From left: S. Balusubramanian,Additional Secretary, Ministry of Industry and Commerce of Sri Lanka, AnuraDissanayake, Secretary, Ministry of Mahaweli Development and Environment, Hilde Timmermann Head of Finance and Contracts, the Delegation of the European Union to Sri Lanka and the Maldives, IndraniVithanage, Acting Secretary, Ministry of Power and Energy and Dr. Rene van Berkel, UNIDO Representative

The European Union delegation to Sri Lanka and the Maldives along with the United National Industrial Development Organisation (UNIDO) recently held a workshop as project consultation and validation for new initiative to support to the implementation of Sri Lanka’s National Determined Contributions (NDC) in the industrial sector. 

Further to the Paris Agreement on Climate Change (2015), Sri Lanka has pledged a reduction of greenhouse gas (GHG) emissions by 30 percent through its Nationally Determined Contributions (NDCs) during the 2021-2030 period. This is against the base year 2010. The industry sector together with the transport, forestry and waste will contribute a 10 percent reduction while the remaining 20 percent will be from the energy sector.

While Sri Lanka has already taken steps to recognise ‘green’ initiatives in businesses, established the National Green Reporting System, Presidential Awards and capacity development initiatives, there is still a large lapse in terms of the entire industrial sector pledging their active support to the climate change battle. This takes into consideration both the large players and the SMEs who must collectively rise, in meeting NDC obligations.

An important challenge remains to proof emission reductions in a transparent and accountable manner to the international community, for which a so-called Monitoring, Reporting and Verification (MRV) system is required. Experts see the main obstacle therein the lack of a unified approach for information gathering on industry activity by and integrating from different sources of collection. 

Many organisations, both State and non-governmental, collect some data independently, targeting the clusters or business cross sections for which they serve. Absence has been long felt, therefore, for an integrated data collection/sharing platform to ensure meaningful comparison, buttressed by a national policy and supporting legal and regulatory framework to share data among stakeholders.

At the request of the Government of Sri Lanka, the EU Sri Lanka Delegation is in the process of developing a five-year technical cooperation project under the EU Global Climate Change Alliance plus programmse in the areas of industrial energy efficiency, and resource efficiency for cleaner production. The EU has put aside approximately € 7.7 million for this project, to be executed by UNIDO. 

The EU is the single largest bilateral donor funding UNIDO to assist developing countries achieve Sustainable Development Goal (SDG) 9: to Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. In Sri Lanka, the EU already funds trade initiatives through International Trade Centre and UNIDO working with the Department of Commerce and the Export Development Board (EDB) in setting up quality infrastructure and export facilitation, particularly for Cinnamon, spices and food products. UNIDO helps to improve the quality of traditional foods, meet sanitary standards for exports and training in certification systems and the relevance of those certifications.

Head of Finance and Contracts of the EU Delegation to Sri Lanka and the Maldives Hilde Timmerman said during the initiation of the workshop, “Climate Change is one of the greatest threats facing life on earth. It is not a problem we can put off and deal with when we have more time or more money - actions we take now will determine what the world we live in will look like in the near future. This project is essentially about ensuring that industries emit less – but what does this mean for industries? It means higher profitability in terms of energy efficiency savings, but also new markets, especially international markets for organisations that comply with certain standards that show a lower carbon footprint.”

This workshop was held in order to introduce the project, discuss and validate the project’s individual approaches, and to amend them where required. Most importantly, it sought to secure the commitment of national stakeholders in the project. 

The project is to be implemented by UNIDO, working in close cooperation with the Ministry of Industry and Commerce, Ministry of Mahaweli Development and Environment, Ministry of Power and Energy and the private sector. Several State sector stakeholders were present at the workshop as speakers as well as participants. The private sector was represented by several chamber organisations representing both large organisation and the SME sector.

Technical expertise for the project will be provided by UNIDO, which works globally with UN member states in the middle income countries and least developed countries on industrialisation in line with SDG 9. 

UNIDO Representative Regional Office India, Dr. Rene van Berkel who spoke at the workshop, shared some thoughts with the Daily Mirror. 

The aim of the project should not be to just focus on the NDCs’ he cautioned, “Which is just a means and not the end in itself. Rather, he stressed that the NDCs should be addressed with the ultimate aim to reduce GHG emissions, and not just set up systems. In climate action by the industries, most of the emphasis is on energy efficiency and to the introduction of new renewable energy. A lot of solutions are available”, he pointed out.

Renewables in the industry
Industry uses energy on one hand, as thermal energy for heating up and cooling down, and on the other as electrical energy to run equipment. UNIDO has worked with many SME industries in India, Indonesia and Malaysia etc. and observed the possibilities. 

There is a lot of focus on solar energy - PV systems - as it is simple to integrate in existing power systems. Solar energy, though can also be used in part for heating up, as in the case of heating water for sterilization in dairy processing. Similarly, many industries such as pharmaceuticals, leather factories can use solar thermal energy in their processing using solar collector systems. It can also be used as energy for cold chain in food production. Using solar refrigeration or solar driers as the case may be, for example, fruits, vegetables and spices can be preserved for additional income for the community from their agricultural production. 

Opportunities for integration of renewable energy in industry are already plentiful, but also still facing technical challenges for complete conversion. Although things have improved a lot, storage of renewable energy is still the unsolved problem for commercial viability.

Renewables and energy efficiency
Industrial GHG emissionsare dominated by emissions associated with energy use, yet also include emissions from their manufacturing processes such as CO2 from cement, methane from waste management, and N2O from selected chemical processes. Particularly in electronics sector, the emissions are in minutequantity, but highly potent as GHGs. This leads us to look at better technologies, opening up opportunities for innovation and productivity.

End of the day, industries need to be able to demonstrate that emission reductions have been actually made. It is far from an easy task, as consistent data is required. An action plan is required to nail down GHG emissions, and look at what are the specific technologies are used, and which ones are most affordable. 

The minimum abatement cost must be ascertained, as there is limited amount of money, to get the biggest reduction of GHG emissions. For some sectors the solution will lie in renewables, for some it will be energy efficiency. For others, it could be something else entirely. This can be worked out in the industry mitigation plans. 

For all this to work, government policy with appropriate technology and fiscal policies must be implemented to compliment the national Climate Change Agenda with consistencies in place. 

At the same time, capacity building is required to monitor, assess and implement energy conservation through combination of improved housekeeping and management and introduction of energy efficient equipment. Successfully implemented plans in selected companies can then be taken as examples to demonstrate the use of cleaner production, and the specific way they chose to tackle the problem.

The expected outcome is lower greenhouse gas emissions, achieved via a transparent and viable method at a least cost. 

The project is expected to look at all these angles, in its overall objective to help achieve NDCs and foster SDG 9.

Problem of quantifying
Awareness is the first hurdle in getting organisations fully committed. In large industries with their sophisticated infrastructure, energy monitoring and management is already relatively well established. But SMEs have less systems in place, and are less organised, and have very limited understanding where energy is actually going. First, they must examine the day to day functions and their energy requirements.

Dr. van Berkel explains further, “For small businesses - it is really about trying to first understand the big picture, not precisely maybe, but a rough idea, and then start monitoring. Even if it is not perfect, they have to start with some kind of an assessment as to where the energy is flowing. Often, there is only one meter and one bill to pay, and so impossible to control. One has to know, where the electricity, fuel, steam, whatever, is going etc. For a business of any size, every bit of energy saved is money in the pocket. 

“But bigger opportunities arise in looking at the particular processes in detail, and in using innovation”, he points out. 

So, making energy monitoring available is the first step in this discovery. While the technology is not that expensive, it may still prove to be too much for a small business. 
“This could be easily sorted out through a supporting agency - like the Energy Authority, which could rent equipment out to a qualified network of people who could then carry out the assessment” Dr. van Berkel suggests. 

To a certain extent the government has already taken some initial steps. There are Energy Managers etc. But at the moment, they are mostly focused on the larger industries and not SMEs.

Where the information?
Awareness creating tools to identify energy equipment, understand the do’s and dont’s and quick tips have to be developed to the opportunities and needs of different sectors - either in hard copy or even mobile apps. Small businesses need these information at their fingertips to embrace the climate change drive. It must also be intuitive where they can go to for technical assistance. 

At the moment, it is not very clear for even those who are interested or convinced that they need to act. The National Cleaner Production Centre (NCP), Sri Lanka Energy Managers’ Association (SLIMA), and some private consulting firms help companies out. But still, the visibility of the options available is lacking. Institutions like the IDB could actively disseminate information, provide some references. It needs to be brought into mass attention, why you need to go for energy efficiency, and where to go for assistance.

“The need transparency about the process of accessing technical support and find information is vital”, Dr. van Berkel stressed.

“Having said that, there is still something convincing to be done. Companies are often not so aware of what an energy cost is. They only think if energy cost is less that the labour cost, then no need to focus on energy. The great misperception in SMEs is that the only way to grow profits is by selling more - at a better price with cheaper inputs. This is the traders’ mentality, and not so much a manufacturer’s mentality; that through manufacturing excellence you can actually change this black-box cost and get much more profits”, he noted. 

Money in the pocket
One thing is for sure. Saving energy goes straight into the pocket and the quickest way to make money, without additional burden in increasing sales effort. In considering renewables intelligently, lifetime cost of ownership matters. 

A small example can be used to illustrate this point. Imagine the comparison between a coal fire boiler and a solar thermal system. 

If the coal fire boiler is three (03) years payback and the solar power boiler is five (05) years payback, economically speaking, if the lifetime of the equipment is 20 years, the power cost after payback will be; coal fire boiler (3 years payback, 20 year lifetime) - Pay for 17 years, solar power boiler (5 years payback, 20 year lifetime) - 15 years Free.

If bottom line is what matters, then there it is.

Bottom line for earth?
The Secretary General of the United nations recently cautioned climate change as the single biggest challenge the world faces today. Although the aim, advocated through Inter-governmental Panel on Climate Change (IPCC), was originally to limit the mean temperature rise to two degrees, experts now say that this will not be sufficient, and 1.5 degree is a safer target to avoid catastrophic disturbance of the climate and ecosystems. As land, water, energy, food and climate are all closely interrelated, the real impact of climate change above land will be about twice the mean temperature rise. 

Therefore, all sectors have to be addressed with equal tenacity to tackle the global climate change issue. This may be the only opportunity we get, to overtake in the climate change race, before humankind is left behind forever, possibly signing the warrant for yet another mass extinction, although this time it will be caused by man himself.