This article is part of our special report Resource Efficiency.
SPECIAL REPORT / Metal industries want EU member states to implement legislation on waste, recycling and sustainable development. At the same time, they are concerned about the loss of profits resulting from "rushed" laws that could force them to do business outside Europe, says Oliver Bell.
Oliver Bell is president of Eurometaux, the European umbrella association for the non-ferrous metals industry and raw materials companies. He provided written responses to questions from EurActiv's Ana-Maria Tolbaru.
Industry fears that if the EU sets too strict rules on resource efficiency, they will be forced to move their activities abroad. What is your view?
This might indeed be the case. Fear is also in this case a bad advisor. Back to facts, the resource efficiency indicators currently under discussion are mainly based on quantities of raw materials in relation to the gross domestic product – for example DMC [domestic material consumption].
Unfortunately these indicators worsen if the gross domestic product decreases, e.g. due to economic downturn, while the use of raw material stays the same. If these kind of indicators drive policy, it could imply that energy intensive companies relocate abroad.
This would lead to an improved resource-efficiency ratio for the given country even though the amount of material used remains the same. A proper indicator for resource efficiency also considers the metals invested and bound into the infrastructure. The current indicator wrongly classifies these investments in stock as “consumption”, therefore underrating resource efficiency.
What countries are friendlier to business when it comes to resource efficiency regulations?
Many countries are in the process of developing resource-efficiency programmes. It is still difficult to have a complete overview. However, there are low-hanging fruits for enhancing resource efficiency which can be easily harvested if we resolutely implement existing legislation.
For example, there is much to gain if we improve the control of illegal exports of end-of-life products and other waste which contain valuable material. In many cases, recycling outside the OECD means high losses in raw materials compared to recycling in modern EU recycling plants.
A global certification scheme for recycling could contribute to preventing those losses. Taxes on raw materials are not efficient since they further increase high material costs as well as decrease the competitiveness of the most efficient companies in the EU. Finally, compulsory recycled contents in products are misleading since they just divert scarce secondary raw materials from one application to others without improving recycling.
A recent report from Harvard Business School found that resource-efficient companies tend to produce higher investment returns than their less resource-efficient rivals. What do you think about these findings?
This study does not indicate which companies have been included. Especially the resource- and energy-intensive basic industry relies on a systematic comparison along the value chain. It is important to compare like with like, and not to compare light with heat.
Metals industry should be compared with metals industry and not with the service or consumer goods industry. This is a foremost necessity. The metals industry is permanently forced to utilise high-priced raw materials in an efficient way to survive international competition.
There are many examples of highly innovative efficiency technologies. An excellent overview of best-practice examples is provided by the company initiative 'Metals pro Climate'. It is an honour to chair this initiative and present our modern base-material-driven industry as a problem solver. However, standard “one-size-fits-all” solutions are in most cases not achievable.
Our experience shows that improvements in resource efficiency are always a combined result of scientific, technical, economic and environmental consideration and integration. In many cases lifecycle analysis even shows that a higher resource input is needed to make resource efficiency gains possible during the use phase of products.
Do you think that industry can regulate itself through natural competition? Would legal benchmarks not stimulate investments in resource efficiency measures?
The metals industry is increasingly compelled by market forces to utilise high-priced raw materials in an efficient way in order to survive international competition. Before setting benchmarks we need consensus on how to correctly measure resource efficiency. This process is important but needs some more time.
Even if sustainability is an important criterion for investments, we should accept that profit is nevertheless an important one, too. And last but not least CSR [corporate social responsibility] should follow facts and figures – [and] investors should be able to compare like with like.