Mounting pressure
Not just hot air
Promising technology
Summer 2006
Who's surprised these days to hear of new rises in the price of energy? We
only have to look at our monthly bills to get a clear sense that costs are
rising. And while most of us agree that we owe it to future generations to
be as energy efficient as we can, the immediate cost of our reliance on
fossil fuels will soon be felt.
Estimates of sky-high oil prices are not the rumour mongering of
pessimists; respected analysts are speculating possible price rises for oil to
between $85 and $100 a barrel, or even more. "[The oil price] could spike
at $105 and stay that way for years," say Arjun Murti and Brian Singer of
Goldman Sachs, experts on energy commodities.
It won't be a surprise to many people either, then, that a higher oil price
will raise the cost of practically everything else too, including—you guessed
it, a glass of beer.
It's clear what the main answers to the problem of keeping oil (and
hence other) prices low are: to find new energy sources and to take a more
active approach to conservation. And these solutions will also have another
upside, because they would contribute to solving environmental problems
that are becoming more and more apparent in the headlines of global
warming. Green economics makes sense on every level: multinationals,
companies and some individuals at least are sure to look for ways to save
energy.
Heineken—a company that uses energy resources for some of its core
processes, including brewing, transportation and cooling—is acutely aware
of this dilemma and has set about tackling it head on.
The issue hit home (literally) five years ago for Jaco Bakker, Manager of
Safety, Health and Environment at Heineken's three breweries in the
Netherlands. He had installed solar panels on the roof of his home to
supplement his domestic power supply. Before long he noticed a dramatic
change on the reading on his electricity meter...and his bill. "After a while
the dial went down and I could see exactly how much energy I had saved
compared to my normal consumption, simply by using the solar panels." If
one household can make a difference, imagine what a multinational like
Heineken can achieve.
Operating in more than 170 countries around the world, Heineken is
acutely aware of its corporate social responsibility. "In fact we were among
the first in our industry to make a commitment to reducing our energy
consumption," says Bakker, who plays a key role in coordinating the growing
range of energy saving and monitoring measures that are being
implemented at Heineken's Dutch breweries. Heineken's Corporate Social
Responsibility (CSR) programme is based on the guidelines for multi
national enterprises produced by the Organisation for Economic
Cooperation and Development (OECD). These guidelines are widely
recognised as the international benchmark standard for CSR.
In late 1997, the Netherlands and the EU made a commitment to reduce
their greenhouse gas emissions at the Climate Conference in Kyoto. Two
years later the Dutch government and local energy-intensive companies
drew up an Energy Efficiency Benchmarking Covenant in which they agreed
to work together to become world leaders in energy efficiency by 2012,
when the first Kyoto commitment period closes. "This benchmark has
proven of considerable value to us, not only in the Dutch breweries, but
also on an international level, as Heineken uses it to assess the
performance of all its breweries worldwide," Bakker states proudly of the
covenant.
Running somewhat parallel to the Covenant is the EU's Emissions
Trading Scheme, which restricts energy-intensive industries to specific
carbon emission levels over a certain period. Companies that exceed their
allocated levels have to buy additional carbon credits on the open market.
All this makes the reduction of energy an important factor in the financial
performance of European companies.
"These new requirements, not to mention the rising cost of energy
itself, mean that it is now vital for companies to introduce energy-saving
measures," explains Bakker. "This is much more than an environmental
issue now - this is about saving energy in order to save money and remain
competitive. Our senior managers consider this a priority issue for the
company."
Heineken's environmental strategy is based on a strong performance
measurement and improvement system with clear targets. Pjotr van
Oeveren, Safety Environment Policy Manager at Supply Chain Services,
explains it concretely. "In 2002 we started an Aware of Energy Programme,
in which we committed ourselves to cutting down our energy use by 15 per
cent by the year 2010. The corporate organisation proposes a target
percentage of energy savings for each brewery based on specific
feasibility."
Once a target has been assessed and accepted by the regional
management, the brewery is required to take action and implement the
measures that are most economically practical for its situation," says van
Oeveren. "Different locations require different solutions. While some
breweries embark on a big project like replacing a cooling system, others
find that small-scale measures like the proper insulation of pipes or
reductions in evaporation rates are just as effective in improving their
environmental performance."
The Aware of Energy Programme is closely connected to Heineken's TPM
(Total Production Management) Company Strategic Programme, in which a
brewery's performance is scored against five environmental parameters on
a scale that ranges from "poor" to "best in class". The main parameters,
which cover all the common environmental issues, are thermal energy
consumption, electricity consumption, water consumption and waste
discharge.
A complementary fifth parameter, the Eco Care Indicator, includes
issues such as environmental management, use of renewable energy, green
electricity, reduction of air emissions, prevention of waste water pollution,
re-use of by-products and segregation of waste. The scores are monitored
on a quarterly basis and improvement targets are agreed with each
brewery as part of the three-year planning process. The breweries also use
internal benchmarking and exchange best practices to help them improve
their performance.
A brewery uses huge amounts of thermal energy (heat), and hence
electricity. Heat is generated to boil the liquid extract (the wort), for
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