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SMART PLANNING FOR CLIMATECHANGE & THE SUSTAINABILITYIMPERATIVE Owen Glubiak, NativeEnergy, Inc. Greg Strong, Spring Hill Solutions, LLC Morgan Wolaver, Otter Creek Brewing CompanyCraft Brewer’s ConferenceApril 24, 2009
Smart Planning for Climate Change &the Sustainability ImperativeWhy pay attentionControl Costs/Energy Security Be Prepared Sell More Beer! How to do itAssessing and Mitigating Impact Planning Strategically Who’s doing it
“We are facing a challenge that will affectall aspects of human activity for decadesto come. It will affect trade and investmentdecisions. It will reshape the competitivelandscape.”Dr. Gro Harlem BrundtlandSpecial Envoy to theUN Secretary-General on Climate ChangeBali, December 10, 2007Source: Reuters
I have solid proof that Global Warming is real
U.S. Temperature and PrecipitationChanges by 2030.Source: Intergovernmental Panel onClimate Change (IPCC)
Cost Increase: Future OutlookEnergySource: Department of Energy (DOE)Lack of supply meeting demand EIA forecasts 17% increase in average price Agriculture: HopsDecrease in yields Past price increases with supply shortageSource: U.S. Climate ChangeScience Program WaterEPA looking to upgrade infrastructure Hundreds of Billions Cost passed to consumer (Direct & Indirect) Source: Environmental ProtectionAgency (EPA)
The Guinea PigsNew Belgium Brewery475,000 Barrels of beer produced (2007) Location: Fort Collins, Colorado Category: Regional Craft Brewery Otter Creek Brewery30,000 Barrels of beer produced (2007) Location: Middlebury, Vermont Category: Microbrewery
Balance Sheet: Energy, ClimateChange, WaterNew Belgium BreweryElectric ( 120,000)Water( 650,000)Hops( 640,000)
Balance Sheet: Energy, ClimateChange, WaterOtter Creek BreweryElectric ( 12,500)Water( 47,000)Hops( 200,000)
Sell More Beer
Sell More Beer: Coffee vs. BeerCoffeeSource: American Journal forAgricultural EconomicsConsumers awareness for fair trade/organic logo’s on coffee.Growing at 40% per YEAR Willing to pay price premium: 0.20 per pound Actual Premium: Fair trade- 1.50 per pound Organic- 3.00 per poundDemographics: ages 18-30Beer Demographics51% beer drinkers b/w ages 21-34 Affluent 48% prefer premium quality beers Source: Scarborough Research of NY
Be Prepared: Climate RegulationCurrently in Massachusetts: Mandatory Greenhouse Gas Reporting Regulation (310 CMR7.71)Facilities with stationary sources of air emissions that collectivelyemitted more than 5,000 tons of carbon dioxide equivalents(CO2e) (approximately 450,000 gallons of #2 oil)Proposed regulations by the U.S. EPA: Facilities with stationary sources of air emissions that collectivelyemit more than 25,000 tons of CO2eEqual to emissions from 2,200 homes, 58,000 barrels of oil, or131 rail cars of coalBased on GHG emissions from 2010
Carbon Offsets ØA Strategic Tool for EngagementCraft Brewer’s Conference (Boston)April 24, 2009
What Is An Offset ?
Schrack Farm - Manure DigesterSpent 2MM for new barns in 2001Couldn’t get sufficient financing tosecure USDA matching grantsOffset purchases helped with 13%of project cost. Made it happen.Pennsylvania family dairy since 1774800 Cows generating 1000 MWh/yrReducing 2937 tons CO2-e/year
Emissions (Thousands of Tons)A Brewer’s Approach2520Inbound Freight15Outbound FreightTravel & Transport10Natural GasPropane5ElectricityOffsets Purchased‐FY '03FY '04FY '05FY '06FY '07*
How To Get ROI With Offsets19Generally, the process involves the following steps:1) Measure emissions 2) Set offset goals within a climate change strategy –?3) Clarify expectations about the benefits of offsetting versus makingreductions internally4) Explore the range of offset offerings5) Choose offset providers6) Communicate your actionsOffsetting Emissions: A Business Brief on the Voluntary Carbon MarketSecond Edition February 2008Business for Social Responsibility
How To Get ROI With Offsets20Generally, the process involves the following steps:1) Measure emissions -Offsetting Emissions: A Business Brief on the Voluntary Carbon MarketSecond Edition February 2008Business for Social Responsibility
How To Get ROI With Offsets21Generally, the process involves the following steps:1) Measure emissions 2) Set offset goals within a climate change strategy –?Offsetting Emissions: A Business Brief on the Voluntary Carbon MarketSecond Edition February 2008Business for Social Responsibility
Offsets in Business - Strategy22Brand Identity(Interface, ClifBar, Ben & Jerry’s,Stonyfield, GMCR)Stakeholder Relations- Employees(Timberland, Mohawk Paper)- Customers(Aveda, ClifBar, Stonyfield, GMCR)Enhance Reduction ProjectROI vs Offset CostsCIGETARTSRegulatoryRequirement- EU/CA/RPSEULAVGaining CarbonMarket ExperienceCorporate GHG reduction or GreenPower commitment- EPA Green Power Partner or Climate Leaders
How To Get ROI With Offsets23Generally, the process involves the following steps:1) Measure emissions 2) Set offset goals within a climate change strategy –?3) Clarify expectations about the benefits of offsetting versus makingreductions internallyOffsetting Emissions: A Business Brief on the Voluntary Carbon MarketSecond Edition February 2008Business for Social Responsibility
How To Get ROI With Offsets24Generally, the process involves the following steps:1) Measure emissions 2) Set offset goals within a climate change strategy –?3) Clarify expectations about the benefits of offsetting versus makingreductions internally4) Explore the range of offset offeringsOffsetting Emissions: A Business Brief on the Voluntary Carbon MarketSecond Edition February 2008Business for Social Responsibility
Help build “real time” purchases35 Projects
How To Get ROI With Offsets26Generally, the process involves the following steps:1) Measure emissions 2) Set offset goals within a climate change strategy –?3) Clarify expectations about the benefits of offsetting versus makingreductions internally4) Prioritize offsets’ desired attributes5) Explore the range of offset offerings6) Choose offset providersOffsetting Emissions: A Business Brief on the Voluntary Carbon MarketSecond Edition February 2008Business for Social Responsibility
Check The Guides Tufts Climate Initiative-Study of 13 world wide offset providers, NativeEnergyTop 4 overall,overall Top ranked US company Consumer’s Guide to Retail Offset Providers-Top tier rated provider out of 30 reviewed, Top 3 in US Carbon Offset Provider Evaluation Matrix- 92% score and “Most Recommended”#1 Ranking
Pioneer in Climate-Solutions28Founded in 2000Shelburne, VTNativeEnergy isa pioneer in theUS voluntarycarbon market– in terms ofearly entranceand thedevelopment ofa uniquefunding modelfor new offsetprojects.U.S. Founding MemberInternational Carbon Reduction and Offset Alliance
Conservation, Efficiency & Offsetting29
How To Get ROI With Offsets30Generally, the process involves the following steps:1) Measure emissions 2) Set offset goals within a climate change strategy –?3) Clarify expectations about the benefits of offsetting versus makingreductions internally4) Explore the range of offset offerings5) Choose offset providers6) Communicate your actionsOffsetting Emissions: A Business Brief on the Voluntary Carbon MarketSecond Edition February 2008Business for Social Responsibility
Communicating Your Actions Walk the Talk, then Talk theWalk Engage Employees. Makesure they understand yourobjectives and commitment. Involve other stakeholders –risk managers, bankers, theBoard Be explicit – not vague – inall communications particularlyto clients OR run the risk ofgreenwashing.
Otter Creek Brewing Inc.REDUCING CARBON FOOTPRINT REDUCING OPERATING EXPENSES
ASSESSMENT AND ACTIONSCarbon Footprint AssessmentEnergy Efficiency UpgradesRenewable EnergyRecycling: paper, glass, spent grainWaste ReductionLocal EconomyMessaging/MarketingProviding a Voice on PolicyZero Carbon Footprint
CARBON FOOTPRINT ASSESSMENTON GOING ANALYSISMETHOD DEPENDS ON BUDGETINTERNAL: Direct CO2 emissions onsite INTERNAL/EXTERNAL: Direct & Indirect emissionscreate through energy use ENVIRNOMENTAL ACCOUNTING: Grain toConsumer.
OTTER CREEK ANNUALCARBON FOOTPRINT (1 of 2)OCB Annual Carbon FootprintCattle Methane7%EmployeeCommutes10%Boiler rt17%Input Transport22%RefrigerantGasPurchased 7%Electricity7%
OTTER CREEK ANNUALCARBON FOOTPRINT (2 of 2)ANNUAL EMISSIONS (lbs CO2 equiv.)SCOPE 1 EMISSIONSBoiler FuelPropaneMechanical CarbonationRefrigerant GasSCOPE 2 EMISSIONSPurchased ElectricitySCOPE 3 EMISSIONSInput TransportBeer TransportEmployee CommutesCattle MethaneManufacture of Purchased MaterialsWaste DisposalCARBON FOOTPRINT REDUCTIONSBiodiesel boilerFree-air coolingEfficient lightingHeat recovery from ,427BEER SERVING FOOTPRINT35,000 barrels per year31 gallons per barrel10.67 beers per gallon11,573,333 beers per year2,717,640 lbs CO2 per year0.23 lbs CO2 per 12 oz.beernumber low, missing mfg & waste disposalnot complete303,666118,98743,1208,324133,235OTTER CREEK CO2 REDUCTIONS ARE EQUIVALENT TO:25.3 car equivalents removed from roador35.4 acres of tress planted
ENERGY EFFICIENCY (1 of 2)Pumps – high efficiencyCoolers – microprocessor controlled unitsLighting – reduced units, high efficient tubesHeat Exchanger - glycol, larger liquor tanksAir Compressors – VFD, larger tanks
ENERGY EFFICIENCY (2 of 2)UPGRADES SAVINGSUPGRADECOSTOutside AirFan MotorsVFD CompressorT5 Lighting 3,41881813,05011,988TOTAL Spent grains otherCraftboard Payback(years)Tons CO2Reduced .1 mwh 9,7583.05630,000 82,0005,0000.4?.
RENEWABLE ENERGYBiofuels (diesel, ethanol)Biomass (wood, grass, etc.)Solar PVWindDigesterOther: algae, hydrogen, solar steam
RENEWABLE ENERGYPOTENTIAL OTTER CREEKSYSTEMCOSTCHP SystemBiomass PelletsWaste Digestor 1.25M ( 2.0M) 2.75M( 3.5M)AnnualSavingsAnnualSavings75% 90% Biodiesel favorable for CO2 reduction but no cash savingsSolar or wind are not as favorable options for our locationWood Pellets - Creates local but doesn't eliminate BOD issues/costDigestor - Eliminates BOD loading but more upfront cost155,000205,000Payback(years)812Tons CO2Reduced700850
RECYCLINGGlass – Separate container, crushed has more valueCardboard – Separate container broken down,baled has more valuePaper & Plastics – Mixed containers. Haulers mayprovide separate containers.Food Waste – Compost employee food if possiblefor brewery land or for employees to take homeSpent grains, hops & yeast– Animal feed, commercialcompost, blend with pellets for boiler.
WASTE REDUCTIONMake convenientMaking part of Company Mission Statement createsEmployee ownership.Reductions implemented in SOPEvaluate monthly as part of Operating BudgetShare savings with employees
LOCAL PURCHASINGLOCAL ECONOMYSpend Locally - 1 spent locally is equal to 3spent in the community that buys your beer.Low Lying Fruit - Pint glass printing, T-shirt printing,rebuilt pallets, brewing ingredients (work withfarmers), sell local cheese in retail storeReduces transport emissions
MESSAGING/MARKETINGSustainability – added value to produceLeverage – mediaMission Statement – message to consumersValues Statement – for employees to buy in.Participate – Local events (Green-Up Day)
PROVIDING A VOICE ON POLICYCommunicate - to local and federal legislators.Push - to set aside grants, low interest loansDemand – reduction in emissionsInvite – government to your brewery or brewpubYour Voice is Your Vote
ZERO CARBON FOOTPRINT
Take – Away’sWhyCosts 80/20 Regulation HowPlanning Strategically Conservation, Efficiency, Offsetting
Questions ?Owen GlubiakNativeEnergy Inc.802.861.7077 x213owen.glubiak@nativeenergy.comGreg StrongSpring Hill Solutions LLC802.864.2372greg@springhillsolutions.com
Biodiesel boiler 118,987 Free-air cooling 43,120 Efficient lighting 8,324 Heat recovery from exchanger 133,235 OTTER CREEK CO2 REDUCTIONS ARE EQUIVALENT TO: 25.3 car equivalents removed from road or 35.4 acres of tress planted BEER SERVING FOOTPRINT 35,000 barrels per year 31 gallons per barrel 10.67 beers per gallon 11,573,333 beers per year
