In the recent years businesses and communities across Asia have been repeatedly shaken by severe weather events with worse damages in decades caused by the destructive power of the accelerating changes in climate. The Economic and Social Commission for Asia and the Pacific (ESCAP) has concluded that climate change magnifies the risks from natural disasters, increasing the costs of protecting people from negative impacts.
The Asian Development Bank (ADB) estimates that the intense rains leading to massive floods in India, Bangladesh, and Nepal bring financial losses of up to $215 billion each year to the region’s economies. The super-typhoons battering Philippines, China, and Hong Kong are disrupting not just local business operations, but also their product supply chains around the globe. ADB projects that 410 million of Asians will be vulnerable to coastal flooding by 2025, while over 60% of the region's population is currently employed in business sectors that are at high risk of suffering from the impacts of climate change.
The rapidly expanding manufacturing industry in Asia is a significant contributor to greenhouse gas pollution due to high energy consumption, and the region’s share is expected to reach 43% of the world electricity demand by 2030. The welfare losses from the increasing exposure to the industrial emissions are estimated to cost South and South-East Asia equal to 7.5 % of regional gross domestic product. Without radical changes in business operations, Asia and the Pacific could emit 48% of the world's greenhouse gases during the next decade. China is now considered the world’s biggest polluter of greenhouse gases, producing 28% of global carbon emissions, more than the United States and Europe combined. The manufacturing industry is the largest energy consumer in China, currently accounting for 56.7% of the total national annual energy consumption. The energy intensity in the Chinese manufacturing industry is high above the global average levels, and the government data shows that China’s electricity consumption has increased by 6.6 percent in 2017, with most of the additional energy supply derived from burning coal, generating drastic amounts of greenhouse gases.
The International Energy Outlook 2018 published by the U.S. Energy Information Administration predicts China will remain by far the world’s leading producer of energy-intensive goods with the projected energy consumption increasing up to 25% by 2040 unless the industry transforms its energy management practices. The resulting greenhouse gas emissions would accelerate climate change posing significant risks to local communities and ecosystems, triggering extreme weather with stronger droughts, winds, and rains, higher sea levels, and warmer oceans creating more powerful storms and coastal damage. The manufacturing industry would suffer serious losses, as its operations are sensitive to high temperatures, extreme weather conditions, and freshwater shortage. Data analysis of half a million Chinese manufacturing plants suggests that accelerating climate change would dramatically lower the output for the Chinese manufacturing sector falling by 12% annually, equivalent to a loss of $39.5 billion in 2007 dollars. As the Chinese manufacturing sector accounts for 32% of the national GDP and supplies 12% of global exports, the impacts on the local and global economies would be substantial.
In the 2015 Paris Agreement, an international treaty on climate change signed by almost 200 countries, China has officially committed to peak carbon emissions around 2030. In its National Strategy on Energy Production and Consumption Revolution (2016-2030), China set an ambitious energy consumption target of 6 billion tonnes of coal equivalent maximum in 2030.
Complying with the National Strategy and safeguarding the manufacturing industry long-term interests requires decoupling of energy consumption from economic growth, implementing sustainable energy management strategies at the local level, investing in improving industrial energy efficiency capabilities. Sustainable energy management involves systematic continuous efforts to improve energy efficiency through behavioural changes, smart managerial and technological solutions to optimise the company operations. Luckily, these efforts tend to pay off, strengthening the company’s resource security, public image, and long-term economic resilience. The Carbon Trust estimates that a 20% cut in manufacturing energy costs will bring the same bottom line benefits as a 5% increase in sales.
API sustainability experts have developed this step-by-step guide to help manufacturers better understand their business energy performance, risks, and opportunities, implement energy efficiency best practices, and achieve a sustainable return on investment.
1. Assess your energy consumption
Conduct a detailed documented energy review of your company's facilities and operations, analyse energy use and consumption data, determine areas of significant energy use, identify opportunities for improving energy efficiency. Energy assessment involves analysis of the historical utility data over a period of 12-24 months with a detailed load breakdown and on-site analysis of significant energy uses, their relevant variables, risks, current energy performance, and identification of workers that influence or affect it to prevent dysfunction and energy waste.
Create a centralised Energy Management Information System (EMIS) using a specialised software platform with instant online access to energy information, measurement data and costs, details about energy conservation measures, and records of resulting savings. Energy information can be gathered either in real time or reported on a daily basis to determine the current energy performance and identify factors of significant energy consumption, evaluate energy performance against set targets. EMIS facilitates timely informed decisions for effective operational management at the relevant level of your organisation.
2. DEFINE YOUR ENERGY BASELINE
Use the information collected from the initial energy review to establish an energy baseline using the historical utility data, recorded energy use trends, and benchmarking. Identify the appropriate energy performance indicators to monitor and measure energy performance against the energy baseline. Use specialised energy and sustainability software portals to document the calculation methodologies, data management processes, change management procedures, greenhouse gas emissions inventories, and associated roles, responsibilities, and timeframe.
Measure any changes in the energy performance against the identified energy baseline, reassessed and update the baseline annually or when there are major changes to the static factors. The obtained data can be used to report the company's ongoing energy and environmental performance.
3. INITIATE ENERGY AUDITS
Use the energy information obtained from the energy review assessment to select sites and processes that are using excessive energy and have the potential for energy efficiency improvements. Employ an energy expert to perform a comprehensive on-site audit of facilities and site operations. The auditor should produce a customised action plan specifying no cost, low-cost, and medium cost solutions to reduce energy consumption, as well as areas that require capital-intensive investments in energy efficiency.
Establish an ongoing program of audits and assessments with regular internal auditions at planned intervals to evaluate the dynamics of energy consumption against the energy objectives and targets, assess the effectiveness of the implementation of energy conservation measures, develop corrective actions and preventive actions. Use an energy and sustainability portal to develop consistent audit plans and document the audit results and recommendations. Energy audits should identify individual equipment energy usage share, suggest priority areas for energy and cost reductions, and produce recommendations for further actions for on-site personnel and other corporate sustainability stakeholders.
4. DEVELOP YOUR ENERGY MANAGEMENT STRATEGY
In collaboration with energy experts, create an effective energy policy highlighting your approach to sustainable energy management, commitment to continual improvement in energy conservation specifying energy performance indicators, objectives, and targets. The energy policy should be accompanied by a document management plan describing the scope, process, and methods for reporting data including calculation methodologies, boundaries, auditing, and verification procedures.
Introduce an Energy Data Collection Plan specifying which data is required to effectively monitor the key characteristics related to significant energy uses such as relevant variables, operational characteristics, and static factors. Specify in what way and at what intervals should the data be collected and documented.
5. DESIGN AN ENERGY MANAGEMENT ACTION PLAN
The Energy Management Action Plan determines the responsibilities, resources, time frame, and methods for energy performance measurement, monitoring, evaluation, verification, and reporting. The Plan should include energy strategy communication methods and tools for management, employees, and end-users and awareness training making sure that all employees are competent to perform their roles and receive the appropriate information and training.
6. CONDUCT REGULAR ENERGY MONITORING
Perform ongoing energy assessments to optimise your operational efficiencies: monitor, measure, and analyse the crucial aspects of your operations, significant energy uses, their variables, energy performance indicators, dynamics towards achieving energy reduction objectives and targets using real-time metering tools to collect, log, mine, and analyse energy data. Maintain accessible detailed records of the monitoring results traceable to the relevant activities.
Establish a common automated system that can process the obtained data sets and identify, model, visualise, and evaluate progress to help identify and implement the most viable control measures. Consolidating energy data, modelling production energy consumption, and expert energy analytics of actual performance against the expected energy consumption projections can save you up to 30% of the manufacturing energy costs. Regular monitoring will provide you with valuable statistics on the facility's energy demand, facilitate forecasting and load aggregation, optimise operating performance, predict energy loads, modify production schedules according to energy demands, control capability, leverage off-peak times, identify power quality issues that can compromise your operations and protect your equipment, predict, assess, and reduce the associated environmental impacts.
7. CALCULATE ENERGY REDUCTIONS AND COST SAVINGS
Monitor and report operational costs and procurement of energy supply, services, and assets to make informed decisions for further business development. Use financial appraisal tools such as simple payback period calculations or discounted cash flow techniques to assess the net present value and internal rate of return. For capital-intensive projects, use Life Cycle Cost Analysis to calculate the costs and financial savings that may occur over the entire project lifetime to evaluate whether the investment will be profitable in the long-term perspective.
Based on the calculations of projected cost-savings, devise a sustainable procurement strategy. The calculations of potential energy savings from energy efficiency projects must be verified proving the adequacy of selected measures and ability to deliver the desired results. Introduce a Measurement and Verification process to increase the credibility of energy management within your organisation and ensure the future allocation of resources for implementing energy efficiency projects. The International Performance Measurement and Verification Protocol provides recognised methods and techniques for determining different types of savings across the industrial processes and facilities, describes best practices in savings recording, accurate estimation, and verifiable reporting of energy savings.
8. USE ENERGY MANAGEMENT MATRICES TO CONTROL ENERGY PERFORMANCE
Utilise performance-based energy management matrices to review the existing energy management practices within your organisation, analyse your operations in terms of energy management, financial allocation, awareness and organisation, technical issues. Define clear targets for all activities and prioritise energy management actions.
Manufacturers typically apply three levels of matrices: top level matrix summarising the results for an organisation, organisational matrices mapping out activity levels in each of the areas listed above and then feeding results into the top level, and detailed matrices covering all the technologies within the built environment and feeding the results into the second level technical matrix.
9. Get carbon neutral certified
Introducing carbon management programs for your business can help you evaluate, monitor, reduce, prevent, or compensate your greenhouse gas emissions by tracking the dynamics of your carbon footprint and implementing adequate carbon reduction measures. Carbon neutral certifications can significantly reduce your company’s ecological footprint and boost your brand image showing your customers, partners, and investors that your products are environmentally safe and sustainable.
Proactively implementing carbon management work practices helps companies to comply with the increasingly strict national and international environmental regulations. Obtaining recognised certifications and labels for the household goods industry helps optimise the resource use, reduce the energy demand throughout the product’s life cycle, prevent environmental damage, minimise risks, financial losses, and production costs in the long run.
10. WORK WITH EXPERTS IN SUSTAINABLE ENERGY MANAGEMENT
Seek professional help from energy experts experienced in sustainable manufacturing best practices to build an effective energy management framework for your business.
API is a recognised expert in energy conservation and sustainable manufacturing of household goods with a rich practical experience in strategic energy management and preparation for carbon neutral certification . Our sustainability experts and specialists in household goods can help you develop and implement sustainable management strategies, policies and action plans, achieve legal compliance with environmental legislation, implement long-term carbon reduction initiatives, verify your energy performance and implement international standards.
We specialise in sustainability services, evaluation of manufacturing processes, carbon footprint calculation, life cycle assessment, independent performance verification and validation, sustainable supply chain management, and professional sustainability training.
For more information and guidance, please book an API consultation.
All data is quoted from and belongs to published literature. API does not hold any responsibility for the accuracy, timeliness or validity of any data or information.