Investing in renewable energy: Lessons from the manufacturing sector

As companies target net-zero carbon emissions , and electrification and decarbonisation plans ramp up, it’s an exciting time to work in sustainability. But what does it take to drive change across a global organisation?

kp is one of the world’s leading plastic packaging manufacturers. With an extensive portfolio of high-quality packaging solutions, our experts create innovative films and trays that protect medication and medical devices, keep products safe, help avoid food waste, and preserve the integrity of countless products.

But this comes with a large requirement for energy, which has required us to implement a roadmap for our sites to not only improve energy efficiency, but to increase renewable energy, both of which reduce carbon emissions. As manufacturers around the world look to accelerate their sustainability journey, we wanted to share our approach to help demystify the often overwhelming range of decarbonisation solutions.

Sustainability at kp

For as long as I can remember, sustainable operations have been a focus at kp. Our sustainability strategy, Investing in Better, is closely linked to our strategic objectives for growth.
As a team, we’re unified to:

Close the Loop, championing the circular economy.
Work Smarter, looking at how we can use less energy, generate less waste, and use more renewables.
Act Responsibly, to keep our teams safe and strengthen our inclusive culture.

As kp’s Group Director of Operational Sustainability, I work with 28 production facilities across Europe, the Americas and Asia. I drive, influence, and manage targets to ensure sustainability is fully integrated into kp’s day-to-day global operations. This is where my role gets quite exciting as we look at our energy mix and how we can move away from fossil fuels and toward zero-emissions electricity, how we can adapt our processes to be less energy intensive, how we can increase energy efficiency and manage energy demand.

The foundations we’ve laid have resulted in a 47 per cent reduction in Scope and 2 emissions², and 54 per cent of electricity coming from renewable sources³.

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Playing our part as members of the UN Global Compact

kp’s commitment to sustainability goes beyond our sites. We’re members of the UN Global Compact – the world’s largest responsible business initiative, connecting companies and other organisations in a global movement to drive sustainable growth. It is a voluntary initiative based on CEO commitments to implement universal sustainability principles and to take steps to support UN goals.

As a member, we have committed to:

Operationalise the 10 principles.
Report annually on progress.

We also believe in sharing our knowledge with others. In September I joined a lively discussion as part of a UN Global Compact webinar series. Alongside Tom Wigg, Senior Advisor – Net Zero Carbon Buildings, at the UK Green Buildings Council (UKGBC) and Simon Shaw, Sustainability Manager, at Good Energy we discussed practical steps businesses can take to procure or generate renewable energy.

Having opinions from different sectors on the call made for a rich conversation, that I hope was useful for attendees to listen to. The lively Q&A indicates it was, and I’ve recapped below the key topics I covered.

“I don’t think there's any nicer feeling than standing on the roof of these buildings looking out onto the horizon, looking at the new solar panels taking up most of the roof space. It is a really tangible way to visualise kp’s commitment to sustainability, that our whole team can be proud of.”

Ethan O’Brien

Operations Sustainability Director Klöckner Pentaplast

Renewables in manufacturing

Increasing the use of renewable energy is a key focus area for kp, to help meet our carbon emissions reduction goals and to secure our supplies of energy. We’re making progress by generating renewable energy on-site and procuring renewable energy sources from the market.

We’re now at 54 per cent renewable electricity using a combination of on-site solar and green procurement. But this didn’t happen overnight. We took four main steps to get here:

Map energy consumption profile.
Energy efficiency first principle.
Make renewable energy.
Buy renewable energy.

Map energy consumption profile

kp’s global energy consumption is equivalent to 200,000 European homes in a year; on par with a city like Oxford, England. We’ve mapped out what we’re using and where we’re using it. Around 90 per cent of the energy we use globally is in the form of electricity. This energy is predominately used to produce plastic packaging, which requires very high temperatures during the process. Furthermore, energy is used in cooling systems, compressed air and other services such as heating and lighting we also use electricity for. And the temperature point is a very important one, as it is a driver in terms of what technologies we should ultimately be investing in over the long term. Luckily for us, because our processes are already electrified, which isn't the case for all industrial companies, we know renewable electricity is the key for us to achieve our operational decarbonisation goals.

Energy efficiency first principle

Our guiding principle is that the greenest unit of energy is one you don’t consume, and over the last five years, we’ve reduced kp’s energy consumption by 20 per cent. Some of that’s down to our product portfolio changes, but a lot of that is down to the over 300 projects that have been implemented to improve energy efficiency since 2020.

So having focused on using less energy, we then move on to using green energy. But this leaves a big question: to make or to buy. And this isn’t always straightforward as there are so many interlinking factors and local policy frameworks to take into consideration when operating globally…

Which is where on-site technology assessments come in, and this was a big workstream for us. Working across our global sites, we quickly identified solar energy as the best option for kp as it:

Made financial sense.
Was suitable for many of our buildings and land.
Was suitable for our processes.

That’s not to say we didn’t consider hydrogen, biomass and battery storage, but this assessment helped us to rule these options out as they’re not quite right for us.

Make renewable energy

After exploring the options that applied to us, we mapped out on-site and near-site options. Where the conditions and the commercial case (and financing options) make sense, we’re committed to making our own renewable energy. We’ve already completed four installations and by the end of 2023, Rayong, Thailand; Valencia and Pravia, Spain; and Santo Tirso, Portugal were operating on-site solar energy systems. And we have a several further installations that we’re actively scoping.

Buy renewable energy

However, when we look at the density of energy we’re using in our sites, you’re looking at a maximum of 10% per cent that could be supplied using on-site solar. So, where we need to buy electricity, we are looking at power purchase agreements and we buy renewable certificates as part of our current approach. But there are additionality questions, pricing volatility and changing regulatory frameworks to consider.

Top tips to decarbonise manufacturing

The above is a whistlestop tour of work that took years to come to fruition. My takeaway message for any of you who are actively working in and are about to start the journey, or who are educating themselves for the first time, is that you have two options: you can generate and use energy yourselves, or you can buy it. And when you break down those two options, you’ll find the right mix for you.

Just remember:

No one size fits all.
Let the energy consumption profile drive which renewable technologies best suit needs.
Stick to your action plan and make a strong business case for it.
Simplicity is the ultimate sophistication.

Continuing the journey towards decarbonisation

At kp, we continue to focus on selecting the right solutions, that align with business objectives and see us make considered investments to decarbonise. We have made strong progress by generating renewable energy on site and procuring renewable energy products from the market, but there is still more to be done, and we have a responsibility to push ourselves with the next iteration of our ambitious sustainability targets.

And given that we’re all working within an emerging and evolving policy landscape, we should embrace change as it comes, push ourselves to do what’s right for our business, and share best practices.

Finally, if your company isn’t part of the UN Global Compact, find out more at: About the UN Global Compact | UN Global Compact

Ethan O’Brien
Operations Sustainability Director
Klöckner Pentaplast