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Manufacturers Should Consider GHG Emissions on Site-by-Site Basis

david-dornfeld2Last time we discussed some of the motivators for companies paying attention to green manufacturing – that is, drivers for incorporating green in your business strategy. I have posted, on my lab’s website, a set of slides presented recently to an industry group meeting titled “Challenges & Opportunities for Sustainable Manufacturing: Green as a Competitive Advantage” (click on the image in “featured work” for a pdf download).

All the data on energy consumption, global temperatures, CO2 levels in the atmosphere, other impacts of industrialization and population growth head up and to the right in the graphs … meaning things are moving toward more challenging conditions.

You may or may not fully agree with the predictions but, from the perspective of cost of energy, availability of energy, cost of treatment/disposal of waste products, etc., things will get more expensive. And, as mentioned in the previous posting, legislation marches on. The recent deliberations in the US Congress have a goal to reduce CO2 emissions from utilites, manufacturers and other emitters.

Regardless of your feelings towards the severity of the situation, there are forces moving to make it more and more expensive and difficult to continue “business as usual” with respect to environmental impacts of manufacturing around the world. We should be prepared and use this to our advantage.

Consider where something, say an auto, is manufactured. One can make a simple analysis of energy needed to make an automobile. This is called “embodied energy”-  expressed in units of kWh-  and is a representation of the energy needed to make the car, not to operate it, the so called manufacturing phase not use-phase requirements. Then, through the magic of conversions, we can estimate the greenhouse gases (GHG) attributable to that embodied energy by converting from kWh to GHG using factors that are based on the source of the electricity; that is, from coal or other carbon-based energy sources, or hydro, solar or wind and other renewable sources, or nuclear.

Carbon based energy has a higher GHG impact than renewable. This allows us to see the impact of where we manufacture something. Interestingly, making the same vehicle in different places (depending on the energy mix) will result in dramatically different GHG output. If you’d like to see the data on this…send me a note…I can send the links.

Let’s look at some examples. If I build my “typical auto” in France, which has most of its electrical energy generated in nuclear plants, the GHG impact of manufacturing that auto will be about one-seventh that of building it in the U.S., or less than one tenth that of building it in China. If we zoom in on the U.S. we see great differences between states also. Building a car in California with its mix of renewable energy versus Kentucky with its dependence on coal fired plants means a factor of four in difference in GHG impact between the same manufacturing process – only based on location. Maybe manufacturing automobiles in California is not such a wild idea!

So why does this matter? Regulations already exist that apply penalties for excessive GHG emission in products during the use-phase. For example, if you want to buy an auto in France you will see listed, along with fuel consumption in liters/km, the GHG generated in units of grams of CO2/km traveled. Here is one for a Ford site in the UK. CO2 emissions are listed in g/km and you can compare performance over a range of engines. And, if you buy a vehicle with a large engine that emits GHG above a certain level you’ll pay more. If you buy one below a certain level, you pay less.

Same manufacturer, same quality vehicle, same operation, same manufacturing process – but costs more if it emits more GHG in operation. This same will happen in due time for manufacturing based on embedded energy in the product due to manufacture (that is, embedded energy in the materials, water, energy, consumables, etc.)

If your product is a machine tool your customer will be concerned about the energy and resources used to build the machine tool, because it may affect the cost. And then, when it is installed in the factory, the customer will be worried about how much energy the machine uses in its “use phase.” And then there is the transportation cost from the manufacturing site to the distribution site and customer. We should include those impacts as well.

And so it goes! The smart manufacturer will optimize where to build the product in terms of energy mix and transportation costs to the consumer. We probably need to add availability of water and the energy cost of providing that as well. These kinds of considerations will, in my opinion, greatly influence the location of manufacturing (and, hopefully, offset some of the fascination with low labor costs as the sole determiner of location).

Paraphrasing Lord Kelvin, “If you can’t measure what you make, you don’t know if you’ve made it or not.”

We need to be able to understand and measure the resources used in our products and their use. Then we can make informed decisions about their design, distribution and utilization. This really encourages us to think about the life cycle costs of energy and consumables in the manufacture of a product – an important driver for green manufacturing.

David Dornfeld is the Will C. Hall Family Chair in Engineering in Mechanical Engineering at University of California Berkeley. He leads the Laboratory for Manufacturing and Sustainability (LMAS), and he writes the Green Manufacturing blog.

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2 thoughts on “Manufacturers Should Consider GHG Emissions on Site-by-Site Basis

  1. David,

    You make some very interesting points on the impacts associated with embedded CO2 and GHG from a manufacturing perspective. However in your automobile example the transportation and distribution impacts were not considered. It is quite likely that a car made in Washington State – 100% hydro powered – may have a strong CO2 edge but still lose out in the East Coast market to an auto manufactured in Kentucky or to an Alabama or Texas based manufacture in the South once transportation and distribution are taken into account.

    This assumes all raw materials carry the same total embedded energy along with land, water, and air use. However this is far from the case. The entire supply chain must be considered not just point of manufacture.

    Your columns are most enlightening. I look forward to your next installment!

    Best regards.

    Jack

  2. Jack-
    Thanks for your comments. You are absolutely correct and I do mention the need to consider transportation as part of this later on in the text. This will be considered more completely in later postings (remember – this is a reprint from my blog so for the latest material check that out). Depending on the mode of transportation (that is train, ship, truck, air) the impact of transportation varies tremendously. Specially for production off shore. We recently did a study on the sensitivity of transportation for manufacture of body in white components in one location and assembly in another and sales in a third location. Choices in transportation mode and distance determine the setup with minimum impact. So, for sure, it must be considered. In fact, one’s supply chain could be designed to make sure the impact of energy mix, transportation, etc., which can be dominant factors in some products, is minimized. As a result, the distribution network could look very different.

    Thanks for reading
    Dave

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