Eco-Efficiency Analysis- A Sustainability Decision Tool for BASF A. Kicherer (Ludwigshafen, Germany)

1. Validated Eco-EfficiencyAnalysisMethod Eco-Efficiency Analysis- A Sustainability Decision Tool for BASF A. Kicherer (Ludwigshafen, Germany)

2. The Ludwigshafen site • BASF’s largest production site worldwide • 8,000 sales products • 2,000 buildings • 70 miles of roads 150 miles of rail track • 35,000 people (83,000 worldwide)

3. SEEbalance®-Analysis* Eco-Efficiency- Analysis * being developed Sustainable Development is based on three Pillars Sustainable Development Ecology Society Economy

4. What is Eco-Efficiency Analysis? • Method for the comprehensive assessmentof products and processes. • Ecological and economic aspects are given equal weight in assessments. • The products are analyzed from the angle of the end customer. • (Future) scenariosand effects of various action options are presented. • Eco-efficiency analysis is a standard tool in the BASF Group; more than 240 analyses have been carried out.

5. Project Furniture Clear Coat

6. NC-lacquer(established technology) PUR-lacquer (market leader) UV-powder (new technology) UV-water (new technology) Alternative Systems for Furniture Clear Coat Define comparable products Determine demand- specific benefit Coating of 1 m² furniture surface

7. UV-water Further development User spezific benefit: Coating of 1 m² furniture surface UV-powder PUR-lacquer NC-lacquer Further Development of UV-Water Technology Improves the Eco-Efficiency 0,3 High eco-efficiency Environ. Impact (normalized) 1,0 Circle size: Market share in Europe Low eco-efficiency 1,7 1,7 1,0 0,3 Total costs(normalized)

8. Communication • BASF-Coatings develops new, environmentaly friendly lacquers, even if they are innitially somewhat more expensive. • Together with customers improvements can be initiated which reduces the costs. • The eco-efficiency analysis can easily communicate these future trends and improvements.

9. Airemissions 50% Air emission 50% Greenhouse warming potential 50% Ozone depletion potential Emissionen Emissions 20% Wateremissions 35% Emissions Photochemical ozone creation potential 20% Wastes 15% Acidification potential 10% Assessment Factors of the society Energy consumption 20% Raw material consumption 20% 10% Area requirement 20% Toxicity potential 20% 10% Risk potential

10. ...Basically, the large number of indicators used in eco-efficiency analysis make relatively reliable statements possible ... Dr. Reinhard Loske Mitglied des Deutschen Bundestages Umweltpolitischer Sprecher Bündnis 90/DIE GRÜNEN ......Politically, it is worth considering how this tool can find wider application....... ....The sensitivity considerations carried out in the eco-efficiency analysis make sense and provide good orientation as regards further ecological and economic optimizations.... Öko-Institut e.V.;Bereiche Chemie und Umweltrecht Acceptance of the Method by Stakeholders, NGOs and Science ...

11. ... and the whole World. Pilot project with UNEP/UNIDO to improve the eco-efficiency of Moroccan dyehouses Assessed since 2002 as one of the world’s most sustainable chemical companies, partly as the result of the development of eco-efficient products

12. Strategy • Decisions on investments • Research/product development • Prioritization of research projects • Marketing • External customers optimize their products and processes with eco-efficiency analyses • Politics • Discussion with opinion makers in political decisions What does BASF use Eco-Efficiency Analysis for? Internal External

13. reduce costs! develop alternatives! reduce environmental impact! Consequences of Eco-Efficiency Analyses Environmental Impact (normalized) low bring to market! Depending on the position of the analysed product, different strategic recommen- dations are given. 1,0 high high low 1,0 costs(normalized)

14. Examples for More Profit Created Through Eco-Efficiency Analysis • An eco-efficiency project with a coatings customer resulted in a additional business of about 400.000 € per year. • An annual saving of 100.000 € could be obtained by an eco-efficiency analysis for transportation of chemicals. • The eco-efficiency analysis with an American customer in the aggregate sector increased the annual sales of 2.200.000 US$ by about 10% • The ROI is therefore much smaller than 1 year

15. Why is Eco-Efficiency Successful? • Quantitative results with a clear assessment • Simple and impressive illustration of the results • Scenario- and sensitivity analysis • Short timeframe (2 - 6 month) • Low costs for the analysis • Combination of LCA with LCC

16. The Eco-Efficiency Team: Our Homepage: http://www.oekoeffizienzanalyse.de

17. Back-up slides

18. Solution, electro-chemically Solution, 40% Granules, synthetically Granules, biotechno- logically Powder from plants The detailed Results can be read off in the Ecological Fingerprint Energy consumption 1,0 Material consumption 0,5 Emissions 0,0 Riskpotential Toxicitypotential

19. Raw material costs are normally small compared to total costs House Insulation Systems 160 140 120 Disposal 100 Transports DM/m² thermal insulation system 80 Adhesive and plaster 60 Aluminium edges 40 handscrafts Insulation material 20 0 Neopor Styropor Mineralfiber

20. Are you interested? How can you proceed? • Get in touch with us. (http://www.oekoeffizienzanalyse.de) • We will provide you with a tailor-made proposal. • Your own efforts to determine the input data are relatively low. • The total costs are between € 20,000 and 30,000 (depending on the complexity).

21. Opportunities for Marketing and Sales • Direct comparison with your competitor • Show your customer the superiority of your product • Label, broschures, publications • Comparison of your customers competitors • Demonstrate your customer the superiority of his product. • Common communication, label • Help your customer to optimize his processes Added value increases customer relation

22. Development of environmental protection in companies Production inte-grated environ-mental protection Product integrated environmental protection End-of-pipe technology Sustainable Development 80‘s 90‘s 00‘s e.g. Waste water treatment plants, e.g.: Residual materials of a procedure are raw materials of another e.g.: Green Engineering Social, economical and ecological aspects of products

23. Total: 28.2 kg Air 3.6 kg Water 1.8 kg Total: 6.7 kg Landfill 22.8 kg 1.8 kg 1.0 kg 3.9 kg 1991 2001 Production-related waste and emissionsPer metric ton of BASF Aktiengesellschaft products

24. Jeans Dyeing Project

25. Determine demand- specific benefit Select BASF product Indigo powder from plants synthetic indigo granules Dyeing of blue denim for the production of 1000 jeans biotechnological Indigo granules synthetical indigo solution,40%, synthetical lndigo solution, 40%, electro-chemicaldyeing process Alternative Systems for Indigo dying Define comparable products

26. Electrochemical Benefit: 1.000 jeans dyed with indigo Solution Biotechnological Granules Plants In the Eco-Efficiency Portfolio, the Environ-mental Impact is plotted against the Costs Environ. Impact (normalized) 0,4 High eco-efficiency 1,0 Low eco-efficiency 1,6 The portfolio is based onto a principle idea of Schaltegger and Sturm 1992 1,6 1,0 0,4 Total costs(normalized)

27. Consequences of the Analysis • Construction of a plant for the production of 40% indigo solution (beginning production at the end of 1999) • Increased R&D expenditure for the electrochemical process (construction of a pilot plant) • Communication with customers and professional circles • Success of the measures: Increase of the market share from 2% (1999) to approximately 40% (2002)