5 Steps To Create Your Carbon Reduction Strategy
Thoughtful business. Efficient energy use. Foresight in a fast-changing landscape. It may be a little daunting, yet it’s also very empowering to know that we can do more. In light of the recent IPCC Climate Assessment Report, we’ll have to do more if we’re to uphold the Paris Climate Agreement commitment of limiting global temperature to well below 2°C Celsius. Wanting to answer the call and cement their legacies, governments, corporations, and organisations have been releasing commitments to reduce carbon emissions and be Net-zero is a term meaning to get to zero emissions, there is no current standard on what getting to net-zero means. For governments a net-zero target is one that covers all scope 1 emissions in their jurisdiction. For business it usually covers scope 1 and 2 emissions, although some companies also include some scope 3 emissions. The Science Based Targets Initiative is currently working on a standard for companies. More by 2050.
Setting and reaching carbon targets can seem complicated, but there is no need to go at it alone. To help with implementation and successful follow-through of carbon reduction strategies, Northmore Gordon is working with businesses to reduce their dependency on fossil fuels and shorten the distance to net-zero carbon emissions. In doing so, Northmore Gordon helps Australian businesses develop and execute carbon reduction strategies that will help them improve energy performance and stay competitive in a decarbonizing global economy.
In this article, we’ve outlined a roadmap to reduce carbon emissions. If while reading you have any questions or find yourself ready to make forward strides, don’t hesitate to reach out for a courtesy consultation.
Step 1 — Determine business preparedness and state of carbon emissions
Understanding your business’s current situation is critical to developing an effective plan. With regard to industrial energy users, you’ll want to determine:
- What business resources are available to manage decarbonisation efforts
- How much carbon emissions the business currently produces
A great place to start is by taking the Carbon Health Check quiz on our website. With questions pertaining to your business, its current available systems, and its goals, the quiz will help your business realise whether or not it has sufficient resources to guide itself through a carbon reduction plan or whether outside consultation would be greatly beneficial.
After determining the extent of your business’s resources and ability to effectively implement an emissions reduction plan, now it is time to determine how much carbon the business emits. If you are a large energy user, it’s likely you already report greenhouse gas emissions to National Greenhouse and Energy Reporting (National Greenhouse and Energy Reporting Scheme. Large energy users and greenhouse gas emitters that exceed the thresholds must report their detailed energy and emissions data each year to the Australian Clean Energy Regulator.) — a database that contains reported carbon emissions for each fiscal year — and can find your emissions there.
If you don’t report to NGER, then begin by examining the energy sources your business consumes. Most business operations are powered by electricity, which contributes to Scope 2 emissions. If some business processes require thermal energy, then they’re likely powered by burning natural gas.
Finally, if your business relies on forklifts and trucks to move goods within its facility or transport them elsewhere, then LPG and diesel consumption will constitute a portion of the carbon emissions. Natural gas, LPG, and diesel fuel consumption contribute to Scope 1 emissions. For more insight into your emissions and to take a deeper look at Scope 1, 2, & 3 emissions, check out our Carbon Footprint Analysis Form.
Step 2 — Establish your baseline year
Serving as a benchmark to measure progress, your baseline year is an important element to successfully carry out a carbon reduction strategy. It’s best to select a year that is representative of your most stable production or operations. Therefore, do not choose a baseline year in which the business:
- Implemented a number of energy efficiency projects, as this will inflate carbon reduction achievements
- Experienced abnormal increase in production or activity, as this is not reflective of typical years
- Suffered from decreased production, such as during Covid-impacted years
To establish an effective baseline emissions year, choose a year within a 3-5 year span when carbon emissions remained relatively steady (+/- 5%).
Step 3 — Create a carbon reduction project list
After establishing a baseline year, generate a list of potential projects that will contribute to net carbon emissions reductions. It can be effective to brainstorm this list with the whole operations team in order to brainstorm a range of ideas, from optimizing current systems, to transitioning to alternative energy sources, to adjusting procurement strategies, to offsetting emissions through other contributions.
Optimizing current systems — it’s often effective to start with energy efficiency measures using existing infrastructure because that will reduce energy intensity — therefore reducing emissions and saving on energy costs — without changing operations. For processes requiring thermal energy, there may be opportunity to recover waste heat and transfer it to another process in order to reduce energy consumption. Improving Heating, ventilation, and air conditioning is the technology of indoor and vehicular environmental comfort. Its goal is to provide thermal comfort and acceptable indoor air quality. More insulation or implementing LED lighting are potential ways to optimize current systems.
Transitioning to other energy sources — fuel source has a huge impact on how much carbon your business emits. Clean renewable energy sources, such as wind and solar, are significantly less carbon-intensive than burning natural gas. The most common renewable energy project is installing behind-the-meter Solar Photovoltaic More solar. While not suitable at all locations, other alternative fuel sources to consider include bioenergy, hydropower, and geothermal energy.
Adjusting procurement strategies — there are a variety of options and sources to purchase electricity, some of which are less carbon-intensive than others. Purchasing Greenpower from your energy retailer is a common way to reduce Scope 2 emissions.
Offsetting emissions through other contributions — while it doesn’t impact local air quality and work environment as much as making on-site improvements, your business can purchase carbon offsets (such as planting trees) in order to work closer to net-zero emissions.
For each project on the list, estimate energy, cost, and carbon emissions savings. In addition, calculate other financial metrics such as simple payback and net present value (NPV). These parameters will be used for your target setting and roadmap analysis.
Step 4 — Set your targets
At this stage, you are setting the target goal for the carbon reduction strategy. A number of governments and other companies have set targets, allowing you to align with their ambition. For example, the NSW State Government has set carbon reduction targets for its state-owned assets to reduce carbon emissions by 50% come 2030 and 100% by 2050.
The Science Based Targets Initiative (Science Based Targets initiative More) is a collaboration that provides science-driven tools and guidelines to establish an emissions reduction plan. To contribute to a healthier and more prolific future, consider using SBTi to serve as a model and leader for other businesses in your area and sector.
Step 5 — Create your roadmap
With a list of potential projects and a commitment to an emissions reduction target, it’s time to create a framework and timeline for your carbon reduction strategy.
Referring to your carbon reduction project list (Step 3), it’s important to differentiate between simpler, less expensive measures and harder improvement measures so as to determine the timeline that works best with your business and goals. Starting with energy efficiency measures may be low-hanging fruit, yet it may not cut emissions as significantly as fuel switching.
Creating your carbon reduction strategy is an iterative process. Adjustments will undoubtedly be made as situations change, policy shifts, and new technologies become available.
Once you have completed your roadmap, it’s important to get executive sign-off on the strategy and communicate it to the public. This transparency drives greater incentive to follow through with your plan.
Climate change affects us all. We are all in this together, and it will take all of us to take meaningful action to remedy the situation. That’s why it is so important for your business to establish and adhere to a carbon reduction strategy. Governments alone won’t be able to solve our climate problem — the private sector will need to play an active role if we’re to avoid the most severe consequences of climate change.
Because we’re all in this together, you can feel confident that support is available to help with your carbon reduction strategy. At Northmore Gordon, we will get you started on the right foot and will provide continuous support to make sure that you reach your target goals.