Industrials have just 3000 days to Correct the Course of Climate Change
The Intergovernmental Panel on Climate Change (IPCC) report released a few weeks ago warns of increasingly extreme heatwaves, droughts and flooding, and without any meaningful intervention, the global temperature will reach or exceed 1.5◦C of warming by 2030. It also points out that there is at least 90 percent certainty that the planet’s warming is due to human activity. The head of the UN rightly calls the findings for this report as a ‘code red’ for humanity.
Economic prosperity at what expense?
From this year’s massive wildfires in Greece and Turkey to large-scale flooding in Europe, increasing climate anomalies are already a clear message from nature that we need to act now. Such incidents are on the rise throughout the globe and are likely to worsen over the next decade.
The industry forms the backbone of economic success and well-being. We need the metals industry to construct buildings and roads; we need food to improve health and life expectancy; we need the energy to power our schools, hospitals, businesses and home life. However, the industrial sector contributes as much as 28% of the global carbon emissions. McKinsey estimates almost 45 percent of the industry’s CO2 emissions result from the manufacturing of cement, steel, ammonia, and ethylene. And if food wastage were a country, it would be the third-largest emitting country in the world.
At the same time, the climate change crisis also has important economic ramifications. The Swiss Re Institute believes the world could lose a fifth of GDP without climate action. Moreover, the industrials themselves will not be spared from the impact of climate change. In the food industry, heat stress from global warming will undoubtedly lead to lower crop yields or failures and put their supply chain under pressure. A McKinsey report says that 14% of the world’s steel companies’ potential value is at risk if they do not decrease their environmental impact.
So, as one of the largest contributors to carbon emissions, how can the industrial sector take the lead in correcting the course of the climate change crisis?
Decarbonizing industrial operations
Essentially, there are three key approaches to move towards net-zero. One approach is investing in new technologies, such as hydrogen-based production, that will significantly reduce carbon emissions. Another way to address carbon emission is by transitioning to lower-emitting energy sources, such as renewable energy, and implementing carbon capture use and sequestration. However, both these approaches are still in relative infancy and therefore come with high costs to deploy them at scale. The third is process and asset optimization, which can help manufacturers reduce greenhouse gas emissions by 20% with little or no capital investment.
So, how do we then achieve decarbonization that creates immediate impact and makes economic sense? The answer lies in the power of Artificial Intelligence (AI).
AI to the rescue
Reducing waste is central to any net-zero initiative. That’s why AI-powered asset and process optimization should be prioritized to optimize cycle time, as it lowers raw material waste and water consumption and reduces the amount of carbon emissions generated. In addition, by keeping functions within spec brings down the number of defective products that will otherwise end up in landfills.
Using AI to monitor your asset’s energy efficiency or more reliably forecast fuel consumption all make important contributions to reducing energy consumption and the environmental footprint of industrial plants.
Adopting a sustainability-first mindset is not just about reducing the environmental footprint — it also opens new opportunities to develop lower-emission products and market segments. The development of the plant-based segment is a booming example of this working in the food sector. McKinsey estimates that the chemicals industry, for example, stands to drive profit-pool growth of $60 billion by 2030 by reusing and recycling plastics.
Several leading industrial companies are spearheading the movement towards net-zero. A food manufacturer, for example, is leveraging the Canvass AI platform to increase the energy efficiency at the plants — saving nearly 9 million pounds of CO2 emissions each year. Another large metals manufacturer has saved over $2 million in energy savings and an additional half a million dollars in improved yields by adopting the Canvass AI platform. In addition, other customers are using Canvass AI to reduce water consumption, reduce waste, improve quality and optimize their cycle times — all of which make tangible contributions to reducing the plant’s environmental footprint.
With just over 3000 days until 2030, the onus is on the industrial sector to fast-track their sustainable operations, and with AI, they can do so without compromising their profitability or economic goals. The industry must make meaningful contributions today before it is too late.
