Measuring Environmental Impact


Measuring Environmental Impact
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Following the Paris Agreement and amid growing sustainability concerns expressed by consumers and regulators, industrial companies from every sector are making pledges to cut carbon emissions and lower their environmental impact.   

Lubricant producers and the companies that supply them are engaged to reach “net zero” and other ambitious milestones, but announcements regarding time frames and measurement methodologies are often confusing or absent. This leads, unsurprisingly in the current context, to skepticism and accusations of “kicking the can down the road.” Meanwhile, regulators—including the Securities and Exchange Commission in the United States—are pushing forward with efforts to require companies to add climate impact data to their regulatory filings.  

These ambitious objectives may not all be part of a voluntary greenwashing intent. An impact measurement problem exists across all sectors of the economy. In an anonymous survey of 1,491 corporate executives across a range of industries, 65% said that while they wanted to make progress on sustainability efforts, they weren’t aware of how to do that. The survey also indicated that measuring progress was seen as a major obstacle, according to a report by Fast Company.  Just 36% said that their companies had measurement tools in place to monitor sustainability efforts, and only 17% said that they were using data from measurement tools to optimize their sustainability strategies. 

A Sectorial Effort 

As the saying goes, “What gets measured gets done.” 

Companies in the lubricants sector all have different targets and timeframes for reaching net zero. This is to be expected, as each company has its own priorities and externalities. However, companies could build significant credibility by joining forces to come up with ways to measure environmental impact.  

“Guidelines and formulas to measure Scope 1, 2 and 3 emissions, life cycle assessments, etc. are widely available from numerous sources,” said Ramesh Navaratnam, business manager-Americas at Patech Fine Chemicals. “The only hurdle is the adaptability to specific processes. The process of grease manufacturing is different from manufacturing metalworking fluids. Or a base oil process is different than that of an additive manufacturer.”

Scope It Out
Most would probably agree that organizations should cut emissions whenever and wherever they can. Understanding the different categories of emissions can help them to do just that. 

Scope 1: According to the United States Environmental Protection Agency, Scope 1 emissions are “direct greenhouse gas emissions that occur from sources that are controlled or owned by an organization.” These emissions can include those associated with fuel combustion in boilers, furnaces, vehicles and more. 

Scope 2: Scope 2 emissions are indirect greenhouse gas emissions that are associated with the purchase of electricity, steam, heating or cooling. Why are these emissions considered indirect when they occur at the facility in which they are generated? In short, they are classified as they are because they are a result of an organization’s energy use.

Scope 3: Scope 3 emissions are the “result of activities not owned or controlled” by an organization, according to the EPA. Rather, these emissions are those that the organization “indirectly impacts in its value chain.” They include all emissions not encompassed by the organization’s Scope 1 and 2 emissions and are sometimes referred to as value chain emissions. 

Given the lubricant industry’s recent evolution, with an increasing number of compositions and uses amid growing demand for technical capacities, both greenhouse gas reduction and measurement of environmental impact can be overwhelming. Even the most straightforward task, like measuring Scope 1 GHG emissions, is quite complex. Further, a company also needs to look at Scope 2 and Scope 3 to have a clear vision of their emissions.  

Scope 2 covers indirect GHG emissions, like electricity purchased from other companies. Scope 3 is the most difficult to identify and address, as it corresponds to the results of all activities from assets owned and controlled by suppliers and other organizations indirectly implicated in the value chain. Regulators are likely to reserve Scope 3 requirements for the largest corporations.  

Companies need to be transparent and work together if they want to come up with a coherent way to measure and compare such efforts. “Lubricant industry organizations like ILMA, NLGI and STLE have all recognized the need to develop better guidelines for this industry,” Navaratnam, who is also the current Secretary of the Independent Lubricant Manufacturers Association’s Sustainability Committee, added. “UEIL has taken a leap forward and has already put out guidelines on how to measure CO2 emissions, as an example.”

Is LCA the Least Imperfect Tool Available?

There are many ways to make a lubricant more sustainable. Impact assessment should, of course, go beyond carbon emissions to include other measures of environmental safety. Biodegradability, for example, has long been a given for lubricants used in remotely operated underwater vehicles that are at risk of leaking into the environment. Now biodegradability is becoming a more widespread feature in lubricants.  

For a more complete environmental impact analysis, what tools can help? The American Petroleum Institute has declared that life cycle assessment, or LCA, should be considered as the reference in the market to evaluate carbon footprints fairly in an effort to compare and improve.  

According to Sphera, a creator of sustainability software, LCA is “the systematic analysis of the potential environmental impacts of products or services during their entire life cycle … You evaluate the potential environmental impacts throughout the entire life cycle of a product (production, distribution, use and end-of-life phases) or service. This also includes the upstream (e.g., suppliers) and downstream (e.g., waste management) processes associated with the production (e.g., production of raw, auxiliary and operating materials), use phase and disposal (e.g., waste incineration).”

Tyler Housel, sales director at the Lexolube unit of Zshimmer & Schwarz, explained: “As we consider the operation more holistically, we begin to focus on different parts of the value equation. This includes energy and waste in the manufacturing process and transportation, and further back to the raw materials and forward to the end of life.” 

Indeed, LCA has a lot going for it. There is a growing demand to consider environmental impact as a multifactorial, dynamic and complex topic. As lubricant producers increasingly focus on reducing emissions, they should continue to increase their efforts to reduce other types of environmental impacts that will be of growing concern in coming years. 

Players in the lubricant sector should engage in an LCA process that is evolutionary. In the mid-2000s, for example, the environmental impact of additives was seen as marginal, since they make up such a small percentage of a formulation. Then studies in the 2010s uncovered cases in which additives that represent 20% of the final formulation could be responsible for as much as 80% of the total environmental impact. 

There are other considerations to take into account, too, like the amount of agricultural land a biobased component requires and the pressure its production puts on the human food chain. Conversion of edible products like soya, sunflower or palm oils as industrial products is no longer considered by many to be sustainable.  

In short, producers should try to consider as many factors as possible under the scope of LCA to be sure that they are not creating new problems when they change production processes or suppliers in their efforts to get closer to net zero. 

Measurement Is an Evolving Process

Even if LCA measures many different criteria—from toxicity to climate change or water depletion—it only considers the environmental footprint or negative impact an activity can have.

Companies in the lubricants industry are constantly trying to improve the performance of their products, and there are clear and common benchmarks and measuring methods for most performance criteria.  

“The most basic role of a lubricant is to make a process or operation proceed more efficiently,” Housel, who is also a member of the ILMA Sustainability Committee, said. “Taken at this level, all lubricants provide a benefit because efficiency is a primary goal under LCA. The value was historically measured by the reduction in energy consumption, waste and wear, minus the price.” 

It is not as straightforward to measure environmental impact, especially in an industry in which it is clearly advantageous to factor in improvements or favorable comparisons involving a product’s “handprint.” 

Handprints are changes to environmental impacts that companies (or individual products) cause outside of their footprints. If a formula change makes the product 50% more effective, that is going to have a positive impact on the efficiency of the end customer’s machines. Thus, the handprint is improved.  

Similarly, if a new formulation makes a fluid last longer, regardless of whether it has an increased biobased component, the handprint is improved.  

A new formulation that swaps a biobased ingredient for a petroleum-based one is likely to improve a product’s sustainability, but that is not a given. If that formulation’s performance is not as good as the previous one’s, the product’s handprint is less impactful.  

The key is finding ingredients that lower a product’s direct environmental impact while maintaining the same performance. 

Keep Environmental Claims Simple 

For now, LCAs generally do not include products’ handprints, though frameworks for doing so have been proposed.  

The industry must work to find the best ways to combine measures of handprint and footprint into a meaningful, industry-standard rating.  There are new initiatives bubbling up every week, it seems, but without a comprehensive, industrywide set of environmental impact criteria, it is hard to decide which ones are worth paying attention to.  

“Over the years, we have seen factors added to the equation in a rather haphazard way.  For example, biobased content and biodegradability each add value, and the magnitude could range from nearly zero to very large depending on the application,” Housel said. “How do we weigh this against differences in price and lubrication performance? Unfortunately, our industry is far from having a perfect measuring stick to determine the absolute LCA value. I am skeptical that we will ever be able to make an exact LCA calculation for a lubricant, but it is important that the industry find common ground.”

Until such industry standards gain wide acceptance, it might be best to keep environmental claims simple. Patech, a maker of specialty lubricants and additives, has shared the following straightforward set of environmental commitments based around production efficiency, developing natural products and performance: 

  • “We continuously improve our production in terms of energy saving, water efficiency, waste reduction and emission reduction. 
  • “We focus on developing natural and biodegradable products, such as environmentally friendly lubricants, and also commit to develop the novel refrigeration oils for the low GWP refrigerant to reduce the impact of global warming. 
  • “In the meantime, we concentrate on providing a higher performance product, which can improve the service life and energy efficiency of customers’ equipment.”

Tools to measure sustainability are available to companies in the lubricants industry, though not all companies are aware of them and they are far from perfect. The challenge for lubricant producers is to find molecules and processes that will simultaneously reduce their environmental footprint while maximizing the handprint, or the performance that helps business-to-business customers and end users improve their own environmental footprint.  

Until industry organizations or regulators come up with common metrics and guidelines as well as a set of best practices to test, implement and measure new initiatives to improve environmental footprints and handprints, environmental claims and pledges should be straightforward and easy to verify.  

Joachim Merziger is chief commercial officer at AFYREN, and Sebastian Anton is director of business development. AFYREN is a French maker of biobased carboxylic acids. Its products are designed as drop-in solutions for existing production processes. 

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