Industry lagging on 2020 climate change targets

October 14, 2010

TORONTO: Global producers of industrial products continue to be big contributors of greenhouse gases, according to a new PricewaterhouseCoopers report.

The global consulting firm notes that the aerospace and defence, industrial manufacturing, chemicals, metals, and transportation and logistics sectors have undertaken initiatives to reduce their collective carbon footprint, but their overall commitment lags far behind what’s needed to reach the Copenhagen Accord’s emissions targets.

The agreed to carbon intensity targets average 2% a year to 2020, compared to the 3.4% PwC estimates will be necessary to stay on a low carbon pathway to 2050.

PwC notes some industries have made progress. Here are some highlights:

• Aerospace and defence is producing jets that are 70% more fuel efficient than those produced 40 years ago and further improvement is planned. And the International Civil Aviation Organization (ICAO) has issued mandates to: cap CO2 emissions starting in 2010 (carbon-neutral growth); improve fuel efficiency by an average of 1.5% per year from 2009 to 2020; and reduce CO2 emissions 50% by 2050 relative to 2005 levels. Efforts are also being made to better employ technology and aircraft operations to improve fuel efficiency, such as retrofitting existing aircraft wings with new winglets to reduce drag, as well as improving flight planning accuracy and weight reduction strategies.

• The chemicals and industrial manufacturing sectors are employing strategies that reduce their internal emissions at the plant or factory level, while researching and developing product offerings that help customers reduce their own carbon footprints. Attention is also being focused on improving technical processes in production, enhancing the use of renewable raw materials and promoting recycling as a means of lessoning carbon emissions.

• Strengthening the current patchwork of emissions regulations will have a significant financial impact for global metals companies. Metals companies will either have to invest in new technologies or bear the cost of participating in one of the various emission trading systems. One US proposal would require importers to purchase emission allowances; however, some progress is being made on a global and individual company basis.

• To help overcome the carbon footprint of transportation and logistics processes, many sectors are shifting to transport modes with lower emissions such as ship or rail, downsizing products and packaging, and upgrading to truck fleets that are more fuel efficient or use bio-fuels. To lower emissions further, transportation and logistics companies will need to collaborate more with their customers. This may lead their customers to consider how to optimize their inventory locations and distribution centres, and closely examine the transportation services they employ.

Click here for a copy of the report.