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Strategic Plan - Institute for Industrial Productivity

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<strong>Strategic</strong> <strong>Plan</strong><br />

Sharing best practices<br />

<strong>for</strong> the low carbon future<br />

iipnetwork.org


Role of the <strong>Institute</strong> <strong>for</strong> <strong>Industrial</strong><br />

<strong>Productivity</strong><br />

The <strong>Institute</strong> <strong>for</strong> <strong>Industrial</strong> <strong>Productivity</strong> (IIP) maintains a<br />

network of policy, technology, and finance experts to identify,<br />

analyze, and share best practices, tools, and in<strong>for</strong>mation<br />

that can boost the effectiveness of government and industry<br />

ef<strong>for</strong>ts to significantly reduce industrial energy intensity and<br />

greenhouse gas (GHG) emissions while improving productivity.<br />

Energy use and CO 2<br />

emissions will almost<br />

double by 2050 if current trends persist. This<br />

would put the world on the path towards a 6 ° C<br />

rise in average global temperature.<br />

IEA, Energy Technology Perspectives, 2012<br />

Urgent Situation<br />

<strong>Industrial</strong> activities today account <strong>for</strong> nearly a third of global energy demand and almost 40%<br />

of carbon dioxide (CO 2<br />

) emissions. Rapidly growing economies are expected to significantly<br />

increase industrial energy demand through 2030. Given the attendant risks to climate, energy<br />

security, and business, governments and industry have gained a renewed respect <strong>for</strong> the many<br />

economically attractive ways to simply decrease industrial demand <strong>for</strong> energy.<br />

Making more efficient use of the energy we have today—eliminating waste and doing more<br />

with less—offers the cheapest and most immediate route to improve energy security and<br />

avoid harmful emissions.<br />

<strong>Industrial</strong> Direct CO 2<br />

Emissions by Region<br />

Converging factors make this a critical time to<br />

refocus global ef<strong>for</strong>ts on increasing industrial<br />

energy productivity and sustainable production<br />

worldwide:<br />

• Rising demand <strong>for</strong> global resources<br />

• New capital investments<br />

• <strong>Industrial</strong>ization of emerging countries<br />

• Climate change<br />

Source: IEA, Energy Technology Transitions <strong>for</strong> Industry, 2009.<br />

* Assumes global enery-related CO 2<br />

emissions in<br />

2050 will be half of 2005 levels.<br />

To address this urgent need, IIP provides specialized expertise in the policies, programs,<br />

financing, and technologies required to accelerate reductions in the intensity of industrial<br />

energy use and carbon emissions in key regions around the globe.


IIP Vision <strong>for</strong> Industry<br />

By 2020, advanced technologies and<br />

energy management practices will be in<br />

broad use across industry—significantly<br />

reducing life-cycle process and product<br />

energy requirements; usage intensities<br />

<strong>for</strong> energy, water, and other resources;<br />

and associated carbon emissions. This<br />

industrial culture change will energize<br />

economic growth and help mitigate severe<br />

climate impacts. Supportive government<br />

policies and a public-private network <strong>for</strong><br />

sharing best practices and results will<br />

reduce carbon intensity and encourage<br />

greener manufacturing.<br />

By 2030, the industrial sector will<br />

make rigorous use of a wide range of<br />

smart manufacturing practices such<br />

as innovative materials and processes,<br />

automation and control systems, cradleto-cradle<br />

design, full cost accounting,<br />

industrial ecology principles, and carbon<br />

mitigation strategies. These practices will<br />

further boost industrial productivity and<br />

significantly lower the carbon intensities of<br />

energy and materials use while providing<br />

sustainable solutions to the global energy<br />

economy.<br />

By 2050, industrial hubs will<br />

be models of green industry,<br />

demonstrating integrated, optimized,<br />

networked, next-generation systems to<br />

minimize carbon intensity throughout<br />

the supply chain (e.g., closed-loop<br />

manufacturing systems with near-zero<br />

discharge). Significant use of renewable<br />

energy sources, highly efficient<br />

manufacturing processes, recycling,<br />

and carbon capture and re-use will<br />

enable high-quality industrial products<br />

with minimal embodied energy and lost<br />

carbon.<br />

IIP Goals<br />

IIP activities are designed to achieve two overarching goals:*<br />

••<br />

Drive a reduction in industrial energy intensity averaging 3.5% per year through 2030 in<br />

China, India, and the United States through 2030.<br />

••<br />

Contribute to a 25% reduction in annual GHG emissions by 2020 (avoiding 2.0 GtCO 2<br />

per year) and a 50% reduction by 2030 (avoiding 2.7 GtCO 2<br />

per year) in the industrial<br />

sectors of these countries.<br />

Historical and Goal-based Reductions in Energy Intensity and CO 2<br />

Emissions through 2030<br />

Note: <strong>Industrial</strong> energy intensity in 2000 U.S. dollars.<br />

Source: UNIDO <strong>Industrial</strong> Development Report 2011 (historical data), IIP Goals (projections)<br />

* Basis of goals: Reaching the aggressive yet achievable IIP goal of reducing energy intensity 3.5% per year compared to<br />

baseline projections would provide a 25% decrease in industrial final energy use and emissions in 2020, compared to<br />

baseline projections. Achieving a 50% reduction in industrial GHG emissions by 2030 will require emissions reductions<br />

beyond the 3.5% annual improvement in energy intensity relative to baseline projections. These reductions are most likely to<br />

be achieved through fuel switching (including low-carbon electrification) and limited application of industrial carbon capture,<br />

storage, and reuse.


Global <strong>Industrial</strong> Energy Use by Country, 2009<br />

<strong>Strategic</strong> Focus<br />

IIP focuses its ef<strong>for</strong>ts on countries and sectors that drive world industrial demand while<br />

offering major opportunities <strong>for</strong> improvement.<br />

Country Focus<br />

IIP concentrates ef<strong>for</strong>ts on the following three countries, which collectively use 47% of<br />

global industrial energy and produce 54% of energy-related industrial CO 2<br />

emissions:<br />

••<br />

China<br />

••<br />

India<br />

••<br />

United States<br />

Sector Focus<br />

Within these countries, IIP seeks to maximize its impacts on industrial energy use and<br />

emissions by focusing primarily on three of the most energy-intensive industries:<br />

••<br />

Cement<br />

••<br />

Chemicals<br />

••<br />

Iron and steel<br />

Global <strong>Industrial</strong> Energy Use by Sector, 2009<br />

To facilitate work with these and other energy-intensive industrial sectors, IIP maintains<br />

offices in: Beijing, New Delhi, Paris, and Washington, DC.<br />

Source: IEA Online Data Services –<br />

World Energy Balances and CO 2<br />

Emissions from<br />

Fuel Combustion (accessed 2012)<br />

Three Integrated Strategies


Strategy<br />

IIP provides critical analysis, in<strong>for</strong>mation, tools, and expert support to assist government and<br />

industry—the two most essential groups in generating large-scale improvements in industrial<br />

energy efficiency.<br />

Our three main strategies are mutually rein<strong>for</strong>cing. We assist governments in tailoring<br />

policies to more effectively foster improved industrial energy efficiency, and we team with<br />

industry to promote effective use of energy management systems and investment plans to<br />

take advantage of supportive government policies. We develop key enabling resources to<br />

assist both of these key stakeholder groups in implementing effective programs. Academia,<br />

non-profit organizations, and other groups contribute to and benefit from our work.<br />

1. Work with Governments to Improve Policy Making<br />

Create resource materials and pursue activities that help government policy makers develop,<br />

implement, and monitor improved energy and carbon per<strong>for</strong>mance in industry:<br />

••<br />

Help design, implement, monitor, and evaluate policies that encourage industry adoption<br />

of energy management systems (EnMS).<br />

Policy Areas of Interest<br />

• Voluntary programs<br />

• Standards<br />

• Tax and fiscal incentives<br />

• GHG targets<br />

• Measurement and verification<br />

• Recognition<br />

• Support <strong>for</strong> policy implementation<br />

••<br />

Advise on standards, incentive mechanisms, voluntary programs, and complementary policies.<br />

••<br />

Assist in developing policy implementation guidelines, appropriate benchmarks, industry<br />

targets, and in<strong>for</strong>mation collection mechanisms.<br />

••<br />

Organize and convene <strong>for</strong>a, workshops, and online events to bring together key policy<br />

makers and industry experts to help craft effective government policies.<br />

2. Team with Industry to Implement Energy Efficiency Best Practices<br />

Work with industry to facilitate implementation of energy efficiency best practices and<br />

EnMS to substantially reduce energy intensity and carbon emissions:<br />

••<br />

Help companies develop targets, baselines, and benchmarks and assist them in implementing<br />

plant assessments and other strategies to achieve energy and carbon savings.<br />

••<br />

Develop and disseminate energy system optimization tools and approaches.<br />

••<br />

Develop and demonstrate alternative approaches to financing energy efficiency measures<br />

and advanced technologies.<br />

••<br />

Develop approaches to implement EnMS in companies that account <strong>for</strong> a significant<br />

portion of demand and face structural challenges (e.g., numerous locations, diverse<br />

products or processes).<br />

3. Develop Critical Resources and an Integrated Network to Catalyze Major<br />

Improvements in Energy and Carbon Management<br />

Assist industry and government in overcoming technology, policy, and financing hurdles to<br />

increase industrial productivity:<br />

••<br />

Organize and convene multi-disciplinary teams to develop and tailor integrated solutions <strong>for</strong> focus<br />

areas and provide viable models and resources <strong>for</strong> expediting energy efficiency improvements.<br />

••<br />

Develop global databases on technologies, programs, policy, financing, and supply chain initiatives.<br />

••<br />

Enhance understanding of innovative measures, such as full cost accounting, cradle-tocradle<br />

design, and supply chain programs.<br />

••<br />

Develop targeted in<strong>for</strong>mation on global best practices, energy management systems,<br />

voluntary programs, per<strong>for</strong>mance standards, and certification.<br />

See IIP’s Policy Pyramid at http://iepd.iipnetwork.org<br />

Energy Management System (EnMS)<br />

An EnMS is a systematic approach to<br />

monitoring, controlling, and saving energy<br />

in an industrial facility to achieve continual<br />

improvement in energy efficiency, productivity,<br />

and cost-effective operation. This approach<br />

involves setting energy goals, policies, and<br />

targets; developing baselines of energy use<br />

and identifying energy per<strong>for</strong>mance indicators;<br />

assessing opportunities; establishing plans;<br />

and periodically reporting progress.<br />

Sector- and Country-Specific Resources<br />

A database containing technical best practices<br />

is being developed specifically <strong>for</strong> IIP’s sectors<br />

of interest, such as iron and steel and cement.<br />

Databases tailored to IIP focus countries are<br />

also under development. Please visit<br />

http://ietd.iipnetwork.org<br />

IIP has developed the Assessment to Action<br />

(A2A) tool <strong>for</strong> improving energy productivity<br />

in the ammonia industry. This tool is available<br />

from our website: www.iipnetwork.org/a2a


Delivery Mechanisms<br />

ClimateWorks Network Organizations<br />

• Energy Foundation<br />

• China Sustainable Energy Program<br />

• Shakti Sustainable Energy Program<br />

• Collaborative Labeling and Appliance<br />

Standards Program<br />

• European Climate Foundation<br />

• Global Buildings Per<strong>for</strong>mance Network<br />

• International Council on Clean<br />

Transportation<br />

• <strong>Institute</strong> <strong>for</strong> Transportation and<br />

Development Policy<br />

• Regulatory Assistance Project<br />

• Climate and Land Use Alliance<br />

• <strong>Institute</strong> <strong>for</strong> <strong>Industrial</strong> <strong>Productivity</strong><br />

Partnerships<br />

Working closely with key stakeholders and ClimateWorks Network regional partners, IIP finds<br />

and shares solutions that address the needs of focus countries, cultures, and situations.<br />

Through our offices around the globe, we <strong>for</strong>m collaborative partnerships with industry,<br />

government, financial organizations, industry associations, universities, philanthropic<br />

organizations, and other non-governmental groups.<br />

Communications Channels<br />

While providing access to a broad range of resources, IIP also works to match products to<br />

customer needs and adjust <strong>for</strong> cultural sensitivities. Our communications materials are<br />

presented in clear, concise language to convey compelling in<strong>for</strong>mation on best practices<br />

and share success stories. We use a variety of communications channels to increase our<br />

effectiveness in reaching our key audiences:<br />

••<br />

Webinars<br />

••<br />

Social media<br />

••<br />

Training materials<br />

••<br />

Fora<br />

••<br />

Web-based databases<br />

••<br />

Reports<br />

••<br />

Meetings and workshops<br />

IIP tailors integrated solutions to the needs of<br />

industries and governments.<br />

Organization and Management<br />

IIP is structured to bring a broad spectrum of knowledge, experience, and expertise to its<br />

activities and facilitate the development of tailored solutions appropriate to its customers.<br />

IIP is led by a flexible, high-quality management team located in four main offices, each with<br />

an established professional staff and extensive regional networks.<br />

••<br />

Washington, DC<br />

••<br />

Beijing<br />

••<br />

New Delhi<br />

••<br />

Paris<br />

Jigar V. Shah, Executive Director<br />

James E. Quinn, Head-North America Program<br />

Patrick J. D’Addario, Director, Financial Products<br />

Dongmei Chen, Head-China Program<br />

Somnath Bhattacharjee, Head-India Program<br />

Julia Reinaud, Policy and Programs Director<br />

Board of Directors<br />

IIP’s Board includes respected international authorities on diverse aspects of industrial policy<br />

and operations from China, India, the United States, and Europe.<br />

<strong>Strategic</strong> Advisory Group<br />

Our <strong>Strategic</strong> Advisors are experts from industry, government, research organizations, financial<br />

institutions, and environmental groups with an interest in our mission. These dedicated<br />

individuals help to define IIP’s strategic direction, advise on project activities, and facilitate key<br />

projects and partnerships.


IIP Strategy in China<br />

Country snapshot: China has emerged as a leader in world manufacturing output and<br />

consumes approximately 30% of global industrial energy. Rapid urbanization and an influx<br />

of investment from state-owned and multinational firms fueled rapid growth in China’s<br />

manufacturing sector over the past decade. To raise incomes and social benefits <strong>for</strong> all citizens,<br />

China’s 12th Five Year <strong>Plan</strong> now seeks a more balanced growth structure—moderating GDP<br />

growth and shifting emphasis from export-led growth toward increased domestic consumption.<br />

Policy initiatives target increased industrial energy efficiency and wider use of non-fossil fuels.<br />

These initiatives are compelling old, inefficient plants to be closed, upgraded, or replaced<br />

with more energy-efficient practices and technologies across China’s most energy-intensive<br />

industries, including iron and steel, petrochemicals, and cement.<br />

Goal: Drive a 3.5% annual reduction in energy intensity in at least 15,000<br />

companies in key industries through 2020.<br />

Government<br />

IIP will build linkages with China’s national,<br />

regional, and provincial governments to support<br />

policy development and create policy incentives<br />

<strong>for</strong> broad industry adoption of energy systems<br />

optimization (ESO) and energy management<br />

systems (EnMS). Activities will include monitoring<br />

and evaluating implementation ef<strong>for</strong>ts, conducting<br />

pilot demonstration projects, and facilitating<br />

achievement of national energy goals. IIP will<br />

partner with the China Sustainable Energy Program<br />

(CSEP), the National Development and Re<strong>for</strong>m<br />

Commission (NDRC), and the Ministry of Industry<br />

and In<strong>for</strong>mation Technology (MIIT) to target key<br />

energy-intensive industries and provinces.<br />

Resource Materials and Networking<br />

Industry<br />

IIP will develop a robust network providing tools,<br />

methodologies, and other resources to help<br />

China’s industrial companies lower their energy<br />

intensity. IIP will develop business cases and<br />

incentives, increase energy management capacity,<br />

provide frameworks <strong>for</strong> in<strong>for</strong>med discussion, and<br />

help demonstrate successful use of energy best<br />

practices in key industries (including chemicals,<br />

cement, and iron and steel). IIP will assist in the<br />

design, implementation, and evaluation of energy<br />

per<strong>for</strong>mance demonstrations by industry partners<br />

and document the results in case studies. These<br />

ef<strong>for</strong>ts will help China reach its target goals <strong>for</strong><br />

its Top 10,000 Enterprises, Top Runner, and 100<br />

Energy Efficiency Standards programs.<br />

To support China’s industrial energy policies, IIP will conduct demonstrations and help to identify, develop, and<br />

deliver a robust portfolio of materials. IIP will work with CSEP to further develop partnerships with NDRC, MIIT,<br />

the China National <strong>Institute</strong> of Standardization (CNIS), the Center <strong>for</strong> <strong>Industrial</strong> Energy Efficiency (CIEE), Shanxi<br />

and Shandong provinces, key industry associations, and companies in the target industries.<br />

Representative Activities: 2012 -2013 Representative Activities: 2014-2015<br />

Work with Shanxi and Shandong provinces to<br />

implement pilot energy management programs.<br />

Scale up pilot energy management programs <strong>for</strong><br />

adoption by China’s Top 10,000 enterprises.<br />

Top 10,000 Enterprises Program<br />

This program aims to save 250 million tonnes<br />

of coal equivalent (tce) by 2015 in the roughly<br />

15,000 enterprises that collectively use<br />

about 60% of China’s energy. Specific energy<br />

savings targets are set <strong>for</strong> all enterprises that<br />

use more than 10,000 tce and designated<br />

others that use more than 5,000 tce annually.<br />

Each must set up an energy management<br />

system, establish benchmarks, and conduct<br />

energy audits, among other activities.<br />

http://iepd.iipnetwork.org/policy/top-10000-<br />

energy-consuming-enterprises-program<br />

Top Runner Program<br />

By 2015, the Ministry of Industry and<br />

In<strong>for</strong>mation Technology (MIIT) aims to bring<br />

all enterprises in China’s petrochemical, iron<br />

and steel, and cement industries up to the level<br />

of energy efficiency practiced by the current<br />

top per<strong>for</strong>mers in each industry. In June<br />

2012, MIIT identified the top petrochemical<br />

per<strong>for</strong>mers <strong>for</strong> 10 products. If the rest of<br />

China’s petrochemical producers match the<br />

top runners, they could collectively save an<br />

estimated 21 million tce annually by 2015.<br />

100 Energy Efficiency Standards Program<br />

This program aims to review existing standards in<br />

terms of domestic and international best practices<br />

and introduce 100 new or revised standards over<br />

the next two years. Launched in 2012 by the<br />

National Development and Re<strong>for</strong>m Commission<br />

(NDRC), General Administration of Quality<br />

Supervision, Inspection and Quarantine (AQSIQ),<br />

and Standardization Administration of China<br />

(SAC), the program presents an opportunity to<br />

establish an enduring system to en<strong>for</strong>ce industrial<br />

energy standards.<br />

Publish best practices summaries <strong>for</strong> facilities in the<br />

petrochemical industry participating in the Top Runner<br />

Program.<br />

Continue technical support <strong>for</strong> the 100 Standards<br />

Program: develop implementation guidelines <strong>for</strong> EnMS<br />

in steel and cement and <strong>for</strong> ESO in steel and refining;<br />

energy standards <strong>for</strong> energy-intensive products.<br />

Develop plan to introduce energy efficiency<br />

technologies in key chemical furnaces (kilns).<br />

Pilot energy management practices in the cement,<br />

petrochemical, and steel industries.<br />

Develop ESO case studies <strong>for</strong> the iron and steel industry.<br />

Establish ESO and EnMS Knowledge Exchange.<br />

Work with financial institutions to improve practices<br />

and conduct pilot demonstrations of innovative<br />

financing options <strong>for</strong> energy efficiency projects.<br />

Promote implementation of ESO standards in the iron<br />

and steel and oil refining industries.<br />

Develop implementation guidelines <strong>for</strong> EnMS in eight<br />

additional sectors.<br />

Disseminate measurement and verification protocols<br />

<strong>for</strong> energy management.<br />

Identify cement industry best practices and case studies.<br />

Extend Knowledge Exchange Plat<strong>for</strong>m.<br />

Energy Systems Optimization<br />

While energy-efficient components can<br />

provide efficiency gains of 2% to 5%,<br />

optimizing energy use at the systems level<br />

can deliver average efficiency gains of 20%<br />

to 30% within a payback period of two<br />

years or less. System design and operational<br />

practices must be re-evaluated and optimized<br />

periodically with changes in equipment and<br />

production patterns.<br />

Source: UNIDO web page at unido.org/index.<br />

php?id=1000498


IIP Strategy in India<br />

Per<strong>for</strong>m, Achieve and Trade (PAT)<br />

In 2011, India introduced the market-based<br />

trading scheme Per<strong>for</strong>m, Achieve, and Trade<br />

(PAT) to increase the cost effectiveness<br />

of energy efficiency improvements. 478<br />

enterprises in nine energy-intensive sectors<br />

(including power, iron and steel, cement, pulp<br />

and paper, and fertilizer) are required to reduce<br />

their energy costs by target amounts by 2014.<br />

Upon certification, companies exceeding<br />

their targets may accrue business benefits<br />

by trading their certificates; companies that<br />

do not meet their targets will either buy<br />

certificates or pay a penalty.<br />

MSMEs<br />

Micro, small, and medium enterprises<br />

(MSMEs) often possess significant<br />

opportunities <strong>for</strong> improving their energy<br />

efficiency, yet they lack the needed expertise<br />

and financial resources. A range of strategies<br />

can help these businesses capitalize on<br />

opportunities to gain a competitive edge.<br />

Carefully designed interventions can<br />

substantially mitigate CO 2<br />

emissions as well as<br />

deliver diverse co-benefits.<br />

Country snapshot: Despite considerable progress, the energy intensity of India’s industrial<br />

sector remains relatively high. Energy per<strong>for</strong>mance varies widely within the subsectors<br />

due to the wide range in plant vintage, production capacity, level of technology, quality<br />

of raw materials, and product mixes. In the cement and fertilizer sectors, <strong>for</strong> example,<br />

India has some of the best-per<strong>for</strong>ming plants in the world. This high bandwidth in energy<br />

efficiency poses a challenge to policy makers in designing effective and targeted policies.<br />

The Energy Conservation Act (ECA) of 2001 established the Bureau of Energy Efficiency<br />

(BEE), set up energy efficiency standards by product/process, required energy audits by<br />

an accredited auditor, and made certified energy managers mandatory in energy-intensive<br />

industries. In 2011, the government launched its ambitious Per<strong>for</strong>m, Achieve, and Trade<br />

(PAT) scheme, which combines regulation with a flexible market mechanism. In addition<br />

to the energy-intensive sectors covered under PAT, micro, small, and medium enterprises<br />

(MSMEs) constitute another significant industry segment with many energy-intensive subsectors<br />

in which the cost of energy <strong>for</strong>ms a sizeable share of total production costs. These<br />

MSMEs represent a tremendous opportunity to improve energy efficiency and mitigate<br />

GHG emissions through technology upgrades, modernization, and adoption of better energy<br />

management practices.<br />

Goal: Drive a 3.5% annual reduction in energy intensity in India’s energy-intensive<br />

industries through 2020.<br />

Government<br />

IIP will engage with BEE and other relevant<br />

government agencies, banks, regulators, and<br />

utilities to evolve an environment conducive to<br />

the success of India’s PAT initiative. IIP activities<br />

will similarly pave the way <strong>for</strong> increased use of<br />

alternative fuels and raw materials (AFR) in<br />

energy-intensive industries, such as cement,<br />

and will facilitate development of policies that<br />

complement effective implementation of PAT. IIP<br />

will also provide in<strong>for</strong>mational resources to support<br />

BEE’s ef<strong>for</strong>ts to promote energy efficiency across<br />

the MSME sector.<br />

Industry<br />

IIP will work with industry associations, selected<br />

industrial clusters, and large corporate groups and their<br />

suppliers to build technical capacity, provide essential<br />

tools, and promote implementation of industrial energy<br />

efficiency best practices. These ef<strong>for</strong>ts will focus on:<br />

(1) developing the major industry associations<br />

as change agents, (2) demonstrating intelligent<br />

bundling of medium-scale projects, (3) creating<br />

knowledge exchange plat<strong>for</strong>ms on energy themes,<br />

(4) piloting a greening of the supply chain, and (5)<br />

developing effective, easy-to-use tools to help industry<br />

continuously improve energy per<strong>for</strong>mance.<br />

Resource Materials and Networking<br />

IIP will develop databases, specialized assessment tools, best practice guides, and case studies to expand industry awareness of<br />

and capacity to implement energy-saving measures. IIP will provide expert policy guidance, hold conferences on topics of critical<br />

interest, and create specialized knowledge exchange plat<strong>for</strong>ms.<br />

Representative Activities: 2012 -2013 Representative Activities: 2014-2015<br />

Customize assessment tool to identify and prioritize<br />

energy-saving opportunities in India’s ammonia industry.<br />

Work with the cement industry to create an action<br />

plan to increase thermal substitution rates.<br />

Provide technical support <strong>for</strong> bundling of mediumscale<br />

projects in a steel re-rolling cluster.<br />

Promote use of cleaner technologies by IKEA vendors<br />

to green the supply chain.<br />

Assist foundries in implementing promising<br />

opportunities (identified using IIP’s best practices<br />

guide) by working with the credit facility created under<br />

the World Bank/GEF/BEE project.<br />

Help frame complementary policies to assist effective<br />

implementation of PAT.<br />

Create AFR database and promote AFR use across<br />

India’s cement industry.<br />

Promote use of assessment tool by all ammonia<br />

producers.<br />

Hold seminar on the role of supply chain initiatives in<br />

promoting sustainable business.<br />

Promote energy efficiency best practices in 450<br />

foundries in India.


IIP Strategy in the United States<br />

Country snapshot: The United States consumes nearly 11% of the world’s industrial energy<br />

(IEA 2012) and offers substantial potential <strong>for</strong> efficiency improvements. The continuing<br />

economic recovery is stimulating demand <strong>for</strong> industrial products and attracting new<br />

investment in manufacturing capacity and infrastructure. These trends, in combination with<br />

low natural gas prices (helped by the development of new shale gas resources), could signal<br />

a healthy growth in U.S. manufacturing capacity, including the energy-intensive chemicals,<br />

fertilizer, cement, and iron and steel industries. State-of-the-art technologies and energy<br />

management practices can substantially reduce the energy intensity of U.S. production.<br />

Goal: Drive a 3.5% annual reduction in energy intensity in key energy-intensive<br />

industries through 2020.<br />

Government<br />

Industry<br />

Superior Energy Per<strong>for</strong>mance<br />

This U.S. certification program will be launched<br />

in 2013 to provide industrial facilities with<br />

a roadmap <strong>for</strong> continually improving energy<br />

efficiency while maintaining competitiveness.<br />

The program will set up a globally accepted<br />

system <strong>for</strong> verifying the energy management<br />

practices, per<strong>for</strong>mance improvements, and<br />

savings that accrue through use of the ISO<br />

50001 energy management standard.<br />

http://iepd.iipnetwork.org/policy/superiorenergy-per<strong>for</strong>mance<br />

At the Federal level, IIP pursues opportunities to<br />

assist in developing decision tools and training<br />

materials on energy best practices and in delivering<br />

them to key industry groups. Products address<br />

systems approaches <strong>for</strong> energy management and<br />

energy system optimization. The President’s August<br />

2012 Executive Order promoting industrial energy<br />

efficiency, in combination with new opportunities<br />

at the regional and state levels, could drive new<br />

policies and programs. To support the Executive<br />

Order, IIP will partner with the Energy Foundation<br />

and work with key states, regions, utilities, and<br />

regulatory groups to identify and implement policies<br />

that foster energy efficiency and address financial,<br />

regulatory, and institutional barriers.<br />

To lower industrial energy intensity, IIP will<br />

develop a network <strong>for</strong> providing tools, training,<br />

and technical and financial assistance to<br />

energy-intensive industries (initially chemicals,<br />

cement, and iron and steel). Ef<strong>for</strong>ts will focus on<br />

key elements of energy management systems,<br />

including developing goals and targets, baselining,<br />

benchmarking, plant assessments, portfolio<br />

management, and implementation strategies. This<br />

work will entail direct engagement with industry<br />

and trade groups through workshops, on-line<br />

webinars, databases, and the development and<br />

adaptation of tools and in<strong>for</strong>mation materials.<br />

Boiler MACT<br />

Forthcoming revisions to the Clean Air Act<br />

include a new U.S. emissions standard to<br />

reduce hazardous air pollutants emitted<br />

by industrial boilers and process heaters.<br />

Boiler MACT (maximum available control<br />

technology), as it is known, could affect more<br />

than 1,500 units when it goes into effect<br />

in 2016. Combined heat and power (CHP)<br />

technology is seen as a leading compliance<br />

strategy <strong>for</strong> some operations.<br />

Resource Materials and Networking<br />

To support work with government and industry, IIP will help to identify, develop, adapt, and deliver a robust<br />

portfolio of materials. These resources will include policy databases, supporting measures and tools <strong>for</strong><br />

implementation, technical and financial databases, and in<strong>for</strong>mation on important technical resources, programs,<br />

training materials, and publications from the United States and around the world. IIP will establish and nurture<br />

partnerships with key U.S. groups, including the ACEEE, Alliance to Save Energy, U.S. Commerce and Energy<br />

Departments, Environmental Protection Agency, National Association of State Energy Offices, regional energy<br />

efficiency organizations, and state and utility energy programs.<br />

Representative Activities: 2012 -2013 Representative Activities: 2014-2015<br />

Work with Ohio groups and industries to assist in<br />

identifying CHP and waste heat opportunities and<br />

technical and financial needs to meet expected EPA<br />

coal Boiler MACT requirements.<br />

Establish chemicals and cement industry working<br />

groups in Gulf area to identify key opportunity areas<br />

and hold workshops and webinars on topics of interest.<br />

Develop on-line database <strong>for</strong> describing key U.S.<br />

resources.<br />

Conduct monthly series of on-line webinars to address<br />

best practices in energy systems management in<br />

energy-intensive U.S. industries.<br />

Work in several important industrial states in the<br />

Midwest to provide enabling tools and models to<br />

accelerate the use of best practices and advanced<br />

technologies.<br />

Develop and adapt tools and technical in<strong>for</strong>mation<br />

targeting waste heat recovery applications in energyintensive<br />

industries.<br />

Further develop an expert network of technical,<br />

financial, and policy experts that can develop an<br />

integrated, system-wide approach to substantially<br />

reducing industrial energy intensity.<br />

Revise and expand databases, software suites, training<br />

materials, and in<strong>for</strong>mation products that can provide<br />

cost-effective solutions to saving energy and carbon.


IIP Strategy <strong>for</strong> Global Research<br />

ISO 50001 Energy Management Standard<br />

The ISO 50001 Standard, released in June 2011,<br />

provides a systematic approach <strong>for</strong> industrial and<br />

commercial facilities to plan, manage, measure,<br />

and continually improve energy per<strong>for</strong>mance.<br />

Organizations can use its internationally<br />

recognized framework to voluntarily implement<br />

an energy management system.<br />

Measurement & Evaluation<br />

Accurately measuring energy use is a critical<br />

first step toward energy savings. Following<br />

established measurement methods and<br />

protocols in setting an energy baseline or<br />

assessing project impacts will enable accurate,<br />

transparent, and consistent evaluation of energy<br />

efficiency projects, per<strong>for</strong>mance, and progress.<br />

Global Superior Energy Per<strong>for</strong>mance<br />

An initiative of the Clean Energy Ministerial and<br />

International Partnership <strong>for</strong> Energy Efficiency<br />

Cooperation, GSEP aims to reduce global energy<br />

use in industrial facilities and commercial<br />

buildings by encouraging continuous<br />

improvement in energy efficiency. The initiative<br />

also aims to promote public-private cooperation<br />

on specific technologies or in individual energyintensive<br />

sectors.<br />

Global snapshot: As economies gradually recover from the recent global recession,<br />

businesses will be ramping up production and investing in new industrial capacity—increasing<br />

the global demand <strong>for</strong> energy. In some regions, rapid urbanization and industrialization are<br />

also significantly increasing energy use. Technology choices in all new or expanded industrial<br />

plants will have an enormous impact of energy use and carbon emissions over the coming<br />

decades. These choices will either alleviate or exacerbate global issues of energy security,<br />

water quality, climate, and health. Greater awareness and technical knowledge of energy<br />

best practices, in combination with effective policies, standards, and appropriate financial<br />

instruments, can improve technology choices and the energy per<strong>for</strong>mance of industrial<br />

operations today and <strong>for</strong> the future.<br />

Focus: Initially transfer best practices in policy, finance, and technology to target<br />

regions; progress to the transfer of innovations, smart manufacturing, and other<br />

approaches leading to zero plant emissions.<br />

Government<br />

IIP facilitates the sharing of in<strong>for</strong>mation across<br />

governments on effective policy frameworks <strong>for</strong><br />

improving the energy per<strong>for</strong>mance of energyintensive<br />

industries and tailors solutions to local<br />

needs. IIP workshops and resources assist policy<br />

makers in designing complementary policies with<br />

appropriate targets, benchmarks, protocols, and<br />

incentives. In concert with regional needs, political<br />

systems, and cultures, IIP works with government<br />

agencies to design and implement pilot programs<br />

that demonstrate the benefits of effective<br />

systems approaches to energy management and<br />

optimization in IIP’s region of focus.<br />

Resource Materials and Networking<br />

Industry<br />

IIP disseminates best practices, technology<br />

in<strong>for</strong>mation, tools, financing options, and case<br />

studies, as well as sector- and country-specific<br />

in<strong>for</strong>mation. <strong>Industrial</strong> firms can use these<br />

resources to identify, implement, and monitor<br />

new energy efficiency options. IIP also works with<br />

selected industrial firms and government partners<br />

to demonstrate various approaches to energy<br />

efficiency—helping to document the benefits, prepare<br />

case studies, develop guidelines, and disseminate<br />

these materials so that industrial companies around<br />

the globe can replicate successful programs and<br />

benefit from the experiences of others.<br />

IIP provides governments and industry with integrated expertise in policy, programs, finance, and technology <strong>for</strong><br />

industrial energy efficiency. IIP maintains and continuously improves a suite of databases, tools, and multimedia<br />

resources on technology, financing options, program approaches, supply chain initiatives, and technical in<strong>for</strong>mation.<br />

Representative Activities: 2012 -2013 Representative Activities: 2014-2015<br />

Energy Management Working Group<br />

One of six GSEP working groups, this group<br />

facilitates international dialogue to share<br />

best practices and resources to accelerate<br />

continuous energy per<strong>for</strong>mance improvements.<br />

It supports participating governments in<br />

creating high-impact programs.<br />

Document policy frameworks that tie energy<br />

management to energy per<strong>for</strong>mance improvements<br />

and incentives.<br />

Expand and enhance IIP’s databases on policy,<br />

programs, financing, technology and supply chain<br />

initiatives.<br />

Evaluate the effectiveness of fiscal incentives in China,<br />

the United States, Germany, and Japan.<br />

Pilot the integration of energy efficiency assessments<br />

into the mainstream financing practices of HSBC India<br />

and one Chinese bank.<br />

Explore opportunities to pilot and scale up energy<br />

management implementation through supply chains.<br />

Launch monthly <strong>Industrial</strong> Excellence series and other<br />

multimedia products in partnership with the Clean<br />

Energy Solutions Center.<br />

Translate technology database into four languages by<br />

partnering with industry associations or energy service<br />

companies.<br />

Help integrate energy efficiency assessments into the<br />

mainstream financing practices of eight additional<br />

financial institutions.<br />

Assist additional government agencies to design<br />

energy management programs and facilitate<br />

implementation of EnMS in companies.<br />

Promulgate ISO 50001 in 20 supply chains.<br />

Create social networks of energy-efficiency<br />

stakeholders in selected technology/industry-specific<br />

sectors.<br />

Expand resources on global best practices.


Sharing best practices <strong>for</strong> the low carbon future | iipnetwork.org<br />

2200 Pennsylvania Avenue, N.W., 4th Floor, East Tower, Washington, D.C. 20037 U.S.A.<br />

info@iipnetwork.org | Twitter.com/iipnetwork<br />

October 2012

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