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Appendix - Sustainable technology options and policy instruments

Report no 3 - Appendix2006-05-16

EPSD - European Panel on Sustainable Development

www.gmv.chalmers.se/epsd


Appendix - Report no 3, EPSD - European Panel on Sustainable Development 3 4

EditorsFredrik Hedenus and Allan Larsson

Chapter 1Anders Ahlbäck, Sara Backlund, Ola Carlson, Raul Carlson, Göran Dave, Bengt Fjällborg, Zsofia Ganrot, Lena Gustafsson, Katarina Gårdfedlt, Andreas Hagson, Fredrik Hedenus, Filip Johnsson, Christer Larsson, Jonas Norrman, Jonas Nässén, Mattias Olofsson, Quang Tran, Frances Sprei, Hans Theliander, Stefan Wirsenius, Johan Woxenius

Chapter 2Rikard Engström, Fredrik Hedenus, Allan Larsson, , Lennart Olsson, Magnus Pruth, Barry Ness, Dan Strömberg


Appendix - Report no 3, EPSD - European Panel on Sustainable Development4

1. Sustainable investment options

In this Appendix we describe more in detail important po-tential investment options to reach a sustainable EU. Also we give a brief overview different policy instruments that may promote more resource and energy efficient techno-logies. We discuss some potentially important sustainable technologies for energy supply, sustainable transportations, households, industry and finally waste management. We do not intend to cover all technologies, but rather show the many and varying options that may be applied for a more sustainable future.

1.1 Energy supplyIn this section we discuss five technologies that are amongst the reasonable investments at the short or middle term, and have a reasonably large potential. These are biomass, wind power, solar power, carbon capture and storage and nuclear power.

1.1.1 Biomass

In most global energy scenarios, which meet stringent CO2-constraints, bioenergy is assumed to be the dominating new energy source, displacing fossil fuels and associated CO2 emissions. Furthermore, biomass may constitute a domestic supply of energy in the future, even though also import from the tropics (where the yield is significantly higher) may be an attractive option. In the EU-25 total bioenergy use is approx-imately 850 TWh (including biological waste). Among EU Member States Sweden, Austria and Finland have leading positions in biomass utilization. In Sweden the use of bio-mass has increased substantially, following the introduction of a carbon dioxide tax in the early 1990s. Around 60% of the energy supply for district heating is presently biomass while fossil fuels constitute less than 20%.

Biomass sources include agriculture residues, forestry residues and energy crops, i.e. crops harvested primarily for their energy content (eucalyptus, willow). For biomass to play a major role in the future energy system a more systematic use of residues and in particular the expansion of short rotating energy crops is needed. In the short run there is an excessive production of food in the some parts of the EU, thus to use some agricultural land for bioenergy purpose might be a win-win solution. However, in the long run there might be a competition between food and biomass production, therefore land availability is a major limiting factor when estimating bioenergy supply potentials. Also large monoculture bioenergy plantations may reduce bio-diversity as well as affecting water resources. Considering these aspects, the bioenergy supply potential is estimated to 2000 TWh in 2010, around 20% of the present energy supply in the EU. The potential in the long run is estimated to be even larger

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Biomass is increasingly being used in combined heat and power production and more advanced technical solutions based on gasification are being developed and tested for this purpose. Biomass in pellets form may also be used for residential heating, even in one or two dwelling buildings.

Furthermore biomass may be converted into fuels, used in the transport sector, see section 2.2. The biofuel option, however, reduced net energy supply compared to using the biomass for heat purposes, due to that energy is required to transform the biomass into fuels 1.1.2 Wind energy

It can be recognized by everyone traveling in Denmark and northern Germany, that wind electric energy production is increasing every year. In 2003 44 TWh electricity from wind power was produced in the EU-25 (1.4% of the total electricity supply), mainly in Denmark, Spain and Germany. In Denmark close to 20% of the domestic electricity con-sumption is produced from wind power.

The wind power industries in Europe have over 80% of the world market. Several independent organizations such as European Wind Energy Association2 or BMT-consultant3 in Denmark predict a high growth of the wind power market in the coming years. If the project plans of the UK, Spain, Holland, Ireland and several other countries in Europe are added together the total amount of wind power will increase by 50 GW in the coming five years.

The produced power of a wind turbine greatly depends on the wind speed at the site. Therefore wind turbines are typically installed close to coast or even offshore. To avoid spreading wind turbines over a very wide area in the lands-cape, wind turbines are today planned and erected in large groups called wind farms. These wind farms have a total installed power of 10-1000 MW. The cost of electricity from wind power is around 40 Euro/MWh, which makes it one of the most cost-effective renewable energy sources.

1.1.3 Solar energy

There is a huge physical potential for solar energy. The solar energy reaching the earth each year is roughly 10,000 times greater than the global human energy use during the same time. Of course the influx is unequally distributed. The average solar influxes in typically sunny areas such as the Sahara are around 2.5 times higher than in average influx in for instance Scandinavia. Solar energy may mainly be used in two ways, for heat or electricity production.

Solar thermal technologies using collector arrays for heat purposes have been growing fast during the 1990s in Europe, USA and Japan. Today 1 TWh heat is produced in the EU from solar energy. It is regarded as a fairly mature technology but some developments are taking place with respect to material technology and design. The main bott-lenecks for their massive diffusion are the lack of standards, the absence of economy of scale, inadequate attention given to design for manufacturability etc. However, projects are under way, through which customers collaborate to overcome these obstacles.

Solar photovoltaic technology, PV, is still a marginal source of electricity in the EU, in 2003 280 GWh solar electricity

1EEA (2005) EEA Briefing 2005 02

2 The European Wind Energy Association www.ewea.org3 BTM Consult www.btm.dk


Appendix - Report no 3, EPSD - European Panel on Sustainable Development 5

was produced. The reason for the relative low adoption of solar PV is it’s high price. The price of producing solar elec-tricity is roughly 10 times higher than conventional electricity production. On the other hand the price for solar PV has decreased by more than 90% from 1976 to 2001 .

Even though solar PV is expensive, there are nevertheless niche markets, mainly off-grid applications, where PV technologies thrive. In the last 10 years the annual sales of PV cells have increased by 35 per cent per year. Cur-rent market growth is mainly driven by public initiatives to support building integrated PV, in Japan, Germany and in the US. Further development and investments in solar PV is expected to reduce the cost of solar PV even further in the future.

1.1.4 Nuclear power

Nuclear power is one of the major suppliers of electricity in the Community, supplying 33% of the electricity. On the other hand no new nuclear plant had been built the last 15 years until Finland recently announced that they were going to construct a new reactor. The high capital costs of nuclear power as well as public concerns have made nuclear power a less attractive option the last decade.

Climate change has, however, raised the interest of nuclear power again since life cycle analysis show low greenhouse gas emissions per produced kWh electricity. Thus, nuclear power is a potentially an important carbon emission abate-ment technology. It is estimated that a carbon dioxide price of 20-40 E/ton CO2 is required to make nuclear power more profitable than coal fired power plants5 .

Still, the same concerns remain as been debated in the past, security issues, disposal of nuclear waste and pro-liferation of nuclear weapon. Security has improved since the reactors of the 70 and 80s were constructed. For instance the plant build in Finland, is designed be able to contain a meltdown. Disposal of nuclear waste remain an important issue in the public debate, and there are still no final disposal sites for nuclear waste in the EU. There is ongoing research on transmutation, where the most long-lived parts of the nuclear wastes are fissioned to short-lived products, thereby reduce the long-livety of the waste. These transmutation technologies, however, increase the cost of nuclear power, thus a higher carbon price is required to make nuclear power cost-effective. The proliferation of nuclear weapon is also a major concern if nuclear power is used as a global carbon dioxide abatement technology. The proliferation risk of a European nuclear program is rather indirect than direct. Increasing number of people with knowledge of nuclear material increase the risk of proliferation, as well as the larger amounts of potential weapon material. From a political perspective there may also be less possibility to refrain other countries to adopt nuclear programs if the community have a large program of its own. Nuclear are thus an interesting carbon dioxide abatement option, even though it is important that the community deals with the major concerns of nuclear power in a proper way before launching a large scale expansion of nuclear power.

1.1.4 Carbon capture and storage

With fossil fuels providing 80 per cent of the global energy supply it is obvious that we are currently far away from a sustainable energy system. Although some renewable en-ergy technologies (mainly wind and biomass) have seen a strong growth in several member states, these constitute a small part of the overall power generation in the EU, and it seems as development of an energy system largely based on renewable energy technologies will take a long time — at least considering what cost society at present seems to be willing to put in for the development and implementation of such technologies. Yet, there is a need for immediate action and more stringent post-Kyoto emission targets will require ‘bridging technologies’.

One such bridging technology is Capture and Storage of CO26 which has the potential to contribute to a signifi-cant reduction in CO2 emissions from large point sources (mainly power plants but also from industrial processes such as, refineries and cement factories), allowing fossil fuels to be part of a bridge to a non-fossil future and taking advantage of the existing power-plant infrastructure with its ability to secure base load at a reasonable cost.

1.1.4.1 Carbon capture technologies

Capture and storage of CO2 involves three steps; the cap-ture process including compression of the captured CO2, transport to the storage site and storage. There is currently a strong expansion in R&D activities in these steps, especially in the field of CO2 capture which represents the highest cost and where the largest potential for cost reductions can be expected. Technologies for the purpose of CO2 capture from coal-fired power plants, which are now in near demon-stration phase are the amine-based absorption process, the integrated gasification combined cycle (IGCC) and the O2/CO2 combustion process (or oxy-fuel combustion). It is difficult to speculate when CO2 capture and storage can be implanted on a large scale. From present perspective it seems reasonable that pilot plants will be in place in two or three years time, and the first large scale plants (several 100 MW) can be commissioned before 2015. The time required to develop of a large network of CO2 capture and storage plants will obviously depend on post Kyoto targets and the effective price of emitting CO2.

CO2 capture can also be applied to large plants burning other fuels than coal, i.e. to natural gas plants but also to plants burning biomass (which then would yield a negative CO2 source providing sustainable biomass production). Although it has been proposed to apply CO2 capture as a repowering option (i.e. to equip an existing power plant factory with CO2 capture) it seems most likely that large employment of CO2 capture will be in the form of new plants, since high efficiency power plants are required to reach competitive costs.

1.1.4.2 Carbon dioxide storage and transport

Storage options include storage in depleted oil and gas reservoirs, coal seams, deep saline formations (aquifers) and in the ocean. Storage in aquifers has the largest po-tential and it is estimated that such formations can safely

5 MIT (2003) The Future of nuclear power. An interdisciplinary MIT study http://web.mit.edu/nuclearpower/

6 This is often also referred to as Carbon Capture and Storage (CCS) or Carbon Sequestration.



store the European CO2 emissions for several hundreds of years. However, site-specific investigations are required to get more exact data on the actual storage capacity. CO2 is also used to enhance oil recovery (EOR) and EOR thereby constitutes a value added storage option (the CO2 will then have a certain value which offset some of the storage cost). Ocean storage currently faces strong environmental concerns and R&D activities are low in this area. The first commercial CO2 storage in an aquifer is annual injection of 1 Mt CO2 in the Utsira aquifer in the Norwegian part of the North Sea, which has been going on since 1996.

To transport the CO2 it must be compressed to form a supercritical or dense fluid, which is then transported by high-pressure pipeline or boat. The cost of transportation, depends to a large extent, on the distance between the source and the final destination and to what extent a large integrated transportation network can be established.

1.1.4.3 Opportunities and obstacles

The cost of removal of carbon dioxide from flue gases from a power plant result in an extra 15 – 25 euros per MWh electricity. This means that the cost to produce electricity by combustion of fossil fuels with carbon dioxide capture is of the same order as for combustion of biomass or wind-power, and substantially lower than for solar energy.

In summary, it can be concluded that CO2 capture and storage has a great potential for reducing CO2 emissions at a reasonable cost, using the existing power-plant infrastructure and maintaining coal as fuel, which may offset some of the increasing dependency on natural gas, increa-sing the security of supply. CO2 capture and storage can also be applied on natural gas and oil and possibly on power plants which co-fire coal and biomass, as well as on some carbon dioxide intensive industrial processes. Another ad-vantage, is that it to a large extent can be developed within the existing energy infrastructure which helps maintaining local job opportunities and reduce risk for siting conflicts (a “dirty coal plant” will be replaced with a new clean coal plant on the same site). However, successful application of CO2 capture and storage requires development of a regulatory regime with respect to international conventions (especially for offshore storage) as well as national, state or provincial legal frameworks (on-shore storage) on storage of CO2, including requirements on allowable levels of conta-mination of the CO2. Important is to find ways to establish regulations and agreements on monitoring of storage sites, especially since the stored CO2 must on remain in the storage site for long times (several 1000 years) in order to avoid significant effects on the climate.

1.2. TransportationProviding people and enterprises with good transport ser-vices is a prerequisite for continued economic prosperity. Today’s transport systems allow more people than ever to move around with relative ease at affordable prices. On the other hand transportation typically generates extensive externalities, in urban areas there are large problems with congestion as well as with local pollutants. Transporta-tion of all types also accounts for around 24% of the EU commercial energy use, and amount to 29% of the carbon dioxide emissions.

Motor vehicles account for nearly 80 per cent of all transport related energy. Currently, the road transport sector is 99,5 per cent dependent on oil and consumes about half of the world’s oil production. Partly for that reason, but also out of environmental considerations, there is an EU target on biofuels and other renewable fuels. The Council Directive 2003/30/EC set a target of 2% renewable fuels of the total fuel used for transport purposes in 2005, in 2010 the target is set to 5.75%.

The high carbon dioxide emissions from the transport sector, as well as its high oil dependency make the rapid increase in the transport sector a real concern. The Kyoto protocol calls for an 8% cut in total EU carbon dioxide by 2008–2012 with respect to 1990 levels, but if current trends continue, CO2 from transport will be about 40% higher in 2010 than it was in 1990.

Energy and carbon dioxide efficiency (i.e. energy use per passenger and per freight transport unit) has shown little or no improvement since the early 1970s. There are several strategies to direct transportation towards sustainability through investments. First, there are new modern systems of better logistics and improved public transportation which may increase the system efficiency significantly, and reduce the total amount of traffic. Second, there are still potentials to make cars more energy efficient, and third, there is a large variety of alternative fuels, which may provide a pathway towards a more sustainable transport system.

1.2.1 Sustainable Freight Transport

The European freight transportation has grown significantly during the last decades. Between 1995 and 2002, road haulage in EU-25 increased by 26% to 1550 billion tonkms, while rail, inland waterways and pipelines roughly kept their volumes. Although intra-European shipping compares to road transport in volume and growth rates, lorries clearly dominate the European transport market with 44% of the total share7.

The road infrastructure is heavily congested in major city areas and along specific routes; about 10% of the total European road network (some 7500 km) suffers from daily traffic jams. There are studies showing that external costs of congestion estimates to approximately 0.5% of Community GDP and are hampering international trade8. Forecasts indicate that traffic intensity and the need for freight transports will continue to grow significantly during the coming decade(s). Hence, without actual measures, future European competitiveness will be inhibited by worse-ning conditions for transportation services.

Since the Commission in 2001 stated its objectives and policies in the ambitious white paper on transport “Eu-ropean Transport Policy for 2010: Time to Decide”9, a considerable number of supportive programmes have been initiated. Four crucial areas for action were identified in the white paper such as: shifting the balance between the modes, eliminating bottlenecks in the transport network, increasing road security and managing the globalisation of

7 European Commission and Eurostat (2004) Energy & transport in figures, statistical pocketbook.8 COM(2001) 370 final White Paper: European Transport Policy for 2010: time to decide9 COM (2001) 0370



transport needs. Some of the more notable initiatives in the area of freight transport and intermodality are the funding programmes like Marco Polo10 , which aims to shift traffic from the roads, and motorways of the sea with focus on establishing new maritime logistic chains in Europe and, additionally, five technology platforms or advisory councils11 within the field of road, rail, air and maritime transport have been launched.

Seaport cities, which function as regional logistic hubs and serve both increased road and maritime transports, are especially affected by transport induced local pollutants and by congestion, concurrently as their logistic capacity is vital for regional industrial development. To fulfil community objectives on sustainability and growth it is therefore of great importance to enhance the logistic capabilities of port cities while, at the same time, reducing environmental stress and dispersion of harmful substances. Especially considering new environmental standards for air pollution is dealt with in the “Clean Air for Europe” (CAFÉ) programme12 , where ship freight related emissions are highlighted as an anxiety. Coupled with the heavy truck load in harbour areas, this will call for new innovative solutions on urban freight transport planning for port cities.

The challenge of improving sustainability in the freight transport sector with its many actors and dispersed and moveable components can be explained as to efficiently design supply chain structures and logistics systems, plan and control complex goods flows, utilise millions of vehicles and vessels, exploit the relatively clean traffic modes of rail and sea, and explore new cleaner propulsion technologies. The immense investments in today’s technical paradigm described as a combination of technological, organizational and institutional characteristics means that new processes and technical components must be explored and gradually implemented into the current structure. In this section we will discuss the concept of intermodality, and thereafter its potential utilisation in a dry port concept.

1.2.1.1 Intermodality

Intermodal Transport is by no means a new concept, the basic principle being: a common loading unit that is, from departure to arrival, shifted between two or more traffic modes. This principle was used already in England on the railroad system during the industrialisation. However, due to heavily increased road congestion, coupled with an in-creased awareness of environmental consequences derived from it, Intermodal transport have undergone a renaissance lately. There are, for instance, studies showing that signifi-cant reductions of CO2-emissions may be achieved through a change of balance between the traffic modes13.

The transport of goods in an Intermodal Transport system needs to pass interfaces where the change of traffic mode occurs, i.e. ports, railway terminals, airports, dry ports etc. In addition to the transports and loading units themselves, the interfaces need some measures of adoption as well to fit in an intermodal system. In such a change, several challenges of both technological and organisational nature would have to be addressed.

The lack of standardisation of loading units has been iden-tified by the Commission as a barrier to the development of intermodality in transports, and to reach their full potential. On the 7 April 2003, the Commission proposed a directive to the Parliament and Council to address the inefficiencies in the intermodal transport chain. They proposed that the Intermodal Loading Units (ILU) should be compatible with all transport modes

1.2.1.2 The dry port concept

Conventional hinterland transport systems are mainly based on several links to the port by road and very few by rail (see figure 2). Rail transport is generally limited to serve rather long distant cargo flows, with similar interfaces for handling containers as those from the road. Traditionally, the intermodal systems in Europe are often divided into a maritime part (sea port traffic) and continental part (road-rail-road traffic). However, due to recent deregulations and increased competition, several ports have shown interest in operating inland terminals as well as rail services as a measure to control and optimise a larger part of the inter-modal transport chain

The dry port concept14 is based on a sea port directly connected with inland intermodal terminals, where goods in intermodal loading units may be turned in as if directly to the sea port. Apart from the basic transhipment services that conventional inland terminals provide; services like storage, consolidation, depot-storage of empty containers, maintenance and repair of containers, custom clearance etc. should be available at full-service dry ports.

Relatively large quantities of goods transport are con- centrated between the sea port and dry port and, thus, giving room for shifting transports of the roads to more sustainable traffic modes, especially to railways and to inland waters. A fully functional dry port concept is believed to increase the energy efficiency and the environmental performance of the regional goods transport system, re-lieve the road congestion of the sea port city, make goods handling more efficient and viable for shippers in the port’s hinterland.

The figure 1 illustrates an example in which all road trans-ports from the ports hinterland have been replaced by rail; where, previously, only the distant shippers used a conventional intermodal terminal. This is possible through the implementation of three dry port terminals covering the necessary distances (short, medium and long) between the port and shippers.

10 Macro Polo, the successor to the PACT-programme (1997-2001), will be followed by Marco Polo II, currently in formation and will be active in the period of 2007-2013. 11 ETRAC - European Road Transport Advisory Council, ERRAC- European Rail Research Advisory Council, ACARE - Advisory Council for Aeronautics in Europe WATERBORNE Technology Platform and EIRAC, European Intermodal Research Advisory Council.12 There is currently a discussion between the Commission and the Parliament on how to strengthen the measures to reach the objectives stated in the CAFE-programme.

13 See, for example PACT 2001/37 and Kreutzberger, E., Macharis, C., Woxenius, J. (2005) Intermodal Versus Unimo-dal Road Freight Transport - A Review of Comparisons of the External14 Woxenius, J., Roso, V., Lumsden, K. (2004) The Dry Port Concept – Connecting Seaports with their Hinterland by Rail, ICLSP 2004, Dalian, 22-26 September.M



Not only traffic that causes congestion directly related to the transportation of goods may relieve the port city. Other activities as custom clearance, security checks and infor-mation handling may be moved from the seaport gate to the gates of the dry port. Further more, physical handling of goods as stuffing, stripping, buffering laden and empty containers can all be done at the dry port and, thus, saving valuable space in the seaport area.

Figure 1

1.2.2 Public transportation

Since over 75% of the population of the European Union lives in urban areas urban transport accounts for a signifi-cant part of total mobility, and an even greater proportion of damage to the health of citizens and to buildings. In the year 2030 total kilometres travelled in EU urban areas are expected to increase by 40%. The car is the dominant transport mode in EU urban – about 75% of kilometres travelled in EU conurbations are with cars. Cars cause severe congestion, safety and environmental problems and more than 10% of all carbon dioxide emissions in the EU come from road traffic in urban areas. The challenge for future urban transport systems will be to meet the demand for accessibility for people, including people with reduced mobility and goods, while at the same time minimising the impacts on the environment while safeguarding the quality of life15.

1.2.2.1 Past development

Since mass produced automobiles became available the

percentages of travel by public transportation and by railroads has steadily decreased. The explanation can be found in urban land use and human behaviour. Time, cost, convenience and security make urban households in general to purchase and use automobiles when they can afford it. Also many – maybe a majority – of urban households con-tinue to prefer a suburban lifestyle when they can afford it - and then not to use transit unless congestion and parking costs seriously restrains auto mobility16. And government pressures are not likely going to reverse that century-long

trend significantly. Until the mid 1960s the demand for public transportation was so great that most agencies managed to operate without external financial assis-tance. But with very few exceptions public transportation is no longer a commercial enterprise. Transit has survived after mid 1960s because government (the tax payers) is subsiding up to two-thirds of the costs in most industrial countries 17. And since people will not give up their cars and more people are getting cars despite more and more congestion, in-vesting in public transportation systems we now have is obviously not the answer, because the situation keeps getting worse rather than better18. Trams, com-muter trains, cars and busses are over a hundred years old – they are obsolete nineteenth-century inventions despite its potential to reduce air pollution, energy use and traffic congestion.

Over a number of decades we have heard about:

• Monorail technology has a track record going back to the 1970s. Over the world there are a number

of systems implemented – most of them in Japan. The applications often serve airports and amusement parks.

• High speed Urban Magnetic Levitation (MAGLEV) transit systems runs on elevated guide ways with the cars suspended 0.3 inches above the guide way surface by electromagnets, and propelled by a linear induction motor. The first commercial systems are currently being operated in public service in Japan and China.

• PRT (Personal Rapid Transit) aim at providing on-demand driverless effective, low cost and sustainable transport for cities, airports and special applications. Thus, the PRT concept attempts to copy the ubiquity advantages of private cars and efficiency of rail transit due to exclusive guideways, but it actually cannot come close to either one of these competitors.

15 Clean Urban Transport. http://europa.eu.int/comm/energy_transport/en/cut_en.html

16 Divati, C & Winstan, B. (2003). Suburbanisation the Masses: Public transport and Urban Development in Historical Perspec-tive. Ashgate, Basingstoke, Hampshire, ISBN 0754607755.17C. Jefferson & Skinner, J. (2005) The evolution of urban public transport, WIT Press WIT Transactions on The Built Environment, Vol 77 ISSN 1743-350918Duckenfield, T (2005). Science tells us that if people don’t feel good about using public transport they won’t. Local Transport Today 427, 29.9.05, p 16.

Figure 1. A comparison between a conventional hinterland transport and an implemented dry port concept with three terminals at different distances from the port.



1.2.2.2 Dual mode system

So, when current urban transportation systems are in se-rious trouble in a number of ways it is imperative that we begin taking a longer view. What should we plan for 2020 and 2050?

First we must realise two special characteristics of urban transportation:

• The longevity and durability of urban structure. Current residential and commercial buildings and infrastructure will dominate the urban landscape also 2020 and 2050, because the costs of reconstruction are high.

• The scale of the investment relative to the existing system. In cities and metropolitan areas even a very large projects in monetary terms – such as a new underground or level-led transit line - will have a very limited impact.

Over the globe private cars and urban sprawl are consi-dered two bad sides of the same coin19. But neither cars nor sprawl can be inherently bad since they are admired lifestyles among large groups. Fuel depletion, pollution, areas of land occupied by buildings and roads, traffic con-gestion and poor accessibility for groups which can not use the car system makes both of them bad. But yet - the most logic alternative to get high capacity, safe high speeds and solve the most of the urban transportation related en-vironmental problem is to design and build a system that keep the advantages of the private cars and uses the huge investments done in today’s infrastructure. Futurists began thinking about vehicles that can drive themselves already 1939 on New York World’s Fair, where General Motors Futurama was presented. Today the technology makes it possible to use “cars” in two distinct modes - as today manually driven on normal streets, and automatically under computer control on high-speed dedicated guide ways – which mainly are reconstructed urban highways. This is to take current Automated Highway Systems thinking one step further 20. Instead of focusing on intelligent vehicles and cruise-assist systems aiming at automated lanes for specially equipped cars on existing highways (like in the EU-projects CHAUFFEUR, ADASE and RESPONSE), a real dual-mode system incorporate most of the intelligence in the infrastructure, not the car. And the dual-mode system makes it possible to use almost all of today’s categories of vehicles used on streets and urban highways: commuter busses, taxis, delivery trucks, rental cars. So, compared to the limited advantages of an AHS, a dual-mode system will reduce most of today’s as well as foreseeable future urban transport problems and at the same time give the entire population a higher level of mobility 21.

Automating the process of driving is a complex endeavour, but much of the technologies needed are already develo-ped. Advancements in information technology of the past decades have contributed to development of automated

public transport, and in the near-term this achievements will act as the prime incubator for automated dual mode system development. In the guide way mode the “cars” will be using the AC power grid; in the manual driven street mode batteries, fuel cells or some other form of portable energy will power the “cars”. Linear electric motors to propel the vehicles are like ordinary AC motors - except that they are laid out flat so that the working parts move linearly instead of rotating. And it is possible to use the magnets and coils for both propulsion and levitation. It is also possible to employ linear synchronous motors, with the great advantage that all the cars will run on the same alternating current, moving at precisely the same speed at all times. This means that the spacing between the cars will never change, so collisions will be virtually impossible and the system capacity coming from rebuilding today’s urban motorway system and major streets into a dual mode system will be enormous due to remarkably lower minimum headways. Another advantage with linear synchronous motor technology is reliability due to few components and the elimination of velocity-control systems and proximity sensors.

Is feasible? It is important to recognise that automated vehicles already transport millions of passengers every day: More and more major airports have automated pe-ople movers, and the same goes for amusements parks, shopping malls etcetera. Urban transit lines in many cities operate with completely automated, driverless vehicles. Modern commercial aircraft and sea transport operate on autopilot for much of the time. Given all this experience in implementing safety-critical automated transportations systems, it is not that big step to develop road vehicles that can operate automated on a rebuilt urban road system on their own segregated lanes. And a dual mode system like this will be more efficient than any “new” public transporta-tion proposal – Personal Rapid Transit, Monorails, Maglev commuter trains etcetera - since it will keep providing the door-to-door travel service without getting out of the car. It also reduces the need of parallel infrastructures.

Efficiency and cost will vary widely depending on the details of the system. In general linear-motor propulsion provides excellent efficiency compared with internal-combustion engines. The cost of rebuilding urban motorways and major streets into a guided will of course be high. But compared with many guided public transport systems the vehicles will be privately owned and not a part of the transportation system cost. And the guide way system will be paid for by every user automatically.

1.2.3 Energy efficiency improvements for vehicles

Logistics and public transportation may increase the system efficiency. But there are also efficiency gains to get in the cars themselves. The trend of CO2 emissions from newly registered cars in Europe, during the last eight years, has been a positive one, from an average of 186 g CO2/km to 164 g CO2/km, while during the same time average po-wer and size has increased 22. Still, to be able to continue and improve the positive trend it is important to harness the technological opportunities that exist in reducing fuel consumption in personal cars. 19 Sierra Club http://www.sierraclub.org/sprawl/

20 Shladover, S. (2000) Progressive Deployment steps Leading Toward an Automated Highway System, 79th TRB annual meeting, Washington. DC. January 2000, Paper No. 00-0835.

21 Reynolds, F. (2005) The Dual Mode EV Revolution. http://www.evworld.com

22 European Automobile Manufacturers Association, Commissi-on Services. (2002) Monitoring of ACEA’s Commitment on CO2 Emission Reductions from Passenger Cars



Improving energy efficiency of a system is mainly about re-ducing losses. For the case of personal cars it is losses due to the physical properties of the car, losses in the engine, and losses during the idle time of the car. To reduce the losses due the physical properties of the car new design and materials are part of the solution. Improving aerodyna-mics has been used for example in the 3CC-protoype by Volvo. Other alternatives are lightweight materials such as aluminium and carbon-fibre, and reduced rolling resistance in car tires.

Increased efficiency in the engine can be achieved by in-troducing gasoline direct injection (GDI), which increases the ratio of air-to-fuel needed for combustion, which may result in fuel savings up to 20%. Other improvements can be made in the variability of valve lift and timing, and turbo charging. Combining these improvements opens up the possibility for smaller engines with more power, generally called downsizing. Not only can the engine be reduced in size but other components in the power train as well, reducing specific fuel consumption. Various flow losses can also be tackled by improving e.g. the control matching of engine and transmission and high efficiency automatic gearboxes23.

Thus there are still a large potential to improve the internal combustion engine. However, historically a large part of engine improvements have been counteracted by increased power and size of the cars. Therefore, to reduce carbon dioxide emissions as well as reduce oil dependency levelling of or reversing current power and size may be as important as improved engines to achieve these goals.

Losses during idle time can be reduced through the in-troduction of stop-start mode that is already prevalent in the hybrid car technologies, i.e. by combining gasoline or diesel engines with electric motors. There are different levels of hybrid cars, where the simplest ones handle only the idle time losses, while the more advanced forms boost the power of the engine.The different levels of hybrids are:

- Stop-start: does not have an extra electric motor. The engine shuts down when it comes to a stop. It starts again through an integrated starter-generator. The improved efficiency is only approximately 10%, but the extra costs compared to a conventional engine are low.

- Mild hybrid: works as the stop-start hybrid but an electric motor is also added giving extra power during acceleration. This technology is used in the hybrid version of the Honda Civic and the savings are said to be up to 37%.

- Full hybrid: there is a continuous variable distribution of power between the gasoline engine and the electric engine. Computer controls maximize the output, by letting the electric motor take over when the engine is the least efficient. This results in better fuel economy for urban driving than motorway driving. The full hybrid system is today used in the Toyota Prius, with a specific fuel consumption of 5 l/100 km for mixed driving (an equivalent conventional car would have a fuel consump-tion of 8 l/100 km).

Improved energy efficiency as well as hampering or reversing size and power trends are typically more cost- effective ways to reduce the amount of fuel consumed, as well as carbon dioxide emissions, from road transport than changing the type of fuel.

1.2.4 Alternative fuel vehicles

Vehicles running on alternative fuels may hamper some of the externalities caused by transportation. Biofuels pro-duced from domestic feed-stock increase the security of supply as well as reduce carbon dioxide emissions. Plug-in hybrid cars and hydrogen fuel cell vehicles increase energy efficiency and also reduce local pollutants. However, as long as electricity are produced from fossil fuels, or that fuel cell cars are run on hydrogen produced from fossil fuels there will be only minor impact on the carbon dioxide emissions. However, given a major transformation towards a carbon neutral electricity system, fuel cell cars and plug-in hybrid also provide carbon dioxide abatement.

In this section we discuss liquid biofuels, such as ethanol, biodiesel25 and synthetic biofuels26 , which are quite easy to fit into the prevailing infrastructure. Further we discuss natur-al gas, plug-in hybrid cars and hydrogen fuel cell cars.

1.2.4.1 Liquid biofuels

Ever since the first oil crises in 1973 particular attention has been given to the potential of using biomass as the basis for production of alternative fuels for road transport. In principle biofuels offer an ideal alternative since biomass potentially are 100 per cent CO2 neutral and may be grown domestically. There are a large variety of liquid biofuel op-tions, e.g., ethanol, biodiesel, and fuels based on gasified biomass such as synthetic diesel and DME.

Present consumption of biofuels is below 0.5 per cent of the total diesel and petrol consumption (around 10 TWh) in the EU and is mainly used in captive fleets that operate on pure biofuels, and supported through different tax ex-emption schemes. In the short and medium term biofuels for road transport have a good potential, as they to some extent can be used in the existing vehicles and distribution systems without expensive infrastructure investment. On the other hand, it has been argued that biomass, being a scarce resource, might be more cost- and eco-effectively used in other sectors, e.g. for heat and process heat27 .

BiodieselBiodiesel, is the main biofuel used in the EU today. More than 2 million tons biodiesel is produced annually in the EU, mainly in Germany, Italy and France. RME (Rapeseed Methyl Ester) is the dominating biodiesel and is produced from rapeseed oil and methanol (presently produced from natural gas), and may be blended in traditional diesel. Ho-wever, there are two main problems with RME. First, life cycle analysis shows even if RME is better for the climate

23 Alliance internationale de Tourisme, Féd´ration Internationale de l’Automobile, 2004, Climate for Change, Global Warming & the Automobile

25 Biodiesel is a collective name for different FAME (Fatty Acid Methyl Ester), e.g. RME (rapeseed methyl ester) and SME (sun-flower methyl ester).26 See e.g. Azar C, K Lindgren and B A Andersson (2003). Glo-bal energy scenarios meeting stringent CO2 constraints - cost-effective fuel choices in the transportation sector, Energy Policy 31(10), 961–976.



than traditional diesel, RME has worse performance consi-dering eutrophication and acidification. Second, the supply potential of rapeseed is rather limited in the EU, thus RME have not the potential to supply a large proportion of the EU diesel demand in the long run.

EthanolEthanol is the second most used biofuel for road transport in the EU, and has since the 80s supplied a large propor-tion of the transport fuel in Brazil. The total production of ethanol in the EU is less than for biodiesel, around 0.5 mil-lion tons a year. In the EU it is allowed to blend up to 5% ethanol in traditional petrol, whereas conventional engines is guaranteed to work with up to 10% ethanol blending or even more. Flexifuel cars, on the other hand are adjusted to be suitable for any blending of ethanol and petrol.

Ethanol may be produced domestically from crops such as wheat or sugar beet or may be imported from for instance Brazil where ethanol is produced from sugar canes in very high volumes. Ethanol from sugar canes is typically cheaper and more land efficient than ethanol produced from wheat, sugar beets or maize. However, there is a potential for more domestically produced ethanol by using cellulose crops as raw material. Also, regardless of feedstock, by constructing new facilities combining bio ethanol production with power generation and heat production enables efficient use of also the non-degradable part of the raw material. By this combi-nation higher energy efficiencies can be obtained.

The process can also be improved by manipulating the microorganisms, e.g., yeast, and the efficiency of ethanol production is dependant on the performance of the cel-lular transport and degradation of sugars via glycolytic and ethanol forming enzymes. Despite more than a century of intensive research, fundamental aspects of the control of these processes are still poorly understood. However, modern biotechnology provides novel insight into the role of sensing, signal transduction and regulatory mechanisms operating in the adjustment and control of biological proces-ses. There is a multitude of signal transduction pathways involved in sensing and regulation of sugar degradation and cellular energy generation. Knowledge and ability to manipulate such control schemes by e.g. genetic and/or metabolic engineering would be of utmost importance for optimisation of industrial bioethanol production.

Synthetic biofuelsThere is also ongoing research on thermo-chemical gasifica-tion of biomass which may significantly improve the energy efficiency of the produced biofuels28. From the synthesis gas, which is the product from gasified biomass, several synthetic biofuels may be produced, e.g., Fischer-Tropsch diesel, DME (dimetyl ether) and methanol. These fuels have good performance for local pollutants, and also reduce the carbon emissions from a life cycle perspective.

There are two main advantages with gasification of biomass for biofuel production. The first is that wood, rather than grain or sugar beets may be used as feedstock. Therefore the biomass supply potential increases significantly. Secondly, gasification of biomass enables more energy efficient pro-duction of fuels than traditional production of ethanol from

wheat or biodiesel. One disadvantage for synthetic biofuels is, however, that the process of biomass gasification still is under development on pilot and demonstration plant level and not currently available for large scale production.

1.2.4.2 Natural gas

Natural gas is an alternative to petrol as fuel for conventional Otto-engine, it requires some changes of the vehicles such as special storage and injection equipment. In Italy 370 000 vehicles run on natural gas provided through a network of 510 refuelling stations. Natural gas has good potential as a motor fuel. It is currently cheaper than oil based fuels, has a high octane number and has no problem in meeting existing emission standards. Especially emissions such as volcanic organic compound (VOC) and particles are virtually non-existent from gas-fuelled cars.

Natural gas, however, even though it has lower fossil carbon content than oil, contributes to global warming. In order to reduce the climate impact natural gas may be blended by biogas from anaerobic digestion of biological waste, see further section 5.2. Thereby there are no net emissions of carbon dioxide when the biogas is burnt. However, methane is a greenhouse gas in itself, therefore it is important to avoid leakage from the extraction and infrastructure of both natural gas and biogas.

1.2.4.3 Advanced technology vehicles

Plug-in hybrid cars and fuel cell cars are both potential vehicle types for the future. They are not yet commercially available thus further developments have to be made in these directions. Another common feature is that they both are dependent on the electricity production system to be a climate friendly option.

Plug-in hybrid cars combine the electric cars and the tradi-tional internal combustion engine. It can be charged by the electric grid as well as driven by traditional fuels. Electric cars have been commercially available for a number of years but have not managed to attract much consumer interest. The size and cost of the batteries relative to traditional cars seem prohibitive for producing a car of sufficient size, power and range between recharging at a price that the buyer would be willing to pay. Plug-in hybrid vehicles may be driven by electricity for short range travels and be recharged during nights, whereas for long-range travel the combustion engine and the conventional filling stations may be used. Plug-in hybrid may thus decrease the problems with local air pollutants in cities. However, as long as the marginal electricity production is based on coal the climate benefit of plug-in hybrids is zero or even negative compared to running a similar sized petrol car, due to the low system efficiency.

Fuel cell cars running on hydrogen are often seen as the transportation mode of the future. Hydrogen fuel cell cars have important benefits such as they practically only emit water vapour and they has high conversion efficiency from tank to wheels. However, the cost of fuel cell engines is still prohibitive and the production of hydrogen is decisive for the emissions level of carbon dioxide. Hydrogen can be produced from natural gas by steam reforming, from biomass, coal, natural gas by gasification and from water by electrolysis. Hydrogen used in the fuel cell vehicles where the hydrogen is produced from coal or electrolyse given

28 For an overview see Hamelinck C (2004). Outlook for advan-ced biofuels, PhD thesis, Utrecht University, The Netherlands.



the present electricity system in the EU, results in higher greenhouse gas than using gasoline in an ordinary car. Thus for fuel cell vehicles to be an carbon dioxide abatement op-tions, the hydrogen must be produced from coal combined with carbon capture and storage, biomass, or electrolysis with a low-carbon electricity system.

There are also still issues on storage and transportation of hydrogen that is yet to be resolved29. Therefore fuel cell hydrogen vehicles are the transport option that is available in the most distant future among the transportation fuels described here.

1.3. Households1.3.1 Energy efficiency in buildings

The building sector accounts for approximately 39 % of the primary energy use and 34 % of the energy related CO2 emissions in the EU-2530. Several studies have pointed to major potentials to increase energy efficiency in the building sector. The technical potentials have been shown to be in the order of 70 % of final energy use31. The potentials, economically feasible at current price levels, are around 20-30 % in Western Europe, 20-40 % in Russia and 10-30 % in North America32.

Special features of the building sector are its long life cycles and slow replacement of the building stock. Many buildings will remain for a century or more, which implies that the sector has time characteristics similar to the climate change issue. This leads to two basic observations. First of all, in order to have an immediate impact on emissions, energy efficiency measures must be directed towards existing buildings. Secondly, the energy efficiency of the current new-construction will affect the prospects for cli-mate change mitigation throughout the coming century and thus the new-construction entails a unique and important opportunity to incorporate energy efficient technologies in the design of buildings.

In existing buildings, the shortest paybacks of investments in energy efficiency are typically found in combinations with other retrofitting measures, e.g. adding insulation when fa-çades are renovated and choosing energy efficient windows when replacing old ones. Seizing such opportunities as they emerge is important in order to utilize the economic poten-tials for improvements in energy efficiency. In Europe, there are a great number poorly maintained blocks of flats from the 60s and 70s which also have a poor energy performance. Investing in these worn suburbs provide opportunities to combine environmental and social goals. An interesting example is the World habitat award winning solar building project in Gårdsten, Sweden, which resulted in a 40 % reduction in energy use as well as social improvements and satisfied tenants33.In the construction of new buildings, passive-house inno-vations make it possible to reduce energy use for space

heating to only a fraction of average buildings. Passive houses are buildings that assure a comfortable indoor climate without needing a conventional heating system, i.e. relying on energy from the sun and waste heat from electrical appliances and humans. This is achieved through a combination of technologies:

• Passive solar gain through optimized south-facing low-emissivity glazing

• Well-insulated building shell• Thermal bridge-free construction• Air-tight building envelope• High efficiency heat exchanger (ŋ ≥ 80 %) or exhaust

air heat pump

Since savings can be made on the conventional heating system (furnace, pipes, radiators etc) this provides a real example of “tunnelling through the cost barrier”, i.e. when investments in energy efficiency are not incremental but taken one step further and the costs may come down. The average cost of heat saved in 12 passive houses in the CEPHEUS project was estimated to 6.2 euro/MWh, which is around the same as the cost to supply heat34.

In most European countries, passive houses are still only in an early phase of pilot projects, but in Germany the passive house market has been growing rapidly from 120 dwellings in 1998 to 4000 dwellings in 2003 and with projections of continuous high growth rates. This rapid diffusion has partly been accomplished through a special financing programme, which provides loans at fixed interest rates set below the capital market level.

1.3.2 Increasing Energy Awareness in Everyday Life through Design

Energy is an invisible and increasingly valuable resource and the use thereof is increasing all over the world, particularly in Western countries. While industry, to some extent, has been successful at efforts to optimize their usage, less such advances have taken place within the domestic sphere. However, in the design of everyday domestic environments, buildings and products, electricity and energy use is not often made explicit. There is little to reveal if a TV or freezer is active or not, nor how much energy it consumes. Not eve-ryone realises that the mobile phone charger uses electricity even if the phone is disconnected. In itself, electricity is both invisible and intangible. As the effects of electricity in our everyday life are taken for granted, electricity becomes even more invisible.

Today we see efforts being made with more energy- efficient technology and information campaigns that aim at influencing people’s awareness about energy. There is, however, an additional possibility of investigating how energy awareness might be increased through product and interaction design. Product design has a crucial role to play

29 Service R F (2004). The Hydrogen Backlash, Science vol 305, p 958-961.

30 IEA, database (2005) 31Jochem, E. (ed.) (2004) Steps towards a sustainable develop-

ment - A white book for R&D of energy efficient technologies, Novatlantis, ETH, Zürich.

32 World Energy Assessment (2000). Energy and the challenge of sustainability, UNDP, New York.

33 Pavlovas V., Dalenbäck J-O. (2005) Solar renovation project Gårdsten, Göteborg – operational experiences 2001 – 2004, 10th International Conference on Solar Energy in High Latitu-des, May 25-27, 2005, Vilnius.

34 Schnieders & Hermelink (2006). CEPHEUS results: measu-rements and occupants’ satisfaction provide evidence for Pas-sive Houses being an option for sustainable building, Energy Policy Vol. 34, Issue 2, 151-171.



since the design of home appliances not only encourages us to buy more items; it also tends to keep the energy use in products explicitly hidden. The idea of treating energy as a design item can enable the designer to explore ways not to hide but reveal the products’ properties, thus increasing the visibility of choices available to the user, as well as promoting reflection upon how energy is used in everyday life. By creating alternative designs that, in various ways, expose and provoke question related to energy, moments of reflection can be introduced as an integral part of what it means to use a product. When thinking about energy as a kind of design system component, we shift from thinking about it in terms of pure technology that should just be there without us having to think further about it, to a mindset in which energy is considered as an expressive subject and opportunity for design. Compared to raising awareness th-rough information about the use of already existing products, this approach turns our attention towards energy also in terms of how to treat it as a core aesthetic and functional issue in early stages of product design.

1.4. Industry processes1.4.1 Prospects for energy efficiency improve-ments of industrial processes

Globally, industry accounts for roughly 40 % of total primary energy use. In the EU the share is lower at around 32 %, whereas the sector emits 30% of the total carbon dioxide emissions35.

In EU-15, industry output has been growing for about 2 % a year during the past 20 years. Yet industry’s energy use has remained at roughly the same level, largely thanks to improved energy efficiency of processes. However, the potential for further efficiency improvements in European industry is still substantial (see Table 1), even in energy-intensive sectors where investments largely have been driven by the objective of lowering high-energy costs. In the new EU member states, the potential for energy efficiency improvements in industry is likely to be significantly higher than in EU-15.

The sectors iron & steel and pulp & paper are among the

largest energy using industrial sectors in the EU, as well as globally. They are also among those sectors that have the largest potentials for energy efficiency improvements. Therefore, those sectors will be treated in more detail in this section.

1.4.1.1 Iron and steel industry

The iron and steel industry is the largest energy-using in-dustry sector in the world, accounting for roughly 15 % of the energy use of manufacturing industry. Since 1950, EU steel industry has shown a strong record of improved energy efficiency: coke requirement per unit produced decreased by on average 3 % per year, and specific energy use of iron-ore based steel production has decreased to about 26 GJ primary energy per ton crude steel (Figure 3).

Figure 2

Steel production from scrap requires much less energy than ore-based production, about 6-7 GJ primary energy per ton crude steel. Hence, increasing the share of scrap based steel production is one important option for increasing the overall energy efficiency of steel supply. However, due to the continuing increase in global steel demand, driven mainly

by developing countries, and long life span of steel in major products (e.g. buildings), scrap-based production cannot account for the major part of total steel supply within the foreseeable future. This means that iron-ore based production will remain the main supply path for crude steel in the nearest decades – therefore this section will focus on prospects for increasing energy efficiency of ore-based steel production.

Figure 2 gives an overview of the potentials for efficiency improvements in ore-based steel production. Specific energy use in the ‘best practice’ case is about 25 % lower than cur-rent average in EU15, equivalent to a reduction potential of about 7 GJ per ton crude steel38.

35 IEA database, data for 200236 IEA database, data for 2002.37 Worrel, E. et al (1994) Energy consumption by industrial pro-

cesses in the European Union Energy 19 (11): 1113-1129.

Energy use as share of total primary energy use36

Estimated potential for energy efficiency improvement com-pared to current best practice37

Iron and steel 3.5% 27%

Pulp and paper 3.5% 25%

TOTAL industrial sector 32% n.a.

Table 1. Energy use and potentials for efficiency improvements for a selection of major sectors

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steelCurrent average EU15

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38 de Beer, J. Worrell, E. and Blok, K. (1998) Future Technologies for energy-efficient iron and steel making. Annual Review of Energy and the Environment 23:123-205

Fig. 2 Specific energy use in crude steel production from iron ore. Electricity is converted to primary energy assuming 40 % yield in electricity production



The ‘improved’ steel mill is an improved version of current predominating steel-making route, a blast furnace followed by a basic oxygen furnace. The specific energy use of the improved blast furnace method is about 3.5 GJ lower than for current ‘best practice’, and is based on assumptions of evolutionary changes of used technologies. These evolu-tionary improvements are characterized by a continuation of current trends, small changes in performance and main process parameters. Most of the technologies that have to be used to achieve this potential have already been demon-strated, and they can be added to the process without major adaptations, and within a relatively short time span.

Of the potential of 3.5 GJ per ton compared with current best practice, only a smaller part is likely to be realized if assuming no substantial policy measures aiming at increa-sing energy efficiency (e.g. fossil carbon tax or investment grants). However, if assuming a fossil carbon cost of the order of 35 E/ ton CO2 (about 50 % higher than the cur-rent carbon cost in the EU emission trading scheme for carbon dioxide), most of the 3.5 GJ potential is likely to be realized.

The ‘advanced’ steel mill has a specific energy use 20 % lower than the ‘improved’ steel mill, or less than half the specific energy use of today’s average. The advanced mill is based on assumptions of major changes of the technologies used in steel making, including:

• Smelting reduction of iron. This process involves reduc-tion of iron ore without the need of coke and agglome-rated (e.g. sintered) iron ore. Hence, this technology replaces three processes of conventional technology – coke production, ore preparation and the blast furnace – with essentially one single process. The specific energy use of smelting reduction is estimated to be more than 10 % lower than the three corresponding processes in conventional technology.

• Near-net-shape casting of crude steel. In conventional technology, several cooling and heating steps take place in the processes of casting and shaping of steel into final products, e.g. strips and thin plates. Near-net-shape cas-ting processes use technologies than can attain the final shape with fewer operations. Depending on technology and final product, near-net-shape casting may reduce specific energy use by around 60 %, or even as much as 90-95 %, compared with the ‘improved’ steel mill

Both smelting reduction and near-net-shape casting have been proven on pilot-plant scale, and are expected be commercially available within 10 to 15 years. However, implementation is likely to take considerably longer time.

1.4.1.2 Pulp and paper industry

Pulp, paper and paperboard mills account for some 7-8 % of the energy use of global manufacturing industry. Energy efficiency of the pulp and paper industry has improved sub-stantially over the past 30 years. For kraft pulp – the world’s single largest pulp type – specific heat (steam) consump-tion per produced unit has decreased by roughly 30-35 % since 1970. However, specific electricity consumption for kraft pulp has remained more or less constant during the same period, or even increased slightly – although at a much lower level than the steam consumption.

One characteristic of the pulp and paper industry is the large variation in specific energy use for different types of pulp and paper products. For thermo-mechanical pulp – a major mechanical pulp type – specific electricity use is much larger than for kraft pulp, about 9-10 GJ per air-dry ton (ADt) wet pulp, to be compared with around 3 GJ per ADt for wet kraft pulp. In contrast, steam use for thermo-mechanical pulp is much lower, about 0.5 GJ per ADt, to be compared with around 10 GJ per ADt for wet kraft pulp. For recycled-fiber pulp (pulp produced from recycled paper), specific energy use is much lower compared with any type of wood-based pulp. For wet recycled-fiber pulp, specific steam use is roughly 0.5 GJ per ADt, and specific electricity use is around 1-1.5 GJ per ADt39.

Another characteristic of the pulp and paper industry are the considerable amounts of energy-rich by-products generated in processes. In the chemical pulping process, there is a substantial turnover of energy, originating from the wood feedstock, which is not driven by the actual energy requi-rements of the pulping process. This is due to the fact that in chemical pulping essentially only the cellulose fraction of the wood – which constitutes about one third (in energy terms) of the wood including bark – ends up in the pulp. The other two thirds of the wood energy consists mainly of the lignin fraction of the wood and may be considered as a by-product of the pulping process. Due to the currently high steam and electricity requirements of the process, es-sentially all of this energy by-flow is converted to steam and electricity which is used in the pulping process. However, for more energy efficient processes than today’s average, some of this energy by-flow may be exported from the plant as a surplus (see Figure 4 ).

Due to the much lower specific energy requirements of recycled-fibre pulp, increasing the paper-recycling rate is a fundamental option for rising the overall energy efficiency of paper supply. Current average recovery rate is little less than 50 % globally, and in EU about 55 %. The much higher recovery rates in individual countries – e.g. Germany 74 % and Finland 73 % – indicate that there is still a great potential for increasing the share of recycled fibre in EU and global paper supply. However, due to wea-ring of fibre strength in each reusing cycle, and end-use of paper that makes recovery impossible (e.g. sanitary paper), a substantial share of paper supply will nevertheless have to come from wood-based pulp. This section will therefore focus on today’s most important wood-based pulp produc-tion, the sulphate (kraft) pulp process, which accounts for about 40 % of current global pulp production (including recycled-fibre pulp).

Figure 3 gives an overview of the potentials for energy effi-ciency improvements of bleached kraft pulp production (in a non-integrated plant, i.e. the pulp is dried and delivered from the plant). In the ‘best practice’ case there are small but not insignificant net surplus of fuels (mainly bark) and electricity generated at the plant. In the ‘improved’ and ‘advanced’ cases, less energy is required for the pulping process, and therefore even larger amounts of the by-product energy originating from the wood can be delivered from the plant as

39 Estimates based on Nilsson, L.J. Larsson, E.D. Gilbreath, K.R. and Gupta, A. (1996) “Energy efficiency and the pulp and paper industry” PU/CEES Report no 294. Princton University and Swedish EPA (1997) “Energy Conservation in the Pulp and Paper Industry” Report 4712.



fuels and electricity. However, especially in the ‘advanced’ case, this larger net-surplus is not only due to the reduced process energy needs, but also to improved technologies for converting the energy in the non-cellulose fraction into fuels and electricity (see further below).

Figure 3

Many of these changes assumed for the ‘improved’ kraft pulp mill are likely to take place in EU pulp and paper indu-stry the nearest 10 years, as part of regular maintenance schemes and investment cycles. However, higher electricity prices, and higher prices and demand for biomass energy in other sectors, will create stronger incentives for imple-mentation of these technologies.

The ‘advanced’ kraft pulp mill is based on assumptions of major changes of pulping technologies, but also, and more importantly, of technologies for conversion of non-cellulose energy into surplus fuels and electricity which can be delivered from plant. One of the more important is black liquor gasification with gas-turbine electricity produc-tion has the potential to double the electricity production from black liquor compared with conventional recovery boiler/steam-turbine electricity production. The gasification unit may also be fed with bark and tree harvest residues, increasing furthermore the electricity output from forest and paper sectors.

These technologies are not expected to be widely used within the nearest 10-15 years, partly because of the long lifetime of present black liquor recovery boilers. There also remain several process-related issues to solve before these they fully can replace today’s technologies.

1.4.2 Environmental Biotechnology

Biotechnology is the area where biology meets technology. During the past 30 years there has been a large extension of the science connected to this area and a number of sub-fields of biotechnology have been developed. Some of them

have been given names according to various colours e.g. red biotechnology for techniques applied to medical proces-ses, white or grey biotechnology for industrial processes, green technology for agricultural processes and for marine and aquatic applications the term blue biotechnology has been used.

This colourful spectrum may describe the broad applications of the techniques, where environmental biotechnology may take a substantial part by means of solving many intriguing problems in the society of today e.g.:

• The high energy consumption in industrial processes as well as by individuals

• The use of limited recourses

• The enhancement of the greenhouse effect and global warming

• The spread of hazardous chemicals in the environment

In this context some examples of applied environmental biotechnology are given which are closely connected to the limi-tation of the global problems mentioned above. Notably the application of envi-ronmental biotechnology in society will promote desirable synergistic effects for example increasing the production of biofuel may provide the chemical industry

with environmentally friendly raw material and thereby limit the spread of undesirable waste.

1.4.2.1 Enzymes, the catalyst in bio processes

Enzyme technology is the largest field of the white bio-technology and the production of commercially available enzymes is inevitable for environmental biotechnology. In our daily life enzymes are used as catalysts for reducing resources or as substitutes for undesirable chemicals. For examples modern detergents allow a much lower wash-ing temperature than was requested together with older practice. This application of environmental biotechnology is saving substantial amounts of water and energy in the society of today.

1.4.2.2 Lignin as raw material for production of che-micals and biofuel

Lignin is, after cellulose, the most common biopolymer. The material has high combustible energy property compared to wood and plants. Despite of the fact that it is available in large quantities in the so called “black liquor” in the alkaline paper pulping processes almost all lignin has so far been combusted in the recovery boiler to produce steam. A large potential in the future is to use lignin as raw material for pro-duction of biofuels and of aromatic-based organic materials (e.g. in the large phenol based industry). Novel techniques are promising in separating the lignin from the “black liquor” and make it available for e.g. biofuel production. The pro-cess has been tested in laboratory scale, bench scale as well as in pilot scale (8 tons of lignin was produced during a month) and found to work very well. Even if the process

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Advanced kraft pulp mill

Fig. 3 Specific energy use of dried bleached sulphate (kraft) pulp produced in a non-in-tegrated pulp mill. For production of wet (i.e. non-dried) pulp in an integrated mill, current average of the specific steam requirement is roughly 35% lower. Net surplus of fuels and electricity is calculated as amount generated at plant minus purchased amount (further details on surplus amounts are given in the text). (Sold surplus of low-temperature heat (used e.g. in district heating) is not included.)



is far from optimized it produces lignin to a reasonable low cost (recalculated to energy base the production prize is less than 2 €/MWh).

Only very small quantities of lignin have so far been used to produce specialty chemicals, as for example, viscosity regulator in concrete and dye, additives in cattle food or the flavoring vanilla. It has also been suggested to use lignin as one of the raw material in manufacturing of glue. It should also be remembered that in the future even larger quantities of raw lignin might be produced if wood will be used for the production of bioethanol. At the present knowledge the lignin from the ethanol production may be suitable for production of syngas, which can be used to produce for example synthetic diesel or DME (dimethyl ether).

1.4.2.3 Environmental biotechnology for future

The potential of further development and implementation of environmental biotechnology in the society by means of positive environmental advantages may include:

• Cleaner waste from industrial processes

• Reducing the use and spread of hazardous chemi-cals

• Reduce limited resource use and promote the use of alternative resources

• Limit the exhaust of greenhouse gases and thereby be a strategic tool to limit and mitigate global warming

• Increase the export of know-how and products from the European community

1.4.3 Environmental information management

Environmental information management for sustainable development of the industrial society is an emerging branch of computer science and information technology. These information needs are large and yet only partly satisfied, and the combined capabilities of the research communities of the computing science and information technology domain is yet to be utilized, coordinated and to be set towards this task. There are needs in the domains of global networks of local databases, business security in combination with demands for openness, combinations of GIS and GPS systems with environmental impact assessment and envi-ronmental risk assessment, satellite monitoring with deci-sion making, environmental materials handling information systems with recycling and waste management systems, monitoring systems combined with forecasting systems, as well as advanced semi- or fully automated supply chain and consumer communication systems, just to mention a few. Currently these tasks are scattered into different scientific communities that are not always supported by computer and information technology specialists, and are focused with individual databases, software and decision support tools.

Information needs are huge since environmental manage-ment for sustainability is driven by the quest for continuous improvement. To establish continuous improvement one need to measure environmental performance in terms of some environmental information and data. Hence, environ-mental management of industrial systems requires informa-

tion of causal effects of industrial activities and changes, like data about product components and material content, environmental risk data, life cycle assessment data and data about environmentally preferable alternatives. The costs for acquiring, managing and compiling this data increase as environmental responsibilities increase. This is regardless of whether the responsibilities are driven by commercial, legal or proactive forces. In fact, acquisition of information is a major cost driver for environmental work. There is also a relation between costs for data and increased precision, credibility and transparency, due to costs for measurements, review and documentation. In addition, environmental statements at the managerial level often are complex com-pounds of data about e.g. resource use, emissions, impacts and prioritizations based on vague grounds. Consequen-ces are that environmental management requests simple environmental statements that cost less, are cleansed from uncertainty discussions, and that are easy to grasp. Today this requirement is largely met with acquiring less data, with lower quality, and by producing environmental statements with more confidence than what can be backed with data and competence. This may lead to wrong decisions.

Industrial environmental information management may be improved to increase cost efficiency and data quality (pre-cision, credibility and transparency), as well as the potential of information to produce verifiable results. The results so far show that there is a large sustainability potential in addres-sing the informatics aspects of environmental management of industrial systems, largely because of increased rationa-lity, improved quality and better effect of the efforts spent on environmental responsibility. The potentials increase as different management systems are integrated and as industries and markets globalize. Rational environmental information management that does not oversimplify com-plexities of sustainability is the next step towards a globa-lisation of the responsibility for sustainable development. Achievements need to be measured continuously, in order to be considered for continuous improvements.

1.5. Waste management1.5.1 Solid waste management

The generation of solid waste is a consequence of the economic activities in society. All products consumed by households, industries, companies, institutions etc eventu-ally turn into waste, which must be managed. In the EU-25 Member States, the solid waste generation was estimated for 2002 at about 1.3 billion tonnes. Of this, around 510 million tonnes were generated in the construction sector, 427 million tonnes in the manufacturing industry, and 127 million tonnes in the energy production and water supply sector. About 241 million tonnes were municipal waste, i.e. mainly household waste and similar waste.

The waste management in Europe so far has caused a number of environmental impacts such as climate change, health effects attributable to air pollutants such as NOx, SO2, dioxins and fine particles, emissions of ozone deple-ting substances, contamination of water bodies, depletion of non-renewable resources, noise, accidents etc. In the short-term perspective (10-15 years), solid waste management in Europe is facing two challenging developments:

1) Growing waste amounts leading to a need for in-creased capacity. Up to 2020, EEA (2005) shows



a somewhat promising trend that there will be slight decoupling between the economic growth (expressed as GDP) and total solid waste amounts within EU-25. However, the decoupling is only weak, meaning that the solid waste growth to some extent will be lower than the economic growth. In absolute terms, the solid waste amount will continue to grow.

2) A transition from landfilling to alternative manage-ment options. The Landfill Directive (Council Direc-tive 1999/31/EC) sets progressive targets over the 2006–2016 period for the diversion of biodegradable municipal waste away from landfill. The final target is to reduce the landfilling of biodegradable municipal waste by 65 % compared to the 1995 level. From an environmental perspective this development should be supported for other types of waste. According to environmental systems analyses performed on waste management across Europe40, landfilling of untreated mixed waste is clearly the worst environmental op-tion.

1.5.2.1 Recycling

There is a large potential for expanding material recycling in the new EU-10 Member States. Landfilling accounts for a much larger share of the waste management in the new EU-10 Member States compared to the old EU-15 Member States. In EU-15, systems for material recycling have been built up and are working efficiently for some materials such as paper, cardboard, glass and metals. When material re-cycling is working efficiently (i.e. small material losses, low emissions at the recycling process, and a demand to use the recycled material in products of similar type as the original product) it is clearly the best environmental option, since it reduces impacts from virgin production and the need for final treatment (see eg. Olofsson et al.2005). For example, recycling of aluminium means energy savings up to around 95 % compared to virgin production.

In this case, what could be very effective on a short term is support to technology transfer. The efficient material recy-cling systems in EU-15 should be adjusted to the specific conditions and implemented in EU-10. For efficient material recycling, there already exist well-functioning markets where there is a demand from European industries for the material. In a European perspective, this development is sustainable also from an economic perspective, since it reduces the imports of virgin materials and fossil fuels. The European recycling businesses could be further expanded while at the same time the European manufacturing industry gained by increased competition on the raw material market.

1.5.2.2 Anaerobic digestion

Another option is the increased use of anaerobic diges-tion of biodegradable waste. In the process, the waste is decomposed biologically. The main products of the process are biogas and digestion residue. The biogas consists of methane and carbon dioxide and can be purified and used in the same way as natural gas. Today most biogas is used for cogeneration of electricity and heat. If the gas is purified

to only contain methane, it may be distributed in natural gas pipelines, and thus used for a large variety of purposes, including transportation. The residue contains many of the nutrients in the waste and can be used in agriculture, thus substituting artificial fertilizers.

When working efficiently (low emissions, high biogas yield that is used for replacing fossil fuels, high quality of digestion residue resulting in a demand from agriculture), anaerobic digestion shows the lowest environmental impacts com-pared to other treatment options of biodegradable waste such as landfilling, incineration and composting. Anaerobic digestion of solid biodegradable waste has been slowly implemented in some of the EU-15 Member States during the 1990s and beginning of the 2000s. However, the tech-nology is still struggling with some problems, which have impeded a large-scale introduction on a European level. For example, the technology has shown to be sensitive to the quality of source-separation and pre-sorting, which must be high-level in order to avoid disturbances in the process.

Currently, research and development are undertaken to enhance the robustness and the efficiency of the process. The potential for reduced environmental impacts is large in all EU-25 Member States considering the targets in the Landfill Directive. A large-scale introduction of anaerobic digestion up to 2016 could help achieving the targets in the Landfill Directive. At the same time, this development will support the economic development in Europe, since it may either reduce the dependence of oil imports through the use of biogas as a vehicle fuel or reducing the emis-sions of carbon dioxide through the use of gas for heat and power generation. It will thus also contribute to the EU target on proportion of biofuels and other renewable fuels of all petrol and diesel for transport purposes (Council Directive 2003/30/EC). The Landfill Directive if successfully achieved will in 2016 divert 41 million tonnes biodegradable waste only in the old EU-15 Member States41. Assuming that 50 % of this diversion would be treated by anaerobic digestion could lead to a gas production corresponding to 20 TWh/yr. With oil prices around $ 60 / barrel the biogas production would correspond to avoided import of approximately 500-1000 million euro/yr.

1.5.2.3 Hydrothermal conversion

Biodegradable waste can also be treated thermally by numbers of technical processes, depending upon the waste material characteristics and the type of energy desired. Incineration and gasification are technologies that utilise high temperatures to recover energy from the waste material. The technologies reduce effectively the waste volume and kill pathogens. However, emissions of heavy metals, dioxins and PCBs is the biggest problem of these technologies, requiring extra flue gas cleaning equipment, which may claim for up to 30% of the investment cost of the treatment plant. In addition, the technologies are not suitable for wastes with a high water content as such of biodegradable waste. Hydrothermal conversion is an environment-friendly tech-

40 Olofsson, M., Sundberg, J. and Sahlin, J. (2005) Evaluating waste incineration as treatment and energy recovery method from an environmental point of view, 13 the Annual North Ameri-can Waste-to-Energy Conference, Orlando, Florida, May 23-25

41 Skovgaard, M., Moll, S., Møller Andersen, F. and Larsen, H. (2005) Outlook for waste and material flows. Baseline and alternative scenarios, ETC/RWM working paper 2005/1, European Topic Centre on Resource and Waste Management, Copenhagen, Denmark



nology, employing the subcritical conditions of water for decomposing biodegradable material, harmful substances such as PCBs and dioxins. It was also reported that heavy metal contaminants that had been subject to this kind of treatment were converted to benign forms. The idea is that above the critical point of water (647 K, 22.1 MPa) water forms a single homogeneous phase, which allows the oxi-dation reaction to proceed rapidly. Most organic carbons are rapidly and completely decomposed to carbon dioxide via organic acids and most of the nitrogen compounds to gaseous nitrogen via ammonia due to strong oxidation by water with some oxidants in supercritical conditions. The idea has been extended to subcritical water conditions (473-647 K) in order to provide much wider and milder reaction conditions. Since hydrolysis becomes a dominant reaction under subcritical water conditions without oxidants, organic acids, amino acids, and fatty acids are expected to be produced from the biodegradable waste by choosing proper reaction conditions. These substances would be used as the resources for many other industries. In certain circumstances, crude oil or the like are produced as the reaction products, which can be easily separated from the aqueous phase by quick splashing technique. It is also re-ported that the separated aqueous phase has a significantly reduced COD level and thus be suitable for discharge to the environment. The solid residue is well suitable for use as fertilizer with no harmful substances or a bad smell.

The technology would be also useful for conversion of biomass to produce renewable chemicals and energy. With zero waste and no emission, the technology would be one of the best choices to approach a Green Chemistry Technology.

1.5.1 Sustainable recycling of nutrients from human and animal excreta

Recycling of nutrients between urban areas and farmland is a critical step towards an ecologically sustainable de-velopment. The problem is related to recycling of limited resources (phosphorous), energy savings (nitrogen), water management and eutrophication. The problem is global, and various approaches and solutions have been sought to close the nutrient and water loops. Nitrogen (N) phosphorus (P) and potassium (K) are the most interesting macronutrients for this type of recycling. Most of these nutrients come from human and animal excreta (urine and faeces). Therefore, source separation has been proposed as an alternative to the use of sewage sludge to achieve recirculation of nutrients.

However, these thoughts have not been realized and, therefore, the nutrient loop between the urban areas and farmland is still broken. Studies have shown that storage and transportation of large amounts of urine, as well as spreading and hygiene, are the main obstacles in achieving system efficiency. In the case of the municipal wastewater treatment plants a similar broken loop is related to the pos-sibility that metals, organic substances or pharmaceuticals contaminate the sewage sludge.

1.5.1.1 Mineralisation of nutrients in urine

Through addition of small amounts of MgO (natural chemical obtained from dolomite) and zeolite to human urine all of the phosphorous (P) and significant parts of the potas-sium and nitrogen were precipitated as crystalline struvite

(ammonium-magnesium phosphate) and mineralised nitro-gen42. By these means 98-100 % phosphorous, 60-80 % nitrogen, 30 % potassium, 3 % calcium, and some sulfur (all macronutrients) can be recovered in 25-35 g solid mineral form from one liter (ca 1 kg) urine. This means a 30–fold concentration (or volume reduction), which facili-tates storage, transport and hygenisation.

The solids are well-known slow release fertilizers, which reduce the risks for burning of plants, leakage to ground-water and nitrogen loss as NH3 (ammonia) evaporation. The added struvite precipitation agent (MgO) is made of dolomite, which is found worldwide, not being a scarce re-source. The adsorbent type can vary depending upon local conditions. Zeolites are present almost everywhere on earth in soils (Scandinavia is one of the few exceptions!), and are also mined worldwide for their special properties and areas of application. Their beneficial effect in agriculture is well known in the field of ‘zeo-agriculture’. Zeolite prices are very low on the global market (75-95 USD/ton).

1.5.1.2 Utilisation of sludge and sludge products

There are also technologies that have been developed and tested for increasing the quality of sludge, at least regarding metal contamination. One of the methods is bioleaching by Thiobacillus ferroxidans, by which metal concentrations have decreased up to 90 %. The quality of the product has been tested in laboratory with promising results, but no field experiments have been conducted, so its value as a fertilizer has yet to be proven. Another alternative is to leach the P, as phosphate, and recover it as a precipitate. This is so far practiced in at least one sewage treatment plant in Japan and in a plant for piggery and cow manure in the Netherlands. In this case the residue is useless and has to be burnt to recover its energy content. Yet another approach is drying and pelletization, which have been found to increase the leaching of heavy metals and the toxicity of the groundwater43.

Thus, there is room for improvement in the handling of sludge, in order to recirculate its nutrients. Presently the sludge is either stored or mixed with other material before it is “deposited” on non-agricultural soil (golf courses, road sides, parks etc). This is certainly not a sustainable solution. A sustainable solution must include trust in the handling of sludge.

1.5.1.3 From waste to resource thinking

Working with new, innovative processes requires a total openness to many research areas and innovations. It also requires courage to test new ideas and try new approaches, to combine different methods and fields of research and use them in new ways. In this case research results from medical science (urology) were combined with chemical processes and crystallography, experiences from agricul-tural sciences, ecotoxicology, Life Cycle Analysis (LCA), and knowledge from geology and even from space science (NASA experiments on life support systems and crop culti-

42 Ganrot, Zs. (2005) Urine processing for efficient nutrient recovery and reuse in agriculture. PhD thesis, Department of Environmental Science and Conservation, Göteborg University.43 Fjällborg, B (2005) Hazard assessment of heavy metals in se-wage sludge. PhD thesis, Department of Environmental Science and Conservation, Göteborg University.



vation on space shuttles!). Taking everything down on earth and into our everyday life to try to find innovative solutions for sustainable wastewater management and agricultural practice is really requiring a lot of boldness and new ways of thinking and seeing the advantages.

Sewage sludge has, for many years, been regarded as a waste problem in most parts of Sweden, and with the prevailing debate no farmer is prepared to take the risk of utilizing it for crop production. Recent studies show a large variation in sludge quality among sewage treatment plants. Wheat could be produced with good results when grown in pure sludge from some wastewater treatment plants, while almost no growth occurred in sludge from some other plants. The nutrients from sludge could be utilized in two principal ways, either as a whole dry product or as a nutrient extract, where the remaining part is burnt for energy.

1.5.1.4 Environmental benefits

Until now nutrient recovery in solid form is the only one re-covering all the phosphorus, most of the nitrogen, together with potassium (and several other nutrients like calcium, sulphur, magnesium) as solid, slow-release fertilizer from human urine. The technique for nutrient recovery as solids from human urine can also be applied on bioleached sludge. The conversion of the nutrients into a dry product will facili-tate storage, transport and hygienisation. This is, therefore, a major step towards a management and technology for recycling of nutrients from human excreta, which can gain social acceptance. This method can also save energy as well as clean water.

Nutrient recovery by struvite precipitation and mineral ad-sorption from human urine and sludge opens totally new opportunities to solve the obstacles known today in closing the nutrient loops between urban areas and farmland. The method is applicable at all scales from one house to a whole community.

Environmental aspects of recirculating nutrients from human excreta are related to pathogens, heavy metals, persistent organic compounds, hormones and pharmaceutical resi-dues. This will be dealt with by application of appropriate chemical, microbiological analyses and bioassays.

Perhaps the most important implication of this method is the energy savings. These are related to not having to remove P (by Al or Fe precipitation) but recover it as struvite in combination with N (which is a product) and to first remove N (as N2) in the sewage treatment plant and then to produce it elsewhere from N in the Haber Bosch process, where nitrogen in the air is fixated, which is very energy consuming. Energy is also saved when the weight of the recovered nutrients is reduced. This reduction is 30-fold for the urine mineralisation and probably 10-30-fold for sludge refinement. Thus, a 30-fold saving of energy would be realistic for both alternatives, only by transport work reduction. Other major energy savings are those related to production and transport of inorganic fertilizers.

1.5.1.5 Industrial opportunities and products

The approach presented above could (1) solve a waste and wastewater related problem in urban settlements and in the mean time (2) develop and produce a natural ferti-lizer (in solid form) with high nutrient qualities, good plant

availability and (3) with considerable potential for reduction of eutrophication caused by wastewater and agricultural sources. This double or even triple utility is important in order to realize our common main goal and vision regarding sustainable, closed nutrient cycles between urban areas and agriculture.



As we seen in chapter one, there are a large variety of technologies that may be adopted. Some are already cost-effective, whereas other face institutional barriers such as energy efficiency measures, or need support to be commercial available such as gasification of biomass. In this chapter we discuss some policy instruments that efficiently may promote sustainable investment options. We will focus on three different categories of policy instru-ment, all important for a portfolio to promote a sustainable development, these categories are getting the price right, improve market conditions and moving new ideas from research to the market.

2.1 Getting prices right Why is there the continued emphasis on resource inefficient technologies and too little promotion of efficient technolo-gies? One answer is that actual market prices do not reflect complete and long term costs. There are externalities that are not reflected in the prices. Correcting externalities can be one response in a portfolio; but first what exactly is an externality? In general an externality is when production or consumption of a product also unintentionally affects other people. An example of a broad negative externality is pol-lution. Pollution directly harms people. Economic theorists’ contend that for markets to work efficiently, people should be compensated the price for accepting that harm such as the costs for individuals to purchase breathing masks, or hospital expenses due to ailments from the pollution. But since it is difficult to determine who is responsible for the pollution or the actual costs incurred by individuals, costs are often not internalised. This means that society in general bares the costs of the harms created, making the actual price consumer’s face also misleading. National and EU policies have been designed to cope with such externali-ties. An important question is which policies are working and how these policies might be further strengthened to help bridge the gap. The improvement of such markets, where they exist, or to create markets where they do not, is an important task. Getting prices right can stimulate the introduction of new technologies as well as hamper demand for environmentally harmful goods.

TaxesThe main purpose of environmental taxes is to reduce the demand for an environmental harmful product and/or to promote more sustainable technologies. The best-known environmental tax among the member states is the gasoline tax. The gasoline tax was introduced after the oil crises in the 70s to reduce the oil dependency. Even though the tax has not been an effective mechanism in altering fuel choice for transportation (the transport sector is still totally dependent on oil), there have been impacts on demand. Calculations have demonstrated that since the 80s, if all OECD countries had applied the same gasoline tax level among the member states, the emission of carbon dioxide from the transport sector in the OECD would have been 40% lower, a larger reduction than proposed in the Kyoto protocol. Conversely if US gasoline tax level (85% lower than the European) had been applied in the OECD the emissions would have been roughly 40% larger44. Other environmental taxes are applied in many member states, for instance direct taxes on sulphur, carbon dioxide and nitrogen emissions. Envi-

ronmental taxes have, however, additional benefits since they generate income for governments. This means that other taxes on goods and labour may be decreased. Since taxes on goods, if the market is ideal, distort the economy, there is an additional benefit from taxing adverse impacts instead of positive contributions to economic output. In this perspective the proposed initiatives in Platform for Action on taxation is welcome. One idea is that Member States should exchange experience and best practice on shifting taxation from labour to consumption and/or pollution in a revenue-neutral way. Another idea is to promote the use of infrastructure charging, drawing on successful local congestion charging schemes and EU wide infrastructure charging for lorries.

Reduction and abolishment of harmful subsidies. EU Member States have a number of subsidy schemes, of which some are harmful to environment. The EU directive about coal subsidies fixes the date of abolishment of the subsidies to no later than 2010. However, there is much more to do in the areas of subsidies to fishery and agricul-ture, of which the effects sometimes are very harmful to the environment. Not only are these subsidies problematic in an environmental sense in Europe, they are also a major obstacle at the global level. If EU wants to seize a world leadership in promoting sustainable development, for example in terms of the Millennium Development Goals, such subsidy schemes must be substantially reformed, if not completely abolished.

Emission Trading SchemesA more recent tool that has been implemented specifically to reach the EU’s Kyoto target is the European Emission Trading System (ETS). ETS places a cap on the carbon dioxide emissions from larger industries and power plants and allows for trading of emissions permits. Thus, compa-nies for which it is inexpensive to make emission abatement can sell their emission reductions to companies for which it is cost more to reduce emissions. Since the emissions trading system started January 1 2005 the price of emitting 1 ton of CO2 has been 15-25 euros, which have raised the incentives for energy efficiency measures and investments in renewable energy sources.

The ETS system is presently in a trial period. For the period 2008-2012 when the Kyoto targets enter into force, each member must decide upon how large part of the emission reductions that should take place within the trading sector (inside the ETS) versus the non-trading sector (sectors outside ETS, mainly transport and local heating). The trade-off is delicate since in the trading sector it is generally less expensive to reduce carbon dioxide emissions than in the transport sector. On the other hand many export industries that must compete with companies on the international market (which don’t have to pay for the carbon emissions) are in the trading sector. Thus, a choice must be made between protecting energy intensive industries and making the emission reduction as cheap as possible.

2. Policy instruments

44Köhlin G., Sterner, T. (2003) Environmental Taxes in Europe Public Finance and Management, 3(1), pp 117-142, ISSN Number 1523-9721



The emissions in the trading sector are determined by the amount of permit allocated to industries, whereas the emis-sion reduction in the non-trading sector must be obtain by domestic taxes or other measures. If many member states allocated a large amount of emission permits to the trading sector this means that the permit price will be lower, but that strong action would be required in the non-trading sector (or that emission permits are bought from Russia). If relatively few permits are allocated on the other hand, less action would be required in the non-trading sector, but the permit price would be higher, which then mainly would affect the energy intensive industries and the electricity price.

If companies perceive that their future emission allocations may be based on their present emissions this gives disincen-tives to abate emissions today. For these reasons auctioning of emissions permits are an attractive options for the ETS in the future. If protecting the energy intensive industry is perceived as vital a middle way may be to allocated permits based on benchmarking to industries that compete at the world market, whereas permits to the electricity and district heating sector are auctioned.

EU may also use emission trading to handle other emissions than carbon dioxide. In the Platform for Action the Commis-sion has proposed to further develop the ETS and consider its extention to other greenhouse gases and sectors, such as aviation. Another option may be to use emissions trading to reduce acidification emission from shipping. Shipping cargo transport carries about 70 percent of all trade between the EU countries and the rest of the world. Sea transport uses only 1/8 as much energy per ton kilometres as railway trans-port. The ratios are even higher compared to road and air transport. Despite this energy efficient mean of transporting goods, ships account for more than half of the Northern Hemisphere’s SO2 emissions and more than one tenth of the world’s NOx emissions. Effective techniques exist for reducing these emissions. The main issue is how to resolve financial problems so that the technical solutions can be implemented. An emission trading system may be an ef-ficient way to give the right incentives in order to reduce the emissions. Still, further investigations are needed in order to establish a regime suitable for the shipping industry.

2.2 Incentives to improve market conditions

In many cases price setting is neither appropriate nor suf-ficient to promote sustainable investments. Pricing may be inappropriate if emissions are hard to monitor, for instance, local pollutants from cars. Pricing may also be insufficient if there is lack of information on how to avoid the emis-sions, or if there are large transaction costs associated with abatement of emissions. This is particularly often the case in the residential sector. In these cases standards or performance targets may be appropriate. A typical area for standards is energy efficiency standards for household appliances and cars. The goal is to limit the energy use for a certain service or product. The producer may, thus reach the standard with the technology that suits the company best, which is an important feature since policy makers in general should avoid choosing a specific technological design. Lessons can be from examples in other countries as well as from the EU. A few examples and initiatives will be presented below.

The California policies for clean cars. In the 1990s California launched an ambitious program to promote the use of zero emission vehicles (ZEV). The car manufacturers were obliges to sell 2% ZEV in 1998 and 10% in 2003. According the original definition of ZEV only electric cars qualified. The ZEV program was renegotiated because the targets could not be met and new types of cars were given credit such as hybrid cars and natural gas cars. The Californian program has though promoted the development of low emission cars domestically in the United States, and has spurred the development of hybrid cars in Japan.

The Japanese Top Runner system. In Japan the Top run-ner program aims to improve the energy efficiency for 18 different types of products such as cars and refrigerators. Performance targets are determined three to twelve years ahead and are based on the present best performance. Ho-wever, the performance target is formulated as an average performance. Therefore each company may produce some products with worse performance if they also supply other products with better performance. Thereby, both flexibility as well as technological development increases.

EU Energy Performance in Building Directive. The EU directive 2002/91 states that all member are obliged to introduce energy certificates for buildings and introduce minimum standards for new buildings as well as for larger buildings that have undergone main renovations. Minimum standards, if sufficiently stringent, promote more efficient buildings. Additionally, energy certificates provide con-sumers with information on the energy efficiency of the building, information that the consumer often lacks. It is important to have a flexible stance on standards. A stringent performance target today may be not applicable in ten years. There is also a risk that products just meet the standard, but do not increase the performance additionally, thus the standard may in the long run hamper rather than promote technological development. The proposal in the Platform for Action on an action plan for energy efficiency is welcome, emphasising the need for a strong push on energy savings in buildings to go beyond the current laws on energy per-formance to help households in particular.

Performance Targets. In the ETAP a more general concept for energy and environment performance was proposed, labelled performance targets and performance verification. Still, the definition of performance targets is to be decided. Targets must be stringent and long-term to drive new technological development. The targets should be met at the company level rather than at the sector level. Making individual companies, rather than the sector, responsible for meeting the targets, will make strong reinforcement easier to apply. There may also be advantages in having a rather automatic update of the performance targets, for instance the best performance in the industry should be the average performance ten years later. Therefore there are additional benefits for the company being the first mover, since the best performing company actually set the norms for the years to come. Recently, the Commission has launched two tenders preparing for an implementation of pilot cases of Performance targets, showing that the concept now is “transferred” to the implementation phase. Still, in this field the EU lags far behind Japan, using the Top Runner Programme as a driver for technology development and environment protection. A matter of concern is that the European strategy for the implementation of the Perfor-mance targets differs from the Japanese Top runner in the



sense that it lacks a legislative incentive. The success of the implementation in Europe is therefore considerably more uncertain.

Public procurement. Public procurement could have significant benefits for the development and implementa-tion of resource efficient technologies. Public authorities across the EU spend about 16 % of EU wide GDP for purchasing goods and services. Originally, the EU legal framework didn’t contain any reference to the possibility to integrate environmental consideration into a public pro-curement procedure. A new public procurement directive was adopted by the Council and the European Parliament in 2004. The main purposes were simplification, clarifica-tion, and modernisation, including provisions for “green procurement”. This enables contracting authorities to ask for products with environmental friendly production methods or to award extra points for products manufactured as such. It also includes the possibility to define technical specifica-tions in terms of performance or functional requirements, including environmental characteristics. In the Platform for Action the Commission has announced a package of measures to improve the environmental performance of cars by promoting clean and efficient vehicles including a Directive on the procurement of such vehicles, new vehicles standards and increasing use of biofuels.

2.3 Moving new ideas from research to markets

Many green technologies today are immature, which is associated with high costs and low performance. As well there exist institutional and regulatory obstacles that keep these technologies from entering the marketplace. One effective way to make an immature technology mature is investment. As investments are made performance impro-ves and institutional obstacles diminish. However, since immature technologies in general are too expensive for the market, the market does not make any heavy investments and thereby the immaturity remains. In order to escape this problem, technology-specific polices is a potentially strong instrument. It is important to note that technology specific polices may be effective to induce technological change, but not ideal to hamper environmental problems in the short run. Still, since sustainable development is a long-term process, it is important to make new technology available for the market, otherwise it may be very hard to reach long-term objectives.

In the Communication on ETAP these questions were discussed and policies were proposed such as leveraging investments, public support for demonstration projects, general price instruments and public procurement. These policies are all vital, and it is important that they are imple-mented by the member states.

However, to guide a new technology to the market several also other measures may be necessary. First actors network have to be crated as is done in the technology platforms launched in the Community. Thereafter, in the early stages the development of a technology, when it is still unproven, demonstration projects may be required. Further technology specific polices for diffusion such as certificate trading and feed-in tariffs may be useful tools to create a niche market for new green technologies. Below we discuss these dif-ferent kinds of policies.

Technology Platforms. Technology platforms are based on initiative by the EU Commissions to launch research in key areas. The idea is based on bringing stakeholders together (industry, consumers, NGOs and public authorities etc) defining a strategic research agenda for the future. Ho-wever, it is the stakeholders who owns the process and the EU Commission do not have a unique decisional role in the process. There are now more than 27 technology platforms in place at different level of development. In order for the platforms to work successfully it is important to have a wide stakeholder involvement, an open and transparent process and that the research has real value for the community.

Important features of a sustainable energy system are ex-plored in the platforms for Hydrogen and fuel cell, Photovol-taics, Zero emission fossil fuel power plants and Innovative and sustainable use of forest resources. Three technology platforms deal with transportation, both from a competi-tiveness and environmental perspective, these concerns road, rail and waterborne transport. Further the platform on Water Supply and Sanitation Technology include research to improve water quality and sludge management. Finally, several platforms relate to biotechnology which also may have importance for sustainable development as we have discussed in this report.

Demonstration programmes. Demonstration program-mes are typical instruments used for the support of tech-nologies in a very early phase in the technology life cycle. Demonstration of a technology may be a test of a prototype of a specific design. By testing the technology, important factors, both positive and negative, can be identified and the uncertainty associated with new technology can be reduced. Thereby the technology becomes a more attrac-tive option on the market. Additionally, and as important, actor networks tend to be created around demonstration projects, which are necessary for the further development of the technology and the market for the technology. This type of action is typically promoted through the EU technology platform framework.

The principle should be that the demonstration program-mes should support diversity through learning in multiple technologies. Thereby more technologies may in a later phase be tested at the market, and the risk for technologi-cal lock-in is reduced. In general, it can be argued that not enough resources are spent on demonstration programmes. Quite few projects have to be involved (even if a variety is supported), and therefore the costs are tiny in comparison to a general tax exemption scheme or larger programmes for technology specific polices, such as green certificates or feed-in tariffs45.

Certificate trading. In the certificate trading system a part of the market is reserved for a group of technologies, e.g. that a certain percentage of the electricity consumption must be supplied with renewables. This means that a niche market is created where the immature technologies receive a higher price than what they would receive through the

45 Sandén, B. and Åstrand, K. (2005) ”Technology Selec-tion and Learning: Two Functions of Market-based Policy Instruments for Efficient Climate Mitigation”. in Åstrand Energy Policy Instruments: Perspectives on Choice, Design & Eva-luation. ISBN 91-88360-79-2, Doctoral Thesis, Environmental and Energy Systems Studies, Lund University



marketplace. In this system the level of diffusion for a group of technologies is granted, but the prices are not. This is one of the main problems with certificate trading systems, since uncertain prices in general makes new investments less attractive.

Feed-in tariffs. Feed-in tariffs have been successfully used in Germany to promote diffusion of wind power and solar power diffusion. It could be considered the reverse of certificate trading. In this system, the price is granted for each produced unit during a long period of time, but the level of diffusion is unknown. This means that a large part of the risk typically associated with immature technologies is removed, making investments more attractive. But if prices are set too low, no investments will be made; if prices are too high excess profits are created.

Contact EPSD

Bo Samuelsson, Chairman EPSDe-mail: [email protected]: +46 706 931883

Helene Bergsten, GMVe-mail: [email protected]: +46 31 7724950

www.gmv.chalmers.se/epsd

appendix sustainable technology options and … hgt/epsd06...appendix - sustainable technology...

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