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Word from the editor Welcome to the second edition of The Fifth Conference, entitled ‘CLEAN’1, where we look at Belgium’s future from an energy and environment perspective. Best described as a conference in print, The Fifth Conference bundles vision and ideas around topics that are of vital importance to this country’s economic future—topics like innovation, energy and environment, transport, entrepreneurship, technology, and more. Here’s how we do it. The Fifth Conference is future-focused; we don’t dwell on the day-to-day quarrel but focus on the bigger, longer-term picture. The Fifth Conference is optimistic and constructive, perhaps naive in places, but dreaming is essential if we want to get somewhere. That’s why being young is so much fun; everything is still possible. The Fifth Conference is about insight and ideas. That’s why we focus each edition on a single (albeit broad) issue. That way we can dig deeper and extract the really stimulating ideas. The Fifth Conference is for the open-minded. There is no political line being punted here. We take an honest look at all sides of the story. Finally, The Fifth Conference is open to the world. That’s why we write in English. Take note, this is not an expat magazine. Primarily, we are writing for Belgians, but we recognise the fact that our economy is one of the most internationalised in the world. Many of our readers work internationally or aspire to work internationally. Apparently about a million of our compatriots live and work abroad today. The young also are looking beyond our borders. A recent survey found that four in five young Flemings are interested in working abroad. And of course this country hosts hundreds of multinationals and international organisations, bringing in 1) A word of thanks to Dirk Le Roy for the insightful tip on choosing this title

achievers from all over the world. Let’s invite them to take part in these conversations about our future. So, why focus on energy and environment in times like these? Because, undoubtedly, this is the challenge of our times. In the longer term, change is afoot, radical change at that. The EU’s Climate Package—a 20%, possibly 30% reduction in greenhouse gas emissions by 2020 (that’s just over a decade away, not a long time frame when talking energy infrastructure)—will be a tremendous challenge for this country. All the ‘baseline’ economic scenarios forecast not a reduction in emissions but a substantial increase (due to economic growth and the dismantling of the nuclear installations). But even if we do manage the EU’s 20/20 goals then we’re not home dry. Far from it. Looking ahead to 2030 and even further to 2050 we’ll be looking at a 50-80% reduction in emissions. Kyoto was child’s play, clearly. And we face challenges of similar scale when it comes to the way we use materials, or the way we produce food. The fact is that the next generation will be living and working in a fundamentally different and hopefully more sustainable economy, powered by an entirely new energy infrastructure. Fortunately, there are plenty ideas on what that future will look like, and how we best get there. In this edition we take a closer look at these. Frank Boermeester Editor, The Fifth Conference

THE FIFTH CONFERENCE CLEAN - Contents

Contents Introduction The Challenge of our Times Energy Production Energy Consumption Materials Management Agriculture & Food Cleantech Sustainable Business

CONTRIBUTORS

Foreword by Jean-Pierre Hansen 9

Belgium looks to become a world leader in eco-business Rudi Thomaes

Sustainable business - what it means to me Mick Bremans 14

Investing in energy & environment Gimv

Introduction

Eco-efficiency, the future: not less, but different Dirk Fransaer

Energy Production

3.1|

The Belgian Energy System – Today versus 2020 39

Inventing tomorrow’s energy infrastructure Siemens 40

3.2|

The Energy Market

Together for less CO2 Electrabel GDF Suez 44

3.3|

Nuclear Phase Out, or Not?

Nuclear cordon sanitaire Johan Albrecht

3.4|

Producing Energy Efficiently

3.5|

Fixing the GRID

Electric ‘Power Highways’ A key component in tomorrow’s energy system Alain De Cat 50

Demand-side participation in the energy system Ronnie Belmans 50

3.6|

The Challenge of our Times

2.1|

Energy & Climate

2.2|

Pollution & Waste

Why should we take the air pollution standards more seriously? Tim Nawrot et al 28

The strength of impartiality Vinçotte

The Potential for Renewable Energy

2.3|

Can Belgium cope with Climate Policy? 32

The Clean Development Mechanism Antoine Geerinckx et al 36

Moving towards a sustainable energy future in Belgium and in Europe Lucie Tesnière 53

3.7|

Wind Energy

A North Sea Electricity Grid [R]evolution Jan Vande Putte

Shifting gears to power the world with wind Hansen Transmissions 58

3.8|

Solar Power

At the forefront of photovoltaics Imec

3.9|

Biomass & Biofuels

Dry continous anaerobic digestion of energy crops Luc De Baere 66

THE FIFTH CONFERENCE CLEAN - Contents

Energy Consumption

4.1|

The Potential for Energy Efficiency

Enabling the transition Belgacom 70

4.2|

The Energy-Intensive Industries

The European energy and climate policy from an industrial perspective Steven Luyten 74

Electrabel, Group GDF Suez, helps solve the energy challenge at BASF Electrabel GDF Suez 76

Industry & Energy, a perfect symbiosis Peter Claes

4.3|

Transportation

Fixing transport Bruno Defrasnes

Materials Management 92

Agriculture & Food

100

Beyond the scarcity and burden of resources Karel Van Acker 93

Green Biotechnology in a changing environment René Custers 102

Clean living Ecover

Challenges for agriculture Piet Vanthemsche 103

Getting it perfectly right Kathleen van Brempt 97

Soil, water, air and light… Jan Vannoppen 104

Creating sustainable value Umicore

78 79

Pipeline transportation: the quiet revolution Gérard de Hemptinne 81

4.4|

Buildings

Derbigum re-invents Buildings Derbigum 84

Archibiotic Vincent Callebaut

Transforming the energyefficiency of government buildings Fedesco 88

The promise of geothermal energy Stijn Bijnens

Cleantech

105

Sustainable Business 110

Investing in Cleantech Bart Diels 106

A leader in sustainable banking Triodos Bank 112

Let’s seize the day Jan Declercq

107

Building new business models for the future Dirk Le Roy 114

Hydrogen as energy carrier Adwin Martens

108

Entrepreneurship Luc Rogge

116

Talent Management Luc Dekeyser & Annemie Salu

117

Investing in a green, innovation-driven economy Flemish Department Economy, Science & Innovation 118

CSR and SMEs? Karel Van Eetvelt 120

THE FIFTH CONFERENCE CLEAN - CONTRIBUTERS

Contributors Case Sponsors RESEARCH PARTICIPANTS Olivier Marquet Belgacom

University of Antwerp, Catholic University of Leuven

CEO

Alpro

CEO

Applitek

Wim Soetaert Professor

University of Ghent, Ghent Bio-Energy Valley

Ecover Derbigum

Bernard Deryckere

Fedesco

David Laurier

Flemish Department Economy, Science & Innovation

Alain Wouters

Partner

Art&Build

Gimv

Charles Van der Heyden

Founder

Asap Photographic Services

Hansen Transmissions Imec

Koen Van Raemdonck

Director Environment and Energy Policy

Siemens

Anouk Van de Meulebroecke

Managing Director

Triodos Bank

Bram Claeys

Advisor Energy

Umicore

Koen Bossuyt

Operations Director

Vinçotte

Géry de Pierpont

Former Director

Anne-France Rihoux Advisor Sustainable Development Sam De Smedt Deputy Chief Energy & Climate Mieke Vercaeren former Advisor Karel Van Acker Professor & Coordinator

Electrabel GDF Suez

Triodos Bank

Luc Van Liedekerke Professor

Energy Efficiency Unit Manager

Lead Sponsor

Managing Director

Tania Van Loon

BASF BECO Belgium Bond Beter Leefmilieu Boss Paints Business & Society Belgium Cabinet of the Federal Minister for Sustainable Development, Energy, Environment & Consumers Cabinet of the Flemish Minister for Public Works, Energy, the Environment and Nature Cabinet of the Flemish Minister for Mobility, Social Economy & Equal Opportunities Leuven Materials Research Centre, KUL

Jerry Crombez

Senior Advisor

Pierre Klees

Honorary President

Philippe De Crom

Director

Gerrit-Jan Schaeffer

Director Energy Research

Koen Knippenberg

Director Quality & Infrastructure

André Pictoel

Chairman

Wim Lefebre

Technical Director Waste & New Energy

Piet Vanthemsche

Boerenbond Catholic University of Leuven

Karel Van Acker Professor & Coordinator Antoine Geerinckx

Managing Founder

Luc Rogge

General Manager

Mick Bremans

CEO

Bruno Defrasnes

Sustainable Development Manager

Antoine Geerinckx

Managing Founder

CO2Logic

Koen De Maesschalck

HR Manager

Filip Martens

General Manager

Johan Cardoen

CEO

Cropdesign

Jean-Vasco Degryse

Environment Coordinator

Deceuninck

Kurt Raumanis

Managing Director

Jim Williame

Chairman

Mick Bremans

CEO

Alexis Van Damme

Environment Coordinator

Electrabel GDF Suez

Gérard de Hemptinne

Chairman

Bruno Defrasnes

Sustainable Development Manager Electrabel GDF Suez

Jan Dewulf

Business Development Director

Vincent Dehullu

Business Developer

Kathleen Van Brempt

Minister for Mobility, Social Economy & Equal Opportunities

Stefan Vergote

Deputy Head of Unit Energy & Environment

European Commission - Environment DG

Freddy De Boever

Environment & Energy

Farm Frites

Lieven Vanstraelen

General Manager

Bart Diels

Partner Technology

Leen Verjans

Communication Manager

Karel Van Velthoven

Marketing Manager

Jan Declerq

Director Business Development, Sales & Marketing

Didier Goetghebuer

General Secretary

Jef Poortmans

Department Director Solar & Organic

André De Smet

CEO

Guido Wauters

Director Qesh and Organizational Development

Steven Luyten

Site development and Energy Manager

Wouter Vermeulen

Chairman

Bruno Vanderschueren

CEO

Lampiris

Roberte Kesteman

CEO

Nuon

Jan Verheyen

Spokesperson

Luc De Baere

CEO

Ivan Pollet

Research & Development

Didier Granville

Chief Marketing Officer

Luc Dekeyser

Director Knowledge Center

Mehdi Jehaes

Commercial Engineer

Alain De Cat

Business Unit Manager Energy

Dirk Le Roy

Managing Director

Ecopower Ecover

Electrawinds EnergyICT

VREG Waterleau

Chairman

Cogen Vlaanderen

EcoHeatSystems

VITO Volvo Group Belgium

Ronnie Belmans Professor

Managing Director

C-Power

Vinçotte Environment

AUTHORS VISION ARTICLES

Jean-Pierre Lemmens

Colruyt

Unizo Vinçotte Group

Lucie Tesnière Policy Advisor Peter Claes

Leuven Materials Research Centre, KUL CO2Logic Colruyt Group Ecover Electrabel GDF Suez European Renewable Energy Coucil

Managing Director

Febeliec

Rudi Thomaes Managing Director

Federation of Enterprises in Belgium

René Custers Regulatory Affairs Manager

FETRAPI Flemish Government

Flemish Institute for Biotechnology

Bart Diels

Technology Partner

Gimv

Jan Vande Putte

Campaigner Energy

Greenpeace Belgium

Jan Declerq

Director Business Development

Global Water Engineering

Steven Luyten

Site Development & Energy Manager

Hansen Transmissions

Johan Albrecht

Senior Fellow

Stijn Bijnens

General Manager

LRM

ICEDD

Luc De Baere

CEO

OWS

Imec

Luc Dekeyser

Director Knowledge Center

Alain De Cat

Business Unit Manager Energy

Imperbel – Derbigum

Dirk Le Roy

Managing Director

Indaver

Tim Nawrot

Professor

Karel Van Eetvelt

Managing Director

Jan Vannoppen

Director

VELT

Vincent Callebaut Architect

Vincent Callebaut Architectures

Fedesco Gimv Group Machiels

Ineos Oxide Kauri

OVAM OWS Renson Samtech SD Worx Seca Benelux Siemens Sustenuto

Dirk Fransaer

Managing Director

Adwin Martens

Coordinator

Hansen Transmissions Ineos Oxide Itinera Institute

SD Worx Siemens Sustenuto University of Hasselt Unizo

VITO VSWB

THE FIFTH CONFERENCE CLEAN - FOREWORD

Foreword by Jean-Pierre Hansen

—CEO, Electrabel

Energy is not an ordinary commodity. It is the key to our sustainable development, both economically and socially. It has a strategic aspect and at the same time a public service aspect. The energy issue not only affects the lives of every individual, community and business: it has a direct impact on our collective future. Wars have been fought over energy; to say they will be again is not mere pessimism.

Electrabel’s challenge is as simple to express as it is hard to meet: energy must be available to everyone at all times and in all places, at a reasonable price and without damage to our planet, its resources, its inhabitants and every living creature that makes its home here. Energy use has a direct impact on what we bequeath to future generations. In particular, it contributes to global warming. However, energy is also essential for our development. We therefore have to consider how to manage it responsibly – that is, sustainably. There are answers,

Electrabel’s role, however, goes beyond merely saying “less consumption, better consumption”. We have to give people the tools to achieve this, without reducing their quality of life but they are dependent on widespread mobilisation. It is no longer enough to wonder about the effects of climate change: it’s time to act, to reverse the present trends. Those who realise that energy is essential for growth and who are ready to reconsider their energy use, can help drive change. This change entails a new relationship between private individuals, economic actors and energy, between those who produce it and those who consume it, between those who make the rules of the game, those who apply them and those to whom they are applied: all these relationships need to be reinvented.

These new relationships are the cornerstone of our sustainable development strategy. We can only meet this challenge together. All together, each with his or her own part to play. Of course we need to modify our behaviour and cut down our energy consumption; by reducing our energy dependence we refuse to stand by and watch while our world deteriorates, and instead become positive drivers of a real transformation.

Electrabel’s role, however, goes beyond merely saying “less consumption, better consumption”. We have to give people the tools to achieve this, without reducing their quality of life. We also need better production: more electricity from less fuel, and consequently lower emissions. That is the ‘backbone’ of our plan “Together for less CO₂”: that, and more. Electrabel is also committed to a richer dialogue with citizens, local communities, businesses and government authorities; and also with its own staff: our starting-point, indeed, is to practice ourselves the new behaviour we preach to others. Our plan is not achieved nor finished: we can only progress by working together.

THE FIFTH CONFERENCE CLEAN - Introduction

1| Introduction “For a successful technology, reality must take precedence over public relations, for Nature cannot be fooled.” Richard Feynman, US educator & physicist (1918 - 1988)

arch 20, 2009 - At the time of writing the world economy is in the doldrums. Markets are falling, companies are going bust, people are losing their jobs and possibly their homes—the economic news is uniformly negative. It is unclear how far we still have to fall. Some say a long way yet, with plenty of misery to come. At the time you read this you may know more, or possibly less. So why on earth publish this edition on energy and the environment? Who cares in times like these? We are tackling this issue because it remains, notwithstanding the economic crisis, the most fundamental set of challenges we will be facing in the coming years and decades. The bottom of the crisis will be reached, sooner or later, and as soon as it does the same dynamics will come into force that placed this topic on our agenda in the first place. The oil price will increase and again put strain on the global economy. CO₂ emissions will continue to increase, to the alarm of climate scientists. Our roads will clog up and continue to spew toxic smog. In sum, we will continue to poison our world and ourselves at dramatic pace, and be confronted with increasingly nasty symptoms proving that this is an unsustainable state of affairs.

Fortunately, change is afoot. The EU climate plan was pushed through, the new US administration is resolutely pursuing a new ‘green economy’, and even China is talking green. Investment in renewable energy has exploded worldwide. Globally, and locally here in this country, we are about to embark on a radical transformation of our energy system. In addition, there is a growing call to fundamentally transform our current industrial model, a linear model that chews in prodigious quantities of primary resources at one end, and spews out toxins and useless waste at the other end.

Make no mistake; we are only in the starting blocks of this process. The Kyoto Protocol, the EU climate policy—these are great political and diplomatic achievements but they are only a policy framework. Awareness of the problem—thanks to the likes of Al Gore—has also changed dramatically. But the real work has only just

begun and the impact on our day-to-day lives is as of yet barely noticeable. The actual process of transformation, once it gets under way properly, will have a tremendous impact. For one, it will cost this country a great deal of money. Massive new electricity generation capacity will be built and the electricity networks will be adapted. Industry (and indirectly consumers) will be paying for its emissions and investing in energyefficiency measures. Companies both large and small will need to spend their way into compliance with ever more stringent environmental legislation. Households will need to renovate their homes. Also, we will need to think and act differently. Many companies will need to change their strategy and business model if they wish to survive. Individuals too will need to adapt to higher energy prices and its impact on heating, transport and food prices. The above is largely a given—it will happen, whether we like it or not. Where we (as a nation, as a region, as a business) do have a choice and a rather fundamental one at that, is in the approach we take to these challenges. Key here is whether we frame the challenge as a cost or as an investment. If we see it purely as a cost, as a burden we have to carry, then we will likely do everything we can to minimise the cost. The cost will remain unavoidably high, however, and we will simply get poorer. Fortunately we are seeing serious commitment from policy makers and enterprise to approach the energy and environment issues as an opportunity for developing innovative and export-focused industries. Thus, Flanders’ new strategic plan Vlaanderen in Actie (or VIA), identifies energy and environment (‘green cities region’) as one of the six ‘breakthroughs’ that will help Flanders become a top five European region by 2020 (in per capita GDP). Investors are taking interest too, with the key venture capital players setting up clean tech divisions. By investing proactively in R&D, in pilot projects and installations, and by taking a head-start in cleaning up industry, building new energy infrastructure and new waste (or materials) management systems, the objective is to develop world-leading companies and expertise in the broad domain of energy and environment.

THE FIFTH CONFERENCE CLEAN - Introduction

This is a global transformation; thus, by taking the lead we put ourselves in the position to sell our technology and know-how to the rest of the world as their investments ramp up. Clearly, however, we are not the only ones to have thought up this plan. In fact, Germany, Denmark and Spain have trail blazed this path before us. Nonetheless, the opportunity remains great. There is tremendous expertise at our universities and research centres, there already are a number of highly successful clean tech exporters, and there is broad commitment from government, business and the energy sector to begin work on transforming the energy system. In this edition of The Fifth Conference we take a closer look at this theme. Three key questions run through our investigation: firstly, how ‘clean’ (or dirty) is this country’s economy? Secondly, how can the average company in this country anticipate on (prepare for) the coming changes? Thirdly, what potential is there for developing eco-business or clean tech? Essentially, this project is about vision, about imagining a future where things are different and better, not just incrementally so, but radically so.

THE FIFTH CONFERENCE CLEAN - INTRODUCTION

Belgium looks to become a world leader in ecobusiness —Rudi Thomaes

Day by day it is becoming clearer that a rising population, global economic growth and changing consumption patterns are placing an increasingly heavy strain on our planet. The rising demand for energy and crucial efforts to reduce CO₂ emissions are intensifying pressure on corporate players to move to the next level and take action to combat climate change. In recent years, many businesses have made considerable progress in this regard, however they still have a crucial role to play in safeguarding our planet. In light of this situation, FEB – encouraged in part by its new president – has for some time now been making the issue a priority on its agenda.

There are two main ways in which businesses can help to create a more environmentally friendly economy. First and foremost, they can take their own internal measures to reduce their environmental footprint. Such measures may take the form of being energy-efficient (building sustainable offices, installing energy-efficient lighting, purchasing sustainable materials, etc.) and/or generating their own energy in a sustainable manner (e.g. using solar panels, wind turbines or cogeneration technology). They can also make a significant contribution by bringing to the market ‘green’ products, technologies and services capable of meeting today’s – and tomorrow’s – needs in an efficient manner. To gain a better understanding of how businesses can play their part in combating climate change, the business school Insead produced a research report for FEB entitled Greening the Economy: Creating a Climate for Change. The study confirms that European industry is a world leader in terms of efficient use of energy. Europe also scores highly in ecoinnovation in general and patent registrations in the fields of renewable energy, waste management and motor vehicle abatement technologies in particular. By contrast, however, we ranked less highly when it came to investment in clean technology (measured in terms of venture capital (VC) investment) and indeed lag some way behind North

America in that regard. Cleantech VC investment has been rising substantially in both Europe and North America over the past seven years but in 2007, for example, the Insead study recorded annual investment in cleantech VC of approximately USD 3,750 million in North America as compared with just USD 1,250 million in Europe. Eco-business is growing rapidly, too, not unlike the growth of the ICT market during the 1980s. There are nevertheless differences between the two models, though. Rising oil prices and national climate targets are two unprecedented factors driving forward today’s worldwide cleantech market. The latter is therefore more attractive than the ICT market in which companies had to make the running themselves and actively ‘push’ mobile Internet technology and other applications. Moreover, the world economy is no longer run by the same players as it once was for it is no longer the G7 but the BRIC (Brazil, Russia, India and China) and Next 11 countries (emerging economies including Egypt, Indonesia and South Korea among others) which will call the shots. Cleantech is therefore a higher priority than ever before from a geopolitical standpoint. Europe has the key tools it needs to be able to compete effectively and, indeed, to conquer the global ecoinnovation market. But with America raising its game, Europe absolutely cannot afford to miss this opportunity.

Eco-business is growing rapidly, too, not unlike the growth of the ICT market during the 1980s. There are nevertheless differences between the two models. The same applies to Belgium. Many Belgian companies have the expertise and knowhow to carve out a pivotal position for themselves in this market. They also have a great deal to contribute in terms of worldwide technology transfer and exchange of best practices with a view to becoming as energy-efficient as possible, reducing CO₂ emissions and promoting renewable energies. If we look at European export figures in detail, we see that five countries account for 75% of ecoindustry exports: Germany, the United Kingdom, France, Belgium and Italy. Belgian eco-businesses make a significant contribution to global environment and climate challenges. Strangely enough, though, they do not yet enjoy the profile they deserve at international level. In a bid to rectify this situation, FEB is seeking to place additional emphasis on Belgian expertise and knowhow during economic missions abroad during late 2008 and throughout 2009. Together with its sectoral federations FEB has put together a brochure on Belgian ecobusiness (entitled Belgian Eco-business: leading the

way ) intended to showcase the range of products and services Belgium has to offer in the field of renewable energy, energy efficiency, water management, waste processing, air purification and soil decontamination. During the most recent economic missions to Egypt, Argentina and Indonesia, this initiative by FEB certainly appeared to achieve the desired effect and promote Belgian eco-business extremely well. Meetings during the mission revealed that the products, services and technologies produced by Belgian eco-businesses appear to be tailored very much to these countries’ requirements.

THE FIFTH CONFERENCE CLEAN - INTRODUCTION

Country share in motor vehicle abatement patents

The Egyptian government, for example, has set itself the goal of generating 3% of the country’s electricity from renewable sources by 2010, with this target figure set to rise to 20% by 2020. Although unable to generate vast quantities of energy from renewable sources on account of its relatively meagre natural resources, Belgium nevertheless boasts many innovative companies with the expertise and knowhow to be of assistance to the Egyptian government. Hansen Transmissions, a market leader in gearboxes, is just one example but there are many other companies, too, with specific expertise in wind energy and which can therefore make a valuable contribution. Belgium’s offshore wind farm in the North Sea is a shining example of advanced environmental technology in engineering terms as well as with regard to dredging and laying the necessary pedestals and other structural components at sea. No other wind farm in the world lies so far offshore and extends so far down beneath the ocean floor. Many Belgian companies have also carved out a niche for themselves in solar energy, too, and a fully fledged chain has emerged, running from the production of photovoltaic cells (Umicore and Photovoltech among others) via the production of modules (Soltech) to the assembly of solar panels. From an architectural standpoint, roofing specialists Eternit and Koramic have also developed an integrated roof solution for solar panels.

The realisation that supplies of raw materials are finite and that the world’s rising energy demand as a result of ever increasing levels of consumption will not be met unless we adopt renewable alternatives is also being brought home to countries undergoing profound economic growth. In late 2007, for example, Argentina pledged to adopt a more prudent approach to energy usage across the board (authorities and general public alike). There are many leading Belgian companies capable of fitting out buildings with the appropriate technology and thereby able to support Argentina in achieving its goal. Recticel, for example, can supply topquality insulation panels while glass films manufactured by Bekaert can effectively block out over 99% UV solar rays. Major cities such as Buenos Aires are often faced with environmental problems such as air pollution, contaminated water and mountains of waste. For instance, Buenos Aires itself has 286 bus lines and Van Hool’s hybrid bus could well be an ideal solution in this respect. Such buses could also help to improve the city’s air quality considerably.

others 4%

EU 51 %

United States 16 % Japan 29 %

Source: Insead

Country share in renewable energy patents

others 19 % United States 18 %

EU 45 % Japan 18 %

Source: Insead

Annual Clean Tech Investment, US and EU (2000 - 2007)

4500

4000

As a result of rocketing economic growth and minimal enforcement of regulations, most industries in Indonesia channel their wastewater directly into rivers without first decontaminating it. This results in watercourses becoming polluted and causes water-supply problems in downstream areas. The Indonesian government has compiled a medium- to long-term development plan (2004-2009) and is actively seeking ways in which to limit damage to the country’s waterways. With wastewater purification a priority in Indonesia, there are now additional

opportunities for Belgian companies, which can offer wastewater-purification technology, drinking-water stations, technology for assessing and monitoring water quality, desalination processes, dredging technology and many other solutions besides. There are also openings in the tourism sector. Belgian company Realco, for example, produces environmentally friendly detergents which not only clean but also enhance water quality. For further information visit www.vbo-feb.be. Rudi Thomaes is CEO of the Federation of Enterprises in Belgium

3500 3000 2500 2000 1500

1000 500 0 2000

2001

2002

2003

2004

2005

2006

2007

Source: Insead

Eco-industry exports in the EU-25

others 26 % GB 12 %

FR 10 %

DE 37 %

BE 8%

IT 7%

Source: Ernst & Young

THE FIFTH CONFERENCE CLEAN - INTRODUCTION

Sustainable business - what it means to me

—Mick Bremans

Sustainable business is all the rage now. See it headlined on the cover of every business magazine, telling us that this is the way we should run our companies, run our local governments —everybody seems to be borrowing the term to accentuate what they are doing and how. I fear, however, that this oversaturation has left the concept somewhat devoid of meaning. The word ‘sustainable’ sounds almost as puzzling today as it did when it first appeared in 1987 in the Brundtland Commission’s report Our Common Future. At that time, the world was just being introduced to the concept, but now it seems that the world is simply confused. ’To be or not to be sustainable, that is the question.’ So, what does ’to be‘ sustainable mean to someone who has been Managing Director of Ecover for more than 15 years? I suppose it can mean many things. For me, two things stand out: firstly, it is an attitude, and secondly, it is an ongoing process.

As an attitude, ‘to be’ sustainable means being accountable to the generations that follow. The next generations are your children and their children and it is simply wrong to create problems for them that they will need to pay for later. We can be sure, they already will be inheriting a fair number of problems, from depletion of natural resources, to pollution (air, soil, water, food), to global warming and climate change. We need to understand that environmental damage often is not an acute problem; on the contrary, studies show that much damage persists for decades if not semipermanently. Just look at some of the toxins that we find today in our habitat: high concentrations of DDT in our Flemish waters can still be found, even decades after we banned the stuff.

Studies also show that our greenhouse gas emissions will cause near permanent climatic change. Since we cannot turn back the clock we need to act now to start minimizing our destructive impact. Otherwise our children, or their children, will have a truly tremendous problem to deal with.

activities. This was groundbreaking stuff and no way near what we were taught in school. Our whole industrial model since the industrial revolution is based on a linear model assuming near limitless natural resources and tolerance to pollution. So yes, it is fair to say we have improved in recent

We need to continue finding new and improved ways of producing. There are a few companies out there who are truly making a difference, but to say that they are 100% sustainable or environmentally friendly is nonsense. The second point on this matter that really stands out is that the work we do regarding sustainability never ends. Every morning when I get up for work, every evening when I leave for home, I face the knowledge that my job in managing a sustainable business is never complete. If we had a sustainability report it would only reiterate how much work still lies ahead; how we need to drive innovation across the company, continuously measuring and enhancing the ecological performance of our products, using our energy and resources more efficiently, focusing more on our employees, reviewing and improving our supply chains, upgrading our production processes, developing promotional activities driven by sustainability, communicating our messages to a wider audience, all of this and more means that for me the concept of sustainability is an openended and ongoing process. Almost 30 years ago, Ecover looked at the laundry detergent business from a different angle. We started with the products themselves and then, over the years, this evolved into building an ecological factory. Today we continue to look for the next step, investigating the role of sustainability in all our

years and we have become more energy efficient and we generate much less hazardous waste and emissions. Yet, as the world economy continues to grow, so our mountain of waste and pollution concentrations will continue to grow in absolute terms (although perhaps less rapidly).

We need to continue finding new and improved ways of producing. There are a few companies out there who are truly making a difference, but to say that they are 100% sustainable or environmentally friendly is nonsense. Let’s be honest, most companies are inherently ‘unfriendly’ to the environment – they may have become less unfriendly over time, but to say that one is truly sustainable or environmentally friendly requires a fundamentally different industrial model. Unfortunately, I don’t believe any company has truly gotten there yet. Not even Ecover and that is why it is a learning process. Today it is more vital than ever that we evaluate all our processes from a long-term perspective. As a company committed ‘to be’ sustainable and to integrate it into everything we do, I can only say that we have done a great deal so far but still have a long way to go. Mick Bremans is CEO of Ecover, a leading manufacturer of ecological detergents and cleaning products

THE FIFTH CONFERENCE CLEAN - INTRODUCTION

THE FIFTH CONFERENCE CLEAN - Introduction

Investing in energy & environment —Gimv Launched Cleantech Division

Set-up nearly 30 years ago, Gimv is the largest private equity group in Belgium and an increasingly important player in Europe. Having successfully navigated the dotcom bust and other recessions through a reasonably conservative investment approach in growing markets, the company today is reputed for its sustainable growth strategy. Not one to blindly ride the market’s ‘bubbles’, Gimv invests in companies that have the potential to deliver significant and sustainable economic value.

emerged as a sector in its own right, both in the way the sector identifies itself and the way investments vehicles are beginning to organise themselves.

The company concentrates its energy in two areas: buyouts and growth financing and venture capital (focussed on high-tech start-ups). On the venture capital side, the company plays a particularly prominent role in the European technology and life sciences sectors. Many of the most successful Belgian high-tech companies, such as Option, LMS International, Metris, Telenet, Galápagos and Ablynx, were established with the help of Gimv.

Today Gimv is at a point where a fully equipped team is in place, with Cleantech a division in its own right. Bart Diels, Partner in the Technology team, takes responsibility for Cleantech and now leads the new division. The division has taken shape with some members of the team appointed from within Gimv, and some sourced externally —with an eye on building a broad range of competencies.

In January 2009, Gimv launched a new Cleantech division. Housed within the successful Venture Capital group, Gimv seeks to make a substantial economic contribution to this increasingly important sector.

Building the Cleantech Division Gimv first became involved in Cleantech in 2006. Applying its signature cautious approach, Gimv first adopted a fund-to-fund approach. As opposed to investing directly in Cleantech companies and setting up a dedicated division, the company first made an investment in another fund—Emerald Technology Ventures, an existing Cleantech market player. This company focuses on three areas: renewable energy, advanced materials (to combat the depletion of natural resources) and water solution companies (addressing urban growth and urbanization). When Gimv first undertook this venture, the sector’s evolution was still largely uncertain. Even though the underlying trends were clearly powerful, one could argue that the label ‘Cleantech’ was unnecessarily hyped. Innovations in the domains of energy and environment are important, but could be covered anyway via Gimv’s Technology and Life Sciences divisions. Today, however, it is clear that Cleantech has

With the market further solidifying in 2007, the company made the decision to increase its commitment via a two-pronged approach: it increased its investment in Emerald, and, significantly, started recruiting specialists to form an own Cleantech division.

Core competencies Gimv’s Cleantech division is a venture capital business and it is this competency—i.e. managing the full cycle of financing high-growth innovative companies—that will determine the success of the business. This is why

the Cleantech team has been recruited mainly from Gimv’s Technology division—where the venture capital track record has been particularly strong. Bart Diels played a key role in some of Gimv’s most important venture capital investment and currently still serves on the board of several high-tech companies (e.g. Metris and Clear2Pay). Besides the core VC competency, the Cleantech team represents an eclectic mix of experience and skills, from solar technology, energy generation and materials to more general Cleantech investment experience. The Cleantech team also benefits from working within a larger investment group. The ties with the Technology and Life Sciences divisions are especially important, given the overlap in technology domains. But also the links with the Growth Financing and Infrastructure Fund DG Infra+ are useful, since they too are active in energy and environmental industries (as illustrated by the investment in Electrawinds). The Cleantech team will focus on the European market and hence the team too has a distinct pan-European profile:

Bart Diels – Partner Cleantech ++ With expertise in different technology sectors and seats on a number of the boards of high tech companies, Diels is responsible for all Cleantech investments and coordinates this activity with the different business units of Gimv.

Sofie Baeten – Associate Cleantech ++ Joining Gimv in 2008, she gained two years of venture capital experience as investment manager at Baekeland Fonds II, a venture capital fund of the University of Ghent. She also held the position of CEO of Viacatt, a small start-up specializing in Ru-catalyst development and R&D and business development roles at Bekaert.

Hansjorg Sage – Partner Technology ++ Prior to joining the team in 2008, Sage was a director in 3i’s global Venture Capital team, where he focused on hardware-related investments in European technology start-ups, mainly in the electronics, semiconductor and Cleantech sectors.

THE FIFTH CONFERENCE CLEAN - INtRoDUCtIoN

1. Sophie Baeten 2. Bart Diels

Johan Reynaert – Associate Technology + Joining Gimv in 2007, Reynaert previously worked as an International Business Development Manager at IMEC leading prospection and setting up collaboration agreements with key players in the semiconductor and solar energy industry worldwide.

Eline Talboom - Senior Analyst Technology + Before joining the team in 2000, Talboom worked with Sydes, the investment vehicle of the VUM Group, the leading Belgian newspaper publisher. Within the team, Eline is focussed on market analysis.

Today, Gimv’s Cleantech team is small but able to draw upon complementary experiences and skills, both at the level of the individual team members but also at the level of the broader group, with its strong track record in high-tech investment. This is critically important because Cleantech overlaps so many other industries and technological domains (semi-conductors, biotech, infrastructure, automation to name a few). Gimv is well positioned in Cleantech because it already covers many of these diverse areas—Cleantech in many ways is a horizontal layer of synergies on top of Gimv’s existing competencies, as opposed to a vertical speciality in its own right. Gimv’s new Cleantech division is an important step in the group’s growth strategy in the European market. Typically for the company, Gimv was not the first to set up a Cleantech investment arm-but once committed it managed to put in place a pan-European team, firmly embedded in one Europe’s top performing venture capital groups.

BIO Gimv

+ www.gimv.com + Largest private equity company in Belgium + Key investor in many of the country’s most successful innovators

The Fifth Conference with:

OBJECTIVES At the beginning of 2009 the Cleantech division formally launched. It expects to carry out its first transactions in the European Cleantech arena across the course of 2009. In the longer term, it wants to establish itself as one of the most important Cleantech investors in Europe. As mentioned, Gimv’s Cleantech division is a venture capital business. As a result, it is interested in innovative, high-growth start-ups. Growth or infrastructure financing, such as Gimv’s investment in Electrawinds, is not its remit. This latter investment was handled by Gimv’s Infrastructure Fund DG Infra+.

Today Gimv is at a point where a fully equipped team is in place, with Cleantech a division in its own right.

At this point, the Cleantech division is not specialised in a particular technological domain or industry sector. Instead, it will strive to build a diversified portfolio covering renewable energy, energy efficiency, water, recycling, electric vehicles, batteries, etc. Also, as a venture capital initiative, the Cleantech division will focus more on innovative technology, components and subsystems, as opposed to complete systems or full projects. Through the study of key trends and drivers in the main Cleantech areas the team will be looking for companies that have the potential to substantially improve or even radically change the way we produce and consume energy, the way we recycle goods, the way we limit emissions, ...

May 2009, Gimv invested in the first financing round of the Belgian cleantech company NovoPolymers (www.novopolymers.com). NovoPolymers focuses on developing and producing innovative polymer films that are used for laminating breakable solar cells. The investment in NovoPolymers stresses Gimv's ambition in the cleantech sector

THE FIFTH CONFERENCE CLEAN - INTRODUCTION

Eco-efficiency, the future: not less, but different —Dirk Fransaer The Brundtland report “Our Common Future”, (Oxford University Press, 1987) introduced, or rather “popularised” the concept of sustainable development, often defined along the lines of: “sustainable development is development whereby the present generation meets its needs without limiting the ability of future generations to meet their needs”. Since then, with oil crises, the cost of energy, raw materials and food rising further, impending world shortages of food and water, and the increasing globalisation of the economy, it has become increasingly clear that the future will be sustainable or will not exist. Much less clear, however, is what that sustainable future should look like.

Sustainable development demands an overall vision on the interplay between industry, environment and people, the so-called 3P’s: People, Planet and Profit, which respectively stand for the social (people), ecological (planet) and economic (profit) dimensions of the concept. To achieve sustainable development one must strive to make these three P’s (that is: environment, society and economy) work together harmoniously. Since 2002 and the World Summit [on Sustainable Development] in Johannesburg Profit has been “replaced” with Prosperity, in order to make social gain part of the equation alongside economic gain (Profit), This changed interpretation is symptomatic of the clarifications and good

intentions that surround the concept “sustainable development”, whereby sustainable development has become an academic and political catch-all phrase encompassing practically all our current problems, with an increasing focus on important social needs in Western Europe. Its implementation in the arena of economy, industry and environment is then often reduced to two approaches, either ecological thinking (”An Inconvenient Truth”, the book by Al Gore about the problems of climate change), or a “greening of the economy”, as recently proposed by the VBO (the Federation of Enterprises in Belgium), and Agoria (the Federation for the Technology Industry in Belgium). The confusing definition of “sustainable development” and the discourse surrounding it mean that it has relatively little or no resonance or understanding among the public at large. Nevertheless there will only be a future if it is sustainable, if industry produces sustainably and consumers consume sustainably. But a sustainable economy does not mean that injustice or unfairness would necessarily be resolved, it does not imply equality among people, not for as long as the sustainable economy is based on the current economic model. And it is this economic model that in spite of trial and error – think of the current worldwide banking crisis – has brought us and the world unprecedented welfare (Prosperity), wellbeing and health. The quote of Winston Churchill about democracy also applies to the current economic model: “It has been said that

democracy is the worst form of government except all the others that have been tried”. To appreciate the vigorous strength of the current economic model one need only think of the hundreds of millions of Chinese, Indians and Asians who in 20 to 25 years have made an enormous economic and social leap ahead thanks to the adaptation of our economic model. That proved to be far more efficient than development aid during the same period. But in that same period the model did not succeed in ridding the world of poverty, also not in China, India or Asia. What, then, should this sustainable future look like? Also here in Belgium/ Flanders. Industry and business in general will increasingly evolve towards sustainability, as it increasingly focuses on integrating and improving the eco-efficiency of production processes and products. Eco-efficiency in this context does not mean less, but different. Production processes will be reconsidered so that applications which today still emit CO₂ in their life cycle and require energy from fossil fuel, will supply energy in the future. Typical examples of this are not only the current lowenergy houses, but houses which will supply net energy to the electricity grid over and above their own energy use. The cost of energy and the supply of natural gas or petroleum for heating and cooling of buildings will largely fall away. In summer the incoming solar heat will be stored so that these houses will remain cool and pleasant in summer without the use of expensive and

The confusing definition of “sustainable development” and the discourse surrounding it mean that it has relatively little or no resonance or understanding among the public at large. energy-intensive air conditioning, and this heat will be stored in the ground. Afterwards, in winter, the stored heat will be recovered and will heat these same buildings. For such an approach one only needs a simple circulation pump, of the type that is already being used with central heating boilers, although the use of “high” temperature radiators (water of 40º to 60º) will be excluded. Underfloor heating on the ground floor as well as on other floors will become standard. Such underfloor heating is “low” temperature heating (20º to 30º), which is compatible with recovered ground heat. In addition, the buildings will supply energy to the electricity grid through the large-scale installation of PV panels, small wind turbines, biogas installations linked to mini-CHP, combined heat and power, etc... These systems will generate enough electricity for domestic use (mainly lighting) and for charging the electric cars in the garage or the driveway. The surplus of generated electricity will be injected into the electricity grid. Cars and transport will be or become electric. Alreadly, we are seeing the introduction of hybrid cars by Toyota, Lexus, Renault, etc… For automobile manufacturers these cars form the logical transition and stepping stone to fully electric cars. If car

batteries today can already guarantee enough capacity for an action radius of at least 400 km, then these cars would not only ensure much cheaper and more energy-efficient transport, but also greater comfort and ease of use. As a matter of fact, hybrid and electric cars were the first reliable cars. Only after the availability of cheap fuel on a mass scale since the 1940-50s did car manufacturers begin to rely more on combustion engines. There are, in fact, few other alternatives for passenger and goods transport in the offing. Only hydrogen is mentioned in this regard, but less and less. To this day hydrogen can hardly be produced sustainably. It is largely produced, directly or indirectly, on the basis of that same finite and expensive petroleum. At present sustainable hydrogen production would involve splitting water electrolytically with the necessary electricity coming from sustainable energy, wind turbines, PV panels. It is clear that, when one has the choice of propelling cars either electrically or via a detour (from electricity to hydrogen and back to electricity [via fuel cells in cars]), direct electric propulsion of transport is the cheapest and most effective way. In the distant future it is hoped that hydrogen could be produced directly from

THE FIFTH CONFERENCE CLEAN - INTRODUCTION

water and solar rays. However, this still requires much research and no certainty exists that it will be successful. What is gradually becoming a realistic use of hydrogen as energy carrier, though, is the production of hydrogen from the mud and sludge of water treatment installations by “cultivating” specific hydrogen-producing bacteria. The hydrogen thus produced can supply enough energy to drive domestic water treatment installations, which currently entail a high energy cost. In this way such water treatment installations can become self-sustaining and profitable entities which contribute to sustainable living in urban areas. In this context it is clear that sustainable energy will be electricity. At present electricity in itself is not yet sustainable because of its production by means of gas and coal power stations, nuclear power stations, etc… Solar panels, wind turbines, hydro-electric power stations, bio-gas power stations, deep geothermal power stations all supply sustainable energy and do so in the form of electricity, either linked to the production of heat and therefore CHP or combined heat and power, or otherwise. The fusion reactors of the future, too, will supply electricity. Sustainable energy will therefore be electric. Such a conclusion also has implications for the distribution of electricity. It means that the transport of the future will require charging points alongside roads, motorways and in car parks. These charging points will withdraw relatively large quantities of power from the grid in short spaces of time,

not so much individually but through the aggregate of the millions of passenger cars and trucks that drive on our roads every day. This involves a rethink of the electricity grid and attention being given to the stability of this grid. Attention to grid stability will also be dictated by the many, small and large power stations that will exist. Every wind turbine, every PV panel, in fact every house can supply a net contribution to the grid and possibly also withdraw energy from it. The current electricity grid is not adapted to or designed for such use and distribution. It is extremely well equipped to ensure the supply of power from a limited number of large production points (power stations) to all houses and to industry, not to inject electricity coming from these houses and industry into the grid. Here lies the first major but unavoidable technological challenge. Transport, passenger vehicles and trucks will withdraw power, but for most of the day and night these vehicles, including trucks, are actually parked next to the road, in car parks or at home. If they are then connected to the grid, these same vehicles can make a significant contribution to grid stability and even supply power to the grid. Electric cars do not only store electricity in their batteries when parked, but can also contribute to the stabilisation of the electricity grid by making electricity stored in the battery available during times of peak demand on the grid. This integration will require new software and hardware components linking up with

the numerous new products and processes that need to be designed. Such product and process renewal will extend to all branches of industry, e.g. also the chemical industry with sustainable chemistry, through the integration of the metallurgical industry and energy storage, rather than as energy guzzler. Examples of this, which will be realised in the short term, are the use of residual heat from blast-furnace plants and foundries so that other nearby industries or housing complexes do not need to install or maintain their own heating systems. Residual heat cycles can already be set up quickly, whereby residues of heat from factories or houses are distributed or stored for later use (storage) or consumed by another user (distribution). Thus, the heat from one production process (e.g. blast furnaces or the chemical industry) can be used, for example, to heat conservatories or houses. Heat (summer heat) can also be temporarily stored in the ground and recovered, often with a high rate of efficiency, in winter. Products will be drastically redrawn and redesigned, e.g. reusable or biodegradable carpet and floor covering, buildings which will warm and cool themselves, roads which supply heat to the environment and will therefore remain ice-free and maintenance-free, windows that will clean themselves and thereby supply energy to the environment, etc... Products could be developed in such a way that they are optimally recyclable or biodegradable. In this way the energy contained in the material will

be optimally used during incineration or composting. Recycling will then relieve industry from having to find new sources. In this context it should be noted that most metals, iron and aluminium can actually be recycled an indefinite number of time. Designing cars with a view to their practically complete recycling will ensure new material flows. In a growing automobile market new iron and steel are always required to make the steel plates from which cars are built. But when the market is stable and cars can be recycled, iron mines will be situated on the roads, in the garages and on scrapheaps. The iron processing industry would therefore revert from the places where iron is currently mined to the places where iron is consumed. Such recycling would thus set in motion a rethink of production processes as well as of the business concept itself.

In the 50s and 60s of the previous century Belgium could have set up a perfectly recyclable telephone system. After all, one could not buy telephones but had to rent them from the state monopoly RTT [Public Department of Telegraphy and Telephony]. With the appearance of telephones which one could simply buy and connect, telephone rental largely disappeared and a market for disposable telephones was created. If one wants to recycle these optimally, and in Flanders we are good at this with the separate collection and treatment of waste, a recycling system (Recupel), plus a regulatory framework to stimulate or enforce such recycling, is needed. It makes no sense to market a recyclable book such as “Cradle to Cradle Remaking the Way We Make Things” – a book that specifically deals with setting up recycling cycles and radical rethinking of

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THE FIFTH CONFERENCE CLEAN - Introduction

The innovation of the last hundred years has continually been guided, controlled and directed by a regulatory framework. products – only to find that no recycling cycle exists for such books and that it ultimately ends up on a rubbish dump – if it is incinerated it would probably yield the highest energy contribution – while normal books are recyclable and are already recycled in large numbers. This is an exciting future, which will be feasible if we commit to the necessary investments and obligations. Increasingly scarce resources will also stimulate this about-turn, alongside regulation by government. A few examples:

The regulatory framework is broader than the setting up or enforcing of recycling cycles. The innovation of the last hundred years has continually been guided, controlled and directed by a regulatory framework. At the end of the nineteenth century, after the invention of the combustion engine and the automobile, cars were being built all over the world, also in Belgium (Minerva). Since 1903, with the first manned aeroplane flight or rather aeroplane hop of the Wright brothers, aeroplanes have been built all over the world. These cars and aeroplanes were driven and flown without official approval, certificates of airworthiness, insurance certificates, driving or flying licences, traffic lights, air traffic control towers, etc… They were built by dozens of companies and small businesses in practically

all Western countries. Today only a limited number of large automobile manufacturers still exist worldwide. The aircraft construction industry is even more duopolistic, namely with Boeing and Airbus. In this process road transport became regulated by a string of certificates and regulations, amongst others the European norms for engines. Typical of this was the striving for a quantifying figure, in Flanders and Belgium for example the Ecoscore, indicating how the car relates to a number of environmental and energy norms such as CO₂ emission, NOx emission, noise, etc… The advantage of such a “figure” is the high degree of regulation which becomes possible as a result, not only in terms of e.g. a green car tax system but also in terms of the introduction of new models on the market. Already today the Flemish government specifies a minimum ecoscore for its commercial vehicles. By systematically increasing this minimum ecoscore over time, manufacturers will be forced to adapt to increasingly stringent environmental and energy norms, failing which their vehicles will not sell or sell less. A similar regulatory system which stimulates market introduction can be found in dozens of other examples such as the EPB (Energy Performance Decree) for the rental and sale of houses, K-values [heat transmission rates] of houses, etc…

Also part of this regulatory framework are certificates of airworthiness for aeroplanes, flying licences for pilots, international agreements around the use of airspace (Eurocontrol, FAA, CAA), international rules for the maintenance of aeroplanes (JAR) and all other aspects of civil aviation. A similar regulatory framework is to be found in the very extensive screening of new medication before it can be sold on the market. Today one would typically allow for an overall development cycle of about 15 years for a new medicine and a development cost of about 900 million Euro. It is clear that, while 100 years ago cars and aeroplanes could still be manufactured by artisans, today this is no longer possible. While 50 years ago Dr. Janssen in de Kempen stood at the cradle of Janssen Pharmaceuticals, testifying to his insight and innovation in healing processes, today this is no longer possible. And this applies not only to very prevalent diseases, but also to specific illnesses affecting only a few hundred or a few thousand people on a world scale. Regulation also plays an increasing role in other fields and places additional pressure on innovation and renewal. In Belgium, the beer country par excellence, there are fewer and fewer breweries, and not only as a result of globalisation. The number of traditional bakeries is diminishing. The number of outlets of pharmacies, the training of medical doctors, the establishments of physiotherapists, etc, are being regulated. Centralised enterprises, in such disparate sectors as beer breweries, clinics, bakeries,

automobile manufacturers, aircraft manufacturers, pharmaceutical industries, etc, can more easily comply with environmental demands, and make the necessary investments in innovation and product development, thanks to rather than in spite of their size. All these examples underline two elements: never before has so much innovation taken place in companies, but the road to market introduction is steadily becoming longer due to the regulatory framework and the impact of innovation on health care, the environment and energy. This trend will continue further. The market introduction of new technologies that use energy or raw materials in an unplanned way are discouraged from the outset. On the contrary, meeting norms and raising these norms will give rise to innovation and market introductions that increasingly meet the criteria of sustainable development and eco-efficiency. In this setting of norms one recognises a trajectory, moving from awareness making to knowledge development, to the establishment of norms, and to the gradual finetuning and adapting of those norms. An example of such a trajectory is REACH (Registration, Evaluation, Authorisation and limitations of Chemical substances). After the “unbridled” introduction of a batch of new materials in the 1950s and 1960s, including plastics, a process of awareness making arose around the impact of for example PVC, phthalates, so-called softening agents, bromides, CFCs in these materials or in the environment in general. CFCs

are a well-known example, whereby these gases were at first considered ideal due to their high inertia—they hardly react with other known substances—while today they are prohibited worldwide due to this same characteristic. This is becaue CFCs gradually drifted to the top of the atmosphere where, under the influence of UV-light, they disintegrated and were partly responsible for the reduction of atmospheric ozone. Softening agents, too, are a good example. Already in the 1970s and 1980s softening agents were prohibited in Japan in plastic bags used for drips, blood bags, etc, the content of which would come into contact with human internal fluids such as blood, serum, etc. The logic behind this was that these softening agents were released in the fluid during the sterilisation of these plastic bags, subsequently to be injected with the fluid into the human body. At that time this immediately posed an immense import barrier for similar plastic bags from abroad because at the time not a single other Western country besides Japan saw a problem with softening agents in such plastics. At present these softening agents are banned worldwide from products that come into contact with human blood and fluids, mainly due to the precautionary principle, and so the commercial advantage for Japan has largely disappeared. Here one sees a second element: such setting of norms can overtly or inherently create a significant commercial advantage. Let us go back to REACH for a moment. At present this only involves the

THE FIFTH CONFERENCE CLEAN - Introduction

registration, evaluation and authorisation of chemical substances. A next step is obviously the registration and evaluation of the production processes themselves as well as the evaluation, not just the authorisation, of these substances and processes. Both the above elements are regarded as rather inconvenient by big business. They give rise to costs over and above the already existing production costs. Locations are sought where cheap production is possible, which is understandable in the current economic model. As a result, industry and production are transferred to low-wage countries. But the criteria mentioned above only take account of the technological elements. However, sustainable production also relates to the social component. If the eco-efficiency, or the ‘sustainability’ evaluation of a product or process, were to take into account the labour costs, the existence or otherwise of a labour consultative model, social benefits for employees, etc, then technologically equivalent products and processes which emanate from Western countries would have a clear advantage. The calculation and processing of these parameters should be “simple” and reasonably straightforward. On this basis, companies and large multinationals with employee participation, and better pay and employment conditions should be able to sell their products more easily. Multinationals and their employees would gain significantly with such an approach. It would increase pressure in developing countries to catch up quickly not

only on a technological but also on a social level. Once multinationals understand these benefits they will become supporters of such an approach, rather than, as in the case of REACH, delaying the process as much as possible. Conversely, countries such as the United Kingdom, which expect little or no social dimension from the European Commission, could easily become obstructive. However, it is clear that the advantage of such an approach, provided there is an unambiguous definition which can be certified and validated, will, through the known principles of competition and free trade, provide strong leverage to implement sustainable business practices in the non-Western world. In this connection special mention of Belgium and Flanders is appropriate. It should be clear that stricter regulation will increasingly discourage small, medium-sized and start-up enterprises. If energy is sustainable, the local aspect of production and consumption will be taken out of the sustainability evaluation and multinationals will be better structured and equipped, also because of employee participation, to capitalise on sustainability. Flanders therefore increasingly needs big Flemish multinationals that anchor sustainable production in Flanders. Also the cost of innovation, to suddenly comply with the high sustainability criteria, will discourage the marketing of new products and will disadvantage start-up, small and medium-sized enterprises. As in the pharmaceutical industry at present, more money and resources

than ever before will be spent on innovation, but there will be less and less renewal. The entire process willl therefore lead to a “rigidification” of economic inequality over a period of several decades, to the benefit of the “West” or the countries which are economically the strongest and most developed at the time. The evolution to sustainability is, in other words, not a race to social equality, but a race to the maintenance and stabilisation of economic inequality, to the benefit of the strongest parties of the time, which at present include the big multinationals and the Western world as a whole. Dirk Fransaer is Managing Director of VITO, a leading Flemish research institute focused on energy, materials and environment

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

2| The Challenge of our Times “How can we dance when our earth is turning How do we sleep when our beds are burning”

Midnight Oil, from the track ‘Beds are Burning’

ack in the 80s, Australian band Midnight Oil became internationally renowned both for its rock music and its political activism. In those days we talked about the green ‘movement’, a fringe of society that fought for the conservation of our environment. Today the world is going green. So what is the problem exactly? Why is the entire industrial world preparing for a radical transformation of the energy system? Why are we in Belgium going to have to spend several billion Euros in the coming decades on cleaning up our industries and homes?

The problem is complex and very broad. Volatile oil prices, import dependency, nuclear risks, greenhouse gas emissions, global warming, rising sea levels, fine particle air pollution, NOX & SOX pollution, hazardous substances, carcinogenic substances... the list can go on. But conceptually we can simplify the issue since most of these challenges are interrelated. From our Belgian perspective it makes sense to look at the problem along two axes. On the horizontal axis we make a distinction between Energy & Climate on the one hand, and Pollution and Waste on the other hand. Along the other axis, we make a distinction between the base problems (e.g. global warming, toxins in surface water) and the challenges inherent in our response to those problems (e.g. reducing CO₂ emissions, building vast renewable energy capacity). Let’s take a closer look at each of these themes.

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

2.1| Energy & Climate

Fossil Fuels and Economics

o state the obvious, energy is fundamental to humanity’s progress. The problem is that about 85% of the world’s energy mix comes from fossil fuels. In Belgium, we are about 78% reliant on fossil fuels; with the remaining covered by equally contentious nuclear energy (renewable energy covers about 2-3% of our needs).1 The importance of this point needs to be understood in its proper context. Our entire economic and, one could argue, demographic system is dependent on fossil fuels. Most people associate fossil fuels—oil, natural gas and coal—with heat and engines. In other words, we burn the stuff. There is more to it though, as Michael Pollan sketched so elegantly in ‘The Omnivore’s Dilemma.’2 Indirectly, we eat fossil fuels too. The green revolution that transformed agriculture following WWII, and that in turn makes possible an expanding world population, is reliant on the nitrogen that we chemically extract from natural gas. To illustrate, the BASF plant in Antwerp is one of the country’s largest consumers of natural gas for the production of ammonia, a major precursor to foodstuffs and fertilizers.

Thus, we are fundamentally reliant on fossil fuels. Unfortunately, there are a number of problems associated with fossil fuels. Yes, they are running out, but as the World Energy Outlook 20083 report states, that is not the most pressing problem. In the years ahead to 2030, we are facing increasing price volatility, uncertain investment in new production (and hence supply), and most importantly, the impact of greenhouse gas emissions on the climate. In 2008, oil prices increased dramatically to peak at approximately $140 per barrel. Such price escalations place significant pressure on the world’s economic system, with some economists arguing that it helped trigger the economic recession we currently find ourselves in. Robert Ayres from INSEAD4, for example, posits that energy (expressed as ‘energy converted to useful work’) can be seen as a third factor of production, next to capital and labour. Ayres finds that his three-factor model is able to explain historical growth of the US economy since 1900 with remarkable accuracy. The key implication of this theory is that continued economic growth depends on a continued supply of cheap energy. In the past, the cost of energy has declined because new sources of cheap oil were discovered, extraction technology improved, and the energy-efficiency of industry, combustion engines, etc has gradually improved. All this seems to be coming to an end or at least slowing down markedly. New sources of oil and gas are increasingly difficult and expensive to extract (technically and geopolitically), which, in combination with increasing demand, is responsible for the dramatic rise in oil prices in 2007-2008. New advances in energy efficiency are possible, but will be increasingly expensive to achieve. And alternative energy sources (renewable and nuclear) to date are not proving cheap to develop. The point is that the world will need to get used to higher and more volatile energy costs, but this in the face of rising worldwide demand for energy. 1) Commission Energy 2030 (2007). Belgium’s Energy Challenges Towards 2030 2) Michael Pollan (2006). The Omnivore’s Dilemma. The Penguin Press 3) International Energy Agency. World Energy Outlook, 2008 4) Robert U. Ayres. “ON THE RELATIONSHIP BETWEEN ENERGY, WORK, POWER AND ECONOMIC GROWTH;” With thanks to Filip Vandeputte from BECO for pointing us to this article

From a Belgian perspective, we face the additional problem that we are 100% dependent on oil and gas imports from geopolitically unstable regions. We are exceptionally reliant on oil for transport (almost entirely), home heating and the chemical industry. On gas, we are particularly dependent for industrial applications and electricity generation.5 To sum up, our economy is inherently reliant on a secure and affordable supply of energy, but increasingly, this is will be neither secure nor affordable. And this is looking at it only from the perspective of fossil fuel supplies, when the most important factors we really ought to consider are the problem of greenhouse gas emissions and pollution.

Changing Climate

ow much do we know about climate change and the impact of our energy system? While a dwindling number of experts still try to question whether climate change really is happening6 and whether human activity is responsible, the consensus today (both scientifically and politically) is more robust than ever. The most credible source on the matter is the Intergovernmental Panel on Climate Change (IPCC), a scientific body established by the United Nations that is tasked with evaluating the risk of climate change caused by human activity (in 2007 it shared the Nobel Peace Prize with former Vice President of the United States Al Gore). In its latest Assessment Report7 in 2007 the IPCC makes a number of key conclusions. Firstly, warming of the climate is unequivocal. Recorded temperatures in the 1995-2006 period rank among the warmest in the instrumental record of global temperatures.8 Sea levels are rising faster: the sea level rose at an average rate of 1.8 mm per year over 1961 to 2003 but at an average rate of about 3.1mm per year from 1993 to 2003. Thus far, about half of the rise in sea level is ascribed to thermal expansion; a quarter is due to the melting of ice. And the ice clearly is melting: the Arctic sea ice has shrunk by 2.7% per decade since 1978 and the world’s mountain glaciers and snow cover are declining. The warming of the climate appears to be associated with increased rain in some parts of the world (e.g. northern Europe), more droughts in others (e.g. southern Africa), and a range of extreme weather events. Also, this is having an impact on natural systems, especially marine systems. Probably most critically, CO₂ emissions are acidifying the seas (the world’ oceans are 30% more acidic compared to pre-industrial times), which some scientists claim could lead to a mass extinction of sea life.9

5) Commission Energy 2030 (2007). Belgium’s Energy Challenges Towards 2030. 6) To get a gist of the sceptics’ frame of mind, read Christopher Booker’s articles, columnist for the Telegraph (www.telegraph.co.uk/comment/columnists/christopherbooker) 7) IPCC Fourth Assessment Report: Climate Change 2007 8) Critics argue that the planet has actually been warming since 1998. Indeed, the warming curve does stabilise from that period on but the overall trendline remains positive and the ice is melting more rapidly than expected. 9) Dr Carol Turley from Plymouth Marine Laboratory, chairing a session on the topic at the Copenhagen Climate Change Congress in March 2009. For a layman’s review of the problem see The Economist’s special report on the state of our oceans (30 December 2008).

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

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Graph Description: Atmospheric carbon dioxide concentration and mean global temperature during the past 1000 years. Carbon dioxide levels (blue line, left-hand axis) are given in parts per million (volume), temperatures (red line, right-hand axis) in degrees centigrade. Source: GNU Free Documentation License, Wikimedia Commons

Secondly, the IPCC states that most of the observed increases in temperatures since the mid-20th century is ‘very likely’ due to the observed increase in anthropogenic (human) greenhouse gas (GHG) concentrations (mainly CO₂, CH4 and N2O), which in turn is due to increased GHG emissions. Thus, the global atmospheric concentration of CO₂ increased from a pre-industrial value of about 280 ppm to 379 ppm in 2005, with the largest growth rate recorded in the 10-year period 1995-2005. Identifying the key culprit, the IPCC states that global increases in CO₂ concentrations are due primarily to fossil fuel use. Finally, the IPCC predicts that with current climate change policies, global GHG emissions will continue to grow over the coming decades. In these scenarios, fossil fuels will remain dominant in the global energy mix to 2030, with the result that CO₂ emissions from energy use will grow by 40-110% in the period 2000-2030. This will continue to drive global warming by about 0.2 C per decade. The IPCC predicts that during the 21st century world temperatures could rise by between 1.1 and 6.4°C and that sea levels will probably rise by 18 to 59 cm.1 However, the IPCC models assume a very slow (over thousands of years) melting of the Greenland ice sheet (at least, if the temperature increase is kept to approximately 2°C above pre-industrial times). There are scenarios, however, that posit a much faster melting of the Greenland ice, in several hundred years. Should this happen, we will be looking at sea level rises of up to 7 meters. An important caveat to this is that global warming and sea level rises are expected to continue for centuries, even if GHG concentrations were to be stabilised. In other words, the climate will continue to warm, no matter what we do. But if we do nothing, the impact is likely to be greater. This is an important point, similarly made in a recent paper by Solomon et al (2006).2 The authors argue that climate change due to increases in CO₂ concentration is largely irreversible for 1,000 years after emissions stop (due to a slower loss of heat to the ocean). Thus, if we manage to cap atmospheric CO₂ concentrations at about 450-600 ppm, we will need to expect irreversible effects, such as rainfall reductions in several regions, leading to “dust bowl” scenarios. 1) More recent scientific evidence presented at the Copenhagen Climate Change Congress in March 2009 (Arctic and Antarctic ice is melting faster than previously expected) indicates that sea levels will rise by approximately 1 meter 2) Susan Solomon, Gian-Kasper Plattner, Reto Knutti, and Pierre Friedlingstein (2009). Irreversible climate change due to carbon dioxide emissions. Proceedings of the National Academy of Sciences. February 10, 2009, vol. 106 no. 6.

The higher the level that CO₂ concentrations peak, the higher the long-term plateau of CO₂ concentrations (and thus higher temperatures, faster sea level rises, acidic seas, etc) we will need to live with. This is why it is so critically important to cap the concentrations as soon and at as low a level as is possible. The IPCC is somewhat conservative in its statements about ‘extreme weather events’ (typically worded along the lines of ‘it is likely that heat waves have become more frequent over most land areas’). John Holmes, UN under-secretary-general for humanitarian affairs and emergency relief coordinator, writes more forcefully in the Economist’s “The World in 2009.” Arguing that we need to prepare so much better for disasters, Mr Holmes claims that nine out of every ten disasters are now climate related. Also, recorded disasters have doubled in number from 200 a year to more than 400 a year over the past two decades. In a similar line, the UK Institution of Mechanical Engineers’ latest environment theme report ‘Climate Change: Adapting to the Inevitable?’ argues that we best start planning our major infrastructure now to deal with extreme weather events and sea level rises. If sea levels were to rise by 7 meters by 2250, then some major adaptations to existing infrastructure and the planning of new infrastructure needs to begin today. To conclude, climate change remains a hotly debated issue. But the science is pretty clear. There is scientific consensus that humanity is causing climate change, that the impact will harm us and the planet, and that we can, through emission reduction action, still have an influence on the severity of the problem. In the next chapter we look at what is being done about it.

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

2.2| Pollution & Waste Remember pollution? These days all we seem to talk about is climate change and greenhouse gas emissions. CO₂, the main greenhouse gas, is not classified as pollution because it is a natural component of the atmosphere and needed by plants in order to carry out photosynthesis. It may harm us indirectly, via climate change or even via increased ozone pollution,3 but it does not directly affect respiration. Lots of other substances, however, do have a direct effect on our health and our immediate habitat. Although it is true that enormous improvements have been booked in minimizing pollution and waste, it still exists and it still harms us. In Belgium, we are rediscovering air pollution, thanks in part to the smog alarms. Contrary to what people may think, the smog situation in Belgium has actually improved over the years. What has changed is our understanding of the health risks. As Tim Nawrot and his colleagues outline in their article on fine particulate pollution, the risks are very real. This is why the SMOG boards have begun to appear on our highways. But fine particulate pollution is just one part of the story. How bad (or good) is the overall situation in this country?

dangerous for human health than even PM2.5. The key culprits behind fine particle pollution: diesel motors (motorised transport and home heating), industry (the Ghent canal zone is particularly bad given the steel works and coal power plant) and agriculture. NOX pollution—the term itself sounds chilling, as it should, since it is nasty. NOx is a generic term for mono-nitrogen oxides (NO and NO2), which are produced during the combustion of fuels, especially coal and oil. In the air it reacts with other compounds to form nitric acid vapour, Ozone and a range of other toxic substances. These are at least one part of the fine particle story, causing lung damage, heart disease aggravation and possibly cancer. NOX clearly is not under control. According to the European Environment Agency, NOX emissions for the EU-27 as a whole are still 20% above the ceiling set for 2010. The main cause of this is the continued growth in road transport. Belgium, and Flanders in particular, are not likely to achieve the 2010 EU target. Oh, and NOx is a greenhouse gas too, contributing to the climate problem.

health effects of ozone read like a tobacco health warning: aggravation of asthma and chronic lung diseases, inflammation of cells lining the lungs, permanent lung damage in children, etc. Ozone harms vegetation and forests too—in Flanders we regularly exceed the EU-set limits on this type of pollution exposure. In terms of air pollution, mention must also be made of NMVOC, otherwise known as non-methane volatile organic compounds, covering substances such as benzene, ethanol, formaldehyde and acetone. While in Flanders much progress was achieved in the 1990s, the concentrations of carcinogenic benzene have stabilised since the year 2000 at around 1-1.5 µg/m3. This is lower than the EU target of 5 µg/m3, but it is important to note that individual exposure is much higher given the time we spend indoor (about double the concentrations of outside) and in traffic jams (several hundred times the average monitored concentrations). Again, the key culprit is transport, responsible for 88% of these emissions. Indoor, all sorts of volatile organic compounds are emitted by household products, appliances, wall and floor coverings, etc.

Air Pollution

ccording to the European Environment Agency, emissions of most air pollutants in Europe have fallen significantly since 1990, resulting in improved air quality. This is also true for congested Flanders. But problems remain, especially in four key areas: (fine) particulate matter, NOX, ozone and NMVOC.

Particulate matter pollution turns out to be more dangerous than previously thought. The bigger particles, the dust that irritates eyes, nose and threat—but not the lungs—are the least dangerous. Anything smaller than 10 micrometers in diameter, however, can reach deep into the lungs and thus cause a range of health problems. As a result, PM 10 and PM 2.5 (referring to their maximum size in micrometers) have been monitored for some years now. Although concentrations have declined markedly since the early 1990s, in Flanders the problem is not under control. In fact, according to Tim Nawrot from the University of Hasselt, Flemish air quality is one of the worst in Europe. Year average concentrations are still above the target set by the European Commission and the number of days per year that the concentrations exceed the ‘safe’ limit remains too high. Furthermore, it turns out that ‘ultrafine’ particles (PM 1 and PM0.1), not yet monitored systematically, are proving to be more 3) A recent study by Mark Jacobson of Standford University predicts that high atmospheric concentrations of CO2 will lead to higher levels of ozone pollution, which in turn could translate into an additional 22,000 deaths a year

Image shows the European mean tropospheric nitrogen dioxide (NO2) vertical column density (VCD) between January 2003 and June 2004, as measured by the SCIAMACHY instrument on ESA’s Envisat. Image produced by S. Beirle, U. Platt and T. Wagner of the University of Heidelberg’s Institute for Environmental Physics. Credits: University of Heidelberg

Ozone is another persistent problem, not the ‘good’ stratospheric ozone protecting us from UV radiation, but the ‘bad’ tropospheric ozone that we recognise as smog on a warm afternoon. This form of ozone is created when NOx and VOC (volatile organic compounds) emissions combine chemically with oxygen to form ozone. This chemical reaction is driven by sunlight; hence ozone typically forms in higher-temperature conditions in the late afternoon. In Flanders, the number of days that ozone concentrations exceed the EU target is far too high, with 2003 (65 days) and 2006 (46 days) being particularly bad years given the warm weather. The

Hold your breath

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

Water

Soil

ccess to clean fresh water is one of the most important drivers of human development. Looking at it globally, we seem to be heading for a water crisis.1 In brief, the argument is as follows. Firstly, demand for clean water is exploding, driven by an expanding world population (the world’s population is set to expand by 40-50% in the next 50 years) and the rapid industrialisation of countries like India and China (with their vast populations). In some areas of the world, however, water resources are limited, and this is likely to get worse as the climate continues to change (dry areas are getting dryer). The result: according to the IPCC as many as six billion people could face water scarcity by 2050. However, much will depend on how societies develop, since economic development and good water management clearly make a difference. Much of the water scarcity today is not linked to a lack of physical availability, but to poverty. In Europe, the picture is mixed. While we cannot yet talk about a water access crisis (although some areas in Europe are beginning to face water scarcity), we have since the Industrial Revolution polluted our river systems, marine waters and groundwater. In the past decades tremendous progress has been made in cleaning up the sewage and industrial waste that is pumped into the river systems. The water quality has certainly improved, but problems remain. In Flanders, for example, the Flemish Environmental Agency (VMM) highlights a number of problem areas in its environmental indicator report.2 The quality of surface water (e.g. rivers) remains poor. While industrial pollution has declined markedly, agriculture and households are the key culprits today. Firstly, our surface water is polluted with excessive concentrations of nitrates and phosphorous (from chemical fertilisers and manure), which continues to harm biological systems (e.g. fish). Secondly, there are still too many harmful chemicals in our water (from insecticides). Acute toxicity levels continue to be measured at several locations in Flanders, and the situation is not improving. In fact, there are increasing risks today due to the rising use of soil disinfectants. It also is striking how persistent pollution can be. For example, DDT, a toxic insecticide banned decades ago continues to be found in high concentrations. Similarly, PCBs (a type of organic chemical used in electrical equipment, banned in the 70s) still continue to be detected in eels. Finally, high concentrations of heavy metals continue to be detected in surface water. Zinc, for example, remains a key problem, but also cadmium and mercury. The sources of heavy metal emissions are complex and varied. While the quality of residential waste water has

1) A dominant theme coming out of the latest World Water Forum in Istanbul (March 2009) 2) MIRA-T 2007 Indicatorrapport

improved (since it is treated more effectively) heavy metals still reach the water via soil erosion and other means such as the wear and tear of vehicle tires. Fortunately, we do not need to drink surface water (swimming isn’t recommended either). Instead, for our water supply we rely on the more stable and higher quality groundwater. The problem here is that the Flemish groundwater systems are overburdened. As a result, Flanders has begun importing water from Wallonia. Looking at the water access issue more generally, Flanders actually rates as a region with a serious water scarcity. When the total water input (i.e., rainfall plus the water inflows via the river systems) is divided by the population size then we see a worsening water scarcity problem in Flanders. This is due to the region’s high population density (and slight increases in population). The fact that most of us do not actually feel any scarcity illustrates the importance of good water management. Nevertheless, it is clear that water resources are finite.

Watch the lead in that salad

While (until recently) not as visible in the general public’s environmental concerns, the state of soil is of critical importance. Soil is the basis for everything we eat and it affects the quality of groundwater. The main problems at a European level are the loss of top-soil (the fertile layer, needed for agriculture), soil contamination and acidification. A key challenge in this area is that we lack information about possibly contaminated areas. Thus, in Flanders approximately 76,000 parcels have been identified as being at risk and are on track to be assessed. There are likely to be many more, however, about which we know nothing. This was well illustrated in a recent Radio 1 programme that looked into possible contamination of residential vegetable gardens3. It commissioned a lab to analyse the vegetables from 13 vegetable patches located across Flanders. In 7 of the 13 gardens at least one legal norm was exceeded, mainly due to the presence of lead. In two gardens the concentrations were found to be particularly high. Also, the presence of banned insecticide DDT was detected in two of the gardens.

3) Peeters en Pichal, Radio 1, September 2008.

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

Waste & materials

t the input side of our economy a vast amount of raw materials—minerals, metals, wood—are consumed. According to the European Environment Agency (EEA), the per capita volume of resources consumed in Europe has remained reasonably stable over the past two decades, at about 15-16 tonnes of material per capita per year. That is a lot, just think about it. At the other end of the system we generate waste. In fact, the EEA notes that about one third of resources used are turned into waste and emissions (about 4 tonnes of waste per capita per year). The projections are that resource use and waste will gradually increase.

In Belgium and Flanders a similar pattern is evident although great progress has been made in the recycling of waste. In Flanders about 70% of residential waste is selectively collected (e.g. plastic, paper, metals, glass, garden refuse, etc), most of which is recycled or composted. The rest is incinerated, often with energy recapture. That is a significant achievement. Unfortunately, residential waste is only about 10% of our total waste mountain. The rest is generated by business—industry, construction, agriculture, retail & services—and this flow continues to increase in line with economic growth. But also here about 70% is ultimately recycled or used as a secondary raw material.

Braungart using their concept of ‘Cradle to Cradle.’4 The problem with minimizing resource use, energy use, emissions and waste is that given projected economic and population growth we are unlikely to achieve much in absolute terms. Also, much of the ‘low hanging fruit’, i.e. the easy efficiency gains, has been picked. This is clearly illustrated by the Flemish environmental indicators: while tremendous progress has been made in the past, in the last decade we have struggled to deal with a number of recalcitrant problems like CO₂ emissions, air pollution (fine particles, NOX, ozone, NMVOCs) and water pollution (nitrates, heavy metals). The situation is likely to get worse because the EU’s pollution legislation will probably become more stringent. The solution here is not simply to try work even more efficiently, but to work differently—eco-effectiveness, as opposed to ecoefficiency in the words of McDonough and Braungart. Indeed, the challenge is beginning to be embraced in Flanders, witness the Plan-C initiative (see Chapter 5), but again, like the energy & climate story, we are talking about a rather fundamental change to our industrial system. It will not be easy.

Health impact

While the waste management battle is slowly being won in Flanders, the problem today is being reconceptualised around materials management. With reason, since the linear industrial model (raw material in one end, waste out the other) is rapidly proving unsustainable. There are three main axes to this argument.

What is all this pollution costing us in the state of our health? According to the European Environment Agency, the best-understood health impacts pertain to air pollution, water quality and insufficient sanitation. Less well understood but of increasing concern are hazardous chemicals and noise pollution.

Firstly, the current system is leading to resource depletion and environmental pressure. Ultimately we will be faced with resource scarcity problems, first in areas like fossil fuels and water, but later in metals, minerals and land. In the shorter term, however, the high levels of consumption create environmental pressure in developing regions (witness the new ‘scramble for Africa’ driven by the Chinese economy) and increasing import dependency for countries like Belgium. Secondly, there is increasing recognition that we know far too little about the environmental and health impacts of the materials we use, process and dispose off. About most of the thousands of different types of chemical substances that exist today, we know almost nothing about how they pass through the environment (to what extent they accumulate, disperse or transform) and affect living organisms.

In Belgium, fine particulate matter, ground-level ozone and NMVOCs are the biggest air pollution threats. While the average European sacrifices an average of about 8 months in his or her lifespan due to air pollution, according to Tim Nawrot from the University of Hasselt the average Belgian sacrifices 13.5 months (the Flemish sacrifice several extra months).

Thirdly, there is increasing recognition that the current approach we use to tackle the above two problems— one that is based on waste and pollution ‘minimization’ and resource ‘efficiency’—is not going to solve the longterm problems. This part of the argument has been forcefully made by William McDonough and Michael

The big question, however, pertains to hazardous chemicals. According to the EEA there are growing concerns about the effects of exposure to a mixture of chemicals at low levels over longer periods of time. To date, most regulation is focused on the chemicals that we know are dangerous (not many) and is based on the effects of high-level exposure to a single substance over short periods of time. The actual exposure we are all confronted with—i.e. prolonged low level exposure to a toxic cocktail of substances—we know very little about.

4) William McDonough & Michael Braungart (2002). Cradle to Cradle: Remaking the way we make things.

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

Why should we take the air pollution standards more seriously?

—Tim Nawrot, Marc Goethals and Benoit Nemery

Even though air quality has improved significantly in comparison with fifty years ago, Flanders, together with surrounding regions, has the highest level of air pollution by particulate matter in Western Europe. This is caused by high population density, intense industrial activity and the enormous volume of traffic. However, Flanders is not only the European hot spot for particulate matter. If you draw the same map for nitrogen dioxide or noise pollution the same dark spot emerges. Naturally, much of it has to do with our population density, but precisely because there are so many of us living in a small area, failure to meet standards has a big impact on public health.

0 5 8 10 12 15 20 75

A large-scale study of 5.000 people indicated a higher risk of hardening of the coronary arteries among persons living close to a busy traffic route in comparison with those living further

Figure 1: Annual average PM2.5 (µg/m3) for the year 2002 in Europe. With permission of the International Institute for Applied Systems Analysis. Since 2000 air pollution levels have not been decreased

Some try to create the impression that evidence of the dangers of particulate matter hardly exists and that policy is supposedly based on just a few studies of questionable quality. However nothing is further from the truth; studies find a consistent correlation. Important here are epidemiological studies. These are studies which track large groups of people over a long time and establish whether those who are more exposed to particulate matter in the places where they live develop certain illnesses sooner than people who are less exposed. Of course other factors which can likewise influence the risk of certain diseases, such as age, smoking habits, socio-economic class etc., must also be taken into account. With this method of research, for example, the relationship between lung cancer and smoking1, the significance of high blood pressure and cholesterol in the development of heart and vascular diseases2 and the relationship between spina bifida and folic acid

deficiency3 were also demonstrated. In addition to epidemiological studies toxicological investigations are important because they can experimentally test the effects of particulate matter on biological systems in a more irrefutable manner. Is particulate matter dangerous? The present air quality in our region is association with a reduction in life expectancy of more than 13 months on average. In children a reduction in lung function has been diagnosed up to 1.5 km away from a motorway. A study in California among newly-born infants born after 40 weeks of pregnancy demonstrated that mothers who had been exposed to relatively high PM2,5 concentrations, (> 18.4 µg/m³) during pregnancy on the basis of where they were living had a 26% greater risk of giving birth to a child that was too small in relation to the term of pregnancy compared with mothers exposed to concentrations of less than 11,9 µg/m3.4 A large-scale study of 5.000 people indicated a higher risk of hardening of the coronary arteries among persons living close (less

1) Doll R, Peto R, Boreham J, Sutherland I.. BMJ 2004:328; 1519

3) Moore LL, Bradlee ML, Singer MR, Rothman KJ, Milunsky A. Folate intake and the risk of neural tube defects: an estimation of dose-response. Epidemiology 2003; 14: 200-205.

2) Kannel WB, Castelli WP, Gordon T, Mcnamara PM. Serum cholesterol, lipoproteins, and the risk of coronary heart disease. The Framingham study. Ann Intern Med 1971; 74: 1-12.

4) Parker JD, Woodruff TJ, Basu R, Schoendorf KC. Air pollution and birth weight among term infants in California. Pediatrics 2005; 115(1):121-128.

than 200 m) to a busy traffic route in comparison with those living further (more than 200 m) away from it.5 The fact that air pollution is not only bad for our lungs, but also leads to heart and vascular diseases, was also clearly demonstrated in experimental or toxicological research where mice were exposed to realistic amounts of particulate matter for an extended period of time.6 We get ill not only from higher than average values but also from peak levels of particulate matter. We can identify particulate matter peaks from the smog alarm, but excessively high particulate matter concentrations also occur when there is no smog alarm. During windless periods all locally-produced pollution remains hanging in the lower parts of the atmosphere which results in us living and breathing in a large cloud of dust. Weatherrelated peaks of air pollution by particulate matter are associated with a limited yet statistically significant excess mortality, especially in summer. Thus we have 5) Hoffmann B, Moebus S, Möhlenkamp S, Stang A, Lehmann N, Dragano N, Schmermund A, Memmesheimer M, Mann K, Erbel R, Jöckel KH; Heinz Nixdorf Recall Study Investigative Group. Residential exposure to traffic is associated with coronary atherosclerosis. Circulation. 2007;116:489-96 6) Sun Q, Wang A, Jin X, Natanzon A, Duquaine D, Brook RD, Aguinaldo JG, Fayad ZA, Fuster V, Lippmann M, Chen LC, Rajagopalan S. Longterm air pollution exposure and acceleration of atherosclerosis and vascular inflammation in an animal model. JAMA 2005; 294:3003-3010.

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

calculated that in Flanders 630 persons die annually as a result of particulate matter concentrations above 20 µg/m³. Twenty µg/m³ was once the aim of the European particulate matter policy, but this objective has been jettisoned. European regulation, which currently uses standards that are considerably higher than those of the World Health Organisation, stipulates that we may have a maximum of 35 overruns of 50 µg/m³ per year. We do not meet this standard at present and no improvement is expected in the coming decade. This is, of course, not surprising when we see how the mantra of ‘Developing Flanders into a logistics centre’ prevails. Take, for example, the Deurganckdok, where the full capacity cannot (yet) be used because the roads to and from the harbour are congested and therefore this project means that new roads have to be built. The controversial Oosterweel connection must allow the additional thousands of containers to be transported into the European interior. This has not been well received by some, not only because of the traffic-related exposure in and above the Antwerp inner city. Of course there is more to it, including sound effects which are often not discussed, and what about the shade which such an infrastructure will cause in a city district? Obviously the air quality issue is a much broader issue than the Oosterweel discussion. Although government supports research into the effects of particulate matter on health, public authorities lack the drive to take on responsibilities in respect of environmental policy and, as licensing authority, to

than that in the United States. Air quality will be determined by, among other things, how we manage the open space which is still available to us. ‘Preservation of the remaining open space’ as an alternative to the mantra of ‘Developing Flanders into a logistics centre’ is one of the solutions. The argument that it is difficult to meet standards in densely populated areas ignores the fact that the importance of a factor in respect of public health increases in proportion to the number of people that are exposed to it.

take health as starting point. From a health perspective it is actually very strange that diesel is cheaper than petrol and that an LPG driver has to pay an annual LPG levy. Local authorities are often very slack when dealing with outdoor burning of rubbish, which is undoubtedly an important source of particulate matter. The converse of course is that we all have to accept our responsibility, in addition to the need for additional technologies that must lead to clean incineration. Is the fight against air pollution meaningful? An important argument in support of the causality behind the reported epidemiological associations is that when reductions in air pollution occur, favourable effects on health indicators are recorded. For example, it has been established that hospital admissions and mortality decreased during a protracted strike in the steel industry in the Utah

Valley7, and that in Atlanta there were fewer acute admissions for asthma in the case of children when city traffic was curtailed during the 2008 Olympic Games8. From 1 September 1990 the residential use of coal was prohibited in Dublin. This led to a significant reduction of black smoke and sulphur dioxide concentrations and a reduction (-5.7%) of the winter mortality in subsequent years9. Magnifying or even ‘producing’ scientific uncertainty is a reliable strategy of organised interest groups to induce policy-makers to postpone or abandon regulation. This has led to a recent increase of the European standard which is 1.5 times higher 7) Pope CA, III. Respiratory disease associated with community air pollution and a steel mill, Utah Valley. Am J Public Health 1989; 79(5):623-628. 8) Friedman MS, Powell KE, Hutwagner L, Graham LM, Teague WG. Impact of changes in transportation and commuting behaviors during the 1996 Summer Olympic Games in Atlanta on air quality and childhood asthma. JAMA 2001; 285(7):897-905. 9) Clancy L, Goodman P, Sinclair H, Dockery DW. Effect of air-pollution control on death rates in Dublin, Ireland: an intervention study. Lancet 2002;360:1210-1214.

Tim Nawrot, Hasselt University, Centre for Environmental Science. Diepenbeek Marc Goethals, O.L.V. Hospital Aalst. Benoit Nemery, Unit of Lung Toxicology, KULeuven, Leuven.

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The strength of impartiality

Vinçotte assists companies in managing their risks.

In recent years, control over the external world has become more difficult. Furthermore customers, regulators, even society at large, are increasingly intolerant of errors and risks. As a result, businesses have to be able to continually bear the test of close investigation in different fields. This is where Vinçotte comes into the picture. Certification, inspection, testing and training: as any factory manager will tell you, these are vital to the effective running of a manufacturing company, both small and large. No-one wants to get years down the line of producing and distributing a product (at great expense) only to discover it doesn’t meet certain standard requirements, and has to be modified, or worse, recalled. Without companies such as Vinçotte, this risk can be very real. With roots in inspection and testing services, the company has developed tremendous expertise in measuring, monitoring and analysing various critical parameters covering a large spectrum of sectors and applications that a typical (and even not so typical) company might encounter in its scope of operations. This is its core competency: using valid and reliable measurement to address operational and regulatory problems. In that sense it is a knowledge business. The company relies on its extensive team of experts, its knowledge and its laboratories. While it does not conduct scientific research as such, science nevertheless is the basis for its methods. The approach taken towards problems is always based on the best available scientific knowledge and documented ‘best practice.’ This is why Vinçotte’s reporting is so widely respected and often carries legal weight. Via Vinçotte, companies can therefore protect themselves against various types of risks: how safe is one’s product/infrastructure/machinery? Does it comply with all the relevant safety regulations/ product specific standards? Is it of sufficient quality and does it meet environmental specifications? Vinçotte sets out to empower companies into answering these questions. Working in the European Union, with a plethora of standards and safety requirements to meet, this kind of service is essential.

Vinçotte Environment: same goal, another domain Times change. With the escalating importance of environmental issues and associated legislation, Vinçotte Environment is becoming an increasingly important division of the company, and a rapidly growing part of the business. With many environmental issues remaining contentious, nothing could be more important than reliable and accurate measurements of the kinds of problems faced by the modern industrial company. Given Vinçotte’s track record, the company has been in a unique position to observe the increasing importance of environmental issues, and prepare accordingly.

Headed up by Phillipe De Crom, the 80-strong division, comprising of engineers, environmental & safety specialists, geologists and biologists and others, finds itself tackling a broad range of environmental problems. Methodologically the division performs precise and controlled measurements (with consultancy and advice to back this up) much like in their traditional business. The focus, however, is environmental and covers air (e.g. emission measurements, gas analysis and automated measurement systems validations), soil

(e.g. soil and groundwater pollution and remediation planning), water (e.g. waste and industrial analysis), hazardous substances (e.g. compliance with REACH), noise and asbestos. Increasingly, the company is being asked to address energy (e.g. efficiency, heat balancing, energy audits and flow measurements) and climate parameters (e.g. CO₂ emissions). Vinçotte’s work needs to comply with the highest scientific standards. This is because so much is at stake here. Vinçotte’s services are typically delivered in the context of important regulatory procedures. For example, regulatory approval for a multi-million euro project will depend on the results of its Environmental Impact Assessment and Safety Assessment. It is absolutely imperative, for all stakeholders involved, that such studies deliver indisputable results. The same applies to energy efficiency audits or emissions monitoring, all which have important regulatory and financial implications for companies. The interconnectedness of many parameters in the energy and environment domain means that Vinçotte increasingly uses a multidisciplinary approach to fully cover the various dimensions of a problem and come up with a more comprehensive solution. Instead of looking at metrics in isolation from each other, a more integrated approach can help companies build a fuller,

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BIO

Vinçotte Environment + www.vincotte.be + Worldwide Vinçotte provides more than 130 specialised inspection, monitoring, testing and certification services in the domains of Safety, Quality, Environment + More then 2.000 employees serve in excess of 15.000 customers

Essentially, it comes down to better risk management. Risks typically exist at various levels, inherent in a company’s products

deeper picture of their environmental impact. But how does this translate into pragmatic benefits? Essentially, it comes down to better risk management. Risks typically exist at various levels, inherent in a company’s products, processes and its organisation. The various types of risk require different competences and different approaches to their management. Thus, a new investment project can stand or fall on the basis of its environmental study, which typically requires investigation into a myriad of different parameters. Products are coming under intense scrutiny since the introduction of new legislation on hazardous substances (REACH). New installations need to comply with all sorts of criteria in the domains of energy, noise, emissions and safety. And there are the ongoing processes in an organisation that need certified monitoring— think of CO₂ emissions, green energy, and more. Looking at the bigger picture also involves looking at your clients in this way. For example, the company is increasingly working with customers along the complete lifecycle of a project. Vinçotte sees their mission evolving from a reactive to a proactive one: by helping clients continuously along the various stages of a project, the company is setting up a partnership and commitment on a long-term basis. For example, a company that receives noise complaints from local resi-

dents can partner with Vinçotte every step of the way. Typically noise emissions are measured at both the source and the place of impact (the residential homes), a 3D acoustic transfer model is developed to track emissions and advice is given on possible solutions to the problem. Vinçotte will also compare the proposals obtained from suppliers to rectify the problem. Following the intervention, Vinçotte can monitor the situation to ensure a durable solution is delivered. As an objective and impartial entity, the company brings into careful balance the concerns of the client, various government agencies, and the ultimate stakeholder: the public. With environmental issues, where there are often diametrically opposing views, the positive consequences of successfully navigating this responsibility are clearly valuable. Becoming more solution focused; offering customers a ‘dashboard’ of sorts to monitor and manage critical parameters in the realm of quality, environment and operational performance. This way Vinçotte offers customers a means to manage their risks and operational performance. Treating projects in these terms means someone is always on guard, which translates into peace of mind for all.

The Fifth Conference with:

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2.3| Can Belgium cope with Climate Policy? Climate Policy Scenarios

emarkably, the world is responding to the climate problem. Considering that we find it difficult to deal with today’s global problems (poverty, war) it is rather striking that we are managing to come to some agreement about managing the risk that we be facing a serious problem sometime in the future. On the other hand, the potential threat is rather catastrophic indeed, especially if global warming gets out of hand. Best we do something. Given our economic dependency on fossil fuels, however, this will not be easy.

The International Energy Agency (IEA) evaluated two climate policy scenarios where the world manages to stabilise GHG concentrations at 550 and 450 parts per million (ppm) of CO₂ equivalent respectively. At present the concentrations are at approximately 430 ppm, rising at an average of 2 ppm per year. The 550 policy scenario assumes an increase in global temperatures of about 3°C, the 450 scenario an increase of 2°C. Both scenarios imply a plateauing of emissions by 2020, followed by substantial reductions. Obviously, in the 450 scenario the reductions will need to be very steep indeed. It requires that OECD countries reduce their emissions by 40% in 2030 compared with 2006 levels (and that other major non-OECD economies limit their emissions growth to 20%). The IEA makes clear that these policy scenarios will be decidedly challenging to achieve if not unrealistically so. In the 450 scenario, for example, the 2030 emissions for the world as a whole would need to be lower than the projected emissions for non-OECD countries alone in the reference ‘business as usual’ scenario. Thus, the OECD countries alone cannot achieve this target alone, even if they cease their emissions entirely. This scenario will require unprecedented political consensus and commitment. Furthermore, the investment required to transform the global energy system will be enormous. By 2030, 40% of total electricity generation will need to come from renewable sources (wind, solar, biomass, hydro). Existing power plants will need to be upgraded and on the demand side households and companies will need to spend on more efficient cars, buildings and appliances. The IEA estimates that the 450 policy scenario will cost trillions of dollars, equalling on average 0.55% of annual world GDP. Although in return, there will be savings in fuel costs—and possibly a reduced risk that Bruges and Antwerp are submerged. Greenpeace and the European Renewable Energy Council (EREC) have taken the scenario planning exercise a step further. Projecting forward to 2050, they argue that if we want to minimize the risk that temperatures will increase beyond 2° C then we will need a 50% reduction in global emissions by 2050, implying an 80% reduction for the OECD economies. Some individuals at Greenpeace argue that even these projections are obsolete and that we need to strive for an 80% reduction in global emissions by 2050, translating in null emissions for the OECD.

Post-Kyoto and EU Climate Policy

o much for the scenarios, what about policy, what are the actual commitments in place today? From our Belgian perspective we are impacted by climate policy from three levels, the international level (Kyoto and post-Kyoto), the EU level, and the national level. The Kyoto Protocol is a first international attempt to stabilise emissions. The industrialised countries, including Belgium, that are signatories to the Kyoto Protocol have agreed to cut their combined emissions to 5% below 1990 levels over the period 2008-2012. Each country has its own targets to be able to achieve that. Thus, the EU committed to reduce emissions by 8%; Belgium by 7.5%. While Kyoto signatories must meet their targets primarily through national measures, the protocol does offer additional means of meeting their targets by three market-based mechanisms: emissions trading, the Clean Development Mechanism (CDM) and Joint Implementation (JI). In December this year (2009) a new post-Kyoto international framework will need to be agreed on at the United Nations Climate Change Conference in Copenhagen. Expectations are high—at Copenhagen the world will need to get serious about its commitment. Kyoto is an achievement because it showed that international agreements on climate are possible and it put in place the basics of a ‘cap and trade’ mechanism. However, its impact is negligible. The emissions reductions targets are far too weak in light of the scenarios posited by the International Energy Agency and the IPCC. In preparation for the Copenhagen conference, numerous international meetings have been held to get the process of negotiation underway. On the whole, these offer little indication that Copenhagen will be a success (although much has changed in the world since then). A G8 summit in 2007 did release a declaration that the G8 would ‘aim to at least halve CO₂ emissions by 2050’ but other meetings such as the most recent in Poznan delivered little in the way of concrete commitment. Perhaps the most positive development looking ahead to Copenhagen is the European Union’s new energy policy, the so-called 20/20/20 plan, agreed upon in December 2008, and designed to slot into a possible post-Kyoto framework. Having already committed to the Kyoto target of an 8% reduction in emissions by 2012, with the new energy policy the EU commits unilaterally to a reduction of 20% in GHG emissions by 2020 (compared to 1990 levels) with the option to increase the target reduction to 30% if an international agreement is achieved at Copenhagen (committing all developed nations to a 30% cut). The longer-term objective is to cut emissions by 50% by 2050. It also sets a target to reduce energy consumption by 20% through increased energy efficiency, and to cover 20% of European energy needs from renewable sources. Overall, the policy departs from the objective that global temperature changes must be limited to no more than

2°C above pre-industrial levels (below the temperature change believed to cause catastrophic climate effects) and that GHG concentrations therefore need to be stabilised at 445-490 ppm. Hence, the more ambitious 30-20-20 version of the EU’s energy policy is in line with the International Agency’s 450 scenario, requiring OECD countries to reduce their emissions by 40% by 2030. It falls short, however, of the Greenpeace/EREC scenario that seeks an OECD reduction of 80% by 2050. The EU’s main policy instrument is the emission trading scheme (ETS). The scheme applies to all the EU countries and currently covers 10,500 installations in the energy and industrial sectors (responsible for 40% of the EU’s total greenhouse GHG emissions). In Belgium the key sectors covered by the ETS are the electricity producers, the chemical industry, the steel industry and the cement industry. The original idea for ETS was that each year in the period 2012-2020 the member states auction off their allotted emission rights. Since the total emissions for industry need to decline by 21% by 2020, the allotted emissions rights will decline gradually each year. While the energy-intensive industries managed to negotiate a benchmarking regime where their emissions rights are allotted free instead of auctioned (on condition that they meet certain energy efficiency benchmarks), the absolute target of a 21% reduction in emissions remains in place. The electricity production companies will, however, have to pay for their emissions rights from 2013 onwards. The economic sectors that fall outside the ETS scheme such as transport, housing, agriculture and waste will need to commit to a 10% reduction in emissions 2005 levels by 2020. Here the principle of ‘burden sharing’ is applied, whereby each member state will contribute to this effort according to its relative wealth. Belgium will need to reduce its non-ETS emissions by 15%. The regional governments of Flanders, Wallonia and Brussels will need to prepare action plans outlining how they intend to achieve these targets. Possible components of these plans will be stricter insulation norms for buildings and a km-tax of some sort on motorised transport. If these targets are not achieved, the regions can use the Kyoto mechanisms to pay for emission reduction projects in developing countries. The 20% target of renewable energy is similarly ‘shared’ out between member states, with Belgium allocated a 13% target (coming from about 2.5% today). The Flemish government and the Belgian employers’ associations (FEB, VOKA) initially reacted with dismay, finding this a particularly steep target that takes little account of the country’s potential for renewable energy. Quoting research conducted for the EU Commission they argued that Belgium has the potential to cover only 9.3% of its energy needs from wind, solar and biomass energy, meaning the rest will need to be imported from abroad. This perspective is countered by the renewable energy industry (EDORA) who argue that the country has the technical-economic potential to cover about 14% of its energy needs with renewable.

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Can Belgium do it?

GHG emissions by sector (Tg - million tonnes)

ow is Belgium doing thus far in the primary climate-related factor, GHG emissions? The positive news is that we seem to have turned the corner. GHG emissions in Belgium continued to rise during the 1990s but have been declining slowly since 2000. According to the 2008 Kyoto Protocol Progress Report that the Federal government lodged with the United Nations Framework Convention on Climate Change, total GHG emissions decreased by 5.2% between 1990 and 2006, and 6% against the ‘base year’ emissions data used for the Protocol. Methane (CH4) and nitrous oxide (N2O) emissions decreased significantly by 31.9 per cent and 16.9 per cent, respectively. But the main GHG in Belgium is CO₂, which accounts for an increasing share of total GHG emissions (86.2% in 2006), and these emissions increased by 0.6% between 1990 and 2006.

Total GHG emissions (excluding LULUCF) 0.160 0.155 0.150 0.145 0.140 0.135

Kyoto target

0.125

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

0.130

In one sense this is an achievement. While the country’s population size and GDP have risen gradually over the years, since 2000 these factors appear to be ‘decoupled’ from energy demand and GHG emissions. Thus, the decline in GHG emissions is particularly striking if looked at on a per GDP unit basis or per capita basis. GHG emissions per GDP unit has declined more than 30% in the period 1990-2006, and per capita the reduction is 10%. However, what matters to the Kyoto Protocol is the absolute figure (target GHG emissions is 134.8 Mton CO₂ eq by 2012) and in that sense we still have some way to go.

1990

2006

Change

Energy Industries

30.2

27.7

-8%

Manufacturing Industries and Construction

33.3

27.6

-17%

Transport

20.6

26.1

27%

Other Sectors

27.6

28.8

0.2

0.1

-43%

Other (Not elsewhere specified) Fugitive Emissions from Fuels Industrial Processes Solvent and Other Product Use Agriculture Waste Source: European Environment Agency

Looking ahead, the Belgian government expects emissions to start rising again to reach, by 2010, a level 4% below base-year emissions (recall, by 2006 emissions had declined 6%). Therefore, to achieve the Kyoto target, use will need to be made of the flexible mechanisms (financing emission reduction projects in other countries). Thus, in the National Allocation Plan1 for the period 2008-2012, the government has committed to keeping the average annual emissions to 135.9 Mton CO₂ eq. This will be accomplished by reduction commitments from the regional governments (Flanders -5.2%, Wallonia -7.5%, Brussels +3.4%) and a budgetary contribution by the Federal government in the sense that it will buy approximately 2.5 million emissions rights a year abroad. Thus, in 2008 the Federal government signed an agreement to spend 2 million Euros on emission rights from Hungary. An embarrassing waste of money, the green lobby argues—this is money that could have been better spent domestically on energy efficiency measures or renewable energy. We need to be clear, however; the Kyoto Protocol is the easy part. After 2012 the new policy instruments come into force (e.g. ETS) that place us on the path to far more stringent emission targets. If we have difficulty achieving the Kyoto targets, do we have any hope of achieving the 2020 targets?

The greatest progress has been seen in energy production for manufacturing (-17%) and to a lesser extent the energy sector itself (-8%). The weakest piece of the puzzle is transport (+ 27%). The surge in transport sector emissions is due to a steady increase in all types of road transportation.

1) Belgian National Allocation Plan for CO2 Emissions, submitted to the EU Commission, Sept 2006

0.9

0.6

-42%

16.4

14.5

-12%

0.2

11.8

10.2

-13%

3.4

1.2

-64%

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

The Cost of the 2020 Climate Policy One thing is clear: it will cost money. The total cost of the EU’s climate plan is estimated at approximately 90 billion EUR per year.1 For Belgium that could mean up to 3 billion Euros per year (up to about a percentage point of GDP), depending on who you talk to. But there are benefits too, in our trade balance and import dependency, in the development of new industries, and in our environment. An often quoted source on the implications of climate policy on the Belgian energy system is the Commission Energy 2030 report, published in 2007 and commissioned by the Federal Minister of Energy at the time Marc Verwilghen.2 Since the EU Climate package was not finalised at the time, the commission made a number of assumptions about a possible post-Kyoto climate package. Given these assumptions, the commission concluded that the costs of Post-Kyoto climate policy will be steep indeed, especially if we go ahead with the planned nuclear phase out. About half of our electricity today comes from emission-free nuclear power. As the nuclear phase out begins (in 2015) we will need to replace that capacity, partly with renewable energy but mainly with gas- or coal-fired power plants. In other words, in a ‘baseline’ scenario, our CO₂ emissions are likely to increase significantly by 2030 (by more than 30% compared to the 1990 level, according to the Commission Energy). But in a post-Kyoto scenario the commission assumed that we will probably be asked to reduce our emissions by 30% (a reasonably accurate assumption given the EU’s climate policy). That is the key problem—one needs to compare the 2030 target against a baseline scenario in 2030, not against our emissions today in 2009. Thus, assuming a nuclear phase out, and under a domestic 30% CO₂ reduction 1) Open Europe (Oct, 2008). “The EU Climate Action and Renewable Energy Package – Are we about to be locked into the wrong policy?” 2) Commission Energy 2030: Belgium’s Energy Challenges Towards 2030. June 19, 2007. Study commission by (then) Minister Marc Verwilghen, Federal Minister of Energy

scenario (where we accomplish most of the reductions ourselves, taking no recourse to paying for our commitments abroad), the commission calculated that final energy demand will decline by more than 30% and energy-related costs for users will rise by a factor of 4 to 5. Even if we do allow for flexible mechanisms, where Belgium buys its emissions credits abroad, then still we will be looking at an extra cost for CO₂ abatement of about 15-20 billion Euros (or about 4-5% of 2030 GDP). Furthermore, the cost of building and integrating ‘foreseen’ renewable energy capacity is estimated at 50 billion Euros over 20 years, or 0.7% of GDP annually over the period 2000-2030. Not surprisingly, the Commission Energy concludes that a 30% emission reduction scenario is unaffordable for the country if we go ahead with the nuclear phase out. More recently, the Federal Planning Bureau released a comprehensive analysis of the EU climate plan’s impact on the Belgian economy3. It comes up with decidedly different results. The total direct cost of the 20-20-20 climate package, including the direct cost of the domestic effort (e.g. in energy equipment cost, fuel purchase cost, ‘disutility’ cost and non-CO₂ GHG mitigation cost) plus other costs such as CDM credits and the cost of RES flexibility, will amount to 3.5 billion Euro (compared to the baseline scenario) by 2020 (expressed in 2005 Euros), translating into approximately 0.86% of 2020 GDP.4 Obviously, the 30-20-20 plan will cost more. However, when account is taken of the feedback effects on the economy, then the final impact may not be that severe. Annual GDP growth between 2010 and 2020 would slow by 0.041% to 0.006% depending on how the proceeds from emissions auctions are reinvested in the economy. In fact, if the “full recycling” option is used where all new and potential public revenues are used to reduce social contributions paid by employers, then up to 26,000 additional jobs (compared to the baseline scenario) could well be created by 2020. Why 3) Federal Planning Bureau (Nov. 2008). Impact of the EU Energy and Climate Package on the Belgian energy system and economy. www.plan.be 4) The European Commission’s own estimate comes to 0.7% of 2020 GDP. The Federal Planning Bureau’s higher estimate is due mainly to reopening of a number of steel mills by Arcelor Mittal.

the tremendous difference in estimated costs between these two studies? A number of key differences stand out. The Commission Energy study projects to 2030 instead of 2020, which is critical, since it in those later years that substantial nuclear power is taken offline. Also, the Commission Energy assumes much higher carbon prices than the Federal Planning Bureau, especially in those later years, with dramatic impact on the total cost picture. Finally, the Federal Planning Bureau does not look at the cost of renewable capacity in the same way. But the jury is still out on this. Federal Minister of Energy Paul Magnette has set up a new committee of experts to advise the government on the country’s ideal energy mix and evaluate previous studies. In the mean time, as Johan Albrecht makes clear in his article, the energy landscape keeps changing: oil prices first rose spectacularly before falling, investment costs for new energy technology are increasing (due to scarcity of resources and expertise in the sector), and new technologies keep on being developed (e.g. nuclear mini-reactors). So much for the differing scenarios; whatever the final cost of the climate policy will be, it will be significant, and even if we see that money as an investment instead of a cost, we are still talking about a massive allocation of resources requiring tremendous political courage and disciplined execution. It is therefore fortunate to see that the main actors, from government to business, are beginning to make a strategic switch, from treating climate policy as a cost to be minimised to an opportunity for creating new industries and reducing import dependency. A number of key challenges need to be addressed, however. Firstly, it is important that we achieve as much as is possible via domestic investments, i.e. that we achieve real reductions in our emissions without taking excessive recourse to buying credits abroad and we build as much renewable energy capacity as possible and thereby avoid having to import large volumes of green energy. Buying credits abroad is a cost pure and

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simple—it offers the country no long-term benefits. Investing aggressively in energy efficiency and renewable energy will save us money in the long term and will stimulate our ‘clean tech’ industries. As the earlier outlined scenarios point out, however, a domestic effort will be expensive. Consider that Belgium today already needs to rely on flexible mechanisms to meet the decidedly weak Kyoto target. Expensive and difficult, but a fundamental choice nevertheless: will be a follower or a leader in this game? The EU has opted for a ‘first mover’ strategy. That is a challenge since we all have to pay for it, but it also is an opportunity to participate in the new industries that are developing. Germany is showing what can be done in this regard. With its proactive renewable energy policies, the German government is spending about 3.5 billion Euros a year on subsidies and feed-in tariffs. That is expensive, but in the process renewables generate more than 14% of the country’s electricity needs (wind alone delivers more than 7%) and renewable energy technologies already make up 4-5% of Germany’s gross domestic product (that figure is expected to rise to 16% by 2025). By taking a first mover position, Germany is betting that the rest of the world will come shopping for its wind and solar technology. Fortunately, the world also comes shopping at IMEC (solar technology) and Hansen Transmissions (wind turbine gearboxes) but the point is that we build on those strengths. Secondly, government policy in Belgium must be better aligned and coordinated (or simply reorganised in context of the state reform), both across the regions (Brussels, Flanders, Wallonia) and across the levels (Federal versus Regional versus Local). Policy jurisdiction in matters energy and climate is complex, especially in Belgium. The EU has set the climate objectives and put various instruments in place. The Belgian Federal government regulates energy production, transmission and tariffs. The regions regulate distribution, renewable energy production and promote energy efficiency. And the local councils have jurisdiction over planning and building permits, etc. Many commentators agree that to date, our energy and climate policies are:

• Fragmented (far too many policy instruments, subsidy funds, etc that lack power because they tend to be small, complex and unknown), • Inconsistent (e.g. the Flemish focus on energy efficiency while at a Federal level the fiscal regime gives half a million Belgians a free car, frequently with a petrol card thrown in for good measure – why take a tram when you have free transport parked on your driveway), • Unstable (e.g. nuclear phase out or not? This point is crucial for attracting desperately needed investment in new electricity production capacity) One possible solution to the problem (besides a comprehensive state reform) is the creation of a Climate Commission, a powerful but neutral body that delivers policy advice and evaluation.5 Alternatively we could look to Europe. A key challenge here is that with the exception of the Emission Trading System, the EU does not create enough policy instruments. Thus, the EU sets targets for renewable energy and energy efficiency but leaves it up to the member states to create the necessary policy instruments. As a result, all member states (and regions in the Belgian case) end up formulating incompatible measures. A key example is the green power certificate system. In Belgium there are four different systems. Ideally there should be a single EU system. In Belgium the situation is particularly challenging because the various governments tend to have contrasting political colours. As a result, there is difficult discussion about topics such as the nuclear phase out, the use of flexibility mechanisms and the potential for renewable energy. Wallonia is ambitious about building renewable energy capacity, while Flanders is concerned that the 13% target will cost us excessively in green energy imports. Perhaps most importantly, there is still no clarity on the nuclear issue. This is crucial for creating 5) Proposed by the action group ‘The Big Ask’ www.thebigask.be

a stable context in which to attract investment in new energy capacity. As long as the decision on the nuclear phase out is deferred, energy companies will be hesitant to commit to large-scale investments. It is ironic, therefore, that the keeping in place of nuclear power, done for climate policy reasons, could in effect lead to less investment in renewable energy. Thirdly, the greatest potential for additional energy efficiency and emission reduction—but also the hardest to implement—is found in the transport sector and in buildings. The existing stock of buildings in Belgium is notoriously energy inefficient and will take decades to modernise, unless government policy becomes far more aggressive. In transport we face the dilemma that the country is an important European transport hub and hence has seen tremendous growth in road freight. More on this will follow later in the next chapters.

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The Clean Development Mechanism

—Green opportunities Arnaud Brohé, Quentin D'Huwart, Tanguy Du Monceau & Antoine Geerinckx The Clean Development Mechanism (CDM) is a flexible mechanism established by the Kyoto Protocol by which a country or a company with carbon target can invest in carbon reductions. For every tonne of carbon dioxide reduced or absorbed through the project, the investor will receive a credit called certified emission reduction (CER). Numerous technologies now exist to reduce the greenhouse gases (GHG) emissions. Beside renewable energies such as wind farm or biomass plant, some projects like methane destruction and energy efficiency improvement also benefit from the CDM. One great advantage of the CDM is its capacity to reduce the cost of CO₂ mitigation for companies based in developed countries. Furthermore, it encourages other companies without emission restrictions to voluntarily choose to develop green projects and sell their carbon reduction credits to companies or nations which have imposed a GHG cap and trade system. Project developers will receive the credits for seven years and can renew this period twice (thus a maximum of 21 years) or optionally once for a single period of 10 years.

Before participating in a CDM project, the developer needs to receive an authorisation from a Designated National Authority (DNA) counter party in a country that ratified the Kyoto Protocol. The project developer has to meet and show the required criteria established by the project host country. The DNA then accepts the project with a letter of approval. Further control is conducted to ensure true GHG reduction occur during the project lifetime. Host country approval is one of the key components to ensure that governments retain sovereignty over their natural resources. Apart from approving the development of the proposed project under CDM, it is also the host country’s responsibility to confirm whether the CDM project activity will help it meet its own sustainable development criteria. Validation and realization of a CDM project is not a simple affair. In order to receive the approbation from the local authorities, it is first necessary to have a good understanding of the legal context of the hosting country. The next step is to prove the project additional. Additionality is the fundamental criterion for the recognition of a project. Under this criterion, the project developers must, from a business-as-usual (BAU) scenario, show that their project will result in GHG emissions reductions which would not occur otherwise. The difference between the

level of emissions in the BAU scenario and in the scenario with the CDM project determines one’s right to CERs. The additionality test is essentially composed of three elements: environmental additionality (does the project reduce emissions below the BAU scenario?), investment additionality (does access to CERs make the project viable?) and technological additionality (does the project lead to a transfer of technologies in the host country?). The study of the BAU scenario with the demonstration of additionality is therefore essential and both are key elements of the project design document (PDD). In the project cycle, this PDD is a key documentation and hiring a carbon consultant to draft it is very often of necessity. The PDD is subsequently submitted to an auditor (designated operational entity) for validation, and once validated, to the CDM Executive Board for registration. This latter is dependent on the United Nations and was established to practically implement the CDM. This Board is also responsible for the quality inspection of independent projects. To produce a PDD is mandatory: no project can earn CERs without its validation and Executive Board registration.

Reductions then need to be determined objectively. This is why the project designer has to include a monitoring plan establishing how they will measure the emission reductions. If developing a CDM project sometimes requires going through onerous processes, CO₂ credits do on the other hand have a real financial value for entrepreneurs. For a CDM project in renewable energy, carbon credits can increase the IRR by at least 15% of the total. In the wastes management sector, a project such as the destruction of methane, can double its profits. It is even possible to create a project

based on carbon credits alone as single source of revenues. In fact, it is easier to prove the additionality of those projects to the United Nations registration board. Analyzing a project proposal requires making an assessment of the CDM potential, of the different offset market options, an evaluation of the associated risks and of the costs of the transaction. Using the service of a CDM specialist consultant ensures that this complex task is carried out professionally and can help avoid significant costs.

Export technology

GLOBAL ENVIRONMENTAL BENEFITS

Investment opportunity

CDM/JI (developed by Belgian/Flemish team)

Source: CO2logic Cheaper CO2 credits

( for governement & companies )

Export knowhow

THE FIFTH CONFERENCE CLEAN - THE CHALLENGE OF OUR TIMES

For every tonne of carbon dioxide reduced or absorbed through the project, the investor will receive a credit called certified emission reduction

Various options exist to maximize the benefits of carbon credits supplied from such projects . A company involved in the EU ETS might keep these carbon credits to help them reach their carbon reduction cap and trade target. Otherwise, a company might sell it’s credits or keep them and speculate on future demand and price increase. Buyers include companies with cap and trade objectives as well as countries (e.g. Belgium or its regions that launched public tenders), or private investors. As well as the CDM, the Kyoto Protocol provides one other flexible mechanism whose principal aim is encourage the development of CO₂ and environmentally friendly project: the Joint Implementation (JI). This latter is very similar to the CDM but works exclusively with projects set up in developed countries. A JI project generates carbon credits called Emissions Reduction Units or ERU’s. Although similar, JI and CDM have significant differences. CERs will continue to be obtained after 2012 while at the present the ERU’s are not guaranteed to exist beyond 2012. The next climate conference held by the United Nations will take place in Copenhagen in December 2009. It will most probably clarify the future of the CDM and JI mechanims. However, it is also believed that the CDM will be reformed, especially regarding advanced developing countries and highly

competitive economical sectors. In addition, the EU wants to establish a worldwide carbon trading system by 2015 at the OECD level. The CDM offers different opportunities and benefits that are not yet fully exploited in Belgium. What are those opportunities and benefits? First there is the environmental benefit of replacing fossil fuel energy by renewable energy projects preventing more CO₂ emissions being released into the atmosphere or supporting other technologies that cut GHG emissions. Then, there are the financial benefits allowing our technologies and knowhow being exported (renewable energy, engineering, consulting…).

For investors and companies there are also very attractive financial returns as previously described. Finally let’s not forget authorities (regional or federal), they will probably need to buy CO₂-credits to meet the Kyoto target and it might be more coherent for them to use the tax-payer money to promote and support our expertise and know-how in clean-tech abroad. Arnaud Brohé, Quentin D'Huwart, Tanguy Du Monceau and Antoine Geerinckx are partners of CO2Logic, a specialist in CO2 offsetting measures

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3| Energy Production

he context is clear. This country’s economy is fundamentally reliant on a secure and affordable supply of energy. Until recently, our existing energy infrastructure has met those criteria rather well. Some will debate the finer points—but the average consumer or company would not. Looking ahead, however, we will need to do things differently. The key drivers of this change stem mainly from EU policy and the problems such policy is trying to address, i.e. continued liberalisation of the energy market (letting EU-wide competition improve choice, prices and the security of supply), reducing greenhouse gas emissions and investing in renewable energy capacity (to address climate change, air pollution and fossil fuel dependency). In Belgium, a number of unique factors complicate the situation further: our ageing energy infrastructure, the nuclear phase out law starting in 2015 and supposed to be fully executed by 2025, and the geographical limits to renewable energy production. One obvious response to the energy problem is to consume less energy (translating into less import dependency, less CO₂, and less money needed for new production capacity). Indeed, energy efficiency is a key policy priority for the Flemish government and it is a main component of the EU’s climate package (20% more energy efficient by 2020). This topic will be looked at in the next chapters, where we focus on energy management in the energy-intensive industries, in transport and in buildings. In this section we look at the production side of the story.

Overhauling the energy system will not be easy. In our Belgian context, there are at least four key challenges that need addressing: one, the energy market needs to function more effectively; two, the nuclear question needs to be decided; three, massive investment in renewable energy (and efficient gas-fired installations) needs to happen; and four, the electricity grid needs to be transformed. Each of these points will be discussed in turn. Firstly, however, a few facts and figures about the Belgian energy system:

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3.1| The Belgian Energy System – Today versus 2020 W

hat does the energy system look like today and how will it have changed by 2020—or rather, how should it be changed if we are to comply with the EU’s 2020 climate package? Probably the most credible word on this matter comes from the Federal Planning Bureau.1 It has done extensive modelling work in this area to forecast how the system would evolve under three different scenarios: a baseline scenario without the EU’s climate package, a 20/20 scenario assuming compliance with the EU’s current commitments (20% reduction in CO₂, 20% of energy needs covered by renewables) and a 30/20 scenario where the EU ups its commitment to 30% reduction in CO₂ emissions. Let us compare the 2005 situation with the 30/20 scenario in 2020, since it is that scenario we need to strive for if we want to achieve the central climate change objective of limiting global warming to 2°C.

According the Federal Planning Bureau’s analysis, energy savings and deployment of renewable energy sources (RES) are the main responses of the energy system to the EU policy targets. Final energy demand still grows marginally (0.4% annually) but it would have grown more in the baseline scenario. Mainly this will be due to improved energy efficiency in the transport, tertiary and residential sectors. As will be seen in a later chapter, the energy-intensive industries have already achieved much of its energy efficiency potential. The change in the energy mix is characterised mainly by increased shares of renewables and natural gas, and a decline in nuclear power (the Federal Planning Bureau assumes implementation of the nuclear phase out law). The share of RES in Gross Final Energy Demand in 2020 reaches 12.3%, just short of Belgium’s target 13%.

Gross Inland Energy Consumption (ktoe)

Final Energy Demand (ktoe)

60000 35000

20000

30000

40000

25000 30000

15000

20000 10000

15000

20000

10000

10000 0

Net Installed Power Capacity (MW) 25000

40000 50000

Demand for electricity is expected to grow by 1.3% per year on average but is likely to accelerate somewhat after 2020 as more low-carbon generation capacity becomes available (hence lowering prices compared to carbon-based energy). Power generation capacity will increase in line with demand but also to cover the variability in renewable power generation. Thus, in 2020 19% of net electricity generated is ‘green’ but in terms of installed capacity renewables represents 28% of total electricity generation capacity.

5000

5000 2005

RES Nuclear Natural gas

2020

Oil Solids

1) Federal Planning Bureau. Impact of the EU Energy and Climate Package on the Belgian Energy System and Economy. November 2008.

0 2005

Transport Tertiary

2020

Residential Industry

RES Nuclear Natural gas

Oil Solids

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Inventing tomorrow’s energy infrastructure

—Siemens innovates along the entire energy value chain Nevada might be best known for easy marriages and gambling but it is also becoming renowned, at least in environmental circles, for the renewable solar energy it produces. Covering an area of 1 square kilometer, Nevada’s solar-thermal power plant drives a 64 megawatt turbine, built by Siemens, and supplies around 14,000 households with electricity while at the same time saving about 80,000 tons of CO₂ emissions. Following the success of the Nevada plant, similar plants are being built worldwide.

Today’s situation and Tomorrow’s challenges While the clean energy generated by these solar plants is important from a climate perspective, they still are only a tiny piece of the global energy mix. In fact, it is expected that worldwide demand for energy will continue growing, especially in developing economies. This will place mounting pressure on the world’s energy infrastructure, both existing and new. Furthermore, with the vast majority (70%) of the world’s oil and gas being supplied by only a handful of countries, demand for fuel diversity has been growing. And, given the already tangible effects of global warming, renewable energy is clearly preferable.

1. Solar-Thermal Power Plant: Putting the Desert to Use 2. Successful Test of the world's first

ultra high-voltage DC transmission

4. . China: New Dimension for Long-

systems(UHVDC)800-Kilovolt Transformer

Distance Power Supply (1,400 kilometers)

3. Irsching: First Fire of the World's Largest

5. New Gas Turbine to Set New World

Gas Turbine

Record forEfficiency

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The challenges are significant. The world’s existing energy infrastructure needs modernizing and so much new infrastructure needs to be built. All this applies to Belgium too

Massive growth in renewable energy capacity – especially wind and solar – is projected, but it is estimated that by 2030, renewable energy will constitute only 9% of the total energy generated on a worldwide basis. From a climate perspective we need to do much better—all eyes are therefore on the upcoming climate conference in Copenhagen to see if a global deal can be reached that will accelerate investment in renewable energy. But even if the most ambitious targets are reached, the world will still be relying on a broad energy mix by 2030. The challenges are significant. The world’s existing energy infrastructure needs modernizing and so much new infrastructure needs to be built. All this applies to Belgium too. The country urgently needs more energy production capacity and, as the AMPERE Commission showed, we will need to rely on all sources of energy.

Siemens to expand position as green infrastructure giant Siemens is set to play a pivotal role in how we end up meeting the world’s energy challenges. As a global technology giant, the company has positioned itself across the entire energy value chain, from oil and gas extraction, to power generation, electricity transmission and distribution. Compared to its competitors, the company is unrivaled in the breadth of expertise it has in everything to do with energy. As such, Siemens has designated the energy sector as one of its three core markets (in addition to Healthcare and Industry). Given the growing demand for clean reliable energy, Siemens’ energy business, covered by six global divisions, is increasingly in the spotlight. It also is responsible for a significant proportion of Siemens’ annual order entry – €33 billion of the roughly €88 billion in total group revenue. Of course, the company’s energy competencies are not confined to the energy sector alone—they also are applied more widely, in industry and especially transportation. To maintain its worldwide leadership position, Siemens relies on innovation. In fact, Siemens prides itself on an innovation track record going back at least 140 years. It is via innovation—i.e. the ongoing invention and development of new solutions to the most pressing engineering problems of the day—that Siemens is likely to play a key role in the future of energy.

Some powerful realizations Siemens has built the world’s most powerful and efficient gas turbine, which achieves energy efficiency (in a combined gas and steam cycle) of more than 60 percent. This is a world record, beating the previous limit of 58 percent. Applying this turbine to a 530 megawatt power plant would reduce CO₂ emissions by about 40,000 tons per year (equivalent to about 10,000 VW Golfs traveling 20,000 kilometers annually).

BIO Siemens

+ www.siemens.com

eration, renewable energy, energy

+ Siemens is a global powerhouse

service, power transmission and

in electronics and electrical

power distribution

engineering in Industry, Energy and Healthcare. + The company’s six energy divisions in the Energy Sector cover

The solar division, which includes both photovoltaic and concentrated solar installations (such as the Nevada plant described earlier), is a new addition to the Siemens renewable-energy business. In wind energy, Siemens has developed the most powerful seriesproduced wind-power system, with a megawatt capacity, 3.6- for offshore applications. In a future energy grid based on renewable energy, urban centers will need to be connected to where the energy is produced, i.e. long distances away in the North Sea (wind) and the deserts of southern Europe and North Africa (solar). To make this possible, efficient transmission of electricity over long distances is needed—exactly the area where Siemens has recently broken new ground. Siemens’ high voltage direct current (HVDC) PLUS system, an advanced solution for longer-range power transmission, is currently being deployed in China, connecting the hydroelectric installations in the province of Yunnan in the southwest corner of China to the megacities of Hong Kong, Shenzhen and Guangzhou on the south coast of the country, a distance of 1,400 kilometers. It will be the first such system to transmit electricity at a voltage of 800 kilovolts and with a capacity of 5,000 megawatts.

the entire energy value chain, from oil & gas to fossil power gen-

In power distribution a key R&D focus for Siemens lies in so-called Smart Grids. In the quest to move from a centralized to a decentralized energy-production model (i.e., where individual homes and companies alternate between being energy consumer and energy producer), a key challenge will be the development of an ‘intelligent grid’ that is able to manage two-way variability in supply and demand. To conclude, Siemens is clearly well positioned to play a key role in the transformation of the world’s energy infrastructure. Continuously rising energy demands, and the company’s commitment to innovation, especially in the current uncertain economic climate, is bound to consolidate its position as a leading energy solutions business.

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3.2| The Energy Market

arket liberalisation is a central tenet of EU policy and has had a substantial impact on various sectors, most significantly the telecommunications sector. It was supposed to be a similar story in the energy sector. EU directives to open up Europe’s electricity and gas markets were adopted in 2003. In response, Flanders immediately opened up its electricity market entirely (including to consumers) and Brussels and Wallonia followed in January 2007.

There are good reasons for opening up the electricity and gas market. The basic idea is that an open competitive market would attract new investors and hence lead to more diversity in the types of fuels and technologies used. In turn, this should translate into more efficient production and competitive prices. Also, an open market should stimulate innovation (in efficiency, in renewable energies, etc) and it should improve the security of energy supply (due to a more diversified offering). A bit like what happened to telecommunications. Where do we stand today in the energy market? The response to this question depends on who you talk to and it subsequently remains one of the most heated debates in the Belgian energy domain. In the public domain it is mainly a conflict between Electrabel and a range of other stakeholders, including political leaders (e.g. Federal Minister for Energy Magnette), competitors, the green movement and academics. The conflict pivots around a number of key issues, including the dominant market share of Electrabel, Electrabel’s advantageous cost structure since it owns the written-off nuclear park, and the resulting barriers to entry this creates for new market entrants and new investment in production capacity. Clearly, today we cannot yet speak of a true open energy market, as originally envisaged by the EU’s policy makers. Yes, Electrabel does still dominate the Belgian electricity market, its control of the nuclear park does create an imbalance, energy prices have been somewhat higher compared to neighbouring countries, and there is an escalating capacity problem due to a lack of investment. But there is more to the problem than the recurring disputes fought out in the media between Electrabel and its antagonists. As such, the problem also deserves a more sustainable, integrated approach. A 250 million euro ‘claw-back’ fine may help the budget but it does not address the root causes of the problem. Other initiatives such as the pax electrica agreement and Elia’s investment in grid interconnections with neighbouring countries are far more important (but less visible in the media).

Electrabel today argues that it has complied with its end of the agreements made with the Verhofstadt government (the ‘pax electrica’). Firstly, having sold off assets in the gas market, Electrabel today is a minor player in the Belgian gas market. Electrabel still dominates the electricity wholesale market (see the graphs below illustrating 2007 market shares based on data from the transmission network operator Elia) but also here change is afoot, following two recent deals between Electrabel and respectively E.ON and SPE. Via a combination of sell-offs and asset swaps Electrabel is effectively transferring approximately 15% of the country’s electricity generation capacity (including a share of the nuclear park) to competitors. It is too early to tell what the impact will be of this change in the market’s structure but it does tackle the dual issues of market share and access to the low-cost nuclear park.

Electricity distribution, share supplied energy 2007

Electrabel 75 %

Nuon Essent Other participants 3% 2% SPE 7% 13 %

Electricity wholesale, share supplied energy on transmission network 2007

Other participants SPE 3% 3% Import 7%

Electrabel 87 %

Equally important to a more balanced allocation of Belgium’s existing energy infrastructure is attracting investment in new production capacity and improving the grid interconnections with neighbouring countries. The point of EU policy is to create an open European market, not simply a tacked-together mozaic of national markets. On that front EU policy has not been successful, although gradual progress is being made. Better grid interconnections with neighbouring countries are probably the most important investments that can be made in pursuit of an open energy market. The transmission network operator Elia is making significant investments in grid interconnections with France, the Netherlands and Germany. Mainly due to progress in the French link, Belgium’s import capacity has increased dramatically. This has also almost entirely eradicated any wholesale price differential between France and Belgium (although this has not translated into lower prices for end-users). Better grid interconnections are important too for new entrants, since it is that much harder for these small players to match demand and supply in real time given their limited local production capacity. The international electricity market gives them access to a more competitive and liquid wholesale market than if they were forced to buy or sell energy to Electrabel. Indeed, in that sense the electricity market BELPEX is functioning well—prices across France, Belgium and the Netherlands are clearly harmonising. Such international trading prices offer at least one useful reference on which to base electricity prices more generally in the domestic market. Price is an ironic issue. On the one hand there are calls to transfer the cost benefits of the nuclear installations to the market in the form of lower prices but lower prices will make it impossible to justify new investment in production capacity (which in turn is needed to improve competition, and thus lower prices). Hence, the idea of claw-back fees to the state which can then be deployed in support schemes for investment in renewable energy. But much more remains to be done to attract new investments and improve the market’s functioning. With the exception of SPE, most new entrants in the market remain very small and are reliant on support mechanisms for green energy. Most new entrants, wether Belgian subsidiaries of major Dutch players like Nuon or Eneco, or homegrown companies like Lampiris or Ecover, have a decidedly green strategy. Whether this is ideologically rooted or not (Ecover’s certainly is) a focus on renewables is recognised as the only way to enter the Belgian market since one avoids head-on competition with Electrabel in that way. Companies like Nuon

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Gas distribution, share supplied gas 2007

Distrigas 45%

Other participants 10 % SPE 6% Gaz de France 10 % Electrabel 29%

and Lampiris argue that the wholesale market simply is not liquid enough to qualify as being competitive. More investment in capacity is needed but this is decidedly difficult to justify given the regulatory hindernesses and complexity (four different regulators!). Hence, these companies need to import green power or invest in smaller renewable energy projects. Lampiris, for example, is investing in cogeneration and solar installations at hospitals, rest homes, apartment buildings, etc. Ecopower is a particularly unique player in the Flemish market in the way it is set up as a cooperative around a number of small renewable energy projects. Nuon is also investing in renewable energy installations at industrial clients but needs to import a good proportion of the 2,7 TWh it supplies to the Belgian market. Notwithstanding the progress that has been made, companies like Nuon continue to appeal to the government to do more to split up the existing production capacity, to make a decision on the nuclear question, and to attract new investment (via fiscal means, subsidies, and an easing of the permitting procedures). Another gripe coming from the new entrants concerns the exchange of information between the energy providers and the distribution network operators. For their client billing, energy providers rely on the metering data that is collected by the network operators. Too often there are delays and errors in this data with the result that the energy providers end up sending out incorrect bills to their customers. Indeed, the Flemish regulator VREG takes note of the fact that there are still too many customer complaints about billing and inconsistent information. For companies like Nuon this is frustrating because their hands are tied in this matter. The complaints are directed at Nuon, but the root cause of the problem lies with the network operators. The problem is that energy providers cannot take recourse to a regulatory framework or SLA-like concepts to enforce better service from the network operators. Again, they appeal to the government for a more balanced system with clear rights and duties defined for all parties concerned.

Gas wholesale, share supplied on transport network 2007 Gaz de France 16 % Distrigas 74 %

Wingas (Russian gas) 9% Other participants 1%

The political and regulatory context can be particularly frustrating for all parties concerned, not only for new entrants, but also for Electrabel and the network operaters. Given the inherent difficulty of liberalising the energy market and the overhaul this energy system needs, it strikes people as absurd that this country has split regulatory authority over the energy domain across governmental levels and regions. The result is inconsistency in policy (since the federal and various regional governments differ in political colour), inconsistency in regulatory mechanisms (four regulators, three different green energy certificate systems), and excessive administrative burden and delay for new investment projects. In fact, given the ambition of creating a truly integrated European market, it makes sense to strengthen policy and regulation at the European level.

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Together for less CO₂

—Electrabel’s sustainability commitments Far too often, the debate on sustainable energy management is limited to environmental sustainability; people often forget the importance of two other major emerging challenges, i.e., that energy from fossil fuels is in finite supply, and that energy is becoming increasingly expensive. Therefore, as leader of the Belgian energy market (with over 70% market share), Electrabel has an integrated strategy on deliverables: ensure a secure supply, at an acceptable price and reduce environmental impact. These elements have all been, and still are, at the heart of company policy, and are dealt with together and simultaneously.

Even though Electrabel has made significant progress in reducing CO₂ to date, the company recently launched “Together for less CO₂” a proactive and systematic sustainable development strategy articulated around 10 concrete commitments that aim to: ++ Reinforce CO₂ engagements in our own activities while ensuring security of supply and affordable prices ++ Work together with customers to reduce CO₂ emissions and energy costs ++ Engage with stakeholders to achieve common goals

Investing in renewable energy and efficiency improvement

BIO

Electrabel, Group GDF SUEZ + www.electrabel.com + Electrabel is part of GDF SUEZ, one of the leading energy providers in the world. The company is the number one on the Benelux market, where it sells electricity, natural gas and energy services and produces

Electrabel has put forward a rather formidable gauntlet: generate in Belgium enough electricity by means of renewable energy to be able to cover the consumption of one million households by 2015. This means increasing its renewable energy production capacity by 600 MW, in effect more than doubling the current capacity in Belgium. This is comparable to installing nearly one wind turbine per week for the next 7 years. Backing this up, the company plans to invest 1.3 billion Euros in biomass, wind and solar power projects. The investments in this regard will come mainly from onshore wind turbines and biomass power plants. For example, Electrabel aims to install 25 wind turbines to feed directly into the high-speed rail link connecting Liége and Leuven. In addition, two massive offshore wind turbine parks (Blue4Power) could be realized in the North Sea off the Belgian coast. In biomass (organic material as fuel), Electrabel is recognised as one the European market leaders, having put in place 500 MW electricity production capacity, mainly in Belgium. The company has specific knowhow in generating electricity from biomass, given its experience and significant R&D investment in this area. To ensure the sustainable character of the biomass used, the company has set up an independent certification procedure.

electricity.

Electrabel is also making strides in solar power solutions. In addition to realising photovoltaic projects in partnerships with industrial customers, Electrabel is involved in the entire supply chain of the solar industry: from design to production and solutions. Electrabel is a major shareholder of Photovoltech, one of Europe’s biggest photovoltaic cell manufacturers. The company also invested in Soltech, a specialist in embedding cells in existing materials like roofing or windows (Thermopane®).

Also at group level, renewables account for a significant share of GDF SUEZ’s energy mix. By the end of 2008, 20% of its total energy production capacity came

from renewable sources. By 2015 it wants to double its worldwide renewable production capacity. As classical power plants still emits CO₂, improving their efficiency remains a key environmental and economic priority. While Electrabel has already improved the energy efficiency of its Belgian power plants by about 20% since 1990, the company sees further possibilities for improvement. It has therefore allocated a 500 million Euro budget in the period 2007-2015 to further increase the energy efficiency of its Belgian fossil fuel-powered generating facilities. It is these combined efforts that ultimately helps to reduce CO₂ emissions. Since 1990, Electrabel’s Belgian power stations have reduced their CO₂ emissions by 29% (while electricity production increased during this period). By 2015, Electrabel aims to further reduce its CO₂ emissions by 1.7 million ton (accumulated reduction over a period of 7 years calculated on the basis of constant production starting in 2007). In the mean time, real progress has been made. By 2008, the company has invested in Belgium 264 million Euros in renewable energy and in the improvement of traditional power stations. Thanks to the investments in renewables, some of them carried out in partnership with Electrabel’s industrial customers, 530,000 households can already profit from green energy. These investments have also translated in reduced CO₂ emissions of 456,000 tons.

Electrabel has put forward a rather formidable gauntlet: generate in Belgium enough electricity by means of renewable energy to be able to cover the consumption of one million households by 2015

Working together with customers. Apart from reducing its own emissions, Electrabel seeks to work in partnership with its clients—industrial, professional and residential—to improve their energy efficiency and environmental impact. The opportunity is significant. For example, a study published in the McKinsey quarterly (2007) reported that energy consumption in both residential and industrial buildings could be reduced by up to 32% by 2030. Many of Electrabel’s initiatives towards its customers have come from its own experience in reducing energy consumption and CO₂ emissions.

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rating with universities, Electrabel is looking for green solutions in areas such as transportation (e.g. how will the electricity grid need to change to cope with hybrid or fully electric vehicles).

On the industrial side, Electrabel is working in partnership with customers to install renewable or more energy-efficient production capacity onsite at their locations. Especially important in this regard are the combined heat and power installations (installations that produce heat and electricity simultaneously, thereby achieving an energy efficiency of more than 85%). In Belgium, Electrabel manages more than 700 MW of such co-generation capacity. Some of Electrabel’s industrial customers are absolutely exemplary in their commitment to CO₂ emissions reductions. Thus, the Volvo Europa Truck plant in Ghent that manufactures 40,000 trucks a year does so today without emitting any CO₂. Electrabel played a key role in this regard by developing a tailor-made sustainability solution comprising the saving of energy, the installation of wind turbines, photovoltaic panels and biomass combustion onsite at Volvo, as well as the supply of green energy. Similarly, Electrabel invested in a massive 888 kWp photovoltaic installation (more than 7000 square meters) at Honda’s factory in Aalst, as part of a programme to develop over 10 MW of photovoltaic capacity in partnership with its customers. When the sun is out this installation produces enough energy to cover the entire site’s electricity needs (including the production infrastructure). Honda’s remaining electricity needs are covered by Electrabel‘s green energy offering AlpEnergie, thus in effect making the Honda plant CO₂ neutral from an electricity perspective. Looking ahead, such renewable energy projects increasingly will be a part of Electrabel’s core business. Electrabel is able to assist customers with a full suite of services around renewable energy, from technical advice and financial planning to the securing of suppliers for building the renewable installation. In addition to these types of large-scale projects, Electrabel is also able to supply green energy thanks to GDF SUEZ’s 5 GW of renewable power generating capacity in Europe. This ‘home made’ green energy complies with the most stringent local and European certification. All customer categories, from business to residential have access to tailored green energy products. By the end of 2008, the total amount of

green electricity sold by Electrabel in Belgium came to 7 TWh (13% of total sales), of which more than half was produced by GDF SUEZ installations. Approximately 106,600 residential customers have chosen Electrabel’s new ‘GreenPlus’ offering based on 100% belgian renewable electricity. Electrabel also works in a more advisory manner with industrial, professional and residential customers to reduce energy consumption. This can entail mainstream services like an online energy measurement platform, energy computation meters and energy audits. On a larger industrial scale, Electrabel employs Rational Use of Energy (RUE) training, energy coaching programmes (on site) and tailored energy audits that comply with relevant audit covenants, regulations and benchmarking.

To conclude, Electrabel has made substantial progress in reducing CO₂ emissions. The energy efficiency of its power generation infrastructure has improved significantly in recent years. Also, renewable energy capacity, while still comparatively small in Belgium, is significant at a European level. But much more needs to be done. In this regard, Electrabel has formulated a new ambitious sustainable development strategy, known as “Together for less CO₂.” The new commitments involve a ramping up of renewable energy capacity (both via Electrabel-owned plants and via installations at industrial clients), further investment in the energy efficiency of its existing plants, and a more proactive effort to help reduce energy consumption at industrial and residential clients. Overarching this, the company seeks a more transparent dialogue with its stakeholders. For Electrabel, these commitments have significant implications. The investments are substantial and the company will need to make changes in the way it works and communicate. However, the goals have been clearly defined—they are steep but realistic. Electrabel has embarked on a new phase in its role as the leading energy company in the Belgian market.

Take Home Attitude Electrabel strives to adopt the advice it imparts to its customers. Many of Electrabel’s initiatives towards its customers have come from its own experience in reducing energy consumption and CO₂ emissions. Thus, Electrabel has set itself the objective of reducing the CO₂ emissions generated by the daily activities of its 8,000 employees in Belgium by 21% before 2011. Innovation is another key pillar in Electrabel’s CO₂ commitments. Investing in R&D in-house and collabo-

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3.3| Nuclear Phase Out, or Not? I

n 2003, the federal government took the decision to phase out nuclear energy. Given the fact that more than 50% of our electricity needs are covered by the seven nuclear installations in Doel and Tihange, this was a decision bound to have serious implications.

The plan is to begin the process in 2015, when Tihange and Doel 1 & 2 will close. In 2025 the remaining four other installations will close. This presents the country with two key problems. Firstly, how will this tremendous amount of generation capacity be replaced, and this in light of rising demand for electricity and decades of underinvestment in the past? Secondly, how will the country meet its greenhouse gas emission targets if the emission-free nuclear capacity is to be replaced at least partly by gas and coal-fired installations? One thing is clear—the debate is a heated one. The Nuclear Forum’s recent media blitz provoked condemnation from the anti-nuclear movement, but ranks as one of the few instances where the pro-nuclear lobby took initiative in the debate. Essentially there are three choices available to the country: one, phase out nuclear energy as planned; two, delay the phase out; three, build more nuclear installation. Each approach has distinct advantages and disadvantages. A nuclear phase out as planned may cause serious problems. The scenarios outlined by the Commission Energy 2030 show us running into trouble due to the escalating costs of the carbon credits we’ll need to pay for. The Federal Planning Bureau’s modelling on the other hand predicts manageable costs in that regard. But many in energy and business circles also argue that we will not be able to replace the nuclear capacity quickly enough to meet demand. Countering this, the anti-nuclear lobby (Bond Beter Leefmilieau, Greenpeace, WWF, Voor Moeder Aarde, etc) argue that the capacity of the first three reactors should be relatively easy to cover by investments that are currently in the pipeline (cogeneration and gas installations at industrial locations and the first offshore wind farms). The question remains, however, what will happen after about 2022 when the remaining installations begin to be taken off the grid. According the Federal Planning Bureau’s models, the energy system will take recourse mainly to gas and renewables. In fact, by 2020 renewable capacity should amount to approximately 28% of total installed electricity capacity. Given the fact that in 2005 renewables represented 5.5% of total capacity, this first phase will already be a herculean task. After 2025, however, when the remaining nuclear capacity is taken offline (and taking with it about 1/3 of the electricity generated in 2020), the investments in renewables and gas installations will need to ramp up dramatically. One key advantage of going ahead with the nuclear phase out—and confirming this decision as soon as possible— is that this will finally create the legal clarity needed to attract major investments in new energy capacity. It will kickstart an engine that needs to ramp up well into the 2020s. Certainly the country will

probably need to import a large proportion of its (green) power needs. Although there are currently indications that our neighbours are keen to restrict export of their green energy to some extent, such tactics will need to be fought vigorously both legally and technically (for example, by investing in more grid interconnections over the North Sea). A delay in the nuclear phase out could buy us more time to build renewable energy production capacity, while still keeping ‘true’ to the principle of nuclear phase out. The danger is that it will create more legal uncertainty and scare off potential investors. An alternative is to scrap the principle of nuclear phase out altogether and start looking at 3rd and 4th generation nuclear technology, which promises more efficiency and less dangerous nuclear waste. Another benefit in this scenario is that we would have opportunity to build on the remarkable nuclear know-how in the country. Thus, the Belgian Nuclear Research Centre in Mol (which employes about 600 people, 40% from abroad) is working on a test reactor of the fourth generation. This reactor will use less uranium than older reactors and its radioactive waste would need storage for about 1,000 years instead of the 100,000 years most of today’s waste needs to be stored for. This EU research programme follows decades of R&D work in Mol and has participation from several Belgian companies. There are serious disadvantages to the nuclear option too. Firstly, there are the obvious dangers of nuclear terrorism and war, or nuclear accidents (remember Chernobyl) and radioactive waste. Such risks must be seen in a global context. While we may consider a few state-of-the-art installations in Belgium safe, we need to recognise that if we think we have a right to build nuclear installations, then everybody does. Imagine a world where there are not hundreds but thousands of nuclear installations. There are two other key problems with the nuclear option too. For one, building nuclear power installations is expensive. Today’s nuclear power is cheap because the original investments are written off. But building new installations will be expensive. For example, the new plant being built in Olkiluoto, Finland is encountering construction delays and is expected to be 50% over its original 3 billion euro budget. For that money we can fill up most of the Belgian offshore concessions with wind turbines. A second problem with nuclear energy concerns the overall energy production model. The classic production model this country has in place today is the baseload model. It is based on the principle that a large proportion of the country’s minimum (nonpeak) electricity needs should be covered by nuclear or coal installations since these are ideal for delivering consistent flows of (cheaper) energy. A nuclear plant you cannot crank up or down in response to changes in demand. The variability in demand—i.e.the peak demand—is subsequently covered by natural gas installations since these installations can be powered up or down very quickly. However, the baseload model falls apart when one tries to integrate massive quantities of unpredictable and variable energy from renewable

sources such as wind or solar. As Greenpeace argues in its energy roadmap, a system based on renewable energy needs to prioritise renewable energy and rely on international grid integration and natural gas/biogas/ biomass installations to cover the gaps with demand. In other words, at a fundamental ‘system’ level, there is no nuclear power and renewable energy option—it is one or the other. However, in the shorter term—since massive renewable energy capacity will take decades to build—the choice is clearly not between renewables and nuclear, but between nuclear and fossils. Which is the lesser of the two evils? Clearly, the nuclear question is a tough nut to crack.

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Nuclear cordon sanitaire —Johan Albrecht Some time ago Joelle Milquet said ‘no’ to the planned phase-out of nuclear power from 2015. So there is some political interest in the energy problem after all. Meanwhile, the federal government calmly awaits developments till after the 2009 elections. To play for time, a new general study is being commissioned about the ideal energy mix for Belgium and related energy issues.

A peculiar move, since the recent study ‘Belgium’s Energy Challenges Towards 2030’ has been available for some time. Indeed in June 2007 the final report of the Energy Commission 2030 led by William D’haeseleer (Catholic University of Leuven) was presented. Because our nuclear park still provides 55% of national electricity production, the Energy Commission 2030 found it scientifically relevant to keep the nuclear option open in a few of the simulations. This logical choice and the study itself were not appreciated by everyone to the same extent. Strange too, because with the PRIMES model the Energy Commission 2030 opted for a standard approach as was the case in earlier studies, amongst others a study commissioned by Bruno Tobback. Of course our policy makers are entitled to commission the same study every year or to have the previous year’s study evaluated once again. What could a new energy study possibly teach us?

than the prices assumed by the Energy Commission 2030 and the price volatility makes investment decisions more difficult. It also appears that the investment cost of all forms of energy technology has increased spectacularly since 2005. Conventional gas and coal power stations were being sold in 2008 at prices 70% higher than in 2005. Since 2000 the total increase in capital costs for fossil fuel power stations has amounted to about 120%. Wind turbines too have become considerably more expensive; a price increase of 25% in 2008 for a turbine of 2.5 MW is by no means exceptional. This cost explosion is the result of higher input prices and a human capital shortage in all energy technology sectors. Electricity and energy services in the coming decades will become significantly more expensive than projected by the Energy Commission 2030. As a result, coal power stations as well as investments in

What do we then choose for our local community; 10 large wind turbines or one mini-reactor underground…? The work of the Energy Commission 2030 is based on modelling work conducted in 2006 and in the meantime a few shock waves have gone through the energy landscape. Even the International Energy Agency has assumed an oil price of $100 per barrel between now and 2015. The fear of recession has released a bit of pressure from the price kettle, but this is a temporary breathing space. Towards 2030 a high degree of price volatility and a real oil price of $200 are expected. These price expectations are much higher

energy savings are becoming more attractive. High oil prices may also speed up the introduction of electric and plug-in hybrid cars into the market, so that already by 2030 part of the transport flow will be linked to the electricity grid. If the proportion of low-carbon electricity increases, the increase of greenhouse gas emissions could be reduced. But this will require considerable investment in additional low-carbon capacity. In this energy landscape a new simulation with PRIMES would show that

the opportunity cost of the planned nuclear phase-out has only increased. This provides interesting possibilities, should the government negotiate this with the sector in a transparent manner. Meanwhile we have a few more years to go until the start of the planned nuclear phase-out. About 1600 MW of nuclear capacity needs to be replaced by other baseload options such as coal and gas power stations. For as long as there is no massive investment in electricity storage from wind turbines, less nuclear capacity will result in more thermal capacity. And the licensing and building of a coal power station takes an awfully long time… Despite the Belgian cordon sanitaire around nuclear energy, much is happening in the nuclear sector. In the US a few companies were granted licenses to start selling compact nuclear reactors of 25 MW around 2015, enough for the consumption of 20.000 families. These mini-reactors are to be placed underground, have no moving parts and only require a service every seven years. If these beautiful promises can be realised, nuclear energy too will be democratised. And what do we then choose for our local community; 10 large wind turbines or one mini-reactor underground…? Surely no shortage of interesting calculations after 2015. Johan Albrecht is Senior Fellow at the ITINERA INSTITUTE. This article was published previously in TIJD, 19 November 2008

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3.4| Producing Energy Efficiently

he process of producing energy consumes energy. In fact, the energy transformation sector uses about a third of all primary energy. Given that in most conventional power stations, only about 30-50% of the energy consumed is converted into electricity (older coal stations are the worst culprits), there obviously is potential—in at least two key areas—to produce a lot more energy with the resources we import.

Firstly, there is opportunity to modernise the large power plants, the installations that feed the highvoltage grid, powering up entire cities. This is at least partly (the other reason is to control emissions better) why Electrabel is investing a great deal of money in its existing infrastructure. The technology used can make a substantial difference. For example, the efficiency of an older coal-fired power plant is only about 30-35%. Compare that to Siemens’ newest gas turbine, currently the largest of its type in the world. This 444-ton machine has a capacity of 530 MW (if combined with a downstream steam turbine), which is enough to power a city of 3 million residents. Its efficiency is a world-record at approximately 60%. Coal is cheap and reasonably abundant, however, which is why coal plants continue to be built. Modern coal plants also are more efficient than older types, and should carbon-capture technology become effective then we can expect a lot more coal plants to be built. All eyes are on E.ON, for example, with its controversial plan to build a new 1100 MW coal-fired plant in Antwerp that it claims will be 46% efficient and ‘carbon-capture ready’. Secondly, there is opportunity to produce a great deal more energy at a decentral level, in smaller scale, using cogeneration technology. Cogeneration is a technique that allows for the production of heat (steam or hot water) and electricity in a single process.

While traditional power plants release their exhaust gases direct into the atmosphere, a cogeneration plant will use those hot gases to produce hot water or steam. Most cogeneration plants today can be found at large industrial sites, where the heat generated is used in the factory’s industrial processes. Typically driven by natural gas or biogas, cogeneration facilities can achieve energy efficiency levels of around 90%. That is a tremendous difference with even the most efficient electricity-only power plants. As a result, there has been tremendous growth in the adoption of this technology in Belgium. Looking at the total power capacity installed, however, the bulk can be ascribed to a handful of massive installations in the chemical industry. But rolling the technology out to smaller scale contexts, to smaller industrial sites, buildings or even residential areas, is proving difficult. Even though cogeneration is supported by a green power certificate system, there are a number of key limitations that hamper growth in the future. Firstly, the heat generated needs to be used in some way or other. While it makes sense for a chemical plant to use cogeneration given the need for electricity and heat in its production processes, in many other settings one first needs to build a district heating system of sorts. Places like New York City and many Scandinavian and Eastern European cities have such district heating systems in place (where large cogeneration plants push steam through a district- or city-wide network of pipes, into the heating systems of apartment buildings and office buildings). In Belgium we do not have such infrastructure in place. New infrastructure is gradually being built, however, with these principles in mind. Electrawinds, for example, has projects on the cards where newly established commercial zones will have access to a central heating system powered by a cogeneration plant. Also, there has been much success (albeit largely due to the feed-in tariffs) in linking cogeneration installations to greenhouse agriculture. A second limitation is that the excess electricity generated needs to be injected back into the grid. While a

large industrial site will typically already have dedicated links to the grid, smaller industrial sites and greenhouse agriculture do not. The vision of decentralised power production, where thousands of small industrial sites and residential zones alternate between being power consumer and producer, implies that the grid needs a major revamp. More on this in the next section: ‘Fixing the Grid.’ Thirdly, it is proving difficult to develop efficient smallscale cogeneration systems for use in smaller companies, buildings or even homes. The problem is that the heat demand profile needs to be reasonably consistent (i.e. consume a consistent amount of heat continuously). That is not the case in smaller buildings or homes. Nevertheless, it is likely that cogeneration technology for the home will eventually become available.

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3.5| Fixing the GRID

anaging electricity flows is no easy task and is about to get a lot harder. Some facts: firstly, electricity’s capacity to be stored is limited and it always follows the path of least resistance; secondly, demand for electricity fluctuates in a sometimes unpredictable manner; thirdly, the supply of electricity will become increasingly variable and decentralised; and fourthly, national grids are being interconnected to create a more integrated European electricity market. This makes the matching of supply and demand—or keeping the grid in balance—increasingly difficult. Traditionally, this problem was handled using the baseload model. Thus, nuclear and coal supplies the minimum ‘baseload’ demand. As demand rises, more nimble gas installations are fired up to ensure the tension on the net remains in balance.

Enter decentral power production and renewable energy. Firstly, consider the offshore wind farms. Today the first 6 wind turbines from C-Power are up and running. That has a neglible impact on the grid. Once the first three planned concessions are built, however, more than 800 MW of (variable) capacity will be connected to the grid. By 2020, the hope is that all seven concessions are complete, translating into more than 2000 MW—that is projected to be about 10% of the country’s total electricity generating capacity. To cope with that amount of power, the high-voltage grid connection from Zeebrugge to Eeklo will need substantial investment. Perhaps more importantly, however, the grid will need to cope with the variability of this injected wind power. Add the projected onshore wind capacity and we could be looking at 20-25% of total electricity capacity varying with the wind conditions in this region. To cope, we will need a significant amount of gas-fired capacity as back up power, and we will likely be relying on a more integrated European electricity grid. Fortunately there is much progress in this regard. Elia, the Belgian transmission network operator, is investing in better interconnections with our neighbours’ grids. As a result of such investments to date, this country is able to import up to about 40% of our electricity needs from France, the Netherlands and Luxemburg. This is particularly useful to improve functioning of the market and to secure our supply risks, mainly because the available electricity becomes so much more diverse in source. Thus, France has plenty of nuclear power, Germany has wind and coal, and the Netherlands has natural gas and a useful connection to the Norwegian hydro installations. Looking ahead, there also are (political) initiatives to begin studying the North Sea grid concepts promoted by Greenpeace and Dutch Natuur & Milieu. Now consider the emergence of smaller power generation installations (solar, biomass, cogeneration) at companies, residents and greenhouse agriculture. These installations inject power in the grid at lower voltages, right down to the level of the distribution networks. This means that the network at various voltage levels needs far more active management. The distribution network operators face a double challenge in this regard. Firstly, they are faced with a technical challenge since to cope with end users who inject electricity in the net, the distribution net needs to change from a uni-directional to a bi-directional and dynamically-managed network, otherwise known as the Smartgrid. Eandis, for example,

expects that about 2600 MW of capacity will need to be integrated in the distribution nets between 2008 and 2020 (2000 MW in midvoltage, and 600 MW in low voltage). By 2030 they expect growth to 5000 MW. In 2008 there already was 559 MW decentral capacity in service or applied for. This will cost them money. Eandis expects to invest 240 million euro extra (in addition to the usual investment budget) in the 2008-2015 period, mainly in the midvoltage network (to cope with the larger cogeneration installations). Most of the investments in the low voltage network (to cope with residential solar installations) will happen in 2016-2020. Much has been written and said about Smartgrids. The longer-term vision indeed is exciting and much R&D work in this area is being done in this country, by the likes of VITO, the University of Leuven and IT firm EnergyICT. A scenario exists where the electricity grid has become intelligent, being able to steer electricity supply and demand right down to the level of the household. For example, if electricity supply declines (the wind isn’t blowing) your home system will begin downpowering or switching off non-essential appliances (in a manner that you programme it to do). The network could also begin drawing power from plugged in hybrid cars. VITO and the University of Leuven are beginning to set up demonstration projects involving several thousand households. Employers association VOKA is on the case too, organising workgroups and projects, with the aim of having Smartgrids rolled in this country by 2020. In Februari this year (2009), network operator Eandis released its long-awaited Smartgrids roadmap. It begins with smart meters. Smart meters will give Eandis the real-time data it needs to manage the network dynamically and they will give households a first tool to begin managing their electricity use more intelligently. Test projects will start in 2011 and a full roll-out is expected from 2014 onwards. The smart meters are the visible parts to the average user. The network itself will be managed by more advanced network management equipment, regulating

the network’s balance and sending signals to suppliers and consumers as needed. An analogy with the internet is appropriate. Essentially the Smartgrid is a platform (akin to the IP network). What need follow are the applications in energy management systems for homes, companies and energy producers (akin to email, www, skype, etc). A second challenge the distribution networks face pertains to the green power and cogeneration certificates they need to buy from their ‘producer’ customers. While today this cost is manageable and for the most part is recouped in the tariffs, Eandis expects trouble ahead as decentral capacity increases. For one, it wants a level playing field—the costs of certificates should be fairly shared out among all distribution networks so that the networks that have a disproprortionate number of producers are not disadvantaged in their cost and pricing structure. In addition, the distribution companies have a particular problem with the larger cogeneration installations at greenhouse farms since it cannot recoup those costs so easily (the joke running in the energy sector is that the system has transformed the tomato growers into certificate growers). Hence, Eandis proposes that an ‘injection tariff’ be introduced that is applicable to the larger producers who inject power in the mid-voltage grid (to help cover the technical costs of linking them to the mid-voltage network). Producers like Ecopower understandably resist such proposals since it will make it near impossible for decentral power producers to compete with the larger centralised producers.

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Electric ‘Power Highways’

—A key component in tomorrow’s energy system, Alain De Cat

In today’s world of energy, we face a triple challenge, call them three megatrends: + increasing demand for energy, driven by demographic dynamics, + decreasing energy resources + concern for the environment: global emissions and climate change Thus, the first trend is in conflict with the two others. In my opinion, the solution to this paradox lies in a balanced energy mix. It is not an ‘or’ story but an ‘and’ story: renewable and nuclear and fossil power generation and energy efficiency. All energy sources will continue to play a role in the energy mix of tomorrow.

Absolutely critical to tomorrow’s energy system is the network, both at the level of transmission and distribution; thus both at the level of ‘power highways’ enabling bulk power transmission but also at the level of so-called ’smart grids‘. To predict the future of these networks, I strongly believe in scenario planning as a way to think strategically. Scenario planning consists of documenting different stories for the future and their consequences on the economy, the environment, etc. By doing so, one can better plan and structure R&D Programs. Let’s take an example: what will our European electricity network look like in 2020?

Demand-side participation in the energy system,

—Ronnie Belmans

The transmission of electricity will remain the most efficient and economic means of delivering energy. Electric “power highways” will emerge as a key component in tomorrow’s energy system, serving two key functions, one, to connect regional power grids with each other, and two, to connect urban and industrial centres to the increasingly remote sources of energy.

Bulk Power Transmission, from source to cities Transmission grids are still bringing bulk power to urban areas and large load centres, as the scarcity of natural resources and ambitious CO₂ reduction targets imply that energy is now produced further and further away from the load centres, by large wind and solar farms,

Despite many efforts to improve energy efficiency, global energy consumption still rises. With respect to electricity, it is generally acknowledged that improving overall energy efficiency inevitably leads to more electric energy use (e.g. plug in or full electric vehicles). Households and other small energy users (small industrial and service companies) are responsible for a large part of total energy consumption. Becoming more dependent on electrical appliances and with increasing demand for heating or cooling, their energy use is even expected to rise during the coming decades. As a consequence, small energy users are a strategic stakeholder when shaping the energy future.

for example. New oil and gas prospecting is as well performed further away in deep seas or conducted under extremely tough climatic conditions. Despite the growing prevalence of distributed generation, an efficient and reliable central power supply system still forms the backbone of the global energy industry in 2020. The worldwide annual consumption of electric power amounts to 27,000 terawatt hours, not least because of the enormous population growth. As most energy is consumed in congested urban areas far from the places of power generation, this gigantic amount of energy demands sophisticated bulk transmission solutions. For reasons of climate protection, economic efficiency, and security of supply, a bulk power system that

At this very moment the electricity and gas market with respect to the individual customer is not really taking off: some small price reductions are the only element available for the time being. It is generally recognized that active demand side participation, by which the energy user really becomes involved in the system, is the only way ahead. Furthermore, the energy system should be developed in such a way that the user receives incentives to actively pursue energy efficiency in every possible way. A third element is the need for integration of different energy sources, often renewables, available at local consumer level and that have a variable, noncontrollable nature. The user has to be in the centre of the system, which has to accommodate his/her demands. The integration of electric vehicles may be both a challenge (more grid load) and a solution (flexible storage). Therefore, research and development needs to

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integrates nuclear, fossil, hydroelectric, and wind power has been developed in nearly all countries of the world. Central plants of outstanding efficiency are in most cases situated on the waterfront and as close as possible to the energy sources. Hence, low-loss and energy efficient high- and ultra-high voltage transmission solutions are an integral part of bulk power systems. Intelligent combinations of DC and AC systems allow for the transmission of enormous amounts of power that are often generated thousands of kilometres from the places of consumption. Superconductors and other new materials allow the internationally interconnected bulk power transmission systems to work with transmission voltages of up to 800 kV DC or 1,000 kV AC. Power electronics, as well as innovative grid control and communication systems,

Beyond the technical challenges there also is an economic one: who will pay for the necessary adaptations to the distribution grid?

allow for maximum capacity utilization and anticipatory prevention of critical grid situations.

Connecting regional power markets With the emergence of new regional power markets and the necessity of reducing CO₂ emissions all over the world, the need for an efficient way to exchange power on an international level has grown. To allow for such exchange, large regional power grids are connected to each other by HVDC (high voltage direct current) long-distance links or “back-to-back”

coupling. In other areas, the emergence of DC grids as a replacement of former AC overhead lines can also be expected. DC power transmission technology is the only way to connect grids of different frequencies or strengths without the risk of jeopardizing existing stability levels.

Also in Belgium These changes will affect us in Belgium too. Besides the purely technical aspects, many processes can also improve power transmission and distribution. The recent ‘market coupling’ of the electrical markets in France,

Rather than remaining a passive consumer, he will become an active pro-sumer take a full systems approach to the problem. It aims at developing products and services that will allow domestic energy users to get the most out of their renewable sources integrated locally, to take advantage of the integration of different energy sources and to optimise their demand in an economic and energy efficient way. Rather than remaining a passive consumer, he will become an active pro-sumer (producer and consumer). This challenge is in accordance with the ideas put forward by the FP7 Smartgrids Technology Platform. By doing so, the local grid (gas and electricity) will be used far more efficiently both in terms of energy and investment. By doing so, it becomes feasible to cover the likely increase in

energy demand for mobility. For the development of the future energy grid, it is essential that innovative pilot and demo projects are set up. To go beyond the level of a purely technological show case, intensive measuring and monitoring programmes are needed, to collect data about the present and future use of electrical energy (for example after the introduction of plug-in hybrid or full electrical vehicles) and the complementary potential of local generation of electricity. Next, research has to be oriented on how an optimal portfolio of distributed resources together with control equipment can be made. Initially this will concern guidelines, but in a later phase, this acquired knowledge can be applied to concrete projects.

Professor Belmans is head of the Electric Energy Division of the Electrical Engineering Department, Catholic University of Leuven. He also chairs the board of directors of Elia, the Belgian Transmission System Operator. Professor Belmans’ research group at the University of Leuven is renowned for its work on smartgrids, renewables and distributed generation, distributed control systems, and electricity markets

Belgium and The Netherlands is a perfect example. The main purpose of this mechanism is to maximize the total economic surplus of all market participants: cheaper electricity generation in one country can meet demand and reduce prices in another country. Coupling the three markets also leads to a more efficient use of the daily capacity of the interconnections between the networks of Elia, RTE and TenneT. Looking ahead, the integration of the growing power generation from renewable sources is an important topic for the industry and the regulators. Beyond the technical challenges there also is an economic one: who will pay for the necessary adaptations to the distribution grid? What drives me in my job is that I can participate in the emergence of a renewed energy landscape.

The combination of new technology and new processes to enhance energy efficiency contributes to the world I want to live in. Alain De Cat is Director Energy Sector at Siemens Belgium

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3.6| The Potential for Renewable Energy

o what extent can we cover our energy needs in this country using renewable sources? Unfortunately there is no straight answer to this question and today depends mainly on which study or report one holds up as evidence. In 2006, the country covered about 2.7% of its energy needs with renewables. Our EU target for 2020 is 13%. The futures-e study, oft quoted by the employers associations, calculates our potential at 9.3%. The Federal Planning Bureau’s latest study on the economic impact of the climate plan comes up with a figure of 12.3%. Most optimistically, EDORA, the association for the renewable energy sector, claims that 14.11% is possible. Why the differences? Obviously there are methodological differences in each study and different assumptions are used. Regarding the use of biofuels in transport there is little dispute. Our EU objective is to cover 10% of our transport fuels by biofuels and since this basically comes down to importing the balance on what we produce domestically, there is little room for disagreement. There is disagreement, however, in the areas of electricity and heat. In electricity, the Federal Planning Bureau’s models deliver the most optimistic result— over 19% of our electricity needs covered by renewables. EDORA isn’t far off at 18.2% but Futures-e comes up with 14.2%. The energy mix differs too. While the bulk of renewable electricity in Belgium will come from wind and biomass, EDORA is more optimistic about wind and even allows for substantial growth in solar power. The Federal Planning Bureau’s economic modelling approach, however, forecasts more use of biomass (much will need to be imported) since it is more efficient, certainly compared to solar. The three studies also differ markedly in the use of renewables in heat generation (from 7% Futures-e to nearly 15% EDORA). Basically, this comes down to differences in the use of solid biomass (such as wood, much of which will need to be imported) and various forms of organic waste and byproducts. All remain reasonably optimistic, however, that the renewables share in heat will increase significantly. Should this not happen, as an Ernst & Young study seems to assume (based on data it reviewed from the EU Commission), then we obviously will need to make up the difference in electricity. The consulting firm concludes that if Belgium wants to achieve the overall 13% target, then it will need to cover nearly a third of its electricity needs by 2020. Whether that is feasible is another question. Each of these areas of renewable energy will be looked at more closely in following sections. In a general sense, however, we can conclude that while there may still be some debate on the potential for renewable energy, most stakeholders are now reasonably committed to achieving a target of 12-13% by 2020. The fact is that we do not have much choice in the matter: whatever we don’t manage to produce domestically we’ll have to import, which could turn out to be even more expensive. We also need to look beyond 2020. For example, there are calls from the European parlia-

ment to set a 60% target for renewables by 2050. Best we get cracking.

use the existing ‘legacy’ infrastructure than not at all. Recall, we have a capacity problem in this country.

Obviously there is debate about the optimal strategy towards those goals, for example, regarding the role of decentral energy production, the best energy mix (biomass versus wind versus solar) and the extent to which the economic crisis will impact on investment (already delaying the offshore wind projects).

If we are to have any hope of achieving the ambitious targets proposed for 2050 and beyond, then clearly we will need a paradigm shift in our thinking about energy. The differences in thinking outlined above probably do not translate into an ‘or-or’ scenario but will need to come down to a mix of both. That is, in the longer term this country will probably be importing green energy from a far more integrated European ‘supergrid’, envisaged by the likes of Greenpeace (see their article on the North Sea Wind Farms), Desertec and Dutch foundation Natuur en Milieu (Masterplan Zeekracht). Simultaneously, a large proportion of residential and industrial energy needs—especially heat—will need to be covered by cogeneration installations, both large and small, that run on locally supplied organic waste streams.

One key issue that the energy producers appear to differ somewhat in opinion over is the role of decentralised energy production. Today’s energy system was built on a centralised model. Large power stations such as nuclear or coal installations generate high voltage electricity which is distributed through the network downward through various levels of declining voltage until it reaches end users. That the energy system will gradually decentralise is not disputed. An increasing number of users (households and industrial sites) are beginning to function both as consumer and producer. Industrial plants have installed powerful cogeneration installations onsite to cover their heat, steam and electricity needs; companies are investing in solar installations on their large roofing areas, some in wind turbines; largescale greenhouse farms run on cogeneration installations; and households are installing solar panels on their home roofs. Depending on these users’ demand fluctuations and the weather, they alternate between being a net electricity consumer or net producer. All energy producers appear to accept this evolution. In fact, most make it a central tenet of their strategy—witness Electrabel’s new ‘together for less CO₂’ strategy where they emphasise the importance of building energy installations onsite at their industrial customers. The energy producers differ somewhat, however, in their view on how decentralised the system will become, although this is largely a logical consequence of their differing business models. The business model of the larger energy producers such as Electrabel, Nuon and SPE is based on larger energy installations. They also operate at a European level. Hence, these companies argue for more flexible European-level support mechanisms for renewable energy, that would enable them to invest in large-scale renewable energy projects in areas where it makes most sense to do so (e.g. solar in Spain). Organisations like Ecover and Lampiris, however, envisage a system of numerous small-scale energy production installations that are placed close to the users. This is especially important for the production of heat. Thus, a small cogeneration installation run on biomass can generate electricity and heat for local residents, companies, agriculture, and do so with exceptionally high energy efficiency. Electrawinds is doing similar things on a larger scale with its new biomass installation in Ostend, designed to produce electricity and to supply heat to local greenhouse agriculture. This is in contrast to Electrabel’s converted coal power plants that run on wood pellets (or a mix of coal and biomass) where the heat generated is lost. The green lobby decries such practices due to their inefficiency but in defense of Electrabel one could argue that is still a better way to

Scenario Renewable Electricity Capacity (MW) 5000 4000 3000 2000 1000 0 2020 EDORA 2020 FEDPLAN 2005 Hydro

Wind

Solar PV

Biomass & waste

Sources: Federal Planning Bureau, ODE Vlaanderen (presentation at Hoorzitting MINA-Raad 22/10/2008), futures-e

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Moving towards a sustainable energy future in Belgium and in Europe:

—Yes, we can! Lucie Tesnière

Europe has adopted last year what currently is the most ambitious legislation in the world to promote renewable energies. The European Union has set itself a binding target of 20% renewable energy in its energy consumption by 2020 compared to 8.5% in 2005. This will translate for Belgium in a 13% target by 2020 compared to 2.2% in 2005. How will Belgium reach this objective? What can be achieved following examples from abroad?

What measures can Belgium implement to reach its target? EDORA, the federation representing the renewable energy sector in Wallonia and Brussels, published a study exploring how to make this target a reality. It estimates that Belgium can reach 13% renewable energy in 2020, without excessive costs and with net benefits in terms of employment, investment and competitiveness. Measures will be needed to adapt infrastructures, remove administrative barriers and stabilise the legislative framework. In the electricity sector, for instance, it is crucial to put in place a stable support scheme adapted to the maturity of each technology, to modernise the electricity grid and extend it to cover offshore developments. In the heat sector, Belgium

should impose a minimum percentage of energy in new and refurbished buildings to come from renewable energy sources and promote district heating using renewable energy sources. Regarding the integration of renewable energy sources in the transport sector, experience shows that fuel distributors only use biofuels if there is a financial incentive or an obligation to use them.

years! In 2007, renewable energies contributed to climate protection with a CO₂ saving of around 115 million tones and to the creation of about 249,300 jobs. Spain on the forefront of renewable’s integration in buildings In 2006, Spain became one of the countries with the most advanced solar legislation in the world.

Measures will be needed to adapt infrastructures, remove administrative barriers and stabilise the legislative framework What can be achieved? Best Practices from the EU: Denmark: Security of supply and Competitiveness During the 1973-74 oil crisis, Denmark was 99% dependent on imported energy. Thirty years later, Denmark has developed strong energy efficiency policies and boosted the development of renewable energy sources to provide 27% of its electricity. Denmark has become one of the few net energy exporters in the EU and the third most competitive country in the world. It is a global leader in the wind power sector: Danish wind turbine industry exports serve about 1/3 of the world market. Germany: a stable support scheme creating jobs and investor confidence Thanks to a stable support scheme, the so-called “feed in tariffs”, the share of renewable energies in the German electricity consumption now stands at 14.2%: it was multiplied by two in only six

The Spanish government approved the new Technical Buildings Code which includes an obligation to cover 30-70% of the Domestic Hot Water demand with solar thermal energy in new and refurbished buildings. This regulation has encouraged a wave of investments in production facilities at European level, and in the distribution and marketing structures in Spain. The announcement of the 20% EU renewable energy target was a first and important step in recognizing the need for a shift towards a sustainable energy system. The European industry is ready to deliver about 35% of Europe’s electricity needs by 2020, depending on the energy efficiency achievements, 25 % of heat from renewable energy sources and 10 % biofuels by 2020. Now it is high time to take the second step: Implement the necessary legislation to make this goal a reality in Belgium and in Europe. The current financial turmoil is an opportunity to address both the economic and

climate change crises with a new “green deal” as a basis for a prosperous European economy. Lucie Tesnière works as Policy Adviser for the European Renewable Energy Council, the umbrella association representing the European renewable energy trade, research and industry associations. It represents an industry with an annual turnover of more than 40 billion euro and more than 450.000 employees. Prior to that, Lucie Tesnière worked for the EU affairs office of Norsk Hydro in Brussels, a Norwegian energy company. Her academic background is political science and European studies.

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3.7| Wind Energy

he Belgian coast—in fact the entire coast of Northern continental Europe—is a windy place. Thus not surprisingly in the decades to come wind is likely to contribute, together with biomass, the bulk of our renewable energy. With solar, it is also the cleanest form of renewable energy—once the installation is built and operating, it causes no more emissions and no fuel is needed. Although we are not the leader in the European class, our plans are big. They should be, since wind energy in Europe is very big. According to the European Wind Energy Association (EWEA) a total 8,484 MW of wind capacity was installed in the EU in 2008, placing it ahead of any other electricity production technology. In other words, Europe installed about half this country’s total electricity generating capacity in a single year. Total installed capacity in Europe stood at 65 GW in 2008, meeting about 4.2% of Europe’s electricity needs.

In Belgium the aim is to install about 6,000-7,000 MW of wind power capacity in the coming decades (the more optimistic scenarios for 2030 posited by EDORA), split reasonably evenly between on-shore and off-shore. The on-shore component will need to be built piecemiel, consisting of numerous small wind farms (sometimes a single turbine) located at industrial sites and zones, the major ports, and along highways and railways. In Wallonia the potential is greater, especially in rural areas. Renewable energy specialists like Electrawinds and Ecopower, but also classic utilities like Electrabel and Nuon have developed smaller on-shore wind farms across Belgium. In built-up Flanders a key obstacle to on-shore wind installations is the NIMBY (not-in-mybackyard) effect. The public is generally pro renewable energy but less keen on a whirring turbine nearby that plunges your summer porch in shadow every couple of seconds or so. Understandably, this is enough to turn anybody nutters. Nevertheless, there is enough potential to achieve ambitious targets—what is needed is a thorough analysis of the geographic (does it blow?), social (NIMBY) and economic (grid connection) potential and strong policy to subsequently allocate those areas to interested developers. A bit like what was achieved in off-shore. Following a failed first initiative to build a wird farm off the coast at Knokke (the project got scuppered by a single resident who complained that the turbines would ruin her view), the Belgian government got it right the second time by demarcating a huge zone beginning 30km offshore, bordering Dutch territorial waters. It is a zone big enough for seven major wind

farms, with a total potential of about 3800 MW. Three concessions have already been awarded to various consortiums and the first project—C-Power—has recently installed its first six turbines. But while the initial regulatory work was exemplary the follow-up process of screening and selecting potential projects could be speeded up. Given the distance from shore and the water depth, these off-shore projects will need to boast pioneering engineering work. C-Power, for example, has opted for a system of gravity-based foundations. Dredging boats first pour gravel on the seabed to create a level platform. Simultaneously, the foundations of the turbines are built onshore. Weighing 3000 tons, these huge concrete conical hulls are then towed out to sea and lowered on the prepared seabed. Sand is poured in the foundations to stabilise them and subsequently a 77 meter column is mounted on the foundation. The turbine, weighing 316 tons is then mounted on the column and the three rotor blades are connected (each with a diameter of 126 meter). The result, a superstructure that can operate in winds of up gale force eleven. This is one approach. Another consortium competing for a separate location is proposing a system based on floating platforms. Exploiting its competencies in oil & gas platforms, the Northwester consortium argues that its model will be far cheaper to build since it simply requires a platform (with the turbine on it) to be towed out to sea and anchored on the sea bed. At present the off shore projects are running into trouble due to the financial and economic crisis. The financing has dried up. Depending on the ultimate depth of the crisis, this situation should resolve itself since the regulatory framework covering the guaranteed green power certificates is seen to be reasonably robust. C-Power, since it is in the middle of works, is understandably less patient. It is, therefore, proposing that the government free up money (for example from the nuclear phase out fund) to invest direct in the project. In the mean time the grid can be fixed. This remains one of the key obstacles to the ambitious wind energy goals. The off-shore wind farms need connecting to the grid. The high-voltage transmission network only extends as far as Eeklo, however, and thus needs to be extended to the coast once the 800-900 MW mark in installed capacity is passed. Some of the consortiums also propose that Elia build an offshore power outlet, so that the developers can avoid each having to lay separate cables to shore. In addition, the grid will need

to be adapted (and further integrated with neighbouring grids) to cope with the variable supply. In Belgium we have a number of ambitious companies like Electrawinds that are building wind farms here and abroad. But as developers we remain a small player on the European map. Where we do rate as one of the top three in Europe is in our export of wind energy technology. Hansen Transmissions (it is a world leader in the manufacture of gear boxes for wind turbines) and Pauwels Trafo (it builds transformers for wind turbines) are key examples in this regard but companies like Samtech (develops simulation software for wind turbine design) also figure high in the European market. The future of wind energy in a sense will depend on how solid the engineering of the latest generation of turbines is. As the industry scales up to meet growing demand in Europe, Asia and America, manufacturers need to be able to produce quickly and in volume. Manufacturers’ time-to-market needs to improve continuously and most critically, the maintenance costs need to be kept as low as possible. If off-shore wind farms start falling apart due to the extreme conditions they need to perform under, investment will dry up. One need only think of how far the technology has come. Early turbines, for example, could only operate at fixed speeds. If the wind became too strong, then they were designed to simply stop turning. Fluctuations in wind, especially gusts, were tremendously stressfull for these early machines. The Danes solved many of these early problems, using mathematical modelling to simulate and predict how various components would be affected by various types of stress (vibration, stretching, bending, etc). Engineers also found ways to handle the effects of gusts by designing variable speed turbines and systems for adjusting the pitch of the rotors, thereby limiting the force of the wind on the system. Turbine design improved, components became lighter, and as a result the manufacturers could build increasingly big turbines. Today’s on-shore turbines are reaching 3 MW and even 7+ MW turbines are being developed for offshore, with the result that the engineering challenges keep on getting tougher. Hansen Transmissions is designing huge gearboxes that need to cope with vibrations (imagine being inside a colossal turbine turning in gale force conditions out at sea) and condition-based monitoring systems to optimise the operational performance and maintenance of these machines. Samtech’s software is used in the design phases, allowing turbine and component manufacturers to simulate and predict the dynamic loads on wind turbines, thereby optimising design and speeding up product development times.

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A North Sea Electricity Grid [R]evolution

—Jan Vande Putte In September 2008, Greenpeace and 3E published the results of a study that looked into the potential of a North Sea electricity grid. The report—A North Sea Electricity Grid [R]evolution—provides an original contribution to the energy debate by showing how a massive expansion of offshore wind power by 2020-2030 will work in practice. Although wind is a variable energy source, this is less the case over a large area like the North Sea. Variations in production at one wind park can be partly balanced by that of another park several hundreds of kilometres away. The 3E/Greenpeace study examined this ‘balancing’ effect in detail for the North Sea. It also shows how the large hydro-energy capacity in Norway can complement the remaining variations in wind power. Calculations were performed using wind speed measurements across the North Sea. Based on actual wind speed data, the study proposes the creation of an offshore electricity grid to enable the smooth flow of electricity generated from renewable energy sources into the power systems of seven different North Sea countries: the United Kingdom, France, Germany, Belgium, the Netherlands, Denmark and Norway.

Reducing variability

Advances in weather forecasting have already made the fluctuations of wind and solar energies very predictable. Fluctuations in the electricity output of energy sources like wind

can be further levelled out. In an interconnected offshore grid, a lower level of electricity output at a single wind farm can usually be balanced against a simultaneous high output from another wind farm several hundred kilometres away or from another energy source. A system of this nature with many thousands of wind turbines is more reliable, and energy production more secure because the impact of maintenance or defects will be negligible. Another contribution of the offshore electricity grid would be to combine the production of a fluctuating renewable energy source (e.g. wind) with dispatchable sources of renewable energy, such as the large hydro-energy capacity in Norway.

The real challenge: ambitious policies Greenpeace strongly encourages political decisionmakers and investors to take these key findings into consideration. The creation of an interconnected offshore grid would give Europe an efficient and appropriate answer to climate change by relying on renewable energy sources (both variable and dispatchable) and abandoning polluting and inefficient production systems based on coal and nuclear power. A flexible production system based on renewables better answers the demand for energy and avoids the huge loss of efficiency specific to large-scale power plants. The 3E study assumes a total installed capacity of 68.4 GW. Locations of more than 100 offshore wind power farms have been identified based on lists of

envisioned projects. The totals of installed power per country have been crosschecked with national and international targets. Before the publication of this study, Greenpeace has been developing regional, national and global energy scenarios that define practical pathways to cut global CO₂ emissions in half by 2050 (compared to 1990 levels) and to phase out nuclear power through massive investment in renewable energy and energy efficiency. The 3E report shows that wind power can offer a significant part of the solution. Greenpeace recommends that the seven North Sea countries coordinate their investments in an offshore electricity grid and facilitate its implementation. Large, outdated coal and nuclear plants have to be phased out and replaced with a more renewable, efficient and smartly-managed power system. The exciting possibilities of a system that combines all of these elements are realistic and practical and involve only existing and costefficient technologies. The challenge is not a problem of technology, but rather in putting policy in place to combine these technologies in an efficient, renewable and smart system.

Wind energy in Europe: a growing success story The world today is confronted with dangerous climate change and nuclear proliferation. Experts warn that fundamental changes must be made to energy production and use within

the next ten years to avoid the worst effects of climate change. The energy revolution is already underway, and the renewable energy industry is booming. In Europe in particular, solar and wind markets have been growing by about 20 per cent each year. In 2007, the renewable energy industry in Europe achieved a turnover of €30 billion and employed at least 350,000 people. In 2007, about 8550 MW of wind turbines were installed in the European Union (EU), generating enough electricity to meet the needs of 5 million EU households. These new wind turbines account for 40 per cent of all newlyinstalled power capacity last year – an impressive growth figure, which leaves the coal and gas industries far behind, with nuclear power lagging even farther behind as the industry continues its decline. The growth of wind power is expected to continue at an even faster pace. Greenpeace and the European Wind Energy Association (EWEA) predict that based on the steady market growth over the last decade, the annual growth of wind power will more than double, with total installed capacity increasing five-fold to 300,000 MW by 2030. According to these projections, wind turbines would comprise more than one quarter (up to 28%) of all installed electricity capacity in the EU. Despite the healthy growth of the wind industry, the EU power system today is still dominated by large coal and nuclear plants. These large-scale power plants are not designed to be switched on and off according the rise and fall of electricity

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Another contribution of the offshore electricity grid would be to combine the production of a fluctuating renewable energy source with dispatchable sources of renewable energy

More intelligent management of demand A highly efficient household consumes only one quarter of the energy of the average household. Demand can be greatly reduced with general energy-efficiency measures, such as using better appliances. Improved management of demand includes creating closer parity between electricity supply and consumption periods; electrical appliances for domestic and industrial uses, for example, can be devised to consume more when supply is higher.

And all with clean renewable sources Fluctuating renewable energy sources can be combined with dispatchable renewable sources like biomass. Hydro plants can be switched on easily to deliver immediate power to the electricity grid. For some hydro plants, excess power (when the wind blows and sun shines) can even be used to pump water back, working like a huge waterbattery. demand; they are inflexible when it comes to our needs. A power system dependent on big power plants is also inefficient; about two-thirds of the energy generated is lost in heat, which is discharged into the environment. What’s more, to shut down such a large plant for maintenance or refuelling requires back up. Unexpected circumstances can also lead to loss of electricity in whole cities or regions. For example, in July 2007, an earthquake in Japan knocked out all seven large reactors at the KashiwazakiKariwa nuclear power plant.

A more efficient decentralised system Generating power close to where people live is far more efficient as energy loss during the transport from the source to consumer is reduced; in small plants, heat losses can be directly recovered to heat up local houses, offices or hospitals. In a decentralised system, buildings (from homes to industrial units) have their own wind turbine, and solar panels or cogeneration units and smaller-scale power plants generate electricity closer to communities.

Greenpeace conclusions European electricity companies such as EDF, E.ON, RWE or Suez are fiercely opposing the closure of their ageing nuclear power and coal plants and are pushing for new ones to be created. These inflexible, inefficient plants are incompatible with the large-scale integration of renewable energy sources. Every new, large fossil fuel or nuclear power plant installed will operate for forty years or more, locking us in to massive environmental problems and blocking the transition to an

efficient, flexible and renewable electricity system. Greenpeace and the European Renewable Energy Council (EREC) commissioned the DLR Institute (German Aerospace Centre) to develop a sustainable global energy scenario up to 2050.This Energy [R]evolution scenario is a realistic blueprint that shows that it is feasible to phase out nuclear power and fossil fuels for a sustainable and equitable energy future through renewable energy and energy efficiency. It is clear that for Europe, and especially for the North Sea countries, offshore wind power will play a significant role in a flexible and efficient power system as part of a mixture of renewable energy sources. The 3E study shows how the reliability of the offshore wind electricity production can be improved considerably by interconnecting the wind farms in the North Sea and by envisaging its combination with dispatchable renewable sources (e.g. hydro in Norway). The study shows how, with the right decisions, the large-scale development of offshore wind would really work, once an offshore grid had been developed to enable the power to flow smoothly from the wind turbines into national power systems.

Greenpeace demands ++ The European Commission and the seven North Sea countries should build a coordinated European approach to the planning of offshore wind development in the North Sea. ++ There should be strategic and coordinated

grid planning on EU and regional levels that is consistent with ambitious short- and long-term scenarios for offshore wind energy development. The guidelines for Trans-European Energy Networks should be revised to facilitate the large-scale integration of renewable energy and alreadyplanned bilateral offshore interconnection projects (such as those between the UK and Norway, the UK and Belgium, and the UK and the Netherlands) should be made compatible with the large-scale integration of offshore wind power.

++ Offshore wind power, and renewable energy in general should be granted unambiguous priority access to the grid.

++ National offshore wind policies or initiatives such as in the German Bight, the UK (3rd Round) and Belgium (“Printemps de l’Environnement”) should be further developed to provide an integrated approach across the seven North Sea countries.

This text was first published in the report: ‘A North Sea electricity grid [r]evolution.’ Published by Greenpeace and 3E, September 2008. Jan Vande Putte is campaigner at Greenpeace International.

++ European guidelines should support the identification of suitable areas for wind farm construction based on geographical, economic and technical data, including wind availability, sensitive and protected habitats and species, shipping routes, fishing activities and grid connections. ++ The power system must be flexible to allow large-scale integration of fluctuating renewable energy. No new, large coal or nuclear power plants should be licensed, and existing plants must be replaced progressively with flexible, highly efficient and more decentralised plants.

++ A u t h o r i s a t i o n and licensing procedures for offshore wind farms across Europe should be streamlined, transparent and efficient. ++ Offshore interconnections should enable the exploitation of the large storage capacity of hydro energy in Norway to complement the variability of offshore wind power and other variable renewable sources.

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Shifting gears to power the world with wind

—Hansen Transmissions builds plants in India and China to meet growing worldwide demand

Sometimes people change the world without you even knowing it. When an o-ring failed on the ill-fated Challenger shuttle flight in 1986, it put in stark relief how small things can be so fundamental to the success of greater goals. It was also the 1980s that saw a far less dramatic (but no less important) change in public perception – how we generate electricity. After the first oil crisis a decade earlier, countries started looking for alternatives to fossil fuels. The first wind farms took root in California, largely on the back of generous tax credits, but also through the realisation that wind is abundant. Not only this, but the technology is attractive because it is both renewable and non-polluting. With a similar realisation sweeping Europe at the time (specifically Denmark, Germany, Spain and Belgium), early wind turbines came in two flavours: Overly massive and inefficient (Europe) or flexible and fragile (US). An early (and seemingly minor) participant in the wind business was Hansen Transmissions, an industrial gearbox manufacturer. The gearbox is the part of the turbine that people never see, yet it’s one of the most critical components in the success of a technology that is to play an increasingly vital role in weaning us off fossil fuels. While early turbines generated mere kilowatts, today’s giants have a 1.5-6.0 megawatt capacity, with a rotor disc area the size of a football field. However, the scaling up of machines and their components has also needed new developments, in particular with gearboxes, which are exposed to lots of vibrations and movements inside the turbines. The blades of the turbine are attached to a rotor hub in the centre, which connects to a drive shaft. Because this shaft spins quite slowly, a gearbox is required to turn a second shaft at speeds high enough to generate electricity.

While there are ways to do away with gearboxes in favour of ‘direct drive’ systems, these are staggeringly heavy in comparison. So the battle to eke out and convert over 50% of the wind’s kinetic energy (approaching the theoretical limit of 59%) is won or lost to a large degree over the efficiency of the gearbox. A Flemish industrial company, founded in 1923, Hansen Transmissions was one of the earliest European entrants into the development of wind power transmission products. Today, they are a world leader in this area, supplying innovative and durable gearboxes. With a Stanford University study theorising the global wind-energy potential to be something in

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the order of 72,000 gigawatts (close to five times the world’s current total energy consumption), the company is in the thick of an endeavour that could literally save the planet. We might not see the gearboxes, but the results are far reaching. Directly mirroring the industry sector, the company has grown enormously over the past few decades, with the wind division growing more than 28% annually to being responsible for 81% of the company’s turnover in 2008. Being an active participant in the industry from very early on means that Hansen partnered up with some of the world’s leading companies in turbine technology, based in Denmark and Spain. Today the company supplies gearboxes to four of the five manufacturers of geardriven wind turbines globally. Another spin off of early participation is the breadth of knowledge the company has accumulated in gearbox design. Transmissions in wind turbines are very different to industrial applications: they’re exposed to vibration, they’re installed high up (difficult to access), exposed to the elements, and naturally suffer the brunt of wind turbulence. This encompasses an entirely different set of operating parameters to their industrial cousins, and from the outset heralded the birth of an entirely new industry. Hansen has played a pioneering role in both the technological development and practical implementation of transmission systems, continuously improving the technology. With a global output of wind turbines expected to reach the 290GW mark by 2012, this propriety expertise is in keen demand. Growing alongside the industry, Hansen’s wind division has turned a corner, with a key goal to meet demand, which translates into expanding capacity rapidly around the world. Initially growth was mainly in the European market (Denmark, Germany and Spain), but subsequent massive growth in Asia has seen the company opening plants in China and India. In fact, 99% of the company’s production is exported worldwide. At this stage of the industry it comes down to a numbers game: how do you build bigger systems (greater than 3MW turbines require transmission systems ranging from 15-65 tons) to be lighter, quieter and more robust? Wind turbines need to operate about 365 days per year, (up to 98% of the time, allowing for a rather Spartan 7 days a year for maintenance). And they need to last 20 years. This means the components need to be very durable. With this firmly in mind, the company has shifted gear and changed the way it maintains its units. Moving to a more proactive condition-based maintenance model (vs. the traditional time based one), means that with sophisticated automated monitoring systems in place, the company (and therefore its clients) can spend less time patching problems by avoiding them in the first

place. With a significant lowering in the total cost of ownership, Hansen is literally at the core of an industry that is set to revolutionize the way we think about energy.

BIO

Hansen Transmissions + www.hansentransmissions.com + Leading position globally

With many countries starting wind energy programs, and existing ones set to heavily increase their yield, a constant need for better technology is the order of the day. Hansen feels it’s up to the task. You might not see the way they’re involved in changing the world, but the results are plain to all.

in the wind turbine gearbox market. + Plans to increase its wind turbine gearbox manufacturing capabilities to 14,300 MW per annum, by 2012

The Fifth Conference with:

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3.8| Solar Power

urope leads the world in the development of photovoltaic (PV) energy systems. According to EPIA, the European Photovoltaic Industry Association, an additional 5,600 MW was installed in 2008 bringing total installed capacity to about 15 GW. Spain (2.5 GW in 2008) and Germany (1.5 GW) lead the pack by a long way, but the US (342 MW in 2008), South Korea, Italy, France, Portugal and yes, even Belgium with 48 MW newly installed in 2008 (coming from 18 MW in 2007 and 2MW in 2006) are rapidly growing markets.

While the PV market comes from a small base in this country, the growth in the market is becoming tangible. One in every 200 Flemish households now has solar panels on their roofing, up from 1 in every 800 in 2007. Companies large and small—Boss Paints, Belgacom, Volvo Trucks, Honda, etc—also are investing, making use of their large roofing areas on warehouses, factories and office buildings. Companies like Electrawinds, Enfinity, but also the larger energy companies such as Electrabel, are actively driving this market. Electrawinds, for example, built a 1.3 MW solar park in a field in Middelkerke. Enfinity offers companies a build or rent model, whereby companies can either buy an installation outright or let Enfinity do the investing (and exploitation) on the basis of a rental fee for the roofing area. It must be said that the green power certificate scheme for solar (a type of feed-in tariff) has been instrumental in that growth. In Flanders this has recently changed, with the Flemish government announcing that it will reduce stepwise the support mechanisms for solar (while increasing those for wind and biomass)—although it must be said that the support for solar energy was exceptionally large compared to the other two.

The expectations are that 2009 will be another bumper year in Flanders since households and companies that invest now can still benefit from the high support scheme (450 euro per 1000 kWh for the next 20 years). In 2010 the feed-in tariff declines to 350 euro. How the market will evolve in subsequent years is uncertain. EPIA expects the Belgian market to continue growing rapidly, reaching between 500 and 800 MW cumula-

tive installed capacity by 2013 (coming from 70 MW in 2008). EDORA is similarly optimistic and expects about 700 MW to be installed by 2020. The Federal Planning Bureau’s modelling, however, forecasts very gradual growth (which it got wrong for 2008) to reach only 93 MW installed by 2020. Looking at it from a cleantech perspective, this is the one area where Belgian companies such as Photovoltec are manufacturers of finished products (as opposed to components and services only). Also in R&D, IMEC is a world leader in a range of PV technologies, from crystalline to organic solar cells. It is the combination of continued technological progress (increasing energy efficiency) and the upscaling of the solar industry (reducing manufacturing costs), that will eventually make PV inherently competitive with fossil fuel-based energy systems. IMEC is a key player in this regard because it is focused on both these areas. For example, it developed high-efficiency crystalline cells that lie at the basis of its spin-off company Photovoltec. Today, Photovoltec manufactures about 100 MW of capacity per year and is growing rapidly.

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IMEC at the forefront of photovoltaics —IMEC ramps up R&D investment in silicon solar cells

“Sticking to your guns” sometimes pays off, but is often perceived as a “sticking in the mud” strategy in today’s ever changing digital econoscape. The industry of photovoltaic cell production, which only really kicked off after the Second World War, has seen many advances in such a short time, but also (fairly recently) a number of detractors. From being a market tipped to take off in the 80s, real economic growth has only been realised in the past few years, as the world returns to a sustainable/renewable energy model as a long term solution. Commencing research in photovoltaic technology in the 80s, IMEC stuck to its guns and today is an absolute world leader in an area that is pivotal to our future energy supplies.

Background to IMEC Set up as an initiative by the Flemish government in the mid 80s, today IMEC is Europe’s largest independent research centre in nano-electronics and nanotechnology. Launched with a fairly modest budget, the organisation nevertheless had a definite and bold goal: strengthen the Flanders-based microelectronics industry through the formation of an advanced research laboratory on microelectronics technologies. From the start, this non-profit organisation had increasing the functionality of chips, nanotechnology and photovoltaic technology at the heart of its aspirations. As of late, the core focus areas of the company have also come to include technology for wireless communication, wireless autonomous transducer solutions, biomedical electronics, organic electronics and GaN power electronics. Part of IMEC’s rapid growth in the mid 90s can be ascribed to its core strategy: to bridge the gap between lab-based research and the industrial application(s) of results. Their semi-industrial plant, providing IMEC with the ability to manufacture a range of technologies, has meant that their R&D work can quickly be translated to a commercial scale. With a sturdy network of major industrial partners (accounting for over 80% of the organisation’s budget) and extensive collaboration with universities worldwide, the organisation is effectively able to leverage cost and risk sharing, cross-fertilization of knowledge and bilaterally shared results. With the often wide-ranging applicability of research, IMEC is actively involved in spin-off initiatives, one of the most successful being Photovoltech, a company initiated directly from photovoltaic research. IMEC’s spin-off companies, which have clear and real economic potential, are a result of IMEC’s ability to readily transform conceived technology (the organisation’s aim is to develop technology that is 3 to 10 years ahead of demand) into readiness for mass manufacturing, to meet an industrial need.

Photovoltaic R&D From its inception, IMEC has conducted groundbreaking research in the field of photovoltaic technology. It is active in four areas: Silicon solar cells Today, 90% of the solar cells produced worldwide are silicon-based solar cells. It is in this area that IMEC’s model of developing technologies that are ready for industrial application is best illustrated. IMEC’s key contribution, leading to the establishment in 2001 of spin-off Photovoltech, was twofold: ++ Developing multicrystalline Silicon Solar Cells with a high efficiency. These type of cells have typically lower efficiencies due to crystallographic defects and impurities present in the substrates – thanks to its developed processes, IMEC managed to reduce the detrimental effects of these properties. ++ Back Contact cells allow cells to be manufactured more efficiently. These are cells where the electric connectivity points are at the back of the cells. Hence, there is no need for bus bars at the front side (the thin white strips previously characteristic of solar cells). As a result, solar cells can be placed closer together. This frees up surface area, thereby increasing efficiency, and also improves the aesthetics of the panel. Today, Photovoltech is IMEC’s largest spin-off company. It manufactures 100MW per year and is growing at an exponential rate.

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BIO IMEC

+ www.imec.be + Europeâ&#x20AC;&#x2122;s largest independent research centre in nanoelectronics and nanotechnology + Performs research 3 to 10 years ahead of industrial needs.

At IMEC, the work in silicon-based solar cells continues. More specifically, IMEC is looking for ways to reduce the production cost of silicon solar cells, while further increasing conversion efficiency. The key opportunity here is in developing and processing ever thinner silicon wafers, since, presently, it is the silicon substrate that is responsible for about half the total production cost. Thinner silicon wafers potentially suffer from mechanical bow due to mechanical stress built up during the cell processing. IMEC realized a number of breakthroughs using a new technology that completely eradicates this problem and allows for the production of cells which are only half as thick compared to the Si solar cells produced nowadays (typically 200 micrometer). Another track IMEC is following is the growth of thin crystalline Si layers on a low-cost Si substrate. This research has resulted in thin-film silicon solar cells of only 20 micrometer with efficiencies above 16%.

a galliumarsenide on germanium solar stack, achieved a world record conversion efficiency of 24.7% and IMEC's infrared transparent thin-film III-V stacked solar cell achieved a conversion efficiency of 23.4%. Thermophotovoltaics Thermophotovoltaic cells convert radiation from heat sources other than the sun. In that regard IMEC has developed germanium cells that achieve a potential efficiency of over 20% for the typical emission spectrum of such heat sources (1000-1500K).

IMEC will continue to support a silicon-based solution in its mission to reduce the costs of generating electricity via photovoltaics by a factor of 3-4

Vision

Organic solar cells While organic solar cells are less efficient and less stable than their inorganic counterparts, they have the potential advantage of flexibility, lightness and lower production costs. IMECâ&#x20AC;&#x2122;s research is focused on improving the conversion efficiency, lifetime and production cost of organic solar cells. In that regard IMEC has developed cells with an efficiency of almost 5%.

All participants in the photovoltaic arena share some common goals: improving performance and lowering costs. Internationally, the R&D focus in photovoltaic technology is gradually shifting to thin silicon-based solar cells and thin-film technologies based on other materials. The latter promise lower production costs, but today they cannot yet compete in electrical performance with silicon-based solar cells. While IMEC is also active in new technologies such as organic solar cells and thermophotovoltaics, IMEC continues to see great potential in silicon cells and is in fact ramping up its research activities in this area, aiming to reduce the costs of generating electricity via photovoltaics by a factor of 3-4 (making the model truly financially viable).

Stacked solar cells These are highly efficient stacks of solar cells made from different semiconductors and designed for use in space or in systems where sunlight is focussed onto the cells. One of IMEC's technologies in this category,

While common misconceptions around photovoltaics (that they cost more in energy to manufacture than they can return) have of late been demonstrably refuted, it is important that more is done to prove the long-term value of crystalline Si technology.

Developing the industry via research and development, both to improve efficiencies (in design, scale and electric conversion rates) means a critical upfront commitment to the process, and involves buy-in from all the different parties concerned. Part of IMECâ&#x20AC;&#x2122;s vision is therefore not just technological advancement but also demonstrating the long-term potential of the technology as an important part of a viable global energy solution.

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3.9| Biomass & Biofuels

nergy from biomass is a reasonably complex field since there are so many different types of organic material and processes to extract energy from. To simplify matters, one look at the field along a number of axes. For example, one can make a distinction between the so-called first-generation material (crops grown for their energy content such as rapeseed, palm oil and types of maize and wood) and the various types of organic waste streams. The organic waste streams can be further split up in residential waste, organic waste from the food industry and agriculture, and waste water and sludge. Another distinction can be made between installations that produce energy for direct consumption or injection into an electricity grid, and those that produce biofuels for transport (biodiesel and bio-ethanol). In each of these areas, Belgian companies and institutions are doing pioneering work.

Biofuels

he biofuels sector should have been one of the most vibrant sectors but isn’t yet. As part of the EU climate package, by 2020 there must be a 10% minimum share of biofuels in all petrol and diesel consumed in Europe. This is a tremendous driver for the biofuels industry and indeed the foundations for such an industry are clearly laid in this country. A key achievement in this regard is the biofuels cluster that is developing at the Port of Ghent. The Ghent Bio-Energy Valley is a public private cooperation between the city of Ghent, the port, the province, Ghent University and various companies. It is trying to build an industrial cluster of biofuel companies, thereby stimulating synergies in R&D, in industrial processes (the one company’s waste is another’s resource), and in infrastructure (e.g. the port). The key achievement thus far is the huge bio-refinery at the port, incorporating the Bioro biodiesel factory and the Alco Bio Fuel bio-ethanol factory. A total of about 250 million euro has been invested in infrastructure by various companies.

A second key achievement is the establishment of Bio Base Europe, an innovation platform set up in partnership with BioPark Terneuzen. While Ghent University has unique credentials in the three main biotech areas, i.e. pharmaceutical, agri and industrial, the latter is reasonably unique because the ultimate product (i.e. biofuels) needs to be produced in tremendous volumes. Hence the innovation chain requires an intermediate step inbetween the university lab (in Ghent headed by Professor Wim Soetaert, also one of the initiative takers of Ghent Bio-Energy Valley) and the large-scale production environment. Bio Base Europe’s infrastructure, therefore, will consist of semi-industrial pilot installa-

tion, currently being built at the Port of Ghent, and a training centre in Terneuzen. The pilot installation will test and refine processes to prepare them for largescale industrial application. It is an open innovation model, in the sense that the facility will be open to private companies from across Europe (i.e. it is not limited to the Ghent cluster). The R&D story at Ghent is critical here because there is an important transition that needs to happen. The problem is that most of the technology used by the existing installations is based on first-generation energy crops. When food prices increased dramatically across 2007 and 2008, energy crops were found guilty in the court of public opinion. This is a contentious topic. Supporters of energy crops argue that the role of increasing demand from China is often ignored in explaining food price increases; also, one can argue that higher food prices are actually advantageous for developing nations since it should stimulate their agriculture sectors, long surpressed due to oversubsidised US and EU agriculture. However, some scientist are now beginning to question whether biofuels from first-generation crops like maize and rape seed do actually have a neutral impact on greenhouse gas concentrations. For example, a recent report by the Paris-based International Council for Science1 concludes that the production of biofuels has actually aggrevated global warming. This is because the farming of energy crops like rape and maize releases nitrous oxide (N2O), a type of greenhouse gas that is far more potent than CO₂ in its effect on global warming. The jury is still out on the matter of biofuels, but in the mean time the regulatory context has changed. In September 2008, the EU parliament voted to adapt the biofuels law, demanding that by 2020 40% of all biofuels must come from second-generation biomass (i.e. agricultural waste and non-food crops). Also, biofuels must be cleaner from an emissions perspective—they must emit 60% less CO₂ than fossil fuels. According to the biodiesel and bio-ethanol industry, this immediately rules out about 80% of all European production. Fortunately, much of the R&D work performed in the past few years has focused on exactly these types of problems. In the mean time, the Belgian biofuels sector has had a more urgent problem on its hand. While most neighbouring countries had drafted laws that compelled the petroleum companies to mix biofuels in their products, Belgium relied on a disfunctional quota system. In 2005, Belgium made a commitment that by 2010 5.75% of the diesel sold in the country would consist of biofuels. Unfortunately today we’re still at 1) ICSU/SCOPE International Biofuels Project Rapid Assassment. (Sept 2008). Biofuels: environmental consequences and interactions with changing land use.

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approximately 1%. Under Belgium’s quota system, seven suppliers were selected after international tender and given specific quotas to supply the Belgian market. The problem is that the petroleum companies (with the exception of TOTAL) are not mixing the biofuels, even though there are strong fiscal incentives for them to do so. Export is not an ideal alternative for the biofuel producers because the fiscal stimulus does not apply abroad. The conflict between the biofuel producers and petroleum sector has become increasingly nasty, each blaming the other for the problem. At the time of writing (April 2009), however, a breakthrough seems to have been reached—the Federal government intends to compel the petroleum companies to mix at least 4% biofuels in their products.

Biomass in coal installations

lectrabel is recognised as a pioneer in the use of solid biomass (wood pellets) in its coal installations, either mixing wood pellets with coal or adapting a plant to run 100% on wood. In the process it has found a way to switch large-scale electricity production capacity to renewables without having to build expensive new installations. As market leader and the incumbent Belgian energy company, Electrabel benefits from (or is burdend by, depending how you look at it) the fact that it inherited the bulk of Belgium’s ageing energy infrastructure. As a result, it isn’t the most efficient way of producing energy—old coal installations do not convert energy very efficiently since a great deal of the heat generated is lost.

Waste-to-energy Given the amount of waste generated by households, industry and agriculture, this area holds promise if it can be effectively converted to energy. The most obvious opportunity, exploited by the likes of waste management company Indaver, is the incineration of various forms of residential and industrial waste. If a material cannot be recycled the next alternative is usually incineration. Most of Indaver’s installations capture the energy released to generate electricity, which is then used to drive the plant and any excess is injected in the grid.

An alternative approach is to ‘digest’ (biologically treat) organic waste streams to produce biogas, which in turn can be used to generate electricity and/or steam. Companies like Global Water Engineering, Waterleau and Organic Waste Systems operate around the world selling their expertise in these areas. Global Water Engineering, for example, is a world leader in the biological treatment of organic wastewater by anaerobic processes. What this means is that they help companies clean up their waste water and turn it into energy. Some industries—such as breweries, beverages, food, dairies, abatoires, startch processing, paper, etc—generate organic waste flows that are particularly polluting for aquatic ecosystems. The classic approach to cleaning up these waste flows is via aerobic digestion, but this process consumes a great deal of electricity. The alternative is to use an anaerobic technique whereby biogas is generated, which can be transformed into steam and electricity. In this way, GWE has helped several factories become entirely self-sufficient from an energy perspectice and in effect turned them into net energy producers (while also cleaning up their waste flows). Waterleau is another interesting case, in the way they have combined various competencies in water, air, soil and energy to offer companies a total solution. For example, Waterleau designed a ‘closed loop’ system for a potato processing company in West-Flanders. It works as follows: the potato and other vegetable waste undergoes a fermentation process to generate biogas, leaving behind a wet sludge. The biogas is treated to extract the sulphur, and is subsequently fired to generate electricity and heat. The electricity is injected into the grid and the heat is used to generate steam. The steam is then used to dry the sludge (from the fermentation process) so that it can go back to agriculture as compost. Finally, an osmosis filter is used to clean up the waste water. Companies like Thenergo and Group Machiels work in similar ways. Group Machiels and potato processer Farm Frites, for example, set up a joint venture—called BioEnergy—that processes potato peels into biogas, in turn used to generate electricity and steam. The steam is used by the factory and the electricity is injected into the net, sufficient to meet the electricity needs of 12,500 households, about the population of the local community Lommel. Almost everything is reused, nothing is wasted. These are all great examples of the decentralised energy production model we are moving towards. OWS or Organic Waste Systems is another interesting company that has developed a process to produce biogas from residential waste, its so-called DRANCO process. Unlike the waste water or vegetable waste

streams used in the cases above, residential waste is typically contaminated with all sorts of solids and non-organic waste (plastic, wood, stone, glass, metal, etc). OWS nevertheless developed a system whereby it is able to digest the organic content of such waste in a relatively simple and efficient system. The largest Dranco facility, for example, in Brecht Belgium manages to process annually about 50,000 ton of selected household rubbish (food and garden waste, but also diapers and non-recyclable paper is added). In one year it managed to produce 7.4 million m³ of biogas, used to drive two gas engines that in turn produced enough electricity to meet the needs of 2000-2500 households. OWS also developed a process to produce biogas from energy crops and crop residues, which is in fact a more efficient way of extracting energy from crops than making biofuels. The OWS lab is currently the world leader in testing the biodegrabality of various forms of agricultural waste. A different waste flow—plant and animal fats—is used by Electrawinds in two biofuel plants in Flanders. Electrawinds developed a method for refining the waste fats so that the energy conversion is as high as possible (45-50%) and to ensure that there are no dangerous emissions released during the burning of these fuels. What these cases illustrate is that there are several methods in which various types of organic waste flows can be converted into energy and other useful material like compost and clean water. They also are nearly all examples of decentralised energy production, where the fuel source (biogas) is used to drive an efficient cogeneration system (otherwise called a CHP or Combined Heat Power system) that produces both electricity and heat simultaneously. What makes them so really efficient is that the heat is also used, either in the company’s production processes or to heat buildings or greenhouse farms in the vicinity. The opportunity clearly is tremendous. If all industries that produce organic waste adopt these practices that would amount to a great deal of clean energy. And there are probably so many more opportunities. For example, researchers at the University of Nevada recently discovered that leftover coffee grounds are an excellent base on which to produce biodiesel. Diesel engines that burn diesel from coffee need little to no adapating and the yield is excellent—about 10-15% of biodiesel by weight of coffee grounds. Furthermore, the residue makes good compost. There is clearly an opportunity here for a company to collect leftover coffee grounds from the thousands of taverns and cafés in the country.

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Dry continuous anaerobic digestion of energy crops

—Luc De Baere

The role of biomethane in the field of renewable energy The production of biogas from agricultural crops and crop residues has the potential to become a very significant source of renewable energy. So far, biomethane has been on the fringe of the booming bio-energy market, with wind, biodiesel and bio-ethanol being the more visible and larger contributors to the rising tide of alternative energy sources. Until a couple of years ago, biomethane was being generated in small quantities on farms, in industrial and municipal wastewater treatment plants, in landfills and in digesters for organics derived from municipal solid waste. However, in recent years the production of biomethane has become increasingly large-scale. By 2008, for example, the installed capacity of biogas plants in Germany reached more than 1300 MW in a total of more than 3800 biogas plants. Also, the number of plants treating the organic fraction of household waste in Europe has grown from 3 in 1990, to 62 in 2000, to up to more than 170 plants that will be installed by the end of 2010. The digestion capacity of more than 5.000.000 ton per year can handle almost 3% of the OFMSW produced in Europe by 2010. This may seem little but represents 20 to 30% of the biological treatment capacity for organics derived from household waste.

But biogas does not have to be converted into renewable electricity per se. Biogas can also be cleaned and upgraded into biomethane and injected into the natural gas network or even used as a vehicle fuel. Both of these applications are being implemented on a full-scale and rapidly gaining interest.

Injection into the natural gas pipeline can provide transportation to a user with a large heat consumption, where the biomethane is converted into electricity and the waste heat from the engines can be used continuously. In this way, an ideal CHP-application is created, while heat is otherwise often lost or used inefficiently at the location of the biogas plant. Use as a vehicle fuel after upgrading is an immediate potential in countries like Italy and Germany, which have an important network of gas stations for cars running on natural gas. Already there are numerous gas stations in Germany and the Netherlands offering biomethane. More than 30 models of cars running on pure natural gas or both gasoline and natural gas/biomethane can be purchased on the European market. The biggest reason however, why biogas should be given a lot of consideration, is the fact that it can generate a large net quantity of bio-energy per ha cultivated. Much larger amounts of bio-energy can be produced per hectare of land utilized in the form of biogas than compared to the net energy yield for bio-ethanol and biodiesel. Production of biomethane will power a car three to four times further than using the same land for production of bio-ethanol and biodiesel. Almost all of the biomass is converted to biogas through the digestion process. Also the quality of the crops can be rather low so that energy crops can be harvested before they are mature. This enables the farmer to grow two crops per year on the same field, increasing energy yield immediately by another 20 to 30%. Additionally, digesters can be constructed more locally,

within a transportation radius of 5 to 10km for the feedstock, while transportation for central biodiesel and bio-ethanol plants can be a large negative factor in the overall net energy yield. Digestion can also utilize a wide variety of feedstocks and crop residues.

Dry anaerobic digestion Neither has biogas technology development been stagnant. New systems are being developed that are more suitable for the digestion of energy crops and crop residues. Dry

liquid manure with a smaller proportion of energy crops, such as maize, being added. However, many farms do not produce liquid manure and if energy production of agricultural crops is going to play a significant role in the production of renewable energy, then digesters will need to run mixtures that do not contain a significant proportion of liquid manure. The technology in this regard is clearly proven. In 2006, for example, a first continuous dry digestion plant of energy crops - using the DrancoFarm process - was taken into operation in Nüstedt,

The biggest reason however, why biogas should be given a lot of consideration, is the fact that it can generate a large net quantity of bio-energy per ha cultivated. fermentation of crops offers great potential for the production of methane as a renewable source of energy. So far, dry fermentation technology has been mostly limited to the digestion of organic fractions derived from municipal solid waste. Source separated organics (biowaste), the organic fraction of residual waste and the organic fraction of mixed municipal waste are being successfully treated by means of dry anaerobic fermentation. There are more than 80 “dry” anaerobic digestion plants treating organics derived from municipal solid waste in Europe, and more are being constructed. Some plants are almost 20 years old. The application of dry fermentation to agricultural energy crops and crop residues has been limited. Most of the agricultural plants are designed to treat

Germany. This plant is converting silaged whole plants of maize, sunflowers and rye together with silaged grass and a small amount of solid manure. Nominal operation of the plant was reached within two months of startup and the proper electrical consumption for the plant amounted to 5%, leaving a net electrical yield of 95% to be put into the power utility grid. The plant can treat about 18.000 ton per year of agricultural crops, and has an electric generating capacity of 750 kW. To conclude, the production of biogas is fast becoming an important source of bioenergy in Germany due to the widespread digestion of crops, both complete plants and crop residues. The most important driving force is the fact that 3 to 4 times more net energy can be produced per hectare cultivated. Agricultural crops can

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be converted to biogas for up to 90% of the biomass, while also the plants do not need to be matured and 2 crops per year are feasible in most regions. Anaerobic dry digestion is an efficient way of producing biogas from crops, without the need for the addition of liquid manure or water. Thus, dry anaerobic digestion may possibly contribute to the rapid increase of biogas as a source of bio-energy.

Luc De Baere is CEO of OWS (Organic Waste Systems). OWS is specialised in biological treatment of solid and semi-solid organic substrates by means of anaerobic digestion

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4| Energy Consumption I

n this section we look at the other side of the energy coinâ&#x20AC;&#x201D;consumption. Energy efficiency is a clear policy priority at EU level. There is the target of Europe being 20% more energy efficient by 2020 and there are a myriad of newly introduced and proposed efficiency laws designed to help achieve that target, laws pertaining to automotive (emission norms for manufacturers), buildings, lighting (ban the bulb), appliances and much else. In Belgium too the federal and regional govern-

ments have introduced various support mechanisms (fiscal measures, subsidies) to support energy efficiency. Encourage your employees to cycle to work, dim those lights, turn the temperature a degree lower, walk to the bakery instead of driveâ&#x20AC;&#x201D;we are confronted by a thousand of these types of messages. But will it help? What is the potential for energy efficiency in this country and what have we achieved to date?

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4.1| The Potential for Energy Efficiency

The Federal Planning Bureau’s economic modelling approach2, however, comes up with different results. Let’s take a closer at these results on a per-sector basis. To recap, final energy demand in Belgium is reasonably evenly split between industry (the largest share 1) Fraunhofer Institute (2003).‘Management of energy demand.’ Study for the Ministry of Economic Affairs, Belgium. 2) Federal Planning Bureau. (2008). Impact of the EU Energy & Climate Package on the Belgian Energy System and Economy.

Residential 27%

Transport 27% Industry 32 %

In its research, the Federal Planning Bureau modelled how energy demand would evolve under the 30/20 EU target scenario (30% reduction CO₂, 20% share renewable) compared to a ‘business as usual’ (baseline) scenario. In the 30/20 scenario, energy prices would rise due to the cost of carbon credits and the investment in renewable energy capacity—that would have an impact on demand. The results are strikingly different to the Fraunhofer conclusions.

Change in Final Energy Demand 2005-2020 20

30/20 SCENARIO BASELINE SCENARIO

-5

Transport

More recently, the Federation of Enterprises in Belgium commissioned consulting firm McKinsey & Co to assess the potential for energy savings in this country. It came up with an astounding energy savings potential of 29% in 2030, with most opportunity in buildings (48% reduction potential), industry (22%) and road transport (21%).

Tertiary 14 %

Tertiary

Not surprisingly, therefore, the opportunity for energy efficiency should be significant. The Fraunhofer study explored three different scenarios for the country: a baseline ‘business as usual’ scenario, a ‘benchmarking’ scenario (based on adoption of established best practice implemented elsewhere in Europe) and an ‘economic potential’ scenario that looks at demand reduction scenarios using economic modelling techniques. In the baseline scenario our energy demand in 2020 would have increased by 16% compared to 2001. In the two other scenarios final energy demand would have declined by 5% and 12% respectively. The impact on CO₂ emissions would be significant: a 15.6% increase in emissions versus a 7.6% (benchmarking) or 18% (economic potential) reduction in the other scenarios. That’s a long way toward our climate policy goals.

Final Energy Demand 2005, by Sector

Residential

In 2003, the esteemed Fraunhofer Institute studied the Belgian potential for energy efficiency on request of the Belgian Ministry of Economic Affairs. 1 The results were not complimentary. On all major indicators (primary energy intensity, final energy intensity and CO₂ emissions per GDP units) we perform poorly against the European average. The key culprits in this regard are transport (a lot of fuel), industry (steel and chemical industry), the service sector, and households and buildings. True, that is practically the entire economy, but a key exception is the energy producing industry itself, which compares rather well against European benchmarks.

at 32%)3, transport (27%), residential (27%) and the tertiary sector (services, retail etc, taking a 14% share).

Industry

t is a simple calculation. Need less CO₂? Stop wasting energy (a great deal of energy is being wasted). Need a 20% share of total energy consumption met by renewables? Stop wasting energy to reduce total energy consumption (20% of 100 TWh is 20 TWh, 20% of 80 TWh is 16 TWh). It is an obvious and very necessary response to the energy and climate problem, if only because the opportunity is apparently still so great.

Total Final Energy Demand

As illustrated in the graph above, the Federal Planning Bureau forecasts that energy demand will still rise 3) 2005 data, based on the Federal Planning Bureau’s data

overall even in the ambitious 30/20 scenario, albeit slower than in the baseline scenario. Energy demand in industry hardly budges, which is explained by the fact that Belgian industry is already reasonably energyefficient. As the Fraunhofer Institute acknowledges, Belgian industry is comparatively energy-intense (due to the steel and chemical industries) but that does not mean it is not energy efficient. It also shows how difficult it is to decouple economic growth from energy consumption, especially if the economy is so reliant on energy-intensive industries. Substantial energy savings are possible, however, in the transport, residential and tertiary sectors. What do we learn from these results? Firstly, saving energy will be not easy. In fact, if we want any hope of actually reducing our energy consumption in absolute terms, we need to do away with the steel and chemical industries. That would be economic suicide certainly, but looking towards 2050 and beyond it does seem wise to begin preparing now for more sustainable materials management (this topic is discussed further in following chapters). Secondly, best we invest in renewable energy to close the gap.

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Enabling the transition —Toward a low-carbon society via smart ICT solutions

BIO Belgacom

+ www.belgacom.com + Largest telecommunications provider in Belgium + Offers a quadruple-play solution that integrates fixed and mobile telephony, Internet and television

Climate change is increasingly recognized as a strategic matter for Belgacom Group, as it represents potential risks for its operations but also enables new business opportunities. Not only does the company consider climate change as a corporate responsibility issue, but it believes it makes business sense to embed climate change thinking in their everyday business. As the leading provider of telecommunication services in Belgium, Belgacom can play an important role in enabling the transition to a low-carbon society. Its strategy to fight climate change is threefold: ++ Reducing its own carbon emissions ++ Helping customers reduce their carbon footprint via smart ICT solutions, ++ Involving its stakeholders (employees, suppliers, etc.)

Belgacom’s enabling role

Recent reports such as the GeSI/Climate Group Smart 2020 study demonstrate that by enabling other sectors to reduce their emissions, the ICT industry could reduce global emissions by as much as 15 per cent by 2020 – a volume of CO₂ five times its own footprint in 2020 (www.smart2020.org). Belgacom’s products and serv-

ices can indeed contribute to lower-carbon ways of living and working. These ICT solutions can be grouped in two categories: dematerialization and smart ICT solutions enabling energy efficiency.

Dematerialization solutions Many physical products and services can be replaced by their virtual equivalents, enabling energy and carbon savings on raw materials, production processes, logistic flows, and end-of-life disposal processes. Examples of such applications include e-billing, mobile payments (parking, tickets, etc.), video on demand (video downloads via Belgacom TV), e-health (digitization of medical files).

optimization solutions for transport and buildings Smart ICT solutions have the ability to monitor and maximize energy efficiency in other sectors, perhaps most importantly in the transport and building sectors, where CO₂ emissions are still growing in most European countries. Smart transport—Significant reductions in transport can be achieved today by using some of Belgacom’s

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1. the Belgacom towers with its solar panels 2. Significant reductions in transport through videoconferencing

by enabling other sectors to reduce their emissions, the ICT industry could reduce global emissions by as much as 15 percent by 2020

Green IT

Belgacom reduced its own CO2 emissions by 50% since 2005 Belgacom is committed to reducing the environmental impact of its own operations (networks, datacenters, offices, stores, fleet, business travel, procurement, etc.). This requires a combination of energy efficiency measures, use of the company’s own technologies to reduce transport, renewable energy, and waste recycling. Although the company is far from finished in this task, its ongoing efforts have enabled them to halve their CO₂ emissions since 2005.

Reducing the need for air conditioning via Free Air Cooling Network exchanges and datacenters are air conditioned to ensure their equipment runs within prescribed temperature and humidity ranges. As a result, these installations consume a great deal of energy. By channeling filtered fresh air from outside into the network exchanges, it is possible to keep temperatures within specification limits and avoid air conditioning. Belgacom achieved important energy savings by deploying this environment-friendly cooling system in its mobile and fixed networks. In partnership with Sun and Cisco, the company recently showcased that the same techniques could be used to cool datacenters and thus save up to 40% in energy use and related CO₂ emissions. solutions like teleworking, videoconferencing, mobile intranet/internet, or health telemonitoring solutions. This leads to reduced CO₂ emissions, increased productivity and lower costs. Future ICT applications in fields such as “intelligent cars” (telematics) or road charging will further accelerate this low-carbon transformation. Belgacom estimates that nearly 2 million tons of CO₂ could be saved annually in Belgium if these technologies were deployed more broadly. Smart buildings—Residential and office buildings can also benefit from ICT-enabled energy efficiency solutions. Belgacom is currently piloting smart metering in Belgium with energy-provider Nuon, whereby customers can monitor and manage their energy consumption in real-time via a remote web interface. Such applications enable customers to visualize their energy consumption and consequently change their behaviour, resulting in 2-10% energy and CO₂ savings. By installing IP networks in buildings, separate information flows on electricity, heating, lighting, etc. can be gathered, converged and managed in real-time, enabling remote and automated facilities management.

Belgacom’s green IT service offering can also help its customers lower their environmental footprint. The company’s hosting and remote management solutions for servers and applications enable businesses to consolidate their data centers, reduce the number of servers and optimize their installed base of servers and current infrastructure. This can lead to an up to 80% reduction in the number of servers and related energy consumption.

eworking, testing electric cars, ecodriving trainings, reducing packaging, reducing paper use and shifting remaining consumption on certified and recycled paper, discounted solar panels for the company’ employees.

Community Involvement By sponsoring the International Polar Foundation and major exhibitions like “C’est notre Terre”, we indirectly help increase society’s awareness on climate change and sustainability challenges. For-instance, several resources and activities covering the IPF, the Princess Elisabeth Station and the Polar Regions are available on Belgacom Group's educational and interactive website for children (www.kidcity.be): quiz, flash animations, videos, contests, articles, stories, pictures, forums and polls. Belgacom’s climate change journey is only starting, but the company feels it is a necessary and value-generating journey, with positive potential returns in terms of internal efficiency, employee and customer goodwill, risk management, innovation and revenue opportunities.

More energy-efficient network and IT assets As Belgacom continues to grow, more data is being transferred via its networks and datacenters, requiring more energy for power and cooling. The company’s aim is to pursue this growth in a sustainable way, by using energy more efficiently. Belgacom’s new generation IP network will generate up to 20% energy savings. The firm’s consolidation and virtualization policy for servers, which enables it to focus usage onto a single server, so that one server is being used to its full potential, while the others are not used, also saves a great deal of power and money. Belgacom also give high priority to energy efficiency as a factor in determining best value and performance for purchases of servers and network equipment.

100% renewable electricity All the electricity Belgacom uses in Belgium to power its networks, datacenters and office buildings comes from renewable sources, either via its own onsite photovoltaic installations, or via purchasing agreements. Other internal initiatives include consolidation of office buildings, waste recycling and reuse, promoting tel-

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4.2| The EnergyIntensive Industries T

ake a drive along the highway from Antwerp to Bergen-op-Zoom in Holland and one begins to understand why this economy is so energy intensive. The horizon is spiked by industrial chimneys and stretches for kilometres like this to the border. This is the chemical and petrochemical cluster at the Port of Antwerp. It also is the source of our environmental problems one is inclined to think. Indeed, it is not pretty and the air does not smell rosy. But first impressions can deceive. While industry is often given the blame for environmental problems, Europe’s industrial sector—and especially the energy-intensive industries—have actual made far more progress in improving their energy efficiency and reducing their environmental impact than households and transport. This is partly because energy is such a significant cost to their operations, meaning that they have been investing in efficiency measures since the oil crisis in the 1970s. Also, however, they were the first target of government regulation.

Take the Antwerp BASF site as an example. BASF Antwerp is the largest chemical production site in Belgium and the second largest of the BASF group worldwide. The site, which it shares with a number of partners (e.g. Zandvliet Power, Air Liquid), is responsible for 4% of total Belgian electricity consumption and 9% of total natural gas consumption. That is energyintensive indeed. It is because chemistry is inherently energy intensive, in the way that many chemical processes are driven by temperature and pressure, both of which require energy. Also, a number of chemical processes use energy as a raw material. Thus, natural gas is used as a raw material to make ammonia. Similarly, chlorine is made using electrolysis, consuming vast amounts of electricity. BASF has made energy efficiency a priority since the 70s when the oil crisis hit. The key achievement of its efforts in this regard is what it calls the ‘verbund’ model. Basically this comes down to the way a chemical plant’s various processes are linked to each other to optimise the use of energy and resources. Thus, all chemical processes that produce steam are linked to chemical processes that use steam. Furthermore, where it is possible excess steam (instead of electricity) is used to drive pumps and various mechanisms. Also, the fuel gas that is released in chemical processes is captured and fired to produce steam, which in turn drives other chemical processes, and so on the cycle goes. The result is that the BASF plant is almost entirely self-sufficient for its steam needs. Only about 3% of the time on year basis does the plant need to take recourse to fossil fuels (natural gas) to produce steam. That extra steam, when needed, is produced by a highly efficient cogeneration plant built onsite by RWE and Electrabel. That same 450 MW plant generates electricity for the BASF site. Six wind turbines onsite do their bit too and the rest is supplied direct by the national transmission network. The result is that the BASF site in Antwerp is a highly energy-intensive (given the nature of its processes) but also incredibly efficient system, that in some areas is nearing the limits of nature’s laws. That also

means that this integrated system is vulnerable to supply problems. Should the supply of electricity or natural gas suddenly collapse then the whole system comes grinding to a halt. Getting it going again afterwards is no easy ask and consumes a huge amount of energy. This is why the BASF site has direct connections to both the Belgian and the Dutch gas networks and a fully redundant set of links to Elia’s transmission network. BASF Antwerp has also managed to decouple its environmental impact from its production volume. While production has consistently increased (until the current economic crisis), the plant’s emissions and water pollution have consistently declined. And that means a great deal to Belgium’s overall environmental picture, given the volumes of emissions at stake here. Ineos is another chemical company with a major plant in Antwerp. It too tells a similar story of interrelated processes, cogeneration and extreme energy efficiency. Also in the steel sector, the Arcelor Mittal plant in Ghent is esteemed for its energy efficiency. That the above companies are not isolated cases is proven by the results of the Flemish Energy Benchmarking Covenant. In context of the Kyoto protocol the Flemish government set up a system in 2002 whereby energyintensive industrial sites are invited to participate in a benchmarking programme. The essentials of the deal are that those sites that proved to be in the ‘world-top’ (a statistical definition but comes down to being in the top 10% of the world ranking) in their energy efficiency and CO₂ emissions control would be given an allocation of emissions rights without cost. By 2007, 182 industrial sites—representing more than 80% of industrial energy use in Flanders—had joined the programme. As it turned out, in 2002 the Flemish group was already better than the world top. But the group improved in subsequent years too, maintaining their world class position. Between 2003 and 2007 the group managed to reduce its energy consumption (under constant production) by more than 5%. Also in absolute terms the energy consumption declined somewhat, while production increased by 5%. CO₂ emissions rose slightly (0.4%) against 2003. The point is, if Belgium manages to meet the Kyoto targets by 2012, then that will be due mainly to the efforts of the industrial sector. However, there is one area where industry is not yet meeting its targets: NOX emissions. As outlined in an earlier chapter, this is one of the key air pollution problems in this country and needs urgent attention. It is a priority for industry, but also for the transport sector. Looking beyond 2012 a new set of challenges is emerging for industry. For one, the emissions targets are getting tighter. By 2020, total CO₂ emissions for industrial sites that fall under the new European emission trading scheme (ETS – covering the period 2012-202) will have to decline by 21% against the base year of 2005. That is a significant cut, especially since many industrial companies are claiming that some of their processes are at the thermodynamic limit of energy efficiency. Be that as it may, the chemical industry’s biggest gripe was not with the target itself but with the way it was to be implemented. The industry argued that the proposed auctioning of emission rights would translate into a production tax of approximately 500 million euro by 2020. The problem is that an auctioning system does not make a distinction between efficient and inefficient processes. If a particular site has made major investments in the past and as a result is currently sitting at the

limits of its efficiency potential, then the carbon credits it needs to buy will be a straightforward production tax. That could make those companies uncompetitive against competitors abroad that do not fall under the European system. As long as the European ETS system is not integrated in a global post-Kyoto system, then there is the risk that European industry will become uncompetitive from a cost perspective, in turn leading to what is called ‘carbon leakage’ (the emissions will happen, but not in Europe). Hence, the chemical industry lobbied for a system similar to the Flemish benchmarking covenant—and got it. Thus, if a company can prove that it is exposed to international competition and that it meets certain benchmarks in energy efficiency, then it will be allocated a portion of its emissions rights free. Obviously not everybody is happy with this adaption of the ETS system. The environmental lobby argues that the whole point of introducing the ETS system is to impose a price on carbon, and thereby stimulate a transition to low-carbon products and processes. Indeed, many—including the pro-business Economist—continue to argue that a straightforward carbon tax would have been a much simpler approach than the cap-andtrade system currently deployed under Kyoto and the EU climate package. The main criticism against Kyoto also focuses on this point, that the carbon market never got going properly—there were too many free emission rights floating about. Some in the chemical industry complain that they are hit twice by the ETS system, in their own emission rights and in the emission costs embedded in the energy price (initially paid for by the energy producers). But that is the whole point, one could argue, to add costs at every step in a high-carbon industrial chain. Chlorine needs to be expensive. The chemical industry is able to turn that argument around too, however, by asking us to look at the entire value chain of a chemical product, including those phases where the product actually saves CO₂ emissions. BASF did this exercise for its entire product portfolio and came up with a remarkable conclusion: for every ton of CO₂ the BASF group emits it is saving three ton elsewhere in the value chain. Key examples here are the fuel additives that allow engines to run cleaner and more efficiently, or the composite materials used as insulation material in buildings and as steel replacement in ships. The final word has not been said on this matter. The energy-intensive industries must be given credit where it is due: they have made tremendous achievements in energy efficiency and emissions control. If some of their principles (i.e. waste nothing) could be deployed in the way we manage our buildings and transportation, then achieving the country’s 2020 targets should be a piece of cake. The key challenge for industry, however, is that they are reaching the limits of further energy efficiency and emission control in a number of processes. Given the fact that emission targets will only get more stringent beyond 2020, and that industry’s energy consumption and emissions levels are, in absolute terms, still enormous, then something more fundamental will need to change. In the longer term industry will need to work not just more efficiently, but differently—different processes, different products.

THE FIFTH CONFERENCE CLEAN - ENERGY COnSUMPTION

The European energy and climate policy from an industrial perspective —Steven Luyten Over the past ten years, Europe took major steps to create an open energy market as well as took pole position in attacking climate change. Harmonizing deregulation (liberalisation of the energy markets) with regulation (the climate policy with its 1001 rules) is and remains a challenging and complex process in multifold ways. Whether in the meantime we are benefitting from lower prices and whether the climate policy is sufficiently effective, remain matters of opinion. Nevertheless, Europe sets the goals high as demonstrated by the recent announcement of the 20/20/20 Climate change Package (20% energy efficiency improvement, 20% renewable energy, 20% reduction in CO₂ emissions) it wants to achieve by 2020. The rest of the world simply looks supportive but relatively uncommitted.

Europe is a house of different colours. On the one hand the EU woke up late to the fact that opening of the energy markets is essential for the competitive position of the energy intensive industry only ten years after the US had already liberalised their energy markets. On the other hand, Europe is front-runner by imposing challenging climate-related targets throughout the entire European economy (from producers through transport/distribution up to the end user).

STATE OF PLAY AND OUTLOOK Climate change is a global issue The global warming effect is a global issue. Europe represents almost 15% of the CO₂ emissions worldwide. Even if Europe would phase out CO₂ emissions by 100% by 2020, there would be no fundamental impact on global warming. In the meantime, emissions in other regions of the world would have increased by more than 15%, even at the most conservative estimates. On the one hand one could say that Europe is standing up by taking leadership in the challenging process to drive us all to a new low carbon economy (energy efficiency/renewable energy/ technological innovation). In the long run, Europe will benefit from this sustainable approach, provided that other countries will also take part. But on the other hand, it is clear that Europe is failing in two ways: (i) the EU is unable to convince the other countries worldwide (contributing 85 % of total CO₂ emissions) to participate in a new low carbon economy, and (ii) by unilaterally imposing strict rules and limitations over a 15 years period (from 2005 to 2020) to the European economy only, Europe prices its own industrial activities out of the market. After all, European companies are active in a global market. The European Emission Trading Scheme (EU-ETS) has saddled the energy-intensive companies in Europe with substantial added costs in

comparison with non-European companies. Disturbing the level playing field will in the long run undermine the viability of European industry by delocalisation. Sustainable development Strongly underestimated is the contribution of industry to society, the economy and the environment. Strong efforts in R&D, education, high safety and environmental standards and energy efficiency are the answers of industry to the next generation. Industry hopes that the EU will not look overlook this contribution and moreover restores the level playing field in order to avoid de-industrialisation. State-of-the-art investments require a stable legislative framework Stability in the rules of play is of the utmost importance for long-term processes. If a referee of a football match had to suddenly start applying new rules to the game, the shock will only last for 90 minutes at most, because the coach and players could make the necessary adjustments after 90 minutes. If industry is considering investing in a new plant, it is critical that the rules of play remain static for longer than 90 minutes. Due to the capital-intensive nature of the investments, state-ofthe-art plants are built with a design intent ranging from 25 to 50 years. Why would the decision makers of companies based in Europe then opt to build new plants in Europe? New and increasingly stricter environmental regulations emanating from international and European

sources undermine the long term justification of projects in Europe. All the European strengths (highly trained and skilled employees, excellent infrastructure) will increasingly be eroded by high labour costs and additional burdens associated with the implementation of an EUlocal climate change policy. Energy & climate: friend or enemy? Although energy and climate used to be separate areas, they are increasingly interlinked to such an extent that all important stakeholders (politicians, economists; business, sociologists, scientists, environmentalist,...) are acknowledging that these two issues should be approached jointly. The climate change policy has a significant impact on the energy mix and consequently cost. Where ‘energy’ and ‘health/environment’ were dealt with by separate departments within companies ten years ago, the current practice is often to have only one specialist responsible for both disciplines. This multidisciplinary approach is clearly gaining further momentum. Liberalisation of markets Although the liberalisation of the energy markets has been hotly debated for many years now, it is clear that the high expectations are not yet being met. Also, there is a distinct lack of transparency. Looking at the price of energy as it appears on our invoices, we learn that the total energy cost is made up of 3 components whereas open markets relates to only one of these three. Firstly

there is the cost of energy (the supplier’s price for the energy, free market), secondly there is the transport/ distribution cost across the grid (this is a regulated cost), and then finally there is a cost imposed by the authorities ( levies related to sponsoring the transition to a low carbon economy, social and other taxes, denuclearisation, etc.). In the meantime we have to accept that the European liberalisation process is progressing stepwise and slowly. The heterogeneity of the European energy landscape—in terms of energy resources, infrastructure and policy— results in a challenging and inevitably slow convergence process. Factors at play in this regard are the unequal geographical distribution of energy sources throughout the member states, the extremely divergent energy mix of coal, nuclear power, gas, renewable sources, the gas/energy companies arising out of the national economies, the slow progress between the member states on electricity grids / gas networks (missing links), regulators, grid operators as well as the polical compromises in their strive to set European wide harmonised rules in the climate policy with associated additional regulated costs. But does the end user ultimately benefit from all this? In the long run the answer is probably yes. But in the meantime adopting the climate package has driven up energy costs significantly. Most of the

THE FIFTH CONFERENCE CLEAN - ENERGY COnSUMPTION

But does the end user ultimately benefit from all this? In the long run the answer is probably yes. But in the meantime adopting the climate package has driven up energy costs significantly.

cost increases were directly related to energy/climate change whereas others were a bit more hidden and have taken us a by surprise (windfall profits) whereas a last category of costs (nonenergy related taxes) does not relate at all to energy and it can be questioned whether they should be addressed in this way. These governmental interventions have all but neutralised the positive effects of market liberalisation. Consequently, European energy consumers companies are faced with a price handicap. Renewable energy (RE) / energy efficiency In both power generation and energy consumption a number of noticeable trends have emerged, triggered strongly by EU initiatives: ++ A shift to natural gas, as it is the fossil fuel that emits the lowest levels of COâ&#x201A;&#x201A;. ++ A broad spectrum of renewable energy technologies being implemented in the various member states, such as wind energy, solar energy, and small-scale hydroelectricity. ++ Typically RE plants are small-scale compared to

the conventional power stations: where a conventional power station would usually generate between 400 and 1200 MWe, renewable energy plants generate power in the range of 1 to 20 MWe. ++ The decentralised nature of RE also affects the grid infrastructure. Grid losses can be mitigated if RE-generation can be located in the proximity of the consumer and consequently no supplementary infrastructure is involved. Apart from this, the disadvantages of RE still outweigh the advantages: renewable energy technologies are far less reliable (conventional back-up capacity to be built, grid to be adapted accordingly,...), and RE technologies are highly favoured in terms of government support schemes driving up the total energy cost for the end user. ++ Even prior to the implementation of the Kyoto targets European companies were front runners in terms of energy efficiency. In Flanders the government set tough goals for industry by introducing

a so-called Energy Benchmarking Covenant. One-hundred and eighty energy-intensive companies (representing 80% of industrial energy consumption) participate and compare their plantsâ&#x20AC;&#x2122; energy consumption to that of similar plants elsewhere in the world. The results confirmed that most companies are world- top and those that still have some room for improvement have to make the necessary investments by 2012 to join the best-in-class companies globally. Implementation of the benchmarking system as a basis for deciding whether to impose additional measures or levies on companies in the transition period to a low carbon economy is probably the best mechanism, since it negates the interference with competitiveness provided that it is imposed globally. Partnerships as a trend in liberalised markets The market liberalisation and climate policy have resulted both horizontally and vertically in various forms of co-operation between companies, R&D centres, .... Many partnerships between manufacturers and end users, manufacturers amongst themselves and end users joining forces to generate energy themselves have sprung up like mushrooms everywhere. Nuclear power as part of the diversification strategy, as part of the solution to climate change, security of supply, etc.

It would fall beyond the scope of this article to delve into this topic. Suffice it to say that it is noticeable how the climate debate is conducted at a political level in total isolation from the nuclear debate. However, nuclear energy will also be a part of the solution (amongst the fossil fuel and RE) to make the successful transition to a low carbon economy. We all hope that nuclear energy can be replaced within a few decades by new highperformance low-carbon technology. Steven Luyten is responsible for Energy, Site Development at Ineos Oxide nv

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Electrabel, Group GDF Suez, helps solve the energy challenge at BASF

—Six wind turbines complement the highly efficient cogeneration power plant at BASF

BASF has a longstanding tradition of taking environmental concerns into consideration in its business. In partnership with Electrabel, the company has implemented an extremely efficient cogeneration process for its steam needs. Also, since there is abundant wind near the production site at the Antwerp Harbour, BASF is using this resource to produce green electricity for its own consumption. Helping its customers to produce on-site heat and electricity (and emitting much less CO₂ thanks to more efficient installations and renewable energy sources) will further inspire Electrabel’s activities in the future.

Dynamic entity The cogeneration unit, which has been operational for several years now, has an electric capacity of 400 MW and can supply up to 300 tons of steam per hour. Maarten Stockmans, Manager Energy Policy at BASF, further explains the design specifications: “We needed a flexible power plant, particularly with regard to steam supply. In normal regime, our total steam needs are currently around 95 tonnes per hour. We cover the biggest part of that need with the heat recovered from our chemical processes. The new power plant is able to supply the difference between our steam needs and our heat recovery. In addition, this plant gives backup in the case of shutdowns in our steam recovery units. The maximum capacity is also in line with our growth plans.” BASF consumes around 85% (on a yearly basis) of the electricity generated by the cogeneration unit. This installation is provides the necessary flexibility as the electricity which is not consumed by BASF is injected into the public grid.

The cogen unit is perfectly integrated within our production. In this way our processes can achieve maximum efficiency at any time

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A strong link in the chain While flexibility is one key aspect of BASF’s processes, integration is another. Maarten Stockmans relates: “All our chemical processes are linked and must perfectly match up on an ongoing basis. The new power plant must therefore also integrate seamlessly into our production processes. In dialogue with our engineers and the experts at Electrabel, we fine-tuned the integration down to the smallest detail. As an example, we developed a connection which levels the temperature and pressure of the produced steam to match our steamgrid. Also, demineralised water from our chemical processes is sent to the power plant and we clean the small amount of waste water out of the unit using our existing water purification installation.”

35 GWh green electricity produced by the new wind farm BASF and Electrabel also came together to further take advantage of the ideal wind conditions at the BASF production site by building 6 wind turbines. The 12 MW windfarm produces approximately 35 GWh which is consumed locally by BASF. Thanks to this cooperation, 14,000 tonnes of CO₂ are saved a year.

From engineering to communication with the neighbourhood Maarten Stockmans appreciates the professionalism of the employees at Electrabel. “At BASF we apply strict rules with regard to quality, security and the environment. The Electrabel engineers have the same standards. They also have good contacts with the grid operator and know the regional legal obligations thoroughly. This sped up the application process of the necessary permits for the cogeneration unit and the wind turbines.”

BIO

Electrabel and BASF Antwerp + www.electrabel.be + www.basf.be + BASF Antwerp is the largest chemical production site in Belgium and the second largest of the BASF group worldwide + Electrabel is the leading energy provider in Belgium and part of the group GDF Suez

“We can also refer to the Electrabel Key Account Manager at any time. He was involved in the project from the beginning and understands our needs. He invited all the representatives of the surrounding municipalities to a public hearing regarding the construction of the cogeneration plant and the wind turbines. The local residents had some concerns about security and the environment. The Project Manager organised a similar public session in the Netherlands. This approach illustrates the importance of working with a professional partner”, concludes Maarten Stockmans .

The Fifth Conference with:

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Industry & Energy, a perfect symbiosis —Peter Claes

Energy developments and breakthroughs have had a tremendous impact on the evolution of mankind in general and on industrial expansion in particular. The first industrial revolution in the 19th century has been made possible by the invention of the steam engine, the multiple applications of oil and petroleum products boosted the huge industrial progress made in the middle of the 20th century, and new energy technologies based on renewable energy and nuclear power look likely to become some of the major drivers for the coming decades. Industry and energy very often evolved in parallel: new energy technologies facilitated substantial progress in industry, improving technical performances, allowing new processes and stimulating the development of new products and applications. Furthermore, energy sources such as oil products, natural gas and electricity found applications as raw materials in industries such as petrochemicals and non-ferrous metals. There is no reason why this symbiosis should disappear in the future. Industry and energy will remain a perfect couple. For industry, as for individuals, energy policy needs to look at three major elements: Energy, Environment and Economy, also known as the 3 E’s. Energy, and more in particular security of energy supply, is crucial. Industry and our modern society as a whole can only function properly if energy is available at all times. For renewable energies based on intermittent sources such as wind and solar energy, this is a major challenge. Environment is equally important, not the least because combustion of fossil fuels is the major source of human CO₂ emission. Compliance with environmental legislation

and the fight against climate change is therefore a huge challenge for the global energy industry, requiring massive investments in existing installations and huge efforts in research and development of new, clean technologies. Economy concerns the price of energy for the end consumer, individuals and businesses. Energy needs to be available at an affordable price for everyone. Where policy used to try to achieve this through regulation of the energy industry until late in the 20th century, open markets and competition between producers have become the new rule in most parts of the western world during the last decades.

very likely to lead to suboptimal solutions. Environmental goals should commit all actors in all countries. Climate change is a global challenge which can only be solved through a global approach. Pushing industry to move to other parts of the world will not reduce global carbon emissions. As for energy markets, industry continues to believe competition is the best driver for security of supply as well as for competitive prices. But policy should lead to real competition between producers, and take the right measures at the appropriate level to achieve this goal. All too often, inadequate legislation and regulation, lack of harmonization and

Energy policy is not about eliminating certain technologies for emotional or ideological reasons, but about finding the right balance between all available options In a more and more global economy, energy policy will continue to have an important impact on industrial development. Industrial activity will develop faster in an environment where the 3 E’s reach an equilibrium, which should result in an affordable, reliable and clean energy supply. Policy makers should therefore strive to reach this equilibrium, and not focus on only 1 or 2 of the E’s. Industrial and economic development will look for those areas in the world where policy made the best choices and achieved the best overall results. As for security of supply, a balanced fuel mix and reliable transmission and transport infrastructure are of utmost importance. Energy policy is not about eliminating certain technologies for emotional or ideological reasons, but about finding the right balance between all available options: fossil fuels, nuclear, renewable energy and bio-fuels. None of these alone can lead to the best equilibrium, but eliminating one of them is

conflicts with other policy aspects (social, environmental, national interests) lead to unclear choices and, in the end, to uncompetitive prices for end users. Energy policy is likely to remain high on the international and national political agendas in the coming decades. Making affordable and clean energy available at all times for all end users is a huge challenge for policy makers and energy producers all over the world. For industry, making the right choices and striking the best balances is of vital importance. Industry is determined to contribute as it did up to now to increase global welfare, to improve comfort and wellbeing for all citizens and to provide solutions for global challenges such as health, food and climate change, some of which cannot be solved without it. Energy choices will be one of the major elements influencing the ability of global industry to reach these goals. Therefore, let us all together make the right choices…

Peter Claes Febeliec (Federation of Belgian Large Industrial Energy Consumers)

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4.3| Transportation Transport is responsible for about a third of our final energy consumption and more than 20% of our energy related greenhouse gas emissions. Most damningly, however, while every other sector managed to reduce or at least stabilise their emissions in the period 19902006, transport’s emissions increased by an astounding 26.7%.1 It also is responsible for much of the air pollution problem in this country (NOx, ozone, VOCs, fine particulate matter, etc). Transport also creates substantial noise nuisance in this densely population country—nothing new really, but it is increasingly recognised as a health risk. Finally, transport is partly responsible for the fact that much of our land is covered in concrete or asphalt and that we have few open spaces left. Fortunately, the EU is coming to the rescue, because thus far, we clearly have not managed to tackle this recalcitrant problem.2 Firstly, included in the EU’s climate package is a commitment to mix at least a 10% share of biofuels in the diesel and petrol sold in the EU. That process is gradually getting off the ground. It took a while in Belgium (see the article on Biofuels & Biomass) but the government recently announced its intention to enforce mixing of biofuels (a 4% share initially). In the area of private vehicles, the EU Commission is enforcing a significant change in Europe’s car fleet by setting binding targets on car emissions. This should have an impact here reasonably quickly thanks to our friendly company car policies (fleet managers are more sensitive to fiscal stimuli and company cars get replaced quicker than private cars). Car components will also be regulated at EU level, for example, to stimulate roll out of more efficient car tyres. More can, however, be done at a Belgian level. For example, root filters for diesel engines are subsidised but given the scale of the fine particle problem, it seems strange that government is not compelling a faster roll out of this technology. The various fiscal and other policies that stimulate the use of company cars and diesel engines are a particularly contentious issue. Critics argue that our disproportionate number of diesel cars contributes significantly to the air pollution problem (fine particles especially). Also, public transport cannot possibly compete against the free Audi parked on the driveway. In defence, the leasing companies argue that this country has one of the cleanest fleets of cars in the world (since the cars are so new). Indeed, when the newest range of hybrid cars enters the market we should see reasonably rapid adoption of this technology. When the plug-in hybrid or full electric car is rolled out in force, however, it is absolutely essential that the electricity system is upgraded as planned (more generation capacity, better grid integration with neighbouring countries, and ‘smart’ distribution networks). Public transport is another key topic. Firstly, we need to get more people on our buses, trains and trams. While there has been some improvement in this regard, a number of tough obstacles remain. On the one hand, the offering needs to improve: better and more integrated networks (linking the regional public transport systems, in network and in ticketing/services) 1) UNFCCC. Summary of GHG Emissions for Belgium. 2) The topic of mobility and logistics, so fundamental to this country’s future, is tackled in the next edition of The Fifth Conference, entitled ‘MOVE’

and more comfortable and safer facilities (on route and in stations). Secondly, public transport itself can clean up further, especially the bus fleets. In that regard, there is innovative work being done by the likes of Van Hool. Van Hool is a leading manufacturer of coaches and buses for public transport and has developed several alternative drive systems which it is successfully commercialising. The range includes hybrid dieselelectric, natural gas and hybrid fuel cell-electric. Public transport is an ideal environment in which to roll out a network of plug-in stations or natural gas stations, which is something Electrabel is working on. A third tactic to strengthen public transport is to weaken the competition—the private or company car—which itself is a highly contentious issue. Probably the most hotly debated issue in the transport domain is goods transport. Belgium is blessed (or cursed, depending how you look at it) with its geographic location at the ‘crossroads of Europe.’ We are right in the middle of a huge industrialised zone in Europe and have one of the most dense road, rail and inland shipping networks of the world. And we have at least two major sea ports, Antwerp being the second largest in Europe. Given the fact that more than 70% of goods transport flows via road, there are a fair number of trucks on our road. Eurostat has compiled some wonderful graphs that plot road transport on the European map in terms of volume in tons (the more volume the denser the line) and in terms of whether it is international or not (international is red and dark red, local is yellow). On that map, Flanders (and much of the Netherlands) is a dark smudge.

Source: Eurostat (Statistics in Focus, 6 Feb 2007). The regional dimension of road freight transport statistics.

Clearly this is an issue that needs addressing if we are to tackle this country’s climate and pollution challenges. There are plans to move toward a more optimal exploitation of our existing infrastructure, for example, by clustering logistical activity (multi-modal transit points and warehouses) in specific parts of the country.3 Also, there is potential to push more traffic on to inland waterways and rail. From an energy and environmental perspective, however, we will have to do much more, especially in the longer term. Mainly, transport will need to wean itself off fossil fuels. Thus, more transport will need to be driven electrically, on rail and via hybrid trucks. Biofuels will not do its bit too. From a clean tech perspective, it seems that we are running behind somewhat in the area of clean or sustainable transport (with the exception of cases like Van Hool 3) the Flemish Institute for Logistics has done much work in this regard, e.g. their concept of Extended Gateways

and Umicore's leadership in catalytic converters). This is a pity, since as a European transport hub we really should be trailblazing in this area. Take the electric car, for example. As a densely populated and built-up country we are an ideal test-site for the electric car and the plug-in stations it needs. Projects are already underway in Japan, Australia, Denmark, Israel, California and Hawaii. California-based Better Place (a developer of electric car infrastructure) has secured agreements in these areas to wire cities with stations where future electric car drivers can plug in to a power supply or change a battery. In Israel, for example, 500,000 charging points for electric cars are set to be installed by 2011. With a lithium-ion battery lasting 170 km, and Jerusalem and Tel Aviv being only 70 km apart, Israel is considered an ideal location to test the product. So is Belgium, obviously.

THE FIFTH CONFERENCE CLEAN - ENERGY CoNsUMPtIoN

—Bruno Defrasnes

The European commission has set ambitious objectives in its Climate Package. It’s proposed that by 2020, Europe should improve its energy efficiency by 20%. Out of the total energy use in Europe, 20% should come from renewables. In addition, a reduction of 20% in greenhouse gas emissions will be needed. These general objectives are being translated into challenging country objectives. While the EU sets policy objectives, the member states and sectors will need to translate these into action plans. Over the past decade, we at Electrabel have managed to reduce our CO₂ emissions in Belgium by nearly 30%, mainly by improving our power plants. With our sustainable development plan “together for less CO₂” we’re ramping up our work in this regard. Thus, we are increasing renewables substantially, improving efficiency and environmental performances of our classical power plants, and helping our customers to reduce their energy consumption and implement low carbon technologies such as gas and renewables applications. As an extension of our efforts, we are convinced that we could leverage the low carbon electricity we produce and the gas we sell to substantially help the transport sector to address its environmental and energy cost challenges.

Although heating and power consumption are important contributors to global warming, other sectors such as transport also contribute

heavily to CO₂ emissions. In Europe, motorised travel is responsible for 21% of all greenhouse gas emissions. Since 1990, CO₂ emissions have increased by 25% in the European Union. Road transport is by far the worst culprit; responsible for 93% of all emissions resulting from travel. (Source: European Environment Agency). To help achieve national 2020 targets, I am convinced that the mobility sector could play a substantial role in (among others things) stimulating relevant technologies and inspiring the market towards clean and efficient vehicles. More and more parties, including the automotive industry, governments and private citizens, are interested in the development of alternative, clean energy sources suitable for use in road transport. The future of mobility will certainly comprise different types of vehicles and technologies. These technologies will offer both short and long term solutions, depending on the kind of application, and should also deal with different travel solutions; a stop-start city car will have different needs than an open-road country car.

travelled (based on Electrabel generation CO₂ footprint – 208g CO₂/kwh), whereas a diesel vehicle of the same type emits 144 g. The cost per km is also significantly better, at 1.3 Euros per 100 km compared with 5.8 Euros for the diesel model. However, Electrical Vehicles still suffer from a limited autonomy and a relatively high price tag. That said, breakthroughs in battery technologies will certainly soften the acuteness of these issues. It should also be noted that a fastcharging infrastructure, that would permit charging times between 10 and 30 minutes, is still not widespread.

According to the Belgian Ecoscore, Electricity and Compressed Natural Gas (CNG) are at the forefront of effective solutions from an environmental perspective. Electrabel is convinced that both energies could really help the transport sector to reduce its CO₂ emissions and allow cost savings for customers. Of all the options, the electric vehicle is considered as the best well-to-wheel performer both environmentally and on energy efficiency, as long as they are supplied by efficient power generating facilities that provide lowcarbon electrical energy. Key benefits include:

An alternative or bridging technology could be the Plug-in Hybrid Electric Vehicle (PHEV) that is powered by electricity, and by petrol when the batteries are depleted, thus solving the problem of the lack of infrastructure and autonomy that electric vehicles will face in the early stage. These can be charged at

To illustrate, a 100% electric car - Renault Kangoo - only emits 32,5g of CO₂ per km

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home or in fast charging stations, and will be able to drive about 60 km on electricity (covering around 70% of all trips for Belgian commuters). This type of car is also perfect for longer trips as it is not reliant upon the charging infrastructure. The PHEV could be a first step towards electric mobility, although both PHEV and EV vehicles should gradually enter the market, the latter being more suitable for city applications. Meanwhile Compressed Natural Gas (CNG) is an attractive upfront alternative, as such vehicles emit very little Particle Matter

Although heating and power consumption are important contributors to global warming, other sectors such as transport also contribute heavily

+ No noise pollution + Exceptional yields from electric motors : up to 95% + Yields in power stations producing electric energy are greater than yields in the internal combustion engines of conventional cars + A cocktail of primary energy sources as power stations, leaving a certain amount of scope for energies that emit little or no CO₂ and other particles (e.g. sulphur dioxide, nitrogen oxide, dust)

Technology Prospects

Ecoscore

Fixing transport

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(responsible for SMOG in our cities), NOx and SOx, and provide an additional 15% less CO₂ emission in comparison with a petrol powered vehicle. Vehicles of all types are already available and also affordable. Even if a widespread filling infrastructure doesn’t exist today, we believe that there is a market for CNG vehicles that will improve the air quality in the short term. Many businesses and large institutions could as of today significantly reduce their CO₂ emissions and their costs by converting their fleet into CNG, based on a local infrastructure. Electrabel already operates three gas pumping stations (which are open for the public) servicing the fleets of customers such as DHL and will continue to assist its customers with switching their fleet to CNG vehicles. Bruno Defrasnes is Sustainable Development Manager at Electrabel

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Pipeline transportation: the quiet revolution

—The future goes underground, Gérard de Hemptinne

In line with the Kyoto Agreement, the European Commission has given effect to the 20-20-20 plan: by 2020 the European member states must bring about an energy saving of 20%, they must reduce their emission of greenhouse gases by 20% and 20% of energy supply must come from renewable sources. Reference is often made to public transport as part of the solution. But the transportation of products via pipelines can also play an important part in achieving the 20-2020 objectives. However, government and public opinion are still too little aware of the benefits of pipelines as a means of transport. In contrast to freight traffic by road, air or rail, for example, pipelines cause no sound pollution and the emission of greenhouse gases is minimal. Only the installation of the pipelines entails a temporary nuisance. What is more, pipeline transportation is especially energy-efficient and entails no empty return trips, wasted kilometres or byproducts such as packaging whatsoever. Just to give an idea: to transport the same amount of energy as 1 natural gas pipeline, about 1.500 trucks with fuel oil would have to drive on our roads or about as many railway carriages with coal would have to crisscross the country. In this way pipelines ensure that freight traffic is to a large extent kept off the roads and thus contribute to safer roads. Moreover, when selecting the pipeline route the people and environment in the vicinity are taken into account. Once the installation is completed, pipelines also have practically no visual impact: only the beacons and markings indicate their presence. Pipelines are also safer than any other means of transportation.

The number of accidents with a pipeline is very small, in stark contrast to the number of traffic accidents. Research shows that most incidents involving transportation pipelines occur when these pipelines are damaged due to work carried out in their proximity. And here the pipeline sector has developed proactive and pragmatic solutions: via the KLIM website contractors and building clients can quickly and easily do the necessary in order to be able to work in complete safety.

A good future, but with one important difficulty: the numerous and lengthy authorisation procedures which are needed for the installation of the pipelines. For each new pipeline a new route has to be traced. No easy number in a densely populated country like Belgium. And for each new pipeline separate authorisation procedures have to be started up. Here, the sector has in the last few years noticed the NIMBY effect increasing strongly. A fundamental paradox: everybody expects to be able to

A good future, but with one important difficulty: the numerous and lengthy authorisation procedures which are needed for the installation of the pipelines. The entire development of the pipeline sector, in fact, is a quiet revolution in sustainable transport and has contributed significantly to the fact that Belgium can today refer to itself as an international junction in the flow of goods in Europe. Thus, companies in the petrochemical and chemical sector mostly use pipelines for inward flows of basic raw materials. And Belgium is also the turntable par excellence of the international natural gas flows in Europe. Pipeline transportation has a promising future. After all, the social demand for sustainable solutions paves the way to an increase in pipeline transportation and the development of certain sectors will also contribute to this. Thus, for example, the supply situation of natural gas in Belgium and Europe is changing, with natural gas having to come from sources further afield. In this context Belgium can increasingly play its role as international turntable in order to secure its own supply of natural gas. The development of the international (petro)chemical axis Rotterdam-Antwerp-Ruhr will also be a motor for the growth of the pipeline sector.

rely unfailingly on essential services, but the installation of the infrastructure for this cannot automatically rely on the support of government and inhabitants in the vicinity. Part of the solution for new pipelines may lie in regional authorities recognising, in environmental implementation plans, strips that are specifically reserved for the installation of pipelines. These pipeline routes can constitute a sustainable solution: the safety of the pipelines can be better guaranteed, investments in pipeline infrastructure will not be slowed down and the pipeline routes will in this way disturb the local population and the environment as little as possible.

Gérard de Hemptinne is chairperson of Fetrapi, the Federation of Carriers by means of Pipeline, and Member of the Management Committee and Director Asset Management of Fluxys The Federation of Carriers by means of Pipeline, Fetrapi, is made up of owners and operators of transportation pipelines in Belgium. Together the members control approximately 8.000 kilometres of pipelines for the transportation of, among other things, petrochemical products and hydrocarbons such as natural gas. The federation looks after the interests of its members vis-à-vis government and encourages ongoing research in respect of the safety and proper functioning of transportation pipelines.

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4.4| Buildings As outlined earlier, the residential and tertiary sectors in Belgium do not compare well against European benchmarks in terms of energy efficiency. Much of this is due to our buildings, both residential and commercial. As the Federal Planning Bureau1 explains, a key problem is that our residential housing stock is relatively old and energy inefficient. Firstly, the types of home are not ideal. Belgium has a scattered building stock, characterised by plenty of detached homes and few apartment blocks. These types of home are much harder to heat than apartment buildings. Indeed, the concept of district heating is unheard of here—most homes have their own heating system, driven by gasoil or gas. Secondly, Belgians tend to live a great portion of their lives in the same home. The investment cycle for residential homes is about 20-30 years. The problem is that a thorough renovation typically only happens when the building is sold. Thirdly, there is a low share of public (social) housing. Social housing parks are easier to design with efficiency in mind and are easier to renovate in ‘bulk.’ The result is that there are many poorly insulated homes in Belgium with inefficient heating systems that run on gasoil. Changing this situation is no easy task since the obstacles are ‘structural’ in nature. Government policy is focused on the problem, however, mainly via various forms of subsidies and support mechanisms. Also, more punitive measures are beginning to be introduced (e.g. in Flanders home sellers need to present an Energy Performance Certificate—a type of mini-energy audit— to the seller). Progress is being made. People are insulating their roofs, installing double glazing and switching to efficient gas burners. But in the longer term, more fundamental elements will need to be tackled (e.g. a gradual introduction of district heating systems, linked to large cogeneration facilities). Electricity use in the homes is being tackled too, but compared to heat, electricity offers more technical and policy options. Thus, the EU is doing its bit by banning the light bulb and imposing all sorts of eco-labelling programmes on electric appliances. Households are able to generate electricity themselves using solar installations (still heavily subsidised at present, notwithstanding the recent reduction). In the longer term, however, the roll out of smart meters (and smartgrids) may have a substantial impact on consumption patterns, especially if electricity prices become market steered. In office buildings the approaches to (and opportunities for) energy efficiency are even more diverse. In fact, with the emergence of the ‘energy manager’ it is rapidly becoming a professional role within companies. When energy prices are high, the drivers for managing this resource well are strong indeed. Companies can tackle their buildings from various fronts: insulation, lighting, heating and climate control, renewable energy (solar panels), and ICT infrastructure.

Take EnergyICT’s solutions, for example. Its solutions allow large multi-site commercial business, like banks or retailers, to manage their energy consumption on the basis of accurate real-time consumption data. By building a complete energy data repository, the system allows its user to forecast consumption patterns, iden1) Federal Planning Bureau. (2008). Impact of the EU Energy & Climate Package on the Belgian Energy System and Economy.

tify energy savings potential and track performance of energy saving projects. This can be particularly handy for companies that pay large premiums for peak power, since the system can predict when a peak is approaching and signal relevant devices and appliances to reduce consumption (e.g. lighting). Lighting manufacturers like ETAP Lighting in Antwerp are also on the case. ETAP is designing lighting management systems that allow companies to manage their lighting infrastructure according to the organisation’s needs. Some lighting installations can be programmed according to the activity they support, others operate automatically (e.g. lights in meeting rooms dim or switch off when empty). Furthermore, these lighting management systems can plug in a broader building management system. Renovating an entire office building for energy efficiency can be expensive. This obstacle can also be addressed by making use of energy performance contracts. In Belgium, Fedesco is using this approach in the public sector (renovating buildings of the Federal government). Basically it entails the involvement of a 3rd party investor, who puts up the money for the renovation and possible renewable energy installations, and is paid back over time via the energy savings achieved.

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Derbigum reinvents Buildings

—From roofing to smart buildings

When you’ve been an industry leader for over 75 years, with worldwide sales and a strong reputation for quality, it seems hard to believe that you would make the decision to restructure your company. “If it’s not broken, don’t fix it” is a statement a lot of companies live by. Derbigum decided to do exactly the opposite – to reinvent the company. When André De Smet was appointed CEO in 2005 he came to the helm of a company with strong brand awareness, three production sites (two in Belgium and one in the US) with major roofing membrane contracts for industrial and institutional buildings. Nevertheless, he and his management team set about radically changing the structure of the company.

Investing in R&D The shareholders of Derbigum had realised one very important thing: it’s not about where you are today; it’s about where you want to be tomorrow. Investing heavily in R&D at this point seems like a huge risk to take. However, in a mature and highly competitive market (where your mono-product offering will inevitably lose ground to new market offerings), growing the business via innovation is the only way forward. Building on an already strong eco philosophy (recycling of products and commitment to energy efficiency), the company sought to tackle the problem of rising energy prices and environmental issues by focussing intently on products that would help their customers reduce their energy costs and limit their environmental impact. The new management started hiring top engineering and scientific talent to develop R&D competencies, and began to instil an innovative culture throughout the entire organisation. It quickly became clear that a new energy was permeating the organisation, with young engineers bringing in exciting new ideas. Allocating dedicated multidisciplinary R&D teams (technical and commercial people) to each project meant that innovation was not solely product based, but also began to change production processes and the way the company works with partners and customers. Gradually, the company underwent a transformation: “we kept what was good and reinvented the future.”

Embedded Solar Panels

Today Derbigum is beginning to reap the rewards of these investments. Firstly, the company has introduced a number of new products: a white self-cleaning roofing membrane (traditionally black) which reflects sunlight to dramatically reduce air-conditioning energy use, and timeously mirrors a new Florida law enforcing the use of white roofing in new industrial sized buildings. A second key product is a white roofing membrane with an integrated solar panel. This flexible

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film-based solar panel fixed to the membrane, offers exceptional durability (both as protective roofing and as energy producer). Other new products include solvent-free glues (used when applying membranes to roofs). Also soon to launch is a patented membrane with fully integrated solar cells (which therefore no longer require adhesion on to the roofing membrane) and membranes based on recycled vegetable oil (as opposed to fossil fuels). Another process-based innovation in the pipeline will introduce products that use fewer raw materials but maintain high performance. As Derbigum changes, so their market is beginning to change. Where previously the company was a productbased business with roofing companies as clients, it is now a far more innovative- and solutions-based company that works direct with the project developers and owners of buildings. As opposed to buying a standardised roofing product, customers now approach Derbigum for more general solutions pertaining to energy efficient buildings. Indeed, since buildings are the largest category of energy users and a major cause of global warming, there is tremendous scope to improve energy efficiency in this industry. Derbigum’s new solutionsbased approach offers expertise, products and systems to help owners of buildings reduce energy consumption and generate renewable energy on their roofs. In this area, the company’s integrated solar cell membrane is the most advanced and reliable product on the market. But the company goes further, partnering with financial institutions to help finance turnkey solutions that

go after attractive subsidy and green certification programs, in this way offering a complete solution. In tandem to this, a new Derbigum Energies division houses specialists for energy audits, and efficiency and renewable energy studies.

Practicing what you preach The company also practices what it preaches and is setting itself up as an industry role model. Having implemented its own solar panel membranes throughout its buildings, the company has developed a staff-focused educational program called Scolaris as a way of further testing and developing products, with the ambition of becoming a net energy producer rather than a consumer. Moving away from fossil fuel dependency and nonrecyclable raw materials is an ongoing process. While their products already comprise 20% recyclable material (typically recovered from their own industrial waste and building sites) the company’s strongest growth is in recycling old defunct membranes into new products. The ambition: all new products comprising of 50% recycled material by 2010. With complete commitment to this strategy, Derbigum’s reaction to the current economic crisis has been to further invest in R&D and improve time-to-market for new products. Their vision of the future includes not only new innovative products but also solutions tackling the energy efficiency and CO₂ footprint of buildings in general. Consequently, Derbigum’s baseline—in a way its

Since buildings are the largest category of energy users and a major cause of global warming, there is tremendous scope to improve energy efficiency in this industry

core mission—was changed early in 2009. “Making buildings smart” – it sums up the transformation well, from a roofing product supplier to an innovative solutions provider for tomorrow’s buildings. Through acquisitions, continued investment in R&D, and clever partnering strategies for further product development, the company aims at not only revolutionising themselves but the entire industry. Winning both the prestigious EMAS European environmental award for commitment to low energy use and CO₂ emission reduction and the Best Innovator Award Belgium for the success of their innovation strategy seems to indicate that the industry is not only taking notice, but standing behind them.

BIO

+ Derbigum + www.derbigum.com + Leading international provider of roofing materials + Three production sites in Belgium and the US turn out 15 million m2 of DERBIGUM membranes and 3.5 million kg of liquid products

1. DERBISOLAR: embedded solar panels on the roof of a youth center in St-Molf, France. No perforation in the roofing for passing the cables. 2. DERBIBRITE: a white reflecting waterproof membrane as a passive cooler for the production site of Kim’s Chocolates, Belgium.

The Fifth Conference with:

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Archibiotic

—Tomorrow's cities, Vincent Callebaut BIO : Renewable biotechnologies and energies Following runaway demographic, economic and industrial development over recent years, anthropic activity is deemed responsible for what is today called “the global ecological crisis” (for example: Hurricane Catarina, the ravages of the tsunami, the loss of diversity, the rarefaction of fishery resources, the increase in the price of raw materials, or even atmospheric pollution). On the contrary, the human race is also the only species acting deliberately and consciously to attempt to restore certain global balances, through the Kyoto Protocol, for example, or the Agenda 21 resulting from the Rio Earth Summit in 1992. In 1913, Frantisek Kupka, a Czech painter, and abstract art pioneer, wrote: “Men are nature becoming aware of itself.” At a time when the planet is no longer in a position to absorb energy dissipation, at the dawn of the XXI century man is finally becoming aware of his impact on the environment and on future generations, and therefore wishes to implement sustainable development.

The operational mode of megalopolises, based on wastage, is in crisis. Areas are being defaced and strangulated, they are becoming congested and are impoverishing their natural biodiversity. As architects and urban planners, and in association with ecologists, we have a duty to attempt to speed up the natural healing and

resilience 1 processes of ecosystems, through multidisciplinary ecological engineering techniques. Faced with the depletion of natural resources, the destruction of ecosystems, the reduction of biodiversity, water pollution, the concentration of greenhouse gases as well as global warming, renewable energy sources (thermal and photovoltaic solar power, wind, water, tidal, ocean thermal, osmotic, geothermal, biomass and fuel cell power), and biotechnologies2 (biomimetics, physio-structure, phytoremediation, bioremediation, genetics) are high-performance tools to re-naturalise the Ecopolises of tomorrow. In search of human nature, the underlying objective is to intensify architectural project capacity in order to improve and protect the environment, and even restore its biodiversity. This in order to allow our ecological debt to be repaid and stabilised3 by minimising the human footprint, and ensuring that nature is able to manifest itself spontaneously and significantly in the affected area. Within this framework, the architect’s primary raw material is life, as a dynamic and functional element of its construction. It 1) Ecological resilience is the ability of an ecosystem, habitat, population or species to resume normal function and development after having been subjected to substantial disturbance. 2) OECD defines biotechnologies as “The application of science and technology to living organisms, as well as parts, products and models thereof, to alter living or non-living materials for the production of knowledge, goods and services.” 3) Ecological debt has emerged as a response to the financial debt which is strangling countries in the south. The Ecuadorian organisation, Acción Ecológica, a member of Friends of the Earth International (FOEI), defines ecological debt as “the debt to third world countries accumulated by the industrialised countries of the North through plundering of resources, damages caused to the environment, and free use of the environment to dump waste, such as greenhouse gases, coming from industrialised countries”

may therefore tend towards positive eco-compatibility of the outside structure within an ecosystem, which itself produces oxygen and electricity, by recycling CO₂ and waste, purifying the water, and integrating ecological niches or biological corridors to feed and protect the fauna and flora that is naturally present, or in transit. It is therefore not only a matter of designing habitable spaces for man, but also of creating natural or artificial biotopes that are likely to adapt to the local context, by inviting biodiversity to develop its fauna and flora around humps, hollows, crevices, shady, humid and sunny areas, herbaceous layers, hanging gardens, organic spaces or other complex surfaces. Surrounded by birds, mammals, amphibians, insects, flowers, herbs, trees and shrubs, the architect must therefore be able to rethink the spatial complexity of his projects, and also imagine new selfmaintenance and minimal management procedures for the inhabitants of these newly built ecosystems.

NICTs: New Information and Communication Technologies At the same time as researching new power and biodiversity-positive architectural prototypes, in other words, prototypes that produce more power or biodiversity than they consume, we are confronted with a globalised world in which the transmission of information is undergoing a quasi-fictional implosion. With no global governance, everyone has access via a ramified, open, flexible, changeable chaos to a powerful set of data from any

point on the globe. Although humanity wishes for a real, re-naturalised, sustainably developing world, it is schizophrenically flinging itself, body and soul, into a bottomless, virtual abyss which controls every daily movement of the citizens of the world. Civilisations interact constantly, diversifying, increasing, hybridising under previously unknown identities. The world is a global village which is electronically linked by a single brain, the Internet, the true nerve centre of the Earth as a living being. Mass media via the world wide web, wikis, instant messaging systems, offshoring, the emergence of individual innovations, spatio-temporal acceleration, ebusiness, social browsing, loss of personal inhibitions, remote work using Transmission Control Protocol, is the new theme of our generation of architects, born right in the heart of cyberculture and cyberspace. “Man and his safety must be the primary concern of any technological adventure,” said Albert Einstein. From the architectural point of view, NICTs enable information to be manipulated by software and hardware, in order to generate, distort, corrupt or abstract complex, interactive geometries with biocenoses (communities of living beings) and biotopes (geological, pedological and atmospheric environments). With a view to enhancing life development, the nervous system made up of NICTs thus enables the establishment of a means of configuration between the frame, information and ecological context. Science and awareness, body and spirit are thus combined.

ARCHI+BIO+NICT The association of living architecture (bios) with NICTs (New Information and Communication Technologies) may come back to antique Chinese thought that has always refused to separate nature from the humanity which feeds off it, the body from the spirit which would not exist without it. Chinese thought gives more importance to relationships than disjointed elements. Human beings and their environment depend on the fusion of variables. “In Time and Space, the Chinese only see a set of occasions and locations. It is interdependencies and solidarities which make up the order of the Universe. It is not believed that man is able to reign in nature, or that the spirit is distinguished from the material. Nothing opposes the human and the natural, nor even thinks of opposing them, such as the free versus the determined” (Marcel Granet, La pensée chinoise [Chinese Thought], 1934). The application of science and technology in the architectural domain allows us to design innovative prototypes of intelligent, interactive buildings, naturally as well as electronically. Architecture is becoming a biotechnological remedy for the global economic crisis, a living interface connecting man and nature. Our projects therefore study biological systems for the development of non-biological or biologically modified systems likely to have technological applications. They examine the world in order to understand the operational mechanisms of living and developing beings, to be able to apply them to human creations in a determined ecosystem. They follow generative rules defined on the basis of algorithms resulting

THE FIFTH CONFERENCE CLEAN - ENERGY COnSUMPTION

In search of human nature, the underlying objective is to intensify architectural project capacity in order to improve and protect the environment, and even restore its biodiversity. from more or less complex geometries. These projects are organised around three major areas of consideration:

realistic, parameterised virtuality, functioning in real-time in a space-time that intersects reality, and in a reformatted natureculture relationship. Equipped with an invisible digital infrastructure, citizen action becomes more important by generating new modes of participative democracies. The “Socrates”4 of today can therefore be free from the world revealed by the senses, in order to reach the world of ideas by allowing himself a platform, a space for freedom and expression. Everyone is faced with their duty to take public responsibility, and it is the future spatiality of this global forum that the projects of this second chapter are attempting to imagine!

++ The Land Arch: is an architectural adaptation of the metamorphosis of “Earthworks”, those stealthy and ephemeral alterations of the landscape linking art and nature, and designed by Land Art artists, led by the iconic figure of Robert Smithson, the leader of the movement. The Land Arch therefore represents the third phase of global urban development. In fact, after having built the city on the landscape, and after that the city on the city, it is now time for the landscape to be rebuilt on the city! Within this perspective, all buildings and infrastructure systems are considered as geographical abstractions and ecosystem distortions. These projects are of the kind that are built on the basis of the living being! Ecolopolises are spontaneously re-naturalising, engendering phenomena of self-integration and bio-regulation between man and landscape.

++ The Growing Process: Mass urbanisation is one of the major aspects of the beginning of the XXI century, and control of it is essential in order to manage the ecological footprint. Equipped with IT, technical and conceptual means, will the architect become the programmer of spatial forms of growth and related interactive processes?

++ The Interactivity Matrix: is the result of the development of the capacity to calculate and network information. The architect sees himself with the new role of designing parallel living spaces in a

4) Reference to the allegory of the cave described by Plato in Book VII of The Republic. The cave symbolises the world revealed by our senses, where all men live and believe they can discover the truth though their senses. However, this life would only be an illusion. The philosopher testifies to this by constant questioning (to which Socrates abandons himself throughout the work), which allows him to acquire knowledge related to the world of ideas, like the prisoner in the cave accesses the reality which is usual for us

The development of dynamic modelling coupled with the capacity for integration of geographical information systems(GIS)5 seems to envisage it. Through their development process, our recent urban studies attempt to fuse with the growth processes of living organisms, whether animal, vegetable or mineral. The final status of a project or master plan is therefore unpredictable, its spatial configuration being open and under constant development. The project is therefore no longer formal but processual! And this process is unstable, unbalanced, fluid, multidirectional, genetically coded and ecologically readapted. It is around these three design themes, and according to the theory that the Ecolopolises of tomorrow will be sustainably built through the possible fusion of natural and technological sciences, that our agency’s projects are establishing new green and sustainable architectural prototypes, which tend towards an equitable rebalancing of human actions on our environment! The only way is to create connections between the disciplines in order to exchange knowledge. With a view to convergence with the forms, structures and organisations of living beings, the architect and engineer analyse nature by combining its models. From the light and 5) A geographical information system (GIS) is an IT tool which enables the organisation and presentation of spatially referenced alphanumeric data as well as the production of plans and maps. Its uses cover geomantic activities related to processing and distributing geographic information. Representation is usually two-dimensional, but a 3D rendering or an animation presenting temporal or spatial variations on a piece of land are possible.

Professor Cuthbert Calculus. From the Land’ Arch to the Growing Process, via the Interactivity Matrix, our Archbiotics boost and care for urban ecosystems, with a view towards a new balance for a constantly changing life. Vincent Callebaut Architecte, Paris, 2008

solid structure of the leaf of the giant lily pad, “Victoria regia”, the ideally hydrodynamic spongy structure of the dolphin which absorbs turbulence-related pressure variations, via the perfectly nested hexagonal networks of beehives, which optimise available space through lightweight solidity, builders are becoming bionics specialists. In search of man’s nature, extending the bionic, the “physionic” concept developed by Professor André Giorgan enables “drawing from thinking matter” on complexity, uncertainty and organisation through knowledge of the living being. “A new discipline, “physionics”, is emerging which goes beyond the simple imitation of natural forms. Its principle: the systematic dissection of the mechanisms that produce or encourage the development of the structures of living things (ecosystem cells). Its objective: to understand how the global unit retroacts on its components, and takes advantage of these interactions to otherwise design the functioning of human organisation.” Through the convergence of the living and technological worlds, which forces a cultural transformation on the basis of complex alchemies, the architect, like a planetary garden “savant-adventurer”, therefore becomes a

THE FIFTH CONFERENCE CLEAN - ENERGY COnSUMPTION

Transforming the energyefficiency of government buildings

—Using 3rd party financing to accelerate investment

There’s a time worn idiom: “Change comes from within”. In the case of Fedesco (a public Energy Services company), change came from inside out. By now, almost everyone has realised that energy consumption, and the reduction thereof is critical as a long term strategy. The problem with long term strategies however, is that they only pay off in the long term. Enter Fedesco. Established in late 2005 as a limited company, this federal government initiative is a wholly owned subsidiary of the Federal Participation & Investment Company. Its mission is simple: carry out projects that lead to energy savings in federal government buildings. Its methods of achieving this however, are entirely inspired. Fedesco works exclusively for the Federal Public Services and other federal government agencies. This translates to a total of approximately 1800 buildings (owned or leased by government) with a total energy and water spend of approximately EUR 150 million. These buildings include the administration buildings but also police stations, courts, prisons, scientific and cultural agencies, parliament, the Senate, the Royal Palace, amongst others. Most of these buildings are really old, and almost all are in need of energy saving solutions. It’s easy to see the benefits of such a strategy - contextualised in the federal policies on sustainable development and energy efficiency (2004-2008 and 2009-2012) and Belgium’s National Climate Plan

BIO Fedesco

+ www.fedesco.be + Fedesco is a public ESCO (Energy Services Company), founded in 2005 by the federal government. The company facilitates and finances energy efficiency projects at federal government buildings. There are about 1800 such buildings with a total energy bill of about 150 million Euros.

(2002-2012), but affording this approach is often extremely costly. Everyone wants energy saving now, but wants to pay for it later. This is exactly the kind of necessity that Fedesco makes possible. Operating on a 3rd party financing model, Fedesco facilitates an Energy Performance Contract between interested parties (usually banks and the federal government). This makes it very appealing for government administrations to go ahead with large scale energy renovations because they carry little to no risk and don’t need to spend big upfront. As solution integrator, the company provides a total solution, including services and contracts, whereby the bulk of the services and work is outsourced to the private sector.

Government agencies rely on Fedesco for advice – it serves as the “Federal knowledge centre for energy efficiency"

THE FIFTH CONFERENCE CLEAN - ENERGY COnSUMPTION

After getting the interested parties together the plan is simple: the federal building in question is assessed to determine a benchmark baseline energy spend. Accompanying this is an energy audit: how the energy is being spent, and how this can be optimised/ improved. Once a comprehensive energy saving plan is in place (which often includes the installation of hardware, energy monitoring and education), an immediate reduction in energy costs is evidenced. This saving between the lowered operating costs and the original baseline spend is then used to pay back the financial outlay. While this means the federal government sector in question doesn’t in effect save much money in the short term, they do however gain immediate environmental recognition, and serve as an example to both industry and other government alike. Government agencies can also rely on Fedesco for advice and knowledge transfer – it serves as the “Federal knowledge centre for energy efficiency” go to. With expertise ranging from needs analysis, the identification of potential buildings and the benchmarking thereof, to the comprehensive follow up of all the technical phases of the project (rapid and focussed energy audits – known as Quickscans, relevant studies, the preparation of both technical and public tenders and follow-up of project sites), Fedesco is also involved in the monitoring of achieved energy savings and the related financial repayments, making the projects effec-

tively turnkey for their clients. The company isn’t just about facilitation, playing an active role in the installation and exploitation of photovoltaic cells on the roofs of federal buildings, as well as a consulting role to the Regie der Gebouwen (Federal Buildings Agency). In a nutshell, Fedesco’s services can be broken down into 4 main types: ++ Firstly there are the standard services (e.g. Quickscans, energy monitoring and verification, staff awareness campaigns). ++ Following this there are Energy Performance Contracts (EPCs), with full 3rd party financing as described above. Typically this model is used for larger projects involving several parallel applications (e.g. replacement of boilers and the insulation of roofing). Fedesco has strong expertise in these types of Energy Performance Contracts. It has worked with the Berlin Energy Agency (which is the reference in this area), to develop a standard EPC contract with addendums (this has also been further fine-tuned for the Belgian context, via consultation with private ESCOs in the Belgian market).

++ Thirdly, the company initiates ‘Transversal Measures’, bringing economies of scale to bear on measures that are applicable to several buildings. Thus, instead of focusing on one building with several measures, here Fedesco focuses on a single measure for several buildings. ++ Finally, the company is involved in knowledge transfer: tailored consulting and training programmes for public agencies with 20 or more buildings, helping them put together a business plan and analyse any organisational or practical obstacles. All of these services have a clear objective in mind: to accelerate investment in energy-saving measures and renewable energy within the federal government’s extensive portfolio of buildings. Fedesco is playing a key role in this by offering government agencies a total solution with little to no financial risk.

1. Justice Palace in Antwerp (new building): optimise the regulation of the HVAC installations 2. Prison of Nivelles: energy audit (which led to several energy saving measures) 3. Building North Gate 3 – Brussels: optimise the regulation of the HVAC installations 4. Justice Palace in Brussels: installation of CHP installation for 2009/2010

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THE FIFTH CONFERENCE CLEAN - ENERGY COnSUMPTION

The promise of geothermal energy

—Stijn Bijnens

“Biomass, sun, wind, … when it comes to alternative sources of energy we tend to look at ground level or in the sky, when in fact we are sitting on a big chunk of rock with a core temperature of about 5.000°C at over 5.000 km depth. In former mining areas, human activity has provided large underground reservoirs where the earth’s heat accumulates at relative shallow depths. This is the case in the province of Limburg, Belgium, where altogether, the mine infrastructure holds about 30 x 106 m³ of water at a temperature range of 24°C to 42°C at a depth range of 400 m to 1.000 m. Taken as such, the cost of getting the water to the surface is too high to allow for a economically viable standard real estate project (e.g. a few office buildings, …). But when you have the opportunity, as we have in former mine locations such as Waterschei (Genk) and Beringen, to provide geothermal energy to a large scale project – i.e. respectively 750.000 m² and 145.000 m² of floor area – the figures start to add up.

we are sitting on a big chunk of rock with a core temperature of about 5.000°C at over 5.000 km depth. What’s more, in such large scale projects, it should be economically viable to realise energy efficiency just by centralising energy production as in an urban heating system. Furthermore, by implementing this principal with a low calorific system, as opposed to a system where hot water or steam is distributed, the link can be made with geothermal energy, resulting in a sustainable and highly energyefficient system. The same scale advantage applies to agricultural activities such as growing fruit and vegetables in greenhouses or breeding fish. Again, the key success factor is clustering greenhouses and fish ponds around a geothermal well in dedicated areas of 10’s of hectares at a time. Ultimately, the nec plus ultra is tapping a fraction of the earth’s heat to produce electricity. And it can be done! Pilots in France are gearing up to produce around 5 MW of electricity with a three well configuration at about 5.000 m depth, pumping up water at around 150°C. A major set back with the present technique is that migration of the water underground, from injection well to production well occur through natural fractures in the underground. This places a high risk on the capital investment necessary to realise such projects. The next stage in developing this technology is to artificially

create an underground heat exchanger by means of innovative horizontal directional drilling and casing techniques, so that this risk can substantially be reduced. Our province has the geology and the ambition to set up such projects. Stijn Bijnens is CEO of the LRM, the investment company of the province of Limburg

THE FIFTH CONFERENCE CLEAN - ENERGY COnSUMPTION

THE FIFTH CONFERENCE CLEAN - Materials Management

5| Materials Management A

few years ago this article would have been entitled .‘waste management’ and it would tell a reasonably positive story. As briefly discussed in chapter 2, much progress has been made in this country in the way we manage our waste. Especially in the residential sector the selective waste collection systems that have been set up, the way it has entered the public consciousness, and the end result—over 70% of waste goes to recycling—are impressive. Today, however, the Flemish government has recognised that waste management is not enough. We need a transition to materials management.

Flanders has come along a way though. Back in the early 80s, when authority for waste management was first regionalised, the newly created agency OVAM was confronted with chaos. There was little coherent policy to speak of and most civic authorities had worked out their own waste management systems. Hence, the first task was to take inventory of what was happening and where it was happening. In a second phase the process of selective waste collection began, separating certain materials like glass and paper for recycling. Legislation was created and waste and recycling infrastructure was set up. For example, Indaver, today one of the leading waste management companies in Flanders, was created with the help of government investment. This process has continued to the situation today where most residential waste is reused or recycled. The rest is incinerated, often with energy recuperation. In the 90s the focus shifted onwards to waste prevention. Eco-label projects and campaigns were set up to help companies and households think about their waste consequences earlier in the purchase or product development cycle. Today, the focus is shifting again: from waste management to materials management. The problem today is that further progress in waste management is limited, certainly in the residential domain. Consumption patterns have kept evolving, positively so for the average consumer, but negatively with regard to the waste mountain. We keep on consuming more goods and services, and this offsets the efficiency gains achieved in better production processes. Much work can still be done for industrial waste, especially waste from the building industry, but even here there are limits to what can be achieved. The net result is that today the waste flows have stabilised in volume (while economic growth continued). Pushing them down further is not possible without making more fundamental changes to the way we manage materials.

If we really want to decouple the waste volumes from economic growth then we need to look earlier on in the material chains to see how products can be designed differently, how production processes can be altered, in fact, how entire business models can be reformulated, so that as many material chains as possible can be made circular as opposed to linear. It

is these insights—well articulated by McDonough and Braungart’s cradle-to-cradle1 concept—that prompted OVAM in 2006 to begin building a transition network for sustainable materials management, leading in 2008 to the launch of Plan-C. The transition network includes participants from government, business, academia and the non-profit sector, and is coordinated by OVAM and Professor Karel Van Acker at the Catholic University of Leuven. Over the past few years this group has tried to work out a long-term vision of how we should be managing our materials within the next two or three decades, and subsequently explored various scenarios of how we could get there (the transition). At this point, the first experiments are being set up. For example, the transition team focused on ‘green chemistry’ is experimenting with the concept of chemical leasing, whereby chemical producers lease their chemical materials as opposed to buying them. These obviously are exciting initiatives but real cradleto-cradle practices or systems today are still far from common. The challenge is significant, since it is a systems change. Business models need to adapt (e.g. smaller, more local supply chains will probably need to emerge), new business models (and companies) need to develop, attitudes need to change, and regulation needs to change. Especially on this latter point companies like Indaver are encountering legal obstacles to new recycling techniques and business models. Specifically, this is because the law (Flemish law in this case) defines which waste materials can be used as ‘secondary’ raw materials. For some materials the legal framework is apparently quite sophisticated (e.g. solvents, compost) but in other areas (e.g. waste oils) it can hinder the development of new recycling models. Also problematic for international companies like Indaver is that the legal framework covering waste is reasonably fragmented at a European level. Member states and regions all have their own legal framework, which often is decidedly complex if not archaic. Nevertheless, in Flanders especially it is clear that progress is being made. Both in political and industrial circles there is vision and initiative (e.g. Plan-C). Also, new business models and technologies are beginning to emerge, witness Umicore’s recycling platform for precious metals and the success of Ecover, a company that is rethinking the detergents business. But even on a smaller scale, a company like ASAP Photographic services in Boom manages to close its water cycle onsite by capturing rain water and treating its waste water via a reed-bed on the roof of its building. Although we are in the starting blocks in the transition to materials management, clearly there is tremendous potential for Flanders to take an international lead in this area.

1) McDonough W & Braungart M (2002). Cradle-to-cradle: Remaking the way we make things.

THE FIFTH CONFERENCE CLEAN - Materials Management

Beyond the scarcity and burden of resources —Karel Van Acker Materials are the fundament on which our society is built. Even the “virtual reality” can only be made tangible by sensors, cameras, computer screens, microchips,... However, some of the minerals of which the materials we use every day are made, are or will become rare. This pending scarcity is diametrically opposed to the forecasted demand for material goods, up to three times the current materials use by 2050. Other effects of our raging hunger for materials are the ever increasing energy demand due to the energy need for production (about 25% of greenhouse gas emissions can be attributed to the mining and manufacturing of materials) and energy consumption during the use-phase of products, and the environmental burden, due to hazardous emissions and waste. How can we cope with this contradiction? Can we conceive a society with a considerate and clean use of materials? I see five elements which are cornerstones of such a vision for sustainable materials management. The first element is materials effectivity, realized by the establishment of a circular economy, instead of a linear one. Materials of high (environmental and technical) quality are carriers of economic activity, and have to be used over and again. Therefore a design of the overall life cycle of materials (and the complex interaction with a multitude of other cycles in the biosphere and

technosphere) is needed. Nowadays, 80% of products are discarded after the first use and up to 90% of the virgin materials used in the manufacturing process has become waste within six weeks after sale. There is thus plenty of room for improvement. Closing the materials cycles can be done on several levels by recycling products, recovering and reusing materials. New types of enterprises and business models will be needed to guarantee that the materials flows are optimally geared to one another and kept in loops. Since energy and materials are limited, and both will be needed even in a closedloop economy, efficiency is a second requirement for sustainable materials management. Every passage of materials through a cycle needs a certain amount of energy and by consequence leads to emission of greenhouse gasses as long as most of the energy is non-renewable. Also, dissipation of (some) materials is not totally avoidable; thus, optimizing the processes (process intensification) and use of materials (materials intensification) stays important. This also implies that local production and consumption cycles are favorable. Furthermore, new models of how functionality (and to a further extent: well-being) can be built with less materials will lead to a more socially embedded service economy, in which services are creating added value. The search for more efficiency is in the first instance profit driven and already ongoing since years. However, material savings from e.g. “light-weighting” in cars were nearly always offset by increased consumption. These findings, together with the knowledge that we are far from intra-generational social equity including large differences in materials needs today, lead us to the third cornerstone of sustainable materials management, i.e. sufficiency. This means a

transition to new lifestyles that accept limits and are in harmony with nature. Lifestyles that reflect on how much is enough for a joyful life. As non-renewable resources become scarcer, there is a clear tendency to rely (again) more on the renewable resources provided by nature. Therefore, the fourth element of sustainable materials management will obviously be compatibility with the biosphere. The capacity of nature to generate our needed resources or to regenerate biodegradable waste is not

industry, governmental agencies, ngo’s) in order to create together definite breakthroughs in sustainable materials management. A specific approach is implemented to manage

A common feeling that the way we use materials has to change is rising in our region. unlimited, and land surface is a scarce good. Therefore, a symbiotic growth of our material needs and nature might be the most difficult aspect of future materials management. Finally, the four previous elements in sustainable materials management can only be achieved by a high level of responsibility of citizens, companies and other organizations and governments. Transparency in materials flows and alert consumers are indispensable. The transition towards the above described sustainable “regime” of material use is very challenging and at the same time full of opportunities. It is clear such a transformation cannot be realized by technological innovations or by fragmented environmental legislation only, but implies changes in the physical, legal and social infrastructure as well as in the mindsets, values and attitudes of many social actors. This conclusion led two years ago to the foundation of the Flemish network for sustainable materials management, Plan C. This network brings together a wide variety of individuals and organisations (universities,

this complex process, more specifically transition management. We believe the flow of a transition towards a more sustainable state can be influenced by a cyclic process of developing a long-term vision (typically a generation’s lifetime) as a framework for short term action, by experimenting on the micro level compatible with that vision and learning from these experiments for the macro-level. In other words, learning-by-doing. Plan C firmly states that an integral system-innovation approach is needed to remove the barriers on our way towards sustainable materials management, involving all social actors. A common feeling that the way we use materials has to change is rising in our region. Industry increasingly recognizes that profit, people and planet are not opponents, but can go hand in hand. The contours of a long-term vision on materials management have been drawn. We now need creativity, solidarity and decisiveness to turn these ideas and concepts into our and our children’s reality.

Dr. Karel Van Acker is Coordinator of the Leuven Materials Research Centre at the Catholic University of Leuven. He also is chairman of the Flemish Transition Network for Sustainable Materials Management (Vlaams Transitienetwerk Duurzaam Materialenbeheer)

THE FIFTH CONFERENCE CLEAN - Materials management

Clean living

—Ecover produces washing and cleaning products that are both high performing and ecological

While keeping ourselves, our homes and our clothes clean with standard chemical cleaning products, we are paradoxically keeping our habitat decidedly ‘unclean’. Chemicals pollute the groundwater and soil, empty bottles clog up landfill sites--clearly the impact that this lifestyle has on the planet has started to show.

Established in 1980, Ecover has grown to become the global pioneer in ecological cleaning products, driven by respect for people and the natural world. You could say the company’s founder, Frans Bogaerts, had a dream; a vision of a phosphate-free, high-performance washing powder to halt the irreversible impact chemicals were having on the environment. In 1984, Bogaerts was confident that he had achieved his objective, and the powder was launched. Over the following years a number of other products were launched, each recognized for its innovation and ecological integrity.

Ecover reached the shelves of supermarkets by the mid-80’s, reinvesting profits in finding alternative ingredients and further developing the range. Word quickly spread and before long Ecover was planning the construction of a new, bigger production facility – the world’s first ecological factory. This grand ambition became a reality in 1992, with the opening of the factory in Malle, Belgium, designed to minimize the need for artificial light and heating, and featuring its own water purification system. In 2007, the concept was taken a step further with the second factory opening in Boulogne-sur-Mer, France. Ecological and recycled materials were selected for the factory’s construction. Rainwater is used for the toilets and washing up rooms, and for maintaining the buildings and machines. Both factories, in Belgium and France, have green roofs that act as effective and efficient temperature-regulators and noise-dampening insulators. Apart from a few workspots, the buildings require no air conditioning or heating throughout the year. Today, Ecover’s innovative and ever-expanding range features laundry, household cleaning and personal care products, each reflecting the company’s eco-aware ethos and ingeniously formulated to give excellent results. Ecological considerations based on a variety of parameters are at the heart of every decision the company makes. All ingredients used are carefully selected to ensure that they are either based on renewable plant extracts or sustainable minerals. Ecover products are quickly and completely biodegradable – and won’t leave any traces behind, either in the home or in the environment. Ecover does not use animal testing, and as the end product leaves no polluting remnants, that means minimum impact on aquatic life. Ecover also avoids the use of optical brighteners, which other companies use to make clothes look whiter than they actually are. It goes without saying that the plastic bottles used are 100% recyclable and boxes are made from recycled cardboard.

In 2009, Ecover will re-launch its renowned re-fill system. As Ecover strives to balance economical, social and ecological aspects of its business and products, the new re-fill system will offer several significant benefits. For example, the system shall offer a Bag-in-Box packaging format which will significantly reduce the ecological impact on the entire chain from supply, production, warehousing, transportation to actual consumer use. To attract retailers and consumers, the new re-fill system has been designed to be user-friendly, light weight with easy installation procedures. Thus, less packaging, less waste, and less energy—all this makes Ecover’s refill system unique in the market category of washing and cleaning products.

THE FIFTH CONFERENCE CLEAN - Materials management

BIO

Ecover is a market leader in the production of ecological washing and cleaning products. Headquartered in Belgium, Ecover also has sites in France, the UK, the USA, Germany and Switzerland. Ecover’s products are sold in more than 26 countries worldwide.

A few facts and figures: With each new Ecover 15L Bag In Box, up to 1 kg less plastic is produced, meaning that up to 30 plastic bottles will not end up in a landfill site. For every 1,000 boxes produced enough plastic bottles are saved to build a tower of 5,970 m high. This is more than 18 times the Eiffel tower!

of 135,29 g/km, well below the average of 160 g/km attributed to an average company car fleet. Ecover’s ecological mission is far from complete. While the company is a trailblazer within its category, the industry as a whole still is a long way off a true ecologically sound model. By innovating both in its product development and in its operational model, Ecover is at least showing that real progress is possible.

For every 1,000 boxes up to one ton of plastic or up to six barrels of oil are saved. A consumer can re-fill a bottle for years and save roughly 10% on regular retail price.

for the 15 liter bag-in-box.

As a truly closed loop sustainable business, Ecover also has a long tradition of encouraging the use of alternative modes of transportation. Its Global Mobility Policy was implemented to help further reduce carbon dioxide emissions of employees commuting to work by car. This measure was taken in furtherance to the already existing remuneration given to employees commuting to work regularly by bicycle or car pool. Under the current policy, more than 35% of Ecover employees, eligible for a company vehicle, drive a Hybrid. The other remaining vehicles, with diesel engines and low gas mileage, are also chosen for their environmental benefits. Remarkably, Ecover’s practices regarding employee mobility keeps total carbon dioxide emissions at an average

1. Ecover’s new re-fill system 2. Ecover’s second ecological factory in Boulogne-sur-Mer, Northern France. 3. Ecover’s washing-up liquid in production 4. Ecover’s new and revolutionary EcoSurfactants Household Cleaning Range

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THE FIFTH CONFERENCE CLEAN - Materials Management

Getting it perfectly right

—Toward eco-effectiveness, Kathleen Van Brempt

Let’s just call a spade a spade and admit that it is not easy for any politician to acknowledge that he or she made mistakes in the past. But I was nevertheless convinced that, together with my party, I took important decisions in the European parliament in the realm of environmental guidelines. As a member of the European parliament I, together with other progressives, lobbied strongly in favour of the WEEE directives1 that relate to collecting and recycling electronic equipment. In 2005, electronic waste in the EU27 amounted to about 8 or 9 tonnes2. By 2020 this could be in excess of 12 million tonnes. At present, depending on the type of equipment, only 25 to 40 percent of that waste is collected even though researchers have shown that it is possible to jack up that figure to 60 or 70 percent. Collection and recycling looked like the best solution for processing potentially hazardous waste at the time. But the German chemist Michael Braungart, in his inimitable style, has relegated the entire European environmental policy to the wastebasket. As a politician one always has to be on the lookout for the proverbial carrot dangled by gurus, and green gurus such as Michael 1) WEEE stands for Waste Electrical and Electronic Equipment 2) Waste Electrical and Electronic Equipment (WEEE), review of directive 2002/96, Final Report 2008, ec.europa.eu/environment/waste/ weee/pdf/final_rep_unu.pdf

Braungart are no exception. But Braungart’s analysis is rock-solid. We have all been taken in by borrowing concepts such as eco-efficiency from business lobbyists. The EU report that analyses the effects of the WEEE directives has eco-efficiency in abundance, but doesn’t exactly paint our recycling policy in a flattering light. Eco-efficiency, unfortunately, means nothing more than companies having to attempt to reduce the amount of waste they produce as efficiently as possible. It does not imply that they should avoid producing waste. In an eco-efficient system you can simply carry on creating waste, just not so much of it. And what is more, you have official permission to do so. In Braungart’s witty words: ‘If you do wrong efficiently, it becomes perfectly wrong’. Braungart’s challenge to us is to develop design and production methods that produce no waste at all. He talks about Cradle to Cradle production (C2C), which stands in sharp contrast to the cradle to grave business we are currently familiar with where we process raw materials into products that either end up on the junkyard conveyor belt or - in the best case scenario – get down-cycled to inferior raw materials for new products. Should it indeed be possible to manufacture without creating waste (and various companies have already proven this possible), we cannot accept eco-efficient production anymore. As a politician, this is a challenge I will have to face in future. This now begs the question of how one turns a vision like that into policy. An advantage offered by a C2C approach is that it should be possible to get widespread public buy-in. Cradle to Cradle production implies that, as a politician, one can get off one’s moral high horse whereby consumers are encouraged to cut back their consumption so that less waste ends up in the environment. That has traditionally been the Achilles

this type of paper it will create a demand and ramp up the switch to producing it. What is more, as part of the recovery policy all European governments want to uphold to counter the economic recession, we can aim our efforts at innovation based on the C2C principle.

For example, there is not a single manufacturer in Europe that can supply C2C paper at the moment heel of green politics. A green policy mostly apportions blame – to manufacturers and consumers alike. Pointing a finger at all and sundry hardly engenders enthusiasm and doesn’t sit well with the masses either. This may well be the reason green parties only ever have marginal voter support, even in tough ecological times. A Cradle to Cradle policy could put an end to appeals based on moralising. After all, there would be no need to scale down production or cut down consumption if products were designed cleverly enough to be returned wholly to the raw material cycle. Governments therefore need to assist in promoting the Cradle to Cradle concept to the various target groups first so that everyone understands what we are on about. I have launched such a promotional campaign in Flanders for 2009.

At the same time, we as the government must adapt the environmental guidelines parallel to the new vision. Environmental legislation may no longer set out how much you may still pollute, but should formulate clear targets for banishing waste forever. Another tool we as government could implement is to make economic support measures dependent on transitioning to C2C production. We could also proclaim a procurement policy which includes C2C as a condition for supplying government. For example, there is not a single manufacturer in Europe that can supply C2C paper at the moment; paper that contains no toxic residues and can therefore comfortably be used as compost. Once it becomes known that public institutions prefer

The danger exists though that we could end up following an economic recovery policy that conservatively meanders along known paths. I have heard various policy makers lament that the efforts required to keep the economy on track unfortunately stymie efforts to make money available for addressing environmental problems. That would be a tragic choice to have to make. A two-pronged policy aimed at creating some breathing space for a faltering economy by supporting radical innovation creates an opportunity to address a number of problems simultaneously. This is the route we’ll have to take if we want to be able to look our children and grandchildren in the eye. The first steps are being taken right now, but we’ll need to don sturdy political hiking boots if we are serious about a clean future.

Kathleen Van Brempt Flemish minister for Mobility, Social Economics and Equal Opportunities

THE FIFTH CONFERENCE CLEAN - Materials Management

Creating sustainable value

—What comes around, goes around

How does a 200-year old mining company move from a commodity player to an innovative clean technology pioneer? By transferring knowledge and expertise in metals into energy-efficient and environmental-friendly solutions. This is the incredible journey that Umicore has taken, to turn a traditional commodities-based company into a materials technology company offering energy, environmental and recycling solutions. Umicore’s history runs back more than 200 years, to an original mining concession for the Vieille-Montagne mine in Moresnet, near the current Belgium-Germany border. Through mergers and acquisitions over the years, the company eventually became Union Minière: an integrated industrial group, positioned as a specialty materials company focusing on precious metals, highmargin zinc products and advanced materials. In 2001, the company changed its name to Umicore, to reflect its new focus on the frontier between metallurgy, chemistry and materials science. Umicore now operates in 4 business areas: Advanced Materials, Precious Metals Services, Precious Metals Products & Catalysts and Zinc Specialties. The Advanced Materials business group produces cobaltbased materials for rechargeable batteries and germanium-based key materials for high-efficiency solar cells. Precious Metals Services is the world market leader in recycling complex waste streams containing precious and other non-ferrous metals, and provides refining and recycling services to an international customer base. Precious Metals Products and Catalysts produces a range of complex functional materials based on precious metals and its expertise in technology platforms such as catalysis and surface technology. It is among the world’s largest producers of automotive catalysts for passenger cars. Zinc Specialties develops zinc-based chemicals, powders and materials for a wide variety of applications. But Umicore’s mission goes much further than advanced materials. Umicore is committed to creating sustainable value by developing, producing and recycling materials in a way that creates materials for a better life. And this is where Umicore’s true drive to innovation lies. What prompted this focus on clean technology? Umicore CTO Marc Van Sande explains the 3 main triggers. The first is the company’s history in an activity that is perceived as ‘dirty’, and the need to clean up both the company’s reputation and the sector. Secondly, the global market has boomed for devices such as consumer electronics that use the materials Umicore produces, for batteries, casings, hardware and more. Finally, there has been a huge jump in environmental awareness, both within the company, and amongst end-

users, manufacturers and governments, pushing and pulling demand for eco-friendly solutions. Umicore wants to respond to these movements, but also strives to lead the way, going beyond what is required today, to find solutions that already address the demands of the future.

Innovator Thanks to over 200 years of experience in metals, Umicore is a true leader in the sector. And the company does not take the responsibilities of this leadership lightly. Umicore now operates on a ‘closed-loop’ business model, which requires managing the metal throughout its lifecycle. “We supply our customers with the advanced metal-based materials,” explains Marc Van Sande. “We then collect the secondary materials that come out of the production process and recycle them. But it doesn’t end there. We also recover the original material at the end of its lifecycle and recycle it as well. And since metals don’t really have an end-of-life, in principle we can reuse the metals endlessly. Nothing is discarded: that’s why it’s a closed loop.” Umicore has succeeded in creating closed loops for previously non-recyclable products. One example is rechargeable Lithium-ion (Li-ion) batteries. These are among the most popular types of battery used in consumer electronics, because they offers one of the best energy-to-weight ratios, no memory effect and a slow loss of charge when not in use. However, they are subject to aging, even when not in use, and are expensive to manufacture. Until recently, these batteries could not be recycled. Umicore developed the VAL’EAS(tm) process which recycles, refines and transforms most of the cobalt contained in the Li-ion batteries into lithium cobalt dioxide (LiCoO2), which is then used in the production of new Li-ion batteries. Umicore is the only company in the world proposing a real closed loop solution for Li-ion batteries, combined with an environmentally sound management of these end-of-life batteries and high recycling and/or recovery rates. Umicore is leading the way in closed loops for other ground-breaking technologies too, such as germaniumbased solar cells to generate energy for space usage, including satellites and NASA’s Mars Exploration Rovers; optic materials for night vision equipment, for the automotive sector; and nanomaterials for optic applications and solar cells.

THE FIFTH CONFERENCE CLEAN - Materials Management

Comprehensive Clean Tech platform A sustainable future for our society requires dealing with our natural resources in a sensible way and finding innovative ways of providing clean and renewable energy. Economic development is perfectly compatible with taking care of our environment. Technological development and improved understanding of materials allow us to minimize the input going into products and maximizing their so-called eco-efficiency. Umicore does just that; harnessing its unique experience and expertise in combining materials science, chemistry and metallurgy into a platform of innovative materials which help improve our quality of life while causing as little damage as possible to the environment. It is this expertise that allows Umicore to deliver energy-efficient and environmental-friendly solutions: the crucial, yet often invisible, building blocks used in rechargeable batteries for laptops and mobile phones, in solar cells, as well as in fuel cells for the future generation of environmentally friendly cars. Some 80% of Umicore’s research and development budget goes into energy, environmental and recycling technologies. Umicore is already world leader in the production of germanium substrates, the building blocks of highly efficient solar cells which today are primarily used in space. However, the company is currently investing to double its production capacity of germanium substrates, in order to meet the expected demand from the terrestrial photovoltaic market. Using concentrator technology - relying on a set of mirrors or lenses to focus the sunlight on tiny solar cells - germaniumbased solar cells would in certain conditions become more cost-effective than traditional, but less efficient, photovoltaics. Umicore is also increasing production capacity of key materials for lithium-ion rechargeable batteries, for use in new applications such as hybrid electric vehicles. And via its joint-venture SolviCore, Umicore focuses on the development of electro-catalyst materials for use in

fuel cells which emit only water vapour and could be used to power the environmentally friendly car of the future.

BIO Umicore

+ www.umicore.com

Umicore’s story doesn’t end there. Since metals can be recycled almost infinitely without losing any of their inherent qualities, Umicore has mastered this technology to become the world’s biggest recycler of precious metals. Its recycling operation in Hoboken, Belgium, is able to capture 17 metals—of which seven precious metals—from a wide range of secondary or end-of-life materials, including electronic scrap from old mobile phones or laptops. This is important to illustrate, 50,000 old cell phones contain about 1 kg of gold and 10 kg of silver.

+ R&D budget of EUR 166 million, equalling 7 % of revenue + 80% of total R&D expenditure is dedicated to clean technology projects. + First to develop recycling technology for Li-ion batteries

Some 80% of Umicore’s research and development budget goes into energy, environmental and recycling technologies.”

Umicore aims to close the materials loop. Its hi-tech materials offer society a comprehensive platform of energy-intelligent solutions which allow us to produce, store and renew energy in an environmentally friendly, renewable and sustainable way. Our strategic vision of sustainable development is the common thread running through all our research and development activities.

The Fifth Conference with:

THE FIFTH CONFERENCE CLEAN - AGRICULTURE & FOOD

6| Agriculture & Food The agricultural sector is not particularly big in this small country—we don’t have the space for it. The sector does excel, however, in vegetable farming; for example, Brussels sprouts, Belgian endive, the Flandria quality label. Also, this country has particularly strong credentials in green biotech (biotechnology focused on agricultural crops and seeds). In fact, much of the original plant research that gave birth to the sector worldwide was conducted in Flanders. The Flemish Institute for Biotechnology continues to house some of the world’s leading scientists in the field, and companies like Devgen and Cropdesign are world leaders in their field. The question we need to ask in context of this publication is whether agriculture, as it is practiced today, is sustainable, and whether the green biotech sector is part of the solution or whether—as some in the green lobby argue—part of the problem. The food industry is another matter. Beyond the beer and chocolate clichés there are numerous world-class food and beverage companies in this country. But with the exception of companies like Alpro, few really stand out for their ‘green’ credentials. So do we really know what we are eating? This is the question Michael Pollan asks in his book ‘The Omnivore’s Dilemma’, a truly shocking account of the industrial food chain in the U.S. It is tale of subsidised but nevertheless unprofitable maize farming on a gigantic scale, of maize-fed animals that are kept alive on a regime of antibiotics, and of an increasingly obese but simultaneously undernourished U.S. population. Pollan shows how industrial farming in the U.S. has entirely disconnected itself from ecological farming methods where livestock and crop cycles interlink in mutually beneficial ways. Instead, the (linear) chain is driven by fossil fuels (pesticides, chemical fertilisers) and emits a tremendous amount of waste and greenhouse gasses. And the end-result is over-processed food, loaded with maize and soya derivatives, that keeps us fat but does not actually nourish us. It isn’t a pretty picture; it is the type of literature that pushes consumers toward ‘organic’ foods.

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Pollan’s story is not directly applicable to our local situation but some of the key principles do apply. For one, the agricultural model does indeed date back to the post-WWI ‘green revolution.’ Yields increased massively since the 1950s, but in the process most crop farming relies on chemical fertilisers and pesticides. Also, livestock farming is practiced in a highly intensive manner in this country, so much so that the animal manure mountain pollutes our ground water (which led to legislation controlling the livestock population in Flanders). The fact that agriculture is subsidised under the European Common Agricultural Policy is another contentious matter. Clearly there are limits (geographically and environmentally) to what is possible here. But also internationally there is increasing recognition that the

industrial agricultural model is not sustainable, if only because it is so reliant on fossil fuels (while demand for high-protein food is increasingly dramatically given the rise of China and India). The question is, where to go from here? What is sustainable agriculture? Looking at it superficially, there are two main responses to the question. On the one hand there are those pursuing a ‘second green revolution’, seeing particular promise in the genetic engineering of new seed strains. On the other hand, ecologists argue the case for ecological (and local) farming methods. While demand for organic food products is increasing in this country, its market share in total household food purchases remains minor (1.6% in Flanders in 2008).1 Organic food production too is marginal in this country—only 0.6% of crop farming land in Flanders is used for organic farming. 2 Hence, much of the organic produce sold in retail is imported from larger-scale producers abroad. From an ecological perspective this is a pity. It can be argued that the potential for organic (or rather, ecological farming methods, to distinguish it from ‘organic’ or ‘bio’ labelling schemes) is much greater, both here in this country and globally. Grassbased farming methods as practiced in New Zealand (dairy cows) or by the likes of Polyface farm profiled in Pollan’s book, do suggest that yields can be competitive with industrial farming methods, although the methods are certainly more labour intensive. Some also argue that ecological farming methods have not been given a fair chance given the amount of R&D investment that went into the ‘green revolution’, compared to ecological farming. Biotech companies like Cropdesign also argue that they are committed to solving the world’s food problem, but take a different approach to the problem: genetic engineering. While in the public mind GM foods have become associated with Frankenstein foods and pesticide-resistant crops, companies like Cropdesign are trying to develop new seed strains that are more tolerant to drought and have improved nutrient use efficiency (thus requiring less fertiliser). In other words, these are potential solutions for farmers in developing nations, confronted by droughts and lacking access to fertilisers. While even Pollan seems to acknowledge that such methods need to be tested,3 seed companies like Monsanto have a tough battle to fight in the court of public opinion. Critics of GM agriculture focus on a number of issues, including uncertainty about the longterm effects of GM crops on human health and the environment; the economic control that seed companies 1) Samborski V. & Van Bellegem L. (2009) De biologische landbouw in 2008, Departement Landbouw en Visserij, Brussel. 2) Samborski V. & Van Bellegem L. (2009) De biologische landbouw in 2008, Departement Landbouw en Visserij, Brussel. 3) Michael Pollan and Hugh Grant, CEO of Monsanto, recently debated on a google.org forum – 18 September 2008 (available on Youtube.com)

THE FIFTH CONFERENCE CLEAN - AGRICULTURE & FOOD

have over their ‘intellectual property’ (i.e. GM seeds); and the possible contamination of non-GM crops by GM crops, implying that the consumer is robbed of choice in the matter. While at present one can still talk of an ideological schism between the ecologists and biologists, in person the differences are less palatable. What is sure, agriculture in the coming decades will need to become more ecological and intelligent. This does not mean that agriculture will turn away from pesticides, herbicides and GM seeds, but that it will begin adopting other methods to increase yield, for example by rotating crops in more optimal ways or using satellite imagery to detect areas that need water or fertiliser. Agriculture is bound to adopt more ecological principles (in the sense of waste avoidance) but simultaneously is likely to become increasingly high-tech. So what are the implications for food companies? How can food companies pre-empt—and in fact exploit—the shift toward more sustainable agriculture and food? Alpro, one of this country’s most successful and innovative food companies, shows one possible way. Here is a company that has placed sustainable development in the DNA of the organisation. Firstly, there is its focus on plant-based proteins from soya, which is far more efficient to produce than animal proteins (in terms of land use, water and fossil fuels). Secondly, there is the way it conducts its business. Key here is the way it processes the soya bean without the use of chemicals, thereby leaving the nutrients intact. Also important is the way it works with its suppliers (e.g. the company sources only non-GM soya beans, produced on land that does not compete with rainforest, and participates in various community development programmes in Africa and Brazil). What is remarkable about a company like Alpro—a characteristic is shares with Ecover—is that this is a company that manages to combine a fundamental commitment to sustainable business while participating in the mainstream consumer goods business. While many ‘sustainable’ food producers limit their distribution to specialised outlets or ‘niche’ categories (e.g. fair trade, organic), Alpro products can be found in the main dairy sections of supermarkets across Europe. The company has managed to develop a strong consumer brand and keeps on innovating in new products—from drinks and deserts to yoghurt and cream replacements. This is a company that illustrates well the overall point being made in this publication, that the transition to a greener, cleaner and healthier economy can be a tremendous opportunity for companies.

THE FIFTH CONFERENCE CLEAN - Agriculture & Food

Green Biotechnology in a changing environment

—René Custers

Plants are natural capturers of solar energy. The consume water and carbondioxide and with the aid of sunlight they convert it into sugars. Plants provide food, feed, construction materials, raw materials, medicines, energy, and are the source of a wealth of natural biodiversity. Plants are renewable and can therefore be at the basis of a sustainable economy. Green biotechnology makes use of modern technologies such as recombinant-DNA technology to explore the potential of plants to build a sustainable world. In laboratories all over the world such modern technologies are being uses to unravel the basic mechanisms of the behaviour of plants, such as its growth, or its reactions to biotic and abiotic stresses. Reductionistic approaches have been replaced by looking at the plant as a whole. High-throughput technologies and bio-informatics are used to create understanding of the complex interactions between numerous genes, proteins and metabolites. The knowledge generated, can be used in different ways and in different types of applications. It can lead to changes in crop management, but also lead to new directions in plant breeding, and also to the development of genetically engineered crops.

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In a world of global warming green biotechnology can contribute in different ways to decrease carbondioxide emissions. I will briefly discuss two approaches: ++ Create significant rises in the per hectare yield of crops to prevent further deforestation. ++ Improve the potential of plants as a source for bio-energy, such as bioethanol or other types of fuel.

Rise of yield Today about 18% of carbondioxide emissions are the result of deforestation and decomposition of matter. Our forests and tropical forests are the lungs of our world and for buffering the enormous carbondioxide emissions forests should be growing instead of decreasing. Part of the deforestation is the result of farmers turning (tropical) forests into arable land. In South America for instance Amazon rain forest is being turned into land for growing soybeans to feed our pigs and poultry. The growing world population, and especially the changing human diet – more wealth means eating not only more calories, but also consuming more animal protein – puts pressure on our food producing system. To save forests and also to save biodiversity we should be increasing the per hectare yield of our crops, and on the other hand seriously protect our forests and take initiatives to grow more forest. It’s not only about technology as farmers that turn forest into arable land are looking for a source of income. But from the technology side green biotechnology can seriously increase yields. There are now many examples of how tweaking the plants’ own genes can have serious effects on for instance the number of seeds, the size of seeds, the size of stalks, the amount of biomass and root mass. Certain modified rice varieties have shown more than 30% yield increase in field trials. Traditionally yields

have been growing slowly at about 1-2% per year. So 30% or more yield increase is quite spectacular. Will the introduction of such new varieties take off the pressure to occupy more land for crops? It can, and I certainly hope so. But this may need policy to create the desired effect. Another intriguing question is whether it will be possible also to grow these crops using less inputs in the form of pesticides and artificial fertilizers. The less inputs we use the less energy – read carbondioxide emissions – we have to use to grow these crops.

Wood produced in a greenhouse has been shown to produce up to 50% more bio-ethanol than conventional wood. Also traditional breeding can help to improve performance, for instance by developing varieties that are better suited for growing in so-called ‘short rotation’. In short rotation you don’t want one dominant stem, but many equally good growing branches. Short rotation is a modern way of growing woody biomass and yields can go up to 30 tons of dry mass per hectare per year, depending on the circumstances.

At least one thing is certain: to fight climate change and become more sustainable we literally have to become greener. Plants for bioenergy Plants are already used quite a bit for the production of different biofuels, such as biodiesel or bio-ethanol. Traditionally plants have been developed for providing healthy foods, and that is why corn nowadays have very big stalks, and wheat and rice are not very tall. Crops have not been seriously selected as a source of bio-energy. That means that there is still a lot of breeding potential to develop crops that have far better characteristics for bio-energy. One example that can be given is wood. Wood – or to be more precise: the cellulose and hemicellulose in wood – can be converted to bio-ethanol or other types of biofuel, but the conversion today is still inefficiënt. One technological strategy which also involves modern biotechnology is to develop better enzymes to do the conversion. A second strategy is to alter the wood properties to make it more suitable for the conversion. Poplar trees have been made that have less lignin. This is a sort of glue that is responsible for the enzymes not being able to do their work efficiently.

The way green biotechnology can contribute to reducing carbondioxide emissions may seem somewhat indirect, but it is real and meaningful. Besides working on yield and the suitability for bio-energy there are other approaches, such as developing crops that can still grow and capture carbondioxide under harsh conditions such as drought, salinity or cold. At least one thing is certain: to fight climate change and become more sustainable we literally have to become greener. We have to grow as many plants as possible. René Custers is Regulatory & Communications Manager at the Flemish Institute for Biotechnology

THE FIFTH CONFERENCE CLEAN - Agriculture & Food

Challenges for agriculture

—Piet Vanthemsche

Agriculture is the oldest economic activity of humanity. This is so because agriculture meets the first basic need of human beings, namely providing a stable and sufficient production of food. Due to the development of agricultural techniques primitive human beings evolved from migratory hunters and gatherers to settled agricultural communities, from which all later civilisations, including our current modern world, have originated. In fact, the word culture is derived from the Latin verb “colere” which means “to till with a plough”. Agriculture was the first form of culture, culture of the land. Very soon agriculture fulfilled various functions: production of (vegetable and animal) food, production of animal feed, production of fibres and (although indirectly) the production of fuel. Up to today these functions are being fulfilled by our agriculture and horticulture, albeit with variations over time. For a long time the need for fibres and fuel was met by using reserves of fossil fuels and mineral raw materials. These reserves are limited, however, and their exhaustion is gradually beginning to appear on the horizon.

The first function of agriculture is indisputably to produce sufficient food stuffs of the necessary quality to provide the world population with food in a sustainable manner. This is a formidable challenge, in the knowledge that the available quantities of soil and water worldwide are limited. According to the FAO only 17% of the world’s surface is suitable or very suitable for agriculture. The debate about this has been going on for a long time. On the occasion of its 125th anniversary the journal Science published an overview of the 125 most important questions that keep scientists “awake at night”. The most important question concerning agriculture is “for how much longer will Malthus be wrong?” In 1798 the 32-year-old Thomas Malthus, chaplain in a small parish in England, published a down-to-earth pamphlet with the title: “An essay on the principle of population”. He argued that the human population always tends to increase, and will therefore always be regulated either by planned measures such as birth control, or by hunger, war and disease. This thesis has stimulated generations of thinkers in the debates about the future of our planet. During his lifetime, in fact, Malthus reviewed his own thesis. Since the time of Malthus the world population has increased from 1 to 6 billion and the apocalypse has been avoided by the green revolution (the production of affordable and sufficient food) through cheap energy and the development of science and technology. By 2050 demographers expect that there will be 9 billion people in the world. The world population not only grows, but also changes the composition of its diet. As a population emerges from poverty, vegetable proteins are complemented with proteins of animal origin.

With the surfaces and techniques that are currently available it will be a tall order to meet the increased demand for food (in terms of volume and composition). The right to balanced sustenance is a basic right, a basic condition for the sustainability of the world population. If the entire world were to switch to the North American diet the challenge would become even bigger. Health considerations will undoubtedly help to redistribute the consumption of animal proteins. A positive North-South story. At the same there is the awareness that agricultural production must take place as sustainably as possible in order to limit the pressure on the environment as much as possible. Agriculture is also being faced with new challenges in terms of the production of fibres and fuel. The development of green chemistry, based on biological instead of fossil fuels and the development of biobased fuels in the quest for renewable energy sources, presents global agriculture with new challenges. To meet all these challenges world agriculture will need research, development and innovation in the field of products (genetics, crop protection, veterinary medicines) as well as production methods, in both animal and vegetable production. Here the cradle-to-cradle concept should be the objective as far as possible. An example of this is the quest for maximum use of by-products (recycling) in the production of animal feed, of renewable energy and in the production of high-grade industrial products (gelatin, cosmetics, biodegradable plastics, …). Europe has resolutely opted for ‘process’ quality, as opposed to many other trade blocs that focus on ‘product’ quality. This costs money. The ‘healthy herd’ principle implies a significant added expense for the European farmer who will not immediately be compensated by the market. This accounts

To meet all these challenges world agriculture will need research, development and innovation in the field of products as well as production methods, in both animal and vegetable production. for the budgets which the European Union is making available for the European Common Agricultural Policy. Sustainable agriculture does not happen by itself. The market cannot absorb (in its production costs) the negative impact of agricultural production on the environment, on the socio-economic development of the countryside and on public health. This is nevertheless a condition for achieving a sustainable agricultural economy. The policy instruments of the European Common Agricultural Policy are already assisting European agriculture to a considerable extent towards achieving sustainable agriculture. It is essential that the world community embraces these so-called ‘non-commercial aspects’ of agricultural economics and integrates them into the debate about food security. This is the only way in which a worldwide sustainable agriculture will be realised. Piet Vanthemsche is Chairman of the Boerenbond, the Flemish agriculture sector federation

THE FIFTH CONFERENCE CLEAN - Agriculture & Food

Soil, water, air and light… —Jan Vannoppen Soil, water, air and light. No more than that is needed for a spinach plant, sunflower or apple tree. Soil to take root in and pump up nutrients. Water to keep the fluid flow going. Air from which chlorophyll composes carbon chains. With the light of the sun as everlasting source of energy. The four elements make the planet beautiful. They form the basis of all life, the entire natural environment which also includes humanity. As gatherer, fisherman, hunter, forester, herdsman, farmer, gardener,… we have moulded that natural environment. From simple beginnings millennia ago our food supply has developed into a complex system. With many advantages, but also at the same time with many disadvantages which are gradually becoming very threatening.

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gradually coming into sight and with it, at the same time, the end of agricultural production based on fossil energy. Decision-makers, and not the least among them, are beginning to realise that agro-industry has allowed our food system to degenerate into a crazy machine that urgently needs to be stopped. Shortly before his election Obama stated: ‘Our entire agricultural system is built on cheap oil. As a consequence our agricultural sector is actually contributing more greenhouse gases than our transportation sector. And at the same time it is creating monocultures that are making us vulnerable …’ He got this analysis from Michael Pollan who works as a food journalist for the New York Times among others. Pollan calculated that at present ten calories of fossil fuel are needed to produce one calorie of supermarket food, that is no less than 27 times more than in 1940. Ecoefficiency has dropped right out of the picture.

Our method of food production puts so much pressure on the ecosystem ‘earth’ that irreversible damage is threatening. In the past one hundred years the policymakers of agricultural universities, trade unions and ministries have concentrated their attention and resources almost exclusively on an industrial approach to agriculture – this at the expense of natural processes and equilibria, and without a long-term perspective. I can still hear my professor of agricultural economics saying: ‘If a fertilizer or pesticide application of one euro leads to a yield increase of more than one euro, then this intervention is justified.’

‘When we eat, we are eating fossil fuels and emitting greenhouse gases,’ says Pollan. What he recommends is something we at Velt have known for a long time: work with nature instead of against it. Replacing monocultures with farms full of biodiversity ensures optimal use of photosynthesis and reduces diseases and plagues, so less petrochemical poison is needed. Fertilizer too requires a lot of fossil fuels and is therefore not sustainable. Compost is a better option, which moreover restores impoverished soil to a natural, healthy, erosion-resistant storehouse of CO₂.

That was 25 years ago. Meanwhile the end of the fossil fuels economy is

In the 1970s organisations such as Velt saw the abuse of pesticides in food

production and moved swiftly into action to show that there was an alternative. It was our volunteers who started the ‘biological cultivation method’ in Belgium, including the development of the Bio-guarantee label. The biomarket boomed, the demand for bioproducts currently exceeds the supply. For the agricultural sector and political leaders the changeover from conventional to organic agriculture is a major challenge. A change of mentality is needed in the farming sector, where being part of the alternative is still considered ‘not done’ by too many people with power. At the same time many more citizens need to be informed about sustainable food consumption: organic produce, but also regional and seasonal produce and, yes, even home-grown vegetables. Even now bigger involvement in authentic food is leading to changes in the consumption behaviour of many people, often families with young children. They are saying ‘Yes we can! We’re giving up bulk food and choosing a different type of quality, good for us, good for animal welfare, good for the planet’. Pollan has replaced the term ‘consumer’ with ‘coproducer’, because our buying power gives us clout and in this way we also help to produce the reality. At Velt we take this one step further by calling for small ecoactive groups to organise themselves to realise some concrete project: a collective garden, an eco-meal for schoolchildren, a stall with ecological bread rolls at a music festival,… While engaged in concrete action they can exchange ideas and together give meaning to ‘ecological living’. They can become really eco-

‘When we eat, we are eating fossil fuels and emitting greenhouse gases,’ says Pollan. active, they can walk their talk. These constructive civic actions will have an important educative value for the people and households involved, and gradually get a response from the media and the broader public. The hopeful result is that more and more people will be inspired to work together with soil, water, air and light for a beautiful planet Earth. Jan Vannoppen is an engineer and doctor in applied biological sciences. He is a director of Velt, a non-profit association for ecological living and gardening with more than 12.000 members in Flanders and the Netherlands.

THE FIFTH CONFERENCE CLEAN - Cleantech

7| Cleantech In the decades ahead, a great deal of money will need to be spent to overhaul our energy system and deal with the escalating cost of carbon emissions. Especially on this latter point, the impact will be wide-ranging, effecting processes and products in all sectors of the economy, from the energy-intensive industries to agriculture and food. Money will also be spent on cleaning up industrial processes and products themselves. The EU’s REACH legislation is simply the beginning of a major process to understand and control the thousands of chemical substances used in our products today. All this money spent will need to count for something. Commentators often refer to Germany and Spain as examples of countries that managed to build new industries and create jobs via proactive government policy on renewable energy. Indeed, according to the German wind energy association, German manufacturers of turbines and components have a 37% share of the world market, earning about six billion Euros in 2007 in exports, and employing more than 100,000 people. But drawing a parallel with Belgium is difficult because we do not have a large home market. Germany already has about 22,000 MW installed wind power capacity—that is about five times as much as Belgium will probably ever build. However, it is possible to draw a parallel with the Danes. Denmark isn’t a particularly big market but Danish companies are world leaders in the field of renewable energy because the Danes are pioneers. They pioneered offshore wind energy and continue to innovate in biomass, geothermal energy, energy efficiency measures and much more. Innovation is the key to making all that money count. In that sense Belgium can build on several strengths. It is important to note that innovation is a complex process—it is not limited to what goes on in labs, universities and research institutes. Crucially, it is also about setting up real-world projects, both pilot projects and commercial projects that are pioneering in some way or other. Thus, in wind energy Belgian companies have strong positions internationally in turbine components and in services (construction, dredging). Already, initiatives are being put in place to build on these strengths via R&D programmes focused on the offshore concessions. Given the distance out at sea and depth of the water, this is pioneering work. In solar energy, IMEC is the role model. Its success in micro-electronics more generally is due not only to its lab research but also to its large pilot manufacturing infrastructure. This also holds true for its activities in photovoltaics. IMEC is increasing its investment in photovoltaics and aims to create more spin-off companies that will seek their markets abroad. In biofuels and biomass, similarly there is much progress with the BIO-BASE pilot installation being built at the Port of Ghent. It will bridge the innovation chain from lab to large-scale manufacturing. In Smartgrids, there is expertise (for example at the University of Leuven) at the level of the lab, but the country is slow off the mark in actually building such networks. Although

there is now some clarity on the planned investments for the coming years, other countries, including the US, will probably pioneer this path. This is a pity, because the real opportunity in this area is not so much the grid itself but the various applications and systems that need to be developed to run on the network (think of advanced energy management systems for homes and office buildings).

The field of materials—both materials science (developing new sustainable materials types) and materials management (cradle-to-cradle recycling models)—is a strong opportunity for this country. There is tremendous expertise in materials (e.g. Leuven Materials Research Centre, Umicore) and Plan-C is an exciting initiative that should lead to pilot projects in new materials management systems.

This country’s buildings may not be energy efficient, but there is tremendous expertise we can build on: insulation materials (e.g. Recticel, Soudal), glass and window frames (e.g. Deceuninck, Reynaers Aluminium), ventilation (e.g. Renson), roofing (e.g. Derbigum), lighting (e.g. ETAP Lighting, Niko, Schréder Group) and much more. However, given the challenge ahead—i.e. if we want to meet our climate policy goals for 2020 and certainly ahead to 2030 and 2050 then we will need to renovate the bulk of our housing stock—it is striking that not more is done to stimulate sector-wide R&D and pilot projects in this area.

Finally, there are a significant number of Belgian companies active internationally in the fields of water treatment, soil remediation and industrial air purification. Waterleau and Global Water Engineering, for example, are key players in the treatment of industrial waste water. Keppel Seghers Belgium builds and operates water treatment plants. AppliTek exports its online water analysis stations around the world. In soil remediation, Deep Green’s technology allows for the treatment of polluted soil without it having to be dug up. The two dredgers, Jan De Nul and DEME, are also moving into soil remediation with their subsidiaries DEC (DEME) and Envisan (Jan De Nul). In industrial air purification, The Sniffers is a key player internationally in emissions measurement and Hamon and Desotec develop and manufacture various types of filters and scrubbers that remove polluting substances.

In transport too there is much expertise to build on. Umicore, for example, supplies one of every three car catalytic converters in the world and is developing advanced catalytic converters for trucks. And bus maker Van Hool developed the first zero-emission bus, based on a hybrid fuel cell drive system. Fuel cell technology itself is being developed in this country at SolviCore, a joint venture between Umicore and Solvay. Adoption of this type of technology could do much to clean up the air in our cities. We also, however, are missing some opportunities. This country is densely populated and has an exceptionally dense transport network (in other words, travel distances are short). As such, there is opportunity in developing the transport network and infrastructure of the future—for example, plug-in networks for electric cars, multi-modal logistical hubs, advanced pipeline systems, etc. To date, there are plenty of ideas in these areas and some projects, but surely we could be doing more. In food too we appear to be missing opportunities, given our fascination with the stuff. While the market for our national product beer is static at best, strong growth is seen mainly in the health segment. Clearly there is room for more companies along the lines of Alpro. The good news is that the sector’s innovation platforms (Flanders Food and Wagralim) are focused almost exclusively on health and sustainability themes. Also, the achievements of Univeg are noteworthy— here is a company that is to a large degree a logistics business, getting fresh produce (real ‘food’ as Michael Pollan would have it) to retailers across the world. In agriculture, the Flemish green biotech cluster enjoys international repute. This is an area where significant risk capital has been invested in, with good result. Key obstacles to the further expansion of the sector, however, are the regulatory limits on field tests with genetically modified crops. The debacle around the Flemish Institute of Biotechnology’s poplar field test is illustrative in this regard.

The breadth of ‘cleantech’ expertise that exists in this country is impressive. In part it can be ascribed to our strong industrial heritage while simultaneously being subject to stringent EU environmental regulation. However, there is more to it than that. Some industrial companies—e.g. Umicore, Solvay, Van Hool—have made rather fundamental strategic decisions to begin investing in clean technology. It is companies such as these that are putting the Belgian cleantech sector on the map internationally. Also, the Federation of Enterprises in Belgium (FED) is actively promoting Belgian eco-business abroad, and the regional governments have stepped up their ‘green’ commitments by allocating more funds for innovation and subsidies. But more can be done—and will need to be done. The job of cleaning this country up is far from complete. In fact, one could argue that we are back in the starting blocks. The age of eco-efficiency is winding down and the age of eco-effectiveness is about to begin, requiring a more radical transformation of this economy. This is an opportunity to boost innovation in cleantech. This country does not have the scale to single-handedly nurture world-class companies to full maturity but it does have the unique make-up to ‘incubate’ such world-class companies. In other words, we need to experiment more with new technologies, here at home. It is pity that some companies mentioned here do practically no business at all in this country, when in fact this country should be the ideal place to pilot new technologies.

THE FIFTH CONFERENCE CLEAN - Cleantech

Investing in Cleantech

—The venture capitalist’s perspective, Bart Diels After ten years of investing in early- to mid-stage technology companies in Europe, I recently took the challenge to lead Gimv’s Cleantech investment practice. After only a few months in the position, it would sound arrogant to claim that I have developed a complete vision on this industry or, in my opinion an even more difficult task, a strategy to tackle it from an investor’s point of view. I accepted the challenge mainly because I felt that Gimv is better positioned than the typical venture capital or private equity fund to cope with the unique characteristics of this still relatively new investment segment. What are some of these challenges?

First of all the current (or has it passed us by already?) Cleantech hype reminds me of the days where all business plans had to have a “nanotechnology’ stamp on it. After a few years the nano-hype disappeared but nanotechnology today of course is still a foundation for a great deal of applications, also in Cleantech. Today we again see many business plans that are labelled Cleantech more for marketing purposes than anything else. In our industry, many VCs that focused on a certain ‘hyped or not’ vertical have disappeared (e.g. the initial dedicated internet funds). This raises the question whether the same will happen to the dozens of dedicated Cleantech funds that were established in the last few years or whether the underlying drivers are so strong that a new vertical can sustain itself. Secondly, the Cleantech label covers a wide range of technologies and sectors, ranging from water purification and power generation to low power chips. Looking at these admittedly extremes in the spectrum it is clear to me that it is going to be very challenging to cover the full breadth of the sector in a typical early-stage venture capital fund. On the other hand, specialising too much would increase the risk profile and make a VC fund very vulnerable.

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Thirdly, the Cleantech industry needs some breakthrough innovations to increase the economic viability of certain applications. My first observations, however, indicate that the cycles to bring these disruptive ideas to market are longer than the typical VC cycle of around 6 to 8 years. Certainly the

Today we again see many business plans that are labelled Cleantech more for marketing purposes than anything else.

current economic circumstances will not help the risk taking attitude either, therefore many VCs have turned to either later stage investments or investment in companies that focus more on making gradual improvements rather then breakthrough ones. To successfully invest in the Cleantech industry, therefore, it seems essential to me that one is able to rely on broad expertise and experience in technology, life sciences, growth and project financing (since Cleantech overlaps with or taps into all these areas), and that one is able to take a longer-term view. At Gimv, given our size and financial strength, we are fortunate to be in that position. However, the future will tell whether our team will be able to convince Gimv’s internal and external stakeholders to not only think green but also think long term, which is not always easy for a public company. Bart Diels Partner Cleantech Gimv

THE FIFTH CONFERENCE CLEAN - Cleantech

Pioneering wind energy

—Dr. Jan Declercq

Flanders may be small, but it certainly packs some punch when it comes to wind energy. Back in the 1980s, Flemish companies played a pioneering role in the development of wind energy technology. For example, at Hansens Transmissions we were one of the first to start developing gearboxes for wind turbines and in 1987 Flemish engineers helped built an off-shore wind farm. Today, Flemish companies continue to play a particularly innovative role in what is now a fully globalised and rapidly expanding industry. The pressure is certainly on to continue innovating. In order to meet the EU’s Energy & Climate targets (13% of Belgium’s total energy consumption needs to met by renewable sources by 2020), we will have to reorient our energy system toward renewables. That will cost money, on which we need to seek a return. That return will be (as it is already today) in the form of competencies, innovation and expertise that we export to the rest of Europe and indeed the world. That is why we are particularly excited about the coordinated action by the Flemish government,

Agoria’s Renewable Energy Club and the innovation platform Generaties to stimulate innovation in the Flemish renewable energy sector. To showcase what is being planned, Minister Ceysens recently organised a seminar in Brussels where the proposed R&D programmes in smartgrids, photovoltaics, biofuels, hydrogen, geothermics and wind energy were presented. In wind energy our ambition is to build significantly on the strengths we already have. Today we retain a strong global position as suppliers of components (e.g. transformers - Pauwels Trafo, gearboxes - Hansen Transmissions, steel construction - Iemants) and services (e.g. construction - GeoSea, project engineering- 3E, energy supply - Electrabel). Clearly there is tremendous opportunity to build on these strengths via coordinated investment in R&D, especially since in Flanders we are in the starting blocks of a huge investment in offshore wind energy. While we are certainly not alone in building offshore wind parks, in Flanders we are going to need to raise the bar significantly given the territory’s distance from shore (30+ km) and water depth. The challenges are significant and pertain to core design concepts (e.g. seabed foundations versus floating platforms) and operational management and maintenance (e.g. safety and access to the turbines). Hence, the research programme we intend to pursue will focus on our existing competencies as applied in the offshore context. Specifically, the five sub-

programmes we propose will look at infrastructure for the performance monitoring of wind parks (e.g. via LIDAR remote sensing), system and component condition monitoring infrastructure (CMS), lab-test infrastructure for lifespan tests of components, virtual test infrastructure for wind turbine components, and maintenance strategies. The opportunity for the Flemish wind sector is clearly tremendous. In Belgium alone it is projected that our installed wind energy capacity will increase at least tenfold by 2020 (from 287 MW in 2007 to more than 2,800 MW in 2020 – Emerging Energy Research, European Wind Energy Association). But as exporters our market is the world: according to Emerging Energy Research, installed capacity globally will top 570,000 MW by 2020 (from 94,000 MW in 2007). We are preparing for this growth accordingly.

Dr. Jan Declercq is Director Business Development at Hansen Transmissions International and President of the Agoria Renewable Energy Club

The opportunity for the Flemish wind sector is clearly tremendous. In Belgium alone it is projected that our installed wind energy capacity will increase at least ten-fold by 2020. But as exporters our market is the world...

THE FIFTH CONFERENCE CLEAN - Cleantech

Hydrogen as energy carrier

at the level of the security of energy supplies and minimising emissions of substances that pollute the environment.

—Adwin Martens

Hydrogen in Flanders ?

In the debate concerning the energy supply of the future, developments have been following in quick succession. The liberalisation of the electricity and natural gas markets in Europe is in full swing, Europe has formulated its 20/20/20 objectives (20% reduction of CO₂ emission, 20% increase in energy efficiency and 20% renewable energy) for 2020, oil and natural gas prices fluctuate strongly, the powerful emergent economies in the BRIC countries (Brazil, India, China) require ever more energy, the post-Kyoto negotiations are in an important phase… In many international future scenarios an important role is ascribed to hydrogen as energy carrier and to fuel cells as a conversion technology in the pursuit of a reliable, environmentally friendly and low-energy society.

What is hydrogen? Hydrogen is the lightest chemical element (H 2) on earth and is the most widespread in the universe. On earth it hardly exists in its pure form, but is found almost exclusively in combination with other elements, particularly with oxygen (in water) and with carbon and hydrogen (in living matter and fossil fuels). Hydrogen is therefore not a recoverable fuel (such as coal, oil, natural gas or uranium) but has to be produced.

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A strong benefit of hydrogen is that it can be produced from a very

wide range of raw materials and processes. Some 500 billion m³ of hydrogen is already being produced annually for the use of the (petro)chemical industry in particular. This industrial hydrogen is currently being produced almost exclusively from natural gas via a process of reforming. This process is used on a large scale in industry and its realisable yields and concomitant emissions of environmentally polluting substances are known. For specific applications hydrogen is produced via the electrolysis of water by means of the classic reaction: 2 H2O, 2 H2 + O2: with this water electrolysis the total yield and emissions are entirely determined by the source of the electricity that is being used.

How sustainable is hydrogen ? The conventional way of producing hydrogen from natural gas is not a sustainable means of producing hydrogen due to the limited nature of natural gas supplies and the emissions associated with the production process. Electrolysis of water on the basis of green electricity does offer the perspective of sustainable hydrogen, especially because hydrogen is an appealing energy carrier for storing energy. During times of ‘excess’ or ‘economically unattractive’ sustainable electricity (for example, from wind energy) this ‘surplus’ can be converted to sustainable hydrogen. This sustainable hydrogen can

Compared to electricity, where storage is a problem, hydrogen thus provides the possibility of achieving a more compact and lighter storage of energy. then be used at a later stage – for example, for transport applications (such as buses for public transport) – or the sustainable hydrogen can be converted back to electricity at times of high demand for electricity. Compared to electricity, where storage is a problem (weight and volume), hydrogen thus provides the possibility of achieving a more compact and lighter storage of energy. As a rule hydrogen is currently stored at 200 bar, but future developments tend towards 700 bar, making the storage volume very limited. Work is also being done towards the efficient storage of hydrogen in liquid form. The storage of hydrogen, therefore, does indeed offer sustainable possibilities for use in vehicles (instead of or in combination with batteries) or as energy buffer (for example, in combination with fluctuating renewable electricity from the sun, wind, water,…).

Where and how can hydrogen be used as energy carrier ? Hydrogen can be converted very efficiently to electricity and heat by means of fuel cell technology. Fuel cells are energy systems which convert hydrogen and oxygen/ air into electricity, heat and water. During this energy conversion process, which

can take place at relatively low temperatures (from 70 °C), there are no emissions of environmentally polluting substances (assuming that hydrogen is the basic material). With fuels cells, moreover, very high electricity yields can be realised (not affected by the Carnot cycle). An important trump card of fuel cells is that the technology can be applied very widely from W’s to MW’s: applications vary from energy supply in portable systems (laptops, cameras,…), by way of vehicles (scooters, fork-lift trucks, cars, buses, trains, ships,…) to stationary systems (cogeneration, power stations,…). In contrast to the production of hydrogen, fuel cell technology is not yet in a commercially viable phase. The first extensive demonstration projects show clear potential, but currently the costs are still too high and the life span and reliability of the systems are still too limited. At present, therefore, the use of hydrogen as basic material for more classic ‘prime movers’ such as piston engines is being tested in parallel with the testing of fuel cells. The piston engine can certainly play a role in a first phase towards the transition to hydrogen as energy carrier. From the above it is clear that hydrogen and fuel cells can play an important role in the energy supply of the future, in which the crucial challenges will be

In Flanders a number of players, some of them among the best in the world, are active in the field of hydrogen and fuel cell technology at the industrial as well as the research level. In the field of alkaline systems (fuel cells and well as electrolysers) the best performing systems are developed and produced in Flanders. In addition, Flemish companies are collaborating with leading companies in the automotive world on the key components of hydrogen technology (including membranes, catalysts) in order to achieve the desired product specifications. Also among end users a Flemish bus manufacturer is one of the leaders in the field of integrating fuel cells in public transport. The strength of Flanders is that the available technological trump cards can cover the entire chain from hydrogen production to the end user. For the future, targeted innovations can stimulate or create new industrial activity in all parts of this sustainable chain.

A glimpse of the future:….. Use half the electricity of an offshore wind farm to produce hydrogen, and you will have enough hydrogen to keep the hybrid buses of ‘De Lijn’ in Flanders on the road without using fossil fuels and without emissions. And this can all be realised with Flemish developers of technology: an innovation trajectory that is filled with promise !!! Adwin Martens is coordinator of the Flemish Association for Hydrogen and Fuel Cells

THE FIFTH CONFERENCE CLEAN - Cleantech

THE FIFTH CONFERENCE CLEAN - Sustainable business

8| Sustainable Business “Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

Brundtland Commission (1987)

n this edition of The Fifth Conference we have addressed a number of interrelated topics: climate, pollution, energy, waste, materials and food. The title of the publication—CLEAN—is a theme running through all the chapters; cleaning up our world, our economy, our industries, the products we use, the food we eat, etc. But also it is about clean-tech, about developing know-how and successful companies that help create a cleaner world. But what are the implications of all this for the average company or organisation? Does it imply that we should all feel compelled to install root filters on our cars, cycle more to work, or build more eco-effective products? Legally, there is no obligation to do any of these things. But it can make sense to do at least some of these things. The question is how one goes about making decisions in this regard. In answering that question we inevitably come to the concept of sustainable or socially responsible business. This needs further explanation.

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In this publication we have tried to describe how the world is changing from an energy and environment perspective. Especially in energy and climate policy, change is afoot—that much should be clear. What yesterday was an ideological fringe movement today has become international law. As Luc Van Liedekerke, Professor at the University of Antwerp, argues, the gradual change in people’s values is a key driver of real change in the way we do business. The pressure on companies and organisation is partly internal (the values of managers and staff) and partly external (stakeholders such as customers, local communities, NGOs, government). But as emerging values (such as concern for the environment, human rights) become increasingly mainstream—and lead to the creation of pressure groups, commissions and committees, and ultimately law—the pressure on business increases. Today there is no legal obligation to use root filters; tomorrow there probably will be. Today there is no legal

obligation to save energy; tomorrow high energy prices (due to the EU’s Climate Package) will compel us to save energy. Yesterday we could sell goods without knowing much about what they were made of; today we need to know exactly which chemicals go into our products and tomorrow we will have to clean up those products (as we begin to learn more about the 97,000 chemicals circulating in Europe that today we know almost nothing about). To repeat, change is afoot. Companies and organisations, therefore, are well advised to anticipate how the social, economic and legal context in which they operate is changing. Again, the question poses itself: how do you do that? A socially responsible—or sustainable—approach to business offers one answer. Everything discussed in this edition is ultimately concerned with sustainability. A climate that is able sustain humanity for the long term; energy sources that are renewable and hence sustainable; goods that are manufactured with closed material loops and hence are sustainable; food production methods that can outlast fossil fuel depletion and meet the demands of a growing world population. But sustainable development is so much more—in this issue we haven’t even touched on issues like biodiversity, poverty and social exclusion. But they matter and will matter more in the years to come. As Dirk Fransaer states in his opinion piece in the first section of this publication, “there is no future unless it is sustainable.” Best we prepare for sustainability then. ‘Corporate social responsibility’, ‘corporate citizenship’, or simply ‘sustainable business’—most people are familiar with the terms but what does it actually mean? Sustainable business has its roots in the broader concept of sustainable development, a topic that hit the global agenda when the World Commission on Environment and Development, otherwise known as the Brundtland Commission, was convened by the United Nations in

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1983. The resulting Brundtland report was published in 1983 and accepted by the UN’s Generally Assembly. It in turn led to the United Nations Conference on Environment and Development (UNCED), better known as the Earth Summit, held in Rio de Janeiro in 1992 (another Earth Summit followed in 2002 in Johannesburg). At the Rio summit the Framework Convention on Climate Change was formulated, which in turn led to the Kyoto Protocol. But sustainable development covers much more than energy and climate. The key objective of the Brudtland report was to explore a vision of economic and social development that avoids environmental degradation and over-exploitation of resources. Its oft quoted definition of sustainable development (see the opening quote of this article) sums it all up nicely, but also immediately makes clear that we are talking about many things: the environment, resources, poverty, and much more. In the mean time the concept of sustainable development has been translated further into government policy, at both a European and national level. In Belgium, the federal government is preparing its third plan for sustainable development (covering the period 2009-2012) and in 1997 the Interdepartmental Commission for Sustainable Development was set up to coordinate execution of the plan across government. In this country typical themes addressed include social exclusion, the ageing population, health risks, pollution, climate change and renewable energy. The business world reacted soon after the Rio Summit by setting up the World Business Council for Sustainable Development, still one of the most influential business forums on sustainability matters. Operating as a platform for best practice sharing it recommends a number of key principles for business, such as ‘business has to earn its licence to operate’ and eco-efficiency— ‘doing more with less.’ Other organisations, both internationally and locally (Business & Society, Kauri, Vlaams Netwerk voor Zakenethiek, etc), and related concepts (e.g. Socially Responsible Investing) emerged in the wake of these developments, leading gradually to an increased professionalization of Corporate Social Responsibility or CSR as it has become known. In Belgium, the adoption of CSR has been very gradual. Today it is still associated mainly with a small number of well-known companies led by what one could describe as ‘inspired leaders’: Colruyt, Van De Velde, Boss Paints, Ecover, ASAP Photographic Services, etc. These are companies where CSR has its roots in the founders’ values. Boss Paints, for example, is a vertically integrated paints manufacturers (own manufacturing, own brands, own retail chain) led by the Bossuyt family, and one the last remaining independent paint manufacturers. Its success some commentators ascribe to its strong value-driven strategy. The core values of the company centre on people, quality and the environment—the idea being that profit will automatically follow if one pays due attention to the other three (in contrast to the triple bottom line principle of people, planet AND profit). Boss Paints is reputed in the market for the quality of its products and the service it provides to its customers, both professional and private. Also more generally the company’s reputation is outstanding. In the business community the company is recognised for its strong management skills and organisational culture. But also in the local community, the company is regarded as a great place to work. Boss Paints achieves this because it invests in its products and its people—more so than the norm. It has a dedicated lab staffed by 20 full-time people who work on new environmentally friendly prod-

ucts—that is a lot given the small size of the company. Staff members enjoy a range of services including child care, organic fruit and soup, a fitness programme, stopsmoking programmes, a generous bicycle programme— all elements that make the company an attractive employer. Its environmental measures include an investment project in solar panels (the objective is to cover 25% of the site’s electricity needs from solar), root filters on cars, trucks on Euro 4 and ultimately Euro 5 engines, and the onsite treatment of its waste water. Most of these measures have a direct impact on the local residential community, i.e. on the local air and water quality. Similar tales can be told about Colruyt, Ecover, ASAP Photographic Services and others. What these companies have in common is the way they have integrated ‘sustainability’ principles in the core operations of the business—the values come from the founders/ owners/managers of the company (it is not the remit of a CSR or communications department)—and the way it is focused on the needs of the companies’ stakeholders: staff, customers, local community. It also is interesting to note that these pioneers tend to be family businesses. As Karel Van Eetvelt, managing director of UNIZO, makes clear in his article, sustainability principles often come naturally to small businesses and independents (think of bakeries, butchers, plumbers etc) since they are so reliant on their local community. Not everybody, however, is blessed with such inspiration. As a result, the values-driven CSR pioneers in this country are a minority. But the situation does seem to be changing of late, driven by two key trends. On the one hand an increasing number of companies are reacting to climate policy and volatile energy prices by making investments in energy efficiency projects, renewable energy and CO₂ ‘neutrality’ programmes (e.g. of the sort facilitated by CO₂logic). The drivers can be particularly strong: there is opportunity to save energy costs, to benefit from various subsidies and support schemes, and off course the positive PR does not hurt. On the other hand, however, there is the gradual professionalization of corporate social responsibility, both as a discipline within companies and as a policy issue for government. This is a positive development, since it offers a methodology of sorts for companies to begin thinking systematically about their stakeholders. Closely aligned with the broader concept of sustainable development, CSR too has emerged as a concept over which there is broad consensus on what it is and how it should be addressed in government policy. At EU level, for example, following much work by the European Multi-Stakeholder Forum on Corporate Social Responsibility1, there is consensus that CSR is a “concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis.” The conclusions of the CSR Forum form the basis of government policy in Belgium, both at a federal and regional level2, and also inform the work of organisations like Business & Society, Kauri, and others. Without going into detail here, a number of key principles are embedded in the CSR definition. Firstly, CSR is concerned with the voluntary integration of environmental and social considerations into business operations, initiatives that go beyond legal obligations. This is an important point because many international 1) European Multi-Stakeholder Forum on Corporate Social Responsibility. Final Results & Recommendations. 29 June 2004. 2) ICDO. Referentiekader: Maatschappelijk Verantwoord Ondernemen in Belgie. 29 March 2006.

companies operate in areas where the law pertaining to environmental and social issues is either very different or very ineffective compared to the company’s home country. But it is more than too. There is explicit recognition that CSR is about going beyond the law, not simply replacing a legal vacuum, since the law cannot cover everything. Secondly, CSR is concerned with the core business activities of a company; it is about strategy, not idealism. Hence, the engagement of top management and operational management is critical; it cannot simply be delegated to the communications department. Thirdly, the process of CSR (it is a process, an ongoing learning process) is best informed via stakeholder dialogue. This is the way to keep the initiatives relevant, to anticipate change, and to earn commitment from one’s stakeholders. Finally, CSR is a systematic process. It is not about once-off projects; instead it is about setting clear strategic objectives and putting systems in place to ensure projects are managed professionally and progress is monitored. For larger companies, this often culminates in formal CSR reporting. It is via CSR that business can contribute to sustainable development, but in the process also ensure that business itself is sustainable. While fluctuating energy prices and climate policy today are the great drivers of ‘sustainability’ initiatives, companies are well-advised to position such initiatives within a broader CSR framework since it is in this way that strategic depth is given to such investments.

THE FIFTH CONFERENCE CLEAN - Sustainable business

Triodos Bank a leader in sustainable banking

True triple bottom line banking – People, Planet and Profit – that’s the founding philosophy of Triodos, Belgium’s only fully sustainable bank

Formed initially by a concerned study group in the Netherlands in the early 1970s, Triodos Bank (which literally means three ways) was established in 1980 as a vehicle to finance sustainable projects and to enable companies and individuals manage their money more responsibly. Now, nearly 30 years later Triodos Bank is being hailed as the epitome of “back-to-basics” banking. It represents sustainable banking based on the real economy and is a model of social, environmental and financial responsibility.

Triodos Belgium is one of the five European divisionsbranches of the group, next to the Netherlands, United Kingdom, Germany and Spain. Set up in 1993, Triodos Belgium has posted annual growth rates of 25% to 30%, and today manages ½ billion Euro in deposits, proving that the concept has a definite place in the Belgian market. Operating from one central location in Brussels, the bank serves its customers via phone, internet, or in-person at its offices. Overheads are kept low and liquidity high. This allows the bank to focus its attention on its core business: investing the savings of more than 30,000 customers in a more sustainable economy, be it through the financing of numerous sustainable credit projects or the distribution of sustainable funds that invest in stock listed companies, selected according to strict criteria. At a time when Belgium’s big “system banks” are being propped up by the government, Triodos Bank has remained buoyant and profitable thanks to its sound fundamentals —responsibility, sustainability and transparency.

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“When you think about it, the core function of a bank is exceptionally useful to society,” says Belgian CEO Olivier Marquet. “Gather the excess liquidity among households and companies, and reinvest this in the economy, preferably locally because it allows one to assess what one is financing.” With the reputation of banks worldwide badly damaged by the current credit crisis, Marquet says Triodos has been unaffected as it has remained true to banking fundamentals all along.

THE FIFTH CONFERENCE CLEAN - Sustainable business

1. Olivier Marquet, Director Triodos Bank Belgium (front right) with the management team of the Belgian site. © Brecht Goris 2. Fully ecological new Triodos building in Zeist, the Netherlands © Michel Wijnbergh

and to engage in in-person dialogue with customers. Also, a complete list describing the essentials of all loans is available. A fullgiving insight is available. This is unique - Triodos Bank is the only bank that discloses in detail where it is investing its customers’ money. Transparancy is absolutely key to the model because only in this way do you offer people the ability to manage their money in a responsible manner – people have the right to know what is happening with their money.

Banking need not be complex. In fact, the central function of a bank—i.e. channelling excess liquidity to projects that generate value (in economic, social and environmental terms)—should be relatively simple. The success of Triodos Bank shows that responsible money management—and hence sustainable banking—is possible. In times like these, that is good news.

“We do not invest in speculative ‘constructs’ that have little or no connection to the real economy,” he says. “It’s easy to say this now given the financial crisis but this has been our commitment from the start.”

Sustainability and risk management Using their customer’s deposits to invest in sustainable projects, Triodos Belgium is active in nature and the environment, culture and welfare, the social economy and North-South solidarity. Key investments to date have been in: ++ Renewable energy—mainly in wind, solar and biomass energy, investments have been made in projects by Ecopower, Electrawinds, Hydroval, Thenergo and others ++ Environmental technology – investments in cleantech, such as recycling and energy-efficient lighting ++ Sustainable building & construction—projects such as the Passiefhuis-Platform ++ The Fair-trade sector—including Oxfam Fairtrade and Max Havelaar, which contribute to sustainable development in the South ++ Organic farming and food production—including companies such as Biofresh, EXKi, and Fromagerie des Ardennes

Each of the companies Triodos Bank invests in is put through a rigorous evaluation as part of the bank’s mission to contribute to a more sustainable economy. Projects must have intrinsic value in terms of ethics and sustainability. Equally important is the need to be financially feasible. Group CEO Peter Blom says that while sustainability is often used as a marketing buzzword, for Triodos it involves an alternative view of the economy, society and ecology. Concern for people and the environment are not set off against a good financial return but these two factors are seen as strengthening one another over time. Triodos’ stringent criteria of ethics, sustainability and profit result in high liquidity ratios as there is a shortage of projects that qualify. Less than 70% of their deposits are currently invested. When Triodos Bank decides to finance, it does so as a partner, levering its credit-structuring experience and expertise in sustainable projects. While this is good for Triodos, because a closer relationship reduces credit risk, it is also shaping the bank’s reputation as one that understands the unique needs and dynamics of the sectors it is active in.

Transparency and Accountability Transparency has been a cornerstone of Triodos’s business philosophy since its inception. The bank’s clients are kept up-to-date with all developments via regular newsletters. The bank also invites all customers to an annual meeting, for an update on the bank’s activities

The Fifth Conference with:

THE FIFTH CONFERENCE CLEAN - Sustainable B usiness

Building new business models for the future

—Dirk Le Roy In early October 2008 I exchanged views with Frank Boermeester about the new publication of the Fifth Conference which was meant to deal with ‘Clean Technology’. Quite soon we came to the conclusion that ‘Clean’ provides a much stronger anchor for the purpose of this book. Clean elevates itself to the level of values. It embodies the level of ‘yes, we can’. It conjures up a world in which it is good to live. Not in the form of a clinically sterile environment, but a world in which organic growth of the economy and nature combine with a general sense of well-being – or even stronger, happiness – in society. As with many powerful words the strength of ‘Clean’ does not come from the word itself, but from the inarticulate premise that is associated with it. The world, after all, is not like that.

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‘Clean’ creates the tension of a drawn bowstring. The arrow departs from the world where we now are and live in to an ‘even better’ world. ‘Even better’, because our world has not deteriorated. Certainly when the focus is on the west. Much more prosperity, just think for a moment how things were 30, 50 or less than 100 years ago. I would also like to say much more well-being too, but a statistic similar to GNP does not exist for this. In the last 40 years, however, people have come to realise that this prosperity has come at a price. An impoverished south, social exploitation, an uncontrolled exhaustion of the natural environment. These must all be discounted should a GWP (Gross Well-being Product) be calculated. It’s the sudden disasters and scandals that get into the newspapers and remain in everyone’s memory. The explosion of the pesticide factory in Bhopal (1984), the nuclear disaster in Chernobyl (1986), the oil spill of the tanker in Alaska (Exxon Valdez, 1989). Nonetheless there is also a growing awareness of the chronic pollution of our biotope with the greenhouse effect as best-known example. The extent of the impacts is becoming disquieting. The Arctic Climate Impact Assessment1 predicts that half of all ice will be gone by the end of this century. In 1965 only 1% of the Amazon forest had been cleared for cultivation, in 2025 a quarter will be gone. If we continue at the same rate and especially in ‘the same way’ we will be able to say with misplaced pride within 1) A study carried out over a four-year period by hundreds of researchers and presented in 2004 in order to give an objective perspective with regard to the effects of climate change

100 years that the total destruction of the environment has been achieved. Add to this an exponential population growth2 and the challenges are clear. The figures are perhaps not known, but the story is. Fortunately there is a growing awareness. It is not the first time that the bowstring has been drawn for a ‘better’ world. In 1968 with ‘The Limits to Growth’ of the Club of Rome, in 1987 with ‘Our Common Future’ of the Brundtland Commission in which the term sustainable development was coined for the first time, in 1992 with the UN World Summit in Rio where a global sustainability agenda was drawn up. Economic, social and environmental legislation was expanded, enforceable at national and regional levels, permissive at international level. Contributions to sustainable development have come from all sides. International labels such as FSC (sustainable wood) were created to guide the consumer in the choice of products. Financial markets established separate stock market indices (Dow Jones Sustainable World Indexes in 1999, FTSE4GOOD in 2001). Sectors (textile, diamond, soya, palm oil, …) started collaborating with NGOs in order to draw up codes of good conduct. Proactive entrepreneurs and companies joined forces on new platforms (World Business Council on Sustainable Development and CSR Europe, both established in 1995). Are all these concrete contributions sufficient or just a stopgap? Certainly 2) from 3,3 billion in 1965 to an anticipated 7,8 billion in 2025 and 9 billion in 2050

in relation to activities at the environmental level we see a clear improvement in many areas (soil, air, water, …) at the local level (in the west) and a deterioration at the global level (greenhouse effect). The fact that it can be done differently also at the global level is shown by the resolute policy choices to stop acid rain and the growing hole in the ozone layer. Collective action is possible, yet often only when there is a pressing need.

(much less) emission. On all fronts one gradually comes to the conclusion that eco-efficient initiatives are useful but insufficient. Ecoeffectiveness goes beyond eco-efficiency. Eco-effectiveness raises the question whether we are optimising the right things. In Japan Toyota engineers dream of a car that will take CO₂ from the air. Perhaps impossible, but one day when it’s driving around all earlier technology – for any citizen – will

This not only changes the economy itself, but also the way in which businesses are managed. The pace at which the world changes remains in stark contrast to the pace at which the awareness of the consequences hereof changes. It has taken more than 30-40 years to see attitudes change from initially defensive (waste cost reduction, compliance with legislation) to collaborative (preventive measures, management approach) to a proactive approach (product accountability, life cycle analysis, eco-efficiency). But even with this ecoefficient approach there is no guarantee of success because of the rebound effect. Reducing the emission of a car by 10, 30 or 50% still produces emission and, with an increase in traffic of 20, 40 or 60%, more than previously despite the eco-efficient approach. Ecoefficiency does not necessarily change the process or the product. A diesel engine with a carbon filter remains a combustion engine with

immediately seem outdated and old-fashioned. And the innovator will become the new market leader. Such innovations demand leadership. ‘Clean’ requires vision and leadership to shift entrepreneurship to a new level. A transition from an efficiency economy to a high-quality innovation economy. This not only changes the economy itself, but also the way in which businesses are managed. We get innovation in the management of companies, cities, regions. Ecover incorporated the holistic reflex via a concept manager, Alpro introduced a sustainability balanced scorecard, Ghent and Antwerp incorporated sustainability as a horizontal objective into urban policy, the CSR3 Resolution of the European Parliament (2007) launched an appeal to national, regional and 3) Corporate Social Responsibility

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local authorities for the introduction of a sustainable procurement policy4, in Flanders Plan C arose as a network for the sustainable management of materials. International norms broadened their focus and moved from a thematic approach, quality (ISO9000, 1988), environment (ISO14001, 1996), social (SA8000, 1997) to the integrating character of sustainability (ISO26000, expected in 2010). Management will acquire a more integrating character up to and including the reporting stage (according to the Global Reporting Initiative Guidelines, dating from 1997). Different systems, different management, new entrepreneurship, new products and services. A next phase is thus taking shape. A phase in which products and services are contemplated that are not just somewhat but totally better. Here nature sets the example. Nature produces in abundance and diversity and nothing is wasted. Everything has a function for other living organisms. Just as nature forms a closed biological metabolism, the challenge is also to create this for all technological materials. In the first place this forms the basis for a new business model – Cradle to Cradle5. In this model an enterprise is organised in such a manner that the outcome is beneficial for the enterprise as well as for the environment and society. Designing Cradle to Cradle ranks every substance that 4) The Netherlands accepted the challenge and aspires to 100% incorporation of sustainability criteria in national procurement and 50% in provincial procurement by 2010 5) Chemist Michael Braungart and architect William McDonough are the founders of Cradle to Cradle, an all-embracing concept of ecoeffectiveness.

Dirk Le Roy is managing director of Sustenuto, a leading consultancy in CSR and sustainable development

features in the product in terms of function and safety. Click systems replace adhesive substances to make products reducible to their basic components ‘as easily as Lego’. Substances which may impact negatively on people or the environment will be replaced. Every trajectory starts with a thorough screening which includes the entire supply chain. How the product is manufactured, how it is marketed, all this is part of the design. Up to and including return after use and meaningful recycling. Just like in nature everything that is produced and used is linked to each other in a cycle. Closing the biological and technological cycles fundamentally changes the logistics. It is no longer just distribution of products to users, but also setting up reverse trajectories called ‘reverse logistics’. After use a product does not necessarily have to return to the initial producer. The product can contain a (bio-)chip with information about its composition whereby present ‘waste collectors’ become future ‘materials managers’.

It is easy to deduce that this will ‘spontaneously’ lead to new innovations. Eco-effective products are correctly designed from the outset and create benefits at various levels: reduced (costs of) raw materials, ‘waste becomes food’ for new products, more valuable and sought after products with a stronger position in the environment and the market. It is not difficult to see the future developing like this. The context exists, increasing raw materials and energy prices, pressure on the environment, more awareness among consumers, the examples are present actually and potentially. The challenge of the 21st century is to be far more effective and to design products in such a way that they are safe and reusable from beginning to end, or in other words …. Clean.

THE FIFTH CONFERENCE CLEAN - Sustainable B usiness

Entrepreneurship

—Being of service and being useful for the society of which we are a part, Luc Rogge

In Belgium, Collruytgroep is known for its somewhat unique approach to doing business. Think of the range of retail formulas we have successfully introduced over the years, from organic food stores and home delivery to non-food and gas stations. Or our strong vertical integration: we do our own logistics, production, ICT, filming, printing, recycling, and much more. The Colruyt approach ultimately has its roots in the values and philosophy of the company founders: simplicity, strong engagement and the ongoing search for efficiency and sustainability. So what does sustainable business actually mean to us? The basis: sustainable people management In the first place, ‘sustainable business’ for us translates into sustainable people management. At the Colruyt group we work from the fundamental belief that co-workers are inherently motivated to make a positive contribution if a number of conditions are met: Firstly, there needs to be sufficient clarity about the direction we wish to follow and which resources will be allocated to make that possible. Furthermore, it is important that at least these resources are present or will be created: a very broad training and development offering (4.5% of our wage costs go to training and development), a low threshold and open communication system and last but not least, appreciation and support. Trust—having trust, showing trust—is absolutely key in this, and generates positive energy. And from this positive energy, positive action can follow when the necessary resources (financial and other) are made available.

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This principled approach has made it possible to grow our staff number and make

it more diverse. Today at the Colruyt group work 62 different nationalities, men and women, young people and older people, highly educated and less educated, etc. One of the key success factors for a diversity policy is offering equal opportunities and hence investment in training. Hundreds of people at Colruyt are learning another language, computer skills, team work, cooking, etc. Because at the end of the day an HR policy is successful only if everyone can find his or her place in the organisation, deliver useful work, receive the necessary appreciation thereof, and which finally will translate into real work satisfaction.

initiatives: the installation of wind turbines and solar panels, the building of a common water purification station, hundreds of initiatives around waste prevention, waste recycling and much more.

Values-driven entrepreneurship This pursuit of sustainable growth can also be understood in context of our vision on entrepreneurship and our ‘people-vision’: in our business operation we strive to engage all in the joint endeavour to deliver valuable goods and services, without waste of national treasures, which is appreciated and

That is why there is a daily focus on avoiding the demotivating factors, the factors that drain our available energy. Not a paradise, but each day somewhat better. Striving toward a sustainable balance In its steady growth, the Colruyt group has always strived for a balance between environmental concerns, societal issues and economic factors. Or otherwise put, the effort and investment made in these three areas (environment, people and society) make that today we live and work in a growing business. This type of approach is these days called ‘sustainable business.’ We would also describe it, with reference to our core activities, as ‘society-nourishing’ business. We have in fact always been of the opinion that sustainable growth can only be guaranteed if we assess everything we do according to their possible impact on the afore mentioned three domains. By adopting this approach over the past 10 years a certain dynamic has emerged which has led to numerous

is affordable for potential users. Simultaneously it is necessary to create sufficient added value so that other societal needs can also be addressed. The core values—Simplicity, Respect, Teamwork and Service—are in the company DNA. These values are kept alive on a daily basis by focusing on the associated points of interests: efficiency, the individual, the team, and quality. If in addition the essential level of trust and a high degree of conscientiousness are present, then indeed significant things can be achieved. This entrepreneurship is for many a key driver of job satisfaction. What one observes and senses in the stores is the tremendous engagement of the Colruyt co-worker. We work on the assumption that a spontaneous love for the job, for the discipline, will develop; that a spontaneous connection with the tools or

machine will develop. Also, there is the comradeship, the friendship with the people we work. We also know that frustration and alienation threaten at any time. This is why such effort is made year on year to organise work in such a way that alienation is reduced, and so that our natural motivation, our spontaneous tendency to apply ourselves and enjoy ourselves, can be kept alive. That is why there is a daily focus on avoiding the demotivating factors, the factors that drain our available energy. Not a paradise, but each day somewhat better. As cherry on the cake the Colruyt co-workers benefit for many years now (since 1988) from a system of financial participation. Initially set up for group executives, the system was later extended to every member of staff. This type of approach to business we could call ‘valuedriven business’, whereby in each domain (economy, society, people, environment) the key drivers are commitment, engagement and responsibility. This type of approach is closely related to the concept of ‘sustainable business.’

In Conclusion The above vision is the result of a step-by-step approach and evolution whereby ‘strong commitment’ and ‘accountable and valuedriven business’, together with a direct and accessible communication system are the key foundation stones. Nevertheless, this evolution has not reached its conclusion and we are in full development to a new phase; a phase whereby our stakeholders actively participate in our mission: ‘together creating sustainable added value, by value-driven craftsmanship in retail’.

Luc Rogge is directorgeneral of Colruyt Group

THE FIFTH CONFERENCE CLEAN - Sustainable Business

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Motivate Appraise Reward

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Results

Culture

Context

In the 1980s, but mainly in 1990, the competence mindset made its appearance as the foundation of any HR policy. It started with the organisational strategy, followed by job descriptions which were meant to flesh out the strategy and then suitable competence management came. Unfortunately though, the organisation-focused competence management mutated into a gap mindset in some organisations, whereby the skills necessary for the job are compared to those of the (potential) candidate. By comparing the two, it becomes clear

Talent management implies consciously dealing with and developing an employee’s potential so that he or she can be utilised as part of the company’s strategy both now and in the medium term. For that reason we advocate an integral approach to talent management. That means every employee should be given the opportunity to develop his or her talents. It also means that all HR processes and leadership style should reflect the manner in which one wishes to develop talent management. Talent management is not a separate HR process, but impacts on all existing processes. It is nothing less than a total mindset, a big picture view of strategic and integrated HR policy. Talent management is a strategic choice an organisation makes.

Design Discover Identity

INDIVIDUAL TALENTS

For instance, in a time of talent drought in the labour market, an organisation may find it hard to find the right talent. There is strong competition from many other firms. How does a company position itself as an attractive player in the labour market? To a large extent the answer lies in talent management.

Synthesis

Integral approach

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There are many reasons to justify the existence of talent management. Since 2000 Belgium, in tandem with many other Western economies, has set off resolutely on the path toward a knowledge economy. In the Lisbon guidelines, European leaders set the target to make Europe the world’s most dynamic and competitive knowledge economy by 2010. The shift this created in the labour market has had a far-reaching impact on companies and their HR management.

In our view, proper talent management is ideally a combination of these two approaches. It is extremely important to use the talents and inherent motivation of people as the point of departure in order to obtain engagement and facilitate empowerment so that people will do their job with heart and soul. A business should simultaneously keep an eye on the skills it needs for playing out its strategy so that it can achieve results. Competence management remains an HR cornerstone.

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Win-Win

Cost saving is another equally important argument in favour of talent management. Staff turnover is high; it is taking longer to fill vacancies (48 days in 2007 versus 42 days in 2005, figures supplied by SD Worx personnel agency). It is expensive to source, train and initiate a new employee. Talent management has a more direct impact on cost saving as well: motivated employees perform better, which indisputably has a major influence on the company’s bottom line. Talent management is more than a buzzword – it has a fixed place on the HR agenda.

Another approach, other than the organisationfocused approach, is the person-centred approach. Here HR places the focus on the individual and his or her specific potential and attempts to use his or her skills to the best advantage of the organisation. In practise, this approach is mostly applied for high potentials, the top employees in the company.

Strategy

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Talent is a scarce commodity. Any organization must make a concerted effort to manage that talent and talent management should be part of the furniture in HR parlance, not a buzzword. But does everyone understand the meaning of this concept or do we all fill in the blanks as we see fit? Maybe you think talent ‘management’ a misnomer? Managing may sound the same as ‘keeping under control’ and that is precisely what prevents talent from growing. What is your understanding of dealing actively with talent? How do we apply that as part of a results-oriented and strategic HR policy?

which skills the employee does not yet have. With the best intentions an attempt is then made to instil these skills through training and coaching.

Context

—Luc Dekeyser & Annemie Salu

But attracting employees is not the sole purpose of talent management. The employee also demands it. The modern generation demand a personalised approach when it comes to assessing their skills and mapping out their career paths. They make informed choices and weigh up a job or employer against their personal development needs. At the same time they want a healthy balance between work and home life. If an employer then has proper talent management in place, it can adapt to reality. Traditional careers and training programmes no longer suffice for locking in mobile young talent, engaging them and developing them.

Leadership

Talent Management

Talent management implies consciously dealing with and developing an employee’s potential so that he or she can be utilised as part of the company’s strategy both now and in the medium term. Attracting, engaging, developing This integrated approach manifests in the form of a talent management model whereby attracting, engaging and developing individual talents are the three main pillars. These three aspects of talent management are linked and form a loop. First, talent is attracted, then engaged by the company and subsequently offered the opportunity to develop new skills over time. During the development process the employee may then be attracted by a new function or by additional or different responsibilities. The employee is cushioned in a talent cycle that offers ample opportunities for growth. At the same time a system of competence management is fostered which assists in promoting the envisaged company strategy and results. Competence management supports the person’s growth during the talent cycle. This growth must be guided and supported by management and the business culture. Good leadership is one of the key leverages in the competition

for and retention of talent. Leadership is decisive in creating a motivating work environment and a stimulating organisational culture.

The perfect recipe for good talent management There is no generally applicable success recipe for effective talent management. The manner in which talent management is addressed in an organisation must reflect the organisation’s strategy and values. It follows that each organisation’s take on this will be different, just as each organisation’s strategy and culture differs too. Our view is that talent management is the future HR hot topic and that it is not a ‘soft’ issue but drives the organisation’s results and is key to achieving a successful and sustainable economic policy. Luc Dekeyser and Annemie Salu are, respectively, Director and Senior Advisor at the HR Centre of Knowledge SD Worx

THE FIFTH CONFERENCE CLEAN - sUstAINABLE BUsINEss

Investing in a green, innovationdriven economy

—Flanders re-aligns support schemes for business The energy crisis and climate change have pushed numerous scientists and entrepreneurs towards alternative green energy. Governments worldwide have launched incentives to set the course. Companies producing in an environmentally friendly manner deserve a big helping hand, and businesses or sectors that are still hesitant should be provided with strong incentives so that they will change tack quickly and efficiently. Green business is by definition creative and inventive; it is a way of doing business that warmly embraces technology. Because technology and ecology go hand in hand. Since January 2009, companies doing business in Flanders and opting for environmentally friendly production can make use of the new ecology premium. Volatile oil prices and fossil dependency put pressure on the competitiveness of our economy. It is our aim to support businesses in the transition to a low carbon economy. The business community is becoming increasingly aware that a lower energy bill can lead to cost reduction and is switching to environmentally friendly production. Ecological entrepreneurship is no longer a cost but a must. Large enterprises can get subsidies for up to 20 percent of their investment cost, small businesses up to as much as 40 percent. Flanders needs this approach because it lacks its own sources of energy and is therefore to a very large extent dependent on other countries. Such support also stimulates research into new technologies in the field of renewable energy, which in the long run can again reduce costs. Finally, strong clean tech businesses make a positive contribution to the balance of trade and can create numerous high-grade jobs. For that reason we have systematically increased the so-called ecology premium and made sure that more and more businesses can get access to it.

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premiums to the value of 21.650 million euro were paid out to 253 companies. The success rate for entrepreneurs is 100%. As from 2009, 120 million euro will be injected each year into businesses that are being run in a more sustainable and environmentally friendly manner. Solar panels remain the most popular form of clean technology for entrepreneurs. In the past year businesses invested a total of 230 million euro in PV installations. This is equivalent to a production of 65 million kWh p.a. or the annual consumption of almost 20,000 families. Translated into surface area this is equal to 123 football pitches. Other examples of clean technology used by enterprises are wind turbines, the recycling of water or the use of alternative water sources (rain or pond water) for evaporation condensers, hydropower for energy, the photovoltaic conversion of solar energy, the Euro V-engine for heavy vehicles (an engine with lower emission standards than current truck engines), or placing root filters on heavy vehicles.

The ecology premium itself is granted on the basis of a call system. Enterprises can sign up for it with their investment projects up to three times per year. The projects are selected on the basis of socio-economic and sustainability criteria.

Besides the ecology premium, Flanders also stimulates green risk capital. The Participatijmaatschappij Vlaanderen (PMV) puts almost 25 million euro in environmental and energy-friendly technologies, of which as much as 15 million euro are invested in the Capricorn Cleantech Fund, the leading venture capital fund in Europe with regard to investments in the cleantech sector.

During the first two calls, at the end of 2007 and early 2008, a budget of 25 million euro was made available on both occasions. During the first call (SeptemberDecember 2007) ecology premiums to the value of 24.989 million euro were granted to 244 companies. During the second call (January-April 2008) ecology

To maintain its competitive position internationally, Flanders must keep investing in innovation and technology. This can of course be done through traditional public tenders, but even better by means of ‘innovative tendering’. As such, innovative solutions are, so to speak, ‘ordered’ in the market. Orders are examined

THE FIFTH CONFERENCE CLEAN - sUstAINABLE BUsINEss

It is our aim to support businesses in the transition to a low-carbon economy

together with the market players with the aim of getting a product that meets the demand as closely as possible. An amount of five million euro was allocated for this purpose in the Flemish budget between 2008 and 2010. With regards to biotechnology we support scientific research that is aimed at greening our economy. The Flanders Institute for Biotechnology (VIB) has made an important breakthrough in the development of biofuels. The first tests with biofuels obtained from genetically modified poplars are very promising. This scientific breakthrough can offer new economic perspectives for Flanders in the longer run as well. The times are changing rapidly. Since the autumn of 2008 energy prices have dipped significantly, but in the meantime the financial crisis has infected the real economy. After this historic downturn the economy may never be the same again. But instead of taking cover and waiting for the storm to subside, we must now take the courage to think beyond the traditional economy powered by fossil energy sourcesâ&#x20AC;&#x201D;and stoutly invest in a new, environmentally viable as well as product friendly economy. So, let us start digging for victory, at a turning point where we need to stimulate more entrepreneurs and businesses to invest in an economy driven by green innovation. Once the dust of the current crisis will have settled, those who will have combined courage and creativity with green innovation and future-orientated products will be better placed than others.

Patricia Ceysens Flemish Minister of Economy, Enterprise, Science, Innovation and Foreign Trade.

THE FIFTH CONFERENCE CLEAN - Sustainable B usiness

CSR and SMEs?

—Karel Van Eetvelt

Corporate social responsibility (CSR): isn’t that meant for big companies only? Ask the average Belgian for shining examples of CSR companies and he probably won’t get beyond a few multinationals. That is normal. Even the EU’s 2001 Green Paper on corporate social responsibility extensively applauds the good results of large companies.

In the Green Paper SMEs are advised to learn a lesson from these big players. The federal and Flemish policymakers invariably spread a similar message. It therefore comes as no surprise that Mr Average does not associate SMEs with CSR. SME entrepreneurs are nevertheless quite good in this field. Important criteria for CSR are: relating well to employees, providing proper information to, for example, banks and people in the neighbourhood, respecting the environment and the like. In many places this appears to be going quite well.

Pillar of the local community Many entrepreneurs practise corporate social responsibility without being aware of it. Because they are literally amongst the people and relate to the local community. These entrepreneurs know their neighbours and are often active as chairpersons or committee members in local associations or school committees. They often play the role of main sponsor. How many entrepreneurs don’t keep the local football team afloat? Or sponsor or organise art exhibitions? Give free products to youth movements? Go on camps or look after the transport of tents and equipment? How many countless grocers and supermarket owners buy lottery tickets or sponsor posters for student parties? A recent UNIZO study showed that an independent shopkeeper spends on average € 1500 annually on sponsoring. That is a telling amount.

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These entrepreneurs also know the personal circumstances of their employees. They often advise and assist them with family problems. They maintain a very direct relationship with their customers and, if a problem arises, they can be approached personally. No ombudsman is needed. Customers also do not have to call via a distant call centre with anonymous customer or complaint services to get complaints off their chests. But: these entrepreneurs do not write books about it, nor build PR campaigns about their efforts for the environment, HRM policy or good relations with the community. SMEs simply practise CSR. Without making a big deal of it. What is special about an SME is that personal and formal accountability coincide. That economic relationships are human relationships as well.

It is printed on paper, therefore it exists Testimonials and labels are frequently used as a way of ‘displaying’ CSR efforts. Here, too, big companies are more active than SMEs. The latter often lack the resources to record their efforts on paper and thus acquire a label. For that very reason they remain in the shade. Yet the values of SMEs often form the basis for their action. Not so long ago one of our directors expressed his vision as follows: “A company in which human values prevail, based on mutual trust in relationships and focussed on a meaningful goal, development of people, a positive contribution to society, with respect for the environment.” Such an attitude most probably

Our conclusion from this entire story is simple: if a problem exists, it is one of visibility. explains SMEs’ aversion to labels and certificates. They find it difficult because the process to obtain and retain the label or testimonial is often at odds with their way of running a business. This, after all, demands great flexibility aimed at continually responding to the rapidly changing demands of customers. SMEs want to keep their business running and, in addition, do the best they can for society. But don’t ask them to put this down on paper and develop ‘systems’. Don’t bother them with paperwork. They aren’t made for that. We have to ask ourselves what the added value is of all that bureaucracy: specialised companies get richer and paper is produced to comply with what society supposedly requires. The importance one attaches to labels and testimonials fits in with the general belief that ‘what is not bureaucratised, does not exist.’ This phenomenon also crops up elsewhere. Smart Alecs make sure that everything works out on paper, then ‘everything is in order’. Reality is often completely different. A little while ago senator Hugo Van den Berghe (CD&V) made a statement that is still relevant: “The degree of decadence of a society can be measured by the degree of bureaucratisation.” As an example of this

he mentioned the Austrian Empire, which “bureaucratised so much in order to divert attention from its own decadence.” One can only conclude that history regularly repeats itself.

SMEs distrust media The way in which corporate social responsibility appears in the press also explains many misconceptions. Recently the ‘sustainable business’ prize was awarded. The press paid much attention to the winner, Ecover1, an increasingly important player which, for that matter, we respect a lot. The company is a growing family-owned SME which has demonstrated that less polluting washing powders can also be marketed successfully. But the fact is that the other winner, a company with five employees that managed to scoop the ‘sustainable business’ award in the category of enterprises with fewer than 10 employees, received no mention. Yet the prize-winning photo lab, Asap Photographic Services, is a pioneer in its sector. It removes waste products from its production water by making use of the purifying power of a small field of reed on the roof of the business and, in its own league, contributes in a special way to a better environment. That one person sows and another reaps is a well-known phenomenon. In addition to this, SMEs, unjustifiably for that matter, tend to some extent to distrust the media world which 1) http://www.ecover.com/be/nl/

THE FIFTH CONFERENCE CLEAN - Sustainable Business

Karel Van Eetvelt is managing director of UNIZO, the largest employers association in the country. It unites approximately 85,000 small businesses and entrepreneurs in Flanders and Brussels.

is unknown to them. And the best way to change this? Much more than in the past we need to openly share these fine examples via the media with a large part of the population.

CSR guide Here, too, an organisation like UNIZO can play a role by responding to the widespread misconceptions concerning the social responsibility of SMEs. For that reason we have published a book with 15 testimonies of SME pioneers in CSR. They show how an independent entrepreneur constantly takes social issues into account without losing sight of the most important – namely the economic – objective of the business. We have also published a practical handbook dealing with the problems which the SME manager encounters on a daily basis and for which he seeks sustainable solutions. The handbook must systematically stimulate the entrepreneur to reinforce his aspirations in the environmental and social arena alongside the pursuit of his economic objectives, supported by good relationships with all stakeholders.

SME and CSR: increase visibility I am in good company with my vision about the high CSR calibre of SME activities. Take for example Luc Van Liedekerke of the Leuven Centre for Economics and Ethics. He consistently defends the proposition that SMEs in particular act as pioneers in respect of CSR. Our conclusion from this entire story is simple: if a problem exists, it is one of visibility. The entrepreneurs themselves find what they do nothing more than selfevident. The same applies to their communities. Everyone finds the CSR efforts of the local entrepreneurs so normal that these are no longer ‘seen’ and are therefore underestimated. For us, therefore, the issue is to bring this aspect of SMEs more into the open. We have to publicise the fact that independent entrepreneurs are more than important creators of jobs or contributors of taxes and parafiscal revenues. They are indispensable pillars of our society.

Credits Illustrations

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Photography

unless stated differently cover: Julie Cuyvers page 25: Timo Balk @ sxc.hupage 26: Haroldo Sena @ sxc.hu page 46: Jonathan Ruchti @ sxc.hu

Typography

cover titel font : Gravure condensed regular and black Edito, Vision and Case articles in the Fresco family Fresco, Fresco sans Pro an Fresco sans condesed