Bioplastics continue to receive media exposure as the “greener” alternative to petroleum based plastics. Other studies point out major pitfalls of bioplastics and debunk the theory that it is a more environmentally superior option. If you are a plastic manufacturer exploring the idea of bioplastics, then this article will provide you with a baseline framework on how to begin to think about this issue.
Economics of bioplastics: Manufacturing bioplastics means becoming less dependent on foreign oil, which is both scarce and costly (and rising all the time). However, it also means the cost of agricultural crops to manufacture bioplastics would increase if the demand for it rises in the future. We have seen this with corn prices and ethanol use. It will definitely take time for the industry to mature and efficient production methods to be developed and until then, bioplastic manufacturers must look for innovative ways to overcome the cost barrier. PepsiCo announced that it will be producing 100% plant-based PET bottles by using orange and potato peels among other bio-based feedstock. While these peels may be trash for some, it can serve as valuable raw materials and cost savers for others. Bioplastics’ current lack of economies of scale, relative to petro-based plastics calls for innovative solutions to packaging needs.
Misconceptions about bioplastics: Bio-based plastics are not always biodegradeable while biodegradable plastics are not always manufactured with renewable resources. Many people become swayed over the word “bio” and automatically believe it is a greener option. It’s important to get your facts straight and to communicate your green initiatives clearly to the public in order to avoid greenwashing accusations. Here are some distinctions that you need to keep in mind:
- Bioplastics are a form of plastics derived from renewable biomas sources, such as vegetable oil, corn starch, pea starch or microbiota, rather than fossil fuel plastics which are derived from petroleum.
- Biodegradable plastics are degradable due to the action of micro-organisms and enzymes (such as fungi or bacteria). The mineralisation of organic structures by micro-organisms converts the bioplastics into carbon dioxide, methane, water and biomass.
- Compostable plastics are degradable due to a biological process occurring during composting and are converted into carbon dioxide, water, and biomass. There are no toxic side effects like toxic residue for water, soil, plants or living organisms.
Environmental Impact of bioplastics: While it may be true that manufacturing bioplastics causes less greenhouse gas emissions due to its renewable sources, it is important to recognize that a lot of energy goes into growing bio-base feedstock such as corn. Petro-based plastics have been around for a longer period of time and have reached production efficiency. When comparing the two, you should look at the life cycle of each to determine the true environmental impact. In addition, since current recycling system is not conducive to bioplastics, there is a lot of work to be done to adjust the current system.
While the idea to move away from relying on crude oil to produce plastics is a good idea, the bioplastics industry is at its infancy and has yet to reach efficiency and economies of scale. In the short term, switching to bioplastics may put burden on your current operations and budget. However, as the industry matures through research and development, it has great potential in providing sustainable solutions across various industries.
On-going climate change provides operational, financial and public relational challenges to businesses across industries. It is critical for executives to understand the risks associated with these challenges and to develop sound strategies to address them. Here, we take a look at some of the most important threats that businesses are facing today within the landscape of global warming. In addition, we suggest ways to turn these risks into opportunities in order to stay competitive in this changing environment.
Threat: CO2 emissions for 2010 were by far the highest in history and regulators will respond to this breaking news with tighter control on the businesses’ carbon emission levels.
Opportunity: Companies can avoid being harmed by carbon taxation and rising energy costs by adapting to a more energy-efficient operation. This can also open up funding streams from carbon cap-and-trade programs.
Threat: Rising global temperature will trigger drastic changes in the weather pattern around the world. Businesses may incur physical damages from natural disasters such as tsunamis and earthquakes.
Opportunity: By investing in climate-proof operations such as purchasing insurance and mapping out emergency protocols, businesses will be able to execute a quicker recovery from natural disasters.
Threat: Scarce resources such as nonrenewable energy will continue to increase in price and companies that rely on it will face heavy burden on their budgets.
Opportunity: Businesses that act early in using alternative sources of energy will be able to gain a sustainable competitive advantage.
Threat: Consumers are becoming more knowledgeable about environmental issues, altering their preferences and decisions on purchasing goods.
Opportunity: The upside to this trend is that there is an emerging market for environmentally friendly products and services. Targeting this market has the potential for high profitability and consumer loyalty.
Today, businesses are operating in an environment where there is pressure from both government regulators and educated consumers. In addition, there are operational and financial challenges that drive up the competitiveness in the market. Successful and sustainable businesses will be those that understand these risks and develop innovative strategies to adapt and mitigate climate change.
Posted by akeenan | Posted in Uncategorized | Posted on 15-06-2011
Chemical manufacturing companies are faced with a challenge in the global market as China continues to build capacity and compete on lower price. In order to maintain market share, international as well as U.S. domestic players need to differentiate themselves by capitalizing on green supply chain management.
The chemical industry is a challenging space. Prices for raw materials and energy are constantly on the rise, leaving businesses with lower profit margins. While increasing direct costs leave little room for flexible pricing on the supplier’s side, customer demand for supply chain data and product specifications are making delivery more complex.
In recent years, The Chinese chemical sector has captured a big part of the global market by offering low price on its products. In fact, it experienced 10.2% growth in 2009 to reach a value of $648 billion . How can established companies compete under these circumstances? There is a limit to how much manufacturers can cut their costs and competing solely on price against China will not stand in the long-run. For this reason, chemical companies should explore alternative strategies around practicing green supply chain management. Here are three reasons why this can help drive profitability and growth:
Solidify customer loyalty
Market demand and regulatory pressure for sustainability are at their peaks and global industry leaders are responding more vocally than ever. Corporations such as Wal-Mart, IBM, Proctor and Gamble and UPS already have committed to reducing their environmental impact throughout their value chain. This means that customers are buying on cost as wells as seeking manufacturers that can meet their sustainability indexing. In order to establish themselves as a partner in their clients’ minds, manufacturers must be able to quickly and efficiently gather the data the clients need and then use them to drive measurements and process innovations.
Lead on product and operational development
By allowing visibility up the supply chain, chemical manufacturers will be able to identify their most polluting products and replace them with environmentally friendly alternatives. This data also reveal energy use which can drive more efficient operations and synergies between marketing, product development and supply chain. While this is an investment, the resulting ROI can supersede the initial front cost associated with the operational change. This strategy can help validate new product uses and become a differentiator in competing for purchasing contracts against foreign players.
Use data as a source of competitive advantage
Although Chinese government has come up with several new environmental regulations, they are not perceived as being proactive on enforcement. With economic growth often defining the country’s outlook, corporate social responsibility has not been as scrutinized in China as it has been in Europe or in the United States. By competing solely on price, other established manufacturers have the opportunity to leverage the environmental aspect of their business as a source of competitive advantage. It is critical to set an efficient supply chain, processes and infrastructure now as regulations are expected to become even tighter with recent information on world’s carbon emissions.
Many corporations have begun to require their suppliers to meet certain environmental standards through green supply chain management. Chemical manufacturers, who have been squeezed by foreign competition in the recent years, can utilize this opportunity to capture or sustain market share. By managing environmental impact through green supply chain management, chemical companies can increase customer loyalty, meet regulatory requisites, reach operational efficiency and compete on product innovation.
There is growing demand for environmentally-friendly products. As consumers become more educated, they are paying attention to the full range of environmental effects related to products –such as the source, production use and disposal.
With new data on global warming driving up consumer awareness, plastic packaging has come under a high level of scrutiny in the public eye. The pressure is on from not just the consumers but also from policy makers who are passing stricter legislation for health safety and waste management.
For these reasons, brands have begun to take a more holistic approach to social responsibility, demanding increased visibility up the supply chain. Polymer manufacturers— key players within the supply stream—are now held accountable to take greener initiatives.
Polymer manufacturers are faced with environmental challenges
Most polymers used today are derived from petroleum— a non-renewable resource. Plastics take up 4% of the world’s oil consumption, and public concern is growing on the large portion of landfills they take up, considering their non-biodegradable composition. In addition, the VOCs (Volatile Organic Compounds) released in the air as well as the hazardous waste from manufacturing process negatively affect the community and environment around the polymer plants.
As both end consumers and brands are becoming more sensitive to these environmental issues, it is critical for polymer manufacturers to come up with solutions that will drive efficiency, process change and differentiation of their products. Here are some helpful ways to think about this challenge:
Assess your product’s current impact on the environment: You need to know your product’s life cycle impact—you can’t manage what you don’t measure. How much energy are you utilizing? Are you complying with all the environmental regulations? How much of your feedstock comes from recycled content? What happens to your product after consumer use?
Innovate your way to sustainability: Whether it is finding an alternative to petro-based polymers or incorporating smarter packaging or adapting to a more efficient manufacturing process, capitalizing on this new market focus can deliver long-run advantages. Find alternatives to your environmental problems through product innovation and operational efficiency.
Communicate your efforts to stakeholders: It is important to support your initiatives with communications that have both authenticity and hard data. Whether is in comparison to peers or your own past performance, messaging your work well will increase awareness of your business among key audiences, gain product credibility and avoid green washing accusations.
An international polymer manufacturer was able to take a more competitive stance within the market by analyzing the environmental difference between recycled and virgin content in manufacturing PET films through a Life Cycle Assessment. Through this analysis, the manufacturing company was able to rationalize an increase in unit price while increasing sales to consumer product companies through clearer product differentiation.
Environmental accountability is fast becoming a core part of polymer sales and product development, with consumers driving growth in the ‘green’ packaging market. In order meet this demand, brands are communicating with their suppliers up the value chain to take sustainable initiatives. By assessing and reducing their environmental impact, polymer manufacturers will be able to gain competitive differentiation for their products.
International Energy Agency (IEA) announced this past Monday that CO2 emission levels for 2010 have broken the record of being the highest yet in history. Growing public concern for climate change, cost of resources as well as tighter governmental regulations are expected to escalate—this calls for businesses to refocus on their CO2 emissions.
Current emission level makes UN’s climate goals highly unattainable
UN climate change talks in Cancun last year set the cap for global temperature to 2°C, which scientists believe would be the “threshold for dangerous climate change.” With recent estimates on carbon emission, this goal seems farfetched. The IEA’s 2010 World Energy Outlook suggested that in order to stay below the 2°C target, carbon emissions in 2020 must not exceed 32 Gt. However, with 1.6 gigatonnes (Gt) increase in emissions last year, it will only take 1.4 more to reach 32 Gt. (Refer to chart below)
In addition, IEA stated that 80% of the future carbon emissions from the power plants for 2020 are already locked-in, with most of the infrastructure newly built or currently under construction. Overall, this is an urgent blinking yellow light, warning us of projected climate change and the serious consequences that are associated with it.
“This is a wakeup call for all of us,” says Andrew Keenan, CMO of Verus, “CO2 emissions will continue to spike even though climate change no longer makes front-page news. This calls for a serious action.” There are opportunities for business owners to think ahead and to take the lead on reducing their carbon footprint. Many pressing factors that make this a time-sensitive matter.
Growing public concern for climate change: With 2°C increase in temperature, come serious consequences that will endanger the environment and the livelihoods of people. Heat waves, sea level rise, floods among many other occurrences will disrupt the lives of millions of human beings as well as other life forms on earth. Consumers, activists, stakeholders as well as organizations driven by social missions will be taking an even more fervent stance in promoting green initiatives.
Changing costs and availability of resources: Attempting to reduce global carbon emission means higher energy costs and carbon taxes for businesses. Fuel prices are subjected to increase and it is important for businesses to become more fuel efficient in their operations in order to cope with these changes. As more companies reach higher level of efficiency, they will be able to cut costs and lessen their carbon footprints. In addition, carbon emissions increase is a global issue and therefore, there are cost implications even if you are outsourcing overseas.
Tighter government regulation: Following IEA’s announcement of the 2010’s carbon emission level, global leaders will be stepping up to regulate carbon emissions on a more rigorous level. While businesses across industries will be impacted by such adjustment, heavy-emitters such as those within energy, cement and other industries that burn a lot of fossil fuels.
Businesses should take initiative by reassessing their carbon footprint
Climate change should no longer be on the backburner. The 2010 carbon emission level provides strong evidence that action must be taken now. In order to meet public demand and governmental control and to offset the expected rise in resource costs, businesses should evaluate their current carbon footprints up their supply chain and consider ways to become more efficient and sustainable.
Life Cycle Assessment—a tool that evaluates environmental impacts on a product-level life cycle—delivers valuable information to companies that can impact their financial performance as well as strategic stance.
Sometimes called “cradle-to-grave” or “cradle-to-cradle” analysis, LCAs take a holistic approach in evaluating factors in product manufacturing that impact the environment. The analysis provides a methodology to assess often hidden factors starting with raw materials, how the materials that make up the product are transported and what methods are used for consumption and disposal.
LCAs allow companies to integrate environmental consideration into core business operations, revealing opportunities for improvement as well as strategic issues. Overall, information from an LCA can help top management make informed decisions that will impact their company’s top and bottom line and help develop a sound strategy.
Impacting Top-and-Bottom Line
LCAs link environmental impact with financial implications by identifying fuel, energy and environmental risks, but also by identifying ways to cut costs and improve processes within the scope of a product. With the comprehensive performance data from an LCA, managers can better identify where fuel and energy are being spent and thus focus on where improvements can be made. By mitigating environmental issues and achieving more efficient and low-impact operations, companies are also able to achieve top-line growth.
An LCA of for a building product manufacturer revealed that a huge amount of energy use was resulting from a common practice which involves burning off natural gas to destroy toxins before they reached the atmosphere. Using findings from the LCA, the company focused on this as an opportunity to decrease energy use and boost environmental performance, and successfully pursued a grant from their State Department of Energy to purchase a cogeneration unit to capture the wasted energy. As a result, the company was able to lower its long-term costs by adapting to a more energy-efficient process, which also decreased its carbon footprint.
Developing a Sound Strategy
Protecting the environment is no longer restricted to extending a company’s social responsibility. More importantly, it has become a matter of strategy and a source for competitive advantage. The benefit of LCAs can vary according to the specific pains and interests of a company. This information allows top management to make key decisions in defining the strategic direction of its products or company by conforming to emerging client buying preferences, risks and challenges within the regulatory landscape, as well as identifying opportunities for improvement and innovation.
TreeZero Paper Products—an innovative company that creates paper products without the use of trees—underwent a life-cycle greenhouse gas emissions analysis that helped define it product’s environmental advantages over tree-based paper. Its unique process of using bagasse from sugar cane and bamboo from waste scaffolding was validated through the LCA and as a result, TreeZero was able to launch a new product by taking a strategic stance that distinguishes its product from traditional paper products.
Whether it is a product manager needing to differentiate product benefits, or a CEO looking to understand the risks and rewards inherent in their business, environmental analysis has never been more important. LCAs offer directed, meaningful analyses which tell a story about the energy and effect of a product or process, providing critical data to the supply chain, marketing and strategic management.
[Re-posted with permission from SACE]
Southern Alliance for Clean Energy recently underwent a short stint of navel gazing by calculating its annual carbon footprint for the second time, and we took appropriate action to attain carbon neutral certification for 2010. While SACE can still make many improvements, we have taken steps to more accurately measure our carbon footprint than in years past, and are excited to share the results.
SACE’s carbon footprint in 2009 and 2010 was calculated based on Scope 1, 2 and 3 carbon emissions. This means we account for the carbon dioxide equivalent of greenhouse gases emitted from our direct energy consumption.
Examples of Scope 1, 2 and 3 GHG emissions. Source U.S. EPA
For SACE that consists of our biodiesel manufacturing, offices, transportation and accommodations for work-related events, waste, and staff commutes to the office. In 2009, our carbon footprint was 260 metric tons of carbon dioxide (CO2). Last year, in 2010, we had a carbon footprint of 200 metric tons of CO2, a significant reduction.
Becoming Carbon Neutral
In 2009 and 2010, SACE reduced our carbon footprint by participating in TVA’s Green Power Switch. Through this program, we purchased five 150 kWh blocks of green power each month.
This totaled 9000 kWh for the year, which offset about half of the electricity consumption from our Knoxville office. The remainder of our carbon emissions were accounted for by purchasing carbon dioxide offsets from the Chicago Climate Exchange Registry by Verus Carbon Neutral, the company that we chose to review our carbon footprint and provides us with our annual carbon neutral certification. The Chicago Climate Exchange Registry is a voluntary, for-profit greenhouse gas trading system. Verus Carbon Neutral purchased 100 metric tons of offsets from Wright’s Dairy Farm and 112 metric tons of offsets from Valley Wood Forestry to offset our carbon emissions.
As you can see in the chart below, we have some overlap in our carbon offsets. This is because we erred on the side of caution and purchased a few extra carbon offsets, making SACE a bit carbon negative this year! We also did not count our recycling credit granted by Verus Carbon Neutral, that credit is not shown in the chart below.
Based on these actions, Verus Carbon Neutral was able to certify SACE as carbon neutral company in 2010.
Managing our Footprint
As the old adage goes, you can’t manage what you don’t measure. The first step SACE took in managing its carbon footprint was simply to begin tracking it. While our CO2 emissions from 2009 to 2010 were reduced, the components of our footprint also changed.
This chart compares SACE’s carbon emissions from 2009 and 2010
As shown in the accompanying chart, our travel emissions were about 50% less in 2010 than in 2009, and our transportation emissions went up by about 50%. This was due to a few different reasons. Our transportation emissions are from the diesel consumed in trucks used in our biodiesel operations. These emissions changed from 2009 to 2010 because we drove our trucks more miles, and we also used different biodiesel/diesel blend levels. Our travel emissions – emissions from transportation and accommodations for work-related events – were reduced partly because of a shift in programmatic priorities, as well as a conscious effort to reduce our carbon dioxide emissions from flying.
Moving forward, we plan to more proactively manage our carbon footprint – now that we have an idea of the amount, and how we are consuming carbon. For context, 200 metric tons of carbon dioxide is the equivalent of the emissions from the annual electricity use of about 22 homes in the United States.
Recently, SACE purchased an office building in Knoxville, which presents many opportunities for reducing our energy consumption (and resulting carbon dioxide emissions) on site. Retrofits on our building to save energy are already underway, including foaming our external walls, installing Solatubes, and upgrading our lighting system. This week, Pioneer Heating and Air Conditioning is beginning to install a vertical loop geothermal system that we anticipate will reduce our cooling and heating electricity consumption by 70%.
We are also looking for ways to improve our data tracking, which may result in a lower carbon footprint simply because we have better information. For example, Verus uses a model that estimates building electricity consumption based on location and building type. The building model assumption for our Knoxville office is 60% higher than our actual energy usage.
Similarly, employees usually attempt to rent fuel-efficient vehicles for work related travel. However, we did not record the miles per gallon, or make of the vehicles, so, to be conservative we used the 2010 vehicle MPG average (27 MPG). This year, we have encouraged employees to record the make and model of their rental vehicles so we can more precisely track gallons of fuel consumed. We hope that by elevating employee’s awareness of how we are consuming carbon, we will also encourage creative solutions to reducing our emissions.
We also have learned that calculating a carbon footprint is still a bit of an art, particularly when you are getting started. We encourage anyone that is tracking their carbon footprint, on their own or with a consultant, to verify the assumptions being made and double-check the final output – as you would with any analysis. Half of the value of calculating a carbon footprint is understanding how and where you consume carbon. We will keep you posted on how we do in 2011!
We all see sustainability reports and environmental claims with statements such as: “it’s like taking X cars off the road” or “it’s like saving Y trees.” Equivalents like these are designed to help us understand what CO2 looks like. Let’s take a look behind the curtain…
Metric Tons of CO2 per year
Whether you’re offsetting the emissions or preventing them from occurring altogether, the most common metric is mass of GHG per year, usually in metric tons of CO2 annually.
But what does a metric ton of CO2 look like? If you were to build a cube to represent one metric ton of CO2, it would measure 27’ on all sides. Keep that in mind as we look at the other measures of emissions.
Number of Passenger Cars
This is probably the most common equivalency that people use. In order to accurately use it, you have to make a few generalizations first. We will assume that gasoline is only considered, the average fuel economy of a passenger vehicle is 20.3 MPG (this includes a weighted average of cars and light trucks), and the average vehicle is driven 12,000 miles per year. Again, these are all averages that must be made for this equivalency to be used.
The result is that a passenger vehicle emits about 5.5 metric tons of CO2 per year.
Number of Trees
Carbon sequestration through trees is another popular means to quantify green claims. Of course, carbon sequestration rates vary by tree species, soil type, regional climate, topography and management practice. According to American Forests, sequestering one metric ton of CO2 equals about 3.6 trees planted per year.
This means a single tree sequesters about .277 metric tons of CO2 over 40 years.
Area of Cropland
Carbon dioxide is not the only GHG; below is an example of the relative greenhouse gas impact of N2O and methane compared to CO2. N2O emissions originate largely from soil in cropland.
1.1 acres of cropland emit our normalized metric ton of CO2-e, so a typical average per acre emission rate is .91 metric tons of CO2e.
Area of Ocean Cover
At the upper layers of the ocean, photosynthesis occurs and enables the sequestration of carbon dioxide. According NASA, much of the world’s ocean area absorbs about .25kgC per square meter per year. This amounts to…
1091m2 of ocean cover to sequester a metric ton of CO2.
Amount of Coal Burned
Looking at EPA data, if you were to burn a single metric ton of coal, you would release 2.1 metric tons of CO2. If you extrapolate this to something relatable, like a railcar full of coal, you would release about 191.5 metric tons of CO2.
2.1 metric tons of CO2 is released by a metric ton of burned coal.
Household Energy Use
Given average household energy use, an American releases roughly 12.9 metric tons of CO2. This, of course, is a broad generalization. Each state uses a different mix of fossil fuels and renewables to generate electricity, which affects its carbon footprint. For example:
- Indiana is 24 metric tons of CO2.
- New York is 6.8 metric tons of CO2.
- Californian is 3.4 metric tons of CO2.
- A metric ton of CO2 is like a 27’ cube
- A passenger vehicle emits 5.5
- A tree sequesters .277
- An acre of crops emits .91
- A metric ton of coal releases 2.1
2 cars ~ 5-6 metric tons of coal ~ 12 acres ~ 40 trees
Posted by email@example.com | Posted in Uncategorized | Posted on 08-03-2011
On May 3, 2010 the Intercontinental Exchange (”ICE”) announced the acquisition of Climate Exchange (”CLE”), the parent of the Chicago Climate Exchange (”CCX”).[i] The deal closed in July 2010. ICE operates three futures exchanges, which hosts trading in half of the world’s crude and refined oil futures contracts traded each day. ICE is a component of S&P 500 index and is headquartered in Atlanta.[ii] As with most (if not all) acquisitions, ICE has taken the business of CLE under its direction.
This means in the case of CLE, the European emissions trading is done under the ICE name. Further, the CCX is no longer trading in the way it has before. ICE has maintained a registry for offset projects under the same protocols as the CCX. These offsets can trade through ICE and the transactions are viewable. It will operate a new Offsets Registry Program in 2011 and 2012.
However, ICE decided not to extend the program, whereby emitters work under a voluntary cap-and-trade system to reduce their carbon footprint. The members including AEP, IBM, Ford and others are no longer under a voluntary and legally-binding program to reduce their emissions as they had been since 2004. The offsets created through “energy efficiency,” as these reductions were called, are no longer of use.
What does this mean?
Of course the CCX has always been an exchange but part of its business was to perform the work of a government. It took on the responsibility to monitor and affirm emissions reductions for its members. Typically, a process like this is done by the government or, more specifically in the US, the EPA.
The CCX (or ICE) still trades emissions reductions, including: Regional Greenhouse Gas Initiative (”RGGI”) credits, offset projects, California Climate Action Registry (CCAR) credits, and Renewable Energy Credits. The piece of the business that will not continue is the part that pertains to managing a cap-and-trade system.
What is next?
For businesses and individuals who want to support effective offset projects, nothing has changed. The CCX Registry will continue to verify and register projects. The unequivocal need for emissions reductions obviously does not go away. Verus will continue to help business reduce and/or offset their emissions in the hope of alleviating the effects of greenhouse gases on our environment.
Posted by akeenan | Posted in Supply Chain | Posted on 23-02-2011
Earlier we looked at the major ways in which you can clean up supply chains and eliminate inefficient waste, but the question remains: how do you go about initially tackling the issue and implementing it?
Fortunately, EPA answered this very question in their guide, “The Lean and Green Supply Chain.” Below is a paraphrasing of their recommended four-step process to implement innovative changes to supply chains.
1. Identify Costs – Materials tracking
Process mapping allows you to see where the waste exists from start to finish. It also lets you compare how much waste exists in the various steps in the supply chain, from production to transportation to end-use.
You can also perform mass balances, which track where the initial virgin materials go, from extraction to the final product. These two tools will show you the processes that need retooling and remind you which ones you can leave alone (for now, at least).
Here is a full list of other common tools, including a questionnaire, that you can use to completely understand where the real problem exists.
Source: Scottish Government Read the rest of this entry »