Manufacturing

The challenge

Denmark’s manufacturing sector has reduced direct emissions (scope 1) by 65 per cent since 1990 through increased efficiency, relocation of production and fuel switching. Meanwhile, output has increased by 35 per cent.

Today, only 20 per cent of manufacturing companies have formulated climate targets for their organisation, and only 10 per cent have calculated their emissions and carbon footprint. Thus, there is insufficient knowledge, information and attention to the topic in most c...

Most projects and initiatives to reduce CO2e emissions require an up-front investment. Companies usually have a short time horizon, requiring investments with a pay back within e.g. 3 years. Thus, many efficiency projects that are technically and even economically feasible may not be realised if their pay back time is longer than 3 years. It is a challenge to inform and incentivize manufacturing companies – from large corporations to the many SMEs – to engage in energy efficiency and other climate measures. The first step is to create awareness and start sharing information, experience, best practice and concrete solutions among companies.

The potential

The vision for 2030 is for Denmark to have the world’s first climate-neutral manufacturing industry while continuing to create green exports, growth and jobs in Denmark.

The climate partnership has charted a path for an 80-85 per cent reduction in CO2e by 2030 using measures that are chiefly economically viable. Through economic incentives and further use of biogas, reductions can reach 90-95 per cent. Meanwhile, indirect emissions (scope 2) can be reduced by 95 per cent through further energy efficiency in electrical equipment and switching to green energy sources in the energy sector. Thus, the manufacturing industry can nearly reach climate neutrality in scope 1 and 2 by 2030.

Realising this vision requires strengthened advisory services to companies, better financing possibilities, intelligent tax reform providing incentives for electrification and use of surplus heat and support for biogas for medium to high temperature processes.

Recommendations

Strengthened information and advisory services

Develop knowledge platforms to provide knowledge to industry, including the many SMEs, granting access to tools for measuring emissions, possible climate measures and consulting services

Better financing possibilities

Many companies have competing investment projects and require a short pay-back time on any project undertaken. Some energy efficiency measures may have a longer pay-back time than the company threshold, while still being optimal for society. Co-financing and other specialised incentive schemes for investments in energy efficiency should be made available

Intelligent tax reform

Taxes on the use of electricity and surplus heat should be lowered – enabling greater
consumption of green energy sources

Support for biogas

Biogas is an optimal green energy source for medium and high-temperature processes that cannot run efficiently on electricity. Thus, efforts should be made to ensure more biogas in the national biogas grid and that companies use green gas in their processes

The Climate Partnership for Manufacturing

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