Climate
Strengthening our climate commitments
Alfa Laval’s climate commitment has been strengthened significantly during 2023, with a science-based validation of our climate targets, collaboration with external partners both up- and downstream in our value chain, and introducing new and more energy efficient products on the market.
Validation of science-based targets
Alfa Laval has committed to a near-term science-based target to reduce scope 1 and 2 carbon emissions by 95 percent and scope 3 value chain emissions by 50 percent by 2030 (compared with a 2020 baseline). Furthermore, we have committed to achieve net-zero emissions in all scopes by 2050. Both the near-term and long-term targets have been validated by the Science-Based Targets Initiative (SBTi) in 2023, ensuring that Alfa Laval’s climate ambitions are in line with the latest science and contribute to meeting the 1.5-degree target defined in the Paris Agreement.
Progress on emission reduction targets
Operational emissions (scope 1 and 2) have been reduced by 52 percent since 2020 and we have therefore achieved our 2023 target and are on track towards the near-term target (2030). Value chain emissions (scope 3) have continued to increase, mainly due to a growing business and larger volumes of products put on the market. An error in the calculation of downstream emissions was identified in 2023, resulting in an increase in emissions compared to what was reported in 2022. This has also affected the baseline (2020) and emissions of previous years.
Operational emissions
Fossil fuels for heating and electricity production are the main sources of greenhouse gas emissions from operations (scope 1 and 2). Replacing these fuels with renewable sources and using energy more efficiently are high priorities for Alfa Laval in the short- to medium-term.
Reaching the target 2023
Alfa Laval continues the journey to analyze the energy consumption on sites globally to find savings opportunities. We are currently working on five sites where we analyze patterns and trends more thoroughly together with an external partner. The analysis is performed on a bi-monthly basis in Ronneby, Pune, Qingdao, Jiangyin and Richmond. During 2023, Alfa Laval has mapped the natural gas consumption in our facilities to formulate a strategy on how to phase out the gas usage, and we will continue the work in 2024.
Switching to renewable sources of electricity
During 2023, emissions from scope 2 were reduced by 78 percent (versus the baseline in 2020). The decrease can mainly be attributed to changing electricity agreements, from fossil-based to renewable sources at our sites. Now more than 60 percent of our sites use energy from renewable sources and 97 percent of the electricity came from renewable sources in 2023 compared with 80 percent in 2020.
Alfa Laval is continuously expanding its self-generating production capability especially from solar plants where we have added capacity in Italy and Sweden during the year. In 2023, we started installation of solar panels on the roofs in Monza, which will generate approximately 575 MWh per year when fully operational, corresponding to almost 60 percent of the site’s annual electricity consumption. Alfa Laval will continue the journey to produce its own electricity in the coming years.
Introducing the Climate Playbook
The Climate Playbook sets out four important steps towards more energy-efficient operations that will help us reach our near-term climate target.
1. Control
To have control of energy consumption data by installing Alfa Laval Energy Management (ALEM).
2. Analyze
To analyze energy patterns and trends to identify energy savings opportunities.
3. Optimize
To optimize ways of working based on identified energy savings opportunities.
4. Modify
To modify existing infrastructure and invest in new equipment or technologies.
Energy efficiency improvements at Alfa Laval in Denmark
By applying the Climate Playbook methodology, Alfa Laval in Kolding, Denmark, has reduced total energy use by almost 3,000 MWh (close to 25 percent) in the past year.
Control
The starting point was to increase the number of energy measure points to establish a baseline understanding of the site’s energy usage and pattern, and all in all, approximately 4,000 points were identified. The establishment of the baseline was performed across all departments on the site.
4,000 points were identified
Optimize
Change of human behaviour and control of facility energy use was in focus and several activities were initiated. For example, energy use during Christmas could be reduced by 30 percent by reminding employees to switch off lights and machines when not at work.
Human behavior and Facility controlling campaigns
Analyse
From the extensive list, the top 50 energy users were detected. These were analysed with local site manager, facility management and real estate. Results from the analysis showed a high degree of energy usage not linked directly to production, e.g. lighting and ventilation were turned on in non-working hours.
High degree of energy usage not linked directly to production
Modify
In the modify stage, the ventilation units in the production facility were replaced – this gave greater opportunity for adjusting ventilators. The higher controlling resulted in a 50 percent reduction of energy consumption in the ventilation system.
Ventilation units replaced – 50 percent reduction of power consumption
Climate-related risks and opportunities
According to the recommendations from the Task Force on Climate-related Financial Disclosures (TCFD), companies should disclose information on climate-related risks and opportunities relevant for investors. Alfa Laval aims to apply the TCFD recommendations, and we include disclosures on the management of climate-related risks and opportunities, including governance, strategy, targets and metrics in the annual report and separate sustainability notes.
In the transition to a low-carbon economy, there are regulatory and market pressures to reduce carbon emissions. In response to this, Alfa Laval has set a science-based target aiming for a 95% reduction of scope 1 and 2 emissions by 2030 (with a 2020 baseline) and 50% reduction of scope 3 emissions. We also see opportunities in this transition, providing energy efficient products that help customers mitigate climate impacts.
Alfa Laval has carried out an initial in-house assessment of physical climate-related risks and we are currently in the process of updating this analysis with more granular data using a third-party solution. The updated analysis will cover all Alfa Laval locations around the world and provide valuable insights regarding the need for local adaptation solutions based on state-of-the-art climate projections.
Scope 3 – Upstream
Upstream value chain emissions
Greenhouse gas emissions upstream are mainly embodied in the materials Alfa Laval purchase from suppliers, representing about 80 percent of emissions. Steel and copper are some of the most significant raw materials used in Alfa Laval products, and we are aiming to reduce the impacts from metals manufacturing by purchasing increasing quantities of steel and copper with a low carbon footprint.
Collaboration with Boliden
Alfa Laval has teamed up with Boliden, a Swedish mining and smelting company, to use their Low-Carbon copper to produce heat exchangers. The cooperation will enable Alfa Laval to produce heat exchangers with a reduced carbon footprint, and help achieve our science- based climate targets.
“To drive the transition towards a more sustainable society it’s vital that we find partnerships and collaborations that complement the ambitions that we have as a company. Bringing together Boliden’s copper and our energy-efficient heat exchangers means we can contribute to the industry’s transformation towards net zero,” says Tom Erixon, President and CEO of Alfa Laval.
The cooperation with Boliden is part of Alfa Laval’s strategic ambition to reduce the environmental impact of raw materials. Boliden’s Low-Carbon copper is produced from copper mined in the north of Sweden and recycled material such as electronic waste, using renewable energy which gives the raw material one of the lowest carbon footprints of any refined copper in the world. The copper will mainly be used in Alfa Laval’s brazed heat exchangers which are used for heating, cooling, evaporation and condensing in numerous applications, including heat pumps. By using Boliden’s copper, the carbon footprint of the heat exchangers will be reduced compared to other available alternatives.
“With our Green Transition Metals, we create a foundation for Europe’s climate transition as they represent some of the most sustainable options on the market. If we want to enable the society of tomorrow, we need to start today. And Alfa Laval is now utilizing the fact that our offering is available today, and by that they are part of leading the industry”, says Mikael Staffas, CEO of Boliden.
Scope 3 – Downstream
Downstream value chain emissions
Customers’ use of Alfa Laval products is the single largest source of downstream emissions, accounting for around 98% of total greenhouse gas emissions. Innovating products that use less energy during their lifetime is essential for Alfa Laval to reach our near-term and net-zero target. In 2023, we discovered a calculation error for products in use emissions. Emissions for 2020-2022 have been recalculated, but we have not yet formally restated the baseline or target year emissions.
New product installation
Chelsea Sugar aimed to reduce carbon emissions with a new evaporation system installed and activated during 2023.
Alfa Laval’s Mechanical Vapour Recompression (MVR) technology enabled Chelsea to turn to wind, solar or another renewable power source and thereby cut carbon emissions from this part of the process to near zero. This also lowered natural gas usage at the sugar refinery by drastically reducing the input steam demand of the evaporator and cutting energy consumption of the evaporator plant by 76 percent. In concentrating the sugar from 65 percent to 78 percent dry solids, the energy consumption of the MVRs was reduced to 36 Wh/kg whereas in the existing TVR system, the energy consumption is around 190 Wh/kg. Overall, the refinery’s equipment upgrades reduces energy consumption for the whole site by 9%, and CO2 emissions by 11%.
“It is the ability of Chelsea to evolve and adapt to changing times, which has enabled us to thrive and grow over the past 138 years. Today, one of our biggest challenges is that we must develop an increasingly sustainable operation and business, and the environmental impact of our sugar production is an important part of this,” says Graeme Smith (GM Operations ANZ) from Chelsea. “Our relationship with Alfa Laval goes back many years, and it is the strength of our interaction and the mutual confidence in our competences, which has now enabled Chelsea to take on the journey in making the business even more sustainable.”
CO2 emissions reduced
11%