The impact of resource wise cities on regional economy

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Gaia Consulting's study indicates that resource-wise measures could have positive impacts on economy, employment and environment.

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The impact of resource wise cities on regional economy

  1. 1. © Gaia Monday, June 02, 20141 The impact of resource-wise cities on regional economies, employment and emissions 30 April 2014
  2. 2. © Gaia2 Resource wisdom has many benefits • The first that comes to mind is the ability to save on natural resources, materials and energy. • Resource wisdom also creates new business and jobs. • This slide show presents the results of an impact assessment of selected resource-wise measures implemented in Jyväskylä. • The assessment covers local added value generated by new business, as well as permanent effects on employment and greenhouse gas emissions. Cost savings and investment needs were also assessed. • The main goal is to reveal the size of the impact of various measures. • This slide show begins with a summary, followed by a more detailed description of each measure. Further details on the calculation assumptions are provided in the slide show annexes.
  3. 3. © Gaia3 6. Energy efficiency of buildings 7. Optimisation of soil material transport 1. Reduction of leftover food Resource wisdom in Jyväskylä 9. Reduction of water consumption 3. Production of biogas and soil from biowaste 5. Increasing the use of wood fuel 4. Production of transport fuel from biogas 8. Reduction of private car use 2. Production of local food +1000 person- years/year -500 kt CO2-eq/year € +€100M added value/year
  4. 4. © Gaia4 Summary of selected measures Measure Spatial scale Added value from production €M/year Saving s €M/ye ar Investm ents €M Jobs, person -years Reduction of CO2 emissions, kt of CO2/year 1. Reduction of leftover food Jyväskylä 0.1 - 0 0 0.1 2. Production of local food Central Finland 80 - not calculated 860 not calculated 3. Production of biogas and soil from biowaste Jyväskylä region 1 - 4-7 10 4 4. Production of transport fuel from biogas 1 Central Finland 20 - 70-100 170 60 5. Increasing the use of wood fuel Jyväskylä 7 - 50-70 80 370 6. Energy efficiency of buildings Jyväskylä - 28 70-100 not calculated 60 7. Optimisation of soil material transport Jyväskylä region - 0.2 0.1 not calculated 0.3 8. Reduction of private car use Jyväskylä - 2 0 0 4 9. Reduction of water consumption Jyväskylä - 1.5 0 0 3 1 includes biogas production in case 2
  5. 5. © Gaia5 The measures and their impact The results
  6. 6. © Gaia6 1. Reduction of leftover food Starting point: Approximately 11% of food produced in institutional kitchens is thrown away. The amount of food that goes to waste could be reduced by selling leftover food, which would also help to reduce the amount of biowaste. Outcome: The amount of leftover food generated by institutional kitchens providing free meals in the Jyväskylä region (schools and other educational institutions) will be reduced by selling leftover food to external customers. Meals will be sold for a nominal price that covers the cost of bread, spread and beverages. It is estimated that this would reduce the amount of food wasted by 50,000 meals a € €
  7. 7. © Gaia7 2. Production of local food Starting point: Primary production in Central Finland is currently valued at €261M, while food industry production totals €438M. Depending on the line of business, primary production has a 70– 84% self-sufficiency rate, while the food industry has one of 15–88%. Outcome: An increase in locally produced food so that half of the raw materials and food stuffs acquired from elsewhere in Finland and from abroad are replaced by produce from Central Finland. This would increase the value of Central Finland's primary production by 10% and regional food industry production by 12%. €
  8. 8. © Gaia8 3. Production of biogas and soil from biowaste Starting point: The amount of biowaste currently collected in the Jyväskylä region is approximately 13,000 tons a year. The collected biowaste is used in soil production at a composting plant run by local company, Mustankorkea Oy. Outcome: More efficient collection of biowaste and the expansion of the collection area will increase the amount of recovered biowaste by some 5, 000 tons a year. A new biogas plant will start producing biogas from biowaste. Nutrient-rich residues will be used by the composting plant in the production of soil. Biowaste Biogas production plant Soil Biogas € €
  9. 9. © Gaia9 INFOSHEET: Waste recovery at Mustankorkea At present, the composting plant of Mustankorkea Oy handles 30,000 tons a year of separately collected biowaste and manure, and sludge from wastewater treatment plants. Together with peat and other soil materials, the composting end- product is used as a raw material for soil products. In 2013, the total amount of soil products sold came to around 27,000 tons. In the future, Mustankorkea may also begin the production of biogas from biowaste (current amount some 13,000 tons, but there is potential for 5,000 tons more), manure and sludge (current amount some 17,000 tons, but there is potential for 10,000 tons more). These higher amounts of recovered materials will be based on the more efficient collection of biowaste and the expansion of the collection area. Biogas production would multiply the added value derived from the plant’s refining processes, while significantly enhancing its future potential for soil production. Source: www.mustankorkea.fi; Managing Director Esko Martikainen
  10. 10. © Gaia10 4. Production of transport fuel from biogas Starting point: Total consumption of biogas in Central Finland is around 30 GWh a year. While biogas is mainly used for heat and electricity production, some is already an ingredient in the production of transport fuel. Outcome: Central Finland will exploit half* of the technical and economic potential of biogas, i.e. 245 GWh. New production will be entirely focused on the further processing of biogas into transport fuel. *the most profitable projects € € Photo: Metener Oy There will be enough biogas to cover the fuel consumption of around 17,000 private cars. The reduction in the use of foreign fuels will help improve Finland’s trade balance by approximately €16M a year.
  11. 11. © Gaia11 5. Increasing the use of wood fuel Starting point: In 2012, total consumption of wood fuel in Jyväskylä was 1,270 GWh. This was 20% more than in 2010. Outcome: The annual use of wood fuels will be increased by 1,000 GWh. Compared to 2012 consumption levels, this would mean eliminating the use of coal (160 GWh), and reducing oil consumption by 50 GWh and peat consumption by 790 GWh. This will mainly be achieved through an investment that will enable the 100% conversion of the Keljonlahti power plant to wood fuel-based production. € € Fuel acquisition and logistics Domestic wood chips Power plant The reduction in the use of foreign fuels will help improve Finland’s trade balance by approximately €8M a year.
  12. 12. © Gaia12 6. Energy efficiency of buildings Starting point: Around 2,440 GWh of energy was used to heat buildings in Jyväskylä in 2012. Electricity consumption by residential buildings and agricultural activities came to approximately 450 GWh. Outcome: Energy efficiency will be improved by 11% for heating and 7% for electricity consumption, to correspond to the average values for various types of building monitored by Motiva through energy audits. The interest-free payback time on investments has been 2.7 years on average. € € A G F E D C B
  13. 13. © Gaia13 INFOSHEET: Improving the energy efficiency of outdoor lighting A practical trial was implemented in Jyväskylä, in which the outdoor lighting system of one housing company was replaced with a new LED lighting solution. With the old system, annual electricity consumption was roughly 6,700 kWh. Following the installation of a LED solution, electricity consumption fell to 1,700 kWh. This amounts to 5,000 kWh in annual savings – 75% less than at the starting point. The overall cost of renewing the lighting system was approximately €5,400, including design (€400) and installation (€5,000). Annual savings in electricity totalled approximately €600, making the interest-free payback time on investment around nine years. Were the average emission coefficient for electricity supply in Finland to be applied in this case, changing the outdoor lighting system would equate to a reduction in greenhouse gas emissions of around 1.5 kt CO2 eq a year. Source: Impact assessment and expansion effects of resource-wise practical trials in Jyväskylä, Sitra reports 75, 2014
  14. 14. © Gaia14 7. Optimisation of soil material transport Starting point: Each year, some 860,000 tons of soil material are transported in Jyväskylä. They travel an average distance of 18 km. 50% of these journeys are made by empty vehicles. Outcome: The introduction of smart programming and a material bank will help make soil transportation more efficient. As a result, less temporary storage, less loading and fewer vehicles will be needed, and reuse will increase. Driving with empty loads will be completely eliminated. € € Optimisation of soil material transports
  15. 15. © Gaia15 8. Reduction of private car use Starting point: Private car use has increased by 10 percent in Jyväskylä in the last 20 years. The car is the preferred mode of transport for 60-70% of Jyväskylä’s residents. Outcome: The share of trips made by car will be reduced, while walking, riding a bike and using public transport will become more popular. 80% of the employees of the City of Jyväskylä will change their behaviour to comply with their employer's commuting guidelines. These guidelines recommend walking or using a bike when commuting less than 5 km. In addition, a campaign will seek to increase the popularity of public transport from 5% to 7%, in line with the objectives of the City of Jyväskylä. € €
  16. 16. © Gaia16 9. Reduction of water consumption Starting point: Average daily water consumption is 155l, of which 40-50l is heated water. Outcome: Various measures will be introduced to reduce water consumption among people living in apartment blocks, based on a reduction target of 20%. Options include encouraging behavioural changes through the installation of water meters and increased awareness, or switching bathroom and toilet fittings for models that save on water and energy. € €
  17. 17. © Gaia17 INFOSHEET: Planning with energy and climate issues in mind Designing and comparing energy solutions during planning will help to save money and make land use more efficient. If all planning in Finland followed the example of Skaftkärr in Porvoo, municipalities would have saved up to two billion euros by 2020. Efficient and energy-wise planning could help municipalities to lower their investments in local infrastructure construction by 170 – 240 million euros a year, which equates to roughly five per cent of total municipal investments. Annual savings in transport fuels in 2020 would amount to 80 – 110 million euros, or around 160 euros per resident moving into a new housing area. These figures are based on the assumption that all new construction areas in Finland will be planned in an energy-wise manner over the next ten years. Source: Sitra, press release, 2 October 2012
  18. 18. Gaia Group Oy, Bulevardi 6 A, FI-00120 HELSINKI, Finland – Tel +358 9686 6620 – Fax +358 9686 66210 www.gaia.fi Our Clients Make the World Safer and Cleaner. FINLAND – SWITZERLAND – CHINA – ETHIOPIA – ARGENTINA
  19. 19. © Gaia19 Assumptions, calculations Background materials
  20. 20. © Gaia20 General assumptions • Meta-analysis was used in this case, i.e. the impact assessment was mainly based on data obtained from previous assessments, which was supplemented where necessary. The goal was to demonstrate the scale of various options. • In assessing each option’s potential, the goal was to achieve a realistic and feasible outcome. For this reason, account was not taken of the full potential of each measure in every case. Instead, only the realisable potential was highlighted. • Assessment of the employment impact took account of permanent jobs only. The investments have also had a temporary positive employment impact, but this was excluded from the reported results (in some cases, more detailed information was provided on the employment impact of investments by more precise reporting on the calculation assumptions and initial data). • In cases (1-5), which involve the creation of new, local added value, the annual added value of regional production was calculated. In cases (6-9), where the consumption of energy, fuel or water was reduced, calculations were performed to determine the value of annual savings. Calculation assumptions and initial data
  21. 21. © Gaia21 1. Reduction of leftover food Raw materials • According to estimates, under current conditions one fifth of the food produced by institutional kitchens goes to waste. Leftover food, which could be reduced by selling leftover meals, is thought to account for 11% of this (see Sitra report). According to calculations, the amount of leftover food could be reduced by 50,000 meals in Jyväskylä. This is based on an assumed emissions reduction of 1.3 kg of CO2 per 300 g meal. Implementation • Some food destined for the (biowaste) bin could be served to customers for a nominal fee outside normal catering times. Investments • No new investments required. These activities will be run use current facilities and equipment, by existing personnel. Added value to production • Let us assume that the price of a meal is €1.5. This would cover the cost of the bread, spread and beverages. According to estimates, 50,000 meals could be sold each year. Assuming that the cost is €50/ton of biowaste, the biowaste-related cost reductions would be marginal. It is also assumed that the reduction in biowaste transportation would not affect costs. Employment impact • No need for additional workforce – operations will continue using existing personnel. CO2 calculations • An emissions reduction is assumed of 1.3 kg of CO2 per sold 300 g meal. It is also assumed that the reduction in biowaste transportation would not affect CO2 emissions. Let us also assume that the customers buying the leftover meals arrive on foot or using the same mode of transport that they would have used if they had gone elsewhere instead. Other • We may also assume that the purchase of leftover meals would have no significant impact on demand for other restaurant services. The sale of leftover meals should be limited to leftover food from the institutional kitchens of schools and educational institutions that provide meals free of charge. This would help to prevent customers of regular lunch services from switching to after-service meals in the hope of saving money. Calculation assumptions and initial dataPremise Theresults
  22. 22. © Gaia22 2. Production of local food Raw materials • At present, primary production in Central Finland is currently valued at €261M and food industry production is worth €438M. Depending on the line of business, the self-sufficiency rate is 70–84% for primary production and 15–88% within the food industry (source: Ruralia Institute, Reports 93). Application • The quantity of local raw materials used in local food production and food service and retail activities could be significantly increased. This would have an impact equivalent to the entire share of GDP accounted for by primary production, the food industry and food service and retail activities. There would also be an employment impact. Investments • Not included in the assessment Added value to production • Calculations of the value added in production are based on the assumption that 50% of the maximum demand potential presented in Ruralia's report, which does not include imports from elsewhere in Finland or from abroad, would be realised. In the calculation assumptions, the resulting impact on Central Finland’s GDP due to value added in primary production would be 10% (€28M) , and that of the food industry would be 12% (€49.5M). We could also assume that 40% of ingredients used by the food industry would be local, while the corresponding figure for publicly operated kitchens would be approximately 50%. This would mean that half of the raw materials currently acquired from elsewhere in Finland or from abroad would be replaced by local raw materials. Employment impact • In primary production, the employment impact would be 10%, or an additional 383 person-years, and in the food industry, 8.5 %, or an additional 477 person-years. This would account for half of the likely employment impact of the Ruralia project if the maximum employment potential were realised. (Data on Central Finland) CO2 calculations • Let us assume that the changes in CO2 emission levels arising from changes in land use are not significant. At national level, the CO2 emission impact of changes in transportation and logistics could be negative, due to Finland’s inefficient logistics chain (compared to large chains). A more precise assessment of the changes in CO2 emissions would require more detailed initial data on the origins and mode of transportation used for food imported to Central Finland, and the locations and types of food production that would replace the current situation. Other • In geographical terms, our scenario is limited to Central Finland. There would not necessarily be any justification in limiting the definition of locally produced food to that produced in the Jyväskylä region or province. Besides, it may prove challenging to obtain initial data on the basis of Calculation assumptions and initial dataPremise Theresults
  23. 23. © Gaia23 3. Production of biogas and soil from biowaste Raw materials • An additional 5,000 tons of biowaste could be collected every year (13,000 tons of biowaste are currently handled at Mustankorkea each year). This estimate is based on information provided by Mustankorkea' s Managing Director Esko Martikainen. Application • All collected biowaste (18,000 tons a year) is primarily used in the production of biogas, whose end-product is methane, which can in turn be used in energy production or as transport fuel. Approximately 15 GWh of methane is generated each year (this calculation is based on data from Wabio on biowaste sorted at the creation site, TS 35%; VS/TS 80%). At the composting plant, reactor residues are utilised in soil production. Investments • The investment calculation is based on the calculation guidelines given in the Wabio brochure. The need for pre-treatment and the cleaning of raw gas have a bearing on the size of the investments. The price range was determined bearing this in mind, while taking account of the alternative factors presented above. Added value to production • The value of the methane generated in heat production would be €45/MWh (Statistics Finland), and as a transport fuel it would total €90/MWh (VAT 0%) (selling price includes VAT 24%: €1,505/kg CH4; source: Gasum). The value of soil is €15/ton (source: Mustankorkea’s price list). These represent the high and low ends of the price range. Energy is a dominant factor. Employment impact • VTT's estimate of 0.7 person-years/GWh was used here. This took account of permanent jobs only. In addition, investments have a significant positive but temporary impact on employment (a rough estimate would be a few dozen person-years). CO2 calculations • Biogas is used to replace either engine fuel or diesel fuel as a transport fuel, or LFO in heating (emission coefficient: 265 gCO2/kWh). Calculation assumptions and initial dataPremise Theresults
  24. 24. © Gaia24 4. Production of transport fuel from biogas Raw materials • Tähti et al. (Potential for biomethane and hydrogen production in Finland, 2010) have estimated that biogas production in Central Finland has a technical and economic potential amounting to 490 GWh. The theoretical potential is 1,200 GWh. Application • Let us assume that half of biogas production’s technical and economic potential is realised, i.e. 245 GWh. This would best be done by making use of the more profitable half, with most production being concentrated in large plants. The result would be lower unit costs. The resulting biogas would be further processed into transport fuel. Investments • Assessment of the investments was based on the investment required for previously completed plants (Labio Oy, former Kujalan Komposti, 50 GWh – €17M). The results were also compared with the report by Saana Ahonen: ”Biogas as a transport fuel – regional transport biogas supply chain in Central Finland”. These factors were used to establish a price range, while bearing in mind the aim of using the alternatives with the greatest potential profitability. Added value to production • Biogas produced as a transport fuel was valued at €90/MWh (VAT 0%) (sales price, VAT 24% incl.: €1,505/kg CH4; source: Gasum). Employment impact • We used VTT's estimate of 0.7 person-years/GWh. This took account of permanent jobs only. In addition, the investments would have a significant positive but temporary impact on employment. The assessment took no account of this. CO2 calculations • Biogas is used to replace either engine fuel or diesel fuel as a transport fuel (emission coefficient: 265 gCO2/kWh) Other • The number of vehicles covered by the amount of transport fuel produced from biogas is given as a rough estimate, calculated on Calculation assumptions and initial dataPremise Theresults
  25. 25. © Gaia25 5. Increasing the use of wood fuel Raw materials • The total amount of wood fuel used in Jyväskylä amounted to 1,060 GWh in 2010 and 1,270 GWh in 2012 (source: Jyväskylän Energiatase energy balance report). The power company Jyväskylän Energia also aims to increase its use of wood fuel. Here, the assumption is that the use of wood fuel can be increased by another 1,000 GWh per year from its 2012 level. This will be achieved through an investment that enables Keljonlahti to increase its wood fuel use to 100%. Application • Compared to 2012, coal (160 GWh) will be completely replaced by wood and 50 GWh of oil consumption. The remaining share (790 GWh) will replace peat (as a reference figure, Keljonlahti used 940 GWh of peat in 2012). It was assumed that the total amount of fuel would remain the same. Investments • Investment in Keljonlahti approx. €55M (source: Tero Saarno). The investments made also include some written-off costs. Added value to production • Calculation of the value added to production in the region involved totalling the change in value of the domestic fuels used. The price of wood and peat, based on data from Statistics Finland (in December 2013: wood: €21/MWh, peat €18/MWh). Use of wood is growing; peat use is diminishing. Employment impact • On the basis of the employment estimates given by the Pellervo Economic Research Institute (wood/wood chips, the following figures have been calculated: 0.15 person-years/GWh; peat: 0.088 person-years/GWh); The employment impact of wood use would be positive, while that of peat use would be negative. CO2 calculations • Emission coefficients provided by Motiva: Fuel heat values, cost-benefit ratios and carbon dioxide-specific emission coefficients and energy prices_19042010 Other Calculation assumptions and initial dataPremise Theresults
  26. 26. © Gaia26 6. Energy efficiency of buildings Starting point • A total of 2,440 GWh of energy would be used to heat buildings and the electricity consumption of housing and agriculture would total 450 GWh (Jyväskylän energiatase 2012 energy balance report). Energy saving potential • Based on more than 1,000 energy review reports, Motiva has estimated that potential savings in heating would total 11% and electricity savings would come to 7%. This would give an average payback time on investment of 2.7 years. Investments • The value of investments in the above-mentioned targets was calculated on the basis of the Motiva reports, with a payback time of 2.7 years. To verify the results, the limit values were broadened and the calculations repeated with a payback time of 3.5 years. Value of energy savings • The value of energy savings was calculated on the basis of consumer prices (Statistics Finland consumer prices for heating energy, December 2013). Electricity €150/MWh, district heating €76/MWh, oil €108/MWh, wood pellets €60/MWh. Employment impact • Not included in the assessment. The employment impact of the investments was evaluated as being in excess of 1,000 person- years. However, this figure was not included in the report due to the principle that only jobs permanent during the period under review would be included. CO2 calculations • The electricity calculations were based on the five-year national average (Statistics Finland, Tilastokeskus, benefit sharing scheme, 223 g/kWh), the district heating calculations on the CSR Report of power company Jyväskylän Energia (210 g/kWh), and the light fuel oil (LFO) calculations were based on information provided by Motiva (267 g/kWh). The breakdown of heat consumption was based on the Jyväskylän energiatase 2012 energy balance report. Calculation assumptions and initial dataPremise Theresults
  27. 27. © Gaia27 7. Optimisation of soil material transport Starting point • 860,000 tons of soil material is transported within Jyväskylä each year. The average distance of each journey is 18 km and a typical load of soil weighs 17 tons. Source: Jyväskylä 75 Savings potential of transports • Journeys by empty vehicles will be eliminated. Investments • During resource-wise practical trials, the cost of investing in the development of a material bank and programme would be €20,000 - 100,000. The value of savings in transportation costs • The consumer price of diesel, €1.6/l, was used to calculate the value of savings in transportation costs. Financial savings in fuel costs were taken into account. Fuel consumption while driving with an empty load totals 0.27 l/km (VTT's LIPASTO emission calculation system). Possible savings related to temporary storage areas and the reuse of material have not been factored in. Employment impact • Not included in the assessment. The possible employment impact may result from i) changes in transportation used, or ii) program maintenance. CO2 calculations • Driving with an empty load generates 864 g CO2-eq/km (Sources: Jyväskylä 75 and VTT's LIPASTO emission calculation system). Calculation assumptions and initial dataPremise Theresults
  28. 28. © Gaia28 8. Reduction of private car use Starting point • In Jyväskylä, as a share of all modes of transport, public transport accounts for 5%, with 18,000 trips made each day. For commuting trips of less than 5 km, the initial data was obtained from the Jyväskylä Region Travel Survey (Commute intelligently II, 2013), commissioned by the City of Jyväskylä. According to this survey, nearly one in two workers use a private car to travel to work. The City of Jyväskylä employs 6,500 people, of whom 50% have a commuting distance of less than 5 km. Of these employees, 30% use a car to travel to work. The average commuting distance used in the calculations was 3 km. Potential for reduction • The assumption is that 80% of city employees covered by the commuting guidelines will change their behaviour. In addition, campaigning will be used to increase the popularity of public transport from 5% to 7%, in line with the objectives of the City of Jyväskylä. The potential exists to increase the occupancy rate of public transport, eliminating the need to add bus services in order to implement this measure. Investments • No significant investments. Value of savings • Bus fares will generate additional income for the bus company. The calculations were derived from the average fare determined on the basis of the price of a single fare for an adult and children, €2.5. The average distance travelled was 7 km. The occupancy rate of buses would increase from the current level (15 persons/bus) to 21 persons per bus. These calculations were based on car fuel consumption of 6.5 l/100 km and a fuel price of €1.7/l. Introduction of this operating model would require guidelines for city employees and the acquisition of certain equipment. Positive impact: there would be a reduction in traffic congestion, noise and accidents, and less need to invest in new lanes on roads. In addition, there would be positive health impacts, such as fewer particulate matter emissions discharged into the air we breathe, and improved health among commuters who would use their own muscle power to get around. Employment impact • Not included in the assessment. Calculation assumptions and initial dataPremise Theresults
  29. 29. © Gaia29 9. Reduction of water consumption Starting point • The starting point is the average water consumption of Finns, 155 l/day, of which 40–50 l is heated water (Motiva, 2013). Approximately 58,600 people live in apartment buildings in Jyväskylä. Potential for saving water • Motiva has estimated that the installation of water meters would reduce water consumption by 15-20%. In the practical trials conducted under the Towards Carbon-Neutral Municipalities (or, HINKU) project, alternative bathroom and toilet fittings helped to reduce water consumption by 16%. Based on these figures, the estimated potential saving in water would be around 20%. Investments • No investments. Value of the water saved • The calculation of the value of the water saved was based on lower water rates and water heating costs, using the consumer price of water (the consumer prices of Jyväskylän Energia, December 2013). According to the cost structure applied to water management in Jyväskylä, 20% of water rates are not based on fixed costs. Employment impact • No significant employment impact. CO2 calculations • These figures were calculated on the basis of savings related to the energy required to heat water (district heating coefficient 210 g/kWh, CSR Report of Jyväskylän Energia), to pump raw water (electricity need 0.00042 kWh/l, Jyväskylä 75, and 223 g/kWh in emissions), and for wastewater treatment (0.47 kg CO2/m3, Tenhunen 2000). Calculation assumptions and initial dataPremise Theresults

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