Interpreting Results of Product Carbon Footprinting Analysis

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Interpreting Results of Product Carbon Footprinting Analysis

  1. 1. WSQ Graduate Diploma in Process Technology (Sustainable Manufacturing) Unit 1: Session 8: 3rd August, 2010 Dean Stanton Course Instructor | BrandGreen Carbon Footprint Measurement and Reduction Strategies for Products and Manufacturing Operations Interpretation of Carbon Emissions and Practical Applications
  2. 2. About Us
  3. 3. BrandGreen. Founded in 2004. Offices in Cambridge, London & San Francisco. Launched Singapore office in 2010.
  4. 4. WhoWeWorkWith . Top 100 companies, including M&S, Tesco, HSBC, British Gas, O2 and VW Government Investors NGOs / Not for Profit
  5. 5. WhoWeWorkWith . Top 100 companies, including M&S, Tesco, HSBC, British Gas, O2 and VW Government Investors NGOs / Not for Profit
  6. 6. HowWeDoIt. We help our clients see how doing the right thing can make powerful business sense… “Building the business case”
  7. 7. HowWeDoIt. …working closely with client teams to build an actionable strategy… “Developing a real world action plan”
  8. 8. HowWeDoIt. …and helping to make the changes that lead to breakthrough transformation. “Making sustainability business as usual”
  9. 9. WSQ Graduate Diploma in Process Technology (Sustainable Manufacturing) Unit 1: Session 8: 3rd August, 2010 Dean Stanton Course Instructor | BrandGreen Carbon Footprint Measurement and Reduction Strategies for Products and Manufacturing Operations Interpretation of Carbon Emissions and Practical Applications
  10. 10. Unit 1: Develop Carbon Footprint Measurement and Reduction Strategies for Products and Manufacturing Operations This unit covers the knowledge and issues relating to carbon footprint measurement across operations and the value chain. The course involves demonstration of practical quantifying methodologies and standards, and discussions on how carbon footprint assessment can increase manufacturing efficiency. Key carbon reduction strategies such as life cycle thinking, resources management and 3Rs will be taught together with practical examples and applications. Participants will be able to take away practical knowledge and apply that in their work environments for quantification of carbon footprints and continuous improvement towards sustainable manufacturing. RECAP
  11. 11. Session 8: Interpretation of Carbon Emissions and Practical Applications In this session, course participants will learn: How to interpret the results of carbon footprint analysis (Lecture Format) How leading companies have applied these insights to make significant reductions in impacts and costs (Case Studies) Practical applications to deliver positive bottom line financial improvements and to reduce the impacts from operations (Tutorial Exercises)
  12. 12. Session 8: Contents and Structure 1.Interpreting the results of carbon footprint analysis 2.Case studies a. Walker’s Crisps b. Innocent Drinks 3.Challenge exercise Resources •Case study pack •Background reading materials Lecture 1 hour Lecture 1 hour . . Group work 1 hour
  13. 13. Session 8 Pre-amble: Review of learnings from previous sessions
  14. 14. What’s been covered to date (not exhaustive): Corporate and product carbon footprints  ISO 14064 and other GHG protocols Principles and methodologies  ISO 14040  PAS 2050 System boundaries and product category rules Carbon footprint calculation  Hands on use of carbon footprint software tool Reporting practices ISO 14064, 14044 Now we have all this great data, what can we do with it ?
  15. 15. CAVEAT: Many of your assumptions will be proved wrong! Probably the first lesson we learned in the UK back in 2006 was that key assumptions we had about the biggest sources of product related carbon emissions were often completely wrong. This is only to be expected. Up until to this point nobody had actually measured these things properly. Learning: when it comes to carbon, received opinion is often wrong. Having incontrovertible data to hand is a powerful weapon in challenging the status quo, improving efficiency, enhancing productivity and growing profits for your business.
  16. 16. Session 8 Section 2. Case Studies How leading companies have applied the insights from carbon footprinting to make significant reductions in impacts and costs
  17. 17. Case Studies Outline 1. Introduction  Carbon = costs = profits  Carbon = product innovation = revenues + profits  Focus on carbon = additional business benefits 2. Real world success stories  Case study 1: Walker’s Crisps (PepsiCo)  Case study 2: Innocent Drinks 3. Recap on key learnings
  18. 18. Session 8 Section 2. Case Studies 1. Introduction
  19. 19. Introduction Carbon = costs = profits Guiding principle: Wherever you reduce the carbon intensity of your products or services … … you reduce costs … … and wherever you reduce costs, you have a positive impact on the financial bottom line for your business.
  20. 20. Introduction Carbon = product innovation = revenues + profits Moreover: Through a deeper understanding of your “production” processes and where the carbon “hotspots” are, you can unlock opportunities not just for process innovation, but for creating entirely new – and lower carbon – products and services. Hence through the insights leading to product innovation we can move on from merely reducing cost to creating new sources of revenue for your business – resulting in top line revenue growth as well as enhanced profitability.
  21. 21. Introduction Focus on carbon = additional business benefits  Corporate reputation: brand enhancement internally and externally  Customer demand: customer preferences for carbon footprint clarity  Employee engagement: they know that it is the right thing for you to do, and will be energised  Risk management: minimise impact of future regulations and supply chain disruption  Relationship benefit: improve efficiency of the product supply chain, hence supplier relationship engagement  Social benefit: shows serious commitment to reducing climate change impacts and leads change by example
  22. 22. Session 8 Section 2. Case Studies 2. Real World Success Stories
  23. 23. Real world success stories Walker’s Crisps  PepsiCo is the parent company of Walker’s  The Walker’s business includes the largest crisp manufacturing plant in the world  Potatoes are 100% UK sourced, so much of the supply chain is contained within the UK  The first company in 2006 to work with the Carbon Trust to measure a product carbon footprint  The first company to be measured under PAS 2050  The first product in the world to carry a product carbon label: Walker’s Cheese and Onion Crisps
  24. 24. Real world success stories Walker’s Crisps: Highlights  Only using British potatoes, to cut down food miles  Improving production efficiency to reduce gas by 11%, electricity by 22% and water consumption by over 700 million litres in one factory alone  Making a 4.5% reduction in emissions associated with producing crisp packets  Recycling over 90% of waste  Reducing the weight of packaging  Running delivery lorries on biodiesel and using fuel efficient driving Saving 4,800 tonnes of CO2 Reducing carbon footprint by 7% Saving close to S$1m annually
  25. 25. Real world success stories Walker’s Crisps: The value of data  PepsiCo and Walker’s first started working with the Carbon Trust as long ago as 2002, addressing their corporate level carbon footprints.  Taking the insights from measurement and applying that to their operations has resulted in a reduction in energy use of over 30% since 2000 (baseline).  Building on this initial analysis, it became clear that a significant portion of overall emissions was product related, which in turn had much to do with the company’s supply chain.  Starting in 2006, detailed product-level carbon footprint analysis was performed (see table). Identifying emissions reduction “hot spots” (45g bag of Walker’s Crisps)
  26. 26. Real world success stories Walker’s Crisps: Insights from interpretation  Interpreting the results of the carbon footprint analysis, almost 75% of the carbon footprint of a 45g pack of crisps on the supermarket shelf came from two sources:  Manufacturing (~25%)  Raw materials (~50%)  Surprisingly, the total impact of transportation was relatively low at around 10%.  But what this did tell us was that although Walker’s had significant scope to address their own direct impacts in the manufacturing process, some of the biggest gains might well come from engaging with suppliers (i.e. tackling Walker’s indirect emissions).
  27. 27. Real world success stories Walker’s Crisps: Practical steps in manufacturing  Taking a harder look at the individual components of the manufacturing related carbon footprint analysis, a number of key reduction opportunity areas were identified:  There was a considerable time lag between the production process start up and shut down cycles, resulting in wasted energy use. Work was performed to reduce the impact of these cycle times by 35% over 6 months.  15% of manufacturing related energy use was in lighting systems, some of which were running 24 hours a day. The company introduced enhanced automation and new lighting technologies to cut this component by 40% over less than a year.  Since 2009, all manufacturing operations have achieved ISO 14001 status.  The company is on target to replace an additional 7% of grid electricity consumption with energy from renewables by 2011 (resulting in a total of 15% of electricity from renewables).  At the same time, the company is now on target to reduce further the energy intensity of crisp production by ~35% by 2011, primarily through upgrading to newer technologies.
  28. 28. Real world success stories Walker’s Crisps: Practical steps in raw materials  Indirect emissions of 48% were related directly to Walker’s upstream raw material suppliers and a further 12.4% from packaging.  The primary raw material components in crisp manufacture are potatoes, sunflowers (oil) and various seasoning ingredients.  Walker’s has instituted a series of annual supply chain “summits”, now part of an iterative engagement process:  Communicate the value of footprint analysis;  Train on data collection and interpretation;  Collaborative and brainstorm group interventions to identify opportunities for individual and joint action;  Feedback to the process.  One outcome from the summits has been the development of the concept of chain of custody, whereby each supplier assumes ownership of  Calculating their part of the carbon footprint;  Identifying opportunities to reduce emissions during their ‘custody’ of the product. Current Initiatives with Suppliers Investment in research to help farmers reduce emissions through: Better agricultural and storage practices, including how to reduce soil erosion from potato farming; Identifying varieties of potato that can grow using less water.
  29. 29. Real world success stories Walker’s Crisps Combined raw material / manufacturing impacts  Perhaps the most astonishing insight to come from interpreting the carbon footprint analysis results happened right at the interface between raw materials and manufacturing processes.  One of the key manufacturing carbon hotspots identified (representing ~15% of total manufacturing related carbon emissions) was the extraction of water from the raw potatoes at the start of the process.  Further investigation and detailed discussions with both factory floor and purchasing staff revealed that it was received practice on the part of the potato farmers to spray the potatoes with water before transporting the potatoes to the factory.  Ostensibly, this was to preserve the freshness of the raw materials. In practice, this could increase the weight of a consignment by up to 22%, and of course the farmers were paid based on the weight of their product.  The Walker’s factory team reached out to engage with the potato farmers to cease spraying the product with water, in returned for increased financial compensation per tonne of raw material.  This allowed Walker’s to eliminate one entire production step, and an associated 15% of manufacturing emissions, as well as changing how the industry operated.
  30. 30. Real world success stories Walker’s Crisps: Recap  Only using British potatoes, to cut down food miles  Improving production efficiency to reduce gas by 11%, electricity by 22% and water consumption by over 700 million litres in one factory alone  Making a 4.5% reduction in emissions associated with producing crisp packets  Recycling over 90% of waste  Reducing the weight of packaging  Running delivery lorries on biodiesel and using fuel efficient driving Saving 4,800 tonnes of CO2 Reducing carbon footprint by 7% Saving close to S$1m annually
  31. 31. Real world success stories innocent drinks  Founded in 1998, innocent is a successful producer of natural drinks and fruit smoothies.  The company, founded on the principle of using only ‘100% natural, healthy renewable ingredients’ has the fastest-growing product in the UK Grocery 100 list.  A privately-held business with 250 employees.  One of the first wave of three pilot companies to work with the Carbon Trust starting on product carbon footprinting in 2006  First product to be certified: Mango and Passionfruit Smoothie  Sustainability part of innocent’s brand DNA, so footprinting natural next step
  32. 32. Real world success stories innocent drinks: more about Operate in 11 countries Rapid growth profile
  33. 33. Real world success stories innocent drinks: smoothie lifecycle
  34. 34. Real world success stories innocent drinks: the value of data Initial review of the analysis results focused attention on two key problem areas…
  35. 35. Real world success stories innocent drinks: the value of data Product carbon footprint of different packaging formats A consistent theme across different packaging types and sizes, with the exception of the smallest format bottle, where packaging was a major factor
  36. 36. Real world success stories innocent drinks: insights from interpretation One immediate quick win was the reduction of the impacts of packaging – switching to 100% recycled plastic reduced the overall footprint by 15%, and becoming the world’s first food company to use 100% recycled bottles (now entire range is 100%).
  37. 37. Real world success stories innocent drinks: surprises from interpretation  One surprise coming from the assessment was the relatively small contribution of transport and distribution to product-level greenhouse gas (GHG) emissions, particularly for the 250ml bottle size.  Given the conventional wisdom that ‘food miles’ generate high carbon emissions, innocent could have made expensive investments or sourcing decisions that would not necessarily have reduced carbon emissions as much as focusing efforts on manufacturing, packaging and growing processes.  Packaging emissions were higher than expected – especially for the smallest drinks size. Clearly, it made sense to invest in this area for carbon reduction.  Similarly, given the impact that farmers have on the overall smoothie footprint, it also made sense for innocent to focus on engaging with fruit suppliers to reduce their emissions.
  38. 38. Real world success stories innocent drinks: practical steps in packaging  In September 2007 innocent became the first food company in the world to use 100% recycled plastic for its bottles.  From January 2008, the entire drinks range is now packaged using 100% recycled plastic.  The results of this initiative have been dramatic (all at no added cost):  14% reduction in materials due to light weighting the bottle.  55% carbon reduction from the bottle manufacturing process.  Enabled the company to demonstrate that it is a leading edge investor in sustainable innovations (packaging).
  39. 39. Real world success stories innocent drinks: practical steps in supply chain  innocent has been working closely with suppliers to improve energy efficiency and reduce waste.  By creating a dialogue with one supplier in particular, innocent helped identify a range of opportunities:  Reducing waste to landfill The supplier set up a group of employees from different parts of the business to look at how they could increase the amount of waste materials being recycled throughout the factory. In the first month, waste to landfill was reduced by 15%, and within six months the reduction reached 54%. This was not the result of any new technology, just clearly labelled bins combined with educating and encouraging staff to separate the waste (see next slides). innocent now has key performance indicators in place with all manufacturing and logistics suppliers to measure energy and water usage, waste production and recycling
  40. 40. Real world success stories innocent drinks: practical steps in supply chain
  41. 41. Real world success stories innocent drinks: practical steps in supply chain … and switched to renewable energy Identified energy savings of 25% = cost savings of £125k per annum
  42. 42. Real world success stories innocent drinks: practical steps in manufacturing
  43. 43. Real world success stories innocent drinks: practical steps in manufacturing
  44. 44. Real world success stories innocent drinks: key learnings  Carbon reduction initiatives accumulate into significant savings when multiplied across the supply chain – the combined impact of moving to recycled plastic packaging and working with suppliers to increase energy efficiency and reduce waste caused a meaningful reduction in product-level emissions of over 15%.  Conventional wisdom can be wrong – the key contributors to carbon emissions across the supply chain are not always those expected, e.g. transport and distribution are only part of the equation and not as significant as the term ‘food miles’ implies.  On the other hand, large emissions sources can be a surprise as well, opening up new opportunities for collaboration – innocent’s agriculture emissions were higher than expected, leading to previously unanticipated carbon saving initiatives to help suppliers reduce fertiliser and pesticide use.  The knowledge gained in a product carbon footprinting exercise is not only useful at the time of the analysis but can provide a decision making structure for purchasing and other significant decisions going forward.
  45. 45. Session 8 Section 1. Interpreting the results of carbon footprint analysis
  46. 46. Interpreting the results of carbon footprint analysis Outline 1. Key areas of reduction 2. Examples in detail
  47. 47. Key areas of reduction: overview Raw Materials Agriculture Raw Materials Extractive Manufacturing Energy Efficiency Manufacturing Switch to renewable energy Packaging Recycled content Weight reduction Other Transport & Distribution More efficient fleets and driving Switch to alternative fuels Smart logistics
  48. 48. Key areas of reduction: raw materials (agriculture) Raw Materials – Agriculture (12% global CO2) Changing agricultural practices  Reduce tCO2e content of pesticides and fertilizers* *often as much as 35% of the raw material  Go organic??  Replace diesel plant (e.g. for irrigation) with renewable energy (e.g. solar power, wind, small scale hydro)  Measures to reduce soil erosion
  49. 49. Key areas of reduction: raw materials (extractive) Raw Materials – Extractive Industries Changing extraction practices: levers and drivers  Stripping ratios  Extraction depths  Production volumes / intensity  Drill, blast and dig process optimisation  New technologies to mine, mill and smelt  Minimising waste stock piles  Total hydrocarbon resource management
  50. 50. Key areas of reduction: packaging Packaging Options to reduce impacts (not exhaustive)  Add or increase recycled content  Evaluate use of bio-materials (bio- and non bio-degradable)  Reduce weight and thickness  Innovative pack design to fit optimal container and pallet volumes  Re-usable packaging (e.g. The Body Shop)  End-customer recycling facilities (both b2b and b2c)  Impact of zero-waste policies?
  51. 51. Key areas of reduction: manufacturing (EE) Manufacturing – Energy Efficiency Options to enhance energy efficiency (not exhaustive)  Upgrade to newer technologies / plant  Increased system automation and controls  Evaluate all process / production steps and eliminate where possible  Reduce start-up and shut down cycle times  Evaluate all HVAC optimisation opportunities  Sequencing production processes and in-site locations  Other?
  52. 52. Key areas of reduction: manufacturing (RE) Manufacturing – Renewable Energy Options to implement RE solutions (not exhaustive)  Replace wasteful and costly fossil fuel / grid generation with:  Solar Photovoltaic  Mid-scale (500KW+) wind  Small to mid-scale hydro  Waste to energy  E.g. Anaerobic digestion  Biofuels for generation  Other?
  53. 53. Big win opportunities Biofuel Generation from Algae The current biofuel production process is highly unsustainable (land use, energy requirements) => negative impact on agriculture Biofuel generated from algae could solve these issues: - Saving in energy - Saving in land use - Higher yield
  54. 54. Big win opportunities Renewable Energies on a Large Scale A combined use of renewable energy sources could meet our current energy needs: - Solar energy (photovoltaic and thermal) - Hydroelectric energy - Wind energy - Geothermal energy - Ocean thermal energy - Ocean wave energy - Tidal and current energy These technologies are available today.
  55. 55. Key areas of reduction: transportation and logistics Transportation and distribution Options to optimise / reduce (not exhaustive)  Computerised fleet management  Driver training and incentivisation  Switch fleets to more sustainable fuel sources  Recycled cooking oil  Introduction of hybrids  Electric vehicles (where possible powered by RE)  Fleet share (more than one end user)  Eliminate empty beds
  56. 56. Big win opportunities Sustainable Transportation Transportation accounts for almost one third of all greenhouse gas emissions. Improving energy efficiency and emission reducing technologies within transport is a priority. - Hybrids - Fuel cells - CNG vehicles - Mass public transportation
  57. 57. Supplementary slides A word about waste…
  58. 58. Big win opportunities Waste: the facts  Cities are growing fast  Landfills are reaching saturation/ incineration produces emissions  Waste has a lot of value but is not exploited  We must shift from a global unsustainable waste management model to a sustainable one
  59. 59. Big win opportunities Garbage output Waste Output 2002: 7,677 tonnes/day Equivalent to 1,100 truck loads! Equivalent to 2.8 million tonnes/year If stacked to an average man’s height (1.7m), it would occupy 350 football fields
  60. 60. Big win opportunities Tuas South Incineration Plant
  61. 61. Big win opportunities Waste Disposal at Pulau Semakau
  62. 62. Pulau Semakau Landfill Big win opportunities  Completed 1999  Cost: $610 million  Life Span: 30 years  350 hectares
  63. 63. Big win opportunities Waste to Energy  By 2050 80% of the world population will be living in mega cities  The tremendous amount of waste generated can be valued  Entire cities can be powered out of energy generated from waste  Capture of gases (CO2 & CH4)  Use of heat energy generated from the decomposition process
  64. 64. Big win opportunities Waste Engineering  Non-traditional waste recovery  Bio-plastics  Hi-Tech & Hi Value Add
  65. 65. Big win opportunities Traditional Recycling • Value waste • Use of recycled content within products • Reduce mass consumerism 1) Educating the community 2) Implementation of infrastructures to treat the waste accordingly “Technology will not solve all our problems, we must also change our behaviors”
  66. 66. Session 8 Section 3. Challenge Exercise
  67. 67. Challenge exercise Working in groups, take a look at the following product lifecycle and:  Estimate the relative carbon emissions in percentage terms at each key stage of the lifecycle  Identify the key areas to focus on  Make recommendations on the types of changes you might implement to reduce product carbon footprint
  68. 68. Grid electricity Lifecycle of a men’s white T shirt (large)
  69. 69. How did they achieved this 90% step-change reduction?
  70. 70. Solar electricity …by switching the entire energy supply of the manufacturing plant to renewable electricity (from solar)
  71. 71. Session 8 Appendices
  72. 72. Supply side market map: renewables Renewables Solar Advanced photovoltaics (PV) Conventional PV Solar water heating Solar thermal electric Marine Wind Onshore Offshore Small scale Wave Tidal Thermal energy Near-shore Offshore Shoreline Tidal stream Lagoons and barrages Bio Hydro Geothermal Large scale Thermal Small-scale Biomass for heat Biomass for electricity Biogas Bio fuels Not exhaustive Other Priority areas
  73. 73. Supply side market map: clean technology FF and Nuclear Fuel cells Large static Portable Small static Coal Nuclear Fission Fusion Alternative Cleaner Coal Coalmine methane Carbon Capture and Storage CHP Gas Turbines Large scale Small-scale Local grid-connected 1 2 3 4 Fossil fuels and nuclear (“brown to green”) High efficiency combined cycle gas turbine (CCGT) Other Not exhaustive Priority areas
  74. 74. Supply side market map: clean technology Other T&D Electricity T&D Gas & alternative distribution Grid connection Hydrogen Storage Electrical Thermal energy Hybrid Production Storage Distribution Advanced Batteries Information Systems Alternative Hydrocarbons For energy users Smart grid software / hardware Other “Other” Not exhaustive Balance of system Demand response Priority areas
  75. 75. Demand side market map: clean technology Energy Efficiency and Clean Products Transportation Improved vehicles Alternative transportation fuels Smart logistics Industry Buildings Design Controls HVAC Equipment* Processes* Control systems* Clean Products Materials Biomaterials and polymers Nanotechnologies Advanced chemicals Energy efficiency and clean products Not exhaustive Supply and distribution Traffic management systems Lighting systems Advanced buildings materials Zero waste lifecycle solutions *Generic and industry specific Product design Lifecycle analysis Evaluation and labelling Packaging Priority areas
  76. 76. Demand side market map: clean technology Emissions, Waste and Water Emissions Measurement and control Compliance Remediation Water Waste & Related Recycling Usage reduction Treatment Emissions, waste, water and agriculture Not exhaustive Trading Offsets Remediation and treatment Usage efficiency Pollution Conservation Appliances Distribution Storage Treatment and purification Salt to freshwater technologies Remediation Priority areas Agriculture Land management / crop selection Natural interventions Emissions

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