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By Jim Dills, Green EcoSystems Group
In the new green business climate, global manufacturing companies must continually assess and improve their products and processes to retain customers; gain competitive advantage; and comply with environmental legislation like RoHS, REACH, WEEE, and EuP. Eco lifecycle assessment and improvement processes are required for the management of the critical environmental aspects and impacts of product toxicity, waste stream management, and energy use.
Figure 1 summarizes the relevant stages of the eco lifecycle for both products and processes. Products and processes should be assessed based on inputs expended and outputs generated across each stage of the eco lifecycle.
Traditionally, most manufacturing companies have not viewed raw materials extraction or processing as relevant to the overall lifecycle of their products and have not considered the input/output costs of both of these stages when determining total product cost. All stages in the eco lifecycle should be considered, assessed, and optimized to maintain competitive advantage in the new green business climate. European Union (EU) legislation such as Energy using Products (EuP) requires that manufacturers accurately track and report the eco lifecycle costs of their products. Companies that market products from the perspective of total input/output costs and benefits across all stages of the eco lifecycle will garner more market share, positioning their brands as more "Green/Ecosystem-conscious" and their companies as more socially responsible from an environmental perspective.
Eco Lifecycle Market DriversThe areas of eco lifecycle assessment, improvement, and innovation will become increasingly important for companies wishing to compete in global markets. The EU continues to be the champion of legislation focused on reducing product toxicity, hazardous waste, and energy use of products. Current EU directives such as Restriction of Hazardous Substances (RoHS), Registration, Evaluation and Authorization of Chemicals (REACH), Waste Electric Electronic Equipment (WEEE), and EuP are examples of key legislative drivers for improvement of each of the core environmental aspects within an eco lifecycle. A key business driver for any manufacturing company is the establishment of competitive advantage. In a green ecosystem, this is achieved by considering the company's accomplishments and direction in product toxicity, waste stream reduction, and energy utilization, as well as rapidly implementing eco lifecycle product/process improvement plans.
Product Toxicity Considerations in the Eco LifecycleThe objective of global RoHS legislation is to eliminate toxic substances in electronic products. The initial group of RoHS substances included lead, mercury, cadmium, chromium, polybrominated diphenyl ethers (PBDEs), and polybrominated biphenyls (PBBs). EU currently is "recasting" its RoHS restrictions, and as of now, four additional substances are under review and will most likely be added to the current list of RoHS substances in late 2010. These substances are hexabromocyclododecane (HBCDD), bis (2-ethylhexyl) phthalate (DEHP), butyl benzyl phthalate (BBP), and dibutylphthalate (DBP). Their addition will significantly impact electronics manufacturers as all four are used as flame-retardants or plasticizers in electrical and electronic equipment.
REACH legislation, which went into effect in 2007, poses significant business risk for all manufacturing companies. REACH compliance is mandatory for all companies that put raw chemicals on the EU market, as well as all producers that ship products, or articles, into the EU, regardless of industry. The deadline for the pre-registration of substances put on the market in excess of one tonne per year was December 1, 2008. U.S. manufacturing companies and their customers must now contend with toxic substances or substances of very high concern (SVHCs) that are in articles they sell into the EU. Currently 15 substances have been officially designated as REACH SVHCs. Around 200 additional substances are expected to be added to the SVHC list in 2009; this list is expected to reach 3,000 substances by 2018. For more information on REACH's effect, read REACH Exposed: Stressing Environmental Compliance.
Waste Stream Considerations in the Eco LifecycleIn addition to recasting RoHS, the European Commission has proposed to reshape the WEEE directive. A draft of the revised WEEE Directive was released on December 4, 2008, and adoption of final texts is not expected until later this year. Significant proposed revisions include:
- •Harmonization of registration and reporting. •Interoperability of registers.•New binding targets for EEE collection.•Recycling/ recovery targets for re-use of whole appliances.•Targets for the recovery of medical devices.•Scope of WEEE to be included in RoHS.•Clarification of scope, definitions, and exclusions.•Increased minimum inspection, monitoring, enforcement requirements.
While producers of EEE will benefit from proposed harmonization of registration, reporting, and clarified/ fixed product lists, producers must ensure full compliance in preparation for proposed increases in enforcement, inspection, and monitoring requirements of products/shipments.
Energy Usage Considerations in the Eco LifecycleThe EU implemented an ambitious energy program under the EuP directive to address the security of its energy supply, also addressing energy-related health and environmental issues. A key aspect of the energy program requires/incents manufacturers to reduce environmental impacts associated with all stages of the eco lifecycle for their energy-using products. EuP energy-efficiency requirements, which became enforceable in January 2009, require that standby electricity consumption be cut by almost 75% by 2020. By 2010, the standby power consumption of equipment in any condition has to be less than 1 W if the equipment is providing a reactivation function or 2 W if the equipment is providing a status/information function. These values will be lowered in 2013 to 0.5 and 1 W, respectively.
Companies whose products fall within the scope of EuP will face several data collection challenges. They will be required to collect and report upon various energy metrics related to the energy use of particular product groups.
Most importantly, EuP introduces additional requirements that are potentially far more challenging than RoHS, REACH, WEEE, or any other current legislation. Companies will be required to provide ecological profiles of their products, necessitating information on material and energy inputs and outputs. Ecological profiles must include information specific to the environmental aspects for each stage of the eco lifecycle, starting with extraction of raw materials from the earth and/or use of recycled materials and continuing through the processing, manufacturing, distribution, and use stages; profiles end with the product disposal stage.
Eco Lifecycle Improvement ProcessesEco lifecycle improvement processes require focus on four major areas, demanding communication with a company's upstream supply chain as well as its downstream customers. These processes are identified in the green ecosystem process improvement matrix in Figure 2 and are summarized here.
Initially, companies should perform an internal assessment as well as an assessment of their upstream supply chain. Key tasks include determining the company's Eco Lifecycle position and conducting an Eco Lifecycle gap assessment. The second process companies should implement is conducting an inventory of all of the substances used, waste streams created and energy consumed for each of its products and internal manufacturing processes. Key tasks for this process include collecting toxicity data, collecting energy consumption data and establishing a cost for both product and process waste stream management.
The third process is analyzing data that was collected during the inventory process. Key tasks include identifying competitive threats, product/process risks and quantifying the input/output impacts of toxicity, waste and energy use for each product and process. Finally, companies should develop their implementation plan. Key tasks in this phase include assigning resources and identifying Green EcoSystem knowledge management technologies.
Recommended Actions for Manufacturing CompaniesCompanies will continue to be asked by their customers to provide substance level information regarding the chemicals and the products they sell to them. Even if a company does not export products directly to the EU, at least one of its customers most likely does and will require substance level information for each component it buys. If you have not yet started to collect full disclosure substance data for your products, you should start immediately. While manufacturing companies have resisted data collection activities at this level because it is hard work and the accuracy of the data received is always suspect, they need to overcome this mindset and aggressively pursue full disclosure data collection.
To keep customers happy and reduce internal costs associated with "greening" your company, conduct an initial eco lifecycle assessment to determine how environmental legislation and competitive pressures will affect your business, disrupt your supply chain, and influence your strategic customer relationships. Next, prioritize products or product families affected by legislation and competitive threats. Collect full disclosure, substance-level data for your products. Conduct substance inventories initially focused on your upstream product supply chain and chemicals used in your internal manufacturing processes. From there, rapidly implement eco lifecycle improvement and innovation programs. Consider outsourcing eco lifecycle assessment, improvement, and innovation programs to companies that specialize in this area.
Jim Dills, Green EcoSystems Group, may be contacted at (719) 488-0500; firstname.lastname@example.org.