Bottom-Cut Method Explained

Basic concept

Electric Power contracts

• In case of electric power companies evaluation is based on their CO2 emissions factor and the measures taken to reduce environmental impact.
• The method will allow in principle participation of multiple companies in bidding
• They are in principle set per region
• Have to ensure fair competiion
• Criteria underlying the method are reconsidered on an annual basis. 

For electric power contracts this means that bidders are scored based upon their performance in the preceding fiscal year in the following 5 factors

1. CO2 emission factor per kWh
2. Use of unutilized energy
3. Use of renewable energy
4. Green Power Certificate to be transferred ie., the percentage of electricity supply scheduled for use
5. Energy saving/power use reduction information provided to customers

For each of the factors, potential bidders will receive a point-score. The division of points is to be set by the government entities independently.

Industrial Waste Management contracts

For Industrial Waste Management the basic concept fo the Bottom-cut method is as follows:

• Evaluation based on efforts to reduce greenhouse gases and other emissions and assessment of compliance with "Excellent Contractors Certification (J)"* standards.
• Consider efforts at each stage of the disposal process to conserve environment,
• Make sure that industrial waste management businesses conform to the standards set by the  "Excelllent Contracts Certification" system,
• Procuring entities set concrete standards taking into account the characteristics of the type of waste and recyclables

The bottom-cut method used with industrial waste processing takes the following criteria into account:

1. Environmental conscious efforts
1. Environment/CSR Report
2. Greenhouse gases emission reduction plan/objectives
3. Worker training/eduction
2. Compliance with Excellent Contractors' standards
1. Compliance (following legal prescriptions)
2. Business transparency
3. Environmental conscious efforts (ISO14001 etc.)
4. Electronic information systems (Registerad with the 'electronic information processing systems (J)"
5. Financial soundness

Although introduction of this method is also proposed for procurement of marine vessels, no concrete explanation of scoring criteria are available.

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