5. Multi-criteria Decision Aid (MCDA)
6.6 Differences in Climate Change Response Initiatives
6.6.2 Adaptation and Operational Efficiencies
are involved with it you are not aware. So I said that‘s what we could be doing differently, we could be communicating more what we are doing, and blowing our own horn so to speak.‖
The differences in the level of activities regarding awareness raising could possibly be explained by the differences in the timing of climate change response between the two companies, or the motivations and drivers for climate change response. ATNS has recently embarked on the climate change response journey, having identified climate change response as a strategic priority only in 2011, while Tongaat Hulett has been a participant to the Carbon Disclosure Project (CDP) for more than four years now. Climate change response within the aviation industry has only taken centre-stage in the last two years (see ATNS Case Introductory), implying that the need to research and understand the impacts and dynamics is still high and the level of education and awareness on the subject could still be very low, hence the need for such programmes.
Some of the key activities constituting building a brand involve communicating the brand position, which may explain the amount and level of communication and awareness building underway or planned. Tongaat Hulett, on the other hand, sees itself as a dominant player in the sugar industry and is the only local producer of starch in Southern Africa, with no excess capacity. Thus, the need to market and communicate climate change initiatives for competitive leverage is not as strong.
There is a spectrum of initiatives covering energy efficiency, material efficiency and water management and redesigning operations. Some of the initiatives mentioned and documented in the Sustainability Reports include the following:
Water usage
‖For TH operations, the standard in terms of water usage has been four tonnes of water per tonne of maize; we have come up with a lot of initiatives… some mills are now using far below this standard... we are not there yet, we will have to do more in terms of recycling, water treatment plants. If we are to have real quality, we have to invest in terms of effluent treatment plants.‖
Concerning operations redesign and energy efficiency, some statements to validate it include:
Boilers
―Our processes also consume lots of energy… we were utilising electrical boilers in our mills. We converted those electrical boilers to gas boilers, because it is highly inefficient for us to raise steam using electricity. In fact from a carbon footprint perspective, you are better off.‖
Dryers
―We have a spray dryer and we had to pre-heat the air to put into the spray dryer to dry one of our products. We had electrical heaters that we changed into gas heaters.‖
Variable Speed Drives
―We have been changing some of the technology operating and running our motors. We use variable speed drives (VSDs), so we are progressively going through our plants and going for the bigger drives and putting in VSDs… We have some major items of equipment that use fluid coupling to assist with the starting. We have replaced those fluid couplings which are very inefficient with VSDs as well. So we have just gone through a study where we saw opportunities where we could replace these things.‖
Operations Redesign
―So you can go through the life of a boiler: how much would you have spent in terms of maintenance by the end of its life? It would be much better to go with gas. Also what you see as a benefit mostly is that when you want to start up your plant to produce stuff, with coal you have to get people to come through at about three o‘clock in the morning to start making a fire for you to get the heat up to produce steam. Gas is instant! So when you do all those calculations it‘s still much cheaper to go with gas. From an efficiency point of view, when you have a 20 tonne boiler, you get about 18 or 19 tonnes of steam, (but) when you have a coal boiler because of efficiency issues you get about 14 or 15 tonnes. So you do the math.‖
Process Vapour Harvesting
―We have an effluent plant in Meyerton. Instead of letting the flame burn into the atmosphere like most effluent plants do, we utilise that heat to reduce the amount of steam we use in our processes. The other impact in terms of trying to reduce our carbon footprint is, through the process we end up with process vapour. We have identified those areas as sources of energy that instead of that vapour leaving and going into the atmosphere; we utilise the heat content of that vapour to reduce the amount of steam used in our processes.‖
Material efficiency
―One of the prime efficiency measures that we have lived with and is part of our business is the yield. For every tonne of maize that we draw in, we measure how much product we sell. It goes over a weigh bridge. That is the prime material efficiency and we are currently busy with the benchmarking process, working with our partner to do a step change in that material efficiency.‖
―…it‘s still being investigated. Even material efficiency - we are constantly trying to say ‗how can we use the materials most responsibly and how can we use less?‘ For example, in our processes and in the wet milling process, we use quite a lot of chemical agents. There is always a huge focus on those to say how we can make sure that we reduce their utilisation? Again largely driven by costs, but also driven by environmental things because some of the chemical agents we use end up going as effluent, so we have to try and reduce those so that we can manage what actually goes out downstream as waste.‖
Waste Management
Waste is also a key environmental challenge for the sugar refinery and starch industries in general and for Tongaat Starch operations, however there are initiatives underway to generate electricity from the waste.
―There are lots of initiatives… some of them are driven by legislation interestingly and what comes to mind there is, the effluent from the plants - we need to treat it and take out any harmful substances so that the water can be reused. The second part is the actual reusing of the water because that then means we are using less water. The third initiative which is not driven by legislation but seeing as we have got this effluent, we have treated it, we have taken out the solids. There is a further thinking to use that waste to generate electricity?‖
―… on waste management, I think we want to talk around the potential agreement with a waste management organisation that would take our effluent, together with other sources, harness methane out of the waste and generate electricity out of it.‖
Some barriers are slowing Tongaat Hulett‘s climate change response journey, such as expensive technology and partnerships which have not been successful. There is however, evidence to show that they are working on reducing the amount of waste generated from their operations.
―We are not there yet, we will have to do more in terms of recycling (and) water treatment plants. If we are to have real quality, we have to invest in terms of effluent treatment plants… It is a priority but the technology is still very expensive when you look at it from a payback perspective.‖
―One of the strategies is: we got involved with the local municipalities in KZN in terms of recycling with the view of a joint venture. We decided that we really have to work on this JV in terms of getting the capacity of the effluent plants to the levels where they are supposed to be.
We were prepared to pay for consultancy and other resources. We were going to supply them with the technical know-how because we have the skills and to partner with their engineers in order to do it properly…‖
Green IT
The innovative use of IT in business processes to reduce carbon footprint across an enterprise and beyond (Murugesan, 2008), in areas such as teleconferencing and tele-presence, is offering significant benefits to companies, including reduced travel-related carbon emissions, increased employee satisfaction, increased profit margins as a result of lower overhead cost (Molla, 2009) for office space, heating, lighting, air conditioning, water use, etc. Other related initiatives such as hoteling reduces the amount of office space per employee as office space is reserved as-and- when needed. Green IT is also finding use as a business enabler for e-business and supply chain management, regulatory compliance and governance, business process management and other applications, with significant return on investment (Ruth, 2009).
While such benefits exist, Green IT is one area which ATNS is currently exploring, but have not fully understood in terms of its contribution to climate change response and environmental sustainability:
―I‘m doing a research on green IT strategic planning but obviously I‘m not a CIO…‖
‖Because it‘s sad that people are saying aviation is the future tobacco industry. With all this flying going on, we need to work towards better management. If it‘s a meeting, a conference there is technology we can use; ways of saving all of those elements - video conferencing, telecommuting, etc. - working smarter basically.‖
Tongaat Hulett, however, had not considered this possibility and when it was pointed out during one of the interview sessions, one of the executives felt it was an area they needed to investigate and would recommend for implementation if it met financial investment criteria hurdles.
6.6.3 New Products and Revenue Streams