Sps Conference Essen 009 Samuel Shiroff Cool Carbon Fridge Exchange Sep09 2

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Cool Carbon: A Multi-Faceted Refrigeration Product

Samuel Shiroff
Conference “The Future of
Sustainable Products and
Services”
September. 28, 2009

BOSCH UND SIEMENS HAUSGERÄTE GRUPPE

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The BSH Shareholders | 1

BSH Bosch und Siemens Hausgeräte GmbH

50 % 2009 50 %

Robert Bosch GmbH Siemens AG

1967

BOSCH UND SIEMENS HAUSGERÄTE GRUPPE Cool Carbon: A Multi-Faceted Refrigeration Product Sept 28, 2009 I Folie: 2

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The BSH Corporate Principles | 2

Our Vision Our customers can trust us.
We want to be the
benchmark
of our industry. We are pioneering innovators
in our industry.
Our Mission
BSH is one of the
Our people are the foundation
world’s leading
of our success.
manufacturers of
home appliances,
and creates value We enhance the value of our
for its customers company.
and shareholders.
We bear responsibility for
environment and the society.


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BSH – Global Success

13 brands*
~ 39,000
employees worldwide*
~ EUR 8.76 billion
sales**
> 60 companies
in ~ 40 countries*
42 factories in Europe,
the U.S.A., Latin America
and Asia*
Global sales and
customer service network

** Valid at: August 2009
** Valid at: 31.12.2008


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BSH – Brands

Main Brands Special Brands Regional Brands Products


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BSH Wins the First German Sustainability Award 2008

The panel was impressed by BSH’s
consistent sustainability management all
along the entire value chain and
communication on sustainability issues,
furthering the company’s image.

The prize is awarded to companies
combining financial success with
social responsibility and environmental
protection

More than 350 companies entered the
competition (incl. Volkswagen, BASF,
Osram, Henkel)

The structures and processes for
sustainable corporate management were
assessed

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Contents
Refrigerators and the Energy Challenge in Brazil

Project Overview

Lessons Learned

Moving Forward


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The importance of refrigerators in Brazilian energy use
Energy consumption due to fridges: Participation of major utilities in average
18,3 TWh/year residential energy consumption

Energy use percentage of fridges:
4,5 % of national consumption
22 % of residential consumption

Shower
Light bulbs
Freezers
Fridges
Iron
Sound system
TV
Air Conditioner

Source: Research of utilities possessions and usage habits – base year 2005 - July 2007, Eletrobrás, Procel


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In most cases refrigerators are acquired in very precarious situation and are
basically used to refrigerate bottle of waters
examples found in north of Brazil

source: CELPA


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Some Refrigerators work continuously with a curtain instead of a door. Projected
consumption measured on an average use during a 4 day period: 169 kWh/month
examples found in north of Brazil

source: CELPA


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Concept: Use current fridge-exchange program as test for CDM

Brazilian energy efficiency requirements
– Utilities must spend .05% of revenues on efficiency (supply &
demand-side programs)
– Funds are spent on combo efficiency and social –focus on
favelas (slums)
BSH at forefront of fridge exchange program
– BHS exchanged 45,500 (total 100k industry-wide)
– BSH offers recycling old fridges (guarantees they are no
longer used)
– Risk: Cost position weaker than comparative rivals, might
mean losing future business

Opportunity: increase revenue per fridge via CDM
– Leverage based on:
– Efficiency of new fridge / Inefficiency of old (recycled)
fridge Macro-economic savings
– Fuel-mix used to produce electricity –Lower “base” and “peak” demand
– 1 MW Coal = approx. 1 ton CO2 (country/region specific) –Fewer additional power plants to build
– Recycling of Old Fridges –More down-time for costliest fuels
– Possible subsidy to build new recycling plant (Montreal
Protocol) Micro-economic savings
–Significantly lower energy bills and/or
– Carbon credits for CFCs and/or HFCs (t.b.d.) –realization of “suppressed demand”
– Revenue from sale of recycled materials –Social added value

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BSH Business Model, Modular and flexible proposal with both ecological product
and reverse manufacture


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Recycling
Initial Old refrigerator
Exchange Program

Favela
BSH New refrigerator

Utility or Govt


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Contents

Project Overview

Lessons Learned

Moving Forward


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Project Framework
Public Private Partnership with the GTZ
Synergistic and complimentary expertise

Risk-sharing cost and reputational

Goals:
Design: Develop a new CDM methodology to allow for CO2 credits from energy
efficiency and coolant gasses to encourage refrigerator exchanges and
environmentally responsible recycling

Prepare: Develop an action plan for applying the new methodology

Apply: Establish partnership with a utility for first pilot project

Repeat: Determine where replication is possible


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3 Core elements offering new sales opportunities for selling refrigeration
Refrigerator Exchange

Goal is to replace old inefficient fridges with new highly efficient
models saving electricity for the consumer and the planet

Recycling

The old fridge must be recycled to ensure it is no longer used and all
CFCs are destroyed

CDM

The Clean Development Mechanism (CDM) is used to capture the
value of the carbon saved by the increased efficiency and captured
gasses from recycling


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Recycling
CDM Utility Old refrigerator
Exchange Program

Favela
BSH New refrigerator

10yr 9 yr 8 yr 7 yr 6 yr 5 yr 4 yr 3 yr 2 yr 1 yr
CO2 Emission Reduction (CER‘s) 1 yr
2 yr
3 yr
4 yr
5 yr
6 yr
7 yr
8 yr
9 yr
Utility 10yr


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Recycling is a fundamental component for exchanges
Old units must be removed from market!
Recycling ensures efficiency gains and environmental advantages
Waste Electrical and Electronic Equipment. (WEE)
CFC / HFC – Ozone Killers and Climate Killers added value

Metals 42,81%
(Fe/NE/Al)

Plastic 12,95%

Glass 3,89%

HFC CFC
CER / VER
destruction


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Contents

Project Overview

Lessons Learned

Moving Forward


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Lessons Learned
Methodology Preparation:
– Overall very successful and fast: 144 days
– PPP highly conducive to success legitimacy and expertise
– Meth Panel made unprompted and problematic alternations (lack of
understanding of industry)

Preparation of action plan
– Coordination with utilities proved complex due to CO2 learning curve
– Establishing necessary conditions challenging but not impossible
Apply:
– PDD with methodology already submitted
– BSH working with new factory owner and utility on 2nd one

Repeat:
– Currently in the process of determining where conditions are suitable


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Lessons Learned

Technology:
– It is possible to design highly efficient appliances
that meet or exceed minimum requirements
– …but. . . the most efficiency technologies require
additional support to ensure access

Access
– Incentives need to be created
– Financing (including CO2) needs to be in place

Action
– Companies must see a clear economic benefit
(government programs can help)
– NGOs and Development Orgs need to be integrated to facilitate access to market


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Contents

Project Overview

Lessons Learned

Moving Forward


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A market research has been compiled in 47 countries around the world:

• fridges older than 10 years ?
• refrigerant containing CFC?
• energy mix ?
•…

• CDM market potential ?


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Program Potential in the Researched Countries

CDM Potential
Low Medium High


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Next steps

In Brazil
Brazilian Factory Sold
Working with new owner to implement first project

Around the world
Searching for locations for repetitions
New dynamic for Phase II recycling and CFCs set into motion

Learning Curve
BSH better understands CDM and is looking into other possibilities
New perspective on working with un/under-served market segments
Exploring other resource-related issues (water)
Very open to additional Public Private Partnerships


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Protos: Sustainable Products and Services
Services
Warm Food, Safe Fuel, Faster, Low Cost Target
Market
Segment:
Environmental Health / MDGs
Kerosene Stove
Users
Cost Gap Payment

Reduced Deforestation Maternal Health

Grants
CO2 Neutral Fuel Child Health
Payment Reduce Costs:
Scale,
Technical
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Development
Companies WHO / UN Reputation / Brand
Governments IGOs/ NGOs
General Public Political
Foundations
Development Orgs Operational

CO2 Certificates

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Thank you for your attention


Sps Conference Essen 009 Samuel Shiroff Cool Carbon Fridge Exchange Sep09 2

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