Detailed assessment of the market potential, and demand for, an eu ...

DETAILED ASSESSMENT OF THE MARKET POTENTIAL, AND DEMAND FOR, AN EU ETV SCHEME

BUSINESS CASE ANNEXES To the European Commission

DG Environment

Under Framework Contract No. DG BUDG No BUDG06/PO/01/LOT no. 1

ABAC 101931 ? EU ETV Scheme

EPEC

June 2011

Contact name and address for this study: Jonathan Lonsdale, Principal E-mail: jonathan.lonsdale@ Tel: +4420 7611 1100; Fax: +4420 3368 6900 GHK Consulting, Clerkenwell House, 67 Clerkenwell Road

European Policy Evaluation Consortium (EPEC) Brussels contact address: 146 Rue Royale ? B-1000 Brussels Tel: +32 2 275 0100 Fax: +32 2 275 0109 E-mail: contact@ URL:

This report has been produced by the EPEC consortium with contributions from:

Jonathan Lonsdale Mark Peacock Nihar Shembavnekar Ali Erbilgic Tamara Kulyk

Philippe Larrue Patrick Eparvier Carlos Hinojosa

The opinions expressed in this study are those of the authors and do not necessarily reflect the views of the European Commission

CONTENTS

Annex 1 Annex 2 Annex 3 Annex 4 Annex 5 Annex 6 Annex 7

BUSINESS CASE: INSULATION ......................................................... 1 BUSINESS CASE: BIOBASED PRODUCTS ..................................... 18 BUSINESS CASE: SITE INVESTIGATION TOOLS........................... 32 BUSINESS CASE: IN-LINE WATER MONITORING.......................... 54 BUSINESS CASE: MICRO COMBINED HEAT AND POWER........... 70 BUSINESS CASE: SOLAR HYBRID TECHNOLOGIES .................... 91 BUSINESS CASE: ANAEROBIC DIGESTION................................. 111

EPEC

ANNEX 1 BUSINESS CASE: INSULATION

The following business case has been prepared on the basis of seven interviews. The interviews include four company representatives and three certification bodies. A total of eight companies and eight certification bodies and testing centres were contacted.

A1.1

Introduction

This business case builds on market analysis findings of the Cleaner Production and Processes technology area and Low Carbon Building Materials technology group (see main report). This showed that overall, the low carbon building materials technology group could strongly benefit from an ETV due to the lack of international recognition of existing certification schemes and the barriers to growth this may create.

The insulation sector is a very large market (e.g. floor, wall and roof insulation as well as pipework) within which companies are required to obtain certification within different member states in order to access new markets. Despite the presence of a number of very large companies that dominate the current supply side, the insulation sector is also characterised by the presence of a large constellation of SMEs, often working at the local or national level, bringing to market both renewable-based and leading edge innovative insulation products (e.g. aerogels). These producers often have to prove to the market the extent to which some of their products offer both superior performance and stronger environmental credentials than traditional solutions.

There are two dimensions to the environmental innovation of new insulation materials. In some cases, innovation is oriented towards the content of the insulation product (i.e. insulation panels made of biomass). In other cases, insulators are produced using traditional materials while achieving higher levels of performance, notably in terms of thermal transmission. Most often however, these two dimensions go hand in hand.

There are two points which are important to consider when analysing the potential of an ETV in this sector. First, because insulation materials are parts of buildings, the safety for use dimension is crucial in product testing and certification. Second, buildings are long-term creations and as such, establishing long-term performance of innovative insulators is also a key element.

The construction sector is highly conservative, because producers often have to deal with safety and insurances issues. Performance claims are not only insulation-related, they also concern the water, fire or sound resistance of the product.

There are two major and overlapping uncertainties over performance claims in the insulation sector: medium to long-term performance (dynamic performance), and performance under real-life operating conditions. This is highly relevant for the market because the performance of the insulation product is dependent on the surrounding environment and materials. In other words, performance of insulation materials may vary considerably based on the types of additional products used in the construction of the building. In addition, the ease with which these products can be manipulated by installers is also a key priority for consumers.

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A1.2 Current status of the market and technology

A1.2.1

Nature of the market opportunity

The insulation market is a mature market, with a large number of technologies available. However, innovative technologies represent a small share of the total turnover of the insulation market in the European Union (around 5%). Some member states dominate the innovative market: Nordic countries, Germany and Austria. With policy makers and civil society increasingly focusing on energy efficiency and the environmental impact of construction products, more innovative products are entering the market. Due to the highly competitive nature of the market, there is an innovation push for highly energy-efficient technologies. The new building business relies increasingly on green-oriented products, and the same process is starting in the retrofit sector ? even though retrofit activities are far less targeted by regulation.

Potentially, the market for new high efficiency technologies in the insulation sector is unlimited. Even when taking into account the diversity of insulation needs across Europe (depending for instance on climate specificities), all individual homes, buildings and industries could be the target of these technologies. Growing environmental regulation is likely to provide producers with great opportunities to expand this market.

Overall, the market opportunity for EU producers of new insulation technologies is high. With energy efficiency being a European flagship action in the EU 2020 strategy, awareness among producers and end users should rise, and drive the market to further take into account the environmental-related performance of the products.

A1.3 Innovation drivers

A1.3.1 Main EU and Member states regulations influencing the development of the technology

At EU level, the Energy Efficiency in Buildings Directive 2002/91/EC (2002) is the central piece of regulation. This directive has far reaching implications for home-owners and the construction sector. It has helped turn attention towards the energy efficiency of construction products, especially insulating products. This has stimulated R&D expenditure in insulation technologies.

At the member state level regulation is indeed particularly relevant to the insulation sector. The diversity in climate and land conditions across countries has meant construction regulations vary significantly. Several member states have adopted very demanding regulation for insulation. For example, in France, the new building regulation code (RT 2012) demands high energetic performance for new buildings and takes into account the insulating capacity of the building. The UK has developed a special code for sustainable homes (2007), aimed at changing practices in the construction of new houses by introducing minimal standards for energy efficiency.

Owing to differences in national construction regulations and building standards, the construction material market is highly fragmented. Companies have a very difficult time entering new markets due to the cost of adapting their products to local regulations.

A1.3.2

Non-regulatory end user requirements on innovation and performance

With rising energy prices, reduction of energy needs is of great concern for final users. Fundamentally, insulating products aim to reduce the demand and use of energy. This

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