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Improving Micro, Small, and Medium Enterprises (MSMEs) Competitiveness through Low Carbon Economy


IMPROVING MICRO, SMALL AND MEDIUM

ENTERPRISES (MSMEs) COMPETITIVENESS

THROUGH LOW CARBON ECONOMY

Policy Partnership on Science, Technology and Innovation

Asia-Pacific Economic Cooperation

June 23-24, 2016

Crowne Plaza Hotel, Mandaluyong City

Metro Manila, Philippines


Proceedings of the Improving Micro, Small and Medium Enterprises (MSMEs)

Competitiveness Through Low Carbon Economy Workshop

Prepared by

AB Culaba and AT Ubando (De La Salle University)

Edited by

CPC David, NA Peña and EAS Dimapilis (PCIEERD)

Published by

Philippine Council for Industry, Energy and Emerging Technology Research

and Development (PCIEERD)

Department of Science and Technology

DOST Complex, Bicutan, Taguig City, Metro Manila

1631 Philippines

Copyright © 2016 PCIEERD

All rights reserved.

No part of this publication may be reproduced, stored in a retrieval system, or

transmitted, in any form or by any means, electronic, mechanical, photocopying,

recording and/or otherwise without the prior written permission of the Editors.

Date of Publication: August 2016

Cover Design: Robby Manrique

Layout: Ma. Ethel Culaba

ii


Table of Contents

Title Page ……………………………………………………………….. i

Copyright Page ………………………………………………………..…ii

Table of Contents …………………………………………………….…iii

List of Annexes …………………………………………………….……iv

Executive Summary …………………………………………………… v

Workshop Programme ………………………………………………. vi

Chapter Title Page

1 Introduction ………………………………………….………………….. 1

2 Improving Micro, Small and Medium Enterprises (MSMEs) Competitiveness Through Low Carbon Economy 2.1 Status of Low Carbon Technologies for MSMEs

in the APEC ……………………………………………………. 4

2.2 Energy Efficiency Policies in MSMEs: The Australian

Experience …………………………………………………….. 4

2.3 Carbon Footprint Labeling for MSMEs ……………………… 5

2.4 Energy Saving System in Industry …………………………... 5

2.5 Energy Efficiency Policies and Practices in MSMEs:

The Chinese Taipei Experience ……………………………... 5

2.6 Financing Options for MSMEs Low Carbon Projects ……… 6

2.7 DOST Energy Audit and SETUP Program for MSMEs ….… 6

3 Open Forum Discussion

3.1 Morning Session Discussion ……………………………….… 7

3.2 Afternoon Session Discussion ………………………………. 8

4 Workshop Policy Discussion …………………………………………11

5 Moving Forward ………………………………………………………. 14

6 Workshop Resolution ………………………………………………… 15

References …………………………………………………………….. 18

iii


List of Annexes

Annex Title Page

A Bionotes of Speakers ………………………………………… A1

B.1 Opening Remarks by Dr. Carlos Primo C. David …………. A2

B.2 Overview of APEC Policy Partnership on Science,

Technology and Innovation by Dr. Mario V. Capanzana … A3

C.1 Status of Low Carbon Technologies (Energy Efficiency)

for MSMEs in the APEC by Mr. Ruamlarp Anantasanta … A4

C.2 Energy Efficiency Policies and Practices in MSMEs:

Australian Experience by Mr. Alan Pears AM …………….. A5

C.3 Carbon Footprint Labeling for MSMEs

by Mr. Tony Yangping Shih …………………………………. A6

C.4 Energy Saving System in Industry

by Mr. Shigeru Sakashita ……………………………………. A7

C.5 Energy Efficiency Policies and Practices in MSMEs:

Chinese Taipei Experience by Mr. Yi-Yuan Su …………… A8

C.6 Financing Options for MSMEs Low Carbon Projects

by Mr. Raymond A. Marquez ……………………………….. A9

C.7 DOST Energy Audit and SETUP Program for MSMEs

by Dr. Julius Caesar V. Sicat ……………………………….. A10

D.1 International Technology Transfer & Cooperation

Improving Micro, Small, and Medium Enterprises (MSMEs)

Low Carbon Technology Innovation by Ms. Ruixue Tian … A11

D.2 The Challenges of the MSME Supply Chain

by Mr. Alan Pears AM ………………………………………. A12

D.3 Simple Smart Sustainable Screen Solutions

by Mr. Anton Chupilko ………………………………………. A13

E Workshop Photos …………………………………………….. A14

iv


Executive Summary

The two-day workshop on “Improving Micro, Small and Medium Enterprises (MSMEs) Competitiveness Through Low Carbon Economy” was organized by the Philippine Council for Industry, Energy and Emerging Technology Research and Development (PCIEERD) of the Department of Science and Technology, Philippines. The workshop is an initiative under of the Policy Partnership on Science, Technology and Innovation (PPSTI) under the subgroup on “Promoting Enabling Environment for Innovation”. Funded by APEC, it is aimed at identifying barriers and to assist the MSMEs in the APEC economies to successfully adopt an environment-friendly business of operation. AS MSMEs account to about 97% of all business establishments of APEC economies, low carbon strategies such as the utilization of energy-efficient and cost-effective energy systems have demonstrated positive results in the reduction of production and energy costs as well as greenhouse gas (GHG) emissions. These would enhance the competitiveness of small businesses at the same time contributing to pollution reduction associated with production processes. A total of seven (7) invited papers were presented by experts from the different APEC-member economies. It has been recognized that the MSME is a challenging sector primarily because small business would have few resources and limited access to low carbon technologies. However, experts agree that this limitation could be address through the implementation of energy efficiency strategies which could result in lesser investment cost and yet can generate significant environmental benefits. It was further observed that energy efficiency is a good indicator for efficient processes, particularly those that use electricity and thermal heat. In countries like Australia, there exists comprehensive energy efficiency policies that implement programs such as “business energy centers” for the purpose of providing technical advise on how to save energy in companies as well as make available industry energy efficiency resources and case studies. Cleaner Production (CP) technology are already applied to some small companies and there have been demonstrated success in its application such as increased productivity, reduced operating costs, public health and environmental benefits, improved worker health and safety, reduced risk of liability, and improved global competitiveness. Other low carbon initiatives include labeling schemes such as those in Taiwan where energy conservation labeling, comparative labeling, and energy efficiency ranking labeling are used. In the APEC region not many countries adopt carbon footprint labeling. Through this initiative, visualization of carbon emissions is achieved through the conduct of a life cycle assessment (LCA) of products and is able to identify carbon hotspots and employ some optimal solutions. To address resource limitations, there are available financing windows for MSMEs like term loan approach, leasing approach, and Energy Service Companies (ESCOs). The latter would provide financing and assurance of energy saving that could reach up to 45% based on successful ESCO projects. Energy auditing could provide a good picture of the level of energy use of a facility, and could pave the way for an efficient implementation of energy efficiency strategies to achieve a low carbon economy. A Resolution had been agreed upon by the APEC delegates that would assist MSMEs achieve a sustainable and competitive business through adoption of low carbon technologies.

v


WORKSHOP PROGRAMME

vi

DAY 1: AM (Thursday, 23 June)

0830 - 0930 Registration

0930 - 1000 Opening Remarks

DR. CARLOS PRIMO C. DAVID

Project Overseer and Executive Director, DOST-PCIEERD

Overview of APEC Policy Partnership on Science, Technology and Innovation (PPSTI)

DR. MARIO V. CAPANZANA

APEC PPSTI Focal Person

Group Photo

Coffee Break

1000 - 1030 Status of Low Carbon Technologies (Energy Efficiency) for MSMEs in the APEC MR. RUAMLARP ANANTASANTA Deputy Managing Director, Project Management Office Excellent Energy International Co., Ltd Thailand

1030 - 1100 Energy Efficiency Policies and Practices in MSMEs: Australia Experience

MR. ALAN PEARS AM Senior Industry Fellow RMIT University Australia

1100 - 1130 Carbon Footprint Labeling for MSMEs MR. TONY YANGPING SHIH Deputy Director & Researcher, Department of Products Taiwan Textile Research Institute Chinese Taipei

1130 - 1200 Open Forum

1200 - 1330 Lunch

http://www.trri.org.tw/


WORKSHOP PROGRAMME

DAY 1: PM (Thursday, 23 June)

1330 - 1400 Cleaner Production and Energy Saving Opportunities for MSMEs MR. SHIGERU SAKASHITA President and Chief Consultant Ai-Ai Energy Associates Co., Ltd. Japan

1400 - 1430 Energy Efficiency Policies and Practices in MSMEs - Chinese Taipei Experience MR. YI-YUAN SU Assistant Professor, National Chung Hsing University Chinese Taipei

1430 - 1445 Coffee Break

1445 - 1515 Financing Mechanism Windows for MSMEs

MR. RAYMOND A. MARQUEZ Managing Director Econoserv Solutions International, In.

1515 - 1545 DOST Energy Audit and SETUP Program for MSMEs

DR. JULIUS CAESAR V. SICAT Regional Director, DOST Region III

Philippines

1545 - 1615 Open Forum

Wrap Up of Day 1

vii


WORKSHOP PROGRAMME

viii

Day 2 (Friday, 24 June)

0930 - 1015 Synthesis

Panel Discussion on:

Policy Recommendations for Creating Conducive Environment Towards Enhancing MSME Competitiveness

1015 - 1030 Coffee Break

1030 - 1200 General Discussion

Finalization and Presentation of Policy Recommendations

Closing Remarks

ENGR. RAUL C. SABULARSE

Deputy Executive Director, DOST-PCIEERD

1200 - 1330 Lunch


1. Introduction

Asia-Pacific Economic Cooperation (APEC), a forum of 21 Pacific Rim member

economies has driven the economic growth of the region since 1989. The combined

real gross domestic product (GDP) had doubled in the last 24 years through trade

and investment liberalization as well as regional economic integration. The Micro,

Small, and Medium Enterprises (MSME) contributed significantly to this economic

growth. The MSMEs account to over 97% of the region’s business sector and

provide over 70% of the all the jobs across the region. As economic development

continues, the demand for energy in the region also increased significantly. This

could pose serious impact to the environment and natural resources. Development

must proceed with prudent use of energy resources to address the current issues on

global warming. The level of energy demand by the MSME sector, however, would

vary from one economy to the other and so its composition.

According to the International Energy Agency (2015), MSMEs contribute to about

13% of the annual global final energy consumption. The consumption of energy at

the individual company level is moderately high but on aggregate could result to a

considerable amount. In the Philippines, the Bureau of Micro, Small and Medium

Enterprise Development (2014) reported the total business establishments in 2014

reached 946,988. MSMEs account for 99.6%, of which 90.3% are micro enterprises

while medium-size companies is measly 0.4%. Close to two-thirds of the country’s

total employment is provided by the MSMEs according to the report.

With the projected economic growth of the APEC region, the consumption of energy

by the MSMEs is expected to rise. The efficient use of energy in the MSMEs will be

vital to its profitability and competitiveness. The adoption of low carbon technologies

would significantly reduce energy costs and bring down greenhouse gas emissions

leading towards a low carbon economy (LCE). The competitiveness of the MSME

sector can be enhanced through an LCE following a framework as shown in Figure 1

below. It is recognized that MSMEs have constrained access to preferred energy

sources, especially the energy efficient ones primarily because they have limited

resources to acquire and use such technologies. The government needs policies that

promote, assist and incentivize small businesses to adopt low carbon technologies.

These would address some barriers to their adoption. An effective information,

education and communication (IEC) program would be needed to ensure that

owners and employees of such companies understand and appreciate the value and

benefits that it would bring to them with the utilization and use of energy-efficient

technologies. Companies would typically view their adoption more of costs than as

savings or increased profitability through less pollutive and healthy operation and

environment. They need assistance also in capacitating their workers on the use of

these new technologies such as the conduct of plant-level technical seminars and

trainings. These cross-cutting activities are necessary in order to achieve a low

carbon economy but these can only be effective if energy efficiency management

strategies could be institutionalized. Companies would need to access technology,

innovation support to upgrade its facilities and processes, and to capitalize on the

advances of information and communication technology in order to enhance its

1


Fig.1 Framework for Enhanced Competitiveness of MSME through Low Carbon Economy

productivity. Products should be designed in such a way that their environmental

performance is determined throughout its life cycle or may even apply branding such

as product eco-labels. More importantly, small business would need access to

funding and some incentive programs to sustain sustainability and competitiveness.

This Workshop has been designed to bring together policy makers, technology users

and developers, MSME representatives, and government officials from the APEC-

member economies. There were seven (7) invited presentations by APEC delegates

that covered the technical aspects of energy efficiency and it approaches such as

the status of low carbon technologies in the APEC region, energy efficiency policies

and practices in the MSME sector, carbon footprint labeling, energy auditing as well

as financing options. Annex A shows the bionotes of the workshop speakers. After

extensive discussion on the theme, a Resolution was crafted and approved the

APEC delegates which identified the mechanisms and the platform for discussing

2

CROSS-CUTTING ACTIVITIES

Policy

Information

Education and

Communication

Technical

Capacity &

Initiatives

Finance and

Investments

Technology

Barriers

Outcome:

Improved Competitiveness of

APEC MSMEs Through LCE

Technology

Innovation Support

and Upgrading

Mechanism

ICT for Knowledge

Acquisition,

Application and

Dissemination

LCA-based

framework for

LCE Technology

Assessment

Eco-labelling

of MSME

Products

Funding and

Incentive

Mechanisms

Outcome:

Low Carbon Economy

Access to

Energy

MSM

Enterprises


best industry practice and policies relevant policies related to the promotion of

voluntary adoption and deployment of low carbon technologies. A set of specific

recommendations were indicated in the resolution which will be presented to the

Policy Partnership on Science, Technology and Innovation (PPSTI). Support for the

development and use through appropriate technology transfer and financing would

also determined as a basis for further cooperation among the member economies.

Dr. Carlos Primo C. David, Project Overseer and Executive Director of Department

if Science and Technology (DOST)- Philippine Council for Industry, Energy and

Emerging Technology Research and Development (PCIEERD), Philippines had

welcomed the delegates and participants to the Workshop. He began by recognizing

that MSMEs are being challenged by the emerging low carbon economy. This will

involve potential increase in energy costs as the country shifts towards more use of

renewable energy, market demand changes as well as with compliance to climate

change-related policies.

He further noted that new skills would be required not only for the competitiveness of

companies but also for adapting and responding to climate change policies. He

hoped that this two-day workshop would lead to meaningful and inclusive policy

resolutions that would enhance the competitiveness of micro-, small-, and medium-

sized enterprises.

He also shared the current DOST Programs for MSMEs, which include SETUP,

technology business incubators, tech transfer initiatives, as well as technical

capacity-building. Dr. David’s presentation is shown in Annex B.1.

Dr. Mario V. Capanzana, Focal Person of the APEC’s Policy Partnership on

Science, Technology and Innovation (PPSTI), Philippines presented the various

programs and projects of the PPSTI. PPSTI which replaced the Industrial Science

and Technology Working Group has served as forum for APEC that relates to

science & technology (S&T) and innovation policy. It facilitates the promotion of a

shared innovative economic growth through strong cooperation among member

states such as the building of science capacity, an enabling environment for

innovation, and regional S&T connectivity. He further presented PPSTI Vision 2025

and its accomplishments thus far. Annex B.2 shows Dr. Capanzana’s presentation.

3


2. Improving Micro, Small and Medium Enterprises (MSMEs)

Competitiveness through Low Carbon Economy

2.1 Status of low carbon technologies for MSMEs in the APEC

Mr. Ruamlarp Anantasanta, Deputy Managing Director of the Project Management

Office of Excellent Energy International Co., Ltd., Thailand showed the varying

characteristics in terms of asset and size of companies as well as the technologies

currently adopted in Thailand, the Philippines, Malaysia and Vietnam. He observed

that there are still many low carbon technologies that are and have yet to be

developed thus MSMEs have limited technology options to adopt. He pointed out

that energy efficiency is a good indicator for efficient processes, particularly those

that utilize electricity and thermal heat for the purpose of reducing energy and utility

losses. In the whole power system, it is from the transmission line, which uses

transformers to connect to the end users that MSMEs are more concerned about.

For example, copper loss and transformer load/no load loss could account for 3-5%

and 1-2%, respectively. In the thermal heat, he identified 6 areas where energy

losses could be reduced.

He also shared their company’s experiences in addressing energy efficiency in

buildings. He cited some energy conservation projects that showed promising

payback periods up to 6 years. The presentation of Dr. Anantasanta is shown in

Annex C.1.

2.2 Energy efficiency policies in MSMEs: The Australian experience

Mr. Alan Pears AM, Senior Industry Fellow of the Royal Melbourne Institute of

Technology (RMIT) University, Australia presented the experience in Australia on

energy efficiency policies for small businesses. He expounded on the country’s

comprehensive, yet broad policy that would also account for the economic and social

aspects. He also cited initiatives such as ‘business energy centers’ that provide fuel-

specific technical advice and where technical advisers are paid based on the energy

savings that has been realized. The government also provides a website for

businesses to access industry energy efficiency resources and case studies

(www.eex.gov.au). He noted that barriers to energy efficiency in Australia are similar

to that of other APEC economies, and their implementation has been challenging.

Australia has also identified key criteria to influence MSMEs as developed by

BahviourWorks Australia for Sustainability Victoria. He added that among the major

questions that need to be addressed include:

What energy/emissions are we trying to cut, i.e., upstream and downstream

supply chain?

Who makes the decision?

What motivates them? How do they think/set priorities?

Who influences the decision makers?

What policy tools or programs will influence the decision makers?

How will these programs work?

4


What is important, he stressed, is the quality and detail of policy/program design and

implementation that would determine its success or failure. Monitoring and learning

from experience are essential for long-term success, he ended. Annex C.2 shows

the presentation of Mr. Pears.

2.3 Carbon footprint labeling for MSMEs

Mr. Tony Yang Ping Shih, Deputy Director and Researcher in the Department of

Products of Taiwan Textile Research Institute, Chinese Taipei provided the overview

of Carbon Footprint Labeling (CFL) program in Europe, the USA, Australia and Asia.

The CFL involves the calculation of the greenhouse gas emissions throughout the

product life cycle. The amount of carbon emissions generated from the manufacture,

transport, and disposal of a product allows the consuming public an informed choice

if they want to minimize their contribution to the ecological footprint for their

purchases. Visualizing the CO2 emissions is easily achieved through a life cycle

assessment (LCA) of the product, which could show low carbon hotspots and

provide optimal solutions. He also showed the easy to follow and use carbon

footprint platform. He recognizes that the CFL presents some challenges and

opportunities, and also observed that not all countries in the APEC region adopts the

CFL program. Mr. Shi’s presentation is annexed in C.3.

2.4 Energy saving system in industry

Mr. Shigeru Sakashita, President and Chief Consultant of the Ai-Ai Energy

Associates Co. Ltd., showed the many opportunities for saving energy in the industry

through cleaner production (CP) technologies. He cited the benefits of implementing

CP such as increased productivity, reduced operating costs, public health and

environmental benefits, improved worker health and safety, reduced the risk of

liability as well as improved global competitiveness. He pointed out that there are 3

approaches which contribute to energy saving in factories, namely: production

technology (process engineering), manufacturing technique (manufacturing

engineering), and energy saving technology (thermodynamic engineering). The

cooperation of these 3 engineering fields will result to an effective energy saving

system. He also stressed the importance of students involved in hands-on technical

experience in companies. Annex C.4 shows the presentation of Mr. Sakashita.

2.5 Energy efficiency policies and practices in MSMEs: The Chinese Taipei

Experience

Mr. Yi-Yuan Su, Assistant Professor of the National Chung Hsing University,

Chinese Taipei presented the profile and energy mix in Chinese Taipei. He also

showed the energy saving policies and common practices that have been

implemented in the MSME sector. The energy efficiency management program is

implemented by the Bureau of Standards, Metrology & Inspection (BSMI) and

Taiwan accreditation foundation. He also discussed various labeling schemes the

country had adopted such as energy conservation labeling, comparative labeling as

well as energy efficiency ranking labeling to achieve a low carbon economy. Mr. Su’s

presentation is found in Annex C.5.

5


2.6 Financing options for MSMEs low carbon projects

Mr. Raymond A. Marquez, Managing Director of the Econoserv Solutions

International Inc., Philippines provides various financing options for low carbon

projects primarily for small businesses. He started with the financing facility available

that includes term loan approach, leasing approach and energy service companies

(ESCO). He elaborated more on the ESCOs as effective means for implementing

energy efficiency strategies. Some of their cost-effective measures include high

efficiency of lighting, Heating, Ventilating and Air-Conditioning (HAVAC) motors,

variable speed drives, and others. He also added that savings are derived from the

energy and maintenance costs. He also shared the two financing schemes that are

followed globally, namely, the Shared Saving Model and Guaranteed Savings Model.

Finally, he linked the other financing with ESCO and pointed out the assurances of

ESCO in realizing a savings of around 15-45% as supported from his sample ESCO

projects. Mr. Marquez’s presentation is shown in Annex C.6.

2.7 DOST Energy audit and SETUP program for MSMEs

Dr. Julius Caesar V. Sicat, Regional Director of the Department of Science and

Technology (DOST) Region III, Philippines shared the efforts of DOST Philippines in

enhancing the MSMEs in the country. He discussed the definition of an energy audit

and why it is important for the MSMEs to achieve a low carbon economy. He

presented the energy audit teams from various government agencies where MSMEs

can availed of its services.. He also presented the Small Enterprise Technology

Upgrading Program (SETUP) as a flagship program of DOST for the improvement of

MSMEs in the Philippines. Annex C.7 shows the full presentation of Dr. Sicat.

6


3. Open Forum Discussion

This section presents the discussion on the floor during the open forum during the

first day of the workshop. There were two discussions, one in the morning and the

other in the afternoon.

3.1 Morning session discussion

Russian Delegate Question

We should look at today how small business manage their energy needs to cut down

on their energy wastes. How do we then transform small business operations to

address this?

Response by Mr. Shih

We should think positive. For MSMEs, no negotiating power to convince the supplier

to provide low carbon footprint material. What can be done is to target energy

efficiency in small ways such as converting the lighting system to LED. The low

carbon footprint products are not sold on a higher price, they sell it with the same

price.

Response by Mr. Pears

Ways to reduce carbon footprint: People avoid travelling, go online selling to reduce

the space and energy costs; processing of products from local wastes instead of

virgin mines (there are higher quality of compound from wastes compared to virgin

mine materials).

Response by Mr. Anastasanta

Below 50% of the world; Work at home no need to travel; promote win-win solution

for government, public, and industry; the government should enforce win-win solution

by providing avenues to cultivate a low-carbon economy thru labeling.

Indonesian Delegate Question

Is there any rule or regulation from the government to support your action in carbon

footprint?

Response by Mr. Shih

Industry should follow the standard suggested by EPA. For Taipei, they follow the

ISO standard for domestic implementation of projects and for certification purposes.

Response by Mr. Anastasanta

It is not forced. Building companies have to submit a report which includes a

reduction plan of energy consumption. However, the government does not enforce it.

This can be done by promoting a win-win solution thru labeling. Customers would

like to purchase a product with the same price but lower carbon footprint.

7


Malaysian Delegate Question

Is there any rule or regulation form the government to promote carbon footprint

labeling? What kind of incentive that the government provides to adopt carbon

footprint labeling?

Response by Shih

There are no strict laws to enforce carbon footprint labeling in Taipei. However, in

Taipei, the textile industry has combined their efforts to negotiate with big-sized

company such as Nike and Adidas to make the low carbon supply chain happen for

a low carbon economy. There are various creative ways for win-win situation to

happen.

Philippine MSME Participant Question by Mr. Rodulfo Plopinio

How did Thailand reduce the transmission loss to 1-5%, while in the Philippines its

13%? How did they charge the feed in tariff?

Response by Anastasanta

Thailand was able to communicate with big energy companies to work on reduction

of electricity losses at a national level. At MSME level, an economy of scale is the

key to reduce the transmission loss. There is a tariff in Thailand in place pegged at

5-10% based on the nation’s renewable energy plan.

3.2 Afternoon session discussion

Australian Delegate Question

When talking about energy efficiency, how many of the companies had some

success with the use of digitalized technology?

Response of Dr. Sicat

The creation of the ICT Office within the DOST allowed the department to enhance

the ICT technology support for the various renewable energy projects around the

country.

Thailand Delegate Question

Given the diagram of the approval process, what are the criteria included for the free

service of energy audits? What are the challenges to conduct energy audit at MSME

level?


The department has to weigh whom to prioritize for the availment of the energy

audits. The government has provided avenues for soft loan for the availment of such

services.

Thailand Delegate Question

What is the best way to address the challenge of funding for the MSMEs?

8



DOST provides technical assistance thru a soft loan as a strategy to engage MSMEs

in availing energy audits. The MSMEs do not mind operating on loans. Given time,

the companies may pay the penalties.

Response of Mr. Marquez

This can be addressed thru ESCOs focusing on higher efficiency projects. The

ESCO can provide an alternative solution thru the funding challenges of MSMEs.

Response of Mr. Su

MSMEs do not have the access for the loans or grants. An option is through the

internet and angel investments. Now the problem, would the government allow loans

from MSME without deposit? Most of the countries do not allow cross-nation funding.

How the financial regulations and jurisdictions can be broken to allow financial

funding of such energy efficiency initiatives. Countries should increase capacities in

terms of technical.

Response of Mr. Sakashita

A good MSME is effective. Engage student to analyze and prepare a proposal for

micro enterprise and increase their capability to analyze performance data on-site.

The key is capacity building thru engagement of students in projects.

MSME Participant Question

Will the new administration support the SETUP?


There is a strong demand for the SETUP program. I am very positive that SETUP

will be able to help more MSMEs.


Why does DOST not require cleaner production and addressing environmental

concern the as a requirement for all MSMEs?


DOST is on the right direction and emphasize to initially undergo energy audit. He

emphasize that the cleaner production and the environmental concern are two

different school of thoughts.


How can technical expertise solve the problem of energy efficiency?

Response of Mr. Sakashita

There are many researchers and engineers to improve the technology. We need to

use the students for their education and enhance the technical capability on

production technology, manufacturing technology, and thermodynamic technology.

9


Response of Dr. Culaba

Intensify internship programs for students to have a hands-on experience.


There is an ICT-powered library for the stand alone ICT library and stand-alone ICT

bags. In terms of warm body of experts, it is a conglomeration of global experts

within the reach of the internet, Philippine MSMEs can access to information.


Is the nuclear energy a safe or mature source of energy?

Response Mr Su

Mature technology is coal. The government of Chinese Taipei believes to have zero

nuclear energy within 4 years, and looking forward in increasing renewable energy

such as biomass and hydro-power.


The cheapest power rating is Taipei. In agro-processing, energy contributes about

70% of the total costs. Is it possible to adopt nuclear costs?

Response Mr. Su

If we exclude the environmental and social costs, the nuclear energy is the cheapest.

For Taipei, they consider the major disasters, environmental concerns, and social

acceptance for a zero nuke program. The spare power during peak time in Taipei is

3%. We should also consider social, environmental, risk concern for a balance

decision in choosing energy source.

Papua New Guinea Delegate Question

Global statics, 80% of all start-ups fail in the 1st year. What is your plan to address

this concern?


The MSMEs should be registered for a minimum of three years to establish a track-

record for the SETUP program. The SETUP is for upgrading program not for start-

ups.

10


4. Workshop Policy Discussion

This section covers the different views shared by each APEC delegate during the

policy discussion forum.

Chinese Taipei

The Chinese Taipei delegate emphasized that focus on cost-effective energy storage

technology and usage of energy for MSMEs can drastically improve the costs of

electricity and reduce greenhouse gas emission. Moreover, he stressed that the eco-

labelling of product and services is very important in making a low carbon economy.

Incentives should be given to MSMEs who would adopt eco-labelling for their

products and services. He highlighted that by choosing eco-friendly materials, it

could significantly reduce the carbon emission.

China

The Chinese delegate emphasized the importance of technology transfer at the

international level to help the MSMEs attain low carbon economy in developing

economies. Examples of successful technology transfer in China was shared and

cited. A presentation was presented by the Chinese delegate, Ms. Ruixue Tian

entitled “International Technology Transfer & Cooperation Improving Micro, Small,

and Medium Enterprises (MSMEs) Low Carbon Technology Innovation” and is

annexed in D.1.

Thailand

The Thailand delegate emphasized to focus on the capacity building in financial

institutions to further understand the risks involved in energy efficient economy of

MSMEs. A suggestion to promote consultation with ESCOs is an important approach

to improve the energy efficiency of MSMEs. In addition, providing one-stop shop

website for all the information needed by the MSMEs on low carbon technologies

shall increase their awareness resulting to a higher possibility of adoption. In the

LCA analysis, an emphasis to include payback period and per cent saving analysis

shall enable the MSMEs to foresee potential benefit of adopting low-carbon

technologies. Lastly, the government should provide incentives for MSMEs, who

would adopt eco-labelling.

Chile

The Chile delegates suggested providing ICT solutions in the dissemination of the

available low carbon technologies as an important strategy to disseminate

information to micro, small and medium enterprises (MSMEs). They have agreed

that promotion of Energy Service Companies (ESCOs) is a key strategy for a

sustainable operation of MSMEs. However, they showed concern that Life Cycle

Assessment (LCA) might be too much for the requirements of MSMEs. Lastly,

MSMEs should also focus on waste treatment schemes and reduction of

greenhouses aside from implementing energy efficient approach.

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Peru

The Peru delegates have emphasized that energy efficient technologies must be

implemented on buildings as most of the MSME establishments are found inside a

building. Promotion of renewable energy technologies will also be a vital strategy for

a sustainable operation of MSMEs for a low carbon economy.

Papua New Guinea

The Papua New Guinea delegate emphasized that in his country, less than 1% of

the population are aware of the need to reduce carbon footprint. The points were

shared to attain a low carbon economy for the MSMEs of the developing economies.

Firstly, the information on carbon footprint and low-carbon technologies should also

be included in the dissemination plan in developing ICT. Secondly, the equipment for

energy auditing should be provided by the government. Lastly, a filling mechanism

for all energy efficiency projects and technology transfer should also be developed to

come-up with a unified database of projects. This shall aid the MSMEs to be aware

of previous case studies and ba able to increase the adoption of low carbon

technologies.

Japan

The Japanese delegate emphasized that understanding the critical process in an

establishment and implementing low-technology can further produce energy saving

opportunities aside from adopting high-technology solutions. An example of low-

technology solution is the identification of potential heat-recovery opportunities in the

establishment.

Australia

The Australian delegate presented a one-slide presentation on the challenges in the

MSME supply chain as shown in Annex D.2. He elaborated the important items in

making a low carbon economy. He underlined that the government has a major role

to play in making the upstream supply-chain of MSMEs compliant with low carbon

technologies thru training, engagement, regulations, motivation and finance. The

access to information on low carbon technologies which are credible, non-conflicting,

trust-worthy, and timely; shall benefit the MSMEs and its customers. He suggested

that customers can also influence the MSMEs thru values features of the product

and services offered by the MSMEs. Lastly, any business proposition with MSMEs

should show benefits in gaining status with their peers, customer, and community.

Philippines

The Philippine delegate emphasized that a policy recommendation must be put

forward for the institutionalization of green technology innovation as well as its legal

work evaluation center in all economies. This policy shall enrich the database and

website of verified energy efficient technologies which the MSMEs can adopt. In

addition, policy recommendation on the use and disposal of non-biodegradable

materials must also be considered towards the improvement of MSME thru low

carbon economy. Lastly, policy recommendation on finance and technology transfer

must also be included to fully support the needs of MSMEs.

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Malaysia

The Malaysian delegate highlighted the need to promote eco-labelling for product

and services of MSMEs. A harmonized website should be provided for the MSMEs

for all relevant information on available low carbon technology. LCA case studies on

MSME are also significant to identify energy saving opportunities in an MSME

establishment. With the LCA in place, the quantification of environmental emission

sources should also be taken into consideration. Water and waste management

should also be considered by the MSME for a low carbon economy.

Vietnam

The Vietnamese delegate emphasized that the development of internet connectivity

infrastructure for MSME is a strategic investment to develop a low carbon

technology. This will enable the MSME to adopt available low carbon technology.

Moreover, support for technology transfer of low carbon technology for MSME must

be provided by the government to facilitate the adoption.

Indonesia

The Indonesian delegate stressed that the biggest barrier to attaining low carbon

economy by the MSMEs is the planning and implementation of projects. The

capacity building of the MSME for a specific region is a key item for a sustainable

adoption of the technology. One should consider the suitable deployment of

technology for specific regions such as typhoon-stricken, earthquake-prone, or

tsunami-susceptible region.

Russia

The Russian delegate emphasized three items to achieve low carbon economy for

MSMEs. Firstly, best practices and guidelines for adopting low-carbon technology

should be available to MSMEs. Secondly, the government should promote low

carbon technology thru incentives and policy recommendations. Lastly, the

government should encourage the use of renewable energy for MSMEs specially for

the regions that are not connected to the grid. The Russian delegate presented a

PowerPoint slide entitled “Simple Smart Sustainable Screen Solutions” shown in

Annex D.3.

The discussion concluded with a Workshop Resolution that was agreed and passed

by the APEC delegates outlining the policy directions, programs and action plans for

presentation to the Forum on Policy Partnership on Science, Technology and

Innovation (PPSTI). The complete content of the Resolution is presented in Section

6 below.

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5. Moving Forward

Engr. Raul C. Sabularse, Deputy Executive Director, DOST-PCIEERD, Philippines

shared his thoughts on the culmination of the two-day workshop. He started by

thanking the staff of DOST-PCIEERD, who worked hard in the preparation for the

workshop. He also thanked the international delegates and the MSME participants

for their active involvement in the workshop. He emphasized that MSMEs contribute

to 97% of all the region’s enterprises which generated more than half of the all the

jobs in the region. It is very important to promote and implement successful

technology transfer programs and policies of low carbon technologies, which would

lead to achieving a low carbon economy for the MSMEs. The sharing of experiences

and best practices on low carbon technology is a proven strategy, which translates to

collaborative projects and activities among economies leading to policy

recommendations.

The presentations from the workshop highlighted some of the low carbon

technologies and strategies such the use energy efficient projects, adoption of clean

technology, conduct energy audits, application of eco-labelling, using life-cycle

assessment, adoption of ISO standards, green building approach; which can

improve the operation of MSMEs towards a low carbon economy. He stressed that

the SETUP program of DOST is successful in improving the productivity of MSMEs.

Through the sharing of information, programs, funding opportunities, and best

practices in this workshop, he hope that the MSMEs capitalize on these presented

avenues of improvement to achieve a low carbon economy.

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6. Workshop Resolution

The Workshop delegates, after an engaging discussion on the floor has come up

with a Resolution that would serve as its recommendation to the PPSTI as far as the

improvement of the MSME competitiveness through low carbon economy. Following

is the content of the said Resolution:

Whereas, APEC has driven regional economic growth by doubling the combined

real GDP over 24 years since 1989 through trade and investment liberalization and

regional economic integration. With this achievement, the micro, small and medium

enterprises (MSMEs) have contributed largely to APEC’s success in leading the

region for economic growth; MSMEs constitute over 97% of all the region’s

enterprises which generated 70% of the all the jobs in the region; MSMEs also

provide an avenue to combine business activities which foster social community

development.

Whereas, the energy consumption of MSMEs vary per economy. However, it

represents a huge portion but sometimes neglected global energy demand aspect.

MSMEs contribute about 13% of the annual global final energy consumption. The

effects of the downstream and upstream supply chain of MSMEs also contribute to

the energy consumption of the production of products and services. With the

projected economic growth of APEC regions, the energy consumption for MSMEs

especially in the urban areas is expected to increase, thereby creating opportunities

for the adoption of low carbon technologies by the MSMEs;

Whereas, many MSMEs often use old and relatively inefficient technologies which

translate to elevated material wastes and environmental emissions. Enhancing the

MSME's energy efficiency, clean technology, and waste management are vital

approaches to improving its competitiveness and profitability;

Whereas, access to relevant information on energy efficient technologies such as

case studies, best practices, technical guidelines and standards are common

barriers for MSME's awareness on available low carbon technologies. MSMEs have

limited access to technical experts on energy efficient measures. MSMEs have

limited technical capability and access to carbon footprint and other environmental

footprint measurements. Such limited knowledge and awareness of energy-efficient

information, interaction with experts, and lack of technical capabilities limit the

MSMEs to expand their horizon on what technologies will have a positive impact on

their operations which potentially translates to energy savings, reduction of

emissions, and incremental profit of their establishments;

Whereas, there is a need to have quantitative and objective tools to account and

quantify the environmental emissions and energy efficiency of the production of

products and services of MSMEs;

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Whereas, MSMEs have very limited capital and resources to adopt energy efficient

and clean technologies; access to financial options remain the key constraints of

MSMEs especially in the least developed economies;

NOW, THEREFORE, the Improving Micro, Small and Medium Enterprises (MSMEs)

Competitiveness through Low Carbon Economy Workshop APEC Delegates

recommend to the APEC Policy Partnership on Science, Technology, and Innovation

(PPSTI) Working Group the following policies to improve the competitiveness of

MSMEs:

Establish government supported APEC MSME Technology Innovation Support

and Upgrading Program

• Provide incentives for energy auditing service and the auditing instruments and

facilities.

• Inclusion of tax breaks for imported low carbon technology equipment;

• Provide energy audit equipment for capacity building;

• Deploy research and engineering students for internship to handle energy-

related projects;

The use of ICT in knowledge acquisition, dissemination, and application of low

carbon technology

• Provide infrastructure for internet connectivity to MSMEs;

• Provide a harmonized website on the available database of energy efficient

technologies;

• Provide avenues to interact with knowledge-based experts online;

• Intensify the research, development, and innovation program for leading MSME

sectors addressing energy consumption;

Institutionalize the use of Life Cycle Assessment-based framework to identify

energy improvement opportunities

• Ratify the Life Cycle Assessment (LCA) based framework as the approach to

analyze energy improvement opportunities of MSMEs;

• In collaboration with ESCOs, an LCA-based framework shall be adopted to

analyze MSME’s energy improvement opportunities.

• To include Measuring Reporting and Verification (MRV) and LCA as a

harmonized tool for the accounting energy saving opportunities.

• To include carbon credits for MSMEs.

Promote and support eco-labeling program for MSMEs

• Provide incentives for MSMEs who would adapt product eco-labeling;

• To quantify the cost-benefit analysis of eco-labeling for product and services of

MSMEs

• Collaborate with Eco-Labeling Organizations to institutionalize the promotion of

eco-labels for the product and services of MSMEs.

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Provision of funding mechanisms for energy efficiency for low carbon

technology projects

• Provisions of technology transfer and funding mechanism of low carbon

technologies (UNFCCC to include MSMEs as priority sector);

• Promote the services of the Energy Service Companies (ESCOs) to support

technology investment in MSMEs;

• Provide additional loan opportunities for MSMEs.

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References

[1] International Energy Agency, 2015. Accelerating Energy Efficiency in Small

and Medium-sized Enterprises: Powering SMEs to catalyse economic growth.

Accessed on June 22, 2016.

https://www.iea.org/publications/freepublications/publication/SME_2015.pdf

[2] Bureau of Micro, Small and Medium Enterprise Development, 2011. Micro,

Small and Medium Enterprise Development Plan 2011-2016. Accessed on

June 22, 2016. http://www.dti.gov.ph/dti/images/NegosyoCenter/2012_DTI_

MSMEDPlan_2011-2016.pdf

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https://www.iea.org/publications/freepublications/publication/SME_2015.pdf

http://www.dti.gov.ph/dti/images/NegosyoCenter/2012_DTI_

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