Memorandum submitted by the Food and Drink
Federation
EXECUTIVE SUMMARY
— Climate change is arguably the biggest
single challenge we face. But it is inextricably linked with the
issue of food security. To meet growing demand, food production
will need to double by the middle of the century. This cannot
be done without greatly increasing the efficiency of resource
use throughout the supply chain. It also needs to be done in ways
which both mitigate and adapt to the climate change process itself.
— Low carbon technologies clearly have
a vital role to play in this. The UK food and drink industries,
now the country's largest single manufacturing sector, are already
making a significant contribution and have the potential to achieve
much more, given the right regulatory and competitive environment
in which to attract the skills and investment needed for successful
innovation.
— This will require a collective and collaborative
effort, on the part of industry, government and other stakeholders,
within a policy framework which recognises sustainable food production
as a priority in its own right.
INTRODUCTION
1. The Food and Drink Federation (FDF) is
the voice of the UK food and drink industry, the largest manufacturing
sector in the country with a turnover of £72.4 billion and
gross added value of £21.6 billion, representing some 14%
of total UK manufacturing. It is also the fourth largest food
and drink manufacturing industry in the world.
2. FDF's membership comprises companies
of all sizes, as well as trade associations and groups dealing
with specific sectors of the industry. We help our members operate
in an appropriately regulated marketplace to maximise their competitiveness.
We communicate our industry's values and concerns to Government,
regulators, consumers and the media. We also work in partnership
with key players in the food chain to ensure our food is healthy,
nutritious and safe and that consumers can have trust in it.
3. A successful food and drink sector is
a vital component of a healthy UK economy. The industry directly
employs 440,000 people, and many more in ancillary services.
It buys around two thirds of the UK's agricultural output and
is the world's eight largest exporter of food and drink products,
worth around £7.5 billion a year.
4. It is also a major energy user, with
annual consumption around 45 TWh which corresponds to CO2 emissions
of 11.3 MTe/annum (primary).
THE CONTRIBUTION
OF FOOD
AND DRINK
MANUFACTURERS TO
A LOW
CARBON ECONOMY
5. Tackling climate change requires everyone
to play their full part—the public sector, energy suppliers,
industry and consumers. In November 2007, as part of its public
Five Fold Environmental Ambition, FDF members committed to an
industry-wide absolute target to reduce CO2 emissions
by 20% by 2010 against a 1990 baseline. We are on target
to achieve this. We also set an aim to achieve a 30% reduction
by 2020, in order to send a clear signal nationally and internationally
about the scale of change required and to show leadership on behalf
of the sector.
6. Energy efficiency improvements, investment
in new more efficient plant, process design, supply chain optimisation
and, increasingly, renewables will all be important in achieving
this goal. In its first annual progress report, published in November
2008, FDF was pleased to report a reduction of 17% by 2006 compared
to 1990—an average saving of 58,000 Te CO2 per
year.
See also www.fdf.org.uk/environment_makingadifference.aspx
DELIVERING ON
ENERGY EFFICIENCY
AND EMISSIONS
REDUCTIONS
Climate Change Policy
7. There are two main policy instruments
that impact food and drink manufacturers: Climate Change Agreements
and the EU Emissions Trading Scheme. Together they provide a regulatory
framework setting targets for emissions reduction within the sector.
8. The FDF Climate Change Agreement (CCA)
has around 900 participating manufacturing sites that between
them produce 37.2 million tonnes of food and drink products.
This is a highly diverse industry and the following sub sectors
are represented in the CCA: alcoholic drinks, baking and cereals,
ambient foods, confectionery, frozen and chilled produce, glucose
and starch, milling, oils and fats, pet foods, meat and fish,
soft drinks and sugar. Energy is used for a very wide range of
applications including, handling, conveyance, steam raising, frying,
boiling, sterilizing, baking, chilling, freezing and packing.
9. At the 4th Milestone in 2008 an
improvement in energy efficiency of 16% against a target of 13%
was reported.
10. FDF welcomes the Government decision
to extend CCAs to 2015 and supports the proposal to move
to absolute carbon targets. However, we urge Government to consider
further proposals to retain CCAs beyond 2015 in order to
provide a more certain investment regime and to give manufacturers
greater certainty regarding medium term emissions reductions targets.
11. FDF supports emissions trading as a
mechanism to reduce carbon dioxide emissions in the most cost
effective manner. FDF members have 54 installations in the
European Union Emission Trading Scheme (EUETS) accounting for
an allocation of 2.3 million allowances in Phase II. In 2013 the
EUETS will enter its third phase when these sites will be operating
under the overall EUETS cap which has been set to deliver a 21%
emissions reduction by 2010 relative to a 2005 baseline.
CARBON MANAGEMENT
AND ENERGY
EFFICIENCY
12. FDF is actively engaged in supporting
the sector to improve energy efficiency and reduce its emissions,
for example through its work with environmental consultants Enviros
to develop a Carbon Management Best Practice Guide, providing
practical advice for improving the efficiency of energy-using
equipment such as boilers, ovens, and refrigeration plants. The
guide is being widely promoted to members. It has also been made
available on FDF's public website for the wider benefit of the
food and drink manufacturing industry.
www.fdf.org.uk/publicgeneral/carbon_management_guidance_2008.pdf
13. FDF has also worked with the Carbon
Trust on a major project focused on refrigeration, which identified
over 28,000Te CO2 savings and a set of guidance
notes for wider use.
www.cclevy.com/refrigeration.html
14. As part of our efforts to share best
practice and promote greater efficiency, FDF has also produced
a number of case studies illustrating what can be achieved. For
example:
— Alpro will save 1,530 tonnes of
CO2 by the end of 2008 compared to 2007 at
its Kettering site as part of its ambition to be carbon neutral
by 2020.
— Alara Wholefoods, is saving 52 tonnes
of CO2 emissions per year at its manufacturing
site in London.
— British Sugar cut CO2 emissions
by 30,000 tonnes per year at its Wissington site following
a £10 million investment in 2007.
— Burton's Foods has reduced its CO2 emissions
by 1,322 tonnes (10%) since 1999 through investment
in new plant and baking equipment
— Kellogg's has achieved reduced CO2 emissions
by installing a Combined Heat and Power plant at its site in Manchester.
— Kraft Foods' global target is to reduce
CO2 emissions by 25% between 2005 and 2011.
— Macphie of Glenbervie will reduce the
company's emissions by 2,100 tonnes per year from 2008 following
investment in a 1.2MW biomass boiler.
— McCain Foods will meet 70% of its electricity
needs at its Whittlesey site from renewable sources following
a £15 million investment.
— Tate & Lyle will achieve a 70% reduction
in emissions from fossil fuels at its Thames Cane Sugar Refinery
following investment in a new biomass boiler—120,000 tonnes
of CO2 per year.
PROMOTING THE
DEVELOPMENT AND
ADOPTION OF
LOW CARBON
TECHNOLOGIES
15. Three areas are of particular relevance
for food and drink manufacturers within their own operations.
ANAEROBIC DIGESTION
16. The conversion of waste food and other
organic material to energy tackles both waste disposal and lower
carbon energy generation. FDF continues to encourage Government
to incentivise growth in the embryonic anaerobic digestion and
composting industries, in line with the policy attached to those
sectors in its 2007 Waste Strategy.
17. To help improve accessibility to anaerobic
digestion and composting capacity, FDF set up a joint industry
and Government Waste Infrastructure Working Group. It successfully
pooled information about existing and, where possible, new capacity
into a single database which will be managed by the National Industrial
Symbiosis Programme (NISP) to help match available capacity to
food and drink industry needs. FDF's priority is to work with
NISP to promote its role as honest broker between the food and
waste treatment industries to help divert food and packaging waste
from landfill.
18. We will work with NISP, WRAP and other
partners to ensure that data on waste treatment capacity continues
to be pooled and the database is kept up-to-date. We will also
press to address difficult and related issues such as planning
permission and joined up local authority approaches to municipal
and commercial waste treatment solutions which have significant
potential for energy recovery.
COMBINED HEAT
AND POWER
19. Combined Heat and Power is a well proven
technology delivering both energy efficiency and lower carbon
generation of heat and electricity. This is particularly true
if combined with low carbon energy inputs such as biomass or gas
from anaerobic digestion plants.
20. The food and drink manufacturing sector
is already a significant user of CHP with around 500MWe installed
capacity, though this tends to be concentrated at larger installations.
It is recognised that there is significant further potential,
however relatively few new installations have come on stream in
recent years largely due to poor payback periods.
21. Current financial support mechanisms
include Climate Change Levy exemptions, Levy Exemption Certificates
for exported power and Enhanced Capital Allowances (ECAs). Further
incentive for renewables CHP could come from additional financial
support such as higher (100%) ECAs or increased renewable obligation
certificates (ROCs). We also see the development and promotion
of energy supply companies (ESCOs) playing an important role in
delivering future CHP projects.
LOW CARBON
ELECTRICITY SUPPLY
22. Food and drink manufacturers quite rightly
focus on energy efficiency as a primary driver to reduce emissions.
But decarbonising the electricity supply market (eg renewables,
new nuclear, carbon capture and storage, energy from waste etc.)
is also an important factor in terms of reducing total emissions.
As an example sites could consider meeting future targets by switching
from a natural gas fired processes to ones using electricity powered
by low carbon grid electricity. FDF urges Government to pursue
its plans for the electricity supply sector as a matter of urgency
and to ensure that the interactions with sectors that use the
outputs of the electricity supply sector are fully taken into
account when developing future emissions reductions policies.
May 2009
| 
