Renewable energy is a pillar in our strategy to lower carbon emissions. Our goal is to reach 40% renewable energy use by 2030 and to reduce total energy consumption by 9%. Reduce carbon emissions by 25% by 2030 from base year 2017.
Not only do we believe in creating sustainable packaging for the food and beverage industry, we also are committed to being the most sustainable rigid packaging manufacturer. We are working to reduce our climate impact by prioritizing innovative projects for energy-efficient melting, transforming our manufacturing systems to be the best-in-class, increasing the percentage of cullet used in our processes, and sourcing renewable energy. A key pillar of this ambition is to reduce greenhouse gas (GHG) emissions 25% by 2030 with an interim goal of 10% by 2025
Our emissions goals have been evaluated and approved by the Science-Based Targets initiative (SBTi), and we were the first glass packaging maker to receive SBTi approval for our targets. SBTi is an independent collaboration between CDP, World Resources Institute, The World Wide Fund for Nature, and the United Nations Global Compact. SBTi approval is an independent assessment and confirmation that a company’s carbon reduction strategies and goals are scientifically based and align with objectives of the 2015 Paris Climate Agreement.
“SBTi approval is one of many important steps O-I is taking to shape a healthier world,” said Jim Nordmeyer, VP, Global Sustainability. “We are committed to improving our processes and our products to ensure we are responsibly doing our part in the food and beverage packaging industry, for our customers, our employees, and our shareholders.”
Meeting our emissions target will require working on two aspects of the energy equation: reducing overall energy demand and supplying energy needs with renewable and lower-carbon sources. O-I has established a roadmap to reduce total energy consumption by 9% and to meet, at minimum, 40% of energy consumption with renewable energy sources by 2030. At O-I, addressing energy reduction is the key to decarbonization. Our strategy details the steps we have taken and our plan for future decarbonization.
Though our climate change strategy considers resource efficiency for materials, water, and waste, it is highly focused on energy efficiency and low carbon energy sources to reduce emissions as our primary environmental impact. Glass melting in our manufacturing process relies largely on natural gas and electricity for power and therefore is our main source of CO2 emissions. Over 80% of our direct CO2 emissions come from fuel consumption and electricity usage in the glass-making process.
Pursuant to our sustainability goals, we have developed a strategy toward lower-carbon glass manufacturing to help address climate change. Grounded in the SBTi, we have set challenging but achievable goals for energy efficiency technology advancement, sourcing of renewable energy, and emissions reduction. We are leveraging product and process innovations to transform our operations toward lower-carbon outcomes. This includes driving lower carbon solutions like cleaner alternative fuels, waste heat use, and increased cullet usage in the place of more energy-intensive raw materials. Our MAGMA (Modular Advanced Glass Manufacturing Asset) and GOAT (Gas-Oxy Advanced Technology) innovations, Total System Cost (TSC), and Operations Integrated System (OIS) programs will also help facilitate processes that will contribute towards us meeting our energy and emissions sustainability goals.
Energy Management Systems
Elevating sustainability throughout O-I has been a catalyst for energy action, bringing different teams together to collaborate on our global sustainability goals. We have built a Global Energy Team to oversee our initiatives to reduce energy and emissions. The team is led by our Director of Global Engineering – Melting, as melting is the heart of O-I’s energy use. This team brings together our internal stakeholders who have a material connection to energy and energy reduction, namely Engineering, Manufacturing, R&D, Procurement, EHS, Finance, Facilities, and Sustainability. This Global Energy Team is working together to identify synergies and opportunities. This cross-functional team meets weekly to address and prioritize energy issues in a way that keeps energy stakeholders working collaboratively and towards achieving unified, global goals.
The Global Energy Team has developed an Energy Management System as the foundation on which all our emissions and energy reduction initiatives are built. Our system follows the principles of ISO 50001 as a standardized methodology for continuous improvement on energy efficiency and to decrease GHG emissions. ISO 50001 focuses on establishing, implementing, maintaining, and improving an energy management system. Its purpose is to enable an organization to follow a systematic approach in achieving continual improvement of energy performance, including energy efficiency, energy use, and consumption. Thirteen of our plants in Europe are ISO 50001 certified, and many others are using the framework to establish consistent management and improvement. Improved energy performance can lead to cost savings and grant opportunities, which in turn can be used to fund more energy projects and innovative R&D in a positive feedback loop.
Energy Efficiency and Technology Transformation
The melting of sand, soda ash, limestone, and cullet into molten glass is a process the relies heavily on natural gas and electricity for power. To make the most sustainable packaging material with an increasingly sustainable process, we have established a strategy toward lower-carbon glass manufacturing. The first priority is creating efficiencies in our melting and refining processes, which make up almost 85% of our energy use. Examples of these processes include innovative reuse of furnace waste heat, use of gas-oxy furnaces, preheating of ingredients, and use of more efficient electrically powered equipment. O-I’s goal to reduce total energy consumption by 9% would save over 560 MJ per MT produced, would result in fewer emission, and ultimately save energy costs.
Furnaces use the vast majority of energy consumed by our plants. Analyses shows that the energy consumption of most furnaces varies by 15% or more at any given tonnage. Our operators work to fine-tune furnace settings to optimize energy usage and minimize emissions.
Our furnaces are the heart of our melting practice, and they can remain in service for an average of 14 years. It is important to make sure that our legacy furnaces operate at their peak performance through proper planning and maintenance. We want to ensure an optimal mixture of gases takes place to achieve the most efficient combustion, since any unreacted gas results in productivity loss and increased emissions. We are making progress on our program to track and meter every furnace so that our energy accounting fulfills the benchmark for each furnace across all locations.
We have implemented innovative measures to make our legacy furnaces more resilient, particularly in the face of climate change. Full production backup power is in place in several furnaces across Europe and Latin America. Globally, many furnaces feature hot hold backup systems to keep furnaces from going cold, causing losses in energy efficiency and possible furnace damage.
In addition to monitoring and maintaining our existing assets for energy efficiency, we are developing and implementing new technologies, and creating best practices for the environmental impact that will disrupt the glass manufacturing industry.
TSC Impact on Energy
Our approach to managing our emissions impact is part of our holistic approach to sustainability. When it comes to process innovation and improvements, we focus on more than just finding short-term ways to achieve a reduction or a cost saving. We look for sustainable improvements—and by that we mean improvements designed to optimize as many parts of our process as possible for the long term. To systematically instill this culture and process, we developed the TSC program.
Through our TSC initiatives, encouraging plants to share information across operations reduces repetition, saves time, and allows our teams to direct more effort toward resource optimization and cost savings. Among these optimization priorities, employee-created energy savings can be found throughout all plant activity. The TSC team has established our Energy Playbook as a central location for all plants to share energy-specific success stories, compile best practices, and record lessons learned so actions and projects can be replicated by other plants.
Since the implementation of TSC in 2017, our employees have taken the initiative to seek out innovative ways to reduce costs, energy use, and emissions. Plants work collaboratively, sharing their ideas and best practices to capitalize on existing and future programs. Our people lead performance improvements, working to optimize our processes for the long haul.
In 2020, over 80 projects specifically focused on reducing energy consumption were implemented, eliminating about 21,000 metric tons of CO2 emissions. These projects focused on efficiency improvement and energy reduction in our furnaces, compressed air and vacuums, gas systems, Variable Speed Drive fans and motors, energy efficiency partnerships, lighting, and energy meters and monitoring systems. Overall, TSC accounted for nearly 400 projects relating to energy use, purchase, consumption, management, systems, and the like.
Increasing Cullet Use
In 2020, over 80 projects specifically focused on reducing energy consumption were implemented, eliminating about 21,000 metric tons of CO2 emissions. Additionally, using cullet has the added emissions-reduction benefit of avoiding the CO2 release that occurs from the chemical reaction of melting virgin batch ingredients. Increasing cullet in the melt by 10% reduces CO2 emissions by approximately 5%.
As a circular material, melting cullet reduces the overall energy intensity in our products. To learn more about how we promote circularity and reduce waste see Raw Materials & Waste. See Recycled Content to learn more about how O-I is working to increase cullet availability.
Systems Advancements- GOAT
The journey to sustainability is grounded in innovation. Moving forward in our low carbon journey, we are consistently evolving our furnace technology, which keeps us at the forefront of energy efficiency and challenges us to pursue further innovation.
O-I is transforming its plants into world-class examples of sustainable glass manufacturing by investing in technology. The gas-oxygen advancement technology (GOAT) process is a combination of several technologies that collectively make our most efficient melting process to date. We start with gas-oxygen (gas-oxy) burners, making high-quality waste heat and virtually eliminating (70%) NOx (nitrogen oxide) emissions at their source. Gas-oxy furnaces burn cleaner than conventional furnaces, as air is replaced with oxygen in the combustion mix, created efficiently onsite.
The GOAT approach goes beyond gas-oxy furnace technology, it also includes cullet pre-heating. This system creates added energy savings by capturing exhaust heat from the furnaces and reusing it to raise the temperature of incoming cullet, avoiding waste heat. Post-use heat can be recirculated from other processes for preheat, directing useable energy from what would otherwise be a waste stream and increasing overall efficiency. In this way pre-heated cullet requires even less energy from the furnace, saving up to one-fifth of the overall fuels required at this stage of processing.
The energy needed to achieve melt in a GOAT furnace is lower by 30%, and consequently CO2 emissions are cut by 40%. Thirteen furnaces have already been outfitted with this technology, with 36 more furnaces earmarked for deployment between 2022 and 2030, at a rate of four furnaces per year.
O-I’s plant in Villotta, Italy, is a case study in how we are transforming our processes to create more sustainable glass manufacturing. In addition to the GOAT technology mentioned above, the Villotta plant also uses an Organic Rankine Cycle (ORC), which is an electric generator that further transforms waste heat into useful energy to power systems within the facility. ORC does this by venting exhaust gas through a heat exchanger, which uses the heat energy to create electricity. The final exhaust from the ORC is treated and filtered to further reduce emissions. Extracting virtually all available heat energy vented from primary melting, the Villotta 2 furnace has consistently run below 3,000 MJ/T, including energy to produce oxygen, and the total plant has an emissions reduction impact of 110kg CO2 eq./MT of glass melted.
Designing for Efficiency
In addition to GOAT advancements, O-I’s proprietary technology, MAGMA, is an innovation that will enable a more flexible, modular, standardized glass production line and allow for rapid mobile capacity expansion in smaller increments. We are currently operating a prototype and our first manufacturing line in Holzminden, Germany. MAGMA is expected to improve our overall glass sustainability profile, including energy impact and lightweighting.
We can make energy-efficient products by starting with design. O-I has been successfully reducing the amount of glass it takes to make containers – a process we call “lightweighting” – while maintaining the high level of performance we’re known for. The lighter-weight containers save material and are more efficient in terms of energy to produce and ship. The continual evolution of lighter-weight containers creates significant savings over millions of containers produced. For more see R&D Transformation.
LED Lighting Projects
Efficiency projects are considered across every part of our business. LED lighting saves a significant amount of energy over time It also has additional benefits over more traditional incandescent lighting, like longer service life and improved visibility. We have been progressively transitioning factories in North America to LED lighting with 15 plants either complete or underway. These projects save at least 50% energy over conventional lighting. The scale of the projects has an impact on CO2 emissions over time equivalent to taking thousands of cars off the road each year. Of those, we have installed, the average energy savings was 63%.
Renewable Energy Program
Another important initiative on our path to lower-carbon processes is to increase our utilization of renewable energy to 40% of our total load by 2030. To deliver on the renewable energy plan, a core team with representatives from Legal, Treasury, Energy Procurement, Finance, and Sustainability functions, along with the Global Energy Team, has been mobilized and is already actively working across our global operations.
O-I invests in Renewable Energy Certificates (RECs) to procure renewable energy for operations. RECs are a way for O-I to meet our targets while supporting grid-connected renewable projects. As the renewable energy transition continues to unfold worldwide, there are compounding benefits for the O-I product chain.
Electrical power is vital to operations as it relies on a continuous energy supply to sustain production without causing potential damage to furnace assets. We believe that by investing in renewable electricity we will not only lower carbon impacts but create resiliency in our systems to the stresses from climate events or other risks such as the availability of electricity. We can use our investment power to bolster resiliency for our communities prioritizing locations based on risk and improvement opportunity assessments. By investing in grid-connected energy projects, we will see an even bigger carbon reduction impact per dollar.
As of 2020, O-I has purchased renewable energy certificates covering 13% of our global electricity consumption and our target is to increase this to 23% as of 2021.
Our North American region is on target to meet 25% of the power supply with renewable energy sources by the end of 2021. More opportunities have also been identified for the European markets in 2021. While we’ve laid out a path to our renewable energy goals based on our best market predictions, we will pursue the options that reduce our normalized energy costs and meet our ambitious goals.
Emissions Reduction Journey
Various factors require O-I to manage emissions. O-I strives to comply with all regulatory agency mandates, such as those requiring reduced furnace emissions or air pollution control equipment. We are committed to fulfilling our role of leadership in sustainability.
As our manufacturing process relies largely on natural gas and electricity for power, we recognize the risks related to emissions. We work to manage the risk posed to our company due to climate change, as well as those our emissions pose to the planet and our communities.
Our emissions management programs include adherence to air permits, creating and following set procedures and processes, and operating and maintaining abatement equipment. We allocate capital and operations funding to manage our emissions. O-I considers future regulatory impacts in our decision making.
GHG Emissions Reporting
Around the world, governments have enacted, or are considering, legal requirements restricting or imposing costs associated with GHG emissions from manufacturing facilities like ours. We are committed to reducing emissions to manage this risk, fulfill our obligations to our stakeholders, and operate according to our values of integrity and accountability. Since 2010, O-I has disclosed GHG emissions and our management of carbon and climate change risks through CDP Climate Change. (See more in Our Sustainability Approach.) This is part of our SBTi communication on progress. CDP focuses on investors, companies, and cities taking action to build a truly sustainable economy by measuring and understanding their environmental impact. In 2020, we were proud of achieving a B rating for Climate Change, demonstrating progress over the past few years.
O-I prepares our scope 1 and 2 emissions inventory annually in accordance with the GHG Protocol Corporate Accounting Standard. The GHG Protocol is a partnership between the World Resources Institute and the World Business Council for Sustainable Development. The scope 1 and 2 emissions inventory is verified by limited assurance through a third party in accordance with the International Standard for GHG verifications ISO14064-3, ensuring that the calculations are in accordance with the GHG Protocol requirements.
Emissions Trading Schemes
Some countries utilize an Emissions Trading Scheme (ETS) to regulate their carbon market in an attempt to mitigate climate change. It is a market-based approach for reducing emissions. The ETS establishes emission prices and allowance allocations for the different sectors of the economy. On an annual basis, these sectors must calculate their emissions by submitting an emissions inventory to a central government authority. Based on the annual emissions, companies can buy or sell emission credits. Currently, most plants in Europe and several in North America are under a trading system, and we comply with all applicable regulatory requirements.
Emissions such as NOx (nitrogen oxides), SOx (sulfur oxide), and PM (particulate matter) are inherent to the glass manufacturing process. The high temperatures in our furnaces destroy most volatile organic compounds (VOCs) that are generated, so our process does not produce significant VOCs. We continually assess the our emissions of air pollutants to determine options to reduce them and protect our communities and planet.
As part of the commitment to environmental sustainability and to improve global air quality, O-I follows national, state, and local specific regulations at all manufacturing facilities, reporting to governmental agencies or externally when required. We strive to meet and exceed air quality standards according to furnace type and local regulations.
O-I understands the need for reducing NOx emissions as part of our environmental and sustainability initiatives. Our strategy for abatement depends on plant, local, and national regulations, and our approach to abatement varies across the regulatory landscape. O-I has partnered with a number of companies that specialize in advanced burner technologies and invested in a number of technologies including low NOx burners, oxy-boost, auxiliary injection systems, and oxygen-enriched air staging. Other emissions abatement systems include: scrubbers, baghouses, electrostatic precipitators, and ceramic candle filters. Many facilities have continuous emission monitors. In fact, we have emission control procedures in place at all of our glass manufacturing locations and have, or will be installed by the end of 2022, NOx reducing process equipment or NOx air pollution control equipment at 80% of our locations worldwide. We will continue to review additional emission control measures to achieve our 2030 goals.
The major source of NOx emissions from glass melting activities is the exhaust gases from the glass furnace. There are several techniques to reduce the emission of NOx in the air. One of these is the DeNOx system, which is a selective catalytic reduction system installed downstream and complementing other existing emissions controls. DeNOx incorporates selective catalytic reduction using ammonia; NOx compounds are converted into nitrogen and water. O-I is actively investing in and deploying DeNOx systems in our facilities. We are in the process of deploying eight systems into various facilities over the next three years.
Reduction of NOx in Seville
Since December of 2020, a new DeNOx system is reducing NOx emissions at our Seville, Spain facility. The installation of the DeNOx system was a 2-year project, completed during the challenges posed by the COVID-19 pandemic, including the availability of contractors to travel and delays in equipment deliveries. We are proud of our team’s effort to remain focused on sustainability goals, during the most challenging times, while also making sure health and safety of our team remained the first and foremost priority.
Our policies require tracking and reporting of environmental parameters to meet all regulatory requirements. Compliance with emission limits and regulations, particularly around air pollutants (e.g. NOx and SOx), are a critical component relating to emission reductions. We monitor notice of violations (NOVs) as part of the emissions initiative to track continuous improvement initiatives. In 2020, O-I saw a 12% decrease in air NOVs.
The Global EHS team establishes and oversees the process for compliance of our facilities with local, national, and regional emissions requirements. Permit limits are defined for each applicable environmental parameter, including, but not limited to the following: NOx, SOx, CO, CO2, O2, HCl, HF, particulate, opacity, tonnage, electric boost usage, and gas flow. These environmental parameters are posted in the applicable locations for quick and accurate reference. In each facility, we have individuals with the specific responsibility to monitor and adjust furnace operational parameters to operate within permit limits and to supply information for operational and reporting requirements
Forming for Our Future
Our Global Energy Team will continue to develop forward-looking initiatives to reduce energy use and emissions. Some of these initiatives include developing company-wide standards and procedures as well as establishing an “Energy Manager” role at each plant. We have REC procurement planned in the Netherlands, Poland, Brazil, and Colombia that will bring us closer to our 2030 goal of 40% overall renewable energy supply. Additionally, our short-term initiatives include plans to install eleven GOAT systems in the next few years and eight DeNOx systems with five more installations planned by the end of 2021.
O-I is working toward ENERGY STAR certification in our facilities in the United States, and certified our first plant in 2021. ENERGY STAR is a program backed by the U.S. government that signifies products made with energy-efficient processes. Elevating our ambitions, the engineering team is working to expand the reach of the ENERGY STAR benefits and impacts by aligning our global footprint with the best practices recommended by the ENERGY STAR Scale.
Although we cannot predict climate-related regulations, requirements that might be engaged by various governments, or the impact of climate events on our business, we strive to monitor the present and emerging risks related to emissions. We are committed to developing a process to enable us to manage the associated regulatory, reputational, and market risks. As the risks posed by climate change, and associated governmental responses and requirements emerge, we are committed to increasing the rigor of our governance and process to best manage and report on, as appropriate, how those risks affect our business. In addition to monitoring and evaluating legal requirements and our processes, our emissions risk-management strategy includes developing different carbon-pricing models to evaluate emissions-related risks and mitigation solutions based on various inputs.
Aligned with our 2021 efforts to manage climate and emissions risk, O-I will work to continue developing technology to transform our processes, improve energy efficiency, and create resiliency. Our innovations will support the transition to a lower-carbon, energy-efficient economic system. We will continue to innovate and deploy technology to mitigate emerging risks and create value for our stakeholders.
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