Energy Efficiency and Climate Protection
Climate change is one of the most urgent challenges facing our planet. And like all challenges, it presents unexpected opportunities: to do business smarter; be a better corporate citizen; to reach out and work toward a common objective with people around the world, remembering that we do more good when we work together, and that success is more sustainable when it is shared.
The scientific consensus on climate change is clear, and the effects of climate change are already well documented. The potential effects of climate change on people, communities and ecosystems around the world are sobering and demand immediate action.
Climate change could affect our business in numerous ways. Changing weather patterns could harm global agriculture, limiting the supply or increasing the cost of ingredients we use in our products. Extreme weather could impair our bottling plants, disrupt our supply chain and affect demand for our products. Even our efforts to cut greenhouse gas emissions could result in increased costs for energy, transportation and raw materials.
Cutting our carbon emissions
In 2010, we reduced our global greenhouse gas emissions from manufacturing by 2 percent compared to 2009—from 5.33 million metric tons to 5.20 million metric tons—even as our unit case volume increased 5 percent. Though we are trending in the right direction, we still have a lot of work to do to get back to 2004 levels. Our total emissions in 2010 were 9 percent higher than our 2004 baseline of 4.79 million metric tons. The good news? Our productivity is improving. Our global product volume in 2010 was 25.5 billion unit cases—29 percent more than in 2004—and our greenhouse gas intensity (per liter of product) has improved 14 percent since 2004.
2010 Coca-Cola System Greenhouse Gas Emissions by Region
(from manufacturing sites)1
(CO2 emissions in millions of metric tons)
Coca-Cola System Greenhouse Gas Emissions from 2004 to 2010
(from manufacturing sites)1
(CO2 emissions in millions of metric tons)
1We are currently evaluating materiality of other sources, such as ingredient CO2.
In developed countries, we have made steady progress toward our goal of reducing emissions from manufacturing by 5 percent compared to 2004 levels by 2015. In 2010, we reduced emissions in developed countries by 1 percent compared to 2009 and 6 percent compared to 2004, our baseline year.
We have implemented several measures to cut greenhouse gas emissions since our last sustainability report, the 2009/2010 Sustainability Review. These measures include:
- Through research with Coca-Cola bottling partners and plant managers worldwide, and with the help of our partner WWF, we developed 10 high-return, low-risk energy best practices for bottling partners to implement by 2012 and a global campaign site for them to register their progress.
- A new combined heat and power plant went online at Ballina Beverages, our Ireland-based concentrate manufacturing facility, in November 2010. The plant captures heat from electricity generation and diverts it to heating and hot water systems. This operation is currently exhibiting 17 percent lower carbon dioxide (CO2) emissions due to heat and power co-generation.
Goal:
Grow our business but not our systemwide carbon emissions in our manufacturing operations through 2015 compared with our 2004 baseline.
Progress:
Our global manufacturing emissions in 2010 were 2 percent lower than emissions from 2009. These emissions, however, remain
Goal:
By 2015, reduce emissions from our manufacturing operations in developed countries by 5 percent compared to our 2004 baseline.
Progress:
In 2010, emissions at our manufacturing operations in developed countries were down 1 percent compared with the prior year and down 6 percent compared to 2004.
Phasing out hydrofluorocarbon (HFC) coolers
Hydrofluorocarbons, or HFCs, are powerful greenhouse gases hundreds of times more potent than carbon dioxide. While they currently have a relatively small impact on global warming, HFC emissions are anticipated to represent 9 to 19 percent of projected greenhouse gas emissions by 2050. Historically, much of the refrigeration equipment we and other companies rely on has used HFC-based cooling systems. With more than 10 million dispensers, vending machines and coolers in the marketplace, we have the opportunity to contribute to the global response to climate change.
In 2009, we worked with Greenpeace to set a goal of installing 150,000 HFC-free coolers around the globe by the end of 2010, bringing our global total to 277,000 by the end of 2010. We are pleased to report that we have met that goal and exceeded it.
In 2009, we announced a commitment to achieve 100 percent HFC-free new equipment by 2015, starting with 150,000 units in 2010. In total, we installed 162,000 HFC-free units in 2010—including 25 on Washington, DC’s Capitol Hill—bringing our global total to 277,000 by the end of 2010. Additionally, we increased that total to 400,000 by August 31, 2011.
We are also making steady progress against our pledge to have 100 percent of our cold-drink equipment HFC-free by 2015. In 2010, approximately 15 percent of our new cold-drink equipment purchases were HFC-free. By phasing out HFCs, we expect to avoid the emission of more than 52.5 million metric tons of carbon dioxide equivalent over the life of our equipment.
Building a more climate-friendly fleet
Truck exhaust is a source of greenhouse gases. More than 200,000 of our signature red delivery trucks represent our system around the world. We want them to represent sustainable-oriented transport as well. So we are powering our fleet with a mix of efficient fuels—including electricity, natural gas, diesel-electric hybrids and biodiesel, along with conventional fuels—and we are exploring new options as they become available. Here are some of our recent achievements:
- We operate the largest hybrid electric fleet in North America. It consists of more than 700 trucks that use about 30 percent less fuel than conventional diesels and could potentially reduce greenhouse gas emissions by approximately 30 percent—more than 1 million metric tons annually.
- Through its Safe and Eco-Driving Program, combined with a complete package of maximum fuel consumption, route management systems, trained drivers and performance monitoring, Coca-Cola Hellenic has avoided 954 tons of carbon dioxide emissions since 2009.
- In July 2011, Coca-Cola Refreshments, our North American Company-owned bottling operations, announced its membership in the National Clean Fleets Partnership, a public-private partnership sponsored by the U.S. Department of Energy. Clean Fleets is intended to help large companies reduce diesel and gasoline use by incorporating electric vehicles, alternative fuels and other fuel-saving measures.
- CCR is also working to deploy more electric trucks. It currently has two electric trucks in the Bronx, New York, and six Navistar eStar electric trucks in markets including Los Angeles, New York City, San Francisco and Washington, DC. CCR is also training drivers to use driving techniques to conserve fuel and reduce emissions.
Goal:
Install 150,000 HFC-free coolers in the marketplace by 2010.
Progress:
By the end of 2010, we had installed approximately 277,000 HFC-free coolers—including 162,000 in 2010 alone. Additionally, we increased that total to 400,000 by August 31, 2011.
Goal:
As of 2015, all new cold-drink equipment will be HFC-free, with an interim goal of being 50 percent HFC-free by 2012.
Progress:
In 2010, approximately 15 percent of our new cold-drink equipment purchases were HFC-free.
Investing in clean energy
As part of our carbon reduction strategy, we are investing in clean energy technology—both in our business and through venture capital funds.
We have installed solar panels at facilities in Macon, Georgia, and Coachella, California. Similar installations are under way at four other North American facilities. We also began construction on a landfill gas-powered co-generation system at our Atlanta syrup branch. The 6.3-megawatt combined heat-and-power system will use biomethane from a nearby landfill as its primary fuel. We expect it to reduce CCR’s carbon footprint by approximately 20,400 tons annually.
Partnering around the world to make a difference
A challenge as huge and far-reaching as climate protection demands cooperation among all segments of society. We draw hope and inspiration from our ongoing collaboration with peer companies, NGOs, government officials and others as we all come together to address the critical work before us.
In 2010, we coordinated a Sustainable Refrigeration Summit, bringing together diverse companies to explore more rapid adoption of natural, HFC-free refrigerants. That summit laid the groundwork for The Consumer Goods Forum’s pledge to start phasing out HFC refrigerants by 2015. The Forum’s commitment was announced in November to coincide with the COP 16 U.N. Climate Change Conference in Cancún, Mexico.
As a co-chair of The Consumer Goods Forum, our Chief Executive Officer, Muhtar Kent, joined fellow co-chair, Lars Olofsson, CEO of Tesco, in announcing The Consumer Goods Forum initiatives. In Cancún, Mr. Kent also took part in a panel discussion on the business case for building a low-carbon economy, which we co-organized with World Climate Ltd. Panelists included Mexican President Felipe Calderón; Dow Chemical President, Chairman and CEO Andrew Liveris; Duke Energy Chairman and CEO Jim Rogers; FEMSA Chief Executive Officer José Antonio Fernández; and Christiana Figueres, Executive Secretary of the United Nations Framework Convention on Climate Change. In addition, we joined bottling partners Coca-Cola Hellenic, Coca-Cola Enterprises and Coca-Cola Ìçecek in signing the Cancun Communiqué, which asks for a strong, effective framework for addressing climate change.
Increasing our energy efficiency
Using energy more efficiently enables us to reduce our carbon footprint, conserve natural resources and contain costs. So through measures sweeping and small, we are using energy more efficiently across our business system.
The total amount of energy consumed by manufacturing sites across our system has grown as our business has grown—from 54.6 billion megajoules in 2004 to 58.8 billion megajoules in 2010. But our energy efficiency ratio—the amount of megajoules used per liter of product—has improved. In 2010, our ratio was 0.45 megajoules per liter—a 1 percent improvement over 2009 and a 14 percent improvement overall since 2004. By improving our energy efficiency ratio, we avoided $163 million in energy costs for 2010—and over $600 million cumulative since 2004.
Coca-Cola System Energy Use from 2004 to 2010
Systemwide total based on estimated total use (billion megajoules)
Coca-Cola System Energy Use Ratio from 2004 to 2010
Average plant ratios based on collected data (megajoules/liter of product)
2Our energy use figures have been recalculated for 2004, 2005, 2006 and 2007 based on changes to the organization. These changes affected our system energy use ratio (efficiency) only for 2004.
More efficient cooling equipment
Glass-door coolers, such as the “visi-coolers” found in convenience stores, make up about 74 percent of our total equipment base and nearly 90 percent of the cold-drink equipment we purchased in 2010. All newly certified models of glass-door coolers are now at least 40 percent more efficient compared to year 2000 levels. For example, approximately 45 percent of our Company-owned coolers now contain energy management devices, resulting in an estimated 16 percent reduction in energy consumption for the cooler fleet. The total decline was from an estimated 10.55 million megajoules of energy that would have been consumed in 2010 without these devices to 8.90 million megajoules of energy actually consumed in 2010 with the devices in place. This decreased energy use has resulted in an estimated emissions reduction of 7 percent. Upon reaching our goal, these energy management devices will allow us to achieve a total of 35 percent in energy reduction.
We estimate that approximately 95 percent of our new vending machines and fountain machines, which make up the remainder of our equipment base, also meet our goal of being at least 40 percent more energy efficient than in 2000.
Goal:
By the end of 2010, increase the energy efficiency of our new cooling equipment by 40 percent compared with 2000 levels.
Progress:
By the end of 2010, 100 percent of our new glass-door coolers and 95 percent of our new vending machines and fountain machines were 40 percent more efficient.
Cutting emissions and energy use in developing countries
In the ongoing global conversation about energy and climate change, emerging countries are often considered the most challenging places to reduce carbon emissions and energy consumption. Developing countries, the argument goes, have less access to clean energy technology and have more to lose economically from any restrictions on growth that may result from emissions limits.
But in fact, as we build new plants in developing nations, we view each as an opportunity to build sustainability into our system through integration of best practices and the latest, cleanest, most efficient technology. In this way, bottling partners in developing countries can “leapfrog” developed nations. Several of our facilities in emerging economies have already achieved levels of energy efficiency that are instructive for our entire system.
For example, our operations in Turkey are the most energy efficient in our global system, with an efficiency ratio of 0.26 megajoules per liter. Our operations in South Africa also exhibit remarkable energy efficiency, with a ratio of 0.30 megajoules per liter. Efficiency at operations in both countries improved in 2010 over 2009—by 4 percent and 6 percent, respectively.
Some of our operations in developing countries have also shown reductions in greenhouse gas emissions in absolute or total terms. For example, absolute emissions from our operations in Mexico decreased by about 13 percent between 2009 and 2010, from 450,000 metric tons to 392,000 metric tons. In Latin Center, absolute emissions decreased by 7 percent, from 157,000 metric tons to 146,000 metric tons. In China and Korea—key growing markets for us—our emissions dropped from 748,000 metric tons in 2009 to 685,000 metric tons in 2010. Reductions in both countries were achieved despite increased sales volumes—another example of how we are growing our business but not our carbon emissions.
Our emissions reductions are sometimes a result of a country or municipality deploying a cleaner power grid. We support such efforts whenever we can. In Mexico, for example, our long-term agreement to buy a certain amount of power from a local utility helped enable development of significant wind power infrastructure.
Building facilities according to Leadership in Energy and Environmental Design (LEED) standards is another way we can improve the energy and carbon footprints in developing countries. We now have LEED-certified facilities in progress in Brazil and completed in China.
For more information, please see our Position Statement on Climate Protection.
