What Is Carbon Neutrality? Achieving Carbon Neutrality in Manufacturing

What Is Carbon Neutrality?

Carbon neutrality refers to achieving net-zero emissions of greenhouse gases, such as CO2. "Net-zero emissions" means offsetting greenhouse gas emissions by subtracting the amount absorbed through afforestation and forest management to effectively achieve a total of zero.

In other words, achieving carbon neutrality requires not only reducing greenhouse gas emissions, but also enhancing initiatives to absorb these gases and protect the environment.

Under the Paris Agreement adopted in 2015, Japan agreed to the global long-term goals of keeping the increase in global average temperature well below 2°C compared to pre-industrial levels while making efforts to limit it to 1.5°C, and achieving a balance between anthropogenic greenhouse gas emissions by sources and removals by sinks in the second half of the century.

To achieve these goals, the Japanese government has since implemented various policies to support corporate efforts toward carbon neutrality.

What Is Carbon Neutrality in the Manufacturing Industry?

Let us take a look at how the manufacturing industry is approaching carbon neutrality.

According to "Japan's National Greenhouse Gas Emissions and Removals in Fiscal Year 2022 (Executive Summary)" published by the Ministry of the Environment, Japan as a whole produced 1,085 million tonnes of CO2 emissions in 2022. By sector, industry including factories accounted for 32%, or 352 million tonnes, of CO2 emissions, which is larger than any other sector.

Because the manufacturing industry uses a large amount of energy including electricity, in order to achieve carbon neutrality for the nation as a whole, it is vital for companies to take energy-saving measures to reduce their CO2 emissions. Going forward, companies will be expected to make more efforts to reduce CO2 emissions such as taking energy-saving measures in factories and offices, as well as improving the energy efficiency of production equipment.

Utilization of renewable energy will also be key. By obtaining the energy needed for manufacturing sites from renewable energy such as solar power and hydroelectric power, it is possible to advance initiatives toward zero CO2 emissions.

Advantages of Carbon Neutrality Initiatives

Taking measures to achieve carbon neutrality has the following advantages for corporations.

Strengthened Competitiveness

As initiatives to protect the environment and achieve carbon neutrality are demanded worldwide, major corporations are not only working toward decarbonization within their own businesses, but they are also seeking to implement decarbonization management throughout their supply chains.

Decarbonization management refers to recognizing climate change measures as materiality in management and incorporating them into business operations to address climate change.

By implementing decarbonization ahead of other companies, these corporations may be recognized as working toward climate change, increasing their market competitiveness.

Reducing Energy and Fuel Costs

By reducing the amount of energy used, companies can reduce costs. Efforts to save energy, such as by switching to LED lighting and upgrading to energy-saving equipment, can lower energy, fuel, and other costs.

Improving Ability to Secure Talent

Raising awareness as a company committed to decarbonization can foster greater trust and empathy among employees. They may feel a sense of pride working for a company that takes the lead on social issues, and this can lead to benefits such as increased employee motivation and retention.

In addition, with increased social awareness of environmental problems, more job seekers will want to work for companies dedicated to environmental activities. Companies can also expect to see an increase in applications from job seekers who want to work for companies that are environmentally-conscious and take the initiative.

Procuring Funds Under Favorable Conditions

Financial institutions are beginning to offer preferential loan terms to companies working toward decarbonization. When considering financing for capital investment and business expansion, companies working toward decarbonization may be able to take advantage of favorable financing terms offered by financial institutions.

Seven Steps to Achieving Carbon Neutrality

Let us take a look at how the manufacturing industry should specifically work toward decarbonization. The following introduces seven steps that companies can take toward achieving carbon neutrality.

Step 1: Collect Information

First, start by collecting information on carbon neutrality. In particular, it is important to collect information on government policies and the policies of business partners.

Research the regulations regarding greenhouse gas emissions and preferential systems available according to the decarbonization efforts, understand when these regulations come into effect, and identify any preferential systems that can be utilized by the company. Based on this, identify the advantages and disadvantages of taking decarbonization efforts for the company, and share these within the company to raise awareness of environmental measures.

It is also important to review the policies and terms of business partners and consider how to align your own company's goals and terms with them. This information can be obtained through seminars on environmental measures and procurement policy briefings of business partners.

Step 2: Create an Internal Framework

Based on insight gained through collected information, build an internal framework to support carbon neutrality initiatives. Management is required to take the lead in the initiative by establishing a dedicated department and building a cooperative framework across different divisions.

It is also necessary to begin fostering talent with insight into carbon neutrality. If the company finds it challenging to develop talent within, they can think about using outside human resources.

Step 3: Gather Metrics

Next, the company will need to measure their energy usage and amount of greenhouse gas emissions. The company can understand the emissions from the energy it uses by looking at its electricity and gas bill statements.

After identifying its entire emissions, the company can calculate the amount of energy used over time such as monthly and daily usage. By gathering information on operation times and energy consumption by category, such as by equipment or production line, it may also be possible to calculate energy usage by product.

Companies that already measure their energy usage and CO2 emissions collect data such as by having workers log operating hours, energy consumption, and production volume in daily reports, or by using a system provided by contractors to continuously monitor electricity and gas usage while workers record work hours, defect counts, and equipment malfunctions.

Step 4: Set Targets

There are various ways to set targets for achieving carbon neutrality, such as aligning with reduction goals within your own supply chain, adopting reduction targets published by industry groups, or following reduction targets established by the government.

First, set targets that align with the long-term targets published such as in the procurement policy of a major business partner. If you can achieve these targets without issue, you can also demonstrate to the outside world that you have a strong interest in and a system for promoting climate change measures by setting targets that are in line with industry-wide or national targets.

Step 5: Analyze Results

This step is to consider ways to reduce your company's energy consumption based on your metrics and targets. Identify equipment and time periods where reducing energy usage may be challenging, review your manufacturing process, and clarify which areas can and cannot be optimized for CO2 reduction.

For example, analyze the correlation between operating hours and energy consumption for each time period, production line, and equipment to identify equipment and time periods where reduction is feasible and difficult.

CO2 can also be reduced by obtaining information on emissions from raw materials from business partners, reviewing manufacturing processes, and reducing raw material procurement.

Step 6: Formulate a Reduction Plan

After establishing targets and completing an analysis, it is time to formulate a detailed reduction plan. Create a roadmap that is in line with the company's reduction plan and management plan.

By comparing the CO2 emissions of each product and considering increasing production for products that use less energy usage and contribute to sales, you can predict the CO2 reduction amount and sales.

It is also important to plan for investment in equipment that will be used. For equipment that uses a large amount of energy, consider upgrading to an energy-saving model even if production capacity is the same, and determine the timeline for that.

Step 7: Implement the Reduction Plan

Implement the initiatives to reduce CO2 according to the reduction plan created in step 6. By advancing the initiatives based on a roadmap, you will be closer to achieving your set targets.

However, for small and medium-sized businesses, it may be challenging to quickly start on such a large-scale initiative. You can start by taking simple energy-saving measures and raising awareness of carbon neutrality within the company.

To take quick and effective steps to save energy, you can upgrade machine tools to energy-saving models. In this way, you can easily reduce CO2 emissions during manufacturing. By considering the use of grants, you can also reduce the financial burden of upgrading equipment.

Introducing Energy-Saving Machine Tools as an Effort to Reduce CO2

Greenhouse gases, including CO2, are considered a cause of climate change. With growing global demand for climate action, it is especially important for manufacturing companies, which emit large amounts of CO2, to take decarbonization measures. In addition to aiming for further energy savings to reduce CO2, companies should consider utilizing renewable energy sources such as solar power and hydroelectric power.

While carbon neutrality is something that cannot be quickly achieved, it is important to understand what we can do now and steadily take action. Companies can begin by reviewing their current equipment and upgrading to energy-saving models in an effort to advance initiatives to achieve carbon neutrality.

In October 2024, Kariya Plant of Brother Industries, Ltd. achieved carbon neutrality in accordance with ISO 14068.
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Kariya Plant Achieves Carbon Neutrality in Accordance With ISO 14068