Why is sustainability and working towards a circular economy more important now than it ever was?
The circular economy, which promotes the elimination of waste and the continual safe use of natural resources, offers an alternative that can yield up to $4.5 trillion in economic benefits to 2030. In 2020 we saw an increasing global movement in terms of focusing investments on rebuilding economies in a sustainable way and, in doing so, keeping emissions lower while promoting growth and jobs creation.
Around 90 billion tons of natural resources are extracted every year to support the global economy. That is more than 12 tons for every person on the planet. Based on current trends, that number is expected to more than double by 2050. Currently, only 9% of resources find their way back into products after their first use.
Moving towards a circular economy will be the most cost-effective and efficient path to reach our sustainability goals. Reusing natural resources will stop the over exploitation of nature and at the same time recover our economies, by allowing us to invest in energy efficiency. Recycling products at the end of their lifecycle will reduce our overall need for energy and thus also the need for extra energy capacity and infrastructure. This will enable a faster, renewable roll-out, create sustainable, green jobs, and move us closer to achieving the global climate and sustainable development goals.
How can technology and moving towards digitization help in achieving sustainability goals?
In the goals of climate change abatement, digitalization holds the ability to change virtually every energy system worldwide. Energy efficiency solutions and possibilities change with the proliferation of digitalization-enabling technologies; from IoT, Big Data to AI brought on by cheaper and smaller sensors, storage and ease of connectivity. Leveraging digitalization to enable greater control of energy-consuming systems, optimization and analytics has the potential to impact both the demand and supply side of energy solutions. Demand-side digitalization must account for the increased energy use of sensors, interfaces and servers needed to power the digital devices, but holds large promise for optimizing energy-use in everything from transport to buildings and industries.
Digital technologies already see wide-spread use in a lot of areas. Residential and commercial buildings are seeing more and more smart appliances and intelligent energy management systems. Industries are seeing an uptake of new technologies such as 3D printing, robotics and connected production systems. All with their own promise for optimization and new avenues of energy efficiency.
Danfoss believes in digitalization as one of the most important tools for enabling the transition towards a low-carbon society and improve energy efficiency in all private, industrial and commercial society. In the future, we need smart digitalized power grids as well as power and heat use applications in buildings, transport and industry which reduce energy demand and offer flexibility. There is potential to drastically reduce energy consumption and emissions by buildings with digital solutions based on technology that we already have. Digitalization and IoT allows for new, intelligent ways of controlling HVAC, Smart Thermostats and Smart Metering solutions to enable demand-side response functionality. Digitalization can help better integrate variable renewables by matching energy demand to times when energy is produced by sun and wind, rather than coal and fossil fuel.
In buildings alone, digitalization could cut energy use by about 10% by using real-time data to improve operational efficiency. Increased storage and digitally empowered demand-response systems could reduce curtailment of solar photovoltaics (PV) and wind power from 7% to 1.6% in 2040, avoiding 30 million tons of carbon dioxide emissions in 2040.
How is your company working towards contributing to the environment?
Danfoss wants to be in forefront of the development within Circular Economy. It is a natural element of Danfoss' sustainability policy and it supports Danfoss' green ambitions as well as the aim to build a service business. Nevertheless, Danfoss will also pursue material efficiency for our products through optimization of lifetime and increased reuse and recycling.
Danfoss is developing service models that aim at optimization of the lifetime of our products. With increasingly number of sensors, connectivity and digitalization, we can monitor and service both our own products and their applications with e.g. predictive maintenance. Danfoss products have high quality and some of the longest lifetimes within the different sectors. Danfoss produce with minimal waste and almost all product waste is used for recycling.
In addition to working towards a circular economy Danfoss commitment towards sustainability is to also walk-the-talk on its resolve to engineer a better tomorrow. The Danfoss India's LEED Platinum rated facility at Oragadam, Chennai boasts of a 1.125 MW solar power plant that contributes to an average 20% of daily energy consumption while over 80% of the energy requirement is fulfilled through offsite renewable sources. Over the last year (since June 2020), 100 percent of the facility's energy requirements has been met through clean energy. Here, the company has also combined its global expertise in digitalization, innovation and energy efficiency to create climate friendly solutions that empower smart societies and industries, to do more with less. For instance, the use of Danfoss' own oil-free Turbocor chillers, Variable Frequency Drives (VFDs), PIBCVs & many more of its energy efficient products has enabled a reduction of campus energy consumption by 40% annually. Overall, the company has achieved 12000+ ton of carbon footprint reduction in just the last two years.
Furthermore, the company had invested in an exhaustive top-soil preservation process. Since then, over 6300+ trees have been planted across the 50-acre campus, including a Miyawaki forest with 3000+ trees, covering 15+ native species. The Zero Liquid Discharge (ZLD) facility on campus is equipped with wastewater treatment plants that include a 150 KLD Sewage Treatment Plant (STP) and 80 KLD Effluent Treatment Plant. The facility's food digestor with a capacity of 100 Kg/day helps recycle canteen waste into biogas, which is in turn utilized at the kitchen within the campus. It is also equipped with a 3600+ KL capacity rainwater harvesting pond and an IOT based water management system which has helped in ~40% reduction of water consumption from 105 to 65 Liter per capita/day.
In 2020, Danfoss joined the UN Global Compact's campaign: Business Ambition for 1.5°C - and joined the Science-Based Targets initiative (SBTi). The company also remains committed towards its ambition towards carbon neutrality by 2030 across all global operations. Last year, Danfoss' total global energy consumption for buildings and processes fell by 7% to 590 GWh, leading to a greater commitment to also double energy productivity and halve energy intensity by 2030.
Danfoss is also among the first manufacturing players to join the EV100 initiative under The Climate Group to support the global transition to electric vehicles by 2030. A dedicated project team has developed a roadmap for the company's journey towards the full electrification of its company car fleet. The roadmap will be revised as technology develops and the availability of EVs and charging infrastructure becomes better.