The sweet smell of decarbonisation

With a history that goes back more than a century, British Sugar is the sole processor of sugar beet in the UK, and the leading producer of sugar into the UK market. The organisation has four manufacturing facilities in the UK – three in East Anglia and one in Nottinghamshire – and is contracted to over 2,500 growers of sugar beet crop. The processed crop produces a range of co-products in addition to the primary sugar product, ranging from animal feed to bioethanol and electricity which is then exported to the national grid.

Can you explain more about your role at British Sugar?

PM: My role was created towards the end of the last calendar year to lead our decarbonisation activity across all areas of our business and operations; from agriculture and how we reduce the environmental footprint of farming, our factory operations and Scope 1 carbon emissions, right through to the supply chain and distribution side of our manufacturing activity.

Our focus to date has specifically been on Scope 1, but we’re continuing to develop and understand our emissions around Scope 3. Scope 2 emissions are really minor for us as it only accounts for a small amount of imported electricity. My role is essentially to drive activity, coordinate and prioritise when necessary.

How big is the decarbonisation challenge for British Sugar?

There’s no question that it is a challenge; but it’s increasingly under the spotlight. Stakeholders have an increasing desire to understand how we drive our sustainability and ESG agenda, and carbon emissions are a big part of that. It’s also become a much bigger question for investors in all sorts of organisations and businesses, us included.

In addition, it’s increasingly becoming a talking point with customers. The majority of the sugar that we produce goes into the industrial sector, but some does go through our sister retail business, Silver Spoon, and customers from both areas are increasingly wanting to understand firstly, what our carbon footprint is and secondly, what we are doing to reduce our carbon and greenhouse gas emissions. The focus on decarbonisation has increased to the point where we have included carbon reduction as part of our key strategic activities and workstreams when we reviewed them last September. And while we have activities around water reduction, packaging and plastics, carbon is seen, and has been agreed, as our priority around ESG.

How has the topic of decarbonisation changed for British Sugar over the past decade?

I’ve been with the business for almost 26 years and we’ve always had energy reduction and usage as a significant area of focus. Heat energy is a significant topic for us, driven by the fact that three quarters of sugar beet is water. Ultimately, to achieve the final solid product, that water needs to be evaporated and the product finished through a crystallisation process.

The heat energy required for that evaporation process is critical. We’ve made great strides over the last 40 years where we have reduced our energy demand by half. That’s been enabled through investment in new technology, efficiencies and continuous improvement activity.

How’s it changed more recently? Decarbonisation from a customer perspective has ramped up over the last two to three years which has been driven, ultimately, by our customers and consumers, and is only going to increase in the years to come.

Questions are now being asked in earnest around what our carbon and greenhouse gas emissions are, what do we measure? How do we measure?

And, importantly, are we improving and what are we doing to reduce emissions further? The landscape has certainly evolved, not only in terms of there being much more interest in the subject, but also around the need to articulate what our decarbonisation plan is, how it will be achieved and whether we’re on track to do so.

We’ve seen ESG and related activities becoming more important right the way through the supply chain, to consumers and supermarkets etc. What marries that desire to improve company credentials in terms of performance around ESG, is how to achieve it in a financially neutral or positive way. Opportunities exist but we need to ensure that as a business we’re investing in the right long-term solutions.

A vital balance has to be struck around how you can improve on your ESG, but also maintaining good bottom line profitability to encourage that reinvestment into improvement as you go forward. There’s a lot of desire, not just in our business, but in industry more broadly, but despite that good intent, after a while those goals can become more challenging from a financial point of view.

In terms of regulation, there are a number of areas that are governed by the Environment Agency. and understanding around climate change adaptation will need to be demonstrated. The main piece of regulatory or compliance pressure for us is around the UK Emissions Trading Scheme (UK ETS); accounting for and ensuring verification of greenhouse gas emissions annually from the burning of fossil fuels.

Additionally, the financial burden associated with regulatory compliance has increased significantly over the last decade. It was a relatively small amount of expenditure eight to ten years ago. That’s certainly one driver to decarbonise, but clearly you can’t do everything overnight.

Your keynote address at Manufacturing Digitalisation Summit will be around the decarbonisation of dispersed industrial sites. Can you give a flavour of the talk and some of the key takeaways?

All four of our sites are dispersed in nature in terms of classification (dispersed being a certain distance away from a track one or track two supported government cluster). All our sites are quite a significant distance from each respective nearest cluster, so we don’t anticipate any direct benefit.

We try and lobby and advocate to a number of groups, including directly with government, around support for dispersed sites, from which around half of the industrial emissions in the UK are sourced.

Some of the challenges that we have, particularly in East Anglia, are around the strength of the electricity and gas networks. If we wanted to move to electrification on-site for example, and away from natural gas usage, with the intent of being able to import more green electricity from the grid, that’s a real challenge as the infrastructure isn’t sufficiently developed at this moment. And that’ll be the same for other industrial operators in the region.

Furthermore, around infrastructure, if I was to highlight hydrogen as an example, the infrastructure isn’t developed yet in this country, and we don’t really know how it’s going to look. Hydrogen will come into track one and likely, track two government supported clusters, but in terms of deploying hydrogen into areas like East Anglia and other more remote regions where dispersed sites are operating, we’re probably 20 years away.

In terms of our decarbonisation plans, our priority is to try and reduce our energy usage, primarily through steam reduction, to as low a point as we can get. Then, when we do find the right opportunities to change from natural gas, we’ll do so at a point where we’re using the minimum amount of fuel possible. We’ve got a number of steam reduction projects which we’re progressing and developing within the business across all four sites.

We’re also looking further out at the different technologies and fuel options that will enable us to change from natural gas in the future. My position, and British Sugar’s, would be that it’s likely to be a blend of fuels and technologies that we’ll need to deploy across the four sites, and maybe within the same site, in order to get to the point where we can ultimately decarbonise.

For manufacturers operating multiple and dispersed sites, what are some of the challenges when it comes to decarbonisation?

To an extent it depends on where your sites are located and if they are genuinely dispersed. For those that are, there are challenges around availability through networks of alternative fuels. So, if you are a dispersed site, and you’re getting on with fuel switching today, and in the years to come, you’re likely to be doing it off grid. And you’re probably tying up with a third-party who is offering that deployment for you on a variety of different levels of ownership.

That again depends on location, appetite and whether you’ve got other significant energy users in the same area that might join forces with you to make that type of investment and project more attractive for yourself and any third-parties you may be working with.

Quite frankly, the more remote you get, the more challenging this becomes. And while there are end of pipe technologies, such as carbon capture and storage, we’re fairly agnostic on that, because it doesn’t genuinely reduce the burning of fossil fuels and emitted carbon.

Our position would be that, as a first port of call, we want to try and reduce the quantity of fossil fuels we’re burning to reduce our greenhouse gas emissions at source, rather than having to adopt a technology that might capture the carbon and put it into storage.

What part can technology and digitalisation play to help address this?

We’re just starting to discover some of the options and opportunities that Industry 4.0 may offer and we’re collaborating with an external partner to help us do that. We’ve identified six areas of work activity and assigned leaders to each one.

Through the increasing level of automation that we’ve deployed across our sites in recent years, providing operators the ability to control the plant remotely on digital equipment, we’re now set up with a much better infrastructure. We’re now trying to test and work out how we take maximum advantage of that to improve the consistency of site operations, and look for opportunities that can be deployed across all sites that gives us the best options for repeatability and consistency.

We’re learning in this space, but I think there’s a massive opportunity both in terms of generating better data and how we use it to improve, but also, how that data is used specifically for energy performance. We will identify opportunities, we just don’t know what they are yet, but we’re fairly confident they will come.

How is the company using renewable energy sources?

It’s currently quite limited because of the size of energy demand that we have. However, there are a couple of areas that are worth highlighting. We have a 5MW anaerobic digestion plant at our Bury St Edmonds site. Pressed pulp, which is what remains after we’ve extracted sugar out of the sugar beet, is then fed into that anaerobic digestion plant. The green electricity generated is injected directly into the network.

The majority of our pressed pulp is dried, pelleted and then sold into the animal feed market in the UK, and therein lies one of our internal conflicts. That actually generates revenue for us with one of our sister businesses. However, going forward, if we want to put that material into anaerobic digestion instead, we will have to give up that revenue and find how that imbalance is addressed elsewhere.

We also have a couple of small solar PV installations. Again, solar PV is one of the areas and potential projects that we are currently reassessing because technologies change in terms of their viability and what’s available.

It is also worth underlining the credentials that we have around good quality, combined heat and power (CHP) plants. All of our sites have a CHP scheme, and obviously, for an overall electricity and heat supply, that maximises the efficiency and utilisation of that input fuel.

A standalone power station generating electricity would be at a much lower overall efficiency than our CHP schemes deliver in terms of useful heat and electricity, which is pushing around 80%.

What does British Sugar’s decarbonisation and digitalisation future look like?

The advent and deployment of Industry 4.0 will evolve at British Sugar; we will embrace it and it will ultimately support improvement and efficiency to a greater level in our existing operations and our continuous improvement. That will help us from an energy utilisation point of view.

I think it might also help identify opportunities where we can look for investment and highlight areas where there is lower performance. In terms of marrying that with a decarbonisation future, I think there’s lots of known technology, particularly within the sugar arena, that we might consider deploying that will help us ultimately reduce energy and decarbonise.

I can see that Industry 4.0 will also help support alternative, lower carbon emitting fuels. When we start to look at alternatives, I would expect digitalisation to be a part of that process. I can also see us having to be much more flexible in terms of switching between different fuels, particularly as we transition from a carbon emitting business in terms of the fossil fuel that we’re burning, to ultimately one where we’re using clean fuels and we’ve decarbonised.

That’s clearly a few years and decades away but digitalisation will help us through that period and to optimise the decarbonisation aspect of the business. It will also help us to marry that with the commercial and financial side of balancing what fuel to use, when and how to generate electricity, and potentially continue to export some of that energy to the grid.

It’s a challenge, because we’re not quite sure how we’re going to get there but I’m absolutely certain that digitalisation will have a part to play in how we go forward and we will understand that better over the next two or three years.