Interpreting Results of Product Carbon Footprinting Analysis

WSQ Graduate Diploma in Process Technology ( Sustainable Manufacturing ) Unit 1 : Session 8 : 3 rd August, 2010 Dean Stanton Course Instructor | BrandGreen Carbon Footprint Measurement and Reduction Strategies for Products and Manufacturing Operations Interpretation of Carbon Emissions and Practical Applications

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WSQ Graduate Diploma in Process Technology ( Sustainable Manufacturing ) Unit 1 : Session 8 : 3 rd August, 2010 Dean Stanton Course Instructor | BrandGreen Carbon Footprint Measurement and Reduction Strategies for Products and Manufacturing Operations Interpretation of Carbon Emissions and Practical Applications

Unit 1: Develop Carbon Footprint Measurement and Reduction Strategies for Products and Manufacturing Operations This unit covers the knowledge and issues relating to carbon footprint measurement across operations and the value chain. The course involves demonstration of practical quantifying methodologies and standards, and discussions on how carbon footprint assessment can increase manufacturing efficiency. Key carbon reduction strategies such as life cycle thinking, resources management and 3Rs will be taught together with practical examples and applications. Participants will be able to take away practical knowledge and apply that in their work environments for quantification of carbon footprints and continuous improvement towards sustainable manufacturing. RECAP

Session 8:
Interpretation of Carbon Emissions and Practical Applications
In this session, course participants will learn:
How to interpret the results of carbon footprint analysis ( Lecture Format )
How leading companies have applied these insights to make significant reductions in impacts and costs ( Case Studies )
Practical applications to deliver positive bottom line financial improvements and to reduce the impacts from operations ( Tutorial Exercises )

Session 8:
Contents and Structure
Interpreting the results of carbon footprint analysis
Case studies
Walker’s Crisps
Innocent Drinks
Challenge exercise
Resources
Case study pack
Background reading materials
Lecture 1 hour
Lecture 1 hour
.
.
Group work 1 hour

Session 8 Pre-amble : Review of learnings from previous sessions

What’s been covered to date (not exhaustive) :
Corporate and product carbon footprints
ISO 14064 and other GHG protocols
Principles and methodologies
ISO 14040
PAS 2050
System boundaries and product category rules
Carbon footprint calculation
Hands on use of carbon footprint software tool
Reporting practices ISO 14064, 14044
Now we have all this great data, what can we do with it ?

CAVEAT :
Many of your assumptions will be proved wrong !
Probably the first lesson we learned in the UK back in 2006 was that key assumptions we had about the biggest sources of product related carbon emissions were often completely wrong .
This is only to be expected. Up until to this point nobody had actually measured these things properly.
Learning : when it comes to carbon, received opinion is often wrong. Having incontrovertible data to hand is a powerful weapon in challenging the status quo , improving efficiency , enhancing productivity and growing profits for your business.

Session 8 Section 2. Case Studies How leading companies have applied the insights from carbon footprinting to make significant reductions in impacts and costs

Case Studies Outline
Introduction
Carbon = costs = profits
Carbon = product innovation = revenues + profits
Focus on carbon = additional business benefits
Real world success stories
Case study 1: Walker’s Crisps (PepsiCo)
Case study 2: Innocent Drinks
Recap on key learnings

Session 8 Section 2. Case Studies 1. Introduction

Introduction Carbon = costs = profits
Guiding principle :
Wherever you reduce the carbon intensity of your products or services …
… you reduce costs …
… and wherever you reduce costs, you have a positive impact on the financial bottom line for your business.

Introduction Carbon = product innovation = revenues + profits
Moreover :
Through a deeper understanding of your “production” processes and where the carbon “ hotspots ” are, you can unlock opportunities not just for process innovation, but for creating entirely new – and lower carbon – products and services.
Hence through the insights leading to product innovation we can move on from merely reducing cost to creating new sources of revenue for your business – resulting in top line revenue growth as well as enhanced profitability.

Introduction Focus on carbon = additional business benefits
Corporate reputation: brand enhancement internally and externally
Customer demand: customer preferences for carbon footprint clarity
Employee engagement: they know that it is the right thing for you to do, and will be energised
Risk management: minimise impact of future regulations and supply chain disruption
Relationship benefit : improve efficiency of the product supply chain, hence supplier relationship engagement
Social benefit: shows serious commitment to reducing climate change impacts and leads change by example

Session 8 Section 2. Case Studies 2. Real World Success Stories

Real world success stories Walker’s Crisps
PepsiCo is the parent company of Walker’s
The Walker’s business includes the largest crisp manufacturing plant in the world
Potatoes are 100% UK sourced, so much of the supply chain is contained within the UK
The first company in 2006 to work with the Carbon Trust to measure a product carbon footprint
The first company to be measured under PAS 2050
The first product in the world to carry a product carbon label: Walker’s Cheese and Onion Crisps

Real world success stories Walker’s Crisps: Highlights
Only using British potatoes, to cut down food miles
Improving production efficiency to reduce gas by 11% , electricity by 22% and water consumption by over 700 million litres in one factory alone
Making a 4.5% reduction in emissions associated with producing crisp packets
Recycling over 90% of waste
Reducing the weight of packaging
Running delivery lorries on biodiesel and using fuel efficient driving
Saving 4,800 tonnes of CO 2 Reducing carbon footprint by 7% Saving close to S$1m annually

Real world success stories Walker’s Crisps: The value of data
PepsiCo and Walker’s first started working with the Carbon Trust as long ago as 2002, addressing their corporate level carbon footprints.
Taking the insights from measurement and applying that to their operations has resulted in a reduction in energy use of over 30% since 2000 (baseline).
Building on this initial analysis, it became clear that a significant portion of overall emissions was product related, which in turn had much to do with the company’s supply chain.
Starting in 2006, detailed product-level carbon footprint analysis was performed (see table).
Identifying emissions reduction “hot spots” (45g bag of Walker’s Crisps)

Real world success stories Walker’s Crisps: Insights from interpretation
Interpreting the results of the carbon footprint analysis, almost 75% of the carbon footprint of a 45g pack of crisps on the supermarket shelf came from two sources:
Manufacturing (~25%)
Raw materials (~50%)
Surprisingly, the total impact of transportation was relatively low at around 10%.
But what this did tell us was that although Walker’s had significant scope to address their own direct impacts in the manufacturing process, some of the biggest gains might well come from engaging with suppliers (i.e. tackling Walker’s indirect emissions ).

Real world success stories Walker’s Crisps: Practical steps in manufacturing
Taking a harder look at the individual components of the manufacturing related carbon footprint analysis, a number of key reduction opportunity areas were identified:
There was a considerable time lag between the production process start up and shut down cycles, resulting in wasted energy use. Work was performed to reduce the impact of these cycle times by 35% over 6 months.
15% of manufacturing related energy use was in lighting systems, some of which were running 24 hours a day. The company introduced enhanced automation and new lighting technologies to cut this component by 40% over less than a year.
Since 2009, all manufacturing operations have achieved ISO 14001 status.
The company is on target to replace an additional 7% of grid electricity consumption with energy from renewables by 2011 (resulting in a total of 15% of electricity from renewables).
At the same time, the company is now on target to reduce further the energy intensity of crisp production by ~35% by 2011, primarily through upgrading to newer technologies.

Real world success stories Walker’s Crisps: Practical steps in raw materials
Indirect emissions of 48% were related directly to Walker’s upstream raw material suppliers and a further 12.4% from packaging.
The primary raw material components in crisp manufacture are potatoes, sunflowers (oil) and various seasoning ingredients.
Walker’s has instituted a series of annual supply chain “summits”, now part of an iterative engagement process:
Communicate the value of footprint analysis;
Train on data collection and interpretation;
Collaborative and brainstorm group interventions to identify opportunities for individual and joint action;
Feedback to the process.
One outcome from the summits has been the development of the concept of chain of custody , whereby each supplier assumes ownership of
Calculating their part of the carbon footprint;
Identifying opportunities to reduce emissions during their ‘custody’ of the product.
Current Initiatives with Suppliers
Investment in research to help farmers reduce emissions through:
Better agricultural and storage practices, including how to reduce soil erosion from potato farming;
Identifying varieties of potato that can grow using less water.

Real world success stories Walker’s Crisps Combined raw material / manufacturing impacts
Perhaps the most astonishing insight to come from interpreting the carbon footprint analysis results happened right at the interface between raw materials and manufacturing processes.
One of the key manufacturing carbon hotspots identified (representing ~15% of total manufacturing related carbon emissions) was the extraction of water from the raw potatoes at the start of the process.
Further investigation and detailed discussions with both factory floor and purchasing staff revealed that it was received practice on the part of the potato farmers to spray the potatoes with water before transporting the potatoes to the factory.
Ostensibly, this was to preserve the freshness of the raw materials. In practice, this could increase the weight of a consignment by up to 22%, and of course the farmers were paid based on the weight of their product.
The Walker’s factory team reached out to engage with the potato farmers to cease spraying the product with water, in returned for increased financial compensation per tonne of raw material.
This allowed Walker’s to eliminate one entire production step, and an associated 15% of manufacturing emissions, as well as changing how the industry operated.

Real world success stories Walker’s Crisps: Recap
Only using British potatoes, to cut down food miles
Improving production efficiency to reduce gas by 11% , electricity by 22% and water consumption by over 700 million litres in one factory alone
Making a 4.5% reduction in emissions associated with producing crisp packets
Recycling over 90% of waste
Reducing the weight of packaging
Running delivery lorries on biodiesel and using fuel efficient driving
Saving 4,800 tonnes of CO 2 Reducing carbon footprint by 7% Saving close to S$1m annually

Real world success stories innocent drinks
Founded in 1998, innocent is a successful producer of natural drinks and fruit smoothies.
The company, founded on the principle of using only ‘100% natural, healthy renewable ingredients’ has the fastest-growing product in the UK Grocery 100 list.
A privately-held business with 250 employees.
One of the first wave of three pilot companies to work with the Carbon Trust starting on product carbon footprinting in 2006
First product to be certified: Mango and Passionfruit Smoothie
Sustainability part of innocent’s brand DNA, so footprinting natural next step

Real world success stories innocent drinks: more about Operate in 11 countries Rapid growth profile

Real world success stories innocent drinks: smoothie lifecycle

Real world success stories innocent drinks: the value of data Initial review of the analysis results focused attention on two key problem areas…

Real world success stories innocent drinks: the value of data Product carbon footprint of different packaging formats A consistent theme across different packaging types and sizes, with the exception of the smallest format bottle, where packaging was a major factor

Real world success stories innocent drinks: insights from interpretation One immediate quick win was the reduction of the impacts of packaging – switching to 100% recycled plastic reduced the overall footprint by 15%, and becoming the world’s first food company to use 100% recycled bottles (now entire range is 100%).

Real world success stories innocent drinks: surprises from interpretation
One surprise coming from the assessment was the relatively small contribution of transport and distribution to product-level greenhouse gas (GHG) emissions, particularly for the 250ml bottle size.
Given the conventional wisdom that ‘food miles’ generate high carbon emissions, innocent could have made expensive investments or sourcing decisions that would not necessarily have reduced carbon emissions as much as focusing efforts on manufacturing, packaging and growing processes.
Packaging emissions were higher than expected – especially for the smallest drinks size. Clearly, it made sense to invest in this area for carbon reduction.
Similarly, given the impact that farmers have on the overall smoothie footprint, it also made sense for innocent to focus on engaging with fruit suppliers to reduce their emissions.

Real world success stories innocent drinks: practical steps in packaging
In September 2007 innocent became the first food company in the world to use 100% recycled plastic for its bottles.
From January 2008, the entire drinks range is now packaged using 100% recycled plastic.
The results of this initiative have been dramatic (all at no added cost):
14% reduction in materials due to light weighting the bottle.
55% carbon reduction from the bottle manufacturing process.
Enabled the company to demonstrate that it is a leading edge investor in sustainable innovations (packaging).

Real world success stories innocent drinks: practical steps in supply chain
innocent has been working closely with suppliers to improve energy efficiency and reduce waste.
By creating a dialogue with one supplier in particular, innocent helped identify a range of opportunities:
Reducing waste to landfill The supplier set up a group of employees from different parts of the business to look at how they could increase the amount of waste materials being recycled throughout the factory. In the first month, waste to landfill was reduced by 15%, and within six months the reduction reached 54%. This was not the result of any new technology, just clearly labelled bins combined with educating and encouraging staff to separate the waste (see next slides).
innocent now has key performance indicators in place with all manufacturing and logistics suppliers to measure energy and water usage, waste production and recycling

Real world success stories innocent drinks: practical steps in supply chain

Real world success stories innocent drinks: practical steps in supply chain … and switched to renewable energy Identified energy savings of 25% = cost savings of £125k per annum

Real world success stories innocent drinks: practical steps in manufacturing

Real world success stories innocent drinks: key learnings
Carbon reduction initiatives accumulate into significant savings when multiplied across the supply chain – the combined impact of moving to recycled plastic packaging and working with suppliers to increase energy efficiency and reduce waste caused a meaningful reduction in product-level emissions of over 15%.
Conventional wisdom can be wrong – the key contributors to carbon emissions across the supply chain are not always those expected, e.g. transport and distribution are only part of the equation and not as significant as the term ‘food miles’ implies.
On the other hand, large emissions sources can be a surprise as well, opening up new opportunities for collaboration – innocent’s agriculture emissions were higher than expected, leading to previously unanticipated carbon saving initiatives to help suppliers reduce fertiliser and pesticide use.
The knowledge gained in a product carbon footprinting exercise is not only useful at the time of the analysis but can provide a decision making structure for purchasing and other significant decisions going forward.

Session 8 Section 1. Interpreting the results of carbon footprint analysis

Interpreting the results of carbon footprint analysis Outline
Key areas of reduction
Examples in detail

Key areas of reduction: overview Raw Materials Agriculture Raw Materials Extractive
Manufacturing
Energy Efficiency
Manufacturing
Switch to renewable energy
Packaging
Recycled content
Weight reduction
Other
Transport & Distribution
More efficient fleets and driving
Switch to alternative fuels
Smart logistics

Key areas of reduction : raw materials (agriculture)
Raw Materials – Agriculture (12% global CO2)
Changing agricultural practices
Reduce tCO2e content of pesticides and fertilizers* *often as much as 35% of the raw material
Go organic??
Replace diesel plant (e.g. for irrigation) with renewable energy (e.g. solar power, wind, small scale hydro)
Measures to reduce soil erosion

Key areas of reduction : raw materials (extractive)
Raw Materials – Extractive Industries Changing extraction practices: levers and drivers
Stripping ratios
Extraction depths
Production volumes / intensity
Drill, blast and dig process optimisation
New technologies to mine, mill and smelt
Minimising waste stock piles
Total hydrocarbon resource management

Key areas of reduction : packaging
Packaging Options to reduce impacts (not exhaustive)
Add or increase recycled content
Evaluate use of bio-materials (bio- and non bio-degradable)
Reduce weight and thickness
Innovative pack design to fit optimal container and pallet volumes
Re-usable packaging (e.g. The Body Shop)
End-customer recycling facilities (both b2b and b2c)
Impact of zero-waste policies?

Key areas of reduction : manufacturing (EE)
Manufacturing – Energy Efficiency Options to enhance energy efficiency (not exhaustive)
Upgrade to newer technologies / plant
Increased system automation and controls
Evaluate all process / production steps and eliminate where possible
Reduce start-up and shut down cycle times
Evaluate all HVAC optimisation opportunities
Sequencing production processes and in-site locations
Other?

Key areas of reduction : manufacturing (RE)
Manufacturing – Renewable Energy Options to implement RE solutions (not exhaustive)
Replace wasteful and costly fossil fuel / grid generation with:
Solar Photovoltaic
Mid-scale (500KW+) wind
Small to mid-scale hydro
Waste to energy
E.g. Anaerobic digestion
Biofuels for generation
Other?

Big win opportunities
The current biofuel production process is highly unsustainable (land use, energy requirements) => negative impact on agriculture
Biofuel generated from algae could solve these issues:
- Saving in energy
- Saving in land use
- Higher yield
Biofuel Generation from Algae

A combined use of renewable energy sources could meet our current energy needs:
Solar energy (photovoltaic and thermal)
Hydroelectric energy
Wind energy
Geothermal energy
Ocean thermal energy
Ocean wave energy
Tidal and current energy
These technologies are available today .
Renewable Energies on a Large Scale

Key areas of reduction : transportation and logistics
Transportation and distribution
Options to optimise / reduce (not exhaustive)
Computerised fleet management
Driver training and incentivisation
Switch fleets to more sustainable fuel sources
Recycled cooking oil
Introduction of hybrids
Electric vehicles (where possible powered by RE)
Fleet share (more than one end user)
Eliminate empty beds

Transportation accounts for almost one third of all greenhouse gas emissions.
Improving energy efficiency and emission reducing technologies within transport is a priority.
Hybrids
Fuel cells
CNG vehicles
Mass public transportation
Sustainable Transportation

Supplementary slides A word about waste…

Big win opportunities Waste : the facts
Cities are growing fast
Landfills are reaching saturation/ incineration produces emissions
Waste has a lot of value but is not exploited
We must shift from a global unsustainable waste management model to a sustainable one

Waste Output 2002: 7,677 tonnes/day
Equivalent to 1,100 truck loads!
Equivalent to 2.8 million tonnes/year
If stacked to an average man’s height (1.7m),
it would occupy 350 football fields
Garbage output

Big win opportunities Tuas South Incineration Plant

Big win opportunities Waste Disposal at Pulau Semakau

Big win opportunities Pulau Semakau Landfill
Completed 1999
Cost: $610 million
Life Span: 30 years
350 hectares

By 2050 80% of the world population will be living in mega cities
The tremendous amount of waste generated can be valued
Entire cities can be powered out of energy generated from waste
Capture of gases (CO 2 & CH 4 )
Use of heat energy generated from the decomposition process
Waste to Energy

Non-traditional waste recovery
Bio-plastics
Hi-Tech & Hi Value Add
Waste Engineering

Value waste
Use of recycled content within products
Reduce mass consumerism
Educating the community
Implementation of infrastructures to treat the waste accordingly
Traditional Recycling “ Technology will not solve all our problems, we must also change our behaviors”

Session 8 Section 3. Challenge Exercise

Challenge exercise
Working in groups, take a look at the following product lifecycle and:
Estimate the relative carbon emissions in percentage terms at each key stage of the lifecycle
Identify the key areas to focus on
Make recommendations on the types of changes you might implement to reduce product carbon footprint

Grid electricity Lifecycle of a men’s white T shirt (large)

How did they achieved this 90% step-change reduction?

Solar electricity … by switching the entire energy supply of the manufacturing plant to renewable electricity (from solar)

Session 8 Appendices

Supply side market map: renewables Renewables Solar Advanced photovoltaics (PV) Conventional PV Solar water heating Solar thermal electric Marine Wind Onshore Offshore Small scale Wave Tidal Thermal energy Near-shore Offshore Shoreline Tidal stream Lagoons and barrages Bio Hydro Geothermal Large scale Thermal Small-scale Biomass for heat Biomass for electricity Biogas Bio fuels Not exhaustive Other Priority areas

Supply side market map: clean technology FF and Nuclear Fuel cells Large static Portable Small static Coal Nuclear Fission Fusion Alternative Cleaner Coal Coalmine methane Carbon Capture and Storage CHP Gas Turbines Large scale Small-scale Local grid-connected 1 2 3 4 Fossil fuels and nuclear (“brown to green”) High efficiency combined cycle gas turbine (CCGT) Other Not exhaustive Priority areas

Supply side market map: clean technology Other T&D Electricity T&D Gas & alternative distribution Grid connection Hydrogen Storage Electrical Thermal energy Hybrid Production Storage Distribution Advanced Batteries Information Systems Alternative Hydrocarbons For energy users Smart grid software / hardware Other “ Other” Not exhaustive Balance of system Demand response Priority areas

Demand side market map: clean technology Energy Efficiency and Clean Products Transportation Improved vehicles Alternative transportation fuels Smart logistics Industry Buildings Design Controls HVAC Equipment* Processes* Control systems* Clean Products Materials Biomaterials and polymers Nanotechnologies Advanced chemicals Energy efficiency and clean products Not exhaustive Supply and distribution Traffic management systems Lighting systems Advanced buildings materials Zero waste lifecycle solutions *Generic and industry specific Product design Lifecycle analysis Evaluation and labelling Packaging Priority areas

Demand side market map: clean technology Emissions, Waste and Water Emissions Measurement and control Compliance Remediation Water Waste & Related Recycling Usage reduction Treatment Emissions, waste, water and agriculture Not exhaustive Trading Offsets Remediation and treatment Usage efficiency Pollution Conservation Appliances Distribution Storage Treatment and purification Salt to freshwater technologies Remediation Priority areas Agriculture Land management / crop selection Natural interventions Emissions

Interpreting Results of Product Carbon Footprinting Analysis

by c3ventures on Nov 14, 2010

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Interpreting Results of Product Carbon Footprinting Analysis Presentation Transcript