How to decarbonise supply chains

The race to achieve net-zero car­bon emis­sions tar­gets is inten­si­fy­ing as con­cerns deep­en over glob­al warm­ing. Despite wind and solar plants eas­ing reliance on fos­sil fuels, renew­able ener­gy com­pa­nies are aware that they too have emis­sions chal­lenges to resolve because of their sup­ply chains. 

Take wind pow­er. The tur­bine blades con­tain petro­chem­i­cal-based resins, while trans­port­ing them by sea or air pro­duces car­bon emis­sions, as does the extrac­tion and pro­duc­tion of the con­crete, steel and oth­er met­als used in their man­u­fac­ture. In the solar indus­try, poly­sil­i­con is a key mate­r­i­al in solar pan­els and 75% of glob­al capac­i­ty resides in Chi­na. But there have been wor­ry­ing reports of forced labour and coal pow­er used in its pro­duc­tion in Chi­na. 

Con­se­quent­ly, there is grow­ing pres­sure on renew­able ener­gy play­ers to do more to make their sup­ply chains more sus­tain­able. At the end of COP26 in Glas­gow, sum­mit pres­i­dent Alok Shar­ma urged the renew­able indus­try to “dri­ve action across your sup­ply chains, encour­age your sup­pli­ers to com­mit to net zero and work with them to reduce emis­sions”.

In March, the Clean Ener­gy Buy­ers Insti­tute launched the Decar­boniz­ing Indus­tri­al Sup­ply Chain Ener­gy ini­tia­tive, which aims to increase aware­ness and devel­op tools to decar­bonise the solar pho­to­volta­ic sup­ply chain. It wants ener­gy cus­tomers and devel­op­ers to part­ner and work to enhance clean ener­gy pro­cure­ment and decar­bonise build­ing mate­ri­als. Renew­able ener­gy trade asso­ci­a­tion Renew­ableUK has been encour­ag­ing its mem­bers for some time to think sus­tain­ably. In 2020, it launched the Mem­ber Val­ues Char­ter which com­mit­ted sig­na­to­ries to reduc­ing emis­sions from oper­a­tions and prod­ucts. 

“When you are a renew­able ener­gy devel­op­er you are, right­ly, held up to even greater scruti­ny than in any oth­er sec­tor. It is no longer enough to gen­er­ate green pow­er,” says Robert Nor­ris, head of com­mu­ni­ca­tions at Renew­ableUK. “You need to look at every part of your sup­ply chain to make sure it is as green as pos­si­ble. That includes where the raw mate­ri­als are sourced and moved.” 

And renew­able firms are also respond­ing. Siemens Game­sa makes wind tur­bines and intends to make its wind tur­bines ful­ly recy­clable by 2040. The tow­ers and elec­tri­cal com­po­nents made of cop­per can be used again but the blades of wind tur­bines are trick­i­er as they are made of com­pos­ite mate­ri­als. They are usu­al­ly sent to land­fill or incin­er­at­ed after reach­ing the end of their work­ing lives. Now, though, by using new tech­nol­o­gy to sep­a­rate the com­pos­ite mate­ri­als the blades can be recy­cled into new appli­ca­tions. In the Dan­ish port city of Aal­borg, home to one of Siemens’ man­u­fac­tur­ing plants, author­i­ties have repur­posed dis­card­ed wind tur­bine blades as bike shel­ters.

Ves­tas Wind Sys­tems, which also man­u­fac­tures tur­bines, isn’t being left behind in the slip­stream. It is devel­op­ing recy­clable blades as part of its sus­tain­abil­i­ty strat­e­gy. It is focused on cre­at­ing a val­ue chain that gen­er­ates no waste mate­ri­als and reduc­ing the CO2 emis­sions from its sup­ply chain by 45% per MW/hour gen­er­at­ed, by 2030. As part of this plan, Ves­tas is work­ing with 27 key sup­pli­ers by ask­ing them to com­mit to using 100% renew­able elec­tric­i­ty, set car­bon emis­sions reduc­tion tar­gets and mea­sure pro­duc­tion waste.

Renew­able ener­gy devel­op­er Vat­ten­fall has also vowed to reduce its sup­ply chain emis­sions from goods and ser­vices – by half, by 2030. Its main emis­sions dri­vers are the extrac­tion and pro­duc­tion of raw mate­ri­als and trans­porta­tion. Part of its attempt to tack­le the prob­lem, it says, is mak­ing cli­mate-smart design choic­es. This includes devel­op­ing con­crete with a low­er share of cement for a new hydropow­er dam in Swe­den. Dur­ing the con­struc­tion of an onshore wind farm in the Nether­lands, it has also intro­duced the envi­ron­men­tal cost indi­ca­tor in its pro­cure­ment process. This assess­ment of the life cycle involves ask­ing sup­pli­ers how they would reduce their ECI val­ue using their design, machin­ery, trans­port, work, and mate­r­i­al improve­ments. 

Those with a high expect­ed reduc­tion gained an advan­tage in the sup­pli­er selec­tion process, lead­ing to reduced emis­sions of green­house gas­es on the project com­pared to nor­mal builds.

“We have had a focus on reduc­ing emis­sions for some time, but we want­ed to cre­ate a firm tar­get for sup­pli­ers,” explains Vattenfall’s head of sus­tain­abil­i­ty Anni­ka Ram­sköld. “But, the biggest car­bon foot­print is rarely with our direct sup­pli­ers. It is usu­al­ly much fur­ther down the sup­ply chain with steel, cement and alu­mini­um, which we don’t buy direct­ly.”

The embry­on­ic nature of parts of the sec­tor can be an issue in find­ing green and eth­i­cal sup­pli­ers. Ian John­ston, chief exec­u­tive of EV group Osprey Charg­ing Net­work, says it has had a sus­tain­able sup­pli­er frame­work in play since 2020. “But the chal­lenge for a busi­ness like ours in a rel­a­tive­ly nascent mar­ket like EV charg­ing, is that we do not yet have a wide range of hard­ware sup­pli­ers to select from,” he says. “The ease of use of the hard­ware we install is a crit­i­cal fac­tor in dri­ver sat­is­fac­tion but we are for­tu­nate that sus­tain­abil­i­ty is such an impor­tant fac­tor across our indus­try that our hard­ware part­ners are also mak­ing strong strides for­ward.”

Mean­while, sup­ply chain experts Achilles is doing its best to make the sec­tor more vis­i­ble for oth­er new entrants, such as lega­cy oil and gas firms, through its Green Ener­gy Net­work. It pro­vides glob­al pre­qual­i­fi­ca­tion ser­vices and ESG scor­ing of poten­tial renew­able ener­gy sup­pli­ers to help devel­op­ers to build new sup­ply chains. “There is mas­sive oppor­tu­ni­ty now as the indus­try ramps up, but it is cre­at­ing grow­ing pains. A lot of swift sup­ply chain build­ing is need­ed,” says chief prod­uct offi­cer Katie Tam­blin. “When there are so many new sup­pli­ers enter­ing the mar­ket, it is dif­fi­cult to ensure that the sup­ply chain is eth­i­cal and sus­tain­able. You need full vis­i­bil­i­ty of the car­bon foot­print across mul­ti­ple tiers of the sup­ply chain – as well as gov­er­nance and issues such as labour rights. There are a lot of risks.” One poten­tial answer – dri­ven by the Rus­sia-Ukraine war and the need for ener­gy secu­ri­ty – is the local­i­sa­tion of sup­ply.

Vat­ten­fall is aim­ing to reduce its expo­sure to steel and is part of the Hydro­gen Break­through Iron­mak­ing Tech­nol­o­gy project, along­side Swedish steel man­u­fac­tur­er SSAB and min­ing group LKAB. The pur­pose of HYBRIT is to cre­ate fos­sil-free steel, using hydro­gen. The US has barred imports of Chi­nese poly­sil­i­con and, as part of its ramp-up of off­shore wind pro­duc­tion, has asked bid­ders to include plans to sup­port port devel­op­ment and the sup­ply chain. In the UK, devel­op­ers of projects that have a capac­i­ty above 300MW must include sup­ply chain plans in their bids. The gov­ern­ment has also fund­ed a new tur­bine tow­er fac­to­ry in the Port of Nigg in Scot­land to increase local pro­duc­tion.

“The gov­ern­ment is keen on cre­at­ing these off­shore wind hubs,” says Nor­ris. “It leads to a low­er car­bon foot­print than import­ing mate­ri­als or get­ting them from else­where in the UK. It is an inter­est­ing blue­print for the future and anoth­er exam­ple of our indus­try walk­ing the walk on sus­tain­abil­i­ty.”

Ini­tia­tives like these will sure­ly help to halt the progress of glob­al warm­ing. There is always, of course, room for fur­ther inno­v­a­tive think­ing in the bid to decar­bonise indus­tri­al sup­ply chains.