The Environment in Tetra Pak s Value Chain Corporate Environmental Report 1999

Transcription

1 The Environment in Tetra Pak s Value Chain Corporate Environmental Report 1999

2 Contents Contents CEO Statement 3 1. Tetra Pak and the environment 4 The environment in Tetra Pak s value chain 6 Tetra Pak s value chain map 7 Our goals 10 Broader business context Product design: for customers and the environment 12 The life cycle approach 13 Which package is the best? Raw materials and the supply chain 15 Packaging materials 16 Machines and equipment Tetra Pak operations 19 Corporate performance Carton packaging performance Plastic packaging performance Machine and equipment performance Support services performance Market companies performance Transport 32 Environmental impact of transport Customers, retailers, consumers and the community 35 Plant optimisation 36 WinBack 37 Recovering full packages Waste management 38 Integrated waste management 39 Recycling 39 Recycling technologies for cartons 40 Recycling technologies for plastic bottles 42 Energy recovery and landfill Appendices 43 Tetra Pak s environmental policy 44 Tetra Pak s environmental organisation 45 Code of Business Conduct 46 Policy on our working environment 46 Tetra Pak sites certified to ISO and/or EMAS 47 ERM commentary 48 Feedback and order form 49

3 I am pleased to present Tetra Pak's first corporate environmental report. It is dedicated to those who are closest to our achievements: our employees and our customers. This report shows how in our company, throughout our value chain, management concerns are linked to the optimal use of resources. In this way, we aim to bring together business growth and environmental performance, creating further value for our products. A number of issues still needs to be resolved and a number of choices remain to be made, while we work with continuous environmental improvement and commitment. Tetra Pak's mission is to contribute together with our customers and suppliers to the safe, efficient and environmentally sound production and distribution of liquid foods to the consumers of the world. This is our contribution to sustainable development and I expect all employees to actively pursue and support this mission. Gunnar Brock President and CEO Tetra Pak Group 3

4 Tetra Pak and the environment Life cycle thinking lies at the heart of Tetra Pak's approach to the environment, from raw materials to waste management. In this report we describe how Tetra Pak manages environmental impacts throughout the life cycle of its products in our own operations and in relationships with suppliers, customers and the communities we serve. JUICE MI JUICE ORANGE

5 1 Tetra Pak and the environment Our packages have one simple purpose, to carry food and drink safely and efficiently from where they were made to where they will be consumed. Last year the world consumed some 52 billion litres of liquid food and drink, including milk and fruit juice, from 86 billion Tetra Pak packages. Packaging means food is less likely to spoil, to be damaged in transit or to be contaminated. So ultimately, good packaging helps save resources. Tetra Pak, however, is more than a packaging supplier. We provide complete systems for processing, packaging and distributing liquid food, from cartons and plastic bottles to the machines that fill them on our customers premises. At Tetra Pak we work with our suppliers and with our customers, the companies that make and pack the food and drink, to try to improve environmental performance throughout the life cycle of our products. This life cycle thinking lies at the heart of Tetra Pak's approach to the environment. In this, our first corporate environmental report, we use the life cycle framework or value chain to help describe how Tetra Pak manages environmental impacts in its own operations and in its relationships with suppliers, customers, consumers and the communities we serve. Tetra Pak makes complete processing and packaging systems including processing equipment (top left), carton packaging machines (middle left), plastic packaging machines (middle right), distribution equipment (top right) and a range of packages (bottom left to right: Tetra Classic, Tetra Wedge, Tetra Rex, Tetra Prisma, Tetra Brik, Tetra Fino, Tetra Top, PET bottles and HDPE bottles). 5

6 Tetra Pak and the environment 1 The environment in Tetra Pak s value chain Life cycle thinking runs throughout Tetra Pak's approach to environmental management, from how we design our products and source raw materials to how we manufacture packages and work with customers and the community. Our company s overall environmental performance depends on actions taken at every stage of the life cycle, and the map overleaf shows how this fits together. The key in the bottom left hand corner will help guide you to more detailed information on how we are tackling each section of the value chain. We also use the relative global warming potential of the different steps, shown by the thermometers on the map, to help illustrate our approach to setting priorities within the life cycle. The map shows, first of all, that food production can have a significant impact on climate change. This means that we must be doubly careful to make sure that our packages and the equipment that fills them do not waste food, and therefore the resources used to produce it. In Product design: for customers and the environment (chapter 2) we describe Tetra Pak s approach to designing efficient packages and machinery. Second to food production, the highest impact comes from the production of raw material for the package. This is why we place strong emphasis on development of packaging material and encouraging suppliers to improve their performance. Raw materials and the supply chain (chapter 3) explains how we manage this relationship. Packaging material production is of course a key focus area for Tetra Pak, and where we have the greatest possibilities to exert influence. In Tetra Pak operations (chapter 4) we set out performance data for 1999 and explain how we approach environmental management for our carton and plastic packaging factories. The impact of machine and equipment production at the sites where we make processing and packaging machinery and non-production sites is less significant, but still important to us. higher. Our management programmes are described in Transport (chapter 5). What happens to our products when they have left the factory is also important, as Customers, retailers, consumers and the community (chapter 6) explains. Through schemes such as Tetra PlantOpt and WinBack, we work closely with our customers to help them optimise environmental and economic performance. The final link in the chain is waste management. The global warming contribution from waste management is largely dependent on the amount of methane gas released if and when packages degrade in landfills. Recycling and energy recovery of packaging material can prevent these emissions. Our approach is explained in Waste management (chapter 7). Global warming and climate change Scientists now largely agree that emissions of greenhouse gases from human activity (for example emissions of carbon dioxide and methane from energy production, transportation and agriculture) may cause significant changes in temperature, sea levels and weather patterns, and change the climate which supports us. The contribution to climate change throughout our value chain was assessed by calculating the release of greenhouse gases at each stage using data from our own operations, life cycle assessments and commonly agreed conversion factors for different fuels and electricity production. The emitted greenhouse gases were thereafter weighted into an index for global warming potential using internationally accepted guidelines. The thermometers on the map show the relative global warming potential for each stage in our value chain. Assessments like this are always affected by uncertainties due to approximations and the difficulty of getting appropriate data. Nevertheless, we believe that they help us in our pursuit towards a more holistic approach to environmental management and understanding of the environmental aspects of our products. Goods coming to and leaving Tetra Pak factories do so in a variety of vehicles, many of which are not under our direct control, making overall environmental impacts difficult to assess. However, the impact of transport is probably comparable to those from our own converting operations and perhaps 6

7 Raw material and the supply chain (chapter 3) Tetra Pak operations (chapter 4) Transport (chapter 5) Food production Customers, retailers, consumers and the community (chapter 6) Waste management (chapter 7) Global warming potential

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10 Tetra Pak and the environment 1 Our goals Environment is a key concern for Tetra Pak. We are proud of what we have achieved, both in our own activities and along the supply chain but we also realise that a lot more is to be done. This corporate environmental report is a significant step towards a more structured and consistent global approach to improving environmental performance throughout the company. Our first priority was to establish the baseline, where we are, at the corporate level and to build a broad consensus within the organisation of the way forward. This report summarises the results of the work done to establish the baseline environmental performance and reflects the outcome of our strategy development work, which involved people from all functions and levels within the organisation. We are integrating environmental considerations into the day-to-day management of our businesses and looking to raise performance levels across the company. Our Environmental Council, the decision making body for environmental issues in Tetra Pak, has set the following goals for 2000: Operations All manufacturing sites will be certified under ISO (the international standard for environment management systems). Carton converting operations will achieve a reduction of 12% in the raw material waste rate relative to Carton converting plants with more than 15% of waste being landfilled will set a reduction target for Manufacturing plants and market companies will set energy reduction targets for We will ensure compliance of all sites with Tetra Pak policy on Ozone depleting substances. Ten specified solvents will be phased out or replaced with more benign alternatives in carton converting plants. Phaseout plans will be established for plants where technological constraints exist. Development The Design for Environment approach will be integrated into the project management elements of the innovation process the process that guides our product development. The Design for Environment standard for machines and equipment (The Eco Machine Handbook) will be implemented in five development projects. Suppliers All Divisions major suppliers will be formally encouraged to implement and maintain environmental management systems and thereby to continuously reduce the environmental impact of their operations. Customers A list of best practices will be issued to be used as a guide to include environment in customer satisfaction programs, to assist customers in integrating environment into their business. Market companies will encourage our customers to implement certified environmental management systems. Integration of business & environment Environment will be integrated into the management systems and business plans of all market companies and business units, and will be part of all Business Review meetings. A presentation of Tetra Pak s environmental policy will be made to each new employee and we will reinforce this by relaunching the environment site on our company Intranet (ORBIS). The Environmental Council will continue to set goals and targets based on a thorough consideration of the environmental aspects of the organisation and with the aim of being a leader in our industry. Broader business context Sound environmental performance is one part of a broader set of obligations or 'corporate responsibilities' which Tetra Pak is addressing throughout its business. These important issues are described briefly below, with more detailed information on our policies and activities available in the appendix to this report. Code of Business Conduct Our first priority is to be a sustainable, profitable business. This means investing for growth, and balancing short and long-term interests by caring about our customers, employees, suppliers and the communities in which we conduct our operations. In the course of meeting our business objectives, it is essential that all employees understand, comply with and share the values of Tetra Pak. Our Code of Business Conduct applies to Tetra Pak companies all 10

11 1 Tetra Pak and the environment over the world. You can find a copy of this code at the end of this report. Managers will not be criticised for any loss of business resulting from adherence to these principles. Equally, no employee will suffer as a consequence of bringing a breach, or suspected breach, of these principles to the attention of management. The Tetra Pak People Idea The People Idea in Tetra Pak is that the value of people's commitment and competence shall exceed their costs, and that the value to the employee of working for Tetra Pak shall exceed the investment she/he makes in the company. It works both ways. The People Idea, together with the Core Values, constitutes the code of conduct for the people in Tetra Pak. Our five Core Values Freedom with accountability Partnership with customers, suppliers and colleagues Long-term perspective Innovation and creativity Commitment and fun. Health and safety Each company within Tetra Pak is responsible for ensuring safe working conditions for our employees and that we comply with local legal requirements. In 1999, we introduced accidents as a management key performance indicator (KPI) for our carton packaging material plants. We are currently developing a company-wide approach to health and safety. The policy on our working environment can be found on page 46. Reporting approach Throughout our business we are focusing on the main environmental issues for Tetra Pak and these are reflected in this report. We have concentrated on reporting our environmental performance in a manner that we believe will make most sense and use to our immediate stakeholders. We have closely followed the development of measures and reporting guidelines within the Global Reporting Initiative (GRI), the United Nations backed programme, and those of the World Business Council for Sustainable Development. Although we have chosen not to be a pilot company, we believe that this report covers many of the key areas of the guidelines. Packaging machines in operation: 8,210 Packaging machines delivered in 1999: 513 Processing units in operation: 13,500 Processing units delivered in 1999: 1,250 Distribution equipment in operation: 10,461 Distribution equipment delivered in 1999: 893 Number of markets: more than 165 Number of employees: 18,400 Number of litres of products delivered in Tetra Pak packages in 1999 (billion): 52* Number of Tetra Pak packages delivered in 1999 (billion): 86 Sales in 1999 in billion Euro: 6.8 * Including cartons, PET bottles and HDPE bottles. (Figures as of January 2000) Market companies Factories for packages and packaging material Management office Regional head offices 11

12 Product design: for customers and the environment The environment is an important consideration when we design new packages and machines. We aim to optimise our environmental performance without compromising our customers needs for safe, functional and cost-effective packages. JUICE MI JUICE ORANGE

13 2 Product design: for the customer and the environment When we design a new product, we take on board a number of issues. Environmental performance is considered together with issues such as food safety, technical performance, consumer demands or economic benefits. The concept of integrated environmental assessment in product development is often called Design for the Environment (DfE). In practice, DfE means applying life cycle thinking so that the environmental aspects throughout the life cycle can be identified, evaluated and optimised. Beginning this analysis and assessment early in the design process allows greater scope for achieving improvements and reduces the risk of having to make costly changes at a later stage. In the course of a development project a number of toll gates have to be passed. Safety, functional, economic and environmental performance are evaluated against defined criteria and targets. It is then decided whether or not the project can move onto the next phase of development, and which problems need to be solved. The continual drive to be able to do more with less (and for less!) pushes us to reduce material and energy intensity of goods and services. Different aspects of, and approaches to, this driver may be given different names, such as source reduction and eco- The life cycle approach At Tetra Pak we try to think in terms of stewardship across the whole life cycle, and to use the concepts and tools of life cycle assessment. We regard Life Cycle Assessment (LCA) as a useful tool to support our efforts to reduce the potential environmental impact of our products and processes. We use LCA as a consistent framework for both operational and communication purposes, to: Identify opportunities to improve environmental performance. Design better products and processes. Develop environmental performance indicators and to assess suppliers. Communicate the environmental profile of our products. We acknowledge that LCAs inevitably involve subjective judgements as well as simplifications and that they may yield results that are conflicting and not easily comparable. The report Investigating the Life-Cycle Environmental Profile of Liquid Food Packaging Systems summarises two Tetra Pak LCA case studies (order form at the end of this report). Identify significant environmental aspects Set environmental objectives Identify Environmental profile Environmental requirements Verify Validate Environmental information available Waste management solutions Ideas generation Development Launch The environment is carefully considered at every step of research and development to ensure that all environmental aspects are addressed and all improvement areas identified throughout the life cycle. This includes, in each step, use of resources, use or emissions of harmful substances, recovery options and recyclability of new packages, as well as consumers' environmental perception. 13

14 Product design: for the customer and the environment 2 Which package is the best? Last year our Life Cycle Assessment (LCA) specialists looked at 22 studies published between 1990 and 1999 that compared different types of packaging. In particular they wanted to compare the environmental impact of a refillable package (such as a glass bottle that can be used several times in its life) with that of a single-use package (such as a carton which is recycled, recovered through energy recovery or disposed of after a single use). Seventeen of these detailed studies showed no clear environmental advantage of one packaging system over another, explains Andreas Barkman, environmental specialist in the Carton Packaging Division. The remaining studies showed results in favour of either the single-use packages or the refillable bottles. This supports the conclusion that there is no one universally superior package. That s one of the reasons Tetra Pak focuses on improving the performance of each one of its packaging systems. efficiency, but the intention and direction remain the same. We are sensitive also to ever increasing concerns related to the use of scarce substances and emissions of hazardous ones, and continually aware of our obligations under various legislative requirements. Developments that have helped reduce the environmental impact of our packages and packaging systems at various stages in the life cycle include: Partnership with aluminium suppliers to produce aseptic packages with the same high food protection capability but with less aluminium. Partnership with plastic suppliers to cut air emissions from the packaging material production process at Tetra Pak. A new lighter and cheaper packaging format aimed at making aseptic packaging and protection of liquid food (particularly milk) more readily available in less accessible parts of the world. We have used the design for the environment concept for many years, with most focus on new developments of packages and packaging materials. Now we are making an effort to strengthen this approach for machines and equipment. During 1999 we developed an Eco Machine Handbook, which sets out a series of tools for managing environmentally conscious development, operation and maintenance of packaging and processing equipment. Now equipment designers and technicians the people who help refine customers production lines have a more consistent framework to optimise use of resources, avoid use of harmful substances and plan for recovery of used equipment. Our LCAs show that most of the environmental impact related to filling machines and processing equipment arises from loss of product, packaging material waste and energy use when liquid food is processed and filled into packages at our customers sites. Reducing wastage of food and packaging is an important environmental objective and it saves money for our customers too! For example, our dairy processing lines feature integrated cleaning systems to regularly flush out the pipes. The cleaning results in the release of milk and water which must then be treated and disposed of a waste problem in its own right. So we carefully design our cleaning equipment to make sure it produces as little waste as possible, reducing the waste problem and saving our customer s precious product. For more information on our activities to improve performance at our customer sites, see Customers, retailers, consumers and the community (chapter 6). 14

15 Raw materials and the supply chain The way our suppliers manage the environment can have a significant bearing on the impact of our own products. That's why Tetra Pak works closely with suppliers throughout its business.

16 Raw materials and the supply chain 3 QUICK FACT Ten of our 29 main raw material suppliers have now been certified to ISO 14001, the international standard for environmental management systems. Like many other companies, Tetra Pak is serious about its responsibilities and works to encourage improved environmental performance from our suppliers. Packaging materials Raw material supply policy Environment is an important element of Tetra Pak s Raw Material Supply Policy, alongside other key business issues such as quality, service, or supply security. We aim to build strong, long-term relations with our main suppliers who we want to be committed to our business. We expect our board, plastic, aluminium and ink suppliers to: Maintain effective environmental management systems and continuously reduce the environmental impact of their operations. Work co-operatively with us to continually improve the environmental impact of our product portfolio over its entire life cycle and to respond to related societal demands and aspirations. And in addition board suppliers must: Demonstrate that they are practicing sound forest management and striving to fulfil the principles of sustainable forest management. Tetra Pak also puts additional specific requirements on their suppliers, for instance by not allowing ink pigments containing toxic heavy metals, to ensure that our packages do not present any unacceptable risks to human health or the environment. Supplier evaluation Tetra Pak has developed a comprehensive evaluation system for its main board, plastic and aluminium suppliers. Suppliers are evaluated by the respective factories and our central quality, environmental and purchasing departments. Each one of these functions assigns points to suppliers against key criteria (for example product quality, service, etc) and the environmental profile criteria account for 5-7% of the total marks. The supplier rating aims to encourage continuous supplier improvement and is also taken into consideration in the annual negotiations defining volume and price. ISO certification for main raw material suppliers (%) Aluminium Plastic Paperboard

17 3 Raw materials and the supply chain Sustainable forest management Tetra Pak encourages paperboard suppliers to apply environmentally and socially sound forestry practices in their own forests as well as when they buy wood and pulp from other companies. Suppliers are increasingly adopting performance standards for sustainable forest management, such as those of the Forest Stewardship Council (FSC), Sustainable Forestry Initiative (SFI) and Pan-European Forest Certification scheme (PEFC). We believe that third party certification enhances credibility, and we therefore give a better score for third party certification than for internally-certified systems in our supplier evaluation system. Bleaching We also pay attention to potentially harmful chemicals that may be released from suppliers operations or contaminate the packaging material. One example is the organo-chlorine compounds, which are linked to the bleaching of pulp for our paperboard. At present, more than 90% of the paperboard we use is ECF (Elemental Chlorine Free) or TCF (Total Chlorine Free). Ideally, all our board should be ECF or TCF, since these bleaching processes give significantly lower organo-chlorine emissions and minimise the risk of contamination. Our aim is that all main global suppliers deliver 100% ECF/TCF board by the end of Smaller local suppliers are required to state their plans for reducing emissions and becoming fully ECF/TCF. Paperboard deliveries to Tetra Pak are regularly tested for dioxins a group of compounds containing toxic organo-chlorines. The tests show that the dioxin levels are below 1 ng/kg (1 ppt), meeting the recommendations of the German Federal Health Office and well within the 2 ppt limit set by the U.S. Food and Drug Administration. Aluminium Tetra Pak aseptic cartons use aluminium to enable the product in the package to be stored for longer even at room temperature. Aseptic packaging has significantly improved the availability of safer food to many consumers in areas of the world lacking chilled distribution networks. The very thin aluminium layer (6-7 micrometers) in the package protects the product from light, oxygen and external odours. There are Aluminium foil plant goes for ISO The Pechiney site at Rugles, which supplies aluminium foil to Tetra Pak, recently got its environmental management system certified to ISO We are using the Tetra Pak supplier evaluation system as a powerful management tool. The introduction of the environment criteria in 1998 in the supplier evaluation system has speeded up the process of ISO certification says Anil Karnatak, key account manager at Rugles. The main steps so far have included defining targets and budgets, introducing a continuous improvement management system, and various more specific investments. For example, the new production line starting up in the first six months of 2000 has addressed environmental concerns from the very start with modern technology, including the Airpure system to recycle the oil vapour. The following targets have been adopted for , with 1999 as the base year: reduction of volatile organic compounds (VOCs) by 20% no more non-ultimate waste to landfill by 2002 fewer than 10 fire starts per year on Rugles rolling mills reduce energy consumption by 5% reduce water consumption by 10% train all employees in at least one action of the contingency plan. Pechiney Rugles is working with its customers to reduce environmental impacts through raw material source reduction (foil thickness reduction) for example. Rugles is also working with Tetra Pak on development of post-consumer waste sorting to enhance recycling. Tetra Pak s supplier evaluation is speeding up the environmental improvement programme at Pechiney s Rugles site in France. 17

18 Raw materials and the supply chain 3 Balancing environmental impacts Environmental improvements often entail trade-offs. One clear example of this is the so-called chemi-thermomechanical pulp (CTMP) technology for making paper pulp. This technology has been developed by some of our board suppliers with the aim of continuously reducing the amount of material that goes into our packaging, reducing environmental impacts and saving money. CTMP manufacturing requires up to 50% less wood compared to conventional chemical pulp. The board is much lighter and when used as one layer in the construction of packaging material for our beverage cartons it results in a final package that is up to 7% lighter than alternatives. However life cycle assessment results of board with and without CTMP does not always give a clear winner and loser. For example, wood consumption will decrease while electricity use on site increases, since the CTMP production is an energy-intensive process. Emissions also vary due to local conditions and characteristics of the manufacturing process. And because the CTMP fibres are different the end-use application of the recycled fibres is also different, see Waste management (chapter 7). Sustainable forestry in Brazil More than 90% of the wood which is used in the manufacture of Tetra Pak board in Brazil comes from certified forests owned and operated by Klabin. Long before certification procedures began to be adopted, Klabin had committed itself to sustainable development says Chief Executive Josmar Verillo. This commitment was demonstrated by the way Klabin planted its forests of pine and eucalyptus and preserved the native forests. two layers of polyethylene between the aluminium and the food product, preventing direct contact with the aluminium during storage. Machines and equipment Packaging machines At present, environment is part of the supplier assessment for our 12 specialist suppliers (for example those making moulded metal and plastic components). We are currently considering to also include it for the 150 or so suppliers of other packaging line components and machinery. Environment counts for 10% of our total evaluation of machine and equipment suppliers. Fulfilling all minimum requirements gains suppliers a Tetra Pak certificate. Not fulfilling all minimum requirements means that a company risks not being a supplier in the long term unless it can improve. None of our specialist suppliers are currently certified to ISO 14001, but six of them have now made a commitment to implement an appropriate environmental management system. Processing equipment During 1999 we wrote to 250 suppliers of processing equipment, asking them to complete a questionnaire on their environmental performance. We are now reviewing their replies and during 2000 we will provide feedback to the suppliers. Economic, environmental and social criteria are used to establish certification for Klabin s forest holdings in the State of Parana to strict Forest Stewardship Council (FSC) standards. Now the company is conducting a program to certify the custody chain, including the independent forest owners, who supply the mill. Wood from certified forests owned and operated by Klabin ends up as Tetra Pak board at the mill. 18

19 Tetra Pak operations Although the environmental impact of our own operations is moderate when viewed across the whole value chain this is our core focus area for improving environmental performance.

20 Tetra Pak operations 4 QUICK FACT Thirty-nine of Tetra Pak s 76 manufacturing sites around the world are now certified to ISO (at the end of 1999), the international standard for environmental management and/or EMAS, the European Union scheme was the first year that compatible performance data was collected from all our operations. It was collected from more than 120 Tetra Pak sites world-wide manufacturing facilities as well as research and development, market company offices and support companies. Although our business is organised in a matrix structure (see page 45), we have grouped our performance into functional areas. In this section we first present our performance at the corporate level, and then give a more detailed breakdown for packaging material production (cartons and plastic), machine and equipment production, support services and market companies. Corporate performance 1999 Below we present our aggregated baseline performance data for selected key parameters. Alongside the annual total for each parameter the table shows the figures per litre of liquid food delivered in our packages. This ratio is used to capture the concept of eco-efficiency. Eco-efficiency in industry means reducing resource use and pollution while maintaining or increasing the value provided. We believe that it is meaningful to relate performance to the value we provide, which is to help deliver food to consumers. The ratios are based on 52.4 billion litres of food delivered in our packages. Raw material consumption Raw materials include all materials used to produce our beverage cartons and plastic bottles but excludes materials used for production of processing equipment and filling machines. Paperboard is the main material as more than 95% of the food delivered in Tetra Pak packages is packaged in cartons. Plastics 24% Aluminium foil 4% tonnes g/litre food Paperboard 1,326, Plastics 438, Aluminium foil 67, total 1,832, Carton packaging material plants Paperboard 72% Plastic packaging material plants 0 500,000 1,000,000 1,500,000 2,000,000 (tonnes) 20

21 4 Tetra Pak operations Energy consumption Our carton converting plants account for 94% of our total energy consumption. Most of the energy is consumed as electricity from the public power grid. To encourage energy efficiency improvement we have a goal that manufacturing plants and market companies will set energy reduction targets for TJ kj/litre food Electricity 2, Fuels 1, total 3, Carton packaging material plants Plastic packaging material plants Fuel oil 3% Diesel 4% LPG* 9% District heating 2% Machine and equipment plants Support services Market companies ,000 1,500 2,000 2,500 3,000 (TJ) Natural gas 16% Electricity 66% *Liquefied petroleum gases Water consumption Fresh water is used for example in printing inks, machine testing as well as for cooling and sanitary purposes. Our carton converting plants account for more than 75% of our total water consumption 1000 m 3 litre/litre food water 1, Carton packaging material plants Plastic packaging material plants Machine and equipment plants Support services Market companies ,200 1,500 (1000 m 3 ) 21

22 Tetra Pak operations 4 Emissions of ozone depleting substances We use ozone depleting substances (ODS) such as CFCs, HCFCs and Halon in chillers, air conditioning systems and fire extinguishers. Emissions of these occur mainly through leakage from chillers, and we have estimated the emissions with the quantities used to refill the equipment. Almost all of the emissions of ODS takes place at our converting factories. Our goal is to ensure that all sites will comply with the Tetra Pak policy on ozone depleting substances in 2000 (see page 29). kg mg/litre food ODS (CFC-11 equivalent) 4, Carton packaging material plants HCFC 21% Plastic packaging material plants Machine and equipment plants Support services Market companies 0 1,000 2,000 3,000 4,000 5,000 (kg) Halons 23% CFC 56% Emissions of greenhouse gases The consumption of energy results in emissions of carbon dioxide (CO 2 ), directly through burning of fuels and indirectly through use of electricity. When calculating CO 2 emissions, we have accounted for the different energy sources used for electricity generation in the countries where our sites are located. District heating was excluded because CO 2 conversion factors are not generally available. In addition to CO 2 we have included the release of CFCs and HCFCs which are also greenhouse gases. tonnes g/litre food Greenhouse gases (CO 2 equivalent) 368, Carton packaging material plants CFC/HCFC 10% Plastic packaging material plants Fuels 18% Machine and equipment plants Support services Market companies 0 50, , , ,000 (tonnes) Electricity 72% 22

23 4 Tetra Pak operations EMS certification Our manufacturing sites around the world have put in place environmental management systems (EMS) such as those certified to ISO to help them achieve performance improvements on a continuing basis. In addition, one market company has been individually certified and three as part of factory certifications. Number of plants % of plants with ISO and/or EMAS Carton packaging material plants 34 68% Plastic packaging material plants 2 14% Machine and equipment plants 3 25% total 39 Carton packaging material plants Plastic packaging material plants 2 14 Machine and equipment plants Total number of plants Number of plants with ISO and/or EMAS Environmental incidents Reported to local site Reported to the local or management national authorities Carton packaging material plants 67 9 Machines and equipment plants 1 1 Support services 5 - total Compliance with local legislation Official notice of Fines or penalties Sites subject deficiency from to legal actions authorities 9 1* 0 (all in carton packaging (in carton packaging material plants) material plant) * 500 Euro due to incomplete official waste registration 23

24 Tetra Pak operations 4 Carton packaging performance 1999 To make Tetra Pak cartons requires four basic materials: board, aluminium (for our aseptic packages), plastics and ink. We call the process of combining these materials converting. Tetra Pak s converting factories use a special laminating technology to combine together layers of board, aluminium and plastic to form the structure of the carton. Each material adds a different property to the carton: board for strength and stiffness, aluminium as a barrier against oxygen, odours and light, plastic as a moisture barrier and as a glue. We also print our customers packaging designs on the cartons, either onto the board before it is laminated, or onto the plastic outer layer afterwards. Printing and inks Tetra Pak s carton converting factories use several printing technologies, such as flexography, rotogravure and offset. The printing is made either onto the board (most Tetra Brik packaging material) or the plastic (mainly Tetra Rex). There are several environmental aspects to consider when evaluating the environmental performance of printing operations, such as volatile organic compound (VOC) emissions (mainly from solvents in inks), material waste, energy use, noise and water consumption. Tetra Pak strives to always take these different aspects into account along with functional and cost aspects in the development and use of printing technologies. Many factors affect the requirements on print quality and appearance, for example, the type of food product packaged and consumer preferences in different countries. We realise that customer preference and demands on print quality will in turn have an influence on the environmental performance of our own printing operations. Environmental performance indicators Three years ago Tetra Pak s Carton Packaging Division began to gather and review progress against six environmental performance indicators (EPIs) from our carton converting factories around the world. These include electricity use, fuel consumption, fresh water consumption, VOC emissions, raw material waste and waste to landfill. In 1999, the scope of data collection was enlarged to include the use of ozone depleting substances and specific solvents. The data presented below cover all our 50 converting factories. Electricity, fuels, water and VOC Four of the EPIs are expressed as a ratio of absolute value and number of standard packages delivered. A standard package is a measure of the area of packaging material used to produce a one (1) litre Tetra Brik package (MSP = million standard packages). total EPI Electricity 1,981 TJ 33,554 MJ/MSP Fuels 897 TJ 15,201 MJ/MSP Water 1,278,000 m m 3 /MSP VOC 1,880 tonnes 31.9 kg/msp 24

25 4 Tetra Pak operations Raw material waste Our environmental goal is to reduce the raw material waste rate in our converting operations by 12% during This means that the target for 2000 is to have maximum 8.0% raw material waste. tonnes EPI Raw material waste 177, % Waste handling The EPI for waste to landfill from converting factories covers all non-hazardous waste produced, there is both waste of raw materials and other types of waste. To increase recovery of factory waste, we have set a goal that factories with more than 15% of waste being landfilled will set a reduction target for In 1999, ten factories had more than 15% of waste sent to landfill. Landfilled Incinerated with 6% energy recovery 6% tonnes EPI Waste to landfill 14, % Recycled 88% Ink challenge demands trade-offs In 1993, a new factory was built at Sunne in Sweden, to print Tetra Rex packaging material. Tetra Rex cartons are printed directly on the outer plastic surface, a process which to date has required the use of organic solvent based inks (for our Tetra Brik the printing is normally made on the paperboard with water-based inks). Sunne went for good environmental performance by using water-based inks thereby avoiding emissions of volatile organic compounds (VOC). However, according to Environment Officer Stefan Hallgren, the factory faced problems of inadequate adherence of ink to the surface. Ink was rubbed off the packages leading to claims from customers, he explains. Furthermore, production waste at Sunne increased. It turned out that both from a quality and environmental point of view overall that waterbased printing was not a sustainable solution. In 1993, Sunne converted to organic solvent based inks, and abatement equipment was installed to minimise VOC emissions. The equipment has reached an efficiency of 80-95%, but the targeted continual 95% emission reduction has not yet been met. The aim is to reach this level during Thomas Karlsson inspects printed packaging material at Tetra Pak's carton converting factory at Sunne in Sweden. The plant uses organic solvent based inks after trials with water-based inks, which did not always meet customers' printing quality requirements. 25

26 Tetra Pak operations 4 Emissions of ozone depleting substances We monitor the consumption of ozone depleting substances (ODS) in order to follow up the implementation of our ozone depleting substance policy. In year 2000 we will ensure that all sites will comply with Tetra Pak policy on ozone depleting substances (see page 29). kg ODS (CFC-11 equivalent) 4,242 Consumption of specific solvents We use specific solvents, for example halogenated and aromatic hydrocarbons, mainly in the printing plate production and for laboratory purposes. These solvents are not used as ink solvents. Our goal is to phase out or replace them with more benign alternatives. Phase out plans will be established for plants where technological constraints exist. tonnes Specific solvents 161 Pioneering environmental management Pakistan Tetra Pak s carton converting factory in Lahore achieved certification to ISO in January, 1999, one of the first companies in Pakistan to get the coveted international standard for environmental management systems. The factory has focused on waste, energy and noise, with action plans and targets to help drive a programme of continuous improvement, says Quality and Environmental Manager Abdul Hakim Chishti. Total waste has been cut from 10.5% in 1997 to 7.7% in The waste reduction programme has involved benchmarking, streamlining, motivation and rationalisation of production planning. Electricity meters have been installed for the major machinery groups (lamination, slitting, water chilling, factory and business unit light load, print press, straw section and stereo, air compression, air handling units). From January 2000 energy consumed by each group will be monitored. On noise a clear action plan, identifying responsible people and setting deadlines, has been developed to help bring down noise levels to 90 db. Monitoring and measurement every three months forms part of a programme which has already helped identify opportunities for improvement on the slitting, printing and lamination machinery. Yugoslavia Tetra Pak s converting factory in Yugoslavia was certified to ISO during the summer of 1999, a notable example of efforts to implement our Environmental Policy. The successful implementation of ISO was achieved in a record short time of only eight months compared to an average of 16 months, says Ankica Simovic, Quality and Environment Manager at the Gornji Milanovac factory. In addition, the Tetra Pak factory is the first site in Yugoslavia to be certified to ISO It was a great achievement considering a bleak post-war environment and boosted the morale of our staff, adds Ankica. Tetra Pak Gornji Milanovac based its environmental management system on the successful implementation of a quality management system (ISO 9002). 26

27 4 Tetra Pak operations Trends in absolute performance From 1998 to 1999 our absolute environmental performance improved in four areas and got worse in two areas total electricity consumption and raw material waste. Overall, our energy consumption (electricity and fuels) was largely stable despite increased production and we will be looking to all plants to set energy reduction targets for The largest improvements was the significant decrease of waste sent to landfill, which was mainly due to improvement at the plant in Denton, USA Electricity (TJ) 1,920 1,981 Fuels (TJ) 1, Water (1,000 m 3 ) 1,316 1,278 VOC (tonnes) 1,977 1,880 Raw material waste (tonnes) 171, ,097 Waste to landfill (tonnes) 18,307 14,133 Electricity Fuels Water VOC Raw material waste Waste to landfill Change 1999 vs 1998 (%) Trends in relative performance From 1998 to 1999 our relative environmental performance per million standard packages improved or remained constant except for electricity consumption. However, the total amount of energy (electricity and fuels) consumed to make each package was stable. The relative performance is consistent with the absolute performance except for waste of raw material, which remains constant in relative terms Electricity (MJ/MSP) 32,746 33,554 Fuels (MJ/MSP) 17,356 15,201 Water (m 3 /MSP) VOC (kg/msp) Raw material waste (%) Waste to landfill (%) Electricity Fuels Water VOC Raw material waste Waste to landfill Change 1999 vs 1998 (%) EMS implementation trend In 1995 our converting factory in Arganda, Spain, was certified to ISO 14001, the first in Tetra Pak. Since then there has been a steady increase in environmental management systems certification. (Number of sites) Sites certified to ISO and/or EMAS

28 Tetra Pak operations 4 Plastic packaging performance 1999 Tetra Pak s plastic bottles are made from one of two materials: Polyethylene terephtalate (PET) commonly used for carbonated soft drinks, water and beer and High Density Polyethylene (HDPE) used for milk. They are designed in different ways, according to the needs of our customers. Tetra Pak produces PET preforms by injection moulding. The PET bottles are then usually manufactured in stretchblow moulding machines at the customer site before filling and sealing. HDPE bottles are in most cases moulded at customers sites in socalled hole-through-the-wall plants before entering the filling line. Furthermore, we manufacture plastic straws and strips for sealing and closures. In 1999 Tetra Pak bought Novembal, a French manufacturer of plastic closures. We conducted thorough, third-party due diligence audits of Novembal s sites. The investigation highlighted some environmental management issues which we will follow up, and we plan to commission similar due diligence audits for all future acquisitions. The performance data presented here cover 13 sites including HDPE bottle, PET preform, strips and straw production plants (closure sites not covered). In addition to the aggregated performance measures, our Plastic Packaging Division piloted monthly reporting of five environmental performance indicators (EPIs) during 1999, at plants in Spain, Italy and Belgium and at our Trafford Park site in the U.K. Waste split saves money When Tetra Pak s Belgian plastic packaging factory began to look at how waste was being handled in 1998, as part of its programme to implement ISO 14001, the site s waste disposal bill was 1.6 million Belgian Francs. By November the cost had been cut to 900,000 Francs simply by putting the rubbish waste in different bins. Waste contractors charge more per tonne for dealing with some types of waste than others. When different sorts of waste are mixed, they charge the same price for all the waste. Now we split the waste stream into different components to ensure that we pay the right price to get rid of each sort of waste, explains Environmental Co-ordinator Katleen Lagaisse. These include: dangerous liquid waste (solvents and oils), dangerous waste (for example paint, oil filters, oily cleaning paper) and other waste (for example domestic, paper and cartons, waste resin). So while we still have to pay a high fee per tonne for mixed waste, the bulk of the waste (which is non-hazardous) can be charged at lower rates. 28

29 4 Tetra Pak operations Electricity, fuels, water and waste The performance is expressed both as the total amount as well as per tonne of used raw material. Electricity 23 TJ 311 MJ/tonnes material Fuels 117 TJ 1,613 MJ/tonnes material Water 26,000 m m 3 /tonnes material Process waste 3,514 tonnes 48.5 kg/tonnes material Ozone depleting substances We monitor the consumption of ozone depleting substances (ODS) in order to follow up the implementation of our ozone depleting substance policy. In year 2000 we will ensure that all sites will comply with Tetra Pak policy on ozone depleting substances. kg ODS (CFC-11 equivalent) 61 Ozone depleting substances Chlorofluorocarbons (CFC and HCFC), often called freons, are used as refrigerants in chillers and air-conditioning systems. These substances contribute to the reduction of ozone in the upper atmosphere. The ozone layer absorbs ultraviolet (UV) radiation, which in excessive quantities can be harmful to plants, animals and humans. In Tetra Pak, CFCs and HCFCs are mainly used in cooling systems in packaging material production plants and in airconditioning systems in buildings. We have drawn up an inventory covering all Tetra Pak sites to establish baseline performance. The inventory also covered Halons, gases that are used in fire extinguishers, and also contribute to ozone depletion. We have an action plan, which among other requirements, does not allow new installations of CFC or HCFC chillers. Our policy Each site is responsible for ensuring compliance with the Tetra Pak action plan and with national legislation. Where following the action plan would imply non-compliance with national regulations, the national regulations must be followed. Decisions relating to the substitution of refrigerant and/or cooling equipment must take into account financial, functional, and environmental and safety aspects. When old systems are scrapped, sites must ensure that the old refrigerant is collected and recycled or destroyed, and that losses are minimised. Process waste handling Incinerated with energy recovery 18% All process waste from our plastic manufacturing sites is being recovered through material recycling or energy recovery. tonnes Recycled 2,878 Incinerated with energy recovery 636 Landfilled - total 3,514 Recycled 82% 29

30 Tetra Pak operations 4 Machine and equipment performance 1999 An important part of our relationship with our customers lies in the machines and equipment which helps them to process the liquid food and fill and seal packages with their products, as well as move the filled packages around their sites. These include separators, homogenisers and aseptic processing equipment, as well as filling machines, conveyors and film wrappers. Tetra Pak has 12 factories around the world where we assemble or manufacture processing and packaging machines and equipment. These plants have a relatively low direct impact, whereas the operation of the machines at the customer s site is more important. We strive to improve the operational performance both through new product design (see chapter 2) and by increasing the efficiency of installed equipment (see chapter 6). We have chosen to divide data into two blocks: processing equipment and packaging machines. Below we present data both as absolute annual values and as the ratio of absolute value and number of delivered processing units and packaging machines respectively. Processing equipment total per delivered unit Electricity 1 TJ 945 MJ/unit Fuels 15 TJ 11,677 MJ/unit Water 60,000 m 3 48 m 3 /unit ODS (CFC-11 equivalent) - kg - kg/unit Packaging machines total per delivered machine Electricity 2 TJ 4,290 MJ/machine Fuels 9 TJ 18,078 MJ/machine Water 82,000 m m 3 /machine ODS (CFC-11 equivalent) 5.6 kg 0.01 kg/machine Support services performance 1999 Tetra Pak s business also includes a number of services that are essential to function as a company and to keep customers satisfied. These include research and development centres which work on new packaging and equipment designs, and various support companies. Performance data for support services sites, which have a low direct impact, are presented below. Electricity 12 TJ Fuels 8 TJ Water 161,000 m 3 ODS (CFC-11 equivalent) 1.4 kg 30

31 4 Tetra Pak operations Market companies performance 1999 Tetra Pak s market companies are a critical link in our business, connecting us with our customers. Largely office-based, these operations are quite different in environmental terms from our manufacturing sites. However, we believe that we must carefully manage all aspects of our activities and that includes offices. The data here represent 39 of our market companies. The market companies have a central role to play in helping to explain to our colleagues and customers what Tetra Pak is doing to contribute to sustainability and to ensure that our customers suggestions to improve environmental performance are translated into action. Electricity 2 TJ Water 60,000 m 3 Best practice in Japan Nihon Tetra Pak is the first of Tetra Pak s market companies to gain an ISO certificate independent of a production facility. Its 1999 objectives were to achieve an overall 15% reduction in copy paper consumption compared to 1997 and reduce electricity consumption by 15% compared to According to environmental specialist Bob Kawaratani: The target for copy paper consumption was met and exceeded in 1999 with a 21% reduction. A new Technical Facility was opened in Gotemba, helping achieve a 24% reduction in electricity consumption for Nihon Tetra Pak. 31

32 Transport Transport of materials to our factories and products to our customers has an impact on the environment, both locally and globally. Tetra Pak is starting to address this complex field in order to reduce impact throughout the value chain.

33 5 Transport Within Tetra Pak, transport and travel services are mainly purchased and managed on a local level, that is by individual factories and offices. At the corporate level, Tetra Laval Group Transport & Travel our in-house experts on transport and travel is responsible for rationalising transportation and the purchase of transport related services. Their main aim is to develop transport solutions which have less impact on the environment and which are compatible with prevailing economic conditions. From May 2000 they have been mandated to co-ordinate and manage the flow of goods, including raw materials, as well as travel related purchases for the whole of Tetra Pak. During 1998 and 1999 Tetra Laval Group Transport & Travel performed a comprehensive - 12,867 Air - 2 Air Rail < 1 70 < Rail 28 Swedish converting factories 131 Truck 1,392 6,541 Truck Sea 4 54 CO 2 emissions (tonnes) Transport (tonne-kilometres) 1,001 15,112 Sea Tetra Laval Group Transport & Travel has calculated CO 2 emissions (total tonnes in 1999) and the distance transported (total tonne-kilometres) for freight to and from the four Swedish carton converting factories. This helps us monitor efficiency improvements and identify lower impact options. 33

34 Transport 5 evaluation of their contracted transport and travel suppliers including shipping, trucking, air transport, car hire and hotels. In total 80 suppliers were included in the evaluation. The result of this supplier evaluation will be used as qualifiers for agreements with Tetra Pak, encouraging our suppliers to continuously focus on the environment. Environmental impact of transport In addition, Tetra Laval Group Transport & Travel assessed the environmental impacts associated with the transportation of all incoming and outgoing goods at the four Swedish carton converting factories during 1998 and This resulted in detailed data on the amount of transport work produced as well as the corresponding carbon dioxide emissions (see figure on the previous page). To get a better understanding of how transport is managed locally, we included specific transport questions to both factories and offices in our 1999 survey. The information gained through the survey, as well as key learnings from the Swedish case studies, will be made available and used within Tetra Pak to encourage enhanced environmental management of all transport and travel operations. Video conferencing saves travel Tetra Pak s use of videoconferencing in Sweden has increased steadily since we first experimented with the technology in From 106 conferences in 1995, by 1999 we were holding 450 a year boosted by active marketing of our facilities around the company. Margereta Olsson, manager of the videoconference suite in Lund, says: We reckon that we saved 1,445,000 km of international travel to and from Sweden in 1999 that would otherwise have led to greater pollution. Number of video conferences in Sweden Tetra Pak s Elisabeth Antonsson, Andreas Barkman and Lars Lundahl are joined by Matt Haddon from consultancy ERM in London during preparation of this report

35 Customers, retailers, consumers and the community Meeting our customers needs is as vital to the commercial success of Tetra Pak as it is to any business. We work closely with our customers to help them in their pursuit of environmental and economic efficiency.

36 Customers, retailers, consumers and the community 6 Environmental education Many Tetra Pak market companies are undertaking or supporting education programmes for schools, including Mexico, Brazil, Argentina, Chile, France, Sweden and Spain. Tetra Pak UK has granted for the third consecutive year The Tetra Pak Award for Environmental Teaching in Primary Schools. Throughout the world Tetra Pak collaborates in packaging waste management programs organised by local authorities, by encouraging consumers to participate and finding enduses to the post-consumer packages. In the Philippines, a craft room sponsored by Tetra Pak at Museo Pambata in Manila continues to attract thousands of school children each year. This has proved to be a unique way of educating children on the issues of recycling and reuse through creative craft ideas. Tetra Pak has developed a number of services to help our customers improve their operational efficiency, reducing costs as well as environmental impact. We believe that the expertise Tetra Pak has developed within its own operations can be valuable to our customers, including: Customer s plant performance Environmental impact monitoring and improvement Waste management and recovery techniques Life Cycle Assessments Regulatory processes and compliance Communication material and skills Distribution equipment. Below we outline three areas where we are using this expertise to help our customers improve their operating and environmental efficiency. Plant optimisation Tetra PlantOpt is a new service which helps customers to achieve environmental and economic efficiencies by optimising their entire plant operations. Our engineers work on customers sites to help identify opportunities for improvement and develop programmes to deliver them. We provide project management support to help customers achieve environmental benefits in a number of areas: In Brazil, Tetra Pak s education kit helps schoolchildren learn about the environment. Tackling litter in Trinidad Several of the market companies in the Americas have a proactive environmental program. For example, Tetra Pak Central America and Caribbean and our customer, Nestle, were the driving forces behind the formation of an industry coalition to help Trinidad address its litter problem. Less packaging material waste Less food product to drains and waste water treatment Minimising the use of hazardous detergents Minimising the use of fresh water Optimal use of energy Reduce space requirement. For example we have helped a major customer in Asia to greatly improve packaging line efficiency through reducing waste on three lines (see figure on the next page). We are working very closely with the Government on a litter program and by piloting recycling says Jose Maria Hernandez of Tetra Pak Central America and Caribbean. 36

37 6 Customers, retailers, consumers and the community WinBack Customer satisfaction surveys suggested that customers were unhappy with the operational efficiency of our packaging lines, also in terms of too much waste. Our response was the WinBack project which, among other things, aims to ensure that: Rebuilding kits specified by the product companies for filling machines and distribution equipment are installed in all cases. Performance Line Monitoring Systems (PLMS) will be installed at customer plants to enable customer machine performance to be monitored remotely, and to compare performance across a range of customers. Technical training will be carried out at Tetra Pak market companies and at customer operations to overcome any problems that do occur. Packaging line waste reduction / customer case study Packing them in Tetra Pak s Tetra Brik business unit has developed a new transport and display pallet that helps retailers and wholesalers save time and space. Once the Floor Based Sales Unit has been loaded with Tetra Brik Aseptic packages in the factory it can be transported right to the shop floor, with consumers able to pick their products directly off it. The new unit uses less than half the material of Tetra Pak s conventional cardboard tray, with a plastic base and layers of cardboard to separate the layers of stacked packages. They are designed to fit neatly onto a standard Euro pallet, four at a time. Cooking with cartons (%) Before Target After Line 1 Line 2 Line 3 Recovering full packages Tetra Pak can also give advice on solutions to recover both packaging and products from full packages not suitable for distribution (for example due to a fault during filling or which are returned by retailers and distribution because the best before period has expired). We have been working to identify equipment to meet the growing need to empty beverage cartons of any shape and size. Benefits include saving employee time through faster emptying of cartons. With very little product in the recovered packaging material it is easier to handle and recycle, allowing for lower transport or disposal cost. The empty packaging can be baled and sent to a recycler. Can you imagine cooking food in an oven made of Tetra Pak cartons? In the semi-arid north of Kenya this is a daily reality for the nomadic Samburu people. Tetra Pak s Peter Rosberg, the factory manager in Nairobi, says: Alison Curtis, an American working in the Wamba Hospital, hit on the idea of using board that had been laminated, but which we could not use because of misprinting. Aluminium coated board is carefully folded to form a bowl shape that reflects the sun s rays towards its middle what is known as a solar oven. Pots full of uncooked food are placed in the middle and because they are painted black they absorb the solar energy that has been concentrated by the reflective bowl. After a few hours the temperature inside the pots can reach 150 degrees Centigrade, boiling two litres of water in 45 minutes and cooking rice in two hours all without burning any fuel. 37

38 Waste management Where our packages end up is one of the most visible parts of Tetra Pak s impact on the environment. Source reduction in making new packages, recycling and energy recovery of used packaging all have important parts to play in completing the value chain.

39 7 Waste management QUICK FACT During 1999, 21% of all beverage cartons in Western Europe were recycled, 18% were reused for energy production and 61% were landfilled. Germany alone achieved 66% recycling. Higher rates of recycling are expected as organised packaging waste collection systems increase throughout Europe. Put simply, waste is what is left when you have finished making something, or that something after its useful life is over. Either way, waste is a major concern for modern society as we consume more and more natural resources. Across the world, local and national governments are increasingly concerned that used packaging, and other types of waste, is managed effectively, with consumers playing their part alongside manufacturers, distributers and public authorities. In Europe, used packaging of all types accounts for 25-35% of household waste, which in turn represents a significant part of municipal solid waste (MSW). However MSW is a small part, about 5%, of the total waste. We believe good packaging helps to save resources by delivering products safely and efficiently to consumers. Tetra Pak has adopted the concept of source reduction which means using less natural resources to make the package in the first place. Although making sure resources are used efficiently in the first place is an important issue, a lot can be done to optimise what happens to our packages after used by consumers. Tetra Pak works alongside other players in the value chain to deal effectively with packaging waste. Integrated waste management The ability to combine waste management technologies to handle different materials from different sources is called integrated waste management. The ultimate aim of an integrated waste management system is to handle waste in a cost-effective way while minimising the environmental impact. Therefore, local conditions have to be accounted for to find the optimal combination of different waste management technologies. After use, Tetra Pak packaging can go through all recovery options. The used packaging can be recycled to recover the material. The packaging contains energy that can be recovered in municipal incinerators or in industrial plants. In a number of countries, trials have shown that cartons can also fit into composting programmes. In the compost, paperboard will degrade while the plastic and aluminium residues have to be removed. Finally, if appropriate recovery options are not available, packages go to landfill. In an integrated waste management system each of these alternatives has its role to play. Recycling Our first aim is to comply with legislation: so as a key objective we will meet recycling targets where required. To meet our objective we work closely with some of our suppliers, recycling companies and local entrepreneurs to find stable, low cost, recycling capacity with minimum environmental impact. In other words, finding ways of further using the resources in our used packages in a way that truly replaces the use of new resources. Furthermore, we support the development of new technologies for recycling of used packages and recovering the different materials contained in them. For Tetra Pak, contributing to the recycling capabilities of the packages we produce is part of a responsible approach to the environment. The recyclability of 39

40 Waste management 7 Self-assessment system satisfies new European waste law The European Packaging and Packaging Waste Directive, which came into force in 1994 and is currently under revision, aims to both reduce the environmental impact of packaging and packaging waste and ensure the free movement of goods in Europe. Specifically, it requires that: By % of packaging waste is recovered and 25-45% recycled in each member state. By % of each type of material is recycled in each member state. Some essential requirements are met: minimum use of material by volume and weight, waste management suitability in terms of recycling, energy recovery, composting and landfilling, and minimum established levels of harmful substances. Packaging complying with the directive can circulate freely within the EU. Teresa Presas, Director Corporate Environmental Affairs who has been following-up the implementation and revision of the directive explains: Tetra Pak has devised a transparent system of self-assessment in complying with the directive s essential requirements which can be examined by customers and regulators alike. Through this system, Tetra Pak also ensures that suppliers upstream are meeting the required standards. our products is part of the development process of new products and improvement of existing ones. But recycling is a commercial operation. Its success depends on the end market. Both paper and plastic are commodities, so the economics and extent of recycling depends on the prevailing market conditions. Tetra Pak continues to examine the cost-efficiency of packaging recycling, through new sorting equipment, recycling technologies and through focusing on the flow of material for recycling. Recycling technologies for cartons At the moment, waste from Tetra Pak products both direct from our packaging material factories, from customer sites, and post-consumer is recycled in two ways: repulping and press moulding into panel boards. Our technical group in Sweden works closely with R&D, business units and market companies around the world to discuss existing and future needs for recycling capacities and recycling technologies. In many cases the challenge is to find a viable end market for the recycled material. Repulping The most common way to recycle used beverage cartons is by recovery of the fibre at paper mills. The packaging material is put in water and de-laminated under high friction by hydraulic forces. This process, Once used packages have been collected they are sorted and baled before being repulped to make recycled paper products. For more information order What happens to used beverage cartons?, from Tetra Pak using the form at the end of this report. 40

41 7 Waste management QUICK FACT After extensive trials involving Tetra Pak, Australia s two largest cardboard recyclers, Amcor and Visy, last year agreed to allow aseptic cartons to be recycled through the mixed paper stream, simplifying collection from householders and avoiding sorting costs. known as hydrapulping yields a pulp slurry. The strong virgin fibres used in beverage cartons give a high fibre quality which becomes increasingly important as higher recycling rates of paper and board tend to deteriorate the overall fibre quality in recycled paper and board grades. Plastic closures do not interfere with the repulping process, and end up as reject together with the polyethylene and aluminium layers. A major challenge is what to do with the reject. During 1999 a Finnish company completed a study verifying material recovery of the aluminium and energy recovery of the polymer materials (see next page) and Tetra Pak is now working closely with them. In Germany the reject is used as fuel in cement kilns and in Brazil Tetra Pak has patented equipment to clean the reject so that it could be used to make new plastic products. Panel boards What started as a research project in Sweden in the mid-1980s has grown into a number of successful businesses around the world. Market demand from the construction industry is growing for panel boards made by shredding and then heat-moulding carton waste. Manufacturers of office furniture are also showing interest. Since the first plant was opened in Kenya in 1987, third-party manufacturers in nine further countries have invested in equipment to turn carton waste into a competitor to chipboard, plaster board and Medium Density Fibreboard (MDF). The technology has particular appeal in developing countries, with three plants in China alone. A key challenge for Tetra Pak is to help these panel board manufacturers to handle more post-consumer waste, with its impurities, higher moisture content and residual odour from the food product which the cartons used to contain. Recycling grows in China The third Chiptec panel board plant was opened in Shanghai in During 2000 a major new facility will be built by Sheng De Industry, in Shenzhen with an annual capacity of 6,000 tones, the largest in Asia. Transfer stations in major Pearl River Delta cities in southern China will be set up to help collection of Tetra Brik Aseptic packages. In early 1997 Chiptec was one of the first batch of 27 technologies recommended by the Chinese environmental authorities for spreading nationwide. The following year the recycling technology also passed an official State technical appraisal. The next step is to establish production facilities in Fujian province and Beijing where market conditions are mature. To make Chiptec economically viable, greater efforts will be spent on developing higher-value added downstream end uses. In 2000 the Asian Development Bank accepted Chinese Chiptec as a case study in its Sustainable Development Report. Used beverage cartons are being turned into new products from building panels to table tennis bats. 41

42 Waste management 7 Finnish foil recovery saves energy The layer of aluminium foil in Tetra Pak s aseptic cartons is the thinnest layer in any industrial process and is used to prevent the food inside from oxidising. The aluminium foil constitutes approximately 4% of the total weight of an aseptic carton. Because producing virgin aluminium from bauxite ore is very energy intensive, Tetra Pak has been working with Finnish company Corenso United Oy to recover the foil in used cartons. In June 1999 Corenso unveiled plans for a EUR 17 million plant that will recover 2 million kilograms of aluminium a year to be used in making new aluminium products with 95% less energy. Our gasification plant uses the plastic film in the cartons to generate energy, providing enough power to fuel the aluminium recovery process as well as turn the fibres into pulp for recycling, says Lauri Makipaja of Corenso. The plant, which will come on stream in autumn 2000, is expected to generate 165 GWh of energy, enough to heat a town of 25,000 people for a year and saving 16,500 tonnes of oil. Correnso s Lauri Makipaja inspects used cartons before the aluminium foil, paperboard fibre and plastic are recovered. QUICK FACT The Plastic Packaging Division has developed two new types of oxygen barriers for PET bottles Glaskin and Sealica. When adding barrier material to packages it is important to ensure complete recyclability. During 1999, recycling trials where carried out in conjunction with the recycling association PETCORE and a supplier. Recycling technologies for plastic bottles Used plastic bottles, which have been collected and sorted, are cut into small pieces, called flakes, in a grinder. The flakes are then washed by water in large tanks with mixers so that the slurry will be moving and the friction enhance the cleaning process. This process will not only clean the flakes, but also remove any paper labels. Sometimes detergents are added to the water. Recycled products derived from post-consumer HDPE milk bottles include motor oil bottles, merchandise bags, drainage pipes, blow-moulded containers, pallets and garbage sacks. Recycled PET is used mainly in fibre applications. There are different types of fibre applications and the industry comprises four major fields of application: staple, filament, non-woven and fibrefill. The PET fibres can be used for production of clothes and sportswear. Other applications include carpets, strapping, sheets, films and containers. PET can also be chemically recycled which means that used PET is broken down into small chemical constituents. Chemically recycled PET has the same properties as virgin PET and can therefore be used in food contact applications. Energy recovery and landfill Life cycle studies have shown that from an environmental point of view, energy recovery can be as good a way of dealing with used packaging as recycling. For example, the materials in each tonne of used cartons contain about as much energy as half a tonne of oil. Many local authorities burn municipal solid waste (including organic waste, glass and metals, as well as other packaging) to recover energy. Taking out the non-combustible elements creates Refuse Derived Fuel, which improves the fuel quality and energy value. In the European Union, 18% of all used beverage cartons are valorised by energy recovery. Sometimes landfill is the most environmentally feasible management option, for example in remote areas where the impact of transporting waste over long distances to an incinerator or recycling plant would offset the benefit of recovery. Tetra Pak is sponsoring studies to help us better understand how packaging degrades in landfills. 42

43 Appendices JUICE MI JUICE ORANGE