Environmental Technologies Industries
||Environmental Technologies Industries
|Colombia Environmental Export Market Plan|
|Chapter 3 - The Market by Sector|
Colombia is an attractive venue for firms involved in the many environmental submarkets. It has a history of economic stability and good marks with the World Bank, the Inter-American Development Bank (IDB), and other multilateral lending institutions; it has a long-standing, if largely unrealized, commitment to sound environmental management; and its recent moves toward private-sector involvement, both through polluter-pays programs and through specific regulatory initiatives (such as the Bogotá River Cleanup Program mentioned earlier) are encouraging.
The major environmental technology market segments are:
- environmental studies;
- water and wastewater treatment;
- air pollution control;
- solid waste management, disposal, and recycling;
- hazardous waste management and treatment; and
- pollution prevention.
Although air pollution control, hazardous waste management, and pollution prevention are potentially large markets, at the current time they are only rudimentary practiced or regulated.
The market segment with the highest growth from 1994 to 1997 was environmental studies. Within that category, demand has been highest for:
-- environmental alternative diagnostics studies (diagnósticos ambientales de alternativas, DAA),
- environmental information systems;
- natural resource inventories;
- environmental impact assessments (EIAs, estudios de impacto ambiental), including
-- environmental evaluation and management documents (documentos de evaluación y manejo ambiental, DEMA), and
-- environmental management plans (planes de manejo ambiental, PMA).
Since 1993, when the Ministry of Environment was established, the demand for various kinds of environmental studies has been growing. Not only does the Ministry itself require them in certain circumstances, but the 34 regional autonomous corporations and four special municipal environmental protection agencies (EPAs) do as well.
The National Planning Department (Departmento Nacional de Planeación, DNP) estimates that from 1994 to 1997 the demand for environmental studies averaged $34 million per year. Environmental information system designs, natural resources inventories, and environmental quality diagnostics are all important sources of contracts for consulting firms. At the national level, the largest contract awarded so far for the design of an environmental information system was $60,000. It was let by the Institute for Environmental and Meteorological Studies (Instituto de Estudios Ambientales y Metorologicos, IDEAM), and the recipient was a Canadian firm.
At the regional level, several regional autonomous corporations (CARs), departmental governments, and municipalities have made commissioned natural resource inventories, environmental quality diagnostics, environmental management plans, and environmental monitoring programs. For example in 1997, the Cundinamarca CAR hired the local firm Ecoforest to develop natural resource inventories in the Cundinamarca region. The contract was worth nearly $800,000. Departments have also ordered diagnostic studies and environmental action plans. The costs of these studies generally range from $50,000 to $280,000.
Environmental studies are also commissioned in support of loan applications made to multilateral banks such as the IDB, the International Bank for Reconstruction and Development, and the Andean Promotion Corporation (Corporación Andina de Fomento, CAF). The price tags associated with such studies have ranged from $15,000 to $70,000, and this segment alone generally reaches an annual level of $200,000.
Environmental impact assessments (EIAs) - including alternative diagnostics studies, effect and management documents, and environmental management plans (EMPs) - comprise the largest subsector of the environmental studies market. The national ministries, the CARs, and municipal environmental authorities can all request or require such studies. Between 1994 and 1997, more than 1,090 such studies were filed at the Ministry of Environment alone, and the total annual market is estimated at $14 million.
Of these studies, the distribution by sector is as follows: 46 percent are for the hydrocarbon industry, 31 percent for infrastructure, 11 percent for power, 8 percent for agroindustry, and 4 percent for mining.
Ministry officials estimate that an environmental alternatives diagnostic study, a set of environmental evaluation and management documents, or an EMP for a road project might cost $1,500 per kilometer (km) of road, while an EIA for the same road project might cost $3,000 per km. Several recent contracts can serve as other examples of costs: the EMP for a lubricant company (Mobil) cost about $40,000; the solid waste EMP for a mining company (Cerro Matoso S.A.) cost $60,000; and the environmental evaluation and management documents package for widening a mining supply line (Ferroníquel) cost $140,000.
Some U.S. firms have been awarded contracts for the preparation of EIAs for large investment projects. For example, Parson Engineering, in association with the Colombian firm Carinsa, carried out the environmental alternatives diagnostic study for a road and pier on the Pacific Coast. Ecology and Environment, together with Colombian firms, was awarded a 10-month contract ($1.2 million) for an environmental alternative diagnostics study on the Inter-American Highway in the Darien Gap (which is on the Colombia - Panama border). ICF Kaiser in association with Colombian firms prepared an EIA for a harbor in the Pacific Ocean, bringing in $1 million for an 18-month project.
Of the proposed EIA studies up for bid in 1998, several stand out: the Chingaza Project II for expanding Bogotá’s drinking water supply system ($1.2 million for the impact study); the project to dredge the Dique Canal ($2 million); and the Bogotá metro construction project ($2 million).
Finally, a number of consulting contracts in environmental areas have arisen because companies may want to avoid Colombia's expensive social security payment system (outside contractors in Colombia pay their own social security taxes). Engineering consulting firms can provide professional services, allowing them to do this. For example, between 1993 and 1997, British Petroleum used personnel from the engineering consulting firm Hidromecanicas to handle environmental oversight while building oil facilities in Casanare. The contract was worth $4 million; the consulting firm used 40 percent of this amount for salaries and 60 percent for overhead and utilities. It paid the project director $7,000 a month and inexperienced professionals $2,000 a month.
|Related Activities and Corollary Demands|
A number of programs and contracts related to Colombia's management of its environment deserve mention.
For example, thanks to an IDB loan, a new training program for officials of the Ministry of Environment, the CRAS (Water and Sanitation Regulatory Commission), and various urban environmental departments has begun. The training contracts total $7 million for four years. The Ministry of Environment and the Colombian Institute for the Promotion of Higher Education (Instituto Colombiano de Fomento para Educación Superior, ICFES) arranged training programs in environmental planning and management with the National University of Colombia and the Environmental Studies Institute (Instituto de Estudios Ambientales, IDEA).
The development of environmental markets in Colombia has also spawned a demand for somewhat specialized organizational and restructuring contracts. For example, in 1997 the Ministry of Environment hired Booz-Allen & Hamilton to advise on its own restructuring. The contract was for $200,000. Some regional councils, such as the Cauca Valley CAR, have also ordered consulting projects relating to their internal organizations.
Water, Wastewater, and Sanitation
Of all the Colombian environmental markets, water supply, residential and industrial wastewater treatment, and municipal sewerage systems offer the best opportunities for U.S. (and indeed, Colombian) companies at present. Public utility coverage is 76 percent for drinking water and 64 percent for sewer systems, which means that 9 million people have no water service and 14 million lack access to sewer systems. Moreover, the World Bank estimated a few years ago that only about 50 percent of existing Colombian water companies had adequate treatment plants, and that of these, only the larger ones provided adequately treated water on a regular basis. Less than 4 percent of the country's municipalities have adequate wastewater treatment facilities.
Wastewater treatment is a growing market, fueled by regulations concerning the management and control of industrial waste as well as a number of environmental cleanup projects involving the nation's watersheds. The relevant regulations stem from Decree 1594 of 1984, the wastewater discharge fees regulations of Law 99 of 1993, and Resolution 273 of 1997.
Although Law 99 of 1993 gives municipalities responsibility for the adequate utilization and management of water resources, municipalities have not properly taken on this responsibility because of (1) insufficient intergovernmental regulations, (2) an inability by the Ministry of Environment and the CARs to enforce environmental regulations, and (3) a lack of funds. In fact, according to officials from Bogotá’s EPA, the most important factor restraining pollution control projects is the lack of financial resources.
Moreover, regulations, policies, and programs for the reuse of industrial or residential wastewater - for example, for agriculture or industrial recycling - are completely lacking.
For example, with a population of 6.3 million people and the highest industrial concentration in the nation, Bogotá is Colombia's largest city. Its wastewater, both industrial and residential, is discharged into the Bogotá River untreated. As a result, the river is anaerobic for more than 200 km (125 miles) downstream of the city. This situation poses a severe public health risk for several communities on the lower basin, including Agua de Dios, Tocaima, Anapoima, La Mesa, Mesitas, Apulo, and Mesitas del Colegio.
Even though water treatment has been regulated, analyzed, and funded more than any other environmental issue in Colombia, it still remains unclear which authority is ultimately responsible. Water utilization and purification for human consumption are the responsibilities of municipalities, yet both municipalities and CARs have been given responsibility for wastewater treatment.
|Case Study: The Tanneries of San Benito|
One clear example of how the lack of funding can impede environmental commitments can be seen in the San Benito tanneries along the Tunjuelito River in Bogotá. As in many cities, the tanneries are clustered together. Their “foul odors and organic residues would cause public outcry” if they were more dispersed. Although once outside the city, the San Benito neighborhood has now been surrounded by Bogotá. It is home to about 8,000 people and contains about 300 tanneries of various sizes.
Major effluents are a mixture of hazardous wastes such as heavy metals, organic compounds, and liquid detergents. They are discharged directly into the sewerage system or the Tunjuelito River. The tanneries also contribute heavily to air pollution in the area, and sludge, humid tannery wastes, fleshings, and trimmings can be seen (and smelled) in the streets and along the river. About 50 tons of solid wastes and between 2,000 and 4,000 cubic meters of liquid wastes are generated every day.
Interestingly, some activities that would elsewhere be called “clean technology” are routinely (but unknowingly) carried out by the tanneries. For example, fleshings from raw hides are sold commercially for the production of grease and animal feed (around 10.5 tons per week); 70 percent of the fleshings and cuts produced in San Benito are sold to companies that produce gel and dog-chews (some exported to the United States); most tanneries perform the dehairing after the liming process, which is the recommended technology for a high chrome penetration (and hence less chrome in effluents) in the posterior tanning process; and most tanneries have grease traps and screens in-house, though lack of maintenance and backstoppings are continuous problems.
However, some of these “waste reutilization” activities bring their own environmental harm. For instance, some of the tanneries boil trimmings from the finishing process to obtain grease for fuel. The smoke and ashes resulting from this may contain toxic substances such as calcium chromate, a known carcinogen. Ashes and wastewater are discharged directly into the river.
A number of environmental proposals have been made, including one by the United Nations Industrial Development Organization and another by Promoción de la Pequeña Empresa Ecoeficiente Latino Americano (PROPEL), but no adequate solution has been found.
The cost of industrial wastewater treatment facilities for the San Benito area would be about $6 million, plus yearly operational costs of about $2 million. The air pollution problem would be more difficult to solve because the tanneries are dispersed throughout the San Benito area. Nevertheless, a single environmentally state-of-the-art facility with the same production capacity as all the small San Benito tanneries would cost about $17 million.
Despite budgetary and administrative difficulties, some of the CARs have had good results. For example, the Cauca Valley CAR designed a successful program for water pollution control in the high basin of the Cauca River. New strategies for wastewater treatment are also being defined at the city level. One strategy that has been particularly successful is the development of concession projects supported by multilateral bank loans. An example is the Degremont-Lyonnaise des Eaux project mentioned earlier.
Drinking Water and Sewage Systems
According to a 1997 DNP publication, the cost of extending and upgrading sewerage and drinking water systems will be about $300 million per year for quite a few years. Historically, drinking water services have been a municipal responsibility, and some municipalities have established sanitation and drinking water companies. The companies that have received the largest contracts in water pipes and sewage systems from 1995 to 1997 are the Bogotá Water Pipe and Sewer Company (Empresa de Acueducto y Acantarillado de Bogotá, EAAB), the Medellín Public Works (Empresas Publicas de Medellín, EEPM), the Cauca Valley Water and Sewer Company (Empresa de Acueducto y Acantarillado del Valle del Cauca), and the Municipal Company of Cartagena (Empresas Municipales de Cartagena).
These potable water and sewage service organizations form part of the Colombian Association for Sanitary and Environmental Engineering (Asociación Colombiana de Ingenieria Sanitaria y Ambiental, ACODAL). ACODAL, like DNP, estimates that to extend drinking water and sewage services coverage to 90 percent over the next 10 years, an annual investment of about $300 million per year will be needed. In 1999, the Bogotá Water Pipe and Sewer Company is going to offer the largest drinking water supply contract yet: $259 million for enlarging Bogotá’s potable water treatment system. Regarding sewage systems, the largest projects will be under the auspices of the same company, with funding from the Santafe I loan from the International Bank for Reconstruction and Development.
Municipal Wastewater Treatment
In 1997, more than 73 percent of urban residents and 37 percent of those living in rural areas were covered by sewerage systems. All of the major urban areas had sewer systems in place, but the systems were (and are) often deficient. For example, only 54 percent of the city of Barranquilla’s more than one million inhabitants are covered by the sewerage system. In fact, despite 20 years of “command and control” regulatory efforts, more than 95 percent of Colombia's municipal waste water is discharged into surface waters without treatment. In terms of biological oxygen demand (BOD) and total suspended solids (TSS), this discharge leads to an annual addition of 464 metric tons and 290 metric tons, respectively. As of 1997, fewer than 5 percent of Colombian cities treated their wastes before discharging them to surface waters. The city of Bogotá produces about 500 tons of BOD per day; in Cali the domestic sector produces approximately 64 tons per day; and in Medellín all of the wastewater is discharged directly into the Medellín River.
The market for domestic wastewater treatment equipment is estimated at $65 million per year. The required equipment includes primary and secondary treatment plants, as well as associated equipment and supplies such as pressure valves, gates, vents, water pumps, instruments for detecting and measuring leaks, and chemical products.
The largest contract related to domestic wastewater treatment so far has been the Degremont award for the treatment of four cubic meters of wastewater per second at the discharge of the Juan Amarillo collector on the Bogotá River. The contract sets rates according to the cubic meter of water treated, but revenues are estimated at $30 million per year.
The Institute for Integrated Management of the Medellín River (Instituto para el Manejo Integral del Rio Medellín, MIRIO) and the Colombian government have recently established a cleanup program for the Medellín upper river basin over the next 20 years. The total value of the program is approximately $440 million. The first phase of the project involves building wastewater treatment plants in San Fernando (about $45 million) and Bello (about $120 million).
For the building of wastewater treatment plants for 21 municipalities in the upper Bogotá river basin, the regional CAR has spent an average of about $5 million per year. The program for building wastewater treatment plants is valued at $23 million but, for example, in 1997, only about $4 million was spent. The average cost of building a municipal treatment plant (for centers of population with 20,000 to 100,000 inhabitants) varies between $500,000 and $12,000,000. As a case in point, the cost of the Nemocon treatment plant reached $600,000 in 1997. The treatment plant construction program is financed by the IDB. During the first half of 1998, the CAR awarded a contract for the Calera wastewater treatment plant for $2 million. During 1999, it expects to contract out the construction of Villapinzón wastewater treatment plant for about $12 million.
The Bogotá, Medellín, Cali, and Cartagena wastewater treatment systems will be up for bids between 1998 and 2005. In addition to the four cubic meters contracted out to Degremont, the Bogotá residual water treatment system has approximately 20 cubic meters per second of discharge at an estimated cost of close to $2 billion per year.
Several municipalities have wastewater management projects. The programs at Cali and Cartagena Bay stand out for their sizes. Construction of the Cali wastewater treatment system will begin in 1999. The project includes four “activated sludge” treatment plants that will treat about three cubic meters per second. The cost for the treatment plants is estimated at $250 million. Cleaning up Cartagena Bay will require an investment of $110 million. This investment will allow for increasing the sewerage system coverage, building collectors, and constructing a main into the Caribbean Sea.
In 1997 the public works company of Sogamoso (in the Boyac Department) announced plans to build a new municipal wastewater plant. This announcement was an initiative of the public and private sector in order to clean up the area's environment.
The use of wetlands to control flooding and as a primary wastewater treatment option has been under consideration for the city of Bogotá. The U.S. firm, Ecology and Environment Company, designed a wetlands conservation program within Bogotá’s urban perimeter. The cost of carrying out the wetlands management plan is $47 million. An environmental management plan will be prepared by Bogotá’s EPA, the Bogotá Recreation and Tourism Institute, and the local utility between 1998 and 2001.
Industrial and Agricultural Wastewater Treatment
Apart from the Cauca Valley and the upper Bogotá river basin, in which the regional authorities established industrial dumping control programs in the 1980s, most regions and municipalities lack effective industrial wastewater control programs. Between 1980 and 1995, the industries of the Cauca Valley CAR invested approximately $85 million in wastewater treatment systems. Nonetheless, industrial wastewater is a significant problem despite these programs and despite efforts to tighten up the regulatory framework. For example, heavy metals - especially lead, chromium, iron, and mercury - are present in the Bogotá and Medellín Rivers at high concentrations.
The company with the largest investment in this sphere was Smurfit Carton of Colombia, which spent almost $23 million in environmental improvement programs between 1980 and 1996. Most of the money was spent on a secondary wastewater treatment plant. During the same period, industries located in the upper Bogotá river basin invested about $140 million in similar projects.
Preliminary policies aimed at controlling and monitoring industrial effluents have been introduced in Bogotá, Medellín, and Barranquilla. These programs have encouraged some industries to install their own water treatment plants. For example, in 1996, Pavco invested $500,000 in a wastewater treatment plant.
The Overall BOD and TSS Picture
The Ministry of Environment has estimated overall BOD and TSS output from the three major point sources: municipal, industrial, and agricultural. The 1998 estimates are as follows:
BOD (metric tons/year)
TSS (metric tons/year)
Under a complex (and highly praised) pollution charge system, the Ministry has come up with a system of polluter-pays taxes on these two types of pollution. The minimum tariffs are $30 per ton BOD and $13 per ton TSS. According to the pollution reduction goals set by each environmental authority, the minimum tariff will increase each semester by a factor of 0.5 for five years. The results at the net present value, discounted at 12 percent annual rate are presented in table 6.
Table 6: Ministry of Environment's Estimate of the Revenue Earned From Pollution Charges on BOD and TSS 1998-2007
Figures are in 1997 dollars
Source: Arjona, 1997.
The program was introduced in March 1997, and a year was dedicated to training regional officials for implemen-tation. At present, 12 of the CARs have completed their implementation plans; 3 have begun charging; and 1 (Corporación Autónoma Regional del Río Nare) is currently receiving fees from all three sectors.
Officials at the Ministry of Environment and the DNP hope that the taxes will encourage the industrial and agricultural sectors to install their own water treatment equipment in order to reduce the costs incurred from pollution, thus stimulating considerable spending in the private sector. The Ministry of Environment is now predicting that by the year 2007, nearly 30 percent of the cost of Colombia's municipal water treatment program will be financed through pollution charges.
Despite the fact that the industrial and agricultural wastewater treatment market is just beginning, it is believed that the fees will stimulate investments of around $47 million per year.
Oil Spill Control
In 1996 petroleum and petroleum products surpassed coffee as Colombia's largest export category. (Despite having very large crude oil reserves, the country lacks sufficient refinery capability to meet domestic need. Thus, gasoline is imported while oil is exported.) More than 521 oil spills were registered between 1986 and 1997, especially in the Caño Limon - Covenas Pipeline, and in total more than 2.5 million barrels have been spilled. Occidental Petroleum, British Petroleum, Hocol, Exxon, and Ecopetrol are some of the companies that have obtained equipment to control hydrocarbon spills.
Among the pieces of the equipment used to control hydrocarbon spills are skimmers, booms, vacuum trucks, and temporary storage tanks. Engineering companies involved in construction for the oil business also control spills and repair the pipelines. The annual cost of controlling these spills is estimated at $42 million.
A promising new growth area lies in the handling and beneficial reuse of sludge generated by municipal wastewater treatment plants. As additional plants come on-line across the country (both publicly owned and operated, and under concessionary regimes), significant volumes of sludge will be produced. The amount of sludge for Greater Bogotá alone is estimated at 30,000 tons a year. This sludge will be produced in the wastewater treatment plants to be built by the French firm Degremont, the first of which will begin operations in 1999. The sludge produced by the wastewater treatment plant will be put into landfills in the vicinity of the Juan Amarillo wastewater treatment plants. Regarding the market as a whole, many technical and financial questions must be answered, but Colombia's extensive agricultural lands - starting with the massive Sabana lettuce and vegetable farms currently irrigated with raw wastewater from Bogotá - present promising possibilities. The use of treated sludge in conjunction with reforestation programs has also been mentioned.
Laboratories and Water Quality Monitoring
Another business opportunity for U.S. companies is to establish laboratories and water-quality monitoring systems. Between 1994 and 1997, the Ministry of Environment and IDEAM spent about $3.5 million on such equipment. By the year 2000, IDEAM hopes to have a $1.5 million national reference laboratory and an analytical quality-control program.
Suppliers to the Market
Local contractors and European firms have dominated the Colombian water, wastewater, and sanitation market sectors over the past several years. Local production is concentrated on a limited number of products, including cast-iron water pumps, automatic control valves, flocculators, chloride feeders, and filter beds. In addition, most of the prominent local companies build wastewater treatment plants, although often using some imported parts. Degremont, Vikoma, Oil Slick, Oil Mop International, Aguas de Barcelona, Tecniaguas, Jorge Triana & Compania, and Acuatecnica Limitada are the most important players.
Air Pollution Control
Despite serious local air-quality problems (especially in such cities as Bogotá, Medellín, Sogamoso, Cartagena, Barrancabermeja, Cali, and Barranquilla), Colombia's market for air pollution control equipment for stationary sources is small. Sulfur oxides are the major pollutant released from stationary sources; together with smaller quantities of other suspended particles, they constitute about 40 percent of air pollutants in the major cities. The remaining 60 percent are released from mobile sources and include carbon monoxide, hydrocarbons, and nitrogen oxide.
The total Colombian market for air pollution control services and equipment has fallen markedly, from around $19 million in 1993 to $5 million in 1997. This decrease may be blamed on lax and ambiguous laws, and on the inability of environmental authorities to enforce any existing air pollution control regulations. In the wake of intense lobbying by the National Association of Industrialists (ANDI), the Cane Growers Association (ASOCAÑA), and the Colombian Oil Association (ACP), the government decided not to pressure utilities and industries to comply with strict air standards. The official reason was that strict enforcement “could hinder economic development,” but many electric utilities were in poor financial shape as well. Finally, during 1992 and 1993, El Niño caused lighter rainfall than usual, so hydroelectric power production was reduced and there was a major power shortage in Colombia. To help alleviate this, the government ran fossil-fuel plants at full capacity.
Among the models being considered at the Ministry of Environment for controlling air pollution from point sources are clean production pacts, a pollution charge system analogous to the country's system for water pollution, regional emissions trading, command and control, and end-of-pipe regulations. Industry is strongly opposed to the last two, as well as to pollution charges, and this opposition will probably strongly affect what is done.
More than 80 percent of the air pollution control market is made up of imports. Because the major stationary sources of air pollution in Colombia are fossil-fuel-fired power plants, cement factories, iron and steel mills, and the chemicals industry, one class of products with high sales potential is electrostatic precipitators.
The portion of the market pertaining to stationary sources relates primarily to (1) installing equipment for monitoring suspended particles and polluting gases, (2) converting to cleaner fuels for power production, and (3) making changes that will reduce the level of emissions per product manufactured.
In some cases, industry has opted for electrostatic filters, scrubbers, and other equipment to control atmospheric emissions. Carton de Colombia, Cementos Boyaca, and some of the thermoelectric plants have done this. In fact, between 1994 and 1996, Cementos Boyaca invested $14 million in an environmental program that included air pollution control equipment and reforestation projects.
Table 7 shows the major buyers of air pollution equipment and services in Colombia in 1990–1991. The current situation is thought to be comparable.
If Colombia's air pollution regulations were modified (or if the environmental authorities were to be given different powers), air pollution control could turn into one of the most promising market segments. For example, according to a study prepared by the Mining and Energy Ministry and the Planning Unit of the Energy Ministry, enforceable air pollution control regulations would require Colombian electric utilities to spend an equivalent of $125 million to $150 million over a period of five years just to equip existing plants.
It is worth noting in this context that some of the largest public utilities, affected by huge debts and inefficiency, are now being privatized. Privatization began slowly with the construction of several electric power generation plants under BOMT (build, operate, maintain, and transfer) agreements. By 2010, public utilities are expected to own only 32.7 percent of the country's electricity generation capacity as compared with 75.5 percent in 1996. Table 8 shows Colombia's generating capacity in 1997.
Table 7: Major Buyers of Air Pollution Equipment/Services in 1990-1997
Source: Department of Commerce, 1993.
|State-owned industries (oil and gas, fertilizer power generation, coal, asphalt, petrochemicals)|
|Iron and Steel|
|Brick and Tile|
|Pulp and Paper|
Table 8: Utility Generating Capacity in Colombia (MW), 1997
Source: Henao, 1997.
Percent of total Capacity
Besides retrofitting existing fossil-fuel-fired facilities, opportunities may exist in fitting plants with electrostatic filters and other air pollution controls. For example, the Paipa I and Termozipa IV and V plants all needed to have electrostatic filters installed to control particles in suspension. In 1997, the Bogotá Electric Utility contracted with a German company to supply and install these electrostatic filters.
In summary, the size of the air pollution control market for Colombia's 31 electric utilities will depend strongly on the degree to which regulations are passed and enforced.
The Colombian Government is presently designing an energy efficiency program to reduce demand for electricity in the residential, commercial, and industrial sectors. The final targets include electric motors, air conditioning, and lighting. The estimated cost of designing and implementing the energy efficiency program is about $10 million over a two-year period. The end result will be a market of up to $11 million for energy-saving versions of existing (“power-hungry”) equipment.
In 1996, the Ministry of Environment issued regulations that require new vehicle producers to install catalytic converters and evaporative emission canisters to begin controlling emissions from mobile sources by 1999. The regulations also require older cars to control their exhaust emissions according to a sliding scale of permissible emission levels. The CARs will license garages and workshops to inspect and certify the automobiles covered.
Catalytic converters will be favored if Ecopetrol (the state-owned oil company) goes ahead with its plans to produce low-sulfur gasoline. The cost of canisters and catalytic converters for new cars amounts to about $7 million per year. The smog-checking equipment needed will cost approximately $35 million during 1999 to 2000.
Within the category of diffuse sources, the pollution caused by the burning of roots in sugar-cane farming (primarily in the Cauca Valley) and the dispersion of particulate matter from open-pit coal mines have received the most attention from Colombia's environmental authorities. However, controlling these diffuse sources is not presently a high priority for the government.
After each harvest, sugar cane roots are burned, producing huge clouds of suspended particles that affect urban centers in the Cauca Valley. In 1995, the Ministry of Environment, the Cauca Valley CAR, and the Corporacion Autonoma Regional De Risaralda (CARDER) signed a clean production agreement under which members of ASOCAÑA would voluntarily reduce emissions and discharges until they were in compliance with the legal standards and decrees.
Of the national measures taken to control suspended particles from mines, the CARBOCCOL-INTERCOR Association's program at the Cerrejon Norte mine is the most effective. Between 1990 and 1996, the association invested $36 million in studies, meteorological monitoring systems, air-quality monitoring programs, land rehabilitation and revegetation programs, and dust control.
The Colombian air-quality monitoring system consists of 25 monitoring stations located in Bogotá, Cali, Medellín, Barranquilla, and Cartagena. The monitoring stations measure TSS, sulfur dioxide, nitrogen oxides, ozone, carbon monoxide, total hydrocarbons, wind direction and velocity, humidity, and temperature.
In 1996, the Ministry of Environment acquired 32 air-quality monitoring systems from the Colombian firm Autorama for about $600,000. These monitoring stations were distributed to the CARs for installation in selected cities in 1997 and 1998. Most of them are located in Bogotá. During 1996 and 1997, the Bogotá EPA acquired 10 monitoring stations from the Argentinean company Eliovac for almost $2.4 million. The market for air-quality monitoring systems is settling at an estimated $1 million per year.
The Overall Market
Despite the fact that high import tariffs and licensing requirements kept the Colombian market relatively closed to foreign firms before the “opening” of the economy, the United States maintained the largest average annual share of the Colombian air pollution control market from 1991 to 1997.
This U.S. dominance is attributed to a preference among Colombian buyers for U.S. equipment and brand names. Local production is focused mainly on mobile-source air filters, filters for industrial machinery, and dust masks. U.S. companies prominent in the Colombian market include American Air Filter, Cambridge, Farr and Koch, and Dassiby. Most foreign producers sell through local representatives or distributors.
According to the Potable Water and Basic Restoration Regulating Commission, 43 percent of Colombia's 1,065 cities have no basic sanitation services. Despite the environmental and public health risks inherent in this, neither the National Congress, the Ministry of Environment, nor any other authorities have given it much priority. The only guideline established for the handling and disposal of solid wastes was Decree 2104 of 1984, which was suspended in 1996 because of its ambiguity, technical deficiencies, and unenforceability.
While the population has not yet “developed a consciousness related to the problem, landfills are overflowing and new ones are difficult to site. Moreover, a number of disasters and near-disasters - most notably the four-day landslide at the Doña Juana landfill in October 1997 - have forced the nation to begin solving the solid-waste problem. For instance, the Project for the Cleanup of the High Basin of the Bogotá River is currently being executed by the Cundinamarca CAR and funded by the IDB. The project, which was begun in 1991, includes the construction of 25 sanitary landfills. By November 1996, eight landfills had been built, but were completely inadequate.
In 1997 the National Environmental Council approved an Integrated Policy for Solid Waste Management. The following are its major goals:
- waste minimization,
- waste and waste byproduct utilization,
- increased recycling, and
- defining and implementing technically and economi-cally sound methods for final waste disposal.
In conjunction with this policy, the Ministry has recognized the necessity of establishing and implementing a program to measure and classify Colombia's total solid-waste stream. In particular, much more accurate measurements of the sources, composition, and quantity of hazardous wastes need to be found. Current estimates of these parameters are known to be highly inadequate; in fact, dumping locations and practices are largely unknown.
Table 9 shows estimates of the breakdown of end-disposal methods used in Colombia. The amount of solid waste produced in Colombia amounts to about 22,400 tons per day. The largest percentage goes to open air dumps or into bodies of water, particularly streams and rivers. Bogotá, Medellín, and Cartagena account for 32 percent of the waste destined for landfills. Sanitary landfills do not have gas collection systems or leachate treatment plants. The handling and disposal of hazardous wastes is generally not controlled at all.
Table 9: Solid Waste Distribution by Final Disposal Method (National Daily Average)
Source: Tecnogerencia, 1997.
Tons / Day
Percentage of Distribution
|Other destinations, generally uncontrolled|
Municipal Solid Waste
Colombian solid wastes are mainly organic matter. In fact, organic matter, which is largely food residues, accounts for 67 percent of the total solid waste. Paper and cardboard amount to about 13 percent of the total.
Table 10: Composition of Typical Household Wastes in Colombia
Source: Tecnogerencia, 1997.
|Organic matter, rapidly biodegradable|
|Paper and cardboard|
|Plastic and rubber|
|Glass and ceramic|
Tecnogerencia, a consulting firm working under contract to the Ministry of Environment, calculates that 14,320 tons of municipal solid wastes are generated daily. According to the Pan-American Health Organization and the Ministry of Environment, approximately 68 percent of municipal solid wastes are disposed of in uncontrolled dumps or other sites such as rivers, creeks, lakes, or open spaces. Ending such practices will necessitate building and operating sanitary landfills. At present, in more than 95 percent of municipalities, commercial trucks with no special equipment or modifications collect and transport waste. The cost of this service varies between $10 and $25 per ton.
The few existing landfills in Colombia have many deficiencies. The biggest landfills are those in Bogotá, Medellín, and Cartagena. These three landfills share the following common characteristics: high methane and carbon dioxide emissions, no regulations for toxic waste disposal, direct discharge of leachates into rivers and streams, and unstable slopes. The cost of final disposal in existing landfills fluctuates between $3.5 and $7 per ton. The landfills’ poor design and operating problems have led to many health emergencies. For example, in 1997, around 800,000 tons of waste from the Doña Juana landfill slid into the Tunjuelito River. The cost of mitigating and controlling this landslide reached $20 million.
As part of the Upper Bogotá River Environmental Rehabilitation Program, the regional CAR is building sanitary landfills in 25 municipalities along the upper Bogotá river basin. Feasibility studies and site selection have already been completed. By October 1997, eight landfills had been built. Opportunities may exist for U.S. companies in the construction, collection, transportation, and disposal of waste for these municipalities. The Mondonedo landfill, a large industrial and municipal dump, was one of the first marked for concession to a private company. The revamped landfill will receive waste from seven municipalities in Bogotá’s Sabana region, which produces around 500 tons per day. The cost of construction is expected to be close to $400,000, and the operating costs have been budgeted at $1.2 million per year.
Industrial Solid Wastes
Industrial solid-waste production in Colombia is estimated to be about 6300 tons per day. Thirty-four percent is produced by industries located in the industrial corridor of Zipaquirá - Bogotá - Soacha. The asbestos and the fiberglass industries have their own landfills. Other industries, such as the petroleum industries, have built and currently operate sanitary landfills in the Casanare and Arauca zones. Private industrial investment in solid-waste disposal is estimated to be about $1.5 million per year.
About 70 percent of Colombia's industrial waste is produced in urban areas. The major contributors are industries such as construction, food and beverage processing, chemicals, and petrochemicals, as well as the so-called informal sector, which includes metalworking and electroplating, automobile repair shops, tanneries, and the like. Given that appropriate waste-handling procedures are not codified, industries generally send their wastes directly to municipal dumps, store them in situ, dump them into rivers or lakes, or abandon them on unused land. In some cases, dangerous industrial waste is sent unprocessed to landfills.
Paper, cardboard, glass, and metal recycling is done by low-income social groups in Colombia. The people who recycle are popularly known as “throw-aways” (los desechables). Their recycling effort is important in recuperating certain raw materials - particularly glass, paper, and cardboard. The recyclers roam urban streets, especially in Bogotá, digging through trash cans and selecting materials that can be resold. In 1995, some 280,000 tons of matter, primarily paper and cardboard, were recovered in this way.
Table 11: Volume of Recycled Material in Santafé de Bogotá in 1993
Source: Sánchez and Enciso, 1995.
Volume recovered in tons/year
|Cardboard and Paper |
A certain amount of recycling also takes place at open air dumps, again done informally by low-income individuals. The largest effort of this type is at Cali, where about 400 people recover about 250 tons of material per month at the Navarro dump. Needless to say, the conditions in which these people work are appalling.
At the national level, paper, glass, and cardboard show the highest levels of recycling because of the demand by glass manufacturing companies and pulp processors. For example, the Peldar company makes extensive use of glass recovered in the Medellín metropolitan area, in the Oriente Antioqueño, and in the Sabana of Bogotá. Carton Smurfit Colombia is the largest recycler of cardboard and paper.
Table 12: Major Recycling Programs Coordinated by the Private Sector
Source: Sánchez and Enciso, 1995.
Amount Recycled (Tons/Year)
Carton de Colombia
|Metal (cans, pipes, cables, garage wastes)|
The Ministry of Environment has promoted recycling projects in low-income groups despite the low profitability and the health risks involved in waste recovery in landfills, dumps, and other places of final disposal. These recycling programs serve as alternative employment and as a means of raising incomes. In Barranquilla, for example, cooperatives now provide services to several pilot programs. Seven collection sites for wastes from subnormal zones (“shanty towns”) will be built in Barranquilla by the Fundacion Social and by DADIMA, the city's EPA. A recycling plant will be built in Manizales to recycle about 20 tons of material per day, roughly 10 percent of the city's total daily waste.
Hazardous wastes are one of the principal environmental problems in Colombia. Although some progress has been made in the areas of wastewater treatment, air pollution control, and municipal waste disposal, progress in hazardous waste management has been slow. With regard to existing sites, there is no codified remediation mechanism and no Superfund-type program.
While the transportation, treatment, and management of hazardous wastes represents a significant potential market, the Ministry of Environment and the DNP have so far neither produced regulations nor even settled on approaches. For that reason, the market remains uncertain.
There is some activity, however, and the 1997 Integrated Policy statement has set forth goals and guidelines for quantifying, analyzing, and minimizing Colombia's hazardous waste problem.
A number of programs are in the early stages. For instance, a study has been started in the
Mamonal - Cartagena industrial zone to quantify and classify hazardous wastes found along Colombia's Atlantic coastline. The study, which cost $430,000, also includes designing strategies for controlling these wastes.
It is estimated that the amount of hazardous waste produced in Colombia varies between 500 and 800 tons per day. Bogotá’s EPA has estimated that 160 tons of hazardous wastes are produced daily in that city alone. Among the wastes identified thus far in Bogotá’s waste stream are polychlorinated biphenols (PCBs), phenols, pentachlorophenols, thinner, benzene, toluene, xylene, lead, mercury, chrome, cadmium, cyanide, arsenic, and lithium.
The Ministry of Environment is currently attempting to analyze hazardous waste production - both composition and amount - in the nation's two largest industrial areas, Bogotá-Saocha and Cali-Yumbo.
A number of hazardous waste handling projects are being initiated or planned:
- During 1999–2002, power companies will be offering contracts for PCB handling.
- The Cauca Valley (CVC) and Boyaca (CORPOBOYACA) regional corporations plan to initiate hazardous waste management projects in Cali and Sogamoso.
- Cauca Watershed CAR, which serves the city of Cali, is currently seeking international funding for a five-year program to develop a technical information system for managing industrial hazardous wastes, to train people, and to develop a technical and legal program to encourage hazardous waste recycling.
- Under the Sogamoso cleanup initiative, a number of local iron smelting companies and family-operated utensils and ceramics operations are working with engineering companies from the University of Tunja on plans to install toxic waste treatment plants.
Hospital wastes constitute another source of environmental risk. Colombia's National Health Code (see Law 09 of 1979, Art. 30) requires that all solid wastes considered infectious or contagious must be incinerated at their place of origin. The extent to which this is practiced is difficult to say. In Bogotá, for example, out of more than 1,000 health centers and hospitals, only 51 have incinerators that comply with the guidelines. During 1996, the Bogotá Mayor's Office, through the agency of the Secretary of Health, was able to acquire five incinerators for municipal hospitals. The daily production of hospital waste in Bogotá may be as high as 11 tons.
Other major cities are also making plans for improved biomedical waste handling. Barranquilla envisions incinerating its wastes and then sending the ashes to the city's sanitary landfill. Cali is currently collecting low-hazard hospital waste and dumping it in landfills untreated; high-risk material is sterilized before being sent to landfills.
Groundwater pollution in the industrial zones is a critical environmental problem. The most serious situation is in the areas around the Barrancabermeja and Mamonal refineries, where Exxon, and later Ecopetrol, dumped oil-ridden wastes in the past. Between 1993 and 1997, Ecopetrol invested approximately $34 million in bioremediation and oil farming projects.
Pollution Prevention and ISO 14000
The concept of pollution prevention is just being recognized in Colombia. It has begun to take hold, in part, because of clean production agreements and voluntary compliance programs. The national government has promoted clean production programs through tax breaks and subsidized credits.
Colombia joined the World Trade Organization (WTO) in 1995. According to Decree 2746 of 1984, ratified by Decree 2269 of 1993, the Instituto Colombiano de Normas Técnicas y Certificación (ICONTEC) is recognized as the national standardization body for Colombia. It is a member of the International Standards Organization (ISO) and the International Electrotechnical Commission (IEC), and recently received recognition from the German Association for Accreditation (TGA) to carry out ISO 9000 quality management certification.
ICONTEC has also been accredited as a certification institution by Colombia's national accreditation body, the Superintendencia de Industria y Comercio (SIC). ICONTEC is a private, nonprofit organization.
Given the large Colombian export market and the number of multinationals established in Colombia, there is a high degree of interest in achieving ISO 14000 compliance. Although it is too early to evaluate the effect of the ISO 14000 on pollution prevention, it clearly will encourage further efforts to minimize pollution, simply because certification in ISO 14000 requires companies to consider all ways to diminish their overall pollution. By November 1997, several companies had begun working toward ISO 14000 certification. These include Rohm and Haas, ICI, and Hocol. Several state-owned organizations - such as EAAB (the Bogotá water and sewerage utility) and Instituto Nacional de Vias (INVIAS), the national agency charged with building and maintaining roads - also hope to receive certification in the near future. ICONTEC has performed preliminary environmental audits for the state-owned oil company (Ecopetrol) and Interconexion Electrica (ISA).
The National Association of Industrialists (Asociacion Nacional de Industriales), the Colombian Petroleum Association (Asociacion Colombiana de Petroleo), the Colombian Farmers Society (Sociedad de Agricultores de Colombia, SAC), the Cane Growers Association (ASOCAÑA), and the Sustainable Development Business Council (Consejo Empresarial para el Desarrollo Sostenible, CECODES) have successfully lobbied to get tax breaks and subsidies for environmental technologies investments and also for “clean production agreements.” These clean production agreements have taken hold in a few industrial corridors and productive sectors. The Ministry of Environment has signed agreements with the Oriente Antioqueño Business Corporation and the Mamonal Foundation concerning an industrial zone near Medellín and the Mamonal Industrial Corridor near Cartagena.
The Ministry of Environment has also signed agreements with several productive sectors such as ASOCAÑA, the hydrocarbon sector, the electrical sector, the carbon subsector, the pesticides subsector, and the palm oil subsector. Likewise, 43 companies have signed the “Responsible Care” voluntary regulations.
The clean production agreement involving the electrical sector has established a series of technological reconversion activities. Among the more prominent of these are (1) improving fuel quality by washing the coal used in thermoelectric plants, (2) installing burners that emit lower levels of nitrogen oxides, and (3) substituting thermoelectric plants with natural gas or combined cycle plants. The cost of washing coal in the Paipa, Zipaquira, Yumbo, and Tasajero thermoelectric plants is estimated to be $7.8 million per year. The investment needed to install burners that produce lower levels of nitrogen oxide in the Paipa, Zipaquira, Guajira, Yumbo, Cartagena, Barrancabermeja, and Tasajero plants is estimated at $10.5 million.
The National Congress established the basic economic incentives for its environmental policy through Law 188 of 1995. These incentives include pollution fees and taxes for the exploitation of renewable natural resources. These instruments are meant to encourage a shift toward cleaner production measures. Through a loan from the National Government and the Andean Promotion Corporation (CAF), industries have received subsidies totaling $350 million for reconverting industrial processes. The Industrial Promotion Institute (Instituto de Fomento Industrial) gives out credits, with prior consent from the Ministry of Environment, to properly distribute the resources.
Pollution prevention will grow in companies that have policies of “continuous improvement” that take them beyond Colombian environmental regulations. The adoption of the ISO 14000 goals by several corporations is an example. The possibility of ISO 14000 certification may encourage some businesses, especially those involved in international trading or with multinational operations, to seek pollution prevention measures.
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