Low Carbon Logistics - Opportunities for Green Supply Chain”

Role of Renewable energy (PV) and energy efficiency management

Building on Science

Dr. George C.Y. So KCSJGeneral Manager and Senior Consultant to DuPont

Construction Industry Board

Safety

Sustainability

Efficiency

Technology

Reliability

CSR

“We do not inherit the earth from our ancestor, we borrow it from our children”Haida Proverb

2003: Artic ice free

by 2070

2008: Artic ice free

by 2013 ?

The Story begins with………… ..

- a Movie “ Inconvenient Truth”

-“ 6 degree”

- Story of stuffs

What’s Happening to Our Planet?地球發生甚麼事地球發生甚麼事地球發生甚麼事地球發生甚麼事?

Arctic circle ice is melting at an incredible rate (free fall);the landscape covered with iceis 40 % less in 2007 vs 1970北極海冰融化越來越快北極海冰融化越來越快北極海冰融化越來越快北極海冰融化越來越快, 其總面積在其總面積在其總面積在其總面積在2007年更插水式地減小年更插水式地減小年更插水式地減小年更插水式地減小, 比比比比1970年年年年少了少了少了少了 40%

The biggest Crisis Human Beings ever face人類面臨最大危機人類面臨最大危機人類面臨最大危機人類面臨最大危機

Global Warming全球暖化!!

CO2TARGET CURRENT IREVERSIBLE

350 ppm 387 ppm 450 ppm

-- Newsweek, March 23, 2009

�� By 2050By 2050, CO2 emissions will have to be 80 % below today’s to keep atmospheric levels no higher than 450 ppm (we’re now at 386 ppm, compared with 280 ppm before the Industrial Revoluti on)

� World used 14 trillion watts of power in 2006� Assuming minimal population growth (to 9 billion pe ople), slow

economic growth (1.6 %/yr – a recession level), and unprecedented energy efficiency ( ����500% worldwide), it will use 28 trillion watts by 2050

� To keep CO2 levels below 450 ppm, 26.5 trillion watts must be zerozero--carboncarbon

ChallengesChallenges

NuclearNuclear

� In 2006, it provided 0.9 trillion watts

� To get 10 trillion watts, less than half of what we ’ll need in 2050, we’d have to build 10,000 reactors, or one every ot her day starting now.

WindWind� If we’re able to put to use every

breeze that blows, we’ll get 10 to 15 trillion watts

� Yet, a more realistic figure is 3 trillion watts

� Or, 1 million state-of-the-art turbines, and even that requires storing the energy when the wind doesn’t blow-something we don’t know how to do in an efficient way

SolarSolar� To get 10 Trillion watts by 2050, we’d need to cove r 1 million

roofs with panels everyday from now until then

Eventual depletion of our energy resourcesEventual depletion of our energy resources世界能源世界能源世界能源世界能源开开开开始殆始殆始殆始殆尽尽尽尽世界能源世界能源世界能源世界能源开开开开始殆始殆始殆始殆尽尽尽尽

据位於巴黎的世界能源据位於巴黎的世界能源据位於巴黎的世界能源据位於巴黎的世界能源处处处处 (World Energy Council in Paris) 估估估估计计计计：：：：

世界的世界的世界的世界的石油石油石油石油将将将将於於於於 40 年年年年内开内开内开内开始殆始殆始殆始殆尽尽尽尽 Petroleum depletion in 40

years

天然气天然气天然气天然气在在在在 50 年年年年内内内内丶丶丶丶煤煤煤煤矿矿矿矿在在在在 120 年年年年内内内内将将将将被用完被用完被用完被用完 Natural gas in 50

years, and coal depletion in 120 years

全球全球全球全球 400 多座多座多座多座核能核能核能核能电电电电厂所需的厂所需的厂所需的厂所需的铀矿铀矿铀矿铀矿也也也也将将将将於於於於 60 年年年年内内内内耗耗耗耗尽尽尽尽In 60 years,

the uranium will be depleted.

能源供能源供能源供能源供应紧张丶应紧张丶应紧张丶应紧张丶成本提高成本提高成本提高成本提高，，，，导导导导致价格增致价格增致价格增致价格增长长长长 Energy demand driving

cost up

Renewable Energy再生能源再生能源再生能源再生能源却可永远任由我们使用Renewable Energy再生能源再生能源再生能源再生能源却可永远任由我们使用

From 2007 to 2030 Scenarios

�Population: 6 Billion

�CO2 emission: 7 Billions Tons

�Population: 8.2 Billion

�CO2 emissions: 2.7 Billions Tons

Chinathe rising superpower

中國崛起中國崛起中國崛起中國崛起

Chinathe rising superpower

中國崛起中國崛起中國崛起中國崛起

By 2022, if we do not reduce the CO2 emission by 20 %, the effect of global warming will be irreversible, bringing to us a catastrophe

2022 年年年年, 如果我如果我如果我如果我们们们们不能不能不能不能减减减减少少少少 20 % 二氧化碳排放量二氧化碳排放量二氧化碳排放量二氧化碳排放量, 全球暖化的影全球暖化的影全球暖化的影全球暖化的影响将会响将会响将会响将会是是是是无无无无法挽回法挽回法挽回法挽回 ,带来带来带来带来灾难灾难灾难灾难性的代价性的代价性的代价性的代价 !!

By 2022, if we do not reduce the CO2 emission by 20 %, the effect of global warming will be irreversible, bringing to us a catastrophe

2022 年年年年, 如果我如果我如果我如果我们们们们不能不能不能不能减减减减少少少少 20 % 二氧化碳排放量二氧化碳排放量二氧化碳排放量二氧化碳排放量, 全球暖化的影全球暖化的影全球暖化的影全球暖化的影响将会响将会响将会响将会是是是是无无无无法挽回法挽回法挽回法挽回 ,带来带来带来带来灾难灾难灾难灾难性的代价性的代价性的代价性的代价 !!

This is our green mission这这这这就是我就是我就是我就是我们们们们的的的的绿绿绿绿色使命色使命色使命色使命

This is our green missionThis is our green mission

这这这这就是我就是我就是我就是我们们们们的的的的绿绿绿绿色使命色使命色使命色使命这这这这就是我就是我就是我就是我们们们们的的的的绿绿绿绿色使命色使命色使命色使命

Content

A Sustainable energy future- 450 ppm Scenario

Key challenges in Current environment

Market size and opportunity of renewable/clean ener gy

The Birth of A Multinational Solar Company under HK /SZ innovation circle

Policy to Prosperity- Grid Parity

Green Logistics to Green Living- low carbon economy path via energy efficiency

management

Conclusion

Content

A Sustainable energy future- 450 ppm Scenario

Key challenges in current environment

Market size and opportunity of renewable/clean ener gy

The Birth of A Multinational Solar Company under HK/ SZ innovation circle

Policy to Prosperity- Grid Parity

Green logistics to Green Living- low carbon economy path via energy efficiency

management

Conclusion

.

Population Growth•6 billion in 2010 to 9 billion in 2050

•50% Urban in 2010 to 70-80% in 2015

Climate Change•Potential for 4 to 5 Degrees C increases in

temperature in Central/Eastern Europe•Hottest days could increase by 8%

Energy and Water•Increasing Energy Prices

•Energy Demand Up•Water and Food Demand Up

Safety and Environment•Increasing need for People, Asset and

Environmental protection

Key challenges in Current Environment

Content

A Sustainable energy future- 450 ppm Scenario

Key challenges in Current environment

Market size and Opportunity of renewable/clean ener gy

The Birth of A Multinational Solar Company under HK/ SZ innovation circle

Policy to Prosperity- Grid Parity

Green Logistics to Green Living- low carbon economy path via energy efficiency

management

Conclusion

Market size and opportunity市市市市场场场场机机机机会会会会与与与与规规规规模模模模

� Market size is measured by Trillions市場以萬億計算

� Market Drivers: Petroleum depletion石油枯竭, climate changes氣侯暖化, government subsidies政府補貼and environmental policies環保政策

� Rapid Market Growth: Average CAGR ~ 24% to 2030市場快速增長

� For a sustainable business: Grid Parity与市電同價

Content

A Sustainable energy future- 450 ppm Scenario

Key challenges in Current environment

Market size and opportunity of renewable/clean ener gy

Policy to Prosperity- Grid Parity

The Birth of A Multinational Solar Company under HK /SZ innovation circle

Green Logistics to Green Living- low carbon economy path via energy efficiency

management

Conclusion

Policy to Prosperity

(PV as an example)

Key to success to Grid Parity: Subsidy is mid-term solution

cost reduction is a long term solution

Content

A Sustainable energy future- 450 ppm Scenario

Key challenges in Current environment

Market size and opportunity of renewable/clean ener gy

Policy to Prosperity- Grid Parity

The Birth of A Multinational Solar Company under HK /SZ innovation circle

Green Building to Green Living- low carbon economy p ath via energy efficiency

management

Conclusion

DuPont Apollo

(A wholly own subsidiary of DuPont China Limited)

Content

A Sustainable energy future- 450 ppm Scenario

Key challenges in Built environment

DuPont Vision and Mission

Market size and opportunity of renewable/clean ener gy

Policy to Prosperity- Grid Parity

The Birth of A Multinational Solar company under HK /SZ innovation circle

Green Building to Green Living- low carbon economy p ath via energy efficiency

management

Conclusion

Green Logistics to Green Living能源管理能源管理能源管理能源管理 –能源效率能源效率能源效率能源效率, 能源收集能源收集能源收集能源收集, 能源储存能源储存能源储存能源储存

Energy Management - Energy efficiency, energy generation, energy storage

优化设计优化设计优化设计优化设计 –创造舒适环境创造舒适环境创造舒适环境创造舒适环境Performance based design – comfortable environment

>40% CO2 Climate Change Emissions - from Buildings a nd Construction.

New Regulations 2010, 2016, 2018, 2020…..-Very costly to do nothing.

-PV Feeder tariffs

-Code for Sustainable Homes etc

-Life Cycle Analysis/Environmental Profiles

Passivhaus, Germany

Green Build

Council

A Driving Force

Low carbon supply chain

� 1.Focus on efficiency gain across their end-to-end supply chain.

� 2. Environmental expectations� 3. Emergence of New legislation� 4. Consumers’ spending decisions are

increasingly based on value in the current economics circumstances

Three principles for a low carbon supply chain

� 1. Look at the end-to-end chain as a joined up process

� 2. Implementing more a granular carbon processes across the supply chain.

� 3. Insert the ‘cost’ of carbon as a factor in KPI design and business case arrangement.

Five supply chain decarbonizationopportunities

� 1. Understanding the carbon impact of production locations and raw material origins-and implementing alternatives sourcing options where needed

� 2. Reduce speed requirements� 3. Reducing packaging use

� 4.Increase the use of recycling and reverse logistics

� 5. Revisiting distribution channels

Fundamental Changes

Sourcing strategies

� 1. “nearsourcing” to counter the rising transportation cost

� 2. Multiple sourcing to counter the volatile climate conditions to ensure business continuity

� 3. Energy efficiency is one of the distinguishing factors to select individual suppliers

Buyer-supplier relationship

� 1. Partnerships for collaborative innovation will find new opportunity to drive new efficiency

� 2. IT solutions will play an important role in providing insights and data in managing the value chain.

� 3. A new commercial relationships which will call for transparency and traceability between buyers and suppliers.

Solutions Outside the B2B relationships

� 1.Lifecycle analysis� 2.Consumer interface to reduce climate

impacts arising from product use, maintenance and disposals

� 3. Carbon accounting and product carbon labeling

� 4.Policy compliance and regulatory issues.

Examples

Wal-mart / Retail industry

– 60,000 suppliers, indirect emissions to be 72 % of the company total in 2006

– “Sustainable Value Networks”-renewable energy, zero waste and sustainable products-incent carbon emission reductions through partnerships that extend beyond Wal-marts walls to include collaborations from non-profits, suppliers, and other environmental stakeholders spanning from Government officials to academics.

Clean Cargo Working Group/ Industry: Cross-Industry

� Corporate Social Responsibility� Collaboration between 20 ocean going and other

freight service providers (e.g. Maersk Line, Hapag-Lloyd), leading multinational manufacturers (e.g. Toyota, Chiquita). Carriers involved in clean cargo in 20098 accounted for ~68% global containers shipped worldwide. Transportation providers in the group help cargo owners to manage their transportation emissions by reporting emission date for better decision making

Nike/ Industry: Apparel/Footwear

� Estimate the embedded caron in its products to be equal to 2.5 times the carbon emiteed by the footwear factories marking the products

� Need to consider alternative materials in the design process-remval of “F-gases” from its shoe lines reduced 80% of Nike’s footprints between 1997-2006.

DHL/ Industry” Loigistics

� Target: 30 % improvement in group carbon efficiency by 2020

� Key performance levers include optimizing air and ground fleets, improving energy efficiency, developing innovative technology, enhancing employees incentives and involving subcontractors.

� Examples: “Smart Truck” project where “intelligent” vehicle processes dynamics route planning abnd live traffic data to enable pick-up and deliveries to become more efficiency in terms of time, cost and emissions.

Cadbury/ Industry: Food and Agriculture

� Measured GHG emissions “From Farm to Plate”

� The company deduced that over 60 % of its carbon footprints comes from dairy in its milk chocolate products. Cadbury shared the data with its customers and suppliers in UK and engaging the suppliers to teach them sustainable practices for reducing emissions

Electronics Industry Citizenship Coalition (EICC)/ Industry: Technology

� A 40 member coalition of Consumer electronics brand and their suppliers (including HP, IBM, Intel) to develop a standardized industry accounting tool for GHG that enables a streamline, objectives process for measuring emission in the supply chain.

� This group utilize shared data to promotes operational efficiency and share understanding of allocation and responsibility issues with respect to suppliers GHG.

� Through this work, EICC is working to illuminate key legislative priority areas for the governments and other policy makers

Levi Strauss & Co. (Levi’s)/ Industry: Retail

� Levi is a member of Business for innovative Climate and energy policy (BICEP).

� Levis undertook “ Cradle to Grave” Lifecycle analysis (LCA) on selecting high volume products, including its 501 jeans and Dockers Khakis lines, which revealed that the largest carbon impact was in washing and drying (consumer use) Taking ownership for indirect emissions, the company chose to engage its consumers through products labeling. Clothing labels on these products were altered to encouraged consumers to reduce emission by washing the product in cold water versus hot water

Content

A Sustainable energy future- 450 ppm Scenario

Key challenges in Current environment

Market size and opportunity of renewable/clean ener gy

Policy to Prosperity- Grid Parity

The Birth of A Mulitnational Solar Company under HK /SZ innovation circle

Green Logistics to Green Living- low carbon economy path via energy efficiency

management

Conclusion

Conclusion-Message to take away 帶走信息帶走信息帶走信息帶走信息

HK/SZ Innovation Circle深港深港深港深港創新圈創新圈創新圈創新圈

CradleTo Cradle循環性循環性循環性循環性

Sustainability可持續發展可持續發展可持續發展可持續發展

ParadigmShift跳躍跳躍跳躍跳躍, 創新創新創新創新

Technological Innovation科技創新科技創新科技創新科技創新

New BusinessModel 新商業模式新商業模式新商業模式新商業模式

Low CarbonEconomy低炭經濟低炭經濟低炭經濟低炭經濟

New ConsumerismBehaviour消費模式消費模式消費模式消費模式

Cooperation amongAcademia, GovernmentAnd Enterprises學術學術學術學術, 政府政府政府政府, 企業企業企業企業

The harshReality of Global全球暖化全球暖化全球暖化全球暖化warming 的事實的事實的事實的事實

Knowledge Intensiveeconomy

EnergyEfficiency

CSR

What a beautiful planet earth!

Time is running out if we don’t act now!!