Review of how four major tire and rubber companies are offsetting the impact of EU environmental rules. Article originally published in the January/February 2018 edition of European Rubber Journal magazine.
EU manufacturers face energy and emissions challenges
The Emission Trading Scheme, for example, imposes large extra costs on European manufacturers that operate energy-intensive processes. Ironically, these extra costs have increased imports of cheaper tires from countries without any such environmental-policy charges.
Nevertheless, the regulatory costs have also pushed EU-based manufacturers to the fore in the development of emissions-reductions and energy-saving manufacturing strategies at their facilities – both within the EU and overseas. But making progress in these areas is seldom straightforward.
The complex nature of the challenges involved is well documented in the latest CRS reports from a selection of major players in the industry.
More than 66% of the rubber and elastomers compounder’s energy usage was based on purchased electricity, 16% on natural gas, while the use of biofuels and fossil-free electricity amounted to 11%.
The year-on-year rise in Hexpol’s energy-usage in 2016 was mainly due to business growth, which led to an increase in the number of production units and production volume. This offset the benefits accrued from a range of energy-efficiency projects across the group.
The company said its key energy performance indicator (GWh/net sales) “remains unchanged over a five-year perspective.” But as sales prices have dropped in recent years – due to falling raw materials costs – the net-sales-linked energy indicator has not reflected Hexpol efficiency efforts.
Mixing equipment, presses and other heavy production equipment are the big energy users at Hexpol, though demand from compressed air, cooling, lighting, ventilation and materials-transfer systems is also significant.
During 2016, energy-saving measures at the company included energy audits at various facilities, implementation of the ISO 50001 energy management system and the installation of variable frequency drives on rubber mixing equipment.
Other significant efficiencies were delivered through detecting leaks in the compressed air systems, the installation of cooling systems with improved energy efficiency and wider use of LED lighting and lighting control systems.
Hexpol also reduced energy consumption by enhancing its control of processes for mixing rubber and cutting cycle times at several units. Faster conversion of equipment when changing products and pre-heating of presses has also helped.
The Swedish company reported emissions from the use of fossil fuels and purchased electricity at 143,000 tonnes during 2016, 22% higher than its prior-year level. Indirect emissions through purchase of electricity accounted for 88% of the total amount of carbon dioxide.
Hexpol linked its enlarged carbon footprint to higher production levels, increased use of energy, and the addition of acquired facilities.
“Significant parts of the production take place in USA, Mexico, Germany and China,” it also explained. “As a result, our indirect emissions are highly affected by electricity that is produced from fossil sources in these countries.”
“This year’s allowance of ‘green electricity’ was only 4% compared to more than 90% during the previous years,” said the company, noting that this had affected the group’s total emissions of CO2 in a negative way.
The purchase of ‘green’ electricity elsewhere had a positive impact on the carbon dioxide footprint. But, similar to the situation as for its energy-use indicator, Hexpol’s overall climate-change KPI was negatively affected by lower raw material prices.
The European tire manufacturing industry reduced CO2 emissions from its manufacturing processes by 20% in the last decade, according to the latest data from the European Tyre & Rubber Manufacturers’ Association (ETRMA).
In its current ‘industrial plan’, for example, Pirelli envisages a reduction in specific emissions – on tonnes of finished product – of CO2 equal to -15% by 2020 compared to 2009 values.
Pirelli recorded a reduction in specific emissions (weighted on tonnes of finished product) of 2.2% in 2016 compared to 2015 and 3.6% compared to 2009 – the year on which its 2020 target is based.
The plan already encompasses a range of projects, including a cogeneration plant for the production of electricity, steam and hot water at the company’s Settimo Torinese plant in Turin, Italy.
There are two cogeneration modules: a 4.8MW turbine unit powered by natural gas and a 1MW internal combustion engine powered by vegetable oil, which ensures about 20% of energy from renewable sources. The Turin plant is also equipped with a 1.2MW photovoltaic system.
Another project features a 500kW photovoltaic power plant installed at Pirelli’s Rome plant in in the US, which is reducing the emissions from the production site by up to 5%.
In Brazil, meanwhile, a biomass plant, fuelled with waste wood from local supply chains, is supplying steam for Pirelli’s plant in Campinas.
In 2016, this initiative allowed the replacement of more than 52,500 MWh of energy from fossil sources, for a savings in terms of CO2 emissions-avoided of over 10,000 tonnes.
Encouraged by the environmental benefits of this technology at the Campinas site, Pirelli said it is considering extending the project to other plants in Brazil.
Pirelli has also started to procure electrical energy from renewable sources at its plant in Silao, Mexico. In 2016, an agreement came into force for the dedicated supply of 3MW electrical generated from wind sources, to cover about 30% of electricity consumption of the plant.
As well as economic advantages over the purchase of energy from the national grid, Pirelli said the renewable energy programme at Silao has reduced annual CO2 emissions by about 12,000 tonnes.
In the same sector, Nokian Tyres Is aiming to cut its CO2 emissions from production by 20% by 2020 and 30% by 2030 – compared to a 2013 baseline.
Nokian buys energy – electricity, heating and steam – for its factory in Nokia from an external supplier. Renewable energy sources account for around 40% of the electricity purchased, while bioenergy and natural gas are energy sources for heating and steam generation.
A biomass power plant that supplies the Nokia factory started full production in April 2016. The power plant primarily uses local wood-based fuels, such as wood chips and peat.
The plant is also suited for burning fibre clay and sludge from the Nokia paper mill. The strategy is to reduce the use of natural gas, in favour of local energy sources from the region.
With its investment in the biomass plant, Nokian reckons that the proportion of renewable energy sources will grow by up to 50%.
Despite these and other measures, the company missed its target of reducing yearly energy consumption per production tonne by 1%. This, it explained, was due to “the lower production volume and production idling in Nokia.”
Nokian’s Vsevolozhsk factory in Russia uses its own – natural-gas-fired – power station for generating most of the energy it needs. Therefore, its direct greenhouse gas emissions exceed those of the factory in Nokia.
In its overall manufacturing operations, Continental is aiming for a 20% reduction in relation to the adjusted sales volume of energy and CO2 emissions between 2013 and 2020.
However, total energy requirements at the Hanover, Germany-based group rose by 12.2% in 2016 to 33 million GJ – from 29.3 million GJ in 2015.
Electricity accounted for 16.3 million GJ and fossil fuels for 16.7 million GJ. The fossil-fuel share included 3.4 million GJ of purchased steam and 79,840 GJ of district heating. The quantity of self-generated renewable energy was 2,907 GJ.
By 2020, Continental said it aims to reduce specific energy consumption relative to adjusted sales to 669 GJ per million euros. In 2016, however, consumption increased by roughly 5.1% year-on-year to 819 GJ per million euros in adjusted sales.
Acquisition a factor
In 2016, Continental said it saved energy through the introduction of energy-management systems and various efficiency campaigns in areas of infrastructure and production. It also defined criteria around energy efficiency for machine procurement as well as for new building construction and equipment.
At Continental AG, CO2 emissions from global locations – which span the manufacture of tires as well as rubber- and metal-based engineering parts and systems – increased 10% year-on-year in 2016 to 793,895 tonnes.
The increase was linked partly to increases in production volume, start-up effects of producing new products and “virtual increases caused by the adaptation of local/regional emission coefficients.”
At 19.7 tonnes, CO2 emissions per million euros of adjusted sales in 2016 were 4.2% above the prior-year level. This, said Continental, was primarily caused by the inclusion of environmental data from a major acquisition – as explained above.
Overall, Continental invested around €18 million in CO2 reduction projects within the scope of its environmental strategy in 2016.
Continental sites with on-site boiler houses emit nitrogen oxide, dust and sulphur dioxide, while various manufacturing processes involve the use of highly volatile organic solvents that can result in VOC emissions.
Some 3,000 tonnes of VOC emissions were produced by purchased solvents in 2016, according to figures in the German group’s CSR report.
Continental recorded all solvent consumption globally in 2016, to develop reduction plans. The data is now being integrated into the environmental programmes of different manufacturing locations.
Of Continental’s 210 production sites, 189 were certified in accordance with ISO 14001 at the end of 2016.
Unlike its competitors, Michelin’s sustainable development report for 2016 does not include any detailed commentary about energy consumption or carbon emissions at its factories. The French tire maker does, however, include data showing a 13.5% reduction in energy consumption and 22.7% drop in CO2 emissions since 2010.