Can Green Turn Your Bottom Line Black? Written By Joanne Costin
Article Date: 11-01-2007
Copyright(C) 2007 Associated Equipment Distributors. All Rights Reserved.
Dealers who 'get' the green trends can help their customers get more jobs. Watch for our Part 2 focus in December on: dealer operations go green - how resource-saving initiatives can boost your bottom line and your image.
In a very short period of time, improving the environment has moved from a marginalized issue reserved for hard-core environmentalists to one that resonates with most Americans. As a result, government agencies and businesses have also embraced the green movement.
Research this year indicates that 90 percent of Americans surveyed agreed that there are important green issues and problems, while 82 percent believe it is important for companies to implement environmentally friendly practices. Just a year ago, the same survey revealed that most consumers were unfamiliar with the green movement.
As dollars invested in the green movement increase, dealers need to address the sustainability of their business practices and assess market opportunities. To help you find the answers, we offer some facts, thoughts and opinions from organizations and people well versed in the greening of the industry.
Green buildings conserve raw materials and use less energy and renewable resources, thus reducing C02 emissions. According to Jerry Yudelson, consultant and author of "Green Building A to Z," green building is growing at a 50 percent annual rate and represents 10 percent of all commercial new construction starts.
"It's certainly a trend that dealers should have on their radar," said Yudelson.
The U.S. Green Building Council coalition works to promote environmentally responsible buildings. Through its LEED (Leadership in Energy and Environmental Design) Green Building Rating System building owners and operators can measure building design and performance. Four progressive levels of LEED certification - Certified, Silver, Gold and Platinum - are achieved based on the number of points awarded to a building project for performance in categories such as sustainable sites, water efficiency, materials and resources, and innovation and design process.
Dealers who can assist their customers in winning green projects will have a competitive edge. Storm water management, geothermal systems, and site development all offer opportunities to earn LEED points, as does the use of recyclable materials.
"It's all about learning what the needs are and figuring out how to respond," said Yudelson.
It's also possible that LEED points might one day be earned for reducing emissions on jobsites.
In fact, it was a Maryland-based contractor's pursuit of credits that resulted in Wirtgen's 100 percent recycled Green Mix asphalt being approved as eligible for points toward LEED certification. Wirtgen assisted the contractor in developing information for the submission process. The product can be mixed in the KMA 200 cold mill plant or in mobile reclaimers.
"Since you don't have to heat the aggregate, there are very low emissions," said Wayne Evans, vice president, business development/pavement technology, Wirtgen America Inc. "It can be used as a binder or base course for roadways, parking lots - most any place where hot mix can be used today."
To achieve the best results, Wirtgen provides customers with value-added technical expertise through its Advanced Pavement Technology Solutions (APTS) group.
"Dealers need to be aware of these developments," said Evans, "so they can help their customers apply the technology."
"Road construction is probably the most sustainable construction out there," said Robert Lanham, vice president of Williams Brothers Construction, a highway contractor based in Houston. "We recycle every crumb of asphalt, every crumb of concrete and of sub-base."
By utilizing more on-site recycling, highway contractors like Williams Brothers are keeping waste out of landfills and reducing their raw materials and transportation costs. As a result, Wirtgen has seen growth in large stabilization and recycling equipment. Evans believes it has been driven by high energy costs and a growing demand for environmentally friendly products.
Forty-four states now use recycled concrete as a road base. Meanwhile, asphalt is America's most recycled resource - 73 million tons are recycled each year.
Similarly, the Green Highways Partnership is striving to make road and bridge construction greener through the use of superior watershed-driven stormwater management, recycled materials and cutting edge technologies to protect habitats and ecosystems from the encroachment of highway infrastructure. This public-private partnership which includes the Environmental Protection Agency (EPA) and Maryland State Highway Association, among others, has initiated several pilot projects including the nation's first truly green highway: U.S. Route 301 in Maryland.
Porous pavements are also gaining acceptance. These pavements allow water to drain through the pavement surface into a stone recharge bed and infiltrate into the soils below. While porous pavements have been around since the mid-1970s, they have only recently been used on higher-traffic applications such as the Pringle Creek Community Development in Salem, Ore., Chicago's Green Alley pilot program also is evaluating porous pavements.
New diesel engines are cleaner than ever, but because engines sometimes operate for 20 or 30 years, many machines in operation don't meet current standards. The EPA estimates that nonroad diesel engines contribute 46 percent of nitrogen oxides (NOx) and 70 percent of particulate matter (PM).
The EPA, through its Clean Construction USA program suggests several strategies to reduce emissions. "Cleaner Diesels: Low Cost Ways to Reduce Emissions from Construction Equipment" can be downloaded from the EPA Web site.
In California however, emissions on existing self-propelled construction equipment will soon be regulated. On July 27, 2007, the California Air Resources Board (CARB) voted to adopt new regulations for in-use off-road diesel vehicles at a cost to the industry of more than $3 billion dollars. Manufacturers and dealers in California are gearing up to retrofit or upgrade an estimated 180,000 machines. Dealers across the country need to assess whether their state will introduce similar legislation.
"We are concerned about clean air," said Mike Carcioppolo, corporate product support sales manager for San Diego-based Hawthorne Machinery. "We have children who live in the state who will live here for years to come." But the aggressiveness of the timetable, he adds, will be a challenge.
"The California dealers have completed an in-depth analysis of the population of machines likely to be retrofit in response to the new off-road regulation and are planning staffing and inventories accordingly," said Ken Katch, director of the Caterpillar Emissions Solutions Group.
"With the large variety of machines in the population, the biggest challenge we're going to have is on the repower and retrofit side," said Carcioppolo. "New machines already meet Federal EPA standards."
Hawthorne plans to address the challenge in several ways. An emissions specialist will assist customers and help them evaluate their fleets and find solutions. Caterpillar is also introducing a fleet analysis tool.
"We'll be able to sit down with our customers and say, ‘Here's your fleet, here's what's available today," said Carcioppolo. "You can repower these machines, you can retrofit these machines or you can replace with new."
Caterpillar and other manufacturers are focusing first on solutions for the largest horsepower machines and those with the greatest population. Fleet size (based on total horsepower) will determine the timetable for compliance and some requirements.
Carcioppolo believes it's important for dealers to communicate the complexities of an engine repower solution to customers. "You can't just take an engine out and replace it with a higher tier engine," said Carcioppolo. "A repower solution requires a complete protocol be followed. That includes, but is not limited to, cooling systems, electronics and torque curves."
Help the Customer
Questions and concerns from customers are on the rise. The emissions seminars Hawthorne has hosted for the past five years now draw hundreds of customers. Hawthorne will continue educating customers and helping them access whatever funds are available to help finance the retrofits.
"We are going to do everything we can to help our customers meet these regulations."
Carcioppolo believes the regulation is going to have a major impact on the industry and expects other states to follow the California model. By the time that happens, much of the ground work will have already been done. Still, dealers need to prepare customers and encourage them to take advantage of available monies to reduce emissions.
Such is the case in Portland, Ore., where Cummins Northwest is working collaboratively with state and local regulatory agencies to encourage retrofitting and repowers of existing machines.
"I think the main thing driving the business is that everyone is aware of the health concerns, and the consequences of pollution," said Andrew Johnson, vice president of Industrial Business for Cummins Northwest. "Diesel exhaust is being looked at as an easy source to go after and treat effectively."
The company has effectively lobbied for monies to retrofit diesel engines and works with local agencies to obtain funds for their customers.
"Right now there is tremendous political pressure for clean air," said Johnson.
More and more public projects are requiring the use of machines with higher tier engines or retrofit devices. Examples include the Dan Ryan Expressway project in Chicago, the Big Dig project in Boston and the Q Bridge project in Connecticut.
According to Ken Katch, funding programs such as The Carl Moyer program in California and the Texas Emissions Reduction Program are driving repower and retrofit activity. Other states have used smaller amounts of funding from CMAQ (Congestion Mitigation and Air Quality) dollars in their federal highway funds.
"A contractor's biggest concern is ‘How is this going to affect my day-to day operations?'" said Johnson. "We tell them that aftertreatment devices may affect their overall operating costs, but that it is the right thing to do."
Johnson also cautions contractors to use only EPA- or CARB-verified devices to ensure that they will be eligible for grant dollars. He further advises companies to work with established local businesses that can offer proven support, maintenance and repair of the equipment.
Houston-based Williams Brothers Construction has significantly reduced emissions through retrofitting and repowers. Vice president Robert Lanham utilized funds available from the Texas Emission Reduction Program to help recoup from 40 to 80 percent of the cost of emissions projects. He believes dealers should promote solutions more aggressively and make retrofits part of normal rebuild programs.
"If that were the case," said Lanham, "the industry might avoid the draconian measures being taken in California."
The move for cleaner air provides a stimulus for purchasing new machines as well as for retrofits. At Cummins Northwest, they can't get the machines done fast enough. And according to Caterpillar's Katch, demand for retrofit and repower solutions is high.
AED offers advice on selling "green equipment" and retrofit devices in its new Tier 4 Diesel Regulation Handbook.
"You can embrace it as an opportunity to make money, or you can fight it," said Johnson. "But if you fight it, you're going to lose. The decision has been made to have clean air; now we have to decide how we can all benefit from this activity."
The Right Thing to Do
From highways to buildings to equipment, the green movement has gained momentum. For many companies "going green" is simply the right thing to do for their customers, their families and their employees. Dealers who move quickly to become part of the solution stand to profit.
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