Final Report - Innovation in the NSW environmental goods ... · The environmental goods and...

Innovation in the NSW environmental goods and services sector

NSW Innovation and Productivity Council FINAL REPORT

This report is based on findings from a staged research and consultation project commissioned by

the NSW Innovation and Productivity Council (IPC). Preliminary economic analysis of the NSW

environmental goods and services (EGS) sector by GHD in 2017 indicated that the EGS global

market and NSW innovation activity was strong and that the sector had a high potential for

innovation-led growth. CSIRO Data61 were engaged to build a data-rich profile of the EGS sector

across Australia using web-based data collation, linguistic analysis and machine learning to identify

EGS businesses and their specialities, employee size and other firm characteristics. KMatrix

undertook detailed market analysis of the sector and its regional strengths. The IPC Secretariat

worked with The Strategy Group to interview a sample of the critical stakeholders in the innovation

ecosystem – researchers, startups, industry and end users – to understand the market drivers and

barriers to innovation in this sector. A policy review by Common Capital of international best

practice EGS initiatives and the suite of existing NSW EGS and innovation programs provided the

basis for identifying the specific opportunities explored in this report.

This project has been overseen by an IPC subcommittee, with support from a NSW Government

Advisory Group of representatives from key agencies.

IPC Subcommittee membersIPC Subcommittee membersIPC Subcommittee membersIPC Subcommittee members NSW Government Advisory GroupNSW Government Advisory GroupNSW Government Advisory GroupNSW Government Advisory Group

Mr. Neville Stevens AO (IPC Chair) Prof. Annabelle Duncan Vice Chancellor University of New England (IPC Member)

Prof. Alan Broadfoot Executive Director, Newcastle Institute for Energy and Resources (IPC Member)

Prof. Anthony Capon Director Planetary Health Platform, Sydney University

Dr. Chris Armstrong Acting NSW Chief Scientist and Engineer, Office of the NSW Chief Scientist and Engineer

Ms. Anna Mitchell Senior sustainability Strategist, City of Sydney

Ms. Skye Theodorou NSW Department of Finance, Services and Innovation

Mr. David Fowler NSW Environment Protection Agency

Ms. Kate Bromley and Ms. Chirine Dada Jobs for NSW

Mr. Carlos Flores and Ms. Louise Askew NSW Office of Environment and Heritage

Dr. Chris Armstrong Office of the NSW Chief Scientist and Engineer

SENSITIVE: NSW Innovation & Productivity Council advice – not government policy

ContentsContentsContentsContents

Executive summary ....................................................................................................................................... i

1 – Drivers and opportunities .................................................................................................................... i

EGS, innovation and productivity ......................................................................................................1

The market opportunity for EGS ..................................................................................................... 3

Competitive advantages in NSW..................................................................................................... 4

2 - Barriers to growth................................................................................................................................ 13

Market Credibility.................................................................................................................................... 13

Networks and Collaboration ............................................................................................................. 14

Scaling for Export ................................................................................................................................... 15

Market Signals .......................................................................................................................................... 16

3 – The role of government.................................................................................................................... 17

Lessons from best-practice policy ................................................................................................. 17

The NSW context ................................................................................................................................... 19

4 – Proposed actions ............................................................................................................................... 20

Action 1: EGS Innovation Network ...................................................................................................... 21

Action 2: An EGS Skills & Market Development Fund ............................................................. 25

Action 3: EGS Innovation Challenges............................................................................................... 28

Action 4: EGS Export Strategy ............................................................................................................ 31

Action 5: Government Procurement ................................................................................................ 33

Action 6: Large-scale Circular Economy ........................................................................................36

Action 7: A coordinated NSW EGS innovation agenda......................................................... 40

Appendix 1 – NSW University Environmental Research Centres .......................................42

Appendix 2 – International best practice EGS programs ..................................................... 44

Appendix 3 – Stakeholder consultation ..........................................................................................47

Appendix 4– International initiatives ............................................................................................... 50

Appendix 5 – NSW and Australian programs and initiatives relevant to proposed actions ............................................................................................................................................................. 59

Appendix 6 – Circular Economy analysis ...................................................................................... 68

i


Executive summary Executive summary Executive summary Executive summary

This report examines the environmental goods and services (EGS) sector in NSW and

internationally. It explores the state’s strengths across research and industry, outlines the

barriers that may be restricting the growth of the sector and looks at the best ways to

overcome these barriers. The report has been developed by the NSW Innovation and

Productivity Council (IPC) as part of its broader remit to provide advice to government on

emerging high-potential areas of the innovation economy in NSW.

The EGS sector provides technologies, goods and services to reduce the environmental

impacts and increase the resource productivity of a broad range of industries that are

critical to the NSW economy. Recent global growth trends in the sector have far exceeded

those of the wider economy. In the European Union, the EGS sector’s output-to-GDP ratio

rose nearly two percentage points between 2000 and 2014, and created over a million new

full-time equivalent jobs. The size of the global market in environment goods is expected to

reach US$3 trillion by 2020.

In NSW, EGS is an innovation-rich sector with recognised research and industry strengths,

and a competitive advantage over neighbouring states. NSW is home to 43% of Australia’s

EGS businesses and 44% of its ‘innovative’ EGS businesses, double Victoria’s share. Major

sub-industries in NSW include recovery and recycling, water and wastewater treatment,

building technologies, cleaner manufacturing, processes and materials, and renewables.

NSW owes much of this advantage to its strong higher education and research sector.

NSW universities lead the world in ten EGS-related fields, and 17% of university patents

since 2014 were for EGS innovations. Work at these world-class research institutions has a

high potential for growth outside metropolitan Sydney. For example, the University of

Newcastle’s Institute for Energy and Resources is engaging with local industries on

innovative resource productivity improvements, while the University of New England’s

SMART Farm Innovation Centre showcases the latest technologies aimed at improving the

productivity and sustainability of Australia’s farms to grow and safeguard regional jobs.

Sector-specific strategies to support innovation in target segments with clearly recognised

global markets are a feature of high-performing innovation economies. The Jobs for NSW

policy to support tradeable sectors with the potential to become globally competitive and

create resilient jobs already identifies environmental technologies as a priority for NSW.

More so than other growth segments, the EGS sector has the potential to deliver

substantial productivity gains to the NSW economy, by reducing the operating costs of its

customer businesses through resource-efficient technologies, process and services. In

addition to direct benefits of new business and job creation within the sector, growth of

NSW EGS would support businesses across the economy to become more productive,

competitive and better able to comply with regulations. A strong and mature EGS sector

delivers environmental and economic benefits, with spill-over productivity gains

compounding along supply chains and across industry sectors.

This report provides an evidence-base that supports strategic government action for

innovation-led growth in the EGS sector. NSW could take advantage of market trends and

optimise research and industry strengths by making a long-term policy commitment to

position the state as a regional leader in EGS through the development of an integrated

sector growth strategy. This would not include renewable energy, which is considered to be

a relatively mature market receiving a range of other forms of support for innovation.

However some of the actions developed can apply to the renewable energy sector.

ii


Action to support innovation in the rest of the sector could deliver more return on recurrent

public investments in environmental protection by capturing the flow-on economic benefits

of building a globally competitive EGS sector.

The IPC recommend that the following actions to meet the goals of fostering collaboration,

driving market demand and building investment confidence in the sector be considered by

government for further development:

1 EGS Innovation

Network

Establish an EGS Innovation NetworkEGS Innovation NetworkEGS Innovation NetworkEGS Innovation Network to address co-

ordination failures by linking end users to innovators

through virtual and face-to-face networks, cultivating deep

collaboration between different actors, supply chains and

existing hubs. Create a Research Network of the state’s

world-class research institutions, linking their capabilities in

EGS research.

2 Skills and Market

Development Fund

Establish an EGS Skills and Market Development FundEGS Skills and Market Development FundEGS Skills and Market Development FundEGS Skills and Market Development Fund to

support commercialisation with competitive grants that

incentivise co-investment, employment pathways and

university-industry collaboration.

3 Innovation

Challenges

Issue Innovation ChallengesInnovation ChallengesInnovation ChallengesInnovation Challenges that optimise research

strengths and solve priority environmental issues including

contaminated site remediation, waste management data,

state-level biodiversity data, and novel recycling solutions.

4 EGS Export

Strategy

Develop an EGS Export StrategyEGS Export StrategyEGS Export StrategyEGS Export Strategy to stimulate demand for

NSW EGS through trade promotion, enhancing the visibility

and identity of the sector, advocating international adoption

of best practice NSW EGS regulations and programs, and

helping local businesses scale for export markets.

5 Government

Procurement

Make better use of Government ProcurementGovernment ProcurementGovernment ProcurementGovernment Procurement to send a

strong market signal by considering lifecycle costs in value-

for-money assessments and growing local market demand

for EGS innovation.

6 Large-scale Circular

Economy program

Expand existing Circular EconomyCircular EconomyCircular EconomyCircular Economy programs to create a

state-wide manufacturer’s network for reusing waste

streams as inputs that improves resource productivity,

builds NSW resilience to global fluctuations in waste trade

and drives local innovation.

7 A coordinated NSW

EGS Innovation

Agenda

Drive a Coordinated NSW EGS Innovation AgendaCoordinated NSW EGS Innovation AgendaCoordinated NSW EGS Innovation AgendaCoordinated NSW EGS Innovation Agenda and

align activity within government to support EGS innovation

by leveraging existing programs, collaborating across

agencies and designating a team to coordinate delivery of

this strategy.

1


1 1 1 1 –––– Drivers and opportunities Drivers and opportunities Drivers and opportunities Drivers and opportunities

EGS, innovation and productivity

The environmental goods and services sector is a multidisciplinary set of corporations, local

businesses and research organisations that deliver economic value by improving resource

efficiency, mitigating negative environmental impacts and enhancing natural assets.

There is a growing recognition that new technologies and other innovations can provide a

tangible means to achieve sustainability and improved wellbeing. This is seeing a shift away

from treating environmental impacts as expensive externalities and a move towards a more

sophisticated integration of economic and environmental value. Many of the World

Economic Forum’s annual top ten most promising technologies have a clear environmental

focus, from energy-efficient water purification and carbon dioxide conversion, to bio-based

chemistry. A more local example in NSW is a new graphene membrane made from

renewable bio-based materials, which is outperforming conventional filters and has wide

applications from decentralised rural water supplies to end-of-pipe solutions for industrial

wastewater.

Emerging technologies in materials engineering have made possible more durable products

that are lighter, stronger, consume fewer mineral resources and are more readily recycled.

Advances in lighting, heating/cooling and energy management are making the built

environment more efficient. Together with advances in chemical engineering, membrane

science, biotechnology and sensing micro-circuitry, such innovations are expected to play a

major role in creating connected, healthy living spaces in an advanced economy.

New technologies and process innovations are changing the economic value of resources

embodied in consumer goods and primary waste streams, supporting the global emergence

of secondary markets in reprocessing waste into new resources. In NSW, newly developed

mining process innovations are maintaining and even improving yields while significantly

reducing onsite water consumption1. These kinds of innovations deliver a direct productivity

benefit to the business’s bottom line – reducing the environmental impact and increasing

the ease of regulatory compliance allows more expansive operations that can more

efficiently extract resources to increase the amount of saleable product.

Environmental goods and services are designed to make more efficient use of resources,

prevent or repair costly environmental damage caused by economic activities, or create

new economic value by enhancing the quality and health of natural spaces. In all cases, they

deliver productivity co-benefits by reducing input costs, increasing outputs, creating new

opportunities for revenue, avoiding the expense associated with environmental remediation,

reducing costs for the purchase of virgin resources and protecting natural spaces that

provide critical ecosystem and economic services. The EGS sector includes businesses

delivering waste, wastewater, water, energy management, renewable energy, adapted

goods, biodiversity and landscape, and air and climate services, and operates economy-

wide, with core customers in government and the construction, utilities, manufacturing,

mining, agriculture, forestry and fisheries industries2.

1 Broadfoot, A. personal communication, 9 March 2018

2 ABS (2016) 4655.0 - Australian Environmental Economic Accounts

2


Figure 1 – Example NSW and Australian EGS innovations

Solar powered, scalable

solutions to decontaminate

and purify water in regional

areas and developing

countries

Absorbent clay

(PhoslockTM) which

permanently binds

dissolved phosphorous

reducing algal blooms in

waterways

Below ground water

treatment technologies to

remove dissolved and

colloidal contaminants such

as heavy metals and

nutrients (StormDMT)

Water recycling

technologies incorporating

new nanotechnology to

treat water at a finer scale

and reduce the potential of

biofouling (fouling pipes

and surfaces).

Removal of phosphorous in

water treatment plants to

create an environmentally

friendly fertilizer

Innovative plastic melting

process for recycling

PolyWaste TechnologyTM

(Newtecpoly, Moama)

Mixing fly ash, a by-product

of coal combustion, into

concrete mixes

Produce clean gas energy

from agricultural waste

(ARENA)

Decentralised wastewater

treatment innovations

Microfactories for high-

value resource recovery on

a local scale

Bioplastic technology to

produce biodegradable

plastic food packaging

from banana pseudo-stems,

a waste product of banana

fruit harvesting (UNSW).

Intelligent operation of

building HVAC systems

using OptiCOOL

technology

(CSIRO/BuildingIQ)

Roof top gardens and

vertical garden walls (green

infrastructure) to reduce

building heating and

cooling requirements,

improve air quality and

reduce heat effects in

urban environments.

High-reflectivity light-

coloured roofing materials

to reduce cooling bills, and

heat-reflective paint

(SkyCool) to upgrade

existing, inefficient dark

rooftops.

Passive cooling and heating

systems (Ecoheat) that use

solar radiation to directly

heat the home.

High-capacity aqueous

potassium-ion and other

large scale battery storage

for renewable energy

applications

Silicon-free third

generation photovoltaics to

integrate into roofs and

windows as solar panels

(CSIRO/ANU)

Flexible thin film solar cells,

world record for highest

solar energy efficiency in

commercial and perovskite

solar cells

Graphite, hydrogen and

clean energy with lower

carbon dioxide emissions

and cost (USYD)

Intelligent energy grids

including automated

monitoring of commercial

PV systems.

Low cost portable air

sensors to investigate air

quality in real time and can

be used for road tunnels,

ports and railways

Biochar technology and

application for soil

amendment

Soil carbon sequestration

and improved infiltration

through practices such as

regenerative agriculture

Drone technology for more

precise soil analysis and

follow up

DNA analysis for detecting

soil pathogens

Mid-infrared spectroscopy

for fast and low cost soil

analysis

Satellite telemetry, light

weight transmitters, remote

cameras and audio devices

to gather species data.

Smart metering to identify

leaks in water supply

systems to reduce water

losses and improve

efficiency

Online platform ASPIRE for

waste reuse between

organisations (CSIRO)

Citizen science programs

(e.g. Redmap) cost-

effective generation of

large scale environmental

datasets

eSPADE interactive and

detailed online maps of soil

and environmental

conditions to give more

information to landholders

(NSW Government)

Open access datasets such

as the Atlas of Living

Australia.

3


Twenty per cent of Australian businesses report being significantly affected by

environmental issues and 43% are taking measures to minimise their impact on the

environment3. The most common activities relate to reducing resource inputs, including

water and energy, and lifting the rates of material reuse and recycling. Producing more

with less, and gaining more utility from what is produced, is the very definition of

productivity growth.

There is also a link between innovative business models and demand for EGS. Innovation-

active businesses are nearly 1.4 times more likely to be taking action to reduce their

environmental impact than innovation-inactive businesses4.

Some of the economic benefits that are expected to come from a strengthened NSW EGS

sector will flow directly from the growth of businesses, jobs and trade within the sector as

it commercialises more local innovations and gears up to service growing domestic needs

and rapidly expanding export markets. But a mature EGS sector also delivers much wider

benefits in firm-level resource productivity gains that help our industries remain

competitive in an increasingly globally connected economy.

The market opportunity for EGS

Recent global growth trends in the EGS sector have far exceeded those of the wider

economy. In the European Union the EGS sector’s output-to-GDP ratio rose nearly two

percentage points to 5.1% between 2000 and 2014, and created over a million additional

full-time equivalent jobs5. The global market for environmental goods was valued at US$1

trillion in 2014, and is projected to expand to US$3 trillion by 20206.

The picture is similar in NSW, where domestic EGS sales grew by 7.1% in 2017/18 to reach

$43.9 billion7, of which $10.9 billion was in renewable energy. There are two implications

to this trend. Firstly, any sector whose growth outpaces that of the economy will make an

outsize contribution to employment growth, taxation revenue and rising living standards.

Secondly, each domestic EGS sale represents a business or household investing in

resource efficiency to reduce input costs, driving productivity growth across the economy

and signalling the state economy’s appetite for more efficient business practices and

lifestyles.

The current value of NSW EGS exports has been estimated at $3 billion8, including $784M

in renewables. This reflects Australia and NSW’s strong trade relationships with regional

partners across Asia, where booming economies and an increasing concern for

environmental issues from a growing middle class have produced strong regional demand

for EGS. NSW EGS businesses confirm that much of the demand for their products comes

from overseas markets, including mature markets with more stringent regulatory

standards9. For example, demand for NSW concrete products made from fly ash, a by-

product of coal combustion, is driven by markets where end users pay levies based on a

product’s embodied carbon such that fly ash products are more cost-effective than

3 ABS (2017) 8172.0 - Management and Organisational Capabilities of Australian Businesses 2015/16 4 ibid 5 Eurostat. http://ec.europa.eu/eurostat/statistics-explained/index.php/Environmental_goods_and_services_sector. Accessed 6 March 2018. 6 Department of Foreign Affairs and Trade (DFAT). http://dfat.gov.au/trade/agreements/environmental-goods-agreement/pages/environmental-goods-agreement.aspx. Accessed 6 March 2018 – In 2014 Australia joined negotiations on the WTO Environmental Goods Agreement to expand the list of 54 environmental goods on which tariffs were reduced in 2012, Negotiations are ongoing. 7 kMatrix (2018) The NSW Low Carbon and Environmental Goods and Services Sector 8 kMatrix op. cit

9 The Strategy Group (2017) Stakeholder engagement with the NSW environmental goods and services sector.

4


traditional emissions-intensive cement. In China, a long-term plan to improve water quality

has created significant opportunities for an Australian company that is commercialising

CSIRO technology to sequester phosphate in waterways in order to prevent algal

growth10

.

The top four export markets for NSW EGS are Japan, South Korea, China and India, all of

which are priority markets with dedicated NSW Department of Industry international trade

teams. These countries have made public statements signalling their intention to make

extensive use of EGS in the coming years, with China setting ambitious targets to improve

air quality in its cities, and India relying heavily on photovoltaic solar to improve energy

access for its citizens. These types of environmental targets – whether they be self-

imposed or the result of international negotiations – will continue to be a feature of global

politics and a central driver of EGS sector growth into the future. This is a clear market

opportunity for NSW, with its globally recognised natural environment and strong

international reputation for EGS11, to position itself as a regional leader in EGS as nations

look to quickly deliver on their commitments at low cost.

The EGS sector employs a growing proportion of the global workforce. Over 5 million

professionals – more than 1 % of the global user base – include the word “environmental”

in their job description on LinkedIn, and environment-focused businesses are almost three

times more likely to be hiring than other businesses globally12

.

EGS is the ‘core’ business for almost 65% of a sample of 1200+ NSW businesses involved

in the sector, that is, the primary purpose of more than 50% of their business is to deliver

an environment benefit. EGS ‘allied’ businesses are those in the sector that have less than

50% of their operations focused on environmental benefit. Independent quantifications

suggest that the number of jobs in the NSW EGS sector is on par with the agricultural and

mining sectors combined13

. Preliminary estimates based on analysis of LinkedIn data for

this sample of 1200 businesses are that at least 22,950 people are employed in ‘core’ EGS

businesses in NSW and at least 59,750 people in ‘allied’ EGS businesses14

. Detailed analysis

of the NSW market capturing 7871 businesses closely tracks this with 152,000 EGS jobs in

NSW, including 40,000 in renewable energy. EGS employment in NSW is also growing at

an average of 6.0% p.a.15

, and this rate is expected to increase as global and domestic EGS

markets expand. A quarter of the sector’s new NSW jobs are predicted to be located in

regional areas16

.

Competitive advantages in NSW

NSW has natural market advantages in EGS. Australia is renowned internationally for its

clean natural environment and attracts almost 9 million international visitors each year,

more than half of whom visit NSW. Australia’s clean air and water, highly liveable cities

and outdoors-focused lifestyle has helped to build a well-known international reputation

for environmental performance. This reputation also reflects market strengths. Australia

has nearly twice the proportion of environment-focused businesses on LinkedIn compared

10 https://www.austrade.gov.au/australian/export/export-markets/countries/china/industries/environment-and-water-management 11 Ibid 12

Data61 (2017) Analysis of LinkedIn data 13 id (2017) https://profile.id.com.au/australia/industries?WebID=100 Accessed 6 March 2018. 14 Ibid. An early estimate in GHD (2017) Sector focus on innovation of 30,300 noted their data was limited, with employee numbers mainly counted in large utilities, and excluding water efficiency, energy efficiency, air monitoring or other smaller firms, 15

2017/18 kMatrix op. cit. 16 Jobs for NSW (2016) op. cit.

5


to the average for all other countries17

, and these firms are two years younger on average

than non-EGS firms, reflecting the rapid growth of the sector in recent years.

17 Data61 (2017) op. cit.

6


Figure 2: Australian EGS businesses, subsectors and jobs

7


Figure 3: EGS in regional NSW

*Number of businesses identified in the Far West region was too low to allow statistically valid analysis of subsector strengths

8


In the EU and other leading EGS economies, Environmental Goods and Services is a

recognised and economically valuable sector, with strong administrative and policy

datasets18

that track industry performance, jobs growth and economic impacts of the

sector. In Australia, EGS is relatively young and has not yet been recognised as a discrete

industry, so does not feature in economic or policy reports as its own sector. There have

been some efforts from the ABS and others to research the boundaries of the sector19

, but

in wider publications EGS tends to be described under the banner of ‘Environmental

Technologies’ or ‘Cleantech’. This does not cover the full range of activities and services

provided by the sector, which works across a range of ANSZIC industry codes (Figure 4).

Figure 4: ANSZIC industry codes mapped to EGS subsectors

18

For example, Organization for economic cooperation and development (OECD) (1999) The environmental goods and services industry manual for data collection and analysis; https://unstats.un.org/UNSD/envAccounting/ceea/archive/EPEA/EnvIndustry_Manual_for_data_collection.PDF; accessed 30 April 2017 19 For example, Australian Bureau of Statistics ABS (2015) 4655.0 - Australian Environmental-Economic Accounts, Feature article: towards an environmental expenditure account; http://www.abs.gov.au/ausstats/[email protected]/featurearticlesbytitle/9E80135DB8053A73CA257F94001825E2?OpenDocument, accessed 30 April 2017

9


Table 1: NSW EGS subsectors mapped to Eurostat industry categories

NSW SUBSECTORS & ACTIVITIES EUROSTAT CLASSIFICATION

ADAPTED GOODS

Adaptation in: Health; transport Low carbon built environment Building technologies Cleaner manufacturing and cleaner processes & materials

13C: Minimisation of the intake of fossil resources as raw material for uses other than energy production

AIR & CLIMATE PROTECTION Air pollution control; carbon capture & storage 1: Protection of ambient air and climate

BIODIVERSITY & RESOURCE MANAGEMENT

Adaptation in: Agriculture & forestry; disaster preparedness; natural environment Environmental resilience; biodiversity; environmental monitoring, instrumentation & analysis; marine pollution control;

6: Protection of biodiversity and landscape 11: Management of forest resources 12: Management of wild flora and fauna 14: Management of minerals 16: Other natural resource management activities

ENERGY MANAGEMENT Adaptation in: Built environment; energy; professional services Additional energy sources; energy management

13B: Heat/energy saving and management

MULTI-SECTOR EGS

Environmental consultancy & related services; noise & vibration control

5: Noise and vibration abatement 9: Other environmental protection activities

RENEWABLE ENERGY

Biomass; geothermal; hydroelectric; photovoltaic; renewable energy consultancy; wave & tidal; wind

13A: Production of energy from renewable sources

SOIL & WATER REMEDIATION Contaminated land reclamation & remediation 4: Protection and remediation of soil, groundwater and surface water 7: Protection against radiation

SOLID WASTE SERVICES Energy from waste; recovery & recycling; waste management 3: Waste management

WASTE WATER SERVICES Water supply & wastewater treatment 2: Wastewater management

WATER MANAGEMENT Adaptation in: Water 10: Management of waters

10


To map the Australian and NSW EGS sector, CSIRO Data61 have used contemporary data

science techniques of machine learning and linguistic analysis to collect and analyse rich,

publically available web-based information about EGS businesses. Based on examination

of their analysis of a sample of over 3300 organisations, the Australian EGS sector is made

up of ten diverse subsectors20

(Figures 2 -5).

In order of average business size, these subsectors are: (<20 employees on average)

biodiversity and resource management, and air and climate protection; (<50) soil and

water remediation, wastewater management, and adapted goods; and (<100) energy

management, water management, solid waste services, and multi-sector EGS. Multi-sector

EGS is the largest group, employing 33% of the workforce, typically in large engineering

and environmental consultancies. Types of organisations in the sector include research

institutes (1.6%) and industry associations and non-profits (6.3%) but the majority are

small businesses (61%). The sector has a greater representation of medium firms (31%)

than is typical, and its large business cohort (7.3%) includes 25 organisations with over

2000 staff.

NSW is home to 43% of Australia’s EGS businesses (but is only a third of the Australian

economy) and 44% of its ‘innovative’ EGS businesses, which is double the share of the

next strongest state (Figure 5). ‘Innovative’ EGS companies are identified as those that

have a strong digital business model, active partnerships with research institutions or

technology companies, a global marketing focus, or recognition of excellence in

innovation awards21

. NSW also has particular strengths in recovery and recycling, water

and wastewater treatment, building technologies, cleaner manufacturing, processes and

materials, and renewables.

Figure 5: EGS Businesses breakdown

20 ibid 21 Ibid

11


At the same time, NSW universities are producing world-leading EGS research. They are

home to top 10 global researchers in the fields of building simulation (University of

Wollongong), membrane science (UNSW & UTS), environmental remediation (University

of Newcastle), desalination (UTS), solar cells (UNSW) and rechargeable battery

technology (University of Wollongong & University of Sydney). They also have a greater

proportion of top 10 researchers than neighbouring states. NSW universities received at

least $35M in EGS research grant funding last year, and 17% of the patents they registered

since 2014 were for EGS innovations22

.

NSW EGS researchers are working in private R&D labs, university departments and

Cooperative Research Centres that link established research strengths with industry

partners. There are currently 60+ university-led research centres across the state that

target environmental issues in different subsectors (Appendix 1). In Sydney, UNSW’s

Sustainable Materials Research and Technology Centre is driving the roll-out of

microfactories, which use patented technology to extract reusable resources from waste

streams. The University of Newcastle’s Global Centre for Environmental Remediation is

developing effective and affordable approaches to contamination science and land clean-

up, while the University of New England Institute for Rural Futures is working with the

NSW Environmental Trust to find cost-effective solutions to deliver environmental water

to the state’s wetlands and rivers.

Table 2: Selected NSW university research/industry collaboration and alumni

Strength Example commercial partnerships / spinouts Alumni diaspora23

Photovoltaics Photovoltaics Photovoltaics Photovoltaics

University of NSW

Partnership with Greatcell Solar on third generation solar photovoltaic (PV) technology that uses perovskite solar cells to develop an ultra-thin, highly efficient layer of solar energy cells that can be applied to multiple building surfaces.

886 alumni (since 1974*) ~ 55% working in NSW

Rechargeable Rechargeable Rechargeable Rechargeable batteries batteries batteries batteries University of Wollongong

Partnership with China’s Tianneng Battery Group to develop next generation high-energy-density lithium-ion batteries.

Launched AquaHydrex, which is partnering with ARENA on power-to-gas trials to store excess renewables in gas grid.

120 alumni (since 1994*)

Water filtrationWater filtrationWater filtrationWater filtration

University of NSW

Launched the Memtec low-pressure water microfiltration company that sold in 1998 for $600m

504 alumni (since 1973*)

Water treatmentWater treatmentWater treatmentWater treatment UTS

Launched the Aerofloat mechanically simple compact wastewater treatment technology company in 2009.

197 alumni (since 1979*) ~80% working in Australia

Environmental Environmental Environmental Environmental remediation remediation remediation remediation University of Newcastle

Launched Innova Soil Technology company for the safe, reliable and efficient treatment of hydrocarbon-contaminated soils.

363 alumni (since 2005*) ~85% working in Australia

*Year the world-leading researcher in that topic commenced at the university.

Source: CSIRO Data61 analysis 2018

22 GHD (2017) op. cit. 23 CSRIO Data61 unpublished analysis of LinkedIn 2017

12


NSW has also introduced best practice policies in some EGS sectors which has enhanced

its strong industry base and driven local innovations24

. This is particularly apparent in the

energy efficiency and energy management sector under the white certificate Energy

Savings Scheme (ESS), and the NSW-run National Australian Built Environment Rating

Scheme (NABERS), which is internationally renowned for delivering deep cuts in

commercial building energy use. NABERS relies on close collaboration and information

sharing with industry and has seen the growth of service and technology innovation that

improve NABERS ratings, including building management system hardware and software,

and portfolio management tools.

The ESS created a competitive market and financial incentives for suppliers and

manufacturers to develop innovative products and services that deliver energy savings at

least cost. NSW is now leading the world in the wide-scale adoption of efficient lighting,

with a vertically integrated market structure and innovative products developed by

Australian manufacturers that have captured significant market share from established

multinationals. The NSW Biodiversity Offsets Scheme has similarly created a regulatory

environment that rewards innovation in the biodiversity and landscape management

sector.

24 Common Capital (2018) Innovation-led growth in the EGS sector.

13


2 2 2 2 ---- Barriers to growth Barriers to growth Barriers to growth Barriers to growth

The standard rationales for government intervention in innovation economies – to ensure

a pro-innovation business climate, to address infrastructure gaps and investment deficits,

to get better economic return on public program investments, and to address

coordination and information failures25

– also feature in stakeholder reports of the

common issues they encounter in the EGS innovation ecosystem. Interviews with a diverse

sample of 37 EGS researchers, startups, industry and end users identified four major

barriers that are keeping NSW from optimising its research and industry strengths and

better capitalising on market opportunities:

1. Market credibility

No standard process for testing innovations and giving assurance to the market

2. Networks and collaboration

The sector is poorly networked between and within stakeholder groups

3. Scaling for export

There is not enough domestic demand to support start-ups and innovators to scale

4. Market signals

Government policy and funding signals to the market are highly variable.

Each of these barriers affects multiple actors and points in the innovation lifecycle.

Market Credibility

It is difficult for innovators to demonstrate the economic and environmental value

of EGS products

A major challenge facing innovators in the NSW EGS sector is proving the environmental

credentials of their product to a sceptical market. This lack of confidence reduces demand

for EGS as well as the appetite for investment in businesses in the sector. Both of these

factors contribute to difficulties for innovators seeking to bring a novel product to market.

Environmental goods and services can often provide better economic value than

traditional options when measured over the full product lifecycle, but it is common for the

initial purchase price to be higher. But as there is currently no clear and credible process

for testing many innovations and verifying the environmental or economic claims made by

EGS businesses, many customers are unwilling to pay the higher purchase price. The lack

of such standards is particularly problematic for companies that are bringing new-to-

world innovations to market with no track record of successful implementation at scale. It

is also challenging for those focused on business-to-business sales, where the level of

investment required is typically far higher than for business-to-consumer sales and the risk

appetite is far lower, particularly in regulated industries. This leads to low capital

attraction with end users unwilling to invest in untested innovations.

Most stakeholders reported that consumers are increasingly considering sustainability

when making purchases, but lack access to the information they need to be confident in

their decision and are wary of ‘greenwashing’. With few exceptions (such as the NABERS

ratings for building environmental performance, and GECA for a narrow range of

products) it was noted that there is no broadly accepted credible, independent authority

or other testing protocol for verifying a product’s environmental claims. This makes the

sector even more vulnerable to volatile consumer sentiment, which is affected by

25 Clark, G. (2018) Preliminary draft paper. The Innovation Economy: Implications and Imperatives.

14


environmental scandals such as the Home Insulation Program or controversial vehicle

emission tests.

Figure 6: Impact of lack of market credibility in the innovation lifecycle

Networks and Collaboration

Networks for collaboration, procurement and distribution are not strong

Strong relationships between universities and industry are critical to the success of EGS

startups, but stakeholders consistently reported a lack of formal networks for linking

innovators, businesses and end users in the sector. In most instances of successful

research-industry collaboration, the relationship came from personal connections rather

than formal structures, or the collaboration was with overseas universities. One

stakeholder noted that successful partnerships have to be the result of long, ongoing

associations - ‘you can’t manufacture trust’.

Lack of formal networks was an issue for startups, to the extent that one stakeholder

reported having been based in a university incubator physically near academic researchers

working in the same field but not making a professional connection. This is also reflective

of a broader cultural issue about enterprise and university collaboration: Australia is

ranked 32nd

for university-industry collaboration in the 2017 Global Innovation Index26

, a

trend that is mirrored in NSW27

. Stakeholders reported a lack of standardised benefit-

sharing agreements for universities and businesses to work together to commercialise

innovations.

A lack of network connections is not unique to the relationship between industry and

academia, and is also felt by private sector actors. Some large end user firms reported an

appetite to work with local startups but struggled to find suitable candidates. Others had

trouble integrating new innovations into existing supply chains. This was particularly so in

the construction industry, where relationships between manufacturers of sustainable

building materials and end users are heavily mediated by wholesalers and builders. This is

compounded by the issue of market credibility – at each step in the supply chain the

intermediary must be convinced of the value of the product before stocking it. At the

26 Global Innovation Index (2017) https://www.globalinnovationindex.org. Accessed 6 March 2018. 27 CWTS Leiden Ranking (2017) University-Industry Collaboration

15


customer face, the builder must be both willing and able to supply the material for a

similar price as traditional materials.

Figure 7: Impact of poor networks and collaboration in the innovation lifecycle

Scaling for Export

There is low domestic demand to support innovators to scale

EGS innovators are keenly aware of the demand for NSW EGS in overseas markets, but

many faced difficulties getting to the scale that is needed to exploit those opportunities

because of limited local demand. This was particularly the case for new-to-world, or new-

to-market innovations for which anchor customers and testimonials provide critical proof

of the value proposition to potential customers. Australian environmental regulations are

generally more permissive than European markets so domestic markets do not demand

the same level of environmental performance. This stops innovators reaching the level of

turnover required before they can make the investments in manufacturing and other

infrastructure needed to service high demand international markets.

Figure 8: Impact of low domestic demand in the innovation lifecycle

16


Market Signals

Government signals to the market are variable

Innovation relies on a climate of investment certainty, but changing government policies

have sent mixed signals to the market about the value of the sector. Investment in

environmental technologies is highly sensitive to the politics of the day, rising in response

to government commitments and falling away when those commitments change. A lack of

bipartisan consensus from state and federal governments on long-term environmental

priorities has created an uncertain investment environment, effectively restricting the

amount of capital investment in the sector.

EGS innovators have also experienced barriers within regulations designed to protect the

environment, particularly on the issue of recycled materials. While it is not common for

regulations to be identified as directly prohibiting new technologies, the severity of

penalties for noncompliance in regulated industries was seen to contribute to the culture

of risk-aversion among end users. The effect of this culture on market demand is seen as a

major barrier to the uptake of potentially transformative innovations.

Issues were raised with the grants and incentives currently available for innovation in the

sector. In some cases, startups felt that the administrative burden of the application

process outweighed the benefits. This was particularly true for businesses that needed

flexibility in the grant criteria in order to pivot their business as the market required. A far

more valuable type of government support was identified as the government’s potential

role as an anchor customer. Some stakeholders identified having an authoritative anchor

customer as essential to the success of their new-to-market innovations, not only

providing an initial customer base and cash flow, but lending the level of credibility to

their environmental claims that was a critical market signal for future customers.

Figure 9: Impact of poor market signals in the innovation lifecycle

17


3 3 3 3 –––– The rThe rThe rThe role of governmentole of governmentole of governmentole of government

A challenge for government is how to support the market and business conditions that

enable transformative EGS innovations to happen at scale, without distorting the market

or creating perverse outcomes. Government regulation and policy already significantly

shape the activity of the EGS sector and the rate of new business entries closely follows

large scale policy initiatives28

. These are the businesses and innovators that deliver the

environmental standards set by regulators and the low-impact products incentivised by

various government programs at different times – from energy and water efficiency to

end-of-pipe solutions to solar photovoltaics.

Governments have also played a traditional role in addressing market failures and gaps in

investment in the sector, which arise from the ‘public good’ value of EGS innovations

typically being less attractive for private investment than innovations with a clearer

customer base.

In 2017/18 the NSW Government allocated $1.2 billion (1.6% of recurrent expenditure) to

regulate environmental impacts and deliver programs and grants that protect the

environment. These programs tend to sit within environment agencies and have

exclusively environmental goals rather than a shared focus on economic growth, sector

development, productivity, innovation or job creation. Government can get more return

on this recurrent portfolio investment by tactically allocating effort so as to also capture

the flow-on benefits of building a globally competitive EGS sector - more EGS jobs, higher

export sales, and better resource productivity for EGS end users in critical industries.

At an economy-wide level, the rationale for government action to support any innovation

in the market is diverse, ranging from ensuring the supporting infrastructure is in place so

that the innovation ecosystem can thrive, to addressing investment deficits by promoting

local opportunities and incentivising private investment. Government also has a role in

correcting information and coordination failures by helping research institutions to

innovate, fostering highly networked innovation ecosystems and enhancing their visibility

and brand identity29

.

Lessons from best-practice policy

Effective government interventions that have supported innovation in industry sectors of

strategic interest are those that:

• Support commercialisation through sector-specific funding streams and

programs that draw in co-investment and incentivise researchers to collaborate

with businesses.

• Address co-ordination failures by cultivating strong connecting networks that

share information and encourage deep collaboration between different actors.

• Stimulate demand through trade promotion and public procurement.

• Create the right business climate through pro-innovation regulatory reforms.

• Make a long-term policy commitment to the sector while fostering industry

leadership so that most of the effort comes from the market30

.

28 Data61 (2017) op. cit. 29 Clark (2018) op.cit. 30 Clark (2018) op.cit.

18


Analysis of 80 international environmental policies and 87 NSW initiatives31

shows that

programs that are successful in delivering both environmental benefits and local

innovation work closely with the market to create investment certainty, overcome

coordination failures and build demand for innovative EGS products. They have evolved

their approach from just setting rules that curtail environmentally damaging activity to

changing market conditions so as to motivate end users to seek out innovations to

improve their environmental performance (see Appendix 2 for a shortlist of the 35 most

successful international programs).

These programs send strong market signals that clearly communicate policy intent and

also often play a brokering role in drawing together innovators and market actors. The

strongest signals are financial and come in the form of market-based instruments such as

white certificate schemes, or economic incentives such as differential licence or

registration fees based on levels of environmental pollution. As a major consumer,

government can also send financial signals by demanding EGS sector goods directly

through procurement policies, and creating investment certainty by setting realistic,

measurable and long-term environmental targets, with dedicated funding. Persuasive or

light-handed measures include providing clear information that increases demand for EGS,

such as credible environmental rating schemes. More direct measures are regulatory

signals that can be effective in driving innovation to meet new environmental standards.

Many of these initiatives reflect the types of economic interventions seen in international

innovation economy strategies:

Table 3: Focus of successful EGS programs32

FocusFocusFocusFocus ActivityActivityActivityActivity ExamplesExamplesExamplesExamples

Build Build Build Build

networks at networks at networks at networks at

scale scale scale scale

Large industrial communities recover, reprocess and

reuse unwanted or underused resources under a unified

brand.

Develop Develop Develop Develop

niche niche niche niche

markets markets markets markets

Focus on emerging areas of competitive advantage and

create commercialisation and testing hubs.

Drive Drive Drive Drive

domestic domestic domestic domestic

demand demand demand demand

Government commissions environmental goods and

services to provide demand for innovations

Fund Fund Fund Fund

outcomes outcomes outcomes outcomes

Businesses compete for funding to achieve

environmental outcomes on flexible criteria

Set Set Set Set

standards standards standards standards

Create benchmarks of performance and minimum

performance standards and incentivise action

31 Common Capital (2018) op. cit. 32 Common Capital (2018) op.cit.

19


FocusFocusFocusFocus ActivityActivityActivityActivity ExamplesExamplesExamplesExamples

Send price Send price Send price Send price

signals signals signals signals

Polluter pays regulation together with insurance

partnership incentivises reduced pollution with lower

insurance premiums

The value of such international reviews is not to simply identify and transplant initiatives

from overseas, but to adapt relevant approaches and apply their insights and experience

to the local context. The high-level lessons are that environmental programs that

successfully drive local innovation:

• Know the market and engage with the actors that can bring about the desired

change.

• Create the space for market-led actions through a clear mandate, funding

support and long-term signals.

• Broker adoption of innovation at scale, with local relevance to provide the

strongest support for market delivery.

• Understand what works and disseminate and replicate lessons through the

market.

The NSW context

The NSW Government already delivers a range of regulations, policies and programs that

either impact directly on the EGS sector, or more broadly support innovation,

entrepreneurship and commercialisation, often in partnership with universities.

Under the NSW Innovation Strategy, relevant innovation initiatives are being delivered by

Department of Finance, Services and Innovation and the Department of Industry, with

additional start-up support from Jobs for NSW. The Jobs for NSW policy to support

tradeable sectors with the potential to become globally competitive and create large

numbers of resilient jobs identifies environmental technologies as a priority for NSW33

.

On the environment side, the Environment Protection Agency has both regulatory and

program functions, particularly in the waste sector, including funding that is earmarked for

innovation. The Office of Environment and Heritage administers business-facing programs

under the Climate Change Fund and the Environmental Trust, and an extensive range of

environmental grants and initiatives that directly or indirectly engage with the EGS sector.

NSW EGS businesses and innovators also have access to Commonwealth and local

government innovation and environmental funding streams, and this list expands again

when university-led initiatives are considered.

The recommended actions in this report take lessons from international experience to

address known problems in ways that complement, coordinate and leverage this broader

policy and program environment. Funding streams that are already dedicated to particular

areas of environmental protection may be able to boost innovation activity within those

areas. Some existing NSW initiatives are recognised as best practice and can be promoted

to overseas markets, others are still in their infancy and could be used to give EGS

innovators targeted support.

33 Jobs for NSW (2016) Jobs for the Future: Adding 1 million rewarding jobs in NSW by 2036. August 2016, Priority 1.1 p28.

20


4 4 4 4 –––– Proposed actionsProposed actionsProposed actionsProposed actions

It is proposed that the NSW Government develop a strategy to position NSW as a regional

leader in EGS.

The following seven actions are proposed as feasible and desirable options to consider in

developing such a strategy. Rather than looking to adopt regulatory approaches that

might introduce new compliance burdens, the actions seek to integrate environmental and

economic goals, broker relationships and align market incentives towards more

productive, innovative practices. They are designed to address the known barriers to

growth and innovation by creating a positive environment for investors, helping to

overcome coordination failures within the innovation ecosystem, and driving market

demand for EGS:

Figure 10: Proposed actions for consideration:

Each of these actions is based on the evidence collected through detailed IPC research

and consultation with selected sector and relevant government stakeholders (see

Appendix 3 for a list of stakeholders consulted).

Wider consultation with a broader group of stakeholders is advised should Government

choose to develop these options further. The indicative costs and benefits presented for

each action are based on the available evidence, but full cost-benefit analyses should be

conducted as part of any future policy development process.

Position NSW as a regional leader in EGS

GOALS

ACTIONS

Foster collaboration

Innovation Network

Digital platform and

forum for connecting end users, innovators

and researchers

Large-scale Circular

Economy program

Large industrial

network for waste

recovery and reuse

Drive market demand

Export Strategy

Grow export markets through

trade promotion & international adoption of

leading NSW regulations

Innovation Challenges

Solve priority environ-

mental issues through

government-issued

innovation challenges

Government Procurement

Use procurement

policies to grow local

demand for EGS

innovations

Build investment confidence

Skills and Market

DevelopmentFund

Support commercialisation through competitive

grants

Coordinated Innovation

Agenda

Align activity across

government and leverage

existing programs

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Action 1: EGS Innovation Network

An EGS Innovation Network would address coordination failures and help build a mature innovation ecosystem that can better meet the needs of EGS customer industries. A new NSW EGS Innovation Network would provide a membership-based online networking platform and events program that connects end users, researchers, innovators and established SMEs. It would offer a way for industry to seek tested environmental solutions directly from innovators and would provide a market pathway for regional EGS researchers and businesses. At its core would be a new EGS Research Network of NSW universities that facilitates research collaboration and provides a single point of access to high quality environmental researchers for domestic and international businesses and governments. The case for change: coordination and information failures The EGS sector is highly diverse, comprising researchers, startups, businesses and end-users working across a range of different subsectors. IPC’s research has shown there to be a lack of connectivity within the NSW EGS ecosystem, which is hampering collaboration and innovation efforts (see pp. 14-15). In more mature sectors such as agriculture, institutions and initiatives such as the Commonwealth’s Rural R&D Corporations or the NSW DPI’s Global Agtech Ecosystem do the work of linking the needs of end users to the efforts of researchers and entrepreneurs. The comparatively young NSW EGS sector lacks similar pathways for demand-driven innovation. It has a range of existing research and industry hubs within discrete environmental specialties, but these are not well connected across all the actors in the ecosystem or well-coordinated across the different EGS subsectors. Successful innovation networks make connections in ways that overcome information barriers and broker the institutional and professional connections that build a strong sector ecosystem and sustain innovation over the long-term. Successful networks can catalyse significant private investment and can be a cost-effective way for government funds to boost local commercially supported R&D and market uptake of innovations. A new EGS Innovation Network would help meet the environmental and productivity challenges faced by NSW businesses and global industries by building relationships between existing hubs, researchers, innovators, investors and end users, providing an avenue for innovation testing, and coordinating access to funding and expertise.

“We’d love to assist startups in implementing their technology, but we don’t know what’s out there.” - EGS End User

“There’s a real need to ‘close the loop’ on innovation. User needs have to drive our research so what we create has a ready market.” - EGS Researcher

International and local experience of innovation networks There are many international and local approaches to innovation hubs and networks, which can range from loosely connected virtual communities to well-staffed, well-funded R&D laboratories. For instance, the innovation powerhouse Manufacturing USA runs 14 research institutes, including one for Clean Energy Smart Manufacturing, that bring together industry, academia and government into collaborative arrangements that have leveraged $1.4 B in private investment from $600M in government funding, while the international Isle Technology Approval Group is funded by end users to link innovators to large utility customers to test, pitch and trial new technologies in a demand-driven, innovation environment (see Appendix 4).

22


Closer to home, the NSW Energy and Resources Knowledge Hub brings together businesses, research organisations and industry associations to share and direct research to meet industry needs through collaborative projects. Through the NSW Smart Sensing Network, sensing technology experts in academia, industry and government are working together to develop collaborative and innovative solutions to environmental and infrastructure sensing and monitoring challenges. The Cyber Security Network and Defence Innovation Network operate on similar models to undertake quality research for the safety of state’s electronic and physical future. They have a clearly defined objective, a focus on collaboration between the state’s research institutions and business models that drive private investment in research. About the NSW EGS Innovation Network The NSW EGS Innovation Network would be underpinned by an IT platform and directory that connects its members and helps industry and government customers to seek the right solutions for environmental and resource efficiency problems directly from researchers and innovators. The Network would help suppliers to better assess the demand for their innovations and identify new gaps in the market. It would help build market credibility for new-to-market products by connecting innovators to ‘living labs’ where major end users and others can demonstrate new products in situ, and to expert testing facilities where specialists can validate product performance claims. As an online marketplace, the platform will help regional members to participate on a level playing field with those in metropolitan areas. The Network would also be appropriately staffed and headquartered to host regular face-to-face and webinar events that facilitate commercial collaborations and meet the regional and sectoral needs of members. A new EGS Research Network The creation of the Innovation Network would coincide with and build on the establishment of a new EGS Research Network of NSW universities and other research organisations. The Research Network would focus on the translation of research and operate in a similar way to the Cyber Security Network recently established by the Office of the Chief Scientist and Engineer. It would be administered by participating institutions with research themes set in collaboration with co-funders in government and industry. The Research Network would be strongly branded and act as a single point of contact for university-industry collaboration in environmental science, including overseas governments and businesses seeking high quality NSW research and innovation to address their environmental issues. The Network would leverage existing hubs and programs The Network would leverage existing hubs and programs The Network would leverage existing hubs and programs The Network would leverage existing hubs and programs The EGS Innovation Network would have a central coordination role for innovation in the sector as a whole, with complementary branding with the Research Network to build market recognition. It would provide the sector with a focal point of contact for government innovation and environment programs, including Jobs for NSW and environment portfolio grants and finance, the Boosting Business Innovation Program, TechVouchers, Innovation Concierge, the Regulatory Sandbox and other grants and business and export support services (Actions 4 and 7). The Network would also facilitate access to the proposed EGS Skills and Market Development Fund (Action 2), which aims to de-risk end user investment in new EGS innovations and help small and regional innovators to build their early customer base. The EGS platform The EGS Innovation Network platform would provide an interactive directory of member profiles including details of their expertise and needs and an interface to support communication and information sharing between members. It could automatically suggest

23


potential customers to providers and vice versa as well as be searchable by specialties, locations and other parameters. The new Expert Connect website built by CSIRO’s Data61 is a beta-version searchable database of Australian researchers and has the capacity to host ‘innovation challenges’ from both small and high value customers (Action 3). Expert Connect, or other proven business networking platforms, could form the basis for the development of the EGS platform. Other online functionality would support the Network as a trusted source of news, sector data, relevant events and policy updates and establish it as a home site for the effective promotion of NSW EGS innovations to potential investors. Governance The Network would be administered by a small dedicated Secretariat under the collaborative leadership of research and industry stakeholders with a long-term vision for its success. It could be housed within a university with leading EGS research strengths, or in a consortium with industry, and would need early engagement and commitment from high profile ‘anchor’ end users. The Research Network would be established using a similar governance model to the existing Cyber Security, Defence Innovation and Smart Sensing Networks. The strategic direction of the Network is set by a Steering Committee comprising an independent Chair, the Network Director, and representatives from NSW government, federal research organisations (e.g. CSIRO), each of the affiliated universities, and industry. Network members would be best placed to determine the optimal organisation of research and administration staff, while business and operations managers and themed research leaders are common features of the existing networks. Preliminary stakeholder consultation indicates a strong level of sector capacity and interest in establishing the Network. A co-design process with leaders in the research and industry sectors is recommended to identify the best governance, ownership and structure for its administration. Figure 11: Visual snapshot of the EGS Innovation Network

EGS businesses

EGS

Research Network

EGS peak

bodies

Startup hubs

Govern-ment

Peak bodies

End user businesses

EGS Innovation Network

A forum that connects problems to solutions

End Users End Users End Users End Users

InnovatorsInnovatorsInnovatorsInnovators

24


Summary of features Summary of features Summary of features Summary of features ● A powerful mechanism for end users to procure innovative solutions that can be

scaled across the industry. ● A searchable online directory and interface for connectivity between EGS

researchers, startups, end users and investors. ● A core network of environmental researchers that collaborate and coordinate on

local and international EGS research opportunities. ● Builds market credibility by connecting innovators to testing facilities and ‘living

labs’, and creating a space for customer endorsements of new innovations. ● Hosts regular events to share knowledge about markets, build professional

networks and facilitate commercial partnerships. ● Leverages existing environment hubs, and startup, university and industry body

locations to host working space and events for the EGS sector. ● Connects regional EGS businesses to opportunities in other parts of the state. ● Provides a point of contact between industry and government programs. ● Administered by a leading EGS university/ies in consortia with industry, with

strong governance links to the Research Network. ● Established with core funding from government, with a business case and targets

for external and member-based funding streams. Indicative CostsIndicative CostsIndicative CostsIndicative Costs The EGS Innovation and EGS Research networks are designed to deliver a return on government funds by catalysing significant private investment in innovation to deliver the macroeconomic benefits through a stronger EGS innovation ecosystem. It is proposed that government program funding support be reviewed after five years to assess the economic impact of the Networks and the level of external funding attracted. The annual program cost for an EGS Innovation Network, including the Research Network is estimated to be $2.5M, comprised of:

Web platform establishment and support* $500k

EGS Innovation Network: Staffing, events and promotion

$700k

EGS Research network: Staffing, events and promotion

$1.3M

*There may be scope to share costs by developing a web platform that meets the needs of the other Research Networks administered by the Office of the Chief Scientist and Engineer.

25


ActionActionActionAction 2: 2: 2: 2: An EGS Skills & Market Development FundAn EGS Skills & Market Development FundAn EGS Skills & Market Development FundAn EGS Skills & Market Development Fund

De-risk investment and promote collaboration by establishing a competitive fund from new and/or existing sources to drive private investment in EGS innovation. An EGS Skills & Market Development Fund could support and strengthen the EGS Innovation Network and the innovation ecosystem of the EGS sector by creating an incentive for industry to invest in collaboration with NSW-based innovators from the startup and research communities. It would signal to potential investors that government recognises the value of investment in the sector. By targeting funding to collaborative projects, the fund could be used to create productive new links throughout the economy. The case for action: catalysing the ecosystemThe case for action: catalysing the ecosystemThe case for action: catalysing the ecosystemThe case for action: catalysing the ecosystem Collaborative relationships within and between businesses and researchers are important and productive components of successful innovation ecosystems. They must be based on mutual trust, and this cannot be quickly manufactured. Stakeholders consulted have reported a lack of pathways for collaboration and networking in this sector, which is recognised as a barrier to growth and innovation. This was particularly problematic for securing anchor customers when starting new businesses or bringing new products to market as market credibility and endorsement can be difficult to establish in the EGS sector. Co-funding from governments can catalyse and broker new relationships, lowering the barriers to their formation and reducing the financial risk involved in adopting new ways of working together. There are currently few major government funds that drive private investment in EGS innovation. The largest is the allocated $100M Coal Innovation Fund for research, development and demonstration of low emissions coal technologies. The EPA’s Recycling Innovation Fund has delivered $8.9M of matched funding to support research and development of recycling technologies and infrastructure but continued funding is under review. TechVouchers are assisting to build new relationships between individual businesses and researchers for smaller projects but there are few options that support larger collaborations between industry and academia. Jobs for NSW provides a wide range of financial products to startups and scaling businesses with a strong business model in place, however their remit does not extend to early-stage businesses still in the process of translating basic research into applied solutions. The EGS Skills and Market Development Fund would be complementary to these existing programs. About the EGS Skills and Market Development FundAbout the EGS Skills and Market Development FundAbout the EGS Skills and Market Development FundAbout the EGS Skills and Market Development Fund Three proposed streams of funding would be designed to create new linkages between actors in different part of the innovation ecosystem and at different points in the innovation lifecycle. 1. EGS Employment Pathways 1. EGS Employment Pathways 1. EGS Employment Pathways 1. EGS Employment Pathways Specialist STEM (Science, Technology, Engineering & Mathematics) skills are reportedly in demand by EGS startups and SMEs, but it is difficult for small or new businesses to compete with the larger employers in the EGS labour market. The EGS Skills Pathways stream aims to help EGS SMEs attract short-term early career skilled employees. Participating VET, undergraduate and post-graduate students would gain commercial experience that would boost their future employment prospects. This funding stream also aims to catalyse a long-term cultural change process of increasing university-industry collaboration in NSW, where students with commercial workplace relationships early in their training continue to seek out these engagements later in their academic or business careers.

26


Two types of EGS Skills Pathways grants are proposed: EGS Top-up Scholarship An EGS Top-Up Scholarship would increase the stipend payable to STEM recipients of Australian Government Research Training Program (AGRTP) Scholarships who participate in targeted work placements and share their expertise as part of their PhD research. This is similar to the CSIRO’s Industry PhD program, which is currently focused on engineering and computer science, and would also include a 12 month review point to ensure ongoing value for the businesses. EGS Internships EGS Internships would be open to current university students in their third or final year of a STEM degree, as well as recent graduates from STEM university degree or VET qualifications that were eligible for a Jobs of Tomorrow Scholarship. Co-funded 50% by the host business, the grant would subsidise a student for up to 13 weeks full-time work with a NSW EGS SME. Both funds could be administered by the participating vocational and higher education institutions through their existing scholarship offices. 2. EGS Innovation Procurement2. EGS Innovation Procurement2. EGS Innovation Procurement2. EGS Innovation Procurement A reported barrier to the development and implementation of innovative EGS solutions is that commercial benefits from the R&D expense can be difficult to capture directly at the level of an individual business. Whole industries can continue to operate with sub-optimal resource productivity because investing in R&D would put any individual firm at a competitive disadvantage in the short term. This is a recognised market failure and in mature sectors, like agriculture, bodies such as the Commonwealth’s Rural R&D Corporations were established to mitigate the issue. The EGS Innovation Procurement stream would create a funded mechanism for industry to collectively access the EGS Research Network to source innovative solutions to environmental challenges that constrain multiple businesses and actors across the industry. Applications from industry peak bodies or consortia of businesses would be prioritised under fair intellectual property arrangements designed to share the benefits. 3. EGS Runway Grants3. EGS Runway Grants3. EGS Runway Grants3. EGS Runway Grants Runway Grants would help EGS startups demonstrate the value of their products in a sceptical market by reducing the risk borne by businesses that trial innovative products. Startups would need to show that their product has not previously been implemented at scale, and the proposed anchor client would provide ongoing business for the startup if the pilot program succeeds and commit to providing public feedback on the product in order to help build its market credibility. A set proportion of funding in this program could be dedicated to supporting businesses outside metropolitan areas. Summary of features Summary of features Summary of features Summary of features

● Three funding streams: • EGS Employment Pathways – linking EGS SMEs to STEM students and

graduates • EGS Innovation Procurement – linking end users to the Research

Network • EGS Runway Grants – linking EGS SMEs to end users

● Provides targeted funding to boost private investment in the sector. ● Supports priority projects commissioned through the EGS Innovation Network. ● Expert panel/s to assess applications. ● Thresholds for co-funding to be set in consultation with stakeholders.

27


Indicative Annual CostIndicative Annual CostIndicative Annual CostIndicative Annual Cost: $3.: $3.: $3.: $3.6666MMMM The fund would need to be sufficiently resourced to attract additional private investment. An annual commitment of $3.6M could attract a minimum of $6.6M in private investment through:

Annual fund costsAnnual fund costsAnnual fund costsAnnual fund costs Private investmentPrivate investmentPrivate investmentPrivate investment

EGS TopEGS TopEGS TopEGS Top----Up ScholarshipsUp ScholarshipsUp ScholarshipsUp Scholarships to increase AGTRP stipend from $27,082 to $40,000

$6459 per scholarship 55 scholarships Total: $3Total: $3Total: $3Total: $356565656kkkk

$6459 per scholarship. Total: $3Total: $3Total: $3Total: $356565656kkkk

EGS Internships EGS Internships EGS Internships EGS Internships to give STEM graduates paid work experience in EGS SMEs

$4000 per internship 50 internships Total: $Total: $Total: $Total: $200200200200kkkk

$4000 per internship Total: $Total: $Total: $Total: $200200200200kkkk

EGS Innovation EGS Innovation EGS Innovation EGS Innovation Procurement Procurement Procurement Procurement to facilitate access to the EGS Network

Six projects offering 1:2 co-funding up to $333k each Total: $2MTotal: $2MTotal: $2MTotal: $2M

Six projects creating 2:1 private investment Total: Total: Total: Total: ≥$4M $4M $4M $4M

Runway Grants Runway Grants Runway Grants Runway Grants to provide opportunities for SMEs to pilot new products

10 pilot programs offering 1:2 co-funding up to $100k each Total: $1MTotal: $1MTotal: $1MTotal: $1M

10 pilot programs creating 2:1 private investment Total: Total: Total: Total: ≥$2M$2M$2M$2M

Total: $3.Total: $3.Total: $3.Total: $3.55556666MMMM Total: Total: Total: Total: ≥$6.$6.$6.$6.55556666

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Action 3:Action 3:Action 3:Action 3: EGS Innovation Challenges EGS Innovation Challenges EGS Innovation Challenges EGS Innovation Challenges

Stimulate innovation and use our research strengths to solve priority environmental issues through government-issued innovation challenges. A series of NSW government-sponsored EGS Innovation Challenges would mobilise NSW’s EGS industry and researchers to collaborate in solving persistent environmental problems that are holding back productivity growth in critical industries. These solutions should be commercially scalable for domestic roll-out and to export to overseas markets with growing demand for EGS. Challenges could be funded through the relevant portfolios and either make use of the existing Innovation Launch procurement platform or issue prize-based challenges that have been shown to drive significant levels of innovation activity in other jurisdictions. The case for action: persistent and global environmental problems The case for action: persistent and global environmental problems The case for action: persistent and global environmental problems The case for action: persistent and global environmental problems NSW has world class researchers, and the demand for solutions to persistent and priority environmental problems is growing globally. However, stakeholders report that the domestic EGS sector is not currently providing the level of market demand needed for innovators to scale up to export (pp. 15). If NSW can develop world-leading innovations in these areas it will be in a strong position to adopt them locally and scale for global markets. There is an opportunity to change the standard approach to issuing environmental grants by increasing the profile and ambition of priority government investment in environmental solutions to incentivise greater effort from the market. Innovation Challenges can catalyse and focus research and innovation efforts by offering the market a financial reward to successfully deliver a particular outcome. They are a ‘call to action’ aimed at accelerating research, development, and demonstration in innovation areas that will make a significant contribution to economic, environmental and social objectives. Innovation Challenges Innovation Challenges Innovation Challenges Innovation Challenges ---- the international and local experiencethe international and local experiencethe international and local experiencethe international and local experience Innovation Challenges are increasingly used by public and private sectors to seek ambitious solutions to intransigent problems, though the concept has a long history of success. As far back as 1919, the $25,000 Orteig Prize drove millions of dollars (in current terms) into aviation R&D, culminating in the world’s first transatlantic flight in 1927. The US Defence Advanced Research Projects Agency (DARPA) issues challenges to spur innovation that supports the USA’s defence priorities. Previous challenges have included autonomous vehicles and disaster response robots. The current Grand Challenge is seeking solutions to ensure continued access to the increasingly crowded electromagnetic spectrum for consumer and military applications. There are now numerous innovation challenge platforms such as InnoCentive, XPRIZE and Challenge.gov that focus the efforts of thousands of innovators across the world. Under the NSW Innovation Strategy, the NSW Innovation Launch program issues specific portfolio-driven innovation challenges, with priority given to proposals that test or prove new capabilities, technologies, models, processes and practices, and that can be scaled across government. Past challenges include reducing domestic violence reoffending and improving accessibility of cities, and a $10.6M Youth Innovation Challenge is currently underway. The Commonwealth’s Business Research and Innovation Initiative has issued over $8.7M in ‘proof of concept’ projects that address a broad range of problems, while the new Innovation and Science Australia strategy looks to introducing “National Missions” that drive research and industry effort on major issues.

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About the EGS Innovation ChAbout the EGS Innovation ChAbout the EGS Innovation ChAbout the EGS Innovation Challenge series allenge series allenge series allenge series Types of Challenges Governments have taken different approaches to innovation challenges. At one end of the spectrum they simply use outcomes-based procurement to go to market for solutions to difficult problems. Tenderers are invited to use innovative means to deliver a specific goal and proposals are assessed against pre-set criteria as per a standard competitive tender. The approach to market is promoted under the title of an innovation challenge and the awarded contract often involves a component of ‘seed funding’ to further develop or commercialise the ideas. For instance, the Smart Cities & Accessibility Innovation Launch program helped fund the development of an electronic solution to replaced paper dockets in NSW’s Taxi Transport Subsidy Scheme. A high profile option is to offer prizes of a set value as an incentive for innovators to turn their efforts to solving a specific problem. Criteria for success are set just beyond the limits of current technologies, and monetary reward is offered to the first team able to meet them. For example, the New Organ Alliance is currently offering US$1M to the first team able to generate a bioengineered liver capable of keeping an animal alive for 90 days. In NSW, a University of Newcastle team is one of the finalists in a $1.75M XPRIZE competition that challenged entrants to create a device that extracts a minimum of 2,000 litres of water per day from the atmosphere using 100 per cent renewable energy, at a cost of no more than 2 cents per litre. Market benefits for successful proponents also come from the prestige of winning the prize and this approach can incentivise significant effort, with competitors spending over $100M in pursuit of the $10M XPRIZE challenge to design a relaunchable spacecraft. Innovation Launch The Innovation Launch program administered by the Department of Finance, Services & Innovation already provides the mechanism through which government can issue innovation challenges. In the immediate term, the NSW EGS Innovation Challenge action could use this program to take an innovation procurement approach, with a view to adopting prize-based methods of incentivising the market in future years. Using relevant agency program funding (see Appendix 5 for potential partners), one Challenge could be issued each year, with timelines that run over multiple years to reflect the scale of the problems. Each Challenge would be heavily promoted through the EGS Innovation Network and draw on the state’s extensive research strengths in assembling expert panels to assess responses to the Challenge. Potential challenges Four candidate areas have been suggested by stakeholders for consideration in the first round of challenges: Challenge 1: Contaminated site remediation Contaminated land is a major environmental problem and a substantial economic cost in lost land productivity and clean-up costs worldwide. Remediation technologies developed in NSW have export potential and direct benefits for productive land use of NSW’s 1600+ regulated contaminated sites. Three exemplar government-owned sites with the most common environmental contaminants could be used to seek the proposals for innovative solutions to land contamination. This Challenge could seek to partner with the Contaminated Land Management Program and the EPA. Challenge 2: Waste data Waste data at the point of collection is poor and provides a disincentive for households and businesses to fully manage their waste generation. New technologies and methods for generating real waste collection data would improve billing practices such that consumers would have a direct financial interest in waste reduction and increased recycling.

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This Challenge could seek proposals for better measurement and tracking of waste streams in standard domestic, commercial and industrial waste collection. This data would allow more accurate pricing of waste services and incentivise landfill diversion and adaptive re-use of materials and other innovative solutions. This Challenge could seek to partner with the EPA and Waste and Environment Levy funding. Challenge 3: Biodiversity measurement NSW has a world-leading suite of initiatives that work with the market for the protection of biodiversity. However, much of the data from biodiversity initiatives is gathered and held at local level as part of the development process. An IT solution for existing data and a state-wide monitoring program to collect long-term trend data on biodiversity, to be used in conjunction with biodiversity offsets, would activate a broader market to achieve the desired biodiversity goals, creating an incentive for innovation in the aggregation, monitoring and management of biodiversity assets. This Challenge could seek proposals for technologies, sensors, systems and data integration for monitoring species and habitats to collect and analyse state-wide trend data and establish an index of “biodiversity intactness” to measure losses and gains in ecological condition. This could then inform targets and actions at a state and local level, based on an approach used in Alberta (see Appendix 4.) It could drive collaboration between biodiversity conservationists, statisticians, and sensor and machine learning specialists to develop and commercialise the innovative techniques and software required to collate the data and deliver the index. This Challenge could seek to partner with the NSW Biodiversity Conservation Trust. Challenge 4: Novel recycling solutions China’s new policies on the import of recyclable waste provide a driver to expand local capacity to process recyclables and an opportunity to innovate to maximise the value extracted from domestic waste streams. The Challenge could seek new solutions to meet the recycling needs of the state, as well as recognising the potential new export markets for these solutions presented by other markets that previously exported to China. Key features Key features Key features Key features

● Demand-driven challenges issued by government for solutions that address portfolio priorities and can be scaled for export.

● Challenges issued in partnership with relevant agencies and funding sources. ● Government acts as an exemplar with the goal of promoting similar approaches to

innovation procurement in the private sector. Indicative Annual Costs: $5 Indicative Annual Costs: $5 Indicative Annual Costs: $5 Indicative Annual Costs: $5 ---- 10M10M10M10M Program costs will depend on the nature of the challenge set and the needs of the funding agency. The administrators of the Innovation Launch program indicate that total funding pools of less than $5M typically do not represent good value for either participants or government. The most recent Innovation Launch sought solutions to youth unemployment with $10.6M in funding.

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Action 4: EGS Export Strategy Action 4: EGS Export Strategy Action 4: EGS Export Strategy Action 4: EGS Export Strategy

Support NSW innovators to capitalise on growing international demand for EGS by undertaking trade promotion, advocating international adoption of leading NSW regulatory schemes and helping local businesses access export markets. An EGS Export Support and Investment Attraction strategy would promote NSW internationally as the premier source of innovative environmental solutions in the Asia-Pacific region. It would leverage the positive global reputation of NSW environmental research and industry, Australia’s ‘clean and green’ image, and the existing export strengths of the NSW EGS industry to help local businesses access export markets at scale. The case for action: growing global markets and leveraging NSW programsThe case for action: growing global markets and leveraging NSW programsThe case for action: growing global markets and leveraging NSW programsThe case for action: growing global markets and leveraging NSW programs The global market in environmental goods (excluding services) is expected to reach US$3 trillion by 2020, and much of the growth in demand comes from our key trading partners. Sustainability and environmental quality are increasingly prominent concerns in international trade, particularly as living standards improve in developing economies. Through international agreements and environmental legislation, regulated environmental standards are becoming a feature of global markets. This represents a commercial opportunity for businesses in NSW, although many stakeholders interviewed reported difficulty scaling for export in Australia’s lower demand domestic market. The EGS subsectors where NSW has the greatest strengths - such as building technologies, with domestic sales of $3.4bn and growth of 10.7% in 2017/18 - have been driven by local environmental regulatory schemes such as the NABERS building efficiency rating scheme that are recognised as being best practice in working with markets to incentivise innovation and deliver environmental outcomes. Advocating the international adoption of such schemes could facilitate the growth of new export markets for the NSW innovators that develop and deliver EGS under these schemes. About the EGS Export strategy About the EGS Export strategy About the EGS Export strategy About the EGS Export strategy NSW has significant trade partners in China, India and southeast Asia - all markets with rapidly growing demand for EGS. The EGS Export strategy would identify the environmental domains where demand is largest and emerging local environmental issues and policies, and develop programs to support the growth of innovative NSW businesses with these specialisations. It would provide NSW businesses and researchers (using the Innovation Network, Action 1) with information on the regulatory frameworks in a range of overseas markets so NSW businesses can make informed decisions about product development and investment. State and Australian governments already operate extensive trade promotion efforts through negotiations, dedicated programs, and high profile personnel in overseas posts. Austrade has already identified environment and water management as a priority in Chinese markets, and sustainable energy, water and environment as significant for India. It also identifies common challenges for Australian businesses entering these markets and provides support to develop market entry strategies. Austrade can also link to the Chinese Foreign Economic Cooperation Office’s International Platform for Environmental Technology to introduce Australian firms to major environmental projects, opportunities and contacts in the country. The NSW Department of Industry’s (DoI) - Industry, Trade & Investment branch is the front door for new investors in NSW and has the program infrastructure to collaborate with Austrade and assist EGS businesses to take full advantage of international market opportunities. It has offices in China, India, Indonesia, Japan, Malaysia, Singapore, Korea, UAE, UK and USA, and teams dedicated to servicing each market. In each location,

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dedicated Trade Commissioners promote NSW as a destination for foreign investment, tourism and high-quality goods and services, and build international networks that create new opportunities for NSW firms. The top five export markets for EGS are also priority markets for the state as a whole. The Industry, Trade & Investment branch delivers Austrade’s TradeStart program in NSW, with six of the seven NSW offices located in regional areas of NSW. This program helps small and medium sized exporters achieve long term success in international markets. An EGS Export Strategy would leverage these existing resources and international trade networks to promote innovations from the NSW EGS sector and build opportunities for export. At the federal level, there is also scope to better support the NSW EGS sector interests in trade-related policies such as Australia’s position on the current WTO Environmental Goods Agreement negotiations to reduce tariffs on a priority list of environmental goods. Advocating the international adoption of such environmental regulatory schemes, as well as other environmental performance standards in NSW regulation, and promoting the NSW innovators that develop and deliver EGS under these schemes could facilitate the growth of new export markets. Priority schemes for consideration are the NABERS building energy rating scheme, which operates nationally but is administered by the NSW Government, the Energy Savings Scheme (ESS), tradable water rights and biodiversity offsets. These have driven a range of EGS innovations from energy management systems to low-draw lighting to biodiversity monitoring tools. The NABERS program is already collaborating with a range of organisations on the international expansion of the program, including the UK and Indonesia

34, but is

undertaking this effort at the program level which is competing with other program priorities. Such expansion would significantly grow the market for local NABERS service and technology providers. There are also early cross-jurisdictional plans to apply to the Asia-Pacific Economic Cooperation (APEC) to support the promotion of the Energy Savings Scheme approach to overseas jurisdictions. Key feaKey feaKey feaKey featuresturesturestures

● Enhances the visibility and identity of the NSW EGS sector in reference to Australia’s reputation as a clean, green and healthy nation, and NSW’s reputation for world-class research institutions.

● Designates EGS as a priority sector in the next NSW Trade and Investment Action Plan.

● Identifies overseas markets with high demand for specific EGS solutions, and map against local companies with scope to scale for export.

● Provides guidance to EGS businesses on regulatory settings in target markets. ● Links with the proposed EGS Innovation Network to coordinate trade promotion

efforts with research institutions and industry associations. ● Identifies target jurisdictions to adopt best practice NSW regulatory schemes. ● Works with the Australian Government, international governments, organisations

involved in policy in the region including the Asia-Pacific Economic Cooperation (APEC) and the World Bank to promote uptake of NSW schemes and the innovators that deliver under these schemes.

● Engages with Austrade to brief them on the emerging technologies that are being developed in NSW and leverage the Trade Commissioners international networks to promote the NSW EGS sector.

Indicative Annual Costs: $200kIndicative Annual Costs: $200kIndicative Annual Costs: $200kIndicative Annual Costs: $200k The existing international team and networks could deliver the strategy, with the support of an annual program and promotional budget of up to $200,000.

34 NABERS (2017) NABERS Annual Report 2016/17;pp 15, 17

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Action Action Action Action 5555:::: Government Government Government Government PPPProcurement rocurement rocurement rocurement

Send a strong market signal and grow local market demand for EGS through recycled content requirements and the phased introduction of life-cycle costs in value-for-money assessments. The use of life-cycle costing in government procurement could deliver better value for money over the medium-long term and drive demand for local EGS innovation. The procurement of more recycled content products could boost the domestic recycling industry and drive innovation in materials science and reprocessing. EGS procurement policies can build investor confidence, particularly in construction, energy, health services and transport where government purchasing is significant. The case for action: The case for action: The case for action: The case for action: longlonglonglong----term costs and scaling for exportterm costs and scaling for exportterm costs and scaling for exportterm costs and scaling for export The NSW Government spends $25 billion a year procuring goods and services. The core mandatory requirement in the NSW Procurement Policy Framework is for procurers to assess value for money. This includes consideration of costs over the period the goods or services are to be used. In practice, these assessments do not typically consider the full cost of operation and disposal, or the monetised ecological costs of the product, which are difficult to calculate. Environmental goods and services that have a higher up front price but lower maintenance, disposal and environmental costs may not be competitive in tender assessments, even though they may reduce government expenditure over the medium to long term. When domestic demand for EGS is low, it is difficult for local innovators to scale for high-demand high-value export markets. As a major customer of a range of goods and services relevant to EGS sectors, including adapted goods, the government could stimulate innovation and demand by requiring cost-effective EGS products through its procurement policies. China’s National Sword Policy, which restricts the amount of imported recyclable waste that China will continue to accept, provides the immediate policy driver for NSW to increase its domestic recycling capability and grow markets for recycled products. Setting government procurement standards for minimum recycled content of priority goods is one way to support this market transition. Government procurement: the inGovernment procurement: the inGovernment procurement: the inGovernment procurement: the international and local experienceternational and local experienceternational and local experienceternational and local experience The European Union’s Green Public Procurement Policy (see Appendix 4) requires public authorities to procure goods, services and works that have a reduced environmental impact throughout their life-cycle when compared to goods, services and works with the same primary function. The average financial impact has been a 1% reduction in costs, with any higher purchasing prices for EGS products compensated by lower operating costs. There are numerous international examples of environmental and life-cycle assessments in public sector procurement that deliver reductions in operating costs and help to drive a market transformation. The 2010 IT procurement policies of Stockholm County Council mandated 20% better energy performance than Energy Star standards, use of recycled plastics, and zero lead, mercury, PVC or halogenated flame retardants. Bids were assessed on total cost of ownership and environmental criteria. Most suppliers were unable to meet all the requirements, but the policy was the catalyst for rival suppliers to change their practices. The initial contract resulted in savings to the Council of hundreds of thousands of Euros in reduced energy and disposal costs

35.

35

European Commission 2012. Green Public Procurement: A collection of good practices.

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In NSW, the NSW Government Resource Efficiency Policy was introduced in 2014 with specific resource efficiency requirements for purchases relating to energy, water, clean air and waste management. The most recent public report (2015-16) shows that 66% of agencies report their activities; the report does not provide a breakdown of specific compliance with each action. NSW Government also provides a mechanism for ‘innovation procurement’, where agencies can engage a supplier through direct negotiation on short term contracts up to $1M to do proof-of-concept testing or outcomes-based trials, but this has not been extensively used for any procurement type. Supporting EGS through Government ProcurementSupporting EGS through Government ProcurementSupporting EGS through Government ProcurementSupporting EGS through Government Procurement Transition to total life-cycle costing The NSW government could expand its value-for-money criteria to require contractor disclosure and internal assessment of all anticipated costs of the good or service. This could allow EGS to better compete with traditional products despite higher initial purchase prices in cases where total costs are lower because of their greater resource productivity or recyclability. Life-cycle costing accounts for all the costs that will be incurred over the duration of a product’s useful life. This includes purchase price and associated costs, operation and maintenance, and decommissioning or disposal costs (physical removal and secure disposal). Some models also quantify externalities such as environmental and social impacts, or consider them as qualitative factors elsewhere in the assessment criteria. Life-cycle costing also considers the useful lifespan of a product, as a cheaper product that must be replaced after a few years could end up costlier than a longer-lived alternative with a higher upfront cost. Inflation must also be taken into account and future costs reduced by an agreed discount rate to allow for direct comparison of current and future costs. This data must be able to be provided with reasonable effort by normally diligent economic operators. The quality of data about the product and its operating costs and other features can greatly affect its lifetime value proposition. This means that NSW businesses and government would need an agreed methodology for calculating lifecycle cost across a diversity of product types. There are a range of life-cycle analysis tools and guidance materials available in European jurisdictions that could be adapted to the NSW context. A data warehouse of life-cycle methodologies and assessments of goods and services could also be established to create efficiencies and share learnings across agencies. A staged introduction of lifecycle costing would establish these methods in collaboration with industry and start with products that have the most easily measurable life-cycle costs, in consideration of the market availability of environmentally preferable alternatives. It would also include life-cycle analysis training for government employees responsible for procurement. Key featuresKey featuresKey featuresKey features

● Phase in total life-cycle costing as a standard requirement in relevant government procurements, starting with priority procurement streams

● Establish agreed methods and tools for conducting life-cycle analysis for government and industry.

● Upskill employees and create a database of life-cycle measurements and methodologies

● Introduce minimum recycled content requirements for suitable procurement streams

● Review the Government Resource Efficiency Policy to better reflect contemporary efficiency standards and expand the scope of goods and services covered.

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● Commit to regular review and disclosure of progress. IndicatIndicatIndicatIndicative Annual Costs: $200kive Annual Costs: $200kive Annual Costs: $200kive Annual Costs: $200k Administrative costs to conduct training, undertake life-cycle analyses and establish information guides including a repository of life-cycle data is estimated at $200,000 p.a, noting that total life-cycle costing are projected to lower operating costs over the medium-long term. In relation to recycled content, cost benefit analysis will be required before linking procurement policies to environmental targets.

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ActionActionActionAction 6666: : : : LargeLargeLargeLarge----scale scale scale scale Circular EconomyCircular EconomyCircular EconomyCircular Economy

Expand existing circular economy programs to create a large industrial network across NSW that drives innovation in waste recovery and reprocessing, and boosts resource productivity. A state-wide manufacturer’s network and digital platform for reusing waste streams as inputs would improve the resource productivity of NSW businesses. It would also build the domestic recycling sector and drive local innovation in logistics, materials engineering and resource recovery. The Council notes the recent formation of a NSW Government taskforce in response to China’s National Sword policy and has shared its research with the taskforce to support its consideration of a NSW circular economy initiative through that process. The case for action: domestic recycling aThe case for action: domestic recycling aThe case for action: domestic recycling aThe case for action: domestic recycling and opportunities for productivitynd opportunities for productivitynd opportunities for productivitynd opportunities for productivity China’s new ’National Sword’ policy to reduce imports of recyclable waste has provided an immediate market driver for NSW to invest in domestic recycling innovation. More than a million tonnes of Australian waste will no longer be exported to China for processing each year, which represents a significant cost to local operators that will flow on to households and businesses. The economics of the waste industry have changed. Major recycling companies and local governments support urgent action that meets economic needs and community expectations on recycling and landfill diversions. A dedicated government taskforce has been established to provide solutions, including developing proposals for a circular economy program. The commercial benefits of a NSW circular economy are also significant. Businesses spend money disposing of their waste and buying in new resources. But the diversity of materials used across manufacturing businesses and subsectors, and the fast-moving advances in materials science and technologies, has opened up new methods and markets for recycling that give businesses a new pathway to improve their productivity. Circular economy (also called ‘industrial ecology’ or ‘industrial symbiosis’) initiatives make more efficient use of resources by identifying links between the waste streams of one business and the inputs of another. They reduce waste and resource costs and drive innovation in materials engineering, filtration technologies, logistics and enabling platforms, supporting the emergence of new advanced processing industries that can turn waste streams into new resources. Through more efficient use of the resources already flowing through the economy, NSW can create new value without the need for any additional inputs. Just as the sharing economy provided new value opportunities for car and property owners, the circular economy offers businesses the chance to monetise waste streams and excess capacity. By creating new markets in secondary resources, a strong circular economy will also reduce the state’s reliance on export markets in recyclable waste. International and local experience of the circular economyInternational and local experience of the circular economyInternational and local experience of the circular economyInternational and local experience of the circular economy The UK’s National Industrial Symbiosis Programme (NISP) (see Appendix 4) is a business-led circular economy program with over 15,000 participating micro, small, medium and multi-national corporate businesses from every industry sector. It has generated £2.4 billion in new sales revenue and waste disposal and input cost savings, from an initial government program investment of £27 million, and created or safeguarded 10,000 jobs over six years. This includes only direct savings and sales in the first year of the material exchange, and not the ongoing benefits or the economic impact of any positive environmental effects. The model has been replicated in 21 countries worldwide. In Scotland, the Scottish Government estimates that 17,000 people are employed in remanufacturing, contributing £1.1bn to annual economic activity and by 2020 this sector

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has potential to bring an additional £620m and 5,700 new jobs. The Scottish Institute for Remanufacturing was established in 2015. In Victoria, ASPIRE, a CSIRO-developed IT platform that automates the identification of mutually beneficial business-to-business relationships, has been successfully trialled in four cities and is now being trialled regionally. The pilot program generated $207,000 in direct benefits from a cohort of just 118 businesses, with one participant forecasting new private investment of $3 million as a result. In NSW, small-scale circular economy programs have already generated $23 million in savings for businesses and diverted more than 750,000 tonnes of waste from landfill. These programs – EPA’s Circulate and OEH’s Sustainability Advantage – help to facilitate the efficient recovery of commercial and industrial waste streams for local manufacturers to use as a resource, but this is limited in scope and scale. A more ambitiously scaled program could provide a new market incentive for NSW businesses to seek out innovative EGS solutions that maximise the value of their by-products. It could also provide an alternative mechanism for the state to achieve its landfill diversion targets and build NSW resilience to volatility in waste markets. About theAbout theAbout theAbout the NSW Circular Economy programNSW Circular Economy programNSW Circular Economy programNSW Circular Economy program A dedicated digital ‘match-making’ platform would expand the scale and ambition of existing initiatives and create a long-term circular economy. This would be supported by medium-term professional facilitation of business relationships and the participation of local councils as small funding partners and facilitators. The delivery of the program could initially occur in discrete circular economy centres (CECs) to allow more targeted engagement of a smaller cohort of businesses. Digital infrastructure A five-year large-scale program to create and sustain the NSW circular economy would be underpinned by the widespread implementation of a digital platform that provides a user-friendly means of identifying mutually beneficial business relationships at scale and unifying the current programs. The platform would host business profiles that clearly communicate their key waste streams, input resource needs, logistical constraints and other information that allows them to match up with businesses or materials reprocessors that can use the waste or provide the resources. This platform would provide the necessary infrastructure for the circular economy to become a fully business-led initiative over time. A potential program partner on the digital platform could be CSIRO’s ASPIRE platform, which was designed to support circular economy initiatives and has been successfully verified in Victoria at city and regional level. A low-cost adaptation of this platform for NSW could add compatibility with other popular business software tools such as Salesforce, and make general user interface updates. The cost of this work and ongoing hosting and maintenance is estimated at less than 10% of the total program cost. Business facilitation International experience shows that a major challenge in establishing widespread circular economy programs is demonstrating the value of the initiative to a market that is unfamiliar with the concept. In addition to the digital platform, the first five years of the program would include a comprehensive facilitation component similar to what is currently offered under the Circulate and Sustainability Advantage initiatives and businesses would not incur costs for participating. Facilitators would be trained and drawn from within local and state governments and peak business groups. They would have existing relationships with local businesses through their substantive roles, and capacity to dedicate a portion of the week to facilitation. This would include recruiting local businesses to attend workshops, where their resource

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‘haves’ and ‘wants’ could be identified and entered into the digital platform, and following up on matches to help businesses realise the benefits of the identified opportunities. Significant areas across the state could act as Circular Economy Centres (CECs) - local hubs for assistance, networking and events in service of growing the circular economy. A regional facilitation officer in each CEC would engage with businesses in smaller locations in the region. Business participation Current NSW program participants could provide an initial membership by transitioning to the digital platform, but the program will need early commitment from businesses in target industries (Appendix 6). These include those involved in the manufacture and processing of large volumes of physical resources (manufacturing, construction and waste management), those with a large exposure to consumer waste (wholesale and retail trade and accommodation and food services) and major government actors that can influence the market (public administration, education and training, and health care and social assistance). In 2015, there were 34,600 NSW businesses in these sectors with five or more employees. Targets ranging from 10–25% engagement of these businesses over five years would see the participation of 3460–8650 businesses. Engaging businesses will require the support and coordination of local councils and business chambers to provide local knowledge and the leveraging of the business connections developed in existing NSW Government initiatives. Membership should also be based on detailed analysis of the composition of NSW industry. Geography and logistics International precedent has shown that distance and regional location does not need to be a barrier in circular economy programs, but it is important that programs are suitably resourced to provide support in areas of lower business density. The regional facilitation officers at each CEC will be critical in providing a link between rural communities and the circular economy opportunities in urban areas. Businesses in regional NSW may also face higher transport costs over greater distances, increasing the threshold for viable material exchanges. The digital platform will need the functionality to identify aggregation opportunities to overcome this issue. Regional NSW could be supported through at least three CECs across the state at locations selected on the basis of population, business type and density, and the level of participation of local councils and business chambers. Appendix 6 details 15 potential CEC locations for consideration. Administration The program would be suitable for initial administration by an industry-facing and regionally-connected NSW Government agency, in a collaborative formal arrangement with participating local councils. The business case for the program would assess the feasibility of phasing ownership and management to industry after the five-year establishment phase. Key featuresKey featuresKey featuresKey features

● Expands the existing Circulate and Sustainability Advantage circular economy initiatives into a new, large-scale statewide program.

● Increases scope of current programs to include all non-hazardous waste streams. ● Underpinned by an IT platform that connects and matches business waste streams

and resource needs. Could leverage CSIRO’s ASPIRE digital circular economy platform.

● Works with existing program participants, local councils and waste management firms to establish critical mass.

● Establishes and trains a state-wide network of embedded facilitators for the first five years.

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● Develops a specialised offering to support the initiative in regional areas with a lower concentration of businesses.

● Has government as an active participant in the program to reduce government waste disposal costs and demonstrate the value of the circular economy.

● Capacity to transition to a passive (IT-driven) or industry-run model over time. Figure 12: Visual snapshot of the Circular Economy program

Costs and benefitsCosts and benefitsCosts and benefitsCosts and benefits Based on local and overseas examples (Appendix 6), an effective large-scale circular economy initiative for NSW could require a time-limited commitment of $20M over five years, with a review to be conducted after three years to assess the program’s future needs and capacity for industry. There are three main cost streams: one-off expenses associated with launching the program; hosting and maintenance of the digital platform; and ongoing staffing, workshops and program administration. CSIRO’s indicative estimate for the platform and associated maintenance, staff and training is $500k per annum. Based on the benefit-per-business seen in the UK’s NISP and the Victorian ASPIRE pilot, a successful circular economy initiative could deliver between $95M (low engagement, low benefit per business) and $400M (high engagement, high benefit per business) in cost savings, new sales opportunities and additional private investment. It is recommended that under the China National Sword taskforce, the government conduct large-scale stakeholder consultations to identify potential barriers to program implementation and uptake. Some may require government to alter some regulations, for instance those governing the transport of waste materials, to fully activate the circular economy.

Data and Logistics

Commer-cial

Materials reprocess-

ing

Materials science

Commer-cial

Industrial

Large-scale Circular Economy program

Creating new forms of

productivity and resilience

Waste Waste Waste Waste producersproducersproducersproducers

InnovationsInnovationsInnovationsInnovations

Industrial

Waste Waste Waste Waste rererere----usersusersusersusers

New New New New industriesindustriesindustriesindustries

Purification technologies

IT platform

40


Action 7: Action 7: Action 7: Action 7: AAAA coordinated NSW EGS innovation agendacoordinated NSW EGS innovation agendacoordinated NSW EGS innovation agendacoordinated NSW EGS innovation agenda

Send a clear signal to the market and align activity across government by leveraging existing programs, facilitating regulatory reform and designating a team to coordinate delivery of actions. A sustained, co-ordinated and multi-agency approach to EGS innovation would support the delivery of the mutually supportive actions proposed in this report. The suite of existing programs and proposed new actions that target innovation and/or the environmental goods and services sector could be coordinated across government by a small team to deliver better economic returns on government’s investments in environmental protection and showcase early use of newly-established government innovation programs. This would include promotion of EGS sector access to programs, rapid review and response to regulatory barriers to innovation in the sector, and incorporation of industry and innovation considerations into environmental programs. A whole-of-government effort on EGS innovation would send a strong, consistent signal to the market and investors that EGS is a priority sector for the state. The case for action: wicked problems and market signalsThe case for action: wicked problems and market signalsThe case for action: wicked problems and market signalsThe case for action: wicked problems and market signals The EGS sector services a range of critical industries across NSW - from construction to agriculture to mining to professional services. Environmental issues themselves are ‘wicked problems’ that cut across portfolio boundaries. This complexity is even more marked when government is also focused on developing the industry and innovation ecosystem of the researchers and businesses that are providing the goods and services to solve the environmental problems. There are a number of innovation, environmental and business development programs already delivered by NSW and other governments and organisations (Appendix 5) that could be leveraged to underpin the success of the other proposals in this report. In the EU and other leading EGS economies, EGS is recognised as a discrete sector, with strong administrative and policy datasets that track industry performance, jobs growth and economic impacts of the sector. In Australia, EGS is relatively young and has not yet been recognised as an industry, so does not feature in economic or policy reports as a standalone sector. Stakeholder consultation conducted by the IPC showed that a related lack of alignment within government and across jurisdictions on policies and programs that impact the EGS industry does not send a clear signal to market to give potential investors confidence in EGS innovations. The NSW Government has already committed to some ambitious long-term environmental targets, such as net zero carbon emissions by 2050, and improvements in waste avoidance and resource recovery. Achievement of these targets will need a strong EGS innovation ecosystem, which can be better supported by existing business and industry engagement programs. About the Coordinated Agenda for EGS Innovation About the Coordinated Agenda for EGS Innovation About the Coordinated Agenda for EGS Innovation About the Coordinated Agenda for EGS Innovation A small designated team to lead inter-agency collaboration, stakeholder engagement and coordinate overall delivery of the recommended actions would give them cohesion and make best use of existing efforts. It would work closely with other agencies on the delivery of the actions proposed in this report as well as existing environmental and innovation policies with implications for NSW EGS sectoral growth. The team would also work across government and industry to identify and address specific environmentally-regulated issues that need innovative solutions that could be addressed through Innovation Challenges (Action 3), the Skills and Market Development

41


Fund (Action 2) or the NSW Regulatory Sandbox, which offers innovators the opportunity to test business models and technologies that are subject to regulation in NSW. Under the NSW Innovation Strategy, government is already delivering a range of innovation and entrepreneurship programs that tactically support the innovation ecosystem and could be targeted to support the delivery of a whole-of-government agenda for EGS innovation (see Appendix 5). The Regulatory Sandbox could be used to select specific environmental regulations that act as a barrier to EGS innovation and work with industry to resolve them, for example new adapted goods made from recycled materials that are reportedly restricted in the market by regulatory barriers. Innovation locations such as the Boosting Business Innovation Program and the Sydney Startup Hub could host EGS innovators and build their networks with researchers, investors and end users, and Jobs for NSW financial products could be promoted through EGS publications and events (Action 1 Innovation Network). The Sydney School of Entrepreneurship could develop an academic unit of study for EGS disciplines that connects student entrepreneurs into industry, and the Innovation Launch and Innovation Procurement mechanisms could be used to support EGS innovators to develop solutions to major regulated environmental issues (Action 3 Innovation Challenges, Action 5 Government Procurement).Opportunities from the TechVouchers and other schemes would be promoted through the Innovation Network. On the environment portfolio side, greater consideration of industry impacts and outcomes could be incorporated into the program design and evaluation to measure the broader economic effects of the environmental portfolio investments. An evaluation of how existing NSW environmental initiatives currently work together as a suite to drive changes in the market that support innovation and commercialisation could also identify specific opportunities to improve. Existing environmental business programs such as Sustainability Advantage and other business resource efficiency programs delivered under the Climate Change Fund (Appendix 5) could encourage clients to join the Innovation Network (Action 1), and provide learnings for other government business programs about how to support the variety of industry end users of EGS to help government deliver on its ambitious environmental targets. Key featuresKey featuresKey featuresKey features

● Underpinned by a long-term policy commitment to support innovation-led growth of the EGS sector and a five year funding commitment.

● Supported by a dedicated delivery and coordination team that works collaboratively with agencies and teams with responsibility for implementing existing and new actions.

● Targets existing innovation and entrepreneurship programs for the EGS sector. ● Leverages environmental business programs to help build momentum in the

Innovation Network. ● Collaborates with environmental, innovation and other portfolio agencies such as

transport and health to issue Innovation Challenges to solve high-value, persistent environmental problems.

● Includes an assessment of industry and innovation impacts in the design and evaluation of traditional environmental initiatives.

● Uses a broad range of existing programs to support end users to achieve NSW’s long-term environmental targets.

Indicative Annual Costs: $500kIndicative Annual Costs: $500kIndicative Annual Costs: $500kIndicative Annual Costs: $500k An effective EGS coordination team would likely require three FTE employees up to a budget of $500k. Operational costs would be drawn from the specific programs the team administers.

42

APPENDIX 1 – NSW UNIVERSITY RESEARCH CENTRES AND HUBS

Appendix 1 Appendix 1 Appendix 1 Appendix 1 –––– NSW NSW NSW NSW University University University University eeeenvironmental nvironmental nvironmental nvironmental rrrreeeesearch csearch csearch csearch centresentresentresentres

University of Sydney Sydney Environment Institute

Australian Centre for Climate and Environmental Law

Sydney Institute of Agriculture

Marine Studies Institute

ARC Centre of Excellence for Translational Photosynthesis

Bushfire and Natural Hazards CRC

University of NSW ARC Centre of Excellence for Climate System Science

ARC Research Hub for Green Manufacturing

Australian Centre for Advanced Photovoltaics

Australian Water Recycling Centre of Excellence

National Centre for Groundwater Research and Training

National Centre of Excellence in Desalination Australia

Water Research Australia

Centre for Ecosystem Science

Centre for Energy and Environmental Markets

Centre for Marine Bio-Innovation

Centre for Sustainable Materials Research and Technology

Climate Change Research Centre

Connected Waters Initiative

Water Research Centre

Advanced Environmental Biotechnology Centre

Sydney Institute of Marine Science

CRC for Greenhouse Gas Technologies

CRC for Low Carbon Living

Australian Energy Research Institute

UNSW Global Water Institute

Macquarie University Centre for Environmental Law

Marine Research Centre

Centre for Green Cities

Species Spectrum Research Centre

Planetary Research Centre

Centre for Energy and Environmental Contaminants

University of New England

Institute for Rural Futures

Centre for Invasive Species Solutions

SMART Farms

University of Newcastle Newcastle Institute for Energy and Resources

Centre of Excellence for Geotechnical Science and Engineering

Priority Research Centre for Organic Electronics

CRC for Contamination Assessment and Remediation of the Environment

Invasive Animals CRC

International Centre for Balanced Land Use

Global Centre for Environmental Remediation

NSW Institute for Frontier Geoscience

Centre for Plant Science

Centre for Water, Climate and Land

43

APPENDIX 1 – NSW UNIVERSITY RESEARCH CENTRES AND HUBS

Centre for Water Security and Environmental Sustainability

University of Wollongong

Centre of Atmospheric Chemistry

Australian Centre for Cultural Environmental Research

Australian National Centre for Ocean Resources and Security

Engineering Materials Research Strength

GeoQuest Research Centre

Centre for Environmental Informatics

University of Technology Sydney

C3 (Climate Change Cluster)

Centre for Clean Energy Technologies

Centre for Compassionate Conservation

Centre for Technology in Water and Wastewater

Deep Green Biotech Hub

Institute for Sustainable Futures

Materials and Technology for Environmental Efficiency

Centre for Autonomous Systems

Western Sydney University

Hawkesbury Institute for the Environment

Global Centre for Land-based Innovation

Bushfire and Natural Hazards CRC

Charles Sturt University Graham Centre for Agricultural Innovation

Institute for Land, Water and Society

Southern Cross University

Forest Research Centre

National Marine Science Centre

Centre for Coastal Geochemistry

Marine Ecology Research Centre

44 APPENDIX 2 – INTERNATIONAL BEST PRACTICE PROGRAMS

Appendix 2 Appendix 2 Appendix 2 Appendix 2 –––– International best practice EGS programs International best practice EGS programs International best practice EGS programs International best practice EGS programs

InitiativeInitiativeInitiativeInitiative DescriptionDescriptionDescriptionDescription

BiodiversityBiodiversityBiodiversityBiodiversity

Agricultural subsidy (Switzerland)

Eligibility for farm support payments depends on adherence to environmental legislation. If a farmer contravenes these laws, they can be fined, and payments can be withheld. Farmers can also receive additional payments for extensive ecological crop production or organic production.

Impact Mitigation Regulation (Germany)

Requires the preservation of the existing ecological situation where new development occurs. Habitat banks are land purchased by government (with a known ecological value) and are available for developers to purchase to compensate for impacts of economic development.

Results based Agri-environment schemes (EU)

A robust framework for education campaigns, as well as monitoring and evaluation. Farmers are able to receive payment for their involvement in successful conservation practices.

Doctrine and guidelines on the mitigation hierarchy (France)

A “polluter pays” approach that imposes a cost on the activities that cause adverse impacts to biodiversity, with a no-net-loss (NNL), and ideally, net gain of habitats.

Provincial wildlife population monitoring program plan (Canada)

See Appendix 4. Aims to collect long-term trend data to evaluate the effectiveness of forest management in maintaining wildlife. The data will inform future requirements for improving the management of natural resources.

Clean AirClean AirClean AirClean Air

Tech-to-Market’s Innovative Pathway’s Funding Opportunity (USA)

See Appendix 4. Funds mechanisms that facilitate more efficient pathways for clean energy technologies to reach market.

The Top Runner Program (Japan)

Mandatory energy efficiency standards for a variety of appliances, equipment, and automobiles. It uses the most efficient model currently on the market (the “Top Runner”) as its benchmark and stipulates that all products in that category must meet a weighted average standard of the benchmark within four to eight years.

SunShot (USA) A 10 year Federal government R&D funding program (2011-2021). Its aim is to drive innovation, catalyse growth in the solar industry, and help drive down costs throughout the marketplace.

KfW-Effizienzhaus (Germany)

A voluntary national energy rating scheme for existing homes. The scheme is attached to a finance mechanism, with the amount and terms of the funding increasing based on improved building performance relative to the baseline minimum standard of new houses in Germany (EnEV).

Energiesprong – A disruptive market mechanism to cost effectively improve the energy performance of older social housing up


Stroomversnelling (Sweden) to minimum standards.

Smartway Program (USA) A voluntary public-private program that is comprised of partnerships, financial incentives, policy and technical solutions, and research and evaluation projects that find new ways to optimize the transportation networks in a company’s supply chain.

Clean Fuels Program (USA) Provides grants to fund cooperative partnerships which are used to cosponsor projects intended to demonstrate the successful use of clean fuels and zero or low emission transport technologies.

KWS 2000 (Netherlands) Agreements with government and industry to meet targets. Industry supported to adopt new technology and processes through grant funding for new technologies and practices that could be applied sector wide.

Super Truck (USA) A 5-year matched grant funding program targeting emissions reductions in the road freight sector.

Industrial Energy Efficiency Accelerator (UK)

See Appendix 4. A technology neutral competition for companies that have existing or near-market innovative technologies for energy efficiency or emissions reduction.

Pro-Lite (EU) A specialist procurement advisory agency initiated and funded by the EU to provide guidance for public-sector authorities on ways of consolidating their lighting procurement power to create economies of scale, support innovative procurement solutions and drive European economies.

Contaminated SitesContaminated SitesContaminated SitesContaminated Sites

Environmental Liabilities Directive (EU)

Establishes a strict framework for the prevention and remedying of environmental damage. It is based on the polluter pays and precautionary principles, and focuses on preventing and mandating the remediation of any environmental damage (including loss of environmental services).

EPA Green Remediation Focus (USA)

Develops and promotes innovative clean-up strategies that restore contaminated sites to productive use, reduce associated costs, and promote environmental stewardship.

State Coalition for the Remediation of Dry Cleaners (USA)

An information sharing hub, it advances practices used for drycleaner site remediation by documenting technical information about best practice.

MiscellaneousMiscellaneousMiscellaneousMiscellaneous

Manufacturing USA (USA) See Appendix 4. Provides funding for advancing manufacturing innovation. Structured into discrete ‘institutes’ that bring together industry, academia and government to work in specific advanced manufacturing technology areas, such as the Clean Energy Smart Manufacturing Innovation Institute.

Green Public Procurement (EU)

See Appendix 4. A process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.

Innovation Platform and PIANOo (Netherlands)

A centralised procurement advisory body for all Dutch national government departments and municipal authorities. This body has developed criteria and practical instruments to implement Sustainable Public Procurement (SPP).


OkoKauf Wien (Austria) Ecological criteria applied to procurement procedures.

WasteWasteWasteWaste

National Industrial Symbiosis Programme (UK)

See Appendix 4. Establishes mutually profitable links between companies so that unwanted or underused resources (including energy, waste, water and logistics) are recovered, reprocessed and reused by others.

German Resource Efficiency Programme (Germany)

A detailed framework that sets out a long-term roadmap for the nation to make natural resource extraction and use more sustainable.

The Green Dot (Germany) A packaging waste labelling and industry contribution scheme. The Green Dot indicates to consumers that the manufacturer has met their obligations to take back and/or to recycle its packaging.

Elretur (Sweden) Legislation that makes it a producer’s responsibility to manage the waste from their electric and electronic equipment at point of disposal.

Bio Base Europe (Belgium) An innovation and training centre set up to grow the bio-based economy in Europe. It supports the development of technologies that convert of biomass into industrial enzymes, fine chemicals, food ingredients, biopolymers, nutraceuticals, bioplastics, biomaterials and biofuels.

The Scottish Institute for Remanufacture (Scotland)

See Appendix 4. Funds collaborative projects between a university and a business, enabling companies to increase Reuse, Repair and Remanufacture in their manufacturing operations.

Smart Specialisation Strategy (Slovenia)

A platform for concentrating development and investment on areas where Slovenia has the critical mass of knowledge, capacities and competences, and where there is innovation potential.

European Institute of Innovation and Technology (EU)

Enhances innovation in the raw materials sector by sharing of knowledge, information and expertise. Entrepreneurs, start-ups and SMEs have access to funding opportunities and support through partner networks and collaboration activities.

WaterWaterWaterWater

Imagine H2O (International) A start-up accelerator. It provides early stage technology start-up companies with mentorship and introductions to investors, strategic partners, and end-users.

Alliance for Water Stewardship (International)

Develops and administers the International Water Stewardship Standard (the AWS Standard), which provides a globally-applicable framework for major water users to understand their water use and impacts, and to work collaboratively and transparently for sustainable water management.

Water Technology Innovation Blueprints (USA)

Highlights the EPA’s initial ideas and plans for advancing technology innovation across various water programs.

Isle Technology Approval Group (International)

See Appendix 4. Connects innovators with large private and public organisations looking for new technology, giving them a unique opportunity to connect directly with potential customers internationally.

47 APPENDIX 3 – STAKEHOLDER CONSULTATIONS

Appendix 3 Appendix 3 Appendix 3 Appendix 3 –––– Stakeholder consultation Stakeholder consultation Stakeholder consultation Stakeholder consultation

In the development of this report the IPC Secretariat consulted with 84 people from 59 organisations across industry, research and government.

November 2017: Stakeholder interviews conducted by The Strategy Group and the IPC Secretariat November 2017: Stakeholder interviews conducted by The Strategy Group and the IPC Secretariat November 2017: Stakeholder interviews conducted by The Strategy Group and the IPC Secretariat November 2017: Stakeholder interviews conducted by The Strategy Group and the IPC Secretariat

Armidale Council Luke Finnegan

Bluescope Steel Ross Davies

Calix Phil Hodgkins

City of Canterbury Bankstown Rebecca Bell

City of Sydney Phil Raskall

Climate-KIC Chris Lee

Corkys Group Rodney Peet

Cubic QED David McMurran

Earth Funerals Kevin Hartley

Eco Logical Australia Andrew Morrison

Eco Team Stefanie Stanley

Edge Environment Rich Griffith / Tom Davies

Fernlawn David Puxtey

Flurosat Anastasia Volkova

Foresight Environmental Oliver Batchelour

Green Environmental Choice Australia Kate Harris

Greening Australia Peter Flottmann

Lendlease Jon Collinge

Local Government NSW Leisha Deguara

Mirvac Belinda Aspinall

Moss Environmental Shonelle Gleeson-Willey

Nexergy Grant Young

SkyCool Rex Lehmann

Smart Shepherd Dave Rubie

Southern Cross University Scott Johnson

Stockland Greg Johnson

Stone and Wood James Perrin

University of New England Darren Ryder

University of Newcastle John Lucas

University of Newcastle Sidsel Grimstad

University of Sydney Peter Ampt

University of Technology Sydney Stuart White

University of Technology Sydney Peter Ralph

University of Wollongong Paul Cooper

UNSW Veena Sahajwalla

UNSW Stephen Summerhayes

WattBlock Brent Clark


February 2018: EGS subcommittee workshopFebruary 2018: EGS subcommittee workshopFebruary 2018: EGS subcommittee workshopFebruary 2018: EGS subcommittee workshop

IPC Subcommittee IPC Subcommittee IPC Subcommittee IPC Subcommittee –––– Innovation in the Environmental Goods and Services Innovation in the Environmental Goods and Services Innovation in the Environmental Goods and Services Innovation in the Environmental Goods and Services sectorsectorsectorsector

IPC Neville Stevens Chair

University of New England Annabelle Duncan Vice Chancellor

Newcastle Institute for Energy and Resources

Alan Broadfoot Executive Director

Office of the Chief Scientist and Engineer

Edward Jansson Senior Manager

University of Sydney Planetary Health Platform

Tony Capon Director

City of Sydney Phil Raskall

Anna Mitchell

Strategic Research Manager

Senior Sustainability Strategist

NSW Government Advisory GroupNSW Government Advisory GroupNSW Government Advisory GroupNSW Government Advisory Group

OEH – NABERS

OEH - Science

Andy Dunne

Louise Askew

Head of Innovation & Development

Senior Social Scientist

EPA David Fowler Director, Regulatory Reform and Advice

Department of Finance, Services and Innovation

Skye Theodorou Senior Policy Officer

Jobs for NSW Chris Allen Manager, Strategy and Program Design

Project researchersProject researchersProject researchersProject researchers

Data61 Paul McCarthy

Colin Griffith

Andrew Reeson

Common Capital Henry Adams

April April April April –––– June 2018: InformationJune 2018: InformationJune 2018: InformationJune 2018: Information----gathering and gathering and gathering and gathering and selected selected selected selected testing of potential testing of potential testing of potential testing of potential options options options options

NSW GNSW GNSW GNSW Government overnment overnment overnment StakeholdersStakeholdersStakeholdersStakeholders

Office of the Hon Gabrielle Upton

Christian Dunk - Deputy Chief of Staff and Policy Director

Office of Environment & Heritage (OEH) - Sustainability Advantage

Rob Thomas – Senior Team Leader

Rod Clare – Senior Project Officer

OEH – Science

Matt Reilly – A/Executive Director

Louise Askew, Senior Scientist Social Research

Emma Mudford - Communications & Engagement, SEED

OEH – NABERS

Carlos Flores, NABERs Strategic Delivery Manager

Andy Dunne, Senior Team Leader Technical services

Karinne Taylor, Senior Project Officer

OEH – Government Resource Efficiency Policy (GREP)

Kaspar Sollberger - Senior Policy Officer, Climate & Resource Efficiency Policy Division

OEH Environmental Trust

Peter Dixon – Director, Grants

Geoff Hudson – Senior Team Leader, Contestable grants & Research

Environmental Protection Agency (EPA)

Carmen Dwyer - Executive Director, Waste

David Fowler – Director, Regulatory Reform

Kathy Giunta – Director Resource Recovery

Henry Moore - Manager Waste Innovation and Strategy

Simone Thomas – Business recycling fund

Belinda Chellingworth - Circulate

Deb Law – Construction waste and infrastructure

Office of Chief Scientist & Engineer

Chris Armstrong – NSW Chief Scientist & Engineer

Edward Jansson – Senior Manager OCSE


Department of Finance Services & Innovation (DFSI)

Skye Theodorou – Senior Policy Officer

DFSI - NSW Procurement Guy Raithby-Veall - Sustainability and Diversity Manager (Advisory Services)

Jobs for NSW

Chirine Dada – Manager Strategy and Programs

Fiona Rose – Director Client Engagement

Jack Wang – Senior Advisor Client Engagement

Treasury

Peter Leventis – Principal Economic Analyst - Economic Strategy

Cassandra Wilkinson – Director Agency Budget & Policy – Planning & Environment

Department of Primary Industries

Michael Bullen - Director General DPI

Managing the Global Ag-Tech Ecosystem (GATE)

Commonwealth bodies Commonwealth bodies Commonwealth bodies Commonwealth bodies

Innovation and Science Australia

Charles Day - CEO

CSIRO

Tom McGinness – Director Strategic Partnerships

Sarah King

Heinz Schandl

Expert iExpert iExpert iExpert interviewsnterviewsnterviewsnterviews

Australian Institute of Refrigeration, Air Conditioning and Heating (AIRAH)

Phil Wilkinson, Executive Manager

Australian Packaging Covenant Organisation (APCO)

Brooke Donnelly, CEO

Climate-KIC Chris Lee, CEO

Parramatta City Council Anthony Collins – Sustainability and Waste Services Manager

Helen Papathanasiou - Manager, Environmental Outcomes

Startup AUS Kate Dezarnaulds – Partnerships

UNSW Professor Veena Sahajwalla - UNSW Centre for Sustainable Materials Research and Technology (SMaRT Centre)

International Synergies

(Designed and ran the UK’s National Industrial Symbiosis Program)

Rachel Lombardi – Director Business Development

James Woodcock – International Manager

Waste Management Association of Australia (WMAA)

Gayle Sloan - CEO

May 2018 May 2018 May 2018 May 2018 –––– OptionOptionOptionOption----testing with November 2017 interviewees testing with November 2017 interviewees testing with November 2017 interviewees testing with November 2017 interviewees

OrganisationOrganisationOrganisationOrganisation NameNameNameName Job roleJob roleJob roleJob role

AMP Capital Darren Teoh Environmental Performance Manager

Corky’s Group Rodney Peet General Manager

Lendlease Jon Collinge General Manager, Sustainability, Investment Management

UTS – Climate Change Centre Peter Ralph Executive Director

Lucy Buxton Industry Engagement Manager

Local Government NSW Liz Quinlan Senior Policy Officer – Waste

Sydney Water Diego Macias Research Program and Governance

50 APPENDIX 4 – EXAMPLE INTERNATIONAL INITIATIVES

AppendixAppendixAppendixAppendix 4444–––– InternationalInternationalInternationalInternational initiativesinitiativesinitiativesinitiatives

ActionActionActionAction 1:1:1:1: InnovationInnovationInnovationInnovation networksnetworksnetworksnetworks

Isle Technology Approval GroupIsle Technology Approval GroupIsle Technology Approval GroupIsle Technology Approval Group

SectorSectorSectorSector:::: Urban water management, wastewater management Region:Region:Region:Region: International, including Australia Initiative type:Initiative type:Initiative type:Initiative type: Persuasive measures - Linking innovators to large utility customers Governance:Governance:Governance:Governance: Private company Funding:Funding:Funding:Funding: Funded by end-users Website:Website:Website:Website: http://www.isleutilities.com/services/technology-approval-group Description:Description:Description:Description: Isle Utilities is a private company which was established in the UK in 2005 with a mission to create a collaborative environment that allowed innovation in the water sector to flourish. The process accelerates the market uptake of ‘step-change’ technologies by engaging the industry during the pre-commercial stages of development and by leveraging strategic partners and external investment from venture capital investors. The company attributes its success to its use of a ‘collaborative innovation framework’ through the establishment of a Technology Approval Groups (TAG). The TAG is a forum that connects innovators with large private and public organisations looking for new technology, giving them a unique opportunity to connect directly with potential customers internationally. Based on the success of the concept, the company has expended the program internationally. It now has operations in the US, Canada, Netherlands, Singapore, UAE and Australia. It is also now taking the model and applying it in other areas such as the industrial water, rural water, built environment, manufacturing, mining and agriculture. The Isle Technical Approval Group in Australia consists of thirty of Australia’s largest urban water utilities, including Sydney Water, Central Coast Water, and the Sydney Catchment Authority. Isle claims to have assessed 200 technologies through the TAG, and pitched five technologies to members every quarter. Around 70% of technologies that present at TAG move forward with either trials, demonstrations or further research (http://www.isleutilities.com/services/technology-approval-group/tag-australia).

What has the initiative achieved?What has the initiative achieved?What has the initiative achieved?What has the initiative achieved?

EconomicEconomicEconomicEconomic

(HIGH) (HIGH) (HIGH) (HIGH)

Large number of new technologies being supported Large number of new technologies being supported Large number of new technologies being supported Large number of new technologies being supported

• Over the last 12 months, over 200 technologies were assessed through TAG with five technologies selected to pitch in front of TAG members every quarter.

• Around 70% of technologies that present at TAG move forward with either trials, demonstrations or further research.

EnvironmentEnvironmentEnvironmentEnvironment

(GREEN)(GREEN)(GREEN)(GREEN)

Significant potential for environmental benefitsSignificant potential for environmental benefitsSignificant potential for environmental benefitsSignificant potential for environmental benefits

• Tackling the private and public water sector as well as industrial water, rural water, and the built environment, manufacturing, mining and agriculture sectors offers significant reductions in water use and waste water production.

How has the initiative changed the market?How has the initiative changed the market?How has the initiative changed the market?How has the initiative changed the market?

Innovation:Innovation:Innovation:Innovation: Sustaining innovation High Potential

Rate of changeRate of changeRate of changeRate of change Disruptive

PersistencePersistencePersistencePersistence Transformative


Manufacturing USAManufacturing USAManufacturing USAManufacturing USA

Sector:Sector:Sector:Sector: Various process efficiencies - industry Region:Region:Region:Region: North America - USA Initiative type: Initiative type: Initiative type: Initiative type: Economic incentives - Innovative disruptive market development program Governance:Governance:Governance:Governance: National government funded. Non-government operated (not-for-profit institutes). Funding:Funding:Funding:Funding: National government funding US $600 million - attracted over US$1.4 billion in match funding from non-national government sources. WebWebWebWebsite:site:site:site: https://www.manufacturingusa.com Description:Description:Description:Description: Manufacturing USA is significantly funded program that advances American manufacturing innovation. It is structured into discrete ‘institutes’ that bring together industry, academia and government that work in specific advanced manufacturing technology areas. The Clean Energy Smart Manufacturing Innovation Institute promotes optimized energy productivity & efficiency that has the potential to achieve a 10-20% reduction in production costs, a reduction in energy consumption with a $7B-15B per year energy cost savings, and a 20-50% reduction in supply chain energy stream use & waste. The Rapid Advancement in Process Intensification Deployment (RAPID) Institute has a priority to achieve a 20% increase in energy efficiency through process intensification technology, a doubling of energy productivity through a process intensification technology, and to reduce cost of deploying modular chemical process intensification by 50%. Each institute is a public-private partnership which can rapidly develop ideas and inventions into products and processes. The collaboration sets out to solve industry-relevant manufacturing problems in research and development, technology transition, workforce training, and education. What has the initiative achieved?What has the initiative achieved?What has the initiative achieved?What has the initiative achieved?

EconomicEconomicEconomicEconomic (HIGH)(HIGH)(HIGH)(HIGH)

Attracted external funding, reduce production and energy costs Attracted external funding, reduce production and energy costs Attracted external funding, reduce production and energy costs Attracted external funding, reduce production and energy costs • Combined the Institutes have attracted over $1.4B in cost share from

non-Federal sources. • The Clean Energy Smart Manufacturing Innovation Institute has the

potential to achieve: o a 10-20% reduction in production costs, a reduction in energy

consumption with o a $7B-15B per year saving in energy cost savings, and o a 20-50% reduction in supply chain energy stream use & waste.

• The Rapid Advancement in Process Intensification Deployment (RAPID) has a priority to:

o achieve a 20% increase in energy efficiency o a doubling of energy productivity, and o reduce the cost of deploying modular chemical process

intensification by 50%

EnvironmentEnvironmentEnvironmentEnvironment (GREEN)(GREEN)(GREEN)(GREEN)

Reduced energy consumption and wasteReduced energy consumption and wasteReduced energy consumption and wasteReduced energy consumption and waste • The institutes cite high targets in reducing energy use and waste

production


Innovation:Innovation:Innovation:Innovation: Disruptive Innovation / High Potential




ActionActionActionAction 2:2:2:2: SkillsSkillsSkillsSkills andandandand MarketMarketMarketMarket DevelopmentDevelopmentDevelopmentDevelopment FundFundFundFund

TechTechTechTech----totototo----Market's Innovative Pathways Funding OpportunityMarket's Innovative Pathways Funding OpportunityMarket's Innovative Pathways Funding OpportunityMarket's Innovative Pathways Funding Opportunity

Sector:Sector:Sector:Sector: Air + Climate - CO2 emissions from energy Region:Region:Region:Region: North America - USA Initiative type: Initiative type: Initiative type: Initiative type: Economic incentives - Innovation support through incubation and acceleration and investor services Governance:Governance:Governance:Governance: National government - Office of Energy Efficiency and Renewable Energy Funding:Funding:Funding:Funding: National government funded. US$ 7.8M for 11 projects (1st Round) Website:Website:Website:Website: https://www.energy.gov/eere/technology-to-market/home Description:Description:Description:Description: Rather than funding individual technology solutions, Tech-to-Market seeks to fund mechanisms that facilitate more efficient pathways for clean energy technologies to reach market. The program consists of two priorities. Firstly, stimulating collaboration between the technical community and industry, and secondly by lowering barriers to resource access, including access to capital and physical resources needed to develop technologies into commercially ready products. Examples of initiatives under Tech-to-Market include:

• IncubatenergyIncubatenergyIncubatenergyIncubatenergy, a national network of incubator and technology financial support

groups

• Access to U.S. Department of Energy's scientists and facilities

• Training on manufacturing processes and supply chains.


EconomicEconomicEconomicEconomic (HIGH)(HIGH)(HIGH)(HIGH)

Attracting investment and creating jobs, for example:

• Incubatenergy has supported over 500 companies, collectively raised more than $1 billion in follow-on funding and generated $330 million in revenue. The national network also has significantly impacted economic growth, supporting the creation of nearly 3,000 direct jobs.

• Powerhouse - an incubator & accelerator company has supported 42 companies and has generated $52M in revenue, raised $287M in capital, and employed 386 people.

• Clean Energy Trust - to date has awarded over $3.7M in funding to 33 clean energy start-ups, which have raised an additional $112M in follow-on-funding – and have created over 300 jobs.

EnvironmentEnvironmentEnvironmentEnvironment (Lack of d(Lack of d(Lack of d(Lack of data)ata)ata)ata)

Long-term potential unknown

• Long-term potential for new technologies developed is dependent on eventual market uptake.

• One example of a completed funded project contributed to a 242 MW solar installation.

• Overall figures for the environmental benefits of the program are not available.


Innovation:Innovation:Innovation:Innovation: Breakthrough Innovation / High Potential


PersistencePersistencePersistencePersistence Unclear


European Institute of Innovation and Technology European Institute of Innovation and Technology European Institute of Innovation and Technology European Institute of Innovation and Technology ---- RawMaterialsRawMaterialsRawMaterialsRawMaterials

Sector:Sector:Sector:Sector: Waste - all sectors Region:Region:Region:Region: EU - Various Initiative type: Initiative type: Initiative type: Initiative type: Persuasive measures - Product development and commercialising centre Governance:Governance:Governance:Governance: EU government funded. Non-government operated. Funding:Funding:Funding:Funding: European Commission funded - €2.7 billion (2014–2020) WebsitWebsitWebsitWebsite: e: e: e: https://eitrawmaterials.eu/ Description:Description:Description:Description: EIT RawMaterials was initiated by the EIT (European Institute of Innovation and Technology) in 2008 and funded by the European Commission. Its goal is to find new solutions to secure the supplies of and improve efficiencies of processing raw materials (extraction, processing, recycling and reuse). It is the largest program of its kind in the world (4% of EU GDP). EIT RawMaterials unites more than 100 partners – academic and research institutions as well as businesses – from more than 20 EU countries. The aim is to enhance innovation in the raw materials sector by sharing of knowledge, information and expertise. Entrepreneurs, start-ups and SMEs have access to funding opportunities and support through partner networks and collaboration activities. Activities carried out include matchmaking, networking, product/process validation, acceleration and upscaling, education, business creation and support and internationalisation. While innovation takes time to reach delivery, EIT RawMaterials has been criticized as ‘not having delivered tangible results' to date, especially given the funding available. WhatWhatWhatWhat hashashashas thethethethe initiativeinitiativeinitiativeinitiative achieved?achieved?achieved?achieved?

EconomicEconomicEconomicEconomic (LOW) (LOW) (LOW) (LOW)

Develop and commercialise innovative products By the end of 2019, EIT Raw Materials aims to:

• Develop 50-80 new or improved products, processes or services, and to have these marketed by 10-20 new start-ups,

• Develop 120-180 patents, and to commercialise 5-15 of these, and

• Have 300-600 graduates of EIT-labelled courses


Potential dependant on technology uptake

• This program seeks to see reductions in resource usage (energy, water and raw materials) through developing new technology and processes for material extraction, processing, recycling and reuse.

HowHowHowHow hashashashas thethethethe initiinitiinitiinitiativeativeativeative changedchangedchangedchanged thethethethe market?market?market?market?

Innovation:Innovation:Innovation:Innovation: Disruptive Innovation / High Potential


PersistencePersistencePersistencePersistence Unclear


ActionActionActionAction 3333:::: EGSEGSEGSEGS InnovationInnovationInnovationInnovation ChallengesChallengesChallengesChallenges

Provincial wildlife popProvincial wildlife popProvincial wildlife popProvincial wildlife population monitoring program planulation monitoring program planulation monitoring program planulation monitoring program plan

Sector: Sector: Sector: Sector: Biodiversity and soil – forest management Region: Region: Region: Region: North America - Canada Initiative type: Initiative type: Initiative type: Initiative type: Persuasive measures - Data collection and reporting Governance: Governance: Governance: Governance: State government legislation, Provincial government implementation Funding: Funding: Funding: Funding: Provincial government funded. Amount not published. Website:Website:Website:Website: https://www.ontario.ca/page/provincial-wildlife-population-monitoring-program-plan Description: Description: Description: Description: The Provincial Wildlife Population Monitoring Program aims to collect long-term trend data to evaluate the effectiveness of forest management in maintaining wildlife on Crown land in Ontario. The data will inform future requirements for improving the management of natural resources, and provide a basis to understand and identify change in populations, including initial warning of possible threats or detection of changes in time to allow mitigation measures. Species that are monitored include terrestrial and riparian vertebrates expected to be affected by forest management activities. This program is being piloted from 2015-2020. After 2020 the Ontario government will conduct a thorough assessment measuring both the environmental and economic effectiveness program. WhatWhatWhatWhat hashashashas thethethethe initiativeinitiativeinitiativeinitiative achieved?achieved?achieved?achieved?

EconomicEconomicEconomicEconomic (LOW) (LOW) (LOW) (LOW)

No evaluation data

• Assessment is scheduled to take place after the pilot ends in 2020.


No evaluation data

• Assessment is scheduled to take place after the pilot ends in 2020.

HowHowHowHow hashashashas thethethethe initiativeinitiativeinitiativeinitiative changedchangedchangedchanged thethethethe market?market?market?market?

Innovation:Innovation:Innovation:Innovation: Basic Innovation / Low Potential

Rate of changeRate of changeRate of changeRate of change Incremental

PersistencePersistencePersistencePersistence Transitory


ActionActionActionAction 5555:::: GovernmentGovernmentGovernmentGovernment ProcurementProcurementProcurementProcurement Green Public ProcurementGreen Public ProcurementGreen Public ProcurementGreen Public Procurement Sector: Sector: Sector: Sector: Public Procurement Region: Region: Region: Region: EU - Various Initiative type: Initiative type: Initiative type: Initiative type: Direct government services - EU Government procurement policy Governance: Governance: Governance: Governance: National government(s) Funding:Funding:Funding:Funding: Relevant national government procurement budget. Amounts not published. Website:Website:Website:Website: http://ec.europa.eu/environment/gpp/index_en.htm Description: Description: Description: Description: Green Public Procurement (GPP) is defined in the EU Directive COM (2008) 400 as “a process whereby public authorities seek to procure goods, services and works with a reduced environmental impact throughout their life cycle when compared to goods, services and works with the same primary function that would otherwise be procured.” To assist with GPP the European Commission have developed environmental procurement criteria for 21 product and service groups. The basic concept of GPP relies on having clear and ambitious environmental criteria for products and services. At the national level, most EU Member States have now published GPP National Action Plans (NAPs). These plans outline a variety of actions and support measures for green or sustainable public procurement. Many have set targets for GPP either in terms of overall procurement targets, or for individual product and service groups. GPP can be a major driver for innovation, providing industry with real incentives for developing green products and services. This is particularly true in sectors where public purchasers represent a large share of the market (e.g. construction, health services, or transport). In contrast to common perception studies show that GPP can lead to decreases in purchasing costs (although modest), especially if you consider the full life-cycle costs of a contract and not just the purchase price. The main outcome is environmental. Studies in Europe indicate that GPP has on average led to a 25% reduction in CO2, with construction, gardening, paper and textiles attaining the highest reduction percentages. WhatWhatWhatWhat hashashashas thethethethe initiativeinitiativeinitiativeinitiative achieved?achieved?achieved?achieved?

EconomicEconomicEconomicEconomic ((((MEDIUMMEDIUMMEDIUMMEDIUM) ) ) )

Small cost reductions possible through GPP.

• The European public service spends approximately 16% of European Union’s Gross National Product on purchasing products and services.

• From a life cycle perspective, Green Public Procurement can lead to cost reductions with the average financial impact of GPP being a 1% reduction (reductions vary between countries ranging between a 5.7% reduction in UK to a 0.3% increase in Denmark).

• Using GPP can lead to higher direct purchasing costs, but can result into an average decrease of indirect costs for public organisations of around 1%. The reason behind this is that higher purchasing prices of green goods are compensated by lower operating costs.

• The two groups that were studied to result in the largest cost savings were construction and transport.


Large reduction in CO2 emissions possible through GPP

• While GPP has implications for a range of environmental issues primary data sources relate to CO2 emission reductions.

• In the EU GPP has contributed to an average reduction of CO2 emissions of 25% in 2006/2007 (reductions vary between countries ranging between a 9% reduction in Germany to a 47% reduction in the Netherlands).


• Construction and electricity leads to the largest proportion of emissions that the government procures.


Innovation:Innovation:Innovation:Innovation: Sustaining innovation / Medium Potential




ActionActionActionAction 6:6:6:6: CircularCircularCircularCircular EconomyEconomyEconomyEconomy

NationalNationalNationalNational IndustrialIndustrialIndustrialIndustrial SymbiosisSymbiosisSymbiosisSymbiosis ProgrammeProgrammeProgrammeProgramme

Sector(s):Sector(s):Sector(s):Sector(s): Waste materials (industrial), water, emissions, virgin raw materials Region:Region:Region:Region: Europe - UK Initiative type: Initiative type: Initiative type: Initiative type: Economic incentives - Industrial symbiosis Governance:Governance:Governance:Governance: National government funded and co-ordinated - Department for Environment and Rural Affairs. Implemented by private enterprise - International Synergies. Funding:Funding:Funding:Funding: National government funded program - £27 million (2005-2008). Website:Website:Website:Website: http://www.international-synergies.com/projects/national-industrial-symbiosis-programme/ Description:Description:Description:Description: The National Industrial Symbiosis Programme (NISP) was the world’s first, and highly recognized, national industrial symbiosis program. It is a program that establishes mutually profitable links between companies so that unwanted or underused resources (including energy, waste, water and logistics) are recovered, reprocessed and reused by others. NISP originated as three pilot schemes in Scotland, West Midlands and Yorkshire & Humberside in 2003. Their success provided a clear evidence base to the Department for Environment and Rural Affairs (DEFRA), who in 2005 awarded International Synergies £27 million over three years to roll out the program across all nine English regions. NISP is a business-led program with over 15,000 participating industry members who form part of the network. NISP members comprise of micro, small and medium businesses as well as multinational/corporates from every industry sector. NISP has shown that this model has the benefits of being:

• Scalable – NISP was initiated as a pilot program prior to scaling up;

• Replicable - The model has to date been replicated in 21 countries world-wide; and

• Cost effective – NISP used modest funding for very large economic and environmental savings.


EconomicEconomicEconomicEconomic (HIGH) (HIGH) (HIGH) (HIGH)

Large scale cost savings and employment potential • NISP generated £1.4 billion in new sales. • Saved £1 billion by reducing waste disposal, storage, transport costs

& purchasing costs. • Over 10,000 jobs were created or safeguarded.


Large scale environmental benefits • Between 2005-2013 NISP diverted 47 million tonnes of industrial

waste from landfill. • Reduce carbon emissions by 42 million tonnes.

• Reused 1.8 million tonnes of hazardous waste. • Saved 60 million tonnes of virgin material.

• Saved 73 million tonnes of industrial water.


Innovation:Innovation:Innovation:Innovation: Sustaining innovation Very High Potential




TheTheTheThe ScottishScottishScottishScottish InstituteInstituteInstituteInstitute forforforfor RemanufactureRemanufactureRemanufactureRemanufacture (SIR)(SIR)(SIR)(SIR) Sector:Sector:Sector:Sector: Solid waste management Region:Region:Region:Region: Europe - Scotland Initiative type: Initiative type: Initiative type: Initiative type: Economic incentives - Funding and other support Governance:Governance:Governance:Governance: National government funded - Zero Waste Scotland and Scottish Funding Council. Implemented non-government (multi-stakeholder body) - SIR Steering Group. Funding:Funding:Funding:Funding: National government funded - £1.3M (2015-2018). Attracting £800,000 from industry. Website: Website: Website: Website: http://www.scot-reman.ac.uk/ Description:Description:Description:Description: The goal of the Scottish Institute for Remanufacture (SIR) is to accelerate the move to a Circular Economy in Scotland through Product Remanufacture, Reconditioning, Repair and Reuse. SIR funds collaborative projects between a university and a business, enabling companies to increase Reuse, Repair and Remanufacture in their manufacturing operations. Between 2015 – 2018 this program will:

• Establish the Institute (£1.3M),

• Fund 75 joint research projects with a high proportion of those being implemented into actual operations (£915k – attracting a 1:1 match funding from industry), and

• Deliver workshops and training for the sector (£75). WhatWhatWhatWhat hashashashas thethethethe initiativeinitiativeinitiativeinitiative achieved?achieved?achieved?achieved?

EconomicEconomicEconomicEconomic (MEDIUM) (MEDIUM) (MEDIUM) (MEDIUM)

Stimulate jobs growth and reduce costs for producers • The Scottish Government estimates that 17,000

people are employed in remanufacturing in Scotland, contributing £1.1bn to annual economic activity and by 2020 this sector has potential to bring an additional £620m and 5,700 new jobs.

• Two case studies report material cost savings, increased productivity and reduced operating costs.


Reductions in use of new materials • Case studies report reductions in the amount of

material saved through remanufacturing. • The reduction in the use of new materials has

implications for other environmental benefits.


Innovation:Innovation:Innovation:Innovation: Basic Research / Medium Potential



59 APPENDIX 5 – RELEVANT NSW AND AUSTRALIAN PROGRAMS AND INITIATIVES

AppendiAppendiAppendiAppendix 5x 5x 5x 5 –––– NSW and Australian programs and initiatives relevant to proposed actionsNSW and Australian programs and initiatives relevant to proposed actionsNSW and Australian programs and initiatives relevant to proposed actionsNSW and Australian programs and initiatives relevant to proposed actions Program/PolicyProgram/PolicyProgram/PolicyProgram/Policy RegionRegionRegionRegion DescriptionDescriptionDescriptionDescription SubsectorSubsectorSubsectorSubsector

Links to Action 1. Innovation NetworkLinks to Action 1. Innovation NetworkLinks to Action 1. Innovation NetworkLinks to Action 1. Innovation Network

Boosting Business Innovation Program

NSW The NSW Government has invested $18 million in the Boosting Business Innovation Program, working with all 11 NSW universities and CSIRO to deliver a range of new innovation spaces and activities for business communities, giving small businesses access to research organisations to build strong local business communities and stimulate economic growth in metropolitan and regional NSW. The program is boosting:

• a networked innovation ecosystem across NSW • additional external funding

• small to medium enterprises (SMEs) who want to scale up and innovate • the regional start-up sector and creating innovation clusters across the state • access to high tech equipment and technical expertise research by SMEs and start-ups

through TechVouchers

Small Business Innovation

CSIRO National Flagships Initiative ‘Water for a Healthy Country’

NSW CSIRO provides an integrated and multidisciplinary research approach to deliver knowledge to improve water management in regional and urban environments and to enable improved water security – at both national and international scales. It also establishes strategic partnerships with government, industry and communities.

Environmental Innovation

Energy and Resources Knowledge Hub

NSW The Energy and Resources Knowledge Hub is an innovation hub that aims to facilitate effective collaboration and knowledge sharing as fundamental to a thriving, resilient and innovative economy. The Hub brings together industry, research organisations and government to drive collaboration, innovation and growth in the energy and resources sectors. It is hosted out of the University of Newcastle in collaboration with NIER, and with support from the NSW Department of Industry.

Energy and resources

Global Ag-Tech Ecosystem or GATE

NSW DPI supports GATE: The Global Ag-Technology Ecosystem, which is a collaborative technology and research facility based at Orange in Central NSW that opened in early 2018.

Agricultural Innovation

Jobs for NSW NSW Provides grants, loans and loan guarantees to help innovative businesses prosper and create new jobs in NSW.

Innovation

NSW Innovation Fund NSW The NSW Government is providing up to $4 million in Innovation grants to help rural local councils with populations of less than 10,000 explore new ways of working. The Innovation Fund is a targeted program that supports small councils in regional NSW to develop new ideas and innovative ways of working to improve their performance to benefit their communities.

Innovation

NSW Regulatory Sandboxes

NSW The Regulatory Sandbox program offers innovators the opportunity to test business models and technologies that are subject to regulation in NSW. Applicants are provided with a regulatory exemption in order to test products in a live environment.

Innovation


Program/PolicyProgram/PolicyProgram/PolicyProgram/Policy RegionRegionRegionRegion DescriptionDescriptionDescriptionDescription SubsectorSubsectorSubsectorSubsector

NSW Smart Sensing Network

NSW The NSW Smart Sensing Network (NSSN) is an innovation hub that brings together smart sensing technology expertise in academia, industry and government to develop a strong, collaborative and innovative network. It aims to deliver economic and social benefits for New South Wales. It is hosted out of Sydney University and the University of NSW, with support from the NSW Department of Industry.

Sensing technology

NSW Soil Knowledge Network

NSW The NSW Soil Knowledge Network Inc. is an independent, not-for-profit group of retired and semi-retired soil specialists who are available as mentors and trainers to support natural resource managers and land users in NSW.

Soil + Biodiversity

NSW Sustaining the Basin: Irrigated Farm Modernisation

NSW The IFWUEA provides funding and training to help irrigators improve their water irrigation efficiency.

Water - Irrigation

NSW University research centres and hubs

NSW See Appendix 1 All

Sustainability Advantage NSW Sustainability Advantage is a business support service which provides training and mentoring to help business measure and implement improvements to the environmental performance of their operations. For businesses that commit to improvements there is a merit recognition system.

Climate + Air (Energy efficiency) + Water efficiency + Waste

Sydney School of Entrepreneurship (SSE)

NSW A partnership between TAFE NSW and the 11 NSW universities providing talented students with entrepreneurial skills as part of their tertiary degree or vocational education program. Also connects student entrepreneurs with industry, startups and researchers.

Innovation

TechVouchers NSW TechVouchers provide up to $15,000 funding for SMEs to conduct R&D in collaboration with a NSW university or CSIRO. The voucher amount must be matched in cash by the applicant.

Innovation

UNSW Innovations NSW UNSW Innovations is the technology transfer and innovation office of UNSW Sydney. To achieve positive outcomes, UNSW Innovations collaborate with business, research organisations and the community.

Innovation

UWollongong iAccelerate business incubator

NSW iAccelerate is a University of Wollongong (UOW) business incubator program that is built around a robust educational program, formalised business acceleration monitoring and one-to-one mentoring.

Innovation

Innovation Grants City of Sydney

Feasibility studies that investigate innovative environmental solutions with the potential to improve environmental performance across a range of buildings and facilities in Sydney. Up to $20,000 is available in this category, with support to be matched by 25% or more cash or value in-kind from the applicant. Demonstration projects that implement solutions to reduce resource consumption and can be rolled out at scale. Up to $80,000 is available in this category with funds to be matched by 50% or more cash or value in-kind from the applicant.

Environmental Innovation

ARENA Advancing Renewables Programme

Aus ARENA’s Advancing Renewables Program provides support for development, demonstration and pre-commercial deployment projects that can deliver affordable and reliable renewable energy for Australian families and businesses. It does this through funding, project support and facilitates collaboration industry and allied sectors to remove barriers and increase uptake.

Climate + Air (Sustainable energy)



ARENA Renewable Energy Venture Capital Fund

Aus ARENA’s Renewable Energy Venture Capital Fund Program provides venture capital and active investment management advice to encourage the development of Australian companies that are commercializing renewable energy technologies.


ARENA Research and Development Programme

Aus The ARENA R&D program provides support to projects that will increase the use of renewable energy technologies in Australia, increasing their competitiveness with conventional energy sources. It does this through funding, project support and facilitates collaboration industry and allied sectors to remove barriers and increase uptake.


Australian Soil Network Aus The Australian Soil Network provides an overview of soil research. It facilitates implementation of the National Soil Research, Development and Extension (RD&E) strategy.

Soil + Biodiversity

Business Research and Innovation Initiative

Aus The BRII encourages businesses to develop more innovative solutions to government policy and service delivery problems by inviting proposals for a series of ‘challenges’. Applicants receive funding to create new products and innovations that meet defined government needs, while retaining their intellectual property and the right to commercialise the ideas in Australia or overseas. Awarded over $8.7 M in 2017 in 'proof of concept' applications to address a range of problems.

Innovation

CEFC Clean Energy Innovation Fund

Aus The CEFC Innovation Fund targets technologies and businesses that have passed beyond the research and development stage, but are not yet established or of sufficient maturity, size or otherwise commercially ready to attract sufficient private sector capital. The Innovation Fund can provide debt and/or equity finance for innovative clean energy projects and businesses which support renewables, energy efficiency and low emissions technologies. The Innovation Fund does not make grants.


Cooperative Research Centres

Aus The Cooperative Research Centres (CRC) Program supports industry-led collaborations between industry, researchers and the community. Grants fund collaborative research for up to 10 years. A newer CRC-P program supports shorter collaborations of up to three years.

Innovation

CSIRO Innovation Fund Aus Joint public-private investment fund to help Australian innovations to become successful businesses. It invests in start-up and spin-off companies, existing SMEs engaged in translation of research, and company formation opportunities.

Innovation

CSIRO ON Prime Aus ON Prime is an entry level, part-time pre-accelerator program that helps research teams validate their research and discover a real-world application for it. It provides provide teams with an opportunity to test paths for their IP, know-how or tech through a process of customer discovery and market validation. All teams who participate in ON Prime will have access to facilitators and mentor network of business leaders, entrepreneurs.

Innovation

DIIS - National Innovation and Science Agenda - Incubator Support Programme

Aus The Incubator Support initiative helps startups achieve commercial success in international markets. This is achieved by giving them mentorship, funding, resources, knowledge and access to business networks.

Innovation

Entrepreneurs' Programme - Accelerating Commercialisation

Aus Accelerating Commercialisation provides access to expert guidance and grants to help businesses commercialise their novel products, processes and services.

Innovation



Entrepreneurs' Programme - Innovation Connections Grant

Aus Innovation Connections is a service provided under the Entrepreneurs’ Programme. It offers easy to access advice, assistance and tailored support to small and medium businesses to improve business capability and competitiveness. Grants can be up to the value of $50,000 to reimburse you 50% of the total project costs.

Innovation

Expert Connect - CSIRO Data61

Aus An ‘Expert Connect’ online platform to connect businesses with researchers in Australia’s leading research institutions

Innovation

Incubator Support – Expert in Residence

Aus The $23 million Incubator Support initiative supports the Australian Government’s commitment to assist Australian start-ups to develop the capabilities required to achieve commercial success in international markets and realise their economic potential faster than they otherwise would, develop Australia’s innovation ecosystem including in Australian regions. The initiative provides grant funding through two components to deliver Incubator Support projects, both of which require a funding contribution from applicants.

Innovation

Linkage Projects Aus The Linkage Projects scheme promotes national, and international, collaboration and research partnerships between key stakeholders in research and innovation including higher education institutions, government, business, industry and end users. Research and development is undertaken to apply advanced knowledge to problems, acquire new knowledge and as a basis for securing commercial and other benefits of research.

STEM Research

Links to Action 2. Links to Action 2. Links to Action 2. Links to Action 2. Skills and Market Development FundSkills and Market Development FundSkills and Market Development FundSkills and Market Development Fund


Innovation

Medical Devices Fund NSW The Medical Devices Fund is a competitive technology development and commercialisation program that supports individuals, companies, public and private hospitals, medical research institutes, universities and the medical devices industry, to take local innovation to market. It aims to increase the uptake of NSW medical devices by the health system where they are cost effective and contribute to improved patient outcomes.

Health Innovation

NSW Generation STEM NSW Funded by a $25 million grant to CSIRO, the NSW STEM Foundation aims to develop strategies to attract and retain talent in STEM careers in NSW.

Innovation

NSW Innovation Fund NSW The NSW Government is providing up to $4 million in Innovation grants to help rural local councils with populations of less than 10,000 explore new ways of working. The Innovation Fund is a targeted program that supports small councils in regional NSW to develop new ideas and innovative ways of working to improve their performance to benefit their communities.

Innovation

CSIRO Innovation Fund Aus Joint public-private investment fund to help Australian innovations to become successful businesses. It invests in start-up and spin-off companies, existing SMEs engaged in translation of research, and company formation opportunities.

Innovation

Coal Innovation NSW Fund NSW The Coal Innovation NSW Fund invests directly into the NSW CO2 Storage Assessment Project, research, development and demonstration projects and other initiatives in low emissions coal technologies.




Domestic and Family Violence Innovation Fund

NSW NSW Government is providing $20M over 2 years to fund new projects tackling domestic and family violence through prevention, early intervention and crisis response.

Social innovation

Social innovation Fund NSW Targeted on the townships of Wagga Wagga, Eden and Kempsey, the social innovation fund of $900,000 seeks to address access to education and youth employment to strengthen community engagement. Focussed on changing community attitudes, system/behavioural innovations

Social innovation

Innovation for Community Impact

NSW Grants to address pressing and persistent social issues facing communities in regional areas, including domestic and family violence, education disengagement, criminal behaviour, and unemployment. Funding of $500,000 per round with three rounds so far.

Social innovation

Farm Innovation Fund NSW Low cost loan (50% of treasury bond rate) to assist primary producers to improve farm infrastructure that will significantly improve long term profitability and address adverse seasonal conditions. $500M total (loan fund), individual farms can apply for up to $500,000 in loans.

Agriculture innovation

Mental Health Innovation Fund

$4 million in funding to drive innovation and improve mental health services. The fund will assist start-ups, private sector, local businesses, carers and individuals working alongside all levels of government.

Health innovation

Horticulture Innovation Fund

VIC Aimed at encouraging innovation and collaboration in the horticulture sector through a $1M fund for research and development projects that contribute to a more productive and profitable sector, with grants of up to $50,000. Projects need to improve farm performance or improve market access and business diversification in the sector. Recipients are required to share the results of the research to facilitate learning and collaboration across the sector.

Agriculture innovation

Innovation Voucher Program

SA & WA

Funding for SMEs to commercialise their innovations and expand to create jobs. Through the development of collaborative relationships with research providers and specialist commercialisation support services. Vouchers up to $20,000 in WA out of a total funding of $16.7M and up to $50,000 in SA.

Innovation

Links to Action 3: InnovatLinks to Action 3: InnovatLinks to Action 3: InnovatLinks to Action 3: Innovation Challengeion Challengeion Challengeion Challenge

Contaminated Land Management Program

NSW The Contaminated Land Management Program (CLM Program) supports the investigation and remediation of a variety of sites that may pose a significant risk of harm to the environment.

Soil + Biodiversity

Emergency pollution clean-up program

NSW The EPCUP contributes funding towards the management of illegal pollution events, when measures need to be taken immediately.

Water + Soil+ Biodiversity

Innovation Launch NSW Innovation Launch provides seed funding of up to $150,000 for ideas that have a demonstrated public value. Applications are sought in response to ‘innovation challenges’ and priority given to proposals that test or prove new capabilities, technologies, models, processes and practices, and that can be scaled across government.

Innovation

NSW biodiversity offsets policy for major projects

NSW The NSW Biodiversity Offsets Policy for Major Projects clarifies and standardises biodiversity impact assessment and offsetting for major project approvals in NSW.

Soil + Biodiversity



NSW Innovation in Priority Problem Waste Management Grants

NSW The Innovation in Priority Problem Wastes Management Grants Program aims at innovative projects that will provide new recycling infrastructure solutions, establish (or expand) recycled material markets through research and development, and improve and introduce new approaches and technologies to increase the efficiency of recycling facilities for priority problem wastes. Wastes targeted as priorities under both streams of the program are 'problematic' materials that are not captured under other Waste Less, Recycle More programs, do not have existing mature markets or are contaminating waste streams that could otherwise be recovered if they were removed.

Waste

Recycling Innovation Fund NSW The Waste Less, Recycle More Recycling Innovation Fund provides $15 million for new solutions to address targeted types of waste. The funding aims to improve efficiency and recycling rates at recycling centres and support new markets for recycled materials.

Waste

Regional Growth Fund NSW $1.3 billion over 4 years from June 2017. Invests in projects that facilitate regional development through six funds. These funds aim to build essential infrastructure, support arts and culture, enhance and build sporting infrastructure, improve regional voice and data connectivity, invest in our mining-impacted communities, spur job creation and deliver local infrastructure.

General

Waste Less, Recycle More NSW Waste Less, Recycle More provides funding for business recycling, organics collections, market development, managing problem wastes, new waste infrastructure, local councils and programs to tackle illegal dumping and litter.

Waste

Links to Action 4. Export StrategyLinks to Action 4. Export StrategyLinks to Action 4. Export StrategyLinks to Action 4. Export Strategy

Biodiversity Offsets Scheme

NSW The Biodiversity Offsets Scheme creates a transparent, consistent and scientifically based approach to biodiversity assessment and offsetting for all types of development that are likely to have a significant impact on biodiversity. It also establishes biodiversity stewardship agreements, which are voluntary in-perpetuity agreements entered into by landholders, to secure offset sites.

Soil + Biodiversity

Energy Savings Scheme NSW The ESS creates a financial incentive to reduce the consumption of energy by encouraging energy saving activities. Energy Savings Certificates (ECS) are generated when an energy user undertakes an eligible energy savings activity. The ESS works by placing an obligation on NSW energy retailers and other liable parties to purchase energy savings in the form of ESCs each year. There is early work proposed to APEC to support the uptake of ESS by other local and international jurisdictions

Climate + Air (Energy efficiency)

NSW Trade and Investment Action Plan

NSW Sets an agenda for NSW’s trade priorities. A key plank is improving the state’s global competitiveness through a focus on innovation and ‘Asia-literacy’. Identifies seven priority sectors are identified in addition to attracting foreign direct investment. Ten priority markets are identified including China, India, Korea, Japan and the USA, the top five export markets for NSW EGS.

General

AUSTRADE Aus Austrade provides support to Australian businesses trying to develop international markets for their products. They currently list two export opportunities aligned with this proposed strategy: • Environment and water management in China • Sustainable energy, water and environment in India

All

NABERS Aus NABERS is a national voluntary rating system for buildings, tenancies and homes in regard to their energy efficiency, water usage, waste management or indoor environment quality. It also forms the basis of the mandatory National Commercial Building Disclosure (CBD) Scheme. They have commenced work to export the NABERS scheme to other countries.




WTO Environmental Goods Agreement

Aus In 2012, APEC leaders agreed to reduce tariffs on a list of 54 environmental goods. Australia joined negotiations with 43 other nations in 2014 to expand the number of goods covered by the agreement. These negotiations are ongoing.

All

Links to Action 5. Government Procurement

Government Resource Efficiency Policy

NSW The GREP provides direction to NSW Government agencies to consider resource productivity through their procurement and other decisions. The GREP requires agencies to: Incorporate resource-efficiency considerations in all major decision Focus on the challenge posed by rising costs for energy, water, clean air and waste management Seek to leverage their purchasing power when procuring resource efficient technology and services Publish annual statements of their performance against the policy.

Climate + Air (Energy efficiency)(Public Procurement)

Procurement Innovation Stream

NSW Procurement accredited NSW Government agencies can engage a supplier through direct negotiation on short term contracts valued up to $1,000,000 (including GST) in order to do proof-of-concept testing or outcomes-based trials.

Innovation

Links to Action 6: Circular EconomyLinks to Action 6: Circular EconomyLinks to Action 6: Circular EconomyLinks to Action 6: Circular Economy

Circulate NSW A six year, $5.46 million grant program to support recovery of commercial and industrial and construction and demolition waste from organisations across NSW. Recipients work with other businesses to identify industrial ecology opportunities, increase efficiency, and save money by reducing waste sent to landfill. The program model has recently shifted away from paying consultants to identify business opportunities and towards paying the businesses themselves. There are now also four funding windows a year instead of one and the program has expanded to include construction and demolition waste in addition to commercial and industrial waste.

Waste



ASPIRE - CSIRO Aus An IT platform that identifies mutually beneficial business-to-business relationships that can reduce waste disposal and input costs. Successfully trialled in four Victorian cities and is now being trialled on a regionally.

Waste

Links to Links to Links to Links to Action Action Action Action 7. Coordinated agenda7. Coordinated agenda7. Coordinated agenda7. Coordinated agenda

Boosting Business Innovation Program

NSW The NSW Government has invested $18 million in the Boosting Business Innovation Program, working with all 11 NSW universities and CSIRO to deliver a range of new innovation spaces and activities for business communities, giving small businesses access to research organisations to build strong local business communities and stimulate economic growth in metropolitan and regional NSW

Small Business Innovation

Defence NSW NSW Defence NSW is the coordinating body established under the “NSW: Strong, smart and connected” strategy to support the state’s defence industry. The team is staffed by six people and is tasked with clearly articulating and facilitating the delivery of the strategy’s objectives.

Defence



Innovation Launch NSW Innovation Launch provides seed funding of up to $150,000 for ideas that have a demonstrated public value. Applications are sought in response to ‘innovation challenges’ and priority given to proposals that test or prove new capabilities, technologies, models, processes and practices, and that can be scaled across government.

Innovation


Innovation

NSW Generation STEM NSW Funded by a $25 million grant to CSIRO, the NSW STEM Foundation aims to develop strategies to attract and retain talent in STEM careers in NSW.

Innovation

NSW Innovation Concierge NSW The NSW Innovation Concierge is a way for innovators, entrepreneurs and people with a passion for problem solving to ask the NSW Government questions and to submit innovative proposals. NIC will answer your NSW Government-related innovation queries and connect you to relevant sources of knowledge.

Innovation

NSW Regulatory Sandboxes

NSW The Regulatory Sandbox program offers innovators the opportunity to test business models and technologies that are subject to regulation in NSW. Applicants are provided with a regulatory exemption in order to test products in a live environment.

Innovation



Sydney School of Entrepreneurship (SSE)

NSW A partnership between TAFE NSW and the 11 NSW universities providing talented students with entrepreneurial skills as part of their tertiary degree or vocational education program. Also connects student entrepreneurs with industry, startups and researchers.

Innovation

TechVouchers NSW TechVouchers provide up to $15,000 funding for SMEs to conduct R&D in collaboration with a NSW university or CSIRO. The voucher amount must be matched in cash by the applicant.

Innovation

Waste Less, Recycle More NSW Waste Less, Recycle More provides funding for business recycling, organics collections, market development, managing problem wastes, new waste infrastructure, local councils and programs to tackle illegal dumping and litter.

Waste

EGS Innovation Strategy EGS Innovation Strategy EGS Innovation Strategy EGS Innovation Strategy ---- potential funding partnerspotential funding partnerspotential funding partnerspotential funding partners

Climate Change Fund NSW The Climate Change Fund supports activities to help homes, businesses, communities and government agencies manage the impacts of climate change and reduce energy consumption, water use, greenhouse gas emissions and utility bills. $250-300M available each year to address the impacts of climate change, encourage energy and water savings and increase public awareness of climate change.

Climate + Air (Energy efficiency) + Water efficiency

Coal Innovation NSW Fund NSW The Coal Innovation NSW Fund invests directly into the NSW CO2 Storage Assessment Project, research, development and demonstration projects and other initiatives in low emissions coal technologies.


Contaminated Land Management (CLM) Program

MSW $2M p.a. from Environmental Trust to support the investigation and remediation of a variety of sites that may pose a significant risk of harm to the environment.

Soil + Biodiversity



Contestable Skills Budget NSW ~$760 million contestable funding for Smart and Skilled training programs Skills

Environmental Restoration and Rehabilitation Grants

NSW The Restoration and Rehabilitation Program is a contestable grants program seeking to achieve long-term beneficial outcomes for the NSW environment.

Soil + Biodiversity

Jobs for NSW NSW Provides grants, loans and loan guarantees to help innovative businesses prosper and create new jobs in NSW. $190M over four years to support innovative startups and scaling small-to-medium enterprises in NSW. Products include the Minimum Viable Product Grant, Building Partnership Grant, Accelerating Growth Loan, Regional Growth Loan, Strategic Growth Loan, and Loan Guarantee.

Innovation

NSW Biodiversity Conservation Trust

NSW The NSW Biodiversity Conservation Trust manages and delivers private land conservation projects across NSW. $240M to support working with landholders, farmers and other organisations that wish to participate in private land conservation. May be a suitable partner on a related innovation challenge.

Soil + Biodiversity

NSW Environmental Trust NSW The NSW Environmental Trust is an independent statutory body established by the NSW government to fund a broad range of organisations to undertake projects that enhance the environment of NSW. Its main responsibility is to make and supervise the expenditure of grants. The Trust is administered by the Office of Environment and Heritage (OEH). $62M for environmental projects in 2016/17. The next round of major projects funding starts February 2019 and takes two years to allocate. Projects funded must address a major environmental issue. The Trust has tended not to fund energy, water and waste projects as they are already funded through other streams.

All

Regional Growth Fund $1.3 billion over 4 years from June 2017. May be a suitable funding partner on a related innovation challenge. Invests in projects that facilitate regional development through six funds. These funds aim to build essential infrastructure, support arts and culture, enhance and build sporting infrastructure, improve regional voice and data connectivity, invest in our mining-impacted communities, spur job creation and deliver local infrastructure.

Waste Levy NSW The Waste Levy requires certain licensed waste facilities in NSW to pay a contribution for each tonne of waste received at the facility. The contribution, passed onto those using the facility, aims to reduce the amount of waste being landfilled and promote recycling and resource recovery. $659M in 2016/17 from the levy on waste. Used for initiatives that promote recycling and resource recovery. Approximately 18% is returned to local councils for waste management initiatives with the remainder allocated annually through the budget process.

Waste

68 APPENDIX 6 – CIRCULAR ECONOMY ANALYSIS

Appendix 6 Appendix 6 Appendix 6 Appendix 6 –––– Circular Economy analysisCircular Economy analysisCircular Economy analysisCircular Economy analysis

Benefits of the UK program (NISP)Benefits of the UK program (NISP)Benefits of the UK program (NISP)Benefits of the UK program (NISP)

Economic Actual With persistence

(conservative) Cost savings (£) 156,082,258 468,246,774 Additional sales (£) 176,097,919 528,293,757

Environmental

Landfill diversion (t) 7,022,384 21,067,152 CO2 reduction (t) 6,038,059 18,114,177 Virgin material savings (t) 9,704,711 29,114,133 Hazardous waste eliminated (t) 363,626 1,090,878 Water savings (t) 9,959,738 28,709,214

Social

Jobs created 3,683 13,309 Jobs saved 5,087 18,379 Cost per benefit Actual With persistence

(conservative) £1 new income 2p 0.7p £1 cost saving 3p 0.8p 1 t virgin material saved 41p 14p 1 t water saved 41p 14p 1 t CO2 reduced 65p 22p 1 t landfill diverted 56p 19p 1 t hazardous waste eliminated £10.86 £3.62


Circular economy program types Circular economy program types Circular economy program types Circular economy program types Initiatives to support the circular economy can take a variety of forms:

Passive Supported Fully Facilitated

Description A waste exchange database is established whereby businesses enter their own details and search for resources held by other businesses.

An independent assessor visits companies to collect data on processes and waste streams, and uses this to identify opportunities. Depending on resourcing the assessor may also provide implementation support.

Businesses participate in workshops where a facilitator identifies opportunities through discussions about a business’s waste streams and input needs. These schemes typically also provide support for implementation.

Advantages Low cost. Data focus allows development of strong business cases.

Result in the highest number of relationships being identified.

Disadvantages Relies on individual businesses taking the initiative to search the database and contact the target company. Lack of support means data can be out of date or incomplete.

Relatively costly. No support for implementation or building relationships between businesses. Involvement of a third party helps

Highest absolute cost, though this can be offset by the number of opportunities identified.

Target Target Target Target NSW NSW NSW NSW businessesbusinessesbusinessesbusinesses The success of a circular economy program depends on driving business participation in order to reach a critical mass beyond which mutually profitable business relationships are readily identified. For this reason, initial circular economy centres (CECs) should be determined on the basis of population, business type and density, and the cooperation of local councils and/or business chambers. Table 4 details 15 potential CECs, including the largest significant urban area in each of the state’s nine regions, and all urban areas with a population greater than 50 000. Three CECs are proposed for metropolitan Sydney, corresponding to the Greater Sydney Commission’s ‘three cities’ model. These locations would leave Port Macquarie (population 46 948) and Dubbo (37 666) as the largest centres without a CEC within 100 km. Table 4: Potential CECs, ranked by population Circular Economy Centre

Region Pop. (2016) Regional Business Count* (2015)

Eastern Harbour City (Sydney)

Metropolitan Sydney 4 741 874 41 550

Central River City (Parramatta)


Western Parkland City (Penrith)


Gold Coast-Tweed North Coast 663 321 3 281


Circular Economy Centre

Region Pop. (2016) Regional Business Count* (2015)

Heads

Newcastle-Maitland Hunter 481 183 4 925

Canberra-Queanbeyan

South East & Tablelands

447 457 1 675

Central Coast Central Coast 329 437 1 807

Wollongong Illawarra - Shoalhaven

299 203 2 292

Albury-Wodonga Riverina 91 923 2 155

Orange-Bathurst Central West & Orana

76 527 1 972

Coffs Harbour North Coast 70 857 3 281

Tamworth-Armidale New England & North West

66 673 1 341

Wagga Wagga Riverina 56 181 2 155

Bowral-Mittagong** South East & Tablelands

39 300 1 675

Broken Hill Far West 17 780 240

*Businesses with ≥5 employees.

**Included as alternative to Queanbeyan, whose viability relies on inclusion of Canberra. Locations outside NSW noted in italics. Focus Sectors and Participation TargetsFocus Sectors and Participation TargetsFocus Sectors and Participation TargetsFocus Sectors and Participation Targets A fully developed circular economy program has the potential to incorporate intangible resources such as expertise or transport capacity, but for the sake of simplicity the program should initially focus on physical resources. Recruitment efforts should be focused on three sections of the economy: industries involved in the synthesis, repurposing or collection of resources (ANZSIC Divisions C–E), industries with a large exposure to consumer waste (ANZSIC Divisions F–H), and industries with significant state and local government actors (ANZSIC Divisions O–Q). Table 5 shows the number of businesses with ≥5 employees in each of these sectors. Table 5: ANZSIC Division of NSW Businesses (≥5 employees)

ANZSIC Division 2015 Business Count*

A Agriculture, Forestry and Fishing 1 416

B Mining 195

C Manufacturing 5 500

D Electricity, Gas, Water and Waste Services 309

E Construction 6 962

F Wholesale Trade 5 111

G Retail Trade 5 758

H Accommodation and Food Services 5 197

I Transport, Postal and Warehousing 2 143

J Information Media and Telecommunications 878

K Financial and Insurance Services 2 516

L Rental, Hiring and Real Estate Services 3 196

M Professional, Scientific and Technical Services 7 956

N Administrative and Support Services 3 109

O Public Administration and Safety 589

P Education and Training 1 223

Q Health Care and Social Assistance 3 950

R Arts and Recreation Services 528

S Other Services 3 856

Sectors involved in resource synthesis, collection or repurposing Sectors with large volumes of consumer and packaging waste


Sectors with significant government actors * Businesses with ≥5 employees. Uptake milestones amongst target businesses Uptake milestones amongst target businesses Uptake milestones amongst target businesses Uptake milestones amongst target businesses after five years:after five years:after five years:after five years:

Penetration 1% 5% 10% 25% 50%

Businesses 346 1 730 3 460 8 650 17 300

A target of 3460 businesses (10% of businesses in target ANZSIC divisions) could be set as the benchmark after five years. Calculating costs and benefitsCalculating costs and benefitsCalculating costs and benefitsCalculating costs and benefits While there are a number of unknowns surrounding the quantum of funding required for the first large-scale circular economy program in Australia, indicative costings can be derived from international precedent. The UK’s fully facilitated circular economy program cost around $48M over its first five years and engaged 12,500 businesses across 13 regions in that time. A Canadian pilot of the same model in two cities is underway in Canada. If the same cost-per-business were applied to the five-year target of 3460 businesses engaged, the program would require $13.3M over five years. In practice, the lower number of businesses and the greater distances in NSW compared to the UK, are likely to increase the cost-per-business in NSW. An alternative approach to costing is to assess the necessary diversions from landfill. The EPA’s Circulate program has disbursed $2.96M in grant funding so far to divert 50,000 tonnes of waste from landfill at an average cost of around $59 per tonne. To fully resolve the problems created by National Sword, NSW would need to recycle at least 350,000 additional tonnes of waste each year. Assuming the same cost-per-tonne over five years, this would equate to a total program cost of $104M. In reality though, the larger scope of a NSW program would likely create economies of scale that push down the cost per tonne of landfill diversion, and circular economy would not be the sole policy response to the crisis. A realistic estimate of the cost of an effective, transformative circular economy program for NSW is therefore likely to be around $20–30M over five years. If successful, the program would divert significant quantities of waste from landfill, and as such would be an appropriate use of revenue collected from the waste levy. An initial commitment of $4–6M per annum would be around 1% of annual levy revenue. As the benefits of the circular economy become more evident over time, it may be possible to develop a model for industry to fund and run the program itself. The network could be administered by a board comprising representatives from industry groups, local councils and business chambers with funding sourced from a combination of council rates, peak body membership fees and participation charges. Such a system would represent a minimal burden on the state’s businesses; ongoing statewide costs of $4M per annum would represent less than 0.01% of NSW business profits (based on 2015 figures).

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