In 2015, we launched our ambitious “Climate Strategy 2030”, which requires us to reduce our own energy intensity and CO2 intensity by 50% before 2030. To achieve these goals, we have set in motion a number of measures to further reduce our energy consumption and drive greener technology investments in buildings and processes.
We have chosen not to buy our way to carbon neutrality, but rather to put our money where our mouth is with our own solutions. We take a very practical approach, showing that we can reach ambitious energy and climate targets with existing technology. This fits with our growth themes: Infrastructure, Food, Climate, and Energy, and provides the backbone and license to engage in the public debate and offer quality solutions to our customers, which are reliable in the long run.
Danfoss Climate strategy goals
Putting a price on carbon
Danfoss is committed to set an internal price on carbon in accordance with the United Nations’ “Business Leadership Criteria on Carbon Pricing”. A framework is currently being developed, and we strive to implement it in selected areas of the organization during 2017.
Energy-saving projects in buildings
In 2016, we continued the implementation of energy-saving projects at the 27 largest factories worldwide, accounting for 84% of Danfoss’ total energy consumption. Half of the energy consumed is used for buildings, and the rest is used in production processes. The annual energy consumption in these buildings amounts to more than 245 MWh, of which 30% can be saved. Half of the expected energy savings was achieved in 2016, and the remaining savings will be effective in 2018.
Energy consumption and CO2 emissions
Since 2007, Danfoss’ energy intensity was reduced by 40% through energy-saving projects in the largest factories. Energy productivity has in the same period improved by 67%.
In 2016, Danfoss emitted 233,716 tons of CO2 as a result of its electricity and heat consumption compared to 234,400 tons in 2015. The sources were both scope 1 emissions (its own plants for the generation of power and heat) and scope 2 emissions (purchase of power and heat from external sources).
The CO2 intensity of the energy used in 2016 increased slightly to 410 kg CO2/MWh. The main cause for the increase is increased electricity consumption in countries with high carbon intensity in the electricity supply. The energy intensity fell 6% to 14.5 MWh/DKKm in 2016 versus 15.4 in 2015. This is caused by a 3% decrease in the total energy consumption combined with a 3% increase in net sales.
Supply chain emissions
As a global company, we have a global and diverse supply chain. Approximately 4,000 suppliers of direct materials supply their products to Danfoss, driving energy consumption and greenhouse gas emissions.
The global emissions amount to 782,000 tons CO2, which is 3.5 times the emission from Danfoss’ own processes and buildings. The largest sources of emissions are turned or cast metal parts (60%), electronics and electromechanical parts (18%), and plastics (13%). An in-depth analysis will be made in 2017 to prioritize improvements and supplier collaboration.