Reduce carbon footprint in packaging coatings value chain

AkzoNobel was the first Paints and Coatings company to have SBTi approved carbon reduction targets in line with the 1.5 degree C scenario for its own operations and value chain. It is expected to be valuable for the ecosystem to explain how the carbon reduction plans were developed for the packaging coatings value chain.

For Scope 3, action was taken by increasing the more sustainable product offering, by innovating for the development of new, more sustainable solutions and by engaging with the suppliers and customers around the world to collectively find solutions towards AkzoNobel’s target of halving carbon emissions in the company’s value chain by 2030, using 2018 as the baseline. Collaboration with the company’s value chain partners is key to collectively decarbonize. During 2023, the company continued to integrate sustainability and innovation into its daily business to work towards its ambitions.

AkzoNobel developed a detailed plan for 2030, starting with developing the baseline for their different value chains. This includes the carbon footprint of purchased goods and services (upstream), own operations, and clients (application and use of products, and end-of-life, i.e. downstream)

This overview is updated on an annual basis and while AkzoNobel’s operations made up around 2% last year, they’ve now reduced this to 1% because of carbon reductions in their Scope 1 & 2 (38% vs 2018 baseline). In AkzoNobel’s own operations, energy was reduced by 7%, and 100% renewable electricity is now used in several countries, such as the USA and countries in Europe.

When it comes to reducing carbon emissions across AkzoNobel’s coatings value chain, first the baseline was established. The CEPE and Ecoinvent databases were used to define the carbon footprint of the raw materials. For the energy used at can coaters key value chain data was calculated, based on data from industry associations, and customers. This way the value chain now has clarity on the carbon footprint across the value chain, which makes it easier to define where to focus AkzoNobel’s carbon reduction efforts.

Then the team defined four key levers that should help to achieve the 50% carbon reduction. These levers are:

1. Energy transition

2. Process efficiency

3. Reduced solvent emissions

4. Circular solutions

Projects related to the value chain reductions are grouped under these four key levers in AkzoNobel’s reporting to enable all stakeholders to better understand the impact of these levers.

Then cross functional teams came together to brainstorm on potential projects per lever, per segment and per region. These projects were then quantified, and discussed with other players in the value chain, to define what projects should be worked on. Examples under these four levers are:

• Energy transition: for example, moving to the second generation BPAni inside spray coating can reduce the carbon emissions by around 30% versus conventional Epoxy inside sprays, because of the use of acrylics instead of epoxies

• Process efficiency: for example, decreasing the curing temperature, or moving to alternative -more efficient- curing methods

• Circular materials: for example, moving to biobased raw materials, this can be both C14, or mass balance biobased

• Lower VOC: for example, through the development of water-based products (with a 45% reduction in carbon emissions from VOC with AkzoNobel’s latest generation of beverage ends external coatings compared to current solvent-based product), or through the use of bio-based solvents were water-based is not an option

For packaging coatings, after quantifying the impact per project, and testing the feasibility with value chain partners, AkzoNobel identified key projects to work on. One example is the Product Carbon Footprint data that they share with AB InBev to align on opportunities to reduce carbon footprint together. By sharing their approach, key carbon reduction projects, and carbon footprint per product AkzoNobel enables their value chain partners to choose projects and together reduce the carbon footprint.

To stay within the 1.5 °C global warming limit companies will have to collaborate and share best practices, therefore AkzoNobel much appreciates this opportunity to learn from other players in the packaging value chain, and share how they work on their carbon reduction plans, and ensure they are integrated in the business strategy.

Sustainability impact

Climate

Scope 1, 2, 3 (purchased goods & services, end of life treatment, processing of sold products, use of sold products, CF from solvent emissions)

Overall emissions data from AkzoNobel:

• AkzoNobel expects 50% reduction in Scope 1,2,3 vs 2018 baseline in 2030

• In 2023, AkzoNobel achieved 9% reduction in Scope 3 vs the 2018 baseline in 2030

Overall 2023 results, for AkzoNobel:

• 38% carbon emissions reduction achieved in Scope 1 & 2 since 2018 (target is 50% by 2030)

• 62% of energy consumed in Scope 1&2 is from renewable sources (target is 100% by 2030)

• 7% energy reduction in Scope 1&2 since 2018 (target is 30% by 2030)

This initiative contributed to the above emissions reduction results.

Business impact

Benefits

During 2023, AkzoNobel continued to integrate sustainability and innovation into their daily business to work towards their ambitions. Sustainability is key to achieving their business targets, and sustainability targets are embedded in their board’s incentive program (20% of the Board of Management’s long-term incentive is linked to environmental, social and governmental (ESG) goals, including energy use and renewable electricity).

In the company’s own operations, energy was reduced by 7%, and 62% of energy consumed in Scope 1& 2 is from renewable sources.

This initiative contributed to the above energy reduction results.

Costs

• Operating Expenses (OPEX): The main costs of developing the carbon reduction plans were in FTE; carbon expertise, product expertise, business expertise and analyses were required, as well as time commitment from all other functions across the company.

• Capital Expenses (CAPEX): The main financial investments were, and will be, in the execution of the carbon reduction plans, for example in building a plant for the second generation BPAni products (€32 million in a new plant at the existing Vilafranca site in Spain) and in the research and development of circular materials and products that allow for alternative curing methods/ temperatures and process efficiency.

Indicative abatement cost

No direct abatement cost incurred by the business

Impact beyond sustainability and business

Co-benefits

• Engagement; colleagues shared that they appreciate AkzoNobel taking action on sustainability and putting their money where their mouth is by investing in more sustainable products and innovations.

• External rating agencies: AkzoNobel achieved a Platinum Ecovadis score, AAA MSCI rating and low risk Sustainalytics rating.

Typical business profile

All businesses

Approach

Companies can leverage the approach AkzoNobel has taken for their own operations as well as the value chain:

1. Start developing a baseline, for example by using existing databases (e.g. Ecoinvent database)

2. Define relevant carbon reduction levers. For example, in AkzoNobel’s case: (i) moving to the second generation BPAni inside spray coating can reduce the carbon emissions by around 30% versus conventional Epoxy inside sprays, because of the use of acrylics instead of epoxies, (ii) process efficiency: for example, decreasing the curing temperature, or moving to alternative -more efficient- curing methods. (iii) Circular materials: for example, moving to biobased raw materials, this can be both C14, or mass balance biobased. (iv) Lower VOC: for example, through the development of water-based products (with a 45% reduction in carbon emissions from VOC with AkzoNobel’s latest generation of beverage ends external coatings compared to current solvent-based product), or through the use of bio-based solvents were water-based is not an option.

3. Brainstorm on projects for the value chain. For example, in AkzoNobel’s case, products made with alternative raw materials with a lower Product Carbon Footprint such as its BPAni beverage can coatings.

4. Quantify the projects

5. Test them with the value chain

6. Create an action plan (including incentives)

7. Report progress, and review and adjust where needed

Stakeholders involved

Internal Stakeholders

• Procurement

• R&D

• Sales

• Marketing

• Finance

• Sustainability

• Operations

• HSEs

External Stakeholders

• AkzoNobel’s value chain

• SBTi organization

Key parameters to consider

Making the draft plans, to be validated with the value chain, took around a year.

Implementation and operations tips

Organize trainings for all functions, to help them understand carbon footprint, Scope 1,2, 3, carbon reduction levers and how they can contribute to achieving the goals.

Ensure buy-in from the top, and incentives for different functions (this does not have to be monetary, it can also be additional training opportunities, increased responsibilities, and -perhaps most important- compliments)