Mapping the road to carbon neutrality by 2030

Alfa Laval has long had a clear focus on reducing its carbon footprint, and it is now a cornerstone of Alfa Laval’s sustainability strategy. Alfa Laval works actively to reduce its carbon footprint across the value chain and at the same time introduce technologies that ensure customer processes become as energy efficient as possible and enable the transition to clean energy sources.

Climate

For scope 1 and 2, Alfa Laval has committed to be carbon neutral by 2030. For scope 3, Alfa Laval has, in alignment with the Paris agreement, committed to an absolute reduction of 50 percent by 2030. The long-term target is to reach net zero by 2050. In 2022, Alfa Laval worked on refining and improving its carbon footprint and taking the learnings to the next level. By thoroughly enhancing the calculation for the entire value chain, Alfa Laval has identified not only the company’s emissions but also the roadmap on how to significantly make improvements.

The CO2e emissions are calculated in accordance with the GHG Protocol, enabling Alfa Laval to apply for the Science Based ­Targets initiative (SBTi). With 2020 set as the baseline for the entire value chain, knowing very well that this is a challenging target as the pandemic put a strain on the 2020 result and there has been a rebound since.

Greenhouse Gas Protocol (GHG)

The GHG Protocol Corporate Accounting and Reporting Standard provides requirements and guidance for companies preparing a GHG emissions inventory. The Scope 3 standard is the only internationally accepted method for companies to account for external value chain emissions, both upstream and downstream, of their operations. In addition, if a company reports positive impacts, it should also report a complete inventory of scope 1, 2, and 3 emissions and set reduction targets for these emissions.

Scope 3

Suppliers

Goods transport

Scope 1 & 2

Operations

Scope 3

Goods transport

Use

Product End of life

Scope 1 covers direct emissions from energy used in our premises or company vehicles.

Scope 2 covers indirect emissions from the generation of purchased electricity, steam, heating and cooling consumed by Alfa Laval.

Scope 3 includes all other indirect emissions in Alfa Laval’s value chain, both upstream and downstream, including goods transportation.

All parts of the value chain are important. Alfa Laval works with scope 1, 2 and 3 to ensure that all decisions are driving the reduction of the total carbon footprint as fast as possible.

The mapping of our carbon footprint process shows that the external footprint (scope 3) accounts for about 98 percent of our total value chain impact. For both Alfa Laval as a whole and the individual business units, it is essential to distinguish between scope 3 upstream and downstream as the impact from the different products varies significantly. Heat exchangers have the largest footprint upstream due to metal heavy products, but a very low footprint downstream as the products do not consume any energy, but rather increase energy efficiency in our customers’ processes and applications. For rotating equipment, the downstream footprint is high, because of the energy they consume. Even though the products themselves are very energy efficient, the long lifespan of Alfa Laval’s products of up to 25 years, means that they use significant amounts of energy during their life cycle.

During 2022, there was an increase in the scope 3 footprint, which is caused by increasing sales volumes. However, many supplier-­related actions have been initiated and carbon footprint reductions are expected in a couple of years, as a pay-off from those actions.

Scope 3 upstream

For scope 3 upstream, the largest category is purchased goods and services. In the mapping of the baseline for 2020, the largest supplier categories were addressed. More than 1,000 suppliers distributed over 158 supplier categories were mapped and ­contacted during the year. In total, the project addressed more than 80 percent of the total spend. The analysis has shown that the carbon footprint from purchasing (scope 3 upstream) is almost eight times larger than the internal footprint (scope 1 and 2). Other parts included in the scope 3 upstream calculations are upstream transportation and distribution, business travel, employee commuting etc.

Scope 1 and 2

Alfa Laval has for many years reported on the energy consumption, energy sources and energy mix from all production sites. The carbon footprint all production sites, i.e. the carbon footprint for production (scope 1 and 2).

Scope 3 downstream

Emissions from goods transportation to customers are followed-up by the freight forwarders for outbound goods transportation. The baseline shows that transportation emissions are equal to the total of scope 1 and 2 emissions. There is a positive trend on development and a large number of initiatives are in the pipeline.

The use phase (downstream) has been more difficult to calculate due to the complexity of the immense product portfolio. This part of the value chain also clearly stands out as the largest, as Alfa Laval has a number of products that consume energy over a long period of time. To calculate the emissions in scope 3 downstream, analysis of the direct use phase emissions for the delivered products during their expected life­span was carried out.

Carbon footprint in numbers

During 2022, a roadmap to reach the targets set for 2030 and onwards was established. There is a positive development for scopes 1 and 2, while the initiatives for scope 3 upstream and downstream (use phase) will take longer.

Scope 3 upstream

Scope 2

Scope 1

Scope 3 downstream

Alfa Laval’s roadmap

Alfa Laval’s mapping work in 2021 gave it the knowledge and focus needed to prioritize its work towards its climate goals. Below are the focus areas, in general terms, for reducing emissions in each scope.

Scope 1

– Replacing natural gas as a heating source in applicable production facilities
– Improving energy efficiency in different sites including buildings and equipment
– Further reducing emissions from company cars by shifting to hybrid and electric cars 

Scope 2

– Shifting to renewable sources of electricity in all facilities
– Investing in waste heat recovery, which is used for heating Alfa Laval facilities
– Installation of solar panels at production facilities and distribution centres

Scope 3

– Source from suppliers that offer materials and other inputs with a lower carbon footprint
– Improve material efficiency in manufacturing, including reduction of waste
– Continuous optimization of Alfa Laval products, which reduces energy consumption while products are in use
– Promote transition to renewable sources of energy upstream and downstream
– Reduce the proportion of freight transport by air
– Partnerships to ensure reuse and recycling of materials at the end of life of products

Putting the roadmap into action

The target for 2023 is to reduce scope 1 and 2 by 50 percent compared to 2020. In 2022, scope 1 and 2 emissions were reduced by 46 percent. Below is a description of the actions taken to reduce emissions across the value chain during the past year.

Scope 3

Upstream emissions
During 2022, the sourcing organization worked with climate initiatives to deliver greenhouse gas emission reductions, build capabilities, engage suppliers, and deliver results. After the 2020 climate baseline was established, pioneers within sourcing have driven several projects to reduce CO2 emissions from material, supplier production and transport. While focusing efforts based on these learnings Alfa Laval is creating a solid foundation for climate action.

Scope 1

For the past three years, Alfa Laval has been working on connecting manufacturing sites to a platform – the Alfa Laval Energy Management (ALEM). This allows analyses of energy data (for example electricity, and gas) in order to find savings opportunities and take actions. In 2022, Alfa Laval initiated an analysis based on the data in the ALEM platform for two sites in the group: Qingdao, China and Lund, Sweden. The analysis provided good savings opportunities. For example in Qingdao, opportunities to reduce gas consumption by 10 percent have been identified. Alfa Laval will continue to perform the analysis work and add more sites globally to the programme.

Scope 2

Switching to renewable sources of electricity
During 2022, emissions from scope 2 were reduced by 69 percent (vs baseline 2020). The decrease can be attributed to changing electricity agreements, from fossil-based to renewable sources in our sites. Now more than 40 of our sites use energy from renewable sources and in 2022 93 percent of the electricity came from renewable sources compared with 80 percent in 2020. Three sites, located in Italy and China, use photovoltaic energy generated from solar panels on site.

In 2022, Alfa Laval’s manufacturing facility in Krakow, Poland started to install solar panels on the roof, which will be able to generate approximately 300 MWh per year, equalling 10 percent of the site’s annual consumption. Alfa Laval will continue the journey to produce its own electricity in the coming years.

Scope 3

Downstream emissions
There is a clear correlation between the rate at which renewables and other clean energy sources are introduced to the market and Alfa Laval’s ability to achieve scope 3 downstream targets, especially with regards to Alfa Laval’s rotating equipment. Alfa Laval cannot fully influence the rate at which this transition happens but can control the rate at which more energy-efficient products are on the market. Energy efficiency will be paramount for Alfa Laval’s customers to reach their carbon emission targets, and for the achievement of the Paris agreement. By way of example, every year Alfa Laval’s heat exchangers reduce annual energy use in industrial processes by around 100 GW and, at the same time, reduced CO2 emissions by 50 million tonnes.

Lowering the negative impact of goods transport
Alfa Laval is working on reducing its climate emissions from goods transportation by choosing transport modes with lower carbon emissions. In practice, Alfa Laval is shifting away from air transport to other modes of transport and changing its internal logistics to ensure minimum emissions from goods transport. For instance, Alfa Laval’s distribution centres are actively working with suppliers and customers to go from air freight to land- or sea-based transport modes.

Partnerships enable better reuse of materials
Carbon emissions at product end of life are mainly a result of waste disposal or energy intensive recirculation processes. Read more about Alfa Laval’s initiatives on taking responsibility for the end-of-life phase of its products (Circularity).

Making an impact

Food & Water Division:

Contributing towards emissions reductions

Plant-based foods have significantly lower carbon footprint than animal-based foods (according to a recent study, 62-92 percent less carbon emission) (FAO 2022). Alfa Laval is investing in the development of new sustainable foods with a lower environmental impact and is branching out to enter new partnerships and communities to drive the food transformation that will enable sufficient, healthy, and appealing food to feed a population
of almost 11 billion people in 2050.

In 2022, Alfa Laval signed a contract with a US-based pioneer in the field of plant-based protein for the delivery of a process line for a plant in Singapore. The equipment will enable the extraction of protein for nutritional supplements from mung beans. A zero-liquid discharge installation will ensure the reuse of 92 percent of the plant’s process water.

Energy Division:

Energy Hunter

As much as 50 percent of today’s potential for energy savings comes from the industrial sector, and 30 percent from buildings. The solutions to enable these energy efficiency improvements already exist. Alfa Laval’s energy-­efficient heat transfer solutions can enable energy and water savings, improve heat recovery, and reduce carbon dioxide emissions in almost every industry and building.

Through the Energy Hunter programme, we are training our global salesforce and partners to become Energy Hunters. We strive to change the mindset of ourselves, our partners, and our customers to shift their focus from only the products and their features to a bigger picture of value and realizing the impact of heat transfer losses and opportunities for waste heat recovery.

Marine Division:

E-PowerPack

Waste heat is a readily available but under-utilized energy source on board. Heat in the engine exhaust gas accounts for about 25 percent of the energy from combusted fuel, and there is additional heat to recover from engine jacket water and the scavenge air cooler.

The E-PowerPack uses Organic Rankine Cycle (ORC) technology to turn waste heat into clean electrical power.