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Project Report Shivram Mukherjee (Energy Management), 2009 11



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  • 1. DEVELOPING GHG ACCOUNTING FRAMEWORK & ASSESMENT OF PROBABLE STRATEGIES TO MITIGATE CO2 EMISSION IN A CHEMICAL INDUSTRY Project Report Submitted to the University of Calcutta In Partial Fulfillment for the Award of Master of Public Systems Management (With Specialization in Energy Management) By SHIVRAM MUKHERJEE ROLL NO: 107/MPS/090098 REGISTRATION NUMBER:-107-1121-0027-09 SESSION: 2009-2011 INDIAN INSTITUTE OF SOCIAL WELFARE AND BUSINESS MANAGEMENT COLLEGE SQUARE WEST, KOLKATA 700 073 May, 20111
  • 2. ACKNOWLEDGEMENTAt this outset, I would like to avail this opportunity to express mythankfulness and gratitude towards Dr. K.M Agrawal, Head of the Department,Masters in Public Systems Management, IISWBM, KolkataI would like to thank Dr.Sarbani Mitra, Coordinator, EnvironmentManagement, IISWBM Kolkata for her constant guidance, encouragement andgiving me precious tips for completing my project workI am also thankful to Mr. Arindam Dutta, Coordinator, Energy Management,IISWBM, for his valuable inputs and guidance for the completion of the projectwork on time.I would also like to extend my heartfelt gratitude towards Mr. Rajib KumarDebnath, Director (Environment& Sustainability Services) and DeloitteTouché Tohmatsu India Pvt. Ltd for providing me this opportunity tocomplete my project & project work at this esteemed organization.I am also thankful to my external guide Mr. Jaideep Singh Rathore & mycolleague Mr. Chandan Singh, Assistant Managers at Deloitte TouchéTohmatsu India Pvt. Ltd. Bangalore, whose constant encouragement andsupport helped me gain substantial knowledge in the area pertaining to myproject work.Finally, I would like to thank my parents and all my friends without thesupport, motivation and guidance of whom; I wouldn’t have been able tocomplete the project work2
  • 3. INDUSTRY NAME AND BRIEF DESCRIPTION DELOITTE TOUCHE’ TOHMATSU INDIA PRIVATE LIMITED Deloitte Centre, Anchorage II, 100/2 Richmond Road, Bangalore, Karnataka – 560025 DELOITTE AS A GLOBAL FIRM With over 130,000 employees in 150 countries Deloitte has an unparalleled breadth of service offering, ensuring that it can help the clients with the range of challenges they face. Deloitte is among the leading audit and consulting firm in major countries such as USA, UK, Japan (under the brand name of Tohmatsu), France, but equally so in Latin America, India and China. In India we have offices in 13 locations and over 5000 staff. The service provided by Deloitte includes Consulting, Tax, Audit & Enterprise Risk Services and Financial Advisory. DELOITTE GLOBAL – (ENVIRONMENT & SUSTAINABILITY SERVICES) Deloitte’s Global Environment and Sustainability Services is a global business line of more than 200 dedicated practitioners in more than 20 countries world-wide that are closely interlinked with Deloitte assurance services, risk and management consulting and corporate financial services. Deloitte has delivered services in this field since the Rio Earth Summit in 1992 as such; the group has been involved with Sustainable Development issues since the Earth Summit in 1992 and has been working with industry, governments, and international organizations alike. As a participant in the 1992 Earth Summit (formally known as the United Nations Conference on Environment and Development), Deloitte was among the first professional services organizations to acknowledge the importance of sustainability. Since then, Deloitte practitioners have continued to participate in relationships with organizations like the World Business Council for Sustainable Development, the United Nations Global Compact, and the GRI. Deloitte is a founder member of the World Business Council for Sustainable Development (WBCSD) and the UN Global Compact and is a signatory of the World3
  • 4. Economic Forum Corporate Citizenship challenge. The Environment & Sustainability Services forms a part of the consulting practice present in Deloitte. DELOITTE INDIA - ESS NETWORK & STRENGTH & STRENGTHIn India, the ESS team is represented by professionals having background in Basic Science,Engineering, and Management with an in-depth experience in ESS related services. The ESSnetwork in India is spread across the cities of Kolkata, Gurgaon (NCR), Mumbai, Chennai,Bangalore and Hyderabad, with approximate staff strength of 40. The Environment &Sustainability is headquartered in Gurgaon.Deloitte, a leader in the field of CSR is the Founder Member of World Business Council forSustainable Development (WBCSD) and UN Global Compact and a signatory to WorldEconomic Forum on Corporate Citizenship Challenge. It has chaired the SteeringCommittee, which has played a prominent role in the development of the GRI SustainabilityReporting Guidelines Played a significant role in the development of ISAE 3000.Largestshare of Assurance Services in the Top 50 Best Sustainability Reporting firms. Maximumshare of Reporters which have bagged International Awards on CSR. DELOITTE ENVIRONMENT & SUSTAINABILITY SERVICES - KEY AREAS OF WORK A. Corporate Sustainability Reporting (CSR) B. GHG Accounting & Assurance C. CDM (Clean Development Mechanism) and VCS (Voluntary Carbon) Advisory Services D. Quality, Social, Safety, Health and Environmental Management Systems as per ISO 9001/ISO-14001, ISO 18001 & SA 8000 E. Environmental & Social Due Diligence Review F. Advisory Services on Renewable Energy Certificates(REC’s) G. Advisory Services on LEED(Leadership in Energy & Environmental Design) H. HS(Environment Health & Safety) Legislation Compliance Assessment and Review and EHS & Social Accountability related Advisory services4
  • 5. EXECUTIVE SUMMARYAs we all know that Climate Change is a serious issue that has surrounded the world todayand with more and more issues relating to global warming, increase in the surfacetemperature of the earth, melting of the glaciers, hence it has become a necessity to opt forsuch a mechanism that would not only help to mitigate adverse effects of climate change,but it would help to earn revenue in terms of carbon offsets, and also reduce GHG emission.In recent years the voluntary carbon trading market has been plagued by a perceived lackof credibility stemming from the absence of uniform quality control and assurancestandards.The scope of this study extends over qualitative assessment of the climate change impactson the chemicals and fertilizer industry sectors, estimating the carbon footprint of AquasubChemicals Limited (ACL) for a selected base year and outlining strategy for GHG abatementfor the broad categories of manufacture and production of fertilizers and inorganicchemicals. Both the categories have been traditionally portrayed as major contributors tothe emission of greenhouse gases contributing to climate change.Industrial Processes include the energy emissions and process emissions from themanufacture of cement, limestone and dolomite calcinations, soda ash manufacture andconsumption, carbon dioxide manufacture and aluminium production. It is evident that thecontribution of this sector to global GHG emissions is considerably high.ACL manufactures inorganic fertilizers including Urea and other Phosphatic fertilizerswhich target the huge agricultural markets in India and other developing countries. Theagricultural sector is significantly vulnerable to the risk of climate change. Agriculturalproduction and yield in countries such as India and other developing countries are largelydependent on climatic patterns and monsoons. Shifts in climatic patterns due to globalwarming, uncertainty in monsoons and water availability, increased storm surges, floods,droughts all attributable to climate change can reduce crop production and thus directlyaffect fertilizer demand. Thus climate change has a potentially negative effect on thefertilizer business of ACL. In addition, climate change regulations such as caps on the5
  • 6. emissions of GHGs or sectoral GHG benchmarking may also significantly affect theorganization’s profitability due to high GHG intensity of this business. The trends ofcontinual increase in fossil fuel prices, government policies on energy efficiency and fuelswitch, minimized ecological impact clearly signify the risk associated to climate changeand justify the development of an effective climate change mitigation strategy to tackle thebarriers portended. Site visit by consultants Kick off Calculation of meeting for idea & of work GHG inventory Submission of Discussion with report plant personnel Finalising GHG mitigation Carbon opportunities footprint report identification Prioritization of GHG abatement measuresFig: - Representation of generic approach followed for the carbon footprint studySpecific methodology was followed during the completion of this assessment study:- A. Identification of the GHG source/ sink/ reservoir B. Defining Organizational and Operational Boundary C. Layout of the data collection approach D. Layout of the Calculation Methodology E. Determination of carbon footprint6
  • 7. Determination of Carbon Layout of Footprint calculation Layout of data methodology Collection Defining Approach organization & Identification of operational GHG boundary Source/Sink/Res ervoir Figure 1 Working Procedure followed during the projectThe study clearly indicated the distinct scope of reducing overall GHG emissions of thebusiness operations of ACL. The scopes of reduction may first be identified on a macroscale or the business unit level. Thereafter the scopes of reduction are diversified on aninstallation wise basis or a product wise basis as may be deemed necessary. ACL shouldexplore the need to reach the goal of carbon neutrality (or net zero GHG emissions). Thisshould be an important strategic agenda for ACL in view of their global presence and futureplan for global expansion across diverse geographies. Greater investor interest, greatercustomer acceptance, improved bottom line are the more obvious benefits of reaching thegoal of carbon neutrality.However, like any other business initiative, each of these GHG abatement strategies whichhave been recommended are subject to regulatory risks and risks of implementationdespite the possible strategic and/or financial attractiveness. ACL needs to perform anholistic evaluation of the GHG abatement levers and align their implementations with thegrowth plan of the organization to ensure the path towards ‘low’ or ‘no’ carbon is treadupon.7
  • 10. INTRODUCTIONThe worlds climate has always varied naturally but compelling evidence from around theworld indicates that a new kind of climate change is now under way, foreshadowing drasticimpacts on economies and ecosystems. Levels of carbon dioxide (CO2) and othergreenhouse gases (GHGs) in the atmosphere have risen steeply during the industrial eradue to unplanned human activities like deforestation or heavy fossil fuel use, driven byunrestrained economic and population growth. Climate change, popularly caused by ‘globalwarming’, is a major concern for today’s international scientific community, policy makersand business leaders all over the world. In the world of business, climate change hasdeveloped from being a fringe concern, focusing on a company’s brand and CorporateSocial Responsibility, to an increasingly central topic for strategic deliberation and decisionmaking by investors and industrialists. At policy levels of visionary business leaders,climate change has increasingly assumed an important political, economic and socio-ecological dimension. This entails a broad international consensus to develop an integratedapproach to tackle the problem. Greenhouse gas accounting describes the way to inventoryand audit greenhouse gas (GHG) emissions. Guidance for accounting for GHG emissionsfrom organizations and emission reduction projects is provided by the World ResourcesInstitute (WRI) and World Business Council for Sustainable Development (WBCSD) GHGProtocol.For national GHG inventories, guidance is provided by the Intergovernmental Panel onClimate Change (IPCC) methodology reports. The International Organization forStandardization (ISO) also provides some general standards for- greenhouse gas emissionsat organization level (ISO 14064 - 1) and greenhouse gas emissions at project level (ISO14064 - 2).Specifications to validate and verify relevant accountings are documented in(ISO 14064 .One of the most important and interesting steps was taken by FIFA during 2006/2010World Cups at Germany & South Africa.10
  • 11. INITIATIVES BY FIFA (FE’DE’RATION INTERNATIONALE de FOOTBALL ASSOCIATION)A major initiative was taken by FIFA was to ensure that the Soccer World Cups hosted inGermany (2006) as well as in South Africa (2010) were environmentally sustainable and itwas ensured that GHG emissions from these two huge events were minimal.A key overarching aim of Host City Cape Town’s Green Goal effort was to ensure that the2010 FIFA World Cup was a low carbon event. This specifically relates to ensuring lowclimate change impact through the reduction of GHG emissions. Where GHG emissionscannot be avoided, they will be mitigated through a range of Green Goal 2010 carbonmitigation projects. Hosting a low-carbon event, and reducing its carbon footprint, can beachieved through integrating energy efficiency, waste reduction and avoidance, and waterconservation with all activities related to the event. The objective of the carbon mitigationprogramme is to compensate for unavoidable GHG emissions, such as activities related totransport (ground and air travel) and accommodation. Such compensation can be achievedthrough the purchase of TRECs, or capital investment in climate protection projects.Around 3.2 million home and foreign visitors attended the 64 World Cup matches. Inaddition, more than 20,000 journalists and some 1,500 FIFA officials followed the matches.The transport of visitors, journalists and honorary guests to the venues, and between thestadiums, as well as the transport of supplies and services to stadiums, also involvesadverse effects on the environment. It was estimated that huge amount GHG emissionwould take place. The reduction of traffic-related effects on the environment was animportant objective of sustainable development in Germany. This concerned the avoidanceof unnecessary traffic, the switching of private transport to (local) public transport systemsand the environmentally efficient development of transport through the further11
  • 12. development of Environmental objectives for the 2006 FIFA World Cup March 2003thetechnical and organizational systems of all means of transport.. The realization of the 2006Football World Cup in Germany with a neutral impact on the climate was thus a general,quantifiable environmental objective where considerable amount of GHG emission werereduced. ENTERPRISE CARBON ACCOUNTING (ECA)Corporate Carbon Footprint aims to be a rapid and cost effective process for businesses tocollect, summarize, and report enterprise and supply chain GHG inventories. ECA leveragesfinancial accounting principles, whilst utilizing a hybrid of input-output LCA (Life CycleAnalysis) and process methodologies as appropriate. The evolution to ECA is necessary toaddress the urgent need for a more comprehensive and scalable approach to carbonaccounting. While an emerging area, a number of new companies offer ECA solutions. ECAis a critical part of broader Enterprise Sustainability Accounting. The Evolution of LCA toECA Process LCA Process LCA is the most popular method, currently, for conducting life-cycle assessment, and is often referred to as the SETAC-EPA method because of the roleplayed by SETAC and EPA in this method’s development. The inputs and outputs ofmultiple stages of a product’s life are investigated in turn, and the results are aggregatedinto single metrics of impact such as eutrophication, toxicity, and greenhouse gasemissions. Three tools exist on the market to assist researchers in conducting process LCA(such as GaBi, Ecoinvent, and Umberto). These tools contain data from previousresearchers on the environmental impact of materials and processes that are then strungtogether by the user to form a system.Greenhouse gas inventories are a type of emission inventory that are developed for avariety of reasons. Scientists use inventories of natural and anthropogenic (human-caused)emissions as tools when developing atmospheric models. Policy makers use inventories todevelop strategies and policies for emissions reductions and to track the progress of thosepolicies. And, regulatory agencies and corporations rely on inventories to establish12
  • 13. compliance records with allowable emission rates. Businesses, the public, and otherinterest groups use inventories to better understand the sources and trends in emissions.Unlike some other air emission inventories, greenhouse gas inventories include not onlyemissions from source categories, but also removals by carbon sinks. These removals aretypically referred to as carbon sequestration.Greenhouse gas inventories typically use Global warming potential (GWP) values tocombine emissions of various greenhouse gases into a single weighted value of emissions.All Annex I countries are required to report annual emissions and sinks of greenhousegases under the United Nations Framework Convention on Climate Change (UNFCCC).National governments that are Parties to the UNFCCC and/or the Kyoto Protocol arerequired to submit annual inventories of all anthropogenic greenhouse gas emissions fromsources and removals from sinks.The Kyoto Protocol includes additional requirements for national inventory systems,inventory reporting, and annual inventory review for determining compliance with Articles5 and 8 of the Protocol. Project developers under the Clean Development Mechanism of theKyoto Protocol prepare inventories as part of their project baselines. Corporation andother entities can prepare greenhouse gas inventories to track progress towards meetingan emission reduction goal.Scientific efforts aimed at understanding detail of total net carbon exchange. Example:Project Vulcan - a comprehensive US inventory of fossil-fuel greenhouse gas emissions. ISO14064The ISO 14064 standards (published in 2006 and early 2007) are the most recentadditions to the ISO 14000 series of International Standards for environmentalmanagement. The ISO 14064 standards provide governments, businesses, regions andother organizations with an integrated set of tools for programs aimed at measuring,quantifying and reducing greenhouse gas emissions. These standards allow organizationstake part in emissions trading schemes using a globally recognized standard.13
  • 14. ECONOMIC INPUT-OUTPUT LCAInput-Output LCA utilizes economic input-output tables and industry-level environmentaldata to construct a database of environmental impacts per dollar sold by an industry. Theboundary problem of process LCA is solved in this method because the economic input-output table captures the interrelations of all economic sectors; however, aggregatedindustrial categories limit the specificity of the results. Input–output analysis is a verypowerful tool for the upfront screening of corporate carbon footprints, for informingstreamlined supply-chain GHG accounting and for setting priorities for more detailedanalyses ENTERPRISE CARBON ACCOUNTING (ECA)At its core, ECA is essentially a hybrid life-cycle assessment; however, rather than thetraditional bottom-up approach of life-cycle assessment, ECA links financial data directly toLCA data to produce a snapshot of the companies’ operations. Rather than probing at areasthought to be problematic, ECA quickly identifies problem areas in the supply chain so thatrapid action can be taken. This fundamental shift in thinking enables decision makers torapidly address critical areas within the enterprise and supply chain. SOCIALISED SUPPLY CHAINSocialised supply chain accounting is the term generally applied to Enterprise CarbonAccounting Solutions that provide a collaborative mechanism for supply chain participantsto engage, expose and determine supply chain emissions through the process of sharedknowledge.The term "Socialised Supply Chain" was coined by the CEO of Nootrol, Mark Kearns todescribe a platform where supply chain participants exposed Process LCA and embeddedemissions. Hence it becomes a very important part of the project activity underconsideration. Moreover socialized supply chain has become very important in modeling ofERP (Enterprise Resource Planning)14
  • 15. CARBON FOOTPRINTThe total set of greenhouse gas (GHG) emissions caused by an organization, event, productor person. Greenhouse gases can be emitted through transport, land clearance, and theproduction and consumption of food, fuels, manufactured goods, materials, wood, roads,buildings, and services. For simplicity of reporting, it is often expressed in terms of theamount of carbon dioxide, or its equivalent of other GHGs, emitted.The concept name of the carbon footprint originates from ecological footprint discussion.The carbon footprint is a subset of the ecological footprint and of the more comprehensiveLife Cycle Assessment (LCA). An individuals, nations, or organizations carbon footprintcan be measured by undertaking a GHG emissions assessment. Once the size of a carbonfootprint is known, a strategy can be devised to reduce it, e.g. by technologicaldevelopments, better process and product management, changed Green Public or PrivateProcurement (GPP), carbon capture, consumption strategies, and others.The mitigation of carbon footprints through the development of alternative projects, suchas solar or wind energy or reforestation, represents one way of reducing a carbon footprintand is often known as Carbon offsetting. The main influences on carbon footprints includepopulation, economic output, and energy and carbon intensity of the economy. Thesefactors are the main targets of individuals and businesses in order to decrease carbonfootprints. Scholars suggest the most effective way to decrease a carbon footprint is toeither decrease the amount of energy needed for production or to decrease the dependenceon carbon emitting fuels. The ISO 14064 standards (published in 2006 and early 2007) arethe most recent additions to the ISO 14000 series of International Standards forenvironmental management. The ISO 14064 standards provide governments, businesses,regions and other organizations with an integrated set of tools for programs aimed atmeasuring, quantifying and reducing greenhouse gas emissions. These standards alloworganizations take part in emissions trading schemes using a globally recognized standard.15
  • 16. ISO 14064ISO 14064-1:2006 specifies principles and requirements at the organization level forquantification and reporting of greenhouse gas (GHG) emissions and removals. It includesrequirements for the design, development, management, reporting and verification of anorganizations GHG inventory.ISO 14064-2:2006 specifies principles and requirements and provides guidance at theproject level for quantification, monitoring and reporting of activities intended to causegreenhouse gas (GHG) emission reductions or removal enhancements. It includesrequirements for planning a GHG project, identifying and selecting GHG sources, sinks andreservoirs relevant to the project and baseline scenario, monitoring, quantifying,documenting and reporting GHG project performance and managing data quality.ISO 14064-3:2006 specifies principles and requirements and provides guidance for thoseconducting or managing the validation and/or verification of greenhouse gas (GHG)assertions.It can be applied to organizational or GHG project quantification, including GHGquantification, monitoring and reporting carried out in accordance with ISO 14064-1 or ISO14064-2. ISO 14064-3:2006 specifies requirements for selecting GHG validators/verifiers,establishing the level of assurance, objectives, criteria and scope, determining thevalidation/verification approach, assessing GHG data, information, information systemsand controls, evaluating GHG assertions and preparing validation/verification statements.The scope of this study extends over qualitative assessment of the climate change impactson the chemicals and fertilizer industry sectors, estimating the carbon footprint ofAQUASUB CHEMICALS LIMITED, for a selected base year and outlining strategy for GHGabatement for the broad categories of manufacture and production of fertilizers andinorganic chemicals. Both the categories have been traditionally portrayed as majorcontributors to the emission of greenhouse gases contributing to climate change.16
  • 17. Fig1:- Exhibit showing contribution of GHG from 1978-2010Industrial Processes include the energy emissions and process emissions from themanufacture of cement, limestone and dolomite calcinations, soda ash manufacture andconsumption, carbon dioxide manufacture and aluminium production. It is evident that thecontribution of this sector to global GHG emissions is considerably high at nearly 17%second largest contributor after power plants.Contribution of carbon dioxide gas from the sector is alarmingly high at close to 20.6%contribution1. Other greenhouse gases such as methane and nitrous oxides which areusually released as process gases from chemical and fertilizer industries account minorquantities toward global warming effect. Impact of Climate Change on the fertilizer andchemical manufacturing business AQUASUB CHEMICALS LIMITED manufactures inorganicfertilizers including Urea and other Phosphatic fertilizers which target the hugeagricultural markets in India and other developing countries. The agricultural sector issignificantly vulnerable to the risk of climate change. Agricultural production and yield incountries such as India and other developing countries are largely dependent on climaticpatterns and monsoons.17
  • 18. Shifts in climatic patterns due to global warming, uncertainty in monsoons and wateravailability, increased storm surges, floods, droughts all attributable to climate change canreduce crop production and thus directly affect fertilizer demand. Thus climate change hasa potentially negative effect on the fertilizer business of AQUASUB CHEMICALS LIMITED. Inaddition, climate change regulations such as caps on the emissions of GHGs or sectoral GHGbenchmarking may also significantly affect the organization’s profitability due to high GHGintensity of this business.The trends of continual increase in fossil fuel prices, government policies on energyefficiency and fuel switch, minimized ecological impact clearly signify the risk associated toclimate change and justify the development of an effective climate change mitigationstrategy to tackle the barriers portended.Policy and Regulatory Environment Much of the current policy focus in relation to theIndian fertilizer and chemicals sectors is on the nature and impact of on-going fuel pricing,subsidization reforms and energy efficiency improvement in the production processes.Some relevant policies like Integrated Energy Policy, Electricity Act 2003, Natural GasUtilization Policy, and National Action Plan on Climate Change. However, like any otherbusiness initiative, each of these GHG abatement levers are subject to regulatory risks andrisks of implementation despite the possible strategic and/or financial attractiveness. ACLneeds to perform an holistic evaluation of the GHG abatement levers and align theirimplementations with the growth plan of the organization to ensure the path towards ‘low’or ‘no’ carbon is tread upon.Hence TQMS through the exercise of the assessment of the carbon footprint exercise wantsto play an active role of contributing towards an effective global strategy to combat climatechange by working in cohesion with local and international corporate bodies and theGovernments in creating the right policy, financial, regulatory, social and technologicalenvironment to inventorize the Green House Gas emissions, to formulate a low carbongrowth trajectory and to adapt to the negative impacts of climate change.18
  • 19. Policies associated with GHG Accounting can be identified as follows:- 1. Electricity Act 2003 2. Energy Policy 3. Natural Gas Policy 4. National Action Plan For Climate Change CARBON FOOTPRINT ESTIMATION AND DEVELOPMENT OF GHG STRATEGYIn this context it becomes all the more crucial for an entity like AQUASUB CHEMICALSLIMITED having mainstream interest in the production and manufacture of chemicals andfertilizer industry to orient its growth and sustenance strategies in line with low carbonimpact. AQUASUB CHEMICALS is one of the companies which have identified the need foraccounting its carbon footprint of its business operations which will help in understandingthe current state of its GHG liability. The report may be used by AQUASUB CHEMICALSLIMITED to understand the size of their overall GHG inventory, the anticipated GHG risksfor the future and develop the future strategy for potential GHG mitigation which wouldhelp the organization to reduce its carbon footprint in a progressive fashion over a periodof time.Taking the lead in climate change mitigation activities will help the company to reduce itsGHG liability in the most economically efficient fashion and therefore gain significantcompetitive advantage. By undertaking early actions large corporations can preparethemselves well in advance to face climate regulations, enhance their corporate image totheir global stakeholders, increase valuation of the company and secure access to capitaland finally discover the financial gain from the unrealized assets in a trading environment.The methodology for the assessment study consisted of specific steps which wereincorporated in consultation with top management of ACL.19
  • 20. The study had classified the operations of AQUASUB CHEMICALS LIMITED into two broadStrategic Business Units (SBUs) namely Fertilizers and Chemicals. The Fertilizer SBUconsisted of a product mix including Urea and Phosphatic Fertilizers. The Chemicals SBUunit consisted of a product mix including mainly Soda Ash, Cement etc. GHG emissions ofAQUASUB CHEMICALS LIMITED included the emissions from the production of allinorganic chemicals and fertilizers by the individual production centers all over India andabroad.Now let’s get an idea about Green House Gas protocol:-The Greenhouse Gas Protocol (GHG Protocol) is the most widely used internationalaccounting tool for government and business leaders to understand, quantify, and managegreenhouse gas emissions. The GHG Protocol, a decade-long partnership between theWorld Resources Institute and the World Business Council for Sustainable Development, isworking with businesses, governments, and environmental groups around the world tobuild a new generation of credible and effective programs for tackling climate change. Itprovides the accounting framework for nearly every GHG standard and program in theworld - from the International Standards Organization to The Climate Registry - as well ashundreds of GHG inventories prepared by individual companies.The GHG Protocol also offers developing countries an internationally acceptedmanagement tool to help their businesses to compete in the global marketplace and theirgovernments to make informed decisions about climate change.In 2006, the International Organization for Standardization (ISO) adopted the CorporateStandard as the basis for its ISO 14064-I: Specification with Guidance at the OrganizationLevel for Quantification and Reporting of Greenhouse Gas Emissions and Removals. Thismilestone highlighted the role of the GHG Protocol’s Corporate Standard as theinternational standard for corporate and organizational GHG accounting and reporting.ISO, WBCSD, and WRI signed a Memorandum of Understanding on December 3, 2007 tojointly promote both global standards.20
  • 21. ESTABLISHING BASELINE PROTECTIONThe past decade has been a time of great uncertainty for businesses seeking to incorporateGHG issues into their corporate strategies. The international mechanism establishingbinding limits on GHG emissions – the Kyoto Protocol – entered into force in 2005, morethan seven years after it was negotiated, and its emission caps are set to expire in 2012. Inthe United States, a patchwork of state and regional regulation has evolved in the absenceof a coordinated national GHG mitigation policy. The future of international climate changepolicy post-2012 is unclear, and much of the world is not currently subject to GHGregulation. As a result, many companies find themselves in an uncertain situation in whichthey must make long-term investment decisions without knowing what GHG restrictionsthey may face in the future.In response, some GHG programs, such as the California Climate Action Registry, havesought to establish and “protect” their participants’ baseline emissions. This refers todeveloping and certifying inventories of participants’ GHG emissions and ensuring, insofaras is possible, that any future regulatory programs take into account participants’ pre-regulatory, voluntary efforts to reduce their emissions.The concept of baseline protection has been recognized in legislation introduced before theU.S. Congress, which has proposed considering “early action” in companies’ allocations ofGHG allowances, and has cited a range of GHG registries and reporting programs asexamples of what could contribute to proof of early action. A program design thatincorporates stringent quality assurance measures may strengthen participants’ claim tocredit for early action. When doing a baseline analysis, it is most effective to break outenergy usage by “end-use,” rather than only by sector. For example, if a city can determinehow much energy is used to provide lighting, refrigeration, cooking, electric motor power,etc. the resulting data are much more useful than if broken out by sector -- residential,commercial and/or industrial. Evaluating end-use information will better prepare cities toidentify which programs will have the most impact on their GHG emission reductions21
  • 22. PROVIDING INFORMATION TO STAKEHOLDERSFinally, GHG program aims to provide information on corporate GHG emissions to externalstakeholders – such as investors (through programs such as the Carbon DisclosureProject1), environmental groups, and researchers – on which to base decisions related toinvestments, risk assessment, and policy and advocacy positions.Designers of such programs should consider the most useful level of disaggregation of GHGinformation to satisfy the targeted stakeholder groups. They should also ensure that theiraccounting and calculation methodologies are sufficiently transparent and consistent andthat participants are able to provide additional context to their reported emissioninformation.The strategy will provide the first formal stakeholder consultation of the project on theroad to developing such partnerships and will provide the context for defining theframeworks of how such a national programme could be developed. The strategy willprovide a background of the internationally accepted GHGP tools and guidelines, includingthe newly introduced/developed Scope 3 and life cycle analysis tools. By engaging with theleading members of the Indian business community, the event will attempt to answer thefollowing broad questions. 1. What are the benefits of GHG accounting and inventorization? 2. Are the corporates aware of and are using the GHGP tools that exist or are being developed internationally? 3. What are the experiences of corporates who have attempted to develop GHG inventories in India and what are the challenges to GHG accounting and inventorization? 4. What kind of support would be needed to improve GHG accounting? Is there a need for a capacity building and awareness generation programme at the state/sector level?22
  • 23. OBJECTIVES & TARGETSThe objective of the Project titled: - “DEVELOPMENT OF GHG STRATEGY IN A CHEMICALINDUSTRY” is primarily to reduce the Green House Gas emission to also to mitigate theharmful effects of Climate Change. During the course of the dissertation one live projectwas witnessed, where all the objectives were met. 1. To recommend GHG abatement strategies for mitigation of GHG emissions 2. To show the vulnerable areas in chemical industries and effects of climate change in chemical industry. 3. To analyze and quantify the GHG emissions 4. To understand the policies that are being used to formulate the GHG Strategy 5. To show the GHG abatement strategy contributes towards Sustainable Development. 6. To identify the benefits and Business goals for Carbon footprint estimation 7. To identify the scope of GHG emission to be included for GHG Accounting.23
  • 24. REVIEW OF LITERATURECéline Kauffmann and Cristina Tébar Less in their paper titled “TRANSITION TO A LOW-CARBON ECONOMY: PUBLIC GOALS AND CORPORATE PRACTICES” (30th June -1st July 2010)were of the opinion that policy frameworks, regulations and other drivers of corporateaction in support of a low-carbon economy and documents business practices inaddressing climate change, building on principles of responsible business conduct asidentified in the Guidelines for Multinational Enterprises. It is structured around threebroad areas of corporate action: accounting for greenhouse gas (GHG) emissions;achieving reduction of GHG emissions; reaching out to suppliers, consumers and otherstakeholders.The post 2012 international climate change architecture is still under discussion.However, in the framework of the Copenhagen Accord, many governments have publicallypledged significant economy-wide GHG emission reductions and have started putting inplace policies to achieve emission reductions. Measures taken by governments to reachemission targets vary in type (regulatory measures, taxes, emissions trading markets),scope (sectors covered, types of emissions), and stringency. In particular, as this reportshows, policy measures directly aimed at framing corporate disclosure of GHG emissions,emission reductions and the interface with consumers follow different approaches and areat various stages of development in major OECD countries. Outside of the OECD theyremain largely non-existent.A number of companies have realized the risks of inaction and have put climate changestrategies in place in spite of diverse and incomplete regulatory frameworks. Frontrunnershave started taking action as early as 1990, many in the early 2000s. Since 2005, with thecoming on stream of the European Union Emissions Trading Scheme and increasedattention of policy makers to climate change, mainstreaming of emission reduction inbusiness operations has become more widespread among companies. In particular,evidence collected in support of this work through various sources, including a new survey24
  • 25. by OECD to companies, shows that an increasing number of companies is accounting GHGemissions, establishing corporate plans to address climate change and looking beyond thecompany’s boundaries to contribute to a low-carbon economy.In addition to complying with current regulation and anticipating future policydevelopments, companies have various other motivations to reduce GHG emissions.Drivers include cutting energy costs, reducing dependence on fossil fuels and seizing newbusiness opportunities. Companies are also increasingly responsive to societalexpectations in relation to climate change. If direct pressure from investors, consumers andemployees does not appear to be a major driver, companies are mindful of preserving orimproving their reputation. Companies are also aware of the importance of contributing toshaping the policy debate at international, national and regional levels.Accounting GHG emissions is an essential step for companies to assess climate change-related risks and understand their impacts on climate. The reporting of this informationcan help policy makers in developing targeted climate change policies and monitoringprogress across industries. For consumers, commercial partners and financial institutions,this information provides a basis to understand the company’s carbon footprint and itsperformance in managing climate-change risks.According to Christian Van Stolk, Myles Collins, Mengjie Wu, Abigail Brown in their reporttitled “ACCOUNTING FOR SUSTAINABILITY PART III”(November 2006) pointed out somethemes on the approaches and initiatives taken by actors in specific countries based on theexamples identified. However, this report does not aim to give a comprehensive overviewof global accounting for sustainability initiatives and programmes, nor provide anexhaustive overview of initiatives and measures taken in the countries selected. Theaccounting for sustainability field is emergent and multidisciplinary, with differentperspectives, frameworks, and approaches. This report offers a flavour of some of theseglobal approaches with a focus on their implementation and impact. Specifically, the reportshows examples of initiatives that aim to internalize the external costs of economic activityand how initiatives aim to change the behavior of decision-makers and consumers.25
  • 26. For Tata Steel, Asia’s first and India’s largest integrated private sector steel company,reducing its Green House Gas (GHG) emissions through energy efficiency is a key elementof its primary business goal: the acceptability of its product in international markets. Eachyear, in pursuit of this goal, the company launches several energy efficiency projects andintroduces less-GHG-intensive processes. The company is also actively pursuing GHGtrading markets as a means of further improving its GHG performance.To succeed in these efforts and be eligible for emerging trading schemes, Tata Steel musthave an accurate GHG inventory that includes all processes and activities, allows formeaningful benchmarking, measures improvements, and promotes credible reporting. TataSteel has developed the capacity to measure its progress in reducing GHG emissions. TataSteel’s managers have access to on-line information on energy usage, material usage, wasteand by-product generation. Using this data and the GHG Protocol calculation tools, TataSteel generates two key long-term, strategic performance indicators: specific energyconsumption (Giga calorie / tonne of crude steel) and GHG. Since the company adopted theGHG Protocol Corporate Standard, tracking performance has become more structured andstreamlined. This system allows Tata Steel quick and easy access to its GHG inventory andhelps the company maximize process and material flow efficiencies.According to CLIMATE MODELLING FORUM , A report published by MINISTRY OFENVIRONMENT & FOREST (MoEF), GOVERNMENT OF INDIA (September 2009) , Theinternational debate on climate change is influenced to a significant extent by studies thatestimate the GHG emissions trajectories of the major economies of the world. These studiesare based on detailed energy-economy models that project global and region or country-wise GHG emissions. Until recently, most of these studies have been carried out indeveloped countries, and have often applied assumptions and techniques that do notnecessarily reflect the ground realities in developing countries.With a view to develop a fact-based perspective on climate change in India that clearlyreflects the realities of its economic growth, the policy and regulatory structures, and thevulnerabilities of climate change, the Government of India, through the Ministry of26
  • 27. Environment & Forests, has supported a set of independent studies by leading economicinstitutions. This initiative is aimed at better reflecting the policy and regulatory structurein India, and its specific climate change vulnerabilities. The studies, which use distinctmethodologies, are based on the development of energy-economic and impact models thatenable an integrated assessment of India’s GHG emissions profile, mitigation options andcosts, as well as the economic and food security implications. Mitigation of GHG emissionswill, beyond a fairly modest level, involve appreciable economic costs to a society. On theother hand, the adverse impacts of climate change would be felt in diverse sectors whichare at the core of livelihood concerns, especially of the poor – agriculture, water resources,coastal resources, vector borne disease, “natural” calamities, etc.According to the report published by THE ENERGY RESOURCE INSTITUTE (TERI), titled“CLIMATE CHANGE MITIGATION MEASURES IN INDIA” (2008) India is the world’s fourthlargest economy and fifth largest greenhouse gas (GHG) emitter, accounting for about 5%of global emissions. India’s emissions increased 65% between 1990 and 2005 and areprojected to grow another 70% by 2020. By other measures, India’s emissions are lowcompared to those of other major economies. India accounts for only 2% of cumulativeenergy-related emissions since 1850.On a per capita basis, India’s emissions are 70% below the world average and 93% belowthose of the United States. India remains home to the world’s largest number of poorpeople, with nearly 35% living on less than a dollar a day. Its economy is growing rapidly,however, with GDP rising about 8% a year over the past five years. As the economy hasgrown, emissions intensity (GHGs per unit of GDP) has declined significantly. India’s GHGintensity is currently 20% lower than the world average (and 15% and 40% lower than theUnited States ’and China’s, respectively). Factors contributing to the decline in energyintensity include improved energy efficiency, increased use of renewable and nuclearpower, expanded public transport, and energy pricing reform.With rapid economic growth, rising income, and greater availability of goods and services,energy demand rose 68% between 1990 and 2009, about 3.5% annually.3 The government27
  • 28. projects energy demand growth of 5.2% a year for the next 25 years, driven by annual GDPgrowth rates of 8-10%. Coal accounts for 39% of total primary energy demand, followed bybiomass and waste (29%), oil (25%) and natural gas (5%). The high proportion of biomassand waste reflects the fact that some 500 million people have no access to electricity orother modern energy services. Coal is projected to remain the primary energy source, withdemand growing nearly three-fold by 2030.As in many other countries, India has a number of policies that, while not driven by climateconcerns, contribute to climate mitigation by reducing or avoiding GHG emissions. (Specificestimates of the emission impacts of the policies described below are in most cases notavailable. However, a recent analysis by The Energy and Resources Institute (TERI)concluded that in the absence of a number of energy policies that are currently beingimplemented, CO2 emissions would be nearly 20% higher compared to business as usualscenarios in both 2021 and 2031.).Many of these policies are contained in the Five Year Plans developed by the PlanningCommission to guide economic policy in India (the 11th Five Year Plan covers 2007-2012).9 Other policies are found in the Integrated Energy Policy approved by the PlanningCommission in 2006 with the broad objective of meeting energy demand “at the least costin a technically efficient, economically viable and environmentally sustainable manner.” InJune 2008, Prime Minister Singh released India’s first National Action Plan on ClimateChange outlining existing and future policies and programs addressing climate mitigationand adaptation. The plan identifies eight core “national missions” running through 2017and directs ministries to submit detailed implementation plans to the Prime Minister’sCouncil on Climate Change by December 2008.As per working paper titled “INCENTIVE-BASED APPROACHES FOR MITIGATINGGREENHOUSE GAS EMISSIONS” by Shreekant Gupta (October 2002), As a consequence ofthe flexibility mechanisms incorporated in the Kyoto Protocol, incentive-based policiessuch as emissions trading and the clean development mechanism are being widelydiscussed in the context of greenhouse gas (GHG) abatement. This paper examines various28
  • 29. issues related to incentive-based approaches for India. Some of the specific questions itaddresses are: does India stand to gain or lose if emission trading is realized even if itremains outside such an arrangement? Are there any other incentive-based approaches,e.g., carbon taxes that India could adopt? In the ultimate analysis, however, market-basedinstruments (MBIs) for GHG abatement in India cannot be viewed in isolation from anoverall incentive-based orientation towards environmental policy as well as broadereconomic and legal reform that creates a suitable milieu for MBIs. Therefore, the papergoes on to examine problems of implementing MBIs in general, particularly those related tomonitoring of emissions and of enforcement. Several specific solutions are also proposed.MBIs can be broadly classified in two groups: price-based instruments and quantity-basedinstruments. While all of these instruments can be used to address a wide range ofenvironmental problems, they are discussed below primarily in terms of their applicationto greenhouse gas (GHG) abatement. Within the first group, one can further differentiatebetween direct and indirect price-based instruments. The former induce generators ofpollution to reduce pollution by charging for the use environmental resources, e.g., air andwater. Indirect price-based instruments on the other hand, increase (decrease) the pricesof outputs and inputs that are complementary (substitutes) to the polluting activity. Forexample, a tax on petrol (or a subsidy to mass transit) is an indirect price-based instrumentto address industrial air pollution.According to the paper titled “IMPLICATIONS OF CO2 CAPTURE & STORAGE FOR GHGINVENTORIES & ACCOUNTING” by William Kojo Agyemang-Bonsu (Ghana), A.M. Al-Ibrahim(Saudi Arabia), Carlos Lopez (Cuba), Gregg Marland (United States), Huang Shenchu(China), Oleg Tailakov (Russian Federation), the IPCC Guidelines and Good PracticeGuidance reports (GPG2000 and GPG-LULUCF) are used in preparing national inventoriesunder the UNFCCC.These guidelines do not specifically address CO2 capture and storage, but the generalframework and concepts could be applied for this purpose. The IPCC guidelines give29
  • 30. guidance for reporting on annual emissions by gas and by sector. The amount of CO2captured and stored can be measured, and could be reflected in the relevant sectors andcategories producing the emissions, or in new categories created specifically for CO2capture, transportation and storage in the reporting framework. In the first option, CCSwould be treated as a mitigation measure and, for example, power plants with CO2 captureor use of decarbonized fuels would have lower emissions factors (kgCO2/kg fuel used) thanconventional systems. In the second option, the captured and stored amounts would bereported as removals (sinks) for CO2. In both options, emissions from fossil fuel use due tothe additional energy requirements in the capture, transportation and injection processeswould be covered by current methodologies.Methodologies to estimate monitor and report physical leakage from storage optionswould need to be developed. Some additional guidance specific to the systems would needto be given for fugitive emissions from capture, transportation and injection processes.Conceptually, a similar scheme could be used for mineral carbonation and industrial use ofCO2. However, detailed methodologies would need to be developed for the specificprocesses. Quantified commitments, emission trading or other similar mechanisms needclear rules and methodologies for accounting for emissions and removals. There areseveral challenges for the accounting frameworks.Firstly, there is a lack of knowledge about the rate of physical leakage from differentstorage options including possibilities for accidental releases over a very long time period(issues of permanence and liability). Secondly, there are the implications of the additionalenergy requirements of the options; and the issues of liability and economic leakage whereCO2 capture and storage crosses the traditional accounting boundaries.Information on pollutant emissions is usually compiled in ‘emission inventories’. Emissionsare listed according to categories such as pollutants, sectors, and source and compiled pergeographic area and time interval. Many different emission inventories have been preparedfor different purposes.30
  • 31. RESEARCH METHODOLOGYThe methodology for carbon footprint assessment has been undertaken from essentialcomponents from WBCSD GHG Protocol and ISO 14064 Guidelines. Six essential broadsteps have been identified to arrive at the carbon footprint and ultimately the carbon assetsand liabilities of ACL. 1: Identification of GHG source, sink/ reservoir A. Greenhouse Gas (GHG) – Six gases are identified as carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), Hydroflourocarbons (HFCs), Perflourocarbons (PFCs) and sulphur hexafluoride (SF6). B. GHG source- Physical unit or process which releases a GHG into the atmosphere and categorized as scope 1, 2 or 3 emission source. C. GHG sink- Physical unit or process that absorbs a GHG from the atmosphere. Thus process and units in ACL which are the potential GHG source and sink were identified. 2: Defining Organizational & Operational BoundaryBusiness operations vary in their legal and organizational structures. In settingorganizational boundaries, a company selects an approach for consolidating GHG emissionsand then consistently applies the selected approach to define those businesses andoperations that constitute the company for the purpose of accounting and reporting GHGemissions. Setting up Organizational boundary: For corporate reporting, two distinctapproaches are used to consolidate GHG emissions. They are Equity Share Approach &Control Approach which has been defined below.31
  • 32. A. Equity share approach: A company accounts for GHG emissions from operations according to its share of equity in the operation. The equity share reflects economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation. B. Control approach: A company accounts for 100% of the GHG emissions from operations over which it has control. It does not account for GHG emissions from operations in which it owns an interest but has no control. Now here control can be defined in two ways: A. Financial Control: A company has financial control over the operation if it has the ability to direct the financial and operating policies with a view to gaining economic benefits from its activities. Financial control usually exists if the company has the right to the majority of benefits of the operation, however these rights are conveyed. A company is also considered to financially control an operation if it retains the majority risks and rewards of ownership of the operation’s assets. B. Operational Control: A company has operational control over an operation if it or one of its subsidiaries has full authority to introduce and implement its operating policies at the operation. Usually if the company or its subsidiaries is the operator of a facility, it will have full authority to introduce and implement its operating policies.Determination of Operational Boundary for the purpose of Carbon Footprint Estimation:After determination of organizational boundaries, the organization shall establish itsoperational boundaries. The establishment of operational boundaries includes identifyingGHG emissions and removals associated with the organization’s operations, categorizingGHG emissions and removals into direct, energy indirect and other indirect and choosing32
  • 33. which of the other indirect emissions will be quantified monitored and reported. It wouldbe implemented by: A. Site visit to the different units of ACL B. Identification & simplification of boundary into components for identifying GHG emission sources (direct & indirect). C. Study and analysis of each identified component such as Equipment’s, Energy consumption & Materials consumed in the process D. Quantification of the energy consumed during the whole operation procedure 3: Data Collection Approach A. Collection and assimilation of data on the energy consumption of each component (preferably equipment-wise) of the plant- past 1 year. B. Collection and assimilation of data on the material flow in each section (preferably equipment-wise) of the plant- past 1 year. 4: Layout of Calculation Methodology A. Calculation of GHG emissions within each identified component of the unit based on collected data (equipment wise) B. Mass and Energy balance for entire process C. Estimation of specific energy and mass consumption for each sub process33
  • 34. D. Estimation of emission factor for the process. E. Estimation of total GHG emission. F. Guidelines for monitoring GHG emission and development of strategy. G. Guidance for setting up of GHG manual, GHG reduction target as per WBCSD protocol/ ISO14064. 5. Determination of Carbon FootprintThis step consists of identification of areas of high emissions and suggestions for energyconsumption reduction in the same.ACL is a major chemical producing company and hence a major GHG emitter. The annualGHG emissions of ACL stand at around 2.44 million tCO2 per annum due to consumption offossil fuel and electricity. The main drivers for ACL for carbon footprint estimation were: A. Carbon footprint will identify the energy intensive processes, equipments and operations. Improvements in these processes, equipments and operations will lead to lower energy and raw material consumption and hence increased level of understanding of better cost cutting and revenue enhancement opportunities across the organizations value chain. B. This is especially true for energy intensive processes of soda ash, cement and fertilizer manufacturing and power plant operations. Proper implementation of energy efficiency/ GHG abatement measures to further upgrade processes and equipments will generate cost savings from improved operational efficiencies and reduced consumption.34
  • 35. C. There is opportunity to understand the current position in lieu of anticipated emissions trading and GHG emissions regulations and reporting requirements, e.g. Carbon Disclosure Project and Carbon Tax impositions thereby managing the climate change risk effectively. D. Better and effective management of stakeholder expectations can be done (e.g., meet expectations of customers, shareholders and financial institutions). A green image of ACL will help in strengthening investor relationship. E. Fortification of the reputation and brand image of ACL. F. Improvement of the market positioning of ACL in terms of sustainability, brand, products and services. In fact many institutional customers are more inclined to purchase goods which are environment friendly. OPERATION DATA WAY INTRODUCTION BOUNDARY ANALYSIS COLLECTION FORWARD SET UP Figure: - The brief methodology that was followedHere maximum priority was given to operational boundary set up since the industry underconsideration was chemical industry and prioritizing the potential area was of maximumimportance. Data collection was taken as 3rd major priority since the analysis was based ondata collection and analysis had to be inclined towards estimation of carbon footprint ofAQUASUB CHEMICALS LIMITED.35
  • 36. CASE STUDY: - GHG ACCOUNTING/CARBON FOOTPRINTESTIMATION OF AQUASUB CHEMICALS LIMITED, HALDIA,WEST BENGAL.BRIEF INTRODUCTION ABOUT THE ORGANISATION:-The Aquasub Chemical Limited, also known as ACL, is the country’s largest producer ofinorganic chemicals. Over the last two years, the company has witnessed severalacquisitions and mergers which have catapulted it to become the world’s second largestSoda-ash manufacturing company with a unique diverse portfolio of value creating assetsand brands. The company is the only soda-ash manufacturer to have a strong-hold in 4continents. Although the mainstay of ACL is production of soda-ash, ACL also specializes inthe production of other inorganic chemicals such as sodium bicarbonate, nitrogenous andphosphate fertilizers, sodium tri-poly phosphate, cement and packaged salt. Some of themajor achievements of ACL over the last year are. The chemicals’ business of ACL achievedthe highest sales ever, reflecting a growth of 4.42% as compared to the previous year. ACLis the Indian market leader in edible salts and soda ash. The company acquired one of themajor soda-ash players in USA, General Chemical Industrial Products (GCIP), whichcatapulted it to the position of the third largest soda-ash producer in the world along withopening of new avenues for the group. ACL is the most energy efficient urea manufacturerin India. The two main strategic business units (SBUs) of ACL include chemicals andfertilizers. Fertilizers are manufactured in India while the company has chemicalmanufacturing plants spread all over the globe.BRIEF DESCRIPTION ABOUT THE ACL HALDIA PLANT:-The Haldia plant is primarily involved in the manufacturing of fertilizers and chemicals.The integrated manufacturing produces various chemicals such as sulphuric acid,phosphoric acid and phosphatic fertilizers which include sodium tri-poly phosphate(STPP), di-ammonium phosphate (DAP), Nitrogen-Phosphorus-Potassium (NPK)complexes and single super phosphate (SSP) fertilizer. The plant is the largest producer of36
  • 37. STPP, a building component of detergents in India. The product mix and technology usedfor manufacture of each product is as below: A. Sulphuric Acid by Double Conversion Double Absorption Process B. Phosphoric acid by Dihydrate Process C. STPP by Wet process from soda ash D. Single super phosphate by Total H2SiF6 recycles process E. DAP/ NPK complexes F. Linear Alkyl benzene sulphonic acid (LABSA)ACL has a global visibility with various acquisitions and subsidiaries located across theglobe. One of them is Brunner Monde Group (U.K).Brunner Monde Lostock & Winnington (U.K)Brunner Monde is the only U.K. Producer of sodium carbonate (soda ash) and sodiumbicarbonate. It has soda ash plants at Lostock (Greater Manchester) and Winnington (NorthLondon). The Winnington Plant is one of the most efficient power plants in Europe with acombined thermal and electrical efficiency of 85% resulting in total CO2 emissionreduction from 900000 tonnes/year to 750000 tonnes/year. The power and steam to boththese plants are supplied by the combined heat and power (CHP) plant in Northwich,Cheshire, London, is one of the largest such schemes in the UK. The CHP plant is owned andoperated by POWERGEN (now EON) is capable of supplying approximately 500 tonnes ofsteam every hour and generating 130MW of electricity. Brunner Monde consumes only 25MW of the generated 120 MW and the remainder is exported to National Grid.Brunner Monde Delfzijl Plant (NETHERLANDS)The Delfzijl unit in North-east of Amsterdam Netherlands, has a capacity of 50,000tonnes/year of sodium bicarbonate. The plant became operational in June 2008 and servesthe pharmaceuticals and food industries. The plant uses surplus carbon dioxide from thesoda ash plant as one of its raw materials – which improves the air quality, as well asenhances the efficiency of the whole manufacturing complex.37
  • 38. General Chemical Industrial Products (USA)General Chemical Industrial Products (GCIP) is one of the top five global producers of sodaash. GCIP was acquired by Aquasub Chemicals in January 2008, making the company thesecond largest soda ash producer in the world. GCIP mines the Green River basin inWyoming, USA, for naturally occurring deposits of trona (an ore containing soda ash). Thesite is estimated to contain 134 billion tonnes of trona, enough to meet global soda ashdemand for hundreds of years at current levels of consumption. GCIP produces naturalsoda ash, which requires much less energy, capital and raw materials than synthetic sodaash production. Relevant Standards for Carbon Footprint Assessment DESCIPTION GHG PROTOCOL INITIATIVE ISO 14064 Developed for businesses through Consists of a set of unambiguous an inclusive and transparent and verifiable requirements or multi stakeholder process specifications to support comprising of 350+ stakeholders organizations and proponents of Salient Features (incl. Businesses, NGOs, GHG emission reduction projects. governments and Inter Aims to achieve clarity and Government organizations. consistency between those reporting GHG emissions and stakeholders. Types of Standards Accounting and Reporting ISO 14064-1:2006, Standard (Guide for companies to Greenhouse gases – use in quantifying and reporting Part 1, specifies requirements for their GHG emissions) GHG designing and developing Protocol Project Quantification organization or entity-level Standard (Guide for quantifying GHG inventories. reductions from GHG mitigation Part 2, details requirements for projects) quantifying, monitoring and reporting emission reductions and removal enhancements from GHG projects. Part 3, Guidance for conducting of validation & verification.38
  • 39. BASE YEAR SELECTION:-The process of planned abatement of GHG emissions starts off with identification of sourcesand quantification of the emissions which can also be termed as inventorization. The GHGinventory process is an exhaustive and comprehensive analysis of the existing activitiesinvolved and their respective climate change implications (or GHG emissions). Companiesmay need to track emissions over time as a requirement of a variety of business goals, suchas public reporting, establishing GHG targets, managing risks and opportunities andaddressing the needs of investors and other stakeholders. The preliminary use of the GHGinventory is towards arriving at futuristic abatement, mitigation and managementstrategies. A meaningful and consistent comparison of emissions over time requires thatcompanies set a performance datum with which to compare current emissions. This datumis the base year. For consistent tracking of emissions over time, the base year emissionsmay need to be recalculated as companies undergo significant structural changes such asacquisitions, divestments, and mergers.The selection of an appropriate base year is attributed to the availability of verifiable GHGemissions and/or removals data for that year. The base year may either be a single yeardata or a multi-year average or rolling average data. However, once a base year is selected,the same should be documented with reasons responsible for its selection.VALIDITY OF BASE YEAR & RECALCULATION:-The documentation of the base year selection process should also include the detailedprocedure to be followed by the company to allow the base year GHG inventory to remainvalid as a comparative tool. The base year inventory shall be recalculated if significantchanges occur to base year GHG emissions or removals as a result of changes to operationalboundaries, ownership and control of GHG sources/sinks transfers into/out oforganizational boundaries and changes to GHG quantification methodologies will result insignificant changes to GHG emissions or removals. However the base year GHG inventoryshall not be recalculated to account for changes in facility production levels.39
  • 40. DATA COLLECTION & PROCESSING METHODOLOGY:-Data collection forms the corner-stone of GHG inventory process. In order to reportcorporations total GHG emissions, the companies would be required to gather and collatedata from multiple sources. The data collection procedure should be enshrined with thefive fundamental principles of GHG accounting and reporting which are: A. Relevance B. Completeness C. Consistency D. Transparency E. AccuracyFollowing the process of setting up of the organizational and operational boundaries andfurther identifying the scope of emissions, the data collection procedure begins. The datacollection approach may either be a centralized or a decentralized approach. Thecentralized approach demands that the individual facilities report activity/fuel use data tothe corporate (central level) wherein emissions are calculated, whereas the decentralizedapproach as the name suggests involves individual organizations to directly calculate theiremissions using approved methods and reporting the same to the central authority. Inorder to maximize accuracy and minimize reporting burdens a combination of the twoapproaches can also be selected. The collection of authentic data is one of the keyconstraints in developing the GHG inventory. To ascertain the quality of data the followingdata collection tools may be used: A. Secure databases available over company intranet or internet, for direct entry by facilities. B. Spreadsheet templates filled/ mailed to the corporate office where data is further processed C. Paper reporting format40
  • 41. For arriving at the GHG emission inventory for ACL using a decentralized approach, thedata collection has been done using spreadsheets. A preliminary understanding of theprocess flow diagrams has been used to develop customized data collection templates fromthe plant facilities.CALCULATION AND ANALYSIS OF CARBON FOOTPRINT OF ACL:-The procedure followed for Carbon Footprint Estimation exercise has been adopted toensure maximum possible completeness transparency and conservativeness in terms ofidentifying the sources of GHG emissions as well as the data collection and analysisprocedures. Assumptions in the calculations The relevant assumptions in the estimation of Carbon Footprint of ACL are as follows: A. The study considers IPCC 2006 default values of emission factors and net calorific values of fossil fuels in absence of locally measured or country specific values. B. For inter-conversion of units of measurements, standard conversion factors have been used. C. For calculation of emissions due to transportation of products over rail, emission factor for transportation of products by rail has been sourced from WBCSD. D. For calculation of emissions due to transportation of products by road in diesel trucks, a standard mileage value of 3 km/l has been assumed. E. For calculation of emissions due to travel of employees by air, emission factor for transportation of passengers by air has been sourced from WBCSD.41
  • 42. F. For calculation of emissions due to travel of employees by road, a standard mileage value of 12km/l has been assumed. G. Indirect emissions for the sake of calculation complication have been neglected, though their effects have been duly considered. Fossil Fuel Emission Factor(tCO2e/TJ) Net calorific value Natural Gas(Gaseous) 56.1 0.048 Naptha 73.3 0.0445 Natural Gas(Liquid) 64.2 0.0442 LDO/HSD 74.1 0.043 Furnace Oil 77.4 0.0404 LPG 63.1 0.0473 Coal 96.1 0.0189 Pet Coke 97.5 0.032 Coking Coal 96.4 0.0282Table 2:- List of IPCC factors for fossil fuels and emission factor of transportation used for calculations Mode of Transportation WBCSD Emission Factor Emission factor of transportation by 0.02kg CO2/MT-km Railway Emission factor of air-travel of passengers Depends on the distance between source and destination. Table :- Emission Factor consideration as per WBCSD norms42
  • 43. CARBON FOOTPRINT AT HALDIA FACILITY:-Direct Emissions from Haldia Facility:The Haldia plant consists of the sulphuric acid plant, phosphoric acid and phosphaticfertilizer plants which include sodium tri-poly phosphate (STPP) plant, di-ammoniumphosphate (DAP) plant, Nitrogen-Phosphorus-Potassium (NPK) complexes and singlesuper phosphate (SSP) fertilizer manufacturing plant. The carbon footprint of HaldiaFacility has been calculated considering the GHG emissions associated with operation of themanufacturing processes and inbound and outbound logistics for transportation ofproducts. OPERATIONAL BOUNDARY CONSIDERED FOR ACL, HALDIA UNIT CO2& other emissions AQUASUB CHEMICALS, HALDIA Sulphuric Acid & Phosphoric UNIT Acid DAP. NPK, SSP Fig: - Pictorial Representation of ACL PLANT, HALDIA43
  • 44. Emission due to Emission due to % of Emission due to ElectricityName of Unit direct fossil fuel steam consumption Total total Consumption tCO2 combustion tCO2 tCO2 emission Direct EmissionSulphuric Acid Plant 4699 2153 0 6852 10.9359 Phosphoric Acid Plant 4320 0 0 4320 6.894791 STPP Plant 6105 14001 0 20106 32.0895 LABSA PLANT 597 0 0 597 0.952822 SSP Plant 2373 0 0 2373 3.787347 DAP+NPK Plant 19301 9106 0 28408 45.33963 TOTAL 37395 25260 0 62656 100 Table: GHG Inventory of the Haldia Facility-Direct Emissions * Steam consumed in Haldia Plant is generated from Waste Heat Recovery Boilers, hence GHG emissions due to steam consumption is zero. Indirect Emissions from Haldia Facility:- Indirect emissions are those where the GHG inventory is not effected directly like:- A. Emissions due to business travel of employees by road B. Emissions due to business travel of employees by air C. Emissions due to inward and outward bound logistics by road D. Emissions due to inward and outward bound logistics by rail Parameters Tonnes of CO2 Indirect Emission (Road Travel) 19 Indirect Emission (Air Travel) 60 In Logistics 23 Out Logistics (Rail) 16652 Out Logistics (Road) 6655 Total 23408 Table: - GHG Inventory due to Logistics & Travel, Haldia-Indirect Emissions 44
  • 45. Sulphuric Acid Phosphoric Acid Plant Plant 11% 7% DAP+NPK Plant 45% STPP Plant 32% SSP Plant LABSA PLANT 4% 1% Fig: - Showing the percentage of total emission (direct emission) Indirect Emission (Road Travel) Indirect Emission (Air Travel) In Logistics Out Logistics (Rail) Out Logistics (Road) 0% 0% 0% 29% 71% Fig: - Showing percentage of total emission (indirect emission)Emission Factor of Haldia plant: As the source of electricity is the eastern regional gridof India, emission factor of the same grid has been assumed from CEA.45
  • 46. Name CO2 Emission Factor Source Eastern Regional Grid (tCO2/MWh) 0.80 CEA Database Table: - Electricity Emission Factor of Haldia FacilityHence from the carbon footprint study at ACL Unit, Haldia, emission from (DAP +NPK)plant is maximum in case of direct emissions while emissions from logistics freight byRailways is maximum in case of indirect emission.The footprint for ACL has been calculated based on the monitored plant data as providedby ACL. In cases of unavailability of data there could be deviation leading to somedifference between the actual and the estimated emission calculations. The mostconservative estimate has been taken in such a case and standard values or IPCC defaultvalues have been considered. The following parameters have been taken into considerationwhile calculating the GHG inventory of the different chemical plants:Emission Factors- The carbon percentage of the fuel in use are unavailable. So theemission factors of Natural Gas, Naphtha, Pet Coke, LDO and Coal have been taken from theIPCC 2006 guidelines.Net Calorific Value of the fuel -In cases of unavailability of plant data the default NetCalorific Value (from IPCC) values of the fuel into consideration has been taken. The NetCalorific Value of Natural Gas, Naphtha, Pet Coke, LDO and coal have been taken from theIPCC 2006 guidelines.Density of the fuel -In cases where the density of the fuels is unavailable, it has been takenfrom an authentic source or it has been calculated from the fundamentals. In Haldia thedensity of Natural gas has been taken to be 0.667 kg/Sm3 (calculated).Fossil fuel consumption –In case of unavailability of monthly data for fossil fuelconsumption, average hourly data (kg/hour) along with average operational hours for themonths (hour/month) have been used to calculate the fossil fuel consumption.46
  • 47. RESULTS & DISCUSSIONFrom the project activity, potential areas of increasing CO2 emissions were identified, bothfor direct emissions and both for indirect emissions. Now the question arises, are there anymitigatory measures? In this section we would discuss about the abatement measures andnecessary GHG strategy.GHG Abatement Strategies in the Chemicals SBU of ACLShort term Strategy:-Energy efficiency improvement in production of chemicals such as sulphuric acid,phosphoric acid and phosphatic fertilizers which include sodium tri-poly phosphate(STPP), di-ammonium phosphate (DAP), Nitrogen-Phosphorus-Potassium (NPK)complexes and single super phosphate (SSP) fertilizer. The plant is the largest producer ofSTPP, a building component of detergents in India.ACL may implement Nano-filtration (NF) technology for purification of brine used in thesoda ash plant. Due to unavailability of raw water, ACL presently uses sea water as sourceof raw water. Owing to the high percentage of calcium and magnesium salts, ACL isrequired to treat the raw sea water to remove salts. Thereafter, salt dissolves externally ina static salt dissolver to increase the percentage of sodium chloride in sea-water. The NFplant proves to be an effective technology for sea-water purification utilized for brinepreparation and purification. It is similar to a reverse osmosis plant consisting of:- 1. Conventional pretreatment unit 2. Nano Filtration membranes skidPrior to passing through NF membranes skid, the sea water will pass through cartridgefilters to ensure that zero turbidity water enters the Nano filtration unit. The NF membranewill remove the bivalent ions present in the seawater; Ca, Mg, SO4 while allowing maximumchloride ions to pass through it.47
  • 48. Replacement of the 4-stage Calciner to a 6 stage Separate Line Calciner (SLC) coupled withthe use of high efficiency coolers will result in improvement in the thermal energyefficiency and lead to reduction in overall GHG emissions. The presence of the additionaltwo stages will result in additional heat transfer to the kiln feed and reduce pre-heaterexhaust temperature. Coal combustion will also improve in the new SLC using the hottertiary air from the kiln hood. This will reduce the specific coal consumption, the quantityof air requirement, the pre-heater gas volume and consequently the energy consumption ofthe circulation system. The cumulative effect is a net reduction in emissions of GHGs to thetune of 0.06tonne CO2/kg of clinker.Proper redesigning of the grate system of the existing Cooler has the potential to increasethe cooler recuperation efficiency i.e. higher quantity of heat will be utilized in clinkercooler. The technology involves retrofitting of the clinker cooler for effective trapping ofthe heat in the clinker cooler. New clinker inlet distribution system is used to distribute theclinker on the grate. Due to the benefits of the inlet grate system the proper cooling of inletwill take place with additional benefit of high temperature tertiary air ducts. Theapplication of this technology at the cement plant will help to achieve a shift towards lowcarbon path which can leverage financing through carbon revenue. Approximately 20kCal/kg of clinker of thermal energy savings and is possible by application of thistechnology.The waste heat generated from the clinker-cooler exit-gas and pre-heater exit gas maybe captured in waste heat recovery boilers to generate steam. The steam can generatepower via a steam turbine using Rankine Cycle thus displacing the GHG intensive powergeneration in the coal based captive power plant production facility. The effectiveutilization of the waste gases which would otherwise have been vented into theatmosphere for power generation is a major GHG abatement initiative that may be adoptedat the cement plant.48
  • 49. Fig: -Representative Diagram of utilization of clinker cooler gas for power GenerationInjection of superheated steam into the compressor discharge upstream of combustionchambers will increase the mass flow to the turbine section. This will result in increasedpower output. The modification will result in added mass flow into the turbine withoutconsiderable increase in compressor power consumption. This will result in lower specificfuel consumption and an improved heat rate. Under usual conditions, turbine outputdecreases with ambient temperature. Thus the steam injection modification can maintainthe higher output even at higher temperatures. The maximum steam injection possible forpower generation improvement is approximately 5% of compressor air flow for a typicalFrame V gas turbine that can be retrofitted with steam injection system19. Excess steam inthe fertilizer complex may cater to the superheated steam requirement of the steaminjection modification. As per estimates from BGGTS (joint venture between BHEL and GE)a typical Frame V gas turbine having a steam injection49
  • 50. rate of approximately 5% compressor airflow may result in reduction of heat rate by7.2% vis-à-vis an increase of 2-3MW in power generation.Medium term abatement StrategiesFrom the viewpoint of an organization such as ACL, production of bio-fuels is an importantopportunity of reducing the overall GHG impact. The potential is considerable at close to2.1 to 2.2 tonnes of carbon dioxide for every tonne of bio-diesel production. Bio-dieselproduced may be used in a number of ways to displace the consumption of GHG intensivefossil based diesel oil. These include: A. Substitution of diesel in vehicles used for company travel. B. Substitution of diesel in transportation of raw materials and products C. Sale of bio-diesel for road based or rail based transportation purposesBased on the technology selection for bio-diesel production, the production costs may bequite high. This is a crucial factor as in all likelihood, to remain competitive in the petro-diesel dominated market in India; ACL may have to sell bio-diesel at prices comparable tothat of petro-diesel irrespective of the higher production costs. The role of carbon credits inplugging the gap between the production costs and selling price of bio-diesel will be animportant factor determining the feasibility of the venture.Utilization of the wind energy for power generation using a wind turbine holds significantpotential for GHG abatement that may be adopted in manufacturing facility. Cleanelectricity may be generated with zero emissions by harnessing the wind power potentialof the site where the wind based power plant would be set up. As the plant is located on thewestern coast of India, the wind patterns may be favorable for setting up a wind energybased generation system.Biomass based power generation refers to the process that generates energy in the form ofelectricity or heat from a biomass source like bamboo, rice husk and other agro/forestresidues. Such technologies reduce fossil fuel consumption and decrease GHG emission50
  • 51. Long term abatement StrategiesBrunner Monde Lostock & Winnington (U.K) has been one of the most energy efficientchemical plant in UK. Hence the energy efficiency measures and steps followed by the plantcould be implemented here in India as well. Brunner Monde’ Netherlands could also be anideal example while implementing energy efficiency measuresTidal energy from the motion of ocean tides can be trapped and effectively utilized forclean power generation. Tidal barrage systems are technically feasible, utilizingconventional low head hydro turbines and dams/barrages. Adoption of renewable powergeneration technology replacing the power generation from the existing coal based captivepower plant is a GHG abatement initiative resulting in GHG emission reductions to the tuneof 0.7 tCO2/MWh. Proximity of the plant location to the Arabian Sea will play a significantrole in working out the feasibility of harnessing the ocean waves to generate electricity anddisplace fossil fuel based generation.Geothermal energy i.e. the heat contained within the Earth that generates geologicalphenomena on a planetary scale can be captured and utilized for power generation.‘Geothermal energy’ is often used nowadays, however, to indicate that part of the Earthsheat that can, or could, be recovered and exploited by man. The steam and water capturedbeneath the earth’s surface is separated and electricity generation mainly takes place inconventional steam turbines. Conventional steam turbines require fluids at temperaturesof at least 150 °C. The steam, direct from dry steam wells or, after separation, from wetwells, is passed through a turbine and exhausted to the atmosphere. About 0.77tCO2e/MWh of GHG abatement can be achieved through implementation of this measureSoda ash production by calcination of trona ores is less GHG intensive as compared to theproduction by Solvay process. Hence, a shift in the production from Solvay to natural tronacalcinations will result in reduction of carbon dioxide emissions capacities of soda ash afterdue evaluation of the carbon liability of Solvay Process vis-à-vis trona calcination. This isthus a very important consideration.51
  • 52. CONCLUSIONFrom the case study it was evident that chemical industry was one of the most vulnerableindustries and thereby made significant contributions as GHG emitter. It was also seen thatthe share of indirect emissions were higher as compared to the direct emissions from thechemical plant itself. Hence a short term, long term and long term GHG abatement strategywas required so that GHG emission could be significantly reduced. For that more and moreemphasis was given on utilizing renewable energy sources which not only yielded cleanfuel but also saved national revenue. Now an obvious question that would arise as to why achemical industry requires knowing its carbon footprint estimates?The exercise of carbon footprint will improve industry’s understanding of its emissionsprofile and any potential GHG liability or “exposure.” A company’s GHG exposure isincreasingly becoming a management issue in light of heightened scrutiny by the insuranceindustry, shareholders, and the emergence of environmental regulations/policies designedto reduce GHG emissions.Identification and quantification of the carbon assets and liabilities/risks of ACL which arethe two essential components for understanding climate change risk-return perspective ofACL. Identification of potential opportunities of progressively reducing ACL’s presentcarbon footprint through energy optimization, process modifications and improvements,adoption of clean technologies (e.g. GHG capture and storage) and greening the supplychain Identification of CDM/JI projects in different units and implementation of the same /assessment of the CER/VER earning potential of the opportunities identified.Let’s look what are the benefits of GHG Accounting/Carbon footprint analysis:- A. Carbon footprint will identify the energy intensive processes, equipments and operations. Improvements in these processes, equipments and operations will lead to lower energy and raw material consumption and hence increased level of52
  • 53. understanding of better cost cutting and revenue enhancement opportunities across the organizations value chain. B. Proper implementation of energy efficiency/GHG abatement measures to further upgrade processes and equipments will generate cost savings from improved operational efficiencies and reduced consumption. C. There is opportunity to understand the current position in lieu of anticipated emissions trading and GHG emissions regulations and reporting requirements, e.g. Carbon Disclosure Project and Carbon Tax impositions thereby managing the climate change risk effectively. D. Better and effective management of stakeholder expectations can be done (e.g., meet expectations of customers, shareholders and financial institutions). A green image will help in strengthening investor relationship. E. Fortification of the reputation and brand image improvement since this will add some value to the overall goodwill of the industry/organization. F. Improvement of the market positioning of ACL in terms of sustainability, brand, products and services. In fact many institutional customers are more inclined to purchase goods which are environment friendly. G. Participating in GHG markets – GHG emission profile also helps in participating in carbon trade. This includes supporting internal GHG trading programs, Participating in external cap and trade allowance trading programs, Calculating carbon/GHG taxes. H. To facilitate development and implementation of GHG management strategies and plans as devised by top management53
  • 54. Now an obvious question that arises is how does the project contribute towardssustainable development? Well in brief, the quantification of GHG emission of an industryitself is a giant step towards attaining sustainable development. To add to that if theabatement/mitigation strategies that have been recommended are followed proactivelythen quantifying GHG emission would definitely be a part of attaining SustainableDevelopment by an industry/organization.Let’s get a brief idea about the basic principles of GHG Accounting:-As we all know that carbon footprint of a company can be measured by accounting for itsGHG emissions or by GHG accounting. To ensure that reported data, information & relateddisclosures provide a faithful, true, fair account of GHG emissions, removals, emissionreductions, removal enhancements, GHG quantification, monitoring, reporting, validation,verification shall be based on the following principles:- A. Completeness: All GHG emissions and removals within the chosen boundaries are included. Any GHG emissions or removals not quantified and/or monitored are disclosed and explained/justified. B. Consistency: Consistent methodologies are used to permit meaningful comparisons. Any changes to the methodologies, procedures or any other relevant factors are disclosed and explained/justified. C. Accuracy: Sufficient accuracy is achieved to enable users to make decisions with reasonable assurance as to the integrity of quantification & of reported information. Uncertainties are reduced as far as practical. D. Transparency: All relevant issues are documented and disclosed in a factual and coherent manner (based on an audit trail that allows users to judge it’s reliability). Any relevant assumptions made and appropriate references to the quantification methodologies and data sources used are disclosed.54
  • 55. E. Relevance: GHG quantification, monitoring and reporting methodologies are appropriately selected to reflect GHG emissions/ removals and to serve the decision-making needs of users. Relevance Completeness Accuracy Consistency Transparency Fig: - It represents the principles of GHG AccountingFinally let’s look into the scope of the emission inventory:-Direct (Scope 1) Emissions from fuel oil use, naphtha use, diesel use, LPG use, natural gasuse, coal use, electricity consumption and other fuels etc.Indirect (Scope 2) Emissions from all electricity purchased for use in office buildings andtownships.Indirect (Scope 3) Emissions from air travel, business travel in rental cars/ taxis, rail travel,transport of raw materials and products by road rail, business travel by employees etc.55
  • 56. SCOPE AHEADNow there are a lot of scopes for improvement pertaining to analyzing carbon footprint.The Guidelines for Multinational Enterprises are recommendations from governments tobusiness on responsible business conduct. Though the Guidelines do not specificallyaddress climate change, many of their recommendations reflect governments and societies’expectations on what constitutes responsible business conduct in addressing climatechange. The Guidelines thus have an important role to play in helping build internationalconsensus and spread knowledge about advanced management practices in support of alow carbon economy. This overview highlights recommendations which are relevant tobusiness action to address climate change.Enterprises should contribute to economic, social and environmental progress with a viewto achieving sustainable development, develop and apply effective self-regulatory practicesand management systems that foster a relationship of confidence and mutual trustbetween enterprises and the societies in which they operate. Enterprises should, within theframework of laws, regulation and administrative practices in the countries in which theyoperate, and in consideration of relevant international agreements, principles, objectives,and standards, take due account of the need to protect the environment, public health andsafety, and generally to conduct their activities in a manner contributing to the wider goalsof sustainable development.Consistent with the scientific and technical understanding of the risks, where there arethreats of serious damage to the environment, taking also into account human health andsafety, not use the lack of full scientific certainty as a reason for postponing cost-effectivemeasures to prevent or minimize such damage.Enterprises should ensure that timely, regular, reliable and relevant information isdisclosed regarding their activities and performance. This information should be disclosedfor the enterprise as a whole and, where appropriate along business lines or geographic56
  • 57. areas. Disclosure policies of enterprises should be tailored to the nature, size and locationof the enterprise with due regard taken of costs, business confidentiality and othercompetitive concerns Enterprises are encouraged to communicate additional informationthat could include: value statements or statements of business conduct intended for publicdisclosure including information on the social, ethical and environmental policies of theenterprise and other codes of conduct to which the company subscribes.Enterprises should continually seek to improve corporate environmental performance, byinter alia, such activities as: - development and provision of products and services that haveno undue environmental impacts, are safe in their intended use; are efficient in theirconsumption of energy and natural resources; can be reused, recycled, or disposed ofsafely; - promoting higher levels of awareness among customers of the environmentalimplications of using the products and services of the enterprise.When dealing with consumers, enterprises should act in accordance with fair business,marketing and advertising practices and should take all reasonable steps to ensure thesafety and quality of the goods or services they provide. In particular, they should: - Ensurethat the goods or services they provide meet all agreed or legally required standards forconsumer health and safety, including health warnings and product safety and informationlabels; - Provide accurate and clear information regarding their content, safe use,maintenance, storage, and disposal sufficient to enable consumers to make informeddecisions; - Not make representations or omissions, not engage in any other practices thatare deceptive, misleading, fraudulent, or unfair.Promoting a more systemic approach to climate change would not seek to reduce theproblem to marketing gimmicks, celebrity endorsements, technological quick-fixes, or neo-colonial exploitation. Any individual, organization or government embracing this holisticattitude would commit to doing everything they could to reduce their climate impact, butwould not offset responsibility for any of their remaining emissions. Rather they wouldcommit to demanding, adopting and supporting climate policies that reduce emissions atsource as opposed to offsets or trading. They would support stricter regulation and57
  • 58. oversight and penalties for polluters on community, local, national and international levels,and they would commit to supporting communities adversely impacted by climate changeand so-called ‘climate-friendly’ projects. Finally they would endorse the notion that realsolutions to climate change require social change and they would count themselves to be apart of that movement, spending time and energy towards achieving such change. Fig: - Showing types of project and time needed to offset emissionsUse of Renewable Energy can be an ideal choice to reduce GHG Emission. As alreadydiscussed, use of biomass, wind can be a good option to generate energy. In addition to thatit also gives an option to apply for TREC (Tradable Renewable Energy Certificate) whichcan be traded and credits can be utilized in a positive way.In fact, the speed with which we need to offset our emissions depends on two things:First it depends on the impending nature of the climate crisis. Just how fast do we need toreduce our emissions to stop global warming?Second, it depends on the rate at which global carbon dioxide emissions continue to rise. Ifemissions continue to go up, we need to offset even faster to meet reduction targets. Hencethe ideal solution regarding this issue would be to be categorizing the vulnerable areas andthen quantify the GHG emission and then depending upon the area where emission ishigher, suitable mitigating measure needs to be implemented, like opting for renewableenergy and ensuring that the methods/practices leads to sustainable development.58
  • 59. BIBLIOGRAPHYFollowing journals/research helped to prepare this report:-Babiker, M.H., J.M. Reilly, M. Mayer, R.S. Eckaus, I.S. Wing and R.C. Hyman (2001), ‘The MITEmissionsPrediction and Policy Analysis (EPPA) Model: Revisions, Sensitivities and Comparison ofResults’,Report no. 71, MIT Joint Program on the Science and Policy of Global Change. Cambridge,M.A. Burniaux, J.M., G. Nicoletti, and J.O. Martins (1992), ‘GREEN: A Global Model forQuantifying the Cost of Policies to Curb CO2 Emissions’, OECD Economic Studies, no.19.Paris.Ghosh, Prodipto (1990). “Simulating Greenhouse Gases Emissions due to Energy Use by aComputable General equilibrium Model of a National Economy”: Ph.D dissertation research,Carnegie-Mellon University. Published by UMI, Ann Arbor, MI. Order No. DA9107559.Robinson, Sherman et al (1999), ‘From Stylized to Applied Models : Building MultisectorCGE Models for Policy Analysis’, North American Journal of Economics and Finance, vol. 10,no.2, 5-38. TERI (2006), National energy Map for India: Technology Vision 2030. The Energyand Resources Institute (TERI), New Delhi.Big Sky Carbon Sequestration Partnership and Brunner Monde Report (U.K)Durban 2010 FIFA World Cup Durban Carbon Footprint, Final Report. Future WorkDurban.Following websites were referred while preparing this project:http://www.marketwire.com/press-release/Greengold-Ray-Energies-Inc-923021.html(Accessed on May 21st 2011)http://www.global-greenhouse-warming.com/ISO-14064.html (Accessed on May 13th2011)http://www.climatevision.gov/sectors/cement/pdfs/44182.pdf (Accessed on May 12th2011)http://www.energyrating.gov.au/library/details200606-greening.htmt (Accessed on 2ndMay 2011)59