Sustainable Production - Material Resource Efficiency and Energy Efficiency

Figure*: REPA-steps as a re-iteration cycle / © M. Semadeni

Introduction

The concept of sustainability is intended to support the transformation of the economy towards a "green economy", which also focuses on the development of a circular economy. New technologies play an essential role in this, i.e. sustainability and technology can be closely linked, especially in the manufacturing industry (see article "Expanding Sustainability Assessments").

An important element in the assessment of a company's sustainability is the analysis of resource efficiency based on collected material, energy or material flow data – called resource efficiency potential analysis (REPA). New technologies can play an essential role in deriving efficiency improvements.

A REPA is a structured method to analyze the potential for optimizing the use of resources in an organization, to evaluate these opportunities, and to determine which measures should be implemented (see figure above).

The procedure can be divided into the following iterative steps:

1. Identification of material and energy resources

2. Quantification of material and energy resources

3. Analysis of current efficiency in the use of material and energy resources

4. Analysis of the potential for improvement and possible measures to implement these improvements

5. Evaluation and prioritization of the improvement options i.e. measures

6. Crafting an implementation plan

The goal of continuously optimizing a company's use of resources promotes more sustainable production / sustainable operations. In this way, the company can contribute to a more sustainable economy and support the development towards a circular economy. Additionally, these resource efficiencies will have financial benefits for the company as well as improvements in security of supply through reduced resource use.

To achieve an improvement in material and or energy efficiency, a continuous process with repetitive steps is necessary (see Figure 1), as continuous adjustments are necessary due to the interrelationships between business processes or areas (re-iteration). It is also important that the REPA activities are coordinated with the company's sustainability strategy and with other activities related to sustainability reporting (in particular regarding data collection, results and conclusions).

Central to improving resource efficiency are efforts to avoid waste, e.g. in relation to scrap products, by-products and consumables and consequently the search for alternative uses of such side streams. Classically, the separation and recycling of unavoidable waste (increasing the proportion of ‘recyclates’ used, i.e. secondary resources), the recovery of waste heat and the recycling of process water are further ways to increase resource efficiency.

If the company's waste is thus regarded as a secondary resource, mechanisms can unfold that transform the linear economy from raw material to end products into a circular economy. Secondary raw materials can create new value in a circular economy, enriching a circular value chain with new business interactions (see article "From Sustainability to Circular Economy").

Preparatory tasks

The first step is to get an initial overview of the company. To do this, it is important to understand the corporate business model; existing processes; what infrastructure is available and how is it used; what are the differences between the business locations. Furthermore, it must be clarified to what extent a sustainability strategy and corresponding goals are in place and to what extent sustainability reporting is being pursued or is already underway.

The materiality assessments and risk assessments for the various business areas help to refine the activities to be undertaken for identifying material and energy resources in different areas of the company. Questions about quick wins such as: Does the business have a “hot spot” for energy use and/or waste generation at one or the other location? Or else the business may not have any quick-win opportunities, and a broader implementation strategy is necessary.

In the area of real estate, design and site development can be central to the coordination of opportunities to improve resource efficiency. Mobility concepts could also make an important contribution here. Furthermore, it would have to be clarified whether the infrastructure or parts of it would be used as part of an industrial park with operating companies and a multifunctional working environment (possibilities for cooperative efficiency gains).

For production sites with their own or rented buildings/premises, it is helpful to know the type of buildings (office, warehouse, laboratory, production hall, etc.), age and condition as well as the status of modernization and renovation. These include keywords of sustainable buildings like energy labels and standards, energy management and building services standards, building design standards and sustainable building materials. Of course, binding requirements from the regulatory environment (Energy Act, CO2 Act, Spatial Planning Act, Building Laws) play their role here.

In the run-up to a building operation optimization, it must be clarified to what extent energy efficiency concepts already exist, e.g. regarding heating and ventilation systems, waste heat utilization, environmental heating/cooling utilization, cooling and air conditioning, use of renewable energies and electricity consumption, and/or if water efficiency concepts exist, e.g. regarding wastewater minimization and service water use.

To gain an initial insight into the production and business processes, documentation of the facilities, information on reinvestment cycles and inventories could be helpful. Of course, information on material inputs and consumables, on production aids (auxiliary materials), on energy and water consumption, on semi-finished products, by-products and rejects, as well as on waste and wastewater quantities are essential.

It is important that the questions about data availability and/or collection are asked in coordination with on-going business processes and other sustainability considerations. Data should be available in the longer term through the establishment of a monitoring system, insofar as the progress and effectiveness of efficiency measures can ultimately be reviewed.

General REPA Target Formulations

Once a general understanding of the company has been developed, initial goals can be formulated in coordination with regulatory compliance (e.g. CO2 target agreement, internal guidelines on health-safety-environment (HSE)) and any sustainability strategies or existing sustainability goals (e.g. in climate protection). Additional examples could include operational optimization with regard to energy efficiency (e.g. energy consumption per m2, specification of energy challenging procedures), the use of sustainable energy and material resources, waste management (e.g. waste avoidance, separation and recycling), the timing and much more. Goals must be measurable and therefore formulated based on existing monitoring systems or those that will have to be developed prior to the implementation of improvement measures.

Performing the REPA Steps*

The REPA steps described in the introduction (see figure above) consist of data collection and data-based assessments, the effort of which should not be underestimated; especially if the data first has to be collected and a corresponding monitoring system has to be set up.

Step 1: Identification of energy and material resources

This is the first step in an inventory of the primary resources used in the company, such as raw materials and/or semi-finished products, auxiliary materials, water, air and energy, as well as any secondary resources that have already been used, such as recycled content, recuperated waste heat, reused process water and the reuse of captured greenhouse gases ('carbon capture and utilization' (CCU).

The corresponding waste and wastewater streams and emissions into air and water must also be identified, as well as where which wastes and by-products are generated. The handling of these material flows (reuse, recycling, disposal) must also be taken into account.

Step 2: Quantify energy and material resources

To be able to complete the inventory, the resources identified in step 1 as well as material flows must be quantified. For this purpose, data on the amount of resources, materials and substances used in a defined period of time (including waste, of course) must be available, measured, calculated or estimated. This data search, material and material flow analyses form the core element in order to be able to derive efficiency potentials later on. It would also be helpful to have wear rates of production and operating equipment available.

Step 3: Analysis of the current efficiency in the use of energy and material resources

The data collected in step 2 is used to clarify the company’s current resource usage. For this purpose, a material flow model can be created, which can be used to derive inefficiencies in resource use and waste management. This may concern, energy consumption in production or building use, waste generation due to rejects, emissions into air and water, and much more.

Step 4: Analysis of potential for improvement and possible measures

From step 3, possible options for improving resource efficiency and waste prevention can be derived. The identified improvement options or possible measures must be quantified to be able to estimate their impact on resource efficiency, and material flows. The efficiency improvements lead to potential savings in resource consumption, waste and emissions, and in turn having an impact on operating costs. Possible measures for process optimization and the application of new, more efficient technologies must be verified by means of feasibility analyses.

Step 5: Evaluate and prioritize the improvement options or measures

After the costs of the measures compiled in step 4 have been quantified (investments in the improvement options), the improvement options are compiled in a catalogue of measures and evaluated and prioritized based on their impact potential, feasibility and cost/benefit ratio. This helps to identify the most promising measures for implementation and to be able to provide effective financing.

Step 6: Create an implementation plan

Finally, a mandatory implementation plan of the compiled improvement measures must be drawn up. It defines the required company resources (workers/skilled workers, capital, etc.), schedules, responsibilities and key performance indicators (KPIs), which are to be reported when the plan is executed step by step. This is to ensure successful implementation. Control by means of continuous monitoring of the results (through the established monitoring system) supports the implementation of the measures.

Conclusion

The REPA steps help companies to optimize their use of resources and operate more sustainably. Of course, the efficiency analysis and the catalogue of measures are not enough, because the measures must be financeable and implementable during on-going operations. These two issues – financing and on-going operations – often harbor conflicts of interest that can make it difficult to implement the measures.

There are many examples of how resource efficiency can be improved, such as the use of more energy-efficient machines, improved planning and control of production processes, use of renewable energies, heat recovery, educating employees, etc. Material flows can be directly influenced by, minimizing rejects by using software (optimization of material utilization), increased use of recycled materials, improvement of product design with inclusion of the circularity concept, and reduction of the use of auxiliary materials.

The implementation of such measures requires solid interface management between on-going operations and implementation projects. Delays can occur, for example, due to the elimination of defects in other or previous projects, because their urgency blocks all further implementation steps due to their disruption potential of on-going operations.

Finally, it is important to be able to report on the progress and expected effects of the implementation projects being actually achieved (need for a monitoring system). The results must be comprehensive and should go through internal validation processes (reviews / quality controls / internal audits) to be able to use them in the sustainability reporting.

Furthermore, the results could also be used to evaluate opportunities in adapting the business model in relation to the circular economy and therefore generate additional benefits for the company in cooperation with other market participants.


Marco Semadeni, Dr. sc. nat. ETH

14. October 2024


*based on:

"Guideline - Productivity for Small and Medium-Sized Enterprises", RKW Competence Center, Link https://www.rkw-kompetenzzentrum.de/;

"Resource Efficiency Guideline", Resource Germany, https://www.ressource-deutschland.de; «Information Systems for Enterprise Resource Planning», Springer Link;

"Methodology for the Assessment of Resource Efficiency", Springer Link;

"Material flow analysis and material flow management - a guideline", Eco-controlling in retail companies, Springer Link

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