How to identify carbon reduction opportunities

How to assign emissions to a product to identify reduction opportunities?

Assignment

When producing packaging materials, quality and price are major decision levers. Especially in the food industry, where (human) health and safety are top of the agenda. On the other hand, more manufacturers put in effort to reduce carbon footprint and environmental impact. After all, customer and consumer demand are increasingly driven by a minimal footprint. As manufacturer information on your product’s footprint is essential to be competitive to industry peers. The main question: how to assign emissions to a product to identify reduction opportunities? This project identified just that: the carbon emissions per produced unit per period.

Project summary

Manufacturing of plastics is a pressurized business. Production is energy-intense and not all product can be reused or recycled after its initial lifecycle. At least, not always for the same high-end applications. All the more important to design products and their manufacturing as efficient as possible, next to weighed procurement of ‘better’ products (i.e. less energy-intense or having a closer proximity to the manufacturing plant). All to be ‘as good as possible’ within the boundaries of the required quality.

In line with environmental goals and emission reduction, the (carbon) footprint related to a product needs to decrease as unique selling point. Emissions reduction is not just part of the mission/vision, it becomes part of the license to operate. Especially as part of a human health supply/value chain.

Our approach

The methodology makes use of primary data (energy, procurement of components, water-use, commuting etc.) instead of average indicators. Consumption of the procured elements, in relation to product ‘recipe’ (bill of material, BOM) and factory machinery results in carbon emissions (either as part of the product, or as by-product of the manufacturing process). The allocation of these emissions to the particular process steps are assigned to the product manufactured in that period (hour, day, month, depending on production batches).

First, a blueprint of the operations is created (supported with a visit to the manufacturing plant). In combination with product recipe and production schedule, the manufacturing flows are traced and production volumes are assigned to a certain period.

Products require components and a production sequence to become the product it’s meant to be. Both the components and manufacturing sequences (i.e. machinery used) have an emission footprint, as well as a carbon origin (either fossil, renewable or recycled). In this project, the product lines were monitored separately (not all lines produced the same products in the same pace, resulting in different energy consumption). This level of detail increases the reliability of the (carbon) footprint of a single product.

The outcomes of the project have been shared with the head-office abroad, enabling the company to utilize the methodology uniformly throughout the organization, as well as building up an internal best practice learning curve.

Result

The first part of the project is the carbon footprint per product (piece). With that level of detail the company is able to ‘bill’ the emissions to the customer who ordered the product. Looking ahead, the billing of carbon and related emissions becomes part of regular accounting practices and invoicing. Now, the manufacturing and emissions are linked. BCI embedded the full manufacturing plant in the project, resulting in an emission per piece.

The second part of the project is a management dashboard. This part encompasses the 10 important dimensions of an emissions management dashboard: (1) Data completeness (2) Data quality (3) Usage versus procurement (4) Used components (5) Emissions per component (6) Carbon origin (7) Emissions per scope (1-2-3) (8) Total emissions emitted (9) Waste and (10) Expected direct and indirect carbon charge. With this intelligence, the manufacturer can identify the largest carbon sources and tailor reduction measures to the manufacturing process. As example, component suppliers are exchanged if they have a closer proximity to the facility (whereas costs alone wouldn’t have changed the decision) and residual heat of the plant itself is used to heat the warehouse, reducing the usage of natural gas to net-zero.

Management summary including the 10 dimensions of an emissions management dashboard:

“The insights in the detailed carbon footprint per product helped us identify the largest fields of impact in the production processes. Before, quality and price were the only drivers. With the new insights, ‘price’ got a new dimension in the form of carbon footprint. Now, when procuring components, the origin (in relation to the manufacturing plant location) and the chemical composition of the products we use are main drivers as well. After all, that’s what makes up a large part of the carbon footprint. We did not let go of the quality standards we had, but have been willing to stretch procurement budgets and keep track of the (reducing) carbon footprint of our products. In addition, we are exploring expansion of the methodology to other plants in the organization.”