L’Oréal USA announced plans this month to achieve carbon neutrality for all 21 of its manufacturing and distribution facilities in the United States by 2019. Renewable energy is at the core of this strategy.
The company already has renewable energy installations nationwide, which includes onsite solar arrays in Arkansas, New Jersey, and Kentucky as well as wind turbines in Texas. In order to meet their goal of having carbon-neutral facilities by next year, L’Oréal USA signed an agreement to purchase renewable natural gas from a new processing facility in Kentucky.
Energy Manager Today recently caught up with Jay Harf, vice president of environment, health, safety and sustainability at L’Oréal Operations Americas to learn more about the company’s strategy.
What was the impetus for the carbon neutrality goal?
Reducing our environmental footprint — including our carbon emissions, waste, and water use — is a key element of our global Sharing Beauty with All sustainability program. We were proud in the US to have already reduced our CO2 emissions by 84% and achieved 100% renewable electricity use, but were driven to tackle our thermal (scope 1) emissions and become carbon neutral for all 21 of our US manufacturing and distribution facilities across 12 states.
How does this goal fit into L’Oréal USA’s energy management strategy?
L’Oreal USA currently has 17 renewable energy installations across the country. We had already surpassed the company’s 60% carbon emissions reduction goal in absolute terms in 2017, but wanted to push ourselves further. To reach this new milestone, L’Oréal USA is adding renewable natural gas purchased from a new processing facility in Kentucky. This latest renewable natural gas project further diversifies our renewable energy portfolio.
What are the main advantages to purchasing RNG?
A key component of our criteria when evaluating potential scope 1 solutions was that the project needed to be financially viable. While renewable natural gas offered us a solution, high production costs and demand drive the biogas market cost up significantly.
In order to offset the cost differential between renewable natural gas and non-renewable natural gas, L’Oréal USA will temporarily sell the environmental attributes from its RNG back to the transportation fuels market for approximately five years. When we break even on the project after approximately five years, we plan to use the environmental attributes from the RNG we are purchasing to maintain our carbon neutrality for all 21 manufacturing and distribution facilities.
Given the number of landfills in the US that have the potential to convert landfill gas to renewable natural gas, we believe that our approach could potentially serve as a model to support new renewable natural gas projects in a way that is both environmentally and financially sustainable.
What are the main challenges around this goal?
Tackling scope 1 emissions is a challenge shared across industries. As our US operations team considered approaches to address our thermal needs and reach carbon neutrality, we were driven by L’Oréal’s sustainability philosophy to pursue a local strategy that would have a positive impact in the communities in which it operates while providing “additionality,” meaning the project would not be possible without the company’s committed involvement.
We decided to begin our research into possible solutions in Kentucky, which is home to our Florence haircare manufacturing facility — our largest facility in the country with the largest carbon footprint.
After 18 months of extensive research, including looking at alternatives like anaerobic digesters, we settled on a renewable energy solution utilizing landfill gas from the Big Run Landfill in Ashland, Kentucky, which is 135 miles from the L’Oreal USA plant in Florence.
This project satisfied our sustainability principles and was particularly attractive given the landfill had enough gas to meet our needs as well as the interconnection rights to the pipeline which enabled us to achieve our carbon neutrality goal for all 21 sites with a single solution.
The 3rd Annual Environmental Leader & Energy Manager Conference takes place May 15 – 17, 2018 in Denver. Learn more here.