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IRBEA ANNUAL CONFERENCE 2018DIAGEO’S BIOENERGY EXPERIENCE
SIMON SHANNON – SPM UTILITIES AND INDIRECTS
21 February 2018 Irish Bioenergy Association1
Simon Shannon
DIAGEO IRELAND – AT A GLANCE
Slide 2 of 17
Simon Shannon
DIAGEO IRELAND – AT A GLANCE
€1 BillionExports to 150 Countries
€275 MillionSpent on Goods and Services
from Irish Suppliers
1,200People Employed Directly
130,000 Tonnes / Yrof Irish Barley for St. James’s Gate
Largest purchaser of barley in Ireland
13% of Ireland’s domestic
production of barley
275 Million litres / Yrof Irish milk for Baileys
Largest purchaser of dairy products, excluding co-ops
5% of Ireland’s domestic milk
production
HEADLINE FIGURES
STRONG RELATIONSHIP WITH IRISH AGRICULTRURE
Slide 3 of 17
SUSTAINABILITY COMMITMENT
Diageo’s Annual Report contains a Sustainability and Responsibility Addendum that reports on progress against a suite of CSR Targets.
https://www.diageo.com/pr1346/aws/media/3944/diageo-2017-sustainability-and-responsibility-performance-addendum.pdf
ALCOHOL IN SOCIETY
BUILDING THRIVING COMMUNITIES
ENVIRONMENTAL IMPACT
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CLIMATE CHANGE – BUSINESS IMPACT
IMPACTS OF CLIMATE CHANGE ON MARKET DYNAMICS:• Raw Materials (cereals etc.) impacted by environmental conditions.
• Water scarcity.
• Unpredictable weather conditions impact on Supply Chain Logistics (finished goods, ingredients, components, process aids).
• Mitigation measures create value for Shareholders:– Cost savings resulting from energy reduction and sourcing of alternative fuels.– Leading companies in the Dow Jones Sustainability Index outperform the Dow Jones Industrial
Index.
Is one of 50 Global Corporates to sign a declaration to G20 leaders prompting bold
action on Climate Change
Retained CDP A Rating for Water & Climate (1 of only 25
companies to do so)
Ranked in Top 100 most Sustainable Companies by
Corporate Knights
Signed up to RE100, committing to sourcing 100% of electricity
from renewable sources by 2030
Ranks in the top 10% of businesses in the Dow Jones Europe Sustainability Index
DIAGEO ….
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GHG EMISSIONS TARGETS – PROGRESS TO DATE
Reduce absolute greenhouse gas emissions from direct operations by 50%
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APPROACH TO REDUCING GHG EMISSIONS
• “One Size Fits All Solution” is not appropriate for a multinational company with a global supply footprint.
• Approach:
– Focus on reducing energy demand first.
– Then assess alternative Energy Supply solutions – focussing on largest emitters.
– Consider wider societal / environmental benefits, e.g. gas to site?
• Bioenergy Case studies:
– Scotland
– India
– North America
• Different regions present different challenges and opportunities.
Slide 7 of 17
• Roseisle Distillery opened in 2010, and was the first major distillery to be built in Scotland in 30 years.
• Investment of £17M in an onsite bioenergy plant.
• First Malt Whiskey Distillery to generate significant renewable energy from its Co-Products.
• Offset 13,000 T CO2 per annum.
• Approx. 50% of the distillery’s energy is from renewable sources.
BIOENERGY SOLUTIONS FOR REDUCING GHG EMISSIONS
ROSEISLE DISTILLERY
Milling and Mashing
Fermentation Distillation
MaltWater
Mash Wash New Make Spirit
CaskFilling
Yeast
Steam
To Process
To Maltings
Pot Ale
Solids
Draff
Separation SeparationEffluent
Treatment
Bubbling Fluidised Bed Biomass Boiler
Biogas
Liquid Liquid
Solids
To Water Recovery
Dry Residue from Maltings
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• Distillery in Cameronbridge is the second largest in Scotland.
• Investment of £65M in an onsite bioenergy plant.
• Steam generated by the biomass / biogas boiler is used to generate electricity (up to 80% of the site demand) and for process heating.
• Vast majority of the distillery’s total energy is supplied from on-site, generated renewable sources.
• Offsets over 40,000 T CO2 per annum.
BIOENERGY SOLUTIONS FOR REDUCING GHG EMISSIONS
CAMERONBRIDGE AND SPEYSIDE
CAMERONBRIDGE GRAIN DISTILLERY
Dailuaine• £6M investment in AD technology for effluent treatment.
• Biogas is burned in a CHP, generating 40% of the site’s electrical demand and heat for the distillery and adjacent dark grains plant.
Glendullan• Pot Ale from two nearby distilleries (Morthlach and Dufftown)
is piped to AD plant in Glendullan. This removed 15 trucks movements per day.
• Biogas is recovered and burned in a gas boiler.
Two projects offset 1,000 T/Yr of direct CO2 and further 2,000 T/Yrfrom transport emissions.
SPEYSIDE MALT DISTILLERIES
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• Since acquiring a majority share in USL ( now Diageo India) we have prioritised the integration of our global environmental sustainability standards and programmes.
• Major Challenge - replace Coal as the primary energy source to a more sustainable alternative.
• Solutions:
Nasik Distillery and Packaging Facility
• 75% of coal has been replaced with briquettes made from sawdust, tamarind shell and crop waste.
• This yields an annual CO2 reduction of 15,000 T.
• Farmers in the area have also gained an outlet for the waste from their seasonal crops as well as additional revenue and community employment.
• New 200 kW engine currently being commissioned to generate electricity and heat from biogas that it generated from AD of waste streams.
BIOENERGY SOLUTIONS FOR REDUCING GHG EMISSIONS
DIAGEO INDIA
Roll-out of coal substitution projects
• Target is to deliver in excess of 50,000 T/Yr CO2 emissions reduction through substitution of coal with biomass fuels across 6 sites.
Slide 10 of 17
BIOENERGY SOLUTIONS FOR REDUCING GHG EMISSIONS
NORTH AMERICA – BULLFROG POWER
At a municipal landfill, biogas is captured, cleaned up to produce biomethane and injected onto the national natural gas pipeline on our behalf, displacing fossil-fuel based natural gas and resulting in a direct (Scope 1) reduction to our emissions footprint
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BULLFROG RENEWABLE GAS
• Biogas is recovered from landfill, purified and injected in to the national grid.
• Diageo purchases this gas via a robust certification scheme from the supplier.
• Certification complies with the WRI GHG Protocol.
• The supplier meets strict environmental standards (independently defined by ICF international).
• The supplier is independently audited annually by Deloitte to ensure that the gas is accurately accounted for and credited appropriately to customers.
• This project delivers annual CO2 emissions savings of 55,000 Tonnes.
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CHALLENGE FOR ST. JAMES’S GATE BREWERY
A significant reduction has been achieved in achieved in energy demand.• Investment in energy efficient technologies as part of the €169M capacity upgrade project in St.
James’s Gate Brewery.
• Application of Energy Efficient Design methodologies to all major Capital Projects.
• Implement mature, certified Energy Management System across Operations.
• The St. James’s Gate Brewery consumes less energy now than before the capacity upgrade project, despite producing 20% more output.
A step-change in the way we supply heat and power to the site is required to reach the Corporate GHG Sustainability Target. Slide 13 of 17
CHALLENGE FOR ST. JAMES’S GATE BREWERY
Constraints:• Site footprint.
• Close proximity of residential and commercial buildings.
• Restricted by number of vehicle movements that the site can accommodate.
• A High Efficiency gas-fired CHP Plant is already installed on site. Removing this plant would be a retrograde step.
Solution:• Purchase grid-injected Renewable Gas from an off-site supplier via a certification scheme. Slide 14 of 17
OPPORTUNITIES FOR GRID-INJECTED RENEWABLE GAS IN IRELAND
- Mature technology• Over 14,000 digesters plants in operation in Europe.• In the UK there are 44 producers injecting 2.3 TWh of biomethane to the national grid
annually.
- Strong synergies with the agricultural industry in Ireland:
• Feedstock supply of slurry, wastes, diary slurries, surplus grass silage, break and catch crops.
• Support small-scale farms through Co-Op model, and represents an opportunity for a new income stream.
• Environmental benefits for the agriculture sector (GHG reduction, increased use of biofertilisers)
- Indigenous, secure energy source.
- National Benefit:• National target of achieving 12% of total heat supply from renewable sources by 2020. The
current national renewable heat share is 6.6%.
• The Renewable Gas Industry in Ireland could produce 2% of the national heat supply by 2020, with scope to expand further beyond 2020.
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RENEWABLE GAS IN IRELAND – NEXT STEPS
Renewable Heat Support Scheme• Close the gap between the commodity cost of natural gas and the production cost of renewable
gas.
• Reflect the wider national benefits of renewable gas:- Mitigate penalties for failure to meet RES targets.- Energy security.- Solution for agricultural and food processing waste streams.- Attract inward investment from multi-nationals with stretching sustainability targets.
• Study carried out by SEAI concluded that renewable gas yields a net national economic benefit when feedstocks are waste and grass (under favourable conditions) 1).
Green Gas Certification Scheme in Ireland• Standard, auditable method of measuring the quantity of renewable gas injected into the national
grid and the associated GHG emissions benefit.
• Defining minimum standards regarding plant design, construction and operation.
• Ensure that minimum Sustainability Criteria are met.
• Standardised method of calculating associated lifecycle GHG emissions.
• Establishes credibility and provide assurance to customers that GHG savings can be reported with confidence.
• Consistency with other national and international certification schemes (e.g. GHG Protocol).
• Platform for trading certificates.
1) https://www.seai.ie/resources/publications/Assessment-of-Cost-and-Benefits-of-Biogas-and-Biomethane-in-Ireland.pdf Slide 16 of 17
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