The global manufacturing sector is at a turning point: further fuelled by its own expansion yet forced to slash emissions amidst net-zero commitments. Factories account for close to 30% global CO2 emissions. The total Scope 1 & 2 emissions from factories exceed 10 giga tons every year. This is further increased by the energy-intensive nature of steel, cement, and chemical production. Combating carbon leakage by encouraging greener production globally is the need of the hour that is supported through the EU's Carbon Border Adjustment Mechanism (climate policy that puts a fair price on carbon emitted during the production of carbon-intensive goods that are entering the EU and also encourages cleaner industrial production in non-EU countries) and other climate policies are increasingly garnering popularity as factories are on the lookout for solutions that can help them reduce their emissions in a measurable way without compromising their competitiveness.
Over the years, the manufacturing sector has faced significant challenges; the most crucial among them would be outdated infrastructure, energy-intensive production processes, and complex value chains. Decarbonization would require a sophisticated strategy that includes cost-effective efficiency measures and the latest technology to suit both small and large scale businesses.
Energy Efficiency: The Ultimate Goal
It is common to experience inefficiencies in factories due to outdated equipment, systems, or processes. These factors can result in 30-40% of energy wastage. Addressing these gaps is the first and most essential step to ensure cost-effective routes to lower emissions.
Simple measures such as the installation of variable frequency drives, optimizing compressed air usage, and waste heat utilization can yield 20-30% in overall energy savings. Such measures involve low disruption and can be applicable to both large plants and small to medium-sized enterprises. Many manufacturers are realizing that even small steps in this phase hold significant potential.
Electrification: Redefining Industrial Energy Use
Efficiency is just the beginning, and the trend towards electrification is now growing in strength. Industrial heat, which has traditionally been produced by fossil fuels, is now being produced by electric means such as induction, resistive and industrial heat pump technology. These have the potential to reduce greenhouse gas emissions by 50 to 70 per cent when combined with renewable energy sources.
Also, the economics are now becoming increasingly favorable. The cost of solar power for example has fallen significantly over the past decade, making it easier for industries to either generate their own power or sign up to buy power from renewable sources over long periods. In some cases, production processes have already been adapted to use a significantly higher proportion of this type of energy, demonstrating that reducing greenhouse gas emissions and precision in production processes are not necessarily in conflict.
Also Read: How Industrial AI Transforms Manufacturing
Green Hydrogen: The Future in ‘Hard to Abate’ Processes
Looking to the future, it is clear that electrification is a solution, but some industrial processes are ‘hard to abate.’ Here, the solution is ‘green hydrogen.’
Currently, hydrogen is being used alongside existing fuels to provide an easy solution to the problem. In the future, with the advancement in the cost of electrolyzers, hydrogen is likely to provide near-total decarbonization in some of the most carbon-intensive sectors. The on-going pilots and regulations like the U.S. Inflation Reduction Act and EU Hydrogen Strategy are helping to accelerate the global transition to ‘green hydrogen’ with massive subsidies.
Extension of Lens to Supply Chain
A large portion of industrial emissions is found outside the factory floor. This is particularly true in industries where the emphasis is on assembling products, where up to 70% of the total footprint may be comprised of this category.
This has led to a growing emphasis on supply chain engagement, where there is a focus on collaborative efforts in tracking carbon footprints, auditing, and even engaging in joint decarbonization strategies. In this respect, by working closely with Tier 1 and Tier 2 suppliers on initiatives like this, organizations are not just reducing their footprint, they are making their supply chains more resilient in an increasingly volatile world.
Role of Digital Tools as Enablers of Change
In the current context, the role of digitalization has been quite instrumental in providing precision in the decarbonization drive. The use of IoT sensors, advanced analytics, and even digital twins has been able to help industries, especially in the manufacturing sector, track energy consumption in real-time and make improvements accordingly. These digital tools have been able to help industries achieve incremental improvements, which lie in the range of 10-15%. At the same time, it has also been able to create a foundation for more advanced interventions.
About the Author:
Sivasailam Gunasekaran is Director and CEO of Freudenberg Regional Corporate Center India and Managing Director of Freudenberg Performance Materials India. With over three decades of experience in textiles, technical materials, and manufacturing, he plays a key role in driving the company’s growth and sustainability agenda in India. He is also instrumental in advancing Freudenberg’s “Make in India” initiatives and strengthening its manufacturing and innovation footprint in the region.