Anna Fenger Business - 13/February/2020

Palsgaard: Supply chain emissions slow carbon neutral efforts

A broad range of efforts and investments in energy efficiency and clean energy has allowed Palsgaard to reduce emissions to zero in the majority of its factories

Going carbon neutral is no small undertaking for any company. Trailblazers are managing to cut emissions from their production facilities, but are finding it much more difficult to achieve the same results with suppliers and in transport

Companies with factories in countries less focused on the energy transition may find switching to renewables difficult, leaving them little choice but to buy emissions offsets, such as UN certified emission reduction (CER) credits. Whether such schemes help decarbonise the world is questionable

What Palsgaard has obtained is impressive. But the company risks losing momentum. It needs to look at how it will reduce emissions beyond its own production, from customers, business partners and suppliers

Two large companies, Chr Hansen and Novozymes, are the Danish food ingredient businesses best known internationally for their sustainability efforts, but mid-sized Palsgaard is quietly ploughing its own furrow. The company, which produces emulsifiers and stabilisers for cakes and ice cream coatings, became carbon neutral in 2018, two years ahead of target. But this initial success risks being undermined by a dependence on carbon offsetting and an inability to reduce emissions in its supply chains.

Going carbon neutral in its six factories, which span Mexico, Malaysia, China and the Netherlands, has enabled the company to reduce emissions from 12,029 tonnes in 2010 to zero in 2018. This reduction has saved 56,175 tonnes of carbon dioxide — equivalent to annual emissions from nearly 5000 average European households. ...


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