The European Commission has just published a study* commissioned by the Enterprise & Industry DG saying that policy makers should consider the environmental and energy benefits of glass when designing…
The European Commission has just published a study* commissioned by the Enterprise & Industry DG saying that policy makers should consider the environmental and energy benefits of glass when designing new environmental policies. The study looked at the competitiveness of the glass industry which encompasses a lot of different products: high quality pharmaceutical and cosmetic glass containers, packaging for food and beverages, energy saving glass used in the construction, automotive, and composites industries, as well as in electronic and domestic appliances, through reinforcement and insulation fibres, tableware, and special glass for high-tech applications. The study says the glass industry can improve the image of glass by promoting its products which contribute to huge energy-savings in our society. Low-E windows (coated glass with very good insulating properties), solar control glass (which drastically limits the use of air conditioning), self-cleaning glass (which reduces maintenance) are such examples as well as insulation products like glass fiber, foam glass, reinforcement glass fibers (for lightweight applications such as windmills, blades, automobiles). Other examples bring together the high quality and safe packaging for pharmaceutical products and the promotion of container glass as a 100% infinitely recyclable product that is pure and natural. All of these elements combine to reduce the need for natural resources, CO2 emissions, energy use, etc. The study shows how the environmental advantages of recycling glass may be lost if the industry, which is the major buyer of recycled glass, moved production to lower manufacturing cost regions outside of Europe. Glass is also a reusable product and falls perfectly in line with the EU“s Waste Framework Directive hierarchy. The publication of the report is timely, coming in the midst of discussions on applying a revised EU Emissions Trading Scheme (ETS) to the glass sector which will see the industry“s costs for CO2 rise with the introduction of an auction system. The European glass industry is the worldwide benchmark. With carbon leakage (relocation of production in countries where no carbon-constraint exists) there will be a great loss of innovation and ongoing development of new technologies in the EU. Phase III of the EU ETS will have a major negative impact on the industry: a projection for the UK glass industry forecasts a three to four-fold increase in direct CO2 purchase costs over 2013-20. These burdens, imposed at the production stage, disadvantage glass over substitute materials, whose impact on the environment arise further down the supply chain. A more level playing field could be achieved by considering the whole life cycle of the product, the report says. The relatively high energy intensity of glass production makes reducing carbon dioxide emissions a major challenge. The review shows that the technologies used in glass production to minimise energy use are already mature and that short-term future increases in efficiency are likely to be limited. The study acknowledges that manufacturers are close to the physical limits of efficiency due to the laws of thermodynamics and the limitations of modern materials for furnace construction. Indeed, taking advantage of the need inherent to the glass industry to periodically rebuild furnaces, all sub-sectors have implemented with each rebuild the most recent technologies in burners, refractories, furnace design, etc. The study recognises that since the 1960s, the glass industry as a whole has reduced specific energy consumption by approximately 1.5% per year, i.e. by ca. 50% in total. A lack of competition in the energy market has a further impact on the glass industry. The report shows that there is substantial variation in electricity prices within the EU where the median electricity price increased by 64% between 2004 and 2007 while for gas it increased by 50%. A consequence of this imposed competitive disadvantage is that energy costs are likely to account for a far larger share of operating costs than before. Most glass products are consumed by other industries in the business-to-business market. This limits the ability of the glass industry to pass on costs of ETS as consumers and consuming industries may choose to substitute glass products with non-glass products, e.g. polymers, plastic, steel, aluminium or carton products. The ETS Regulation that applies to the glass industry does not necessarily apply to the industries where the substitutes are produced. Another competitiveness problem that the EU glass industry faces is the relocation of production outside of the EU where environmental regulation in the worst case is non-existent and in many cases less stringent, and where health and safety laws are more relaxed. Relatively high levels of EU regulation have meant that EU glass producers are no longer competing on a level playing field in the global environment and this is handing a competitive advantage in certain markets to non-EU firms. Carbon leakage is a real threat exacerbated by the expansion of capacities in non EU countries especially those that neighbour the EU borders. Over 2004-09 an estimated 7.3 million tonnes of production capacity will be added across several countries, including Russia, Ukraine, Belarus, Qatar, UAE, Egypt, China and other Asian countries as well as North Africa“s Tunisia and Morocco; this reinforces the need for policy makers to ensure that EU glass producers are operating on the same terms. Despite competition from low cost glass products being imported, the report shows that the EU is still a major global player in several areas of the glass sector. The report calls for the branding of glass as a energy-friendly product and suggests that policy makers push on to improve recycling, building insulation and the functioning of the EU energy market – promoting competition in energy markets and development of a pan-EU electricity grid. The competitiveness study on the glass industry is available at : http://ec.europa.eu/enterprise/non_metallic_mineral_products/finalreport_glass_141008.pdf *FWC Sector Competitiveness Studies Competitiveness of the Glass Sector within the Framework Contract of Sectoral Competitiveness Studies ENTR/06/054, Final Report, 14 October 2008.