Over a series of discussions with clients on sustainability we’ve been building a quick and accessible modelling tool to model the carbon cost implications of typical high-volume products across a variety of markets.
Innovating for the triple bottom line
It’s a forward projection tool for product managers and those interested in understanding the carbon footprint of products and how various choices in the manufacturing process impact on not just the CO2e emissions, but also the opportunity for sequestering carbon into long lifetime products themselves. It also has the ability to run scenarios on what the costs of CO2e emissions might be and the potential for sequestration to be a revenue generator.
To make it we consulted data from the Carbon Disclosure Project, DEFRA, BEIS, and many other international datasets and calculators, as well as standards we use in our sustainable designs such as PAS2050, ISO14062 and ISO14067. We’ve shown the results to have good parity with more detailed carbon life cycle analysis (LCA) models that require much more input data, which is often only available after a product is made.
Carbon emission prices continue to go up, of course. And with sustainability issues still high on the agenda for industry decision makers, now is a good time for a progress report. We’ve created a concise video (below) to explain how the tool can help if your carbon modelling is ‘up in the air’. It will give you a quick overview of how the open access tool lets you customise your own product or service and play ‘what if’ with a number of factors – including your opportunity to get paid for sequestering carbon.
While the tool was in development, I wrote a blog setting out why policy changes designed to hit new zero goals were opening up carbon sequestration revenue streams for a wider range of product and service companies than you might imagine. Here’s a link: The other way to fix climate change – and gain competitive advantage. In a nutshell, the key driver in all this is the changing economics. It’s now just as valid to sequester a tonne of carbon as to reduce a tonne of emissions.
Humans love making stuff. By one estimate we’ve made around 30 Teratonnes of it (University of Leicester ‘technosphere’). If we had built a few percent by weight of sequestered carbon into all that stuff while making it, it would have compensated for decades worth of current ‘peak’ emissions (40-50 Gigatons/year CO2e). And we know that’s viable because most of it was concrete, which can now be made with net negative emissions.
The question I got asked most about the sequestration blog was around the definition of neutrality for human emissions when measured in tonnes of CO2e: that ‘half of our activities will emit carbon and half will sequester it’. This doesn’t mean that every person will have to spend 50% of their time planting trees. But it is saying that for every group of people emitting some tonnes of CO2e, whether that’s simply by using an office that’s heated by energy from non-renewable sources, or by eating food that required land that displaced a natural peat carbon store, or flying to a conference that covers climate change, there will need to be someone actively deploying a technology that is capturing just as many tonnes as that group is emitting. With the right pricing markets and automated technologies, the ‘sequestration half’ of this human activity might show up as only a few percent of global GDP.
The trend towards sequestration as the only remaining viable solution to hit global emissions targets when you look at a system level influenced our concept for our modelling tool, which, unlike other tools, includes the future impact on product pricing due to sequestration pricing as well as emissions pricing.
Since the tool was launched, we’ve experienced plenty of engagement with clients interested in tracking their current and future performance. Irrespective of particular sectors, the tool acts as a great starting point for innovation projects initiated with sustainability in mind, as a quick way to assess impact of a product concept before there is enough real product data to feed into more detailed ‘life cycle analysis’ tools. Product managers, as I mentioned, value the insight into when carbon pricing will start to influence their product designs and choices.
Right now, interest is coinciding with a period of rising emissions prices with the support of the European Union, the new Biden administration in the United States, and also China’s National Emissions Trading System planning to carry out its first official transaction this month after successful large scale pilots. This will initially settle at a lower price than the equivalent EU and US schemes, but instantly becomes the emissions market with the largest coverage in the world of 3.5 Gigatons/year, about one third of China’s emissions and one tenth of global emissions.
On July 14th the EU will also launch the newly approved ‘carbon border adjustment mechanism’, reportedly starting with steel, iron, cement, fertilisers, aluminium and electricity. This demands better modelling of embedded emissions for the transport of these goods into Europe, as the new border tax will be worked out including direct production emissions, but also indirect emissions impacted by the energy mix used during production.
This means the emissions impact of power station choices of the producing country will affect the local cost of goods for the first time, with real impact for product owners and their supply chains. Although this is framed as a tax by those who might have to pay up, it also raises the interesting prospect of being paid to import carbon negative materials, which in practice might have just as big an effect on the climate. This combination of parallel activities across the globe creates a big new market for those with the expertise to calculate the carbon content of imports.
Is your carbon modelling up in the air?
And what of the original ‘sequestration pricing’ that we proposed a couple of years ago was going to be an inevitable policy tool, joining the more established ‘emissions pricing’? It’s happening fast on a voluntary basis, and at a more leisurely pace feeding into real policy and regulatory changes with serious impact. Recent examples include the first UK-certified sequestration price (‘Gentle Farming’) earning farmers around £100 extra per hectare, the 45Q system in the US that pays $50 per sequestered tonne (but only $35 if you’re using that CO2 to flush out more oil) with much more to come from the Biden administration, plus a whole suite of priced offset technologies that the airline industry now needs under the CORSIA Resolution now being adopted into national legislation.
You can jump straight into the ‘Up in the Air’ carbon modelling tool by following the link here. It features a range of example scenarios – headphones, housing, automotive, drinks packaging and inhalers – as well as the functionality to create your own. Please drop us an email to let me know what you think, or to discuss any aspects of the topic in more detail. It will be great to hear from you.