Continuous Environmental Improvement

Transcription

1 Continuous Environmental Improvement European Food SCP Round Table Working Group 3 on Continuous Environmental Improvement 21 November 2012

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3 Table of Contents - in Brief INTRODUCTION... 9 EXECUTIVE SUMMARY CHAPTER 1: SUPPLIERS TO THE AGRICULTURAL SECTOR CHAPTER 2: AGRICULTURE CHAPTER 3: AGRICULTURAL TRADE CHAPTER 4: FOOD AND DRINK INDUSTRIES CHAPTER 5: PACKAGING SUPPLY CHAIN CHAPTER 6: RETAILERS CHAPTER 7: CONSUMERS CHAPTER 8: CONSUMER WASTE CHAPTER 9: TRANSPORT & LOGISTICS OPERATORS OVERARCHING RECOMMENDATIONS ANNEXES GLOSSARY

4 Table of Contents in depth Table of Contents - in Brief... 1 Table of Contents in depth... 2 Table of Figures... 6 Table of Tables... 7 INTRODUCTION... 9 EXECUTIVE SUMMARY CHAPTER 1: SUPPLIERS TO THE AGRICULTURAL SECTOR SUMMARY SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Water Air quality GHG emissions Resource depletion Land use () SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES A Actions by suppliers to the agricultural sector to address environmental challenges from the B manufacturing level of the products Actions of suppliers to the agricultural sector to address environmental challenges for the sustainable use of their products SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS Dissemination of existing initiatives or improving environmental practices Recommendations/suggestions for areas of eco-innovation or research CHAPTER 2: AGRICULTURE SUMMARY: SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Water Air Greenhouse Gas emissions Soil Quality Biodiversity Resource depletion Land use SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Specific initiatives Regulations setting the baseline SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS CHAPTER 3: AGRICULTURAL TRADE SUMMARY SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Water Air quality Greenhouse gas (GHG) emissions Land use SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS CHAPTER 4: FOOD AND DRINK INDUSTRIES SUMMARY SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Water Energy and climate change

5 3 Resource efficiency SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Water Energy and climate change Resource efficiency: making the most of raw materials SECTION IV: KEY OBSTACLES Water Energy and climate change Resource efficiency SECTION V: RECOMMENDATIONS Water Energy and climate change Resource efficiency CHAPTER 5: PACKAGING SUPPLY CHAIN SUMMARY: SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES A Environmental challenges for glass packaging B Environmental challenges for plastics C Environmental challenges for steel packaging D Environmental challenges for aluminium packaging E Environmental challenges for paper and board packaging SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Packaging supply chain Cross-sectoral examples: Material-specific examples SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS Dissemination of existing initiatives on improving Environmental Practices Recommendations/suggestions for areas of eco-innovation or research: CHAPTER 6: RETAILERS SUMMARY SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Climate change greenhouse gas emissions Sustainable sourcing and consumption (supply chain improvement) Waste Land use and urban planning SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Reducing on-site energy use and GHG emissions Sustainable sourcing Promoting environmentally sustainable consumption Waste SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS CHAPTER 7: CONSUMERS SUMMARY: SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Water Air quality GHG emissions and energy efficiency Biodiversity Resource depletion Land use Shopping behaviour SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Water Air quality GHG emissions and energy efficiency Biodiversity

6 5 Resource depletion Land use () Awareness building and education SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS CHAPTER 8: CONSUMER WASTE SUMMARY SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Water GHG emissions Soil quality Biodiversity Land use Resource depletion/energy use SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Water GHG emissions Soil quality Biodiversity Land use Resource depletion/energy use SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS CHAPTER 9: TRANSPORT & LOGISTICS OPERATORS SUMMARY SECTION I: ABOUT THE SECTOR SECTION II: ENVIRONMENTAL CHALLENGES Climate change greenhouse gases Air, water and land pollution Land use, habitat and biodiversity Congestion Sustainable global sourcing SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Performance Monitoring Sourcing and packaging Intermodal shift Optimisation of distribution network Route planning, telematics and driver training telematics Vehicle design and modifications SECTION IV: KEY OBSTACLES SECTION V: RECOMMENDATIONS Improved monitoring and reporting Sourcing and packaging Intermodal shift Optimisation of distribution networks and logistics Vehicle improvements Cleaner fuels Green public procurement OVERARCHING RECOMMENDATIONS ANNEXES Annex I: Suppliers to the agricultural sector - Information on the suppliers to the agricultural sector Premixtures and compound feed (FEFAC) Fertilisers (fertilizers europe) Plant protection products (ECPA) Animal health products (IFAH-Europe) Annex II: Agricultural trade - List of initiatives promoted by the Agricultural trade Annex III: Packaging value chain About the chapter Raw materials for packaging Functions of packaging

7 Annex IV: SCP Food round table - product example: Chopped tomatoes in natural juice preserved142 1 Short introduction The life cycle starts with growing tomato Influencing factors and environmental challenges Then the tomato is processed and packed Influencing factors and environmental challenges during processing and packing The chopped tomato is then sold Influencing factors and environmental challenges in the shop The chopped tomato is used by the consumer GLOSSARY

8 Table of Figures Figure 1: Basic flow chart of the food value chain (indicating the most important mass streams) Figure 2: Land use in the EU Figure 3: Source: Eurostat - EU trade in food and drink, by main partners, Figure 4: National virtual water balances related to the international trade of products. Period () Figure 5: Carbon footprint breakdown of retailer operations (EC, 2011)() Figure 6: The relative contribution of different product groups to eight environmental impacts in the Figure 7: EU-25, Energy flow diagram (Sankey diagram) of an optimised food retailer operation with refrigeration heat recovery, high insulated envelope and heat delivery to district heating. EAHR: Exhaust Air Heat Recovery Figure 8: Electricity consumption along the meat and dairy products life cycle, Figure 9: Percentage of food wasted in households, and the percentage that is avoidable Figure 10: Animal by-products and food waste flows in Spain Figure 11: Importance of various aspects of products when deciding which ones to buy Figure 12: Electricity consumption by cold appliances for four scenarios Figure 13: Scheme reflecting the most important wastes from food and drink products and their most relevant reuse, recycling, recovery and disposal routes Figure 14: Flow chart of a biogas plant for the anaerobic fermentation of food waste Figure 15: Figure 16: Figure 17: Figure 18: Figure 19: Key factors and decision points relevant to optimisation of retail transport and logistics operations, categorised according to level of retailer engagement required Flow-chart of an integrated (best practice) approach to systematic reduction of the environmental impact of transport and logistics operations for a particular product group Comparative energy consumption and emissions across freight transport modes, expressed as a multiple of the lowest emitting mode on a per tonne-km basis Effect of increasing load and reducing empty running on specific CO 2 emissions per tonnekm transported for a 40 tonne gross (29 tonne net load) truck Flow-chart of sequential steps (questions and actions) that represent an integrated best practice approach to reducing the environmental impact of transport and logistics operations (best practice actions shaded)

9 Table of Tables Table 1: Portfolio of best techniques for retailers to reduce on-site energy consumption and GHG emissions Table 2: Energy savings from lighting system retrofitting Table 3: Portfolio of techniques employed by retailers to improve the sustainability of product value chains...90 Table 4: Proposed classification of widely recognised third party environment-related standards commonly applied to food products Table 5: Best retailer performance for techniques 4 to 6 (see table 3) across priority food product groups (% private label sales within each product group compliant with specified criteria)...92 Table 6: Organic sales shares within priority product groups...94 Table 7: Specific water consumption (water footprint) for important food and drink products...98 Table 8: Land use in farming; Table 9: Specific waste quantities in the EU in 2008 and the percentages for recycling, composting, incineration and landfilling Table 10: Food waste generation in EU Member States in kg/yr and kg/capita x yr Table 11: Packaging waste per capita in 2008 for the different EU Member States along with the recycling rates for the different materials Table 12: List of key recommended actions to reduce transport-related environmental impacts Table 13: Key data and indicators for monitoring T&L operations Table 14: Overview of some key aspects of the major modes of goods transport, related to efficiency and practical considerations

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11 INTRODUCTION The overall objective of this report is to communicate and promote continuous voluntary environmental sustainability initiatives that are or can be undertaken in the different stages of the food and drink value chain, to address its key environmental challenges. This report covers: Identification and prioritisation of major environmental challenges in the various stages of the different food and drink chains, including consumption Mapping of existing and emerging voluntary industry and multi-stakeholder initiatives and standards in these areas at national, EU and international level Identification of priority areas for continuous environmental improvement, taking into consideration the respective responsibilities of the various players in the food value chain Identification of priority areas for targeted sustainability R&D and eco-innovation Facilitation of concrete sustainability measures across the agro-food sector, on a continuous basis, at all levels, via: Dissemination of best environmental practice and resource-efficient technologies, Identification of opportunities and tools for eco-innovation and technology and knowledge transfer to agro-food companies, in particular for SMEs Identification of barriers to an increased uptake of eco-efficient technologies and best practices in the agro-food chain, in particular in SMEs, and identification of means to overcome these barriers; Promoting identified R&D needs and eco-innovation requirements under the EU research agenda under the 7th Framework Programme (FP7) and European Technology Platforms (ETPs) relevant for food and drink production and consumption. The report structure: In the absence of broadly agreed methodologies, and due to the limited time and resource available to produce this report, the SCP working group 3 decided to structure the work according to the different actors of the food value chain, further referred to as constituencies( 1 ). Each of the nine constituencies are addressed in separate chapters. These have been drafted by the corresponding members, addressing successively The main environmental challenges addressed The existing actions and initiatives currently implemented to address these challenges The main obstacles that must be overcome to reduce these environmental impacts Any recommendation expressed by the constituencies to further reduce the environmental impact of the Food Chain, either by dissemination of current best practices, definition of key areas for R&D or recommendation for policy adaptation. A better life cycle approach would have been achieved through a product category approach, facilitating the identification of areas of possible improvement or facilitating the dissemination of best environmental practices along the food chain. Such an approach could be achieved after the adoption of agreed methodologies. However, an example of this product category approach is available in Annex IV. Content The objective of the report is to give an overview of the challenges that all actors of the food chain have to address to mitigate their environmental impact, and then to give representative examples of the actions and initiatives currently implemented to address those challenges. This is essentially a qualitative approach, but where quantification is used to illustrate or highlight the importance of ( 1 ) The constituencies of the SCP working group 3 are the actors of the different stages of the food value chain as defined in the Rules of Procedures for the working groups and in the Terms of Reference of the European Food SCP Round Table. 9

12 certain challenges or initiatives. Therefore this report is not an exhaustive and quantified description of the environmental impact of the food chain, neither of the actions currently implemented by the food chain actors. However, the Food SCP Round Table members have tried to identify all areas where significant improvements could be made, and to propose recommendations to further significantly improve this impact. The following flow chart illustrates the main interactions between the different actors of the Food Chain which are represented in this Food SCP Round Table. 10

13 E W Aux E W Aux E W Aux 5 1 Raw materials Suppliers Packaging Raw Materials Suppliers Raw Materials Reuse/Recycle Packaging Additives, chemical auxiliaries E Aux SWWGWH WW SWWGWH 3 Trade Fertilizers, pesticides, pharmaceuticals, etc. SWWGWH WW Reuse E W Aux E W Aux E W Aux Aux E W W E L Products Products Consumers Products Retail, Catering and Restaurant EtA GHG ODS 2 Consumer waste Used products Products Landfill / Incineration Food waste Food and Drink Industry Products Agriculture Raw Materials Packaging 4 WW SW WG WH SW WG WW WW FW SW WW SW WGWH ODS GHG P GHG Fermentation or composting GHG Products WH ODS WG IB IS IW EtA GHG Compost and fermentation residues Legend Services Services E Aux Services Inputs E: Energy W: Water Aux: Auxiliaries L: Land Outputs WW: Waste Water SW: Solid Waste WG: channelled Waste Gas WH: Waste Heat EtA: Emissions to Air (diffuse emissions) IW: Impact on Water IB: Impact on Biodiversity P: Packaging materials FW: Food Waste ODS: Ozone Depleting Substances GHG: Green House Gases IS: Impact on Soil 9 Transport EtA GHG ODS Figure 1: Basic flow chart of the food value chain (indicating the most important mass streams). 11

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15 EXECUTIVE SUMMARY To facilitate the access and reading of the report for non-specialists, to offer a quick overview of the overall impact of the food chain in each environmental compartment, as well as to develop a life cycle approach along the food chain, the Executive Summary is structured differently to the report itself. The Executive Summary adopts a more horizontal approach, addressing successively for the whole food chain the main environmental impacts, presenting how the main industrial sectors are most involved in each particular environmental compartment. The different environmental aspects addressed are: water consumption and pollution air quality GHG emissions soil quality biodiversity resource depletion, and land use. For each of these aspects the basic structure of the nine chapters is reflected in the different parts, which are: environmental challenges and indication for which part of the food chain the different above mentioned environmental aspects are most relevant (cycle with the different parts of the food value chain) existing actions to address the challenges policy and research recommendations. 13

16 WATER IN THE FOOD LIFE CYCLE Water is one of the most topical issues in the debate on the environmental impact of food and drink. It is present in the entire life cycle, where it is used: as an ingredient for irrigation and for livestock drinking as a processing factor for cooling as a cleaning agent. The most prominent issues with water are: water quantity abstraction and drainage virtual water trade surface/ ground water quality (e.g. losses of nutrients such as nitrate and phosphate, and plant protection products, as well as sediment transport into surface water due to soil erosion). Material flow Water consumption and waste water discharge containing inorganic and organic compounds Leachate from landfills with inorganic and organic pollutants, run-off water from composting plants Reuse, recycling, recovery, disposal Consumer waste Suppliers to agriculture Transport Agriculture Water abstraction for irrigation and drainage, sediment transport into surface waters due to soil erosion, nitrate leaching and phosphorous runoff from fertilizer use, pesticide losses to groundwater and surface water Run-off water from roads carrying releases of copper, nickel, zinc and org. compounds, effluents from ships Agricultural trade Packaging Virtual water trade Washing and cleaning activities Consumers Food and drink industry Water consumption and waste water discharge from washing operations, boiling, evaporation, extraction, filtration and cleaning containing inorganic and organic compounds Retail, catering and restaurant Waste water from cleaning activities, run-off water from parking area 14

17 Agreements targeted at developing best practices, recommendations and guidelines, leveraging and disseminating how to use nutrients and plant protection products sustainably incl. by the setting up of specific projects (e.g. integrated pest management or TOPPS-Prowadis). Giving recommendations to farmers and advisory bodies on precision farming, development of monitoring tools which help farmers to correctly assess the nutrient availability in soil and the crop needs and development of spreading techniques and spreading equipment facilitating a precise application of the nutrients, such as the use of GPS-coupled laser systems. Product Stewardship Programme among fertilizer europe s members Improving waste water treatment, especially for the manufacture of plant protection products and of food and drinks. There are cases where this links to bioenergy production. Initiatives to improve water efficiency at the household level Use of improved technologies such as water saving devices (e.g. sensor-controlled taps or hand-controlled triggers on hoses) Behavioural changes, aided by the use of water consumption monitoring tools, modifying cleaning and housekeeping routines; identifying and repairing leaks promptly RECOMMENDATIONS EXISTING ACTIONS Encourage further water savings in the whole food chain. Set water prices in line with the rules laid down in the EU Water Framework Directive. Proper implementation of water legislation at national level for all sectors in order to ensure high water quality and quantity and a level playing field. EU and national policies should support development of new technologies and innovative management solutions and encourage a fast uptake by industry. Where necessary adapt regulation accordingly so as to foster innovation. Public policy should create a favorable climate for continued investment in water efficiency improvements. Capital-intensive investment depends on a number of parameters, including water prices, investment cycles, pay-back periods, available funding in SMEs, etc. Reuse of pre-treated waste water, in line with stringent EU hygiene requirements offers further efficiency gains. Recycling of pre-treated waste water, in line with stringent EU hygiene requirements, is another area where further efficiency gains can be achieved through continuous innovation and investment. Enhance access to knowledge to increase transmission of information between companies/sectors/food chain via coordination/collaboration projects on specific common topics along the food chain. Increase access, research and promote science-based areas for innovation to provide an innovation-friendly environment. This will in turn foster research on new innovative products and processes. Increase access and research to eco-innovation practices in partnership with the sector concerned. Areas can include the further optimisation of water use efficiency through improved water management and usage and energy efficiency (eco-efficiency programmes). -Engage with authorities in a win-win situation towards continuous environmental 15

18 AIR QUALITY IN THE FOOD LIFE CYCLE Environmental challenges Air pollution from the food chain is mostly linked to: Processes where dust is produced Pollutants released from combustion engines (linked to transport, production and processing) Use and handling of manure from animal production. Main pollutants include: Sulphur oxides (SO x ) Nitrogen oxides (NO x ) Volatile Organic Compounds (VOCs) Ammonia (NH 3 ) Carbon monoxide (CO) Particulate matters (PM). Material flow Dust during feed production Emissions of NO x, NH 3, N 2 O and VOCs during manufacturing plant protection products and fertilizers Reuse, recycling, recovery, disposal Suppliers to agriculture Emissions from recycling activities (paper, plastics, metals, glass, food waste etc.), methane emissions from landfills Consumer waste Transport Agriculture Ammonia emissions from manure storage, slurry spreading and using synthetic fertilisers Air pollution from engines (NO x, SO 2, CO, VOC, PM etc.) Agricultural trade Packaging Dust from handling produce, loss of refrigerants Air pollution from consumer transport (shopping) Consumers Emissions of dust, NO x, SO 2 and VOCs from the manufacture of packaging materials Food and drink industry Emissions of dust, NO x, SO 2 and VOCs from the manufacture of food and drink products, loss of refrigerants Retail, catering and restaurant Loss of refrigerants 16

19 RECOMMENDATIONS EXISTING ACTIONS Several initiatives are undertaken such as: Compound feed manufacturers apply techniques to reduce PM. The dust is recycled in the manufacturing process which also ensures increased resource efficiency. Local on-site programmes to reduce emissions by using among other special filters (e.g. related to plant protection products manufacturing) Agricultural producers have been working on different technical solutions regarding the treatment of manure (e.g. acidification, cooling) and to improve housing systems (e.g. filtering the air before it leaves animal housing). Use of lorries with higher efficiency, preferably EURO IV and V lorries. Optimisation of route planning for retailers and distribution organisations, as well as for the distribution network. Intermodal shift where possible. EU and national policies should support the development of new technologies (e.g. filters, catalysts) and innovative management solutions (e.g. new fertiliser spreading techniques) to further reduce the release of air pollutants and encourage a fast uptake by industry. Where necessary adapt regulation accordingly so as to foster innovation. Public policy should create a favourable climate for continued investment to reduce air emissions. 17

20 GREENHOUSE GAS EMISSIONS IN THE FOOD LIFE CYCLE Greenhouse gas emissions in the food chain may be linked to various sources: Energy supply (e.g. for manufacturing agricultural supplies) N 2 O emissions from fertiliser manufacture Use of fossil fuels/energy throughout the food chain (for transport, production, heating, cooling and recovery) Natural soil processes (e.g. anaerobic decomposition of organic materials) Application of mineral fertilisers and manure (N 2 O, methane) Ruminant animals (methane) Anaerobic decomposition of organic materials. Material flow Energy consumption for producing feed, fertilizers and plant protection products, N 2 O emissions from HNO 3 production Reuse, recycling, recovery, disposal Suppliers to agriculture Methane emissions from landfill, CO 2 emissions from incineration and composting plants, energy consumption for recycling operations (plastics, metals, glass, paper etc.) Consumer waste Transport Agriculture Methane emissions from livestock production and anaerobic digestion, fuel use, methane and N 2 O emissions from the use of organic and mineral fertilisers Fuel combustion, loss of refrigerants Agricultural trade Fuel consumption for shopping and energy consumption for refrigeration, cooking and dishwashing Consumers Packaging Energy use for the production of packaging materials Food and drink industry Energy use for refrigeration, loss of refrigerants Energy use for cooling, refrigeration, heating and for processing machinery, losses of refrigerants Retail, catering and restaurant Energy use for refrigeration, heating, ventilation and air conditioning, loss of refrigerants 18

21 RECOMMENDATIONS EXISTING ACTIONS Several Initiatives are undertaken to tackle the challenges related to greenhouse gas emissions: Energy efficiency improvements in all sectors, supported by benchmarking and monitoring Bioenergy production (on farm, from by-products in the food processing sector and biowaste) - Improvement in feed manufacturing operation and in the rationalisation of logistics Fertiliser production: improving energy management (e.g. recuperating heat) and reduction of N 2 O emissions Improving efficiency on farm (e.g. nutrient and production efficiencies) Reduce methane release by changing livestock diets Improving the energy efficiency of buildings and infrastructure and logistics in retail Improvement of livestock productivity (more product produced per livestock unit) Improved feed and fertiliser use efficiency, recycling energy Energy efficiency and minimize energy per unit of production including specific GHG reduction targets, recycled energy, introducing coolers switching off automatically when the temperature is below a certain level, automatic sensors to switch off electricity automatically when the offices/building facilities are not used, analysing the energy used on the manufacturing site to identify where further savings can be achieved, low energy office building etc. ( e.g. related to plant protection products manufacturing). R&D in novel production systems (e.g. low carbon technologies, energy efficiency, methane reduction). Development of a GHG emission measurement tool that allows comparable estimates. SMEs should be involved in best practice sharing. Transformation of energy supply. Promotion of energy production from biomass. Public policy should create a favourable climate for continued investment in energy saving and the use of renewable energy. 19

22 SOIL QUALITY IN THE FOOD LIFE CYCLE Environmental challenges Maintaining soil quality is an issue for many sectors by avoiding soil contamination and acidification. As a major land user in Europe agriculture does impact on soil quality, mainly through erosion and eutrophication. Furthermore soil sealing is caused by an increase in building and road infrastructure which is an issue for the food value chain. Mining activities (e.g. phosphorus for feed and fertiliser) impact negatively on soil structure. The main challenges for soil from agricultural activities are: soil erosion due to wind and water leading to nutrient run-off facilitated by low organic matter soil contamination and eutrophication (from excessive use of inputs such as plant protection products, fertilisers) soil compaction affecting soil physical qualities and biodiversity decline in soil organic matter, leading to loss of important soil functions. Material flow Soil sealing for production facilities Reuse, recycling, recovery, disposal Suppliers to agriculture Soil contamination by run-off water from composting plants and leachates from insufficiently controlled landfills Consumer waste Transport Agriculture Soil erosion and compaction due to inappropriate practice, soil contamination, decline in soil organic matter Soil sealing for roads, soil contamination along the roads with inorganic and organic compounds Agricultural trade Packaging Consumers Soil sealing for production facilities Food and drink industry Soil sealing for production facilities Retail, catering and restaurant Soil sealing for parking area 20

23 RECOMMENDATIONS EXISTING ACTIONS Several initiatives are undertaken to tackle the challenges related to soil quality: Improved agricultural soil management (through the compulsory cross compliance requirements and voluntary agri-environmental measures under the Common Agricultural Policy, e.g. minimum tillage, cover crops, improved nutrient management) Use of old sealed industrial sites (brown field sites) instead of setting up green field sites Protection of at-risk soil types (e.g. adapted agricultural activities on organic soils). R&D in improved soil management techniques adapted to local conditions Sharing and spreading of best practice Provide sufficient financial support and promote the uptake of agri-environmental schemes addressing soil quality and provide necessary skills via farm advice, e.g. addressing soil erosion, organic matter content, soil cover 21

24 BIODIVERSITY IN THE FOOD LIFE CYCLE Environmental challenges Biodiversity is affected by all members of the food chain (e.g. through emissions or land use change). Human activities being carried out in ecologically sensitive areas could be particularly harmful to species and habitats. Agriculture has the potential to influence biodiversity positively as well as negatively. Agricultural activities have been shaping Europe s ecosystems for thousands of years through: creation of a mosaic of differentiated land use in an open countryside with a rich variety of landscapes and habitats; maintenance of habitats dependent on specific farming systems, e.g. semi-natural habitats,; avoidance of land abandonment; Preservation of crop and animal genetic resources, including traditional and local plant varieties and rare breeds. Material flow Reuse, recycling, recovery, disposal Suppliers to agriculture Consumer waste Transport Agriculture Fragmentation and modification of landscape and reduction of biodiversity, nutrient input leading to eutrophication, drainage Fragmentation and modification of the landscape Agricultural trade Packaging Consumers Food and drink industry Retail, catering and restaurant 22

25 RECOMMENDATIONS EXISTING ACTIONS Several initiatives are undertaken to tackle the challenges related to biodiversity: Adapted agricultural practices (e.g. agri-environmental schemes that balance agricultural production with environmental sustainability and functional agro-biodiversity) Maintenance and creation of habitats (e.g. landscape elements, permanent pasture, afforestation). R&D in measures that allow productive farming alongside bio-diverse habitats and species protection Sharing and spreading of best practice Use of local knowledge and support voluntary initiatives. 23

26 RESOURCE DEPLETION IN THE FOOD LIFE CYCLE Environmental challenges The production of food and drink products requires considerable input of resources along the food chain in terms of land use energy for production, processing, transport and storage water for irrigation, processing and cleaning operations natural mineral resources such as phosphate fertilisers refrigerants. There is a big difference in the resource intensity of the different products. The high amount of food waste, especially of purchased but not used food represents one of the most important challenges in terms of resource efficiency. Material flow Raw materials for the production of fertilizer, depletion of marine resources for fish feed, use of fossil fuels and electricity produced from fossil or nuclear fuels Reuse, recycling, recovery, disposal Suppliers to agriculture Packaging and food waste to landfill or to incineration without energy recovery, use of fossil fuels and electricity produced from fossil or nuclear fuels Consumer waste Transport Agriculture Use of fertilizers, especially phosphorous and potassium, waste of agricultural products, use of fossil fuels and electricity produced from fossil or nuclear fuels Auxiliaries, other than energy, such as tyres, oil, break fluids, break discs etc., use of fossil fuels Agricultural trade Food waste, use of fossil fuels and electricity produced from fossil or nuclear fuels Consumers Packaging Use of raw materials for producing glass, metal, paper and plastic packaging, use of fossil fuels or electricity produced from fossil or nuclear fuels Food and drink industry Use of fossil fuels and electricity produced from fossil or nuclear fuels Demand of agricultural raw materials, waste of food raw materials or products non-sellable products, use of fossil fuels and electricity produced from fossil or nuclear fuels Retail, catering and restaurant Food waste, use of fossil fuels and electricity produced from fossil or nuclear fuels (non-renewable sources) 24

27 RECOMMENDATIONS EXISTING ACTIONS Several initiatives are undertaken to tackle the challenges related to resource depletion: fertiliser producers aiming at the sustainable use of the phosphate natural resources focus on the recycling possibilities along the product life cycle (e.g. biogas plants, composting). Fish feed industry using more and more sustainable fisheries, using by-products of the fish processing industry and looking for alternatives to fish meal and fish oil. Full raw material utilisation in the food manufacturing industry through the use of by-products. Innovative packaging solutions to avoid food waste. More efficient logistic solutions and changes in vehicle design. Research on the quantity of food waste and on approaches to significantly reduce it. Initiatives to further promote increased recovery and recycling of packaging waste. Intensifying R&D and cooperation in the use of by-products Long-term legal certainty is needed in the classification of waste and by-products Food waste prevention is one of the most favourable ways to minimise the environmental impact of the food chain. Efforts to prevent food waste should be significantly increased as the potential is great and as it is, also from a life cycle perspective, one of the most promising options. Information and communication to consumers seems to be crucial to achieve more food waste prevention. For example, governmental campaigns on these issues can lead to innovation within the food and packaging industries (current situation in The Netherlands and the UK). Other recovery methods, e.g. energy recovery and recovery of organic materials (i.e. composting or anaerobic fermentation) should increasingly be applied. More awareness-raising is needed to prevent food waste, in order to increase awareness of (1) the quantity of food waste generated individually, (2) the environmental problem that food waste presents, and (3) the financial benefits of using purchased food more efficiently increase knowledge on how to use food efficiently, e.g. making the most of leftovers, cooking with available ingredients make consumers aware of planning issues: buying too much and lack of shopping planning frequently cited as causes of household food waste improve the labelling of food and drink products: misinterpretation or confusion over date labels is widely recognised as contributing to household food waste generation, leading to the discarding of still edible food optimise storage conditions of food and drink products: suboptimal storage conditions lead to food waste throughout the supply chain, including at the household level Promotion of a global understanding of recommended common principles and definitions related to sustainability characteristics of packaging for packaging/product value chain e.g. Global Protocol on Packaging Sustainability (GPPS). 25

28 LAND USE IN THE FOOD LIFE CYCLE Environmental challenges Land use and land use change Many sectors have an impact on land use, especially with the increasing competition for land linked to a growing population and lifestyle changes. As the major land user, agriculture has shaped the European landscape. Positive aspects of its action include: Maintaining the viability of rural areas, especially in mountain areas Contributing to preventing floods, landslides, forest fires and degradation of habitats One major land use change is the conversion of grassland to arable land for food, feed and non-food biomass, not only in Europe, but also in other countries and regions (Indirect land use change, ILUC). a Material flow Mining of raw materials for fertilizers, land use for production facilities Reuse, recycling, recovery, disposal Suppliers to agriculture Land use for re-use, recovery, recycling and disposal facilities Consumer waste Transport Agriculture Conversation of grassland and forests, land use for production facilities Land use for roads and railways Agricultural trade Packaging Land use for storage facilities Consumers Land use for production facilities Food and drink industry Demand of agricultural raw materials, land use for production facilities Retail, catering and restaurant Land use for retail facilities including parking areas 26

29 RECOMMENDATION EXISTING ACTIONS Several initiatives are undertaken to tackle the challenges related to land use change: Preserving grassland (e.g. permanent pasture through cross compliance and voluntary schemes) Compensation measures for soil sealing integrated into agricultural land use Application of the EU sustainability criteria for biofuel production Advanced techniques of ecosystem rehabilitation following mining operations for fertilizers Use of efficient trading systems. R&D to evaluate the impacts of land use change in future Agree on the calculation and the mechanism for ILUC (indirect land use change). 27

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31 CHAPTER 1: SUPPLIERS TO THE AGRICULTURAL SECTOR SUMMARY This chapter covers the suppliers to the agricultural sector. They represent compound feed for animals, fertilisers, plant protection products and animal health products( 2 ). The key environmental challenges from the manufacturing side are identified in Section II. To mitigate these, suppliers implement continuous programmes and actions, as well as promoting the sustainable use of their products, working hand in hand with other actors in the food chain. Ongoing success requires building upon existing achievements, increasing the efficient use of resources, as well as researching new innovative products and techniques to further contribute to environmental improvements. SECTION I: ABOUT THE SECTOR This chapter covers four areas of the supply to the agricultural sector, i.e. compound feed, fertilisers, plant protection products and animal health products( 3 ). The suppliers of the products in the four areas covered herein are dedicated to providing high quality, efficient and sustainable products that meet all legal requirements and scientific assessments that these products are safe for the environment. Each product is considered within the whole life cycle of its production, from R&D, to use, and end-of-use of products. The suppliers to the agricultural sector provide products which are designed to be used by farmers. Overall the suppliers to the agricultural sector represent approximately EUR 72.2 billion in annual turnover, and involve around employees (direct and indirect). SECTION II: ENVIRONMENTAL CHALLENGES The suppliers to the agricultural sector consider the efficient use of all resources, such as energy, agricultural and marine feed resources, and water as part of their corporate responsibility. They have identified the main environmental challenges as defined below at the manufacturer s level. The following sections cover the issues related to the manufacturing of the products. For the sake of consistency with the other chapters of this report, the environmental challenges presented relate to the direct impact from the manufacturing of the product and not from the raw material used to manufacture the products. However, as the supply of such raw material may present significant environmental challenges, it is appropriate to provide a complete picture of the activities falling within the scope of the food chain. This integrates the activities of the raw material suppliers in the extent to which i) they would not be covered by any other constituency of the European Food SCP Roundtable (e.g. mining activity for fertilisers) and ii) the raw materials at stake are primarily destined to the 'suppliers to the agriculture sector'. As far as raw material for feed use is concerned, the most significant impacts significant challenges lay in fishmeal and oil production and soybean meal imported from third countries. ( 2 ) The suppliers to the agricultural sector are composed of the following EU associations representing the above-mentioned sectors: FEFAC (compound feed for animals), Fertilizers Europe (fertilisers), ECPA (plant protection products) and IFAH-Europe (animal health products). ( 3 ) See Annex I for details per sector. This chapter does not cover other areas such as machinery and equipment supply, livestock holdings and seeds. 29

32 1 Water Water can be an integral part of some products, a processing factor, or it can be used as a cleaning agent which leads to waste water. More specifically, water can enter into the composition of animal health products, plant protection products and fertilisers as a formulation ingredient, a processing factor or via use a cleaning agent for manufacturing equipment. The vast majority of water used is employed to cool and operate production facilities. For the compound feed sector, water as such is not classed as a resource, since it does not significantly enter into the production process. The challenge for the constituency is therefore to control the level of consumption and monitor the quality of used water. 2 Air quality The manufacturing side can contribute to air pollution through emissions of dust during the production process (e.g. for feed) and emissions of nitrogen oxides (NO x ) and volatile organic compounds (VOC) during the manufacturing process (e.g. plant protection products). For manufacturing of fertiliser, the production of ammonia and nitric acid, which are the basic materials for nitrogenous fertilisers, can release nitrogen oxides (NO x ) and ammonia. The challenge for the constituency is to control the emissions resulting from manufacturing by introducing innovative technologies. 3 GHG emissions For the suppliers to the agriculture sector, the main factor in GHG emissions is energy consumption. This particularly arises from the energy used on the production side (during manufacturing) and during the transport of raw materials and/or products (in particular by road). In compound feed manufacturing, the only relevant environmental impact is GHG emissions due to energy consumption. Feed manufacturing requires power in the form of electricity, mostly for grinding, and steam for heat treatment and to facilitate pelleting. Electricity is the major form of energy consumed in the feed sector, representing half of the energy cost in a compound feed plant. For soybean meal imported from third countries, GHG emissions are mostly linked to soya production, processing and transport, including GHG emissions linked to land use and land use change. Work to develop an appropriate and recognised methodology for the evaluation of the carbon foot print (CFP) linked to feed production and consumption is still ongoing. According to the methods for CFP reporting developed for Productschap Diervoder by LEI/Wageningen University and Blonk Milieuadvies( 4 ), primary calculations conclude that energy used to process feed materials into compound feed represents about 6.5 % of the GHG emissions linked to compound feed production and consumption (from crop production to consumption by animals). The fertiliser industry contributes directly and indirectly to the emissions of greenhouse gases (GHGs), particularly carbon dioxide (CO 2 ) and nitrous oxide (N 2 O), through the production and distribution of fertilisers. GHG emissions are primarily associated with two industrial processes: ammonia production (with emissions of CO 2 ) and nitric acid production, where the main emission is N 2 O. ( 4 ) Towards a tool for assessing the carbon footprints of animal feed - Nov

33 Moreover, through distribution channels, further CO 2 is released into the atmosphere due to energy used in transport. The EU-27 GHG emissions in 2005( 5 ) were, as far as the production of mineral fertilisers and the N 2 O( 6 ) from mineral N fertilisers use are concerned, 1.1 % and 1.2 % respectively (GHG emission ~ 5000 million t CO 2 eq). For plant protection and animal health products, the main link to GHG emissions is energy consumption. For plant protection products, this includes in general the use of electricity, gas, steam and oil. Another link to GHG emissions is related to the emission of CO 2 by the manufacturing and distribution/transport of plant protection products particularly by road. The challenge for the constituency is to ensure energy efficiency whilst avoiding trade-off for the subsequent food chain partners. 4 Resource depletion In aquaculture, the most important feed ingredients of fish diets are fishmeal and fish oil. This is one of the most frequently cited issues with regard to the sustainable development of aquaculture because of its impact on the depletion of marine resources. The use of phosphate as fertiliser (one of the main necessary crop nutrients) or as feed contributes to the exhaustion of the natural phosphate resource. From a global phosphate production of about 50 million tonnes (Mt), 82 % (41 Mt) is used as fertilisers. The EU phosphate consumption is around 3 Mt. High concentration phosphate rocks are a limited resource, and identified/estimated reserves represent only a few hundreds years of consumption (new evaluation currently done). The challenge lies in the sustainable management and efficient use of resources. 5 Land use ( 7 ) During the mining of fertiliser raw materials, the land surface and sub-surface is disturbed by activities such as the extraction of ore, the deposition of overburden, the disposal of beneficiation wastes and the subsidence of the surface. These activities result in a wide range of impacts to the land, top soil, aquifers and surface drainage systems. Additionally, the removal of vegetation may affect the hydrological cycle, and biodiversity of the area. The challenge lies in the fact that mines need to be developed and operated according to the whole-ofmine-life concept, whereby previously unrecovered resources may be retrieved, former wastes converted into useful products and the rehabilitation of the site prepared from the outset. SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES To mitigate these environmental challenges, the suppliers to the agricultural sector have first initiated programmes to reduce impacts at the manufacturing level and to promote sustainable methods for raw material production. Going further, they now manage their products throughout the whole life cycle, from R&D and raw material sourcing, to the use at farm and end-of-use. ( 5 ) EC,2008a; UNFCCC, 2008 ( 6 ) Calculations based on Fertilizers Europe statistics and fertiliser specific emission rates. ( 7 ) As regards the feed sector, issues related to land use concern mostly the use of land for soya production in third countries and are already accounted for under Section 3 on GHG emissions. 31

34 Therefore, the suppliers to the agricultural sector are also providing guidelines, or developing tools and sustainability programmes, on how to ensure that their products are handled and used in a sustainable way. The different actions in place to reduce the impacts of their products along their life cycle are outlined below, addressed in section A for the manufacturing of the products and in section B for the sustainable use of the products. A Actions by suppliers to the agricultural sector to address environmental challenges from the manufacturing level of the products This section covers the manufacturing of the products. 1 Water Several programmes to improve water consumption have been developed by the suppliers to the agricultural sector in relevant areas. Initiatives for plant protection products have been undertaken to minimise water consumption by reducing the volume of water used in manufacturing processes, increasing the volume of water being recycled and utilised for repeated use along the process, and optimising waste water management systems. This includes for example the reduction of water used per unit of production. For the fertilisers industry, initiatives include water treatment, waste water treatment, water recycling and product recovery in fertilisers manufacturing along with ongoing individual industry initiatives. 2 Air quality Enhancing air quality goes hand in hand with energy and resource efficiency and reducing GHG emissions. Compound feed manufacturers have invested in dust abatement equipment (e.g. cyclones) to reduce dust release. The dust is recycled in the manufacturing process which also ensures increased resource efficiency. Besides strict legislations applicable to manufacturing sites (e.g. Directive 2008/1), local site specific programmes for the manufacturing of plant protection products are in place to reduce emissions to air during manufacturing. These programmes include for example the reduction of volatile organic compound and nitrogen oxides (NO x ) per unit of production by applying special filters. 3 GHG emissions Tackling climate change requires integrated and proactive solutions in using energy more efficiently and curbing GHG emissions. The suppliers of the agricultural sector have developed options to reduce GHG emissions resulting from the manufacturing of their products. In feed production, energy savings are an essential driver for increased competitiveness. Although opportunities to save energy in feed production are limited, there are options within manufacture operations and optimisation of logistics. For instance, handling feed in bulk rather than bags reduces energy consumption and this has been a trend in the industry for a number of years. Although always seeking to reduce the energy consumption, certain steps in the production process require high energy input (i.e. pelleting, extrusion, heat treatment). These are critical for improved nutrient utilisation and 32

35 feed conversion or improvement in the hygiene status of feed; these effects related to feed safety, nutritional and environmental balance have to be taken into account. Many compound feed producers are involved in national initiatives, such as the Climate Change Agreements in the UK, where targets are set in kwh/t of production and agreements are made on a relative energy basis. In the fertiliser sector, important investments in new technology have been made in recent years by most EU companies to significantly reduce the emission of N 2 O in nitric acid production units. The implementation of best available techniques (BAT) at new production sites, and modern technologies allow for sunstantial abatement of N 2 O; carbon capture and storage at appropriate ammonia production sites will, for nitrate based fertilizers, greatly help to reduce the industry s carbon footprint. Fertilizers Europe s members are also committed to implementing an ambitious 'Product Stewardship Programme'( 8 ) which has been in place since 2003 and is audited by an external expert every three years, providing a tool for safe and environmentally-friendly manufacturing, distribution and use of fertilisers. This programme addresses the environmental losses to air (ammonia and NO x ), soil (heavy metals) and water (nitrate), including transport and storage up to the distribution networks. Regarding plant protection products, reducing the environmental footprint is done by increasing energy efficiency and minimising energy consumption per unit of production. Specific GHG reduction targets have been set up by company members particularly focusing on carbon dioxide emissions (these are fixed by each company using different mean criteria)( 9 ). Energy efficiency programmes for building offices and factories (e.g. low-energy office building) have been initiated. In order to limit the energy used, different strategies can be undertaken, for example using recycled energy as much as possible, introducing coolers which switch off automatically when the temperature is below a certain level, introducing automatic sensors to switch off electricity automatically when the offices/building facilities are not used, analysing the energy used on the manufacturing site to identify where further savings can be achieved, etc. To reduce emissions from the transport of raw materials and final products, eco-efficiency programmes are in place to reduce the transport footprint particularly by road, adhering to the EU Ecomanagement and Audit Scheme EMAS( 10 ), and applying ISO standards such as ISO and Resource depletion Fertilizers Europe contributes to an important global phosphate project, implemented by IFA (International Fertiliser Association) in collaboration with other international partners, such as USGS. This projects aims at a precise re-evaluation of the global reserve, as well as of the future phosphate consumption. Additionally, important consideration will be made on the sustainable use of the phosphate natural resources, including an important focus on the recycling possibilities along the product life cycle. The fish feed industry encouraged through a private scheme the fishmeal industry to use sustainable fisheries. It also increasingly uses fish trimmings and offals from the fish processing industry. The European Aquaculture Technology and Innovation Platform (EATIP) gathering all stakeholders interested in the sustainable development of aquaculture (universities, industry, farmers, NGOs) has set up in particular a working group to identify research areas to evaluate and improve the sustainability of fish feed ingredients, including alternatives to fishmeal and fish oil( 11 ). ( 8 ) ( 9 ) These targets participate overall to the general reduction of emissions in manufacturing industries as reported by the European Environment Agency. European Environment Agency, Annual European Union Greenhouse Gas Inventory and Inventory Report 2010, June ( 10 ) Regulation (EC) No 1221/2009 of the European Parliament and of the Council of 25 November 2009 on the voluntary participation by organisations in a Community eco-management and audit scheme (EMAS). ( 11 ) 33

36 5 Land use As far as the extraction of fertilisers is concerned, the removal and stockpiling of topsoil for subsequent rehabilitation is carried out at many mining operations. In a number of cases, topsoil is removed and placed directly on landscaped reclaimed areas. This avoids the cost of re-transporting topsoil from the stockpiles and the possible reduction of biodiversity. The re-planting of small trees from areas to be mined and the replacement of dead trees on rehabilitated areas has been used to accelerate the establishment of vegetation and to provide wildlife habitats. B Actions of suppliers to the agricultural sector to address environmental challenges for the sustainable use of their products 1 Sector-specific actions The suppliers to the agricultural sector promote the responsible management of their products throughout the product life cycle. They also cooperate with their suppliers of raw materials to promote sustainable practices. Premixtures and compound feed Products of animal origin form an integral part of the European diet and provide key nutritional benefits. Nutritionally optimised feed meeting the physiological requirements of animals and fish raised for food production purposes is essential to mitigate the environmental impact of production and consumption of animal products. Such feed is produced using available feed resources. The key drivers for improvement of the environmental impact of feed production and consumption are: The promotion of environmentally efficient production systems for farm animals and fish, oriented towards the maximisation of resources efficiency and minimisation of GHG emissions; The changes in diet patterns and composition for farm animals and fish to significantly reduce the GHG emissions attributed to livestock production systems (e.g. methane); The improvement of feed efficiency, i.e. the conversion of feed into animal products, in order to control the use of resources and to reduce the loss of nutrients; The further optimisation of use of co-products from the food industry, biomass and non-organic raw materials to alleviate the pressure on natural resources; Action vis-à-vis suppliers of feed materials to encourage them to reduce their environmental impact. As regards concrete actions aiming at improving the environmental impact of feed production and consumption, the feed industry: continues improving the conversion of feed into animal products (5 kg of feed were necessary to produce 1 kg of pork in the 1950s compared with less than 3 kg nowadays); 34

37 supports the development of certifiable principles and criteria for the responsible production of soya worldwide (RTRS process( 12 )); invests in research for the substitution of fishmeal and fish oil by other feed materials for farmed fish feeding; develops assurance schemes for the responsible supply of fishmeal and oil( 13 ); contributes to international initiatives aimed at evaluating GHG emissions in the livestock sector and identifying improvement options (life cycle analysis/life cycle management and carbon footprint in the dairy sector led by the International Dairy Federation); improves nitrogen and phosphorus efficiency to reduce nitrogen and phosphorus release to the environment (voluntary agreement between feed manufacturers, farmers and authorities in Flanders to reduce the amount of nitrogen and phosphorus in feed); invests in research to reduce methane emissions. It must be stressed that, in the feed sector, optimising the composition of feed to reduce GHG emissions per kg of compound feed produced may also reduce the digestibility and the efficiency of the feed (i.e. the conversion of feed into food) and thus generate higher GHG emissions during feed consumption. It is more appropriate to consider the reduction of GHG emissions linked to feed using kg of animal product as the reporting unit. It must also be stressed that, considering the need to optimise existing feed resources, any improvement in the carbon footprint of compound feed production depends on improvement at feed materials suppliers level: selecting feed materials with the lowest CFP may have detrimental effects on the environment as feed materials with the highest CFP will be used in any case (maybe outside the EU) and optimisation of feed based on CFP may also mean less nutritionally-optimised feed and hence lower livestock performance and therefore higher CFP per kg of livestock product. More information on the environmental aspects and impacts of compound feed production can be found in the FEFAC environmental report( 14 ). Fertilisers While ensuring that the production and use of fertilisers are carried out in the best possible way and with minimum impact on the environment, Fertilizers Europe s agronomists have developed and proposed more advanced recommendations and procedures to apply fertiliser, such as: recommendations to farmers and advisory bodies to adapt fertiliser applications to crop needs development of new product types which better adapt to soil and weather conditions development of simple diagnostic systems development of monitoring tools, and especially of new techniques/technologies which help the farmers to correctly assess the nutrient availability in soil and the crop needs development of spreading techniques and spreading equipment facilitating a precise application of the nutrients. ( 12 ) ( 13 ) ( 14 ) 35

38 With the evolution of techniques, this has led to what is commonly called 'precision farming', making it possible to apply the right rate of nutrients at the right place, and at the right time. As far as the sustainable use of fertilisers is concerned, there are many company initiatives for precision farming, such as the use of GPS-coupled laser systems which allow on the spot evaluation of the nitrogen crop need, and an instant appropriate supply of mineral nitrogen. This application of the exact quantity contributes to the limitation of the losses to water (nitrate) and to air (ammonia). In terms of waste management, there are several initiatives concerning the collection and recycling of fertiliser bags, such as the SOVEEA programme in France( 15 ). In the Product Stewardship Programme( 16 ), particular attention has been given to promote the main features and commitments of this programme to external partners: for example for storage, and for ship, rail or road transports. But it is certainly in the use of fertiliser at the farm where Fertilizers Europe has the biggest challenges in disseminating improved good practices. The implementation and the correct application of good practices are within the farmers jurisdiction. Due to the fact that Fertilizers Europe cannot reach all the European farmers individually, there is collaboration with the main farmer associations, on the national as well as the EU level, regarding the objectives and actions. Moreover, all initiatives are actively supported which aim to develop and promote sustainable farming systems (Good Agricultural Practice (GAP) for the whole farm). All these actions regarding GAP in general and good fertilisation practices in particular have been going on hand in hand with DG AGRI and DG ENV starting at the end of An informal meeting with the Directorate Generals concerned and experts from the different organisations took place in 1 April 2004 in order to exchange views on good agricultural paractices. Fertilizers Europe is also involved in the following actions: EU level: Contribution to various EU (European Nitrogen Assessment project( 17 ) and UN legislative procedure( 18 ) National level: Numerous initiatives with farmers, distribution networks, other stakeholders. Plant Protection Products (PPP) A key action for the plant protection product industry includes developing best practices, recommendations and guidelines in partnership with other stakeholders including the agricultural sector, leveraging and disseminating them on how to use PPP sustainably. National association and companies are also involved with stakeholders and authorities in specific sustainability programmes varying according to national situations and products. Some examples of national initiatives are cited below. Companies usually have in place an overall sustainability programme applicable to all their products among others including PPP. These include a broad range of actions including the promotion of efficient water use in agriculture, reduction of soil erosion, preservation of biodiversity, product sustainability and recycling. This also comprises involvements in other programmes such as CropLife International Sustainability initiatives( 19 ), the Roundtable on Sustainable Palm Oil( 20 ) or the Roundtable on Responsible Soy( 21 ). Furthermore, ECPA has initiated the following programmes, mainly involving other stakeholders as well. ( 15 ( 16 ) %20STEWARDSHIP %20PROGRAM %2008/Front_Page.htm ( 17 ) ( 18 ) UNECE Convention on Long-range-Transboundary Air Pollution, and Task Force on Reactive Nitrogen ( 19 ) ( 20 ) ( 21 ) 36

39 Water The Training Operators to Prevent Pollution from Point Sources (TOPPS)( 22 ) project. This project found that the application of PPP can lead to unwanted side effects such as losses to water from 'point and diffuse sources 23 '. Research has shown that the point sources are the major entry route of PPP into surface water. These can be associated with the handling of PPPs before and after the spraying on the farm and include for example cleaning and filling of the sprayer, the management of residual volumes after application (remnants), storage and transport. Case studies within the EU/ECPA-funded TOPPS project showed that plant protection products in surface water can be avoided by implementing Best Management Practices (BMPs), optimised sprayers and infrastructure. The TOPPS project concentrated on the critical work processes by recommending what and how to do things to avoid point sources. Best Management Practices (BMPs) were developed in a European network of partners in 15 countries. Additional materials supported training, demonstration and other dissemination activities by the TOPPS partners in order to increase awareness on how to protect water. After the TOPPS project focusing on avoiding point sources, the ECPA started a new project in 2011 on the further reduction of PPP entries to water from diffuse sources, known as TOPPS-Prowadis. The main aspects of the new project are the development of best management practices (BMPs) to reduce run-off from the field after heavy rains and recommendations to avoid drift. This will help to further increase the awareness for water protection by sprayer manufacturers, advisers, farmers and stakeholders. The TOPPS BMPs and the new BMPs to reduce diffuse pollution will offer a consistent and broad frame of recommendations to largely prevent water pollution. Safe Use of plant protection products The Safe Use Initiative( 24 ) is an industry initiative in partnership with local stakeholders to promote the safe use of PPPs. The overall objectives are to reduce the routes of exposure by innovative application techniques; reduce dermal and inhalation exposures by properly using appropriate equipment; reduce the environmental impact by container rinsing, in addition to the disposal and avoidance of surpluses whilst ensuring safe and sustainable use practices. Manufacturers and associations actively promote the best safety measures during the use phase via project region communication campaigns, training materials and training sessions. Biodiversity ECPA and its members actively promote integrated pest management (IPM) as the way forward for agricultural production. Implementing IPM contributes to maintaining natural habitats and biodiversity across the entire landscape. IPM means managing, in a given situation, the populations of pests, diseases and weeds by the combination of all appropriate agricultural practices (preventive measures, and cultural, mechanical, biological and chemical practices), in a holistic approach that reduces the impact of pests and damage to an acceptable level and at the same time ensures the protection of human health and the environment. ( 22 ) ( 23 ) Point sources : e.g. spillage during mixing/ loading which could run down a farmyard drain; wash-off from cleaning equipment or containers in a farmyard; accidental direct over-spray of a water-body; accidental spillages during transport to or from the field, dumping left-over spray solution etc. These sources can be relatively easily prevented through proper training, techniques and equipment. Studies show that typically 50-60% of findings of PPPs in water come from these kinds of point sources. The diffuse sources : e.g. run-off, field drainage, spray-drift are also important and must also be addressed through correct infrastructure, training and equipment, but they are harder to prevent as such (in fact, cannot be completely prevented, just minimised) because they are often linked with weather conditions (heavy rain = runoff; unexpected strong wind = drift). ( 24 ) and For more details on country-specific initiatives, see

40 Animal health products IFAH-Europe launched the EPRUMA (European Platform for the Responsible Use of Medicines in Animals)( 25 ) in 2005 promoting responsible use which in turn leads to sustainable use. The message 'As little as possible, as much as necessary' is promoted as a means of ensuring optimum use of inputs. These best practice guidelines are being promoted across the EU. 2 Common multi-stakeholder initiatives Besides the Food SCP Roundtable, the suppliers to the agricultural sector are engaged in many different food chain initiatives dedicated to addressing the challenges pertaining to the environmental impacts as part of sustainable agricultural practices. They are also all members of the European Initiative for Sustainable Development in Agriculture (EISA)( 26 ). EISA is an alliance of national agricultural associations which on the basis of good agricultural practice promote the holistic concept of integrated farming as a guideline for sustainable development of agriculture in the EU. EISA has among other things drafted the European Integrated Farming Framework( 27 ), which offers a definition and detailed description of integrated farming as an approach to sustainable development in European agriculture. EISA is composed of national associations and industry representatives. Some of them and/or their members also participate in other international initiatives such as the Roundtable on Responsible Soy( 28 ). SECTION IV: KEY OBSTACLES The main common obstacle encountered by the suppliers to the agricultural sector is the need for time to adapt to new legislation. This is particularly the case when legislations are conflicting. Furthermore, technical constraints, financial, and human resources issues can create further obstacles according to the size of the company. In addition, the following were also identified as specific obstacles: the complexity of the environmental impact assessment of products, the lack of standardisation of methods, the lack of hierarchy/prioritisation in environmental aspects to improve (priority often based on perception by citizens/policy makers rather than science); the loss of competitiveness against competitors (both EU- and third country-based), when voluntary environmentally- friendly practices trigger costs; the social reluctance to some technology based solutions; the dissemination of good agricultural practices at the farm level; improvement of plant efficiency; the consideration of all three aspects of sustainability along the process. ( 25 ) ( 26 ) ( 27 ) ( 28 ) 38

41 SECTION V: RECOMMENDATIONS 1 Dissemination of existing initiatives or improving environmental practices Programmes to further reduce impacts from the manufacturing side building upon current initiatives are decisive and need to be accompanied by improved existing practices and research into new innovative technologies. Furthermore, working towards responsible and sustainable management of products throughout their full life cycle is important to contribute to sustainable agricultural production, whilst ensuring productivity, through increased efficient use of resources. A number of initiatives of the suppliers to the agricultural sector are taken by companies individually, and their dissemination may depend on possible intellectual property protection considerations. The collective initiatives listed below, though, have been successfully implemented in a number of countries and can be disseminated. Round Table on Responsible Soy: feed manufacturers in several EU countries have developed a joint standard for the import of soybean meal meeting the criteria identified by the RTRS (starting with some criteria with a phasing in period to include all criteria). IFFO assurance scheme for the responsible supply of fishmeal and fishoil: IFFO, representing the fish oil and fishmeal suppliers, developed a standard aimed at ensuring sustainable production of fish feed by ensuring that only fish caught according to sustainable practices be used for fishmeal and fish oil production. Regional agreement limiting the amounts of nitrogen and phosphorus in feed in Belgium: Farmers, compound feed manufacturers and authorities of the Flanders region of Belgium signed a voluntary agreement whereby the compound feed manufacturers committed to limit the amount of protein and phosphorus in pig and poultry feed. This agreement enables farmers to better control their nitrogen and phosphorus input/output balance. This agreement has resulted in a 20 % decrease in emissions of phosphorus and a 5 % decrease in nitrogen. TOPPS (Training Operators to Prevent Pollution from Point Sources)( 29 ): Case studies within the EU/ECPA-funded TOPPS project have shown that plant protection products in surface water can be avoided by implementing best management practices (BMPs), optimised sprayers and infrastructure. ECPA, farmers, research institutes and authorities have together developed training materials and best practices for wider dissemination. Currently a new ECPA project, TOPPS-Prowadis will develop common BMPs to mitigate the pollution of water from diffuse sources. It will seek to reduce run-off from the field after heavy rains and develop recommendations to avoid drift. Safe Use Initiative (SUI)( 30 ): The safety of farmers and their workers in correctly handling plant protection products is paramount. Case studies have shown that increasing awareness and training contribute to the sustainable use of PPP. In partnership with local stakeholders, the ECPA develops practical training materials on the best safety measures to apply, which can be successfully adapted in all possible countries. This contributes overall to the promotion of an integrated pest management (IPM) strategy. Product Stewardship Programme: In September 2003 Fertilizers Europe launched a product stewardship programme for the following reasons: ( 29 ) See pages 18 and 19 for further details. ( 30 ) See page 19 for further details. 39

42 to take responsibility for the product through the value chain from raw materials to end use; to meet the public demands for openness and communication; to share experiences and knowledge; to provide a good structure for setting up Product Stewardship at a company level. Overall policy recommendations for the suppliers to the agricultural sector: It is key to have a food chain partnership approach along the food chain for dissemination of best practices. Increasing awareness, education and training are prerequisites for improving the sustainable use of products throughout their life cycle. To ensure this, the dissemination of existing best practices should be promoted in a cross-sector approach. 2 Recommendations/suggestions for areas of eco-innovation or research The key elements listed below have been identified as areas requiring further research: Increase access to available information and foster research into new innovative products, processes and techniques (R&D) for a more efficient use of resources. Increase access to available information and promote research into eco-innovation practices in partnership with the sector concerned. Areas can include the further optimisation of water use efficiency through improved water management and usage, and energy efficiency (ecoefficiency programmes). Enhance access to knowledge to share information between companies/sectors/food chain via coordination/collaboration projects on specific common topics along the food chain. Continue to foster collaboration with other stakeholders in order to benefit from one another's expertise in the area of sustainable production and ensure a better dissemination of results and findings from sector projects to other sectors, e.g. techniques/best practices to optimise energy consumption developed by the suppliers to the agricultural sector could be used in other sector industries and vice versa. Engage with authorities in a win-win situation towards continuous environmental improvements and the development of guidelines/best practices for the sustainable use of the products. Sector-specific proposals were also mentioned: 1 Premixtures and compound feed The priority for the feed sector is to gain better knowledge of the environmental impacts related to the different raw materials they use. A methodology for Life Cycle Assessment (LCA), common for each sector, is therefore necessary for the measurement of CFP. Another key priority is to encourage research in order to reduce GHG emissions linked to feed consumption. An important prerequisite is to overcome the obstacles mentioned under section IV. 40

43 2 Fertilisers Further good agricultural practices may be developed which improve nutrient (nitrogen) use efficiency, as well as advisory and sensing tools to help farmers when applying fertilisers. In cooperation with the farming community, new communication channels to farm level may be developed. 3 Plant protection products Further best practices, recommendations and guidelines may be developed to ensure the sustainable use of products with stakeholder input. 41

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45 CHAPTER 2: AGRICULTURE SUMMARY: WG 3 -Continuous Environmental Improvement Final Report October 2012 Farming systems play a critical role in the food chain it is therefore crucial for the long term health and prosperity of the whole food chain that farming systems are sustainable. While many believe that agriculture accounts for a notable part of the environmental impacts of the food chain, if managed sustainably, it can also benefit the environment in many ways. Different farming systems (conventional, integrated, organic, mixed and crop-specific systems) complement each other as long as they contribute to sustainability. Reforms of the EU Common Agricultural Policy (CAP) have put an increased emphasis on environmental improvements in agricultural production. Focus on less intensive systems and the introduction of cross-compliance are part of the new approach, which also introduces statutory management requirements and good agricultural and environmental conditions. A wide range of voluntary initiatives build on this framework, and incorporate elements going beyond regulation (so-called agri-environmental measures). In future, increasing food production must also include environmental improvements. For this, EU farmers have a major task ahead producing more but impacting less, and will need the financial support via the CAP and cooperation of all those within the food chain to achieve this goal as well as to continue innovation in the agricultural sector. SECTION I: ABOUT THE SECTOR Agriculture is the most important land user in Europe with the Utilised Agricultural Area (UAA) representing 37 % of the whole European land area (ranging from 7 % to over 65%). Figure 2: Land use in the EU-27 43

46 Arable land represents almost one quarter of the area, with permanent grassland representing 14%, though this can vary by country, for example more than 45% of the land in Ireland and the UK is permanent grassland. Land under permanent crops represents less than 3 % of the land area. Cattle and sheep livestock numbers have fallen slightly over the past decade, while the numbers of pigs have stabilised in the EU as a whole. The distribution of agriculture is varied. In 2007 around 40 % of agricultural holdings were specialised in cropping (field crops, horticulture, permanent crops), 22 % in livestock and 38 % were mixed holdings (mixed cropping, mixed livestock, mixed cropping/livestock). In Mediterranean and Scandinavian countries, specialist cropping is the dominant farm type. In Europe there are 13.7 million farmers working either part-time or full-time and over 38,000 agricultural cooperatives. EU agriculture employs almost 30 million people. Even though a trend has been seen in the last decades towards increasing intensification and larger farm units in all Member States, diversity of farming systems in the EU remains large. This is explained by the biophysical conditions in different regions of Europe, pushing farmers in countries with short vegetation periods or insufficient rain to more intensive production, while wet lowlands in mild climate or mountainous regions are characterised by more extensive animal rearing. SECTION II: ENVIRONMENTAL CHALLENGES The vast diversity of farming practices in the EU poses the biggest challenge in identifying environmental issues. There is no one single tool to ensure environmental sustainability in farming. Farming systems can benefit the environment in many ways including: contributing to water retention and flood control nutrient recycling and fixation carbon sequestration and soil formation biodiversity protection provision of recreational services. The main environmental challenges for agriculture are identified below. 1 Water The use of fertilisers and plant protection products can affect water quality, and water abstraction for irrigation as well as drainage can impact the water availability, as well as the quality of surface and groundwater. The main challenges resulting from agricultural activities on water are: nutrient enrichment of surface and groundwater (from fertiliser use) pesticide losses to water (point sources, leaching, run-off and spray drift) water abstraction and drainage soil erosion causing sediment deposits into surface water. Most European agriculture is rain-fed, with only approximately 7% of the land irrigated. Agriculture accounts for 24% of water abstraction in Europe( 31 ). Irrigation fosters crop production by bringing water to plants, which is absolutely essential if plants are to grow in areas with insufficient rainfall ( 31 ) EEA, 2009: The water we eat- irrigated agriculture s heavy toll 44

47 during vegetation period. Irrigation increases productivity and quality and therefore contributes significantly to agricultural output and food supply. However, irrigation can lead to environmental problems, in particular in regions with water stress. Besides irrigation, water is used in livestock production for animal drinking (e.g. dairy farming) and plant cleaning and therefore any reduction in usage must be achieved through improved efficiency and must not compromise animal health or food safety. Water abstraction for irrigation and livestock rearing occurs from ground and surface water, but also from purposely created reservoirs, ponds and artificial lakes (that can contribute to enhanced biodiversity). Before water use can be considered to have a negative impact on the environment, water used for irrigation (among other uses in other sectors) should be compared with water availability at the local level. Moreover, the water sources used for irrigation also matter, e.g. surface water can be replenished much faster than groundwater. Irrigable and irrigated areas alone give no indication of the intensity of water use, which also depends on the type of equipment used. Sprinkler and drop irrigation methods are less water-intensive than surface irrigation (also called flood irrigation ), which still predominates in some countries. However, the actual risk of nutrient and pesticide pollution from farming depends on the combination of farm management practices such as the amount of water, pesticides and nutrients used, the irrigation, plant protection and fertilisation techniques, and the timing and method of application. 2 Air The main air emission from agriculture is ammonia (NH 3 ) The vast majority of NH3 emissions around 94% in Europe come from the agricultural sector, from activities such as manure storage, slurry spreading and the use of synthetic nitrogenous fertilisers. 3 Greenhouse Gas emissions Agriculture accounts for 9.2% of the total GHG emissions in the EU-27 (decreasing trend). Agriculture is highly exposed to climate change and extreme weather conditions, which may have an impact on yields, location of production, costs of production, etc. with potential risks for food supply, agricultural product prices and farm income. The main agricultural sources of GHG emissions are: livestock rearing including emissions from enteric fermentation, manure deposition by grazing animals, manure management and application to agricultural land application of mineral fertiliser, emissions from the cultivation of organic soils, emissions from crop residues emissions related to on-farm energy consumption emissions related to land use changes, in particular from grassland to arable land. Emissions resulting from natural biochemical processes generally depend on climatic, soil and agronomic conditions which can affect the activity of microorganisms present in animals rumen, agricultural soils and manure storage facilities. On the other hand, agricultural land, particularly grassland, woody crops, wetland and peat soils are important carbon sinks. Furthermore the production of biomass for renewable energy reduces the need for fossil fuels. 45

48 4 Soil Quality The main challenges for soil from agricultural activities are: soil erosion due to wind and water, leading to nutrient run-off facilitated by low organic matter soil contamination and eutrophication (from inputs such as plant protection products, fertilisers) soil compaction affecting soil physical qualities and biodiversity decline in soil organic matter, leading to loss of important soil functions. Agriculture can be beneficial to soil quality through increasing its water and nutrient binding capacity through augmentation of organic matter, improving soil fertility through careful use of inputs and the use of cover crops to increasing soil protection. 5 Biodiversity The diversity within the European landscape has been formed over centuries of farming activity. Agriculture has contributed to the spread of numerous protected species of wild plants and animals throughout Europe and helps maintain the diversity of species and the large gene pool currently existing. Positive contributions to biodiversity include: a mosaic of different land use with a rich variety of landscapes and habitats maintenance of valuable semi-natural habitats allowing agricultural production to be linked to the conservation of natural habitats and wildlife avoidance of land abandonment preservation of crop and animal genetic resources. Agriculture can also impact on biodiversity by: contributing to the loss of biodiversity through mismanaged intensification causing fragmentation and modification of natural habitats contributing to the degradation of protected sites eutrophication in aquatic and terrestrial ecosystems, with an associated negative impact on animal and plant species drainage causing floodplain disruptions and breaking the connection between water bodies 6 Resource depletion Agriculture, as an energy user, contributes to the depletion of non-renewable energy sources. Energy is consumed directly by agriculture for machinery (e.g. cultivation of fields with tractors, heating of livestock stables and greenhouses). Inputs such as fertilisers, plant protection products (PPP) and animal feed concentrates are very important for agricultural production. Although the use of these inputs can increase agricultural production, if not used properly they also have the potential to negatively impact the environment, i.e. soil, water, air and non-target organisms and lead to resource depletion. 46

49 7 Land use WG 3 -Continuous Environmental Improvement Final Report October 2012 Agricultural land use and land use changes can have positive as well as negative environmental impacts. Positive effects include: maintenance of sustainable land use practices, especially in mountain areas, contributing to preventing floods, landslides, forest fires and degradation of habitats conversion of arable land into grassland. Negative effects might occur by: converting grassland into arable land or forest sealing for agricultural buildings EU agriculture s dependence on the import of protein feed (leading to deforestation outside EU). The loss of agricultural land, especially prime agricultural lands due to urban development and its fragmentation for infrastructure is a challenge for agriculture. SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES Very successful private agreements or public-private partnerships exist at national level to further enhance the environmental conditions on farmland, many of them based on farmers engagement with locally developed solutions. In many of these agreements, various stakeholders are involved, with the aim to further improve resource-efficiency and biodiversity protection alongside a productive agriculture. Besides voluntary actions, European Farmers have to comply with high environmental standards set by legislation. Specific initiatives 1 Precision farming Precision technology is the application of technologies and agronomic principles to manage spatial and temporal variability associated with all aspects of agricultural production for the purpose of simultaneously improving crop performance and environmental quality. It can help improve the efficiency of farm operations including soil cultivation, and better targeted fertiliser and agrochemical applications. 2 Water Quality In a number of EU countries there are cooperative agreements (e.g. Trinkwasserkooperation in Germany, accord cadre perimeters de captages in France) between water suppliers and farmers to provide good drinking water quality by securing groundwater quality in areas around drinking water catchment wells. However cooperative approaches have to be extended across field and farm level boundaries to bring the desired results. In the EU there are a number of initiatives which aim at better nutrient utilisation on farm by providing support in nutrient planning. Examples from UK are PLANET, a computerised tool used to develop nutrient and manure application plans for N. P, K, MgO, S, NA and lime and MANNER, a decision support system that can be used to predict the fertiliser N value of organic manures. Another example for improved nutrient management in agriculture is Baltic DEAL, a 3 year project that has been initiated in 2010 by farmers federations from 4 countries with borders to the Baltic sea (Sweden, Denmark, Germany, Finland). It aims at reducing nutrient losses from the agricultural sector without 47

50 impairing competitiveness or production by supporting farmers with specialised advice. The French Agri-mieux programme (previously known as Ferti-mieux ) based on cooperative agreements also aims to improve and protect water quality without generating income loss for the farmers. The programme was launched by the National Association for Agricultural Development, in cooperation with governmental and agricultural organisations such as the Ministries for Agriculture and Environment, the Chambers of Agriculture and water utilities. The agreements mostly consist of providing communication and technical assistance and are non-binding, voluntary programmes, which do not involve compensation. By adopting the label Agri-Mieux, farmers take action to change the use of fertilisers among other measures. The incentives for farmers to participate consist of a label awarded to groups of farmers in a region engaging in voluntary action to protect water resources. The activities have resulted in up to 40% reduction in fertiliser levels in the water after the application of measures. The functioning and success of the Agri-mieux programmes is transmitted from farmers to farmers, through Transfer farms, which act as best-practice examples and offer four days of open days and training a year. 3 Air Quality To reduce NH 3 emissions from livestock rearing, different technical solutions are applied, such as housing systems, acidification of manure, cooling of manure and filtering the air before leaving the stables and improved manure storage and application. The use of improved filter technologies can be co-funded in some Member States through the Rural Development Programmes as innovative measure. In some Member States improved housing solutions are part of the BAT for larger livestock units. 4 GHG Emissions Farmers can be an important part of the solution to climate change problems, by cutting emissions of greenhouse gases (GHGs) and by increasing carbon stocks in the soil. Total emissions from EU agriculture fell by 20% in the period 1990 to 2005, Agriculture reduced its overall GHG emissions over the last 20 years (by 20% since 1990), mainly through the reduction of livestock numbers, but also by improving fertiliser use efficiency, thereby reducing the nitrogen input: this evolution though is also partly linked to the rising costs for those inputs. The reduction in emissions from farming is considerably higher than the overall reduction in emissions in all EU sectors of about 8%. Several initiatives are applied throughout Europe to: reduce methane emissions per unit of product, e.g. by increasing animal longevity and by increasing yield per animal (taking into account economic viability and animal welfare) increase biogas production and reduction of uncontrolled methane release from stored manures and slurries increased nutrient-use efficiency to reduce the amount of mineral fertilisers to be applied (thereby reducing the carbon emissions from their manufacturing) change livestock diets to reduce methane generated through enteric fermentation improve carbon storage in the soil and in biomass (e.g. agro-forestry) Farmers also contribute to mitigating climate change by using biofuels in agricultural vehicles, increasing energy efficiency and increasing feed efficiency. Several guidance documents have been produced, e.g by farmers organisations, to provide farmers with the knowledge and skills to reduce GHG emissions on farm, via e.g. promoting bio-energy production. 48

51 4. Soil Quality Responsible cultivation practices contribute to preserving soil fertility and prevent soil erosion, pollution, salinisation and loss of arable land, water retention potential and biodiversity. Farmers and growers play a critical role in managing, maintaining and protecting agricultural soils. A number of agri-environmental schemes, as well as other voluntary initiatives, in particular farmer's own initiatives, support the implementation of minimum / no-tillage practices, as measures to avoid bare soils over winter (cover crops, undersawn crops). One example is the European "Sustainable Agriculture and Soil Conservation (the SoCo project)" study that started in 2007 and was finalised in 2009 and that gathered a number of best practice examples( 32 ). 5 Biodiversity Farmers take their roles as countryside managers very seriously and are involved in a number of initiatives( 33 ). For example, the decline of farmland bird populations has been significantly slowed down, with population of some species even increasing during the last years. To help this, farmers in England are growing wild bird seed mixtures on almost 30,000ha and adopt targeted agri-environment initiatives leading to significantly increased populations of certain scarce farmland birds e.g. cirl buntings by 130% ( ) and stone curlews by 87% ( ). 6 Resource depletion Energy consumption in agriculture varies widely across livestock and crop production systems. Energy consumed per hectare is by far the highest in the Netherlands, with kgoe/ha. The high intensity of production involving heated glasshouses, the most energy-consuming type of crop production, accounts for most of this. Therefore considerable efforts are put into improving energyefficiency in glasshouses, e.g. via heat recovering, installation of solar panels, improved ventilation. Excessive input use in livestock production can influence nutrient contents and digestibility, leading to differences in manure production and nutrient contents of manure, affecting greenhouse gas emissions, ammonia emissions and nutrient leaching to surface and groundwater. Thus all measures reducing GHG emissions also have the potential to avoid resource depletion. Though many environmental problems are generally associated with intensification, extensification can also lead to negative impacts, especially through soil degradation and erosion. Intensive agriculture need not threaten the environment if products are used properly. 7. Land use Agriculture today competes with many other land users. With the expected increase in global population (+70% by 2050 according to FAO) there will be a need to further increase food production, leading to increased land competition in future in Europe as well as in third countries. There is an obligation to maintain permanent pasture in the EU as set out in Regulation 73/2009 and this strongly limits the possibility of converting grassland into arable land. Agri-environmental measures addressing extensive livestock rearing on permanent grassland can on one hand prevent intensification, but on the other hand contribute to preventing abandonment. 32 See 33 See Farming Biodiversity: table with initiatives at the end of the document 49

52 Regulations setting the baseline Common Agricultural Policy Cross-compliance is a mechanism introduced as part of the 2003 CAP reform where financial support to farmers is linked to abiding with environmental, food safety, animal health and welfare regulations (SMR)(34) and the obligation to maintain land in Good Agricultural and Environmental Conditions (GAEC). These agricultural production standards address soil protection, maintenance of soil organic matter and structure, preventing soil erosion, avoiding the deterioration of habitats, and since 2010 include water protection and management. Another cross-compliance obligation is the protection of permanent pastures and the maintenance of the permanent pasture ratio. The Industrial Emissions Directive (IED) The IPPC Directive, now replaced by the IED, stipulates conditions for large pig and poultry production units by setting challenging emission targets. Stakeholders including the agricultural sector are working with the Commission to identify and describe the Best Available Techniques (BAT) for complying with this industrial regulation for concerned farms. The so-called BREF-notes will regularly be revised and be the basis for permitting the production units. The Water Framework Directive (WFD) European farmers have to meet stringent water standards under this EU legislation. The WFD( 35 ) establishes a legal framework to prevent further deterioration, to protect, enhance and restore waters with the aim of achieving good status of all community waters by In addition to the WFD there are the Floods Directive (Directive 2007/60/EC) and the new Groundwater Directive (Directive 2006/118/EC), the 'daughter directives'. Minimum requirements under the WFD include existing EU legislation (e.g. Nitrates Directive), controls over abstraction of surface and groundwater, controls over practices influencing source and diffuse emission of pollutants and the application of the cost recovery principle. Furthermore, Directive 2009/128/EC on the sustainable use of plant protection products includes the obligation to set up National Action Plans at the latest by December 2012 with appropriate measures to reduce the risks linked to the use of plant protection products, including the mandatory application of the IPM (Integrated Pest Management) approach by farmers at the latest by The National Emission Ceilings (NEC) Directive (2001/81/EC) sets obligations at Member State level to reduce inter alia ammonia (NH 3 ) emissions from livestock rearing. Agriculture is covered by the effort-sharing decision (Decision 406/2009/EC), setting reduction targets for GHG emissions in those sectors not covered by the Emission Trading Scheme (ETS). While each EU Member State is committed to limiting its GHG emissions, the distribution amongst the concerned sectors is decided at the Member State level, leading to differentiated approaches for agriculture across the EU. The EU nature legislation consists of the Birds Directive (2009/147/EC) and the Habitats Directive (92/43/EEC) with the NATURA 2000 network as a key component covering 17 % of the EU territory. In these protected areas at least the current protection status has to be maintained while the farming activity can still, under certain conditions, be pursued. 34 Annex II of Regulation 73/2009, including the Birds Directive, the Habitats Directive, the Nitrates Directive, the Groundwater Directive, the Directive on the placing of plant protection products on the market /60/EC 50

53 Voluntary agri-environment schemes Agri-environmental measures are an integral part of the CAP. By adopting voluntary environmental measures going beyond mandatory requirements, farmers are compensated for the additional costs and/or income foregone. Agri-environmental measures are used to address a wide range of environmental aims and can contribute positively to the protection of landscapes, soils, water and biodiversity. Environment voluntary measures such as grass buffer strips, skylark plots and flower strips, can be adopted on marginal land. SECTION IV: KEY OBSTACLES In many cases there is a negative trade-off between enhancing environmental protection and maintaining or even improving agricultural productivity - in the short as well as in the long term. Farmers cannot be expected to provide public goods through measures that may negatively affect their income unless there are possibilities to provide financial incentives to adapt improved management practices and to implement innovative solutions. For example protecting the environment is never as simple as just reducing fertiliser levels on farm. Whilst the farmers costs may decrease his farm output will most likely also fall. The more sensible solution is to promote nitrogen use efficiency which can benefit the environment and farm incomes a win-win situation. On the other hand, reduced fertilisation also leads to lower protein contents in cereals, e.g. a quality criteria for bread wheat, thus making it more difficult to produce bread wheat. Few indicators to monitor environmental pressures (taking into account the different local conditions) are yet validated by scientists, farmers and the public, thus making it difficult to quantify environmental impacts. An improved understanding of the dynamics of natural processes is essential if farmers are to accurately measure their environmental impact and improvements. For example, for GHG emissions, only mitigation methods that involve reducing the number of animals are counted as a reduction on the enteric fermentation inventory. Thus any changes to the carbon balance based on diet changes or other technologies are not considered as mitigation measures. Therefore a more inclusive and comprehensive inventory calculation should be developed. Another major obstacle is that in the EU less than 15 % of farms own their whole land area and in many of the new Member States more than a quarter of agricultural holdings have no owned land at all( 36 ). Being involved in a tenancy arrangement in particular short term contracts can be a key obstacle for not changing current farming practices as well as for not participating in agrienvironmental schemes (which have a minimum duration of 5 years). If farmers have to adapt to higher environmental standards that are too costly or on too short notice, this might lead to the disappearance of some farming activities as they might not be competitive anymore or might not able to make the necessary investments. Small scale farms and subsistence farming are in particular threatened. The risk of land abandonment with its negative impacts on habitats and species to be preserved and on water retention should be fully taken into account and lead to proportionality. In terms of water use efficiency, there will be a limit beyond which water use reductions cannot be undertaken without affecting crop yields and quality, as well as animal health or hygiene. For biogas installations, the large capital investment, planning constraints and the volume and range of inputs required taken together are all limitations for farmers to invest in this new business opportunity. EU and national government support is necessary to ease the risk of financial investment and sharing of best practice is required to realise the potential for growth in this area. EU waste legislation affecting negatively the mobility of manure can also hamper collaborative on-farm investments in biogas plants. 36 Eurostat

54 SECTION V: RECOMMENDATIONS A system approach is crucial to address the environmental challenges. A lot of farmers rely heavily on purchased farm inputs to provide crop nutrients and to manage pests, diseases and weed problems. To reduce this dependency it is crucial to develop solutions taking into account the different farm types, the practices used and to offer farmers solutions to enhance environmental quality and the natural resource base, while not affecting farm competitiveness. In addition it is important to correctly identify the environmental needs at the landscape level to help farmers set the right priorities, especially in cases where conflicting goals amongst the different natural resources and biodiversity occur. Whenever possible, priority has to be given to environmental improvements providing synergies. It is crucial to give farmers the choice on how to adapt their farming practices, including making use of eco-innovation to maintain and, if possible, to restore natural resources and biodiversity whilst keeping their economic activity viable. After all, farmers can only contribute to environmental objectives where they are still in business. Farmers themselves can be an often underutilised resource in identifying suitable agricultural management practices which are beneficial to the environment, having many years of local knowledge and land management experience. The involvement of farmers via applied research and the implementation of experimentation fields on farms can contribute to continuously improving environmental impacts from farming activity. Several examples exist of practices that contribute to environmental sustainability, but they have to be set in the correct context. Below can be found a comprehensive list of recommendations for future environmental improvements at farm level: sharing and spreading best practice: Existing best practice and technology use should be shared within the agricultural sector. Input providers as well as trade associations can play an active role in supporting, sharing and encouraging the spread of best practice. It is also crucial that national and local authorities and agencies target their support programmes and incentives to help farmers overcome barriers to environmental improvement, e.g. through providing the necessary advice and vocational training to farmers increased use of low emission techniques for spreading of manures and mineral fertilisers.optimising the use of livestock effluents and other by-products for fertilisation investigate new and novel animal feeding strategies - using feeding systems which reduce greenhouse gas emissions from animal respiration using technology in animal housing which enables less energy to be used. This includes low emission new pig and poultry housing support for farmers to produce animal feed and protein crops on farm (in 2009, the EU had to import 70% of the protein it required to feed its livestock) providing support for investments for renewable energy production and a stronger focus on the non-food use of biomass (including by-products) which have huge potential in a more resource efficient and biobased society adoption of new technologies and new approaches to help meet the challenge of sustainable intensification. This includes precision farming. Research and Development and Innovation: Innovation is crucial for long term sustainability. Technological development is expected to deliver significant further improvements in areas such as crop and animal breeding, energy use, greenhouse gases and resource efficiency. Agriculture needs further focus on R&D and investment and increased co-operation across the food chain (including processors and retailers). Particular attention must be paid to environmental benefits that do not impact negatively on production or competitiveness. 52

55 reducing animal disease levels through improved animal health schemes may reduce the use and need for antibiotics, and will help lead to increased productivity recording environmental performance: It is currently difficult to assess and measure how agricultural practices can benefit the environment. Improved monitoring would be beneficial improved uptake of research outcomes and knowledge transfer. There is a need to better understand and better manage the interactions between the impacts of climate change, the use of natural resources, wildlife species and habitats and food production. Therefore networking with farmers, experts and researchers and the setting up of on farm demonstration facilities is crucial key elements in this are an efficient use of nutrients, feed, water, pesticides, energy or light by the plant or animal; using technology including biotechnology (e.g. by using enzymes) and machinery to increase efficiency and target inputs; and reducing waste from the system increased uptake of agri-environment schemes: Better communicating the benefits and accessibility of these schemes to farmers can improve the level of uptake of these schemes. 53

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57 CHAPTER 3: AGRICULTURAL TRADE SUMMARY The present chapter covers the direct environmental impacts of trading activities linked to the handling of agricultural products (refrigeration, cleaning, first conditioning), the procedures linked to the import of agricultural products (loading and unloading activities) and the use of logistic facilities. It does not cover direct environmental effects of transport to which a specific chapter has been dedicated, although the agricultural trade sector is an extensive user of transport and logistic facilities. As a consequence, the direct environmental impacts of agricultural trade are drastically reduced and here only concern those associated with energy use, water use (e.g. refrigeration and cleaning), air quality (e.g. dust during loading and unloading of grains), GHG emissions (mainly related to energy depletion) and direct land use (surface sealing and related logistic platforms also located and exploited in third countries). For the sake of clarity, environmental issues related to direct agricultural production and related production factors (related to the crop protection products, feed materials and other consumer products) are discussed in their specific chapters. The main areas of improvement of the agricultural trade sector defined above lie in reducing carbon emissions from energy use, water savings in the handling of agricultural products and an efficiently coordinated and planned use of logistic infrastructure whilst optimising transport movements. Environmental policies should be coordinated internationally, thus avoiding disruption of trading activities which, globally, could lead to less sustainable solutions. SECTION I: ABOUT THE SECTOR The European Union is the leading trading bloc in the world. Alongside the US it is the leading exporter of agricultural products and remains by far the world s largest importer. Europe imports mostly basic agricultural commodities, but its exports are based on high quality farm products and other processed agricultural products( 37 ). CELCAA is a French acronym which in English stands for European Liaison Committee for Agricultural and Agri-food Trade, with 12 European associations as members( 38 ). The majority of European member associations represent cooperative and non-cooperative wholesalers (collectors, distributors, stores, importers and exporters) of major agricultural products. These agricultural raw materials could be used at a later stage as food or feed or non-food and non-feed purposes. The products traded by CELCAA members are cereals, oilseeds, sugar, fruits and vegetables, animal feeds, oils and fats, potatoes, tobacco, spices, live animals and meat (beef, pork, lamb and mutton, chevon, poultry and game), eggs and egg products, dairy and dairy products, honey and flowers. With regard to retail one CELCAA member represents the butcher sector. Traders collect the agricultural raw material of animal and plant origin from farmers. Depending on the circumstances, the agricultural raw materials may be cleaned, graded, sorted and differentiated into marketable products based on certain qualities requested by marketing standards or client specifications in the form of contractual obligations or private standards. Traders are in charge of facilitating the efficiency of agricultural goods exchanges from different countries respecting legislative requirements in the country of destination and contractual agreements set by their clients, which may go beyond legal requirements (e.g. by way of environmental, ethical, and animal welfare private voluntary standards). Traders are intensive users of transport means and logistics such as port facilities, transport and storage infrastructure; they benefit from the eco-innovations related to these key steps. Agricultural traders interact with different levels of the food chain, which also differs from product to product. Alongside receiving agricultural raw material from the farming sector, they supply ( 37 ) ( 38 ) See CELCAA members at 55

58 agricultural producers with inputs (agro-chemicals, feedstuffs). All production factors are also in compliance with the legal framework of the country of destination that, for instance, in the case of the European Union assures authorisation only to safe products. Different actors inside the agri-food chain rely on the agri-related trade activities for both their supply of raw material and delivery of products. Trade activities also frequently allow efficient movements of by-products from their production sites to other processing plants where they function as raw materials (e.g. by-products of milling and oil extraction), thus resulting in increased sustainability. In 2006( 39 ) agricultural wholesale in the EU represented around enterprises, employing around 1.3 million employees, with a turnover of over EUR 460 billion, and an added value around EUR 40 billion. In the following focus is laid on the structure and evolution of the European Union (EU) external trade in primary goods: imports and exports at the EU level. Primary goods, also called commodities, are goods sold for production or consumption just as they are found in nature; they include crude oil, coal, iron, and agricultural products such as wheat or cotton. In 2009 primary goods accounted for 13 % of total EU exports. The product group food and drink (SITC Sections 0 and 1) includes agricultural products such as food and live animals, beverages and tobacco. Trade in food and drink remained fairly stable between 1999 and 2004 but rapidly increased from The EU posted a trade deficit, valued at EUR 11.1 billion in In exports, beverages are the most important individual products within the group, accounting for around a quarter of the total. Other main products include cereals, fruits and vegetables and dairy products. The US is the main destination country for EU exports, with a 15 % share, followed by Russia, Switzerland and Japan. Coffee and tea, fruit, vegetables and fish make up about 60 % of the imports. The imports of food and drink are less concentrated than total EU imports. Brazil, Argentina and the US are the only suppliers accounting for more than 5 % of total imports. Figure 3: Source: Eurostat( 40 ) - EU trade in food and drink, by main partners, 2009 ( 39 ) Own calculation and rounded figures based on data published by Eurostat in European Business: Facts and figures edition in table 18.7 and table 18.9 see ( 40 ) Data from Eurostat, November

59 SECTION II: ENVIRONMENTAL CHALLENGES The direct impacts of agricultural trade are: water air quality GHG emissions soil quality biodiversity land use resource depletion. With the exception of water and GHG emissions, most impacts are hardly measurable, mainly as they are indirect and therefore difficult to isolate. Over the past four decades a reduction of prices for raw materials and energy has led to a reduction of production costs, which together with a development in transportation (larger and faster shipments) has facilitated trade of raw materials and food products. Thanks to these developments, food production is located where conditions are most suitable, to maximise efficiency of production. Specialisation in food and feed production efficiency is key for reducing pressure on natural resources and improving resource efficiency, however it needs to be managed well. The main environmental challenges for the agricultural trade sector are identified below. 1 Water The use of water for refrigeration, cleaning stores, transport vehicles, cleaning of agri-produce in certain cases represents an important impact. In this respect, the virtual water trade is of relevance. Virtual water trade The virtual water content of a commodity is the volume of water used to produce this commodity. International trade in food and other products implies international flows of virtual water (Figure 4). Many nations save domestic water resources by importing water-intensive products and exporting commodities that are less water intensive. National water saving through the import of a product can imply savings in water at a global level if the flow is from sites with a relatively high water productivity (i.e. commodities with a low virtual water content) to sites with a low water productivity (i.e. commodities with a high virtual water content). 57

60 Figure 4: National virtual water balances related to the international trade of products. Period ( 41 ) Studies by the Water Footprint Network show that the total amount of water that would be required in the importing countries if all imported agricultural products were produced domestically is 1605 Gm 3 /yr. These products are however being produced with only 1253 Gm 3 /yr in the exporting countries, saving global water resources by 352 Gm 3 /yr. This savings is 28 % of the international virtual water flows related to the trade of agricultural products and 6 % of the global water use in agriculture. Countries are of course primarily interested in the status of their own national water resources. Egypt imports wheat and in doing so saves 3.6 Gm 3 /yr of its national water resources. Water use for producing export commodities can be beneficial, as for instance in Cote d Ivoire, Ghana and Brazil, where the use of green water resources (mainly through rain-fed agriculture) for the production of stimulant crops for export has a positive economic impact on the national economy. In general, importing a product which has a relatively high ratio of green to blue virtual water content saves global blue water resources (ground and surface water) that generally have a higher opportunity cost than green water. 2 Air quality During loading and unloading, dust from the agri-produce might pollute the air. In addition, transportation contributes to air pollution through GHG emissions and fine particles. 3 Greenhouse gas (GHG) emissions Operating cold stores, unloading, cleaning, sorting and grading require the use of energy, causing GHG emissions. Refrigeration creates GHG both because of the energy used to operate the equipment and because of the inherent global warming potential (GWP) of the refrigerant gases. It is hard to quantify precisely since the number of enterprises that use refrigerated equipment and the size and efficiency of this equipment varies widely. Estimates carried out by the Food Climate Research Network suggest refrigeration associated with food in the UK accounts for about % of the UK s GHG emissions. Figures for the refrigeration at the food manufacturing, retailing and domestic stages are available and ( 41 ) Chapagain, A.K., Hoekstra, A.Y., and Savenije, H.H.G. (2006) Water saving through international trade of agricultural products 58

61 total about 2.4 % of UK GHG emissions. Energy used by mobile refrigeration units and for the cold chain of imported products prior to their arrival at destination accounts for the remaining emissions. 4 Land use Infrastructure used for trading (roads, railways, stores, airports and seaports) leads to surface sealing. Imported agricultural products still use land in third countries (their impacts on the environment are similar to those considered in the agriculture production constituency). SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES In order to reduce water wastage, traders use more water-saving cleaning equipment with catch systems and recycle water used for cleaning. For refrigeration purposes, groundwater is increasingly being replaced by water from rainwater collection. Optimisation of transport movements, use of reusable and recyclable industrial packaging and various energy saving projects are examples of the sector s active environmental policy. The environmental impact from land use for imported products in third countries is reduced by the use of an efficient trading system. Such systems help compensate for climate-induced production decreases in certain regions and facilitate the transfer of food and agricultural products from regions where their production involves relatively fewer greenhouse gas emissions to regions where production would result in a higher percentage of global GHG emissions. Specific initiatives by constituency members are provided in Annex II. SECTION IV: KEY OBSTACLES Among the European agricultural trading associations there is a common agreement that a vertical sector approach is a must when dealing with sustainability matters. It is widely recognised that trade activities intervene at several steps of the food supply chain, and therefore agricultural traders are in a unique position to contribute to the improvement of common sustainability issues for the whole chain. Climate change might impact on trade in a multitude of ways. For example, governments may introduce a variety of policies, such as regulatory measures and economic incentives, to address climate change. These actions may represent opportunities as well as obstacles to the necessary developments of the agricultural activities of a modern society, which bases its welfare on the principle of an open and efficient agricultural market. Those measures and their governance may have an impact on international trade and the multilateral trading system. Agriculture cannot deliver the expected sustainable development benefits when agricultural markets do not function competitively. Agricultural production relies on a multitude of local variables. Production could therefore be more environmentally efficient in areas where local conditions make it possible to maximise efficiency of production and productivity and therefore increase the global sustainability performances. However, the lack of scientific research aimed at clarifying the interlinkage between regional specialisation and increasing environmental performances represents an obstacle to overcome. Specialisation is considered key to economic efficiency because different individuals or countries have different comparative advantages. While one country may have an absolute advantage in every area over other countries, it could nonetheless specialise in the area which it has a relative comparative advantage, and thereby gain from trading with countries which have no absolute advantages. 59

62 Efforts to reduce GHG emissions should be taken multilaterally in order to discuss the role of the current trade and environment negotiations in promoting also trade in technologies that aim to mitigate climate change. SECTION V: RECOMMENDATIONS The current state of scientific knowledge on climate change and on the options available for responding to the challenge of climate change should be expanded. An EU international policy priority should address on a case-by-case basis scientific policy options already introduced in the different agri-food production systems in order to explore potentially workable solutions to address climate change, both at the international and national level. Policies and measures aimed at reducing GHG emissions and at increasing energy efficiency are needed, especially in less developed countries where the key obstacle may be availability of financial means. Measures on environmental protection, sustainable development and trade should be explored and, where appropriate, WTO rules and disciplines relevant to such measures should be developed. Climate change policies that do not lead to further distortions of the international agricultural trading system are vital for the agro-food sector. Further research on policy measures to address climate change is needed and impact assessments on how these measures may affect agricultural production and on how they relate to international trade rules should be conducted. 60

63 CHAPTER 4: FOOD AND DRINK INDUSTRIES SUMMARY The processing industry has sought to identify the main areas for environmental challenges, innovation and cooperation with other stakeholders. According to the analysis conducted by the members of the food and drink manufacturing sector, the three most important areas for environmental improvement are: resource efficiency, energy and climate change, and water. However, there are already a number of existing initiatives and actions in place to deal with these issues. Food and drink manufacturers produce a wide range of different by-products and co-products besides food to ensure 100 % use of their agricultural resources and avoid waste. Energy efficiency improvements and renewable energy production are also widely applied, while the impact on water is being mitigated by both efficiency and better treatment measures. SECTION I: ABOUT THE SECTOR The food and drink manufacturing sector is the largest manufacturing sector in the EU, with an annual turnover of EUR 965 billion; half of which is generated by small and medium-sized companies (SMEs). The sector employs 4.4 million people, but is highly fragmented, comprising some companies, 99.1% of which are SMEs. The sector purchases and processes 70 % of EU agricultural production. The companies export some EUR 58 billion in food and drink products to third countries contributing to a positive trade balance of around EUR 1.1 billion. The industry serves over 500 million consumers a wide range of food and drink products. SECTION II: ENVIRONMENTAL CHALLENGES The main environmental challenges for the food and drink industries are: Water Energy and climate change Resource efficiency 1 Water Access to water is critical for the food and drink industry, both in terms of quantity and quality. The main challenges for the food and drink industry in terms of water use are: to continuously reduce levels of water consumption in its processes by improving water efficiency without compromising strict food hygiene requirements; to promote the responsible use of water and maintain sustainable water supplies throughout the food chain, including agriculture. In the food and drink processing sector, water serves two key functions. 1. In food and drink manufacturing, water is both a product and a main ingredient (for bottled water, non-alcoholic and alcoholic drinks, etc.). 2. Water is also an indispensable element in many food-processing steps, such as washing, boiling, steaming, cooling and cleaning. In all food sub-sectors, water plays a crucial role in guaranteeing the strictest hygiene standards. Waste water is the most common waste in the food and drink industry. This is because food processing involves a number of unit operations in which water is an essential requirement, such as washing, boiling, evaporation, extraction, filtration and cleaning. 61

64 2 Energy and climate change There is increasing pressure on energy users to improve their energy efficiency, not only as a result of regulatory drivers but also because of rising and highly volatile energy prices and concerns over supply security. The envisaged transition towards a low carbon economy will have far-reaching impacts on all economic sectors, including the food and drink industry. Impacts on the food sector may also stem from global warming itself. Climate change will affect agriculture, availability of clean water and sea temperatures, and this in turn will have direct effects on the sustainability of the food and drink industry. Food and drink manufacturing is characterised by relatively low energy intensity, although there are major differences in energy intensities between the various sub-sectors. Food and drink manufacturing requires process heating and cooling, as well as electric power. Heating processes account for the dominant part of the sector's overall energy requirements, as they comprise high temperature processing such as boiling, drying, pasteurisation and evaporation. Low temperature processes such as freezing and cooling are also important in many sectors. Electricity is required for the operation of processing machinery, such as fans, pumps, ventilation, mixers, compressors, refrigeration and cooling units. GHG emissions from food and drink manufacturing are almost exclusively energy-use related (> 99 %). Process emissions in the industry are very low and predominantly CO 2 -neutral from processes such as fermentation. Energy-use related emissions in the food industry can be divided into: direct (on-site) emissions (burning of liquid, gaseous and solid fuels on site) indirect (off-site) emissions from electricity purchased from power plants. Between 1990 and 2006, the economic value of the food and drink industry's production output grew by more than 57 % in the EU-15 and today amounts to more than EUR 750 billion per year. Despite this notable economic expansion, growth in GHG emissions in the sector was limited to 6 % over the same period in the EU-15, reflecting a relative decoupling of economic growth from GHG emissions. This has been achieved despite significant life style changes that increasingly shift consumer demand towards food and drink products manufacturers, e.g. chilled foods, ready meals, 'life style' foods, and smaller and more convenient package sizes. 3 Resource efficiency Resources used in the food and drink sector are of agricultural origin. Due to their biological nature, virtually every part of an agricultural crop has a useful application. There is both an imperative and an immense potential to use these resources in a highly efficient manner. The first objective of the food industry is to use 100 % of agricultural resources wherever possible and, in so doing, to reduce waste to the absolute minimum. Food and drink manufacturers are increasingly acting as bio-refineries, in which agricultural resources are transformed into a broad range of different products, including co-products and by-products, all of which serve useful applications including not only food, but also animal feed, fertilisers, cosmetics, pharmaceuticals, bio-plastics and bio-fuels. While the food industry is fully committed to resource reduction, a minimum amount of waste is unavoidable and food companies progressively implement sustainable recycling and recovery methods to reclaim resources embedded in waste, and to divert waste away from landfill. 62

65 The way in which renewable and non-renewable resources are used in many parts of the world risks eroding the planet's capacity to regenerate these resources. Globally, this trend is exacerbated by increasing demand for raw materials from emerging economies such as China, India and Brazil. To ensure more sustainable resource use, it is essential to improve resource efficiency and reduce the environmental impacts while ensuring continued economic growth (decoupling). Resource efficiency is also a crucial driver for waste prevention. Where waste generation cannot be prevented, it is imperative to recover its embedded resources in the most efficient manner. SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES 1 Water European food and drink manufacturers undertake continuous investment to ensure sound waste water treatment, which consists of three main elements: first, to reduce the amount of waste water through efficient processing methods; second, to improve the quality of waste water through state-of the-art water treatment; third, to optimise the reuse, recycling and recovery of waste water whenever possible without compromising stringent EU hygiene requirements. Reducing water consumption Concrete action to improve water efficiency at the factory level falls into two categories: behavioural changes (best management practice) and investment in water-efficient technology. Behavioural change is 'the low hanging fruit' for water-efficiency. It incurs limited costs yet can save substantial amounts of water. Behavioural improvements cover a variety of initiatives, which require specific staff training and communication tools. They include: developing water consumption monitoring tools, modifying cleaning and housekeeping routines; increasing staff awareness; identifying and repairing leaks promptly; using sensor-controlled taps or hand-controlled triggers on hoses. Several national, sector and company initiatives have developed best practice on water management, with the potential for low-cost replication throughout the food sector. Investment in new technology is a more capital-intensive element in reducing water use. For instance, figures from the French food and drink industry federation ANIA show that investment in water-efficient technologies constitutes by far the largest share of the sector's environment-related investment in France. Where hygiene requirements allow for it, technologies for water reuse and recycling are implemented. For example, innovative processes have been developed to replace fresh water intake with water recovered during the production process, and to recycle suitable water streams for irrigation purposes around factories. Maximisation of condensate recovery from the steam distribution systems has also been investigated and implemented. Water quality improvement and recovery Quality control of discharged water is a second key element in waste water management in the food and drink industry. In several cases, a 'win-win' solution is feasible: the organic components contained in the process water can be valorised to produce energy (anaerobic digestion), compost (aerobic digestion) and soil improvers, while at the same time significantly improving the quality of discharged water. Several companies operate full three-step treatment: anaerobic pre-treatment (biogasproduction), followed by composting and tertiary treatment, i.e. the removal of nitrogen and phosphorus. This results not only in improved energy efficiency, but also in a decrease in the discharge of oxygen-depleting substances. In Belgium, for example, discharged oxygen-depleting substances (COD) per tonne of product in the sector fell by about 20 % from 2002 to Many companies continue investing in cutting-edge technology to reduce COD still further and to optimise energy recovery. 63

66 2 Energy and climate change Food and drink manufacturers are demonstrating genuine leadership in energy and carbon management. This includes voluntarily cutting energy use, fuel switching, investing in energy efficient and low carbon technologies, participating in national or sector energy efficiency schemes, and carrying out detailed energy audits and feasibility studies. While energy savings opportunities differ markedly among sub-sectors, and best practice is often defined on a sector basis (e.g. for dairy, sugar, brewing etc), a number of general principles can be identified in the industry's move towards sustainable energy and carbon management. Long-term energy efficiency agreements In several EU Member States, the food and drink sector is participating in long term agreements (LTAs) on energy efficiency between government and industry. Benchmarking and monitoring Benchmarking and monitoring is a first step to reduce energy-related emissions by identifying the most important emission sources. Many companies have also set out internal goals on reducing their carbon footprints. Energy efficiency/reduction in energy/fuel consumption Many food producers have improved their energy efficiencies or reduced their fuel usage by other means through technological innovations and/or improved usage reduction programmes and processes. Renewable fuel from by-products Many by-products produced by the food and drink industry may be used as fuel. This can reduce the dependence on fossil fuels. Other examples Other examples include: awareness raising for energy and carbon management, in particular in SMEs definition and dissemination of best practices in energy efficiency facilitating investment in low carbon technology by providing information on existing technologies, investment parameters and saving potentials constructive cooperation with all relevant EU and national stakeholders, including participation in R&D projects, funding schemes and private-public partnerships. Refrigeration Hydrofluorocarbons (HFCs) are used as refrigerants in some types of refrigeration systems, for which currently no viable alternatives exist. If accidentally released into the atmosphere, HFCs contribute to global warming. Although HFCs are a very small source of GHG emissions in the food industry (accounting for around 0.2 % of the sector's emissions), the food industry is gradually moving towards alternative refrigerants as they become technically and economically viable, safe and energy efficient. 3 Resource efficiency: making the most of raw materials Full raw material utilisation Besides its core products, the EU food and drink industry produces many additional products that are used in a wide range of economic applications, ranging from animal feed to fertilisers, cosmetics, pharmaceuticals, lubricants, bio-plastics, bio-fuels and other technical applications. These products are subject to product-related legislation and may offer significant environmental and economic benefits. They improve resource efficiency in industry, helping to reduce agricultural pressures on the environment. They generate higher added value from a given unit of agricultural raw material (stimulating economic growth). In addition, they contribute significantly to the prevention of 64

67 bio-waste and related greenhouse gas emissions. Finally, by-products from the food and drink sector support the transition towards a bio-based, low carbon economy using renewable resources. Example 1: Animal feed Animal feed is the most important use of by-products from the food sector in terms of volume. Each year, about 85 million tonnes of by-products are used for animal feeding (e.g. sugar beet pulp, maize gluten, brewers' grains, whey). 60 million tonnes are used by the EU compound feed industry, while the rest is supplied directly to farmers. Example 2: Bio-energy production Due to the agricultural origin of the raw materials used in the food and drink sector, many by-products are suitable for use as a CO 2 -neutral, renewable energy source. Many by-products from food and drink manufacturing can be transformed into bio-gas via anaerobic digestion in bio-reactors. This technique is increasingly combined with combined heat and power generation (CHP), with the produced heat used 100 % in the internal production process, and the remaining electricity sold to the national grid as renewable energy. Coffee chaff from coffee roasting and spent coffee grounds from soluble coffee manufacturing can also be used as CO 2 -neutral fuels. For instance, spent coffee grounds from soluble coffee production can be burned as renewable fuel to provide steam for other production stages, replacing fossil fuels and reducing CO 2 emissions. Example 3: Fertilisers Several by-products from food manufacturing can be used as bio-fertilisers adding nutritional value to soil. Sugar factory lime, for instance, is recognised as a fertiliser under the EU's regulation on organic agricultural production. In addition to lime (calcium carbonate), it also contains other valuable nutrients such as magnesium, phosphate and potassium, and is used to improve soil structure and reduce acidity. In this way, the sugar industry makes a valuable contribution to environmental efficiency by providing farmers with a sustainable product that prevents the extraction of limited limestone reserves. Example 4: Other applications Bio-based products and raw materials from the food and drink industries are increasingly used to produce plastics, lubricants, detergents, ink, cosmetics and pharmaceuticals. SECTION IV: KEY OBSTACLES 1 Water Hygiene constraints While water savings are continuously achieved by food and drink manufacturers, there are technical limits, and a certain level of fresh, clean water use will always remain necessary to ensure compliance with strict EU hygiene standards. For example, the reuse of water from on-site cleaning stations is regulated by Regulation (EC) No 852/2004 on the hygiene of foodstuffs, stipulating that recycled water used in processing or as an ingredient has to be of the same standard as clean drinking water; additional regulations are under development( 42 ). Authorities tend to interpret quality requirements in the strictest terms in order to prevent any risk of contamination. The food and drink industry supports the highest hygiene standards to guarantee food safety. ( 42 ) SANCO/2011/11145 rev. 1, Commission Regulation (EU) No /.. of XXX laying down measures regarding the use of recycled hot water to reduce microbiological surface contamination of carcases 65

68 2 Energy and climate change Countless food and drink companies have integrated energy and carbon management into their daily business practices and are achieving impressive results. The challenge lies in helping underperforming companies to catch up, while encouraging front-runners to further improve their achievements. In moving towards sustainable energy and carbon management, manufacturers often face a number of barriers that can be summarised as follows: Investment barriers The investment barriers are: Long payback periods in a sector used to short investment cycles Availability of investment funds Lack of commercial competitiveness of emerging technologies Investment uncertainty Gas and electricity price volatility (e.g. CHP). Management barriers Energy and carbon issues should be dealt with at the top management level. In many sub-sectors, energy accounts for a low share of overall costs. Because of the lack of skilled and informed staff, especially in SMEs, there is a gap between intention and ability to implement certain actions. Barriers to sharing best practices Best practice is sometimes seen as a competitive advantage. Technological barriers Remaining technical limitations of emerging technologies. Depending on the type and size of a company, its financial and human resources, and its experience with energy and carbon management, different instruments and support schemes are required. 3 Resource efficiency Besides R&D, on-site investment is often required to implement the required technologies for full resource utilisation. In this respect, the financial restraints of small and medium enterprises (SMEs) in the food and drink sector must be taken into full account if existing technologies are to be applied widely. In certain cases, there may be opportunities to centralise by-product utilisation, especially where they are produced at too low a scale to economically justify internal utilisation (e.g. centralised bio-gas production from by-products from food and drink facilities in a given local area). SECTION V: RECOMMENDATIONS 1 Water Based on its achievements in water use reduction, the food and drink industry is committed to improving water management practices even further, and to exploring new water saving opportunities. 66

69 Future policy recommendations: To encourage water savings in all economic sectors, water prices should reflect real costs in line with the EU Water Framework Directive. At the national level, attention should be paid to the proper implementation of water legislation in all sectors in order to ensure high water quality and quantity. EU and national policies should support efficient water management and technology in all economic sectors. Capital-intensive investment depends on a number of parameters, including water prices, investment cycles, payback periods, available funding in SMEs, etc. Public policy can play a positive role in creating a favourable climate for continued investment in water efficiency. Recycling of pretreated waste water, in line with stringent EU hygiene requirements, is another area where further efficiency gains can be achieved through continuous innovation and investment. 2 Energy and climate change Short- and mid-term strategies for managing a carbon restrained future Short- and mid-term energy use and carbon reductions will be achievable if existing best practice in terms of energy management is still more widespread within the sector. Associations play an active role in supporting, sharing and encouraging the spread of best practice, though it is often more difficult for them to reach SMEs in the industry. Long-term strategies for managing a carbon restrained future Long-term targets require additional focus, R&D, investment and increased cooperation among all stakeholders, including businesses and public authorities. Technological developments are expected to deliver significant GHG savings. Industry need to work closely with authorities to align research and development (R&D) with industry's needs and to implement the results of beneficial R&D. Particular attention must be paid to improving the commercial competitiveness of emerging technologies. Long-term GHG reductions in the food and drink sector may require a major transformation in energy supply, e.g. through the development of renewable and low carbon energy sources. One important option to consider is increased self-generation of low carbon energy on-site. Due to the agricultural nature of raw materials used in the food sector, there is technical potential in several sub-sectors to generate bio-based, carbon-neutral energy from by-products and waste (e.g. anaerobic digestion), though recognising, at the same time, that these by-products serve important alternative purposes along the food chain, e.g. animal feed. Renewable energies also include, amongst others, wind turbines and solar heat. Future policy recommendations: Public authorities and energy agencies to help promote energy efficiency at the level of SMEs (e.g. provision of free energy audits and other relevant expertise). Financial support schemes to overcome existing investment barriers (e.g. CHP). Continued R&D to push innovation. Improve the competitiveness (commercial viability) of low-carbon technologies. Member States to align national energy mix with GHG reduction targets. 3 Resource efficiency Waste prevention remains the industry's priority in the field of resource management. The utilisation of all components contained in agricultural raw materials still offers a huge potential for further resource-efficiency gains. 67

70 Food and drink companies continuously invest in new technologies to adapt their by-products to emerging new markets. Further environmental and economic gains can be realised through intensified cooperation between business partners and the research community with a view to exploring new technologies. Current R&D covers areas such as the utilisation of proteins, oils, sugars, vitamins, colourants or antioxidants contained in the crops. Future policy recommendations: To allow the full environmental and economic benefits of complete raw material utilisation to be realised, long-term legal certainty is required regarding the important distinction between non-waste, including by-products, and waste under EU waste law. This legal certainty is essential in order to justify the significant investment needed for adjusting by-products to the needs of existing and emerging new markets. EU legislation needs to provide the industry with a clear legal basis for its ongoing efforts to optimise raw material use. New Article 5 of the new Directive on Waste is a first important step in the right direction. 68

71 CHAPTER 5: PACKAGING SUPPLY CHAIN SUMMARY: The packaging supply chain is composed of various sectors of economic operators which collectively provide packaging for, in this case, the food and beverage industry. As a packaging material neutral association, EUROPEN represents this constituency of the packaging material sector organisations, most of which are also members of the Round Table. In sustainability terms, packaging contributes positively by preventing food waste and thus loss of far more valuable resources than are used for packaging itself. A significant driver for reducing impacts is the robust market-driven competition between the principal packaging material sectors of glass, metals, paper, plastic, and wood. SECTION I: ABOUT THE SECTOR This Constituency represents the part of the life cycle and supply chain of packaging manufacturing, from raw material sourcing through the manufacturing of packaging. Packing and filling is covered by the food and drink industry constituency. Although members of both of these constituencies share responsibility for and/or are intrinsically connected with the end-of-life phase of packaging, the activities of collecting and recovering used packaging are separately reported in the chapter on Consumer Waste Collection and Recovery. The packaging supply chain is made up of many different sectors, each with their own individual figures, but it is estimated that globally it has an annual turnover of approximately EUR 100 billion and employs approximately 1.35 million people (estimates by the World Packaging Organization, 2006). SECTION II: ENVIRONMENTAL CHALLENGES Members of the packaging constituency have carried out many individual life cycle analyses of various packaging formats which indicate that the environmental challenges for the packaging supply chain occur mainly during the raw material sourcing, converting and end-of-life phases. The individual environmental aspects and impacts (as defined in the Food SCP RT s Guiding Principles) associated with packaging can vary significantly depending on: the packaging material used (e.g. glass, metals, paper, plastics, wood) the function of the package (different products require different packaging, e.g. carbonated and still water, or chilled and ambient products have different packaging specifications). Therefore, it is not meaningful to try to describe the environmental challenges of packaging in a generic sense, or individual packaging formats in isolation from the products they protect. Hence, each packaging material sector has described their environmental challenges and actions to address these challenges. As packaging is intrinsically connected with the end-of-life phase, some references will be made in Section II and Section III to the end-of-life management of each material, while at the same time avoiding overlap with Chapter 8 on Consumer Waste. It is also worth noting that, in the context of a food or drink product, the differences in environmental impact are usually very small between different packaging formats; the resources used to make a package are often far fewer than the resources used to make the food product it protects; however, the overall environmental impact of a food or drink product may partly depend on how it is packaged, therefore the overall objective should be to minimise the impact of the packaged product. 69

72 A Environmental challenges for glass packaging As packaging, glass containers assure the preservation, safe delivery and presentation of a vast array of consumer products. Glass packaging is used for drink and food products, and is used in many different shapes and designs. 1 GHG emissions GHG emissions occur during the production process. However, virgin raw materials can be replaced by recycled glass (or cullet) in the batch which is fed into the furnace. By replacing 1.2 kg of raw material with 1 kg of cullet, 0.67 kg of CO 2 are saved( 43 ) (FEVE, 2010). 2 Resource efficiency Renewable and non-renewable resources are used mainly during the sourcing phase. Indirect impacts may result from transport and energy use during all phases. There are no resource limitations for all of the raw materials. In general, local sourcing minimises transport emissions. 3 Land use As with other resources, land use is particularly relevant where mining is involved. However, glass cullet is a secondary raw material and can be formed into the same product (bottle-to-bottle) and therefore no additional land for mining is needed. In addition once mining operations cease, land, soil and habitat are restored as per local requirements in Europe. B Environmental challenges for plastics Plastics and flexible packaging( 44 ) offer a vaste range of solutions through the diversity of materials, material origins, conversion processes and printing techniques. That variety makes it suitable for every step of the food supply chain (primary, secondary and tertiary packaging). Plastic and flexible packaging for the food sector comprises bags, blisters pack, bottles, bowls, buckets, caps, closures, containers, crates, drums, pallets, pouches, sachets, sleeve, films, etc. The food and agricultural market represent more than 65% of plastics and flexible packaging sold in Europe, according to Industry estimates. Environmental challenges for plastic and flexible packaging concern the continuous improvement of the environmental footprint of processes and products, and particularly on the eco-design of packaging. To meet these challenges, plastic and flexible packaging converters carry out many individual life-cycle analyses of various packaging and are active in recovery systems for packaging at the end of its life-cycle. 1 Water The majority of plastic and flexible packaging converters use a closed-loop water system to reduce water consumption. The main challenges for the plastics and flexible packaging industry are to continue to promote the responsible use of water and closed loop water system, and improving water efficiency of processes. 2 GHG emissions For plastic and flexible packaging converters, GHG emissions mainly depend on the energy used during raw material sourcing, energy used during packaging converting, transport, and the end-of-life phase. The challenges are to: reduce energy used by all the plastic and flexible packaging supply chain promote renewable and low impacts energy ( 43 ) Life Cycle Assessment (LCA) of Container Glass in Europe; FEVE LCA 2010/ PE International, ( 44 ) Flexible packaging is a category of packaging which includes film made of several materials, e.g. plastic, aluminium, paper, such as a yogurt carton lid (aluminium film + plastic film) and film made of several layers of plastic, such as a package for grated cheese. 70

73 optimise transport (vehicles, roadmap, load, reuse of transport packaging, etc.) and promote transport by train and boat when possible further decrease packaging waste which is incinerated without recovery, and further promote recycling and recovery further reduce packaging weight while maintaining its protective qualities (light weighting) further decrease packaging waste which is incinerated without recovery, and further promote recycling and recovery. 3 Resource efficiency Resource efficiency is a key issue for plastic and flexible packaging converters. The challenges are given below. Continue aiming for the source reduction of packaging, without compromising performances and generating product losses. For example, since 1990, the weight of a 1.5 l plastic water bottle was reduced by 40 % to 25 g in 2011 Increase use of recycled materials, when possible, and further decrease the environmental impacts of the production of new raw materials Develop and use bio-based plastics, when appropriate, because of their renewable origins. C Environmental challenges for steel packaging Steel packaging is found everywhere in modern daily life due to its versatility and universal consumer acceptance. Steel is used for a vast range of products (food, beverage, general line, aerosol) in many shapes, sizes and decorations 1 GHG emissions The greenhouse gas of most relevance to the world steel industry is carbon dioxide (CO 2 ). On average, 1.9 tonnes of CO 2 are emitted for every tonne of steel produced. Steel recycling has an enormous impact on the reduction of CO 2 emissions. Recycling one tonne of steel scrap saves 80 % of the CO 2 emissions( 45 ) produced when making steel from iron ore. In fact, each item of recycled steel packaging used saves one and a half times its weight of CO 2. So the more steel is recycled, the more CO 2 emissions are reduced. 2 Resource efficiency Making optimum use of raw materials is of strategic importance to the steel industry. The steel industry s raw material use relates mostly to the bulk raw materials: iron ore and coal, coke and sinter fuels. Iron is a common mineral on the earth s surface. In the 1970s and 1980s, modern steel plants needed an average of 144 kg of raw materials to produce 100 kg of steel. Today, the steel industry uses only 115 kg of inputs to make 100 kg of steel a 21 % reduction. In 2008, more than 475 million tonnes of steel scrap was moved from the waste stream into the recycling stream. Steel recycling accounts for significant raw material and energy savings. Over 1400 kg of iron ore, 400 kg of coal, and 55 kg of limestone are saved for each tonne of steel scrap used( 46 ). D Environmental challenges for aluminium packaging Cans and foil are the best known aluminium end-uses in the packaging sector: about 17% of all aluminium in Europe is employed to produce beverage and food cans, containers, trays, aerosols, tubes, capsules and a wide range of thin (laminated) foil applications such as wrappings, lids and pouches. ( 45 ) Life Cycle Inventory and Impact Analysis for Beverage Cans, Commissioned by BCME/EAA/APEAL ( 46 ) APEAL (the Association of European Producers of Steel for Packaging) 71

74 1 Water Water is commonly used throughout the aluminium industry for cooling purposes, typically cooling of metal (liquid or hot) after remelting, or cooling of tools during hot metal fabrication. The cooling water is discharged after use, with constant monitoring of the quality of water effluents. The water use for a given plant can be very different depending on whether it has a single or multiple cooling use through water recycling systems the latter resulting in a very low net water input. The system used depends on local water availability. Wherever appropriate, water is kept in a loop. The aluminium industry has worked towards a continued and significant decrease of fresh water consumption( 47 ). 2 GHG emissions The most relevant greenhouse gases generated during the production of primary aluminium are carbon dioxide (CO 2 ) and perfluorocarbons (PFCs). On average, about 9.7 tonnes of CO 2 -Equivalents are emitted for every tonne of primary aluminium produced. Around half of the greenhouse gas emissions are related to the supply of electricity. Between 1997 and 2009 the greenhouse gas emissions for the primary production on process level registered a significant reduction of almost 50 %, thanks to process improvements, which allowed for a dramatic reduction of the PFC emissions, and the closure of the lower well-performing smelters. Aluminium recycling has an enormous impact on the reduction of CO 2 emissions. The production of one tonne of aluminium out of scrap saves about 95 % of the CO 2 emissions produced compared with primary aluminium produced from bauxite. In other words, one tonne of aluminium produced from scrap saves more than 9 tonnes of CO 2 -Equivalents. PFC emissions do not occur in the recycling of aluminium scrap. 3 Resource efficiency Aluminium is the third most frequently occurring element on earth and makes up about 8 % of its crust. It is extracted from the mineral bauxite, which is available in abundant quantities. Land rehabilitation is an integral part of bauxite mining. Energy resources are also essential for the production of aluminium. From the early eighties until today the electricity demand has been reduced by approximately 10 %. There is also a tendency to an increased use of renewable electrical energy. From 1997 until today the share of renewable energy has increased by 8 %, which can be explained by the number of bilateral agreements signed by primary smelters for the dedicated supply of renewable energy. The use of recycled aluminium contributes considerably to saving resources, as it saves up to 95 % of the energy and does not require bauxite. The latter is used for the production of primary aluminium. Today, about 55 % of the total amount of aluminium packaging used in Europe is recycled. Used beverage cans have very high recycling rates of up to 90 % or more, while thin foil-based laminated packaging can also be incinerated with energy recovery. A significant contribution to saving resources also comes from down-gauging, which involves using less material for the same function. For instance, the industry has managed to further reduce the weight of the beverage can over the past 16 years by more than 15 % and is still keen to reduce its weight further. The aluminium foil industry has also made great progress in saving material and energy by reducing the gauge of foil without compromising its performance. For example, thickness levels of chocolate and coffee foil have been reduced by 30 % over the past 20 years. However, it should be stressed that due to technical limitations, further progress in the near future will be less spectacular than in the past. End-of-life recycling remains by far the most important contribution for reducing the environmental footprint of used aluminium packaging. And as its atomic ( 47 ) %20Sustainability %20of %20the %20European %20aluminium %20industry.pdf 72

75 structure does not change during the remelting process aluminium can be infinitely recycled without loosing any of its material properties. E Environmental challenges for paper and board packaging Paper and board packaging for the food and drinks sector comprises corrugated boxes and packaging, paper sacks, beverage cartons, folding carton, flexible and waxed paper-based packaging and some speciality papers. And as its atomic structure does not change during the remelting process aluminium can be infinitely recycled without loosing any of its material properties. Consolidated industry environmental data for paper and board packaging for food and drinks are not available (with the exception of EU recycling rates). However, life-cycle data are available for beverage cartons converting ( 48 ) and for corrugated packaging (food and non-food)( 49 ). 1 Water Although water is an essential input to manufacture the paper and board raw material for packaging, it is used in an almost closed loop so that the effective water consumption is low (mainly to replace evaporation losses and water bonded in paper or board). Paper mills in the EU have to comply with legal and environmental requirements set by local/national authorities. Converting paper and board into packaging is a dry process, since water is not used as an input into the converting process but it is mainly used for cooling and cleaning purposes( 50 ). 2 Air quality Emissions from the production of pulp and paper/board (raw materials for paper and board packaging) are regulated by the Industrial Emissions Directive. The SO 2 emissions of the pulp and paper industries are small and have been reduced through a reduction in fossil oil consumption in combination with improved combustion technology and more efficient flue-gas purification methods. NO x emissions have stabilised over the years in absolute terms, but have been reduced significantly per tonne of pulp or paper due to improved combustion and purification methods and reduced consumption of fossil oil( 51 ). Air emissions from paper and board packaging conversion are mainly limited to processes (use of solvents used in printing inks and in printing plate production) and on-site fuel use, depending on individual sites. Water-based inks are increasingly used and the use of solventbased printing inks is regulated under the Industrial Emissions Directive. 3 GHG emissions CO 2 is emitted during the manufacture of the paper and board raw material for packaging, a process which is relatively energy intensive. However, the European pulp and paper industry is the single largest consumer and producer of renewable energy in Europe( 52 ) and has succeeded in reducing absolute CO 2 emissions by 8 % compared to 1990( 53 ). Finally, the trees used to manufacture paper and board absorb CO 2 which is then stored in the product. Converting paper and board into packaging is much less energy intensive, although efforts are being made to reduce emissions during production. The carbon footprint of a paper package is determined mainly by the raw material and whether it is recycled or not at the end of its life. ( 48 ) %20Dataset %20for %20BC %20Converting.pdf ( 49 ) ( 50 ) ( 51 ) Source: CEPI, ( 52 ) CEPI Sustainability Report, ( 53 ) The paper sector was the only major industry sector that was able to reduce emissions under the Emissions Trading Scheme in 2008 versus 2007 (European Commission CO 2 database). 73

76 4 Biodiversity Although biodiversity protection is incorporated into existing tools (e.g. management systems, forest certification, chain of custody, contract terms and conditions)( 54 ), specific and accurate indicators to develop a baseline in individual forests and report continuous improvement are not yet fully developed. 5 Resource efficiency Paper packaging incorporates natural resources, largely in the form of wood which is renewable and recyclable. In Europe, forests are increasing: for example, typically three to five new trees are planted in the Swedish and Finnish forests, or grow naturally, for every tree harvested. Although only a part of a harvested tree goes into a package, every part of it is used effectively (e.g. for furniture, paper and pulp, bioenergy)( 55 ). 77 % on average of paper and board packaging was recycled in the EU in 2008( 56 ), surpassing the 60 % legal target set by the Packaging and Packaging Waste Directive. 6 Land use Forests cover around a third of the EU s land area( 57 ). In Sweden and Finland, from where a large proportion of the raw material for EU paper and board packaging is sourced, 75 % of the annual wood increment is harvested( 55 ) and then replanted. In Europe only wood parts that cannot be used for wood products manufacturing (i.e. furniture) are used for the paper fibres production. SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES The packaging supply chain takes a variety of actions to address environmental challenges: at a corporate level, at a sectoral level, and along the supply chain. 1 Packaging supply chain Along the packaging supply chain more holistic initiatives are taken to address packaging in the context of sustainability. Global Protocol on Packaging and Sustainability (GPPS) - Global indicators and metrics have been developed by The Consumer Goods Forum (TCGF)( 58 ) in an effort to ensure that the packaging supply chain describes and measures the environmental impact of packaging in a harmonised way. The GPPS delivers a common framework and measurement system that trading partners can use to help them make better, more informed decisions about packaging and sustainability. In the context of the European Food SCP Round Table, this global set of metrics will allow companies to describe the environmental attributes and life cycle indicators of packaging on a case-by-case basis and the assessment methodology being developed by WG 1 of the Food RT will be designed so that the packaging of a food or drink product is always included in the functional unit being assessed. The work commenced in 2009 and the GPPS was launched in The CEN Packaging and Environment Standards, mandated by the European Commission, help to minimise resource use, promote continuous improvement and demonstrate compliance with legal requirements. They can be applied to all packaging materials and systems. The standard on prevention by source reduction (Standard EN ) specifies a procedure for assessing packaging during its design phase to ensure that only the minimum material (in terms of weight and/or volume) is used, without compromising packaging performance. Packaging is ( 54 ) CEPI brochure Sharing Experiences: Promoting Biodiversity in the Pulp and Paper Industry ( 55 ) ACE, ( 56 ) Eurostat data for 2008, EU-26 excluding Malta. ( 57 ) DG Environment website, ( 58 ) The Global Packaging Project, 74

77 assessed against ten performance criteria( 59 ) and the single criterion that prevents further reduction by weight and/or volume is identified (known as the critical area ). The process is repeated if changes to the product, packaging system, distribution chain, etc. mean that the critical area preventing further minimisation also change and if conformity can no longer be claimed. This encourages continuous improvement. Actions to address resource use have delivered results: despite a 48 % increase in GDP between 1998 and 2008, an ageing population and a trend towards smaller households (all of which lead to a greater demand for packaged goods), the amount of (non-wood) packaging placed on the market in the EU-15 increased by only 4.8 % during the same period (Eurostat data, 2010). Standards EN EN set requirements to ensure the reusability and/or recoverability of packaging by material recycling, energy recovery or composting. Recovery and recycling help to reduce the impacts of resource use. In 2007, 69 % of used packaging was being recovered in the EU-27 and 56 % was being recycled. (Recycling reached 60 % in the EU-15 in 2007). In the best performing Member States, over 95 % of used packaging was recovered and recycled. ISO Packaging and Environment Standards are being developed. Work commenced in December 2009 and is expected to be completed in Actions to address individual environmental challenges are most often taken at the corporate or sectoral level. Like the challenges themselves, appropriate actions depend very much on the packaging material or system in question and are hence broken down per material sector. Note that the actions listed below are a mere illustration of how the packaging industry addresses its environmental challenges and hence should not be seen as exhaustive. 2 Cross-sectoral examples: An Environmental Management System (EMS) is a common system used by many packaging manufacturers. Such systems typically cover all operations related to the sourcing of raw materials, recycling and reuse of materials and the production, filling and transportation of packaging materials, packaging components, and units of packaging or packaging systems. Accreditation by the ISO standard and EMAS or other relevant standards are measures which are widely used. Where the significance of potential upstream impacts dicate, sectoral guidelines and certification and traceability systems provide guarantees as to the origin and legal sourcing of packaging raw materials. Requirements may include an assessment of the environmental impact of extracting raw materials and measures to preserve biodiversity. Several sectors and companies have developed technical committees, guidelines and tools to decrease the environmental impacts of packaging and to promote reductions of weight and volume, and recyclability. Greater attention must be paid not just to the amount of recyclate that is collected but how it is subsequently used. ( 59 ) Product protection, packaging manufacturing process, packaging filling process, logistics/transport, product presentation and marketing, consumer acceptance, information, safety, legislation, etc. (see Annex II) 75

78 3 Material-specific examples 3.1 Glass Packaging Sector: In the container glass production, virgin raw materials can be replaced by recycled glass (or cullet) in the batch which is fed into the furnace. Through this process, less energy is required to melt recycled glass than to melt raw materials and transform them into glass. Approximately 30 % less energy is required to melt cullet in the furnace compared to virgin raw materials. Furthermore, the energy and CO 2 emissions resulting from the extraction and transport of raw materials are saved (1 kg cullet used replaces 1.2 kg virgin raw materials). The container glass industry, together with Member States and the European Commission, developed and regularly reviews an industry-specific reference document to identify Best Available Techniques (BAT), in accordance with the Directive on Industrial Emissions (IED) (Directive 2010/75/EU). Based on these BAT, permits are granted to the industry. The BAT are reviewed on a regular basis (about every 7 years). Therefore the BAT constitute a continuous environmental improvement of the container glass industry. 3.2 Plastics Packaging Sector: To promote new recyclable packaging, the European PET Bottle Platform (EPBP) evaluates technologies/products and allows new PET bottle innovations, while minimising the economic and environmental consequences for the European PET recycling industry. Eco-profiles of different kind of plastics are developed by Plastics Europe to inform about the reduction of environmental impacts of raw materials production, and to help converters to measure and reduce their own impacts. To increase the use of recycled materials in the plastics packaging industry, it is important to further support and invest in research and development of new recycling processes for food contact applications. EuPlastVoltage: The European plastic converting industry prepares a voluntary long-term agreement on energy efficiency which is aiming at 20% energy savings until 2020( 60 ). IK-Eco Calculator: The German Association for Plastic Packagings and Films (IK) is currently developing an LCA calculator to measure the environmental impacts of plastic packagings. 3.3 Steel for Packaging Sector: 50 % reduction in 40 years time: Climate change has been identified by the steel industry as a major environmental challenge for more than two decades. Long before the findings of the Intergovernmental Panel on Climate Change (IPCC) in 2007, major steel producers recognised that long-term solutions were needed to tackle the CO 2 emissions produced by steel manufacturing. As a result, the industry has been highly proactive in improving energy consumption and reducing greenhouse gas emissions. CO 2 emissions per tonne of crude steel produced are now 50 % lower than they were 40 years ago; a dramatic reduction in climate impact for the sector( 61 ). ULCOS: The largest industry programme to tackle climate change. The kind of reductions being called for by governments and international bodies require the invention and implementation of ( 60 ) ( 61 ) Ultra low Carbon Dioxide (CO 2 ) Steelmaking ( 76

79 radical new production technologies. ULCOS stands for Ultra Low Carbon Dioxide Steelmaking and is the largest steel-industry effort to tackle climate change in the world. It is a consortium of 48 European companies and organisations from 15 European countries that have launched a cooperative research and development initiative to enable a drastic reduction in CO 2 emissions from steel production. The consortium consists of all major EU steel companies, of energy and engineering partners, research institutes and universities and is supported by the European Commission. Begun in 2004, the programme is now in its second phase and well on its way to achieving an ambitious target a 50 % reduction in CO 2 emissions from steel manufacturing. Less material and fewer resources through innovation and research: Innovations in steel for packaging production and can manufacturing mean that less material is used and thus fewer resources than ever before for the same output. In recent years, manufacturers of steel for packaging have developed a new type of steel that is more ductile and which has made it possible to reduce the thickness of cans. Food cans for example, are today 35 % lighter than they were 20 years ago( 62 ). This light weighting innovation combined with the environmental benefits of recycling (every tonne of recycled packaging steel saves two tonnes of raw materials) delivers energy savings of around 70 % and water savings of 40 %( 62 ). In order to better understand the environmental challenges related to steel for packaging, the industry has developed an 'interactive' scorecard which can provide a carbon footprint score based on recycling rates, transport distances and weights. A full and standardised steel for packaging LCI is soon to be released. Steel has a high recycling rate of 71 % in Europe( 63 ), which owes much to its unique material properties. The fact that steel is magnetic makes it the easiest and most cost effective material to sort and recover. When household waste is recycled, these magnetic properties enable steel packaging to be easily separated from other packaging materials. Steel loses none of its strength or inherent qualities, no matter how many times it is recycled. Steel is a permanent material. Over the last few years, the recycling rate for steel packaging continued to grow throughout Europe. Germany is Europe s recycling champion with a recycling rate of 93 %. Belgium and Netherlands follow closely behind, recycling over 87 % of their steel containers( 64 ). 3.4 Aluminium for the Packaging Sector The International Aluminium Institute has adopted a strategy towards the mitigation of greenhouse gases with measures such as: 1. Reduction of perfluorocarbon (PFC) emissions per tonne of primary metal produced through: investment in modern technology attention to good operating practices 2. Improvement of energy efficiency performance throughout the production chain 3. Maximisation of the potential for the recycling of used aluminium products( 65 ). Global aluminium industry will work to encourage a global aluminium UBC (used beverage cans) recycling target of 75 % by This strategy includes the following targets: ( 62 ) APEAL (the Association of European Producers of Steel for Packaging) and Stahlinstitut VDEh ( 63 ) APEAL 2008 recycling figures (the Association of European Producers of Steel for Packaging) ( 64 ) APEAL 2008 recycling figures (the Association of European Producers of Steel for Packaging) ( 65 ) 77

80 50 % reduction in PFC emissions per tonne of aluminium production from 2006 till 2020; 10 % reduction in energy use per tonne of alumina produced for the industry as a whole by 2020 versus 2006 levels. The European Aluminium Association (EAA) publishes an Environmental Profile Report in order to show environmental progress in each stage of the life cycle of aluminium products. For used aluminium beverage cans EAA, together with the beverage can manufacturers, are aiming at a 75 % recycling target Europe-wide, by Initiatives like Every Can Counts in the United Kingdom to address the particular challenge of collecting and recycling out of home used beverage cans should help to generate additional quantities. The initiative is now implemented in France ( Chaque Canette Compte ) and Austria ( Jede Dose zaehlt) and will be extended to other European countries. The EAA supports the goal of Metal Packaging Europe to recycle 80 % of metal packaging by Paper and board packaging Water ACE (The Alliance for Beverage Cartons and the Environment), in collaboration with CEPI (Confederation of European Paper Industries), WFN (Water Footprint Network) and World Wildlife Fund (WWF) has launched a case study on the water footprint of liquid packaging board, which is a raw material for manufacturing beverage cartons. CEPI is developing a water footprinting guideline and more detail is expected to be available this year (2011). ACE members are also involved in the development of a science-based methodology on water footprinting. They support the development of internationally-recognised ISO standards on water footprint to ensure harmonised rules worldwide and across industry sectors. Air quality Environmental Management Systems (ISO14001 or EMAS) are applied in the vast majority of paper and board packaging raw material and converting plants( 66 ) and some packaging converting plants apply World Class Manufacturing principles. This helps to improve overall environmental performance, including reducing emissions to air. GHG Emissions In September 2007, CEPI developed a sector-wide carbon footprint network used widely in the industry and forming the basis on which companies report their carbon footprint to customers. In 2003, it committed to increasing the share of biomass to 56 % on average by 2020 in its total on-site primary energy consumption (it was 54.4 % in 2008). The paper manufacturing sector as a whole (not just raw materials for packaging) reduced its absolute CO 2 emissions by 8 % compared to Although energy intensive, the European pulp and paper industry is becoming less and less carbon intensive( 67 ). The paper industry will produce a roadmap on how the sector could significantly reduce its CO 2 emissions over the next 40 years. The plan will be developed in collaboration with the European Commission. CEPI will explore various routes to achieve its part of the EU s goal of an % reduction in the EU s emissions by 2050 compared with 1990 levels. On the packaging converting side, two companies from the beverage carton sector participate in the WWF Climate Savers programme and have made commitments to reducing their climate impacts, mainly through energy efficiency measures and purchasing renewable energy. Efforts to increase the ( 66 ) 83 % of paper mills were operating an environmental management system in 2006, CEPI Sustainability Report ( 67 ) All data from CEPI Sustainability Report

81 recycling of post-consumer beverage cartons also help extend the lifetime of used fibres as a temporary carbon sink and reduce volumes going to landfill, thus reducing GHG emissions. Biodiversity Steps taken by the paper and paper board packaging industries to help protect biodiversity in forests include ensuring that the wood and paper and board that they purchase come from legal and certified sources (see section on resource efficiency below). Forest owners (who are often independent of paper companies and, indeed, may be two or three steps further up the supply chain) are strongly encouraged to consider biodiversity protection as an integral part of sustainable and responsible forest management. The paper industry contributes to the EU Business and Biodiversity Platform (B@B), a unique European Commission initiative where businesses can come together to share their experiences and best practices, learn from their peers, and voice their needs and concerns to the European Commission. ACE is currently running a pilot project with BirdLife International to further develop understanding and tools for biodiversity in forests. Resource efficiency EU legislation on illegal logging adopted in 2010 aims to ensure that wood and paper purchased for paper-based products including packaging do not contribute to deforestation and forest degradation. In 2005, CEPI introduced a code of conduct that outlines principles to ensure that wood purchased is legally logged and an increasingly large proportion of pulp and paper production companies report full compliance. In 2007, ACE members signed a traceability commitment to ensure 100 % chain-of-custody certification for all paperboard purchased worldwide by 2015 and for all their own packaging material manufacturing plants worldwide by Chain-of-custody is a traceability system to ensure that wood comes from controlled and acceptable sources and ensures traceability throughout the value chain. ACE members accept wood fibres either from forests managed and certified according to FSC or PEFC criteria for forest management, or from controlled wood sources that have defined quality criteria (no wood from forest conversion, no wood from sensitive areas or high conservation value forests, no genetically modified trees). Monitoring of compliance is independently verified by ProForest. The paper and board packaging industry also strives to further increase recycling rates and to avoid incineration and landfill. SECTION IV: KEY OBSTACLES Further actions to decrease the environmental impact of packaging would generate larger negative environmental impacts elsewhere in the product life cycle. For example, as packaging is reduced, the range of scenarios under which food and drink product losses occur increases, until eventually a point is reached where the negative impact of product losses exceeds the benefits from using less packaging material. Any reduction in packaging beyond that point is a false economy, since it increases the total amount of waste in the system. In many cases, there remain few possibilities to further reduce ( lightweight ) packaging without causing such negative environmental impacts. Changes made to packaging (e.g. reduction in weight, substitution of material) in isolation from the contained product may lead to a negative impact at other stages of the product life cycle (e.g. packing and filling, transportation, storage, consumption at home, and waste) and may be counterproductive. Insufficient investment in public waste infrastructure can inhibit cost effective and well-functioning collection systems, which has a negative impact on recovery and recycling rates. 79

82 Measures which cause unfair competitive distortions or which inhibit innovation can restrict opportunities for environmental improvement. The absence of mature methodologies to assess environmental footprints is also a key obstacle. SECTION V: RECOMMENDATIONS 1 Dissemination of existing initiatives on improving Environmental Practices Dissemination of practical advice on developing corporate sustainability strategies for packaging to ensure that a holistic approach is taken to managing environmental impact through the lifecycle of the packaging and the product it contains. Promotion of a global understanding of recommended common principles and definitions related to sustainability characteristics of packaging for packaging/product value chain. Corporate adherence to the Global Protocol on Packaging and Sustainability s (GPPS) principles - and use of its metrics for packaging in the context of sustainable development. Using a single metric can lead to unintended negative outcomes elsewhere, so a comprehensive, justified and consistent selection of a relevant combination of different measures is recommended as best practice (EUROPEN, ECR Europe Guide, 2009, p24). Continuous research and development of optimised packaging solutions able to reduce food waste. 2 Recommendations/suggestions for areas of eco-innovation or research: Further research and development in the area of smart packaging in order to increasingly reduce food waste (e.g. extend shelf-life). Develop further LCA-based environmental footprint methodologies and sector-specific guidance. 80

83 CHAPTER 6: RETAILERS SUMMARY WG 3 -Continuous Environmental Improvement Final Report October 2012 Environmental impacts stemming from the retail sector concern mainly energy use and waste generation. Refrigeration of food products can give rise to significant environmental impacts through energy use and leakage of gases with high global warming potential (GWP). Heating, cooling, ventilation and lighting of buildings can also be energy intensive. Transport of food products to and from retailers is dealt with in chapter 9 of this report. The retail sector has many interconnections with upstream and downstream actors and is strategically placed to deal with, for example: distant suppliers whose environmental performance is otherwise largely unregulated within globalised networks consumer choice issues, for example through marketing and information provision. SECTION I: ABOUT THE SECTOR In 2008, retail enterprises employed almost 18 million people, generated a turnover of EUR billion, and generated a value added of EUR 418 billion( 68 ). The retail trade sector represents over 7 % of the EU-27 non-financial business economy( 69 ), 4.2 % of overall EU GDP, and 20 % of European SMEs( 70 ). This chapter focuses on food (grocery) retail services that represent around half of total retail sales( 71 ). Retail services are a key intermediary service in the modern economy, acting as the conduit between thousands of product suppliers and millions of consumers. Food retail services are provided through a range of formats, including outdoor markets, farm shops, supermarkets, hypermarkets and online shops, and various legal structures, including consumer co-operatives, independent stores, franchises and integrated groups. Grocery retailers work on a vast range of environmental sustainability issues, including: energy efficiency of stores and distribution centres sustainable sourcing encouraging sustainable consumption transportation efficiency waste prevention and management. SECTION II: ENVIRONMENTAL CHALLENGES 1 Climate change greenhouse gas emissions Figure 5 displays a breakdown of GHG emissions directly attributable to the operations of a large European grocery retailer. The largest source of GHG emissions, typically accounting for approximately 60 % of total emissions, is refrigeration. This is divided equally into: ( 68 ) Eurostat, Structural business statistics: ( 69 ) Eurostat, Retail trade and repair. BW EN.PDF. ( 70 ) COM(2010)355 final Retail market monitoring report 'Towards more efficient and fairer retail services in the internal market for 2020'. ( 71 ) Euromonitor International

84 emissions arising from generation of electricity used to run the refrigeration system leakage of halogenated refrigerants with high global warming potential (GWP) (e.g. R404a and R134a). Heating, ventilation and air conditioning (HVAC) account for approximately 13 % of GHG emissions, while other sources are dominated by electricity used for lighting and various ancillary services. Transport and logistic operations account for about 10 % of GHG emissions (see Chapter 9). Retailers may also have some influence over the GHG emissions from product supply chains (next section). Refrigeration 61 % HVAC 13 % Logistics 10 % Source: Carrefour, 2010 and own elaboration Others 16 % Figure 5: Carbon footprint breakdown of retailer operations (EC, 2011)( 72 ) 2 Sustainable sourcing and consumption (supply chain improvement) Typically, over 90 % of the environmental impact associated with products arises during production and consumption, compared with less than 10 % during handling by the retailer( 73 ). The production and consumption of food products alone account for approximately 30 % of environmental impact arising within the EU (EC, 2006)( 74 ). Figure 6 highlights the range of environmental pressures arising from the production and consumption of high-impact product groups, dominated by food and drink, and in particular meat and dairy, products. In addition to global warming, production and consumption of food products give rise to many pressures, in particular: acidification (ammonia from fertilisers, NO x and SO x from combustion processes) abiotic resource depletion (fossil fuels used for energy) pesticide losses to water (ground- and surface water) eutrophication (fertiliser run-off and soil erosion) land-use and biodiversity loss (agriculture encroachment, especially in tropical regions) ozone depletion (refrigerant leakage) photochemical pollution (combustion emissions) soil erosion and water stress (tillage and irrigation, highly site-specific). ( 72 ) EC, Pilot Reference Document on Best Environmental Management Practice in the Retail Trade Sector, ( 73 ) EC, 'Towards a Greener Retail Sector', 82

85 Meat production Prepared meats Fluid milk Cheese Edible fats and oils Soft drinks Drugs Fruit + vegetables Cigarettes Vegetables Roasted coffee Seafood House furnishings Carpets and rugs Poultry processing Apparel manufacture Bread, cake, etc Candy + confectionary Non-durable HH goods Fruits EU15 impact contribution (%) Potato chips, snacks WG 3 -Continuous Environmental Improvement Final Report October 2012 Although retailers are not directly responsible for these impacts, they are strategically positioned to influence suppliers and consumers. In some cases, retailers are the entities with the greatest influence over and potential to demand environmental improvement from suppliers Global warming Acidification Eutrophication Ozone depletion Abiotic depletion Ecotoxity Human toxicity Photochem. pollution Figure 6: The relative contribution of different product groups to eight environmental impacts in the EU-25, Source: based on data from the EC EIPRO study( 74 ). Product groups are ordered according to global warming impact ranking 3 Waste The following example may demonstrate the relevance of the food issue: food and retail industries have been estimated to generate a third of all industrial and commercial waste in the UK( 75 ). UK homes are estimated to produce 6.7 Mt food waste and 5.2 Mt of associated packaging waste annually, with figures for the retail sector varying between 0.4 and 12 Mt annually. In total, up to 50 % of food produced may be wasted along the supply chain( 75 ). Around half of household waste originates from supermarket purchases, and 25 % is packaging( 76 ). Food waste generates environmental pressures through two primary mechanisms: by necessitating more production, distribution and packaging and associated impacts (described in the previous section) creating waste that must be disposed of or recycled, with associated impacts. ( 74 ) EC, Environmental Impact of Products (EIPRO): Analysis of the life cycle environmental impacts related to the final consumption of the EU-25. IPTS, Seville. ( 75 ) Mena et al., The Causes of Food Waste in the Supplier-retailer Interface: Evidences from the UK and Spain. Resoures, Conservation and Recycling, 55 (2011), ( 76 ) 83

86 The disposal of food waste to landfill is the most environmentally-damaging method of waste management, and gives rise to pressures including: land occupation, methane emissions and water pollution. Well-controlled incineration is a less environmentally-damaging method of waste disposal, and enables energy to be captured from the waste materials, but nonetheless results in resource depletion. In addition to food products, other waste materials from the retail sector include: packaging materials such as paper, cardboard, glass, plastic and wood hazardous waste, such as batteries, electronic equipment, fluorescent tubes, cleaning and maintenance agents. 4 Land use and urban planning Retailers typically occupy space within central urban areas or their peripheries. Where large supermarkets, hypermarkets or distribution centres are built on greenfield sites outside of town centres, a number of environmental pressures arise, e.g.: habitat displacement pressures associated with access traffic (large numbers of customers in arriving by cars) reduced groundwater recharge and water contamination arising from parking area run-off. Compared with domestic and transport land occupation, the land area occupied by retailers is small. The main impacts associated with retail development arise from customer transport. SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES 1 Reducing on-site energy use and GHG emissions Table 6.1 provides an overview of the wide range of best practice measures that exist for retailers to reduce on-site energy use and GHG emissions, and indicates whether they are most appropriate for new or existing stores (considering logistics and payback times). 84

87 Table 1: Portfolio of best techniques for retailers to reduce on-site energy consumption and GHG emissions. Technology area Building Electricity Warm water Source: EC (2011)( 72 ) Aspect Techniques Content Scope Envelope Heating, Ventilation and Air Conditioning (HVAC) Integrated approaches Monitoring Refrigeration Lighting Other sspects Solar/biomass Retrofitting the building envelope for optimal energy performance Design premises for new and existing HVAC systems Use of integrative concepts Integration of refrigeration and HVAC Monitoring of stores in the energy management system Efficient refrigeration Efficient lighting Simple secondary measures for reducing energy consumption Use of alternative energy sources Wall, roof, ground, windows, shading systems, orientation Size, zoning, upgrading, diagnosis, screening, maintenance of HVAC systems The use of passive house models or concepts in the design and management of HVAC systems Waste heat recovery from refrigeration. Energy recovery. Use of sustainable heating systems Comprehensive monitoring of energy consumption of stores for an appropriated energy management of retailers Energy saving measures for the refrigeration system of stores. Simple saving measures, refrigeration system retrofitting, refrigerant shifts Use of natural lighting. Use of efficient lighting devices The reduction of the energy consumption through single measures are explained: use of high-rated appliances, setting up energy objectives, training, communication, etc. Efficient integration and optimisation of the input from RES and other sources New and existing stores New and existing stores New stores New and existing stores Existing stores New and existing stores New and existing stores New and existing stores New and existing stores The quality of the building envelope is the primary determinant of energy requirements for HVAC operations, and highly-insulated, airtight building envelopes should be designed in combination with integrated HVAC systems for new premises and for major refurbishments. When incorporated at the building design phase, these measures are a cost-effective way to reduce lifecycle HVAC costs. A large amount of heat arising from compression and condensation phases within refrigeration systems is often wasted, and can be recovered as useful heat using simple heat exchanges. Figure 7 shows that with an efficient building envelope and HVAC system that includes heat recovery from exhaust air, recovery of waste heat from refrigeration systems can exceed the heating demands of a supermarket, so that the retailer may be able to sell surplus heat to neighbouring businesses. An increasing number of retailers are implementing this technique such as KF/COOP Sweden, the S Group Finland, COOPLisboa Portugal, COOP Hungary, COOP Switzerland, and Migros Switzerland. 85

88 Refrigeration system Heat demand EAHR WG 3 -Continuous Environmental Improvement Final Report October 2012 Unrecovered heat from refrigeration cycle Heat content of refrigerant after exchange in cabinets Solar Gain Other heat losses Electricity appliances and lighting Internal Gains Heat loss, exhaust air Electricity demand for refrigeration Recovered Heat from refr. cycle HVAC Heat loss, building envelope Warm Water Produced Heat Building Envelope Figure 7: Energy flow diagram (Sankey diagram) of an optimised food retailer operation with refrigeration heat recovery, high insulated envelope and heat delivery to district heating. EAHR: Exhaust Air Heat Recovery. Source: EC (2011)( 72 ) Refrigeration systems are a major source of retailer GHG emissions, and offer high potential for performance improvement through: the substitution of refrigeration systems based on halogenated refrigerants with systems based on natural refrigerants such as CO 2 the replacement of open display cabinets (vertical and horizontal) with closed display cabinets (with doors). For example, Coop Norway, the S Group Finland and the Cypriot ESEL-SPOLP LTD have taken steps to introduce CO 2 -based refrigeration plants to substitute refrigeration based on ozone-layer depleting substances. Migros and COOP Switzerland as well as ALDI Sued Germanz have already installed many CO 2 -based refrigeration plants, e.g. Migros in Switzerland operates about 150 CO 2 - based refrigeration plants, both for display cases at plus and minus temperatures. Lighting energy can be minimised through the use of daylight where appropriate, but more widely through the use of efficient reflective light fittings, compact fluorescent and LED lamps. Coop Norway continuously replaces inefficient lightning-equipment with low-energy lighting equipment across stores. Coop Italy is also pioneering the use of LED technology for accent lighting. Retailers may use the space on their store and distribution centre sites, including their roofs, to install solar photovoltaic panels or wind turbines to generate low carbon electricity. Alternatively, retailers may invest in specific offsite generation of alternative low carbon electricity. For example, in 2009 Coop Italy inaugurated the new non-food logistic centre in Prato (Italy), which is served by a photovoltaic plant of 2895 kw (the biggest photovoltaic roof in Italy), producing 3200 MWh of electricity. In Finland, the energy company St1 Oy and the S Group established a joint venture for the industrial production of wind power, which is planned to supply 20 % of the electricity used by the S Group by Another example of good practice in renewable energy generation is Colruyt. This group generates 1000 MWh/yr of electricity from roof PV at 17 stores, with a specific generation of 80 kwh/m 2 yr. As well, Colruyt distribution centres are producing more than MWh/yr of 86

89 electricity from wind turbines and 2200 MWh/yr from PV panels. In addition, the group owns a wind offshore farm at the North Sea, which generates more than MWh/yr. Table 2 provides other examples of implementation and energy savings. Table 2: Retailer / Suppliers Tengelmann/KALUX, PHILIPS Unknown/Fobsun Migros/Unknown Source: (EC, 2011) ( 72 ) Energy savings from lighting system retrofitting. Store Location Mülheim, Germany Lyon, France Frauenfeld, Switzerland Average current lighting consumption 17 % of total consumption kwh/yr (tested section) Unknown Applied techniques Natural light LED at freezers T5 35W for basic lighting, etc. Substitution of T8 with LED Substitution of T8 with LED, LED at freezers Energy savings from initial situation Reduction of 50 % of lighting load Reduction of 50 % of lighting consumption Reduction of 50 % of lighting consumption 2 Sustainable sourcing Table 3 provides an overview of retailer techniques that can be employed to improve the environmental performance of product supply chains. Product sourcing and marketing is central to retail business strategy and operations. Modifying these operations to reduce environmental impacts requires a coordinated effort. Retailers such as Coop Switzerland and M&S clearly demonstrate prioritisation of sustainable sourcing within their business strategies, through product sourcing performance and targets (Table 5 and Table 6). Retailers sell a vast range of food products bearing a range of associated environmental impacts. It is imperative that retailers identify priority products for improvement based on the magnitude of environmental impact (i.e. sales volume multiplied by environmental intensity), and achievable reduction potential. Best practice retailers use existing scientific literature, expert consultation, and life cycle assessment (LCA) tools to identify priority products, and improvement options associated with control points along the supply chain (Techniques 2 and 3 in Table 3). For example Coop Sweden, Coop Denmark, the S Group Finland and Coop Norway are working together with their suppliers to develop a tool for the calculation of product carbon footprints and the identification of improvement options. The Co-operative Group UK is working with Manchester University to develop a new software tool (known as the Ready-Reckoner ) for rapid identification of carbon reduction opportunities in product supply chains. The most transparent mechanism for retailers to drive greater supply chain sustainability is to require products or suppliers to be certified according to appropriate third party environmental standards (Technique 4 in Table 3). The Pilot Reference Document on Best Environmental Management Practice in the Retail Trade Sector (EC, 2011)( 72 ) categorises widely-used environmental standards as 'basic', 'improved' or 'exemplary' depending on the environmental rigour of the compliance criteria, and assuming an effective verification mechanism (Table 4). To give some examples of third-party certification of sustainable sourcing: the Co-operative Group UK has stopped selling all fish listed in the MSC fish to avoid list, and has the largest percentage of sales from the MSC s fish to eat list the UK. Coop Denmark has a target for 100 % of wood used in kitchen and furniture products to be Forest Stewardship Council (FSC) certified. Coop Italy decided and makes sure that all its own-brand products do not contain GMOs (see the text box concerning GMO). 87

90 How to understand this textbox There is usually a certain degree of consensus when evaluating the impact on the environment brought about by agricultural production and all the related activities contributing to the production, distribution and recycling of food. However, certain new techniques or technologies, or certain types of agricultural production, are still subject to intense debates with respect to their potential benefit or risk, or where no clear conclusion can be made, despite scientific results documenting and supporting the various opinions. Considering all the arguments, both the pro and cons, the working group could not reach a common understanding and point of view concerning "The cultivation and use of GM crops". Therefore, it was decided to bring together the main opinions and elements of controversy in a text box, independent from the text of the report. In the box, the different opinions are presented along with at least one scientific reference. In no way should this short presentation be taken to constitute an exhaustive summary of the above mentioned controversial issue Text box: Cultivation and use of genetically modified (GM) crops Techniques of genetic modification involving recombinant DNA (Deoxyribonucleic acid) have been used in plant breeding since the 1980s and the first crops produced by GM technologies reached commercial cultivation in the mid-1990's in a number of countries around the globe. From 2007/ /11, then EU 27 imported on annual average 35.6 million tonnes of soybeans and soy meal, 90% of which from Brazil, Argentina and US where GM crops dominate (75% in Brazil, 93% in US and 99% in Argentina) and 6.4 million tonnes of maize, 69% of which from these 3 countries (with 56% GM maize in Brazil and 86% each in Argentina and US)( 77 ). In many European countries, the existing legislation was not regarded as sufficient to regulate genetically modified organisms (GMOs) and so new legislation on GMOs was introduced in the 1980s and 1990s. On the European level, the Directive 2001/18/EC on the deliberate release into the environment of GM organisms, the regulation (EC) No 1829/2003 on GM food and feed are of particular relevance, and Regulation (EC) No 1830/2003 concerning the traceability and labelling of GM organisms and the traceability of food and feed products produced from GM organisms. The regulations generally provide for an authorisation process for experimental and commercial release, import and marketing and use of these crops including a science-based risk assessments (environmental and food and feed safety). In July 2010, the Commission proposed a legal framework for the authorisation of products consisting of or derived from GMOs( 78 ) amending Directive 2001/18/EC as regards the possibility for the Member States to restrict or prohibit the cultivation of GMOs in their territory. A final decision on this framework is expected in In 2011, in Europe, only two GM products are approved for cultivation (1 type of maize and 1 potato for industrial use) and 37 GM crop products have been approved for import (7 cotton, 23 maize, 3 oilseed rape, 3 soybean and 1 sugar beet)( 79 ). Despite the adoption in some non EU-countries, the use of GM crops is still a topic of intense public debate, especially in Europe and also Japan. Recent Eurobarometer data have indicated that more than half of Europeans believes GM foods are not good for them (54%), not safe for future generations (58%) and do not consider GM food safe for their health and the environment (59%). Some stakeholders question the rigour of the risk assessment process and the long-term safety of GM crops. However, the European Commission recently drew the conclusion from the efforts of more than 130 research projects, covering a period of more than 25 years of research, and involving more than 500 research groups, that biotechnology, and in particular GMOs, are not per se more risky than e.g. conventional plant breeding technologies( 80 ) However, the existence of risks is demonstrated by the findings concerning GM crops resistant to the herbicide glyphosate( 81 ). There are stakeholders, such as, for example, environmental organisations that question whether coexistence is possible, referring to cross pollination and admixture between GM and non-gm. However, there are also results ( 77 ) For soybean and soy meal: USDA - for maize: USDA - =BVS&hidReportRetrievalID=455&hidReportRetrievalTemplateID=7, and Nowicki et al., Study on the Implications of Asynchronous GMO Approvals for EU Imports of Animal Feed Products, executed on behalf of Directorate-General for Agriculture and Rural Development European Commission (Contract N 30-CE /00-74), Final Report (December 2010), Most of these imports went into EU livestock production ( 78 ) ( 79 ) ( 80 ) ( 81 ) Book publication "Impact of Genetically Engineered Crops on Farm Sustainability in the United States" of the US National Academy of Sciences (NAS) from

91 published indicating that the coexistence of GM maize and non-gm maize is possible under certain conditions( 82 ). It remains to be seen whether the second-generation GM crops will manage to bring benefits to consumers (e.g. nutritionally enhanced foods, e.g. oils with improved fatty acids composition) and be met with wider public acceptance in the EU. The long-awaited traits that could contribute to enhanced sustainability (e.g. drought tolerance, improved nitrogen use efficiency) will probably also be decisive for acceptance of GMOs. ( 82 ) 89

92 Table 3: Portfolio of techniques employed by retailers to improve the sustainability of product value chains. Strategy Best practice techniques Examples Applicability Prerequisite: integrate sustainable sourcing into business strategy and operations Drive widespread product and supplier environmental improvement Encourage ecological purchasing Source: EC (2011) ( 72 ) 1. Integrate sustainable sourcing into business operations. Develop supply chain environmental improvement objectives and specific targets that are communicated to stakeholders and integrated into the retail organisation through a high-level unit with responsibility for implementation 2. Product supply chain assessment. Collate scientific information on product environmental hot spots, and identify priority improvement options 3. Identify effective supply chain improvement mechanisms. Identify chains of custody and control points to influence the environmental performance of priority product groups and suppliers 4. Choice editing and green procurement. Exclude worst performing products, and require widespread certification according to 'basic', 'improved' or 'exemplary' environmental standards for priority product groups 5. Establish environmental criteria for products and suppliers. Define and enforce basic, improved or 'exemplary' environmental standards for suppliers of priority product groups, targeting environmental hot spots, and work with suppliers to improve performance 6. Intervene to encourage supplier improvement. Assist supplier certification according to third party standards, disseminate best practice, benchmark performance 7. Strategic collaboration on product and standard development. Participate in research to drive supply chain innovation, including collaboration to develop product standards and supplier data exchange 8. Promote front-runner ecological products. Use awareness campaigns, positioning, pricing and own-brand ecological ranges to promote third-party certified eco-products Coop Switzerland, M&S's Plan A, Coop Italy, the Co-operative Group UK, Coop Denmark, Coop Norway Coop Switzerland; M&S and WWF; Sustainability Consortium (Albert Heijn, Asda, M&S, Safeway) Migros (RSPO) Sainsburys, M&S (RSPO); Coop Switz, Migros, Rewe (GlobalGAP); M&S, Migros (BCI); M&S, Waitrose (MSC fish), The Co-operative Group UK, Coop Italy, Coop Denmark, Coop Norway Migros (Terra Suisse) Sainsburys (DDG), Coop Italy Coop Switzerland (FiBL research); Tesco (Sustainable Consumption Institute), Albert Heijn (Pure and Honest); Colruyt (Bio Planet stores); Coop Switz (Naturaplan); Migros (Bio), Coop Norway All retailers All retailers, all core products All retailers, all core products All retailers, all core products Larger retailers, private-label core products Larger retailers, private-label core products Larger retailers, all core products All retailers, all core products 90

93 IMPROVED BASIC WG 3 -Continuous Environmental Improvement Final Report October 2012 Table 4: Proposed classification of widely recognised third party environment-related standards commonly applied to food products. Level Widely used standards Product groups References GG: Global Good Agricultural Practice (and Crops and benchmarked standards) livestock GlobalGAP, 2009( 83 ) GRLF: Greenpeace red-list fish (deselection) Fish Greenpeace, 2010( 84 ) NPC: National/regional production Assured Food certification (e.g. Red Tractor British origin All food Standards, 2010( 85 ) certification) BSI: Better Sugarcane Initiative Cane sugar products BSI, 2010( 86 ) 4C: Common Code for the Coffee 4C Association, Coffee Community Association 2010( 87 ) PEFC: Programme for the Endorsement of Forest Certification Wood and paper PEFC, RA: Rainforest Alliance Agricultural products from tropics SAN, 2010( 89 ) RSPO: Round Table on Sustainable Palm Oil Palm oil products RSPO, 2007( 90 ) RTRS: Round Table on Responsible Soy Soy products RTRS, 2010( 91 ) UTZ Cocoa, coffee, tea UTZ, 2010( 92 ) FSC: Forest Stewardship Council Wood and paper FSC, 2002( 93 ) MSC: Marine Stewardship Council Wild-catch seafood MSC, 2010( 94 ) EX OC: Organic (EC standard, KRAV, Soil EC, 2007( 95 ); EC, All food products Association ) 2008( 96 ); 2010( 97 ) Source: EC (2011)( 72 ) However, some products are not well represented by appropriate 'improved' level third party standards. Retailers can ensure that these are more sustainably sourced by establishing environmental requirements for products or suppliers in contracts (e.g. sustainable fish sourcing: see Table 5) and enforced supplier codes of conduct (Technique 5 in Table 3). The Co-operative Group UK is committed to sourcing 100 per cent of its own-brand canned tuna from more sustainable pole and line fisheries by 2013, and Coop Italy has asked own brand suppliers to avoid Indonesian palm oil until there are reassurances about its sustainability. ( 83 ) GlobalGAP, Control Points and Compliance Criteria: Integrated Farm Assurance Introduction. English Versions V.3.0-3_Apr09Valid from 29 April ( 84 ) Greenpeace, September, ( 85 ) Assured Food Standards, November, ( 86 ) BSI, Better Sugarcane Initiative Production Standard July Downloaded from: Accessed November, ( 87 ) 4C Association, The 4C Code of Conduct version approved in May 2009, including generic indicators approved in February ( 88 ) PEFC, 2010, PEFC Programme for the Endorsement of Forest Certification, ( 89 ) SAN, SAN Sustainable Agriculture Standard July ( 90 ) RSPO, RSPO Principles and Criteria for Sustainable Palm Oil Production Including Indicators and Guidance. October Accessed, August, ( 91 ) RTRS, RTRS Standard for Responsible Soy Production Version 1.0. ( 92 ) UTZ, UTZ Certified Good Inside Code of Conduct For Coffee. Version January ( 93 ) FSC, FSC Principles and Criteria for Forest Stewardship FSC-STD (version 4-0). Downloaded from: Accessed July, ( 94 ) MSC, MSC Fishery Standard. Principles and Criteria for Sustainable Fishing. Version 1.1 (1st May, 2010). Downloaded from: Accessed July, ( 95 ) EC, Council Regulation (EC) No 834/2007 of 28 June ( 96 ) EC, Commission Regulation (EC) No 889/2008 of 5 September ( 97 ) EC, Regulation (EC) No 66/2010 of the European Parliament and of the Council of 25 November 2009 on the EU Ecolabel. 91

94 Table 5: Best retailer performance for techniques 4 to 6 (see table 3) across priority food product groups (% private label sales within each product group compliant with specified criteria) Product Standard classification Technique Best performers 2010 Target (year) Coffee, tea Improved % FT SS ; 20 % 4C CS 100 % 4C (2012) CS Dairy Fruit and veg Basic % NPC Improved % SDDG SS 100 % SAP (2015) M&S Basic % GG CS,ICA,MG,RW Improved % FT (bananas) SS Improved % SAP (2015) M&S Fats and oils Improved % RSPO MG 100 % (2015) CR,CS,M&S,SS,TO 100 % RTRS MG Grain products Improved % SDG SS, 100 % SAP (2015) M&S Basic NA NA Poultry, eggs Improved % SDG SS, 100 % SAP (2015) M&S Basic NA NA Red meat Improved % SAP (2015) M&S, 100 % SDG SS Seafood catch) (wild Basic % GRLF AD,CS,ICA,MG,M&S,SS,WE Improved % SFS ICA,MG,M&S,WE Exemplary 4 66 % MSC M&S 100 % MSC (2012) M&S Sugar Improved % FT M&S;SS (bagged sugar) AD = Axfood, CR = Carrefour, CS = Coop Switzerland, IA = IKEA, KR = Kingfisher, MG = Migros, OT = Otto, RW = REWE, SS = Sainsburys, TO = Tesco, WE = Waitrose. From data presented in EC (2011)( 72 ). In addition to abbreviations for standards labelled: SAP = M&S Sustainable Agriculture Programme, SDDG = Sainsbury's Dairy Development Group, SDG = Sainsbury's Development Group, SFS Sustainable Fish Sourcing criteria. Alternatively, information exchange systems can be established to benchmark supplier performance and disseminate better management practices (Technique 6 in table 3). Examples of this include Sainsbury's Development Group programmes and M&S Sustainable Agriculture Programme (see Table 5). Coop Italy has launched an initiative for all Italian own-brand suppliers called Coop for Kyoto to encourage voluntary supplier commitments to reduce GHG emissions in line with Kyoto Protocol targets. Retailer best practice in these techniques across priority food product groups is summarised in Table 5. Collaboration amongst retailers and other stakeholders to identify supply chain improvement options and develop widely applicable third party product standards is important to realise coordinated and efficient supply chain improvement, and to avoid problems such as 'standard proliferation' (Technique 7 in Table 3). 92

95 3 Promoting environmentally sustainable consumption With respect to food products, organic certification is regarded by some retailers as a front-runner ecological label that drives innovation but might be associated with a significant price premium (see the text box concerning organic food). Organic certification is therefore not appropriate for use as a universal green procurement requirement by retailers, but retailers can play an important role encouraging consumers to buy these products through sourcing, pricing, placement and advertising. How to understand this textbox There is usually a certain degree of consensus when evaluating the impact on the environment brought about by agricultural production and all the related activities contributing to the production, distribution and recycling of food. However, certain new techniques or technologies, or certain types of agricultural production, are still subject to intense debates with respect to their potential benefit or risk, or where no clear conclusion can be made, despite scientific results documenting and supporting the various opinions. Considering all the arguments, both the pro and cons, the working group could not reach a common understanding and point of view concerning "Food from organic farming". Therefore, it was decided to bring together the main opinions and elements of controversy in a text box, independent from the text of the report. In the box, the different opinions are presented along with at least one scientific reference. In no way should this short presentation be taken to constitute an exhaustive summary of the above mentioned controversial issue Text box: Food from organic farming Organic farming production is a holistic production system that, as indicated in regulation 834/2007, respects nature's systems and cycles and sustains and enhances the health of soil, water, plants and animals and the balance between them; encourages preventive rather curative measures; contributes to a high level of biological diversity; makes responsible use of energy and the natural resources, such as water, soil, organic matter and air; respects high animal welfare standards and in particular meets animals species-specific behavioral needs. Organic farming is one of the farming systems such as Integrated Farming aiming at continuous environmental improvement and enhancing sustainability. Cultivation techniques such as minimum tillage or IPM have similar objectives. Organic agriculture, as any form of agriculture, can have both positive and negative impacts on the environment. Organic farming helps improving water management and enhancing on-farm biodiversity. For example, organic agriculture can prove to be well adapted to dry climates (e.g. use of crops with deep rooting systems) However, at the same time, for some crops and animal species, organic farming may have a lower productivity and would need more land for the same output. Therefore eco-functional intensification of organic farming could contribute to a more efficient use of natural resources and processes. Improved nutrient recycling techniques and the use of innovative agroecological methods may contribute to enhancing the diversity and health of soils, crops and livestock. From a health and nutritional value perspective, the discussion on whether there are relevant differences among the different agricultural production methods is ongoing. In any case all food being provided to European consumers has to be safe, meeting the requirements of the EU legislation. It is certain that EU consumers are increasingly concerned about the impact that food chain operations have on the environment. In this respect, products stemming from organic agriculture offer consumer choice in meeting their expectations. In 2009, Coop Norway continued to grant discounts to consumer-members on organic fruit and vegetables. On the Swedish side, KF Sweden's Änglamark label comprises products that have been certified according to exemplary standards, primarily organic (through KRAV or UK Soil Association certification). KF Sweden stock 1736 organic products (including non-food products), accounting for 6.2 % of sales. Some food products in the Änglamark range carry additional certification such as Fair Trade. KF Sweden is responsible for 40 % of all eco-sales in Sweden (vs 22 % market share). Food products with relatively high Änglamark representation include: eggs (19 %), fresh vegetables (6 %), fresh meat (6 %) and cereals (5 %) (KF Sweden, personal communications). Other retailers such as Coop Switzerland and Migros also sell relatively high shares of organic and other front-runner ecological products, achieved through promotion of these products within clearly differentiated, dedicated ecological ranges. Colruyt is pioneering the promotion of organic products within dedicated 'Bioplanet' supermarkets that sell exclusively organic products. 93

96 In 2009, the Italian Coop launched the 'Vivi Verde' ('live green') range comprised of 400 own-brand organic and ecological items, many of which are ecolabelled. The range excludes tropical fats, and includes disposable dishes and glasses produced with biodegradable maize plastic. Coop Switzerland's Naturaplan range comprises over 1600 organic food items certified according to the stringent Bio Bud standard (products cannot be air-freighted or grown in heated greenhouses), and accounts for 7 % of Coop's food sales - and for over 50 % of organic food sales in Switzerland (Coop Switzerland, 2010; Coop Switzerland, personal communication). Overall, 8 % of Coop's food sales are organic, though the share varies considerably across major food groups (Table 6). Table 6: Organic sales shares within priority product groups Product group Organic sales share Coffee, tea 3 % Dairy 12 % Farmed fish 29 % Fats and oils 15 % Fruit and veg 11 % Grain products 20 % Poultry, eggs 23 % Red meat 10 % Sugar 8 % Source: Coop Switzerland Migros Bio-organic food range is certified according to Bio Bud standard, and to Council Regulation (EC) 834/2007 for imported products, and accounts for 3 % of Migros food sales. In addition, Migros has established the Terra Suisse range, which guarantees that food products are produced using limited quantities of agrochemicals, with high animal welfare standards. Terra Suisse accounts for 5 % of Migros food sales (Migros, 2010). 4 Waste A range of EU and Member State legislation relating to waste disposal, recycling and customer takeback services influences retailer practices. In addition to legislative compliance, best practice for retailers to minimise waste includes: using statistical data (including advanced weather forecasts where reliable) to make orders for relevant perishable products as accurately as possible; optimising the efficiency of transport and logistics to minimise the quantity of food that perishes during transport; discounting products immediately before they reach their sell-by date, and giving food that passed its sell-by date but it is still within its best-before date to charities taking care of homeless people; optimising the quantity of packaging, and using recyclable packaging materials, without negatively effecting food preservation. Beyond waste minimisation, two important techniques for retailers to manage waste more sustainably are: installing return systems for PET and PE bottles, and used products, such as batteries, electronic equipment, fluorescent tubes and CO2 cartridges; sending organic waste for anaerobic digestion (fermentation) in biogas plants. 94

97 Every kg of recycled PET reused in new bottles prevents about 3 kg of GHG emissions( 98 ), and can also contribute to reduce littering. Sending food waste to biogas plants avoids disposal to landfill (preventing emissions to soil, water and air), enables the recovery of energy in the form of biogas that is used to generate process heat and electricity for export, and enables recovery of nutrients in the final digestate. One tonne of food waste can generate biogas with an energy content equivalent to 70 l of petrol. Both of the above techniques are implemented by most large German and Swiss retailers, amongst others. For the past 10 years, Coop Italy has been modifying the packaging of its own brand products in line with the 3R strategy to reduce raw material used in packaging production, encourage re-use of bottles and containers through recharge sales, and use recycled materials. Some consumer cooperatives across Europe also indicate on the label packaging disposal instructions (Coop Italy, Coop Norway) and others use deposit schemes for beverage packaging (S Group, Coop Norway). In the UK, the Co-operative Group has been a signatory to the Courtauld Commitment since 2005, thereby committing to absolute reductions in packaging waste. The Group is also on track to respect the commitment to send less than 50 % of total waste to landfill by In Finland, the S Group outlets feature 238 recycling stations where consumers can take their sorted, recyclable package fractions. In 2009, the Finnish S Group had reduced its food waste losses by 14 % compared with The Group has also put in place a policy to minimise food waste by discount actions and optimised purchase orders. Coop Italy promoted the Buon fine ( Good end ) project which aims to recover unsold food products which are still edible and donate them to people in need. This project is managed locally and involves 349 shops, associations and people who received free goods so far for a total of Kg. SECTION IV: KEY OBSTACLES There are a number of obstacles that make it difficult for retailers to implement the above mentioned techniques, even where payback times are short: Building ownership. Retail stores are often located in rented buildings, and it not possible for retailers to renovate these buildings themselves in order to optimise energy performance. Developers and building owners often have little incentive to invest in features that reduce building management costs incurred by users. High investment costs for refrigeration systems using natural refrigerants. The investment costs for these refrigeration systems can be high, and, in the case of retrofitting an existing installation, retailers may not obtain any payback, in the absence of GHG costing (e.g. a carbon tax), for the main benefit of substantially reduced GHG emissions. Similarly, the investment costs for renewable energy installations are high, and the payback period may be long. Uncertainty regarding the future prices that may be achieved for exported green electricity can deter investment. Availability of certified products, e.g. for fish sourced by sustainable fisheries. There are limited numbers of environmentally certified suppliers from which improved products can be sought, and growth in certified suppliers may be constrained by certification system capacities. Similarly, it can take time for retailers to establish effective environmental requirements and supplier improvement programmes including data exchange. Standard proliferation. The rapidly expanding range of environmental standards confuses consumers and makes it imperative that retailers select robust, verified and widely applicable standards. Infrastructure limitations. Some countries have underdeveloped waste recycling infrastructure, in particular for anaerobic digestion. It may be difficult for retailers to find appropriate nearby facilities. Limited availability of transportation means that do not rely on carbon-based fuels. 98 Dinkel, Freddy; Oekologischer Nutzen des PET-Recyclings in der Schweiz,

98 Absence of cost-effective and well-functioning collection infrastructure (for all waste streams) in some countries. SECTION V: RECOMMENDATIONS To reach continuous environmental improvement in the retailers sector, it is first of all important to further disseminate the best practices illustrated in the present chapter in order to turn them into mainstream options. From a policy perspective, it is then recommended to: Put a greater emphasis on the need to attain significant energy efficiency targets; Further promote the generation and use of renewable energies; Support the inclusion of stronger environmental requirements into public procurement criteria; Stimulate awareness-raising about the environmental impacts of the food and drink supply chain both through formal education and marketing and informative campaigns; Promote actions aimed at minimising waste throughout the supply chain including to consumers with specific emphasis on food waste; Support the shift towards the least polluting and most energy efficient modes of transport; Foster public and independent research. It is finally of paramount importance to ensure consistency among the different streams of EU legislation so to strengthen complementarities and avoid costly overlaps. 96

99 CHAPTER 7: CONSUMERS WG 3 -Continuous Environmental Improvement Final Report October 2012 SUMMARY: There are approximately 500 million consumers in the EU-27 who generate substanstial direct and indirect environmental impacts. Consumption-related measures can help consumers to reduce their environmental impacts by raising their awareness of the consequences of their actions and decisions. Reliable and understandable environmental information on products can encourage consumers to consider the wider sustainability implications across the food chain when making purchasing decisions. With regards to the shopping behaviour of consumers, an integrated approach is needed taking into account the environmental and sustainability aspects, as well as the health aspects associated with the consumption of food and drink products, especially the consumption of different animal products. SECTION I: ABOUT THE SECTOR With approximately 500 million consumers in the EU-27, the consumers generate huge direct and indirect environmental impacts. The consumption of food and drink products, private transport and housing are responsible for % of the environmental impact of consumption, and account for some 60 % of consumption expenditure( 99 ). Food and drink products cause 20 to 30 % of the various impacts of private consumption, and this increases to more than 50 % for eutrophication. This includes the full food production and distribution chain 'from farm to fork' (food chain)( 99 ). Within this consumption area, meat and meat products are the most significant, followed by dairy products( 99,100,101 ). Consumption-related measures can help consumers to reduce their own environmental impacts by raising their awareness of the consequences of their actions and decisions. Measures can also make it easier for them to reduce energy consumption and to contribute to waste prevention, recycling and recovery on a daily basis. Reliable and understandable environmental information on products can encourage consumers to consider the wider sustainability implications across the food chain when making purchasing decisions. SECTION II: ENVIRONMENTAL CHALLENGES 1 Water The most important impact of consumers on water is associated with the production of the food and drink products purchased (water footprint for products is defined as water volume consumed to produce a unit weight of food and drink product, e.g. l/kg)( 102 ). Table 7 shows the water footprints for important food and drink products indicating huge differences for the different products. The methodology used is publicly available( 102 ). ( 99 ) Joint Research Centre/Institute for Prospective Technological Studies, Environmental Impact of Products (EIPRO), EUR EN (2006). ( 100 ) Westhoek, H. et al.; The Protein Puzzle The Consumption and Production of Meat, Dairy and Fish in the European Union, PBL Netherlands Environmental Agency, 2011, ( 101 ) Öko-Institut et al.; Policies to Promote Sustainable Consumption Patterns in Europe, 2011; ( 102 ) Hoekstra, A. Y. et al., The Water Footprint Assessment Manual, 2011; 97

100 Table 7: Specific water consumption (water footprint) for important food and drink products Water (l/kg) Water (l/kg) Apples 700 Cheese 5000 Oranges 500 Beer 300 Barley 1300 Maize 900 Wheat 1300 Rice 3400 Bread 1333 Soy beans 1400 Beef Potato flakes 900 Chevon 4000 Sugar cane 1500 Pork 4800 Sorghum 2800 Lamb/mutton 6100 Coconuts 2500 Chicken 3900 Roasted coffee Eggs 3300 Fresh tea leaves 2400 Milk 1000 Wine 960 Source: ( 103 ) However, the water footprint does not provide information on how the embedded water negatively or positively affects local water resources, ecosystems and livelihoods. Water availability data is also required to assess this. In addition to the water consumption to produce the food and drink products, water is consumed in households to cook and wash food products and to clean the dishes. 2 Air quality The rapid increase in the number of hypermarkets and food shops, often located outside towns, has increased the amount of transport kilometres for household food shopping. Although there are uncertainties, studies suggest that the environmental impacts of car-based shopping and subsequent cooking are higher than the impacts of upstream food chain distribution systems( 104 ). 3 GHG emissions and energy efficiency GHG emissions With respect to GHG emissions, there are two major challenges. Firstly, significant GHG emissions are associated with the production of food and drink products. The most GHG-relevant products are meat and dairy products. The European consumption of their produce represent about 10 % of GHG from consumption( 105 ). Secondly, the inadequate disposal of food waste may generate significant emissions of GHG, such as disposal to landfill where methane emissions result from anaerobic processes. Each tonne of food waste is responsible for 4.5 tonnes of CO 2 equivalents( 106 ). In the UK for instance, avoidable food waste represents approximately 3 % of the domestic GHG emissions, with further emissions abroad( 107 ). ( 103 ) Water footprint network, ( 104 ) Foster, C. et al, Environmental Impacts of Food Production and Consumption, 2006; %20Impacts %20of %20Food %20Production %20 %20Consumption.pdf, pp ( 105 ) Westhoek, H. et al.; The Protein Puzzle The Consumption and Production of Meat, Dairy and Fish in the European Union, PBL Netherlands Environmental Agency, 2011, p 167, ( 106 ) wrap, The Food we Waste, Executive Summary, 2008; _The_Food_We_Waste_08_-_EXEC.pdf ( 107 ) wrap/wwf, The Water and Carbon Footprint of Household Food and Drink Waste in the UK, 2011; 98

101 Energy efficiency for food storage and preparation The use of energy for food-related activities in households is a notable contributor to overall GHG emissions along the food chain (about 15 %). Recent research indicates, for example, that food storage, preparation and dishwashing account for about 38 % of the electricity used in the life cycle of meat and dairy products( 108 ) (see Figure 8). Other Processes Others 25% Farming 7% Production Food Industry 18% Dishwashing in households 8% Restaurants and catering 6% Cooking in Household 7% Preparation and consumption Retail 6% Storage of food at households 23% Storage Dsitribution Figure 8: Electricity consumption along the meat and dairy products life cycle, Source: the figure is based on an IPTS Report( 108 ) This compares with a share of 18 % for manufacturing, for instance. Household electricity consumption has continued to grow, largely due to expanding household ownership of appliances, including food-related appliances (refrigerators, freezers, dishwashers, microwaves). 4 Biodiversity Livestock farming requires a lot of land, in the form of grassland or arable land. As a result of human interventions, the original vegetation and associated fauna disappear or change( 109 ). The marketing of endangered species is an important environmental challenge. Notable examples are certain fish species that require protection to prevent extinction (e.g. Atlantic Bluefin tuna). 5 Resource depletion Food waste Food waste generation in households is particularly worrying from an environmental perspective as it results in the loss of all resources invested in the product over its entire life cycle (agricultural inputs, water, energy, packaging, transport, cooling, etc.). Recent research from the UK indicates that about 30 % of food is wasted in households of which more than half is edible food, see Figure 9( 110 ). In addition to the unnecessary loss of natural resources, inappropriate disposal of household food waste generates additional environmental impacts (see Chapter 8). Prevention of household food waste is therefore fundamental in ensuring sustainability in the food chain. ( 108 ) Weidema, B.P. et al., Environmental Improvement Potentials of Meat and Dairy Products, IPTS Publication, 2008; ftp://ftp.jrc.es/pub/eurdoc/jrc46650.pdf 109 Westhoek, H. et al.; The Protein Puzzle The Consumption and Production of Meat, Dairy and Fish in the European Union, PBL Netherlands Environmental Agency, 2011, p 126, ( 110 ) wrap, The food we waste, 2008; 99

102 Household food waste 31% Non-edible food waste (39%) Purchased food 69% Avoidable food waste (61%) Figure 9: Percentage of food wasted in households, and the percentage that is avoidable. Source: based on( 110 ) With respect to food waste, Figure 10 shows an example for the whole food chain from Spain. There, the percentage of food waste from households is lower compared to many other Member States in the European Union. FARMING TOTAL ANIMAL INPUT 135 kg per capita By-products 8.3 kg per capita SLAUGHTERHOUSE By-products 37 kg per capita Total Amount of Animal By-Products (ES) ~85 kg per capita MEAT PROCESSING By-products 15.4 kg per capita DISTRIBUTION Meat Consumption 50 kg per capita RETAILERS HOUSEHOLDS By-products 17.5 kg per capita By-products kg per capita Total Food Waste from Retailers 7 kg per capita Total Food Waste from Households 47 kg per capita Other animal-derived wastes 17 kg per capita Meat Wastes 5.9 kg per capita Total Food Waste (ES) ~130 kg per capita Figure 10: Annual animal by-products (blue) and food waste flows (yellow boxes) in Spain Source: ( 111 ) ( 111 ) EC, Pilot Rreference Document on Best Environmental Management Practice in the Retail Trade Sector, pp

103 The figure is another illustrative example underlining the importance of food waste prevention. From the life cycle perspective, it also confirms that every unit of prevented food waste has a positive impact on the whole chain, in terms of GHG and in terms of all other environmental impacts. With respect to primary packaging waste, see Chapters 5 and 8. 6 Land use Concerning land use, the consumption of meat and dairy produce represents about one third of the total land use for European household consumption( 112 ). Most of the required land area is needed for dairy farming, followed by beef production (see Table 8). Table 8: Land use in farming; Calculations based on ( 113, 114 ) million hectares Total land area used for livestock farming Grassland Arable land used for feed and fodder production Arable land used to produce food for direct human consumption Total agricultural area Shopping behaviour The everyday decisions of the 500 million consumers in the EU form a demand side and are very important. About 80 % of consumers like to have sustainable products, but there is a high pricesensitivity and confusion over relevant criteria, leading to a gap between intention and purchasing decision(115), see Figure 11. Very important Rather important Not all important DK/NA The brand, the brand name of the product 14% 25% 37% 23% The product's impact on the environment 34% 49% 12% 4% 2% The price of the product 47% 42% 8% 2% 1% The quality of the product 67% 30% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Figure 11: Source: ( 116 ) Importance of various aspects of products when deciding which ones to buy ( 112 ) Westhoek, H. et al.; The Protein Puzzle The Consumption and Production of Meat, Dairy and Fish in the European Union, PBL Netherlands Environmental Agency, 2011, p 167, ( 113 ) Lesschen, J.P. et al.; Greenhouse gas emission profiles of European livestock sectors, Animal Feed Science and Technology, Vol , 2011, pp ( 114 ) Oenema, O. et al.; Nutrient losses from manure management in the European Union Livestock Science, Vol 112, Issue 3, 2007, pp ( 115 ) Jacqueline Minor, Director Consumer Affairs at DG SANCO, Key note speech at the first plenary meeting of the European Food SCP Round Table on 13 July 2010 in Brussels. ( 116 ) Flash Eurobarometer: Europeans' Attitudes Towards the Issue of Sustainable Consumption and Production, Analytical Report, 2009; p

104 EU citizens were divided in their opinions as to whether they trust producers claims about the environmental performance of products: 49 % said they trust such claims and 48 % did not trust them. While 3 in 10 EU citizens said they trust companies own environmental and social performance reporting, a considerably higher proportion (47 %) said they do not trust companies reports on this topic( 116 ). Consequently, it is of crucial importance to provide unbiased information to the consumers, ideally through third party certification. As a consequence, the market would be kept honest avoiding `greenwash` attitudes. The methodology for assessing environmental claims are important and shall be based on life cycle thinking (everybody should start from the same basis)( 115 ). Consumers indicated that they are ready to buy environmentally friendly products even if they are more expensive. However, only 17 % had actually done so in the month before the survey( 117 ) (across Europe, there are large differences between intentions and purchasing decisions). This also indicates that concise and reliable information may substantially help reduce the gap between general intentions and concrete purchasing decisions. However, as it is a huge challenge to influence the shopping behaviour of hundreds of millions of consumers. It also seems necessary for retailers to practice choice editing and green procurement ( 118 ). SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES 1 Water The water footprint for different food and drink products may be communicated to the consumers along with information on water availability in the supply region. It needs to be pointed out that the impact of the water footprint depends very much on the local circumstances. The impacts in areas suffering water stress (e.g. excessive extraction of water) are normally far more significant than in areas with relatively plentiful water supplies( 107 ). 2 Air quality Shopping by car To reduce emissions from shopping by car (including CO 2 ), the challenge for the consumer is to use more efficient engines and cleaner fuels, and, wherever possible, to change to alternative transport and/or delivery modes (e.g. use of supermarkets' delivery services where available). 3 GHG emissions and energy efficiency Energy efficient cold appliances There is still significant potential for improved energy efficiency of appliances, and for consumers to apply more energy efficient food-preparation techniques, as demonstrated in Figure 12. ( 117 ) Special Eurobarometer: Attitudes of European Citizens Towards the Environment, 2008; p. 27. ( 118 ) EC, Pilot Reference Document on Best Environmental Management Practice in the Retail Trade Sector, pp

105 Electricity consumption in kwh per 100 liters No incentives, normal replacement Early replacement & only A+/A++ for new appliances Only new A+ and A++ from 2009 Early replacement without increased A+/A++ production Figure 12: Electricity consumption by cold appliances for four scenarios Source: ( 108 ) Food storage and preparation Cooperation among stakeholders is needed to support consumers in saving energy and water in daily food storage and preparation, for example by providing detailed information on the most efficient food preparation techniques. Changing to more energy efficient household appliances (fridges, freezers, cookers and stoves) will be another important contributor. 4 Biodiversity Operators of the food and drink supply chain should make sure that endangered species are not sold and consumers should be informed accordingly, e.g. by MSC certification for wild-catch seafood. 5 Resource depletion Informed choice A number of retailers demand widespread certification according to environmental standards for priority product groups (see examples in Chapter 6). This enables consumers to exercise informed choice. Best practice examples include high penetration of Fairtrade certification within applicable product groups (Sainsbury's), universal GlobalGAP certification of imported fruit and vegetables (Coop CH, Migros, Rewe), and high penetration of MSC certification within wild-catch seafood (M&S, Waitrose)( 111 ). Reduction of households' direct impact As highlighted above, the prevention and reduction of food waste is of major importance. The options given below can be considered to minimise food waste( 108 ): There are indications that an increasingly large group of consumers is prepared to eat less or no meat for one or more days per week ( 119,101 ). In addition to consumer demand, the range of products on offer also plays an important role. This implies that retailers are in a position to ( 119 ) Bakker, H.C.M.d. & H. Dagevos; Vleesminnaars, vleesminderaars en vleesmijders: duurzame eiwitconsumptie in een carnivore eetcultuur (Meat lovers, meat reducers and meat avoiders; Sustainable protein consumption in a carnivorous food culture), Dutch with English summary. Den Haag: LEI Wageningen UR (2010) 103

106 influence consumer choice with an animal- and environment-friendly assortment in their shops (see Chapter 6). The greatest potential to minimise food waste can be explored by improved shopping and household planning. Consumers are often unaware of the environmental impact of food waste generation, and do not consider this aspect in their shopping decisions. Cooperative action is required by private and public stakeholders to support consumers in developing easily applicable strategies to match their daily food purchases with their actual needs. Improving the knowledge-base on consumer shopping patterns (e.g. frequencies and volumes of purchases) will help to identify the main motives for insufficient planning. The actors of the food and drink supply chain will continue to explore opportunities to adapt product and packaging design to changing demographic requirements and purchasing trends (e.g. single households, increasing dietary awareness) in order to avoid unnecessary food waste. Where household food waste cannot be prevented, increased attention has to be paid to environmentally sound management of this waste stream (e.g. biogas and composting). Concerning the recycling of packaging, reference is given to Chapters 5 and 8, especially to the sorting of waste in the households and collection of the different fractions. 6 Land use ( 120 ) Given the global pressure on land use caused by population growth, increasing prosperity and biofuel policy, it would be useful to limit the amount of notably arable land and intensively managed grassland. This could help to reduce deforestation, although the global demand for food and feed is certainly not the only factor influencing land-use changes. Apart from reducing the demand for feed, fuel and food, increasing crop yields could help to reduce the required land area. The scope and effects of yield increases differ strongly per region. 7 Awareness building and education Packaging recovery organisations support active citizenship for sustainable development Since 2000, Ecoembalajes (the Green Dot system in Spain) has been cooperating with Ecovidrio, Ministry for the Environment, APAS (Association for the Promotion of Socio-Cultural Activities) and the Foundation for Biodiversity to develop didactic educational materials for teachers and school children between the ages of eight and twelve. The environmental guides focus on sorting, recycling and reuse of packaging and packaging waste schools and around children are currently using the materials. Ecoembalajes also supports the 'Values from Aldeas Infantiles S.O.S.' school programme that is run by the foundation of the same name. A teaching unit on the subject of waste separation and recycling was developed and distributed to 3750 schools. At the end of 2004, a total of around children aged between six and twelve were taught this subject for one month. Consumer education Consumer education is a key orientation tool in a consumer society and is directly linked to the skills needed to master every day life. Many people do not understand how and to what extent they can influence the economy, the environment and the society through their individual consumer choices. The primary goal of consumer education is to help consumers make informed, rational decisions in the marketplace. In addition, consumers need skills to evaluate marketing and advertising messages and manage their resources. ( 120 ) Westhoek, H. et al.; The Protein Puzzle The Consumption and Production of Meat, Dairy and Fish in the European Union, PBL Netherlands Environmental Agency, 2011, p 117, 104

107 The responsibility for consumer education goes far beyond the boundaries of the education system. Educators share this responsibility with society at large including business and thereby the food and drink supply chain, public authorities and consumer organisations. One means of meeting this duty is by developing and distributing consumer materials. Consumer education materials may take the form of pamphlets, booklets, videos, home-study courses, television programmes, computer software, websites, games, wall charts, or any other print and audio/visual formats. Materials are created for diverse delivery systems including school classrooms, vocational training programmes, cable television networks, community groups, information displays, direct mailings, point-of-purchase offers and interactive technology. For example, Coop Norway has published a "Coop's label guide"( 121 ) to orient consumers in the label jungle of environmental, organic, health, nutrition and fair trade labels. In Sweden, the local consumer co-operative provides in its magazine Mersmak ( 122 ) (literally More taste ) information about energy efficiency measures that its consumer-members can easily undertake. This magazine has an ecological profile based on cooperative values and provides members with information related to food, health and sustainable lifestyle. All educational material shall be based on information which is scientifically reliable and consistent, understandable and not misleading, so as to support informed choice (see: WG2 Guiding Principles). However, informing consumer choice must be balanced with choice editing by retailers (see above and Chapter 6). SECTION IV: KEY OBSTACLES It is a very challenging issue to prepare 500 million consumers to make environmentally informed choices. There are too many labels which many consumers cannot understand. Furthermore, in general, the credibility of the labels is not high enough and a common methodology to develop them is still missing. Also, there are many different environmental pressures across thousands of products. SECTION V: RECOMMENDATIONS Concerning shopping behaviour of consumers, an integrated approach is needed taking into account the environmental and sustainability aspects but also health aspects associated with the consumption of food and drink products, especially the consumption of different animal products. The latter include a balanced diet to prevent obesity, especially amongst children. In addition, the actions described concerning water, air quality, GHG emissions and energy efficiency, food storage and preparation, biodiversity, and resource depletion are worth to be promoted. ( 121 ) ( 122 ) 105

108

109 CHAPTER 8: CONSUMER WASTE SUMMARY WG 3 -Continuous Environmental Improvement Final Report October 2012 Consumer waste collection and recovery is the last stage of the food chain. In this stage the waste is reused, recycled, recovered or disposed off. The level of reuse, recycling, recovery and disposal is very different across the EU. Waste prevention is the most favourable way to minimise the environmental impact of the food chain. Efforts to prevent food waste should be significantly increased as the potential is great and as it is, also from a life cycle perspective, the most promising option. Information, education and communication to consumers is crucial to achieve more food waste prevention. Through prevention, reuse, recycling and recovery of waste; the food packaging chain contributes to sustainability and uses less resources. The challenge ahead is to reach increasingly higher recycling and recovery rates; and to keep the recycling schemes cost-effective. SECTION I: ABOUT THE SECTOR Consumers represent the last stage of the food chain. Regarding this chain, consumer waste consists of several types of waste. With respect to the consumption of food and drink products, in principle, there are two main categories of waste: food waste and primary packaging waste. Waste is defined as 'any substance or object which the holder discards or intends or is required to discard'( 123 ). There are many cases, where, following the EU waste hierarchy( 123 ), wastes can be prevented, reused, recycled, or recovered. Where all these options are not feasible, waste is incinerated in a plant with energy recovery meeting best available techniques standards (concerning energy and waste gas emissions) or, as the most unfavorable option, disposal to landfill meeting the requirements of the Landfill Directive( 124 ). Across the EU, there are many approaches and practical ways to implement this policy. However, there are considerable differences and many existing best practices which may serve as models for others. SECTION II: ENVIRONMENTAL CHALLENGES With regard to the consumption of food and drink products, Figure 13 shows the most important type of wastes and the most relevant current reuse, recycling, recovery and disposal routes. ( 123 ) Waste Directive 2008/98/EC, OJ L 312, , p. 9. ( 124 ) Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste, OJ L 182,

110 Products Home grown/ foraged Food retail Food waste Composting Composting Anaerobic fermentation Tillage land Takeaway Paper, board Recycling Consumers waste (concerning food and drink products) Refillable bottles back to retailer Glass Reuse Recycling Transport operations PET bottles Packaging (plastics, metal) Residual waste also back to retailer Recycling Mechanical-biological pretreatment Recycling Residues from recycling operations Landfilling Incineration with energy recov. Fly ash Figure 13: Slag recovery of metals and recycling Scheme reflecting the most important wastes from food and drink products and their most relevant reuse, recycling, recovery and disposal routes In most European countries, there is a separation between the collection of waste from household and the waste from businesses. The waste from households is generally collected by local authorities as they have the obligation to care for the waste of their inhabitants. They can choose the method of collection. With respect to packaging, collection and recycling fees are often paid by business, who are required by producer responsibility laws to reuse, recover and recycle waste which comes from the products they produce. The industries are often represented through a packaging recovery and recycling organisation, which is founded and run by or on behalf of obliged industry. There are two different methods of household waste collection. The first and most common method, managed by local authorities or municipalities, is the arranged kerbside collections of unsorted and sorted waste. The second method is the 'bring' system. Here, the packaging waste has to be delivered to local collection stations. The collection system for both unsorted and sorted household waste collection varies from one country, region, or city to the next. Thus, in most countries, the following materials are collected separately or municipal waste is sorted into paper and board, glass, plastic, metals, beverage cartons and organic waste (including food waste), and sometimes cooking oil (e.g. in Spain). The other fractions of municipal waste, such as bulky waste, biodegradable waste from gardens and parks, household-type waste collected separately from companies, litter, food waste from canteens, waste from temporary markets (e.g. open air markets), batteries, fluorescent tubes or electronic waste are not mentioned here as this document concentrates on wastes associated with the consumption of food and drink products. 108

111 In addition, in some Member States, there are systems to reuse refillable glass bottles (return systems in retail stores) and to recycle PET bottles to produce new PET bottles (return system in the retail stores and public collection points( 125 )). The residual waste or, if there is no collection of the different fractions, of the mixed waste from households is usually collected by municipalities. The household waste makes up the largest portion of municipal waste. However, most of the wastes can be recycled or recovered. One of the major environmental challenges is to significantly increase recycling and recovery rates. Today, within the EU, there are huge differences. According to Table 9, the range varies from 1 to 100 % for landfilling, 0 to 54 % for incineration (usually with energy recovery), 0 to 48 % for recycling and 0 to 40 % for composting. The percentage of food waste and packaging waste from households is in the order of 50 % (see Tables 9 11). ( 125 ) EC, Pilot Reference Document on Best Environmental Management Practice in the Retail Trade Sector, 109

112 Table 9: Specific waste quantities in the EU in 2008 and the percentages for recycling, composting, incineration and landfilling Municipal waste generated (kg per person yr) Municipal waste treated (%) Landfilled Incinerated Recycled Composted EU Belgium Bulgaria Czech Republic Denmark Germany Estonia Ireland Greece Spain France Italy Cyprus Latvia Lithuania Luxembourg Hungary Malta Netherlands Austria Poland Portugal Romania Slovenia Slovakia Finland Sweden United Kingdom Data for the EU-27, Belgium, Denmark, Germany, Estonia, Spain, France, Italy, Cyprus, Luxembourg, Netherlands, Austria, Poland, Romania, Portugal and the United Kingdom are estimated Source: ( 126 ) One of the biggest challenges is to reduce landfilling, as it leads to considerable GHG emissions and often causes soil and groundwater pollution. Another very significant challenge is the prevention of food waste. Table 10 shows the total food waste generation in EU Member States, which also includes the data for households and food service/catering. Concerning food waste from households (consumers), based on data from national studies, the quantity per capita varies from 17 (Finland) to 137 (UK) kg per year( 127 ). ( 126 ) ( 127 ) Bio Intelligence Service, Preparatory Study on Food Waste Across EU 27, Oct 2010, 110

113 Table 10: WG 3 -Continuous Environmental Improvement Final Report October 2012 Food waste generation in EU Member States in kg/yr and kg/capita x yr Manufacturing Households Other Total Household food waste per capita kg/yr kg/yr kg/yr kg/yr kg/capita x yr EU Austria Belgium Bulgaria Cyprus Czech Republic Denmark Estonia Finland France Germany Greece Hungary Ireland Italy Latvia Lithuania Luxembourg Netherlands Poland Portugal Romania Slovakia Slovenia Spain Sweden United Kingdom NB: Concerning the quantity for household food waste per capita, some numbers are different from the numbers of national studies Source: (estimates( 127 )) One fourth to one third of purchased food is discarded at households( 127 ),( 128 ). This reveals a tremendous potential to explore in the future the prevention of food waste, as this means significant less energy consumption, lower GHG emissions, less water consumption, less water pollution, less application of fertilisers and pesticides, etc. along the whole food chain (agricultural production, food processing, food cooling, transport operations etc). At the same time, the prevention of waste food leads to a significant increase in resource efficiency. So, food waste prevention may be the most important challenge for the future which has not really been addressed so far. To illustrate this life cycle perspective, the example of beef may be used: concerning energy consumption and GHG emissions, the prevention of 1 kg beef waste is equivalent to the prevention of 27.3 kg eq. CO 2 ( 129 ). Concerning packaging waste from households, the quantities per capita and year vary between 40 (Bulgaria) and 233 (Ireland) kg( 130 ). Table 11 shows the numbers for the EU Member States along with the recycling rates for the different packaging materials. ( 128 ) Wrap, The Food We Waste, ( 129 ) Nguyen, T.L., Hermansen, J., Morgensen, L., Environmental Consequences of Different Beef Production Systems in the EU, Journal of Cleaner Production 18, 2010, pp ( 130 ) 111

114 Packaging waste in kg per capita and year WG 3 -Continuous Environmental Improvement Final Report October 2012 Minimising the consumption of packaging materials and to increasing the recycling rates remain challenges. Table 11: Packaging waste per capita in 2008 for the different EU Member States along with the recycling rates for the different materials Recycling rate (%) EU Member States Overall Glass Paper and board Plastic Wood Metal EU-26 (no data for Malta) % 66 % 81 % 30 % 38 % 67 % Austria % 84 % 85 % 35 % 22 % 64 % Belgium % 100 % 89 % 39 % 58 % 94 % Bulgaria % 47 % 85 % 16 % 41 % 65 % Cyprus % 18 % 60 % 15 % 15 % 95 % Czech Republic % 70 % 94 % 50 % 29 % 43 % Denmark % 121 % 61 % 25 % 41 % 82 % Estonia % 46 % 65 % 22 % 57 % 26 % Finland % 80 % 93 % 23 % 21 % 75 % France % 63 % 87 % 23 % 19 % 60 % Germany % 82 % 88 % 47 % 29 % 92 % Greece % 15 % 74 % 12 % 31 % 44 % Hungary % 28 % 91 % 25 % 23 % 67 % Ireland % 74 % 78 % 29 % 77 % 62 % Italy % 65 % 74 % 31 % 53 % 68 % Latvia % 53 % 66 % 18 % 28 % 68 % Lithuania % 50 % 73 % 33 % 43 % 62 % Luxembourg % 92 % 78 % 30 % 19 % 79 % Netherlands % 87 % 96 % 36 % 36 % 86 % Poland % 44 % 67 % 24 % 26 % 38 % Portugal % 52 % 88 % 19 % 65 % 65 % Romania % 35 % 62 % 15 % 8 % 51 % Slovakia % 48 % 54 % 44 % 16 % 56 % Slovenia % 80 % 66 % 56 % 7 % 21 % Spain % 60 % 73 % 24 % 58 % 68 % Sweden % 94 % 74 % 37 % 17 % 71 % United Kingdom % 61 % 80 % 24 % 76 % 57 % Source: ( 130 ) 1 Water In the case of landfilling, the collection and treatment of the leachate according to best available techniques is of relevance as well as the protection of groundwater pollution. For the recycling of paper and board, a significant amount of water is needed and the resulting waste water has to be treated according to the waste water discharge standards. Refillable bottles have to be cleaned and resulting waste water has to be treated adequately. For the recycling of PET and PE bottles, there may be washing operations needed resulting in waste water which has to be treated adequately. 112

115 Concerning composting, contaminated run-off water may be discharged where open-air composting is practised and run-off water has to be adequately collected and treated. 2 GHG emissions GHG mainly result from: landfills when organic matter, such as food waste, is not separated or aerobically pretreated as a result of anaerobic degradation processes waste incineration composting processes recycling processes transport operations (see Figure 13). 3 Soil quality Significant local soil contamination can occur because of landfills and composting plants where adequate prevention and protection measures are not applied( 131 ). In the case of landfilling, in the long term, there may be an influence on soil quality when the landfill area is not well protected as directed in EU Directive 99/31/EC. 4 Biodiversity Landfills may have an adverse impact on water species where emissions of leachate occur and where other contaminated water (e.g. run-off water) is not adequately collected and treated as directed in EU Directive 99/31/EC. Furthermore, there may be an adverse impact on the terrestrial flora and fauna. 5 Land use Land is used for recycling installations including storage areas, for disposal facilities (landfills and incineration plants), and for composting facilities. 6 Resource depletion/energy use A significant amount of raw materials are disposed of in landfills. The minimisation of landfilled wastes and, at the same time, the maximisation of recycling activities enables a more resource efficient economy. Here, the prevention of food waste plays a very important role. The energy consumption for the recycling processes and the manifold transport operations are significant. In the case of existing landfills, the collection and use of methane gas resulting from anaerobic degradation processes is a source of energy to be used. Energy is also recovered where food waste is anaerobically fermented. To facilitate more material efficient packs in the future, both packaging legislation and the EOL waste management systems in the Member States must start converging towards a common long term vision. This convergence will help encourage economies of scale which will in-turn improve the stability of the waste management industry and make investment more attractive. See Chapter 5 for more recycling challenges and activities. ( 131 ) Report on the Implementation of the Landfill Directive in the 15 Member States of the European Union, 2005; 113

116 SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES 1 Water The leachate from landfills can be highly polluted with organic and inorganic compounds. It has to be fully collected, stored and treated according to best available techniques, such as biological treatment at a low food-to-microorganisms ratio (< 0.15 g BOD5/kg dry matter x d) with efficient biomass separation (e.g. with ultrafiltration membranes) to reduce COD to more than 80 %. For the recycling processes of paper and board, prevention and minimisation techniques may be applied as described in the Best Available Techniques Reference Document for the Pulp and Paper Industry ( 132 ). The water consumption for cleaning refillable bottles can be minimised by recycling the washing lye and using easily biodegradable detergents. The part of washing water to be discharged may be neutralised and treated biologically. 2 GHG emissions With respect to the high amount of food waste, its prevention is of crucial importance. As indicated, above, the quantities of consumer's food waste vary between 17 (Finland) to 137 (UK) kg/capita and year ( 127 ). These figures demonstrate the importance of food waste prevention. From the life cycle perspective, it can be seen that every unit of prevented food waste has a positive impact on the whole chain, in terms of GHG and in terms of all other environmental impacts. The best way to treat non-avoidable food waste is anaerobic fermentation, where energy can be recovered and used by producing biogas. A scheme of a plant representing best practice is shown in Figure 14. For this purpose, the food waste has to be collected separately, which is common practice in some Member States of the European Union. ( 132 ) Reference Document on Best Available Techniques in the Pulp and Paper Industry, ftp://ftp.jrc.es/pub/eippcb/doc/ppm_bref_1201.pdf and ftp://ftp.jrc.es/pub/eippcb/doc/pp_d1_0410.pdf 114

117 . Food waste Intake of food waste Pretreatment (comminuting, sorting, debris removal ) Cosubstrates Storage tank Pasteurisation (70 C; 1h) Equalisation tank Pre-acidification Fermentation Biogas Fermentation residues Desulphurisation Storage of fermentation residues Gas storage tanks Combined heat and power plant Agricultural field Electrical energy Thermal energy Figure 14: Flow chart of a biogas plant for the anaerobic fermentation of food waste. Source: ( 125 ) In addition, if the space is available, food waste can also composted on the premises of the households. The compost can be used for gardening. The disposal to landfills of organic matters which can give rise to anaerobic degradation processes should be minimised as much as possible to avoid the formation of methane and other GHG. The gases from existing landfills should be systematically collected and used for energy generation. 3 Soil quality Landfills have to be constructed and operated according to existing regulations to prevent soil and groundwater contamination. This requires for instance water-tight layers and barriers. Composting facilities, incineration plants and recycling installations should be carried out on paved and tight areas to avoid soil contamination. 4 Biodiversity Existing exhausted landfills should be re-cultivated to create space for flora and fauna. 115

118 5 Land use From the life cycle perspective, food waste prevention also means a reduced pressure on land to be used for agriculture. 6 Resource depletion/energy use As already mentioned, food waste prevention is the most efficient way to increase resource efficiency, and support the reduction of resource depletion and energy consumption. Some retailers have started to make consumers aware that prevention is the first and most favourable option towards greater sustainability( 133 ). Efficient collection, reuse and/or recovery systems for used packaging are crucial for resource efficiency. Such systems are in place in most countries throughout Europe. And the EU-wide proportion of packaging being recovered, which stood at 60 % in 2008 for the EU-26 (see Table 11) and at 75% in 2008 for the EU In addition, the amount of used packaging sent for final disposal is declining, as recovery rates, and in particular recycling rates, continue to increase. In general, considering the regulations concerned( 135 ), the recycling and recovery of packaging materials should be maximised and in several (new) Member States, there is still a lot of space for improvement (see Table 11). SECTION IV: KEY OBSTACLES For the countries that already have high recycling rates, it will be very difficult to obtain higher recycling rates. For countries that are just starting or still have a lot of landfill facilities, the political climate is often considered a key obstacle. Another obstacle can be the cost-effectiveness of the recycling schemes, especially when incineration prices are very low. SECTION V: RECOMMENDATIONS In line with the EU waste hierarchy, waste can be prevented, reused, recycled or recoverd: Prevention: waste prevention is the most favourable way to minimise the environmental impact of the food chain. Efforts to prevent food waste should be significantly increased as the potential is great and as it is, also from a life cycle perspective, the most promising option. Information, education and communication to consumers seems to be crucial to achieve more food waste prevention. For example, governmental campaigns on both issues can lead to innovation within the food and packaging industries (current situation in The Netherlands and the UK). Reuse: for instance, new techniques that make the reuse of packaging materials possible. Recycling: countries that support recycled product markets through, for example, their buying procedures. Other recovery methods, e.g. energy recovery and recovery of organic materials (i.e. composting or anaerobic fermentation) should increasingly be applied. More awareness-raising is needed to prevent food waste, in order to ( 133 ) see four examples: Carrefour (Spain) Carrefour, primera compañía de distribución en eliminar las bolsas de plástico, ; Coop Italy Buon fine project: Co-operative Group food waste initiatives: Coop (Denmark) Green Ideas: ( 134 ) EUROSTAT: Packaging and Packaging Waste Statistics in Europe: ( 135 ) Directive 94/62/EC of 20 December 1994 on packaging and packaging waste, OJ L 365, and amendment, OJ L 47,

119 increase awareness of (1) the quantity of food waste generated individually, (2) the environmental problem that food waste presents, and (3) the financial benefits of using purchased food more efficiently increase knowledge on how to use food efficiently, e.g. making the most of leftovers, cooking with available ingredients make consumers aware of planning issues, e.g. buying too much and lack of shopping planning, frequently cited as causes of household food waste improve the labelling of food and drink products, as misinterpretation or confusion over date labels is widely recognised as contributing to household food waste generation, leading to the discard of still edible food optimise storage conditions of food and drink products, as suboptimal storage conditions can lead to food waste throughout the supply chain, including in the household sector. 117

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121 CHAPTER 9: TRANSPORT & LOGISTICS OPERATORS SUMMARY Overall within Europe, the transport and handling of goods is a major contributor to environmental impacts (GHG, PM, NO x, SO 2 and VOC emissions, water pollution, land use and land pollution). Activity has increased rapidly in recent years, mirroring the growth in consumption patterns. Existing actions to minimise these impacts concern performance monitoring, sourcing and packaging, intermodal shifts, optimising distribution networks, route planning, telematics, as well as vehicle design and modifications. For these aspects, recommendations for environmental performance improvements are submitted within the context of remaining key obstacles, such as limited rail network or operator capacities, limited infrastructures or fuel availability for alternatively-powered vehicles and the complexity of optimising multiple logistical and environmental factors. SECTION I: ABOUT THE SECTOR Overall within Europe, the transport and handling of goods is a major contributor to environmental impacts. Activity has increased rapidly in recent years, mirroring growth in consumption patterns. Between 1995 and 2006, total goods transport within the EU-27 increased from billion tkm to billion tkm (Eurostat, 2009( 136 )). Over half of this increase was attributed to road transport, which accounts for almost half of goods transport within the EU. Sea and rail account for 37 % and 10 % of intra-eu goods transport, respectively, whilst inland waterways account for 3 %, and air freight for just 0.1 %. Current data indicate that freight transport declined between 2007 and 2009, to stabilise at a level slightly below that of 2006 ( 137 )). Imports from outside the EU account for a significant portion of goods transport generated by EU retail activity. Such imports are dominated by air and sea transport, which have been estimated to contribute an additional 12.7 % to EU-27 transport-sector GHG emissions (although these are not included in GHG accounting under the Kyoto Protocol). SECTION II: ENVIRONMENTAL CHALLENGES The major sustainability pressures associated with food transport are: climate change (GHG emissions) air pollution (acidification, ozone formation, other human health effects) resource depletion (predominantly oil) water pollution (e.g. heavy metals and PAH run-off from roads, chemical spillages) ozone depletion (from leakage of refrigerants used for transportation) road accidents congestion of passenger transport corridors economic sustainability of the sector noise. 1 Climate change greenhouse gases One of the most important environmental aspects of transport is its direct and indirect emission of greenhouse gases, predominantly carbon dioxide (CO 2 ), but also nitrous oxide (N 2 O) and methane (CH 4 ) from fuel combustion. In addition, the leakage of small quantities of refrigerants ( 136 ) Eurostat, Panorama of Road Transport 2009 edition. Eurostat. ISBN ( 137 ) Eurostat, Statistics in Focus 39/2010. Transport of Goods by Road Has Stopped Decreasing in the Second Half of Eurostat

122 (hydrofluorocarbons) with high global warming potential from mobile cooling units contributes to global warming. In the case of aviation aircraft, emissions of water vapour, sulphate, soot aerosols and nitrous oxides at high altitudes also have an impact on global warming. The IPCC estimates the total climate change impact of aviation to be 2 to 4 times higher than the impact of CO 2 emissions alone( 138 ). Consequently, high level CO 2 emissions from aviation are multiplied by a radiative forcing index (RFI) depending on the height at which they are emitted. For long distance air freight, an RFI of 2.7 is used( 139 ). 2 Air, water and land pollution Besides greenhouse gases there are a number of other air pollutants emitted by transport modes, especially road transport. Sulphur oxides (SO x ) and nitrogen oxides (NO x ) contribute to acidification; NO x, volatile organic compounds (VOCs) such as benzene, and carbon monoxide (CO) contribute to ground-level ozone (smog) formation. These pollutants, together with particulate matter (PM) all contribute to human health damage. Road transport causes pollution of waterways in the vicinity of motor highways, by run-off containing hydrocarbons, heavy metals and different chemicals (brake fluids, windshield detergents, engine coolants, etc). Other transport modes, such as railway or river and sea transport, also contribute to water pollution, e.g. by the release of copper from railroads or effluents from ships. Leakage of hazardous material or oil due to accidents can cause major environmental damage. Transport also has negative impacts on soil, particularly through local contamination by deposited emissions of heavy metals (e.g. lead, zinc, chromium) and polycyclic aromatic hydrocarbons (PAH). Although small, such contamination is long-lived in the soil and accumulates over time in soil. 3 Land use, habitat and biodiversity It is estimated that transport infrastructure consumes % of land in urban areas in OECD countries ( 140 ). In the EU, 93 % of total land area used for transport is roads, while rail and airports occupy 4 % and 1 % respectively ( 141 ) However, the overall proportion of land used for transport infrastructure is minor, so direct habitat loss is not a major problem except where it occurs in areas of high conservation value. More important is the fragmentation of habitats that can occur following road construction in particular, preventing the free movement of animals and hence the exchange of genetic material. Road construction also provides new routes for invasive species migration, disrupting the ecological balance of ecosystems. Noise, lights, and run-off of hazardous compounds from roads cause disturbance in the ecosystems, and lower the reproduction rates of animals. 4 Congestion The economic and social costs of road transport are considerable. Road traffic congestion has been estimated to cost GBP 30 billion (approximately EUR 35 billion) in the UK alone( 142 ). The European Commission calculated in 2001 that road congestion in 2010 would cost an average of 1 % of EU GDP( 143 ). These costs occur through lost production time, accidents, and health impacts. ( 138 ) European Commission, Handbook with estimates of external costs in the transport sector (2008) ( 139 ) IFEU-Heidelberg-Öko-Institute (2010). EcoTransit. Ecological Transport Tool for Worldwide Transits ( 140 ) Organisation for Economic Co-operation and Development (OECD), Decoupling the Environmental Impacts of Transport from Economic Growth. [online] Available at: < ilibrary.org/environment/decoupling-the-environmental-impacts-oftransport-from-economic-growth_ en> [Accessed 20 April 2011]. ( 141 ) OECD (2002), Environmentally Sustainable Transport, Policy Instruments for Achieving Environmentally Sustainable Transport. ( 142 ) Phil Goodwin (2004), The Economic Costs Of Road Traffic Congestion. ( 143 ) European Commission (2001) White paper. European Transport Policy for 2010: Time to Decide. 120

123 5 Sustainable global sourcing Trade and thus transport are inherent components of EU policy. It is essential to provide appropriate and sufficient food supplies throughout the EU market and assure consumer choice. Exports, as much as imports are key to enhancing industry competitiveness. To develop and secure growth and jobs, not only in large companies but also in small and medium enterprises (SMEs), it is essential for industry to reach out to new markets. Moreover, sourcing raw materials and final products from non-eu countries, in particular developing countries, contributes to the development and long-term prosperity of local economies. A transport concept focusing on transport distances alone would therefore seriously undermine a number of key EU policy objectives in terms of social and economic sustainability. However, there is scope for the rationalisation of import and export flows to reduce excessive and unnecessary transport. To achieve this, transport impacts must be assessed in relation to other sustainability criteria, such as production and social impacts in different countries. SECTION III: EXISTING ACTIONS TO ADDRESS THE ENVIRONMENTAL CHALLENGES It is clear that the environmental and social impacts of transport activities related to the food supply chain are significant, and should be reduced. There are four fundamental factors underpinning the efficiency and environmental impact of retail goods transport. These factors are: distance travelled mode of transport used vehicle load factor relative vehicle efficiency within a particular mode. Each of these fundamental factors is in turn affected by multiple contributory factors. For example, distance travelled is primarily a function of source location, and therefore requires integration with other sustainable supply chain considerations. However, the mode of transport, the structure of the distribution network, and the specific routes taken, can all have a significant influence on the total distance travelled. In addition, these factors are strongly interdependent. For example, the mode of transport used and vehicle load factors are both critically dependent on features of the distribution network. Optimising these interdependent criteria is a complex challenge, and requires a holistic approach. In the first instance, it is essential that necessary data are collated to assess the efficiency and environmental impact of the transport and logistics (T&L) operations, including those that are outsourced and those of their suppliers. Figure 15 provides an example to control various factors important to T&L efficiency though key decision points by means of different levels of retailer involvement. Some basic steps can be taken to increase the efficiency of road transport per tkm, e.g. from driver training to aerodynamic modifications. Further steps, requiring additional engagement on the part of retailers (or third party T&L providers) include increasing vehicle load factors, reducing empty running, and minimising route distances through optimised route planning. More advanced options include optimisation of the distribution network to accommodate efficient long-distance transport modes and the generation of new opportunities for load maximisation and back-hauling, including through coordination of transport and logistics requirements with suppliers and other businesses. Finally, a fully integrated approach to transport and logistics considers the consequences of sourcing decisions and store locations on goods transport and customer transport, respectively (balanced against other sustainability criteria). 121

124 1. Basic 2. Intermediate 3. Advanced 4. Integrated Secondary routing distance Primary routing distance Primary transport mode Sourcing Mode efficiency feautures Load factor Route planning + telemetrics Distribution network New store locations Figure 15: Empty running Secondary transport mode Important factor Key decision point Key factors and decision points relevant to optimisation of retail transport and logistics operations, categorised according to level of retailer engagement required Front-runner retailers influence 'advanced' T&L factors defined in Figure 15. For example, Coop Sweden introduced in 2009 a new intermodal logistic system, where long distance transports to terminals are done by trains instead of lorries. Calculations show that the transfer of supplier shipments to rail in 2009, compared with unchanged freight by truck, reduced GHG emissions by about 6,500 tonnes of carbon dioxide (CO 2 -e), calculated over a full year. Figure 16 proposes a sequence of questions and decisions for particular product groups that represent best practice in T&L optimisation, based on a systematic and fully integrated retailer approach (Figure 15). Such an approach should consider: source location (balanced against other sustainability criteria e.g. using a balanced score card approach); transport mode, shifting products to more efficient modes where possible; distribution network and logistics to minimise vehicle kms and maximise load (including coordination with suppliers and integration of waste return); vehicle impact (efficiency and energy source). Product group Air freight? N Ocean shipping? N Road? Shipping / Intermodal (air-freight labelling) Y N Y Y N Alternative source location? Y Rail possible? N Y Figure 16: Reduce vehicle impact Increase load factor (Distr. / Logistics) Reduce distance (Distr. / Logistics) Rail / Intermodal Flow-chart of an integrated (best practice) approach to systematic reduction of the environmental impact of transport and logistics operations for a particular product group 122

125 Table 12 categorises best practice for improving the efficiency of T&L operations into separate approaches and associated techniques that are described in this chapter. Techniques are ordered according to the ideal sequence of best practice actions to systematically minimise the environmental impact of T&L operations for a particular product group. Table 12: List of key recommended actions to reduce transport-related environmental impacts Approach Performance monitoring Sourcing and packaging Intermodal shift Optimising distribution networks Route planning, telemetrics and driver training telemetrics Vehicle design and modifications Key techniques Data collation KPI reporting Benchmarking Regional/local sourcing Product/packaging volume minimisation 1. Shipping (1st preference) 2. Inland waterways (2nd preference) 3. Rail (3rd preference) 4. Intermodal (4th preference) 5. LHVs (5th preference) Distribution centre optimisation (intermodal link) Coordination with suppliers (logistics) Depot and hub locations GPS route optimisation Back-loading Driver training GPS cruise control Night-time deliveries Double deck/beam-system trailers Aerodynamics Low rolling resistance tyres Euro V and efficient engines CNG/biogas Mild hybrid 1 Performance Monitoring The first aspect that must be addressed before improvements can be made is data collation, in order to identify and efficiently target improvement options based on key performance indicators (KPIs) and benchmarking. Actors within the food supply chain should have reliable data related to the modes and routes of product transport. To obtain further data, it may be necessary to collaborate with outsourced T&L providers. The major objectives of T&L monitoring are to: 1. benchmark and improve the efficiency of T&L operations 2. enable the calculation of total environmental burden (e.g. carbon footprint) 3. calculate product environmental footprints (e.g. PCF). To address objectives 1 and 2, data are required in relation to all T&L operations (e.g. energy use or t CO 2 eq./yr). To address objective 3, T&L data are required in relation to particular products (e.g. 123

126 tonnes CO 2 eq. per kg product). In the first instance, these objectives can be achieved by applying generic energy use and emission factors to various stages of the transport chain. Table 13 refers to the basic data required to begin assessing T&L performance. However, to address objective 3, more detailed information is required on the actual performance of the T&L chains. For a lorry fleet, this would include the vehicle size distribution, average loading factors for different sizes, distribution of EURO emission standard compliance, etc. To enable meaningful benchmarking, data need to be expressed in units normalised for: (i) distance by weight/volume (e.g. tkm) where the efficiency of various modes are being considered; and (ii) weight/volume delivered where the absolute efficiency of transport and logistics operations are being considered (i.e. accounting for routing improvements and product sourcing). Table 13: Key data and indicators for monitoring T&L operations Description Units Punctuality in delivery % on-time deliveries Reliability of the preparations % delivered in acceptable condition Fuel consumption (diesel) thousand of litres Transport CO 2 t CO 2 Distance travelled thousand km Volume delivered thousand m 3 /tonnes / pallets( 144 ) Weight delivered thousand tonnes Fleet fuel efficiency litres/100 km A comprehensive monitoring and reporting system for goods-transport will enable the identification, and the improvement of efficiency of: product sourcing modal split distribution network route planning vehicles. Improved efficiency in each of these areas will translate into reduced environmental pressures, as described in the subsequent sections. 2 Sourcing and packaging Reducing transport and logistic (T&L) environmental impacts through sourcing decisions for individual product groups should be informed by fully integrated assessment of all product impacts. The promotion of seasonal and locally-grown produce can reduce both T&L and overall life cycle impacts where it avoids long-distance transport but does not necessitate heated greenhouses. Avoiding air freight and reducing transport distances can considerably reduce the environmental impact of T&L activities, and can considerably reduce the overall life cycle environmental impact of products that can be produced efficiently closer to the point of sale. Increasing packaging density can improve the overall efficiency of T&L operations and lead to reduced T&L traffic, thus reducing the entire range of impacts associated with T&L activities. ( 144 ) 120 x 80 cm pallet 124

127 Relative consumption / emissions 3 Intermodal shift WG 3 -Continuous Environmental Improvement Final Report October 2012 As already indicated, the impact of food transport is highly dependent on transport mode. Road transport dominates for food and drink products and is associated with a wide range of sustainability impacts, from GHG emissions to traffic congestion. However, these impacts vary considerably depending on factors such as lorry size and load factor (Figure 17 and Table 14). Air freight is by some margin the most damaging form of transport, but only accounts for a small portion of food and drink transport. Ocean shipping is associated with the lowest GHG emissions, but relatively high emissions of SO x per thousand kilometres (tkm) transported (Figure 17). Despite wide variability in estimates for the impact of freight trains, depending on whether they are diesel or electric, the source of electricity, and load factors (Table 14), they are associated with the lowest overall impacts (Figure 17) Energy CO2 NOx SOx NMVOC PM Truck > 32t Truck 16-32t Truck t Truck t Light truck Freight train Inland ship Ocean ship Airfreight Figure 17: Comparative energy consumption and emissions across freight transport modes, expressed as a multiple of the lowest emitting mode on a per tonne-km basis Source: (projected average for 2010, from TREMOVE( 145 ) and ECOTRANSIT( 139 )). Air-freight CO 2 based on long-haul flight multiplied by RFI of 2.7. Table 14: Overview of some key aspects of the major modes of goods transport, related to efficiency and practical considerations. Mode Road (lorry) Rail Efficiency (g CO 2 /tkm) Source 51 (60 % load factor) NTM (2010) 109 (25 tonne lorry, 57 % load factor and 21 % ADEME (2007) empty running) 62 (overall average) McK&P 72 (>35 tonne lorry) WBCSD/WRI (2004) 1.8 (electric trains, France) ADEME (2007) 55 (diesel trains) ADEME (2007) 40 (electric trains WBCSD/WRI average) (2004) 20 (diesel trains) WBCSD/WRI (2004) Role and restrictions An essential component of retail goods transport, responsible for the final stage of delivery to stores. High flexibility, relatively low cost, but use of large lorries may be restricted by national and local (e.g. city) regulations The most efficient land-based goods transport, well suited for delivering to distribution centres and potentially fast, but restricted by rail network coverage and route capacity constraints. High costs of infrastructure and loading/unloading to road transport make rail a cost-effective option for longer distances only ( 145 ) Tremove (2010): 125

128 Maritime Inland waterways Air freight 26.3 (average, all trains) Tremove (2010) 22 (average for all trains) McK&P 8.4 (average deep-sea container vessel) BSR (2010) 5 (large tanker) 13.5 (small container vessel) 10 (ocean transport) 35 (short transport) 14 (average for maritime transport) DEFRA (2009), NTM (2010) DEFRA (2009) WBCSD/WRI (2004) WBCSD/WRI (2004) EEA (2010) 31 (little variation) McK&P 570 (long-haul) WBCSD/WRI (2004) 800 (medium-haul) WBCSD/WRI (2004) 1580 (short-haul) WBCSD/WRI (2004) 602 (average) McK&P Low-cost, flexible transport, well-suited to carrying large volumes over long distances. Slow, and requires goods unloading and transfer to/from land-based modes at ports Low-cost, efficient transport, but restricted by waterway network coverage and capacity Fast transport for products with short shelflife. Restricted to airport hubs. Relatively expensive and highly polluting NTM, Swedish Transport and Environment Organisation freight calculation tool: ADEME, Emission Factors Guide: Emission Factors Calculation and Bibliographical Sources Used. Version 5.0; McKinnon, A., Piecyk, P., Measurement of CO 2 Emissions from Road Freight Transport. A Review of UK Experience. Energy Policy; WBCSD/WRI, The GHG Protocol: A Corporate Accounting and Reporting Standard. WBCSD/WRI. ISBN ; Tremove, Accessed October, 2010; BSR, Business for Social Responsibility Transport Guidelines DEFRA, Guidance on How to Measure and Report Your Greenhouse Gas Emissions. London; NTM, Swedish Transport and Environment Organisation Freight Calculation Tool: Accessed October, 2010; EEA, 2010: Road transport is often the only viable mode for the first and last leg of most freight journeys owing to its flexibility. Where infrastructure is available and the product characteristics allow for it, rail or inland waterways (canals and rivers) are energy-efficient alternatives that should be encouraged, especially for longer distances. Overseas freight transport is preferably done by sea shipping rather than by air. Although intermodal transport still represents a small part of goods transport, it is increasing rapidly. In a few important European corridors, intermodal transport has the potential to reach a market share of 30 %( 146 ). 4 Optimisation of distribution network Shifting towards more efficient transport modes is the most effective way to achieve T&L efficiency improvements on a per tkm basis, but often requires modification of the distribution network to accommodate modal transfers. For a given transport mode, load factor and empty running are key determinants of specific energy consumption and GHG emissions (see Figure 18). If a 44 tonne truck with a 29 tonne net load capacity operates with an average load of 10 tonnes over 60 % of the distance it travels (i.e. 40 % empty running), the specific GHG emissions for transported goods would be 134 g CO 2 /tkm (Figure 18). If that truck operates with an average load of 20 t over 80 % of the distance it travels, specific emissions would be 59.8 g CO 2 /tkm (55 % lower than the above case). If that truck could be operated continuously at full capacity, specific emissions would amount to just 40 g CO 2 /tkm (Figure 18). The relatively low density of many retail goods restricts the achievable weight-based load efficiency (Lumsden, 2004( 147 )), but there remains considerable scope for improvement, especially ( 146 ) DG TREN. Freight Intermodality. Results from the transport research programme ( 147 ) Lumsden, K., Truck Masses and Dimensions Impact on Transport Efficiency. Chalmers University, Gothenburg. 126

129 g CO 2 tkm WG 3 -Continuous Environmental Improvement Final Report October 2012 when combined with packaging optimisation and load balancing made possible through cluster networks. In summary, there are four primary objectives for distribution network optimisation: enable use of efficient modes for long-distance routes reduce overall transport tkm increase load factors reduce empty running (increase back-loading). The latter three objectives are also achieved through more efficient route planning. Distribution network optimisation is integral to other techniques detailed in this chapter, and the environmental benefits are reflected in overall T&L efficiency improvements. In particular, this technique makes a critical contribution towards the environmental benefits associated with modal shifts and route planning t, 40% t, 20% Empty running elimination Empty runs t, 20% 10 t load increase 10 t, 0% Load t, 0% 20 Base Figure 18: 0 Good Theoretical best Effect of increasing load and reducing empty running on specific CO 2 emissions per tonne-km transported for a 40 tonne gross (29 tonne net load) truck. Source: (based on data from McKinnon and Piecyk, 2009( 148 )). 5 Route planning, telematics and driver training telematics Road transport is an integral part of retail T&L operations, necessary for final distribution from distribution centres (DCs) to stores, but often also a major component of transport from suppliers to DCs. In the context of a particular distribution network with predetermined primary transport modes, the efficiency of T&L operations can be further improved by route planning (including use of telematics), more efficient driving techniques, and vehicle design. The scope for route planning optimisation is somewhat dependent on the distribution network, and overlaps with three of the four objectives for distribution network optimisation: to reduce overall transport tkm to increase load factors to reduce empty running (increase back-loading). In addition, driver training and telematics can reduce fuel consumption per km travelled. The complexity of T&L operations to ensure punctual store deliveries necessitates the use of specialised vehicle routing software, based on optimisation models, to route and schedule transport ( 148 ) McKinnon, A., Piecyk, M., Measuring and Managing CO 2 Emissions of European Chemical Transport. CEFIC. 127

130 activities for large fleets. This software takes into account the multitude of logistical factors that must be considered, including: driver hours-of-service rules, pick up and delivery schedules, vehicle size constraints, vehicle-product compatibility, equipment availability, vehicle-loading dock compatibility, route restrictions and empty mileage. Vehicle routing schedules can reduce the total distance travelled by trucks on multi-drop delivery rounds by between 5 % and 10 % ( 149 )). The benefits of such software can be maximised by extending the parameters considered beyond transport from DCs to stores, to include: transport from suppliers to DCs (integration of upstream transport) waste transport (integration of downstream transport). By reducing the number of vehicle km travelled, and ensuring that a higher proportion of these vehicle km are travelled in free-flowing traffic conditions, as optimised routing can significantly reduce fuel consumption and associated emissions of CO 2, SO x, NO x,voc and PM. 6 Vehicle design and modifications There are many options to improve the efficiency of road transport, the dominant mode of food and drink transport. The internal combustion engine is inherently inefficient, and most fuel energy is lost through friction and heat losses. Of the 30 to 40 % of fuel energy that is converted into kinetic energy, half is used to overcome rolling resistance for large trucks, whilst a third is used to overcome air resistance. Substantial improvements may be realised over the medium term through use of hybrid and electric vehicles, especially for smaller vehicles making city deliveries. In addition, natural gas and biogas may be used instead of diesel in large trucks, with CO 2 savings of % and over 60 %, respectively. There is considerable debate over the potential for biofuels to reduce the emissions of internal combustion engines (see textbox). Nevertheless, a number of stakeholders in the food and drink chain, including most large retailers, have suspended their targets for minimum biofuel percentages owing to concern over the sustainability targets. An adequate sustainability certification, such as that imposed by the Renewable Energy Directive to all biofuels consumed in the EU, and the development of second generation biofuels based on low-input woods and grasses that do not compete with food production, will bring additional potential for biofuels to make an important contribution to reducing the emissions in transport. However, a large number of smaller measures, requiring little or no investment, can be made in the short term to improve the efficiency of road vehicles. Improved aerodynamic trailer design, and retrofitted aerodynamic modifications, can significantly reduce fuel consumption and costs, by up to 10 % for vehicles frequently driven at higher speeds. Reducing rolling resistance through choice of tyres and correct inflation can achieve similar benefits. Meanwhile, driver training in optimised safe and efficient driving techniques can also reduce fuel consumption by up to 10 %, though typically achieves a savings of approximately 7 %( 150 ). Predictive cruise control can save fuel by using GPS traffic information to optimise speed (e.g. to slow down if the road is congested some distance ahead). Replacing diesel-driven auxiliary power units for trailers with electric units can also result in significant efficiency savings. When purchasing used vehicles, the most efficient vehicles with the highest possible EURO standard (preferably IV and V) engines should be specified. ( 149 ) UK DfT (Department for Transport), Computerised Vehicle Routing and Scheduling for Efficient Logistics. DfT, London. ( 150 ) UK Freight Transport Association. 128

131 How to understand this textbox There is usually a certain degree of consensus when evaluating the impact on the environment brought about by agricultural production and all the related activities contributing to the production, distribution and recycling of food. However, certain new techniques or technologies, or certain types of agricultural production, are still subject to intense debates with respect to their potential benefit or risk, or where no clear conclusion can be made, despite scientific results documenting and supporting the various opinions. Considering all the arguments, both the pro and cons, the working group could not reach a common understanding and point of view concerning "Biofuels". Therefore, it was decided to bring together the main opinions and elements of controversy in a text box, independent from the text of the report. In the box, the different opinions are presented along with at least one scientific reference. In no way should this short presentation be taken to constitute an exhaustive summary of the above mentioned controversial issue Textbox: Biofuels Biofuels are one of the solutions in the reduction of emissions in transport because they are the only liquid fuel alternative available today that can help the transportation sector reduce its environmental footprint. It also helps the EU addressing its security of energy supply needs. Nevertheless, the performance of different biofuels in terms of net GHG savings is widely variable, and highly dependent on the origin and type of feedstock and type of processing. Some studies conclude that certain biofuels may even lead to higher emissions than petrol or diesel. The 2009 UNEP study, taking a full life cycle approach, cites evidence that besides GHG emissions, other impacts of biofuels, such as eutrophication, are indeed relevant and already contribute to significantly worsened environmental quality in certain regions. Some studies (e.g. IFPRI 2010) also point out that production of energy crops may indirectly generate the conversion of high carbon stock land to arable land (indirect land use change); which could affect the carbon profile of biofuels. Depending on the model applied and the region considered, the variation of the iluc factors for the different types of biofuels is very broad (see figure below). Consequently, the regional analysis to identify iluc factors at country level (regional model) is more reflecting reality than going for uniform factors (Lahl, Uwe, An Analysis of iluc and Biofuels Regional Quantification of Climate-relevant Land Use Change and Options for Combating it, Study dated 29 October 2010 comissioned by BDB and UFOP). (Source of the Figure: Croezen et al., 2010 H.J. Croezen, G.C. Bergsma, M.B.J. Otten, M.P.J. van Valkengoed; Biofuels: indirect land use change and climate impact; Delft, CE Delft, June

132 More research is needed on the issue of indirect land use change, and sustainability criteria are required to guide the EU toward sustainable biofuel production. In 2009, the Renewable Energy Directive 1 established mandatory target to be achieved by 2020 for a 20% overall share of renewable energy in the EU and a 10% share for renewable energy in the transport sector. At the same time, an amendment to the Fuel Quality Directive 2 introduced a mandatory target to achieve by 2020 a 6% reduction in the greenhouse gas intensity of fuels used in road transport and non-road mobile machinery. Whilst both Directives include sustainability criteria including minimum greenhouse gas saving thresholds, such as to exclude biofuels produced from high carbon stock or biodiverse land and those with lifecycle GHG emissions savings of less than 35% (increasing to 50% and 60% over time), the greenhouse gas emissions associated with changes in the carbon stock of land resulting from indirect changes in land use (ILUC) are not subject to reporting requirements under these Directives (COM(2012(595)) 3, whereas reporting on the measures for the protection of soil, biodiversity, water, air and labour issues is required. The Directive 2009/28 EC aiming at facilitating cross-border support of energy from renewable sources is globally the first approach supporting sustainability schemes, and its effects can already be seen also outside the EU and the biofuels sector. Currently 12 voluntary schemes have been recognised by the Commission ( This new system makes it easy to differentiate between biofuels that are environmentally destructive and biofuels that deliver on the promise of sustainability. The certification system covers the major issues of concern in biofuel production, including their contribution to climate change mitigation and rural development; their protection of land and labour rights; and their impacts on biodiversity, soil and water pollution, water availability and food security. On 17 October 2012, the Commission has published a proposal aiming at capping the share of biofuels made from crops and including ILUC factors in the reporting obligations of the fuel suppliers. The EC has also proposed to set the GHG savings threshold of the new facilities at 60% 3. References 1 Directive 2009/28/EC of the European Parliament and of the Council of 23 April 2009 on the promotion of the use of energy from renewable sources and amending and subsequently repealing Directives 2001/77/EC and 2003/30/EC, OJ L Directive 2009/30/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 98/70/EC as regards the specification of petrol, diesel and gas-oil and introducing a mechanism to monitor and reduce greenhouse gas emissions and amending Council Directive 1999/32/EC as regards the specification of fuel used by inland waterway vessels and repealing Directive 93/12/EEC, L Proposal for a Directive of the European Parliament and of the Council amending Directive 98/70/EC relating to the quality of petrol and diesel fuels and amending Directive 2009/28/EC on the promotion of the use of energy from renewable sources, COM(20012)595 final 130

133 SECTION IV: KEY OBSTACLES The main barriers to reducing the environmental impact of transport and logistics operations are: stakeholders of the food and drink supply chain may have limited control over outsourced operations limited rail network or operator capacities limited infrastructure or fuel availability for alternatively-powered vehicles the complexity of balancing environmental factors with the wide range of high-priority factors influencing T&L operational decisions. SECTION V: RECOMMENDATIONS Figure 19 indicates how food and drink stakeholders might evaluate the transport chain for various product groups, taking an integrated perspective that first balances transport mode and distance against other sustainability criteria in sourcing decisions, aiming to avoid air transport, and prioritise ship, rail and intermodal transport over road transport, before looking at improvement options in logistics, and finally vehicle improvements. In practice, where sourcing decisions are dominated by other factors, stakeholders will pass directly to the later stages of improvement. Product group Air freight? N Ocean shipping? N Road? Shipping / Intermodal (air-freight labelling) Y N Y Alternative source location? Y Y Rail possible? N Y Figure 19: Reduce vehicle impact Increase load factor (Distr. / Logistics) Reduce distance (Distr. / Logistics) Rail / Intermodal Flow-chart of sequential steps (questions and actions) that represent an integrated best practice approach to reducing the environmental impact of transport and logistics operations (best practice actions shaded) 1 Improved monitoring and reporting Stakeholders must collate relevant data in order to identify improvement options. Where T&L operations are outsourced, stakeholders should collaborate with outsourced T&L providers to obtain these data, which should include: total energy consumption (fuel use) and emissions specific energy consumption and emissions modal split of transport load factors routing distances. 131

134 2 Sourcing and packaging Avoiding air freight and reducing transport distances can considerably reduce the environmental impact of transport and logistics activities, and can considerably reduce the overall life cycle environmental impact of products that can be produced efficiently closer to the point of sale. Increasing packaging density can improve the overall efficiency of transport and logistics operations and lead to reduced transport and logistics traffic, thus reducing the entire range of impacts associated with transport and logistics activities. Stakeholder should: integrate transport distance and mode in product sourcing decisions (i.e. consider influence of sourcing distance and primary mode of transport) maximise product density through packaging design. 3 Intermodal shift The road to rail or ship modal shift has great potential to deliver 'friendlier' miles for the industry. Food and drink sector stakeholders should prioritise rail and water-based transport over road transport, through intermodal logistic networks, where possible. However infrastructural improvements are also required, in particular more efficient rail services (in terms of reliability, punctuality as well as crossborder speed and inter-operability between national railway systems). Uptake by the food and drink stakeholders is also currently hampered by a lack of communication about possible synergies, networks, back-loading opportunities and a general lack of flexibility amongst the rail freight industry. Further harmonisation of inter-modal unit loads and development of inter-modal terminals is also essential. Whilst the food and drink stakeholders welcomes recent initiatives to improve infrastructures for alternative modes of transport at the national level, they call for more pan-european work to look at the existing barriers to achieving greater modal shift from road to rail or ship, and how these might be overcome. Key areas of immediate action towards the realisation of intermodal freight transport in Europe are: pursuing the strategy on trans-european transport networks and nodes harmonising regulations and competition rules in support of a single market in transport eliminating obstacles to inter-modality. 4 Optimisation of distribution networks and logistics There is considerable scope for vertical and horizontal collaboration within food supply chains to optimise loading rates and increase back-hauling. Meanwhile, centralised distribution networks, especially those centred around water or rail delivery for longer journeys, can substantially reduce transport-related impacts. Use of appropriate information technology software during design and route planning, and GPS during operations, is essential in order to optimise logistics processes. Key stakeholder actions include: development of central hubs based around efficient modes coordination of cluster networks to optimise supplier transport implementation of back-loading, with waste and supplier deliveries use of logistics software for route planning extention delivery hours to avoid traffic. 132

135 5 Vehicle improvements WG 3 -Continuous Environmental Improvement Final Report October 2012 Multiple potential improvements to vehicle design include low-cost retrofit options, that can significantly reduce operating costs and environmental impact. These should be implemented by food and drink stakeholders with their own transport operations, or requested of transport and logistic providers (perhaps through agreements that split investment costs and share financial savings). Primary options include: fitting low rolling resistance tyres aerodynamic modifications purchasing efficient EURO V trailers installing electrically-driven trailer ancillaries driver training and use of telematics implementation of a frequent vehicle inspection and maintenance programme purchasing (bio) gas or hybrid vehicles. 6 Cleaner fuels Further efforts should be made to promote the development of lower GHG fuels such as biogas and sustainably sourced biofuels. Policy makers should end subsidisation of fossil fuels and instead subsidise renewable energy sources. Policy coordination is required to establish common standards for recharging facilities for electric vehicles, and to promote the development necessary infrastructure for electric vehicles in urban areas. 7 Green public procurement Public institutions should commit to low-carbon vehicles through public procurement policies. 133

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137 OVERARCHING RECOMMENDATIONS Based on the information gathered in this report, the European Sustainable Consumption and Production Round Table proposes the following overarching recommendations: Collaboration for environmental improvement All actors in the food chain should jointly cooperate to overcome the identified challenges of: climate change, resource depletion, erosion or contamination of fertile soil, limited water resources, loss of biodiversity. This requires significant collaborative efforts based on a common understanding within the actors of the food chain, starting from agriculture and its suppliers and ending with consumers and the management of their waste. Promotion of best practice Examples of best practice should be shared and promoted throughout the food chain. These need to take into account the various environmental impacts of the different food chain actors and the scope for improvement taking into account their cost-benefits. However, consideration must be given to the geographical and sectoral differences within the European food chain in order to avoid a one size fits all scenario that would not lead to optimal environmental improvement. Whilst recognizing there are already numerous examples of good and best practice for environmental sustainability, these need to be promoted further through awareness raising campaigns, improved networks for communication with the targeting of relevant audiences, introduction of financial and behavioural incentives and regional, national and international co-operation. Best practices shall be developed and defined on the basis of life cycle thinking reflecting the whole food value chain and considering all relevant environmental aspects, such as GHG emissions (energyrelated and of other origin), resource efficiency including energy and water, biodiversity, soil quality and land use, air quality and others (integrated approach). Environmentally sustainable sourcing Sourcing that takes into account environmental sustainability is vital throughout the food supply chain. In order to achieve credibility, this should be based on independent third party verification or equivalent schemes that use a transparent and harmonised methodology in accordance with the integrated approach. However sustainability also includes social and economic aspects, which must be considered in the food chain. Consumer awareness Specific efforts are required to raise consumer's awareness and education to empower them to make informed choices, which may result in more sustainable consumption patterns. This should include the promotion of healthy and balanced diets that prevent obesity, especially amongst children as well as actions for helping consumers avoid and reduce food wastage. In addition, the actions described 135

138 concerning water, air quality, GHG emissions and energy efficiency, food storage and preparation, biodiversity, and resource depletion are worth to be promoted. Overcoming the waste problem Waste needs to be tackled through a co-operation between all actors in the food chain. A detailed and systematic analysis of waste flows along the food chain and recommendations on how to minimise them based on proper evaluation of costs/benefits, effectiveness and trade-offs is a priority area in order to improve waste management. In addition, the actions described concerning GHG emissions, soil quality, biodiversity and land use are worth to be promoted. Science based policy instruments Any setting of an EU wide political frame on environmental sustainability including if required regulation, should be sound and scientifically based ensuring long term certainty and reliability. This will enable the necessary investments to be made by the actors of the food chain. Emphasis on research and innovation Support at EU and national level for research and innovation should be enhanced to help actors in their efforts to improve environmental sustainability. One area of research should be directed to environmental sustainability indicators in order to improve their robustness and practicability. For businesses to become more resource efficient and to make use of new environmentally sustainable products and processes it is essential to provide them with an innovation-friendly environment. 136

139 ANNEXES Annex I: Suppliers to the agricultural sector - Information on the suppliers to the agricultural sector 1 Premixtures and compound feed (FEFAC) Compound feed produced by industrial compound feed manufacturers represent approximately 1/3 of all feed consumed by animals, i.e. 147 million t of compound feed in 2009, EUR 40 billion, production sites (with 85 % SMEs) and employees (direct). The purpose of the compound feed industry is to valourise available feed resources and combine them in order to produce nutritionally optimised complete or complementary feed meeting the nutritional requirements of animals and fish raised for food production purpose. FEFAC does not represent feed materials suppliers (whether farmers, food industry as supplier of by-products for feed use, importers of feed materials from third countries) nor suppliers of roughages. 2 Fertilisers (fertilizers europe) Mineral fertilisers represent around 55 % of all fertilisation in the EU. The growth and harvest of any crop takes nutrients from the soil reserves which must be replenished. Mineral fertilisers are one of the means of achieving this and are therefore essential for providing high quality food to the world s fast growing population. Already 48 % of the global population is fed thanks to the use of mineral fertilisers. In the EU-27, the fertiliser industry employs around workers (direct and indirect) with an annual turnover of EUR 12.2 billion in 2007/ million tonnes of nutrients (10.5 for N, 2.7 for P, 3.1 for K) have been used on average during the last three campaigns. 3 Plant protection products (ECPA) These include insecticides, fungicides and herbicides used for both agricultural and non-agricultural uses. Using plant protection products allows farmers to control pests and diseases, protect and treat developing food crops (e.g. fruits, vegetables and cereals), and helps provide high quality fresh fruits and vegetables at affordable prices. The sector covers around employees with an approximate annual turnover in 2007/2008 of EUR 6 billion. 4 Animal health products (IFAH-Europe) The EU Animal Health sector represents a turnover of EUR 4 billion with workers (direct and indirect). Research and development of animal health products include consideration of environmental safety with the products being used on animals and residue monitoring thereafter. 137

140 Annex II: Agricultural trade - List of initiatives promoted by the Agricultural trade In accordance with the assumption that only a holistic sector approach is fitting in order to apply the life cycle approach to the environmental challenges, CELCAA member associations are promoting, in collaboration with the operators they represent, specific actions, some of which are described below: The UECBV (European Livestock and Meat Trading Union) and CLITRAVI (European Association for Meat Processing Industry) committed themselves to delivering practicable but challenging achievements in the coming years. The members of the joint UECBV - CLITRAVI Taskforce on Climate Change issues committed to taking up the climate change and sustainability challenges by promoting a modern and efficient livestock-meat production and processing, making use of the best available practices and technologies in order to green their activities. The taskforce members strongly consider that an improved dialogue with all stakeholders all along the livestock/meat production chain is essential in order to achieve the best outcomes. Moreover, a pan-european taskforce platform for the exchange of research results through a European Network for Livestock/Meat development is expected to help interested parties to understand the operators circumstances and realities, creating the basis expected to facilitate the identification, adaptation and dissemination of promising technological and institutional innovations. The taskforce platform is feeding a database of scientific literature related to the environmental performance of the livestock/meat production chain, its members contribute to updating it on a regular basis with the aim of tracing and distinguishing scientific facts from non-reliable figures. A core part of this group s activity is the promotion of consistent messaging on environmental issues concerning the livestock-meat chain within Europe and globally also through a positive use of media, detecting false information and facilitating knowledge flows amongst all parties interested in a constructive and science-based channel of communication. COCERAL, representing grain traders, and Unistock, representing storers of agri-bulk are actively tackling the issues of sustainability related to their activities through an ad-hoc working group on sustainability which meets regularly. This informal platform discusses jointly with Fediol, Euromalt, Euromaisiers, Euroflour( 151 ) on the already existing regulatory issues that govern sustainability (e.g. the Renewable Energies Directive), the upcoming challenges for the sector and the areas for environmental improvements. The linkages with the other steps of the food supply chain are always taken into consideration in analysing the challenges posed by sustainability in order to keep a holistic chain approach. The fruit and vegetable sector has been proactive in developing sustainable agricultural practices to cope with increased requirements from consumers and is continuously looking for improvements in the supply chain. The sector has seen the highest uptake of organic and integrated farming systems and is addressing its GHG emissions through the establishment of a carbon footprint methodology and carbon offsetting schemes. Concrete examples in the trade segment include enhanced monitoring of transport conditions (often in real time) which prevents damage to the produce during transport, thus avoiding wastage of perishable products. Modern packing and ripening facilities have vastly improved energy efficiency in their operations, notably through the use of waste heat from cooling units and movement sensors for various appliances. New developments often consider the combination of various activities in the supply chain at the same site in order to create win-win situations for all those involved (e.g. use of waste heat from refrigeration for heating greenhouses). The horticultural sector was one of the first sectors to come up with a product specific protocol for measuring GHG emissions, mainly as a result of the Dutch project 'Towards a protocol and calculation tool for calculating greenhouse gas emissions of horticultural products' supported by the Ministry of Agriculture and the Dutch Product Board for Horticulture. The Dutch Horticulture Carbon Footprint ( 151 ) All four associations represent the first processing of cereals and oilseeds and form part of the constituency Food and drink industry 138

141 protocol (DHCF2009), can be considered to be a further specification of or an alternative to the PAS2050 Protocol. For many areas, the PAS2050 has provided the outline, but lacks detail in practical application for horticultural products; which need to be addressed through a product-specific protocol. The scope of the DHCF2009 Protocol is limited to business to business information exchange on carbon footprinting of horticultural products. Along with the protocol, a web-based tool was developed to enable operators to calculate their GHG emissions and assess the impact of more sustainable practices. Freshfel Europe (European Fresh Produce Association) assists its members in understanding the various implications of the dossier and coordinates research efforts in various Member States. For this purpose a dedicated working group on environmental sustainability was launched and a regular newsletter is issued keeping members informed of the latest developments both in the EU and third countries. More recently, food waste throughout the supply chain is increasingly being scrutinised and addressed through joint efforts with public authorities. The wine sector initiative of the OIV The wine sector is highly dependant on natural resources: soil, energy, climate, water, etc. Adaptation to the already unavoidable impact of climate change will be the big challenge for the European wine sector in the coming years, especially in Southern Europe. Therefore, preserving the natural assets through environmental sustainable practices is imperative for the long-term viability of viticultural activities. The European wine industry is committed to taking up the climate change and sustainability challenges by supporting the OIV initiative on CO 2 calculation. The OIV IWCBP (International Wine Carbon Dioxide Balance Protocol) is a tool which establishes the principles for the calculation of the emissions and sequestrations of greenhouse gases, expressed in C equivalents, for the wine sector. The OIV is an intergovernmental organisation made up of 45 member states and 10 leading scientific and professional organisations related to the wine sector. Its mission is to contribute to international harmonisation of existing practices and standards in regard to production and marketing of vine and wine products. 139

142 Annex III: Packaging value chain 1 About the chapter As a founding member of the SCP Round Table, EUROPEN (The European Organisation for Packaging and the Environment) represents the packaging supply chain and is equally mandated to coordinate the participation of the packaging material-specific association members, i.e. ACE: Alliance for Beverage Cartons and the Environment APEAL: Association of the European Producers of Steel for Packaging EAA: European Aluminium Association EMPAC: European Metal Packaging EuPC: European Plastics Converters FEFCO: European Federation of Corrugated Board Manufacturers FEVE: European Container Glass Federation FPE: Flexible Packaging Europe. 2 Raw materials for packaging There is no such thing as a fundamentally good or bad packaging material: all materials have properties that may present advantages or disadvantages depending on the context within which they are used. Some common applications and end-of-life options for packaging materials are outlined below. Final packaging choices require a more detailed analysis of the characteristics of each material. Glass: produced from sand, limestone and soda ash, makes impermeable containers that are easy to open and reclose. In most countries, bottles and other glass containers are either returned to be refilled or are recycled at a high rate. Metal: is used to make containers, foils and closures. Tinned steel is used for food cans and some beverage cans. Aluminium is used for most beverage cans, foils and closures. Both types of cans are recycled at high levels with significant environmental benefits. Foils are often used in laminates with paper and plastic materials to make flexible packaging and beverage containers. Paper & board: is based on organic fibres from wood and other biomass sources. Paper is readily recycled and high recycling levels are achieved. For product packaging, paper is frequently used in combination with coatings, foil, wax or plastic materials to provide barrier properties and sealability. For secondary and tertiary packaging, corrugated board is commonly used and generally has significant levels of recycled material. Plastics: made from oil or biomass, come in a number of specialised varieties. Polyethylene terephthalate (PET), polyethylene (PE) and polypropylene (PP) are used to make bottles and other lightweight containers as well as flexible packaging. Plastic packaging can be reused, recycled or used for energy recovery. Certain types of plastics can also be composted. Wood: used mostly for pallets and crates, is also used for some niche products such as wine cases. The wood generally comes from managed forests and is frequently reused for a number of transport cycles. 140

143 3 Functions of packaging Protection Promotion Function Information Convenience Unitisation Handling Waste reduction and recycling and reuse of by-products Features Prevent breakage (mechanical protection) Prevent spoilage (barrier to moisture, gases, light, flavours and aromas) Prevent contamination, tampering and theft Increase shelf life Description of product List of ingredients Product features & benefits Promotional messages and branding Product identification Product preparation and usage Nutritional and storage data Safety warnings Contact information Opening instructions End-of-life management Product preparation and serving Product storage Portioning Provision of consumer units Provision of retail and transport units Transport from producer to retailer Point of sale display Enables centralised processing and reuse of by-products Facilitates portioning and storage Increases shelf life Reduces transport energy 141

144 Annex IV: SCP Food round table - product example: Chopped tomatoes in natural juice preserved 1 Short introduction This product example reflects the structure of this report according to the different actors of the food value chain, here called constituencies, and shall illustrate the approach it follows. The life cycle thinking is demonstrated by means of the product 'Chopped tomatoes in natural juice preserved' (Figure 1). Figure 1: Example for a chopped tomato product The following figure shows the material flow as well as the different constituencies involved. First the tomato is grown, then processed and packed, sold, consumed and then discarded. A major part of consumer waste is reused, recycled or recovered, indicated by the dotted arrow in the Figure 2 below. Reuse, recycling, recovery, disposal Consumer waste Suppliers to agriculture Discard Grow Agriculture Transport Use Packaging Process and pack Agricultural trade Consumers Food and drink industry Sell Figure: Retail, catering and restaurant Life cycle of chopped tomato products with indication of actors involved (constituencies according to the European Food SCP Round Table) 142

145 2 The life cycle starts with growing tomato Farmers in Mediterranean countries grow selected varieties of tomatoes suited to use as chopped tomatoes in natural juice. The tomatoes are characterised by uniform ripening, few seeds and thin skin that can easily be removed. The tomatoes are field grown, in most cases using irrigation (Figure 3). To grow tomatoes, the farmers need to prepare the soil, to apply fertilisers (in most cases nutrients essential for growth, for example mineral) and to make use of plant protection products or biological pest control as tomatoes are vulnerable to damages caused by fungus and insects. During the harvesting campaign only lasting some weeks, it is essential to collect the tomatoes at the required stage of ripening, ripe enough for perfect taste and not too ripe in order to minimize postharvest losses due to damages resulting in tomatoes not fulfilling the processing requirements. The harvesting on field is done mechanically using special harvester (Figure 4) allowing a great level of automation of the harvesting process. Figure 3: Tomato harvesting using a special harvester Leaves and stipes are left on the field. Only a very small amount of the tomatoes produced to be sold as fresh vegetable but not fulfilling the quality criteria are processed, going into juice production. Those tomatoes may be grown under plastic or in glasshouses and the harvesting is often done manually. The Netherlands, Belgium and Spain are important countries for glasshouse production of fresh tomatoes. In the EU, field grown tomatoes for processing are mainly grown in Italy, Spain and Greece. Another important producer country is Morocco. In most cases, the tomatoes are directly transferred from the harvester to a truck, in order to be brought immediately to the processing site. Those that are coproducts from the growing of fresh tomatoes are usually collected at farm level and then processed. The majority of tomatoes to be processed are grown conventionally, often applying integrated pest management, while biological pest control is more easily applied in glasshouses. For tomatoes in particular, specific plant protection products and biological control agents have been and are being developed to protect tomato crops against the specific pest- tuta absoluta - which has devastating effects. 3 Influencing factors and environmental challenges 143

146 There are huge differences in the environmental challenges, depending on where the tomatoes are grown and whether with irrigation or without( 152 ). The specific challenges lie in the efficient use of resources such as energy, air, land or water. While in the Mediterranean region there is plenty of sunlight, the limiting factor is in most cases water in sufficient quantity and quality. On field production of tomatoes for processing requires a much larger land surface than if tomatoes are grown under glass, but it allows alternating with other annual crops. In Northern Europe, the lack of sun and the lower temperature precipitate the use of natural gas for heating and sometimes lightening. Regarding biodiversity, it is important to note that tomatoes need pollinators, which are released in many cases. Biological pest control techniques have become increasingly important over the last years, but chemical plant protection still prevails. Specific programmes addressing the encountered challenges have been developed, such as the minimisation of water consumption during the manufacturing process or the efficient use and energy to reduce GHG emissions. To reduce the amount of water to be supplied to the tomatoes, modern irrigation techniques are applied, e.g. sensor based drip irrigation, sometimes applying deficit irrigation. Another best practice example is a fast response to the appearance of the pest tuta absoluta in Europe (see above). Aside from manufacturing, specific actions have been developed in cooperation with growers for the sustainable use of inputs. This includes best practices, guidelines, recommendations and practical advice to rationalise the use of inputs. For example, in order to protect tomatoes grown in greenhouses, appropriate engineering measures have been developed (e.g. novel spray equipment and calibration advices). Another example is the precision farming techniques. Adapting fertiliser application to crops needs, helps the farmers assess the nutrient availability in the soil and apply only the necessary mineral nitrogen limiting at the same time the losses to soil and water. Fertigation is another example where the supply of nutrients and water occurs simultaneously and in a targeted way. 4 Then the tomato is processed and packed Chopped tomatoes are a packed product of non-whole tomatoes, normally of a round type, peeled and with the addition of juice. Depending on the type of cutting the product can be rough and with regular shapes or subtle and with irregular shapes. The process can be distinguished in the following main phases: The fresh tomatoes, when delivered at the factory (Figure 5), undergo a qualitative control. If they are considered adequate they will be washed, or otherwise returned to the agricultural producer. The industrial process starts with the washing and sorting of the tomatoes (Figure 6). During washing, sand from the mechanical collecting process and plant residues are removed. In the sorting, yellow and damaged tomatoes are thrown out, while the healthy ones, red and mature, continue towards the peeler. ( 152 ) Article 56 of Regulation n 533/2011 provides the framework for environmental action in fruit and vegetable production by the producer organisations in the EU. 144

147 Figures 4 and 5: Tomato delivery and washing at a factory During peeling, the peel is separated from the fruit, then on specific rollers the skins are removed. At this point the product, by means of belts, passes on to the dicer where it will be cut. The parts that are obtained after draining, and with addition of juice, are packed and immediately hermetically sealed. Chopped tomatoes in natural juice preserved may be packaged in different materials, depending on the particular packaging system used, and packaging supply chain infrastructure. Goods manufacturers are free to use any packaging system (e.g. carton packages, glass jars, metal cans) which protects the tomatoes from spoilage and contamination as well as enable the delivery of the product to the point of sale and consumer( 153 ). The process ends with the sterilisation and cooling of the boxes with the pulp. The final stage includes the storage of the product in warehouses where, after labeling, it is ready to reach the final consumer. Co-products from the tomato processing and out of specifications products can also be used as feed ingredients, provided that compliance with safety rules is insured. The benefit is threefold: i) lower food production cost due to the utilisation of co-products, ii) lower price for animal products due to lower feed costs, iii) reduced pressure on natural and human edible resources. 5 Influencing factors and environmental challenges during processing and packing From the environmental perspective the amount of water required remains high, especially during the washing of the tomatoes and the sterilisation and cooling of the product. Also the use of electrical energy for the functioning of the plants and the related emissions of CO 2 are significant. Finally, the processing activities also entail a relevant production of waste and sludge from depuration, though this has been heavily reduced over the last years by a change from cold to hot processing It is not easy to quantify the environmental impact given that there are several factors involved, such as the type of equipment used, the meteorological conditions during processing, the quality of the raw material, the presence of foreign materials and tomatoes not adequate for processing. ( 153 ) Meanwhile ensuring the health and safety standards of the chopped tomatoes, in accordance to EU Packaging and Food Safety laws. 145