Energy Reduction for Emissions Reduction

ENERGY REDUCTION FOR EMISSIONS REDUCTION 3 Steps Manufacturers Can Take To Make Lasting Changes

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INTRODUCTION When it comes to manufacturing, it pays to be energy efficient — and not just because of cost savings. Consumers and supply chain partners are asking manufacturers to decarbonize as federal, state, and local governments are enacting mandates. In fact, the federal government is using the proverbial carrot in the form of grants to get manufacturers on board with becoming more energy efficient as a way to kick start their decarbonization journey.

For example, in March 2023 the DOE Office of Clean Energy Demonstrations (OCED) issued a Funding Opportunity Announcement (FOA) for approximately $6 billion in grant money to significantly reduce greenhouse gas emissions in energy-intensive industrial subsectors through transformational, commercialscale demonstration projects. Meanwhile, the U.S. Environmental Protection Agency is encouraging manufacturers to earn the agency’s ENERGY STAR certification as a way to reduce energy costs, boost consumer confidence, and add to income.

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Why all the incentives? Today, manufacturing comprises about a

In this playbook we will examine the specific benefits of GHG

quarter of the United States’ direct, Scope 1 emissions, according

emissions management for manufacturers, what’s holding

to the EPA. Manufacturers are being prodded to measure and

organizations back from reaching their sustainability goals, and how

manage their greenhouse gas (GHG) emissions to reduce this

it’s not just possible but easier than ever to create a comprehensive,

impact. For instance, in March 2022 the U.S. Securities and Exchange

integrated plan to move ahead.

Commission (SEC) proposed a rule that would mandate all companies to include climate-related data and potential risks in their public

This playbook reviews the following three steps that can

disclosure filings.

help manufacturers: 1.

Understand the common barriers.

Impact’s 2023 Net Zero Report say they have made some form of

2.

Create a holistic energy management program.

public commitment around Scope 1, Scope 2, and Scope 3 GHG

3.

Enable the correct expertise.

Combined, it may be why 68% of manufacturers surveyed for ENGIE

emissions reduction — compared to only 52% of other industries surveyed. So how will manufacturers reach these stated goals?

SECTION 1 Understand the Common Barriers: Why Manufacturers Are Struggling with Climate Goals In 2022 the World Economic Forum published carbon footprint

“A lot of our manufacturing clients aren’t adequately sub-metered

guidance for the manufacturing industry. In it, the organization

to know where the electricity draws are coming from within their

summarized the impact of the sector. One surprising fact: The

facility,” she says. A manufacturer might be able to provide energy use

industry as a whole consumes 54% of the world’s energy sources.

data from building to building — how many kilowatt hours per square

As the WEF pointed out, “There is an urgent need for manufacturing

foot of electricity are being consumed — but typically not beyond

companies to address the challenges of decarbonization” to help

that, and that’s if the facility is modernized, she adds. “Sometimes it’s

reduce their GHG emissions and limit global warming. As calls

the entire site that’s on one meter.”

manufacturers will have to address unsustainable business practices and update or replace outdated physical assets that — if left in place — will make it impossible to reach those goals.

Doing so requires an intimate knowledge of disparate systems and services and how they consume energy. A production line, for example, could exist across multiple facilities within an organization

“

A lot of our manufacturing clients aren’t adequately sub-metered to know where the electricity draws

are coming from within their facility.

and most manufacturers simply don’t have sufficient granularity of data to provide actionable insight, says Valeda Scribner, Senior Carbon Advisor at ENGIE Impact.

4 | Energy Reduction for Emissions Reduction

Valeda Scribner, Senior Carbon Advisor at ENGIE Impact

“

to reduce global warming and other climate changes heat up,

Without submetering, it is very difficult to know which elements within an organization use the most energy — whether heating, cooling, lighting, or processing equipment. There are some elements that are more easily measured, but even so they can be difficult to remediate. Equipment may be inefficient, and facilities may be poorly designed or fitted with older lighting, heating, and cooling systems.

And, since many factories may rely exclusively on fossil fuels, these lacking design elements create even more of an issue when it comes to meeting emissions reduction goals.

Case Study An American multinational healthcare manufacturer is a good example of this. The company serves more than a billion people with its technology solutions and has an extensive, difficult-to-quantify carbon footprint. Nevertheless, the company set ambitious goals to reduce its Scope 1 and Scope 2 emissions from purchased energy by at least 50 percent by 2030.

5 | Energy Reduction for Emissions Reduction

Through partnership with ENGIE Impact, they identified carbon reduction projects that spanned chiller optimization and summer cooling practices, clean energy supply, lighting, compressed air optimization, demand management, and HVAC practices including heating and heat recovery. With the help of ENGIE Impact’s collaboration models, the manufacturer worked closely with site equipment operators to perform deep-dive assessments of operational processes with the potential to yield big reductions.

Many manufacturers that view energy efficiency as a way to generate savings may look for specific one-off projects. However, this strategy does not align well for meeting an organization’s climate goals. While changing traditional light bulbs for LED lighting will give organizations a quick win, this one-off project focus will not be enough to reach an organization’s goals. It’s crucial to ensure goals are aligned with resources available in the organization. In the case of the multinational healthcare manufacturer, they were able to enact process transformation by combining collaborative assessments with a detailed energy management and training program so everyone in the organization from leadership to the factory floor had a role in the process.

SECTION 2 Take SMART Steps: Create a Holistic Energy Management Program An energy management program — or a review and refresh of production processes — lays the critical foundation to emissions management and reduction. The first step to success, however, is gaining support for the project. Everyone in the organization including C-level executives, board members, line managers, and equipment operators should be involved with the discussions and agree to support them, Scribner says. This is more easily accomplished if everyone in the organization knows why they are undertaking emissions reduction efforts. There’s an added benefit to this, too, since the CDP Climate Change questionnaire, a globally utilized environmental impact disclosure platform, specifically requests data on a company’s climate-related incentives available to employees. Reporting companies score highest for long-term incentive programs involving executive management.

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Once everyone is on board, it’s time to focus on measurement —

These meters can uncover the biggest energy drains in the

establishing a baseline of Scope 1 and Scope 2 energy consumption

organization and provide SMART (specific, measurable,

and process emissions within the organization. This includes every

achievable, relevant, and time-bound) targets for change. This

asset owned or controlled by the organization including generators,

becomes especially important when you implement your energy

machinery, company-owned fleets, on-site lighting, and HVAC

management program since there is often reticence to overcome

equipment. While it is more difficult, organizations are encouraged to

in the manufacturing industry, Scribner says. “Most are afraid of

assess Scope 3 — upstream and downstream emissions — as well.

negatively affecting product quality.” Experts can help manufacturers navigate this careful balancing act, suggesting changes that don’t

“If you can’t measure it, you cannot improve upon it,” Jason Bell,

fundamentally change a business’s core priorities and practices

Sustainability Solutions Director, Net Zero Sites at ENGIE

yet still help them reduce energy consumption and emissions,

Impact, explains. “Establishing a baseline and understanding how

says Scribner.

your equipment, processes, and people influence your energy

Scope 3 emissions assessments for elements such as outside product transportation to and from suppliers and customers or employee remote work or transportation can come later, he says. But don’t let perfect be the enemy of the good — starting the accounting process is better than waiting.

This exercise is often easier if you work with an external partner that is experienced in energy management that can complete an energy

“

Establishing a baseline and

understanding how your equipment,

processes, and people influence your energy consumption and spending all begins with a current state assessment.

assessment leveraging metering tools to capture asset-level data.

Jason Bell, Sustainability Solutions Director Net Zero Sites at ENGIE Impact

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“

consumption and spending all begins with a current state assessment.”

SECTION 3 Enable the Right Talent & Governance Structure To Implement Your Energy Management Plan Once you have buy-in and a good understanding of your energy use and associated emissions, you can develop an action plan that will help you set and achieve energy efficiency goals. This phase of the project will include a written outline that shows how you can improve energy efficiency, transition to low- or no-emission energy sources, and, as a last resort, offset your use. Executed correctly, an effective management plan can help an organization be successful in executing a sustainability program, something only 12% of all respondents reported doing in ENGIE Impact’s 2023 Net Zero Report.

It is at this point in the journey that energy experts can work with employees and contractors to assist with a sustainability transition. Given that the 2023 Net Zero report found that 72% of all respondents reported a lack of internal talent and decarbonization specialists within their organization was somewhat of a barrier or a major barrier, having outside help when it comes to human capital can change everything, Bell adds. Creating an internal governance and accountability group that works with external resources will ease the energy efficiency journey —which should involve stakeholders operating and managing the production process.

“Employees have a huge impact on how a facility’s assets and

Finally, manufacturers must realize that energy efficiency and carbon

equipment consume energy. They ultimately drive and operate

reduction isn’t just a one-off exercise. The practice is a marathon,

critical processes, so they are an integral part of finding efficient

not a sprint. Bell says he tells his clients to think of energy efficiency

solutions. For example, if they don’t recognize how and when they

like they would a goal of zero accidents, and approach changes and

start and stop equipment, and when equipment is left on, then they’re

improvements much the same way.

lacking an understanding of their relationship to the process or the portfolio of buildings. Without this understanding of impact on utility

“It’s very much driven by a cultural component and behaviors of how

consumption, they have no ability to change things in a positive way,”

people operate their processes, and organizations must reassess on a

says Bell.

periodic basis.”

When you can show your employees what their actions mean and you can make as much of an impact on energy efficiency as changing out equipment or installing energy-saving elements within the line, Bell says. Human capital aside, manufacturers should also be looking at upgrading or retrofitting equipment with energy efficient components, transitioning to renewable fuel sources, adding green mobility solutions, adding on-site renewable energy generation, and purchasing carbon offsets — although offsets are a last resort and are not incorporated into GHG inventory accounting. Manufacturers should also be voluntarily reporting to the CDP, SASB, GRI, TCFD, and other industry-specific, regional, and international frameworks to make sure their efforts are on track and publicly communicated.

“

Employees have a huge impact on how a facility’s assets and

equipment consume energy. They ultimately drive and operate critical processes, so they are an integral part of finding efficient solutions.

Jason Bell, Sustainability Solutions Director Net Zero Sites at ENGIE Impact

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“

how those actions relate to a factory’s overall cost and energy spend,

CONCLUSION At the American multinational technology company, each of these

After the pilot training programs, the company realized a 9%

steps came together to create an impressive outcome — and the

potential annual cost reduction and a potential cost savings of $2.6

process still has many years ahead. The company, with help from

million each year. In addition, the company is seeing an 8% potential

ENGIE Impact, went through a collaborative auditing process and

reduction in overall energy demand equaling more than 30 Gwh per

training program to identify supply, demand, renewable, and clean

year. Even more impressive is the 26% potential reduction in carbon

energy projects as well as capabilities building towards carbon and

emissions, equating to 28,600 mT CO2e each year. Going forward,

emissions reductions with their people. It culminated in an 8-week

the manufacturer is launching a 58-step action plan to achieve even

pilot program across 11 global sites.

more energy savings, with the potential to replicate the current results to other sites around the globe.

This is a common outcome for customers, says ENGIE Impact’s Bell.

“ENGIE Impact focuses on collaboration and partnership with its clients, advising and providing a teaching and training methodology,” he says.

If an organization doesn’t adequately understand their operational resource usage they have no ability to improve their impact on the planet. This is where the critical benefit of partnering with energy experts that understand the challenges manufacturers face becomes crucial. ENGIE Impact experts provide a combined knowledge of holistic energy management and the need for inclusion at the site level to bring about lasting change. In the end, Bell says, the best solution is the one that follows the old adage about teaching someone to fish rather than just handing them food. Energy efficiency through decarbonization requires transformation, collaboration, and education.

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To learn more about ENGIE Impact’s transformational services, contact ENGIE Impact to take action today.

info.impact@engie.com engieimpact.com

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