Energy and Greenhouse

Industry Goal:  An energy efficient industry that is reducing greenhouse emissions

An effective response to impacts of climate change is a critical component to sustainability, and actions that directly reduce energy demand and emissions are required.

A national carbon trading scheme is scheduled to commence in 2011 and will be the single biggest economic reform this country has ever undertaken. It requires a fundamental structural adjustment to the way we as humans do things - the way we produce and consume energy, and all the products and services that go with it. Whether directly part of the trading scheme or not, every company will be impacted by a changing climate and directly by a future price on carbon - most obviously through higher electricity prices passed through the value chain. There will also be impact on feedstock pricing and increased regulatory and reporting demands.

The industries have the opportunity to play a lead role to address climate change through improved energy efficiency, reduced energy use and reductions in the greenhouse gas signature of manufacturing operations and along the supply chain.

Carbon, sourced from oil and gas, is used directly to make the majority of plastic and chemical products. The carbon is retained when products are used or recycled, or the energy value of the carbon can be recovered for heat, steam or electricity. Energy - electricity, steam and heat - is used in the manufacturing steps, while transporting products requires energy as fuel. Energy is often required when products are used by customers and consumers.

The industries account for approximately two percent of total energy use (and a corresponding two percent of Australia's greenhouse gas emissions). As with water consumption, energy use (and subsequent greenhouse gas emissions) varies amongst individual plastics and chemicals companies.

Companies must respond and adapt now for carbon pricing and new markets in energy and greenhouse solutions. However, there will be particular challenges facing the chemicals and plastics sector in responding to these changes. The key action pathways will include energy efficiency, switching to less greenhouse intensive sources and offsetting residual greenhouse emissions. The product and service areas will present significant transformational opportunities, as customers and supply chain partners look for the next generation of products with zero or beneficial greenhouse impact.

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