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1 Worldbank Flickr Roadmap for Scaling Up Resource Efficiency in Israel 1

2 Roadmap for Scaling Up Resource Efficiency in Israel Author: Adi Dishon, Managing Director, Weitz Center for Sustainable Development SwitchMed Programme is implemented by United Nations Industrial Development Organisation (UNIDO), United Nations Environment Programme Mediterranean Action Plan (UN Environment/MAP), Regional Activity Centre for Sustainable Consumption and Production (SCP/RAC) and the UN Environment s Division of Technology, Industry and Economics (DTIE). SwitchMed is funded by the European Union 2

3 Roadmap for Scaling Up Resource Efficiency in Israel Author: Adi Dishon, Managing Director, Weitz Center for Sustainable Development Introduction The objective of this document is to provide a brief description of a roadmap for the scaling up of Resource Efficient and Cleaner Production (RECP) in Israeli Industry based on experience from the MED TEST II project. It is based on the commitment and active participation of the following major stakeholders: Government: Ministry of Economy, MoEP, Ministry of Energy, Treasury. NGOs: Manufacturers association, Weitz Center. Private sector: Industries, Green Target, Sher Consulting and Training. The roadmap was prepared by a round of bilateral consultations with the different stakeholders between November 2016 and April Abbreviations: BAT Best Available Technique RECP Resource Efficient and Cleaner Production CP Cleaner Production (This refers to manufacturing procedures that prioritize reduction of losses and pollution at source or source solutions rather than end of pipe solutions) EC European Commission EE Energy Efficiency FP SwitchMed Focal Point IPCC Intergovernmental Panel on Climate Change MoE Ministry of Economy MoEnergy Ministry of Energy MoEP Ministry of Environmental Protection OECD Organization for Economic Co-operation and Development SME Small and medium-sized enterprises TEST Transfer of Environmentally Sound Technology 3

4 I. Starting situation The awareness of RECP has been present within the professional levels of the Israeli government for quite some time. The first CP center was established in A comprehensive process of Green Growth round tables was conducted which led to the development of the National Green Growth Plan In this plan the importance of RECP was already identified. However this plan did not materialize and was not implemented due to lack of budget. The lack of budget resulted mainly from the lack of commitment by the highest levels of government. Two twinning programs between Israel and Germany have focused on the issue of Resource Efficiency. The recent program of could be considered as an important milestone at the policy level as clear objectives and tools have been provided to the MoEP. The TEST approach implemented in Israeli companies within the SwitchMed Programme became a real turning point providing very encouraging cases and experience with RECP and its actual benefits. The results show that there is a lack of awareness about potential for financial savings and economically profitable environmental improvements through RECP within the industry. Flows of natural resources are poorly managed (if at all) leading to significant unnecessary losses of raw materials, water and energy. Some losses such as packaging losses are not managed at all. The main barrier for implementation by the plants prior to the project was lack of knowhow and the need for technical assistance. In addition, the current regulations are end of pipe oriented. Currently, of the 3 billion NIS invested annually by the manufacturing industry to adhere to regulatory requirements, 87% are deferred to end of pipe solutions. This is one of the highest percentages compared with statistics established by the OECD. The average within the OECD is 62%. In the SCP Action Plan for Israel which was developed under the SwitchMed policy component, the action relevant for RECP in the manufacturing industry is the establishment of a RECP knowledge center. Overview of instruments suggested for further investigation within the TEST Policy Module: 1. Active Platform for Resource Efficiency A key insight from the mapping process was that there is currently no active platform for the manufacturing sector in Israel for promotion of RECP. Such a platform could support manufacturers of all sizes (small, medium and large) looking to improve their environmental performance through economically sound measures. As indicated in the first Twinning Project ( ) outcomes, as well as the SCP Action Plan, there is great potential and a need for the creation of a platform offering specific guidance and support for manufacturers in Israel on implementation of RECP. 2. The National Emission Reduction and Energy Efficiency Plan - One of the two tracks, the NIS 500 million for state loan guarantees for companies and entities that want to invest in energy efficiency track under the implementation plan, presents an opportunity for broadening the scope and development of incentives also for broader concept of RECP. 4

5 II. Vision and its leverage points The vision for resource efficiency is a widespread implementation of RECP in the Israeli Manufacturing Industry. The goal is to put in place a closed loop of addressing all aspects of RECP. Providing support for satisfaction of all related industry needs on the one hand, and on the other hand putting the incentives for action in place through regulation and financial incentives. The recent development by which the government has allocated 50 million NIS for the establishment of a RECP Center for Sustainable Industry has addressed the major issue of lack of commitment and the shift in mindset. This is due to a culmination of events. The outcomes of the UNIDO MED TEST II program and the scaling up efforts played a pivotal role in this shift. The establishment of the RECP Center is the major leverage point for achieving the vision, as there will be one body in Israel with the sole mandate of promoting RECP in Israel. 5

6 Matrix of ideas for scaling up resource efficiency The purpose of this matrix section is to summarize all major ideas identified before discussion on the Roadmap for Scaling Up (for example within policy study or session at SwitchMed Connect 2016) as well as those which were newly developed within discussion of stakeholders. This discussion led to the development of the Roadmap which is described in Section IV. Ideas for scaling up are presented in a structure suggested within the Green Paper on the Scaling-Up of MED TEST II Activities and enabling discussion on leverage points within the whole system influencing an uptake of RECP. Table 1 Summary of approaches for scaling up identified prior to development of the Roadmap for Scaling Up Desired output Institutional Activities LEVEL support Top down perspective MINDSET And commitment most important in Israel now POLICY Adoption of integrated approach environmental improvements and competitiveness go side by side. RECP is the win-win strategy to overcome those two seemingly conflicting challenges. Integrated approach to industrial environmental management Life cycle approach National RECP committee comprising ministries (FPs, MoEnergy etc.), representatives of industry and academia Government / ministries Tax Authority Establishing national RECP committee Changing mindset of policy makers and industry through demonstration and awareness raising (cooperate with UNIDO on RECP marketing materials & tools) Expand definition from Energy Efficiency to Resource Efficiency Following roundtable in May EC could support follow up involve a recognised international body a) EU Delegation in Israel asking Israeli government to support follow up. b) Another option could be OECD. Commitment of government to introduce IPPC regulation (under negotiation) Policy instrument(s) for SMEs Activities Bottom up perspective Present TEST results Use results of TEST demonstrations and compare them with situation if traditional approach of endorsing Emission Limit Values is applied (without prior systematic introduction of resource efficiency approach) Commit other ministries. Utilise roundtable in May (to gain participation at the level of Directors General) Lobbying 6

7 Financial institutions (banks, environmental fund) MoEP adopts MED-TEST methodology as standard for RECP BAT start with business licences plant should submit RECP Plan and keep it vague. TEST could provide basis for template. Ministry could come with some standard TEST methodology could be used and provide link. Enable Grace Period for implementing source solutions. Establishing financial mechanism(s) a) for Investment needing measures b) for provision of technical assistance New rules for tax authority promoting RECP (Tax Agency could provide some incentives to proactive companies) MANAGEMENT New programs : Follow up of TEST for companies RECP Center for Sustainable Industry Israeli government is considering launching a follow up TEST project financed by MoE Raising funds for follow up RECP program with support of Ministry of Finance New feedback loops: Green labelling RECP loans Tax refunds Bank(s) Establishing a data source centre(s): Introducing statistics on Key Performance Indicators (KPIs) Exchange of information on Best Available Techniques (BAT) Program on building capacities for technical assistance to supporting tools Voluntary reporting on selected KPIs Rules and institutional support for 7

8 labelling OPERATION Resource efficiency implemented within industry Government (BAT offices, inspection), Industry Service providers Other stakeholders at operational level Support development of new capacities Amend TEST methodology for commercial use (simplification, shortening implementation period and resource intensity) Implementation of follow up TEST program and related capacity building 8

9 III. Roadmap for Scaling Up Table 2 Overview of the Roadmap Activity Ownership Implementation Period Budget Output MoEP, MoE MANAGEMENT and Treasury POLICY ACCESS TO FINANCE Expand EE to RECP Implementing agency to be selected through bidding MoEP & MoE MoEP & MoE 2018 Existing funds MoEP, MoET MoE MoEP, MoEnergy and Treasury Investment Authority, Innovation Authority Million Coordination and promotion of RECP through Knowledge Centre Million from National GHG guarantees Legislative incentives for RECP such as a Grace Period for compliance Financial mechanisms for implementation of RECP Financial mechanisms for implementation of RECP Goal: Put in place a closed loop to address all aspects of RECP implementation in the manufacturing industry in Israel (see Figure 1 below) MANAGEMENT: The first activity is to address the lack of knowhow by establishing a RECP Center for Sustainable Industry. The budget for the RECP Center has been allocated and shall originate from several ministries (Economy, Environmental Protection, Treasury). The intergovernmental team working on establishing the RECP Center should serve as the national RECP committee. The timeframe for this activity is planned for early 2018 for publishing the tender for the operation of the RECP Center. The RECP Center is planned to operate for 5 years from mid Planned budget: 50 million NIS / 12 Million. Ownership: MoE, MoEP, Treasury. The RECP Center shall: 1. Provide partly subsidized advisory services to the plants, based on the TEST methodology. A commercialized abridged version of the methodology should be developed on the operation level. 2. Provide trainings on RECP and TEST methodology to local service providers, engineering students and industry. 9

10 3. Maintain a roster of experts on RECP issues and specific industry sector experts, from Israel and abroad. 4. Maintain constantly updated data on BAT, industry sector key performance indicators and benchmarks. Publish this data. 5. Raise awareness regarding the potential for RECP for industry. 6. Serve as the national focal point for RECP and intergovernmental coordinator addressing barriers and exploring opportunities for promotion of RECP. Performance indicator: Economic savings achieved & percentage of reduction in pollution (Energy, Waste, Waste water etc.) POLICY On the policy level and as a supportive measure the relevant regulation needs to be adopted. Plants who have conducted an RECP assessment via the RECP Center and wishing to implement RECP measures leading to reduction of pollution at the source vs. end of pipe solutions shall receive a grace period for implementation and compliance by the MoEP. The MoEP needs to be oriented towards RECP and reduction at source solutions, encourage and enable plants to adopt source solutions vs. end of pipe. This practice needs to be standardized, equal and transparent in all regions of the MoEP. This has started to be implemented, but not in a systematic and uniform manner. It should be widely implemented by end of Performance Indicator: Number of plants that have approached the MoEP to implement solutions of pollution prevention rather than end of pipe and have been granted a "grace period". ACCESS TO FINANCE The third area of activities is to provide the industry with access to finance for RECP solutions. The immediate opportunity for this is within the framework of the national plan for GHG reduction, and the provision of government backed guarantees. Within this program, the criteria for the government backed loans should be expanded to include not only energy efficiency but also RECP investments. This program is developed by an intergovernmental team in the MoEP, MoEnergy and Treasury. It should be operational by mid Total budget: 120 Million. Performance Indicator: Percentage of guarantees loaned for investments in RECP. The next step is to engage the current governmental financing schemes to provide finance opportunities for the industry for RECP investments such as the National Investment Authority and National Innovation Authority of the MoE. This shall be looked into by the RECP Center, which should provide recommendations on how this should be done, based on a needs assessment of the industry. This shall be studied by the end of 2018, to be implemented by mid Ownership: the MoE, assisted by the RECP Center. 10

11 Performance Indicator: Capital invested in RE and economic and environmental benefits from pollution prevention at the source. Figure 1 IV. Conclusions The above roadmap addresses all aspects of streamlining resource efficiency in Israel. As such it forms a closed loop, offering a full range of solutions to respond to the needs of industries, from technical assistance to financing opportunities, and aligned with the incentives from the regulation. Within two years (by mid-2019) and the establishment of the financing mechanism, a closed loop for streamlining RECP should be in place. Within four years (and towards the end of the five year budget for the RECP Center), a survey quantifying the results and the level of implementation of RECP in Israel should be conducted. Should the results be positive, this shall serve as the justification for renewing the budget for the continuation of the RECP Center. 11

12 UNIDO UNIDO supports the development of green industry and sustainable production in the southern Mediterranean by partnering with the manufacturing sector on the implementation of its TEST (Transfer of Environmentally Sound Technologies) methodology, in the context of the SwitchMed Programme. TEST is a comprehensive approach that both presents the business case of resource efficiency to industries, and helps service providers increase their capacity to deliver sustainable production services matching the industry needs. It addresses the challenges and barriers industries are facing in becoming more resource and energy efficient, and less-polluting. The methodology also stimulates the manufacturing of products that are responsibly managed throughout their life cycle, and increases the productivity and competitiveness of the companies with a higher chance of access to international markets with good quality products and compliance with environmental standards. For industries, TEST is key in taking a step towards a circular economy and to improve patterns of Sustainable Consumption and Production. For further information about progress on the implementation of TEST in the participating countries of SwitchMed please visit: 12

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