Project Report Shivram Mukherjee (Energy Management), 2009 11

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Project Report Shivram Mukherjee (Energy Management), 2009 11

  1. 1. 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, 2011
  2. 2. 2 ACKNOWLEDGEMENT At this outset, I would like to avail this opportunity to express my thankfulness and gratitude towards Dr. K.M Agrawal, Head of the Department, Masters in Public Systems Management, IISWBM, Kolkata I would like to thank Dr.Sarbani Mitra, Coordinator, Environment Management, IISWBM Kolkata for her constant guidance, encouragement and giving me precious tips for completing my project work I am also thankful to Mr. Arindam Dutta, Coordinator, Energy Management, IISWBM, for his valuable inputs and guidance for the completion of the project work on time. I would also like to extend my heartfelt gratitude towards Mr. Rajib Kumar Debnath, Director (Environment& Sustainability Services) and Deloitte Touché Tohmatsu India Pvt. Ltd for providing me this opportunity to complete my project & project work at this esteemed organization. I am also thankful to my external guide Mr. Jaideep Singh Rathore & my colleague Mr. Chandan Singh, Assistant Managers at Deloitte Touché Tohmatsu India Pvt. Ltd. Bangalore, whose constant encouragement and support helped me gain substantial knowledge in the area pertaining to my project work. Finally, I would like to thank my parents and all my friends without the support, motivation and guidance of whom; I wouldn’t have been able to complete the project work
  3. 3. 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 World
  4. 4. 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 & STRENGTH In 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 ESS network 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 for Sustainable Development (WBCSD) and UN Global Compact and a signatory to World Economic Forum on Corporate Citizenship Challenge. It has chaired the Steering Committee, which has played a prominent role in the development of the GRI Sustainability Reporting Guidelines Played a significant role in the development of ISAE 3000.Largest share of Assurance Services in the Top 50 Best Sustainability Reporting firms. Maximum share 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 services
  5. 5. 5 EXECUTIVE SUMMARY As we all know that Climate Change is a serious issue that has surrounded the world today and with more and more issues relating to global warming, increase in the surface temperature of the earth, melting of the glaciers, hence it has become a necessity to opt for such 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 lack of credibility stemming from the absence of uniform quality control and assurance standards. The scope of this study extends over qualitative assessment of the climate change impacts on the chemicals and fertilizer industry sectors, estimating the carbon footprint of Aquasub Chemicals Limited (ACL) for a selected base year and outlining strategy for GHG abatement for the broad categories of manufacture and production of fertilizers and inorganic chemicals. Both the categories have been traditionally portrayed as major contributors to the emission of greenhouse gases contributing to climate change. Industrial Processes include the energy emissions and process emissions from the manufacture of cement, limestone and dolomite calcinations, soda ash manufacture and consumption, carbon dioxide manufacture and aluminium production. It is evident that the contribution of this sector to global GHG emissions is considerably high. ACL manufactures inorganic fertilizers including Urea and other Phosphatic fertilizers which target the huge agricultural markets in India and other developing countries. The agricultural sector is significantly vulnerable to the risk of climate change. Agricultural production and yield in countries such as India and other developing countries are largely dependent on climatic patterns and monsoons. Shifts in climatic patterns due to global warming, uncertainty in monsoons and water availability, increased storm surges, floods, droughts all attributable to climate change can reduce crop production and thus directly affect fertilizer demand. Thus climate change has a potentially negative effect on the fertilizer business of ACL. In addition, climate change regulations such as caps on the
  6. 6. 6 emissions of GHGs or sectoral GHG benchmarking may also significantly affect the organization’s profitability due to high GHG intensity of this business. The trends of continual increase in fossil fuel prices, government policies on energy efficiency and fuel switch, minimized ecological impact clearly signify the risk associated to climate change and justify the development of an effective climate change mitigation strategy to tackle the barriers portended. Fig: - Representation of generic approach followed for the carbon footprint study Specific 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 footprint Site visit by consultants Calculation of GHG inventory Discussion with plant personnel GHG mitigation opportunities identification Prioritization of GHG abatement measures Finalising Carbon footprintreport Submissionof report Kick off meeting for idea & of work
  7. 7. 7 Figure 1 Working Procedure followed during the project The study clearly indicated the distinct scope of reducing overall GHG emissions of the business operations of ACL. The scopes of reduction may first be identified on a macro scale or the business unit level. Thereafter the scopes of reduction are diversified on an installation wise basis or a product wise basis as may be deemed necessary. ACL should explore the need to reach the goal of carbon neutrality (or net zero GHG emissions). This should be an important strategic agenda for ACL in view of their global presence and future plan for global expansion across diverse geographies. Greater investor interest, greater customer acceptance, improved bottom line are the more obvious benefits of reaching the goal of carbon neutrality. However, like any other business initiative, each of these GHG abatement strategies which have been recommended are subject to regulatory risks and risks of implementation despite the possible strategic and/or financial attractiveness. ACL needs to perform an holistic evaluation of the GHG abatement levers and align their implementations with the growth plan of the organization to ensure the path towards ‘low’ or ‘no’ carbon is tread upon. Identificationof GHG Source/Sink/Res ervoir Defining organization& operational boundary Layout of data Collection Approach Layout of calculation methodology Determination of Carbon Footprint
  8. 8. 8 INDEX Serial Number Page Number 1. ACKNOWLEDGEMENT 2 2. INDUSTRY OVERVIEW 3 3. EXECUTIVE SUMMARY 5 4. ABBREVIATIONS 9 5. INTRODUCTION 10 6. OBJECTIVES & TARGETS 23 7. REVIEW OF LITERATURE 24 8. RESEARCH METHODOLOGY 31 9. DATA ANALYSIS/CASE STUDY 36 10. RESULTS & DISCUSSION 47 11. CONCLUSION 52 12. SCOPE AHEAD & REFERENCE 56-59
  9. 9. 9 ABBREVIATIONS GHG: - GREEN HOUSE GAS WBCSD: - WORLD BUSINESS COUNCIL FOR SUSTAINABLE DEVELOPMENT WRI: - WORLD RESOURCE INSTITUTE SBU: - STRATEGIC BUSINESS UNIT ACL: - AQUASUB CHEMICALS LIMITED NPK: - NITROGEN-PHOSPHORUS-POTASSIUM LABSA: - LINEAR ALKYL BENZENE SULPHONIC ACID STPP: - SODIUM TRI POLY PHOSPHATE DAP: - DI AMMONIUM PHOSPHATE SSP: - SINGLE SUPER PHOSPHATE GWP: -GLOBAL WARMING POTENTIAL IPCC: -INTERGOVERNMENTAL PANEL ON CLIMATE CHANGE CCS: - CARBON CAPTURE & STORAGE
  10. 10. 10 INTRODUCTION The world's climate has always varied naturally but compelling evidence from around the world indicates that a new kind of climate change is now under way, foreshadowing drastic impacts on economies and ecosystems. Levels of carbon dioxide (CO2) and other 'greenhouse gases' (GHGs) in the atmosphere have risen steeply during the industrial era due to unplanned human activities like deforestation or heavy fossil fuel use, driven by unrestrained economic and population growth. Climate change, popularly caused by ‘global warming’, is a major concern for today’s international scientific community, policy makers and business leaders all over the world. In the world of business, climate change has developed from being a fringe concern, focusing on a company’s brand and Corporate Social Responsibility, to an increasingly central topic for strategic deliberation and decision making 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 integrated approach to tackle the problem. Greenhouse gas accounting describes the way to inventory and audit greenhouse gas (GHG) emissions. Guidance for accounting for GHG emissions from organizations and emission reduction projects is provided by the World Resources Institute (WRI) and World Business Council for Sustainable Development (WBCSD) GHG Protocol. For national GHG inventories, guidance is provided by the Intergovernmental Panel on Climate Change (IPCC) methodology reports. The International Organization for Standardization (ISO) also provides some general standards for- greenhouse gas emissions at organization level (ISO 14064 - 1) and greenhouse gas emissions at project level (ISO 14064 - 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 2006/2010 World Cups at Germany & South Africa.
  11. 11. 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 in Germany (2006) as well as in South Africa (2010) were environmentally sustainable and it was 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 the 2010 FIFA World Cup was a low carbon event. This specifically relates to ensuring low climate change impact through the reduction of GHG emissions. Where GHG emissions cannot be avoided, they will be mitigated through a range of Green Goal 2010 carbon mitigation projects. Hosting a low-carbon event, and reducing its carbon footprint, can be achieved through integrating energy efficiency, waste reduction and avoidance, and water conservation with all activities related to the event. The objective of the carbon mitigation programme is to compensate for unavoidable GHG emissions, such as activities related to transport (ground and air travel) and accommodation. Such compensation can be achieved through 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. In addition, 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 the stadiums, as well as the transport of supplies and services to stadiums, also involves adverse effects on the environment. It was estimated that huge amount GHG emission would take place. The reduction of traffic-related effects on the environment was an important objective of sustainable development in Germany. This concerned the avoidance of unnecessary traffic, the switching of private transport to (local) public transport systems and the environmentally efficient development of transport through the further
  12. 12. 12 development of Environmental objectives for the 2006 FIFA World Cup March 2003the technical and organizational systems of all means of transport.. The realization of the 2006 Football World Cup in Germany with a neutral impact on the climate was thus a general, quantifiable environmental objective where considerable amount of GHG emission were reduced. ENTERPRISE CARBON ACCOUNTING (ECA) Corporate Carbon Footprint aims to be a rapid and cost effective process for businesses to collect, summarize, and report enterprise and supply chain GHG inventories. ECA leverages financial accounting principles, whilst utilizing a hybrid of input-output LCA (Life Cycle Analysis) and process methodologies as appropriate. The evolution to ECA is necessary to address the urgent need for a more comprehensive and scalable approach to carbon accounting. While an emerging area, a number of new companies offer ECA solutions. ECA is a critical part of broader Enterprise Sustainability Accounting. The Evolution of LCA to ECA 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 role played by SETAC and EPA in this method’s development. The inputs and outputs of multiple stages of a product’s life are investigated in turn, and the results are aggregated into single metrics of impact such as eutrophication, toxicity, and greenhouse gas emissions. Three tools exist on the market to assist researchers in conducting process LCA (such as GaBi, Ecoinvent, and Umberto). These tools contain data from previous researchers on the environmental impact of materials and processes that are then strung together by the user to form a system. Greenhouse gas inventories are a type of emission inventory that are developed for a variety of reasons. Scientists use inventories of natural and anthropogenic (human-caused) emissions as tools when developing atmospheric models. Policy makers use inventories to develop strategies and policies for emissions reductions and to track the progress of those policies. And, regulatory agencies and corporations rely on inventories to establish
  13. 13. 13 compliance records with allowable emission rates. Businesses, the public, and other interest groups use inventories to better understand the sources and trends in emissions. Unlike some other air emission inventories, greenhouse gas inventories include not only emissions from source categories, but also removals by carbon sinks. These removals are typically referred to as carbon sequestration. Greenhouse gas inventories typically use Global warming potential (GWP) values to combine 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 greenhouse gases under the United Nations Framework Convention on Climate Change (UNFCCC). National governments that are Parties to the UNFCCC and/or the Kyoto Protocol are required to submit annual inventories of all anthropogenic greenhouse gas emissions from sources and removals from sinks. The Kyoto Protocol includes additional requirements for national inventory systems, inventory reporting, and annual inventory review for determining compliance with Articles 5 and 8 of the Protocol. Project developers under the Clean Development Mechanism of the Kyoto Protocol prepare inventories as part of their project baselines. Corporation and other entities can prepare greenhouse gas inventories to track progress towards meeting an 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. ISO 14064The ISO 14064 standards (published in 2006 and early 2007) are the most recent additions to the ISO 14000 series of International Standards for environmental management. The ISO 14064 standards provide governments, businesses, regions and other organizations with an integrated set of tools for programs aimed at measuring, quantifying and reducing greenhouse gas emissions. These standards allow organizations take part in emissions trading schemes using a globally recognized standard.
  14. 14. 14 ECONOMIC INPUT-OUTPUT LCA Input-Output LCA utilizes economic input-output tables and industry-level environmental data to construct a database of environmental impacts per dollar sold by an industry. The boundary problem of process LCA is solved in this method because the economic input- output table captures the interrelations of all economic sectors; however, aggregated industrial categories limit the specificity of the results. Input–output analysis is a very powerful tool for the upfront screening of corporate carbon footprints, for informing streamlined supply-chain GHG accounting and for setting priorities for more detailed analyses ENTERPRISE CARBON ACCOUNTING (ECA) At its core, ECA is essentially a hybrid life-cycle assessment; however, rather than the traditional bottom-up approach of life-cycle assessment, ECA links financial data directly to LCA data to produce a snapshot of the companies’ operations. Rather than probing at areas thought to be problematic, ECA quickly identifies problem areas in the supply chain so that rapid action can be taken. This fundamental shift in thinking enables decision makers to rapidly address critical areas within the enterprise and supply chain. SOCIALISED SUPPLY CHAIN Socialised supply chain accounting is the term generally applied to Enterprise Carbon Accounting Solutions that provide a collaborative mechanism for supply chain participants to engage, expose and determine supply chain emissions through the process of shared knowledge. The term "Socialised Supply Chain" was coined by the CEO of Nootrol, Mark Kearns to describe a platform where supply chain participants exposed Process LCA and embedded emissions. Hence it becomes a very important part of the project activity under consideration. Moreover socialized supply chain has become very important in modeling of ERP (Enterprise Resource Planning)
  15. 15. 15 CARBON FOOTPRINT The total set of greenhouse gas (GHG) emissions caused by an organization, event, product or person. Greenhouse gases can be emitted through transport, land clearance, and the production and consumption of food, fuels, manufactured goods, materials, wood, roads, buildings, and services. For simplicity of reporting, it is often expressed in terms of the amount 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 comprehensive Life Cycle Assessment (LCA). An individual's, nations, or organization's carbon footprint can be measured by undertaking a GHG emissions assessment. Once the size of a carbon footprint is known, a strategy can be devised to reduce it, e.g. by technological developments, better process and product management, changed Green Public or Private Procurement (GPP), carbon capture, consumption strategies, and others. The mitigation of carbon footprints through the development of alternative projects, such as solar or wind energy or reforestation, represents one way of reducing a carbon footprint and is often known as Carbon offsetting. The main influences on carbon footprints include population, economic output, and energy and carbon intensity of the economy. These factors are the main targets of individuals and businesses in order to decrease carbon footprints. Scholars suggest the most effective way to decrease a carbon footprint is to either decrease the amount of energy needed for production or to decrease the dependence on carbon emitting fuels. The ISO 14064 standards (published in 2006 and early 2007) are the most recent additions to the ISO 14000 series of International Standards for environmental management. The ISO 14064 standards provide governments, businesses, regions and other organizations with an integrated set of tools for programs aimed at measuring, quantifying and reducing greenhouse gas emissions. These standards allow organizations take part in emissions trading schemes using a globally recognized standard.
  16. 16. 16 ISO 14064 ISO 14064-1:2006 specifies principles and requirements at the organization level for quantification and reporting of greenhouse gas (GHG) emissions and removals. It includes requirements for the design, development, management, reporting and verification of an organization's GHG inventory. ISO 14064-2:2006 specifies principles and requirements and provides guidance at the project level for quantification, monitoring and reporting of activities intended to cause greenhouse gas (GHG) emission reductions or removal enhancements. It includes requirements for planning a GHG project, identifying and selecting GHG sources, sinks and reservoirs 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 those conducting or managing the validation and/or verification of greenhouse gas (GHG) assertions. It can be applied to organizational or GHG project quantification, including GHG quantification, monitoring and reporting carried out in accordance with ISO 14064-1 or ISO 14064-2. ISO 14064-3:2006 specifies requirements for selecting GHG validators/verifiers, establishing the level of assurance, objectives, criteria and scope, determining the validation/verification approach, assessing GHG data, information, information systems and controls, evaluating GHG assertions and preparing validation/verification statements. The scope of this study extends over qualitative assessment of the climate change impacts on the chemicals and fertilizer industry sectors, estimating the carbon footprint of AQUASUB CHEMICALS LIMITED, for a selected base year and outlining strategy for GHG abatement for the broad categories of manufacture and production of fertilizers and inorganic chemicals. Both the categories have been traditionally portrayed as major contributors to the emission of greenhouse gases contributing to climate change.
  17. 17. 17 Fig1:- Exhibit showing contribution of GHG from 1978-2010 Industrial Processes include the energy emissions and process emissions from the manufacture of cement, limestone and dolomite calcinations, soda ash manufacture and consumption, carbon dioxide manufacture and aluminium production. It is evident that the contribution 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 are usually released as process gases from chemical and fertilizer industries account minor quantities toward global warming effect. Impact of Climate Change on the fertilizer and chemical manufacturing business AQUASUB CHEMICALS LIMITED manufactures inorganic fertilizers including Urea and other Phosphatic fertilizers which target the huge agricultural markets in India and other developing countries. The agricultural sector is significantly vulnerable to the risk of climate change. Agricultural production and yield in countries such as India and other developing countries are largely dependent on climatic patterns and monsoons.
  18. 18. 18 Shifts in climatic patterns due to global warming, uncertainty in monsoons and water availability, increased storm surges, floods, droughts all attributable to climate change can reduce crop production and thus directly affect fertilizer demand. Thus climate change has a potentially negative effect on the fertilizer business of AQUASUB CHEMICALS LIMITED. In addition, climate change regulations such as caps on the emissions of GHGs or sectoral GHG benchmarking may also significantly affect the organization’s profitability due to high GHG intensity of this business. The trends of continual increase in fossil fuel prices, government policies on energy efficiency and fuel switch, minimized ecological impact clearly signify the risk associated to climate change and justify the development of an effective climate change mitigation strategy to tackle the barriers portended. Policy and Regulatory Environment Much of the current policy focus in relation to the Indian 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 Gas Utilization Policy, and National Action Plan on Climate Change. However, like any other business initiative, each of these GHG abatement levers are subject to regulatory risks and risks of implementation despite the possible strategic and/or financial attractiveness. ACL needs to perform an holistic evaluation of the GHG abatement levers and align their implementations 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 wants to play an active role of contributing towards an effective global strategy to combat climate change by working in cohesion with local and international corporate bodies and the Governments in creating the right policy, financial, regulatory, social and technological environment to inventorize the Green House Gas emissions, to formulate a low carbon growth trajectory and to adapt to the negative impacts of climate change.
  19. 19. 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 STRATEGY In this context it becomes all the more crucial for an entity like AQUASUB CHEMICALS LIMITED having mainstream interest in the production and manufacture of chemicals and fertilizer industry to orient its growth and sustenance strategies in line with low carbon impact. AQUASUB CHEMICALS is one of the companies which have identified the need for accounting its carbon footprint of its business operations which will help in understanding the current state of its GHG liability. The report may be used by AQUASUB CHEMICALS LIMITED to understand the size of their overall GHG inventory, the anticipated GHG risks for the future and develop the future strategy for potential GHG mitigation which would help the organization to reduce its carbon footprint in a progressive fashion over a period of time. Taking the lead in climate change mitigation activities will help the company to reduce its GHG liability in the most economically efficient fashion and therefore gain significant competitive advantage. By undertaking early actions large corporations can prepare themselves well in advance to face climate regulations, enhance their corporate image to their global stakeholders, increase valuation of the company and secure access to capital and finally discover the financial gain from the unrealized assets in a trading environment. The methodology for the assessment study consisted of specific steps which were incorporated in consultation with top management of ACL.
  20. 20. 20 The study had classified the operations of AQUASUB CHEMICALS LIMITED into two broad Strategic Business Units (SBUs) namely Fertilizers and Chemicals. The Fertilizer SBU consisted of a product mix including Urea and Phosphatic Fertilizers. The Chemicals SBU unit consisted of a product mix including mainly Soda Ash, Cement etc. GHG emissions of AQUASUB CHEMICALS LIMITED included the emissions from the production of all inorganic chemicals and fertilizers by the individual production centers all over India and abroad. Now let’s get an idea about Green House Gas protocol:- The Greenhouse Gas Protocol (GHG Protocol) is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions. The GHG Protocol, a decade-long partnership between the World Resources Institute and the World Business Council for Sustainable Development, is working with businesses, governments, and environmental groups around the world to build a new generation of credible and effective programs for tackling climate change. It provides the accounting framework for nearly every GHG standard and program in the world - from the International Standards Organization to The Climate Registry - as well as hundreds of GHG inventories prepared by individual companies. The GHG Protocol also offers developing countries an internationally accepted management tool to help their businesses to compete in the global marketplace and their governments to make informed decisions about climate change. In 2006, the International Organization for Standardization (ISO) adopted the Corporate Standard as the basis for its ISO 14064-I: Specification with Guidance at the Organization Level for Quantification and Reporting of Greenhouse Gas Emissions and Removals. This milestone highlighted the role of the GHG Protocol’s Corporate Standard as the international standard for corporate and organizational GHG accounting and reporting. ISO, WBCSD, and WRI signed a Memorandum of Understanding on December 3, 2007 to jointly promote both global standards.
  21. 21. 21 ESTABLISHING BASELINE PROTECTION The past decade has been a time of great uncertainty for businesses seeking to incorporate GHG issues into their corporate strategies. The international mechanism establishing binding limits on GHG emissions – the Kyoto Protocol – entered into force in 2005, more than seven years after it was negotiated, and its emission caps are set to expire in 2012. In the United States, a patchwork of state and regional regulation has evolved in the absence of a coordinated national GHG mitigation policy. The future of international climate change policy post-2012 is unclear, and much of the world is not currently subject to GHG regulation. As a result, many companies find themselves in an uncertain situation in which they must make long-term investment decisions without knowing what GHG restrictions they may face in the future. In response, some GHG programs, such as the California Climate Action Registry, have sought to establish and “protect” their participants’ baseline emissions. This refers to developing and certifying inventories of participants’ GHG emissions and ensuring, insofar as 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 the U.S. Congress, which has proposed considering “early action” in companies’ allocations of GHG allowances, and has cited a range of GHG registries and reporting programs as examples of what could contribute to proof of early action. A program design that incorporates stringent quality assurance measures may strengthen participants’ claim to credit for early action. When doing a baseline analysis, it is most effective to break out energy usage by “end-use,” rather than only by sector. For example, if a city can determine how 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 to identify which programs will have the most impact on their GHG emission reductions
  22. 22. 22 PROVIDING INFORMATION TO STAKEHOLDERS Finally, GHG program aims to provide information on corporate GHG emissions to external stakeholders – such as investors (through programs such as the Carbon Disclosure Project1), environmental groups, and researchers – on which to base decisions related to investments, risk assessment, and policy and advocacy positions. Designers of such programs should consider the most useful level of disaggregation of GHG information to satisfy the targeted stakeholder groups. They should also ensure that their accounting and calculation methodologies are sufficiently transparent and consistent and that participants are able to provide additional context to their reported emission information. The strategy will provide the first formal stakeholder consultation of the project on the road to developing such partnerships and will provide the context for defining the frameworks of how such a national programme could be developed. The strategy will provide a background of the internationally accepted GHGP tools and guidelines, including the newly introduced/developed Scope 3 and life cycle analysis tools. By engaging with the leading members of the Indian business community, the event will attempt to answer the following 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?
  23. 23. 23 OBJECTIVES & TARGETS The objective of the Project titled: - “DEVELOPMENT OF GHG STRATEGY IN A CHEMICAL INDUSTRY” is primarily to reduce the Green House Gas emission to also to mitigate the harmful effects of Climate Change. During the course of the dissertation one live project was 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.
  24. 24. 24 REVIEW OF LITERATURE Céline 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 corporate action in support of a low-carbon economy and documents business practices in addressing climate change, building on principles of responsible business conduct as identified in the Guidelines for Multinational Enterprises. It is structured around three broad areas of corporate action: accounting for greenhouse gas (GHG) emissions; achieving reduction of GHG emissions; reaching out to suppliers, consumers and other stakeholders. The post 2012 international climate change architecture is still under discussion. However, in the framework of the Copenhagen Accord, many governments have publically pledged significant economy-wide GHG emission reductions and have started putting in place policies to achieve emission reductions. Measures taken by governments to reach emission targets vary in type (regulatory measures, taxes, emissions trading markets), scope (sectors covered, types of emissions), and stringency. In particular, as this report shows, policy measures directly aimed at framing corporate disclosure of GHG emissions, emission reductions and the interface with consumers follow different approaches and are at various stages of development in major OECD countries. Outside of the OECD they remain largely non-existent. A number of companies have realized the risks of inaction and have put climate change strategies in place in spite of diverse and incomplete regulatory frameworks. Frontrunners have started taking action as early as 1990, many in the early 2000s. Since 2005, with the coming on stream of the European Union Emissions Trading Scheme and increased attention of policy makers to climate change, mainstreaming of emission reduction in business operations has become more widespread among companies. In particular, evidence collected in support of this work through various sources, including a new survey
  25. 25. 25 by OECD to companies, shows that an increasing number of companies is accounting GHG emissions, establishing corporate plans to address climate change and looking beyond the company’s boundaries to contribute to a low-carbon economy. In addition to complying with current regulation and anticipating future policy developments, companies have various other motivations to reduce GHG emissions. Drivers include cutting energy costs, reducing dependence on fossil fuels and seizing new business opportunities. Companies are also increasingly responsive to societal expectations in relation to climate change. If direct pressure from investors, consumers and employees does not appear to be a major driver, companies are mindful of preserving or improving their reputation. Companies are also aware of the importance of contributing to shaping 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 information can help policy makers in developing targeted climate change policies and monitoring progress across industries. For consumers, commercial partners and financial institutions, this information provides a basis to understand the company’s carbon footprint and its performance in managing climate-change risks. According to Christian Van Stolk, Myles Collins, Mengjie Wu, Abigail Brown in their report titled “ACCOUNTING FOR SUSTAINABILITY PART III”(November 2006) pointed out some themes on the approaches and initiatives taken by actors in specific countries based on the examples identified. However, this report does not aim to give a comprehensive overview of global accounting for sustainability initiatives and programmes, nor provide an exhaustive overview of initiatives and measures taken in the countries selected. The accounting for sustainability field is emergent and multidisciplinary, with different perspectives, frameworks, and approaches. This report offers a flavour of some of these global approaches with a focus on their implementation and impact. Specifically, the report shows examples of initiatives that aim to internalize the external costs of economic activity and how initiatives aim to change the behavior of decision-makers and consumers.
  26. 26. 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 element of its primary business goal: the acceptability of its product in international markets. Each year, in pursuit of this goal, the company launches several energy efficiency projects and introduces less-GHG-intensive processes. The company is also actively pursuing GHG trading markets as a means of further improving its GHG performance. To succeed in these efforts and be eligible for emerging trading schemes, Tata Steel must have an accurate GHG inventory that includes all processes and activities, allows for meaningful benchmarking, measures improvements, and promotes credible reporting. Tata Steel has developed the capacity to measure its progress in reducing GHG emissions. Tata Steel’s managers have access to on-line information on energy usage, material usage, waste and by-product generation. Using this data and the GHG Protocol calculation tools, Tata Steel generates two key long-term, strategic performance indicators: specific energy consumption (Giga calorie / tonne of crude steel) and GHG. Since the company adopted the GHG Protocol Corporate Standard, tracking performance has become more structured and streamlined. This system allows Tata Steel quick and easy access to its GHG inventory and helps the company maximize process and material flow efficiencies. According to CLIMATE MODELLING FORUM , A report published by MINISTRY OF ENVIRONMENT & FOREST (MoEF), GOVERNMENT OF INDIA (September 2009) , The international debate on climate change is influenced to a significant extent by studies that estimate the GHG emissions trajectories of the major economies of the world. These studies are 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 in developed countries, and have often applied assumptions and techniques that do not necessarily reflect the ground realities in developing countries. With a view to develop a fact-based perspective on climate change in India that clearly reflects the realities of its economic growth, the policy and regulatory structures, and the vulnerabilities of climate change, the Government of India, through the Ministry of
  27. 27. 27 Environment & Forests, has supported a set of independent studies by leading economic institutions. This initiative is aimed at better reflecting the policy and regulatory structure in India, and its specific climate change vulnerabilities. The studies, which use distinct methodologies, are based on the development of energy-economic and impact models that enable an integrated assessment of India’s GHG emissions profile, mitigation options and costs, as well as the economic and food security implications. Mitigation of GHG emissions will, beyond a fairly modest level, involve appreciable economic costs to a society. On the other hand, the adverse impacts of climate change would be felt in diverse sectors which are 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 fourth largest 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 are projected to grow another 70% by 2020. By other measures, India’s emissions are low compared to those of other major economies. India accounts for only 2% of cumulative energy-related emissions since 1850. On a per capita basis, India’s emissions are 70% below the world average and 93% below those of the United States. India remains home to the world’s largest number of poor people, 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 has grown, emissions intensity (GHGs per unit of GDP) has declined significantly. India’s GHG intensity is currently 20% lower than the world average (and 15% and 40% lower than the United States ’and China’s, respectively). Factors contributing to the decline in energy intensity include improved energy efficiency, increased use of renewable and nuclear power, 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 government
  28. 28. 28 projects energy demand growth of 5.2% a year for the next 25 years, driven by annual GDP growth rates of 8-10%. Coal accounts for 39% of total primary energy demand, followed by biomass and waste (29%), oil (25%) and natural gas (5%). The high proportion of biomass and waste reflects the fact that some 500 million people have no access to electricity or other modern energy services. Coal is projected to remain the primary energy source, with demand growing nearly three-fold by 2030. As in many other countries, India has a number of policies that, while not driven by climate concerns, contribute to climate mitigation by reducing or avoiding GHG emissions. (Specific estimates of the emission impacts of the policies described below are in most cases not available. 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 being implemented, CO2 emissions would be nearly 20% higher compared to business as usual scenarios in both 2021 and 2031.). Many of these policies are contained in the Five Year Plans developed by the Planning Commission 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 Planning Commission in 2006 with the broad objective of meeting energy demand “at the least cost in a technically efficient, economically viable and environmentally sustainable manner.” In June 2008, Prime Minister Singh released India’s first National Action Plan on Climate Change outlining existing and future policies and programs addressing climate mitigation and adaptation. The plan identifies eight core “national missions” running through 2017 and directs ministries to submit detailed implementation plans to the Prime Minister’s Council on Climate Change by December 2008. As per working paper titled “INCENTIVE-BASED APPROACHES FOR MITIGATING GREENHOUSE GAS EMISSIONS” by Shreekant Gupta (October 2002), As a consequence of the flexibility mechanisms incorporated in the Kyoto Protocol, incentive-based policies such as emissions trading and the clean development mechanism are being widely discussed in the context of greenhouse gas (GHG) abatement. This paper examines various
  29. 29. 29 issues related to incentive-based approaches for India. Some of the specific questions it addresses are: does India stand to gain or lose if emission trading is realized even if it remains 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-based instruments (MBIs) for GHG abatement in India cannot be viewed in isolation from an overall incentive-based orientation towards environmental policy as well as broader economic and legal reform that creates a suitable milieu for MBIs. Therefore, the paper goes on to examine problems of implementing MBIs in general, particularly those related to monitoring of emissions and of enforcement. Several specific solutions are also proposed. MBIs can be broadly classified in two groups: price-based instruments and quantity-based instruments. While all of these instruments can be used to address a wide range of environmental problems, they are discussed below primarily in terms of their application to greenhouse gas (GHG) abatement. Within the first group, one can further differentiate between direct and indirect price-based instruments. The former induce generators of pollution to reduce pollution by charging for the use environmental resources, e.g., air and water. Indirect price-based instruments on the other hand, increase (decrease) the prices of outputs and inputs that are complementary (substitutes) to the polluting activity. For example, a tax on petrol (or a subsidy to mass transit) is an indirect price-based instrument to address industrial air pollution. According to the paper titled “IMPLICATIONS OF CO2 CAPTURE & STORAGE FOR GHG INVENTORIES & 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 Practice Guidance reports (GPG2000 and GPG-LULUCF) are used in preparing national inventories under the UNFCCC. These guidelines do not specifically address CO2 capture and storage, but the general framework and concepts could be applied for this purpose. The IPCC guidelines give
  30. 30. 30 guidance for reporting on annual emissions by gas and by sector. The amount of CO2 captured and stored can be measured, and could be reflected in the relevant sectors and categories producing the emissions, or in new categories created specifically for CO2 capture, transportation and storage in the reporting framework. In the first option, CCS would be treated as a mitigation measure and, for example, power plants with CO2 capture or use of decarbonized fuels would have lower emissions factors (kgCO2/kg fuel used) than conventional systems. In the second option, the captured and stored amounts would be reported as removals (sinks) for CO2. In both options, emissions from fossil fuel use due to the additional energy requirements in the capture, transportation and injection processes would be covered by current methodologies. Methodologies to estimate monitor and report physical leakage from storage options would need to be developed. Some additional guidance specific to the systems would need to be given for fugitive emissions from capture, transportation and injection processes. Conceptually, a similar scheme could be used for mineral carbonation and industrial use of CO2. However, detailed methodologies would need to be developed for the specific processes. Quantified commitments, emission trading or other similar mechanisms need clear rules and methodologies for accounting for emissions and removals. There are several challenges for the accounting frameworks. Firstly, there is a lack of knowledge about the rate of physical leakage from different storage options including possibilities for accidental releases over a very long time period (issues of permanence and liability). Secondly, there are the implications of the additional energy requirements of the options; and the issues of liability and economic leakage where CO2 capture and storage crosses the traditional accounting boundaries. Information on pollutant emissions is usually compiled in ‘emission inventories’. Emissions are listed according to categories such as pollutants, sectors, and source and compiled per geographic area and time interval. Many different emission inventories have been prepared for different purposes.
  31. 31. 31 RESEARCH METHODOLOGY The methodology for carbon footprint assessment has been undertaken from essential components from WBCSD GHG Protocol and ISO 14064 Guidelines. Six essential broad steps have been identified to arrive at the carbon footprint and ultimately the carbon assets and 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 Boundary Business operations vary in their legal and organizational structures. In setting organizational boundaries, a company selects an approach for consolidating GHG emissions and then consistently applies the selected approach to define those businesses and operations that constitute the company for the purpose of accounting and reporting GHG emissions. Setting up Organizational boundary: For corporate reporting, two distinct approaches are used to consolidate GHG emissions. They are Equity Share Approach & Control Approach which has been defined below.
  32. 32. 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 its operational boundaries. The establishment of operational boundaries includes identifying GHG emissions and removals associated with the organization’s operations, categorizing GHG emissions and removals into direct, energy indirect and other indirect and choosing
  33. 33. 33 which of the other indirect emissions will be quantified monitored and reported. It would be 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 process
  34. 34. 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 Footprint This step consists of identification of areas of high emissions and suggestions for energy consumption reduction in the same. ACL is a major chemical producing company and hence a major GHG emitter. The annual GHG emissions of ACL stand at around 2.44 million tCO2 per annum due to consumption of fossil 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 organization's 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.
  35. 35. 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. Figure: - The brief methodology that was followed Here maximum priority was given to operational boundary set up since the industry under consideration was chemical industry and prioritizing the potential area was of maximum importance. Data collection was taken as 3rd major priority since the analysis was based on data collection and analysis had to be inclined towards estimation of carbon footprint of AQUASUB CHEMICALS LIMITED. INTRODUCTION OPERATION BOUNDARY SET UP DATA COLLECTION ANALYSIS WAY FORWARD
  36. 36. 36 CASE STUDY: - GHG ACCOUNTING/CARBON FOOTPRINT ESTIMATION 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 of inorganic chemicals. Over the last two years, the company has witnessed several acquisitions and mergers which have catapulted it to become the world’s second largest Soda-ash manufacturing company with a unique diverse portfolio of value creating assets and brands. The company is the only soda-ash manufacturer to have a strong-hold in 4 continents. Although the mainstay of ACL is production of soda-ash, ACL also specializes in the production of other inorganic chemicals such as sodium bicarbonate, nitrogenous and phosphate fertilizers, sodium tri-poly phosphate, cement and packaged salt. Some of the major achievements of ACL over the last year are. The chemicals’ business of ACL achieved the highest sales ever, reflecting a growth of 4.42% as compared to the previous year. ACL is the Indian market leader in edible salts and soda ash. The company acquired one of the major soda-ash players in USA, General Chemical Industrial Products (GCIP), which catapulted it to the position of the third largest soda-ash producer in the world along with opening of new avenues for the group. ACL is the most energy efficient urea manufacturer in India. The two main strategic business units (SBUs) of ACL include chemicals and fertilizers. Fertilizers are manufactured in India while the company has chemical manufacturing 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 of
  37. 37. 37 STPP, a building component of detergents in India. The product mix and technology used for 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 the globe. 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 sodium bicarbonate. It has soda ash plants at Lostock (Greater Manchester) and Winnington (North London). The Winnington Plant is one of the most efficient power plants in Europe with a combined thermal and electrical efficiency of 85% resulting in total CO2 emission reduction from 900000 tonnes/year to 750000 tonnes/year. The power and steam to both these 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 and operated by POWERGEN (now EON) is capable of supplying approximately 500 tonnes of steam every hour and generating 130MW of electricity. Brunner Monde consumes only 25 MW 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 50,000 tonnes/year of sodium bicarbonate. The plant became operational in June 2008 and serves the pharmaceuticals and food industries. The plant uses surplus carbon dioxide from the soda ash plant as one of its raw materials – which improves the air quality, as well as enhances the efficiency of the whole manufacturing complex.
  38. 38. 38 General Chemical Industrial Products (USA) General Chemical Industrial Products (GCIP) is one of the top five global producers of soda ash. GCIP was acquired by Aquasub Chemicals in January 2008, making the company the second largest soda ash producer in the world. GCIP mines the Green River basin in Wyoming, USA, for naturally occurring deposits of trona (an ore containing soda ash). The site is estimated to contain 134 billion tonnes of trona, enough to meet global soda ash demand for hundreds of years at current levels of consumption. GCIP produces natural soda ash, which requires much less energy, capital and raw materials than synthetic soda ash production. Relevant Standards for Carbon Footprint Assessment DESCIPTION GHG PROTOCOL INITIATIVE ISO 14064 Salient Features Developed for businesses through an inclusive and transparent multi stakeholder process comprising of 350+ stakeholders (incl. Businesses, NGOs, governments and Inter Government organizations. Consists of a set of unambiguous and verifiable requirements or specifications to support organizations and proponents of GHG emission reduction projects. Aims to achieve clarity and consistency between those reporting GHG emissions and stakeholders. Types of Standards Accounting and Reporting Standard (Guide for companies to use in quantifying and reporting their GHG emissions) GHG Protocol Project Quantification Standard (Guide for quantifying reductions from GHG mitigation projects) ISO 14064-1:2006, Greenhouse gases – Part 1, specifies requirements for designing and developing organization or entity-level GHG inventories. Part 2, details requirements for quantifying, monitoring and reporting emission reductions and removal enhancements from GHG projects. Part 3, Guidance for conducting of validation & verification.
  39. 39. 39 BASE YEAR SELECTION:- The process of planned abatement of GHG emissions starts off with identification of sources and quantification of the emissions which can also be termed as inventorization. The GHG inventory process is an exhaustive and comprehensive analysis of the existing activities involved and their respective climate change implications (or GHG emissions). Companies may need to track emissions over time as a requirement of a variety of business goals, such as public reporting, establishing GHG targets, managing risks and opportunities and addressing the needs of investors and other stakeholders. The preliminary use of the GHG inventory is towards arriving at futuristic abatement, mitigation and management strategies. A meaningful and consistent comparison of emissions over time requires that companies set a performance datum with which to compare current emissions. This datum is the base year. For consistent tracking of emissions over time, the base year emissions may need to be recalculated as companies undergo significant structural changes such as acquisitions, divestments, and mergers. The selection of an appropriate base year is attributed to the availability of verifiable GHG emissions and/or removals data for that year. The base year may either be a single year data 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 detailed procedure to be followed by the company to allow the base year GHG inventory to remain valid as a comparative tool. The base year inventory shall be recalculated if significant changes occur to base year GHG emissions or removals as a result of changes to operational boundaries, ownership and control of GHG sources/sinks transfers into/out of organizational boundaries and changes to GHG quantification methodologies will result in significant changes to GHG emissions or removals. However the base year GHG inventory shall not be recalculated to account for changes in facility production levels.
  40. 40. 40 DATA COLLECTION & PROCESSING METHODOLOGY:- Data collection forms the corner-stone of GHG inventory process. In order to report corporations total GHG emissions, the companies would be required to gather and collate data from multiple sources. The data collection procedure should be enshrined with the five fundamental principles of GHG accounting and reporting which are: A. Relevance B. Completeness C. Consistency D. Transparency E. Accuracy Following the process of setting up of the organizational and operational boundaries and further identifying the scope of emissions, the data collection procedure begins. The data collection approach may either be a centralized or a decentralized approach. The centralized approach demands that the individual facilities report activity/fuel use data to the corporate (central level) wherein emissions are calculated, whereas the decentralized approach as the name suggests involves individual organizations to directly calculate their emissions using approved methods and reporting the same to the central authority. In order to maximize accuracy and minimize reporting burdens a combination of the two approaches can also be selected. The collection of authentic data is one of the key constraints in developing the GHG inventory. To ascertain the quality of data the following data 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 format
  41. 41. 41 For arriving at the GHG emission inventory for ACL using a decentralized approach, the data collection has been done using spreadsheets. A preliminary understanding of the process flow diagrams has been used to develop customized data collection templates from the plant facilities. CALCULATION AND ANALYSIS OF CARBON FOOTPRINT OF ACL:- The procedure followed for Carbon Footprint Estimation exercise has been adopted to ensure maximum possible completeness transparency and conservativeness in terms of identifying the sources of GHG emissions as well as the data collection and analysis procedures. 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.
  42. 42. 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 0.0282 Table 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 Railway 0.02kg CO2/MT-km Emission factor of air-travel of passengers Depends on the distance between source and destination. Table :- Emission Factor consideration as per WBCSD norms
  43. 43. 43 CARBON FOOTPRINT AT HALDIA FACILITY:- Direct Emissions from Haldia Facility: The Haldia plant consists of the sulphuric acid plant, phosphoric acid and phosphatic fertilizer plants which include sodium tri-poly phosphate (STPP) plant, di-ammonium phosphate (DAP) plant, Nitrogen-Phosphorus-Potassium (NPK) complexes and single super phosphate (SSP) fertilizer manufacturing plant. The carbon footprint of Haldia Facility has been calculated considering the GHG emissions associated with operation of the manufacturing processes and inbound and outbound logistics for transportation of products. OPERATIONAL BOUNDARY CONSIDERED FOR ACL, HALDIA UNIT Fig: - Pictorial Representation of ACL PLANT, HALDIA AQUASUB CHEMICALS, HALDIA UNIT CO2& other emissions Sulphuric Acid & Phosphoric Acid DAP. NPK, SSP
  44. 44. 44 Name of Unit Emission due to Electricity Consumption tCO2 Emission due to direct fossil fuel combustion tCO2 Emission due to steam consumption tCO2 Total % of total emission Direct Emission Sulphuric 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
  45. 45. 45 Fig: - Showing the percentage of total emission (direct emission) Fig: - Showing percentage of total emission (indirect emission) Emission Factor of Haldia plant: As the source of electricity is the eastern regional grid of India, emission factor of the same grid has been assumed from CEA. Sulphuric Acid Plant 11% Phosphoric Acid Plant 7% STPP Plant 32% LABSA PLANT 1% SSP Plant 4% DAP+NPK Plant 45% 0% 0% 0% 71% 29% Indirect Emission (Road Travel) Indirect Emission (Air Travel) In Logistics Out Logistics (Rail) Out Logistics (Road)
  46. 46. 46 Name CO2 Emission Factor Source Eastern Regional Grid (tCO2/MWh) 0.80 CEA Database Table: - Electricity Emission Factor of Haldia Facility Hence 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 by Railways is maximum in case of indirect emission. The footprint for ACL has been calculated based on the monitored plant data as provided by ACL. In cases of unavailability of data there could be deviation leading to some difference between the actual and the estimated emission calculations. The most conservative estimate has been taken in such a case and standard values or IPCC default values have been considered. The following parameters have been taken into consideration while calculating the GHG inventory of the different chemical plants: Emission Factors- The carbon percentage of the fuel in use are unavailable. So the emission factors of Natural Gas, Naphtha, Pet Coke, LDO and Coal have been taken from the IPCC 2006 guidelines. Net Calorific Value of the fuel -In cases of unavailability of plant data the default Net Calorific Value (from IPCC) values of the fuel into consideration has been taken. The Net Calorific Value of Natural Gas, Naphtha, Pet Coke, LDO and coal have been taken from the IPCC 2006 guidelines. Density of the fuel -In cases where the density of the fuels is unavailable, it has been taken from an authentic source or it has been calculated from the fundamentals. In Haldia the density 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 fuel consumption, average hourly data (kg/hour) along with average operational hours for the months (hour/month) have been used to calculate the fossil fuel consumption.
  47. 47. 47 RESULTS & DISCUSSION From the project activity, potential areas of increasing CO2 emissions were identified, both for direct emissions and both for indirect emissions. Now the question arises, are there any mitigatory measures? In this section we would discuss about the abatement measures and necessary GHG strategy. GHG Abatement Strategies in the Chemicals SBU of ACL Short 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 of STPP, a building component of detergents in India. ACL may implement Nano-filtration (NF) technology for purification of brine used in the soda ash plant. Due to unavailability of raw water, ACL presently uses sea water as source of raw water. Owing to the high percentage of calcium and magnesium salts, ACL is required to treat the raw sea water to remove salts. Thereafter, salt dissolves externally in a static salt dissolver to increase the percentage of sodium chloride in sea-water. The NF plant proves to be an effective technology for sea-water purification utilized for brine preparation and purification. It is similar to a reverse osmosis plant consisting of:- 1. Conventional pretreatment unit 2. Nano Filtration membranes skid Prior to passing through NF membranes skid, the sea water will pass through cartridge filters to ensure that zero turbidity water enters the Nano filtration unit. The NF membrane will remove the bivalent ions present in the seawater; Ca, Mg, SO4 while allowing maximum chloride ions to pass through it.
  48. 48. 48 Replacement of the 4-stage Calciner to a 6 stage Separate Line Calciner (SLC) coupled with the use of high efficiency coolers will result in improvement in the thermal energy efficiency and lead to reduction in overall GHG emissions. The presence of the additional two stages will result in additional heat transfer to the kiln feed and reduce pre-heater exhaust temperature. Coal combustion will also improve in the new SLC using the hot tertiary air from the kiln hood. This will reduce the specific coal consumption, the quantity of air requirement, the pre-heater gas volume and consequently the energy consumption of the circulation system. The cumulative effect is a net reduction in emissions of GHGs to the tune of 0.06tonne CO2/kg of clinker. Proper redesigning of the grate system of the existing Cooler has the potential to increase the cooler recuperation efficiency i.e. higher quantity of heat will be utilized in clinker cooler. The technology involves retrofitting of the clinker cooler for effective trapping of the heat in the clinker cooler. New clinker inlet distribution system is used to distribute the clinker on the grate. Due to the benefits of the inlet grate system the proper cooling of inlet will take place with additional benefit of high temperature tertiary air ducts. The application of this technology at the cement plant will help to achieve a shift towards low carbon path which can leverage financing through carbon revenue. Approximately 20 kCal/kg of clinker of thermal energy savings and is possible by application of this technology. The waste heat generated from the clinker-cooler exit-gas and pre-heater exit gas may be captured in waste heat recovery boilers to generate steam. The steam can generate power via a steam turbine using Rankine Cycle thus displacing the GHG intensive power generation in the coal based captive power plant production facility. The effective utilization of the waste gases which would otherwise have been vented into the atmosphere for power generation is a major GHG abatement initiative that may be adopted at the cement plant.
  49. 49. 49 Fig: -Representative Diagram of utilization of clinker cooler gas for power Generation Injection of superheated steam into the compressor discharge upstream of combustion chambers will increase the mass flow to the turbine section. This will result in increased power output. The modification will result in added mass flow into the turbine without considerable increase in compressor power consumption. This will result in lower specific fuel consumption and an improved heat rate. Under usual conditions, turbine output decreases with ambient temperature. Thus the steam injection modification can maintain the higher output even at higher temperatures. The maximum steam injection possible for power generation improvement is approximately 5% of compressor air flow for a typical Frame V gas turbine that can be retrofitted with steam injection system19. Excess steam in the fertilizer complex may cater to the superheated steam requirement of the steam injection modification. As per estimates from BGGTS (joint venture between BHEL and GE) a typical Frame V gas turbine having a steam injection
  50. 50. 50 rate of approximately 5% compressor airflow may result in reduction of heat rate by 7.2% vis-à-vis an increase of 2-3MW in power generation. Medium term abatement Strategies From the viewpoint of an organization such as ACL, production of bio-fuels is an important opportunity of reducing the overall GHG impact. The potential is considerable at close to 2.1 to 2.2 tonnes of carbon dioxide for every tonne of bio-diesel production. Bio-diesel produced may be used in a number of ways to displace the consumption of GHG intensive fossil 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 purposes Based on the technology selection for bio-diesel production, the production costs may be quite 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 to that of petro-diesel irrespective of the higher production costs. The role of carbon credits in plugging the gap between the production costs and selling price of bio-diesel will be an important factor determining the feasibility of the venture. Utilization of the wind energy for power generation using a wind turbine holds significant potential for GHG abatement that may be adopted in manufacturing facility. Clean electricity may be generated with zero emissions by harnessing the wind power potential of the site where the wind based power plant would be set up. As the plant is located on the western coast of India, the wind patterns may be favorable for setting up a wind energy based generation system. Biomass based power generation refers to the process that generates energy in the form of electricity or heat from a biomass source like bamboo, rice husk and other agro/forest residues. Such technologies reduce fossil fuel consumption and decrease GHG emission
  51. 51. 51 Long term abatement Strategies Brunner Monde Lostock & Winnington (U.K) has been one of the most energy efficient chemical plant in UK. Hence the energy efficiency measures and steps followed by the plant could be implemented here in India as well. Brunner Monde’ Netherlands could also be an ideal example while implementing energy efficiency measures Tidal energy from the motion of ocean tides can be trapped and effectively utilized for clean power generation. Tidal barrage systems are technically feasible, utilizing conventional low head hydro turbines and dams/barrages. Adoption of renewable power generation technology replacing the power generation from the existing coal based captive power plant is a GHG abatement initiative resulting in GHG emission reductions to the tune of 0.7 tCO2/MWh. Proximity of the plant location to the Arabian Sea will play a significant role in working out the feasibility of harnessing the ocean waves to generate electricity and displace fossil fuel based generation. Geothermal energy i.e. the heat contained within the Earth that generates geological phenomena 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 Earth's heat that can, or could, be recovered and exploited by man. The steam and water captured beneath the earth’s surface is separated and electricity generation mainly takes place in conventional steam turbines. Conventional steam turbines require fluids at temperatures of at least 150 °C. The steam, direct from dry steam wells or, after separation, from wet wells, is passed through a turbine and exhausted to the atmosphere. About 0.77 tCO2e/MWh of GHG abatement can be achieved through implementation of this measure Soda ash production by calcination of trona ores is less GHG intensive as compared to the production by Solvay process. Hence, a shift in the production from Solvay to natural trona calcinations will result in reduction of carbon dioxide emissions capacities of soda ash after due evaluation of the carbon liability of Solvay Process vis-à-vis trona calcination. This is thus a very important consideration.
  52. 52. 52 CONCLUSION From the case study it was evident that chemical industry was one of the most vulnerable industries and thereby made significant contributions as GHG emitter. It was also seen that the share of indirect emissions were higher as compared to the direct emissions from the chemical plant itself. Hence a short term, long term and long term GHG abatement strategy was required so that GHG emission could be significantly reduced. For that more and more emphasis was given on utilizing renewable energy sources which not only yielded clean fuel but also saved national revenue. Now an obvious question that would arise as to why a chemical industry requires knowing its carbon footprint estimates? The exercise of carbon footprint will improve industry’s understanding of its emissions profile and any potential GHG liability or “exposure.” A company’s GHG exposure is increasingly becoming a management issue in light of heightened scrutiny by the insurance industry, shareholders, and the emergence of environmental regulations/policies designed to reduce GHG emissions. Identification and quantification of the carbon assets and liabilities/risks of ACL which are the two essential components for understanding climate change risk-return perspective of ACL. Identification of potential opportunities of progressively reducing ACL’s present carbon footprint through energy optimization, process modifications and improvements, adoption of clean technologies (e.g. GHG capture and storage) and greening the supply chain 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 of
  53. 53. 53 understanding of better cost cutting and revenue enhancement opportunities across the organization's 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 management
  54. 54. 54 Now an obvious question that arises is how does the project contribute towards sustainable development? Well in brief, the quantification of GHG emission of an industry itself is a giant step towards attaining sustainable development. To add to that if the abatement/mitigation strategies that have been recommended are followed proactively then quantifying GHG emission would definitely be a part of attaining Sustainable Development 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 its GHG emissions or by GHG accounting. To ensure that reported data, information & related disclosures provide a faithful, true, fair account of GHG emissions, removals, emission reductions, 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.
  55. 55. 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. Fig: - It represents the principles of GHG Accounting Finally 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 gas use, coal use, electricity consumption and other fuels etc. Indirect (Scope 2) Emissions from all electricity purchased for use in office buildings and townships. 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. Completeness Consistency Transparency Accuracy Relevance
  56. 56. 56 SCOPE AHEAD Now there are a lot of scopes for improvement pertaining to analyzing carbon footprint. The Guidelines for Multinational Enterprises are recommendations from governments to business on responsible business conduct. Though the Guidelines do not specifically address climate change, many of their recommendations reflect governments and societies’ expectations on what constitutes responsible business conduct in addressing climate change. The Guidelines thus have an important role to play in helping build international consensus and spread knowledge about advanced management practices in support of a low carbon economy. This overview highlights recommendations which are relevant to business action to address climate change. Enterprises should contribute to economic, social and environmental progress with a view to achieving sustainable development, develop and apply effective self-regulatory practices and management systems that foster a relationship of confidence and mutual trust between enterprises and the societies in which they operate. Enterprises should, within the framework of laws, regulation and administrative practices in the countries in which they operate, and in consideration of relevant international agreements, principles, objectives, and standards, take due account of the need to protect the environment, public health and safety, and generally to conduct their activities in a manner contributing to the wider goals of sustainable development. Consistent with the scientific and technical understanding of the risks, where there are threats of serious damage to the environment, taking also into account human health and safety, not use the lack of full scientific certainty as a reason for postponing cost-effective measures to prevent or minimize such damage. Enterprises should ensure that timely, regular, reliable and relevant information is disclosed regarding their activities and performance. This information should be disclosed for the enterprise as a whole and, where appropriate along business lines or geographic
  57. 57. 57 areas. Disclosure policies of enterprises should be tailored to the nature, size and location of the enterprise with due regard taken of costs, business confidentiality and other competitive concerns Enterprises are encouraged to communicate additional information that could include: value statements or statements of business conduct intended for public disclosure including information on the social, ethical and environmental policies of the enterprise and other codes of conduct to which the company subscribes. Enterprises should continually seek to improve corporate environmental performance, by inter alia, such activities as: - development and provision of products and services that have no undue environmental impacts, are safe in their intended use; are efficient in their consumption of energy and natural resources; can be reused, recycled, or disposed of safely; - promoting higher levels of awareness among customers of the environmental implications 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 the safety and quality of the goods or services they provide. In particular, they should: - Ensure that the goods or services they provide meet all agreed or legally required standards for consumer health and safety, including health warnings and product safety and information labels; - Provide accurate and clear information regarding their content, safe use, maintenance, storage, and disposal sufficient to enable consumers to make informed decisions; - Not make representations or omissions, not engage in any other practices that are deceptive, misleading, fraudulent, or unfair. Promoting a more systemic approach to climate change would not seek to reduce the problem to marketing gimmicks, celebrity endorsements, technological quick-fixes, or neo- colonial exploitation. Any individual, organization or government embracing this holistic attitude would commit to doing everything they could to reduce their climate impact, but would not offset responsibility for any of their remaining emissions. Rather they would commit to demanding, adopting and supporting climate policies that reduce emissions at source as opposed to offsets or trading. They would support stricter regulation and
  58. 58. 58 oversight and penalties for polluters on community, local, national and international levels, and they would commit to supporting communities adversely impacted by climate change and so-called ‘climate-friendly’ projects. Finally they would endorse the notion that real solutions to climate change require social change and they would count themselves to be a part of that movement, spending time and energy towards achieving such change. Fig: - Showing types of project and time needed to offset emissions Use of Renewable Energy can be an ideal choice to reduce GHG Emission. As already discussed, use of biomass, wind can be a good option to generate energy. In addition to that it also gives an option to apply for TREC (Tradable Renewable Energy Certificate) which can 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 to reduce our emissions to stop global warming? Second, it depends on the rate at which global carbon dioxide emissions continue to rise. If emissions continue to go up, we need to offset even faster to meet reduction targets. Hence the ideal solution regarding this issue would be to be categorizing the vulnerable areas and then quantify the GHG emission and then depending upon the area where emission is higher, suitable mitigating measure needs to be implemented, like opting for renewable energy and ensuring that the methods/practices leads to sustainable development.

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