportunity to introduce kenaf to the then Malaysian premier Tun Dr Mahathir Mohamad at the MALBEX construction exhibition. Jalaluddin, who was working on biocomposite materials, was presenting on the use of kenaf for composite products when Mahathir stopped at his booth. Mahathir was supportive of the eﬀorts and ordered the setting up of the National Standing Committee on Kenaf with the Malaysian Agricultural Research and Development Institute (MARDI) concentrating on upstream processes such as cultivation, while UPM focussed on downstream processing. The committee developed more products with funding from the National Economic Action Council (NEAC). In 2004, a kenaf fibreboard factory was established in Pahang under Matsushita Electric Works Ltd (MEW) and MIECO Chipboard (which left the partnership in 2007). An industry source says the factory is now producing 60,000 pieces of board a month for export to Japan where it is

 

Beginnings of a sunrise industry

Kenaf is strong and very light. Yarns can woven with aramid, also know as Kevlar, to make bullet proof vests

popular among housing developers for its light weight, high strength and eco-friendly characteristics. The Minister of Plantation Industries and Commodities at the time, Datuk Seri Peter Chin Fah Kui, was convinced that kenaf is a crop that Malaysia can promote. The Malaysia Tobacco Board was replaced with the National Kenaf and Tobacco Board in April 2010 and kenaf promoted as an alternative crop to tobacco. Commercial scale kenaf plantations total only around 1,000 ha today. However, there are plans for the states of Kelantan, Tereng-

ganu and Pahang to cultivate something like 10,000 ha of kenaf under the Eastern Corridor Economic Region (ECER) programme. Now seconded to the Malaysian Timber Industry Board (MTIB) as director general, Jalaluddin was instrumental in convincing MEW – the Japanese electrical giant which owns the Panasonic brand – to set up their kenaf manufacturing facility in Malaysia. They are now operating in Kuantan as Panasonic Electric Works Kenaf (Malaysia) Sdn Bhd (PEWKM). “At the time, MEW was working on a pilot plant in China to produce composite boards using kenaf. They wanted to do this commercially and were looking to set up a plant in Southeast Asia.” Malaysian Kenaf Entrepreneurs Association president Rusila Kamarulzaman adds, “The Malaysian government aims to promote kenaf as the nation’s third commodity after palm oil and rubber. If things are in place, this is achievable. Furthermore, many more kenaf products can be manufactured compared to what palm oil can produce – from building materials to aerospace to carbon, the application is really very wide.”

    •  

 

In 2008, Everise Crimson Sdn Bhd (Everise) collaborated with the state of Kelantan on an integrated kenaf polymer composite project. A factory was built by the state and is today operated by Everise to produce wall panels and floor decking. Wall panels contain 35% kenaf while floor decking has 65% kenaf content. This two-year-old company received a 10-year tax incentive under Malaysia’s Eastern Corridor Economic Region (ECER) initiative. They engage farmers to plant the kenaf, and process it at their factory which employs about 20 locals. The processed kenaf is turned into pellets for the production of kenaf polymer composites. Products made from these composites do not need to be painted as pigments are added during the blending process according to customer specifications which explains why the pellets come in a variety of colours. Surface coating is also not required. Everise signed a memorandum of understanding with the Malaysian Agricultural Research and Development Institute (MARDI), which conducted initial research on kenaf and a pilot programme to produce kenaf polymer composite. Already selling kenaf composite wall panels, Everise has a

 

Everise Crimson setting the stage to export

Above left: Everise Crimson’s pellets are used to make kenaf polymer composites in a choice of colours. They don’t have to be painted as pigments are added during the blending process. Above right: Sample kenaf floor decking used for poolside outdoors, and even farm enclosures

few agents distributing their products. Several resorts, budget hotels and homes in Kelantan are using their products for interior decoration. Market response has been good and the company is now concluding a contract to supply a prospective customer with flooring for a goat barn. “Wood composites have been in the market for quite a while – for example, composite decks made of saw dust and rice husk. We wanted to promote kenaf so we tried it and it’s workable,” says managing director Rusila Kamarulzaman. Everise Crimson is also looking at

producing a more value added structural building material out of kenaf. To this end, they are collaborating with a local university to create a composite for structural use as steel rods or trusses. A company in Australia has shown keen interest in their product for the past two years but Everise is not ready. “We can’t take orders from overseas clients yet as we are doing more R&D to ensure that our products don’t warp during transportation,” Rusila says. While already in commercial production, Everise’s factory is not yet running at full capacity.

opportunities

 

ASEAN’s biggest eco trade show kicks oﬀ Exhibitors from EU, Taiwan, Japan, South Korea, Singapore, China and Malaysia Business matching, networking opportunities, conference and ministerial roundtable in the programme

This month, up to 400 exhibitors from various parts of the world will showcase their eco-products and services at Malaysia’s – and ASEAN’s – biggest trade show dedicated to green technology. More than 80,000 visitors are expected to converge at the Kuala Lumpur Convention Centre for the second edition of the International Greentech & Eco Products Exhibition

buildings cut energy consumption, and its ultra-efﬁcient dry-transformers. From the East, the Taiwanese have two pavilions housing 19 companies, including ﬁve dealing in LED lighting. Among the products that visitors will view are polli-bricks, greenroof and greenwall products and eco apparels. The Japan Pavilion will be

Minister of State, Trade and Industry S Iswaran. There will be two sessions, the ﬁrst being a closed-door, and for the other, attendance is by invitation. The topic for the second session is “Ministerial Dialogue: Pathway and Roadmap towards a Low-carbon Economy – Realising Development Goals and Tracking Afﬁrmative



Top: Prime Minister Najib (second from left) launching the inaugural event last year. Third from right is minister Peter Chin. Below: Japan technology on display

Minister Chin (ninth from left) with his senior oﬃcials and 14 event supporters at the sneak preview of IGEM

& Conference (IGEM 2011) from September 7th-10th, and the organisers are hoping it will generate sales leads to surpass last year’s RM1 billion (US$334 million). The numbers are looking better. At the inaugural show last year, 277 exhibitors participated, taking up 502 booths. This time around, the organiser expects 610 booths to be occupied. Malaysian Minister of Energy, Green Technology and Water Datuk Seri Peter Chin Fah Kui expressed satisfaction over the growth of the event, and the strong branding of IGEM. Malaysian companies will again make their presence felt. But the European Union (EU), which leads in greentech, will reprise its strong presence, with some 30 companies housed in the EU Pavilion, including giants like Siemens and ABB. ABB, a power and automation technology group, will showcase its vast eco-friendly technology portfolio, including the i-bus KNX, which helps     •  

represented by 15 companies, followed by South Korea (13 companies), Singapore (eight) and China (six). These were ﬁgures given at press time. The event will be launched by Malaysian Prime Minister Datuk Seri Najib Tun Razak, whose administration is ramping up the green economy.

Ministerial roundtable This year, to bring the event to a new level, a ministerial roundtable will be held on September 8th, carrying the theme “A Prosperous Low Carbon Future: Leveraging on Green Growth for a Carbon-Efficient Economy”. The ministers who have confirmed attendance are India’s Minister of New and Renewable Energy Dr Farooq Abdullah, Algerian Minister of Energy and Mines Youcef Yousfi, Energy Minister of Brunei Pehin Datu Singamanteri Colonel Awang Mohammad Yasmin Umar, Cambodia’s Senior Minister of Environment Dr Mok Mareth and Singapore’s Senior

Actions.” The dialogue will cover how countries manage climate change challenges, whether the shift to lowcarbon and energy-efﬁciency can drive business opportunities, and the role public policies play. Concurrently, there will be a twoday conference beginning September 7th, with the theme “Green Business – The Economy of the Future”. It will feature business and industry leaders in panel discussions on how to make money from green. There will a special address by Dr Rajendra Pachauri, chair of the Intergovernmental Panel on Climate Change (IPCC) which, along with former US vice-president Al Gore, was awarded the 2007 Nobel Peace Prize. As was the case last year, exhibitors can take part in international business matching. There will also be one-to-one matching and other networking opportunities. IGEM is organised by the Ministry of Energy, Green Technology and Water. Visit igem.com.my for details.

 

India to build world’s largest solar power plant Project involves two plants with a combined capacity of 150 MW Facility in Shivaji Nagar, Dhule, scheduled to be operational end 2012

By Tejas Patel India, with its population of 1.2 billion, has projected its installed capacity for power generation to reach 800,000 MW by 2030, with renewables like solar playing an increasingly large role. This explains the recent announcement of a project to set up the world’s largest solar power plant in western Indian at the cost of Rs 1,987 crores (US$441 million). (As of September last year, the world’s largest PV plant was Sarnia Photovoltaic Power Plant in Ontario, Canada, with 80 MW in capacity.) According to the state government, the upcoming Indian project, situated in the Dhule district of Maharashtra, involves setting up two solar power plants with a combined capacity of 150 MW in the Shivaji Nagar area. The project will be operational by end of next year. Chief minister of Maharasthra Prithviraj Chavan says the state government will have a 20% equity in the two projects, and the rest will be funded by the German governmentowned KFW Development Bank.

Of the new capacity, 100 MW will be generated using crystalline silicon photovoltaics and the rest through thin ﬁlm. The proposed solar plants will be operated by Maharashtra State Power Generation Co Ltd (Mahagenco). The plants will provide power to Maharashtra State Electricity Distribution Company (Mahadiscom) at the rates ﬁnalised by the Maharashtra Electricity Regulatory Commission (MERC). The plants will also supply power to the Bombay Electricity Supply and

Transport Undertaking (BEST). The project is being executed by Lanco, which has partnered with Juwi India Renewable Energies Pvt, the Indian subsidiary of Germany’s Juwi Holding and Megha, which has partnered with Aries Ingeneriay Sistemas (Spain) and GreenBrilliance Energy Private (US). The success of these proposed solar plants will impact on India’s solar power mission. The Indian government has launched a major initiative named Jawaharlal Nehru National Solar Mission (also known as National Solar Mission), to meet India’s growing energy demand and also promote green sustainable growth. The mission aims at making India the global leader in solar energy. The National Solar Mission, if successful, will help India attain solar power equivalent to one-eighth of its current installed power. It will also help India limit its heavy reliance on fossil fuels.

The gridinteractive solar power in India as of December 2010 was merely 10 MW



case studies

Energy from bumpy rides Researchers from the State University of New York have come up with an award-winning energyharvesting shock absorber that can be installed in a vehicle’s suspension system to absorb the energy from travelling over bumpy roads. Professor Lei Zuo and graduate students Xiudong Tang and Zachary Brindak from the State University of New York at Stony Brook came up with the innovation, which won them the R&D 100 award from R&D Magazine. The development joins regenerative braking and other

techniques that harvest the vast amount of energy wasted by vehicles. The researchers have patented two types of shock absorbers: linear and rotational. When installed in a medium-sized car traveling at 102 km/h, the shock absorber can generate 100–400 W of energy under normal driving conditions, and up to 1,600 W on rough roads. Trucks, rail cars, and off-road vehicles get a return of 1–10 kW, depending on road quality. The harvested energy charges the battery and reduces the load on the vehicle’s alternator. This way, the

harvested energy could increase fuel efficiency by 1–4% in conventional cars and by 8% in hybrid vehicles. The electricity-generating absorbers can be retrofitted into vehicles without modifications. They are not yet commercially available, but the patent is ready for licensing. In 2009, Massachusetts Institute of Technology undergraduate students came up with a shock absorber that worked on the same principle. They later formed a company called Levant Power Corp to develop the product commercially. Source: Physorg.com    •   

case studies

 

 

These windmills have become a tourist attraction, allowing enterprising local folk to sell tourist products

The windmills of Bangui Project owner NWPDC eyeing new projects in Aparri and Pamplona in Cagayan Developers get nod for wind farms in Burgos, Pasuquin, Balaoi and Caparispisan

By G Danapal

Facing the wind-lashed Bay of Bangui in northern Luzon’s Ilocos Norte Province in the Philippines, towering windmills rise some 70 metres from the sand-clad beach. They are hard to miss, even for those travelling several kilometers away along the Maharlika coastal highway between Laong and Pagudpud. These 20 windmills, neatly arranged in an arc across nine barangays, have been a source of pride among the rural folk of the coastal town of Bangui since the tri-blades of the windmills were set in motion in 2005 to generate renewable energy for the province. Ofﬁcially known as the NorthWind Bangui Bay Project, these windmills are also a major tourist attraction among visitors who stop by for tequila sunrise or sunset photos. Enterprising locals sell T-shirts, drinks and snacks to capitalise on the growing popularity of the windmills. The ﬁrst of its kind in the Philippines and in South-east Asia, the     •  

Bangui wind farm’s 20 Vestas wind turbines light up Bangui and supply more than 40% of the needs of the Ilocos Norte Electric Cooperative. All in all, these wind turbines generate 25 MW of electricity to power up an estimated 108,000 households. Just a year into operation, the NorthWind Power Development Corporation (NWPDC), the Manila-based company that runs the farm, reported 70 million pesos (US$1.7 million) in annual savings passed on to consumers in the form of lower electricity tariff. In March this year, public-listed Ayala Corporation (Ayala Corp) – one of the most reputable conglomerates in the Philippines with vast investments and holdings in the real estate, manufacturing, automotive, electronics, telecommunications and ﬁnancial sectors, to name a few – acquired 50% of NWPDC for 513 million pesos (US$12 million) via Michigan Power Inc, a wholly-owned unit of Ayala, thus signalling the entry of Ayala Corp

into the renewable energy business, seen by energy experts as an attractive investment prospect following the passage of the Philippine Renewable Energy Act, which gives fiscal incentives and priority at the grid to operators of renewable energy power plants. “We believe there are opportunities to make early stage investments in the renewable energy space, which may have the potential to grow over time given the need to develop alternative sources of energy. In addition to our wind and solar initiatives, we are also developing platforms for hydroelectric power,” says Ayala Corp president and chief operating officer Fernando Zobel de Ayala. Buoyed by the success of the Bangui wind farm project, which is part of the Pagudpud wind farm initiative designed to improve the livelihood of farmers in the region through efficient use of renewable energy, NWPDC is now going for new wind power projects in Aparri and Pamplona towns in Cagayan province.

up in 1996 through a wind resource analysis and mapping study conducted by the National Renewable Energy Laboratory (NREL). The study concluded that various areas in the Philippines are amenable to wind power installation, including Bangui and Burgos towns in Ilocos Norte, Batanes and Babuyan Islands, which are north of Luzon and the higher interior terrain of Mindoro, Samar, Leyte, Panay, Negros, Cebu, Palawan and Eastern Mindanao. This led to the inception of the wind farm project in 1999. Under the build-operate-and-own scheme, via a US$40 million interestfree loan from the Danish Development Agency (DANIDA), Phase I, comprising 15 wind turbines, was completed with connectivity to the Ilocos Norte Electric Cooperative (INEC) grid. On May 8th, 2005, NorthWind began delivering power to INEC. The Bangui wind farm has been

In July this year, Ilocos Norte Governor Imee Marcos – the daughter of former president Ferdinand Marcos – announced that in a bid to make Ilocos Norte, dubbed “Marcos Country”, the home of renewable energy (RE) in the country, the provincial government had given the green light to three wind power developers – Energy Development Corp (EDC), Energy Logics and UPC Renewables, an afﬁliate of the Italian UPC Group – to build new wind farms in Burgos, Pasuquin, Balaoi and Caparispisan this year. Wind power pioneer NWPDC does not see the entry of new players as competition since all energy produced would be sold to the national grid through the wholesale electricity spot market. It is, in fact, glad that its Bangui project has drawn more “green investors’’ into the clean energy generation business. The Bangui project was drawn

ratified by the NWPDC and the International Bank for Reconstruction and Development through the World Bank Prototype Carbon Fund. It was the first project in the Philippines to be part of the Emissions Reduction Purchase Agreement (ERPA) under the Clean Development Mechanism and also the first Philippine company to receive Carbon Emission Reduction Certificates (CERs) from the Executive Board of the United Nations Framework Convention on Climate Change. The project cost for Phase I came up to US$23 million. Phase II, completed in June 2008 at a cost of US$23 million, added five more wind turbines, raising the total capacity of the project to 33 MW to make Philippines the largest wind-power producer in South-east Asia. Phase III, when completed, will bring the total construction cost for the Bangui Bay Project to US$75 million.

Vast opportunities for wind in the Philippines, including typhoon power Fusion of technological and natural elegance. A spectacular sunset turns the sky into a blaze of fiery red and flaming orange against the silhouettes of towering windmills rising from the shrub-clad beach of the Bay of Bangui, Ilocos Norte

 

According to a study by the US Department of Energy, the Philippines has a potential wind energy capacity of 76,000 MW spread over 11,000 sq km. Of the provinces surveyed, 47 can produce at least 500 MW and 25 at least 1,000 MW. A diﬀerent study by the WWF Philippines chapter says the country’s wind energy potential is 7,404 MW in 1,038 surveyed sites. The results show the potential of the three major islands in the Philippines: • 4,900 MW in 686 sites in 28 provinces in Luzon island, the most preferred location among investors; • 2,168 MW in 305 potential wind sites in the Visayas region where TransAsia Renewable Energy Corp (part of PHINMA) is investing 6.45 billion pesos (US$151 million) to build the first wind farm in San Lorenzo, Guimaras, with an installed capacity of 54 MW to come online in 2013; • 336 MW in 47 potential sites in Mindanao island, the region with the least energy generating potential as it is a known typhoon-free area. The main drawback to foreign investors is the constitutional provision that prevents foreign ownership of properties in the Philippines; to set up wind farms, land acquisition is inevitable. Partnership with local investors is an option and foreign investors can explore the possibility of assistance and guidelines through the National Grid

Corp of the Philippines (NGCP) and the Wind Energy Development Association of the Philippines (WEDAP), which is composed of First Gen Corp’s aﬃliate Energy Development Corp; Alternergy Philippine Holdings Corp; Trans Asia Oil and Energy Development Corp; PetroEnergy Resources Corp; UPC Renewables and NorthWind Power Development Corp. Investors must ensure their wind farms are equipped to handle the 20odd typhoons that visit the Philippines annually. The Philippines Department of Energy (DOE), as early as 2007, had oﬀered rights to the development of 16 sites as wind farms. These sites were: Carmen and Oslob in Cebu; Bago City and

Cauayan in Negros Occidental; AllenLavesares and Calbayog City in Northern Samar; Siquijor; Pasuquin, Ilocos Norte; Bantay, Ilocos Sur; Bani and Bolinao in Pangasinan; Maconacon, Isabela; Tagaytay, Cavite; San Andres, Quezon; and Mercedes and Daet in Camarines Norte, all of which are said to have the potential to produce about 345 MW of power. In February this year, the DOE inked 17 wind energy projects with investments totalling US$1 billion. They include Danish wind giant Vestas Wind Systems Asia-Pacific, which is set to establish an IT hub in the Philippines and will assist the government to meet its target of producing 417 MW wind energy by 2013.

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case studies

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First dual-certified dedicated oﬃce tower in KL Awarded BCA Green Mark Gold (Provisional) and GBI (Provisional) Green features allow up to 25% reduction on energy consumption

By Suvarna Beesetti Strategically located at the intersection of Jalan Binjai, Jalan Ampang and Jalan Tun Razak in Kuala Lumpur, the 35-storey Menara Binjai is the first dedicated office tower in Malaysia to receive both the Singapore Building and Construction Authority (BCA) Green Mark Gold Certification (Provisional) and Malaysia’s Green

Building Index (GBI) Certiﬁcation (Provisional). The ofﬁce tower is situated on the site of the former family residence of the late physician Dr Chua Boon Teck, whose father was Chua Cheng Tuan, one of the co-founders of Cycle & Carriage Co, now known as Cycle & Carriage Bintang Bhd, the largest

Project details

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• Location: J B, K L • Owner & Developer: K J S S B • Architect: V A S B • Civil & Structural Engineer: W M S B • Mechanical & Electrical Engineer: R • Landscape Designer: V L S B • Property Manager: CB R E • Completion: E   • Awards: BCA G M G C P  GBI C P

    •  

The 35-storey oﬃce tower will be situated on the site of a doublestorey colonial bungalow which once belonged to the Chua family

dealer in Mercedes-Benz cars in Malaysia. Dr Chua’s wife, the late Khor Joo Saik, was a shrewd businesswoman who acquired substantial plantation and property plots for the Chua family. According to Chua Guan Hock, a descendant of the Chua family and director of Khor Joo Saik Sdn Bhd, the landowner and developer of the dual-certified green building, Menara Binjai has a gross development value of RM180 million (just under US$60 million) and a total net lettable area of 333,000 sq ft. The building comprises 29 levels of office floors with a net lettable area of 12,000 sq ft to 13,000 sq ft on each floor, ground and mezzanine floors, four podium carpark levels and four basement carpark levels. Due to be completed by the fourth quarter of this year, the development of the office tower complies with stringent environmental regulations that include minimising the impact of its construction on the surrounding area and adopting low carbon footprint strategies. The adoption of key green features throughout the building along with energy-efficient operations will result in up to 25% savings on electricity and air-conditioning. These features include low-E double-glazed windows for optimum heat and sound insulation, energy-saving light fittings with daylight sensors, as well as waterefficient sanitary fittings. Chua points out that incorporating green features into the building allows the company to be more “disciplined.” He says: “It made us more aware of the impact that we have on the environment, and made us more conscious of saving water and reducing wastage of raw materials.” Other green features at Menara Binjai include an energy-saving flexizone central air-conditioning system with individual floor control supported by state-of-the-art energy-saving chillers. The system is also equipped with variable air volume (VAV) boxes to provide flexible zonal control for as little as 600 sq ft of space. The destination-based lift system provides additional security by allowing customised floor selection to (continued on page 38)

3rd INTERNATIONAL CONFERENCE ON

presents 3rd International Conference on World Class Sustainable Cities 2011 (WCSC 2011)

ÓäÊ-i«Ìi LiÀÊÓä££ÊUÊ- iÊ >ÀLÞÊ Ûi Ì Ê i ÌÀi]Ê Õ> >Ê Õ «ÕÀ SYNOPSIS The 3rd series of the ‘International Conference on World Class Sustainable Cities’ (WCSC) event is themed ‘Transforming Cities: From Vision to Implementation’. Global challenges and the ensuing economic competitiveness, as well as issues of climate change, has forced cities to re-think their growth strategies. City Transformation has been a successful growth strategy in many cities in order to not just provide settlements to live, work and play, but also the twin challenge of mitigating climate change. WCSC is designed to showcase some of the best and successful practices and experiences from World Class Cities, as well as the efforts made within our own nation by way of promoting a constructive platform to educate and change the mindsets of city stakeholders, industry players, Government, RA’s, NGO’s and the public on key challenges faced in transforming our cities into sustainable human settlements that meets the needs of the present and enhancing that of the future.

CONFIRMED SPEAKERS & PANELISTS * (a) (b) (c) (d) (e) (f) (g) (h) (i)

The Honorable Madam Chen Chu, Mayor of Kaohsiung City, Taiwan Mr Sebastian Moffat, President & Chief Executive Ofﬁcer, The Consensus Institute, Canada Representative from the City of Vancouver, Canada Y Bhg Tan Sri Ahmad Fuad bin Ismail, Mayor of Kuala Lumpur Ms Renuka Indrarajah, Director of Management Committee, GAB Foundation Representative from the Greater KL/Klang Valley River of Life International Master Planning Competition Winner Representative from REHDA Wilayah Persekutuan (Kuala Lumpur) Branch Representative from the Malaysian Institute of Planners (MIP) Representative from the Malaysian Institute of Architects (PAM) * Subject to changes

Registration Fee

Brochure & Registration Form

RM600 (MIP / PAM / REHDA / Government) RM250 (Students) RM700 (Public)

www.rehda.com

Jointly Organized by

Wilayah Persekutuan (K.L.) Branch

Corporate Partners

Endorsed and Supported by

Kuala Lumpur City Hall

For futher info, please contact

03-7880 8000

Platinum Sponsor

Gold Sponsors

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    •  

These destination-based lifts allow customised floor selection to minimise waiting and stopping times (above). Mahogany wood panels in the lobby will be created from the salvaged remains of an ancient tree that once sheltered the Chua family residence (below)

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minimise waiting and stopping times, resulting in shorter travel times and excellent handling capacity at peak hours. The former is supported by Kone Ecodisc drive motors that not only maximise lift efficiency but also regenerate electricity during operations through its counterweight and braking system. This will translate into a 30% savings on the total electricity used for lifts. The sky garden and a boutique gym on Level 30 of the building provide an oasis for rejuvenation or even an informal venue for meetings. Another unique feature is the triple volume bamboo garden terraces on every third floor to simulate the feel of nature, with a magnificent green panorama. The lobby will feature mahogany wood panels and furniture created from the salvaged remains of an ancient tree that once sheltered the 6,000 sq ft double-storey colonial bungalow, which was the Chua’s family home.

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A sky garden and a boutique gym on Level 30 provide an oasis for rejuvenation or even an informal venue for meetings

As a development built to CONQUAS (Construction Quality Assessment System) and QLASSIC (Quality Assessment System in Construction) standards, Menara Binjai also boasts penthouse offices on its three top levels which have programmable express lifts, exclusive washrooms with showers, and superb unobstructed views of the Kuala Lumpur cityscape. Menara Binjai will be professionally managed as a singleowner office tower and is awaiting Multimedia Super Corridor-status accreditation. Targetting tenants from the oil and gas, financial, services and trading sectors, the tower will feature a centrally-located data centre on the fifth floor to save its tenants the cost and hassle of setting up their own server rooms. With no immediate plans to sell the building, the developer of Menara Binjai is offering a competitive rate of RM7.50 per sq ft for their would-be tenants.

people

Expanding ecomaginatively in South-east Asia GE Malaysia’s market development director Azli Mohamed is gearing up for busy days. As the international technology, services and finance giant prepares to grow its revenues in South-east Asia by about 30% this year and invest at least US$1 billion in the region over the next three years, Azli tells Siaw Mei Li how the company is demonstrating to governments and industries that eco-business is good not only for the planet but also for the sustainable growth of local economies.

It comes as no surprise that the one word constantly on the lips of GE Malaysia’s Azli Mohamed is “ecomagination”, a key initiative of the US multinational corporation that provides ecologically-responsible industrial solutions. “When ecomagination was started globally over five years ago, mooted by our CEO and chairman Jeff Immelt and carried out with a significant investment, GE was among the first companies to take such an effort at a serious level and many on the board of directors were not in agreement about it. For one thing, it was common to link green efforts to greenwashing at that point in time. “But ecomagination has two bottom lines – to address climate change issues and at the same time, be instrumental to increasing the company’s revenue and long-term growth. We want to make money but we want to be green as well, and not at a cost to the business.” This strategy seems to have worked. Since 2005, the company has increased its ecomagination portfolio from 17 products to over a hundred today, ranging from aircraft engines to washing machines. About US$5 billion has been invested in clean tech since the start of the programme, and it appears to have paid off handsomely. Azli says in 2010, the company closed US$18 billion in ecomagination sales. Last year, the company set an ambitious new goal of growing eco revenues at twice the rate of total company revenue in the next five years. To be sure, GE’s green technology is about building value for customers. At the 2011 Paris Air Show, AirAsia Bhd, Asia’s biggest low-cost carrier, placed the largest single firm aircraft order in aviation history with its order for 200 Airbus A320neo aircraft powered by the new LEAP-X engine,     •  

GE Malaysia market development director, Azli Mohamed

a product of CFM International, a joint venture between GE Aviation and Snecma of Safran Group. Azli estimates that with LEAP-X’s 15% fuelefﬁciency improvement over current CFM engines of its class, AirAsia can expect each new aircraft to save US$12 million on fuel cost over a 15-year ownership horizon, assuming a jet fuel price of US$2.50 per gallon. Azli also shared on how GE has been engaging country and industry partners in the region:

On South-east Asia and the Middle East Indonesia: This country has by far the largest geothermal resource in the world. GE Energy Financial Services provided a US$50 million loan to Indonesia’s biggest geothermal producer, the 220 MW Wayang Windu project. Singapore: Since 2009, GE and the National University of Singapore (NUS) have jointly invested S$130

• Started career in investment banking and has dealt in mergers and acquisitions over the past 11 years prior to joining GE in August 2010

• Has lived in the Middle East for five years • Hails from Teluk Bahang, Penang in northern Malaysia and is a fan of the “mamak” soup on Penang Road • Plays percussion, the guitar and keyboard, and a few traditional instruments. Has performed at the Dubai Jazz Festival and, prior to that, in the Kuala Lumpur jazz scene • An avid photographer who’s had a couple of his photos purchased by KLM, Azli is now most frequently seen wielding the camera “at relatives’ weddings – pro bono!”

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The CFM LEAP-X aircraft engine provides significant reductions in fuel burn, noise, and NOx emissions compared to the current CFM engine model of the same class. LEAP engines are a product of CFM International (CFM), a 50/50 joint company between Snecma (Safran group) and GE

Felda, for example, has over 70 mills releasing harmful methane gas that’s best captured to produce energy that can be fed to the grid. While we do have the most important thing, which is the gas engine, we’re working with a third-party consultant to provide a holistic value proposition incorporating the capture technology and addressing other technicalities. On the MOU we’ve signed with NAZA Group, particularly on the EV front, we will work together on building awareness and the EV infrastructure framework for Malaysia. We’re aware of the Ministry of Energy, Green Technology and Water’s pilot programme with Proton; we would like to create a complementary strategy, drawing on our EV experience in the United States where we work with [EV infrastructure support provider] Better Place to engage stakeholders across the board – from the utilities, OEMs, automotive players, even the small companies interested in installing the charging device, to municipal governments in every state – to build a more robust regulatory structure and help stakeholders better support each other. We hope that GE’s fast-charging WattStation EV charger will also support a possible EV trial involving commercial vehicles or public transportation in Putrajaya or Cyberjaya. Through our MOU with Formula 1’s Team Lotus via 1Malaysia Racing Team (headed by Tony Fernandes and Kamaruddin Meranun of Tune Group and SM Nasarudin of Naza Group), Team Lotus’ cooperation with GE on R&D initiatives will ride on GE’s global research centres and corresponding efforts in three key areas of technology: improving fuel-efﬁciency and emission levels in hydrocarbonbased vehicles; exploring the market for lightweight EVs, possibly by translating GE’s experience with composite materials and batteries into the automotive industry; and developing infrastructure to support and facilitate the development of EVs in ASEAN countries.

On the Asian business environment When you deal with countries in Asia, the biggest stumbling block is in understanding the regulatory structure and how we can work within the

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million (over US$100 million) in the NUS-GE Singapore Water Technology Centre, where researchers develop solutions for low-energy water desalination, reclamation and reuse. GE is also currently exploring EV tests with a utility body on EV charging solutions and smart grid applications. Thailand: GE Energy plans to introduce its cadmium telluride (CdTe) thin-film photovoltaic technology in the Thai solar energy market within the next two years. The technology is the most efficient of its kind and could soon be generating energy at less than US$1 per watt. Vietnam: A wind turbine-generator manufacturing facility, a US$61 million investment by GE Energy, was opened in Haiphong to produce generators for 1.5 MW wind turbines. Abu Dhabi: GE teamed up with Mubadala back in 2008 to work across renewables, R&D, finance, power and aviation. Its sixth global research centre, and the first to be branded an ecomagination centre, will be based in Masdar City – the upcoming sustainable planned city and cleantech cluster of the region. Malaysia: The two main areas we look at are palm oil mills and landfill gas. We have one of the most efficient gas engines in the world from GE Jenbacher, a company we acquired seven or eight years ago out of Austria. We’re talking to major agriculture players and approaching sewerage companies for opportunities on the biogas front.

GE’s WattStation™ electric vehicle (EV) charger is designed to significantly decrease EV charging time from 12–18 hours to as little as 4–8 hours. Its smart grid-enabled technology could also help utility companies manage the impact of EVs on the local and regional grids

constraints. GE’s company-to-country strategy pools resources across different businesses to come up with solutions that support the countries’ development. However, the company’s ability to effectively penetrate the market also depends on the country’s regulatory environment. In Thailand, the industry structure evolves every time there is a change of government, but the country has tremendous potential, especially in renewables, and we’ve done quite a lot on the green front with very good biogas projects on agricultural waste and landﬁll gas. In Indonesia, we’ve placed ourselves in industries there where we are better off and covered, and can work as a technology provider in energy, power, transportation, locomotive, and oil and gas. We’ve earmarked Indonesia, Thailand and Vietnam as key markets for growth, but past challenges have taught us to tread carefully. GE is a very straightforward company. Everything is black and white and we’ve positioned ourselves as a company of utmost integrity. There are things we can work with and things we still choose to stay away from. GE is a participating exhibitor at the IGEM 2011 Exhibition & Conference Malaysia taking place in Kuala Lumpur this month. President of GE Asia Pacific Stuart Dean is a panelist at the conference.    •   

people

Singapore’s green innovator of the year Technical director of Samwoh Corporation Dr Ho Nyok Yong is Singapore Building & Construction Authority (BCA) Green Innovator of the Year for 2011. He tells Suvarna Beesetti in an email interview about his work and achievements in sustainable construction.

How do you feel about being named the BCA Green Innovator of the Year and how has this changed your life? It is a great honour to me, my research team as well as my company. It will deﬁnitely motivate us to be more involved in green work. I have been involved in R&D work on sustainable technologies for more than 20 years, and I do not think I will ever stop campaigning for the green cause. Do you think that more businessmen should follow in your footsteps? My passion is to convert waste into useful material as well as to formulate new green products and technologies that can beneﬁt the industry. It is my     •  

tours to raise awareness on environmental issues. We hope that the inspirational stories on how we came to embark on green R&D work will encourage everyone to make a commitment to be green in their schools, their communities, their homes and their personal lives. It is heartening to receive feedback, often from young people, after the tour that they learnt a lot on green activities, and were inspired and motivated by our efforts.

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Growing up in a village in Ipoh, Malaysia, surrounded by abundant greenery Dr Ho Nyok Yong learnt to love nature. However, as his village embraced urbanisation, large tracts of forests were sacrificed for new townships. Trees were felled and hills flattened. Having witnessed such destruction, Ho was driven to do something meaningful to conserve the environment. The technical director of Samwoh Corporation, an integrated construction and sustainable recycling company did his doctorate research on the efficient use of industrial waste for structural applications. Since then, he has not looked back, and has been involved in R&D work on material science, recycling of waste materials and industrial by-products, green building and sustainable construction, and green asphalt pavement engineering. Ho has authored over 50 technical papers, and has spoken at conferences and seminars all over the world. He has received a number of awards, the latest being the BCA Green Innovator of the Year 2011 award, in recognition of his contribution to the industry.

• Born in Ipoh, Malaysia • A registered professional engineer of Singapore and Malaysia, and a Chartered Engineer of UK • President of the Singapore Contractors Association Limited • Chairman of Recycled Material taskforce at Singapore Green Building Council • Past president of the Singapore Concrete Institute

hope that my green R&D work will also inspire everyone, especially the younger generation, to think green. Both my company and I strongly believe that going green should not be symbolic. It should be the aspiration of all socially responsible business corporations. We share our knowledge and experience by opening up our R&D centre to schools, higher institutions and the public via educational

What is your personal contribution to the environment in your daily life? I am active in green activities organised by the BCA, National Environment Agency (NEA), Land Transport Authority (LTA), Civil Aviation Authority of Singapore (CAAS), Singapore Environment Council (SEC) and Singapore Green Building Council (SGBC). I have also initiated a number of research partnerships with tertiary institutions as well as local authorities on green technologies and the efﬁcient use of waste materials for construction. Most of the research work has received the authorities’ approval. I am currently president of the Singapore Contractors Association Limited (SCAL) and chairman of the Recycled Materials taskforce at SGBC. These roles enable me to guide and advise on sustainable construction. What is your personal philosophy on green technology? I believe in a pragmatic approach to R&D. In my more than 20 years of experience in the ﬁelds of civil and environment engineering, I have always been inspired and driven by

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A building almost entirely constructed from recycled concrete aggregate (RCA)

The Samwoh Eco-Green Building, Ho’s pride and joy, is the first building in the region to use concrete with up to 100% RCA and was awarded the BCA Green Mark Platinum Award

the need to recycle waste materials as there is a lack of natural materials in Singapore for construction. Most industrial wastes can be turned into reusable materials through R&D. They can substitute natural materials as well as alleviate waste disposal problems. This is in line with the government’s call for the 3Rs (i.e. reduce, recycle and reuse). The continuous development and invention of new green products by our team, which strongly emphasises practicality, efﬁciency and environmental protection, will complement the government’s efforts to meet the target of greening 80% of all buildings by 2030. This will then make Singapore a truly sustainable built environment. What is the biggest challenge for developers to adopt sustainable construction and concrete technology? How can they overcome it? It is common public perception that recycled materials are a poor substitute for natural materials. Another challenge is the initial cost of adopting green technology. I believe education plays a big part in changing this perception. The government also plays a major role in the adoption rate of green technology. By supporting green initiatives, it can encourage developers to work towards sustainable construction.

“I envision a future where nothing will go to waste. More developers will embrace the idea of sustainable construction.” What is your most successful green technology project to date? I would say my proudest achievement was to lead a dedicated research team comprising researchers from Samwoh, BCA and Nanyang Technological University (NTU) in the study and application of recycled concrete aggregate (RCA) for structural concrete applications. Our extensive research led to the construction of the Samwoh EcoGreen Building, the ﬁrst building in the region to use concrete with up to 100% RCA. The building represents the biggest leap of faith that any building owner has taken with regard to the use of recycled materials and it was awarded the BCA Green Mark Platinum Award. The building was ofﬁcially opened on March 22nd last year by then Senior Minister of State for National Development and Education, Grace Fu. The building has received much media publicity and attracted over 3,000 visitors from Singapore and around the world. During such visits, I shared my

Some 2 million tonnes of construction and demolition (C&D) waste is produced every year in Singapore. As land is limited on the island state, the disposal of C&D waste is a problem. On top of this, Singapore lacks natural construction aggregates. As a solution, Samwoh Corp set up plants to process the C&D wastes, which contain mainly aggregate and cementitious materials, into recycled concrete aggregate (RCA) for road construction, civil engineering precast concrete components, and more successfully, the construction of the Samwoh Eco-Green building (picture on left). Oﬃcially opened last year, the three-storey building has attracted the interest of industry players as it is the first in the region to be built with concrete that contains up to 100% RCA. The building serves as a research project to evaluate the use of RCA in structures and its incorporation in building standards. To monitor performance, fibre-optic sensors are embedded in the support columns. Acording to the developer, the replacement of natural aggregate with RCA did not increase nor decrease the construction cost of the building. The costs are comparable. Apart from the use of sustainable construction materials, the building was also designed with green features like low-energy lighting, water-eﬃcient fittings, and recycled materials for interior fittings.

experience and knowledge on green technologies and initiatives, and this has helped to promote the use of green materials in construction. What do you think is the future of green technology in the next ten or even ﬁfty years? I envision a future where nothing will go to waste. I believe more developers are embracing the idea of sustainable construction. Consumers are also becoming more educated about sustainable development. With this increasing focus on the environment, I foresee a Singapore that is going to be even greener.    •   

people

Managing agro-wastes with micro-organisms Dr Suhaimi Masduki, chief executive oﬃcer of award-winning bioremediation company BioFusion Sdn Bhd, talks to Jay Roshen about waste management, creating businesses from biotechnology and the environment, his take on the Malaysian R&D scene, and on BioFusion’s award from SMIDEX and the Malaysian Ministry of International Trade and Industry.

“We look forward to working, or creating businesses together with our clients, or any other entities. Biotechnology is all encompassing; no single technology component will achieve its target on its own.“

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Getting the microbes to do the dirty is what BioFusion Sdn Bhd is good at. The Malaysian home-grown company has created its own techniques to bioremediate soil and agricultural wastes by using micro-organisms. On June 7th, it won an award for “Best Innovation in Biotechnology and Agro Technology” at the 2011 Malaysian SME Innovation Awards. The honour came with RM200,000 (US$67,000) cash. BioFusion’s paid up capital is about RM500,000. Its current market value is about RM15 million.

Suhaimi Masduki

Tell us a little about BioFusion We were established in 2008 to embark on activities related to bioremediation. What we do is treat and, above all, manage waste, particularly from agriculture. We do soil and water remediation too. What is the salient innovation in the technology you use? How different is your technology from others in the same industry? Bioremediation involves the development of biocatalysts – that is, the effective use of micro-organisms or EM. Our EM is developed based on clients’ requests; this way, the EM works better as it is focused on the required target process. We develop EM for composts; we develop EM for biofertilisers in the case of nitrogen ﬁxers. The development of these micro-organisms follows ecological principles. We do not modify the micro-organisms genetically; we only enrich them and nurture them to grow well in the intended modiﬁed environment during bioremediation. As they are developed ecologically, propagation is made easier and they can be co-cultured, thus reducing the cost of production. Is it a home-grown, self-innovated technology?     •  

Yes, it is our own home-based technology. No one else has done this. But our innovation does not end here because innovation does not deal with technology alone. Innovation involves activities that facilitate the ﬂow of business. Anything that creates interest in business is also innovation. This becomes one of our business development strategies. Our marketing approach is to create awareness among our clients and we assure them we will stick with them until they succeed. Our philosophy is “Our clients’ success is our business”. Our technology is 100% home grown; we are proud of this.

BioFusion won the recent SME Innovation Awards. How do you feel about winning in the biotech and agricultural category? I am very happy of course. We had the opportunity to explain to the public about our business and our direction. The response was really good.

Malaysia has abundant agricultural waste. Do you feel these wastes could be treated and turned into valueadded products? Agricultural wastes will be one of our renewable resources. All wastes can be treated and managed. The best option is to reduce waste as that ultimately reduces the cost of management, treatment and ﬁnally disposal, if it has to be disposed.

What would you tell young bioentrepreneurs? I am in fact a “new-old” entrepreneur. I think I missed much of the real business world. Nonetheless, what I experienced in the public sector was a blessing as I gained extra knowledge and am able to put something together through BioFusion. To young entrepreneurs, I have just a few words: “Have an ambition and work hard at it”. If anyone is interested in the environment business, look at the big picture, look at the gullies, the valleys, the water systems, et cetera and decide how to make the situation better.

What kind of waste is the most difﬁcult to deal with? It is those that are generated in small amounts in scattered areas. These wastes are hard to manage.

What are your plans for the RM200,000 you won? Some will be put aside as incentives for staff who have worked really hard, especially in our early struggles, and some will be used to buy the critical equipment that we need.

What can we do to further to improve this sector? Working together and integrating the various technology components is the crux of the matter. In Malaysia, we have the tendency to isolate ourselves when developing biotech products. As a result, we fail to achieve the desired target, or it takes a long time. To improve the biotech sector, we need

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How do you see the Malaysian biotech landscape in the next 10 years? Biotechnology has a great future in Malaysia. We have to fall back on our resources, particularly renewable ones. Biologists, engineers, chemists, have to work together to develop meaningful biotechnological products. We look forward to working or creating businesses together with our clients, or any other entities. Biotechnology is all encompassing; no single technology component will achieve its target on its own.

Agro-wastes: Biologists, engineers, chemists, have to work together to develop meaningful biotechnological products

to take two drastic steps: the ﬁrst is to focus on what needs to be done, and the second is to create a meaningful team comprising relevant expertise to complete the job. To me, a molecular biologist is just a component in the development of a biotechnological product. Tell us a little about yourself? I completed my ﬁrst degree on

Agricultural Engineering in 1975, but was never satisﬁed with it. I thought it did not give me the true picture of what was happening in the environment. While working at the Malaysian Agricultural Research and Development Institute (Mardi), I did my Master’s degree at the Universiti Malaya Chemical Engineering department. This time around, I studied microbial kinetics, hoping to understand microbiology better. Subsequently, I pursued my PhD in microbial ecology in Belgium. I did deeper research on microbial interactions and environment; this included waste and waste-water management, environmental hygiene and biotechnological processes in environmental technology. I continued dwelling on my interest in Mardi until I retired in 2008. I was also involved in the National Committee on Clean Development Mechanisms and in some other committees related to the environment.

2nd Annual

a i GREEN

s A Optimising Green Water & Waste Management for Sustainable Future GTOWER HOTEL, KUALA LUMPUR - SEPTEMBER 26 & 27, 2011 http://www.comfori.com/greentech For more information, contact Huey Ying at hueyying.leong@comfori.com or (603) 5621 3630 *Green Purchasing Asia subscribers are eligible for 5% discount on conference fees.    •   

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The many faces of biodegradability Showing biodegradation within a timeframe and extrapolating the data is unscientific Biodegradation of compounds containing complex chemicals can complicate matters

Dr Prasad Modak is chairman of the Green Purchasing Network of India. He can be reached at pmodak@vsnl.com

By Prasad Modak

Certifying biodegradability – can we trust? Going by the deﬁnitions listed above, most products are fundamentally biodegradable; the only difference being the amount of time it takes to break each one down. Depending on the time, biodegradation may be partial or total. In the test recommended by the European Union (EU), a 10-day window is used to deﬁne ready biodegradability. Within this time, a readily biodegradable substance must reach at least 60% mineralisation based on CO² production or O² depletion, or 70% based on reduction in chemical oxygen demand (COD). The 10-day     •  

window begins when biodegradation has reached 10% and must end within the 28-day test. Many manufacturers show some biodegradation taking place for an xperiod of time and then use the data to extrapolate. But you cannot extrapolate the biological degradation process as that is scientiﬁcally unsound. The Biodegradable Plastic Institute (BPI) in the US conducted two separate sets of tests on the Aquamantra water bottle sold by Dana Point, a California-based company which uses an additive from Enso Bottles LLC. The ﬁrst test showed that the degrada-

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The claim of biodegradability is often associated with environmentallyfriendly products, but I often wonder what exactly this means? The US Environmental Protection Agency (EPA) defines as biodegradable those materials which can decompose under natural conditions. The American Society for Testing and Materials (ASTM), a leader in setting international standards, states that biodegradation is brought about by a biological activity, particularly enzymatic action, which can lead to chemical structural changes. The Federal Trade Commission (FTC), another US government agency, has drawn up guidelines on what legitimately qualifies as biodegradable materials. Examples of biodegradable materials include fruits, vegetables, leaves, paper and seeds. Non-biodegradable materials, on the other hand, do not break down easily. These materials pose a threat to the surroundings since they simply pile up and take a long time to degrade. Materials that you see in landfills mostly comprise non-biodegradable materials such as plastics.

Some plastics biodegrade for awhile and then stop

tion process plateaued after 60 days and the second showed no degradation at all after 45 days. The company then did a 30-day test and extrapolated that the material will biodegrade in four years. This could be misleading. Another example is found in the August 2010 issue of Biocycle Magazine. It published a study initiated by the Environmental Services Department and performed at the Miramar Greenery Composting Facility. Here 105 different compostable products were evaluated. The majority of the products selected meet ASTM standards (either ASTM D6400 or D6868). All of the products tested were purchased in the market. However, more than half of the 105 products did not

biodegrade greater than 25%. Fifteen items that were both ASTM and BPI certiﬁed showed almost no effects of biodegradation. Independently assessed and disclosed biodegradation data is thus essential to assess the fate and behaviour of substances in the environment.

Biodegradable products: Are they always benign? Take the case of active cleaning chemical nonylphenol ethoxylate (NPE), which is made of carbon, hydrogen and oxygen. NPEs do biodegrade to a benzene ring type and other simpler structures. However, this class of chemicals is considered suspicious because NPE can be possible endocrine disruptors. This means NPE may mimic endocrine hormones and cause havoc with a woman’s reproductive system. So although biodegradable, NPE is by no means environmentallyfriendly. End products of biodegradation: Are they always safe? It gets more complicated when we think about products that contain complex chemicals. Pesticides such as DDT are hazardous and toxic in their own right and take a long time to biodegrade. More than their slow breakdown, the problem is that the breakdown products are even more toxic and dangerous than the original DDT. So biodegradation of such compounds can in fact complicate matters! While biodegradability is something we all should desire in green products, we must understand its limitations, especially the “fuzziness around its hallow”. Until such time that we come up with a better operating and communicable deﬁnition, biodegradability is like Hamlet asking – “To be or not to be!”

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More push for Taiwan’s green building material industry As of May, 474 green building material labels have been awarded

Dr Ning Yu is president of the Environment and Development Foundation and chairman of Taiwan Green Purchasing Alliance.

Green buildings account for about 10% of all new buildings last year

By Ning Yu

output of Taiwan’s building material industry last year was about NT$768.6 billion (US$26.5 billion), with green materials accounting for NT$61.5 billion. Green buildings account for about 10% of all new buildings last year. MOEA also estimated that the value of green building materials may increase to NT$69.4 billion in 2015. To

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Taiwan’s green building material labelling programme was developed based on the Green Building Promotion Plan approved by the Executive Yuan (the government’s executive arm) in 2001, and ofﬁcially started accepting applications for label use in 2004. Currently, the programme divides green building materials into four categories: ecological, healthy, recycling and high performance. Of these, the ﬁrst two place emphasis on functionality while the rest focus on environmental friendliness. Through this programme, Taiwan’s domestic building material industry is provided with an independent and comprehensive system to assess and review the environmental performance and characteristics of building materials. In 2009, the Ministry of the Interior stipulated that interior decoration materials counted as green building materials be raised to 30% from 5%, with the goal of reaching 100% in future. This was done to reduce resource consumption in the production of building materials, promote the upgrade and transformation of the traditional building material industry, phase out use of poor quality building materials and enhance the built environment for the health and comfort of occupants. Statistics published by the Taiwan Architecture & Building Centre, which manages the labeling programme, show that as of May 2011, a total of 474 green building material labels had been awarded, with 120 of them awarded last year. The number of labels issued has risen in recent years, indicating the awareness of builders, and that green building materials are abundantly available. Data provided by the Statistics Department of the Ministry of Economic Affairs (MOEA) also show the total

Taiwan’s iconic green building: Taipei 101’s LEEDEBOM Platinum Level has set three records – tallest green building, largest green building (about 150,000 sq m), most-user green building (with about 90 tenants)

cope with this trend, it is necessary to promote green building materials, to enhance their manufacturers’ economies of scale and competitiveness, to establish a customised green building rating system and to create a robust domestic market. Due to its role in environmental and ecological protection, the green building material label is a crucial element of Taiwan’s green building promotion policy. In 1999, the government developed the green building EEWH evaluation system exclusively for the subtropical climate to serve as a basis for the green building material labeling programme. In this system, “EEWH” stands for “ecological”, “energy-saving”, “waste-reduction” and “healthy”, the four indicators of the green building promotion plan. Two years later, the green building promotion plan was adopted as a green building assessment system for the subtropical and tropical climate in Taiwan. The green building label and the green building material label are two different but related schemes, as each category of green building materials correspond to one to three indicators of green buildings. When applying for a green building material label, a product in any of the four categories needs to meet the common criteria, in addition to meeting the individual category’s requirements. The common criteria require building materials to contain no hazardous substances, and comply with all applicable national product performance standards. It has been almost seven years since the roll-out of the building material labelling programme. To ensure continued acceptance and buy-in, its credibility may be enhanced through surveillance veriﬁcation of labelled products.    •   

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Algae for biofuels: A promise in waiting Attempts being made to produce 4th generation biofuels from genetic modification Production faces limitations over economics, species selection, cultivation and harvest

Khoo Hock Aun is vicechairman of the Roundtable on Sustainable Biofuels. His email is khoohockaun@ cosmobiofuels.com

By Khoo Hock Aun

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In the midst of algal growth tanks, researcher Brian Dwyer of Sandia National Laboratories in Albuquerque, New Mexico views a sample prior to a turbidity measurement

or as a polymer of carbohydrates known as chrysolaminarin. • The green algae (Chlorophyceae). These are also quite abundant, especially in freshwater. They can occur as single cells or as colonies. Green algae are the evolutionary progenitors of modern plants. The main storage compound for green algae is starch, though oils can be produced under certain conditions. • The blue-green algae (Cyanophyceae). Much closer to bacteria in structure and organisation, these algae play an important role in ﬁxing nitrogen from the atmosphere. There are about 2,000 known species. • The golden algae (Chrysophyceae). This group is similar to the diatoms. They have more complex pigment systems and can appear yellow, brown or orange in colour. About 1,000 species are known to exist, primarily in freshwater systems. They are similar to diatoms in pigmentation and

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Algae are fundamentally differentiated between macroalgae and microalgae. The former are usually referred to as “seaweed” and are fastgrowing organisms of considerable size. Microalgae are microscopic photosynthetic organisms which are the most primitive form of plants. While the mechanism of photosynthesis in microalgae is similar to that of higher plants, they are generally more efficient converters of solar energy because of their simple cellular structure. As the cells grow in an aqueous suspension, they have more efficient access to water, carbon dioxide and other nutrients. For these reasons, microalgae can produce 30 times the amount of oil per unit of land compared to terrestrial oilseed crops. Microalgae are remarkable and efficient biological factories capable of converting a waste (zero-energy) form of carbon (CO²) into a highdensity liquid form of energy (natural oil). Their growth is not directly linked to human food or land consumption, so some call microalgae the “3rd generation biofuel”. Microalgae have been categorised in several classes, distinguished by their pigmentation, life cycle and basic cellular structure. According to a US National Renewable Energy Laboratory report, the four most important (at least in terms of abundance) are: • The diatoms (Bacillariophyceae). These algae dominate the phytoplankton of the oceans, but are also found in fresh and brackish water. Some 100,000 species are known to exist. Diatoms contain polymerised silica (Si) in their cell walls. All cells store carbon in a variety of forms. Diatoms store carbon in the form of natural oils

biochemical composition. The golden algae produce natural oils and carbohydrates as storage compounds.

Cultivation There are mainly two different cultivation systems: open pond systems and photo-bioreactors (PBRs). Algae farms may be set up with open, shallow ponds in which waste CO² is bubbled into the ponds and captured by the algae. They are referred to as “raceway” designs, in which the algae, water and nutrients circulate around a racetrack. Paddlewheels provide the ﬂow and algae-containing water is removed at the other end. The open system has been used for the Chlorella algae. As for the PBRs, the main advantage of such closed systems is that they allow good control of growth conditions. Biological contamination is less likely and higher structure densities are possible. The main problems of PBRs are their

high costs, overheating, build-up of photolimited zones in the inner zone, photoinhibition in the peripheral zones, cell structure damage due to hydrodynamic stresses, and growth on the reactor wall. These farms have been used to produce algae biomass for uses as diverse as oil, hydrogen and biogas, environmental applications, and as a feedstock in the cosmetic and pharmaceutical industry. Algae technology provides a means to recycle waste carbon from fossil fuel combustion. Algae farming is one of the few avenues available for high-volume re-use of CO² generated by power plants. It is a technology that marries the need for carbon

editorial

disposal by power plants with the need for clean-burning alternatives to petroleum in the transportation sector. In a world of ever more limited natural resources, algae technology offers the opportunity to utilise land and water resources that are, today, unsuited for any other use. Land use needs for microalgae complement, rather than compete, with other biomass-based fuel technologies. However, there are still a number of limitations to successful application. It comes as no surprise then that governments and private companies are now trying to develop a viable path towards 4th generation biofuels which include genetically-modifying marine micro-organisms to produce biofuel.

A variety of applications as well as associated risks are opened by genetic modification of algae: as a biofuel crop it could make other unsustainable biofuels obsolete. While genetic modification may benefit mankind as a whole, if pure commercial self-interests prevail, the technology could be monopolised by a few privileged countries. Currently, algae biofuel production is facing serious limitations with regard to economics, species selection, cultivation and harvest. Genetic modification has been proffered as a means to transcend these limitations but its role is uncertain though, as genetic engineering raises serious ethical and environmental concerns.

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Building with two gauges China likes assets rating; US prefers operational ratings Information should be easy to access for property buyers

By Elisa Wood

Describing a building as green makes a lot of people cringe. The word is overused. And what does it mean exactly? Serious efforts are underway to move from the hype and offer a more specific analysis of a building’s energy performance. Think nutritional labels for food, except in kilowatt-hours instead of calories. In fact, more than 50 national, regional and local governments have created policies to rate and disclose the energy efficiency of commercial buildings, according to the Institute for Market Transformation (IMT). They include the European Union, China, Australia and Brazil. In the US, two states have such policies, California and Washington, as do five cities: Austin, Washington DC, New York City, San Francisco and Seattle. These programmes have already placed more than 60,000 buildings, totaling 4.1 billion sq feet of floor

space, under energy rating and disclosure rules. Meanwhile, Massachusetts is considering standards, as is the city of Portland, Oregon. And many more local and state governments are expected to follow. To help them, IMT has published a report that details best practices in building labelling. Why label buildings the way we do food? When a building has an energy performance label, buyers and sellers better understand its market value, IMT says. “The premise mirrors transparency rules in other market sectors, such as nutritional labels on food and fuel economy ratings on vehicles, which are recognised around the world as consumer protection and keystones of free and fair enterprise,” says IMT, which is a Washington DC group that seeks ways to overcome market failures in the energy efﬁciency industry. While building labels may be a good idea, they are not always easy to

create. For starters, property owners must be able to access data on how much energy their buildings consume. For large buildings, with many tenants, this can be difﬁcult. Sometimes tenants have their own electric meters. In addition, once the building has a label, the information has to be easy to access for potential buyers. IMT recommends that states post the data on easy-to-navigate web sites that allow searches by address, benchmarking metrics, owner’s name, and traditional real estate characteristics, such as building size. Two major approaches exist to rate buildings, says the report. Asset ratings measure the structural energy performance of buildings based on simulated operating conditions. Operational ratings, on the other hand, measure how much energy a building actually consumes. China tends to use asset ratings, while most US jurisdictions, so far, seem to prefer the operational approach. How quickly will energy performance labelling catch on? It’s clearly become a hot topic, and the IMT report will help jurisdictions that want to move forward. Still, creating the rules is a state-by-state or even city-by-city effort, as is often the case when it comes to US energy policy. – realenergywriters.com    •   

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Easy money-saving tips for business Cut paper cost by 40% by switching to duplexing (two-sided) printers

Environmental measures can be easy or hard. Go for the easy stuff with the biggest returns ﬁrst. Here are some examples: • Insulation: Most businesses leak huge quantities of heated air in the winter and cooled air in the summer. Simple and inexpensive measures like insulating outlets and switchplates on outside-facing walls with foam gaskets (and plugging unused outside-wall outlets with baby outlet protectors) can make an immediate difference. So can making sure windows are properly caulked. And ensuring that doors to the outside close tightly and have weatherstripping and heat-trapping rubber sweeps. • Temperature control: Install programmable thermostats to stop heating/cooling air when the building is shut for the night – and programme them properly: no more than 68°F/20°C in the winter, no lower than 75°F/24° C in the summer during working hours, and perhaps 55°F/13°C in the winter and 85°F/29°C in the summer, from half an hour after the end of the workday until half an hour before employees start arriving in the morning. • Power control: Plug computers, machinery, and appliances into smart power strips that eliminate “energy vampires” by cutting power to the device when it’s not in use – and train your people to ﬂip the power strips off if they’re the last to leave at night. • Less use of paper: Cut your paper costs by 40% or so by switching to duplexing (two-sided) printers and copiers, setting them to default to two-sided, and training your employees to use that setting where it’s possible. Have a goal that the only single-sided copies are the last pages of documents with an odd number of pages.     •  

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Talk about all the green things your company is doing in your marketing campaigns

Green oﬃce culture: Set aside the money you save from these measures to look at more complex steps, such as auditing your manufacturing process for energy savings

Of course, some documents do need to be printed one-sided. But often, that’s because they’re going to be used as a reprint master – which can be avoided by printing from a digital file instead of a hard copy, gaining higher quality in the process. • Recycling: Recycle all the scrap paper in your office. Recycle plastic and metal as well. And switch to recycled copy paper, toilet paper and paper towels; these days, the latter two don’t have to cost any more than non-recycled, and copy paper is only a bit more. • Sustainable office habits: Change your break room and lounges around with a goal of sustainablity. Get rid of disposable cups and buy each employee a personalised coffee mug, plus a few for visitors. Use reusable

Shel Horowitz is the primary author of “Guerilla Marketing Goes Green”. He can be reached at shel@ greenandprofitable.com

rags and sponges instead of paper towels. Switch to organic fair-trade coffee, tea, and cocoa. If your business is in a place where the water is drinkable, add a water filter to the sink and educate your employees that using filtered tap water is much greener than bottled, as well as much cheaper for them. • Greening the workplace: Next, look at steps you can take to make your employees more comfortable and happier, which in turn will make them more productive. Bring houseplants into work areas – they turn carbon dioxide (a major greenhouse gas) into oxygen. Provide natural lighting where possible. Use fresh air from open windows during the spring and fall, if your building is set up with windows that open. Use curtains and drapes to let in sun in the winter, block it out during the hot summer – and to keep heat in during winter nights, while releasing it in summer. These, of course, are only the tip of the iceberg. We can all cut energy, water and waste in thousands of ways, many of which, like the measures above, cost little or nothing. Set aside the money you save from these measures to look at more complex steps, such as adding more insulation, auditing your manufacturing process for energy savings, switching to low-water or even waterless toilets, planting an area of your roof or adding solar panels, going through the LEED or EnergyStar certification process, and so on. And don’t forget to start talking about all the green things you’re doing in your marketing, on your website, and in your press releases. The marketing benefit alone, in some cases, can be enough to cover the capital cost of the next round of improvements.

information

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New global language of green Resource eﬃciency to be high on the agenda to improve profits and be competitive Pace of legislation and policy initiatives on cleantech issues rising

“Green” will become the new global language, says Ernst & Young, in its report on what the world will look like in 2020. One of the six trends identified (see box below) is that climate change will remain high on the agenda as companies seek to explore resource efficiency to improve profits and be competitive. Worldwide, the pace of legislation and policy initiatives on green issues is rising. “Between July 2008 and February 2009, for example, 250 climate-change regulations were enacted globally as governments, both emerging and developed, hastened the implementation of policies to support clean technologies (cleantech),” the report says. “Mandatory standards on efficient energy consumption, biofuels, vehicle emissions and eco-labelling are going into effect in greater numbers than in previous years.” It says resource-efficiency initiatives are not aimed at helping the environment alone but also to serve strategic goals such as national security, job creation and the positioning of domestic markets as the leaders of “the industries of tomorrow.” Companies are beginning to understand that sustainability efforts are critical drivers of competitive advantage. “In their efforts to decrease dependency on fossil fuels and reduce environmental damage, companies are reviewing their supply chains, reducing carbon footprints and developing green products,” it says. Increasingly, organisational responses to resource efficiency and sustainability efforts are becoming deciding factors in business performance. A recent study by A.T. Kearney (“Green” Winners — The Performance of sustainability-focused companies during the financial crisis, 2009) reports that the stock prices of companies committed to sustainability outperformed their industry averages by 15%. Companies should look out for the following, says Ernst & Young:

Cleantech a key enabler Cleantech will be a key enabler of the resource-efﬁciency and sustainable growth agenda. In a 2009 Forbes/Ernst & Young survey of 308 corporate executives worldwide, the majority expected their ﬁrms to spend at least US$10 million on cleantech investments by 2010, with 22% predicting a cleantech spend of at least US$100 million. The largest corporations are leading with cleantech spending as high as 5% of annual revenues. Indeed, consumer products and other industries with high energy consumption are setting the pace for cleantech spending. Legislative complexities As countries evolve at different rates in terms of their climate change agendas, it is important to understand the regulations in each jurisdiction. “For example, in the US and Canada, in the absence of a comprehensive national strategy, several states and provinces have introduced their own legislation to combat climate change. As a result, organisations with multiple locations in a single country need to do their homework at both national and local levels.

“Similarly, organisations doing business in an EU country like Germany or France will need to keep track of country-speciﬁc regulations as well as the broader regulations of the EU.” All these will impact customers, supply chains and business models.

Resource scarcity creates tension Resource shortages have real, tangible and wide-ranging impacts. Water scarcity is driven by rapid urbanisation, population growth, climate change, energy production, agriculture and contamination, and is a big source of tension among Israel, Palestine, Jordan, Syria and Lebanon. The United Nations has warned that nations need to work together to avoid a global water crisis. Worldwide, the US$500 billion water market is emerging as the major new cleantech opportunity as scarcity drives demand for treatment and desalination solutions. Fierce competition for oil will also result in the emergence of new power brokers over time. The US Energy Information Administration expects nonOPEC petroleum supply growth will surpass that of recent years because of the large number of new oil projects expected. The largest non-OPEC supply growth in 2011-2013 are expected to come from Brazil, the US, Azerbaijan, Russia, Canada and Kazakhstan. There will be rising investment in energy and non-energy commodities driven by the unpredictability of securing resources for the future.

Six key trends for leaders to bear in mind Ernst & Young, with the help of futurologist Dr Ian Pearson, believes these are the six key trends that business leaders should concern themselves with:

Increasing political and economic dominance of emerging markets will cause global companies to rethink and customise corporate strategies

Climate change will remain high on the agenda as companies seek to explore resource eﬃciency to improve the bottom line and drive competitive advantage

Financial landscape will look vastly diﬀerent as increasing regulation and government intervention drive restructuring and new business models

Governments will play an increasingly prominent role in the private sector as demand for greater regulation and increasing fiscal pressures dominate the agenda

Technology will be driven by emergingmarket innovations and a focus on instant communication anytime, anywhere

Leaders will need to address needs and aspirations of an increasingly diverse 21st century workforce.

Source: Ernst & Young

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Nuclear-renewable debate heats up in India Farmers protest plan to build 9,900 MW nuclear power plant in Jaitapur Activists blame powerful companies for promoting nuclear option

By Tejas Patel

Farmers in Jaitapur in India’s Maharashtra state are protesting against the government’s plan to build a 9,900 MW nuclear power plant. The protests intensiﬁed after Japan’s Fukushima Daiichi nuclear disaster following a 9.0 magnitude earthquake and tsunami on March 11th. The plant will be built by Nuclear Power Corporation of India and the six reactors of 1,650 MW each for the plant will be acquired from French company Areva SA. If the Jaitapur plant is commissioned, it will be the world’s largest. The protests against the plant following Japan’s disaster has triggered debate over the viability of building nuclear power plants to meet growing energy needs. Nuclear power is India’s fourth largest source of energy after thermal, hydro and renewable sources. India’s 20 nuclear power plants generated 4,780 MW last year. Five more are being built that will yield 3,900 MW. The government plans to increase nuclear energy output to 63,000 MW by 2032. But these massive expansion plans are now facing a wall of protests with activists citing the example of Germany, which is to phase out nuclear energy by 2022. Countries like China, Switzerland, Israel, Malaysia, Thailand and the Philippines too are reviewing their nuclear energy programmes. Activists argue that India has abundant renewable energy resources, and with proper funding to this sector, energy needs can be met. They quoted the statement of physicist Sowmya Dutta that the “world has potential for 17 terra watt nuclear energy, 700 terra watt wind energy, and 86,000 terra watt of solar energy”. In fact, a new report by the Intergovernmental Panel on Climate Change (IPCC) says close to 80% of the world’s energy supply could be met by renew    •  

tion wrote: “There is no geological repository in existence anywhere in the world which can reliably and safely conﬁne and contain these high-level nuclear by-products for the enormous time period necessary to reduce the radioactivity to acceptable levels. Till today there is no scientiﬁc answer to the problem of disposal of nuclear waste and radioactive by-products of nuclear reactors.”

Protests against the proposed Jaitapur nuclear power project widen after the Fukushima disaster

ables by mid-century if backed by public policies. “The ﬁndings, from over 120 researchers working with IPCC, also indicate that the rising penetration of renewable energies could lead to cumulative greenhouse gas savings equivalent to 220 to 560 gigatonnes of carbon dioxide between 2010 and 2050,” states the IPCC. “Alternatives to nuclear energy are a thousand times more abundant and a million times less risky. To push nuclear plants after Fukushima is pure insanity,” argues environmentalist Dr Vandana Shiva. Past nuclear accidents at Three Mile Island in the US and Chernobyl in Ukraine have also raised concerns about nuclear power. According to strategic affairs analyst Brahma Chellaney, India too faced challenges when the December 2004 Indian Ocean tsunami inundated the country’s second-largest nuclear complex. The Janahit Seva Samiti group, which opposes the nuclear plant at Jaitapur, says there is no satisfactory technology today for eliminating the radioactivity produced by nuclear reactors. In a letter to the Chief Minister of Maharashtra in January, the organisa-

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The Samiti activists also argue that besides extremely high costs, building and maintaining nuclear plants results in security and environmental risks. According to them “public opposition to nuclear power in Europe and the US has also been growing and that is why the western countries are selling their reactors to India, China and South Korea.” In India, many supporters of nuclear energy are scientists associated with nuclear/atomic regulatory bodies. Dr Anil Kakodkar, former chairman of the Atomic Energy Commission, is one. He says seismic activity in Japan is very different from India’s. He adds that solar energy cannot be an alternative to nuclear power as it is not available round the clock and also requires more land than nuclear power plants. The debate over which route India should take is continuing with a lot of activists blaming the powerful cartel of corporations that promote the use of nuclear energy. They accuse these companies of spending millions to promote their message that nuclear energy is clean and safe. – THLMediagrove

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Australia carbon tax unlikely to drive up renewables Grattan Institute says, for most, carbon price would only have minor impact A$23 a tonne not enough to present renewable energy as attractive alternative

By Tan Su-Yin

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It is an issue that has divided the nation for a decade and seen two failed bouts at parliament. But if all goes as planned, Australia’s emissions trading scheme will take off, ﬁnally. From next July, 500 of Australia’s biggest polluters will pay a tax of A$23 (US$24.60) a tonne on their own carbon emissions. The carbon price rises by a real 2.5% per annum until 2015 when the tax will morph into a market-based emissionstrading scheme. Agricultural and land sector emissions will not be covered, and light commercial vehicles and households will not face a carbon price on fuel. However, changes to fuel tax credits or excise will create a carbon price equivalent for some commercial users of fuel. The Clean Energy Future package’s goal is to reduce Australia’s total emissions to 5% below 2000 levels by 2020, and to 80% below 2000 levels by 2050. The government hopes to introduce it by September and have it passed by year-end. It is a controversial move for one of the world’s largest coal exporters and most carbon-intensive economies. While many scientists and environmentalists have hailed the plan as a good start, reactions from businesses and consumers have been mixed. A broad range of industries, from retail to tourism, say the tax and its knock-on effects could be devastating. Tony Wood, Energy Programme director of Grattan Institute, an independent think tank focused on public policy, says the institute ﬁnds most of these claims overstated. A     •  

Australia is one of the world’s largest coal exporters and most carbon-intensive economies

report published in 2010 says for most, a carbon price would only have minor impact on costs and competitiveness – smaller than factors such as exchange rates, labour market costs, and fuel prices. “Many industries will be able to pass on costs to their customers,” says Wood. Tony Wood: The primary driver for renewable energy demand continues to be the Renewable Energy Target

Some businesses have already signalled higher prices. Aviation group Qantas has said the tax will raise fares by A$3.50 per ﬂight sector on average. According to treasury modelling, carbon pricing is expected to increase electricity prices by 10% in 2012–13. Not all businesses can pass on the higher costs without losing competitiveness. Businesses that are in emissions-intensive, trade-exposed industries, face the challenge of cost

increase that their rivals in other countries do not. To mitigate this, the Federal Government will allocate A$9.2 billion to assist the industry over the ﬁrst three years. The most emissionsintensive trade-exposed activities will receive free carbon permits, with the assistance reduced yearly. Less emissions-intensive, trade-exposed activities and small businesses get other forms of support such as grants. Consumers get relief too. Prime Minister Julia Gillard announced that half the tax revenue will go to some measure of compensation, with nine out of ten households in line to receive tax cuts or payment increases. Shane Oliver, chief economist of AMP Capital says as these beneﬁts kick in next year, the clean energy plan could stimulate the economy slightly in the short term. Over the longer term, there is a good chance the economic impact will be minor, he says. “Over time, with a price put on carbon pollution, investment in clean energy and growth in clean industries will likely offset reduced investment and slower growth in dirty energy and sectors. Businesses and households will use the price signal from the carbon price to reduce energy consumption.“ Will renewable energy get a boost? Some say that the price of A$23 a tonne isn’t high enough to present renewable energy as an attractive alternative, at least until various forms of assistance are phased out and prices climb. “The price on carbon will drive the lowest-cost emissions reduction activities,” says Wood. “In the short term, these are unlikely to include renewable energy. There are simply cheaper ways to reduce emissions.” He says the primary driver for renewable energy demand continues to be the Renewable Energy Target, which is legislated to ensure that 20% of Australia’s electricity supply comes from renewable sources by 2020. The package does give

renewables a big boost in funding. The new commercially-oriented Clean Energy Finance Corporation (CEFC) has A$10 billion to invest in the commercialisation and deployment of renewable energy, energy efﬁciency and low-pollution technologies, as well as in manufacturing businesses that

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provide inputs for these sectors – for example, manufacturing wind turbine blades. Controversially, however, carbon capture and storage (CCS) is left out of the equation. Wood says the exclusion of CCS is counter-productive. “The core of the climate change package is

the application of a market mechanism to achieve reductions in greenhouse gas emissions at lowest cost to the economy. CCS is both a low-emission technology and projected in the Treasury modelling to form 30% of electricity generation by midcentury.”

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China halves EV production, faces major challenges Purchase subsidies fail to lift EVs to popularity Supply-side support needed for batteries, charging infrastructure and production

The Chinese government has halved its electric vehicle (EV) production target for 2015 to 250,000 units in the to-be-released Energy Efficiency and New Energy Vehicle Industry Plan 2011–2020, according to a source close to the situation. Li Yizhong, deputy director of the Chinese People’s Political Consultative Conference (CPPCC) Economic Commission and former Minister of Industry and Information Technology, says, however, that the target is far too conservative, as the number represents a mere 1% share of the 25 million vehicles that China expects to produce in 2015, according to the recently released Twelfth Five-Year Plan spanning 2011 to 2015. Bottlenecks remain with the industrialisation of electric vehicles (EV) in China, as no material breakthrough has been achieved in terms of battery technology, charging station installation, fiscal subsidy policy and consumer acceptance, says an industry analyst who believes the adjustment to the EV target was the right thing to do. Subsidies granted to private buyers of new energy vehicles amounted to less than 100 million yuan (about US$15 million) for all of 2010, representing only a small fraction of the previously planned subsidies totalling 5 billion yuan (about US$773 million), adds Zhen Zijian, an official at the Ministry of Science and Technology.

The Chery QQ3 is among many China-made EVs hit by poor sales

Challenges to production Driven by a series of policies issued by the Chinese government to support the development of EV, China’s domestic automakers have demonstrated unprecedented enthusiasm for EV manufacturing. Today, there are more than 1,000 EV producers in China. However, unsatisfactory sales have led to concerns over the future development of the market. Despite government subsidies, EV fail to gain popularity among consumers due to a variety of factors including short driving range, long battery recharging times, poor safety performance and inadequate charging infrastructure. Dieter Zetsche, head of Mercedes-Benz Cars, says the necessary breakthrough in battery technology is unlikely over the next ten years. A report released by the World Bank has identiﬁed several challenges China faces in promoting EV. Firstly,

the country’s existing EV policies focus mainly on purchase subsidies rather than on the production side. Measures must be taken to stimulate technical innovation, put in place a vehiclecharging infrastructure and improve manufacturing capacity. Secondly, it has become increasingly evident that the sector needs to develop integrated charging solutions to ensure safe charging of EVs. Thirdly, China has to develop unified standards on charging, safety and battery disposal. Furthermore, US-based FMC and Germany’s Chemetal jointly announced a 20% increase in the price for lithium starting from July 1st. The price hike is expected to trigger increases in lithium battery prices, putting much pressure on companies looking to promote lithium batterypowered EVs. Hybrids preferred Hybrid technology is looking more and more like the preferred option during the transition from fuel-powered vehicles to EVs, as reflected by the strong sales of Toyota and Honda hybrids in the US and Japan. The good news is that the Chinese government is paying particular attention to hybrids in the Energy Efficiency and New Energy Vehicle Industry Plan 2011–2020, as part of efforts to promote energy-efficient cars. Bullish outlook still Nevertheless, some remain bullish on China’s EV market. According to the Boston Consulting Group, a leading global management consulting firm, by 2020, China will become the world’s largest EV market, followed by Europe and the US, with EVs expected to account for 7% of its new car sales. – Nanjing Shanglong Communications    •   

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ASEAN goes for regional certification Jakarta tasked to implement accreditation scheme Only 200 energy managers in ASEAN, mostly in Malaysia

By Stephen Ng

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Kaidalova: AEMAS is open to anyone with a basic degree, not just engineers

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There are only some 200 energy managers in the entire ASEAN region, and most are based in Malaysia. According to Malaysia Green Technology Corporation (MGTC) chief executive ofﬁcer Dr

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Under the ASEAN Plan of Action for Energy Cooperation (APAEC 201015), all ten member countries have committed to reduce their energy intensity by 8% by 2015 (based on 2005 levels) and eight countries, namely Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Thailand and Vietnam, have committed to improve the energy efficiency of their industries. The ASEAN Centre for Energy (ACE) in Jakarta has been tasked with implementing the ASEAN Energy Management Accreditation Scheme (AEMAS) in these countries to help achieve this target. AEMAS is the world’s first regional certification system for energy managers and energy end-users. ACE acting executive director Christopher Zamora says AEMAS is the product of a long process based on thorough reviews of existing environmental and energy management systems. “It started as a series of projects, implemented by ACE with financial support from the European Commission-ASEAN Energy Facility since 2002,” Zamora says. “This series of projects cover the initial design of AEMAS, the development of training curricula for energy managers and training providers, and the development of the energy management tools and simulation test.” The scheme is designed to complement the existing environmental and energy management system, ISO 50001, with the added advantages of achieving quantifiable energy savings and carbon dioxide reduction. It was designed by the ASEAN Energy Efficiency and Conservation Sub-Sector Network, and subsequently endorsed by the ASEAN Ministers on Energy Meeting (AMEM).

million), provided by the EU under the Switch-Asia Programme for four years, starting February 2010 and ending in January 2014. Once accredited, energy managers will play an important role in corporations to help achieve the three core objectives of AEMAS, which are: • Reduce energy consumption in the manufacturing sector • Reduce emissions of greenhouse gasses • Increase the professional standing of accredited energy managers. Analysts say given the green push by governments in the region, energy management will be the next big thing. Energy savings will eventually

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Nazily: MGTC will be involved in training and certification of energy managers

Nazily Mohd Nor, whose organisation is the AEMAS Country Chapter for Malaysia, Malaysia’s target is 500 energy managers by 2014. As at May 2011, more than 160 energy managers have passed out as accreditated energy managers. “This will still not be enough to meet the demands of the country,” he says. “For this reason, MGTC will be involved in the training of local trainers and auditors, certiﬁcation of energy managers and energy end-users under the Energy Management Gold Standard, and providing technical training to support the scheme.”

More recruits According to Viktorija Kaidalova, programme manager of European Union (EU)-Malaysia Cooperation on Environment, Sustainable Energy and Research, the certiﬁcation of energy managers under AEMAS is open not only to engineers, but anyone, including lawyers and accountants, as long as they have a basic degree. The scheme, she adds, currently enjoys a funding of 1.7 million euros (US$2.44

Kurup: AEMAS is just a start of the journey in a more structured manner

be where the big money is, and the potential is great for energy managers. At the AEMAS launch in Kuala Lumpur recently, TM Research and Development (TM R&D) and Universiti Teknologi Malaysia (UTM) received the Energy Management Gold Standard Certification One Star – a recognition for having their own energy management system according to ISO 50001, budgets for energy efficiency measures, procurement policy and internal investment criteria that favour energy efficient technologies, motivation plans for personnel involved in energy management systems and an AEMAS certified energy manager. TM R&D chief executive officer Dr Gopi Kurup, who received the award on behalf of his organisation, says: “To us, AEMAS is just the start of the journey in a more structured manner.” Last month, Green Purchasing Asia featured case studies of how Malaysian buildings, including TM and UTM buildings, cut energy use susbtantially with the support of energy managers.

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Malaysia’s feed-in tariﬀ scheme delayed to December Subsidiary laws, power purchase agreements, admin guidelines complex and technical Architect of Malaysia’s FiT mechanism Ahmad Hadri leaves ministry, joins US-based First Solar

By Ann Teoh

Chin, in justifying the delay, says he is not delaying the implementation on a whim but that the seven subsidiary laws, nine standardised Renewable Energy Power Purchase Agreements (REPPAs) for the different renewable

known who will replace him at the ministry. Chin says, however, SEDA Malaysia will be officially set up on September 1st as planned, and its website, a crucial element as this is where transactions are made, will be launched that month (September 8th, according to industry insiders). “My ministry has decided to launch SEDA, Malaysia’s portal, earlier because I know the stakeholders and public are eager to know about the roles and functions of the agency and Tan Sri Dr Fong Chan Onn Datuk Seri Peter Chin: Online has been appointed as SEDA FiT applications will facilitate want to familiarise themchairman good governance selves with the procedures sources, and 19 administrative guideand processes involved in applying for lines are complex and technical, and the FiT,” says Chin. crafting the said documents is taking “We understand the quotas for the more time than originally anticipated. renewable energy resources under the He says the authorities want to FiT system are modest, and to ensure avoid any glitches in the FiT implethe integrity of good governance, we mentation. “A sound and resilient have developed a mechanism enabling regulatory framework is crucial to enall applications to be carried out sure the FiT system operates smoothly. online. The e-FiT Online System is the This has been one of the many lessons first of its kind in the world that will that my ministry has learnt from other handle submissions and online approvcountries that have adopted the FiT.” als of the FiT applications, including Coincidentally, on the day of tracking the progress of the work plan Chin’s announcement on August after the approval is granted.” 15th, First Solar Inc announced that Chin also announced the apAhmad Hadri Haris, the man credited pointment of politician and former with developing the FiT mechanism in Minister of Human Resources Tan Sri Malaysia, had joined them as senior Dr Fong Chan Onn as SEDA chairdirector of public affairs for Asia man. Appointed from the industry are Pacific. Ahmad Hadri was the chief former Department of Civil Aviation technical advisor for renewable energy director-general Datuk Kok Soo Chon; at the ministry and the National Project former principal assistant director of Leader of the US$25-million Malaysia the Economic Planning Unit (EPU) Building Integrated Photovoltaic in the Prime Minister’s Department (MBIPV) Project, a project he led for (Energy Section) Dr Pola Singh and six years from 2005. He also holds a former Accountant-General Datuk position in the International Energy Mohd Salleh Mahmud. There will also Agency Photovoltaic Power System be a representative each from Chin’s (IEA-PVPS) Programme. It is not ministry and the EPU.  

The implementation of the muchawaited feed-in tariff (FiT) scheme that is to spur the growth of renewable energy in Malaysia has been deferred by three months to December 1st, as the government wants more time to craft the subsidiary laws, power purchase agreements and administrative guidelines. The delay was not unexpected, as the posts of the chief executive and nine other positions for the Sustainable Energy Development Authority (SEDA) Malaysia were advertised only on July 28th, ﬁve weeks before the expected implementation. In June, a local daily reported that Badriyah Abdul Malek, the energy sector undersecretary for the Ministry of Energy, Green Technology and Water had been tipped to be the CEO. Still, the delay is a blow to those who have invested in grid-connected renewable energy systems in the country as the FiT offers premium tariffs that would make their investments worthwhile. (Green Purchasing Asia published a cover series on Malaysia’s FiT in the June issue, which is downloadable on www.greenpurchasingasia. com.) The FiT is a commitment from the government to enable renewable energy to reach a target of at least 985 MW by 2015 and 2,080 MW by 2020. The renewable resources eligible for the FiT are biogas, biomass, small hydros and solar photovoltaic (PV). The two sets of laws that pertain to the quota-based scheme FiT – the Renewable Energy (RE) Act and the SEDA Act – were passed in April. A workshop organised by the ministry in late April to discuss details of subsidiary legislations drew more than 200 active participants. Minister of Energy, Green Technology and Water Datuk Seri Peter

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All hail the big green spender Large-scale green public and B2B procurement to boost ecolabel adoption Eco standards have been proven to save costs as well as the environment

By Siaw Mei Li

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If Australia’s Food Standards Amend- of dollars when it changed its dairy packaging into rectangular, stackable ment (Truth in Labelling – Palm Oil) jugs that were easier to pack and ship Bill is passed, manufacturers will have – halving labour, lowering water use by to declare palm oil specifically on the up to 70% and reducing fuel use now ingredients list of product packaging. that fewer trips were needed to deliver Malaysian palm oil industry stakeholdmilk and retrieve empty crates. Underers argue that such labelling would girding budget airline AirAsia’s order prejudice consumers against palm oil products. Champions of the Bill say that on the contrary, it would allow consumers to shop with a clearer conscience, allow users of certified sustainable palm oil to distinguish themselves in the market, and promote sustainable resource management. With consumer awareness and global competition on the rise, green standards are increasingly important for industries ranging from paper products and furniture to electronic gadgets. Meanwhile, large-scale and institutional green procurement is As environmentally preferable procurement goes mainstream, crucial to making sustainable proeco standards and labels become crucial for matching businesses with credible green suppliers ducers viable in the short-run and profitable in the long-run. for 200 Airbus A320neo aircraft at the In a May interview with Sustain2011 Paris Air Show is the projection able Industries, Anastasia O’Rourke, that the new LEAP-X engines would co-creator of the Ecolabel Index, save the company as much as US$12 observed: “I see the most active million on fuel over 15 years. growth in interest in ecolabels in B2B Ecolabels are also being increastransactions, rather than with consumingly used in institutional purchasing ers.” O’Rourke said companies are to meet policies for green purchasing, requiring that suppliers comply with ecolabels and green standards to boost notably in governmental agencies, and by institutions such as universities and the environmental performance of hospitals, says O’Rourke. their own products, substantiate green Although government efforts to claims and reduce risks in their supply green the economy have their fair chains. Examples of such companies share of criticism and setbacks in include Walmart, McDonald’s (whose Filet-O-Fish in Europe is now made out places like the UK, the US and Ausof Marine Stewardship Council [MSC] tralia, public procurement provides the scale for businesses to invest in certified fish only) and Unilever, who have pledged to purchase only sustain- time-intensive and costly sustainability audits and certification processes. able palm oil by 2015. Across Europe, where public Companies have found the savings authorities spend some 2 trillion from their green purchasing decisions euros annually, the EU’s Green Pubgood for the bottom line. In South lic Procurement process leverages Africa, Walmart saved tens of millions     •  

governments’ collective purchasing power to source from suppliers with lower environmental impacts and promote sustainable consumption and production. In the UK, the Carbon Disclosure Project Public Procurement Programme is in its fourth year of helping government departments and suppliers to cut carbon impacts. In 2009, it helped save 32 million tonnes of carbon dioxide equivalent and £221 million (US$365 million). In the US, business opportunities are being created for green producers amid the severe economic recession. Over US$78 billion, or some 10%, of the early 2009 economic stimulus package worth US$787 billion was directly earmarked for green projects. In October the same year, President Barack Obama signed an executive order requiring federal agencies to prioritise sustainability when buying products and services, and to meet goals such as a 30% cut in vehicle fleet petroleum use by 2020 and 50% recycling and waste diversion by 2015. Taiwan’s Government Green Procurement Legislation allows public servants to preferentially purchase products bearing the Green Mark ecolabel, while Japan’s Green Purchasing Law has been in effect since 2001. China’s 2011 budget included 159 billion yuan (US$24.2 billion) in spending on energy conservation and environmental protection, and its Government Purchase Law’s preferential green purchasing policy, which took effect in 2003, saved the government 5.1 billion yuan in the first five years. The outcome of the Australian palm oil bill remains to be seen, but it has prompted the Malaysian palm oil industry, like Indonesia’s, to draw up its own sustainability standards after some major players hit a bumpy patch on the road to certification via the Roundtable on Sustainable Palm Oil (RSPO). What’s certain is that sustainability standards are no longer optional and institutional demand is instrumental for sustaining large-scale green transitions.

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ABB and Siemens nail US$1.7b oﬀshore-link deals

European engineering giants ABB and Siemens have won separate contracts to build high-voltage direct-current (HVDC) transmission lines for offshore wind farms in the German North Sea. ABB secured a US$1 billion order from Dutch-German transmission system operator TenneT to design and install the 900 MW Dolwin2 link, which will harness power from PNE Wind’s 400 MW Gode Wind 2 and other as-yet undecided projects. Separately, Siemens and Italian cable maker Prysmian won an order in the region of €600 million (US$710 million) to build the 690 MW Helwin2 link, which will accommodate the Amrumbank West project, part-owned by E.ON. Prysmian says its share of the deal is worth about €200 million. Both the Dolwin2 and Helwin2 links are scheduled for completion in 2015. TenneT is building four grid-clusters in the North Sea, known as Sylwin, Helwin, Borwin and Dolwin. Each cluster will have several offshore substations, which will harness adjoining projects and feed their electricity to shore. Siemens, ABB and Areva are among a small group of companies globally supplying HVDC links, which are critical for reducing transmission losses from distant offshore wind farms. (Source: www. rechargenews.com)

Local suppliers to win from China national solar FiT China has unveiled its long-awaited national feed-in tariff (FiT) for solar projects. Solar developers selling to grid operators from projects that were approved before July 1st and are completed by end-2011 will get 1.15 yuan/kWh (US$0.18/kWh), the National Development and Reform Commission (NDRC) says. For other projects, the on-grid price will be 1 yuan/kWh. Solar installations in Tibet will continue to get a previously agreed rate of 1.15 yuan/kW. The FiT are higher than the prices under China’s old bidding     •  

Poo-powered electricity The Bill & Melinda Gates Foundation is giving away more than US$41.5 million to develop innovative toilets for the world’s poorest regions. Scientists in the project are working on seemingly wacky ideas, such as transforming human faeces into charcoal and microwavepowered toilets that can generate electricity from gasiﬁed human waste. But while these may seem odd, they could revolutionise life for millions. “The Bill & Melinda Gates Foundation believes in the power of innovation, and we focus our funding on where we can have the biggest impact in helping people lead healthy, productive lives. No innovation has saved more lives in the last 200 years than the ﬂush toilet and sewer system,” says Frank Rijsberman, director of water, sanitation and hygiene for the foundation. “But we need new approaches to ensure that the 4% of humanity without access to improved sanitation has a safe and affordable way to go.” (Source: www.fastcompany.com, www. gatesfoundation.org)   

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contracts, which ranged from 0.73 yuan/kWh to 0.99 yuan/kWh. China targets more than 5 GW of new solar power plants by 2015, though the goal may be doubled. Jefferies & Co analyst Jesse Pichel says China’s solar subsidy could boost the fortunes of Chinese equipment producers such as Yingli, JA Solar, Suntech Power and Trina Solar. (Source: www.rechargenews. com)

Tagging the ones that did not get away If an initiative from EcoTrust Canada called ThisFish takes off, you’ll be able to scan tags on coveted crustaceans (and a growing menu of other seafood as well) to learn more about your meal’s route from boat to table. By tagging individual fish, shellfish, and crustaceans, ThisFish aims to connect retailers and consumers with fishermen who sustainably harvest the seas’ dwindling bounty. The tag gives independent fishermen the leverage they need to brand themselves. ThisFish has tagged some 170,000 fish – an impressive start, but only a drop in the bait bucket compared to the more than 80 million

tons of seafood harvested annually worldwide. (Source: www.fastcompany. com)

Korea and Bolivia joint venture for lithium-ion battery parts A consortium of Korea Resources (KORES) and Korean steelmaker POSCO will be setting up a joint venture with Bolivia’s state-run miner Comibol to manufacture lithium-ion battery parts. However, the scale of investment and the launch date have yet to be decided. SK Innovation and LG Chem are also expected to participate in the venture. Bolivia is home to the world’s largest lithium reserves, estimated at 5.4 million tonnes. (Source: EV Update)

Pan Pacific to open Green Mark Platinum hotel in Singapore

The Pan Paciﬁc Hotels Group will open its ﬂagship Green Mark Platinum-

rated hotel in Singapore mid 2012. The S$350 million Parkroyal on Pickering, designed by WOHA, will feature a hotel-in-a-garden concept. Its sustainable features include rainwater harvesting, automatic sensors to regulate energy and water usage and solar cells. The hotel will also have 15,000 sq m of sky gardens, reﬂecting pools, waterfalls and green walls. “The design of Parkroyal on Pickering demonstrates how we can not only conserve greenery in our high-rise city centre but multiply it in a manner that is architecturally striking, integrated and sustainable,” WOHA senior associate Donovan Soon says. “It underpins our garden city image and will set Singapore as a world leader on the stage of green high-rise developments.”

Chinese and Germans fight for solar market in soccer field

Chinese solar companies are entering the homes of German soccer fans for the first time, ramping up advertising in Europe’s biggest power market. Bloomberg reported that China’s Suntech Power Holdings Co., the world’s largest solar-panel maker, put its name on jerseys of 1899 Hoffenheim’s players for their opening game in the Bundesliga, a profitable German soccer league. Another Chinese company, Yingli Green Energy Holding Co, is backing Bayern Munich, Germany’s most successful club, that aims to unseat champion Borussia Dortmund, which is sponsored by German panel maker Q-Cells SE (QCE). “It’s an unprecedented marketing push,” Pascal Schulte, senior consultant at Sport+Markt, a sports marketing research firm in Cologne, tells Bloomberg. German homeowners spent US$6.7 billion on solar panels in 2010 and there will be a power shortfall with

Waste not: Comfy stools with missing footprints The Italian design team 13 Ricrea has come up with a brilliant idea of transforming latex waste into designer furniture. The Latex Roll is a soft, comfortable and ergonomic pouf made from latex waste from the shoe industry; to be precise, from the production of insoles. Once the footprints are cut out, tonnes of bright colour latex are left as factory-ﬂoor waste. All this would have ended up in landﬁll but, with Angela Mensi, Cristina Merlo and Ingrid Taro’s creativity, the useful life of the latex is extended. The latex roll is a perfect example of upcycling, where waste material is converted into new materials or products of better quality. Upcycling cuts down on the use of raw materials when creating new products. (Source: www.e-side.co.uk)

Chancellor Angela Merkel’s pledge to shut nuclear reactors by 2022. The rush to build brand awareness increases pressure on German solar manufacturers Solarworld AG (SWV) and Q-Cells, which are battling competition from cheaper Chinese photovoltaic devices.

better prices than those without. The certiﬁcations included in the report were from Earth Advantage, the federal government’s Energy Star programme and LEED home designations from the US Green Building Council. (Source: http://www.sustainablebusinessoregon. com)

30% premium for green homes in Portland

Ming Yang signs oﬀshore agreement with Three Gorges

In the United States, Portlandarea homes with green credentials command prices an average 30% higher than the non-certified ones, even while the overall market share of certified green homes in the region took a slight dip. Earth Advantage Institute, a non-profit green building organisation, recently announced the results of its annual certified home analysis for the Portland metro region from May 1st, 2010 through April 30th, 2011. The report found that new homes and existing homes with certification of sustainability measures, such as energy efficiency and green building materials, get

Wind turbine manufacturer China Ming Yang Wind Power Group (Ming Yang) has signed a strategic cooperation agreement with Three Gorges New Energy (CTGNE), a subsidiary of Three Gorges Corporation, the holding company responsible for building China’s Three Gorges Dam Project. The agreement covers collaboration on offshore wind development in Guangdong, and gives Ming Yang preferential status in CTGNE wind power projects in the province. The agreement also “paves the way for domestic and international wind power projects development in the future,” according to Ming Yang. In late July, Ming Yang won a contract to supply and install sixteen 3 MW Super Compact Drive (SCD) turbines in an offshore project in Guangdong    •   

for Guangdong Yudean Xuwen Wind Power. The company claims the agreement marks the ﬁrst fullservice engineering, procurement and construction (EPC) deal awarded for a Chinese offshore wind project. (Source: www.rechargenews.com)

Suzlon fined US$490,000 for US pollution breaches Wind turbine maker Suzlon was ﬁned US$490,000 by US authorities over environmental violations at its plant in Minnesota. The Minnesota Pollution Control Agency (MPCA) says the Indian wind equipment group is paying the ﬁne in four equal instalments for offences related to an inspection of Suzlon Rotor Corporation’s bladeproduction facility in Pipestone in 2009. Suzlon has “agreed to resolve air quality, hazardous waste, solid waste, and stormwater violations at its wind turbine blade manufacturing plant in Pipestone,” the MPCA says. A fourth blade-production line was also installed without obtaining permits. Suzlon says the penalty does not impact on its business. It describes the breach as a “one-off and isolated incident” and that the company has been in full compliance since the breaches were discovered. Opened in 2006, the Pipestone plant employed more than 500 people at its peak, but Suzlon is down to only a skeleton staff in the face of declining US orders. (Source: www.rechargenews.com)

New global business forum hunting for partners in Asia WORLD RESOURCES INSTITUTE

The World Resources Institute (WRI), a US-based think-tank, is hunting for partners in Asia for its newlylaunched global business forum aimed at accelerating private sector action on climate change. The founding members of the Next Practice Collaborative, launched in July, are aluminium ﬁrm Alcoa, chemical company AkzoNobel, cement maker CEMEX, health products company     •  

Johnson & Johnson, engineering firm Siemens, office supplies company Staples and engineering conglomerate United Technologies Corporation. Next Practice will focus on business and finance models for low-carbon economic growth in major markets like the US, China, Mexico, India and Brazil. Advisors will include individuals like Carter F. Bales, chairman, NewWorld Capital Group LLC; David Blood, co-founder and senior partner, Generation Investment Management; Stefan Heck, director, McKinsey & Company; Rebecca Henderson, Senator John Heinz Professor of Environmental Management, Harvard Business School; Charles O. Holliday, Jr., former CEO of DuPont and chairman, Bank of America; and Jigar Shah, CEO, Carbon War Room. (Source: www.wri.org)

Siemens and Carbon Trust launch efficiency financing The Carbon Trust, an independent non-profit company set up by the UK government to support low carbon technology, has teamed up with Siemens Financial Services to offer UK manufacturers finance for buying energy-saving equipment. They say the potential demand for such finance could be £4.6 billion (US$7.5 billion) over the next three years. The green finance scheme matches monthly repayments with savings from reduced energy consumption. Any manufacturer can apply. The scheme will allow them to invest in equipment, such as high-efficiency motors, that will not only save energy, but often help to improve productivity. The Carbon Trust will assess the carbon, energy and cost savings of applications while Siemens provide the financial backing and manage the provision of funding.

EcoBroker, a new branch of real estate broking Dramatic cathedral ceilings got househunters Matt Thompson and Charlotte Lowson all excited but their realtor,

Jeanne Moyer (photo), the first EcoBroker in Wake County, US, cautioned them that they’d have to fill the space with heat come winter. Realtors in US are obtaining training in energy-efficient, healthy homes and lifestyles in response to greater green awareness. Moyer says she chose the EcoBroker certification, which is not recognised by the National Association of Realtors (NAR) but, she feels, has more depth than the NAR’s Green Designation. Both certifications require 18 hours of online or in-person courses that go into identifying and evaluating homes and communities with green attributes, understanding green financing tools and following green work practices. With her training, Moyer points out green features in otherwise conventional homes, and advises on retrofitting older ones. She even has a list of reliable vendors. (Source: www. newsobserver.com)

Carbon-labelled products sell better than organic Nine out of ten households in Britain, a pioneer in carbon labelling, bought products with carbon labels last year, albeit mostly unwittingly, with total sales exceeding £2 billion (US$3.1 billion). This is more than the total sales of organic products (£1.5 billion) or Fairtrade products (£800m) and is largely due to Tesco, Britain’s biggest retailer, carbon labelling more than 100 of its own-brand products, including pasta, milk, orange juice and toilet paper. (Tesco said in 2007 that it wants to carbon label the 70,000 products it sells but has managed only 500 so far.) Carbon Trust, a consultancy funded by the British government, has footprinted more than 5,000 products worldwide, from building materials to pharmaceuticals. Among the ﬁrst products to have carbon labels applied were the cheeseand-onion potato crisps made by Walkers, a brand owned by PepsiCo, which had a footprint of 75 grams per packet. (Source: The Economist)

Dongfeng Nissan to produce EV Dongfeng Nissan Passenger Vehicle Company (Dongfeng Nissan), a joint venture between Japan’s Nissan and Chinese automaker Dongfeng, will be introducing an electric vehicle (EV) model under the Venucia brand (Chinese name: Qi Chen) in 2015. The EV will be rolled out as part of pilot programmes in Wuhan, Hubei Province and Guangzhou. Dongfeng Nissan was involved in launching the Nissan LEAF in China. It plans to introduce 30 new models by 2015, including 50,000 units of the EV. The ﬁrst Venucia model will go on sale at beginning of next year. The EV in 2015 will ofﬁcially be an indigenous Chinese product.

Knowledge & networking

SEPT

International Green Building Conference (IGBC) 2011 13th-16th September 2011 Suntec City, Singapore www.sgbw.com.sg Build Eco Xpo (BEX) Asia 2011 14th-16th September 2011 Suntec City, Singapore www.bex-asia.com 3rd International Conference on World Class Sustainable Cities (WCSC) 2011 20th September 2011 Sime Darby Convention Centre, Malaysia www.pam.org.my/events/events2011/Leaflet_as_at_5_July_2011.pdf Electric, Power & Renewable Energy Indonesia 2011 21st-24th September 2011 Jakarta International Expo Kemayoran, Indonesia www.pamerindo.com/events/4

Philippines government asked to defer renewable energy Philippines’ biggest power distributor Manila Electric Co (Meralco) has asked the Aquino administration to defer renewable energy (RE) generation until costs drop to levels close to grid parity with conventional sources. High generation costs lead to high power prices which burden consumers, it says. Meralco supports the National Renewable Energy Board’s position for higher installation targets for run-of-river hydropower and biomass, with their relatively lower generation cost compared to other RE sources. Based on the Department of Energy’s new targets, only 50 MW would be allowed for solar facilities; 200 MW for wind; 10 MW for ocean; 250 MW for hydro; and 250 MW for biomass. The initial targets were 100 MW for solar; 220 MW for wind; 10 MW for ocean; 250 MW for hydro; and 250 MW for biomass. These targets are part of the petition for feed-in-tariff rates submitted last May. (Source: Philippine Daily Enquirer)

IGEM 2011 (2nd International Greentech and Eco Products Exhibition & Conference Malaysia) 7th-10th September 2011 KLCC, Kuala Lumpur www.igem.com.my/2011

2nd Annual Green Tech Asia 26th-27th September 2011 Kuala Lumpur, Malaysia www.comfori.com/greentech

5% discount for GPA subscribers

Renewable Energy World Asia 2011 27th-29th September 2011 KLCC, Malaysia www.renewableenergyworld-asia.com/index/conference-information. html 10% discount for GPA subscribers

3rd Annual Sustainable Cities 2011 27th-30th September 2011 Pan Pacific Hotel, Singapore www.sustainablecitiesasia.com

OCT

All-Energy Australia Exhibition & Conference 2011 12th-13th October 2011 Melbourne Convention & Exhibition Centre, Australia www.all-energy.com.au China Wind Power 19th-21st October 2011 New CIEC, Beijing, China www.chinawind.org.cn/home.html Singapore International Energy Week 2011 31st October-4th November 2011 Suntec & Marina Bay Sands Convention & Exhibition Centre, Singapore http://siew.sg/ 4th EV Battery Forum – Asia 8th-10th November 2011 Shanghai, China http://www.evbatteryforum.com/ Visit www.greenpurchasingasia.com for the latest event listings Green Purchasing Asia is a media partner

   •   



Green Economy and Green Jobs in China: Current Status and Potentials for 2020 Jiahua Pan, Haibing Ma and Ying Zhang; Editor: Lisa Mastny Worldwatch Institute worldwatch report 185

Green Economy and Green Jobs in China

Current Status and Potentials for 2020 jiahua pan, haibing ma, and ying zhang

China’s average annual GDP growth of 10% over the last 30 years – among the fastest in the world – was not achieved without major ecological sacriﬁces. According to “Green Economy and Green Jobs in China”, a 36-page report published in July, the World Health Organisation listed seven Chinese cities, including Beijing, among the ten most polluted places in the world in 2008. China’s State Environmental Protection Administration (SEPA) estimates that environmental damage costs China roughly 10% of its GDP in 2005, and China passed the United States in 2006 to become the world’s largest emitter of CO² from industrial sources. In the past decade, however, China has increasingly prioritised green development in leading economic sectors and is also banking on this to expand employment. “Green Economy and Green Jobs in China”, subtitled “Current Status and Potentials for 2020”, examines greening activities in three key sectors of China’s economy – energy, trans    •  

portation, and forestry – and states with confidence that at least 4.5 million green jobs can be expected to come out of these industries by 2020. The findings of this study, dubbed “the most thorough effort known to date to explore China’s green jobs potential” could help counter the common contention by green policy critics that environmentfriendly drives would harm the job market. Although China’s official urban unemployment rate is under 5%, some sources say it reached 9.4% in 2008. Amid these worrying figures, however, the report projects that proper implementation of green development policies can be expected to yield the following positive outcomes between 2011 and 2020: • Solar PV industry to create an average of 6,680 direct jobs annually • Wind power industry to generate some 34,000 green jobs annually (it provided an average of 40,000 direct green jobs annually from 2006 to 2010) • An additional 220 million new vehicles, 16.7 million of those being either hybrids or EVs produced by China • High-speed rail could create an average 230,000 jobs each year • Beijing’s urban rail system alone could create 437,000 jobs each year • Forestation sector could offer as many as 1.1 million direct and indirect jobs annually (it employed as many as 1.8 million full-time workers in 2010 alone) The report comprises a summary; a general chapter on China’s move to green; a section each on greening the energy sector, transportation

and sustainable forest management; recommendations on accelerating the green transition; and ﬁnally, extensive endnotes and an index. The ofﬁcial summary of this report is available online and the complete publication can be bought for US$12.95 in print paperback or PDF at http://www.worldwatch.org/ node/8677

The Global Ecolabel Monitor 2010 World Resources Institute and Big Room Inc / 01

2010 GLOBAL ECOLABEL MONITOR

GLOBAL ECOLABEL MONITOR 2010

TOWARDS TRANSPARENCY

The Global Ecolabel Monitor 2010 report and the ecolabelindex.com website are free resources produced to help companies and consumers navigate, evaluate and compare the “green” claims of environmental certiﬁcations and labels for food and consumer products. The market for products bearing ecolabels is huge and growing. According to the report, over a third to half of US consumers say they would pay a premium for eco-friendly products, while the 2009 Carbon Trust study found that 44% of UK consumers want more information on companies’ green efforts, but 70% are not conﬁdent about identifying environmentally responsible companies.

In November 2009, World Resources Institute (WRI) and Big Room Inc invited over 340 ecolabels in 42 countries to complete a survey of 66 questions ranging from certification criteria to funding sources. More than 113 ecolabel programmes participated in the survey while more than half could not be reached or opted not to participate. In June 2010, the results of this survey were published on the WRI website and incorporated into a searchable, still-expanding database at the online Ecolabel Index. The Global Ecolabel Monitor 2010 reports that 92% of the programmes surveyed require some verification before awarding an ecolabel, while others require registration but no certification. Of the former, 66% require third-party certification to avoid conflicts of interest. Programmes run by non-profits generally had more rigorous requirements, such as site visits, audits and third-party certifications. Less than a third of the ecolabels surveyed regularly monitor environmental and social impacts of their certification, while more than 21% have developed plans to study impacts for the first time. Over half of the ecolabels surveyed were difficult to reach or uncooperative when asked about core metrics, while less than 30% of ecolabels recognise or are recognised by other labelling organisations, indicating the need for improved transparency and more resources for programme support services. The PDF report is available for free download at www.wri.org/publication/ global-ecolabel-monitor while the online ecolabel database can be accessed at www.ecolabelindex.com