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Energy use: cost reduction and climate change

The European food & drink industry has been quite active in reducing its energy use and subsequent GHG emissions. Cost reduction is a driver, but more important are the potential effects of climate change on food production systems.


First of all, the food sector - from farm to table - requires a significant amount of energy in the EU. The amount necessary to cultivate, process, pack and bring the food to European consumers accounts for 17 percent of the EU’s gross energy consumption in 2013, equivalent to about 26 percent of the EU’s final energy consumption in the same year.
The industrial processing of food takes up 28 percent of the total energy consumed in the food chain. Agriculture is the most energy-intense stage with roughly 1/3 of the total amount of energy consumed.
The good news is that the European food & drink sector has been active in reducing its energy use and greenhouse gases (GHG) emissions for almost a decade. According to Food&Drink Europe, the sector’s energy consumption from 2005 to 2013 has declined, both in absolute terms as well as in terms of ‘energy intensity, producing more while using less energy’.

Energy use in the value chain
Agriculture, including crop cultivation and livestock production accounts for nearly 33 percent of the total energy consumed in the food production chain.
Industrial processing requires 28 percent of total energy use. Together with logistics and packaging, industrial processing is responsible for nearly half of the total energy use in the food industry.
Food waste represents only slightly more than 5 percent of total energy use in the EU food sector. Food waste, however, occurs at every step in the value chain. In the EU food waste predominantly occurs in the latter stages of the value chain, at the level of producers, retailers and consumers.

In 2014 the EU generated 100 million tonnes of food waste. Given the large amounts of energy involved in food production, reducing food waste is an important factor for improving the overall energy efficiency of the food production system. Food waste also has the potential to play a role in renewable energy production as a feedstock for bioenergy production. Several food processing industries are also exploring the possibility of recovering the energy contained in food residues on site, through biogas production or in dedicated combined heat and power plants.

Availability of raw materials at risk
The main driver behind the exercise is to aleviate the effects of climate change on the food production system. ‘Food and drink manufacturers have long realized that the climate change challenge will have far-reaching implications for the sustainability and availability of raw materials’, Tove Larsson, the Director Environmental Sustainability at Food & Drink Europe says. ‘That’s why European food and drink manufacturers are actively been working to try to mitigate climate change and incorporate low carbon and energy efficient technologies amongst others into their operations. This makes perfect business sense.’
Although the sector has already made significant steps in reducing its energy consumption, more efforts are needed to meet the sector’s ambition goals.
Meanwhile energy reduction agreements have been established at national levels. For example in the Netherlands, various industrial sectors, including food & drink, have signed long-term agreements with the government in order to increase energy efficiency.
Also, several major companies have set the bar high(er) for themselves. For example, Nestlé has indicated it will reduce its GHG emissions per ton of product by 35 percent versus 2010. Mars wants to cut GHG emissions from its production sites and offices entirely by 2040. The ‘intermediary’ target will be a 40 percent reduction by 2020.

Potential differs from region to region
While the potential of energy use reduction in general might be relatively low compared to other sectors, there are significant differences between EU-member states. The degree of industrial food processing depends on the economy of the country: in low-income countries,
30 percent of food is industrially processed, while in high-income countries
98 percent is processed more or less intensively. As for any other industrial product, the more processed the food, the higher the energy consumption required (source: FAO). Therefore, energy-saving measures in ‘highly intensive processing countries’ are likely to have a bigger overall impact.

Regardless of internal sectoral differences and energy savings already realized, there is still apparently a significant potential for reduction. According to the EU Database on Energy Savings Potentials (2010), the technical energy savings potential per value added is estimated to be 15 percent in 2020.

Low hanging fruit
The next question is: which industrial processes are the most obvious in terms of energy savings potential? Cooling and freezing account for around 30 percent of the energy consumption in the food industry and represent roughly
30 percent of the energy savings potential by 2030.
Thollander and Palm (2013) have focused their attention on individual processes that are especially important in the food sector. Eleven general production processes were identified in decomposition, mixing, cutting, joining, coating, forming, heating, melting, drying/concentration, cooling/freezing, and packing. Seven support processes were also defined, namely: lighting, compressed air, ventilation, pumping, space heating and cooling, hot tap water, and internal transport. A major result of the analysis is that in low energy-intensive SMEs, the largest share of energy is consumed in support processes (up to 70 percent), while in higher energy-intensive factories, energy is mostly fed into production processes (up to 85 percent). Good news for low energy-intensive SME’s: energy saving interventions on support processes are generally less expensive and more feasible than those on capital-intensive production processes.
Specific business cases are best suited to illustrate the efforts of individual companies to reduce the energy consumption in their factories and/or office buildings.
For example, Kellogg’s UK has implemented at two of its production plants a way to capture heat at its wasterwater treatment facility and use it. Before, this heat was dissipated into the atmosphere. By using a heat pump system the heat is captured and stored for cleaning purposes and staff use on site. One factory has started a project to recover energy from the exhaust systems on the cookers and use it to preheat boiler feed water.
Both projects have realized energy reductions of over 3700 MWh with a payback of less than four years. One of the production plants in Manchester has reduced its greenhouse gas emissions by 24 percent since 2009 and is a global front-runner within the multinational for meeting reduction targets.

Wastewater treatment
Another example of wastewater treatment with a positive impact on energy consumption has been realized by Mars Netherlands. In its chocolate factory in Veghel the company established a new wastewater treatment plant. This facility purifies the water to a level of 99 percent purity, reducing the chemical oxygen demand (COD) concentration from 10,000 to 50 mg/l in one single step, without pretreatment. The anaerobic membrane bioreactor ferments the sugars, oils and fats, which are extracted from the wastewater into biogas. This gas is being used for steam production. The amount of produced biogas covers 5 percent of the overall energy requirements of the Veghel plant.

According to the company, the benefit is double: Mars no longer has to pay a fee to the municipal wastewater treatment facility and has also reduced its operating costs by using biogas for steam generation.

Green steam
Companies also have an option to outsource energy supply to third parties, preferably energy based on renewable feedstocks. The Haguenau plant, the largest production facility of Mars in France, uses ‘green steam’ from a nearby incineration plant processing household waste from 225,000 inhabitants in the region. The steam generated from the incineration process is ‘shipped’ to the Mars factory via 1.2 km of underground pipes. Mars feeds the steam into a heat exchanger, which enables the company to produce its own steam for food safety reasons. The company used the green steam mainly for melting the chocolate used in the production of its products, but also to heat the buildings.

Nestlé: both ends of the value chain
Nestlé has implemented several measures to reduce its energy use and subsequent CO2-emissions from its production sites, all over the world. For example in Mexico, 85 percent of all the electricity used in production is generated by windturbines. This practice reduces its emissions (including GHG) by more than 125,000 tons CO2 per annum.

In France, the factory in Challerange, which produces milk powder,
operates a wood-fired boiler using
woodchips sourced from forests certified by the Programme for the Endorsement of Forest Certification. The initiative not only reduces the CO2 output of the facility dramatically, it also reduces the dependency on fossil prices and the volatility in price levels.

Nestlé doesn’t limit its energy use policy to its production facilities, but also extends this up and down the value chain. At the beginning of its supply chain, the company  is helping farmers to improve their operation through specific programmes that are aimed at more sustainable farming practices, including energy use. A good example is a project directed at dairy cooperatives in Indonesia to use biogas units to convert methane from cattle manure into energy. Meanwhile, at the other end of the value chain, Nestlé has acquired freezers that operate on natural refrigerants. These machines only use half the amount of energy needed by the older models. It also enables the company to market its products in a more cost-efficient and environment-friendly way. The knife cuts at both ends.


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