Carl Bro a/s - Team Leader - IPPC-experts - Quality Assurance PROJECT TEAM Carl Bro a/s - Team Leader - IPPC-experts - Quality Assurance Ifo - Economists Regional Environmental Center - IPPC-experts © 2005, Carl Bro as - page 2

Assessments of competitiveness – focus on cases FOCUS OF STUDY Assessments of competitiveness – focus on cases No focus on general binding rules No specific analysis of different approaches implementation © 2005, Carl Bro as - page 3

Impacts on competitiveness PROJECT OBJECTIVES Impacts on competitiveness Does the main conclusions from the 2001 “Hitchens” study also apply in other selected sectors, and are they still valid ? What effect has implementation of IPPC and BAT on competitiveness within particular sectors within EU ? Does implementation of IPPC and BAT have an effect on the competitiveness for EU-installations compared to non-EU competitors ? What is the influence of the different approaches taken by selected Member States on SME’s competitiveness in selected sectors? © 2005, Carl Bro as - page 4

HITCHENS STUDY Starting point: Hitchens et al., (2000), “The Impact of BAT on Competitiveness of European Industry” Aim of the “Hitchens study”: to develop a methodology to assess the impact of the introduction of BAT (as defined in Directive 96/61/EC (IPPC) Directive), on firm competitive performance, both in relation to the EU's competitors and within the EU. The selected case study approach was applied to three industries: cement, paper and pulp and non ferrous metals (more than 100 cases incl. overseas visits) Two main questions: Is a BAT plant viable? Is the application of BAT to existing plants likely to lead to a significant number of closures? © 2005, Carl Bro as - page 5

HITCHENS STUDY Overview of results of the “Hitchens study”: The use of BAT in the selected sample of firms yielded no evidence of distortion of national or international competitiveness; Study made the stringent implementation assumption that sample plants were required to meet all the BAT requirements as stated in the BREF; List of factors favouring and hindering the take-up of BAT was identified. © 2005, Carl Bro as - page 6

HITCHENS STUDY Methodology of “Hitchens study”: Set of hypotheses capturing negative and positive factors which influence the costs or benefits arising from an adjustment to the adoption of BAT; use of questionnaire for interviews. Cement: the average performance of plants in different countries with different environmental stringencies, and therefore different mixes of BAT and emission standards, was compared country by country. Non ferrous metals/paper and pulp: economic and environmental performance of individual plants with and without BAT irrespective of the European country of origin were compared © 2005, Carl Bro as - page 7

HITCHENS STUDY Main strengths of “Hitchens study”: A micro study recognizes differences between plants. Important when considering the implementation of IPPC. Managers can answer the detailed questions about the impact of specific environmental initiatives on firm performance. Broad categorization by critical variables related to the adoption of BAT by all firms in the industry is important to judge the impact on the industry as a whole. © 2005, Carl Bro as - page 8

HITCHENS STUDY Main weaknesses of “Hitchens study”: There can be problems identifying plants with the full range of BATs and plants which also reach strong environmental performance standards. To show which BATs are sensitive needs analysis of emission reduction associated with the BAT. Difficult to achieve statistical representativeness with a case study approach. © 2005, Carl Bro as - page 9

METHODOLOGY OF THE STUDY - TASKS Case selection Data gathering Assessments Project reporting © 2005, Carl Bro as - page 10

METHODOLOGY – TASK 1: Case selection Case sectors Selection criteria Environmental significance Economic significance Actual competition Large and SMEs within sector Focus on particular products Proposed sectors (4 to be selected) Steel (e.g. tubes/wires/profiles) Paper (e.g. Kraft pulp) Glass (e.g. reinforced glass fibre) Pig farms LVOC Slaughterhouses ? © 2005, Carl Bro as - page 11

METHODOLOGY – TASK 1: Case selection Case Member States Selection criteria Relevance of the MS for the sectors selected Centralized and regional/local issuing of IPPC permits Old and new MS´s As many regions of Europe as possible should be represented Proposed Member States Germany Poland Czech Republic/Hungary Spain/Italy UK Denmark/Sweden Belgium ? © 2005, Carl Bro as - page 12

METHODOLOGY – TASK 1: Case selection Case installations Methodology List of installations within sectors in MS´s Collection of information about installations (date of permit issue, environmental significance – e.g. EPER) Select 15-20 installations within each chosen sector Selection criteria Installations that comply with IPPC – not too recent permits “New” and “existing” installations SME´s and large installations Scale of investments induced by IPPC-implementation Environmental significance All chosen sectors and MS´s represented © 2005, Carl Bro as - page 13

METHODOLOGY – TASK 2: Data gathering Questionnaire on competitive issues for case installations (50-100) Collect IPPC-permits and economic data from case installations Interviews with industrial organisations in selected countries Training of experts and site visits (about 20 installations) © 2005, Carl Bro as - page 14

METHODOLOGY – TASK 3 Assessments of impacts on competitiveness Suggestion for draft methodology concerning this study: Step 1 - Sector level: Assessment of impact of IPPC implementation on competitiveness within the EU in the light of industry and market structure. Step 2 – Micro level: Questionnaire-based approach in selected installations of EU Member States. Step 3 – Combining sector and micro level: Analysis of financial strength of selected sectors and analysis of international context. © 2005, Carl Bro as - page 15

Expected role of Advisory Group in first stage: DISCUSSION ISSUES Expected role of Advisory Group in first stage: Comments to proposed methodology and approach Comments on the proposed sectors/MS´s Expected role of Advisory Group in later stage: Support in the selection of case installations Facilitate contacts with operators and authorities © 2005, Carl Bro as - page 16

Selection of sectors and MS´s NEXT STEPS Selection of sectors and MS´s Preparation of questionnaire (January-February) Selection of case installations (February-March) Sending out questionnaires to case installations (March) Site visits (May/June) Assessment phase (June – Sept) Final report (Oct) © 2005, Carl Bro as - page 17