How can process electrification decarbonize the CPG industry?

CPG is an essential industry with a large carbon footprint

The consumer packaged goods (CPG) industry is a cornerstone of daily life. It produces essential products that consumers rely on, such as food, beverages, and household goods. However, its fossil-fueled, energy-intensive manufacturing processes are a major contributor to global greenhouse gas (GHG) emissions. Reducing the sector’s negative environmental impact is a challenging undertaking because companies must shrink their carbon footprint while also avoiding costly production disruptions that negatively impact customers, their supply chain, and financial margins.    

Delaying sustainability initiatives is bad for the planet and for business  

Sustainability improvements protect the environment, while also bringing business advantages. According to recent research, investors and consumers are taking company’s environmental, social, and governance (ESG) efforts into account when making their purchasing and investment decisions. CPG is a highly competitive industry, so companies benefit from any positive differentiator.

Increasing decarbonization efforts and improving environmental transparency also helps CPG companies comply with evolving government regulations. For instance, the EU’s Corporate Sustainability Reporting Directive (CSRD) requires regular reporting on emissions and resource usage.

Electrification is one of the most efficient ways to decarbonize the CPG industry 

While initial energy efficiency measures can provide some sustainability relief, they often fall short of delivering the substantial carbon reductions needed to meet decarbonization goals. Energy efficiency measures typically focus on quick-payback measures (under three years) to lower fuel usage and emissions. These efforts generally achieve less than 10% emission reductions.

To make a more significant emissions reduction, CPG companies should consider decarbonization measures like electrification — the replacement of fossil fuels with electricity in industrial processes. It has emerged as one of the CPG sector’s most efficient and effective decarbonization methods.

Utilities (i.e., steam, cold, and HVAC) are a good entry point into electrification. Some of the main advantages of starting with utilities are:

• Utility electrification can have a large environmental impact, as most of Scope 1 emissions today come from processes to heat or chill water.
• Utilities’ temperature range is compatible with established electrification technologies.
• Utility electrification involves lower risks than other starting points because utilities do not require significant alterations to industrial processes.
• Electrification solutions can efficiently substitute or complement conventional heat generation.

Multiple efficient options to electrify are already available as mature technologies, for example, industrial heat pumps, mechanical vapor compression, or e-boilers, and the challenge is to find techno-economically viable solutions

Electrification in practice 

How a large pharmaceutical company is using electric chillers to reduce natural gas use  

A large pharmaceutical company engaged Schneider Electric’s Process Electrification Consulting team to perform a study of one of its sites. The site’s combined heat and power (CHP) units were reaching the end of their lives, and the client wanted to understand where to invest to meet their decarbonation targets while maintaining their profits..

The site had been relying on 2 CHPs to generate electricity for the plant. Steam was produced and considered a “free commodity.”  The site relied on three absorption chillers that essentially used the steam produced from two CHP units to chill water for the process. Operational efficiency was measured to COP = 1.1 (ratio of useful cooling energy on work energy required to produce it).

Based on the analysis of steam usage in the process, it was found that the steam demand could be halved using efficient direct electrification, especially for chilled water production. This would save the steam production of 1 CHP unit (10t/h), which could be substituted with electricity purchased from the grid, with the following balance:

Before: NG consumption 2 x 130GWh/Elec consumption 30GWh -> TOTAL Energy : 290GWh 
After:    NG consumption 130GWh/Elec consumption 80GWh -> TOTAL Energy : 210GWh 

Strategic electrification 

In another instance, Schneider Electric’s Process Electrification Consulting team simulated a reference production site for a client, assessing potential electrification configuration, storage, and participation in energy markets (wholesale market). The site originally relied on a single natural gas boiler to produce steam and hot water. We simulated opportunities that could result in installing an additional e-boiler, heat pump, and thermal storage on this site. We also optimized the fuel source based on wholesale markets, using EMS.

The result: The simulation showed that this scenario could lead to a 20% reduction in fuel costs and a 15% CO2 reduction. Balancing service participation could even bring increased financial benefits.

Details of this project can be found in this video of the presentation I delivered at Hannover Messe.

Expert guidance provides a clear project roadmap 

Electrification involves more than simply upgrading equipment. It requires thoughtful planning, infrastructure modifications, and alignment with the site’s overall energy objectives. CPG companies get the most out of their electrification initiatives when they work with trusted electrification experts who can provide the technical, financial, and operational insights needed to navigate electrification effectively. From initial site assessments to project implementation, a comprehensive roadmap can mitigate risks, maximize benefits, and position companies as leaders in sustainable operations.

For example, companies need to assess factors such as the feasibility of electrification based on available resources and site-specific conditions. They also need to determine whether the existing grid can support the required power demand.

Discover how CPG companies are already benefiting from process electrification

Process electrification is an opportunity to future-proof CPG operations while achieving meaningful decarbonization.

Read this eBook to learn more about why electrification is a smart decarbonization solution for the CPG companies. The eBook includes case studies that demonstrate real-world electrification opportunities. Start your electrification journey today.