Feature article

A Pioneer’s Journey to Global Carbon Neutrality

In 2018, the news went viral: Denmark’s world-leading manufacturer of plant-based food emulsifiers and plant-based polymer additives had become carbon neutral throughout all of its production sites across the planet. The following article describes why and how this was done.

Carbon or more precisely carbon dioxide (CO2) neutrality describes the target of removing as much of this harmful greenhouse gas from the atmosphere as mankind is putting into it, ultimately achieving a net-zero carbon footprint. Under the Paris Agreement on Climate Change in 2015, almost 200 nations pledged to become carbon neutral by 2050 or earlier to help mitigate global warming. So far, however, only two countries have actually reached or exceeded that goal: Bhutan and Suriname.

From the reduction of fossil depletion to the extensive use of renewable energy and ultimately achieving carbon neutrality, we want to share our expertise and inspire others to follow suit.— Jakob Thøisen, CEO Palsgaard A/S

“Act as if your house is on fire!” was Greta Thunberg’s bitter response as she scolded the world’s nations and organisations for failing to live up to their promises while climate change is picking up speed. However, for a more positive outlook, Palsgaard’s remarkable journey to global neutrality has demonstrated that companies can do a lot better and faster. In 2018, within only eight years after announcing that it was planning to become carbon neutral across its entire production network, Palsgaard had delivered on its commitment – two years ahead of schedule.

Palsgaard's Remarkable Journey To Carbon Neutrality — Palsgaard achieved its ambitious goal of becoming CO2 neutral across all of its six production sites worldwide two years ahead of schedule.

What CO2-neutrality means

For industrial companies, there are basically two ways of achieving net-zero CO2 emissions: One, by eliminating, avoiding or offsetting the total amount of greenhouse gas emissions, where ‘offsetting’ refers to CO2 removal in one place to compensate for CO2 emissions in another place, most typically through the purchase of ‘carbon offset’ certificates. And second, by reducing carbon emissions to zero e.g. by shifting from fossil to renewable energy sources. Both approaches need to include all CO2 emitting processes associated with production and distribution, including transportation and energy consumption.

As part of Palsgaard’s Corporate Social Responsibility (CSR), carbon neutrality is firmly embedded in the Danish company’s sustainability strategy. Anders Brix, Group CEO of Schou Foundation, which owns Palsgaard stated, “Carbon neutrality may still be a rare achievement, but it will soon be the norm. Manufacturers are increasingly facing demands by environmentally conscious consumers and legislators to reduce their emissions.”

Between 2010 and 2018, Palsgaard managed to reduce its net carbon emissions from 12,029 tonnes to zero. CO2 reductions over that period totalled 56,175 tonnes, which is equivalent to the amount produced by 4,885 European households per year.[1] At all of the company’s six production sites in Denmark, The Netherlands, Mexico, Brazil, China and Malaysia, carbon neutrality was mainly reached by implementing advanced heat recovery and insulation techniques as well as by switching from heavy fuel oil to biogas and other renewable energy sources, such as wind and solar power. Offsets were and are being applied only as a last and intermediate resort.

A global strategy with local focus and constraints

The reason for setting the 2020 goal in the first place was that the production of plant-based additives, such as emulsifiers or surfactants, is quite energy-intensive. “Our decision to become carbon neutral and switch to renewable energy sources, wherever possible, was inspired by our founder’s values of responsibility, sustainability and determination,” explains Palsgaard’s CEO Jakob Thøisen. “In the tradition of Einar Viggo Schou, who had invented the commercial food emulsifier in 1917, we wanted to make a lasting contribution to the future of our planet. This meant to reduce our carbon footprint and mitigate the climate effects of our production on no less than a global basis, across all of our plants.”

However, the road to carbon neutrality was quite a different one at each of these sites. On the one hand, Palsgaard was looking to tap available regional sources, from wind and solar power to biogas. On the other hand, the engineers had to acknowledge that the rate of innovation in renewable energy varies throughout the world. In some countries, the existing infrastructure and technology made carbon neutrality rather difficult to achieve without purchasing offsets.

Not so in Denmark at the company’s headquarters in Juelsminde. The site was a natural starting point for reducing emissions on a greater level, also because it was using the most energy at the time. Some major changes had already been implemented before 2010, such as straw-fired central heating and industrial boilers conversion from heavy fuel oil to natural gas. With heat exchangers for process heat recovery, certified wind energy, low-energy lighting and process insulation, the factory set the pace for all other sites and became carbon neutral in 2015. The annual emission reduction amounts to 16,000 tonnes of CO2 or the equivalent of 4,200 households.

The second site to become carbon neutral was San Luis Potosí in Mexico in 2016, followed by Zierikzee in The Netherlands. At both locations, Palsgaard had made significant investments to upgrade the sustainable energy infrastructure, including the installation of hundreds of solar panels. In addition, the company purchased carbon offsets to compensate for its remaining CO2 emissions from liquefied petroleum gas consumption and electricity obtained from non-renewable sources. In contrast, the continued use of fossil fuels at the Dutch factory would have resulted in 1,300 tonnes of CO2 emissions per year – the same as produced by 165 Dutch households. Today, the plant is running solely on renewable energy. At San Luis Potosí, the achievement has put Palsgaard far ahead of the Mexican national target of 35% clean energy by 2024.

These milestones were then completed by the plants at Marechal Cândido Rondon (Brazil), Shanghai China) and Nusajaya (Malaysia) in 2018. Achieving carbon neutrality in Malaysia presented a major obstacle since the infrastructure for renewable energy and biogas in the country was not substantial enough to ensure reliable power production on-site. For this reason, Palsgaard has been purchasing CO2 offsets from the United Nations Carbon Offset Platform, which is governed by the United Nations Framework Convention on Climate Change (UNFCCC). The UNFCCC initiative offers UN certified emission reductions (CERs) that contribute to climate-related projects in developing countries. With this offset solution, the company’s CERs help fund two wind energy projects in India.

Jakob Thøisen comments: “All these accomplishments took ‘heart’ work from our people and a focus on innovation, keeping our eyes on the goal in line with our Corporate Social Responsibility.”

At Palsgaard’s main site in Denmark, all electricity is sourced from wind, and indoor heating is powered by burning home-grown straw rather than oil.

840 solar panels were installed to help Palsgaard’s site in The Netherlands become carbon neutral in 2017

Leader in Sustainability

Palsgaard has a long history of social and environmental responsibility, which is laid down in its CSR. “Our activities extend to over 100 countries, but we always bring with us a firm commitment to sustainability. That’s part of our brand and ethical business conduct in line with the principles of the UN Global Compact,” adds Thøisen. Palsgaard’s CSR work is also framed by commitments to the Roundtable on Sustainable Palm Oil (RSPO), the Supplier Ethical Data Exchange (Sedex), the Business Network for Social Responsibility (VFSA), the European Food Emulsifiers Manufacturers Association (EFEMA), and EcoVadis.

Towards industry-wide CO2-neutral supply chains

Palsgaard is also actively monitoring and influencing the sustainability of its upstream partners. Likewise, it is encouraging its customers to join the quest for carbon neutrality by sharing its renewable energy solutions and other ‘green’ approaches. The ultimate goal is to implement industry-wide CO2 neutral supply chains from the plant sources to the final products.

The company’s plant-based polymer additives can be seen as instrumental in achieving this e.g. in packaging. Plant-based additives are not just ‘naturally’ more sustainable when produced at carbon-neutral sites. They also help converters and end-users lighten their carbon footprint when compared with fossil-based synthetic additives. In many cases, they can even reduce the required content in plastic formulations without compromising food safety or end-of-life recycling.

In terms of sustainability, all of Palsgaard’s products are sourced from bio-based, non-animal raw materials, such as rapeseed to sunflower, coconut and other vegetable oils. Where the company uses palm oil, it relies exclusively on supplies recommended by the Round Table of Sustainable Palm Oil (RSPO), enabling it to offer its complete portfolio as mass balance (MB) or Segregation (SG) certified. The MB scheme verifies the content of RSPO certified palm oil along the entire supply chain. The SG model makes sure that the oil is sourced exclusively from Identity Preserved (IP) certified mills.

Moreover, the strive for reducing food losses in a hungry world requires packaging solutions capable of extending the shelf-life of products. With a full range of food-grade and bio-based, animal-free polymer additives building on more than 100 years of expertise in plant-based emulsifiers, Palsgaard is actively addressing these needs. The company’s Einar® range of anti-fog and anti-static surfactants, slip additives, ageing modifiers, mould release agents and dispersing aids offers brand owners, converters and end-users in the plastics industry a superior and responsible choice in line with consumer demands and strict regulatory requirements.

“From the reduction of fossil depletion to the extensive use of renewable energy and ultimately achieving carbon neutrality, we want to share our expertise and inspire others to follow suit,” notes Thøisen.

Palsgaard’s bio-based polymer additives are exclusively derived from animal-free and edible plant sources.

Still neutral in 2019 and moving forward

The CO2 neutral status of Palsgaard’s six global production sites has been reaffirmed by Deloitte Statsautoriseret Revisionspartnerselskab (Copenhagen) in 2019. Deloitte is a world-leading independent provider of audit and assurance, consulting, financial advisory, risk advisory, tax, and related services. It has certified that the company’s factories have successfully offset their consolidated carbon emissions related to electricity consumption and natural gas consumption.

Moving forward, Palsgaard has scheduled to double its total production capacity by 2023, but in doing so aims to stay carbon neutral by continually searching for innovative ways to further reduce the environmental impact of its operations. Plans to upgrade and expand existing facilities also include a new solar power plant at Juelsminde. However, more than the use of renewable energy sources or energy-saving lighting options, a lot of consideration goes into the design of each production step and the selection of each process technology to maximise the feasible cost, product and environmental benefits – for the company, its customers and the planet.

“We’ve come a long way since 1919, when our first emulsifier factory was established in Denmark,” says Jakob Thøisen in closing. “And while we may have reached our 2020 CO2 neutral production goal early, the journey to improve the sustainability of our production processes will continue.”

[1] Diana Ivanova et al., “Mapping the carbon footprint of EU regions”, Environmental Research Letters 12 (2017) 054013, IOP Publishing, https://iopscience.iop.org/article/10.1088/1748-9326/aa6da9/pdf)

A Pioneer’s Journey to Global Carbon Neutrality

What CO2-neutrality means

A global strategy with local focus and constraints

Leader in Sustainability

Towards industry-wide CO2-neutral supply chains

Still neutral in 2019 and moving forward

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