Reduction in Carbon Footprint can actually generate more income.
5 seconds and 5 reasons provide a quick insight in the commercial benefits that can be achieved by introducing Life Cycle Management (LCM) assessment. The reasons are based on actual business situations as experience has taught us.
The main challenge people and companies are facing is to combine the following:
Maintaining extensive expertise and collective data to provide technical solutions based on the latest and commercially available technologies.
Necessary translation of potential technical solutions into a commercial business / financial model; transforming ‘cost and/or waste’ into ‘savings and/or income’.
Applying in-house database and expertise on performance of proper carbon footprint analysis to comply with related governmental directives or shareholders’ requirements, and staying ahead of competition.
Reason 1: Creating value from Waste Streams
Globally, over 150 billion cubic meters of waste gas is flared annually. This represents a monetary value of $65 billion or electrical power for 100 million households. If this amount would be produced by a country, it would be the 6th largest global gas producer.
It is possible via recently proven technologies available in today’s industry to recover the energy, whereby once considered waste streams which often require supplementary fuel for combustion can be properly converted into energy to be re-used in the industry. Applications can vary from heat/steam recovery, energy or electricity production or production of by-products to decrease the costs of the overall production process. G.I Dynamics can provide the latest solutions tailor made for each case and opportunity
Reason 2: Reduction of carbon emissions can actually create new business opportunities
By opening the door on the basis that waste streams can create potential income via introduction of targeted process solutions, it is possible to develop new business opportunities along with reduction of carbon emission.
The business opportunities can vary between the possibility of energy savings, in-house steam production, production of by-products in combination with other stakeholders introducing separate production lines and the possibility to bring on board carbon trading. All these business opportunities can create additional income, and/or less operating expenditure.
G.I. Dynamics has been involved in multiple projects which started with a search to reduce carbon emission, and resulted in new business opportunities with examples such as:
Improved purification of natural gas streams via cryogenic distillation which resulted in less hydrocarbon emissions and more product;
Recovery of hydrogen from a waste stream to be implemented and sold to a third party company;
Reduction of energy usage by using more membrane separation systems instead of distillation systems;
Introduction of more efficient combustion units that can handle low calorific waste stream which result in production of steam and power and thus less external natural gas and power dependence.
Reason 3: Reduction of carbon emissions can secure your operations against future directives
With increasing demand for reduction of carbon emission by governmental bodies and general public, there is a need for optimization of production processes by performance of a life cycle analysis. This mainly is to improve specific targeted processes for reduction of carbon emission including introduction of processes which provide an additional return on investment. This in turn can safeguard the operation against future increasing directives and related penalties. Knowledge of the present situation and understanding the trend towards future requirements and directives is essential to define requirements for operation facilities.
Furthermore, with the increasing value of CO2-equivalents by governmental and public demand, the market for carbon trading is accelerating. Auctioning platforms will increasingly act as vehicles to create income for companies reducing carbon footprint.
It is therefore essential to understand the present regulations and how this translates into future trends. This leads to making the right improvements at the right time. G.I. Dynamics can provide a roadmap to be the best player amongst the peers, while staying focused on the shareholder’s value.
Reason 4: Create a competitive edge over your competition
The emission limits for the production of chemical or energy facilities are in example benchmarked in the EU against the top ten lowest emission producers. This method of benchmarking is regulated by the EU. Upon achieving a lower carbon footprint in the production process, the competition is either required to include the same optimization or will in the end pay a penalty to meet the demands set forth by EU directives.
Via process optimization and lowering emission levels, your organization is able to create an added value over the competition by meeting the present and future environmental requirements. Firstly decreasing the cost of production will make the company more competitive. Secondly by introducing products in the market that are produced with a significant lower emission factor, trading on the basis of a lower carbon certificate will often result in a preferred position by the end-customer. G.I. Dynamics has an experienced team available with expertise on the performance of proper carbon footprint analysis which can result in higher income for you as producer.
Reason 5: Improvement of Shareholder’s value via optimization
One of the key financial parameters, apart from Revenue versus EBITDA and Assets Vs. Liabilities, is the shareholder’s value of a company. Optimization of the business performance by reducing carbon footprint, thus creating new business opportunities reduction of cost of production and being ready for future more stringent directives will improve the Shareholders’ value of the company. This is logically applicable for public traded firms, however can also strongly support private firms in the improvement of shareholder’s value.
Success in the implementation of Life Cycle Management (LCM) with resulting gain in profit over ‘carbon-footprint savings’, and ‘product cost saving’ together with introduction of ‘new business opportunities’ can only be achieved by having a combined comprehensive understanding of (1) Technical, (2) Commercial and (3) Carbon Footprint or Life Cycle Analysis.
G.I. Dynamics can assist your organization in this approach as we have this in-house knowledge available for both chemical and energy industry. This combined approach, defined as Life Cycle Management provides the following support:
LCM allows performance of full Life Cycle Analysis for existing business to identify and achieve improvements.
LCM provides basis for benchmarking against existing and established businesses, and enables development of a basis for definitions like “cradle to gate” or up to “circular”.
LCM is the basis for Carbon Credit (CC) trading as it is the basis for international export crediting.
LCM has data of gas and chemical processes plus operational performance data on all CO2 equivalent elements.
LCM will cover continuous changing stakeholders position and legislation.
LCM also provides input into Business models for return on capital
The main steps in the LCM process consists of the following:
Light Due Diligence of existing business/operations and
Translation of process flow data/diagrams into LCM platform and definition of benchmarks
Setting business targets and criteria
Identifying and qualifying/quantifying carbon footprint improvement steps
Most importantly it is essential for LCM to start with corporate commitment and driven down in the organisation to have a transparent process or a selling process.
Interested to see where G.I. Dynamics can aid your company in Life Cycle Management? Please contact Chris van der Zande via email@example.com or +31(0)174 820 181.