Paul Rak didn’t give much thought to the problem of climate change until the birth of his daughter in 2006. That’s when he started to ask questions common to first-time dads: What kind of world will she grow up in? What am I doing to make it better?
His first fatherly decision was to ditch his gas guzzler and purchase a fuel-efficient Toyota Prius. But as the owner of VeriForm, a metal fabrication shop in Cambridge, Ont., he also woke up to the many ways his business was wasting energy.
Some workers, for example, had a habit of leaving bay doors open between deliveries, even in the middle of winter. “I thought this was insane,” Rak recalled.
The solution, he found, was a simple one. He installed a switch that turned off the gas-fired heater in the building every time a bay door was opened. Employees quickly got the message: staying comfortable meant keeping the doors closed when possible. “My heating bill went from $6,000 to $570 a month,” said Rak.
G7 nations declared this year the importance of eliminating carbon emissions from the global economy by the end of this century. It’s a difficult place to imagine in a world built on the back of fossil fuels, but many businesses are already tackling the challenge. What they’re finding is that long-term gain doesn’t necessarily mean short-term pain, and when it does, the pain is often worth it.
Never has the company been more secure, said Rak. “If we hadn’t of done this we would not exist. We would be bankrupt.”
Energy-efficiency projects are the low-hanging fruit, but what a company decides to take on — from using more renewable energy to electrifying fleet vehicles — depends on where it operates. Each industry and region of the country has its own challenges and natural advantages.
In Ontario, the single biggest action businesses and industries have taken to reduce their carbon footprint is to simply stay plugged in to the provincial power grid. The phase-out of coal-fired power generation has reduced greenhouse-gas emissions from electricity use in the province by about 80 per cent since 2005.
This means industrial processes that rely on electricity, such as arc furnaces used by steelmakers and robotic assembly lines used by automakers, are significantly less carbon-intensive than they were a decade ago. That partly explains why emissions from Ontario’s steel sector, according to industry figures, are more than 20 per cent below 1990 levels.
Mark Jaccard, a professor of environmental economics at B.C.’s Simon Fraser University, called Ontario a “fantastic test case” of how a major effort over 10 years to eliminate coal-fired generation can dramatically reduce a jurisdiction’s emissions.
“We need zero-CO2 forms of secondary energy,” said Jaccard. “For buildings, electricity is great, and now we’re starting to realize electricity is also a good bet for transportation.”
According to a report last week from the Canadian Council on Renewable Electricity, “fuel switching to de-carbonized electricity is the single most significant pathway toward achieving deep emissions reduction globally.”
That’s why all eyes are on Alberta and its fleet of 18 coal-fired power plants, which together are responsible for nearly half of Canada’s electricity-sector emissions. Eliminating coal would significantly lower the carbon footprint of every business and industry that currently plugs into the Alberta grid, and would pave the way for the low-carbon electrification of transportation and more industrial processes.
But clean electricity, said Jaccard, is only part — albeit a big part — of the answer. To achieve its GHG emission-reduction targets, Canada will have to include biofuels and eventually hydrogen in its climate transition plan.
Heat sources will still be required for many industrial processes, from cement making to chemical production, while electricity likely won’t cut it for planes, big trucks and other heavy industrial equipment.
The introduction of carbon pricing across more provinces will encourage industries to innovate and experiment. Making deeper cuts to emissions won’t be easy, and there’s a long way to go, but many companies are already getting creative:
Irish building materials giant CRH has a waste-heat recovery project at its Mississauga cement factory. The company captures and reuses hot gases from five different points in its cement-making process, significantly reducing its natural gas consumption. Emission reductions from the project are the equivalent of taking 1,150 cars off the road.
Greenfield Specialty Alcohols in Chatham is piping CO2 from its ethanol production facility to a tomato greenhouse across the street. Waste heat from Greenfield’s processes will eventually be piped to the greenhouse, which won’t have to burn its own natural gas for heat 85 per cent of the time.
Suncor Energy is testing a new solvent technology from a company called Nsolv to reduce emissions from in-situ extraction of bitumen in the oil sands. Compared to a conventional steam-assisted gravity drainage (SAGD) operation, the solvent reduces GHG emissions by more than 75 per cent.
Purolator, the freight and parcel delivery company, has added 559 hybrid-electric delivery vehicles to its fleet of vehicles over the past decade. This has saved nearly 700,000 litres of fuel.
Operators of the Rio Tinto-owned Diavik Diamond Mine in the Northwest Territories built four wind turbines to reduce the use of diesel fuel, which was being trucked in at a cost of $70 million a year. The turbines power 10 per cent of the mine’s underground operations.
Two businesses cutting the carbon
When you open a freezer door at a supermarket and reach for some frozen waffles, global warming is likely not the first thought on your mind.
Unless you’re Scott Tudor, director of sustainability at Sobeys, the second-largest food retailer in Canada with 1,500 stores.
It turns out that conventional supermarket refrigeration systems are not climate-friendly. “Their emissions represent about 25 per cent of the total greenhouse-gas impact of a store,” said Tudor.
The culprit is hydrofluorocarbons (HFCs), an ozone-depleting gas that also happens to be 2,000 to 4,000 times more powerful than carbon dioxide when it comes to trapping heat in the atmosphere. Leaking HFCs are a big problem in grocery stores, so Mississauga-headquartered Sobeys decided in 2009 to do something about it.
Ironically, the solution was carbon dioxide.
CO2 is an excellent refrigerant and was commonly used a century ago until synthetic versions became the industry standard. The food retailer decided to test the old approach at one of its stores, using a system supplied by Trois-Rivières, Que.-based Carnot Refrigeration.
But the company went a step further. Refrigerators give off heat, as any homeowner knows. Sobeys installed a system that captures that waste heat and circulates it to other parts of the building, reducing the company’s use of natural gas for in-store space heating by 80 per cent.
The overall impact was compelling: GHG emissions from the CO2-based system were 62 per cent lower than a conventional system using HFCs. Not only that, it was cheaper to install and costs half a much to maintain.
“For each store, it’s the equivalent of taking 181 cars off the road,” said Tudor. “We’re committed to moving forward on this.”
To date the company has installed the new system in 75 stores across seven provinces. It’s now mandatory to have them in any newly built Sobeys location.
In that regard, the company has become a North America leader. According to a recent report from the non-profit Environmental Investigation Agency, Sobeys has installed more HFC-free refrigeration systems in Canada that all U.S. grocery retailers combined.
“U.S. retailers, including Walmart, the world’s largest and best-resourced retailer, have refused to take meaningful actions to begin phasing out HFCs or to significantly reduce their HFC emissions from refrigeration equipment,” it said.
Frank Dottori made the decision in the 1980s that Tembec, the forestry products giant he led at the time, would stop using coal as a source of energy. In the early 1990s, he set a goal of phasing out fossil fuel use by 2001.
The company didn’t meet that latter target, but relative to its industry peers, it has consistently shined as an example of how to break free from fossil fuels without breaking the bank.
“We were a little ahead of the game,” said Dottori, 76, who retired as chief executive in 2005 and now spends his time as an industry consultant. “It was perceived as being a bit radical at the time — the rest of the industry saw me as a bit of a rebel — but we always did things based on economics. It was a business decision.”
During Dottori’s final years at Tembec, renewable sources supplied 73 per cent of the energy used at its pulp and paper facilities. Since his departure, the company has continued to squeeze fossil fuels out of its operations. In 2014, renewables accounted for 82 per cent of its energy use, and more improvements are expected.
Recent projects include a new anaerobic treatment facility at its pulp mill in Matane, Que. It turns effluent from the mill into biogas that’s used to fuel pulp dryers. A heavy oil boiler was also replaced with an electric boiler that runs on hydroelectricity. The project reduced oil use at the mill by 90 per cent.
At Tembec’s Bearn lumber sawmill, it replaced two oil-fired boilers with a boiler that burns bark waste, reducing GHGs from building and kiln heating by 88 per cent. And just this year, at its Temiscaming operation, the company began generating electricity using sulfite liquor as a biofuel.
“Tembec isn’t the only company doing these things,” said Dottori. “Most of them have put in big biomass burners to generate their own heat and power, so a lot now are energy self-sufficient compared to 20 years ago.”
Since 2000, the forestry sector has cut its direct carbon footprint in half, according to data from Natural Resources Canada. Shrinkage of the industry accounted for some of that, but fuel-switching and energy efficiency have played a big role.
“Hands down, the forest products industry has made the greatest improvement in carbon emission reductions than any other industry in this country,” said Dottori.
The industry does have an advantage. Unlike most others, the resource it relies on to make wood and paper products is considered renewable, so any byproduct that results from production can be used as a biofuel in that same process. Carbon dioxide will get released, but the greenhouse gas is theoretically re-absorbed by new tree growth.
“Every time we cut a tree, by law in Ontario and Canada we are required at minimum to plant another one,” Dottori said.
The Fortune 500 Forecast
In the lead-up to the Paris climate summit, dozens of Fortune 500 businesses from around the world have pledged to only use zero-carbon electricity in their operations, either through direct acquisition or the purchase of renewable offsets.
The list includes popular brand names, such as Starbucks, IKEA, Nike and Mars, but only a few have set specific dates for reaching 100 per cent. Nike, for example, is aiming for 2025, while Goldman Sachs has set 2020 as its deadline.
At least one has already achieved its global goal: Steelcase, the Michigan-based office furniture giant, hit the 100 per cent milestone in 2014.
When limited to just U.S. operations, there are several dozens of companies powered entirely by renewables, according to the U.S. Environmental Protection Agency. The Top 5 includes Intel, Microsoft and Apple.
The appeal of clean electricity is part of the reason companies such as Microsoft and IBM have chosen low-carbon jurisdictions like Ontario and Quebec for their massive data centre operations.
In Canada, some companies have turned to green energy retailer Bullfrog Power to help decarbonizes operations. Bullfrog’s biggest customer is Unilever, which purchases green power for all of its Canadian offices and manufacturing facilities, which produce everything from ice cream to margarine.
Toyota announced this year that by 2050 none of its models will run exclusively on gasoline. Building on the success of its Prius hybrid-electric line of cars, the company is betting that hydrogen-powered fuel cell vehicles (such as its new Mirai, shown here) represent the industry’s future.
General Motors has been a big proponent of plug-in hybrid and pure electric vehicles, including its Volt and upcoming Bolt. More manufacturers are combining EV charging stations with solar panels, allowing vehicles to “fill up” on clean electricity.
General Motors’ Fort Wayne assembly plant in Indiana uses landfill gas to generate power for 43 per cent of the building’s electricity needs. The company also uses landfill gas for some of the power demand at its assembly plant in Michigan. GM has also been a big user of solar, and increasingly wind power.
BMW is making a substantial push into electric vehicle technology, starting with its i3 all-electric city car. Just as important is its decision to build the vehicles with super-lightweight bodies made of carbon fibre material, as lighter cars use less energy. The company is the first to mass produce cars using the material, and does so at a factory powered with renewable energy.
Electric vehicles are also part of Ford Motor’s plans, but the company has also worked to reduce greenhouse gas emissions from its manufacturing operations. Last year, it invested $25 million (U.S.) to install efficient LED lighting at all North American facilities, including its assembly plant in Oakville and engine facility in Windsor.
Audi is pioneering the production of e-diesel, a synthetic diesel fuel. It’s made from two key ingredients: CO2 captured from the air or industry, and hydrogen that’s been extracted from water using a process ideally powered by renewable electricity. It’s still experimental, but Audi is committed to showing that e-diesel can and should be part of a low-carbon transportation mix.
DieselGate scandal aside, Volkswagen has been trying to reduce emissions from its vehicle manufacturing operations. For example, it purposely painted the rooftops at its Chattanooga assembly facility white to reduce heat absorption from the sun. The white surface reflects sunlight, meaning less energy is needed for air conditioning inside buildings.