CAAA Carbon Neutrality Group Update - Achieving a Sustainable Future
The CAAA Carbon Neutrality Group is focused on addressing challenges in achieving a carbon neutral world, with a special interest in the Compressed Air industry. The group is exploring federal government policies, renewable energy trends, and global greenhouse gas emission targets to drive emissions reductions. Urging businesses to incorporate net zero goals into their planning, the group emphasizes the importance of climate governance and disclosure requirements. The shift towards environmental sustainability is a key focus, highlighting the need for action and innovation in transitioning towards a greener economy.
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Presentation Transcript
CAAA Carbon Neutrality Group Essential Update THURSDAY, 20 OCTOBER 2022
CAAA Carbon Neutral Working Group Why has the CAAA Board formed a sub-committee to consider some of the challenges of achieving a Carbon neutral world as it related to the Compressed Air industry? Federal Government Policy and implications for the Compressor industry Tennant Reed (where will they be focusing their attention to deliver the emissions reductions and how will they enforce them, i.e. where is the regulatory focus? Power Gen / transport). 15 minutes 4 slides Cost trends in renewables Corporate governance Scope One, Two and Three emissions Estimates of the emissions from the Australian Compressor Fleet Member Survey results Summary Questions
Global Greenhouse Gas Emissions To limit global warming to 1.5 oC Global GHG peak before 2025, reduced by 43% by 2030. Methane must be reduced by 34% by 2030. To limit warming to 2 oC will require GHG to peak before 2025 and reduce by 27% by 2030. Globally we are not on track to limit warming to 1.5 degrees C.
Net Zero is the goal We need to act now and need to incorporate this objective into our business planning and commence delivery.
Renewables Cost Trends The cost of renewables have fallen below that of fossil fuel for new electrical generating capacity. Electrify everything you can and deploy Hydrogen for everything else. Implementation of the circular economy is an essential component of the solution.
Climate governance will become a mandatory element of business The International Sustainability Standards Board (ISSB), a subsidiary of the International Financial Reporting Standards foundation (IFRS) have released an exposure draft as to how Boards will be required to disclose: Specific Quantitative Requirements Disclose Green House Gas (GHG) emission on an absolute and intensity basis. Transition and physical risks Climate related opportunities Capital deployment towards climate related risks and opportunities Internal Carbon prices Proportion of executive management remuneration linked to climate considerations.
Climate governance will become an integral component of business management Greenhouse gas emissions Entities will need to disclose Scope 1, 2 and 3 emissions in accordance with the GHG Protocol Corporate Standard. For Scope 1 and 2 the entity will have to separately disclose emissions for its consolidated accounting group and any associates, joint venture or affiliates. Industry based disclosures Entities will be required to make industry-based disclosures in accordance with the SASB standards. Entities will be required to disclose activity metrics to facilitate comparative analysis. The Financial sector will be required to disclose financed or facilitated emissions. Emission reduction targets Entities will need to disclose their emission reduction targets How these targets compare with the Paris agreement to limit warming to between 1.5 and 2 degrees Celsius.
Scope One, Two or Three? How are my compressor emissions classified? The general guidance is: I own a portable compressor which supports a drill rig - Scope One, most easily measured by the volume of diesel consumed in the reporting period. I own an electric compressor to provide plant air in my factory - Scope Two, most easily measured through the kWh of electricity consumed during the reporting period. I transport fuels to support my diesel portable, commute to work and fly to visit customers - Scope 3 and currently these are not reportable under the National Greenhouse and Energy Reporting scheme.
Estimated Industry Scope 3 Compressor Emissions Australia - 2022 Estimates include piston, scroll, screw and centrifugal compression. Total CO2 equivalent emissions in 2022 are estimated to be 3,706,807 tonnes. Emissions from stationary electric compressors can be brought to zero using renewable electricity to power them. CO2 emissions from air travel is included in Scope 3 but as considered to be immaterial.
How to calculate your emissions Scope one and two NGER Tool demonstrate http://www.cleanenergyregulator.gov.au/NGER/Forms-and- resources/Calculators#Emissions-and-Energy-Threshold-Calculator-202021-and- user-guide Scope three CAAA tool Demonstrate Excel tool and call out the assumptions.
Q2 Q4 Survey Results 3. Are you currently measuring estimating scope two emissions? 4. Have you estimated your Scope 3 emissions? 2. Are you currently measuring scope one emissions? 16% 16% Yes - Monthly electricity usage and solar generation 33% Yes, Monthly vehicles, fuel usages 66% 82% 82% No Yes No Yes No Yes
Q5 Survey Results 5. What is the most significant action/s your business is taking to reduce the CO2 emissions from your business? Introduction of solar panels Introduction of sensor LED lighting in office and warehouses Introduction of battery energy storage systems into businesses Conducting energy audits Promotion of energy efficiency product ranges for residual emissions Developing plans to offset carbon footprint Movement of hybrid vehicles Research of organic Rankin expander power generators into the Australian market Ensure sales representatives work on a focused area and not a shotgun approach (Definition of shot gun approach is selling old school sales and not in a good way )
Q6 Survey Results 6. What can the CAAA provide in order to assist members in enabling the delivery of a carbon neutral economy? As a business (wholesale and office environment), unsure of legal requirements and responsibilities to aim for the carbon neutral economy Education for manufacturers / distributors and end user population Provide guidance on what Scope 1, 2 and 3 is unsure on what it is Clear guidance Generate on-going content on relevant energy efficiency topics and distribute by CAAA platforms website, members portal and LinkedIn page Representations to Government Promote variable speed drive compressors on all occasions and when the opportunity presents itself
Summary 1. Compressors are a substantial source of carbon emissions 4.2 m tonnes per year in 2021 2. There will be substantial pressure to electrify everything and source renewable power to avoid having to purchase offset credits. 3. Use the tools to gain a solid understanding of your current emissions profile web site 4. Develop your emissions reduction plan and action.
