Supply Chain Frontiers issue #48
How can you measure the carbon footprint of the supply chain when critical data on fuel consumption is unavailable? This was one of the challenges that the Center for Latin-American Logistics Innovation (CLI) and Colombian food manufacturer Team Foods had to overcome recently in Chile.
Team has been making products such as margarine derived from vegetable oils and fats for more than 75 years. Headquartered in Bogotá, Colombia, the company employs 1,200 people, and also operates in Chile and Mexico.
Greening the supply chain is an integral part of Team's corporate strategy. Central to that strategy is a belief that an enterprise that contributes to a healthier environment and the community can be identified as sustainable and concerned about the resources consumed by its operations. The work carried out by CLI and Team on measuring the organization's operational carbon footprint, and to establish an action plan to mitigate the greenhouse gases emitted by Team's facilities, is part of that commitment to sustainability.
The work began in 2009 with a project to measure the company’s carbon footprint in Colombia. Last year the project was extended to Chile.
The first step, introducing the project in Chile, “was critical, because if you make a good case for the project to the local offices, it is much easier to win their support and get the information you need,” explains CLI researcher Vivian Rangel.
Gathering the data was the next step. Measuring the emissions associated with Team’s manufacturing plant in Chile was relatively straightforward. Of the different energy sources involved, the most important is the fossil fuels burned by the plant’s boilers. Total emissions volumes were calculated for the plant and a local factor applied to take account of variations such as the carbon content of the fuels consumed.
But to get a complete picture – a key goal for Team – it was also necessary to look at external sources of emissions such as freight transportation.
Team Foods Chile imports raw materials from Asia and South America, and sells product to customers in Chile. It employs some ocean transportation, but most of its goods are moved by truck. Measuring truck emissions proved problematical, however.
“There is no national standard or average for truck fuel efficiency in Chile,” says Rangel. In the absence of a standard value, the researchers turned to individual trucking companies for data.
But this option was not easy. The Chilean trucking industry is extremely fragmented, and the companies that haul Team’s loads range from small, single-owner operators to firms with large fleets. Also, “most trucking companies in Chile and Latin America in general, are very closed,” says Rangel. They resist the sharing of commercial information such as the fuel efficiency of their vehicles, or do not possess this type of data.
A further complication was the disparity between information systems – a reflection of the diverse nature of the trucking industry. Data are collected in different ways using manual and automated systems, and the way trucking activity is measured can vary.
To fill this information gap, the company joined with three of its primary carriers to analyze vehicle fuel efficiency. During a two-week test period, the service providers recorded fuel consumption, routes, distances, type of road (i.e. dirt or paved) and load details. This data were used to estimate fuel efficiency.
The researchers also calculated the carbon emissions produced by the ocean carriers and storage facilities used by Team.
Having collected the data, the researchers checked and validated the evaluation model, then completed the final step: calculating the carbon footprint. Based on these measurements, emissions hot spots where Team can reduce its carbon footprint were identified. Transportation emerged as a primary target for these efforts.
The project also provided some valuable lessons for carbon footprint evaluations.
- Corporate commitment is crucial. Without the full support of Team’s management, it would have been very difficult to collect the data needed to calculate the company’s carbon footprint.
- Local buy in is important too. The support of local Team employees was critical to the project’s success.
- Allow for national differences. Measurement systems vary greatly from one country to another. The lack of fuel efficiency standards in Chile, for example, was a potential stumbling block.
The final stage of the project was completed in December 2012. Team is now assimilating the results and developing a plan for reducing its carbon emissions in Chile. One further step that will have to be taken is to review the fuel efficiency figures, which are based on a small-scale field test.
For more information on the project please contact Vivian Rangel.