Green technology report_2012

Cement worksOne company’swaste canbecome another’sraw materialPage 2

Inside »

Reduce, reuse,recycleThe best thingswill come insmaller packagesPage 2

China focusBeijing mountspush for moreenergy fromrenewablesPage 2

Joint initiativesbring benefitsCompanies linkforces to educateeach otherPage 3

EnergyCarbon capture isan opportunity ripefor exploitation butincentives are fewPage 4

Monday November 12 2012 www.ft.com/reports | twitter.com/ftreports

Sustainable BusinessGreen Technology

As US citizens and agenciesembark on rebuilding dam-aged infrastructure in thewake of hurricane Sandy’sdevastation, debates will no

doubt emerge on how best to protectagainst future storms. But whileupgrading power, transport and othersystems is part of the answer, theclean up may also prompt policy mak-ers to consider the role of green tech-nology in building climate resilience.

The extent to which climate changeis to blame for Sandy is unclear. Aconvergence of meteorological factorscould have created such a storm, evenwithout climate warming. But risingsea levels will increase the impact ofstorms, particularly in coastal areas.

Many hope that as stronger evi-

dence of shifts in the world’s weatherpatterns emerges, this will driveinvestment in green technologies –those that not only help preventclimate change by reducing green-house gas emissions but that alsominimise the effects of climate warm-ing and extreme weather events.

On the global policy front, however,consensus is weak. This year’s Rio+20summit must have come as a disap-pointment to those in the clean techsector. At the summit – so namedbecause it was held 20 years after thefirst 1992 Rio Earth Summit – few newnational commitments were made andprevious targets were watered down.

In the world’s largest economy, fewUS politicians have been willing tobroach the topic of climate change

until Sandy propelled it back on tothe agenda.

Despite the lack of political will, notall is gloom when it comes to greentechnology. National governmentsare finding ways to foster the develop-ment of the sector and, in the USmany local, regional and city adminis-trations are doing the same. Mean-while, the private sector continues

to invest in clean technology.Much of the funding is being chan-

nelled into clean energy – productsand services designed to reduceenergy consumption and increase theproportion of renewable fuels in thepower supply. Nimble start-up compa-nies are driving many of the innova-tions. Examples range from US-basedAquion Energy, which has developedadvanced battery systems based onambient-temperature sodium-ion tech-nology, to Nualight, an Irish producerof energy-efficient display lights forgrocery stores that use LEDs (lightemitting diodes).

Both are among those on the 2012Global Cleantech 100 Companies, alist put together by the CleantechGroup that takes stock of companies

and types of companies that are likelyto make the biggest commercialimpact in the next five to 10 years.

In this year’s report, while thenumber of solar companies on the listis down 40 per cent since 2009, energyefficiency has 22 companies on thelist, up from 15 in 2010.

The report’s authors say companiesare increasingly seeking answers toimmediate, specific problems ratherthan investing in longer-term develop-ments with less certain goals. “Thisleads to a lower tolerance for technol-ogy risk and/or a lower tolerance forthe big bet,” writes Cleantech Group’sRichard Youngman in the report.

Nevertheless, investment in cleanenergy continues, rising to a record

Continued on Page 3

Strongerpolitical willis needed tomeet goalsGovernments, businesses andNGOs have tocollaborate if they are to reverse theworld’senvironmental problems, says SarahMurray Storm damage: New Jersey after hurricane Sandy, which some hope will revive the topic of climate change in the US Reuters

Nimble start-upcompanies are drivingmany of the innovations inthe clean tech sector

2 ★ FINANCIAL TIMES MONDAY NOVEMBER 12 2012

Sustainable Business Green Technology

After plugging a devicecalled the modlet into elec-trical outlets, people inhomes and offices can cutwasted energy by managingappliances not in useremotely via the web.ThinkEco, which developedthe modlet, did so fromwithin the walls of the NYCAcre, one of a growingnumber of incubators dedi-cated to the development ofclean tech businesses.

For the start-ups in theportfolio of NYC Acre (theNew York City Acceleratorfor a Clean and RenewableEconomy) a strong focus isthe development of technol-ogies that address energyuse in the urban environ-ment. “We want to helpdrive innovation at scaleand New York with its 1mbuildings is a huge mar-ket,” says Micah Kotch,operations director.

However, while clean techincubators aim to use mar-ket forces to drive a cleanereconomy, developing solu-tions that address issuessuch as carbon emissions,water consumption andwaste is different from fos-tering information technol-ogy or biotech innovationsin that it requires inputfrom a wide range of sec-tors and organisations.

“People have understoodthe technology involved inbuilding cleaner solutions isa lot more complicatedbecause it relies on combi-nations of hardware, prod-uct design and productdevelopment,” says ColmReilly, government andpublic sector expert at PAConsulting.

As a result, when itcomes to launching cleantech incubators, govern-ments, academia and theprivate sector are increas-ingly forming partnerships.

“The incubation of newideas needs to be supportedby a diversity of struc-tures,” says Daniel Esty,commissioner of the depart-ment of energy and envi-ronmental protection forthe state of Connecticut,which has launched a ven-ture capital fund calledConnecticut Innovations.

NYC Acre is a good exam-ple of this cross-sectorapproach. The incubator isrun by NYU-Poly, fundedprimarily by the New YorkState Energy Research andDevelopment Authority anddesigned not only to sup-port start-ups but also tohelp commercialise univer-sity research.

“And we work veryclosely with [private sector]partners like Con Edison,National Grid, Verizon,IBM, Cisco and others,”says Mr Kotch. “They serveon our advisory board, asmentors, as soundingboards, as inspiration.They’re also game changersif you’re a start-up and areable to get in to their sup-ply chain.”

Similarly, LA CleantechIncubator, a Los Angeles-based non-profit organisa-tion that receives fundingfrom the CRA/LA, a localauthority and the Los Ange-les department of water andpower, works with theregion’s research centresand universities.

Outside the US, cross-sec-tor partnerships are emerg-ing to establish clean techincubators. In February, theCarbon Trust, a govern-ment-backed advisorygroup, and General Electricannounced the setting up ofa $5m business incubatorfund designed to help Euro-pean companies developlow-carbon in technologies.

“We’re beginning to seefor the first time incubatorsnot just being created byprivate companies thatcompete with the incuba-tors from government butactually joining up thetwo,” says Mr Reilly.

For start-ups, incubatorsoffer a range of services,from physical space andsupport services, to accessto professional services,expertise and introductionsto funders: “And maybemost importantly, commu-nity,” says Mr Kotch.

However, that communitycan also be a virtual one,argues Mr Esty. His state islaunching an advancedenergy innovation hublocated at the University ofConnecticut, initially focus-ing on the development offuel cells.

Although the hub islocated at the university,“the spokes will connectcompanies across the stateand outside the university,”says Mr Esty.

Incubators can also pro-vide introductions to poten-tial customers. For exam-ple, through its links withCon Edison, NY Acre wasable to facilitate a partner-ship between the electricity

utility and ThinkEco todeploy modlets across NewYork to help manage theelectrical load demanded inthe summer by the city’s6.2m window-mounted airconditioners.

Meanwhile, for cash-strapped governments look-ing to maximise the impactof money spent on fosteringclean energy, investing inincubator facilities offers acheaper alternative to fund-ing subsidies for renewablepower and allows policymakers to make moreinformed decisions.

“If you allow govern-ments to pick the winners,you have selection basednot on prospects for eco-nomic success in the mar-ketplace but too often basedon political calculations,”says Mr Esty.

Because investing inclean tech incubatorsmeans governments are fol-lowing market capital,rather than trying to shapethe market, it lowers therisk of selecting a technol-ogy that may ultimatelyprove not to be commer-cially viable.

“The principle that gov-ernment money should fol-low private capital leader-ship is a better startingpoint,” argues Mr Esty. “Ifyou use limited governmentmoney to leverage privatecapital and piggyback ondecisions being made in themarketplace, you have amuch better strategy forsuccess.”

Put headstogether forclean thinkingIncubators

Sarah Murray findssectors joining forcesto drive innovation

‘Private sectorpartners are gamechangers if youcan get in to theirsupply chain’

Next spring, US shopperswill be able to buy a three-in-one cleaning fluid dis-penser with a trigger noz-zle. It has a twist mecha-nism that switches betweenthe three concentrates,while the refillable handlecontains water to dilutethem as they are used.

Customers can choosetheir three cleansers fromcartridges for glass,kitchen, bathroom, furni-ture and carpet.

“In trials, the initial prob-lem was overcomingsuspicion that it might bedifficult to use or fail towork,” says Kelly M. Sem-rau, chief sustainabilityofficer of Wisconsin-basedSC Johnson, which makesthe SmartTwist. “But bythe end, people didn’t wantto give them back.”

The SmartTwist, in linewith Johnson’s efforts tomake its packaging moresustainable, contains 64 percent less plastic than a sin-gle 26oz trigger bottle, andthe individual filled car-tridges weigh up to 80 percent less than their non-concentrated equivalent.

SC Johnson also met con-sumer scepticism when ittried to launch concen-trated refill pouches forproducts such as Pledge,Shout and Windex. Thepouches were designed topour well but people did notbelieve they would.

Even though concentratesare lighter to transport,convincing people they aremore convenient is a chal-lenge, says Ms Semrau. “Wechanged to small plasticbottles, which people feltwould pour more easily.”

The other problem isprice. People resent the factthat refills are not muchcheaper than newdispensers. SC Johnsonwants supermarkets toinsist that all cleaning prod-ucts should be concen-trates, as they have withlaundry products.

This would create the

volumes needed to reduceprices, says Ms Semrau.

Procter & Gamble is alsotrying to reduce plasticpackaging. Together withthe UK’s Waste &Resources Action Pro-gramme (Wrap), it hasdeveloped software thatmodels plastic bottles towork out where the stressesare.

Peter White, P&G’s globalsustainability director says:“It has enabled us toremove 14 per cent of plas-tic from detergent andbeauty product bottles suchas Olay, Lenor and Aerial.”

P&G also plans to trans-fer 25 per cent of its 2010volume of petrochemicalmaterials to renewables by2010. It has started usingbio polyethylene from sugarcane for products such asPantene.

Instead of emitting car-bon dioxide, this materiallocks it in. Greenhouse gasemissions are reduced bymore than 170 per cent and70 per cent less fossil fuel isconsumed.

P&G is using bamboo,bulrush and sugar canefibres for Gillette FusionProGlide, cutting packaging

weight by 20 per cent andplastic by 50 per cent.

Toy manufacturer Has-bro, which makes My LittlePony, has replaced 34,000miles of wire ties in itspackaging with paper rat-tan or bamboo mix ties.

However, the US is farbehind Europe on sustaina-ble packaging, says NinaGoodrich, director of theSustainable Packaging Coa-lition, a Virginia-basedindustry working group.

Her view is shared byConrad MacKerron, seniorprogramme director of As

You Sow, a non-profitorganisation that encour-ages shareholders to putpressure on US corporatesto take responsibility forpackaging waste.

In 1994, an EU directiverequired member states todevelop regulations on pre-vention, reuse and recy-cling of packaging waste.

Mr MacKerron points outthat this cut waste going tofinal disposal by 43 percent, to 17m tonnes, in thedecade to 2008.

In the UK, the groceryindustry is on target toreduce the weight of pack-aging and increase its recy-cling to produce a 10 percent cut in carbon usage inthe three years to December2012.

Among innovations thathave helped meet the targetis a gas permeable packag-ing film from Evap thatextends the life of JerseyRoyal potatoes from fourdays to eight. This reduceswaste throughout the sup-ply chain by 50 per cent,says Richard Swannell,Wrap’s director of designand waste prevention.

Moy Park, the meat andpoultry producer, has dis-

carded the plastic tray com-monly used for whole chick-ens, in favour of film whichhermetically seals the birdsin a “modified atmosphere”.This prolongs the product’sshelf life from eight days to10 and reduces packagingweight by 70 per cent.

Mr Swannell says it pre-serves food better, givingcustomers longer to use it,and reduces waste in thefood chain. There has alsobeen significant progresswith coffee granule refills,such as those for KraftFoods’ Kenco, he says.

Home Retail Group hasintroduced a reusable bagthat protects large itemssuch as sofas and fittedkitchens during transportand can be removed ondelivery. Such items areoften protected with a lot ofcardboard, plastic film andtape, says Mr Swannell.

Customers sometimescause or discover damagewhen removing packaging.The reusable bags enabledrivers to check goods arein good condition.

“This saves 1,800 tons ofpackaging a year and givesa better customer experi-ence,” says Mr Swannell.

The best things will come in smaller packages

With extremely high tem-peratures required toheat the limestone,cement is a product witha heavy carbon foot-

print. However, as companies start touse more industrial waste and renew-able energy in cement production,some believe the sector could becomea leader in “industrial symbiosis”(where one company’s refuse becomesanother’s raw material), acceleratingprogress towards a zero-waste world.

Manufacturing clinker – which tra-ditionally makes up about 90 per centof cement – is the most energy-inten-sive part of the product. This is partlybecause changing limestone to clinkerneeds temperatures of up to 1,500C,which means burning large amountsof fuel. An important step in reducingcement’s carbon footprint will be toincrease the energy efficiency ofcement plants and find alternativefuels to power furnaces.

However, a second substantialsource of emissions comes from thechemical conversion process itself,during which calcium carbonate isextracted from the limestone, generat-ing large amounts of carbon dioxide.

“From a chemical standpoint, theprocess generates CO2 in addition tothe burning of fuel,” explains HowardKlee, former director of and adviser tothe Cement Sustainability Initiativeat the World Business Council forSustainable Development (WBCSD).

Increased plant and fuel efficiencycannot address these emissions,which means cement makers alsohave to find alternatives to clinker.

This has a dual benefit. First,

cement made with less clinkerreduces the fuel needed to power thekilns. Meanwhile, cement that has alower proportion of clinker has gener-ated fewer emissions related to thechemical decomposition of limestone.

A range of materials can be used toreplace clinker. These include activeminerals derived from industrial waste– such as slag from steel mills and flyash, a byproduct of power plant coalcombustion – as well as naturallyactive materials such as volcanic ash.

The potential for cement productionto use industrial waste is substantial.For example, slag can be used both topower the kilns and as a replacementfor clinker. And as well as poweringtheir kilns with renewable energy,cement plants can turn anything fromwaste wood and sewage sludge to oldtyres and plastics into fuel.

“Our process allows us to use wasteas fuel and integrate that into theproduct without any risk to health,”says Raul Quintal, director of opera-tions planning and performance, atCemex, one of the world’s largestcement producers.

For those in the waste managementsector, cement kilns – with their hightemperatures – provide a safe way ofdestroying unwanted and often haz-ardous materials, helping solve publichealth and safety challenges.

In 1999, when the Belgian govern-ment needed to dispose of thousandsof tonnes of meal and fat from poten-tially contaminated animal products,it requisitioned cement plants, whichcould guarantee the complete destruc-tion of the contaminants in the kiln,while also reducing their emissions

through the fuel substitution.Philippe Fonta, director of the

WBCSD’s Cement Sustainability Initi-ative, cites the example of discardedtyres, which in some places are left indumps where they collect water andbecome breeding grounds for malaria-carrying mosquitoes. “If these usedtyres are no longer abandoned buteliminated by a cement plant, youalso have societal benefits,” he says.

The technology behind this kind ofmatchmaking, or coprocessing, is rela-tively well established. The biggerchallenge, however, lies in creatingthe kinds of infrastructure and indus-try collaborations that facilitate thetrading of waste between waste pro-ducers and cement producers.

“[Coprocessing] is a pretty elegantpiece of industrial ecology,” say RajSapru, director of advisory services atBusiness for Social Responsibility, aUS-based business association andadvisory group. “But since it involvessteel making and cement making, itmeans a market has to exist.”

As new facilities are planned, theinherent efficiency in using waste

materials in cement could influencelocation selection when decidingwhere to build a cement plant.

“We still have to supply a market,”says Mr Quintal. “But when choosingbetween locations, one of the factorsto consider is the availability of andaccess to other industry clusters andtake advantage of those and whateverthose clusters produce.”

Of course, with a legacy of existingcement plants, it will take time beforethe industry can become fully inte-grated with the waste managementsector. And some materials are notsuitable for processing by the cementindustry, including nuclear waste,infectious medical waste, batteriesand untreated mixed municipal waste.

Moreover, for the cement sector tobecome a key partner in the manage-ment of waste, governments need toformulate the right incentives.

“To hit fast forward, there needs tobe more collaboration between busi-ness, government and civil society,”says Mr Sapru. “Cement is an ancienttechnology – it’s not about the tech-nology. It’s about the political will.”

Matching upcompanies is amove to a worldwithout waste

CementOne company’s refuse is another’srawmaterial, writes SarahMurray

Heavy footprint:convertinglimestone toclinker needstemperatures ofup to 1,500C

Johnson’s SmartTwist bottle

Recycling

Reducing, improvingand reusing materialprovides benefits forproducer and buyer,says Jane Bird

When Danish enzymemaker Novozymes waslooking for partners to helpit make chemicals out ofcorn cobs, it came to China.

And when German solar-panel maker Q-Cells wastrying to sell a subsidiarythat had developed arecord-breaking technologyfor thin film solar panels, itfound a buyer in China.

The world’s largest

energy consumer can seemlike a Mecca of clean energydevelopment, with a level ofstate support and commer-cial enthusiasm for newtechnologies that is almostunparalleled. The world’sbiggest consumer of coal,thanks to the policies of thepast decade, is now theworld’s biggest producer ofsolar panels, wind turbines,and electric batteries.

By 2015, Beijing aims for30 per cent of China’s gener-ating capacity to come fromnon-fossil fuel sources, agovernment white paperpublished last month says.Clean energy is prized inChina because it helps thecountry reduce its depend-ence on imported energy

sources and also contrib-utes to lowering carbonemissions.

According to the whitepaper, the vision for 2015includes 400 square kilome-tres of solar heat surfacecollection and 100 gigawattsof installed wind power.Developing new and renew-able energy is a “key strate-gic measure” and an“urgent need in the protec-tion of the environment”,the white paper says.“China’s energy develop-ment must follow a pathfeaturing high-tech content,low consumption ofresources, less environmen-tal pollution, satisfactoryeconomic returns, as wellas security,” it adds.

That line of argument ispart of the reasonNovozymes has had suchsuccess in China. This year,Chinese chemical companyShengguan Group begancommercial production ofethanol made from agricul-tural waste using enzymesprovided by Novozymes.That product, known as cel-lulosic ethanol, gets specialmention in the white paper,with other biofuels such asbiodiesel.

China’s electricity grid isset to be a key front forinvestment in clean energytechnologies, as China’sgrid companies spend bil-lions of dollars on develop-ing a “smart grid”. Atpresent the electricity grid

acts as a constraint on windand solar installations inmany places where it can-not absorb the intermittentpower supplied by solar orwind farms. The problem isso widespread that last yearenergy authorities sloweddown the pace of windinstallations, to give thegrid more time to upgradeits systems.

China is building ultrahigh-voltage electricitylines to carry electricityfrom coal-rich regions, suchas Inner Mongolia and Xin-jiang, toward the areas ofhigh energy demand on theeastern seaboard, so savingon energy for transport.Those conduits stretchingacross the country make

China the biggest builder ofpower lines anywhere inthe world.

Fossil fuel sources willcontinue to be part ofChina’s energy plan and thegovernment is lending itssupport to other types offossil fuel energy, such asshale gas and coal to gastechnologies.

“China needs stuff thatscales,” says David Michael,managing director at con-sultancy BCG in Beijing.“Anything related to natu-ral gas, LNG supply, andshale gas is set to grow.”

China announced a gener-ous tariff for shale gas inNovember, creating a bigeconomic incentive for com-panies to invest in explora-tion for the unconventionalresource. Shale gas,extracted by fracturing rockdeep underground and cap-turing the natural gas thatescapes, has revolutionisedthe energy landscape in theUS and China hopes to dothe same.

As the country works tomake a 40 per cent in car-

bon emissions by 2020 com-pared with 2005 levels,clean coal technologies arein the spotlight.

Coal plants and steelmills are investing in car-bon capture technologiesand processes that canreduce emissions of sulphurand nitrous oxide.

“Making coal cleaner mit-igates the conflict betweenChina’s high-carbon energysector and the goals ofgreen growth,” says anexecutive at Shenhua,China’s biggest coal pro-ducer. Its coal consumptionis set to grow but it willdraw a smaller percentageof its power from coal, leav-ing room for clean energytechnologies to grow.

Beijing mounts push for increased energy from renewables

‘China’s energydevelopment mustfollow a path ofhigh-tech content‘

White paper

China focus

Developing morepower sources is astrategic goal,reports Leslie Hook

FINANCIAL TIMES MONDAY NOVEMBER 12 2012 ★ 3

Sustainable Business Green Technology

Sarah MurrayFT Contributing Editor

Ed CrooksUS Energy Editor

Leslie HookBeijing Correspondent

Mark WembridgeUK Companies Reporter

Jane BirdFT Contributor

Elizabeth DurnoDavid ScholefieldRichard GibsonSub-editors

Adam JezardCommissioning editor

Steven BirdDesigner

Andy MearsPicture Editor

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$280bn in 2011, more thanfive times the $53bn totalachieved in 2004, accordingto Bloomberg New EnergyFinance.

Nor is innovation in thissector limited to small com-panies and start-ups. Cleantech’s heavyweights includethe world’s largest corpora-tions, many of which aremaking substantial invest-ments in developing tech-nologies that address every-thing from energy use towater conservation.

One route to doing so isto establish internalresearch and developmentcentres. Yet companies arealso becoming flexible inthe way they promote inno-vation. This includes usingweb-based crowd sourcingor open innovation to iden-tify clean tech entrepre-neurs. While crowd sourc-ing allows companies look-ing for clean tech answers

to conduct searches amonginnovators across theworld, globalisation of cleantech extends beyond openinnovation.

For a start, as emergingeconomies expand, they willprovide new markets forclean tech products. Mean-while, green technologyinnovation is also shiftingto these markets as theybecome aware that risingwealth leads to increasedresource consumption andthe potential for greaterenvironmental degradation.

Many believe Latin Amer-ica may become a leader infinding ways to delivereconomic growth whileprotecting naturalresources and establishingsustainable renewableenergy supplies, as Brazilhas by developing sugarcane ethanol as a biofuel.

In mature markets, whilegovernments continue toinvest in clean technology,some are changing tack toreflect budget constraintsor shifts in the market.

Continued from Page 1 A number of administra-tions – including the UKand Germany – are debat-ing cutbacks in subsidiesfor renewable energy. Onthe other hand, new jointventure and technologytransfer opportunities existin China, which providesstrong government supportfor a range of energy effi-ciency and renewableenergy technologies.

Some policy makers arechanging the way theyspend government dollars.Rather than trying to shapethe market, they are invest-ing in clean energy incuba-tors or establishing venture-capital funds to supportentrepreneurs with ideas.

The focus of clean tech-nology extends beyondenergy. With the world’swater supplies increasinglyunder pressure, findingmethods of recycling andconserving supplies hasrisen up the agenda for pub-lic and private sectors.

And with waste manage-ment a problem for allorganisations, many arelooking for ways of turningwaste into a resource orreducing packaging.

In the cement industry,the potential for cementfurnaces to become inciner-ators for waste from steelplants and other facilities isprompting discussions ofco-location of these plants –helping cement makers cutcarbon emissions and con-tribute to waste manage-ment.

Plenty of ideas and work-able models are emerging.Yet the question on the lipsof all those who believedeveloping the clean techsector is essential to theplanet’s future prosperity ishow to bring about wide-spread use of green ideasand technologies.

The trouble is that, withsome exceptions, manybusiness models remain inthe pilot stage or are lim-ited to certain companies orindustries.

Without increased collab-oration between public, pri-vate and non-profit sectors,and willingness for compa-nies to work together onenvironmental issues, manyfear that green technologywill fail to reach the scaleneeded to halt or reversethe environmental prob-lems it is designed to solve.

Stronger politicalwill is needed

Investment inclean energycontinues, risingto a record$280bn in 2011

Universities and non-profitorganisations have longexpounded the benefits ofcollaboration in green tech-nology to achieve a com-

mon goal but the spread of intercorpo-rate projects has been less wide-spread.

Kris Gopalakrishnan, executive co-chairman of Infosys, the Indian infor-mation technology consultancy, says:“Companies can educate each other,supply funding, help boost a supplychain and push the project towards itsgoals.

“Through co-operation and thesharing of skills, innovation andresources from the private sectoracross various industries, the develop-ment of green technology will growfaster. Any new project could thenbecome a new revenue stream.”

But concerns over privacy, intellec-tual property and the compromise ofcommercial viability must all be tack-

led when two or more companiesdecide to throw in their lot togetheron a green technology project.

However, these issues can and havebeen overcome, as SSE, the Britishenergy company, proved with a car-bon capture project at its Ferrybridgepower station in West Yorkshire.

Initiated late last year, the projectwas set up to capture 100 tonnes ofcarbon dioxide per day from theemissions of a five megawatt coal-fired power plant.

The green technology – often toutedas a way of cleaning up after “dirty”fossil fuel power plants by preventingCO2 from being released into the air –captures the gas and pipes it tostorage deep beneath ground or sea.

The Ferrybridge project was acollaboration between SSE, DoosanPower Systems, which builds, main-tains and extends the life of powerplants; and Vattenfall, the Swedishenergy company.

SSE’s rationale was simple: the col-laboration achieved the desired resultfaster than if it had gone ahead alone.

“The power of collaboration lies inbringing together companies who arereal specialists in their respectivefields to form a creative force that isgreater than the sum of its parts,allowing them to achieve technologi-cal enhancements that may not other-wise have been possible,” said SSE.

“We’ve also found a good culturalfit between organisations is crucial tothe success of any collaboration.”

As well as corporate partners, theproject benefited from £6m of publicfunding and had the co-operation ofthe Northern Way, the body set up tobridge the productivity gap betweenthe north and south of England, aswell as the Technology StrategyBoard, the UK innovations agency.

Although bringing so many part-ners together could have strained thescheme, the carbon capture project –

one of the first of its kind in the UK –has proved to be a litmus test for notonly the green technology, but alsocorporate collaborations.

The project has provided valuableinformation for industry regulators,such as the Environment Agency, andSSE is considering broadening its col-laborations into a larger scale opera-tion at its gas-fired power station atPeterhead in Aberdeenshire.

The benefits of corporate collabora-

tion in green technology have notbeen restricted to power companies.

This year, Eco Plastics, the Lincoln-shire-based recycling group, created ajoint venture with Coca-Cola toincrease the pace of development inthe UK’s recycling infrastructure.

In May, they opened the £15m Con-tinuum Recycling plant, which hasmore than doubled the amount of bot-tle grade recycled plastic that waspreviously created in the UK.

The plant processes plastic packag-ing and turns it into materials thatCoca-Cola can use to make drink bot-tles. The turnround time from collec-tion to a new bottle appearing on theshelves is as little as six weeks.

The partnership has created atemplate for Coca-Cola in other coun-tries, with similar projects lined upfor other markets, including France.

Other recent collaborative projectscan be found in the US, where Heinzteamed up with Coca-Cola, Ford, Nikeand Procter & Gamble to speed thedevelopment and use of plant-basedplastics. All use the plastic PET poly-ethylene terephthalate in productssuch as plastic bottles, clothing, shoesand automotive fabric and carpet.Through the creation of the PlantPET Technology Collaborative, thefive pooled their technologies andresources to increase the amount ofplant-based plastics used in consuma-ble bottles.

The group said: “PTC members arecommitted to researching and devel-oping commercial solutions for PETplastic made entirely from plants andwill aim to drive the development ofcommon methodologies and standardsfor the use of plant-based plastic.”

The role of government as aninitiator of such corporate tie-upsshould not be overlooked,

Mr Gopalakrishnan points out thatthe state plays an important rolethroughout each stage of the develop-ment of green technology. He says:“Government should work as a cata-lyst by helping to fund new technol-ogy, then by spreading best practices,then by acting as a regulator.”

Sharing skills enhanceslikelihood of successCollaboration Joint initiatives bring benefits, saysMarkWembridge

PET project: Continuum Recycling’s plant turns out bottle grade plastic

4 ★ FINANCIAL TIMES MONDAY NOVEMBER 12 2012

Sustainable Business Green Technology

A few years ago there was aadvertisement shown on UStelevision opposing controlson greenhouse gases thatended with the words: “Car-bon dioxide. They call itpollution; we call it life.”

The advert was deridedby environmental cam-paigners for its cynicalobfuscation of the reasonswhy anyone might be con-cerned about CO2. Yet itpointed to what now lookslike one of the most promis-ing approaches to address-ing the threat of climatechange – seeing carbondioxide not as a problem tobe solved but as an opportu-nity to be exploited.

If the world is to put long-term limits on greenhousegases in the atmosphere,then capturing and storingthe emissions from burningfossil fuels seems essential.Oil, gas and coal provideabout 80 per cent of theworld’s energy and it is dif-ficult to see how they willnot continue to be indispen-sable for decades to come.

Managing their green-house gas emissions, how-ever, is extremely difficult.Switching power generation

from coal to natural gas,which creates roughly halfthe emissions per megawatthour of electricity, has hadsome impressive effects inthe US but there are limitson how much progress canbe made.

The International EnergyAgency, the watchdogbacked by rich countries’governments, warned thisyear that a “Golden Age ofgas”, in which abundantreserves of shale gas world-wide are being unlocked byadvances in productiontechniques, would result inglobal temperatures risingby 3.5 degrees C.

However, the develop-ment of technologies forcarbon capture has beenplagued with delays andsetbacks.

In Britain, for example,the government announcedat the end of October ashortlist of four carboncapture projects potentiallyeligible for £1bn of funding.That was more than fouryears after the previousgovernment decided on itsshortlist of four. Havingwanted to see commercialcarbon capture plants inoperation “by 2020”, the UKis now talking about thatgoal “in the 2020s”.

Projects have beenshelved in the US, Canada,the Netherlands and severalother countries.

The Global CCS Institute,the international think-tankthat brings together govern-

ments and the industry topush for more progress,said in October that in thepreceding 12 months ninenew projects had beenlaunched but eight hadbeen cancelled.

It warned: “It is clear avery substantial increase innew projects needs tooccur” to keep carbon diox-ide emissions at levels thatwould make it likely therise in global temperaturescould be kept within accept-able limits.

The problem is not somuch that carbon captureis a new technology – allthe elements of the processare in use today – as that itis difficult and expensive tomanage at a large scale.

Without clear economicincentives, companies willnot invest in the technologyand, with finances strainedin both the public and pri-vate sectors across thedeveloped world, it is hardfor governments to providethose incentives.

As a result, the greatestprogress in carbon captureis now being made onprojects where the carbondioxide is used for someother purpose, most oftenenhanced oil recovery.

Since the 1970s oil compa-nies have been injectingcarbon dioxide into reser-voirs to squeeze out morecrude. In Texas, they payabout $30 per tonne to getit, largely from naturalsources.

That is still less than thecost of capturing carbonusing many of the methodsavailable but there arewidespread hopes that thecosts can fall.

General Electric andSargas of Norway this yearlaunched a joint venture tosell gas-fired power plantsthat would capture 90 percent of their CO2 emissions,for a cost that they hopewill be well below that $30per tonne.

In the meantime, compa-nies are pushing with car-bon capture projects for oilrecovery with the help ofgovernment support.

Seattle-based SummitPower has been makingprogress with the TexasClean Energy Project(TCEP), a 400MW coal-firedpower plant to be built inwest Texas, that will pro-duce about 3m tons of CO2per year to be used for oilrecovery. The project wasgiven a $450m grant by theUS department of energy.

Georgia-based SouthernCompany is building a coal-fired plant with carbon cap-ture at Kemper, Mississippi,again for use in oil recov-ery. Like the TCEP, thetechnology involves gasifi-cation of the coal and thenburning the gas. Southernand its partner KBR, thecivil engineering contrac-tor, are marketing the tech-nology around the world asa way to provide “clean,safe, reliable and affordable

energy produced by anabundant and underutilisedcoal resource”, with thesale of the CO2 helping tokeep the cost down.

There is not enoughdemand from the global oilindustry to provide amarket for all the CO2produced by the world’spower plants but environ-mental groups such as theClean Air Task Force arguethat by making carbon cap-ture more commerciallyattractive, enhanced oilrecovery could shave a vitalfive or 10 years off the timeneeded to make it an effi-cient technology.

However, there is anotherapproach that is potentiallyeven more interesting. Sky-onic, another Texas-basedcompany backed by venturecapital as well as BP andConocoPhillips, the oil com-panies, is developing a tech-nology to capture CO2 fromindustrial waste gases andto mineralise it into carbon-ate and b-carbonates thathave a commercial value.

The process can be retro-fitted to existing plants andrequires no undergroundstorage of CO2, which hasoften proved controversial.

It is early days yet but ifthe process can be made towork on a large scale at areasonable cost, it couldplay an important rolein enabling the world tocontinue using fossil fuels,while avoiding the worst oftheir effects.

Carbon capture is an opportunity ripe for exploitationEnergy

The processeswork but officialincentives are few,reports Ed Crooks

When EMC was consideringhow to improve its disposalof electronic waste, it justso happened Kathrin Win-kler, the information tech-nology group’s chief sus-tainability officer, was read-ing a book on iconoclasts.For her, the notion ofdestroying established con-ventions fitted perfectlywith how she felt thecompany should approachthe problem.

This was part of the rea-son that EMC, based inMassachusetts, decided tolaunch an online Eco-Chal-lenge working with theEnvironmental DefenseFund and InnoCentive, theopen innovation company.

“Diversity of experienceand perspective helps gen-erate innovation,” says MsWinkler. “And I was takenwith the idea of being ableto reach out to innovatorsin other industries.”

Through the Eco-Chal-lenge, EMC wanted to finda system for tracking ship-ments of used electroniccomponents and subsys-tems so that they could bedisposed of responsibly.

Ms Winkler says:“E-waste is a social, eco-nomic and environmentalissue. It ends up in landfillor in the developing world,hurting people in the infor-mal economy who extractthe raw materials.

“And there’s true eco-nomic value locked up inthere, so it makes sense toaddress all this together.”

As with any company inthe electronics sector, theproblem EMC was grap-pling with lay in the com-plexity of technology.

Electronic equipment ismade up of many compo-nents – often tiny in size –making it difficult to labelor track every part.

The Eco-Challenge askedparticipants to come upwith a process or devicethat would track the pas-sage of waste items – fromcomputers to mobile phonesand television sets – fromwhere they had been usedto final disposal.

With a $10,000 prizeoffered, the challengeprompted almost 800 indi-viduals and companies towork on the problem, with

more than 60 entries sub-mitted.

Three winners wereselected. One used passiveradio frequency identifica-tion ink, another combinedelectronic identificationwith an online crowdsourc-ing platform to create aholistic picture of the com-ponents and the third usedlabels printed with uniqueencrypted codes for eachmajor component in thesystem.

“The three each poten-tially have a piece of thesolution but no one com-pletely solves it,” explainsMs Winkler. She says EMCis inviting the winners towork with it to explore howthe three solutions might becombined.

EMC wants to find a solu-tion to help manage notonly its own e-waste moreresponsibly but that of theentire sector.

For this reason, thecrowdsourcing approachwas particularly appropri-ate as an R&D tool, unlikeother developments, whereopen innovation might riskloss of intellectual property.

Gwen Ruta, who directs

the corporate partnershipsprogramme at the EDForganisation, says the non-competitive nature of manyenvironmental problemsmakes them well suited toopen innovation.

“And e-waste is a goodexample,” she says. “It’s aproblem that affects yourbusiness but being able tosolve it helps everyone’sbusiness equally.”

The complexity of theelectronics supply chainmeans that companies likeEMC rely on a deeply inter-twined web of suppliers –and the same applies to thereverse supply chain in thecollection and disposal ofe-waste.

Any system that can beused across the industrywill therefore generateeconomies of scale.

“We’d like to see the over-all system change,” says MrWinkler. “In most cases agood solution isn’t going toscale economically if it onlyserves one company.”

Company onthe track of ananswer toe-waste riddleElectronics

There is economicvalue in sorting outthe problem, asksSarah Murray

The nature of manyenvironmentalconcerns makesthem well suited toopen innovationA

s well as attending semi-nars and networkingevents, visitors to thisweek’s GreenBuild expo inSan Francisco can watch a

“speed dating” session during whichexecutives from Saint-Gobain, theFrench building materials group, willchoose three winning ideas based onthe strength of 10-minute pitches.

The session – part of an approachthe company calls “outovation” – isone of many open innovation methodsbeing used to find clean tech ideas.

“Quite simply, a fresh set of eyescan come up with an answer,” saysGwen Ruta, who directs the corporatepartnerships programme at Environ-mental Defense Fund, the US-basedenvironmental group.

Last year, EDF launched a partner-ship with InnoCentive, an online openinnovation company, to speed upenvironmental innovation in busi-ness. Ms Ruta says: “If you’ve got astubborn environmental problem thatyou’ve been working on internally,maybe you can make more progressby opening it up externally.”

This has been Saint-Gobain’s experi-ence. Rakesh Kapoor, the company’sNorth America director of researchand development says: “Any of us –particularly in large companies – canbecome very inward looking. But abreakthrough can come from any-where, so we’re trying to set up sys-tems where we’re looking to the out-side for technology.” The Saint-Gobain competition – which has been

running for several years – hasallowed the company to identify arange of new ideas.

This year the eight finalists – fromearly stage start-ups to well-estab-lished entrepreneurs – have proposalsthat include an eco-friendly resin forbuilding materials, self-shading smartwindows and thin-film coating equip-ment that makes products such asLED lights and photovoltaics moredurable and cheaper to manufacture.

Mr Kapoor, who is also director ofNOVA External Venturing, a unitthrough which Saint-Gobain develops

partnerships with start-ups, finds itrefreshing to see such ideas emerge.

He says: “When you work in asimilar line of business for a longtime, you think you’ve got the worldfigured out. But the world is alwaysthree steps ahead and someone elselooking at the same reality might lookat it differently.”

This is what motivated EDF to formits partnership with InnoCentive.

Companies working with EDF andInnoCentive can identify stubbornenvironmental problems, formulate

them as “Eco-Challenges”, post themonline and offer financial rewards forthe most promising solutions.

Companies are not alone in lookingto source ideas from across the world.Open innovation is moving into thenon-profit and development world.UK-based Skipso, a global network ofclean tech experts, investors and serv-ice providers, helped a Swiss non-gov-ernmental organisation that wantedto find a way to electrify a village inRwanda using renewable energy. MrKapoor says: “In just a few weeksthey were able to source experts fromall over the world and select a winner,an engineer from a Spanish com-pany.”

The United States Agency for Inter-national Development is lookingexternally for ideas. Its GrandChallenges in Global Development aredesigned to find a broad range of solu-tions to development issues, includingaccess to clean technologies.

In June, for example, USAIDlaunched a challenge inviting innova-tors to find new ways to deliver cleanenergy to smallholder farmers acrossthe developing world.

Rajiv Shah, USAID administrator,says: “The Grand Challenges allowthe development agency to cast its netwide when searching for solutions.

“Whereas a traditional aid effortmight get six to 10 proposals on aproject idea, each of these challengeshave had 600 plus incoming,” he says.

“More than half are from the devel-oping world itself and more than 30

per cent are from the private sector.”It is this ability to tap into the

expertise of a range of sectors andorganisations that those looking fornew clean tech products and servicesfind compelling about the open inno-vation model.

However, when it comes to reachingas many clean tech entrepreneurs andexperts as possible, web-based crowd-sourcing models have the greatestpotential. “With a few key strokes,you can tap into the scientific commu-nity around the world,” says Ms Ruta.

This is particularly helpful in theclean tech sphere.

Carlo Soresina is co-founder ofSkipso, which was set up in 2008 tounite the fragmented community ofclean tech entrepreneurs and experts.He says: “Unlike ICT [information andcommunication technology], whereyou have a lot of innovation comingout of Silicon Valley, clean tech ismuch more broadly distributed geo-graphically,”

To be successful, the challengesneed to be formulated in the rightway. If the problem is set too broadly,a deluge of responses can make ithard to identify promising solutions.

Yet defining it too narrowly coulddeter those who might in fact haveideas with the potential for success.

And soliciting ideas from unex-pected quarters is a key advantage ofcrowd-sourcing. Mr Soresina says:“Often the best solutions come fromexperts in a completely different fieldor an adjacent community.”

Fresh eyes may resolve dilemmasInnovationBusiness andNGOs harness the power of networking to find expert help, writes SarahMurray

‘If you’ve got a stubbornenvironmental problemyou can make progress byopening it up externally’

While thetechnology is notnew, it is difficultand expensiveto manage

Clean coal: a carboncapture unit at

Longannet powerstation, Scotland

Getty