Proactive decision-making for emissions management: the roadmap to net zero

In order to make good on commitments to achieve net zero carbon emissions, companies in the process industries need to stop relying on a reactive approach.

Shareholders, financial institutions, governments and intergovernmental commissions are exerting pressure on industry to progress towards a target of achieving net zero carbon emissions by 2050. Many major emitters — including industrial producers — have pledged to make more progress and be more transparent regarding their efforts and results in emissions management.

For many companies, this shift will require a significant change in how they operate. Most are currently only able to see and report on their enterprise-wide carbon emissions yearly — and it is often a backwards-looking view of the data. Quite simply, this lack of real-time insight into emissions will not suffice as companies must understand their options, decide on actions and track progress against net zero commitments across their entire value chain.

New digital technology solutions give industrial producers a valuable new option for emissions management and avoidance: real-time visualisation of emissions data across the entire organisation. Companies that implement these tools can quickly move from a reactive approach to proactively making informed decisions to resolve, and even avoid, critical issues and in the process achieve 15–20% of emission reduction potential simply through faster and better operational decision-making.¹

Emissions reduction has been a focal point of the 2023 United Nations Climate Change Conference (COP28), as it was during COP27.

At the same time, the International Sustainability Standards Board (ISSB) released two new reporting standards for sustainability in 2023: IFRS S1, a sustainability reporting standard, and IFRS S2, a climate change reporting standard. The European Union has already signalled that it will be recognising those reporting standards. And in the US, the Securities and Exchange Commission (SEC) has issued a proposed rule change to require sustainability and GHG emissions reporting from public companies that have announced net zero commitments to their investors.

These are just a few examples of the global imperative companies face to increase transparency around their progress towards net zero carbon goals. In this context, industrial producers — in particular, energy (oil and gas), chemicals (bulk and specialty) and mineral processing companies — need to be able to report accurately, consistently and in an auditable way:

• greenhouse gas emissions
• carbon intensity of their products and operations
• progress against future pledges.
   

This level of reporting is challenging, time-consuming and expensive for companies. To a large extent, industrial organisations are still cobbling together their emissions reporting by merging complex spreadsheets created by different functional groups, different assets and different business units. As a result, they get a view into their enterprise carbon emissions only once a year, and it’s an after-the-fact report with high potential for inaccuracy.

Step one in any emissions avoidance transformation is to gain a greater understanding of — and a greater view into — operations in real time. Using the latest technology that can capture, visualise and interpret from across the enterprise is the key to moving from just reporting on emissions to proactively prioritising decisions that strategically reduce emissions while minimising impact on profit.

Several industry-leading companies are acting tactically to improve their carbon emissions picture. Organisations in the process industries are beginning to take advantage of new technology-powered visualisation and decision-making frameworks — and by doing so, they’re changing emissions tracking from an annual process to a daily event. These companies can now see where issues are in real time and take immediate action to resolve them, or even change operational plans to avoid them in the first place.

Seven steps to active decision-making

Currently, even as companies make emissions reduction a component of their business, many are challenged to truly understand their operational data and make effective decisions around carbon mitigation. In fact, McKinsey reports that less than 10% of the data collected in facilities is actually being used to make emissions-related decisions.¹

In short, companies are deciding how to reduce carbon and where to invest without the analytical tools that can provide:

• a detailed understanding of how much carbon is being emitted
• the capital and operating impacts of making changes
• ranked options for balancing emissions with yield and profit.
   

To achieve a state of active decision-making, companies need to implement a framework that enables them to optimise across multiple parameters and multiple disciplines (engineering, operations, compliance and executive) — with a particular focus on balancing profit with decarbonisation.

Advanced technology offers a seven-step roadmap that can quickly transform the emissions management function:

1. Mobilise existing data to calculate emissions in real time

The starting point is accurately collecting, validating and contextualising information on fuel use and electricity use, as well as any real monitoring data available. Advanced data and analytics technology solutions can bring this data into view instantly and ensure that it is consistent across the enterprise. The mass balance approach is state-of-the-art for both downstream and upstream assets.

2. Utilise planned emissions and profit from the planning system

Planning systems are well established to optimise for profit, and the most advanced tools now also provide templates for tracking carbon through the system, to predict and optimise the plan for carbon emissions. Planners can look at scenarios involving higher- or lower-carbon feedstocks and less-carbon-intensive process routes. Plans can be evaluated and compared for impact on both emissions and margin.

3. Map actual to plan, evaluate gaps and prioritise options

With these pieces in place, companies can look at the plan versus the actual on a real-time basis — and visualise it for all levels of the organisation. A dashboard can highlight impacted units and systems in a plant, and indicate which of them is not operating within the emissions avoidance plan.

4. Target emissions management KPIs by region and company

Every organisation has specific targets that they must create a plan against and keep metrics on. Calculations and rules can vary by country, province or state, and there are also internal carbon pricing rules. Emissions management and visualisation technology can be customised to reflect each company’s parameters — giving them the ability to track actual emissions, carbon intensity by product, bio-feedstock content and performance against specific emissions allowances.

5. Gain a deep understanding of operational flexibility and benchmark performance

Using plant data to calibrate rigorous hybrid models, operators will leverage AI to continuously adjust the models to how the unit is actually running — and tune the model to be accurate in predictively modelling carbon emissions. These models also provide a true representation of what’s achievable in terms of emissions reduction, giving decision-makers accurate data to set benchmarks against.

6. Optimise energy usage and emissions with utilities insight

With energy use being the largest contributor to emissions, it’s critical to use models when making operations decisions on electricity, steam and fuel. Using a utilities model can help operators find the best way to use utilities and generate optimal results — and the contribution of renewable power to the utility mix can be tracked and included in the decision-making process.

7. Generate auditable results

Transparency is critical in today’s environment, as regulators — both governmental and financial — are demanding to verify emissions reporting. A system that enables outside auditors to review emissions data is essential to track and prove progress on emissions management goals.

This is what the ideal end state will look like when an advanced decision management framework is implemented. But where do companies start? The good news is, much of the necessary data collection infrastructure is already in place.

Mobilising existing data to create impact

The elegance and utility of today’s technology is that it can take advantage of all the different measurement and data systems that companies have already invested in, and it is possible to roll all their process information and emissions data up into a single, easy-to-use dashboard.

Companies that are currently filling in spreadsheets to track emissions and energy use can now move to an advanced, real-time visualisation, including features like a geographic view across the whole network and a logical process flow diagram view.

By mobilising the data available from all the different systems that are running in each plant, such a technology framework enables teams across the organisation to understand their mission at a detailed level — and the concurrent actions of other players — and ensures the tools being used are synchronised and that everyone is working from the same data and toward the same outcome.

In addition, all the data should be packaged and presented at a high level in such a way that anyone in the organisation can absorb it. By simplifying and organising the important data, this technology empowers the broader organisation to understand what is happening and take action if needed.

Table 1: The advantages of moving to integrated emissions reporting.

Conclusion

If companies are going to make good on their commitments to achieve net zero carbon emissions, looking at emissions once a year in an after-the fact report is simply not a viable option. In order to make the necessary step change in carbon reduction, companies in the process industries must empower the entire organisation to take action by providing daily insight into what’s happening across the enterprise and unit-by-unit, how performance compares to the plan, and where money can be spent with most impact.

By using technology that compiles systems data into a single, interactive decision-support solution, with a visual dashboard that provides daily insights, leading organisations are advancing the way they do business. They’re making a true impact in emissions management and avoidance while also protecting profit.

Instead of relying on a reactive approach, compiling systems data into a single, interactive decision-support system can help companies to proactively use their sustainability strategies as a competitive advantage.

_{1. McKinsey & Co 2022, The green IT revolution: A blueprint for CIOs to combat climate change.}

Top image: iStock.com/Sakom Sukkasemsakom