Embedded Carbon – The Hidden Challenge to Net Zero
With the impending implementation of CBAM reporting in the EU in mind, Owlett-Jaton has stepped up its auditing processes for its Asian factories, taking into account environmental, sustainability and ethical considerations as a means to further reduce its carbon tonnage and focus on responsible sourcing.
Owlett-Jaton, the UK’s largest wholesaler of fasteners and fixings, was early to recognise the importance of environmental responsibility and became the first and only fasteners and fixings wholesaler in the UK to be awarded Environmental Accreditation ISO 14001:2015.
Since becoming accredited, the supplier has reduced its carbon tonnage by 30% whilst growing the business. In achieving these improvements, the business has undertaken a wide range of initiatives, including:
- Sourcing all electricity from renewable sources.
- Installed LED lighting across offices and the warehouse at the Stone site.
- Invested in high-speed doors in the warehouse to minimise heat loss.
- Investment in lithium-ion battery-powered mechanical handling equipment. This equipment not only uses less electricity but eliminates the use of lead-acid batteries and the potential for hazardous chemical spills associated with their maintenance.
- Introduced plug-in hybrid electric vehicles and battery electric vehicles to the company car fleet, together with the installation of on-site charging.
- The consolidation of operation onto a single site has allowed the business to increase sales whilst reducing its overall energy consumption by 30%.
- All waste is segregated and recycled or re-used whenever possible.
- Packaging changes made to improve the environmental performance of products, including:
- All purchased cardboard packaging is fully recyclable and FSC-sourced with high recycled content.
- Introduced paper gummed tape in place of polypropylene.
- Reduced the use of plastic packaging formats and switched to recycled materials.
// We are very proud of our progress having reduced energy usage by over 30% over the past five years, but our usage represents less than 0.5% of the CO2 embedded in the products we sell! //
In Torque Magazine’s November issue, CEO Ian Doherty commented as guest editor, “As 2023 draws to a close, we can look back on a year of record temperatures, melting glaciers and ice caps, and extreme weather events. There can surely be no doubt that climate change is real and having a substantial impact on all of our lives.
In the UK at least, much manufacturing has been offshored, largely to China and other Far East countries. In fasteners, this is certainly true. Fastener manufacture, like many other metal industries, is an energy-intensive process. Taking the whole supply chain from ore extraction through smelting, wire drawing and transport from the Far East to Western markets, it is not unrealistic to consider that the manufacture and transport from the Far East has generated 3-4 tonnes of CO2 for each tonne of fasteners.
We are very proud of our progress having reduced energy usage by over 30% over the past five years, but our usage represents less than 0.5% of the CO2 embedded in the products we sell!
The EU, and probably in due course the UK, are trying to address this challenge with the introduction of the Carbon Border Adjustment Measure (CBAM), the first phase of which has already started. Until the end of 2025, CBAM is reporting only but will bring the scale of the importation of embedded carbon into the limelight. From 2026, the embedded carbon will be charged to importers, effectively an import tax, at the prevailing rate of carbon credits in the EU Emissions Trading Scheme. It does not seem unreasonable to expect an increase to landed costs by 10-20%.
Whilst I do believe CBAM is heading in the right direction, charging for embedded CO2 and providing incentives for offshore manufacturers to become more carbon efficient, the implementation looks extremely daunting for those who have to report. CBAM will be painful from both a cost and administrative perspective, but it, or something equivalent, is, in my opinion, a necessary step on the road to net zero”.
Having got its in-house initiatives in order, Owlett-Jaton has been looking more closely at its extended supply chain with a focus on responsible sourcing. With the lifting of Covid travel restrictions, the wholesaler has recommenced its in-depth audit of its Far East factories. Historically, these audits were predominantly product and quality-based, they are now broader, taking into account environmental, sustainability and ethical considerations. With over 30 factories already audited in 2023, Owlett-Jaton is making significant steps to further cement its position as a leader in this area and meet the needs and expectations of its customers.