Galvanising the manufacturing sector to reduce carbon emissions

The manufacturing sector in Europe is responsible for more than 17% of the EU’s total carbon emissions and a 2012 report by the UK government’s Department for the Environment and Rural Affairs (Defra) suggested that the country’s direct manufacturing emissions for 2009 stood at 400 million tonnes.

While there has been progress in the introduction of practices aimed at reducing carbon emissions across the industry, there is still a significant need for more action. But it is not for businesses to act alone. To promote real change in the manufacturing industry, government must play an active role, and several approaches are vital.

Energy efficiency first

The most effective method to tackle global warming is through improved energy efficiency. Government and policy makers are key in encouraging this, and progressive tax thresholds and incentives are examples of how they can make a difference.

The automotive industry is a prime example of the potential successes of incentivising emission reduction. In 2012, the European Commission set targets for manufacturers of new cars and light commercial vehicles to reduce emissions to an average of 95 grams of CO2 per kilometre across their entire portfolio by 2020. As reinforcement, manufacturers that fail to meet this target will be fined for each gram of CO2 emitted over the threshold, providing a financial incentive to enhance the sustainability of their vehicle design.

To further promote innovation in the automotive sector, the EU has also actively encouraged member states to introduce their own measures to push consumers to purchase more fuel-efficient automobiles. In the UK, for example, consumers pay less road tax if they drive a lower-polluting vehicle. French consumers receive a price cut when purchasing a low-polluting car, but pay a premium to buy a high-polluting vehicle.

This combination of pan-European targets allied to national incentives has helped inspire a number of innovations in the European automotive sector in recent years, including the greater use of lightweight materials, such as aluminium or carbon composite, stop-start technology, and brake energy recovery.

As a result, the average CO2 emissions of new cars across the EU has fallen from more than 170g CO2/km in 2001 to 132.2g CO2/km in 2012 – a reduction of more than 20% in just over a decade.

As the automotive sector has shown, designing policies that provide incentives to empower energy efficiency policy makers can have a real impact on behaviour and drive a reduction in carbon emissions.

Governments should also support the development of new technology to improve efficiencies at the production stage, such as high-efficiency boilers and insulation. Technologies such as ‘light-weighting’ or auto start/stop should also be ‘business as usual’. By providing tax breaks on these initiatives, governments can boost energy efficiency across the whole manufacturing sector.

Scaling up renewables

When shifting towards energy efficiency, we must switch to renewable sources of energy and make the most of the extensive benefits it presents, such as the creation of more jobs and lower costs.

The Dutch Government has an official process for biogas, similar to green electricity credits, and as a result has made significant progress towards its goal of reducing CO2 emissions, increasing the amount of renewable energy produced, and becoming less dependent on imported energy. Its New Gas Platform promotes ‘green’ gas and has a target that green gas should account for 8–12% of gas use in the country by 2020, rising to 15–20% by 2030. The Interface Scherpenzeel factory uses 100% biogas for energy use through the anaerobic digestion of fish and chocolate waste, which is then fed into the national gas grid. This, combined with a reduction in energy use per unit of production, has led to ongoing net annual savings of €7.6m in costs and the creation of new jobs.

The adoption of similar incentives and targets across Europe would galvanise businesses to switch to renewable energy sources, with potential of reducing the detrimental consumption of energy from non-renewable sources to almost zero.

Embodied carbon

The full carbon impact of manufactured products goes beyond carbon emissions or consumption, it must also take into account the embodied carbon within the product.

The approach towards reducing embodied carbon needs to be reflective of that for cutting carbon emissions. As the automotive industry has proved, setting clear goals and implementing easy measurement tools achieves results. Now, to truly reduce the entire CO2 footprint of products, there needs to be a measurement tool that takes into account all the carbon impacts throughout its lifecycle.

In the construction industry, manufacturers are approaching this challenge by using independently-verified environmental product declarations (EPDs), which are principally calculated using lifecycle assessments (LCAs). EPDs show the embodied carbon and environmental impact of a product, and can help developers achieve BREEAM certification.

However, a key disadvantage of EPDs, LCAs and similar measurements is that they fail to offer a single, clear and easy-to-understand figure – no magic metric. This can make it more of a challenge for specifiers and customers to identify the most sustainable products.

Financing low carbon, financing services

So, developing a magic metric that defines a product’s full environmental impact is vital if we are to ensure that we successfully tackle carbon emissions across the value chain.

In Paris, there will be lots of conversation around financing the low-carbon economy. But first, the group should define the low-carbon economy. Yes, we should support renewables and energy efficient technologies, but we also must create the bigger picture.

The best way to achieve a low-carbon economy is to promote a service economy. At present services, which require more labour than trading in commodities and products, are at a disadvantage because of the way tax regimes are set up. Labour should be taxed less than high impact resource extracting.

A successful Paris agreement would…

• Set a global objective of a net zero increase in GHG emissions well before the end of the century.
• Persuade the private sector to begin investing the $90trn that needs to be spent worldwide to build low-carbon and climate resilient economies. Carbon pricing is one.
• Ensure a transition to a low-carbon economy by requiring governments to increase the ambition of their targets every five years, and would hold them accountable to those commitments.
• Bring about ambitious national commitments to reduce emissions that would in turn make economies stronger, lift millions out of poverty, and deliver co-benefits such as improved health.

With such instruments in place and a collaborative approach, manufacturers and Government’s will be able to foster a higher level of innovation and make important steps toward lowering the EU’s total energy consumption and carbon emissions.

Ramon Arratia, sustainability director, Interface