The year 2020 will be remembered as the year that Nature struck back.
As the novel Coronavirus pandemic has spread across the globe, we’ve also experienced a record-breaking Atlantic hurricane season that has brought widespread storm damage to the Gulf Coast. Meanwhile, the Western states of California, Oregon, and Washington have been blanketed with acrid smoke as massive wildfire conflagrations have burned out of control.
These unprecedented weather events are taking place at a time when the world’s average temperature has increased by 1°C since the start of the industrial revolution.
Given that climate scientists believe we are on track to double or triple this temperature increase within the lifetime of today’s youngest generations, it’s sobering to imagine the potential ecological destruction and misery we may suffer in the future unless we take drastic action to control greenhouse gas (GHG) emissions now.
Corporate America is beginning to take action.
According to one of the leading environmental consulting companies, Natural Capital Partners, nearly 25% of Fortune Global 500 companies have made a commitment to reduce their net greenhouse gas emissions to net-zero by 2030.
The number of major companies that have publicly committed to achieving this “carbon neutral” status is growing – from around 100 in 2019 to more than 200 today.
And the list keeps growing.
For example, Formaspace clients Ford Motor Company and Google have both recently announced plans to become carbon neutral. Apple, during its recent product introductions, pointed out that its new iPad Air will be carbon neutral, joining Microsoft, which previously announced its ambitious plans to go even further — to go “carbon negative” (e.g. remove more carbon from the atmosphere than it produces).
Meanwhile, Tesla, which is building a new electric truck manufacturing facility in Austin, has pledged carbon neutrality for its giant “Gigafactory” battery manufacturing operations, and oil and gas producer BP has recently committed to aggressive plans to reduce its carbon footprint.
How quickly will other manufacturers jump on the carbon-neutral bandwagon?
There are signs that we may soon reach a tipping point.
Leading-edge companies have already demonstrated it’s possible to go carbon neutral using today’s technology, and many have saved significant money on energy costs as a result.
Adding to the pressure, more consumers are making their purchasing decisions based on the environmental stance of companies they do business with. The same goes for business-to-business (B2B) transactions: as more and more companies pursue a carbon-neutral agenda, they are strongly motivated to purchase goods and services from other companies pursuing the same goals, to reduce the carbon footprint across their collective supply chains.
Finally, finance and government regulations are adding additional pressure on companies to make the switch toward carbon-neutral programs. Institutional investors are using the power of “investor activism” to encourage policies that are friendlier to the environment. In Europe, the EU has set forth a goal to be carbon neutral by 2050, and the state of California has announced its ambitious plans to be carbon neutral by 2045.
Conduct a Carbon Audit and Track Your Carbon Emissions “Budget”
What steps can your manufacturing company take today to reduce its carbon footprint and achieve the goal of becoming carbon neutral?
As with any other business initiative, the first step is to create an accurate baseline measurement of the “before” state, so you’ll have a wide-ranging understanding of exactly where you need to improve.
Tracking the monthly electric utility bill is no longer sufficient; instead, you will need to invest in new meters, sensors, and other devices to get a true understanding of every aspect of your current energy usage — as well as to accurately quantify any greenhouse gases emitted into the atmosphere during your production processes.
In addition to these so-called “direct emissions,” you will also need to identify and measure “indirect emissions” (such as those created by the power plant supplying electricity to the grid) as well as “indirect value chain emissions,” which span the gamut from the carbon emissions created by vendors supplying your raw materials to your customers who buy and use your products.
Keeping track of all this energy usage data is complicated, so don’t reinvent the wheel by trying to create a framework formula from scratch.
Instead, focus your efforts on collecting the data by leveraging one of the several environmental management system (EMS) frameworks adopted by other companies.
Popular EMS frameworks include the pioneering system developed by Natural Capital Partners back in 2002, the ISO 14000/14001 series of energy standards, as well as two standards developed in Europe: the Eco-Management and Audit Scheme (EMAS) and PAS 2060 from the British Standards Institution (BSI Group).
Most of the organizations offering environmental management system (EMS) frameworks are also in the business of offering carbon-neutral “certifications” once you meet your carbon-neutral goals.
Tip: Before you select an EMS framework, perform due diligence to determine which of the available certifications are the most well-regarded in your industry sector and make your final EMS selection based on that criteria. Once you commit to a specific EMS implementation, it stands to reason it will be far easier to get a “carbon neutral” certification from the same organization.
Change Up Energy Sources Powering Manufacturing Processes to Reduce Greenhouse Gas Emissions
When it comes to manufacturing companies, production processes tend to use the most energy, unlike other businesses, where heating and cooling buildings are typically the greatest energy users.
That’s why switching to renewable energy sources to power your production lines can have an outsized impact on reducing carbon emissions.
And there are a lot more environmentally friendly options available today. In many markets, you can choose electricity providers that use solar, wind, or other renewable energy sources. This can be supplemented with on-site power generation using solar arrays or wind turbines.
Not all manufacturing operations can be converted to renewable energy, however. Energy-intensive processes (such as blast furnaces used by metal manufacturing companies) may need to use fossil fuel-based power for the foreseeable future.
In these cases, adding an energy co-generation system makes sense. Co-generation systems can absorb any excess heat (which would otherwise go to waste) and use it for another purpose, such as generating steam to heat buildings, or powering other manufacturing processes, thus reducing the overall energy usage.
A Case for Energy Grid Micromanagement
Industrial power customers who are used to paying for cheap power during off-peak hours (such as at night) will need to rethink their approach to energy use management.
This is because wind and solar production peaks during the daylight hours, providing a surplus of available power during the middle of the day.
(This also means you may be able to negotiate with your utility company get the cheapest, cleanest electricity during the middle of the day.)
Electric grid operators describe this new phenomenon as the “duck curve” – a name given to the shape of the curve that results when you calculate the difference between consumer demand for electricity (which peaks in the early morning and again in the late afternoon) and the available supply of solar and wind energy (which peaks during the middle of the day).
Balancing between these two curves is tricky for grid operators. Without large scale energy storage systems, most grid operators need to be ready to “dispatch” power plants (typically powered by fossil fuels) very quickly, especially during the late afternoon demand peak, then throughout the night and into the morning peak period, after which, the solar and wind supplies become available again.
Suffice to say that managing the balance between these ever-changing supply and demand curves is a major challenge for grid operators (as well as manufacturing companies operating their own on-site solar or wind generation systems) – making it a task that is well suited for automated computer systems.
Sensing an emerging need, Google has created a new AI-based system (using its Deep Mind machine learning technology) that is capable of making micro-adjustments throughout the day to optimize energy. The new system was initially developed for Google’s own energy-intensive data centers, but the company has announced it intends to sell these AI-based energy management systems to other industrial users as well.
Reduce HVAC Energy Use with Smart LEED-certified Buildings
The second biggest source of energy use in the manufacturing sector is heating and cooling the building. (For most other businesses, this is typically the number one energy user.)
Fortunately, we now have a well-understood set of principles to reduce energy consumption in buildings, thanks to the widespread adoption of LEED building standards, which have encouraged generation after generation of efficiency improvements. In some cases, the most efficient LEED buildings have been able to achieve “net-zero” or even “net-negative” energy use.
Manufacturing facilities can also take advantage of these innovations, such as extreme R value insulation in the walls, green roofs that collect rainwater and avoid reflecting heat back into the environment, as well as optimized building site placement, automated window openings, and moveable shade systems that maximize solar heating during the winter while minimizing it in the summer.
Incentivize Waste Reduction across the Organization: Little Changes add Up to Big Numbers
The next challenge posed by pursuing a carbon-neutral agenda is getting your entire organization to embrace these new changes.
- Business managers need to understand how to incorporate the new carbon-neutral requirements into their budgeting and management processes (such as KPIs) to make sure everyone is aware of them (and properly incentivized) to reach the new goals.
- Engineering and manufacturing departments need to incorporate the new carbon-neutral requirements into their existing value engineering processes and develop solutions that optimize production output while minimizing greenhouse gas emissions.
- Operational, supply chain, and logistics teams need to re-prioritize the selection of vendors and other partners to reduce the overall “carbon budget” spend.
- Corporate marketing and communications departments and public relations team members need to promote the importance of the new carbon-neutral goals, both to internal audiences, as well as to the public, press, and analysts.
- Management needs to encourage and reward all employees who contribute ideas and special efforts to reduce carbon emissions.
Develop a Carbon Neutral Supply Chain
Remember that to achieve your carbon-neutral goals, you need to calculate all “indirect value chain emissions,” including those carbon emissions created by vendors supplying raw materials.
To meet your carbon-neutral goals, supply chain managers will need to take additional steps to evaluate and rank the vendors they do business with.
Does a vendor also have a carbon-neutral goal that’s in alignment with yours?
Do you have visibility into the vendor’s processes, and can you trust their information?
Is it possible to coordinate operations to help them meet their goals (and help you in return)?
Move toward Greener Logistics and Distribution Methods
Transportation, warehousing, and material handling can be another significant source of “indirect value chain emissions.”
When optimizing your warehousing and distribution center operations, take energy use into consideration.
For example, depending on your operational needs, it may be more efficient to have fewer, larger shipping facilities or a larger number of smaller ones closer to your customers. Only a detailed analysis can identify the optimal approach.
If raw materials or finished products need to travel long distances, transportation by rail and by ship generates less greenhouse gas emissions than transportation by air freight or overland trucks. Make sure that containers and truck trailers are traveling with full loads to reduce the number of trips.
Packaging can also be optimized to reduce waste. Possibilities include using recyclable materials or redesigning products so they can be shipped with less disposable packaging.
Consider the Impact of the Entire Product Life Cycle
“Indirect value chain emissions” are not limited to the upstream supply chain; they also apply to downstream uses of your products and services.
Engineers, product designers, and product planners need to consider the carbon emissions created by the customers who use your products as well as what happens to them when they have reached the end of their useful life.
In Europe, EU regulations oblige manufacturers to create product recycling programs for energy-intensive manufactured products, such as automobiles. Here in the US, some states encourage recycling beverage cans and bottles by collecting a small deposit, which is refunded when the empties are returned to a retailer.
One idea that might provide inspiration is HP’s program to recycle its printer toner cartridges. Replacement toner cartridges are delivered in a box that the user can use to return the old cartridges, using a prepaid shipping label.
Other carbon-neutral challenges facing product engineers include:
Is your product repairable in the field, or will it end up in a landfill when it breaks?
Does your product use the least amount of energy possible? Can it be turned off completely at the switch? (Many products draw a few watts of electricity even when “off.”)
What if you can’t meet your Carbon Neutral Goals?
Due to energy-intensive production methods, many manufacturing companies find it hard to meet their carbon neutral goals by implementing energy reduction programs alone.
What are the alternatives?
Investing in Carbon Offsets
The first option is investing in so-called “carbon offsets,” which are alternative means of reducing your net carbon emissions. The classic example is planting a large number of trees to offset the greenhouse gases emitted by a factory. Each tree absorbs a small quantity of carbon from the atmosphere each year, and this goes into a calculation to “offset” the carbon pollution created by other sources (e.g. the factory in this example).
Cap and Trade Mechanisms and Carbon Markets Trading in Carbon Credits
Another approach is the so-called Cap and Trade system, in which Company A, which is emitting excessive greenhouse gases, makes a financial trade with Company B, who has reduced their emissions below a “cap” set by the government.
In recent years, this approach has been transformed into a formal carbon trading market, whereby companies who are emitting excess carbon can purchase “carbon credits” available on the marketplace.
Europe has an active carbon-trading market place, as does a consortium of nine eastern US states, dubbed the Regional Greenhouse Gas Initiative. And California launched its own carbon trading market in early 2020.
When All Else Fails: Carbon Sequestration and Carbon Removal Technologies
Reducing carbon emissions across the entire economy is an even bigger challenge.
For example, Lawrence Livermore Laboratory conducted a study that concluded the state of California would need to remove 125 million tons of carbon each year to reach its stated goal of becoming carbon neutral by 2045 – an effort equivalent to taking 26 million cars off the road every year.
Scientists are looking at two emerging technologies to remove carbon from the atmosphere directly.
The first is carbon sequestration, in which carbon emissions are captured from emissions sources (such as factories or refineries) and stored permanently in underground caverns, for example. (Some carbon sequestration advocates are also proposing pumping carbon gases into very deep ocean waters, but this idea is very controversial.)
The second approach is called carbon removal technology, in which machines would ingest carbon directly from the air, allowing it to be processed into useful materials or possibly sequestered in storage.
Companies such as Microsoft are looking at using carbon removal technologies to surpass their goal of becoming “carbon neutral” to become “carbon negative,” meaning they would be capable of reducing carbon emissions faster than they produce them.
We expect other companies will follow suit in the coming years to address the problem of climate change.
Formaspace is Your Industrial Efficiency Partner
Formaspace is uniquely positioned to assist with your production, material handling, distribution center, and laboratory needs.
We build custom industrial furniture solutions here at our factory headquarters in Austin, Texas, using locally sourced steel and other American-made raw materials.
If you can imagine it, we can build it.
Speak with your Formaspace Design Consultant today to find out how we can help you meet your production efficiency goals.
