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Supply Chain, Decarbonize Thyself

Jeff St. John: February 25, 2009, 9:48 AM

The global shipping and warehousing industry can cut its carbon emissions — estimated at about 5 percent of the global total — in half if it undertakes a series of changes to the way it does business.

That’s the news from the World Economic Forum and consulting firm Accenture, which released their “Supply Chain Decarbonization� report on Wednesday.

Given that a corresponding Accenture survey found only one in ten supply chain executives were actively managing the carbon footprint of their companies’ operations, this new report could be seen as a to-do list for the industry.

The report said global transport and warehousing has 13 “commercially feasible� ways to cut in half its estimated annual carbon emissions of about 2,800 megatons — which is about 5 percent of an estimated 50,000 megatons of CO2 released from manmade sources into the atmosphere each year.

Among the key recommendations the report outlines are switching to electric or biofuel-powered trucks (a 175-megaton reduction); making warehouses and other buildings more energy efficient (a 93-megaton reduction), switching freight from planes and trucks to railroads and ships (a 115-megaton reduction), and allowing all those modes of transport to move more slowly so they use fuel more efficiently (a 171-megaton reduction).

Optimizing transportation networks — in other words, doing things like making sure trucks aren’t moving half-empty — could yield another 124-megaton reduction in carbon emissions, the report found.

Packagers of products can do their part by using less material or switching to greener packaging, for a 132-megaton reduction, the report noted.  

But not all of the 13 steps the report outlines for carbon reduction are within a company's control. Some — like the recommendations to source agriculture and manufactured goods closer to destination markets and in nations or regions that have lower carbon emissions, for a total 335-megaton reduction — will fly in the face of the decades-long trend towards more globalized world trade.

Know Your Chemicals, Make Healthier Buying Decisions

Ucilia Wang: February 25, 2009, 8:23 AM
Do you know what chemicals are used to make the toys and furniture in your home, or the plastic lunch box and bottles that hold your food and drinks?

In California, work is underway to create a database of chemicals and their toxicity levels for public access, thanks to a law that took effect in January this year. State officials hope to use the online database to nudge manufacturers into ditching more harmful ingredients and designing better products.

The state Department of Toxic Substances Control (DTSC), part of Cal EPA, is developing the database, which will enable consumers to evaluate and decide whether they want to buy certain products. The state also enacted another law last month that empowers the department to identify and rank chemicals that pose health threats and figure out alternative that manufacturers could use.

“There is a lack of information to choose non-toxic products,� said Maureen Gorsen, director of the DTSC, at the Cleantech Forum in San Francisco Wednesday. “What are alternatives to plastics? That’s where the opportunities are for green materials.�

In the past, the state’s efforts to regulate chemicals mainly focused on cleaning up chemical spills and limiting toxic exposures in the workplace. News about high lead content in toys highlighted the public's ignorance on what they touch and use daily.  Autism, cancers and other health problems also have been linked to excessive exposures to toxic chemicals.

The DTSC has created a wiki to allow consumers to pitch in to help to create the rules for collecting the chemical data and assessing the toxicity levels of the consumer products. The two laws came out of the Green Chemistry Initiative launched by the Cal EPA in 2007.

Here are some interesting numbers from Gorsen and the DTSC website:

  • The U.S. chemistry market is worth $635 billion. California accounts for $7.2 billion of that pie.
  • The worldwide chemical market grows 3 percent each year, doubling every 25 years.
  • About 100,000 different chemicals are used to make consumer products today.
  • Two million plastic beverage bottles are tossed away every five seconds in the United States.
  • 426,000 cell phones are discarded each day in the country.

In a Down Market, Green Building Is Soaring

Michael Kanellos: February 24, 2009, 2:40 PM
For green building companies, the good times have just begun. Despite the worldwide economic crunch, a number of companies with green building products or services are doing well. Kevin Surace, CEO of Serious Materials, said that his green drywall company had a record year last year and is in the midst of a record quarter at the moment, he told an audience at the Cleantech Forum in San Francisco. Matt Golden of Sustainable Spaces, which does energy assessments for homes, says his company is wrapping up a record month. Dan Geiger, who heads up the U.S. Green Building Council in Northern California, says interest in the group continues to build. Classes are exceeding expectations. And to top it off, David Elien, CEO of GE Lumination, says that the LED market is down, but because notebook makers are buying fewer LEDs. "General lighting is up," he said. So what gives. "Some of the bigger customers are taking their dollars out of new projects and putting them into their existing footprint and optimizing it for energy efficiency," said Elien. "When they come out of the downturn, they want to lower their operating expenditures." Surace had another explanation. Housing starts are 83 percent down. But new home builders have never been interested in products like Serious' EcoWall. "Big tract home builders don't care. They don't pay your electrical bills," Surace said. (Surace, by the way, sits on numerous green building advisory committees and boards. Serious also sells windows.) The product is mostly being bought by commercial builders and custom home builders. A lot of these segments are only down moderately. Large builders like Webcor now get the lion's share of revenue from green projects. The stimulus bill will also pump billions into retrofits and energy efficiency programs, Surace and Golden said. You can learn more about it at the Green Building Summit we are holding in Menlo Park, Calif. on June 11. If you have a business plan for green building or would like to participate, drop me a line.

Achates Power, Stealthy Diesel Startup, Comes Clean

Michael Kanellos: February 24, 2009, 1:01 PM
Achates Power, which has been touting its opposed piston/opposed cylinder engine for the past few years but not providing a lot of details, unfurled a good portion of its business plan today at the Cleantech Forum during a presentation and an interview. First, to recap. The company is working on engines based around a design originally coined by the Junkers aircraft company back in the 1930s. (You know -- the guys who made planes for the Third Reich.) The Junkers Juno had one of the most efficient engines ever made, said CEO David Johnson (Johnson replaced James Lemke who became CTO a bit ago.) In these engines, the pistons face each other in one long cylinder, rather than sit in separate cylinders. Competitors like EcoMotors (which also has opposed piston/opposed cylinder engines) say these engines could lead to cars that get 100 miles a gallon. Now, the new material. Although based around the engine in the Junkers Juno, Achates has tweaked the engine to give it more balance torque. "We are both highly efficient and have high power density," he said, calling the engine "clean, durable and compact." "We eliminate the cylinder head and improve the performance," he added. The engine also weighs less than standard diesel engines, which further improves gas mileage. The company has already completed and built a two-stroke first generation engine, which it calls the A40. It has one cylinder and two pistons. "A military customer has already taken it and packaged it into a vehicle," he said. A new engine with four cylinders and eight pistons will be done in about two months. Achates now wants to raise $25 million to design a second generation engine based on a different design. To date, Achates has raised $35 million already from, among others Sequoia Capital and John Walton. Walton, a member of the Wal-Mart family, is also the guy who plunked money into First Solar. Achates, he added, won't make engines. It will license the designs to large manufacturers and vehicle makers. The company will charge $50 million in up front fees and five percent of revenue earned from its products after that. It hopes to sign its first deal in 2010. Licensing is common practice in pharmaceuticals, but in hardware it often results in acrimony and lawsuits. Johnson, though, said that the vehicle industry would license. One, they've done it before -- the Wankel engine was produced under licenses. Second, vehicle makers have to meet CAFE standards. They may have no choice. The first customers will likely be truck makers. Diesel in the U.S. is bigger in trucks than cars and truck makers are friendlier when it comes to licensing than car makers. Johnson showed a slide that says the company has been in talks with Eaton, Delphi, Caterpillar and others. Oh, one of the board members is Gary Convis, who ran Toyota in the U.S.

U.S. Needs a $1 a Gallon Gas Tax, Says Nobel Laureate

Michael Kanellos: February 24, 2009, 11:56 AM

What will get the U.S. moving toward greenhouse gas reductions and greater energy autonomy? A $1 a gallon gas tax, says Arno Penzias.

Penzias, who won the Nobel Prize in Physics in 1978 (with Robert Wilson) for confirming the Big Bang and who now works as a VC at NEA, says that the tax should then be paid directly to the states. (I ran into Penzias in the hallway at the Cleantech Forum taking place in San Francisco.)

What else needs to be done? Smart grid. “We’ve got to have a grid� that works better, he said. Penzias is also something of an advocate for nuclear for providing baseline power.

New technologies, he added, aren’t necessarily the answer nor do we necessarily have the luxury of time to wait for them. Greenhouse gas reductions could be accomplished with existing technologies. They just have to be implemented.

“We’ve got to make do with what we have,� he said.

Getting infrastructure implemented in the U.S., however, isn’t easy. He said he’s been waiting for better cell coverage at his vacation house for a while.

Bioplastics Close in Price to Regular Plastic and Trader Joe’s Coconut Packages

Michael Kanellos: February 24, 2009, 10:09 AM

Bioplastics are no longer the Cadillac option.

Cereplast, which makes biodegradable and compostable resins for food containers and industrial parts, has managed to reduce the cost of some of its resins so that they compete with regular petroleum-based plastics, said CEO Frederic Scheer in an interview at the Cleantech Forum in San Francisco. That’s a big change from three years ago when bioplastics were more of a disposable status symbol.

Last summer, when oil was around $100 a barrel, conventional petroleum-based resins sold for around $1.00 per pound. Cereplast’ s compostable resins, which completely dissolve in landfills, sold for about $1.05 a pound while the company’s hybrid bioplastics, which mix conventional and renewable resins, sold for 85 cents a pound. Thus, hybrid bioplastics were cheaper. Where carbon credits applied, compostible plastics were too.

Now, conventional resins sell for 50 to 60 cents a pound, thanks to a drop in oil prices to $35 to $40 a barrel. Compostable resins are around 85 per pound, so still expensive, but the company’s hybrid resins go for around 55 to 65 cents.

“We are very, very competitive,� he said.

Bans on Styrofoam will also push demand and in turn lower prices, he added.

Another factor that’s helping drop the price of bioresins is the paper industry. The paper industry buys a lot of starch. With Web-based publishing, increased recycling (and increasing stockpiles of recycled paper) the price of starch has been dropping because demand for paper has dropped.

And no, it won’t compete with food just yet. “We use four different starches, but in the U.S. we primarily use corn starch,� he said. “If you take the entire bioplastic industry, we represent less than one thousandth of 1 percent� of the starch market.

Meanwhile, the next time you pick up ginger at Trader Joe’s, you’ll be picking up some recycled coconut fiber too.

Earthcycle Packaging sells recyclable containers made from Malaysian palm fiber, said company representative Tracy Chmelaukas. The company makes containers for Trader Joe’s. Just thought you’d like to know. Cereplast and Earthcycle both have booths at the show.

Cleantech Forum: Masdar Raising New Fund; Cal. Atty General Has Green Plan

Michael Kanellos: February 24, 2009, 9:53 AM

SAN FRANCISCO -- I’m in the hallways at the Cleantech Forum in San Francisco today and here is what’s happening.

The Masdar Foundation, the massive investment and development organization funded by the government of Abu Dhabi, is raising a $700 million fund, according to a source. The foundation will partner with Deutsche Bank. Masdar partnered with Credit Suisse on their first fund, but there are more to come. The whole Masdar effort — which involves building solar factories, erecting net-zero energy cities, and starting a graduate school for energy efficiency with the help of MIT — is going to be billions. More on this later.

California Attorney General Jerry Brown spoke today. I missed his talk but ran into him (and his larger-than-life eyebrows) in the hallway. His office is putting together its own solar and renewable energy effort. Governor Schwarzenegger already has one. The efforts are somewhat similar, but Brown may focus a bit more on energy efficiency and distributed power, indicated Cliff Rechtschaffen, special assistant to the AG.

I also told Rechtschaffen about an idea from Matt Golden, CEO of Sustainable Spaces: give tax credits for energy efficiency and energy reduction that are equal to the solar credits. Right now, California residents can get whopping credits for solar, but less for reducing power consumption. Rechtschaffen said that is one of the ideas they are looking at.