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Material Resource Efficiency

Opportunities and implications within the UK construction, chemicals and metal sectors.

Duncan OswaldDan WhittakerMark Hilton

27th April 2018

Report for the Department of Environment, Food and Rural Affairs

Prepared by Duncan Oswald, Dan Whittaker and Mark Hilton

Approved by

………………………………………………….

Mark Hilton

(Project Director)

Eunomia Research & Consulting Ltd37 Queen SquareBristolBS1 4QS

United Kingdom

Tel: +44 (0)117 9172250Fax: +44 (0)8717 142942

Web: www.eunomia.co.uk

Acknowledgements

Our thanks to….

Disclaimer

Eunomia Research & Consulting has taken due care in the preparation of this report to ensure that all facts and analysis presented are as accurate as possible within the scope of the project. However no guarantee is provided in respect of the information presented, and Eunomia Research & Consulting is not responsible for decisions or actions taken on the basis of the content of this report.

http://www.eunomia.co.uk/

Version Control Table

Version Date Author Description

V0.1 02/03/2018 Duncan Oswald Outline report structure

V0.2 05/03/2018 Duncan Oswald Removed content still under consideration.

V0.3 21/03/2018 Duncan Oswald First draft for internal review

V0.4 23/03/2018 Duncan Oswald Construction sector amendments

V0.5 26/03/2018 Duncan Oswald Project director review

V0.6 27/03/2018 Duncan Oswald First draft for issue to client

V0.7 16/4/2018 Duncan Oswald Final draft for internal review

V0.8 27/4/2018 Duncan Oswald Final draft for issue to client

Executive Summary

E.1.0 Background

The Department for Environment, Food & Rural Affairs (DEFRA) commissioned Eunomia Research & Consulting Limited (Eunomia) to conduct a study to identify the financial savings that are available through the implementation of resource efficiency measures in the Chemicals, Construction and Metals sectors. These sectors had been identified as requiring more detailed assessment in a study conducted by Oakdene Hollins in 20171 entitled Business Resource Efficiency.

This study was required specifically to model the scale of financial savings available in sub-sectors within these three sectors, to rank these sub-sectors and to identify the headline financial savings and associated savings in greenhouse gas emissions in the top five sub-sectors.

The study was also required to identify the barriers to implementation of these opportunities and to propose policy interventions that might be effective in surmounting these barriers.

E.2.0 Approach

To make the findings as robust as possible and to minimise bias, the study is based on a range of different data-sets, harmonised to a common framework using the Standard Industrial Classification (SIC) code system.

Foremost among these is the database of resource efficiency opportunities maintained by the Greater Manchester Growth Company (formerly the ENWORKS programme). This includes tens of thousands of opportunities identified and implemented in a wide range of companies across the north-west of England over the last ten years. This database was queried for all opportunities identified within the three sectors in question.

The ENWORKS data has been supplemented with data specific to the Construction sector from WRAP, Zero Waste Scotland (ZWS) and BRE, and by more widely applicable data relating to Resource Efficiency Business Models (REBMs) and average savings based on historical resource efficiency programmes.

1 Oakdene Hollins Research & Consulting (2017) 2017_Business_Resource_Efficiency.pdf, May 2017, http://www.oakdenehollins.com/media/452/2017_Business_Resource_Efficiency.pdf

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An online survey was developed to gather further information directly from industry bodies and their members, particularly relating to the barriers to implementation and policy interventions which might be effective in overcoming them.

Finally, respondents and other contacts were interviewed to gain greater depth of understanding and to sense check the findings of the modelling.

E.3.0 Key Findings

The following table sets out the top five sub-sectors in terms of financial savings available through resource efficiency opportunities, together with the associated reductions in greenhouse gas emissions.

Financial savings (£m/yr)

Greenhouse gas reductions

(ktCO2e/yr)Chemicals 306 699

Other plastic products 105 371

Pharmaceuticals 93 15

Soap, detergents, perfumes and toilet 48 39

Plastic plates, sheets, tubes and profiles 29 27

Plastic packaging goods 31 247

Construction 1,589 4,465

Residential buildings for the private sector 167 1420

Installation of building services, plastering, 796 1569

Other specialised construction activities 159 314

Commercial buildings 213 662

Development of building projects 254 500

Metals 858 541

Manufacture of products from metal 260 14

Vehicles and transport equipment 204 36

Manufacture of motor vehicles 212 459

Metal structures and equipment 100 14

Machining 81 32

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The table is ranked in order of a weighted aggregation of ranks from a variety of data sources and analyses, while the financial savings are a median value of these analyses, so the financial savings are not necessarily in rank order.

These figures suggest that significant economic and environmental benefits are still available through the promotion of resource efficiency across these three sectors.The survey and interview elements of the study suggest, however, that resource efficiency is rarely considered as a priority in its own right. A minority of businesses consider it in anything other than purely economic terms. Where resource efficiency opportunities align with very clear economic drivers, they are likely to be implemented; where they do not, they are not. Programmes delivering consultancy assistance are successful in raising awareness of resource efficiency issues and in characterising opportunities but even in these situations, opportunities will very rarely be implemented if there is a net cost to the business.

The main perceived barriers to wider implementation of resource efficiency (as reported by respondents) are lack of alignment of economic drivers with environmental imperatives. There was a general view that industry is capable of delivering the benefits of resource efficiency if government can provide a clear and consistent policy framework.

Previous work, however, has made clear that there is a wider range of barriers, including:

A lack of readily available and good quality data with which to make a business case for change;

A lack of managerial resource (time) to investigate the opportunities and make the business case;

A lack of awareness of key opportunities and related techniques and technologies;

Upfront capital and managerial costs for implementation of solutions, often with simple payback periods longer than the often required 2 years; and

A general lack of focus on resource efficiency, the priority generally being production throughput and quality control.

E.4.0 Recommendations

The carbon reduction trajectories that would enable global emissions to remain consistent with a warming effect of only 1.5 to 2 degrees require not only that energy

Material Resource Efficiency iii

systems decarbonise but also that energy efficiency must deliver around 40% of the reduction in greenhouse gas emissions required by 2050. Resource efficiency and circular economy approaches can reduce carbon emissions by as much as energy efficiency2, so for the UK to meet its sustainable development goals and remain aligned with the goals of the Paris Agreement, much greater emphasis needs to be placed on implementation of these approaches.

Targets and aspirations under the new Defra 25 Year Environment Plan include:

maximising the value and benefits we get from our resources, doubling resource productivity by 2050;

working towards our ambition of zero avoidable waste by 2050; and working to a target of eliminating avoidable plastic waste by end of 2042.

The Industrial Strategy also has a focus on boosting productivity, with clear links to resource efficiency.

The development and introduction of new policy instruments aims to avoid significant disruption to existing models of business and employment by giving businesses time to plan and adapt. However, there is a strong argument and a common theme in both the literature and in interview responses, that this approach is not adequate to the task. In the last ten years, UK electricity grid carbon intensity has reduced by almost half through the implementation of a range of policy instruments; a similar approach is now required for resource efficiency.

Improvements to grid carbon intensity have come about because the broad trajectory has been well understood and clear targets have been set (although recent reversals in policy have slowed the pace of uptake of many renewables quite considerably). Back in 2008, the UK Climate Change Act was ground-breaking in its establishment of an independent advisory committee and legally-binding carbon budgets. The problem of tackling resource efficiency is every bit as complex and important, (and indeed, the two cannot be meaningfully decoupled) so the issue will require the same level of commitment if it is to be addressed successfully. The potential rewards on the resource efficiency side are significant: the UK has been grappling with a productivity conundrum in recent years; greater resource efficiency will tackle environmental impacts while delivering productivity gains for business.

2 Cooper, R. (2008) Mental Capital and Well-being: Making the Most of Ourselves in the 21st Century. State-of-Science Review: S2-DR2. The effect of the Physical Environment on Mental Well-being. Foresight Mental Capital and Well-being Project., 2008

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There have been no clear mandatory drivers for material resource efficiency3, the focus being on support, either at National level (from Envirowise through to WRAP and ZWS), or at local level, typically funded by ERDF, and rising and falling in prominence with the availability of funds. Voluntary initiatives, largely co-ordinated by WRAP, have also been used. Regarding these, while the number of signatories and participants has been impressive, the net impacts have been shown by independent analyses to be rather limited, and in some cases quite expensive, even though the schemes are widely trumpeted by their sponsors.

We believe that there is a place for the greater use of a range of economic and other policy instruments to drive business behaviour more quickly to improve material resource efficiency. Various potential policy interventions could be considered to accelerate material resource efficiency action and to realise the remaining potential identified. A number of policy instruments are discussed below that would help to address the three key areas of resource efficiency considered in this study:

Waste prevention at source (i.e. process efficiency); Material substitution (e.g. use of more sustainable and less hazardous materials);

and Waste reuse and recycling.

These have been suggested in both interviews and the published literature. The focus here is on manufacturing in general and on the three specific sectors where appropriate.

The approaches noted could be enshrined through a Resource Efficiency, or a Circular Economy Act, in a similar fashion to the Climate Change Act, with independent, evidence-based, legally-binding targets. Like the Climate Change Act, this would be a world-leading step taken by UK Government which would have the advantage of setting the UK economy on a path to increased productivity as well as greater sustainability.

The 25-year Environmental Plan states an intention of ‘maximising the value and benefits we get from our resources, doubling resource productivity by 2050’. In terms of what exactly this means, it does require further articulation: what is the metric to be used, and what is being expected of individual sectors?

It is suggested that a headline indicator of resource productivity (which should be clearly defined) is developed for use in the Resources and Waste Strategy.

3 PPC/IED has been a driver to a degree but has focused primarily on pollution, energy and water use.

Material Resource Efficiency v

Recognising that different metrics may be appropriate for different sectors, then alongside this headline indicator, sectoral performance indicators should be developed to track the key performance outcomes that the sector is being pushed to deliver.

There is precedent for this approach in existing legislation and policy, such as the sectoral thresholds for inclusion in the Environmental Permitting Regulations (Pollution Prevention and Control in Scotland and Northern Ireland), allocation of sectoral carbon reduction targets and indeed, the Industrial Strategy.

Sectoral benchmarking could then be used by businesses to gauge their performance (albeit recognising that there are significant differences even within sectors) related to what they produce and their competitors.

This could support the setting of interim targets on the path to the 25YEP objective: indeed, recognising that global GHG emissions must halve in each decade following this one to remain on a 1.5-2°C trajectory, the 2050 target in the 25YEP may prove to be insufficiently ambitious.

The merit of this approach is that it establishes the basis for a clear trajectory and enables some of the other policies below to be linked back to the relevant sector-specific metrics.

E.4.1 Potential policy mechanismsIf environmental costs that are currently external to economic decisions can be internalised, markets will function more efficiently in allocating resources. Section 4.1.2 sets out a range of economic measures that could be used encourage resource efficiency in the UK, including:

Extending Climate Change Levy Agreements to include the embodied carbon of raw materials and waste;

Modulated taxes on virgin materials, waste, packaging etc. to better reflect their environmental impact;

Green public procurement; A preferential tax regime to encourage resource efficient businesses; Extension of the Landfill Tax to Energy from Waste, to reflect carbon impacts.

Non-fiscal mechanisms are another established way of influencing behaviour, particularly in the business community. Even without the introduction of new measures, steps could be taken to better align existing legislation, such as that covering the definition, handling and transport of waste, with the needs of a more circular economy

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(e.g. EC communication on options to address the interface between chemical, product and waste legislation4). A number of options are explored in Section 4.1.3, including:

Extension of Environmental Permitting Regulations to include raw material and waste impacts;

Extension (or replication) of the Energy Savings Opportunities Scheme to Resource Efficiency Opportunities;

Mandatory reporting of waste and material yield; Product passports; Minimum recycled content; Resource Efficiency Technologies List; Enhanced Producer Responsibility.

E.4.1.1 Mechanisms to support businessBusiness support programmes have been implemented in various guises with some success, however, these support schemes flourish and dwindle with the availability of funding, such as ERDF regional support. Where the funding is inconsistent, the approach to delivering advice, and the expertise of those engaged in its delivery, will have a bearing on outcomes. What is needed is a mechanism that can sustain on an ongoing basis a programme of business support that needs no public subsidy. In principle, this ought to be possible: the funded support schemes themselves highlight financial benefits to businesses that far exceed the costs of their provision. Our experience indicates that it should be possible to operate advisory services on a no-win, no-fee basis. What has been lacking is the mechanisms that would unlock such an approach.

There appear to be two options:

a) Continuing with boom-bust services of one-to-one advice for SMEs which are essentially grant-funded (or funded through grants to a significant degree); or

b) Exploring mechanisms to facilitate those willing to provide services on the basis of the savings likely to be generated from the resource efficiency interventions identified.

We believe the latter is worth of further exploration, using novel financial instruments to unlock the resource efficiency gains identified in this study.

4 European Commission (2018) Communication from the Commission: on the implementation of the circular economy package: options to address the interface between chemical, product and waste legislation.

Material Resource Efficiency vii

E.4.1.2 Regional Resource Efficiency ClustersThe Clean Growth Strategy from BEIS noted, under the resources section, from page 109, para 19:

We will explore how data can support the development of a network of resource efficiency clusters led by Local Enterprise Partnerships (LEPs), whereby LEPs would develop local level strategies to drive greater resource efficiency, supporting processes such as industrial symbiosis and the development of new disruptive business models that challenge inefficient practice. We will explore how we can better incentivise producers to manage resources more efficiently through producer responsibility schemes.

Our understanding is that this concept of a resource efficiency hub is at a relatively early stage. We know that there is interest in regions in carrying this forward: as yet, the mechanisms for doing what is set out above are not clear. We assume that ONS will be involved, and will seek to support this approach.

As well as exploring mechanisms for provision of advice (see above), we believe there would be merit in working closely with one or more of the regions to test different models of developing hubs. This might also benefit from working in regions with different sectoral profiles. Some form of challenge could also be set to incentivise the delivery of on-the-ground improvements to ensure that hubs focus on delivering change.

E.4.2 ConclusionLike its predecessors, this report concludes that resource efficiency delivers significant financial and environmental benefits. It is also clearly an absolute requirement for sustainable development. Recent developments suggest that not only does resource efficiency address the problem of economic productivity, it also has the potential to reduce greenhouse gas emissions by as much as energy efficiency. Resource efficiency has been implemented incrementally over many years with effects that are obviously beneficial but a very long way from its full potential.

We suggest that some combination of the approaches noted above and throughout the report could be enshrined through a Circular Economy Act, in a similar fashion to the Climate Change Act, with independent, evidence-based, legally-binding targets. Like the Climate Change Act, this would be a world-leading step by the UK Government which would have the advantage of setting the UK economy on a path to increased productivity and sustainability.

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Material Resource Efficiency ix

Contents

Executive Summary........................................................................................................i

1.0 Introduction............................................................................................................1

1.1 Background.............................................................................................................1

1.2 Aim..........................................................................................................................1

2.0 Methodology...........................................................................................................2

2.1 Introduction............................................................................................................2

2.2 Framework..............................................................................................................2

2.2.1 Scope.............................................................................................................. 2

2.2.2 Economic data................................................................................................3

2.2.3 Environmental data........................................................................................3

2.3 Literature review.....................................................................................................4

2.3.1 CIEMAP...........................................................................................................4

2.3.2 Resource Efficient Business Models (REBMs)..................................................4

2.4 ENWORKS Resource Efficiency Toolkit database....................................................4

2.4.1 Introduction to ENWORKS...............................................................................4

2.4.2 Resource Efficiency Toolkit Database Query...................................................5

2.4.3 Extrapolating to UK scale................................................................................5

2.5 Construction: WRAP/SmartWaste..........................................................................6

2.5.1 Background.....................................................................................................7

2.5.2 Data sources...................................................................................................7

2.5.3 Method...........................................................................................................8

2.6 Industry survey.....................................................................................................10

2.7 Sense-checking interviews....................................................................................10

2.8 Aggregated rankings.............................................................................................10

2.9 Quality Assurance.................................................................................................11

2.9.1 Data sources.................................................................................................11

2.9.2 Modelling methodology................................................................................12

2.9.3 Internal review..............................................................................................12

3.0 Results...................................................................................................................13

3.1 Sectoral framework...............................................................................................13

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3.1.1 Chemicals......................................................................................................13

3.1.2 Metals...........................................................................................................14

3.1.3 Construction..................................................................................................14

3.2 Insights from the literature review.......................................................................14

3.2.1 Overview.......................................................................................................14

3.2.2 SREMs...........................................................................................................15

3.2.3 REBMs...........................................................................................................15

3.2.4 Average Savings............................................................................................16

3.2.5 Other estimates............................................................................................16

3.2.6 Waste data...................................................................................................17

3.3 Results from the ENWORKS database...................................................................20

3.3.1 Coverage.......................................................................................................20

3.3.2 Output.......................................................................................................... 23

3.3.3 Resource efficiency opportunities.................................................................24

3.3.4 Summary.......................................................................................................26

3.4 Results from the WRAP/SmartWaste analysis (construction)...............................29

3.4.1 Literature review and analysis conclusions...................................................29

3.4.2 Cost metric findings......................................................................................30

3.4.3 Carbon metric findings..................................................................................31

3.5 Industry survey results..........................................................................................32

3.5.1 Monitoring Business.....................................................................................33

3.5.2 Barriers to Resource Efficiency......................................................................34

3.5.3 Additional Information..................................................................................34

3.5.4 Government Policy........................................................................................34

3.5.5 Cost savings..................................................................................................35

3.6 Follow-up interviews (sense-checking).................................................................36

3.7 Aggregated rankings.............................................................................................36

3.8 Sectoral economic benefits...................................................................................38

3.9 Sub-sectoral environmental ranking.....................................................................39

3.10 Barriers to Resource Efficiency..............................................................................41

3.10.1 Survey responses...........................................................................................41

3.10.2 Literature and wider insights........................................................................42

3.10.3 Understanding the True Cost of waste..........................................................43

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3.11 Policy options........................................................................................................44

3.11.1 Survey Responses..........................................................................................44

3.11.2 Interview responses......................................................................................45

3.11.3 Literature insights.........................................................................................45

4.0 Conclusions and policy options discussion.............................................................46

4.1.1 A Vision.........................................................................................................48

4.1.2 Market-based mechanisms...........................................................................48

4.1.3 Other mechanisms........................................................................................50

4.1.4 Mechanisms to support business..................................................................51

4.1.5 Regional Resource Efficiency Clusters...........................................................52

APPENDICES................................................................................................................53

A.1.0Sectoral framework...............................................................................................55

A.2.0Literature review...................................................................................................63

A.4.0Survey and interview contacts..............................................................................72

A.5.0ENWORKS database..............................................................................................75

A.6.0WRAP/SmartWaste...............................................................................................76

A.7.0Ranking summary and output...............................................................................79

A.8.0Environmental ranking summary..........................................................................80

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1.0 IntroductionThe Department of Environment, Food and Rural Affairs (Defra) recognises that the construction, chemicals (including plastics) and metals sectors are very important parts of the UK economy. According to provisional 2016 figures from the Annual Business Survey5, they account for around 8.1%, 2.1% and 4.7% of UK GVA.

Research into resource use efficiency over the past decade has found that the three sectors offer significant opportunities for improvements in material efficiency. However, a key data gap is knowing which activities within each of the three sectors provide the largest opportunities and the size of those opportunities in economic and environmental terms, as well as the barriers and appropriate role of policy in helping to realise those opportunities.

1.1 BackgroundThe above data gap was identified in previous work undertaken by Oakdene Hollins in 20176, Business Resource Efficiency. Based on this research, DEFRA wished to model the financial and environmental savings available from these sectors to a higher resolution, so that particular sub-sectors could be targeted more effectively.

1.2 Aim The aim of this study is therefore to characterise the sub-sectors which comprise these three sectors, to gather information on the scale of resource efficiency opportunities at the sub-sector level and to model this information to identify priority sub-sectors for intervention, to encourage realisation of both cost and environmental savings.

The study also aims to identify barriers to the implementation of further resource efficiency opportunities and possible policy interventions that Government might consider introducing which would overcome these obstacles.

The study considers only material related opportunities; energy efficiency and water minimisation is scoped out.

5 Melanie Richard (2018) Annual Business Survey - 2016 Provisional Results6 Oakdene Hollins Research & Consulting (2017) 2017_Business_Resource_Efficiency.pdf, May 2017, http://www.oakdenehollins.com/media/452/2017_Business_Resource_Efficiency.pdf

Material Resource Efficiency 1

2.0 Methodology

2.1 IntroductionTo characterise resource efficiency opportunities in the three sectors, the study set out to gather information from a range of sources, as follows:

The published literature The ENWORKS Resource Efficiency Toolkit database An online survey Semi-structure interviews with industry

However, as assessment of these resources progressed, it became apparent that in some there were gaps in the quality (or existence) of the data, where in others there was more potential than anticipated, and in some there were opportunities for developing novel perspectives to shed light on the problem.

In summary:

the published literature contains detailed quantitative information on the Construction sector but less for Metals and Chemicals;

analysis on cross-sectoral initiatives such as the Resource Efficient Business Models (REBMs) project (based on REBUS, an EU project involving WRAP) and the Shared Resource Efficiency Managers project (DEFRA) have provided unexpected additional perspectives on scoping the study;

the ENWORKS RE Toolkit database has proven a rich source of highly detailed and structured information which can be usefully extrapolated to the wider economy;

completion of the online survey has been limited but has nonetheless yielded useful information, particularly regarding barriers and opportunities for overcoming them;

the survey revealed limited enthusiasm for a workshop, so this element was replaced with more in-depth interviews with stakeholders, particularly representatives of industry bodies.

Evolution of the methodology as the project progressed has resulted in a slightly different approach to that originally envisaged, although this has focused resources most effectively to ensure the most robust foundation based on the best data available.

2.2 Framework

2.2.1 ScopeThe first step was to establish the scope of the study. Using the Standard Industrial Classification (SIC) system7, defining the Construction sector is relatively straightforward, as it is all included within Section F (so Sections 41, 42 and 43). However, the Chemicals and Metals sectors are contained within the much larger Section C: Manufacturing.

7 ONS (2017) UK SIC 2007 - Office for National Statistics, accessed 2 March 2018, https://www.ons.gov.uk/methodology/classificationsandstandards/ukstandardindustrialclassificationofeconomicactivities/uksic2007

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2.2.1.1 Construction sector

In the construction sector in particular, many activities fall into more than one SIC code and many businesses carry out more than one activity.

For example, civil construction activities are split up into sub-sectors for e.g. “construction of roads and motorways (42.11.00),” “construction of railways and underground railways (42.12.00)” and others which are expected to have similar issues from a resource efficiency point of view, whereas “construction of domestic buildings (41.20.20)” does not include any subdivision for e.g. public-sector or private sector housing, which is an important distinction in the sector and from a resource efficiency perspective.

For the Construction sector, the SIC system has therefore been adapted slightly to better reflect the structure of the sector, the way data is collected and the potential for resource efficiency opportunities.

2.2.1.2 Metals sector

Considering the Metals sector at the level of four-digit SIC codes results in 65 sub-sectors, many of which are very similar from a resource efficiency point of view (e.g. “manufacture of cutlery, “manufacture of locks and hinges”). This many sub-sectors was considered too many for the on-line survey, so the list was condensed on the basis of the similarity noted above. The original and condensed frameworks are set out in Appendix A.1.0.

For the Metals sector, the scope was initially agreed to include only Section 24, which covers the manufacture of primary metals. However, it was felt that the opportunities for resource efficiency gains would be limited within this restricted scope, so the definition of this sector was expanded to include Sections 25-32, which encompasses the manufacture of products from metal.

2.2.1.3 Chemicals sector

From the outset, it was important that plastics be included within any consideration of the Chemical sector, given public concern and government focus. This resulted in the Chemicals sector being defined for the purposes of this study as all activities included within SIC codes 20, 21 and 22.

2.2.2 Economic dataBased on the scope and detail of the sectors under consideration, information has been supplied by the Office for National Statistics (ONS) to provide a framework to characterise the scale of the sectors, using the following metrics:

Number of enterprises Number of employees Turnover Gross Value Added (GVA)

In all cases, the data used come from 2016, unless no data were available from this year, in which case the closest available data were substituted.

Much of the available data on resource efficiency opportunities is restricted geographically, by sectors or otherwise. The economic data have been used as a common frame of reference to allow the potential to be estimated for implementation of these opportunities across the UK economy.


2.2.3 Environmental dataData on the reduction in greenhouse gases (GHGs) emissions available from implementation of resource efficiency opportunities has been derived from:

WRAP/SmartWaste analysis for the Construction sector; ENWORKS Resource Efficiency Toolkit database; and WRAP Resource Efficient Business Models (REBMs) modelling.

These data-sets have been harmonised with the condensed framework and averaged to allow an estimate of the climate change mitigation impact of proposed resource efficiency actions. Estimated reductions in greenhouse gas emissions apply to individual resource efficiency opportunities in the same way that cost savings are considered, i.e. implementation of a particular opportunity will result in a cost saving and a reduction in greenhouse gas emissions compared to business as usual. Neither figure considers ongoing savings from, e.g. use of improved products.

2.3 Literature reviewA summary of the background information reviewed is presented as Appendix A.2.0. This includes all references cited in the tender brief and in Eunomia’s proposal, together with those identified in the inception meeting and subsequent correspondence and those identified during the research process, or referred to by interviewees.

The results of the literature review are discussed in Section 3.2 below but a brief commentary is included here, as the results of the review have led to modifications to the methodology.

2.3.1 CIEMAPBased at the University of Leeds, the Centre for Industrial Energy, Materials and Products (CIEMAP) has produced a series of leading papers on resource efficiency, many of which were cited in the inception meeting.

While these papers are excellent, they tend to focus at the level of the whole economy and to treat resource (and energy) efficiency in the context of the whole system, rather than discreet opportunities within specific sub-sectors. They are therefore unfortunately of less direct relevance to this study than had been hoped.

2.3.2 Resource Efficient Business Models (REBMs)The WRAP publication, “Extrapolating Resource Efficient Business Models across Europe8” takes a different approach, looking at the implementation of REBMs across Europe (and at the level of the individual EU Member States), building on the REBUS project, which was part funded by the EU LIFE Programme. REBMs include concepts such as mobility as a service (MaaS), where the product is kilometres travelled, replacing the conventional model of car sales, servicing, fuel, insurance etc. The common thread of REBMs is that they encourage manufacturers to retain ownership of their products, so that it is in their own interests to

8 Keith James, Peter Mitchell, Dorothea Mueller (2016) Extrapolating-resource-efficient-business-models-across-Europe.pdf, November 2016, http://www.rebus.eu.com/wp-content/uploads/2017/07/Extrapolating-resource-efficient-business-models-across-Europe.pdf

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ensure that they are robust, repairable and efficient. This publication has been used to provide another view on estimating the scope of these opportunities.

2.4 ENWORKS Resource Efficiency Toolkit database

2.4.1 Introduction to ENWORKSENWORKS is a former programme and brand, now part of the Greater Manchester Business Growth Hub, which has helped thousands of businesses across Greater Manchester to grow, develop and reach their full potential. The geographical area covered today is that of the Greater Manchester Combined Authority (GMCA) but for the period under review, the data cover the whole North-West of England with a population of over 7.2 million people – the third biggest UK region after London and the South East.

Since 2001 ENWORKS has delivered the following validated achievements:

• 13,396 business assisted, 5,458 intensively on resource efficiency

• 8,264 jobs created or safeguarded

• £271m of cost savings achieved

• £365m of sales increased or safeguarded

• 28.4m tonnes of materials saved

• 1,130,578 tonnes of CO2e saved

• 955,000 tonnes of waste diverted from landfill

ENWORKS is part of the Greater Manchester Business Growth Hub, which has helped thousands of businesses across Greater Manchester to grow, develop and reach their full potential. The geographical area covered today is that of the Greater Manchester Combined Authority (GMCA) but for the period under review, the data cover the whole North-West of England.

2.4.2 Resource Efficiency Toolkit Database QueryThe ENWORKS database includes data for 4,200 SMEs and 1,300 larger companies in NW England, with good representation in construction, chemicals, plastics and metals, and provides quality-assured data on:

cost savings and additional sales (e.g. from new products and innovations); waste tonnages (by material type); and GHG reductions (using standard UK Government emission factors for embodied CO2e in materials).

A query was run on resource efficiency opportunities contained in the ENWORKS Resource Efficiency Toolkit database which have been identified within the three sectors. So that this query was comparable to the results of the survey described in Section 2.6, the same condensed framework of sub-sectors was used and opportunities were mapped to these sub-sectors.

For each sub-sector, ENWORKS then provided the following information:

Number of opportunities identified in the database Total material savings (in tonnes) Total cost savings Total carbon savings (tCO2e)


2.4.3 Extrapolating to UK scaleUsing the number of enterprises within each sub-sector in the north-west, versus the UK economy as a whole, we were able to extrapolate from the ENWORKS database to an estimate of the resource efficiency savings available across the UK. The accuracy of this estimate is biased towards those sub-sectors best represented in the ENWORKS database, so the degree to which each sub-sector is represented in the dataset has also been calculated, to give an indication of the robustness of this method.

The ENWORKS database records historical resource efficiency opportunities, so its use to model future opportunities must be approached carefully. Does the prevalence of a particular opportunity in a particular sub-sector suggest that replication across the wider economy is feasible, or that it is likely that the sub-sector has already implemented that opportunity widely?

We have taken the view that the implementation of resource efficiency initiatives is mainly driven by the presence of a consultant or other resource efficiency specialist, particularly in the case of SMEs. This view is difficult to substantiate (the ENWORKS data, or any similar database, for example cannot do this, since every opportunity in the database is by definition prompted by the presence of such a specialist) but the team has many decades of resource efficiency experience and the consensus is that it is much closer to the truth to assume that those companies that have not had any such intervention have not implemented the same opportunities than it is that they have.

It is certainly true that identified opportunities that are agreed with companies but not proactively followed-up and supported, are generally found not to have been pursued when subsequent market research is undertaken. By this reasoning, the scale and proportion of opportunities identified by resource efficiency professionals developing the ENWORKS database should broadly be available across the rest of the UK economy.

The Oakdene Hollins report9 looked at opportunities across three years (2006, 2009 and 2014), finding that the level of opportunities identified was effectively flat. Similarly to this study, the report is based on a combination of “snapshot studies” comparable to the ENWORKS data (which are more accurate but do not cover the full range of sub-sectors) and extrapolation from comprehensive data sets with a less direct relationship to resource efficiency, such as waste generation.

The report included energy and water, as well as material resource efficiency savings. When energy and water saving opportunities are removed from the figures, the remaining potential for savings from material resource efficiency was determined to have increased from £2.7bn in 2006, dipping to £1.9bn in 2009 then increasing to between £3bn and £4.6bn in 2014.

While these headline figures include significant sectoral variation, the report identified this trend as a balance of opportunities being implemented versus new ones being identified through better information and dissemination. For example, the authors identified a falling trend in the availability of resource efficiency opportunities in the food production sector as implementation of the Courtauld Commitments saw quick wins being implemented, while in the hospitality sector, improvements to the identification and characterisation of opportunities by WRAP resulted in an increase in the estimate of savings available.

This assumes that the predominant reason that the hospitality sector had not implemented these savings was that they were unaware of them and that the reduction in opportunities in the food production sector


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represents an approach to process optimisation. Unfortunately, robust evidence to support or refute these assumptions does not seem to exist. Furthermore, they are based on underlying assumptions of broad stability in terms of the cost and regulation of raw materials and waste, and no radical change in consumer attitudes.

Given that there are so many conflicting factors at play, many of which are poorly understood or even unknown, this study does not attempt to extrapolate historical trends into the future but works on the assumption that it is broadly reasonable to work with the most recent available historical figures.

2.5 Construction: WRAP/SmartWasteThe summary of analysis of the ENWORKS data presented in Appendix A.5.0 and discussed in Section 3.3 below shows that the opportunities identified account for 17.1% of the companies in the area in the Chemicals sector and 24.3% of those in the Metals sector. By contrast, the proportion of Construction companies in which resource efficiency opportunities were identified is less than 1%.

Given that the ENWORKS database is the only source of information identified which yields insight into the relative economic and environmental scale of resource efficiency opportunities down to the sub-sector level, an additional approach was needed to ensure that this part of the study was robust.

2.5.1 BackgroundIn 2011 WRAP estimated that 100 million tonnes of construction, demolition and excavation (CD&E) waste was generated every year in the UK10. Separately, WRAP also estimated total waste arisings of 494 tonnes per £ million construction spend, which is equivalent to ~ 70 million tonnes based on 2016 estimates (CITB - Construction Skills Network forecast spend data11). Additionally, DEFRA estimated that 55 million tonnes of non-hazardous C&D waste was generated in the UK in 201412. It is worth noting that even the lower figure is over five times the figure for the chemicals, metals and machinery sectors combined.

Note: it is not clear from the WRAP data how excavation material fits within these headline figures but they are of the same order of magnitude as the DEFRA non-hazardous C&D waste figures, so demonstrate the approximate range of waste generation associated with the construction sector.

WRAP undertook a further study (PRO095-00313) which looked at sales volumes and wastage of specific materials by type. The most significant materials by sales volume were calculated and estimates of percent wastage of each material were applied.

The construction waste baseline totalled 35.5 million tonnes of waste for the following materials:

Aggregates, Concrete Products, Other Cement, Clay Products, Timber, Steel, Plastic, Insulation, Glass Products, Slate

10 http://www.wrap.org.uk/sites/files/wrap/HW2L_Report__10555.pdf11 Construction Industry Training Board (2016) Industry Insights - Construction Skills Network Forecasts 2017-2021., accessed 26 March 2018, https://www.citb.co.uk/documents/research/csn%202017-2021/csn-national-2017.pdf

12 Defra 2016 (UK Statistics on Waste)

13 WRAP Entec (2010) PRO095-003 – Scoping study to compile estimates of the resource efficiency impacts of material and water use in the built environment, August 2010


This was for construction waste only and does not include soil (excavation). It again is a similar order of magnitude when compared to the other data highlighted above.

2.5.2 Data sourcesThe construction sector literature review identified a number of key datasets. The research required a number of data manipulation steps in order to combine and analyse them. As absolute savings were not the goal for this study, but rather a ranking of opportunities by material and sub-sector this method was considered acceptable.

The datasets were:

1) Waste type by construction project (BRE SmartWaste)

This is benchmark data recording volume of waste per £100,000 of construction spend for various construction waste types by construction project type (e.g. residential, commercial etc.). This data was taken from a publicly available study14 and is based on a sample of projects using BRE’s SmartWaste tool. Although only for a relatively small sample of projects, it provides the volume of construction waste by material stream for each construction type (e.g. residential, commercial etc.).

2) Waste volume to weight conversion factors (EA/SEPA)

These density conversion factors were developed by the Environment Agency for the 1998/99 commercial and industrial (C&I) waste survey in England and have since been used across the UK by all of the environment agencies, including SEPA. The factors were derived from a number of different sources including published research, advice from the waste management industry and some original research at the time. There is a factor for each of the European Waste Classification (EWC) codes in the List of Wastes.

This dataset was used to convert volume into tonnes per £100,000 using WRAP material-specific conversion factors.

3) UK construction spend data by construction type – CSN & Experian, Construction Skills Network Forecasts 2017–2021

This dataset estimates future UK construction spend value by project type through to 2021. For simplicity this was averaged to provide average annual spend expected going forward. This data was useful in scaling up impacts to a UK level.

4) Scoping study to compile estimates of the resource efficiency impacts of material and water use in the built environment, August 2010 (PRO095-003)

This was an unpublished study for WRAP by AMEC. The report was intended for internal use by WRAP, being carried out to inform WRAP’s thinking on priorities for future activities in relation to the construction sector and the built environment. The analysis provided a series of approximations using information available at the time. The aim of the project was to obtain an indication and comparison of impacts across a range of construction resource efficiency improvement opportunities, without seeking a high degree of accuracy. This helped identify and quantify the most significant opportunities to deliver savings (financial and environmental) through take-up of good practice. The focus was on a selection of materials only and not all construction materials. Those selected were:

Aggregates

14 Gregory, A. (2008) Resource Planning Tool, 2008

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Concrete products Other cement products (which we have assumed to be primarily plasterboard) Clay products Timber Steel (note: aluminium is not included in the analysis due to its relatively low use in construction

compared to other materials identified) Plastic Insulation

Further analysis then drew upon other sources such as WRAP’s suite of construction good practice guidance, Zero Waste Scotland’s Circular Economy opportunities in Scotland’s construction sector study, “Sustainable Materials: With both eyes open15” and EC’ A European Strategy for Plastics in a Circular Economy16.

2.5.3 MethodThe process to establish priority sub-sectors was as follows:

1) Waste type by construction project type data - m3/£100k spend (BRE smartwaste data), were converted into tonnes using EA EWC code density factors.

2) Waste type by construction project type data – tonnes /£100k spend, were then grouped together to create key sectors and selected only using major waste streams, to match WRAP’s impact data fields.

3) UK construction spend data by construction type (CSN & Experian - Construction Skills Network Forecasts 2017–2021) were then applied to generate UK waste type by construction project tonnes p.a.

4) These data were then converted into percentage of each waste type total by construction project, e.g. 0.16% of clay product waste and 40% of the concrete waste is from infrastructure. This was to allow material-specific savings potential to be split out across project types. Using the data generated in step 3 directly didn’t create an overall tonnage in the correct order of magnitude; we therefore used it to understand the proportional split of waste by material type across construction projects. It required some grouping together to match the construction types to those used in other data-sets.

5) These percentages from step 4 were applied to WRAP - PRO095-003 (2010) overall material value, tonnes of material and CO2e for the building and construction products. These data were considered to be a more accurate than the BRE up-scaled data.

6) The WRAP PRO095-003 (2010) data were applied to derive improvement opportunity (%) for various interventions to generate tonnes of waste impact p.a. by material by construction type.

The six approaches were then combined into three individual tables, one for each metric: i.e. waste tonnage, value, CO2e tonnage. The values were ranked from large to small, and the top 20 most significant impacts areas identified. For the purposes of comparing this approach with the other data-sets (ENWORKS, REBMs etc.) only the financial value of savings and reduction in greenhouse gas emissions were used. For those sub-sectors which were not included in the WRAP/SmartWaste analysis, cost and greenhouse gas

15 Jonathan M Cullen; Julian M Allwood (2011) Sustainable Materials: with both eyes open, accessed 26 March 2018, http://www.withbotheyesopen.com/read.php16 Documents on the strategy for plastics in a circular economy, accessed 26 March 2018, https://ec.europa.eu/commission/publications/documents-strategy-plastics-circular-economy_en


emissions savings have been estimated pro-rata from the average of the sub-sectors included, on the basis

of turnover.

Figure 2.1: Flow-diagram summarising process steps

2.6 Industry surveyAn online survey was designed and deployed using the SurveyMonkey platform. This was disseminated to a list of 71 major industries in the sectors and to industry bodies representing the sub-sectors covered by the study, plus additional contacts supplied by DEFRA. Within the constraints of data protection, a list of these contacts is presented as Appendix A.4.0. These trade organisations were all contacted, the project was explained to them and they were asked to complete the survey and disseminate it to their members.

The survey aimed to capture the following information:

1) the sub-sector and scale of the company represented by the respondent;2) details of any resource efficiency monitoring and reduction activity already underway;3) barriers to implementation of resource efficiency; 4) recommendations for policy interventions to overcome these barriers;5) any resource efficiency savings already identified, including quantitative data, where available

(estimated and realised); and6) Greenhouse gas emission reductions associated with these initiatives (estimated and realised).

As discussed in Section 2.2 above, the full SIC listing was condensed to facilitate the survey.

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Finally, respondents were asked whether they would like to attend a workshop to discuss the interim findings of the study and to present any additional information to support their industry’s interests. There were not enough positive responses to make this approach viable, so this part of the project was changed to direct phone interviews, as below.

2.7 Sense-checking interviewsThose contacts which were prepared to engage with the study were contacted to gather more detail on their views of the interim results, as well as the survey results. The original list of contacts, along with additional contacts who had responded to the survey, were contacted again for the purpose of conducting semi-structured phone interviews.

Interviews were carried out with those respondents that could be contacted, during which they were invited to comment further on their responses to the survey questions, using the structure outlined in Section 3.5, and also encouraged to give any further context and background to their responses.

2.8 Aggregated rankingsThe treatment of the data described above resulted in four systems of ranking: by turnover, number of employees, ENWORKS opportunities and WRAP/SmartWaste opportunities. Each has pros and cons:

Ranking by turnover and number of employees are both robust datasets directly covering the entire UK economy but their correlation with resource efficiency opportunities in specific sub-sectors is weak, as it relies on a single figure (from Envirowise) relating to savings averaged across the whole economy.;

ENWORKS opportunities are directly attributed and therefore strongly correlated to specific sub-sectors but the dataset does not represent equally all sub-sectors, as identified opportunities are not evenly distributed and the region covered accounts for only a portion of the overall UK economy;

WRAP/SmartWaste data are highly detailed (more detailed than the other datasets, so some of the detail has to be sacrificed in a direct comparison) but only apply to the Construction sector, and only to certain sub-sectors within it.

To summarise, the rankings based on turnover and number of employees are expected to give a good measure of the overall scale of opportunities but a poor representation of the relative importance of sub-sectors; ENWORKS data give an excellent representation of sub-sectoral detail for well-represented sub-sectors but less so for those less well represented; WRAP/SmartWaste data are both robust and detailed but apply only to the Construction sector.

These ranking systems have therefore been aggregated but with greater weighting being given to the WRAP/SmartWaste and ENWORKS data, as they are based on measured data specifically attributed to sub-sectors. In the case of the Construction sector, only the WRAP/SmartWaste and ENWORKS data are used to generate the aggregated ranking, as turnover and employee numbers have been used to derive the WRAP/SmartWaste ranking, so to include those ranking systems again would be double-counting. In this sector, the WRAP/SmartWaste ranking system is given twice the weight of the ENWORKS data, to represent the inclusion of employee number and turnover data in its calculation, and the under-representation of Construction sector opportunities in the north-west.


For the Chemicals and Metals sectors, in order for all four ranking systems to be included in the overall assessment without overwhelming the detail, the turnover and employee number rankings were each given a weighting of 25, ENWORKS data were given a weighting of 50 (in effect giving the ENWORKS data-set equivalent weight to the ONS economic data) and the WRAP/SmartWaste results were given a weighting of 100 (but only in the Construction sector, as this is the only sector to which the WRAP/SmartWaste data refers, and which is poorly represented by the other data-sets). 17

This weighted system was considered more representative of the relative robustness of the data-sets than treating them equally would have been. The treatment was also tested for sensitivity to adjustments in the relative weighting and the overall ranking was found to be resistant to quite sizeable alterations, giving us confidence that this was a reasonable way to deal with the relative merits of the disparate data-sets.

For the Construction sector aggregate ranking, changing the weighting around completely (so that the ENWORKS data has twice, rather than half the weight of the WRAP/SmartWaste data) changes the order in which the top five sub-sectors are ranked but does not change what they are. For the Chemicals and Metals sectors, doubling the relative importance of the ENWORKS data has the same effect (re-ordering the top five but not altering which sub-sectors are represented), while giving each data-set equal ranking only alters the fifth and sixth places, swapping “building of ships and floating structures” for “machining.”

The aggregated ranking has then been used to assess the economic value of resource efficiency opportunities in the top five sub-sectors in each sector and the greenhouse gas emissions reductions associated with them, based on a median value of the various calculation methods used. Median values have been used in this case because the range is large but the sample size small.

2.9 Quality AssuranceThis section describes the provenance of the underlying data used in the analysis, the analytical methodology and quality assurance procedures used.

2.9.1 Data sourcesThe principle data sources used are as follows:

17 N.B. the ranking system scores highest for a low number, so the system gives more weight to smaller multipliers.

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Data Source

Standard Industrial ClassificationUK SIC 2007, Office for National Statistics (ONS) website.

Annual UK economic surveyAnnual Business Survey, UK non-financial business economy: 2016 provisional results. ONS website.

ENWORKS database Supplied under contract from ENWORKS.

WRAP/SmartWaste Described in detail in Section 2.5.2

In addition, individual data-points taken from various publications are described in the text.

2.9.2 Modelling methodologyThis section describes those specific elements of the methodology relating to the source and treatment of data. The foundation for the study uses a combination of data from the UK annual economic survey and the Standard Industrial Classification (SIC). The SIC framework was used in discussion with Defra to define the scope and detail of the three sectors and the sub-sectors within them. The SIC framework was modified slightly to better reflect the scope and required outcomes of the study, as described in Section 2.2.

Sub-sectoral economic data (turnover, employee numbers and GVA) were taken from the UK annual economic survey for the most recent year in which they were available. In the vast majority of cases this was 2016 but in a couple of instances there was no data for that year, so the most recent data were substituted. This economic framework was then used as the basis for interpolating across sub-sectors studies such as Resource Efficient Business Models (REBMs), and average savings based on employee numbers and turnover.

ENWORKS have supplied a spreadsheet including analysis of 2,260 individual resource efficiency opportunities, each attributed to a sub-sector as described above. The database includes the financial and greenhouse gas emission savings attributed to each opportunity and also a classification of the type of opportunity, split into:

resource reduction, waste diverted from landfill and substitution.

This gives the scale of financial and emissions savings identified in each sub-sector represented within the geographical area covered by the database. These figures are then extrapolated to cover all sub-sectors and the whole UK economy as described in Section 2.4.3.

Once the ranked order of resource efficiency opportunities in each sub-sector is derived by the various treatments described, these are aggregated as described in Section 2.8 above.

2.9.3 Internal reviewThe model has been independently audited by one of Eunomia’s modellers from another team, according to Eunomia’s quality management procedures. This audit included:


a check of data sources cited, to ensure that they are relevant and current; spot-check of copied data, to pick up any inaccuracies or inconsistencies; an audit of calculations for sense, consistency and completeness; an overview of the process for logic and general sense; and a cross-check that output figures are within a reasonable expected range.

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3.0 Results

3.1 Sectoral frameworkA summary of the full and condensed sectoral frameworks is included as Appendix A.1.0.

Figure 3.1 below summarises the scale of the sub-sectors in the condensed framework by turnover and number of employees. Turnover for each sub-sector in the top five is marked for Chemicals (green), Construction (yellow) and Metals (blue), with employee numbers in grey. A similar figure with data for all sub-sectors in the condensed framework is included in Appendix A.1.3.5.

This figure gives a quick impression of the relative scale of the three sectors, and the relative importance of each sub-sector. Of the three, the Construction sector is by far the largest in terms of both turnover and employee numbers, with the specialist contracting sub-sector being the largest by both metrics.

Figure 3.1: Turnover of top five sub-sectors in each sector.

3.1.1 ChemicalsIn terms of number of enterprises and number of employees, the chemicals sector is dominated by the manufacture of plastic products, while in terms of turnover, pharmaceuticals dominate.


In the condensed framework used across all analyses, the amalgamation of plastic products for construction with other plastics makes this sub-sector the top ranking in number of enterprises and employees (and second in turnover), while pharmaceuticals is the top ranking in turnover and second in number of employees.

Generally, the sector is dominated by the manufacture of plastic products and pharmaceuticals, with manufacture of detergents, perfumes and toilet preparations and other chemical products also ranking highly. Primary plastics manufacture also ranks fifth in terms of turnover.

3.1.2 MetalsThe automotive and aeronautical sectors are the most important in terms of both number of employees and turnover, with machining, manufacture of metal structures and manufacture of fabricated metal products also important.

In the condensed framework, the amalgamation of sub-sectors allows treatment and coating of metals to make fifth place in terms of number of companies.

3.1.3 ConstructionOverall, building services (installation of building services, plastering, joinery, electrician etc.) dominates the sector in terms of both employees and turnover. Construction of civil engineering, transport infrastructure and utility projects ranks second overall, although with a noticeably higher turnover, compared to number of employees, as would perhaps be expected.

As discussed in Section 2.2.1.1 above, the unique nature of the construction sector means that commonalities in resource efficiency opportunities are found across sub-sectors in a slightly different way to that found in other sectors. As a result, the condensed framework for this sector is not a simple amalgamation of similar sub-sectors; it has also been expanded to show differences in public and private sector projects, which tend to have different priorities and procurement practices.

In the condensed framework for the construction sector, this treatment results in the top ranking sub-sectors being trades (including heating, ventilation, and air conditioning (HVAC), joiner, electricians etc.), civil engineering projects, development of building projects and lastly non-residential buildings for the public sector.

3.2 Insights from the literature reviewA summary of the information sources reviewed and a brief synopsis of their content and relevance is included as Appendix A.2.0.

3.2.1 OverviewThe literature on the cost and carbon savings from resource efficiency and related initiatives (e.g. circular economy, resource efficient business models) is extensive but predominantly based on an extrapolation from high-level economic statistics.

As discussed elsewhere, there is relatively good data for the Construction sector but this sector is a special case given the very high unit cost, long design life and high GHGs emissions in use of its products.

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The literature has qualitative information on resource efficiency in the Chemicals and Metals sectors but very little was evident quantitatively or in more detail at the sub-sectoral level. Some relevant quantitative information can be gathered from the research undertaken on resource efficient business models (REBMs) and average savings figures identified through historical programmes such as Envirowise, however these approaches only really allow an estimate to be made of savings available at the sectoral level. Any further refinement is based solely on economic data (e.g. scaling by the size of each sub-sector), offering no insight into the relative uptake of opportunities in different sub-sectors.

Nonetheless, these views on the problem are informative and are considered below:

3.2.2 SREMsThe Defra publication EV0548: “Encouraging and supporting SMEs to improve their resource efficiency; piloting shared resource efficiency manager models in SME manufacturers18” reports on a study into the effectiveness of deploying Shared Resource Efficiency Managers (SREMs) to identify and implement resource efficiency opportunities.

This study is predicated on the observation that a lack of expertise and staff resource contributes to reduced implementation of resource efficiency. This can to some extent be mitigated by buying in external consultancy assistance but this tends to lead to a less effective, cyclical approach to resource management in response to short-term need. The study recruited and deployed two SREMs for one year: one covering members of EEF - The Manufacturers’ Organisation (formerly the Engineering Employers’ Federation) local to the south-west of England and south-east of Wales, and one in the supply chain for Rolls-Royce.

Each SREM implemented savings in excess of their costs in the first year, together with additional identified savings and ongoing savings that would be realised annually. The SREMs found that “the largest actual savings resulted from changes to waste management practices, with the potential savings associated with improvements to production practices and procedures and associated reductions in materials use and production wastes. In the majority of participating businesses, the cost of materials was found to be significantly more than the costs of energy, though relatively little had been done to reduce or change materials use and prevent wastage of materials in the production process.”

3.2.3 REBMsThe WRAP publication, “Extrapolating resource efficient business models across Europe”19 analyses the potential for widespread implementation of resource efficient business models (REBMs) across the European Union. REBMs (now more normally called Circular Economy Business Models (CEBMs)) are new ways of doing business which break the traditional linear economic model, for example product service systems (selling mobility rather than cars, light levels rather than lighting) and take-back for re-manufacture. The report is based on an assessment of REBM implementation across EU Member States and concludes with three scenarios: “no new initiatives,” “current development path” and “transformation.”

18 Ann Stevenson, Ed Gmitrowicz, Chris Hillier, Einir Young (2016) EV0548: Encouraging and supporting SMEs to improve their resource efficiency. Piloting shared resource efficiency manager models in SME manufacturers, August 201619 Keith James, Peter Mitchell, Dorothea Mueller (2016) Extrapolating-resource-efficient-business-models-across-Europe.pdf, November 2016, http://www.rebus.eu.com/wp-content/uploads/2017/07/Extrapolating-resource-efficient-business-models-across-Europe.pdf


For the purposes of this assessment, the difference between “current development path” and “transformation” has been taken as the potential for improvement as a result of possible government intervention. The study models increase in GVA per annum in the year 2030 in Euros, so the quoted figures have been adjusted using the exchange rate at the time of writing and UK economic growth figures for the past twelve years as a proxy for the next twelve; they have then been adjusted using a linear regression to reflect the impact in a single year, rather than over twelve. The results of this analysis are presented in Appendix A.2.1.

As it is based on an extrapolation across the economy (and specifically across the sectors and sub-sectors in question), this approach does not really provide any more detail in terms of which sub-sectors will yield the greatest savings, as the estimates for REBM opportunities are based on the GVA of each sub-sector; however, this approach does allow a scale to be established in terms of GVA, greenhouse gas emissions reductions, and reductions in resources used and disposed of. REBMs are only one way of implementing resource efficiency, which would make these figures an underestimate of real savings available. However, REBMs are also not equally applicable across all industrial sectors, which will compensate this effect to some degree.

3.2.3.1 Analysis

Using the assumptions and calculations set out above, the top five sub-sectors within each sector, in terms of potential GVA increase through implementation of policies to encourage REBMs, were calculated. These results are reported in Appendix A.2.1.

As discussed, this ranking is the same as the GVA ranking contained within the ONS data, as the WRAP study reports only a single figure for the whole UK economy, which is interpolated to the sub-sectoral level on the basis of GVA (since the study is based on GVA); the point of applying the REBM figures is to use this research to provide another data point for the scale of cost and carbon savings available through resource efficiency, rather than to provide another rank of relative scale.

3.2.3.2 Applicability of REBMs

REBMs have been around for decades (e.g. Rediffusion television rental, Xerox pay per copy) but have been popularised in the past few years as a tangible means of implementing circular economy practices within the existing economy. There are excellent examples which are directly relevant to this study (e.g. carpet tile hire by Interface and others, the build-to-rent model operated by housing associations), however there are also sub-sectors covered by this study where it is more difficult to imagine their widespread deployment (e.g. pharmaceuticals, fertilisers, explosives). These considerations have been taken into account in the WRAP research at an EU economy level, so the assumptions of that study do not necessarily map exactly onto this one. However, it was felt on balance that the REBM mapping approach has enough merit to include.

3.2.4 Average SavingsBased on decades of experience, programmes such as the Environmental Technology Best Practice Programme and its successors Envirowise and WRAP have claimed that resource efficiency savings averaging 1% of turnover or £1,000 per employee can generally be identified across manufacturing sectors. This figure is based on an average taken across a broad representative sample of the UK economy. Clearly it is an over-simplification but it is still informative, being based on such a large sample. As with the

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extrapolation of REBM data in Section 3.2.2, this treatment offers only limited insight into the relative scale of resource efficiency opportunities across sub-sectors but it does provide a reasonably robust estimate of the headline figures.

To assess total savings available from the sectors in question, based on the estimate that 1% of turnover or £1000 per employee can be saved, these figures have simply been multiplied through the sub-sectoral turnover and employee numbers. The results of this assessment are presented in Appendix A.2.2.

3.2.5 Other estimatesThe most recent Oakdene Hollins report20 on the subject estimates savings available to the entire UK economy through low cost or no cost resource efficiency opportunities at between £3bn and £4.6bn (excluding energy efficiency and water) in 2014. Adjusting this figure for inflation and pro-rata on the basis of sub-sectoral GVA gives a mean figure of £632m for the three sectors under consideration in this study.

The overall sectoral savings from the Oakdene Hollins report are presented in Table 3.1 below, alongside comparable figures from the data sources and analyses used in this study.

This Oakdene Hollins figure is a low estimate compared to the others identified, however it should be borne in mind that the Oakdene Hollins study looked only at low-cost/no-cost opportunities, scoping out those requiring significant investment, with a payback of more than one year, and also interventions such as lean manufacturing, resource efficiency business models etc. Unfortunately, the Oakdene Hollins report does not explain how estimates for resource efficiency opportunities were calculated, stating only that it was achieved through “quantification of savings opportunities (p.35).”

Estimate (£m) Chemicals Construction Metals

Oakdene Hollins 93 199 340

WRAP/SmartWaste - 3,540 -

ENWORKS 739 35,470 684

Turnover 736 2,574 1,947

Employees 309 1,357 842

REBMs 418 749 983

Table 3.1: Sectoral resource efficiency opportunities by analysis method

Across the other analysis methodologies used in this study, the immediately obvious observation is that the savings available in the Construction sector according to the ENWORKS data are ten times higher than the next highest (and likely most accurate) estimate, derived from the WRAP/SmartWaste treatment. As discussed elsewhere in this report, this is an anomaly caused by the very low representation of



Construction sector businesses in the ENWORKS data, together with a high value for those opportunities that were identified, which was then multiplied by the very large number of similar businesses across the UK as a whole. This calculation methodology is consistent, so the result is valid however it is clearly an outlier; this is why:

the additional WRAP/SmartWaste analysis was undertaken; aggregation of rankings is weighted to reflect the accuracy of the analyses; and the average of savings taken across all analyses is the median.

3.2.6 Waste dataOne approach to assessing resource efficiency opportunities in these sectors is to look at waste arisings. Reasonably accurate waste data have been collected in the UK for many years, which in principle could be used to shed some light on the potential for cost savings.

However, waste data are collected by waste type (e.g. aggregates, metals) not by the type of business which is responsible for the waste. Even so, there is some potential for attributing waste to sectors. Aggregate waste, for example, comes principally from the Construction sector; metal and plastic waste are similarly attributable to the production processes which use them.

Data from the Commercial and Industrial Waste survey21 have been analysed and are presented below. Because of the disconnection between what waste is and where it comes from, and because of the wide range of values that can apply to waste materials (for example, a tonne of waste listed as aluminium could come from producing drinks cans or satellites, with different implications for the implied “embodied value” of the material) these figures are not used to shed light on the scale of resource efficiency opportunities directly, however they do contain insights which help to qualify other analyses.

21 Defra (2016) Digest of Waste and Resource Statistics - 2016 Edition (revised)

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Figure 3.2: Commercial and Industrial Waste data 2010-2014.

On the above graphs for each sector, the lines show total sectoral turnover for the year in question, with the columns showing waste generation in million tonnes, split into the categories as shown in the Legend.

The relative size of the three sectors is evident from the scales of the three graphs, with Metals and Construction amounting to around 2 to 3 times the turnover of the Chemicals sector. There is also a clear correlation between turnover and waste generation but a large difference in the relative generation of waste (tonnes of waste per £ of turnover). For the Metals sector, relative waste generation across the three sample years (averaged across all waste types) varies between 11 and 13 tonnes per million pounds


of turnover; for the Chemicals sector, the range is 28 to 49 t/£m, whereas the Construction sector generates between 553 and 588 t/£m.

Figure 3.3: C&I waste data 2012.

A more detailed treatment of the waste generation data for 2012 has been provided by Natural Resources Wales22. This does not cover the Construction sector but it does allow some insight into the difference in waste generation between the Chemicals and Metals sectors and the resulting opportunities for resource efficiency improvements.

These data show that total waste generation from the Metals sector is four times that of the Chemicals sector but waste sent to landfill is only twice as much, largely because of higher recycling rates. Recycled waste can ideally be used as a feedstock for new products, thus increasing resource productivity. These results are not surprising as it is in the nature of many of the products manufactured by the Chemicals sector that they cannot be recycled (e.g. detergents, fertiliser, and explosives) whereas the potential for recycling and recyclability in the Metals sector is much higher.

Defra statistics23 suggest that the recovery rate of Construction sector waste is comparable to the other two sectors (at 88.6% in 2012), it is just that the waste generated is of much lower value per tonne, leading to a relative waste generation rate that is over ten times that of the Chemicals sector.

3.2.6.1 Implications for resource efficiency

Although these data only drill down to the sectoral level, they are sufficiently detailed to illustrate the difficulties of extrapolating from the weight of different types of waste to the scale of resource efficiency opportunities available from different sub-sectors.

These data demonstrate that some types of waste are inherently more recyclable than others (as are some types of product) and there is an implication that this recyclability implies the possibility of increasing the recycled content of the products which generate those wastes, which offers some insight into one aspect of resource efficiency. However, waste data struggle to shed much light on the overall financial or environmental scale of opportunities in particular sub-sectors.

22 Extract from 2012 I&C waste data for Wales, provided by Natural Resources Wales.23 Defra (2018) UK Statistics on Waste

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3.3 Results from the ENWORKS databaseAs discussed in Section 2.4, the ENWORKS database includes many thousands of resource efficiency opportunities, categories according to industrial sub-sector (among other criteria) and including associated greenhouse gas emission reductions. The results of the query of this database are presented in Appendix A.5.0.

3.3.1 CoverageThe data used in the query cover the north-west (NW) of England. In terms of the sub-sectors covered in this study, the north-west includes 13% of companies in the Chemicals sector, 9% of the Construction sector and 9% of Metals. Although there is some overlap where more than one opportunity was identified in the same company, we were able to estimate the extent to which the database has identified opportunities within the sectors as 17.1% in Chemicals, 0.5% in Construction and 27.1% in Metals (number of opportunities identified as a percentage of number of companies).

From these figures it is apparent that using the ENWORKS database to extrapolate to the UK economy is a reasonably robust approach for the Chemicals and Metals sectors but not so for Construction. This is why the additional analysis using WRAP/SmartWaste analysis was undertaken to give a more reliable and detailed insight into resource efficiency opportunities in the Construction sector.

This point is illustrated by the series of figures below, which show the number of companies in which opportunities have been identified by the ENWORKS database, compared to the number of companies in the north-west, then the number of companies in the north-west compared to the number of companies in the UK.


Figure 3.4: Chemicals sector, ENWORKS database coverage in NW

Figure 3.5: Chemicals sector, sub-sectoral representation in NW compared to UK

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Figure 3.6: Construction sector, ENWORKS database coverage in NW

Figure 3.7: Construction sector, sub-sectoral representation in NW compared to UK


Figure 3.8: Metals sector, ENWORKS database coverage in NW

Figure 3.9: Metals sector, sub-sectoral representation in NW compared to UK

3.3.2 OutputThe reliability of the extrapolation from the NW of England to UK depends on the representation of opportunities within the ENWORKS database and the representation of UK companies within the NW, as described. In some instances, there are no opportunities in the database or no companies in the region for a particular sub-sector, in which case no extrapolation can be made.

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Cross-referencing output from the ENWORKS database with other assessment methods gives an indication of any sub-sectors where there may be significant gaps. The synopsis of rankings presented in Appendix A.7.0 illustrates this.

The way in which this aggregation has been carried out is described in Section 2.8 and the results of the process in Section 3.7.

3.3.3 Resource efficiency opportunitiesThe sub-set of the ENWORKS database used for this study, covering only the Chemicals, Metals and Construction sectors, includes 2,261 resource efficiency opportunities. These are categorised into:

Resource reduction; Waste diverted from landfill; and Substitution.

The figures below show the breakdown of these opportunity types across the sub-sectors with commentary on the types of opportunities identified.

3.3.3.1 Chemicals


Figure 3.10: Type of opportunity, Chemicals sector

Resource efficiency opportunities in the Chemicals sector are predominantly concerned with:

Implementation of a formal system of monitoring, process value mapping and identification of financial yield losses;

Improved segregation of waste materials, leading to reduced disposal costs and opportunities for re-use of materials and energy recovery;

Renegotiation of contracts, bulk purchasing; and Sector-specific specialist technologies, e.g. regranulation, solvent recovery.

3.3.3.2 Construction

Figure 3.11: Type of opportunity, Construction sector

These opportunities are mainly concerned with:

Improving waste segregation to reduce disposal costs and increase value, potential for reuse and energy recovery;

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General process value mapping to identify financial yield loss hot-spots; Bulk purchase and waste contract renegotiation (e.g. reduced uplift frequency); and Use of recycled materials

3.3.3.3 Metals

Figure 3.12: Type of opportunity, Metals sector

These opportunities are mainly related to:

Establishment of monitoring, resource efficiency teams and programmes; Process value mapping; Waste segregation to reduce disposal costs and increase opportunities for increasing value,

opportunities for re-use, heat recovery; Sector-specific specialist technologies (e.g. solvent recovery, effluent treatment)

3.3.4 SummaryThese figures show a clear distinction in the attribution of opportunities identified in the Construction sector, compared to the two more conventional manufacturing sectors. The vast majority of opportunities


in the Metals and Chemicals sectors come from resource reduction, whereas the majority in the Construction sector are from waste diverted from landfill.

This is illustrated in the following figures, which show the number and financial totals of resource efficiency opportunities identified in the ENWORKS data by sector, attributed to more detailed categories:

Figure 3.13: Number and financial total of opportunities by category, Chemicals Sector

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Figure 3.14: Number and financial total of opportunities by category, Construction Sector


Figure 3.15: Number and financial total of opportunities by category, Metals Sector

These figures show quite clearly that process improvements are the predominant opportunity in the conventional manufacturing sectors, as would be expected in an environment where consistency, repetition and high volume output are critical. The story in the Construction sector is different, with more opportunities being presented by the reuse and recycling of materials. These data span thirteen years, from 2004 to 2017, over which period the Construction sector made great improvements as a result of the introduction of the Landfill Tax and the WRAP Commitment to halve waste to landfill.

However, when the underlying detail of these opportunities is assessed, a strong common theme emerges. This shows that, across the board, the following steps are required for any successful resource efficiency opportunity:

1) Establishment of a formal resource efficiency framework. This may be part of an existing management system, lean manufacturing protocol or stand-alone initiative, or the result of external consultancy assistance being made available or bought in;

2) Development of a financial yield-based process model, populated with accurate data and including costs often considered external, such as waste disposal, energy, water, effluent, packaging etc.

3) Consideration and modelling of costs and potential opportunities, including calculation of avoided costs from disposal, reduced material costs from re-use and use of recycled material, energy from waste etc.;

4) Consideration of specialist technologies developed specifically to reduce costs in particular activities, such as solvent and coolant recovery, effluent treatment etc.

While individual resource efficiency opportunities identified in the ENWORKS database may be attributed to only one of these steps, they mostly result from the application of this process. This suggests that it might be productive to encourage a standardised approach to resource efficiency. In the same way that the UK led the world in the development of the BS7750 Environmental Management Systems standard which went on to become the international standard ISO14001 in use today, BSI has developed the BS8001 Circular Economy standard. BS8001 is a voluntary guidance standard however and a company cannot be certified for compliance. Although this standard has only just been issued, it may be worth considering whether it would be helpful to develop it into a full externally certifiable standard. This would allow deployment of the standard to be encouraged through procurement and supply chain channels, as well as by local enterprise partnerships.

3.4 Results from the WRAP/SmartWaste analysis (construction)Analysis of the WRAP/SmartWaste data for the Construction sector, described in Section 2.5, results in the following breakdown of sub-sector resource efficiency opportunities.

Sub-sector Savings

£m ktCO2e Rank

Development of building projects £313 500 5

Construction of civil engineering, transport infrastructure and utility projects £319 678 4

Construction of non-residential buildings for the public sector £266 397 6

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Construction of commercial buildings £400 662 3

Construction of industrial buildings £67 82 9

Construction of residential buildings for the public sector £141 232 8

Construction of residential buildings for the private sector £814 1,420 2

Demolition, site preparation, test drilling and boring £41 65 10

Installation of building services, plastering, joinery, electrician and other trades £982 1,569 1

Other specialised construction activities £196 314 7

Table 3.2: Summary of results from WRAP/SmartWaste analysis

These are presented more fully in Appendix A.6.0 and described below.

3.4.1 Literature review and analysis conclusionsWRAP’s PRO095-00324 Study was the most significant information source identified for construction resource efficiency impact potential. It assessed the impact in terms of waste tonnage, CO2 and cost of a shift from standard to good practice, for a number of improvement opportunity types as follows:

1) Improved onsite waste reduction i.e. the waste tonnage from a change from standard to good practice wastage rates in the construction process; the embodied carbon with this change and the cost saving through avoided material use and waste management.

2) Increased offsite construction i.e. the tonnage saving in waste arisings on site that can be achieved by moving from standard practice conventional construction to good practice off-site construction; the embodied carbon associated with this change and the cost through avoided material use and waste management.

3) Improved recycling / reuse through improved waste segregation on site and at MRFs i.e. the waste tonnage recovered resulting from the use of good practice MRF operations and segregated skips compared with mixed skips and standard practice MRF operations; the embodied carbon associated with this change and the change in waste management cost.

4) Increased recycled content in construction materials i.e. potential saving in the materials used to make the construction products that can be saved by increasing the recycled content of the products and the associated embodied carbon. The cost savings are zero as the level of increase in recycled content is set on a cost-neutral basis.

5) Designing for deconstruction, i.e. the tonnage of materials that can be saved in constructing new buildings where construction products can be re-used (not recycled) from the disassembly of buildings that have been designed for deconstruction; and the associated embodied carbon. The cost savings would be zero as the level of re-use achievable is on a cost-neutral basis.

6) Increased refurbishment rather than demolition i.e. saving through the reduction in construction and demolition waste arising (assuming 90% demolition waste arising is recovered) from replacing 10% of new build with refurbished buildings; the embodied carbon and the avoided cost of waste management.

24 WRAP Entec (2010) PRO095-003 – Scoping study to compile estimates of the resource efficiency impacts of material and water use in the built environment, August 2010


7) Application of lean design. Aspects of lean design include: Efficient design to use less total material – including avoiding "over-design"; Design using more efficient (e.g. stronger) materials / products / components, and Matching the construction design to the materials / components available (e.g. through

dimensional optimisation of structures and/or components).

As expected, the ranking in the table in Section 3.4 above reflects the findings of WRAP’s PRO095-00325 study but the additional analysis undertaken provides some granularity on which construction project type might be a priority for focus.

Depending on the metric, the significance of certain opportunities varies by material type. For example, when assessing:

Waste / material tonnage: aggregates, concrete and plasterboard are most significant, as they make up a significant volume of construction material.

Cost: a wider range of materials join the ranking including plastic, timber and insulation. CO2e tonnage: steel joins the ranking but timber and aggregates drop off. This is due to their lower

embodied carbon compared to products like steel.

These results are presented in full in Appendix A.6.0.

It is also worth noting that:

Design for deconstruction and refurbishment aren’t broken down by material types so this may over-emphasise their importance.

Combining the findings of the WRAP report with additional information from WRAP, ZWS and EC information sources, the following can be discerned.

3.4.2 Cost metric findingsIn terms of waste reduction, concrete products, insulation, steel, plasterboard and plastic are ranked highly. Private housing stands out as a priority sector for concrete, insulation and plastic products and the key opportunities are reflected in the discussion above.

Interestingly in cost terms, off-site construction enters the rankings in terms of timber, plasterboard and plastic, whereas it is not present in carbon or waste reduction terms. This however does mirror findings in ZWS CE opportunities in Scotland’s construction sector study (2017)26 which identified modular construction as a key opportunity area27.

Evidence suggests that waste reduction and lean design practices offer a good balance of both resource reduction and cost saving.

25 WRAP Entec (2010) PRO095-003 – Scoping study to compile estimates of the resource efficiency impacts of material and water use in the built environment, August 201026 Zero Waste Scotland (2017) RAP002-001 - Identification of Circular Economy Opportunities in the Scottish Construction Sector, April 2017

27 In Scotland there is a priority around modular/ off-site timber frame construction, as this is the prevalent housing construction technique in Scotland (and to a lesser extent in Wales). Timber frame construction is much less prevalent in England. Modularity also has links to steel construction products and opportunities for design for deconstruction such as using bolts and fittings rather than welding.

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3.4.3 Carbon metric findingsWaste reduction and lean design offer the greatest opportunities in embodied carbon terms. For onsite waste reduction, concrete products, insulation, steel, plasterboard and plastic are identified as significant, with private housing and to a lesser extent commercial and infrastructure being priority construction types. This was closely mirrored by lean design opportunities, although insulation doesn’t appear in the ranking.

The potential of increasing recycled content is not so significant in carbon terms, reflecting that the processes for recycling materials in order to increase recycled content have carbon impacts of their own.

Overall, these findings mirror those in ZWS CE opportunities in Scotland’s construction sector study (2017) which identified priorities for:

Improving on-site aggregate (including concrete aggregates) resource efficiency through application of designing out waste principles, as well as a suite of measures to increase recycled and reused aggregate content in public sector projects and improve co-ordination between supply and demand; and the economics of recycled aggregate.

Improving on-site plasterboard resource efficiency - designing out waste, material optimisation, as part of a suite of measures to drive closed-loop and lean design and construction for plasterboard.

Improving insulation resource-efficient practices, particularly those associated with refurbishment, repair and maintenance with a view to developing Product Service System offers, and requirements/ guidelines to support small / short refurbishment projects (housing / commercial). Qualitative evidence from discussions with contractors suggests that insulation off-cuts may often be used to fill cavities beyond their required insulation level. This reduces waste generation on site but it isn’t clear whether this is the best solution over the product’s life-cycle. I.e. do the additional in-use energy savings outweigh the material inefficiency of adding more insulation than required or would a more optimal solution be to minimise offcuts through better design and planning?

Steel’s presence in terms of waste reduction (commercial and private housing) and improved reuse and recycling, and that design for deconstruction is present in the carbon ranking also mirrors findings in the ZWS CE opportunities in Scotland’s construction sector study. This identified construction steel as a key priority for moving up the waste hierarchy from recycling to reuse (structural steel recycling is ~90%, reuse ~5%). And that this should focus on:

o Requirements for design for deconstruction by clients in public sector procurement. o Greater standardisation of components and connections.o Stimulating a stronger market for reusable steel construction products.o Improving deconstruction and co-ordinating between supply and demand of reusable

components.o Addressing barriers such as re-testing, certification and warranties for reused steel pieces.

Steel is also a priority material identified in “Sustainable Materials: with both eyes open28”, recommending specification of reused steel and supporting designers and fabricators in meeting requirements, moving to lightweight design that can save a third of metals and taking on board design for deconstruction principles to aid reuse and recycling at end of first life.

28 Jonathan M Cullen; Julian M Allwood (2011) Sustainable Materials: with both eyes open, accessed 26 March 2018, http://www.withbotheyesopen.com/read.php


Whilst plastics turned up individually in the carbon rankings, it is important to remember the role plastics have to play in terms of design for deconstruction opportunities, which is rising up the agenda as a significant global environmental issue. Construction plastics have for example been identified as a key material stream in EC’s A European Strategy for Plastics in a Circular Economy29, which concluded that:

o Actions were required to improve product design. This particular links to improving the traceability of chemicals and addressing the issue of legacy substances in construction recycled stream applications, which has links to design for deconstruction principles and the need for better labelling and traceability.

o Actions to boost recycled content, with certain applications in the construction sector showing good potential for uptake of recycled content (e.g. insulation materials, pipes, outdoor furniture). This could be driven by greater demand e.g. through procurement requirements but also links with issues of product design / design for deconstruction to boost recyclability or reuse.

o Actions to improve separate collection of plastic waste again to support improved recycling and reuse.

Refurbishment is identified both in the carbon ranking, “Sustainable Materials: with both eyes open”, and the ZWS CE opportunities in Scotland’s Construction Sector study. Timber, plasterboard, steel and insulation being significant related materials with a focus on:

o Increase use of pre-refurbishment audits to aid deconstruction, reuse and segregation for improved recycling and recovery;

o Increased use of design for deconstruction/ flexibility and use of material passports. Particularly for short fit out life e.g. retail, office environments;

o Improve on-site resource efficiency - material optimisation through simplifying/standardising materials, dimensional coordination;

o Increase reuse of existing building components; o Introduce service based models for heating and lighting performance (where public sector

are also occupier).

3.5 Industry survey resultsThe survey described in Section 2.6 was posted on 30th January 2018, disseminated to 71 industry bodies and significant companies representing the sectors under consideration, each of which was phoned so that the importance of the research could be explained and their participation encouraged. Each industry body was asked to disseminate the survey to their members, so the total potential audience would have been in the tens of thousands.

The results were downloaded on the 12th March 2018 and analysed. In total, 34 participants had provided at least partial answers to the survey, hence a very small proportion of the target audience. While not necessarily statistically significant, the responses help to enrich the study overall. The breakdown of businesses is as follows:

29 Documents on the strategy for plastics in a circular economy, accessed 26 March 2018, https://ec.europa.eu/commission/publications/documents-strategy-plastics-circular-economy_en

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Figure 3.16: Responses by Sector

Further detail of the most useful answers is provided in the following sections.

3.5.1 Monitoring Business This question had a 41% response rate (of those replying to the survey at all).

We asked participants about which aspects of their business they monitor. The most common responses were:

1) recycling;2) raw material purchasing and3) individual waste streams by material type

Figure 3.17: Resource efficiency actions already taken

This section was followed up in the sense-checking interviews section below (Section 3.6) with the following questions:


In your opinion, is this representative of the industry? Are there any aspects you would have expected to feature as a top answer that is not listed?

3.5.2 Barriers to Resource EfficiencyThis question had a 47% response rate.

We asked participants about the main barriers to implementation of resource efficiency initiatives. The most common responses were the need for investment and insufficient time. A significant number of respondents also highlighted a lack of resources, support and expertise.

Figure 3.18: Barriers to resource efficiency

Follow-up questions:

In your opinion, is this typical of the situation within the industry? What do you think would be the most practical solution(s) to address these barriers?

3.5.3 Additional InformationThe final section of the questionnaire provided some additional insight regarding the issue of investment (although not necessarily in relation to material resource efficiency). Two different respondents stated:

“Investment in technology, particularly in energy efficiency should be supported and made available via trade associations. For example new burner types for furnaces.”

“Capital investment to achieve savings is equal or more than savings made – funding to help would accelerate process.”


Do you agree/disagree with these statements? Do you have anything additional to add?

3.5.4 Government PolicyThis section had a 47% response rate.

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We asked participants about what they considered to be the key policy or other interventions that government should consider to promote resource efficiency. The top responses to this question were varied, some highlighted tax incentives on recycled materials and the need for recycled material standards. A high number of respondents also answered that training around the issue should be a policy priority and that there was a need for more publicity.

Figure 3.19: Policy instruments


Do you agree with these priorities? How do you think they could be implemented in practice?

3.5.5 Cost savingsThis question had a 24% response rate.

We asked respondents to state the cost savings related to resource efficiency, either as estimate or an actual figure (although some responses relate to energy rather than materials/waste). There was a significant range in the size and type of companies responding so there is a significant range in the cost answers given. Where context was provided this was as follows:

Turnover Employees Estimated savings>£50m 250+ 750k p.a.£2m-£5m 50-99 12% of turnover saved over last 6 years

£2m-£5m 20-49£10000 per year following investment in a incinerating system reducing waste to landfill

£2m-£5m Unanswered £200,000 annual energy savings in a previous company£500,000-£1m 10-19 100k, 1year

Table 3.3: Savings claimed in survey responses

These savings are not restricted to material resource efficiency. Some explicitly include (or only include) energy efficiency and they may also include other opportunities.



Do these cost savings seem typical for a business of this size? Do you think these companies are the ‘top performers’ for resource efficiency or could other

companies make similar savings?

3.6 Follow-up interviews (sense-checking)Engagement from industry bodies and representatives has been very low. Over 80 contacts were emailed and invited to participate the survey; most of these were representatives of industry bodies with significant memberships, who were asked to pass on the invitation to their members. The importance of engagement was impressed upon these contacts and over 50 (for whom telephone numbers were available) were contacted by phone, first to encourage them to participate in the survey, then again to ask for any feedback at all, however anecdotal or qualitative.

Very few contacts were sufficiently engaged with the resource efficiency agenda to participate, in fact more useful feedback was provided by specialists in organisations such as WRAP and Zero Waste Scotland.

While disappointing, this result is nonetheless informative. As suggested from various sources, few organisations are concerned with resource efficiency for its own sake: a small number have taken a strategic decision to use it to differentiate themselves in the market, whether through genuine environmental concern or hard-nosed market research but most businesses are only concerned with resource efficiency to the extent that it aligns with economic priorities.

Discussions with WRAP regarding the REBM study confirmed our view that these business models are not equally applicable across all sub-sectors but also that there was not an obvious way of assessing this. Businesses that might be expected to be less than ideal for the implementation of REBMs (such as much of the Chemicals sector) have in fact made good progress in developing leasing models, green chemistry, renewable feedstocks and so forth.

3.7 Aggregated rankingsThe methods by which the rankings have been derived and the way in which they have been aggregated have been described throughout this document and in detail in Section 2.8. This section describes and discusses the results of this process.

To summarise the process described in detail in Section 2.4, the ENWORKS database describes directly attributed and costed resource efficiency opportunities, providing valuable insight into the relative savings available in each sub-sector. However, as the opportunities are not spread evenly among sub-sectors and the database only covers the north-west of England, this data must be extrapolated to model the UK economy. This resulted in some anomalous results, so additional data-sets were derived to provide different perspectives on the question. Foremost among these was the WRAP/SmartWaste analysis for the Construction sector, which was undertaken because that sector was particularly under-represented in the ENWORKS database compared to its size in the UK economy as a whole. Other analyses included interpolation of the REBM analysis undertaken by WRAP and use of average figures based on turnover and employee numbers.

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Not all these approaches have the same statistical validity, so a decision was taken to give them different weights when aggregating them. For the Construction sector, the WRAP/SmartWaste analysis is considered the most accurate, followed by the ENWORKS database for all sectors, then the other analyses.

The following table shows the rankings based on the ENWORKS data alone, alongside the aggregated rankings (also presented in Appendix A.7.0):


Sector ENWORKS Aggregated ranking

Chemicals

1) Other plastic products2) Plastic packaging goods3) Other chemical products4) Soap, detergents, perfumes and toilet

preparations5) Paints, varnishes, mastics and sealants

1) Other plastic products2) Pharmaceuticals3) Soap, detergents, perfumes and toilet

preparations4) Plastic plates, sheets, tubes and profiles5) Plastic packaging goods

Construction

1) Other specialised construction activities2) Private sector residential buildings3) Commercial buildings4) Installation of building services, plastering,

joinery, electrical5) Demolition, site preparation, test drilling

and boring

1) Construction of residential buildings for the private sector

2) Installation of building services, plastering, joinery, electrical

3) Other specialised construction activities4) Commercial buildings 5) Development of building projects

Metals

1) Vehicles and transport equipment2) Manufacture of products from metal3) Aluminium production4) Tubes, pipes, hollow profiles and related

fittings, of steel5) Metal structures and equipment

1) Manufacture of products from metal2) Vehicles and transport equipment3) Metal structures and equipment 4) Manufacture of motor vehicles5) Machining

Table 3.4: ENWORKS and aggregated ranking by financial value

The difference in rankings is explained as follows:

3.7.1.1 Chemicals

Pharmaceuticals ranks eighth in the ENWORKS rankings because the savings available from the opportunities identified in the ENWORKS database are relatively low but is promoted to second because it is the top sub-sector in terms of turnover and second in terms of employee numbers across the UK; thus the anticipated savings taken across the UK economy are expected to be greater.

Plastic plates, sheets, tubes and profiles ranks sixth in the ENWORKS ranking but climbs to fourth place, as it is the fourth biggest sub-sector in terms of both turnover and employees.

Paints, varnishes and mastics is ranked high on the ENWORKS database because a high proportion of opportunities was identified in this sub-sector. Mitigating this bias using the other rankings means that it is no longer included in the top five.

3.7.1.2 Construction

The Construction sector is generally less well represented than the other two sectors in the ENWORKS data as noted earlier, and this ranking has been modified with the specialised WRAP/SmartWaste data analysis, which itself includes factors related to turnover and employee numbers.

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Construction of residential buildings for the private sector comes second in both ENWORKS and WRAP/SmartWaste rankings, giving it a clear overall lead. The ranking of “development of building projects” remains in fifth place, where it comes in the WRAP/SmartWaste ranking.

The other three sub-sectors in the top five for Construction are all equal: “installation of building services, plastering, joinery, electrical etc., other specialised construction activities and construction of commercial buildings.” Of these, the only one whose ranking has been significantly altered by the aggregation process is “other specialised construction activities” which climbs from seventh in the WRAP/SmartWaste ranking, largely because it comes first in the ENWORKS opportunities.

3.7.1.3 Metals

The relative importance of sub-sectors in the Metals sector is affected strongly by the relative scale and abundance of vehicle manufacturing outside the North West, as this is overwhelmingly the biggest part of the sector UK-wide. Conversely, resource efficiency opportunities from aluminium production are over-represented in the ENWORKS database because of a small number of high value opportunities. This discrepancy is corrected when the other data-sets are included.

3.8 Sectoral economic benefitsThe table presented as Appendix A.7.0 summarises the aggregated cost savings to each sector and sub-sector. The median economic benefits calculated for each sector are:

Sector 2016 turnover (£m) Total cost savings (£m/yr)

Of which top 5 sub-sectors (£m/yr)

Chemicals 73,556 453 306

Construction 257,408 2,123 1,590

Metals 194,662 995 858

Table 3.5: Scale of financial savings

Total sectoral turnover figures are given for scale. These cost savings range from 0.5% to 0.8% of sectoral turnover, with the highest figures being in the Construction sector.


3.9 Sub-sectoral environmental rankingThe aggregate ranking of sub-sectors in terms of greenhouse gas emissions is as follows, with the economic benefit ranking shown for comparison. This is an extract from the table contained in Appendix A.8.0.

Rank

GHG savings

(ktCO2e/yr)

Economic rank

Chemicals 967

1 Other plastic products 371 1

2 Other chemical products 307 6

4= Plastic packaging goods 247 5

4= Pharmaceutical products 15 8

5 Plastic plates, sheets, tubes and profiles 27 14

Construction 4,465

1 Installation of building services, plastering, joinery, electrical

1,569 4=

2 Residential buildings for the private sector 1,420 1

3 Other specialised construction activities 314 4=

4 Development of building projects 500 5

5 Commercial buildings 662 4=

Metals 1,507

1 Manufacture of motor vehicles 459 3

2 Manufacture of vehicles and transport equipment 36 2

3 Manufacture of basic iron and steel and ferro-alloys 887 8

4 Ships and floating structures 93 6

5 Machining 32 5

Table 3.6: Greenhouse gas emission rankings

As discussed in the methodology, greenhouse gas emissions savings are derived from a combination of the ENWORKS data and the REBM modelling, which is itself interpolated to the sub-sectoral level using GVA. In the case of the Construction sector, these data-sets are added to the WRAP/SmartWaste data, which includes emissions reduction estimates. The sub-sectoral emissions quoted in the table above are the median of these data-sets.

The financial rankings use the above data sets plus turnover and employee numbers, so discrepancies between the rankings are caused by high emissions savings identified in the ENWORKS data; or in the case of the Construction sector, on both the ENWORKS and WRAP/SmartWaste data-sets.

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As can be seen from the tables in Appendix A.7.0 and A.8.0, there is a very wide range in the estimates of greenhouse gas savings between the three data-sets including this information (WRAP/SmartWaste, ENWORKS and REBMs). Even the two most robust data-sets (WRAP/SmartWaste and ENWORKS), which are based on direct estimates from industry, vary by a factor of 13. This is likely to be the result of a combination of limited and inconsistent sectoral coverage, together with variation in calculation methodology but unfortunately it means that greenhouse gas saving data must be considered unreliable, as there is no way of knowing which data-set (if any) is correct.

The following figures illustrate this issues by plotting calculated greenhouse gas emission reduction figures for each sub-sector on the same scale:


Figure 3.20: GHG reduction by sub-sector, Chemicals sector

Figure 3.21: GHG reduction by sub-sector, Construction sector

Figure 3.22: GHG reduction by sub-sector, Metals sector

As these figures show, the greenhouse gas emissions reductions estimated from the ENWORKS data are orders of magnitude greater than those from the REBM or WRAP/SmartWaste data-sets but they are also incomplete, having no representation for some sub-sectors in each of the three sectors.

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The effect of this variability on the ranking of greenhouse gas emissions has been minimised by using the same methodology as that used to aggregate financial ranking: first, each data-set is ranked, then they are all compiled into a weighted aggregate rank. This means that the relative scale of emissions savings only counts within each data-set. However, these results suggest that it would be useful to develop a robust and consistent carbon accounting methodology for this type of study, and if the wider uptake of resource efficiency is to be encouraged.

3.10 Barriers to Resource Efficiency

3.10.1 Survey responsesThe survey suggested some potential barriers to implementation of resource efficiency, as follows:

Time Resources Support Information Expertise Incentive Investment Economic uncertainty Other

The clearest signal in the limited number of responses was that economic uncertainty was not considered important. Across the rest of the suggestions, there was no clear trend other than a slight preference in favour of time and investment, rather than information and support.

Additional information supplied under the “other” response included:

“Established practices.”

“No clear guidelines for an organisation to clearly decide on where to allocate investment. Grants and other discount support is not always easy to secure or easy to maintain. Those that miss out are then hampered supporting those that are successful.”

“If we haven’t implemented it, it’s not cost effective.”

“Government incentives such as the EII [Energy Intensive Industries] scheme do not reward companies for being more energy efficient. In fact they penalise them greatly. In almost all the cases that we have been involved in it is better for the companies to waste energy to then gain a 25% reduction in their energy costs through the EII scheme. Unfortunately the government policy makers are being given incorrect information to set effective policies.”

“Shift of mind-set from waste to resource.”

Although these results and responses cannot be considered representative, there seems to be a fairly consistent opinion that clarity and consistency of policy drivers is more important than any particular barrier or intervention. If government can align commercial drivers with environmental priorities, industry has the technical expertise and financial capability to make the changes required.


3.10.2 Literature and wider insightsPerhaps the single biggest overarching barrier to more widespread implementation of resource efficiency is that it is simply not seen as a priority area for many businesses. To the extent that resource efficiency is aligned with profitability, it will generally be implemented, at least within the constraints of the business being aware of the issue and having the resources to address it. However, in many cases resource efficiency is directly at odds with economic and technical drivers (e.g. it is often cheaper and usually easier to use virgin material of known quality and consistency than to risk using recycled material). It can also be difficult to implement from a regulatory point of view, for example where light-weighting or material substitution are often at odds with product specifications for safety, performance and quality.

Resource efficiency is rarely seen as important in its own right unless the business has taken a strategic decision to differentiate itself in the market as resource efficient. Businesses that have done this tend to have the internal expertise and resources required to implement the strategy; those that have not, do not but they do not feel the lack, since they had no particular requirement for it. Thus it is rare for businesses to be held back from implementing resource efficiency because of a lack of expertise.

Any business’s top priority is to stay in business, which is achieved by maintaining or increasing sales and/or profits. A resource efficiency approach can contribute significantly but it does not address these priorities directly, except by accident when economic and environmental drivers are aligned. When resource efficiency and economic drivers are not aligned, opportunities will rarely be implemented as to do so would incur a cost to the business for no benefit, threatening its financial viability.

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This is summarised by the simple diagram below:

RE

+ -

£+ 1. 2.

- 3. 4.

Figure 3.23: Summary of economic instruments

If opportunities are beneficial to profitability and resource efficiency (1), they will be implemented, as long as businesses are aware of them and have the resources to address them. If they are beneficial to neither resource efficiency nor profitability (4), they will not be implemented. Opportunities which increase profitability at the expense of resource efficiency (2) should be made more resource efficient or less profitable; those which increase resource efficiency but only at a detriment to profitability (3) should be made more profitable, in each case using the various policy options discussed below.

All the opportunities identified in the ENWORKS data and through similar initiatives are Type 1: they have been identified through various programmes as beneficial to resource efficiency and profitability; the barriers to their implementation are mainly knowledge and resources.

Policy options should be considered which (a) increase the number of Type 1 opportunities by alerting businesses to their existence and facilitating their implementation, (b) turn Type 2 opportunities into Type 1 by increasing resource efficiency (e.g. material substitution, REBMs etc.), turn Type 3 opportunities into Type 1 by increasing profitability (e.g. tax credits, virgin materials levy) and finally turn Type 2 opportunities into Type 4 (which are not implemented) by reducing their profitability (again through targeted levies etc.).

3.10.3 Understanding the True Cost of waste A major factor in determining whether a material resource efficiency initiative is worthwhile or not is whether there is a clear understanding in the business of the True Cost of Waste. Unlike energy and water which are metered, companies cannot easily ‘meter’ materials use and wastage of those materials. Generally companies only have procurement data for raw materials and overall waste quantities (often estimated from bin volumes rather than weight), split by mixed residual waste and one or two recycling streams. Within the mixed waste there is generally a mix of raw materials and components lost at various stages of the process, including part-made and final product.

Similarly, many sectors ‘lose’ materials to effluent (e.g. from mixing vessels, pipe cleaning and hygiene operations) and even to air (via extraction/filtration systems), which can contribute to high loads on wastewater treatment plant and hence higher on-site treatment or discharge costs. Again, companies will generally only know the effluent volumes and characteristics (e.g. BOD, COD, suspended solids) but cannot easily relate this back to material and product wastage costs.


These lost materials, components and products will have had value added in various ways through the manufacturing process (sometimes called value mapping) as shown in the example below.

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Raw Materials £2,000

Process Stage 1 £4,000



Product (cost price) £10,000

Figure 3.24: ‘True’ Value of waste per tonne

Consequently, while waste disposal costs are often low (only around £100 to £200 per tonne in the UK), the true cost of waste to the business is generally 10 to 20 times higher. In addition, one could include the opportunity cost associated with lost sales, in which case the True Cost also needs to incorporate the profit margin as well as the production cost elements, taking the True Cost even higher.

So, while the waste cost alone does not provide a sufficient incentive to action in most cases, unfortunately the True Cost of Waste is not that transparent to the business, with the various costs having to be pulled from several departments including procurement, finance and the SHE teams to get a complete picture.

Some examples of the true cost of waste (material/product value only, excluding the added value of energy, water, labour etc.) in various sectors are given below from our own site work:

Food (jam) manufacturer: effluent disposal cost ~£17,400; material value ~£236,000 (x14); Ceramics manufacturer (SME): waste disposal bill ~£4,200; material value ~£70,000 (x17); Engineering (Al parts) company: waste disposal cost ~£3,200; material value ~£289,000 (x90); In the hospitality sector WRAP work has shown the True Cost of Waste figure for food to be £1,800

per tonne of wasted food, as against only £100 for waste disposal, i.e. a factor of x18.

When the Financial Director or CEO sees these higher figures, the focus of attention often changes from energy to wasted materials, hence making this information more visible is a very significant need and something that only detailed audit work through business support initiatives can generally provide.

3.11 Policy options

3.11.1 Survey ResponsesThe survey proposed some policy interventions to give respondents somewhere to start. These were:

Awareness and Support Awareness raising Consultancy support TrainingEconomic Instruments Levy on waste (beyond landfill tax) Levy on virgin materials


Tax incentives on recycled materialsRegulation Mandatory reporting on waste Mandatory requirements for recycled content Recycled material standardsOther

These proposals were met with slightly less enthusiasm than the proposed barriers. The strongest signal was a preference for tax incentives on the use of recycled materials to help close loops. Direct responses under the “other” category included:

“Support for repurposing.”

“Demonstrating resource efficiency through local and central government, providing evidence of real cost/benefit analysis.”

“None too much meddling, market forces will produce efficiencies.”

“Correct policies to ensure that companies are being rewarded for increasing efficiencies.”

“Networking events that promote "Circular Economy" thinking, such as NISP.”

Again, while these responses cannot be considered representative, they do suggest some enthusiasm for more support but mainly a wish for a clear, long-term policy framework from government which drives positive environmental behaviour.

3.11.2 Interview responsesThe very limited interview responses themselves suggest a generally low level of engagement with the resource efficiency agenda across the three sectors, except when it aligns with market or financial imperatives. Few business people are concerned with resource efficiency in its own right but most are willing and able to engage with it as long as it is to the benefit of their business. By this way of thinking, it is the role of business to maximise profits within the economic and regulatory framework set by government, and for government to design that framework so as to drive resource efficient behaviours where market failure occurs.

3.11.3 Literature insights“From waste to resource productivity30 is perhaps the most comprehensive and up-to-date assessment of the current state of resource efficiency in the UK as a whole (not just manufacturing) and the potential for policy instruments to encourage it. It suggests a framework for possible interventions, splitting them into market-based and pricing mechanisms, regulatory instruments and strategic actions. This structure works well to support the observations and recommendations of not only that publication but also, more generally, the other literature reviewed here.

It is worth noting that in addition to internal process resource efficiency within businesses, more outward looking and market transformative measures are required in regard to both the greater use of Resource Efficient and Circular Economy Business Models (REBMs and CEBMs) and in stimulating markets for reused materials and objects and demand for secondary / recycled materials.

30 Sir Mark Walport, Professor Ian Boyd (2017) ‘From waste to resource productivity.’ Report of the Government Chief Scientific Adviser, 2017

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Further discussion of potential policy instruments is given in Section 4 below.

4.0 Conclusions and policy options discussionThis study has attempted to model the financial and associated greenhouse gas emission savings available from material resource efficiency opportunities in the Chemicals, Construction and Metals sectors in the UK, to identify the barriers to implementing these opportunities and policy interventions to overcome those barriers. Specifically, the aim of the study was to identify the top five sub-sectors within these three sectors, in terms of financial savings available, and the greenhouse gas emission reductions associated with them.

These sub-sectors and the associated financial and greenhouse gas savings are as follows:

Financial savings (£m/yr)

Greenhouse gas reductions

(ktCO2e/yr)Chemicals 306 699

Other plastic products 105 371

Pharmaceuticals 93 15

Soap, detergents, perfumes and toilet preparations 48 39

Plastic plates, sheets, tubes and profiles 29 27

Plastic packaging goods 31 247

Construction 1,590 4,465

Residential buildings for the private sector 167 1420

Installation of building services, plastering, joinery, 796 1569

Other specialised construction activities 159 314

Commercial buildings 213 662

Development of building projects 254 500

Metals 858 541

Manufacture of products from metal 260 14

Vehicles and transport equipment 204 36

Manufacture of motor vehicles 212 459

Metal structures and equipment 100 14

Machining 81 32


Table 4.1 Top-ranking sub-sectors with financial and GHG savings

A number of different data sources and analysis techniques have been used to gain different perspectives on the problem and to minimise errors and discrepancies. These have been aggregated to derive an overall rank of the financial (Section 3.8) and environmental (Section ) scale of resource efficiency opportunities. For the Chemicals, Construction and Metals sectors respectively, the modelled savings available from the top five sub-sectors are £306m/yr, £1,590m/yr and £858m/yr respectively, with associated savings of greenhouse gas emissions of 699, 4,465 and 541ktCO2e/yr.

The barriers to further implementation of resource efficiency were identified through a combination of a survey, phone interviews and literature review. The responses are numerous and wide-ranging but time, resource and financial constraints remain key issues, alongside market forces that fail to align economic and environmental imperatives.

4.1 Policy Options for Resource Efficiency The carbon reduction trajectories that would enable global emissions to remain consistent with a warming effect of only 1.5 to 2 degrees require not only that energy systems decarbonise but also that energy efficiency must deliver around 40% of the reduction in greenhouse gas emissions required by 2050. Resource efficiency and circular economy approaches can reduce carbon emissions by as much as energy efficiency31, so for the UK to meet its sustainable development goals and remain aligned with the goals of the Paris Agreement, much greater emphasis needs to be placed on implementation of these approaches.

Targets and aspirations under the new Defra 25 Year Environment Plan, for example include:

maximising the value and benefits we get from our resources, doubling resource productivity by 2050;

working towards our ambition of zero avoidable waste by 2050; and working to a target of eliminating avoidable plastic waste by end of 2042.

The Industrial Strategy also has a focus on boosting productivity, with clear links to resource efficiency.

The development and introduction of new policy instruments aims to avoid significant disruption to existing models of business and employment by giving businesses time to plan and adapt. However, there is a strong argument and a common theme in both the literature and in interview responses, that this approach is not adequate to the task. In the last ten years, UK electricity grid carbon intensity has reduced by almost half through the implementation of a range of policy instruments.

Improvements to grid carbon intensity have come about because the broad trajectory has been well understood and clear targets have been set (although recent reversals in policy have slowed the pace of uptake of many renewables quite considerably). Back in 2008, the UK Climate Change Act was ground-breaking in its establishment of an independent advisory committee and legally-binding carbon budgets. The problem of tackling resource efficiency is every bit as complex and important, (and indeed, the two cannot be meaningfully decoupled) so the issue will require the same level of commitment if it is to be addressed successfully. The potential rewards on the resource efficiency side are significant: the UK has

31 Cooper, R. (2008) Mental Capital and Well-being: Making the Most of Ourselves in the 21st Century. State-of-Science Review: S2-DR2. The effect of the Physical Environment on Mental Well-being. Foresight Mental Capital and Well-being Project., 2008

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been grappling with a productivity conundrum in recent years; greater resource efficiency will tackle environmental impacts while delivering productivity gains for business.

There have been no clear mandatory drivers for material resource efficiency32, the focus being on support, either at National level (from Envirowise through to WRAP and ZWS), or at local level, typically funded by ERDF, and rising and falling in prominence with the availability of funds. Voluntary initiatives, largely co-ordinated by WRAP, have also been used. Regarding these, while the number of signatories and participants has been impressive, the net impacts have been shown by independent analyses to be rather limited, and in some cases quite expensive, even though the schemes are widely trumpeted by their sponsors.

We believe that there is a place for the greater use of a range of economic and other policy instruments to drive business behaviour more quickly to improve material resource efficiency. Various potential policy interventions could be considered to accelerate material resource efficiency action and to realise the remaining potential identified. A number of policy instruments are discussed below that would help to address the three key areas of resource efficiency considered in this study:

Waste prevention at source (i.e. process efficiency); Material substitution (e.g. use of more sustainable and less hazardous materials); and Waste reuse and recycling.

These have been suggested in both interviews and the published literature. The focus here is on manufacturing in general and on the three specific sectors where appropriate.

The approaches noted could be enshrined through a Resource Efficiency, or a Circular Economy Act, in a similar fashion to the Climate Change Act, with independent, evidence-based, legally-binding targets. Like the Climate Change Act, this would be a world-leading step taken by UK Government which would have the advantage of setting the UK economy on a path to increased productivity as well as greater sustainability.

4.1.1 A VisionThe 25-year Environmental Plan states an intention of ‘maximising the value and benefits we get from our resources, doubling resource productivity by 2050’. In terms of what exactly this means, it does require further articulation: what is the metric to be used, and what is being expected of individual sectors?

It is suggested that a headline indicator of resource productivity (which should be clearly defined) is developed for use in the resources and Waste Strategy.

Recognising that different metrics may be appropriate for different sectors, then alongside this headline indicator, sectoral performance indicators should be developed to track the key performance outcomes that the sector is being pushed to deliver.

There is precedent for this approach in existing legislation and policy, such as the sectoral thresholds for inclusion in the Environmental Permitting Regulations (Pollution Prevention and Control in Scotland and Northern Ireland), allocation of sectoral carbon reduction targets and indeed, the Industrial Strategy.

32 PPC/IED has been a driver to a degree but has focused primarily on pollution, energy and water use.


Sectoral benchmarking could then be used by businesses to gauge their performance (albeit recognising that there are significant differences even within sectors) related to what they produce and their competitors.

This could support the setting of interim targets on the path to the 25YEP objective: indeed, recognising that global GHG emissions have to halve in each decade following this one to remain on a 1.5-2°C trajectory, the 2050 target in the 25YEP may prove to be insufficiently ambitious.

The merit of this approach is that it establishes the basis for a clear trajectory and enables some of the other policies below to be linked back to the relevant sector-specific metrics.

4.1.2 Market-based mechanismsIf environmental costs that are currently external to economic decisions can be internalised, markets will function more efficiently in allocating resources. The following points are examples of ways in which this type of approach could be used to encourage resource efficiency in the UK, gathered from literature, correspondence with industry representatives and from experience within the wider team responsible for developing this report:

Climate Change Levy and Agreements. Climate change agreements are voluntary agreements made by UK industry and the Environment Agency to reduce energy use and carbon dioxide (CO2) emissions. In return, operators receive a discount on the Climate Change Levy (CCL), a tax added to electricity and fuel bills. There is potential to add the embodied carbon from materials used by an organisation, and the waste it generates, into the CCL mechanism. This would raise the profile of greenhouse gas emissions from material use and wastage, alongside energy, as well as providing a further financial driver.

Taxes on hard to recycle products and packagingThere has been much discussion of the potential for using modulated fees in the context of producer responsibility, especially in respect of packaging. The intention is that under producer responsibility, the recovery of costs from producers should happen via fees which are modulated to reflect environmental characteristics of the product, such as the ease with which they can be recycled, or durability. Especially where no such producer responsibility scheme exists – for example, in respect of construction products - it might make sense to introduce taxes on products which have no meaningful prospect of being recycled. This might include some forms of insulation materials, or carpet, or products using glue / fixings that make disassembly much more difficult.

Green Public Procurement. While not immediately obvious as an instrument to influence manufacturing resource efficiency, procurement by the public sector can promote better product design for resource efficiency and circularity, and the use of RE and CE business models (REBMs/CEBMs) such as lease and remanufacturing. It is particularly well-suited to construction procurement (for example in major infrastructure projects) and could also be used to drive Green Chemistry in the Chemicals sector. It is also important to note that whilst the procurement practices of the public and private sector may differ in many ways, relevant clauses in procurement documentation are readily transferable.

In relation to procurement it is also worth noting that were the public sector to require certain standards of resource efficiency from its suppliers, this would have the effect of raising standards

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across the board, since any company hoping to supply to government would have to comply. However, there are no UK standards for resource efficiency per se; the closest thing available at the moment being a combination of ISO14001 2015 (which has a more strategic and supply chain perspective than previous editions) and BS8001 guidance on Circular Economy for Business, although the latter is not a certifiable standard, so potential suppliers cannot demonstrate compliance. A Resource Efficiency Standard, as a modular addition to ISO14001 2015, could potentially be developed to allow this form of public procurement leverage.

Tax credits for resource efficiency and circular economy innovation. In the same way that research and development (R&D) tax credits work currently, tax breaks could be given for RE and CE innovation within a business, where this sat within defined categories. The thinking behind R&D tax credits is to provide an incentive for businesses to undertake activities which will make the UK economy more productive and competitive and hence this aligns well with RE and CE innovation.

Tax breaks for RE/CE BMs. Tax breaks could be used to encourage the use of such business models. Established examples of this approach (e.g. buying or leasing cars) already have different tax treatment; it would be possible to extend this principle to encourage REBMs by treating them more favourably in the tax system than conventional, linear consumption models.

Extend the landfill tax to other residual waste treatments. The Landfill Tax could also be extended to Energy from Waste (EfW) and other residual waste treatments to encourage further reuse and recycling. The carbon reduction benefit of EfW is already marginal and will decrease as grid carbon intensity continues to fall. Real carbon savings only come from re-use / recycling of material.

Tax on resource use. A longer term goal could be to tax the use of resources per se. Introduction of a levy on virgin materials, with lower rates of levy of secondary materials, would both reduce resource use and encourage use of secondary materials (as done with the Aggregates Levy). In practice, the level of such taxes ought to reflect the extent to which other externalities of resource use are fully internalised.

The combination of an aggregates levy and a tax on landfilling of inert wastes has led to the UK having one of (if not) the highest shares of secondary aggregate in the use of aggregates of any country. Many countries have implemented levies on mineral type resources, so this would be extending an existing precedent.

4.1.3 Other mechanismsNon-fiscal mechanisms are another established way of influencing behaviour, particularly in the business community. Even without the introduction of new measures, steps could be taken to better align existing legislation, such as that covering the definition, handling and transport of waste, with the needs of a more circular economy (e.g. EC communication on options to address the interface between chemical, product and waste legislation33). A number of options are suggested below:

Environmental Permitting Regulations. While EPR (PPC in Scotland and Northern Ireland) in the past has required compliance with Best Available Techniques (BAT), in the main the focus has been

33 European Commission (2018) Communication from the Commission: on the implementation of the circular economy package: options to address the interface between chemical, product and waste legislation.


on energy, water, emissions and waste rather than the efficiency of resource consumption per se. A firmer approach to material resource efficiency targets and enforcement through PPC and IED permitting for larger companies could be driven by the environment agencies.

REOS - ‘ESOS’ for business resource efficiency. ESOS requires that companies above a certain size undertake a review of energy efficiency opportunities every four years but there is no requirement for them to act on them and the report is confidential, so companies are at liberty to ignore the recommendations, and often do. REOS could be used to compliment Environmental Permitting Enforcement and could also apply to some businesses not subject to EPR/PPC but would require the establishment of mandatory Action Plans and Targets to give it teeth.

Mandatory waste and material yield reporting. As an element of the above (and the CCL concept noted earlier), or a stand-alone instrument, mandatory reporting would require businesses to consider the material mass balance for each manufacturing site and the True Cost of Waste (TCoW), taking into account the material costs and overhead related to waste production. This TCoW figure is often comparable with the energy costs, and hence, its calculation and reporting often makes businesses re-focus on material resource efficiency for cost-reduction reasons, even where mandatory targets are not set.

Mandatory instruments for construction sector – including segregation requirements for offcuts during construction (if not the reinstatement of Site Waste Management Plans across the UK), mandatory pre-demolition audits and partial deconstruction and segregation of certain materials and reusable products during refurbishment and demolition.

Mandatory Product Passports. By defining exactly what is in a product and fixing that information to the product using an electronic tag or QR code for example, recycling and reuse can be facilitated. Legacy chemicals in long-life construction and engineered products can be particularly problematic given the steady tightening of restrictions under REACH and knowing what can and can’t be reused/recycled avoids erring on the side of caution, i.e. allowing no reuse and recycling. While there will be confidentiality concerns from manufacturers about exact formulations, chemical disclosures can be banded so as not to give away exact recipes and encrypted to limit access to only those that absolutely need it.

Minimum recycled content in plastic products. This has been discussed widely at the EU level in regard to the plastics strategy, and a gradual and mandatory increase in the required post-consumer recycled content, by particular product group, would help to provide a clear and growing market demand.

Resource Efficiency Technologies List. Many energy efficiency measures are supported by financial instruments such as the Energy Technology List, whereby approved products are eligible for enhanced capital allowances. A similar approach could be used with resource efficiency but resource efficiency opportunities tend to be more specific to the particular process, so compiling a list of generic technologies would be less appropriate.

Extended Producer Responsibility. EPR is a hybrid (part regulatory, part economic) instrument that is product rather than sector specific, although it is worth noting that EPR could be employed for broad categories such as chemical products or construction products. Modulated fees can be used to encourage the use of secondary materials and design for circularity, i.e. durability, repair, upgrade and recycling.

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4.1.4 Mechanisms to support businessAs noted above, business support has been widely used to lesser and greater effect, with and without voluntary agreements, and alone is unlikely to deliver sufficient change. That is not to say that a) providing a forum for businesses to discuss common issues and (pre-competitive) solutions is not valuable or b) that ongoing business support, for SMEs in particular, might not be warranted in some cases: it is just that these need to be used in conjunction with some of the economic and regulatory drivers noted above to make transformative as opposed to incremental change happen more quickly.

That said, the provision of free advice for businesses tends to undervalue the services on offer and perpetuate that state of affairs. If policy drivers incentivise change, the value derived from improved resource efficiency should increase, and with it the value placed on quality advice. The small amount of time and resources (if any) that most SMEs will devote to addressing what for many of them is not considered ‘core business’ makes it likely that they will need some support from others, either in making a transition in their thinking, or through some support in implementation, or in other ways.

Time and again, programmes of advice have demonstrated that they can deliver significant gains, the more when advisors are experienced and have sector specific expertise.34 The ENWORKS programme (which continues as part of the Greater Manchester Growth Company) made very significant inroads over its main period of activity, with impressive validated achievements35:

Worked with 20+ intermediaries 13,396 business assisted, 5,458 intensively on resource efficiency 8,264 Jobs created or safeguarded £271m of cost savings achieved £365m of sales increased or safeguarded 28.4m tonnes of materials saved 1,130,578 tonnes of CO2e saved 955,000 tonnes of waste diverted from landfill 13.13m tonnes of water saved

The Shared Resource Efficiency Manager (SREM) study36 also suggests that provision of resources to industry can be effective.

What is of greater concern, however, is that these support schemes flourish and dwindle with the availability of funding, such as ERDF regional support. Where the funding is inconsistent, the approach to delivering advice, and the expertise of those engaged in its delivery, will have a bearing on outcomes. What is needed is a mechanism that can sustain on an ongoing basis a programme of business support that needs no public subsidy. In principle, this ought to be possible: the funded support schemes themselves highlight financial benefits to businesses that far exceed the costs of their provision. Our experience

34 Many of the Resource Efficiency improvements made by UK SMEs in the last twenty years or so might not have been made if it hadn’t been for one to one support from government programmes ‘hand-holding’ them through the process, from data gathering to making the business case for change.

35 Business Growth Hub (ENWORKS); Making an impact in Greater Manchester; Resource Efficiency and Low Carbon; Summary

Evaluation. 2016 36 Ann Stevenson, Ed Gmitrowicz, Chris Hillier, Einir Young (2016) EV0548: Encouraging and supporting SMEs to improve their resource efficiency. Piloting shared resource efficiency manager models in SME manufacturers, August 2016


indicates that it should be possible to operate advisory services on a no-win, no-fee basis. What has been lacking is the mechanisms that would unlock such an approach.

There appear to be two options:

c) Continuing with boom-bust services of one-to-one advice for SMEs which are essentially grant-funded (or funded through grants to a significant degree); or

d) Exploring mechanisms to facilitate those willing to provide services on the basis of the savings likely to be generated from the resource efficiency interventions identified.

We believe the latter is worth of further exploration, using novel financial instruments to unlock the resource efficiency gains identified in this study.

4.1.5 Regional Resource Efficiency ClustersThe Clean Growth Strategy from BEIS noted, under the resources section, from page 109, para 19:

We will explore how data can support the development of a network of resource efficiency clusters led by Local Enterprise Partnerships (LEPs), whereby LEPs would develop local level strategies to drive greater resource efficiency, supporting processes such as industrial symbiosis and the development of new disruptive business models that challenge inefficient practice. We will explore how we can better incentivise producers to manage resources more efficiently through producer responsibility schemes.

Our understanding is that this concept of a resource efficiency hub is at a relatively early stage. We know that there is interest in regions in carrying this forward: as yet, the mechanisms for doing what is set out above are not clear. We assume that ONS will be involved, and will seek to support this approach.

As well as exploring mechanisms for provision of advice (see above), we believe there would be merit in working closely with one or more of the regions to test different models of developing hubs. This might also benefit from working in regions with different sectoral profiles. Some form of challenge could also be set to incentivise the delivery of on-the-ground improvements to ensure that hubs focus on delivering change.

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APPENDICES


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A.1.0 Sectoral framework

A.1.1 Full framework

A.1.1.1 Chemicals sector


Chemicals (full) Companies Employees TurnoverRank Companies Employees TurnoverSIC Sub-sector UK UK UK(£m)No. Rank Rank Rank20.11 Manufacture of industrial gases 20 5,000 1,201£ * 21 15 1920.12 Manufacture of dyes and pigments 70 3,000 1,041£ 16 18 2020.13 Manufacture of other inorganic basic chemicals 100 5,000 2,150£ 14 15 1420.14 Manufacture of other organic basic 115 10,000 3,145£ 13 12 1120.15 Manufacture of fertilisers and nitrogen compounds 60 2,000 1,371£ 18 21 1720.16 Manufacture of plastics in primary forms 380 9,000 4,309£ 10 13 620.17 Manufacture of synthetic rubber in primary forms 0 1,000 1,748£ * 24 24 1520.2 Manufacture of pesticides and other agrochemical products 70 3,000 865£ 16 18 2120.3 Manufacture of paints, varnishes and similar coatings, mastics and sealants 415 15,000 3,319£ 9 7 1020.41 Manufacture of soap and detergents, cleaning and polishing preparations 350 13,000 3,497£ 11 11 920.42 Manufacture of perfumes and toilet preparations 510 14,000 2,337£ 4 10 1220.51 Manufacture of explosives 20 1,000 175£ 21 24 2420.52 Manufacture of glues 75 3,000 529£ 15 18 2320.53 Manufacture of essential oils 55 2,000 796£ 19 21 2220.59 Manufacture of other chemical products 495 15,000 4,284£ 5 7 720.6 Manufacture of man-made fibres 10 2,000 133£ 23 21 2521.1 Manufacture of basic pharmaceutical 180 4,000 1,267£ 12 17 1821.2 Manufacture of pharmaceutical 420 40,000 17,126£ 8 4 222.11 Manufacture of rubber tyres and tubes; retreading and rebuilding of rubber tyres 40 6,000 1,611£ 20 14 1622.19 Manufacture of other rubber products 540 15,000 2,319£ 3 7 1322.21 Manufacture of plastic plates, sheets, tubes and profiles 470 26,000 4,619£ 6 5 522.22 Manufacture of plastic packaging goods 455 22,000 3,989£ 7 6 822.23 Manufacture of builders' ware of plastic 1,685 44,000 5,406£ 2 3 422.29 Manufacture of other plastic products 2,590 49,000 6,319£ 1 2 3Total Chemicals total 9,125 309,000 73,556£

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A.1.1.2 Metals sector


Metals (full) Companies Employees Turnover Companies Employees TurnoverSIC Sub-sector UK UK UK(£m)NW% Rank Rank Rank24.1 Manufacture of basic iron and steel and of ferro-alloys 720 21,000 5,764£ 15 12 724.2 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel 305 9,000 1,863£ 27 23 2124.31 Cold drawing of bars 10 1,000 79£ 63 52 5924.32 Cold rolling of narrow strip 10 28£ 63 6324.33 Cold forming or folding 30 2,000 529£ 57 48 4024.34 Cold drawing of wire 25 1,000 76£ 59 52 6124.41 Precious metals production 55 1,000 440£ 53 52 4424.42 Aluminium production 120 4,000 1,413£ 43 40 2424.43 Lead, zinc, and tin production 20 1,000 421£ 61 52 4524.44 Copper production 40 3,000 529£ 55 43 4024.45 Other non-ferrous metal production 85 5,000 * * 52 3524.51 Casting of iron 105 5,000 401£ 46 35 4624.52 Casting of steel 90 3,000 189£ 50 43 5424.53 Casting of light metals 135 5,000 568£ 41 35 3924.54 Casting of other non-ferrous metals 105 2,000 176£ 46 48 5525.11 Manufacture of metal structures and parts of structures 3,060 58,000 7,920£ 4 4 525.12 Manufacture of doors and windows of metal 1,230 19,000 2,225£ 7 13 1825.21 Manufacture of central heating radiators and boilers 145 5,000 1,264£ 37 35 2725.29 Manufacture of other tanks, reservoirs and containers of metal 145 4,000 522£ 37 40 4225.3 Manufacture of steam generators, except central heating hot water boilers 95 2,000 291£ 49 48 5025.4 Manufacture of weapons and ammunition 110 14,000 2,627£ 45 18 1525.5 Forging, pressing, stamping and roll-forming of metal; powder metallurgy 630 19,000 2,223£ 17 13 1925.61 Treatment and coating of metals 1,315 23,000 1,780£ 6 8 2225.62 Machining 13,950 101,000 8,171£ 2 1 425.71 Manufacture of cutlery 30 1,000 25£ 57 52 6425.72 Manufacture of locks and hinges 645 7,000 766£ 16 28 3625.73 Manufacture of tools 1,075 15,000 1,088£ 9 17 3125.91 Manufacture of steel drums and similar containers 25 1,000 94£ 59 52 5825.92 Manufacture of light metal packaging 55 6,000 1,227£ 53 30 2825.93 Manufacture of wire products, chain 420 8,000 1,028£ 25 25 3225.94 Manufacture of fasteners and screw machine products 195 6,000 669£ 32 30 3825.99 Manufacture of other fabricated metal products 3,560 31,000 2,961£ 3 6 1328.11 Manufacture of engines and turbines, except aircraft, vehicle and cycle engines 260 27,000 7,693£ 30 7 6

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28.12 Manufacture of fluid power equipment 145 8,000 1,296£ 37 25 2628.13 Manufacture of other pumps and 285 12,000 2,003£ 28 20 2028.14 Manufacture of other taps and valves 170 9,000 1,304£ 34 23 2528.15 Manufacture of bearings, gears, gearing and driving elements 225 8,000 1,205£ 31 25 2928.21 Manufacture of ovens, furnaces and furnace burners 185 2,000 301£ 33 48 4928.22 Manufacture of lifting and handling 855 17,000 3,389£ 11 16 1028.23 Manufacture of office machinery and equipment (except computers etc.) 130 4,000 846£ 42 40 3328.24 Manufacture of power-driven hand tools 15 1,000 102£ 62 52 5728.25 Manufacture of non-domestic cooling and ventilation equipment 825 22,000 3,792£ 13 9 928.29 Manufacture of other general-purpose machinery 1,410 22,000 3,344£ 5 9 1128.3 Manufacture of agricultural and forestry machinery other than tractors 490 7,000 2,260£ 21 28 1728.41 Manufacture of metal forming machinery 425 6,000 799£ 24 30 3528.49 Manufacture of other machine tools 470 5,000 393£ 23 35 4728.91 Manufacture of machinery for metallurgy 10 63£ 63 6228.92 Manufacture of machinery for mining, earthmoving, concrete crushing etc. 265 14,000 3,239£ 29 18 1228.93 Manufacture of machinery for food, beverage and tobacco processing 420 6,000 834£ 25 30 3428.94 Manufacture of machinery for textile, apparel and leather production 145 1,000 225£ 37 52 5228.95 Manufacture of machinery for paper and paperboard production 40 1,000 122£ 55 52 5628.96 Manufacture of plastics and rubber machinery 525 3,000 2,452£ * 18 43 1628.99 Manufacture of other special-purpose machinery 495 10,000 1,689£ * 20 22 2329.1 Manufacture of motor vehicles 865 63,000 59,390£ 10 3 129.2 Manufacture of bodies (coachwork) for motor vehicles (except caravans) 835 19,000 2,719£ 12 13 1429.31 Manufacture of electrical and electronic equipment for motor vehicles 160 3,000 277£ 35 43 5129.32 Manufacture of other parts and accessories for motor vehicles 1,120 44,000 11,868£ 8 5 330.11 Building of ships and floating structures 475 22,000 3,852£ 22 9 830.12 Building of pleasure and sporting boats 505 11,000 721£ 19 21 3730.2 Manufacture of railway locomotives and rolling stock 115 6,000 1,175£ 44 30 3030.3 Manufacture of air and spacecraft and related machinery 770 100,000 28,762£ 14 2 230.4 Manufacture of military fighting vehicles 5 3,000 518£ 66 43 4330.91 Manufacture of motorcycles 90 1,000 388£ 50 52 4830.92 Manufacture of bicycles and invalid 150 1,000 207£ 36 52 5330.99 Manufacture of other transport equipment 105 1,000 77£ 46 52 60

Metals total 41,525 842,000 194,662£

A.1.2


A.1.2.1 Construction sector Construction (full) Companies Employees Turnover Companies Employees TurnoverSIC Sub-sector UK UK UK(£m)NW% Rank Rank Rank41.1 Development of building projects 34,345 80,000 25,397£ 4 7 341.2 Construction of commercial buildings 13,029 64,000 21,345£ 10 9 541.2 Construction of domestic buildings 41,896 210,000 60,033£ 2 1 142.11 Construction of roads and motorways 3,595 40,000 7,737£ 15 11 1042.12 Construction of railways and underground railways 1,605 10,000 4,379£ 17 18 1442.13 Construction of bridges and tunnels 95 1,000 403£ 23 22 2242.21 Construction of utility projects for fluids 495 17,000 3,753£ 20 16 1642.22 Construction of utility projects for electricity 665 23,000 4,179£ 19 15 1542.91 Construction of water projects 305 2,000 436£ 21 21 2142.99 Construction of other civil engineering 16,295 145,000 30,883£ 8 3 243.11 Demolition 775 4,000 1,042£ 18 20 2043.12 Site preparation 3,575 10,000 2,065£ 16 18 1943.13 Test drilling and boring 260 1,000 213£ 22 22 2343.21 Electrical installation 42,495 187,000 21,903£ 1 2 443.22 Plumbing heat and air-conditioning 34,700 128,000 15,316£ 3 4 743.29 Other construction installation 7,820 34,000 5,151£ 12 12 1143.31 Plastering 5,095 15,000 2,323£ 14 17 1843.32 Joinery installation 25,260 86,000 11,402£ 5 6 843.33 Floor and wall covering 7,610 25,000 3,044£ 13 14 1743.34 Painting and glazing 14,295 59,000 4,718£ 9 10 1343.39 Other building completion and finishing 20,550 65,000 10,647£ 7 8 943.91 Roofing activities 8,380 31,000 5,109£ 11 13 1243.99 Other specialised construction activities 22,305 120,000 15,930£ 6 5 6

Construction total 305,445 1,357,000 257,408£

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A.1.3 Condensed framework

A.1.3.1 Chemicals sectorChemicals (condensed) Companies Employees Turnover Companies Employees Turnover

UK UK UK(£m) Rank Rank RankManufacture of industrial gases 20 5,000 1,201£ 17 11 15Manufacture of dyes and pigments 70 3,000 1,041£ 14 14 16Manufacture of other inorganic basic chemicals 100 5,000 2,150£ 12 11 11Manufacture of other organic basic chemicals 115 10,000 3,145£ 11 9 10Manufacture of fertilisers and nitrogen compounds 60 2,000 1,371£ 16 17 13Manufacture of plastics in primary forms 380 9,000 4,309£ 9 10 5Manufacture of synthetic rubber in primary forms - 1,000 1,748£ 20 19 12Manufacture of pesticides and other agrochemical products 70 3,000 865£ 14 14 17Manufacture of paints, varnishes and similar coatings, mastics and sealants 415 15,000 3,319£ 8 7 9Manufacture of soap, detergents, perfumes and toilet preparations 915 29,000 6,630£ 2 3 3Manufacture of explosives 20 1,000 175£ 17 19 19Manufacture of glues 75 3,000 529£ 13 14 18Manufacture of other chemical products 495 15,000 4,284£ 4 7 6Manufacture of man-made fibres 10 2,000 133£ 19 17 20Manufacture of basic pharmaceutical preparations 180 4,000 1,267£ 10 13 14Manufacture of pharmaceutical products 420 40,000 17,126£ 7 2 1Manufacture of rubber tyres, tubes and other rubber products 580 21,000 3,930£ 3 6 8Manufacture of plastic plates, sheets, tubes and profiles 470 26,000 4,619£ 5 4 4Manufacture of plastic packaging goods 455 22,000 3,989£ 6 5 7Manufacture of other plastic products 4,275 93,000 11,725£ 1 1 2


A.1.3.2 Metals sectorMetals (condensed) Companies Employees Turnover Companies Employees Turnover

UK UK UK(£m) Rank Rank RankManufacture of basic iron and steel and of ferro-alloys 720 21,000 5764 8 8 6Manufacture of tubes, pipes, hollow profiles and related fittings, of steel 305 9,000 1863 11 11 9Cold drawing or forming of bar, strip or wire 75 4,000 712 14 13 14Precious metals production 55 1,000 440 16 16 15Aluminium production 120 4,000 1413 12 13 11Copper, lead, zinc, and tin production 60 4,000 950 15 13 13Other non-ferrous metal production 85 5,000 * 13 12Casting 435 15,000 1334 10 10 12Manufacture of metal structures and equipment 4,785 102,000 14849 3 4 4Forging, pressing, stamping and roll-forming of metal; powder metallurgy 630 19,000 2223 9 9 8Treatment and coating of metals 1,315 23,000 1780 5 7 10Machining 13,950 101,000 8171 1 5 5Manufacture of products from metal 13,795 260,000 45209 2 1 2Manufacture of motor vehicles 2,980 129,000 74254 4 2 1Building of ships and floating structures 980 33,000 4573 7 6 7Manufacture of vehicles and transport equipment 1,235 112,000 31127 6 3 3

A.1.3.3

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A.1.3.4 Construction sectorConstruction (condensed) Companies Employees Turnover Companies Employees Turnover

UK UK UK(£m) Rank Rank RankDevelopment of building projects 34,345 80,000 25397 2 4 4Construction of civil engineering, transport infrastructure and utility projects 23,055 238,000 51770 3 2 2Construction of non-residential buildings for the public sector 17,546 79,122 28604 5 5 5Construction of commercial buildings 13,029 64,000 21345 6 6 6Construction of industrial buildings 6,919 43,504 6451 8 8 8Construction of residential buildings for the public sector 5,801 29,075 8312 9 9 9Construction of residential buildings for the private sector 11,631 58,298 16666 7 7 7Demolition, site preparation, test drilling and boring 4,610 15,000 3320 10 10 10Installation of building services, plastering, joinery, electrician and other trades 166,205 630,000 79613 1 1 1Other specialised construction activities 22,305 120,000 15930 4 3 3


A.1.3.5 Sub-sector turnover and employee numbers

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A.2.0 Literature reviewThe following table sets out the sources of information reviewed as a background to the project, with specific commentary on the relevance of each in terms of attributable, quantitative data which can be used to inform the aims of the project. The list is made up of citations from the tender and from Eunomia’s proposal, others supplied during the inception meeting and in subsequent correspondence, and finally additional reports uncovered while researching the project.

The aim of this review is to establish sources of information which might be used to inform an estimate of the scale of financial and environmental savings through material resource efficiency in the construction, chemicals and metals sectors. Additional information of relevance is also noted, such as barriers to implementation and opportunities for encouraging wider dissemination of resource efficiency practice.

Title Comments

“From waste to resource productivity.” Report of the Government Chief Scientific Adviser. Government Office for Science, 2017.

An overview of the resource efficiency landscape, considering the background, data, initiatives already attempted and perspectives on potential policy initiatives. Accompanied by a comprehensive suite of case studies covering the principal sectors responsible for the generation of waste, and perspectives on how resource efficiency can be promoted.

EV0548: Encouraging and supporting SMEs to improve their resource efficiency; Piloting shared resource efficiency manager models in SME manufacturers

This study assesses the effectiveness of the Shared Resource Efficiency Manager (SREM) model, providing company clusters or supply chains with a specialised resource efficiency manager as a shared resource.

The study found that the SREM model is effective in delivering resource efficiency savings, along with a range of additional benefits. Various lessons were learned to improve the effectiveness of future deployment.

The Opportunities to Business of This study models theoretical resource efficiency

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Improving Resource Efficiency – European Commission, Final Report, 2013

savings across the EU for three sectors: Food & Drink, Fabricated Metal Products and Hospitality & Food Services. The headline figure for Fabricated Metal Products is €44-82bn for the EU. Taking the middle of this range and adjusting pro-rata to the UK economy (and adjusting for currency) gives a figure of around £8.5bn a year, which is very high compared to other estimation methods, particularly as “Fabricated Metal Products” does not account for the entire Metals sector as defined in this study. However, the definition of resource efficiency in this case includes energy efficiency, which is scoped out of this study. Also, the scale of opportunities estimated depends on the extent to which such opportunities have already been implemented, which is likely to be higher in the UK than across the EU. Taking these factors into account reduces the estimate in the UK significantly, although it is still higher than any other method.

Business Resource Efficiency Quantification - no cost/low cost RE opportunities in the UK economy in 2014. Oakdene Hollins (2017)

This study provides an estimate of financial savings available to UK economic sectors from resource efficiency interventions with no or low cost. The study focusses on the consumption of energy, raw materials and water, and the generation of waste. Although published in May 2017, the study uses data from 2006, 2009 and 2014 (which was the most up-to-date data-set available at the time), looking at trends in the headline figures.

For the UK economy as a whole, the study estimates savings in the region of £5.7bn-£7.2bn including energy efficiency (£3bn-£4.6bn excluding energy).

The study considers material resource efficiency but does not describe how the figures for material resource efficiency are estimated


(although they appear to be derived from waste generation figures, together with some assumptions about available raw material savings and their economic value). It comments on the “frailty” of the relationship between waste and turnover (and by implication opportunities for material resource efficiency), and suggests that further research would be informative.

Remaining Waste Prevention Opportunities for Scottish SMEs; Eunomia for ZWS/RES.

This recent report for Zero Waste Scotland aims to identify what waste prevention activities are undertaken by businesses and how this varies by sector. The study is restricted to SMEs and specifically excludes the Construction sector, as well as primary metals production. Of those sub-sectors also covered in this study, the ZWS project identified median cost savings of £8,259 per company in Speciality Chemicals, £4,334 in “Miscellaneous Manufacturing” and £2,969 in Engineering. These sectors had identified greenhouse gas emission savings of 33, 28 and 4 tonnes CO2e respectively.

Identification of Circular Economy Opportunities in the Scottish Construction Sector

Eunomia, SGRApril 2017

This report was prepared by Dan Whittaker of Eunomia in association with Mervyn Jones of SGR. Dan has led the Construction sector section of this study, drawing on much of the same core data and analysis, supplemented to take account of the wider UK context and different project focus.

This has allowed this study to look in greater depth at the Construction sector, following the analysis down to the level of specific interventions rather than just sub-sectors.

Closing the circle

Circular economy:Opportunity for the Welsh built environment.

High-level consideration of the application of circular economy models to the construction sector, with a particular emphasis on Wales. The study is based on the premise that a circular

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Constructing Excellence Wales. approach is the best way to improve the environmental impact of the construction sector, then picks case studies to support this position. Limited quantitative data but some discussion of the barriers and potential opportunities for overcoming them.

Growth Within: A circular economy vision for a competitive Europe.

Ellen McArthur Foundation, SUN, McKinsey

An in-depth analysis of structural waste in the EU economy, from an economic perspective. Focusses on transportation, food and construction. Crammed with perspectives, pathways and infographics but very limited quantitative information. Considers economy at a level above that of the individual company, so e.g. recommends off-site construction, distributed energy etc. but makes no specific recommendations for how these should be implemented, or figures for their impact. Also recommends more esoteric or cross-sectoral or external initiatives such as mixed use, vertical farming, shared space and P2P renting etc.

Horizon 2020 ‘Sustainable process industry through resource and energy efficiency’ (SPIRE, 2017) – RE in chemicals

A private-public partnership platform including a range of initiatives attempting to model, measure, implement and promote circular economy in the process industries. SPIRE supports case studies pursuing resource efficiency and circular economy initiatives in a wide range of process industries across Europe.

Sustainable Materials – With Both Eyes Open (Allwood et al, University of Cambridge, 2012)

Sustainable Materials: With Both Eyes Open is an evidence-based report that examines five globally significant materials—steel, aluminium, cement, plastic, and paper. It reviews the lifecycle of each, the extraction, manufacturing and end of life treatments used, along with estimated material consumption and loss levels of each at various lifecycle stages. It identifies some good practice example options for material


resource efficiency and reduced demand at each stage that offer manufacturing and material efficiencies whilst providing the same functionality or services using less material. It assesses the potential economic impact of these changes and suggests the types of policy measures that may be required to drive these changes in practice.

EU BREF and UK Sector Guidance Notes, e.g. Speciality Chemicals; Non-Ferrous Metals

BREF notes include detailed minimum requirements for the operation of installations licensed under the Pollution Prevention and Control Regulations. They contain very little that could be considered resource efficiency, and nothing in the way of recommendations for going beyond the requirements of the legislation. They are agreed by committee at a European level, so typically reflect the current state of practice across the EU, which is often lower than that in place in the UK.

Industrial energy use and carbon emissions reduction in the chemicals sector: A UK perspective. Griffin, Hammond, Norman. Applied Energy, August 12, 2017.

A comprehensive treatment of energy efficiency and associated greenhouse gas emissions from the UK chemicals sector, with analysis of opportunities for improvement and a proposed roadmap for implementation. This paper does not consider resource efficiency.

Opportunities for Energy Demand and Carbon Emissions Reduction in the Chemicals Sector. Griffin, Hammond, Norman. Energy Procedia May 1, 2017.

As above, this paper considers energy efficiency and associated GHG emissions in depth but does not consider resource efficiency.

Briefing: Embodied carbon dioxide assessment in buildings: guidance and gaps. Proceedings of the Institution of Civil Engineers - Engineering

Consider embodied carbon in construction materials and go in great depth into greenhouse gas reduction potential from material substitution but do not inform the economic

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Sustainability July 11, 2017 value of resource efficiency opportunities.

The greenhouse gas emissions and mitigation options for materials used in UK construction. Giesekam, Barrett, Taylor, Owen, Energy and Buildings August 1, 2014

Construction sector views on low carbon building materials. Giesekam, Barrett, Taylor. Building Research & Information Oct 7 2015

Scenario analysis of embodied greenhouse gas emissions in UK construction. Giesekam, Barrett, Taylor, Proceedings of the Institution of Civil Engineers - Engineering Sustainability Aug 2 2016.

Resource consumption, industrial strategy and UK carbon budgets. CIEMAP Nov 2016

Models the impact of implementing resource efficiency initiatives by sector across the whole UK economy, concluding that this approach will not only be successful but also necessary to meet emissions targets under the Paris Agreement commitments. Does not specifically consider the economic impact of resource efficiency.

Thermodynamic insights and assessment of the ‘circular economy’ Cooper et al. Journal of Cleaner Production 20 September 2017.

Uses a thermodynamic assessment to model the EU and UK economies, applying known energy savings from resource efficiency opportunities to derive a figure for overall energy savings available from the resource efficiency approach. Concludes that resource efficiency has the potential to save more energy than energy efficiency initiatives.


Supporting material productivity gains through sector deals. CIEMAP Report

Models the energy and greenhouse gas emissions implications of current economic models and resource efficiency, concluding that resource efficiency is essential to meet greenhouse gas emissions targets and to achieve sustainability. Does not consider financial savings or include data at a sub-sectoral level.

Industrial Decarbonisation & Energy Efficiency Roadmaps to 2050: Iron and Steel. DECC/BEIS, March 2015.

These documents set out a road map for decarbonisation of these sectors, considering decarbonisation technology options, barriers and enablers. They do not consider resource efficiency or the cost saving implications of the proposed choices in these studies, which centre on both decarbonisation and improving energy efficiency in processes, combustion and indirect emissions from electricity used on site but generated off site.

Industrial Decarbonisation & Energy Efficiency Roadmaps to 2050: Chemicals. DECC/BEIS, March 2015.

UK Statistics on Waste. DEFRA, Feb 22 2018.

Various data sources have been assessed which look at waste arisings. However, these arisings are characterised by the type of waste, not the business generating it, so the data are of limited value in estimating the economic and climate benefits of resource efficiency opportunities.

Innovative Business Models Map. WRAP.

An overview of WRAP’s Innovative Business Models programme, this website describes the Programme’s work on alternative business models such as service systems, hire & leasing, incentivised return, re-use and design for long service life.

These models are complimentary to traditional material resource efficiency approaches but are of interest nonetheless (see below). This particular reference does not include information about the application of REBMs to Construction, Chemicals or Metals sector, nor any quantitative data.

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Extrapolating resource efficient business models across Europe. RBM600 2016. WRAP

This report investigates the market penetration of resource-efficient business models across EU member states and assesses the potential for further dissemination, modelling increase in GVA, together with savings in raw materials, waste and greenhouse gas emissions.

The results of the report have been used as the foundation for one of the estimates used in this report. A summary of calculations is presented in Appendix A.2.1 below, with commentary in Section 3.2.2 above.


A.2.1 Resource Efficient Business Models

Incr

ease

in a

nnua

l GVA

(£m

)

Mat

eria

l avo

ided

(kT)

Was

te d

iver

ted

(kT)

GHG

redu

ction

(kTC

O2e

)

Rank

(£)

Chemicals 418 98 167 41Manufacture of industrial gases 11.0 2.6 4.4 1.1 12Manufacture of dyes and pigments 1.4 0.3 0.6 0.1 17Manufacture of other inorganic basic chemicals 13.3 3.1 5.3 1.3 11Manufacture of other organic basic chemicals 14.4 3.4 5.7 1.4 10Manufacture of fertilisers and nitrogen compounds 0.4 0.1 0.2 0.0 20Manufacture of plastics in primary forms 17.8 4.2 7.1 1.8 8Manufacture of synthetic rubber in primary forms 3.1 0.7 1.2 0.3 15Manufacture of pesticides and other agrochemical products 7.1 1.7 2.8 0.7 14Manufacture of paints, varnishes and similar coatings, mastics and sealants 14.8 3.5 5.9 1.5 9Manufacture of soap, detergents, perfumes and toilet preparations 30.2 7.1 12.1 3.0 5Manufacture of explosives 1.0 0.2 0.4 0.1 18Manufacture of glues 2.9 0.7 1.2 0.3 16Manufacture of other chemical products 28.2 6.6 11.2 2.8 4Manufacture of man-made fibres 0.8 0.2 0.3 0.1 19Manufacture of basic pharmaceutical preparations 7.6 1.8 3.0 0.7 13Manufacture of pharmaceutical products 142.0 33.2 56.6 14.0 1Manufacture of rubber tyres, tubes and other rubber products 21.2 5.0 8.5 2.1 7Manufacture of plastic plates, sheets, tubes and profiles 30.5 7.1 12.2 3.0 3Manufacture of plastic packaging goods 21.6 5.0 8.6 2.1 6Manufacture of other plastic products 43.6 10.2 17.4 4.3 2Construction 749 175 299 74Development of building projects 44.9 10.5 17.9 4.4 4Construction of civil engineering, transport infrastructure and utility projects 171.5 40.1 68.4 16.9 2Construction of non-residential buildings for the public sector 16.8 3.9 6.7 1.7 8Construction of commercial buildings 40.9 9.6 16.3 4.0 5Construction of industrial buildings 5.0 1.2 2.0 0.5 10Construction of residential buildings for the public sector 37.9 8.9 15.1 3.7 6Construction of residential buildings for the private sector 59.0 13.8 23.5 5.8 3Demolition, site preparation, test drilling and boring 5.3 1.2 2.1 0.5 9Installation of building services, plastering, joinery, electrician and other trades 345.5 80.8 137.8 34.0 1Other specialised construction activities 21.8 5.1 8.7 2.1 7Metals 983 230 392 97Manufacture of basic iron and steel and of ferro-alloys 19.5 4.5 7.8 1.9 7Manufacture of tubes, pipes, hollow profiles and related fittings, of steel 9.9 2.3 3.9 1.0 10Cold drawing or forming of bar, strip or wire 4.3 1.0 1.7 0.4 13Precious metals production 4.1 1.0 1.6 0.4 14Aluminium production 4.7 1.1 1.9 0.5 12Copper, lead, zinc, and tin production 2.6 0.6 1.0 0.3 15Other non-ferrous metal production 0.0 0.0 0.0 0.0 16Casting 9.3 2.2 3.7 0.9 11Manufacture of metal structures and equipment 99.0 23.1 39.5 9.7 4Forging, pressing, stamping and roll-forming of metal; powder metallurgy 15.9 3.7 6.3 1.6 9Treatment and coating of metals 17.8 4.2 7.1 1.8 8Machining 81.0 18.9 32.3 8.0 5Manufacture of products from metal 260.7 60.9 104.0 25.7 2Manufacture of motor vehicles 294.9 68.9 117.6 29.0 1Building of ships and floating structures 33.9 7.9 13.5 3.3 6Manufacture of vehicles and transport equipment 125.3 29.3 50.0 12.3 3

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A.2.2 Average savings

Turnover Turnover Employees EmployeesChemicals Savings (£m) Rank Savings (£m) RankManufacture of industrial gases 12£ 15 5 11 Manufacture of dyes and pigments 10£ 16 3 14 Manufacture of other inorganic basic chemicals 22£ 11 5 11 Manufacture of other organic basic chemicals 31£ 10 10 9 Manufacture of fertilisers and nitrogen compounds 14£ 13 2 17 Manufacture of plastics in primary forms 43£ 5 9 10 Manufacture of synthetic rubber in primary forms 17£ 12 1 19 Manufacture of pesticides and other agrochemical products 9£ 17 3 14 Manufacture of paints, varnishes and similar coatings, mastics and sealants 33£ 9 15 7 Manufacture of soap, detergents, perfumes and toilet preparations 66£ 3 29 3 Manufacture of explosives 2£ 19 1 19 Manufacture of glues 5£ 18 3 14 Manufacture of other chemical products 43£ 6 15 7 Manufacture of man-made fibres 1£ 20 2 17 Manufacture of basic pharmaceutical preparations 13£ 14 4 13 Manufacture of pharmaceutical products 171£ 1 40 2 Manufacture of rubber tyres, tubes and other rubber products 39£ 8 21 6 Manufacture of plastic plates, sheets, tubes and profiles 46£ 4 26 4 Manufacture of plastic packaging goods 40£ 7 22 5 Manufacture of other plastic products 117£ 2 93 1 ConstructionDevelopment of building projects 254£ 4 80 5 Construction of civil engineering, transport infrastructure and utility projects 518£ 2 238 2 Construction of non-residential buildings for the public sector 286£ 3 17 8 Construction of commercial buildings 213£ 5 41 6 Construction of industrial buildings 65£ 9 7 10 Construction of residential buildings for the public sector 83£ 8 29 7 Construction of residential buildings for the private sector 167£ 6 181 3 Demolition, site preparation, test drilling and boring 33£ 10 15 9 Installation of building services, plastering, joinery, electrician and other trades 796£ 1 630 1 Other specialised construction activities 159£ 7 120 4 MetalsManufacture of basic iron and steel and of ferro-alloys 58£ 6 21 8 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel 19£ 9 9 11 Cold drawing or forming of bar, strip or wire 7£ 14 4 13 Precious metals production 4£ 15 1 16 Aluminium production 14£ 11 4 13 Copper, lead, zinc, and tin production 10£ 13 4 13 Other non-ferrous metal production 5 12 Casting 13£ 12 15 10 Manufacture of metal structures and equipment 148£ 4 102 4 Forging, pressing, stamping and roll-forming of metal; powder metallurgy 22£ 8 19 9 Treatment and coating of metals 18£ 10 23 7 Machining 82£ 5 101 5 Manufacture of products from metal 452£ 2 260 1 Manufacture of motor vehicles 743£ 1 129 2 Building of ships and floating structures 46£ 7 33 6 Manufacture of vehicles and transport equipment 311£ 3 112 3

A.3.0


A.4.0 Survey and interview contactsAgricultural Industries Confederation

Aluminium Federation (ALFED)

Aluminium Federation Ltd

Aluminium Packaging Recycling Organisation (ALUPRO)

Association of British Pharmaceutical Industry

Association of the European Adhesive and Sealant Industry

BOC Gases

British Adhesives and Sealants Association

British Association of Chemical Specialities

British Coatings Federation

British Compressed Gases Association

British Constructional Steelwork Association

British Industrial Furnace Constructors Association

British Manufacturing Plant Manufacturers Association

British Plastics Federation (BPF)

British Society of Dyers and Colourists

British Stainless Steel Association

Building Research Establishment (BRE)

Cast Metals Federation

CELSA Group

Cemex

Chartered Institute of Plumbing & Heating Engineering

Chartered Institute of Waste Management

Chartered Institute of Building

Chemical Industries Association

Chemical Industries Association (CIA)

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CIRFS: European Man-Made Fibres Association

Cleaning Products Industry Association

Confederation of British Industry (CBI)

Confederation of British Metal forming

Constructing Excellence

Construction Industry Council

Construction Industry Research and Information Association (CIRIA)

Construction Products Association (CPA)

Copper Development Association

EEF The Manufacturers’ Organisation

Engineering and Physical Sciences Research Council (EPSRC)

EUROFER (EU Steel)

European Aluminium

Fastener Engineering and Research Association

Federation of British Hand Tool Manufacturers

Galvanizers Association

InnovateUK

Inovyn

Institute of Materials Finishing

Institute of Spring Technology

International Lead Association

International Steel Statistics Bureau

London Bullion Market Association

Metal Packaging Manufacturers’ Association

Mineral Products Association Limited

Minor Metals Trade Association

Modern Masonry Alliance

National House Building Council (NHBC)

Oxo-Biodegradable Plastics Association


Plastics and Board Industries Federation

Plastics and Rubber Machinery Manufacturing Association

Royal Institution of British Architects (RIBA)

Shell

Steel Construction Institute

Tata Steel (UK)

The Alliance for Sustainable Building Products (ASBP)

The British Plastics Federation (BPF)

The British Rubber & Polyurethane Products Association

The Chemicals Industry Association (CIA)

The Packaging and Films Association (PAFA)

The Society of Motor Manufacturers and Traders Limited (SMMT)

UK Green Building Council

UK Petroleum Industry Association (UKPIA)

UK Steel Association

Zinc Information Centre

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A.5.0 ENWORKS database

Note: Sectoral totals include “other” sub-sectors for which data on e.g. number of businesses, turnover are not available, so have been omitted from table.


A.6.0 WRAP/SmartWaste

Total annual cost savings available from each opportunity. Top 20 by value highlighted.

Cost savings (£m) Infrastructure Commercial Public non-housing Industrial Public housing Private housing TotalWaste reduction Clay products 0.03£ 1.21£ 1.71£ 0.23£ 2.29£ 14.44£ 19.9

Concrete products 24.32£ 6.59£ 3.70£ 0.26£ 4.33£ 27.28£ 66.5Aggregates 55.74£ 16.00£ 19.96£ 4.10£ 1.55£ 9.74£ 107.1Insulation 6.76£ 12.04£ 5.52£ 0.94£ 7.19£ 45.25£ 77.7Steel 7.89£ 21.34£ 6.28£ 1.57£ 1.75£ 11.03£ 49.9Other cement 7.54£ 17.75£ 20.63£ 2.46£ 7.67£ 48.27£ 104.3Plastic 8.29£ 30.30£ 12.69£ 3.59£ 18.98£ 119.48£ 193.3Timber 17.73£ 36.88£ 24.21£ 8.77£ 8.68£ 35.73£ 132.0

Offsite Clay products 0.02£ 0.85£ 1.20£ 0.16£ 1.60£ 10.09£ 13.9Concrete products 19.20£ 5.20£ 2.92£ 0.20£ 3.42£ 21.54£ 52.5Aggregates -£ -£ -£ -£ -£ -£ 0.0Insulation -£ -£ -£ -£ -£ -£ 0.0Steel 0.28£ 0.76£ 0.22£ 0.06£ 0.06£ 0.39£ 1.8Other cement 5.20£ 12.25£ 14.23£ 1.70£ 5.29£ 33.30£ 72.0Plastic 3.98£ 14.56£ 6.10£ 1.73£ 9.12£ 57.41£ 92.9Timber 36.32£ 75.58£ 49.60£ 17.96£ 17.78£ 73.22£ 270.5

Recycling/reuse Clay products 0.00£ 0.17£ 0.24£ 0.03£ 0.32£ 2.00£ 2.8Concrete products 5.56£ 1.51£ 0.85£ 0.06£ 0.99£ 6.24£ 15.2Aggregates -£ -£ -£ -£ -£ -£ 0.0Insulation 0.22£ 0.38£ 0.18£ 0.03£ 0.23£ 1.44£ 2.5Steel -£ -£ -£ -£ -£ -£ 0.0Other cement 8.21£ 19.35£ 22.49£ 2.68£ 8.36£ 52.62£ 113.7Plastic 0.12£ 0.45£ 0.19£ 0.05£ 0.28£ 1.78£ 2.9Timber 1.06£ 2.21£ 1.45£ 0.53£ 0.52£ 2.14£ 7.9

Refurb rather than demo All 26.76£ 34.36£ 14.04£ 5.42£ 7.44£ 46.82£ 134.8Lean design Clay products 0.02£ 0.81£ 1.14£ 0.16£ 1.53£ 9.63£ 13.3

Concrete products 31.04£ 8.42£ 4.72£ 0.33£ 5.53£ 34.83£ 84.9Aggregates 22.30£ 6.40£ 7.99£ 1.64£ 0.62£ 3.90£ 42.8Insulation 0.68£ 1.20£ 0.55£ 0.09£ 0.72£ 4.52£ 7.8Steel 3.76£ 10.16£ 2.99£ 0.75£ 0.83£ 5.25£ 23.7Other cement 3.01£ 7.10£ 8.25£ 0.98£ 3.07£ 19.31£ 41.7Plastic 5.67£ 20.71£ 8.67£ 2.46£ 12.97£ 81.68£ 132.2Timber 17.09£ 35.56£ 23.34£ 8.45£ 8.36£ 34.44£ 127.2Total 318.8 400.1 266.1 67.4 141.5 813.8 2,007.6

88 27/04/2018

Total annual GHG emissions savings by opportunity. Top 20 highlighted by cost savings.

GHG savings (kTCO2e) Infrastructure Commercial Public non housing Industrial Public housing Private housing TotalWaste reduction Clay products 0.04 2.10 2.96 0.40 3.96 24.94 34.4

Concrete products 62.14 16.85 9.45 0.66 11.07 69.72 169.9 Aggregates 57.48 16.50 20.58 4.23 1.60 10.05 110.4 Insulation 15.00 26.68 12.24 2.09 15.93 100.32 172.3 Steel 36.02 97.44 28.68 7.15 8.00 50.35 227.6 Other cement 15.93 37.53 43.62 5.20 16.21 102.05 220.5 Plastic 7.33 26.80 11.22 3.18 16.78 105.67 171.0 Timber 9.91 20.63 13.54 4.90 4.85 19.99 73.8

Offsite Clay products 0.03 1.33 1.87 0.26 2.51 15.79 21.8 Concrete products 39.92 10.82 6.07 0.42 7.11 44.79 109.1 Aggregates - - - - - - - Insulation - - - - - - - Steel 1.72 4.64 1.37 0.34 0.38 2.40 10.8 Other cement 6.36 14.99 17.43 2.08 6.47 40.77 88.1 Plastic 3.46 12.66 5.30 1.50 7.92 49.90 80.7 Timber 19.17 39.88 26.17 9.48 9.38 38.64 142.7

Recycling/reuse Clay products 0.00 0.03 0.05 0.01 0.06 0.40 0.6 Concrete products 19.25 5.22 2.93 0.20 3.43 21.59 52.6 Aggregates 5.75 1.65 2.06 0.42 0.16 1.00 11.0 Insulation 0.43 0.77 0.35 0.06 0.46 2.89 5.0 Steel 10.74 29.04 8.55 2.13 2.38 15.00 67.8 Other cement 22.40 52.78 61.34 7.32 22.79 143.50 310.1 Plastic 0.25 0.91 0.38 0.11 0.57 3.57 5.8 Timber 6.60 13.73 9.01 3.26 3.23 13.30 49.1

Refurb rather than demo All 0.01 0.35 0.49 0.07 0.66 4.16 5.7 Lean design Clay products 240.80 65.29 36.62 2.56 42.91 270.17 658.3

Concrete products 21.66- 6.22- 7.76- 1.59- 0.60- 3.79- 41.6- Aggregates 2.37 4.22 1.94 0.33 2.52 15.86 27.2 Insulation 2.57 6.96 2.05 0.51 0.57 3.60 16.3 Steel 7.49 17.64 20.50 2.45 7.62 47.96 103.7 Other cement 1.50 5.48 2.29 0.65 3.43 21.60 35.0 Plastic 0.34 0.71 0.47 0.17 0.17 0.69 2.6 Timber 104.82 134.59 54.98 21.21 29.12 183.36 528.1 Total 678.2 662.0 396.8 81.7 231.7 1,420.2 3,470.6


Total annual waste savings by opportunity. Top 20 highlighted by cost savings.

Waste reduction (mT) Infrastructure Commercial Public non housing Industrial Public housing Private housing TotalWaste reduction Clay products 0.00 0.01 0.01 0.00 0.02 0.12 0.17

Concrete products 0.46 0.13 0.07 0.00 0.08 0.52 1.27Aggregates 7.18 2.06 2.57 0.53 0.20 1.26 13.80Insulation 0.01 0.01 0.00 0.00 0.01 0.04 0.07Steel 0.02 0.05 0.02 0.00 0.00 0.03 0.13Other cement 0.10 0.23 0.27 0.03 0.10 0.64 1.38Plastic 0.00 0.01 0.00 0.00 0.01 0.04 0.07Timber 0.02 0.04 0.03 0.01 0.01 0.04 0.16

Offsite Clay products 0.00 0.01 0.01 0.00 0.01 0.08 0.11Concrete products 0.30 0.08 0.05 0.00 0.05 0.33 0.81Aggregates - - - - - - 0.00Insulation - - - - - - 0.00Steel 0.00 0.00 0.00 0.00 0.00 0.00 0.01Other cement 0.04 0.09 0.11 0.01 0.04 0.25 0.55Plastic 0.00 0.01 0.00 0.00 0.00 0.02 0.03Timber 0.04 0.08 0.05 0.02 0.02 0.08 0.30

Recycling/reuse Clay products 0.00 0.01 0.01 0.00 0.02 0.10 0.14Concrete products 0.23 0.06 0.04 0.00 0.04 0.26 0.63Aggregates 1.44 0.41 0.51 0.11 0.04 0.25 2.76Insulation 0.00 0.01 0.00 0.00 0.00 0.03 0.05Steel 0.01 0.02 0.01 0.00 0.00 0.01 0.05Other cement 0.22 0.53 0.61 0.07 0.23 1.44 3.10Plastic 0.00 0.00 0.00 0.00 0.00 0.00 0.01Timber 0.01 0.03 0.02 0.01 0.01 0.03 0.10

Refurb rather than demo All 0.54 0.69 0.28 0.11 0.15 0.94 2.70Lean design Clay products 0.00 0.01 0.02 0.00 0.03 0.17 0.23

Concrete products 1.18 0.32 0.18 0.01 0.21 1.33 3.24Aggregates 5.75 1.65 2.06 0.42 0.16 1.00 11.04Insulation 0.00 0.00 0.00 0.00 0.00 0.01 0.01Steel 0.02 0.05 0.02 0.00 0.00 0.03 0.12Other cement 0.08 0.19 0.22 0.03 0.08 0.51 1.10Plastic 0.00 0.01 0.01 0.00 0.01 0.06 0.09Timber 0.04 0.08 0.05 0.02 0.02 0.08 0.30Total 17.71 6.91 7.24 1.41 1.56 9.70 44.53

90 27/04/2018

A.7.0 Ranking summary and output Ranking Savings (£m) GHG reduction (kTCO2e)

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Chemicals £ - £ 739 £ 736 £ 309 £ 418 £ 453 2,845 41 1,443 Chemicals - Manufacture of industrial gases 16 15 11 12 -£ 12£ 5£ 11£ 8£ 8.4 1.1 5 Chemicals - Manufacture of dyes and pigments 12 16 14 14 2£ 10£ 3£ 1£ 2£ 208.2 0.1 104 Chemicals - Manufacture of other inorganic basic chemicals 9 11 11 11 7£ 22£ 5£ 14£ 10£ 1.2- 1.3 0 Chemicals - Manufacture of other organic basic chemicals 7 10 9 10 9£ 31£ 10£ 15£ 12£ 12.7 1.4 7 Chemicals - Manufacture of fertilisers and nitrogen compounds 16 13 17 17 -£ 14£ 2£ 0£ 1£ 25.2 0.0 13 Chemicals - Manufacture of plastics in primary forms 15 5 10 10 0£ 43£ 9£ 18£ 14£ 159.7 1.8 81 Chemicals - Manufacture of synthetic rubber in primary forms 16 12 19 18 -£ 17£ 1£ 3£ 2£ - 0.3 0 Chemicals - Manufacture of pesticides and other agrochemical products 14 17 14 17 0£ 9£ 3£ 7£ 5£ 29.4 0.7 15 Chemicals - Manufacture of paints, varnishes and similar coatings, mastics and sealants 5 9 7 7 32£ 33£ 15£ 15£ 24£ 91.0 1.5 46 Chemicals - Manufacture of soap, detergents, perfumes and toilet preparations 4 3 3 3 81£ 66£ 29£ 26£ 48£ 75.4 2.6 39 Chemicals - Manufacture of explosives 16 19 19 20 -£ 2£ 1£ 1£ 1£ 8.4 0.1 4 Chemicals - Manufacture of glues 11 18 14 15 2£ 5£ 3£ 3£ 3£ 1.2 0.3 1 Chemicals - Manufacture of other chemical products 3 6 7 6 109£ 43£ 15£ 29£ 36£ 611.0 2.8 307 Chemicals - Manufacture of man-made fibres 13 20 17 19 1£ 1£ 2£ 1£ 1£ 0.5 0.1 0 Chemicals - Manufacture of basic pharmaceutical preparations 16 14 13 13 -£ 13£ 4£ 8£ 6£ 75.7 0.8 38 Chemicals - Manufacture of pharmaceutical products 8 1 2 2 7£ 171£ 40£ 145£ 93£ 14.8 14.3 15 Chemicals - Manufacture of rubber tyres, tubes and other rubber products 10 8 6 8 3£ 39£ 21£ 22£ 21£ 243.8 2.1 123 Chemicals - Manufacture of plastic plates, sheets, tubes and profiles 6 4 4 4 28£ 46£ 26£ 31£ 29£ 51.7 3.1 27 Chemicals - Manufacture of plastic packaging goods 2 7 5 5 129£ 40£ 22£ 22£ 31£ 490.9 2.2 247 Chemicals - Manufacture of other plastic products 1 2 1 1 330£ 117£ 93£ 45£ 105£ 738.2 4.4 371

Construction £ 3,540 £ 35,470 £ 2,574 £ 1,357 £ 749 £ 2,123 5,919 78,788 74 5,204 Construction - Development of building projects 5 6 4 4 5 313£ 1,059£ 254£ 80£ 45£ 254£ 500 5,624 4.4 500 Construction - Construction of civil engineering, transport infrastructure and utility projects 4 7 2 2 6 319£ 928£ 518£ 238£ 172£ 319£ 678 24 16.9 24 Construction - Construction of non-residential buildings for the public sector 6 9 3 5 8 266£ -£ 286£ 79£ 17£ 79£ 397 3,268 1.7 397 Construction - Construction of commercial buildings 3 3 5 6 4 400£ 6,918£ 213£ 64£ 41£ 213£ 662 1,129 4.0 662 Construction - Construction of industrial buildings 9 8 9 8 9 67£ 95£ 65£ 44£ 5£ 65£ 82 485 0.5 82 Construction - Construction of residential buildings for the public sector 8 9 8 9 10 141£ -£ 83£ 29£ 38£ 38£ 232 1,080 3.7 232 Construction - Construction of residential buildings for the private sector 2 2 6 7 1 814£ 9,188£ 167£ 58£ 59£ 167£ 1,420 16,637 5.8 1,420 Construction - Demolition, site preparation, test drilling and boring 10 5 10 10 7 41£ 2,191£ 33£ 15£ 5£ 33£ 65 5 0.5 5 Construction - Installation of building services, plastering, joinery, electrician etc. 1 4 1 1 4 982£ 3,433£ 796£ 630£ 345£ 796£ 1,569 49,171 34.0 1,569 Construction - Other specialised construction activities 7 1 7 3 4 196£ 11,658£ 159£ 120£ 22£ 159£ 314 1,364 2.1 314

Metal £ - £ 684 £ 1,947 £ 842 £ 983 £ 995 - 3,393 97 1,745 Manufacture of basic iron and steel and of ferro-alloys 9 6 8 8 8£ 58£ 21£ 19£ 20£ 1,771.9 1.9 887 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel 4 9 11 10 49£ 19£ 9£ 10£ 14£ 95.2 1.0 48 Cold drawing or forming of bar, strip or wire 11 14 13 15 3£ 7£ 4£ 4£ 4£ 21.9 0.4 11 Precious metals production 13 15 16 16 -£ 4£ 1£ 4£ 3£ 4.6 0.4 3 Aluminium production 3 11 13 12 92£ 14£ 4£ 5£ 9£ 1.5 0.5 1 Copper, lead, zinc, and tin production 8 13 13 14 9£ 10£ 4£ 3£ 6£ 3.7 0.3 2 Other non-ferrous metal production 13 12 8 -£ 5£ -£ -£ 1.2 - 1 Casting 13 12 10 13 -£ 13£ 15£ 9£ 11£ 14.5 0.9 8 Manufacture of metal structures and equipment 5 4 4 4 46£ 148£ 102£ 99£ 100£ 17.6 9.7 14 Forging, pressing, stamping and roll-forming of metal; powder metallurgy 12 8 9 11 2£ 22£ 19£ 16£ 17£ 233.0 1.6 117 Treatment and coating of metals 7 10 7 9 11£ 18£ 23£ 18£ 18£ 38.6 1.8 20 Machining 10 5 5 5 4£ 82£ 101£ 81£ 81£ 56.0 8.0 32 Manufacture of products from metal 2 2 1 1 164£ 452£ 260£ 261£ 260£ 1.9 25.7 14 Manufacture of motor vehicles 13 1 2 3 -£ 743£ 129£ 295£ 212£ 889.3 29.0 459 Building of ships and floating structures 6 7 6 6 14£ 46£ 33£ 34£ 33£ 182.5 3.3 93 Manufacture of vehicles and transport equipment 1 3 3 2 282£ 311£ 112£ 125£ 204£ 60.0 12.3 36


A.8.0 Environmental ranking summaryGHG rank GHG reduction (kTCO2e) £ Rank

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Chemicals 967 Chemicals - Manufacture of industrial gases 15 12 14 - 8.41 1.11 5 12 Chemicals - Manufacture of dyes and pigments 5 17 14 - 208.19 0.15 104 14 Chemicals - Manufacture of other inorganic basic chemicals 20 11 15 - 1.16- 1.34 0 11 Chemicals - Manufacture of other organic basic chemicals 14 10 11 - 12.73 1.45 7 10 Chemicals - Manufacture of fertilisers and nitrogen compounds 12 20 19 - 25.22 0.04 13 17 Chemicals - Manufacture of plastics in primary forms 6 8 8 - 159.71 1.79 81 10 Chemicals - Manufacture of synthetic rubber in primary forms 19 15 17 - - 0.32 0 18 Chemicals - Manufacture of pesticides and other agrochemical products 11 14 14 - 29.42 0.71 15 17 Chemicals - Manufacture of paints, varnishes and similar coatings, mastics and sealants 7 9 9 - 90.96 1.49 46 7 Chemicals - Manufacture of soap, detergents, perfumes and toilet preparations 9 5 7 - 75.44 2.59 39 3 Chemicals - Manufacture of explosives 15 18 18 - 8.41 0.10 4 20 Chemicals - Manufacture of glues 17 16 17 - 1.23 0.29 1 15 Chemicals - Manufacture of other chemical products 2 4 2 - 610.95 2.83 307 6 Chemicals - Manufacture of man-made fibres 18 19 20 - 0.47 0.08 0 19 Chemicals - Manufacture of basic pharmaceutical preparations 8 13 11 - 75.65 0.77 38 13 Chemicals - Manufacture of pharmaceutical products 13 1 4 - 14.77 14.30 15 2 Chemicals - Manufacture of rubber tyres, tubes and other rubber products 4 7 6 - 243.77 2.14 123 8 Chemicals - Manufacture of plastic plates, sheets, tubes and profiles 10 3 5 - 51.72 3.07 27 4 Chemicals - Manufacture of plastic packaging goods 3 6 4 - 490.95 2.17 247 5 Chemicals - Manufacture of other plastic products 1 2 1 - 738.16 4.39 371 1 Construction 4,465 Construction - Development of building projects 5 3 4 4 500.47 5,624.00 4.42 500 5 Construction - Construction of civil engineering, transport infrastructure and utility projects 3 9 2 6 678.17 23.98 16.88 24 6 Construction - Construction of non-residential buildings for the public sector 6 4 7 8 396.76 3,268.21 1.65 397 8 Construction - Construction of commercial buildings 4 6 3 5 661.99 1,128.99 4.03 662 4 Construction - Construction of industrial buildings 9 8 8 10 81.75 485.33 0.49 82 9 Construction - Construction of residential buildings for the public sector 8 7 3 7 231.66 1,080.46 3.73 232 10 Construction - Construction of residential buildings for the private sector 2 2 2 2 1,420.24 16,636.70 5.80 1,420 1 Construction - Demolition, site preparation, test drilling and boring 10 10 5 9 65.42 4.54 0.52 5 7 Construction - Installation of building services, plastering, joinery, electrician etc. 1 1 1 1 1,568.83 49,171.46 34.00 1,569 4 Construction - Other specialised construction activities 7 5 1 3 313.91 1,364.50 2.14 314 4 Metal 1,507 Manufacture of basic iron and steel and of ferro-alloys 1 7 3 - 1,771.89 1.92 887 8 Manufacture of tubes, pipes, hollow profiles and related fittings, of steel 5 10 10 - 95.19 0.97 48 10 Cold drawing or forming of bar, strip or wire 9 13 12 - 21.94 0.42 11 15 Precious metals production 12 14 14 - 4.59 0.41 3 16 Aluminium production 15 12 13 - 1.45 0.47 1 12 Copper, lead, zinc, and tin production 13 15 15 - 3.66 0.26 2 14 Other non-ferrous metal production 16 16 16 - 1.21 - 1 8 Casting 11 11 11 - 14.55 0.91 8 13 Manufacture of metal structures and equipment 10 4 7 - 17.60 9.74 14 4 Forging, pressing, stamping and roll-forming of metal; powder metallurgy 3 9 8 - 233.02 1.57 117 11 Treatment and coating of metals 8 8 9 - 38.59 1.75 20 9 Machining 7 5 5 - 55.97 7.97 32 5 Manufacture of products from metal 14 2 7 - 1.88 25.66 14 1 Manufacture of motor vehicles 2 1 1 - 889.27 29.02 459 3 Building of ships and floating structures 4 6 4 - 182.52 3.33 93 6 Manufacture of vehicles and transport equipment 6 3 2 - 60.02 12.33 36 2

92 27/04/2018

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