The breadth and depth of resource consumption attributed to the industrial sector is staggering—from aluminum to zinc, H2O to HCL.
In particular, manufacturing companies are categorizing their consumption and by-products to energy, emissions, waster, water with all manufacturing sectors across discrete and process seeking to minimize resource usage and maximize efficiency to reduce their overall environmental footprint.
While all sectors engage with similar, high-level challenges, there is a lot of variance to the environmental footprint across manufacturing sectors, and even within them.
Whilst heavy industries such as oil, gas and mining have received the lion’s share of public attention, these are also, typically, sectors that are more advanced in their investment and ability to improve their sustainability (such as by optimizing energy efficiency). In contrast, some of the discrete and hybrid industry sectors such as pharmaceutical and semiconductor production aren’t as far a.
There are key differences across these industries, including different metrics they are trying to manage, and the significance of their contributions as a part of the broader manufacturing sector.
Reducing energy consumption is considered by most manufacturers to be the most important sustainability objective when determining investment by manufacturing companies. The cost of energy is a major contributor to this, with two-thirds of companies in the process manufacturing sector indicating that energy consumption accounts for more than 10% of their operating costs.
Whilst all industry sectors rely on energy, the process sectors are significantly more energy intensive. The chemical industry accounts for almost as much energy consumed as the next largest sectors of oil and gas, and the metal processing sector. The cement industry has the highest energy intensity (the amount of energy consumed per every million of revenue).
Companies are continuing to shift to renewable energy; however, for most industry sectors, green energy is still less than 10% of their overall energy consumption. And for energy-intensive continuous-process sectors, the ratio can be closer to 1%. Overcoming challenges around energy storage and the adaptation of continuous processes to fluctuating renewable energy supply will be key for these sectors.
The drive to net zero is prioritizing the focus of many manufacturing companies towards emissions reduction. For most industries, the focus is primarily around CO2 reduction, although for the oil and gas sector, methane is also a key consideration. According to Environmental Defense Fund (EDF), methane has a Global Warming Potential (GWP) 80 times larger than that of CO2 for the first 20 years after its released into the atmosphere. Outside of agriculture, the oil and gas industry is the major contributor to methane emissions, which can arise across production and processing through, for example, flaring and intentional venting, as well as in transmission and distribution through fugitive emissions from leaking pipes, vessels and valves.
Efforts to reduce emissions encompass both strategies for reducing direct (scope 1) emissions, most prevalent in energy intensive industries (as discussed previously), as well as the broader scope 3 emissions across the supply chain.
Scope 1 emissions can be as much as 83% of the cement industry, and 80% of metal processing, whilst for the automotive industry—with long and complex supply chains and consumer packaged goods (CPF)—scope 3 emissions dominate (accounting for 97% and 87% of total emissions respectively).
The combination of both long and complex supply chains brings a set of challenges in how to address scope 3 emissions. Ford, for example, has around 1,400 Tier 1 production suppliers (before considering those Tier 2 and Tier 3 suppliers) alongside a strong dependency on heavy emitters, such as metals and chemicals as partners further upstream. As such a review of the selection of materials used in production, as well as both the sustainability and the location of which partners to work with is necessary.
A major challenge for the mining industry is the sheer scale of its waste. The top five mining companies (by revenue) were estimated to account for more than 5 billion tons of waste in 2020, with less than 1% of this waste recycled. The majority of this is left in waste rock dumps and tailing mines. Especially with the increasing material prices, there is a growing focus on the opportunity of re-mining this waste for other materials. Outside of this, much of the waste rock is used at the end of the life of the mine to fill it back in. However, tailings (fine grained rock remnants sometimes mixed with water) can be more of a challenge to deal with, as these huge dams are at risk of collapse, or pollution from effluent and dust emissions which may be toxic.
The disposal of hazardous waste can create additional challenges. For many industry sectors, from chemicals to pharmaceuticals and semiconductors, the volume of hazardous waste can eclipse that of non-hazardous waste. Industries such as semiconductor manufacturing can rely heavily on a range of liquids and solvents, which can be caustic or carcinogenic, requiring significant additional measures to ensure safe processing.
In contrast, in industries such as automotive (90%) and metal processing (70%), the process of recycling is both cost effective and far simpler to address. The simplicity is leading to companies to reuse and re-manufacture material and components.
Although sometimes overlooked in relation to other types of resource consumption, global demand for fresh water is expected to exceed supply by 40% over the next decade. With 17% of global water used for industrial purposes, there is a growing focus on minimizing consumption in manufacturing.
Water is heavily used in different process across a range of sectors, for applications such as washing, cooling, boiling, cleaning, and cutting. Almost 3,000 liters are estimated to be used in the production of a single adult-size T-shirt, whilst for a smartphone, a staggering 15,000 liters is required.
The pulp and paper industry uses the most water, consuming in most of the processes from the making and processing of pulp to the paper manufacturing process, and especially the most water intensive part of the process of bleaching the paper.
With each industry facing unique challenges around reducing its environmental footprint, there isn’t any one-stop solution. This necessitates the need for consulting services including auditing, optimization of application and integration of technology to ensure long-term suitability.