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Sustainable chemical sectorAddressing the challenges and opportunities

2© Ricardo-AEA Ltd Ricardo Energy & Environment in Confidence

Today’s agenda

Sustainability and the chemical sectors

Sustainable chemicals

Private wire and renewable electricity


Today’s presenters

Ian BehlingRicardo Energy & Environment

Principal Consultant

Expert in building effective action plans

that help to bring the value of

sustainability to life.

[email protected]

Colin McNaughtRicardo Energy & Environment

Technical Director- Ricardo EE

Expert in renewable energy

[email protected]

Sam HintonRicardo Energy & Environment

Sustainability Consultant

Expert on life cycle assessment,

SimaPro and carbon footprint

[email protected]

Contact us for any questions after the webinar

mailto:[email protected]



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© Ricardo plc 2017© Ricardo plc 2018

Sustainability and the

chemicals sector

December 2018


Who am I ?

Ian Behling

▪ Principal consultant

▪ Specialising in:

▪ Environmental and business risks and

opportunities.

▪ Development of sustainability strategies

▪ Collection and collation of data to support

effective CSR reporting

▪ Building effective action plans that help to

bring the value of sustainability to life.

+44 (0) 1235 75 3117

[email protected]



Overview

▪ Background

▪ UN Sustainable Development Goals (“SDGs”)

▪ SDGs relevant to chemical companies

▪ Next steps


The

Sustainability

Journey

UN Millennium

Conference

1962 1967 1968

UN Biosphere

conference

1970

1st Earth Day

1979

Three Mile island

nuclear reactor

1984

1986

Chernobyl nuclear plant

meltdown

1989

Exxon Valdez oil spill

1992

Climate Change

Convention

2000

UN Millennium

Development Goals

(“MDGs”)

2002

2005

UN World Summit

2010

MDG Summit

2015

UN Sustainable

Development Goals

(“SDGs”)

2018

TODAY

2030

Rachel Carson’s

Silent Spring

Torrey Canyon oil Spill

Union Carbide’s leak of methyl isocyanate gas

1962 – 2030+

UN Global Compact


Goals

The SDGs explained

169

TARGETS

232

INDICATORS

source: https://sdg-tracker.org/

https://sdg-tracker.org/


Goals


The SDGs most directly applicable to chemical companies



Goals





Goals



1. Identifying and managing the risks of

chemicals of concern

2. Safe and sustainable use of chemicals by

industry

3. Sustainable management of chemicals

through EU legislation



6.3 - By 2030, improve water

quality by reducing pollution,

eliminating dumping and

minimizing release of

hazardous chemicals and

materials, halving the

proportion of untreated

wastewater and substantially

increasing recycling and safe

reuse globally.

3.9 - By 2030, substantially

reduce the number of

deaths and illnesses from

hazardous chemicals and

air, water and soil pollution

and contamination.

SMCW

SDGs that directly reference chemicals

12.4.1 - By 2020, achieve the

environmentally sound

management of chemicals

and all wastes throughout

their life cycle, in accordance

with agreed international

frameworks, and significantly

reduce their release to air,

water and soil in order to

minimize their adverse

impacts on human health and

the environment.

Next steps

Materiality

Supply

Chain

Implement or

enhance business

systems

Explore new

business

opportunities

Target

setting

SDG

Roadmap

Lead by

example

Understand what

the important

issues for your

stakeholders

Understand where

your sustainability

risks and

opportunities are

Management

Systems

Innovation

Measure and

report the

benefits

Align the objectives

and actions of your

organisation

Stakeholder

commitment


Sustainable chemicalsUsing Life Cycle Assessment

December 2018


Who am I ?

Sam Hinton▪ Sustainability consultant


▪ Life Cycle Assessment

▪ SimaPro

▪ Carbon footprinting

+44 (0)1235 75 3187

[email protected]



LCA examples – scale

Passenger trainBrick Green investment group

portfolio

Small Large


LCA examples – complexity

Oil & gas blowout

preventer

Brick Wind-electrolysis

ammonia

Simple Complex


LCA examples – chemicals sector

Wind-electrolysis

ammonia

Waste to fuel plantWhisky by-products


End of lifeManufacturing Distribution Retail UseComponents

What is LCA?

Raw material Energy Water

Carbon

emissions

CO2

Energy Ecotoxicity

!

Inp

uts

Su

pp

ly c

ha

inIm

pa

cts


▪ ISO 14040 defines Life Cycle Assessment to be the…

“compilation and evaluation of the inputs, outputs and the potential environmental impacts of a

product system throughout its life cycle”

▪ Product Category Rules define how an LCA should be performed for a particular product group

▪ An Environmental Production Declaration is a public report on how a product performs against a given PCR

LCAs, PCRs and EPDs

1. Goal and scope

definition

2. Inventory

analysis (LCI)

3. Impact

assessment (LCIA)

4. Interpretation

• product development

and improvement

• strategic planning

• policy making

• marketing

• other


By-products:

▪ Draff

▪ Pot Ale

Case study – whisky by-products

Animal

feed

Renewable

energy


Case study – whisky by-products

-400

-300

-200

-100

0

100

200

Stage Total Stage Total Stage Total

Renewable Energy Animal Feeds Dark Grains

Glo

bal W

arm

ing P

ote

ntial: t C

O2eq

Total

Fertiliser

Animal feed

Bioplant

Bioplant (AF)

Dark Grains Plant

PAS production

Combustor


How do you use it?

Capital burden Dark grains

End of Life

Materials in

Electricity

Natural gas


Percentage of global production of EC critical raw materials within a single country

Resource scarcity


Summary

▪ Any product or process can benefit from life cycle

assessment

▪ It enables you to target impact hotspots

▪ It’s not just about carbon


Private wire and renewable

electricity

December 2018


Who am I ?

Colin McNaught▪ Technical Director In Ricardo EE


▪ Renewable energy

▪ Combined heat, power and energy efficiency

▪ Alignment of commercial and technical issues

+44 (0)1235 75 [email protected]



Three topics

1 Energy system rationale

3 Options & examples

2 CSR


Energy systems rationale: changes in energy markets

Increased renewable electricity

Reduced central generation

Electrification of heat and transport

Smart meters & smart grids

Energy storage

Demand side flexibility

Energy

system

responses

Decarbonisation

Decentralisation

Digitalisation

Long term

trends


Energy system issues: projected power prices

Medium size industry *500MWh to 2GWh consumption

Cambridge Econometrics for the CCC, 2017


Energy system issues: generator & customer impacts

Electricity customersRenewable generators

▪ High uncertainty on income

▪ Challenge to finance projects without a

subsidy

▪ Seeking new forms of income – including

private wire

▪ New flexibility markets are short term and do

not offer funders the certainty require + need

energy storage to be eligible to bid

▪ High uncertainty on costs

▪ Upward pressure on prices – wholesale & CCL

▪ Opportunities to participate in new markets:

▪ STOR

▪ Demand Side Response

▪ But limits on participation as site process

requirements are the priority

Long term predictable prices

Prices that benefit generator and customer

Direct Sale of Electricity to customers


The 155 RE100 members come from many sectors: Banks, Insurance, Food, IT…

Chemical sector RE100 members & their actions:

• AkzoNobel: 6MW on site wind – with community ownership

• AstraZeneca: 7 solar projects on sites + purchase of renewable electricity

• Johnson & Johnson: 48 solar projects on J&J sites: 22MW

• P&G: Purchase from a 123MW windfarm in the USA

• Royal DSM: Purchase 100% renewable electricity in the Netherlands

• Unilever: Purchase 100% renewable electricity in Europe, the US and Japan

Corporate rationale: Renewable Electricity 100: RE100

RE100 member commitments:

Minimum phasing – 100% by 2050, + at least 30% by 2020, 60%

by 2030, 90% by 2040.

Use recognised RE certificates and PPAs with annual reporting.


Options & examples: contractual example - sleeving

Off site

generationElectricity

supplier

Electricity

user

Electricity +

CertificatesElectricity +

Certificates

Fees Fees

▪ Provides electricity user with renewable electricity and the necessary certificates

▪ But much low financial benefit:

o No change to distribution, transmission costs

o Fees reduce the remaining financial benefit


Options & examples: contractual example - onsite and private wire

Electricity

user site

Electricity +

Certificates

Electricity +

Certificates

Nearby

generation

Onsite

generation

Private wire

▪ Onsite or nearby generation could be owned by 3rd party or by the electricity user

▪ Higher financial benefit for both parties:

o Avoids distribution, transmission costs etc.

o Avoids environmental levies

o No supplier fees

▪ But financial security is key for the renewable energy investor


Options & examples: worked example private wire

6 MW of solar PV + 6 MW of Wind

17 GWh pa.

Private wire to site (5km)

£12.4 million incl private wire

15 years

8.02p/kWh

3% (real terms)

8.3%

Capacity

Generation

Grid

Costs

Loan

PPA price

PPA inflation

IRR


▪ Review your electricity supply – does this include renewable energy and renewable electricity certificates

▪ What could you do – on your site or near to your site?

▪ What is your supply chain doing about renewable energy?

Next steps

How Ricardo can help you on renewable electricity & heat

• Scoping assessments

• Full feasibility studies

• Financial assessments

• Due diligence

• Owner’s engineer

• Carbon reporting & LCAs


Any Questions?Attendee control panel

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Ian BehlingRicardo Energy & Environment

Principal Consultant

Expert in building effective action

plans that help to bring the

value of sustainability to life.

[email protected]

+44 (0) 1235 75 3117

Colin McNaughtRicardo Energy & Environment

Technical Director- Ricardo EE

Expert in renewable energy

[email protected]

+44 (0)1235 75 3258

Sam HintonRicardo Energy & Environment

Sustainability Consultant

Expert on life cycle assessment, SimaPro

and carbon footprint

[email protected]

+44 (0)1235 75 3187

Contact us for any questions after the webinar

Thank you for joining us!



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