The Man­u­fac­tur­ing and En­ergy Op­por­tu­nity

Element - - The Blue Economy - Stephen Jones, gen­eral man­ager, In­dus­trial En­ergy So­lu­tions at En­ergy for In­dus­try

To say you’re just “a lit­tle bit” sus­tain­able wouldn’t re­ally stack up in a com­pany’s an­nual re­port. But if you look closer at the cur­rent man­u­fac­tur­ing and sup­ply chain model this is ex­actly how many in­dus­tries op­er­ate.

For years, do­mes­ti­cally and in­ter­na­tion­ally, the pri­mary and con­sumer man­u­fac­tur­ing in­dus­tries have be­come ac­cus­tomed to play­ing what might be called ‘par­tial life­cy­cle eco­nom­ics’. Some­how adopt­ing the mind­set that it’s al­right to ig­nore the real cost that op­er­a­tions are hav­ing on the en­vi­ron­ment.

Some­where in the mix, the end-of-life cost of dis­as­sem­bly, waste, dis­posal, and car­bon im­pact re­lated to op­er­a­tions, have dis­ap­peared. But our past has now caught up with us. As GM of EFI’s in­dus­trial en­ergy so­lu­tions – providers of en­ergy and waste-to-en­ergy so­lu­tions for in­dus­try – it’s clear that the shift to a less re­source-in­ten­sive, re­silient and whole-of-life-based eco­nomic fu­ture for man­u­fac­tur­ing will re­quire a lot of things to change. Com­pa­nies can take a lead­ing role in dif­fer­en­ti­at­ing their prod­ucts to con­sumers on the mer­its of lower car­bon man­u­fac­ture and pro­cess­ing with gov­ern­ments sup­port­ing this ini­tia­tive through a more trans­par­ent car­bon pric­ing model.

Lead­ing busi­nesses are al­ready tak­ing up this chal­lenge where they recog­nise the value of the sus­tain­able sup­ply chain be­com­ing part of their brand fab­ric. How­ever, only we, as con­sumers, wield the power to make this main­stream and place de­mands on in­dus­try to re­tool.

A ‘fully priced’ pro­cess­ing/man­u­fac­tur­ing chain model or an ‘Ex­tended Pro­ducer Re­spon­si­bil­ity’ (EPR) re­cy­cling sys­tem for the con­sumer in­dus­try in­clud­ing fully pric­ing car­bon, wa­ter and waste dis­posal and end-of-life con­sid­er­a­tions will play a piv­otal role in mak­ing the vi­tal tran­si­tion to­wards a fair and sus­tain­able sys­tem for all. Fur­ther, fram­ing a sus­tain­abil­ity model out to 2050 would see a more rep­re­sen­ta­tive price of car­bon cou­pled with a manda­tory car­bon-re­port­ing regime.

Both such mech­a­nisms send a clear eco­nomic sig­nal to com­pa­nies and con­sumers re­gard­ing the true price of the prod­uct or ser­vice you’re buy­ing. A price that ac­cu­rately re­flects im­pacts of pro­duc­tion and end-of-life dis­posal or re­cy­cling costs. We al­ready see fully priced mod­els emerg­ing in Europe with a cost of dis­posal of pack­ag­ing – for ex­am­ple where the con­sumer can see a mea­sur­able price di­rectly at­trib­ut­able to the cost of land­fill or re­pro­cess­ing. This is more trans­par­ent than our cur­rent sys­tem of land­fill and coun­cil-levied street pick-ups.

By pin­point­ing rogue man­u­fac­tur­ing prac­tices and prod­ucts from cra­dle-to-grave the sys­tem en­cour­ages man­u­fac­tur­ers and com­pa­nies to come up with safer, more ef­fi­cient, and more cost-ef­fec­tive so­lu­tions. When a fully priced sys­tem works as it’s sup­posed to, in­dus­try and con­sumers end up with less waste, less emis­sions, less pack­ag­ing – or, at the very least, sys­tems that are more en­vi­ron­men­tally be­nign, and prod­ucts that are eas­ier to re­use, re­cy­cle, or com­post.

At EFI we are in­creas­ingly see­ing our part­ners in the pri­mary pro­cess­ing and ex­port­ing sec­tors be­com­ing aware of these shifts in mar­ket mech­a­nisms and con­sumer de­mands where bar-cod­ing of sup­ply chain in­puts are now de­manded in some mar­kets. But car­bon pric­ing still has some way to go in terms of it be­ing a mean­ing­ful and trans­par­ent mit­i­gat­ing fac­tor in waste re­duc­tion and en­ergy ef­fi­ciency. The cur­rent price and mech­a­nism sim­ply does not sup­port a trusted or com­pet­i­tive al­ter­na­tive to lower-priced fos­sil fu­els.

To ad­dress this EFI has suc­cess­fully carved a unique po­si­tion in the in­dus­trial and com­mer­cial en­ergy sec­tor by de­sign­ing and de­liv­er­ing en­ergy so­lu­tions that meet our cus­tomers’ spe­cific en­ergy needs while tran­si­tion­ing them to­wards a lower car­bon econ­omy. We pro­vide du­al­fuel or “co-fired” so­lu­tions that dis­place fos­sil-fu­elled burn­ers – with mod­ern, more ef­fi­cient plants and wasteto-en­ergy tech­nolo­gies in­clud­ing har­ness­ing land­fill gas, wood and biomass. Our so­lu­tions give our cus­tomers the best of both worlds; sig­nif­i­cantly re­duc­ing en­ergy costs and en­vi­ron­men­tal im­pact with­out sac­ri­fic­ing se­cu­rity of sup­ply. By in­vest­ing in plant tech­nol­ogy we’ve also suc­cess­fully cre­ated new en­ergy ‘clus­ters’, where neigh­bour­ing busi­nesses and in­sti­tu­tions share the ben­e­fits of owned and op­er­ated en­ergy plants.

But sus­tain­abil­ity isn’t a short-term fix. It re­quires longterm, strate­gic think­ing and com­mit­ment. Where we see sus­tain­abil­ity com­mit­ment at the board level and will­ing­ness for busi­nesses to look be­yond the cur­rent 2-3-year hori­zon EFI has added sig­nif­i­cant value at a sys­tems level.

Pro­gres­sive com­pa­nies are now in­stalling our so­lu­tions with a 30-40-year life­span. Why? The de­ci­sion to in­vest in multi-fuel op­tions gives com­pa­nies long-term op­tions and bet­ter bot­tom lines. The ini­tial cap­i­tal cost of EFI’s en­ergy so­lu­tions is only a frac­tion of the full op­er­a­tional cost over its life­span. More­over, opt­ing for the low­est cap­i­tal cost op­tion now only re­stricts fuel op­tions for com­pa­nies go­ing for­ward as well as lock­ing in high-cost fos­sil fu­els into the fu­ture. Who wants to play that game?

We be­lieve that if most New Zealand busi­nesses took a 5 – 10-year hori­zon with their en­ergy sup­ply needs and in­cluded sus­tain­able al­ter­na­tives in­clud­ing biomass and other re­new­able fuel al­ter­na­tives, our econ­omy would be well po­si­tioned to weather what will be a very dif­fer­ent en­ergy fu­ture. When you are used to see­ing im­me­di­ate re­turns the abil­ity to see be­yond the ini­tial hur­dles of in­vest­ing in longterm sus­tain­able man­u­fac­tur­ing and en­ergy op­tions can be dif­fi­cult. But the eco­nomic and en­vi­ron­men­tal gains in mak­ing the shift are rich with clean re­ward.

For fur­ther in­for­ma­tion visit en­er­gy­forindus­try.co.nz

Fuel al­ter­na­tives such as wood chips are an ef­fi­cient and lower car­bon al­ter­na­tive to fos­sil fu­els.

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