Combine digitization and sustainability in Industry 4.0
Every company understands that it has to deal with sustainability in the coming period. The climate agreement alone to reduce CO2 emissions will force a company to take action, if only so as not to be surprised by the ever-increasing CO2 tax of up to €125/ton of CO2. The question is where to start? And how do these changes fit in with the other transition: digitization and industry 4.0? After all, you can only spend your euro once.
The European Union encourages and commits itself to make Europe more sustainable. The Climate Agreement and the European Green Deal give direction to the reduction of greenhouse gases such as CO2. Reduction can start with relatively simple measures such as insulation, utilization of residual heat, and better design of heat balances and process monitoring. Electrification offers several possibilities:
- Power to heat, in which gas is not fired but, for example, electric boilers are used;
- Power to hydrogen, the use of green hydrogen by electrolysis;
- Power to chemicals, the transition from petrochemistry to electrochemistry.
This is supported by CC(U)S systems that can capture CO2 for subsequent storage or useful application. Also the use of biobased feedstock instead of fossil feedstock is a possibility, recently described by the SER, the Social and Economic Council of the Netherlands, as a sensible use of biomass.
Determine environmental impact
Reducing greenhouse gases alone will not yet achieve the goal of a sustainable company. For example, circularity and preventing the depletion of raw materials have not automatically been achieved with the Climate Agreement. And here, too, there is much to be gained for the planet and society as well as for an individual company. In order to work effectively with sustainability, the current situation must first be made transparent. What, for example, is the environmental impact of the company’s own business processes, but also, a little further away, what impact do all these purchased raw materials have? And once the impact has been determined, how can a ranking be applied or where to start improving?
Classification in scopes
In order to collect the information, it is useful to match the classification as defined in the Greenhouse Gas Protocol of 2011. The consumption of utilities and raw materials/consumables is divided into three types or scopes. Scope 1 concerns direct emissions from the company’s own processes. Scope 2 is the indirect emissions from, for example, purchased electricity. Scope 3 cover emissions caused elsewhere in the chain, such as upstream from purchased raw materials.
Much of the data to be collected is already available in a company. However, this data is often spread across several departments. Think for example of data needed for the environmental permit, energy saving studies, production data and purchasing data. Once the data has been collected at company or process level, the environmental impact can be calculated. An objective method to map these out is a Life Cycle Analysis (LCA). With this analysis it is possible to determine the impact of the raw materials, production processes and products used on the environment and our health. A number of environmental effects and indicators are calculated, such as global warming potential (greenhouse gases), toxicity, water consumption, smog and resource depletion.
Environmental cost indicator
In order to gain insight into what the company should tackle first, the so-called environmental cost indicator (ECI) is used. This reduces the importance of each indicator to costs in euros for the environment, so that comparison is possible and it is clear what has the greatest impact on the environment. For example, global warming is calculated back to €0.05/kg Sb eq. If all incoming flows such as energy, raw material, auxiliary materials and packaging are known from the company, just like all outgoing flows such as emissions to water and air, and waste and residual flows, then it becomes visible where the greatest environmental gain can be achieved. Table 1 shows a simplified ECI calculation. It turns out that the corn and wheat used (scope 3) have the highest ECI costs with both more than 1 million, exemplary for the food industry. As far as scope 1 is concerned, the gas consumption was found to have a relatively high ECI of around €4 tons.
This company therefore focused on the improvements with regard to gas consumption and improvements with the chain partners to reduce the impact in scope 3.
The company digitized this modeling into an online integral system. They use it to continuously monitor the impact and map the effect of new projects, raw materials and products. In this way, employees upload all available data directly into the system. As a result, they always have an up-to-date picture of the environmental impact, costs and utility consumption.
This method can also be used for companies with multiple production sites or subsidiaries. It is often difficult to determine where the best sustainable measures can be taken. For example, it is difficult to determine how the potential water savings at plant A relates to the waste reduction at plant B. By calculating the ECI of both measures, it is possible to do so and compare apples with apples. By also including the investment costs of the improvement in the model, a well-founded choice can be made.
Measurable sustainable strategy
Once the impact of the production process and supply chain has been made clear, it is time to set goals. Here one can go back to the 17 Sustainable Development Goals (SDGs) for 2030 of the United Nations. The SDG’s cover such diverse issues as no hunger, no poverty, clean water, quality of education, gender equality and affordable and sustainable energy. These SDGs all sound abstract and can therefore give the impression that one’s own influence on them is not important. A number of companies and organization have taken up the gauntlet and translated the SDG’s concretely into their own contributions. On the process side of the company, SDGs 6, 7, 9, 12 and 13 are particularly relevant. These SDGs concern clean water and sanitation, clean and affordable energy, industrial innovation, responsible consumption and production, and climate action. CO2 reduction is part of this, but there are more sustainable aspects that are considered as such, such as water consumption and waste production.
Measuring progress and steering based on current data
For each of the chosen process-oriented SDGs, KPIs can now be determined, supported by the calculated impact of their own business operations and those of the supply chain. The analysis of SDGs and their KPIs can be converted into a model, with which measures can be calculated, from good-housekeeping measures for energy and water saving to the choice of other raw materials or other production processes.
The model includes the impact and costs of all raw and auxiliary materials. This allows a company to specifically investigate whether there are alternatives that have a lower impact on the environment. For example, a risk analysis can be made of the impact of environmental taxes on raw materials and consumables. It is likely that fossil raw materials in particular will become more expensive through taxes. The EU ETS (European Union Emissions Trading System) ensures that the shadow costs of environmental pollution play and increasing role in the industry’s business cases. The current price is about 28€/ton. By regularly investigating the impact of such charges and the possible alternatives, a company can respond to changes in the market.
The methodology described assumes that data is entered at regular intervals. This usually concerns data from the previous period. With the use of sensors and algorithms, the processes in factories can be further updated and optimized. As a result, the level of detail of the environmental impact is better mapped out, which also allows for better control. Particularly with regard to CO2 reduction, the development of process optimization with algorithms is rapid. Bilfinger Tebodin works together with Bilfinger Digital Next to support the industry. By combining knowledge in the field of energy efficiency technologies with the artificial intelligence-based process optimization of digitization experts, a lot of profit can be achieved. In addition to lower energy consumption and optimal use of raw materials/wastes, predictive maintenance, HSE improvements and quality can also be considered. Digitization offers better possibilities to link the impact of internal and external factors in order to make sustainability more effective.