7.3.1 Management practices, including benchmarking
Management tools are available to reduce GHG emissions, often without capital investment or increased operating costs. Staff training in both skills and the company’s general approach to energy efficiency for use in their day-to-day practices has been shown to be beneficial (Caffal, 1995). Programmes, for example reward systems that provide regular feedback on staff behaviour, have had good results.
Even when energy is a significant cost for an industry, opportunities for improvement may be missed because of organizational barriers. Energy audit and management programmes create a foundation for improvement and provide guidance for managing energy throughout an organization. Several countries have instituted voluntary corporate energy management standards, for example Canada (Natural Resources Canada, n.d.), Denmark (Gudbjerg, 2005) and the USA (ANSI, 2005). Others, for example India, through the Bureau of Energy Efficiency (GOI 2004, 2005), promote energy audits. Integration of energy management systems into broader industrial management systems, allowing energy use to be managed for continuous improvement in the same manner as labour, waste and other inputs are managed, is highly beneficial (McKane et al., 2005). Documentation of existing practices and planned improvements is essential to achieving a transition from energy efficiency programmes and projects dependent on individuals to processes and practices that are part of the corporate culture. Software tools are available to help identify energy saving opportunities (US DOE, n.d.-a; US EPA, n.d.).
Energy Audits and Management Systems. Companies of all sizes use energy audits to identify opportunities for reducing energy use, which in turn reduces GHG emissions. For example, in 2000, Exxon Mobil implemented its Global Energy Management System with the goal of achieving a 15% reduction in energy use in its refineries and chemical plants (Eidt, 2004). Okazaki et al. (2004) estimate that approximately 10% of total energy consumption in steel making could be saved through improved energy and materials management. Mozorov and Nikiforov (2002) reported an even larger 21.6% efficiency improvement in a Russian iron and steel facility. For SMEs in Germany, Schleich (2004) reported that energy audits help overcome several barriers to energy efficiency, including missing information about energy consumption patterns and energy saving measures. Schleich also found that energy audits conducted by engineering firms were more effective than those conducted by utilities or trade associations.
GHG Inventory and Reporting Systems. Understanding the sources and magnitudes of its GHG emissions gives industry the capability to develop business strategies to adapt to changing government and consumer requirements. Protocols for inventory development and reporting have been developed; the Greenhouse Gas Protocol developed by the World Resources Institute and World Business Council for Sustainable Development (WRI/WBCSD, 2004) is the most broadly used. The Protocol defines an accounting and reporting standard that companies can use to ensure that their measurements are accurate and complete. Several industries (e.g., aluminium, cement, chemical and pulp and paper) have developed specific calculation tools to implement the Protocol. Other calculation tools have been developed to estimate GHG emissions from office-based business operations and to quantify the uncertainty in GHG measurement and estimation (WRI/WBCSD, 2005). Within the European Union, GHG reporting guidelines have been developed for companies participating in the EU Emission Trading System.
GHG Management Systems. Environmental quality management systems such as ISO 14001 (ISO, 1996), are being used by many companies to build capacity for GHG emission reduction. For example, the US petroleum industry developed their own standard based on systems developed by various companies (API, 2005). The GHG emissions reduction opportunities identified by these management systems are evaluated using normal business criteria, and those meeting the current business or regulatory requirements are adopted. Those not adopted represent additional capacity that could be used if business, government, or consumer requirements change.
Benchmarking. Companies can use benchmarking to compare their operations with those of others, to industry average, or to best practice, to determine whether they have opportunities to improve energy efficiency or reduce GHG emissions. Benchmarking is widely used in industry, but benchmarking programmes must be carefully designed to comply with laws ensuring fair competition, and companies must develop their own procedures for using the information generated through these programmes. The petroleum industry has the longest experience with energy efficiency benchmarking through the use of an industry-accepted index developed by a private company (Barats, 2005). Many benchmarking programmes are developed through trade associations or ad hoc consortia of companies, and their details are often proprietary. However, ten Canadian potash operations published the details of their benchmarking exercise (CFI, 2003), which showed that increased employee awareness and training was the most frequently identified opportunity for improved energy performance. The success of the aluminium industry’s programmes is discussed in Section 7.4.2.
Several governments have supported the development of benchmarking programmes in various forms, for example Canada, Flanders (Belgium), the Netherlands, Norway and the USA. As part of its energy and climate policy the Dutch government has reached an agreement with its energy-intensive industry that is explicitly based on industry’s energy efficiency performance relative to that of comparable industries worldwide. Industry is required to achieve world best practice in terms of energy efficiency. In return, the government refrains from implementing additional climate policies. By 2002 this programme involved companies using 94% of the energy consumed by industry in the Netherlands. Phylipsen et al. (2002) critiqued the agreement, and conclude that it would avoid emissions of 4 to 9 MtCO2 (1.1 to 2.5 MtC) in 2012 compared to a business-as-usual scenario, but that these emission reductions were smaller than those that would be achieved by a continuation of the Long-Term Agreements with industry (which ended in 2000) that called for a 2%/yr improvement in energy efficiency. The Flemish covenant, agreed in 2002, uses a similar approach. As of 1 January 2005, 177 companies had joined the covenant, which projects cumulative emissions saving of 2.45 MtCO2 (0.67 MtC) in 2012 (Government of Flanders, 2005).
In the USA, EPA’s Energy STAR for Industry programme has developed a benchmarking system for selected industries, for example automotive assembly plants, cement and wet corn milling (Boyd, 2005). The system is used by programme participants to evaluate the performance of their individual plants against a distribution of the energy performance of US peers. Other benchmarking programmes compare individual facilities to world best practice (Galitsky et al., 2004).