On October 6th, EFESO hosted an insightful executive event around the theme of greenhouse gas reduction. It served as a dynamic forum for industry key players to address solutions to implementing sustainable, long-term strategies within the challenging context of Europe's ambitious sustainability agenda.
Gathered under the roof of Europe's sustainable lighthouse port at the Port of Antwerp-Bruges, leaders from diverse sectors engaged in deep discussions on their individual journeys towards sustainability, exploring pragmatic solutions to meet ESG ambitions and sharing both concrete achievements and aspirational visions.
The panel discussion featured Jacques Vandermeiren, CEO Port of Antwerp-Bruges, Veerle Slenders, EVP at Umicore Recycling, Christoph Balzarek, EVP at OQ Chemicals and Bernard Delvaux, CEO at ETEX Group. We took a step further and a deeper dive into specific sustainable topics through four enlightening roundtables:
Setting up a recycling ecosystem
The roundtable focused on a pragmatic example from ETEX. Through a partnership of 3 parties and technological innovation, it was possible for ETEX to move from down-cycling to recycling, and evolve to a profitable business model for the 3 business parties. This case has been preselected to be presented on the World Economic Forum of Davos 2023. The discussion went on:
- How to set up a successful collaboration to value waste, to develop new technologies
- Key challenges, and best practices in setting up a recycling ecosystem
The participants gathered some conclusions:
Challenge is to have ‘secured’ access to a predictable amount of qualitative recycled feedstock and to have a technical solution for the recycling of the material
Access to recycled feedstock and to the technological recycling solution: To partner up with companies that have a deep knowledge of the local ‘waste market’.
- How to find the other parties that are ‘the required piece of the puzzle?”
- “We partnered up with another big player who needed to find a solution to produce to recycled cement. We had the machine but not the volume. They had the volume, but didn’t have a positive business case to invest ‘alone’ in such an expensive machine. By combining our waste streams, and jointly using the same recycling solution, we had a positive business case to invest.”
Finding a long-term WIN-WIN business model with a collaborative attitude between participants that have decision authority is key
- Recycling party will have less stock, costs related to it, as their waste is now being used a feedstock. And they can ask more money for their material
- Win for society is less landfill, less excavation of natural scarce resources in Europe
European regulations make it difficult to set-up X-border solutions for waste within Europe, leading to set-up of more local set-up of ecosystems
- How could regulations work for us rather than against us
- E.g. “The machine is ready. We’re ready to start, but we’re already waiting more than 14 months to get our permit!”
- E.g. “How can we make sure that the ‘blacks mass of car batteries’ stays in Europe?”
Green Energy
This roundtable focused on a concrete illustration from a leading industrial group in the process industry realizing a company-wide Energy Efficiency and CO2 savings program. Initially a CO2 reduction context but external crisis brought the need for acceleration and support from outside to tackle 40 sites.
The discussions were on:
- Realizing a company-wide Energy Efficiency and CO2 savings program
- Key challenges and best practices in Industrial Energy Savings
Key takeaways:
Industrial companies all have ambitious targets to reduce GHG emissions and/or to increase Energy Efficiency. Yet the challenge for the companies is to create the “conditions for success” in the field, needed to realize their ambitious objectives.
Four critical conditions have been identified and ideas were brought forward to dealing with them.
Engaging the local site management – Connect top-down objectives and bottom-up ideas
- Top-down objectives at plant level for sustainability / energy efficiency
- Corporate ‘seed budgets’ to do energy scans (so sites don’t have to mobilize their own budgets right away)
- Corporate drumbeat / follow-up to keeping the momentum.
- Local Energy Leader in the participating sites. (could be also a broader role, like “factory of the future”)
Providing CAPEX buckets for Energy / CO2 projects
- Provide separate budget buckets for Capacity expansion CAPEX and Energy-related CAPEX, to ensure that Energy-related CAPEX are not always in competition with capacity expansion.
- Consider the deconsolidation of the Energy Efficiency CAPEX, through the formula of ESCO (Energy Savings Contract) in which a third party makes the investment and refunds itself through a share of the savings.
- Take a long-term time horizon for energy-related investments.
- Hedge the CO2-costs and include it in the business cases (this will increase the rate of return)
Embarking the operators: Operators have long-vested habits on how they operate.
- They need a climate of trust in which they can explore operating machines differently (e.g., lower steam pressure, lower temperatures, switching off in between batches etc)
- Create a culture of continuous improvement. This can be done for Energy, but it can be much broader of course (operational excellence)
- Ensuring access to the technical capabilities required, either through in-house specialists or external energy Energy Squads, like EFESO proposes.
Product Carbon Footprint and CAPEX investment decisions
Capital expenditures become increasingly relevant for carbon footprint optimization, as such proper methods and tools taking cost and greenhouse gas aspects into consideration become crucial for decision making.
The discussions were on:
- How to tackle CAPEX challenges exploring best practice analytics on product cost and carbon
- Cost / GHG considerations and trade-offs to support CAPEX planning
The participants gathered some key takeaways:
- Taking a (virtual) cost per ton CO² into account in CAPEX investment decisions is a common practice in most companies, even if current price levels (e.g. €80-120 per ton CO²) will not often move the needle
- Pressure to substantially reduce the Product Carbon Footprint is more generated by the fundamental belief in future market value (through customer requirements, legislation compliance now and in the future, attractiveness as employer especially for new generation, ... )
- New legislation (such as the “Carbon Border Adjustment Mechanism - CBAM" in EU) will increase the importance to include CO² impact in footprint optimisation and simulation, including sensitivity analysis to cover future scenario analysis
- Some industries are monetizing product differentiation based on product carbon footprint (offering traditional products, low carbon products and carbon free products at different price levels)
- Although most companies are considering the CO² emissions in the decision process of new capex and that all companies have expressed the target levels for GHG reduction spread out over the next years there is a general belief that the scarcity of resources and availability of relevant resources and alternatives will put a limitation on the progress that will be made (hydrogen, electricity and electricity loading infrastructure, battery materials, etc).
Green breakthrough innovation
The discussion during this roundtable was launched through the story of OQ Chemicals, which has set itself the goal of reducing its greenhouse gas emissions by 30% by 2030.
- How to set up a breakthrough innovation process in a highly complex environment with many interdependencies and limited predictability.
Some key strategies gathered with the participants were!
- To break the status quo and identify both the levers and implications to reach out the defined GHG goals
- Develop a process to find new and innovative solutions by changing the team mindset. A guided way to deal with uncertainty and complex challenges is through a co-creating approach.
- European regulations make it difficult to define the right way. Therefore having a decision model which describes the business environment of high complexity is needed to take the right decisions
- Creating partnerships and cross industry thinking allows e.g. transferring waste to raw material
- Building enthusiasm across the company and using interdisciplinary and diverse teams could help solve the challenges of sustainability, all together
- Creating and understanding the systems’ perspective as a key lever for solving such huge challenges. Understanding your position within the system enables a company to share knowledge and create further and open collaborations within the right companies in the same industry or other industries
As we reflect on the discussions, conclusions and practical insights shared during this event, we are energized to forge ahead our collective mission towards a more sustainable future. These experiences remind us that by embracing collaboration, innovation, and a strong commitment to change, we can make sustainability happen, together!
For more information contact Marcia de Troyer, EVP EFESO