Resource-Efficient Supply Chain for Metal Products in Buildings Sector in South Asia

Metal Industry
Resource Efficiency and
Environmental Performance
Thusitha Sugathapala
Senor Lecturer
Department of Mechanical Engineering
University of Moratuwa
 The Rationale

• Industries are essential drivers of economic progress in

any country.
– Their activities and performance depend crucially on the availability
and quality of raw materials.
• Global extraction and use of natural resources has
significantly increased over the past decades.
– Industrial development and economic growth are tightly linked to
resource use and contribute to rising commodity prices.
– Apart from its economic impacts, resource use is also the key
driver for a number of global and local environmental problems,
particularly GHG emissions and associated climate change issues.

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 2

 The Rationale

• Economic growth and resource consumption

Material Extraction GDP
Billion tons Trillion International Dollars

GDP

Ores and
Industrial
Minerals
Fossil Energy
Carriers

Construction
Minerals

Biomass Source:
Krausmann et al
2009

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 3

 The Rationale

• Arithmetic average of prices in four commodity sub-indices

(food, non-food agro items, metals, and energy)
McKinsey Commodity Price Index

Real price index: 100 = years 1999–2001

Source:
Towards Circular
Economy, Ellen
MacArthur
Foundation 2013

09/02/2023 4

Source: Towards Circular Economy, Ellen MacArthur Foundation 2013

 The Rationale

• Arithmetic average of prices in four commodity sub-indices

(food, non-food agro items, metals, and energy)
Nominal price index: 100 = January 1980
McKinsey Commodity Price Index

Energy
Metal
Non-food agriculture
Food
Source:
Towards Circular
Economy, Ellen
MacArthur
Foundation 2013

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 5

 The Rationale

• Trends in GHG emissions

Increased use of coal relative to
many other energy sources has
reversed a long‐ standing pattern
of gradual de-carbonization of the
world’s energy supply

Growth in Economic output is the

major driver of GHG emissions

The decline of energy intensity of

economic output has had an
offsetting effect on global
emissions arisen from growth in
population
Source:
IPCC AR5, 2014

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 6

 The Rationale

• Increased demand for resources has also intensified global

competition over limited resources and may endanger
growth and stability in the future.
– Resource scarcities will have an important impact on the national
developments.
• Forward-looking economic and environmental policies and
strategies are oriented towards increased “resource
efficiency”.
– Industrial development without resource efficiency policies may
overuse certain raw materials and thus create shortages, pollution,
and environmental degradation.
– De-coupling of resource use from economic growth will have
09/02/2023
positive economic and environmental effects.
Metal Industry : Resource Efficiency and Environmental Performance 7
 Resource Efficiency

• Resource efficiency illustrates economic output generated

per unit of natural resources and can be calculated at the
product, sector and macroeconomic level.
• Resource efficiency has become a core determinant of
economic competitiveness and sustainable growth.
• It has improved significantly over the past years.
– Today, the world economy uses around 30% less resources to
produce on unit of world GDP than 30 years ago.
– Despite the gains in resource efficiency, no evidence exists that the
necessary absolute de-coupling of resource use from economic
growth has yet been achieved.
09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 8
 Resource Efficiency

• Industrial Energy Intensity

3 100
Due to structural change
Low-income developing
economies
Industrial energy
intensity, by
Energy Intensity (ToE per $1,000

Percentage change from 1995

income group 90
2 Due to technological improvement
Low middle-income
developing economies
MVA)

Developing 80
economies
Industrial energy intensity
1
Upper middle-income 70
developing economies Components of change in
High-income developing economies
global industrial energy
intensity
Developed economies
0 0
1990 1995 2000 2005 2008 1995 2000 2005 2008

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 9

 Resource Efficiency

• Material Intensity in Economy

GDP
Material Extraction

Population

Material Intensity

Source: SERI & WU, Global Material Flows Database, 2017

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 10
 Resource Efficiency

• Industrial Competitiveness and Energy Intensity

Developing economies
Developed economies
Competitive Industrial

Predicted trend
Performance Index

Sri Lanka Energy Intensity (ToE per $1,000 MVA) Source: Industrial Development Report 2011, UNIDO

09/02/2023 Metal Metal Industry : Resource Efficiency and Environmental Performance 11

 Resource Efficiency

• Global GHG mitigation targets and energy efficiency

09/02/2023 Metal Metal Industry : Resource Efficiency and Environmental Performance 12

 Environment Performances

• Emissions of pollutants, waste/byproducts resulting adverse

effects on the biosphere (Air, Water, Soil, Ecosystem)
– Throughout the entire lifecycle from extraction of raw materials to
final disposal of the products or decommissioning of the plants.
– Both local and global impacts.
– Both direct and indirect impacts.
• Mitigation through technical and non-technical interventions
• Severity of the issue leads to enforcement of regulations for
emission control:
– Eg: Ambient air quality standards; Source emission standards.

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 13

 Environment Performances

• Stationary sources emission standards in Sri Lanka

– Has been regularized by CEA and about to enforce.
– Include both equipment-based and pollutant-based.
– Eg: Pollutant-based Standards
Cupola, Blast furnaces, Coke oven, Pollutant Process/ Emission limit
Basic Oxygen furnace, Source (mg/Nm3)
Electric (induction & arc) furnace Chlorine Any 35
Fluorine Any 20
Rated
Type of Emission limit Hydrogen sulfide Any 10
Output
Pollutant (mg/Nm3) Cadmium Any 1
Capacity
Any SOX 1000 mg/Nm3 Lead Any 2
  NOX 500 mg/Nm3 Arsenic Any 1
  Particulate (PM) 150 mg/Nm3 Mercury Any 0.01
  Opacity 20% …. …. ….

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 14

 Metal Industry

• The supply of metal products has strengthened human

development through millennia and will continue to play
its role in meeting society’s needs. Iron ore 39%

– Metals have specific Gold 16%

properties which give them a

central role in everyday life
and economic development
Copper 13%
– Metals are elements and
therefore have the potential Silver 3%

to be indefinitely recyclable. Potash 3%

Nickel 3%
– Value of global production by Phosphate rock 2%
Zinc 2%
PGMs 2%
metal in 2011: Other 15%
Diamond 2%

09/02/2023 Metal Metal Industry : Resource Efficiency and Environmental Performance 15

 Metal Industry

• Energy consumptions in Industry

2.5

2.0

1.5
GToE

1.0

0.5
Metals
0.0
1990 1995 2000 2005 2008
 Within industrial sector, metals consume the most energy.
09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 16
 Metal Industry

• Energy intensity in metal industry by income group (ToE/

$1000 MVA): – Developing economies use
about three times more
energy per unit of MVA in
metal industry.
– Both technology and
system improvements
contribute to the improved
performances.
– This signifies the huge
potential for resource
efficiency improvements in
the local industry.
09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 17
 Metal Industry

• Local Industry
Small Industries Medium & Large Industries
(Persons engaged < 10) (Persons engaged 10)
Industry Category Source
No. of Persons No. of Persons
Est. engaged Est. engaged
Manufacture of basic
412 1,256 114 9,059 Census of
metal Industries
Manufacture of fabricated 2003/2004
11,434 23,063 248 8,900
metal products
Value Added (Rs. Billion) in 2012 Annual
Manu. of basic metal 7.9 survey of
Manu. of fabric. metal prod 4.3 industries

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 18

 Metal Industry

• Local Industry. Defense

Water
2.0%
– Electricity consumption 5.8%

Other Garments & Textile

23.8% 14.5%

Banks / Financial
Organizations Airport & sea ports
2.3% 3.3%
Plastics, Polythene,
Metal
PVC Rubber & Leather
5.8%
2.1%Packaging Tea 6.4%
1.8% 5.2%
Cement, Roofing
materials & Ceramic
5.5% Telecommunication
Food & Beverages 2.3%
7.5% Hospitals Hotels
4.7%
Chemical & Mining3.2%
3.9%

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 19

 Metal Industry

• Local Industry.
– Key areas of interventions for resource efficiency

 Good housekeeping Measure

Results
 Better process control
 Equipment modification
 Technology change
Data
Plan Take Action
 On-site reuse and recovery
 Production of useful by-products
Analyze
 Product modification
Information
09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 20
 Metal Industry

• Local Industry.
– Options for Resource Efficiency Improvements
Components of change in industrial energy intensity, by region and income group, 1995–2008

Technology vs Structural
09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 21
 Metal Industry

• Local Industry.
– Options for Resource Efficiency Improvements
Global average energy intensity and best available technology in metal industry: 1960–2010

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 22

 Metal Industry

• Local Industry.
– Options for Resource Efficiency Improvements
Savings potential arising from industrial energy-efficiency improvements
Technical improvement potential (%)
Industry Category Developed Developing
countries countries
Iron and steel 10 30
Aluminium production 35 50
Aluminium smelters 5 - 10 10
Non-ferrous
Other aluminium 5 - 10 10
minerals
Copper smelters - 45 - 50
Zinc 15 45

09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 23

 Conclusions

• Present industrial development pathways has led to

resource depletion; thus challenging the sustainability.
• Considerable progress have been achieved in improving
resource efficiency, particularly in developed economies;
yet further improvements are possible through both
technology and structural improvements.
• Resource efficiency is the key to industrial
competitiveness, which would lead to sustainable business
growth as well as environmental benefits.
• METABUID project is a timely intervention for Metal
Industry in Sri Lanka to become resource efficient and thus
face the global challenge.
09/02/2023 Metal Industry : Resource Efficiency and Environmental Performance 24