Companies across the globe are placing a much greater focus on sustainability and decarbonization in their manufacturing and production processes. This is true across the Asia-Pacific region.
In this initial podcast in our Asia-Pacific Sustainability & Decarbonization (S&D) series, I’m joined by ARC Advisory Group’s General Manager for Southeast Asia, Bob Gill and Emerson’s Director of Strategic Planning, Sustainability & Decarbonization for Asia Pacific, Pravin Raj to discuss the trends, practices, and technologies that companies are following to drive their strategies.
In this episode, we explore Emerson’s Sustainability Framework, key factors driving S&D initiatives, types of transformations, emissions management strategies, early successes, lithium battery & hydrogen production trends, and some of the technologies to enable these initiatives.
Visit the Sustainability & Decarbonization section on Emerson.com and connect with Emerson’s Asia-Pacific Sustainability & Decarbonization experts in your country.
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Jim: Hi everyone. This is Jim Cahill with another “Emerson Automation Experts” podcast. Globally, we are seeing an increasing emphasis on sustainability & decarbonization as countries, corporations and communities further define and implement their roadmaps to achieve net zero / carbon neutrality and operate in a more sustainable way. At the moment, this is nowhere more apparent than in Asia Pacific. Based on a Bloomberg NEF report, out of the $755B the world invested in low-carbon technologies (e.g. renewable energy, electrified transport, hydrogen, carbon capture, sustainable materials, etc) in 2021, 42% of that was invested in China, Japan, India and Korea alone, with China increasing its investment by 60% compared to the prior year.
We are launching an Asia Pacific Sustainability & Decarbonization Podcast Series to take a closer look at trends in the region and to discuss with experts on the technologies and applications that are key to enabling companies to achieve their decarbonization goals. Today, in the very first of this series of podcasts, I’m joined by Pravin Raj, Director of Strategic Planning, Sustainability & Decarbonization from Emerson Automation Solutions Asia Pacific and Bob Gill, General Manager for Southeast Asia for the ARC Advisory Group, to discuss the sustainability and decarbonization trends we are seeing in the Asia Pacific region and how Emerson is supporting our customers in this space.
Welcome Pravin and Bob!
Pravin: Hi Jim and Bob. Excited to be here.
Bob: Hi Jim and Pravin. Glad to be part of this discussion.
Jim: Pravin, it’s great to have you here with us. Let’s begin by asking you to share your background and path to your current role with our listeners.
Pravin: Thanks Jim. I am based in Singapore, and I manage both Strategic Planning and Sustainability & Decarbonization for Emerson Automation Solutions Asia Pacific. Prior to joining Emerson in Singapore, I was based in the United Kingdom and Azerbaijan, where I worked as an Offshore Installation Engineer and later as a Project Manager, responsible for leading the engineering, design, procurement, construction and commissioning of offshore oil & gas platforms.
Empowering a more environmentally responsible planet is ingrained in Emerson’s purpose. I am inspired and passionate about how we help customers across some of the world’s most essential industries make measurable sustainability progress, and am grateful that I can contribute towards that in my current role.
Jim: Thanks Pravin …And Bob, could you also give us a brief intro about yourself?
Bob: Yes, sure. I manage ARC Advisory Group‘s business operations and market research activities in Southeast Asia. ARC provides technology research, advisory and consulting services to industrial automation and software suppliers as well as to end-user companies in the manufacturing, infrastructure and energy sectors. And certainly, at ARC, we see very clearly that sustainability is becoming an absolutely key area of focus for the industrial end user companies in our ecosystem; as it also is for our technology supplier clients, who are developing and evolving products and solutions to help meet the sustainability needs of their clients – the end users.
Jim: Pravin, could you tell us a bit about Emerson’s approach to Environmental Sustainability?
Pravin: Sure Jim. To help the world achieve a lower carbon future, Emerson has developed an Environmental Sustainability Framework, which can be summarized by 3 key elements – Greening OF, Greening BY and Greening WITH. On the Greening OF Emerson, we are working across our sites to reduce emissions, engaging with our energy providers to integrate renewable sources and embedding a sustainability focus in our management processes. On the Greening BY Emerson, we support and enable our customers decarbonization roadmaps with Emerson solutions, technologies and expertise. And finally, on the Greening WITH Emerson, we engage with external stakeholders to provide industry leadership, develop innovative solutions with universities and research centers as well as work to shape future policies with regulators.
Jim: Great! And in today’s podcast, we will be focusing on Greening BY, how we at Emerson are enabling our customer’s decarbonization efforts, especially in the Asia Pacific region.
Bob, we are seeing a lot of momentum in Asia from a Sustainability & Decarbonization perspective, could you share with us some of the key factors that are driving companies in Asia to invest in sustainability initiatives?
Bob: Yes, at ARC we conducted a survey of companies in the process industries, with the aim of getting a better understanding of the current state of sustainability activities and initiatives. Almost half of the of the 200+ survey respondents were from the Asia Pacific region.
We wanted to find out things like the drivers for initiating sustainability programs; where companies are focusing their efforts; what challenges they face, and which technologies are being used to advance sustainability initiatives.
So for example, when we asked about what’s driving companies to initiate sustainability programs, the top two factors cited were:
#1 – To Increase Access to Capital
#2 – Satisfy Customer Buying Behavior
#1 – This 1st factor: Increase Access to Capital
Many large investment firms are increasingly sensitive to the sustainability performance of the industrial companies they invest in, and believe progress on sustainability is important for their long-term portfolio risk. Hence, companies believe successful sustainability programs will be favorable in terms of maintaining key investment relationships and increasing access to capital. This also indicates how critical and central sustainability is becoming for companies i.e. no longer just a nice to have, niche activity.
#2 – And the 2nd most cited factor: Satisfy Customer Buying Behavior
Customers are increasingly demanding products that are more “circular” in their ability to be reused and recycled rather than just ending up in landfill. Chemical companies, in particular, are having to prepare for this customer-driven trend by developing and manufacturing more sustainable materials.
Other factors cited:
#3 – Gain Competitive Advantage
#4 – Deliver Shareholder Value
#5 – Mitigate Regulatory Risk
#6 – Improve Access to New Markets
Jim: Interesting insights there, Bob. In fact, as a result of the factors you have mentioned, I understand we are seeing an increasing number of organizations here in Asia transform their business and invest more in sustainability programs and projects.
Pravin, I’d like to bring you in to comment. What types of transformation are we seeing with organizations in Asia with respect to this?
Pravin: Certainly Jim. We can broadly group the transformations we are seeing with organizations across Asia into 3 categories:
In the first category are organizations that are establishing sustainability roadmaps and investing in sustainability-related companies. This includes:
- Acquiring/buying a stake into companies that own technologies in certain sustainability segments, like buying an existing electrolyzer company that produces hydrogen
- Forming partnerships with companies in a particular segment of the value chain, like supplying fuel cells to EV manufacturers
In the second category are organizations that are making internal organizational changes to drive & coordinate sustainability initiatives such as:
- Forming ESG or sustainability project departments to work on in-house projects
- Refocusing business direction, such as EPCs changing names or setting up new business units to establish capability in the engineering & execution of sustainability projects
3. In the third category are companies that are increasing their investments in R&D / technological developments in the sustainability space
- This is a new space & a lot of new technology is required to drive efficiency and cost reduction. Mid to long term R&D efforts are critical, such as in the hydrogen segment, where driving down the cost of production, ammonia cracking efficiency and effective transportation are all crucial areas to work on
Jim: Really like how you categorized the transformations Pravin. You know, we are seeing these transformations take shape in different ways because organizations have different sustainability objectives. And just to name a few, this could be to improve their energy management, reduce their emissions or even adopt cleaner energy sources.
Bob, let’s start off with Energy Management. What trends are you seeing across Asia?
And aside from the undeniable environmental benefits, what do companies stand to gain from managing their energy consumption better?
Bob: The topic of energy management is taking on an increasingly important role in the industrial environment. The “Green Factory” is not only important from an environmental standpoint, but ultimately increases profitability in production.
Accordingly, the need to reduce consumption of electricity, gas, air, water, steam is driving the market for energy management solutions. And more and more, innovation is increasingly centered on software for data collection and advanced technologies including machine learning, data analytics, and customized intuitive dashboards.
In our latest report on the Energy Management Software market, which we estimate to be worth around $4B globally, while Asia currently lags North America and EMEA in spending on energy management software, the region is forecast to offer suppliers the greatest potential for growth over the next several years.
Pravin: Absolutely Bob, we are seeing a growing demand from organizations for energy management solutions and advisory support, as well as increased government funding to encourage better practices. For example, in Singapore, The National Environment Agency’s Energy Efficiency Fund supports the efforts of businesses with industrial facilities to improve energy efficiency.
Jim: Pravin, Emerson believes in the importance of continuing to work hand-in-hand with our customers to help them achieve their energy management goals. Could you share with us a particular collaboration success story that exemplifies this?
Pravin: You know Jim, organizations are now more focused and adopting new technologies to meet their ESG goals, whether driven by regulatory requirements or corporate objectives.
This particular Life Sciences company had a regulatory requirement for energy consumption reporting on a monthly basis. We are collaborating with them to:
• Automate the current manual process of collecting and reporting energy-related data
• Include all energy streams on-site such as; steam, water, air, electricity, etc.
• Enable higher visibility of energy consumption across the entire organization.
• Facilitate timely maintenance of equipment to ensure energy efficiency and increase equipment life span
In addition to helping them achieve their energy management goals, through these measures, we anticipate around 20-25% reduction in maintenance and 5-8% improvement in equipment life span, as well as 30% improvement in operational efficiency.
Jim: That’s a great example Pravin, of working together to obtain measurable improvements.
Bob, let’s switch gears and talk about a vital focus area to protect our environment, which is Emission Control.
Why do industries play a key role in controlling emissions and how are you seeing the need for solutions evolve here in Asia?
Bob: Rapid industrialization is one of the factors contributing to severe environmental damage. Toxic emissions from various industries can pollute air, water, and land. Power plants and many other industries are emitting tons of harmful gases into the atmosphere. Hence, governments around the world require industries to keep track of pollutant emission rates using emission monitoring systems (EMS).
While continuous EMS (CEMS) has been traditionally used and approved for emission monitoring, many countries now also approve software-based predictive EMS (PEMS) for use in certain applications in lieu of an installed CEMS.
As outlined in ARC’s report on the Emission Monitoring Systems market, stricter enforcement of monitoring regulations in the developed and developing economies is driving much of the growth in the market. Other factors contributing to this growth include the expanding energy sector in Asia and new regulations requiring monitoring of lower emission ranges and new components.
The Asia Pacific region is the biggest market for emissions monitoring systems with a market share of over 50 percent and has thus become a major focus point for many suppliers.
Jim: Couldn’t agree more Bob on the importance of this, and this is an area in which we continuously strive to innovate with our products and solutions to meet the strictest emission control requirements.
Pravin, it would be great to get your insights on this. How are we partnering closely with our customers to solve their emission control needs?
Pravin: I am glad we are discussing this Jim. To build on what Bob mentioned, we are increasingly seeing a need for Emission Control solutions, driven by regulatory requirements. The level of emission control is evolving and the pace varies across countries.
In one particular case, we are collaborating with a Nickel Refining Company in Korea to implement a continuous emission monitoring system (CEMS) solution to ensure compliance with local government emission regulations. The solution includes the online transmission of data to the government.
In addition to this, we are also collaborating on solutions for various other applications/industries such as Marine Ballast Water Management Systems, Truck Emission Control, Flue Gas Desulphurization, Dust Collector Systems, Fugitive Emission Control, and more.
Jim: That’s true Pravin, enabling solutions for a variety of industry applications is critical to achieving the overall objective.
Bob, to help reduce emissions, we are seeing a lot of countries now placing mandates requiring a certain number of new vehicles manufactured to be electric vehicles going forward. This has created a significant boom in battery manufacturing. How do you see things shaping up in Asia?
Bob: Yes, that’s right, Jim. Battery manufacturing is a very good indicator of the rising demand for electric vehicles. Government initiatives support not only the demand side of electric car purchase but also the production of batteries.
And we’ve just come out with a report analyzing for the first time the machinery used for battery manufacturing. This market is experiencing strong growth and is expected to continue its expansion path from the use of Li-Ion batteries for electric vehicles (cars and mobile machinery) and electronic devices.
Indeed, the market is expected to have a compound annual growth of over 25 percent over the next 5 years. And Asia Pacific is easily the largest market for Battery Manufacturing Machinery with around 80 percent share.
The number of battery manufacturing facilities, especially in China, Japan, and Korea, make the region the world’s leading producer of batteries and hence the largest consumer of manufacturing equipment.
Going upstream, elsewhere in Asia Pacific, Australia is the world’s biggest producer and exporter of lithium, the key component in Electric Vehicle batteries. Hence, the mining industry is expected to benefit in the years ahead.
Pravin: Absolutely Bob. The lithium-ion battery value chain starts from the mineral mining & refining, chemical processing of material, battery module packaging and then the recycling of used batteries.
Emerson is engaged in the entire value chain with a whole suite of technologies & comprehensive solution portfolio that comprises advanced process control, instrumentation, and valves to help customers operate efficiently. We also have subject matter experts associated with each part of the value chain to provide advisory support to customers to help them achieve top quartile performance.
In Australia, Emerson has tremendous participation in the mining industry. We are helping customers in Western Australia in Lithium mining, especially with solutions for the leaching process.
In China, Japan & Korea, whether anode, cathode & precursor material processing or battery cell manufacturing, we provide solutions that range from process automation to ultrasonic or laser welding systems for our customers to maximize productivity and quality.
Jim: Great insights, Pravin, on the Lithium battery value chain and the technologies needed to enable the sector.
Bob, in line with the global trend, countries in Asia are rebalancing their energy mix and adding more cleaner fuels to their energy basket to prevent harmful effects to the environment, ensure long-term national energy security and meet their respective domestic requirements.
What clean fuels are you seeing gain significant traction here in Asia?
Bob: Installed capacity of renewable energy in the Asian region is set for major capacity expansion over the next several years. Overall, renewable capacity addition is expected to grow by 40 percent by 2025. Solar and wind power generation are two of the most attractive renewable energy sources to alleviate concerns and reduce carbon dioxide emissions. Falling costs and more supportive policies are driving solar power growth across Asia Pacific, with China alone set to add 619 GW between 2021-2030. China is also the global leader in wind energy: in 2021 it built more offshore wind capacity – 17 GW – than the rest of the world had managed in the last 5 years put together!
Probably less well known is the fact that here in Southeast Asia, Vietnam leads the sustainability charge, hosting a third of all renewable energy capacity in the region. In the face of rising energy demand, the government is intent on reducing the country’s reliance on coal to generate power. Accordingly, under the National Power Development Plan 2021-2030, the government plans to generate 50GW from onshore and offshore wind and solar energy by 2030.
Hydrogen is the new kid on the block, and this nascent sector is notably getting extensive support from governments in the region, such as China, Korea, Japan, who all see its potential and value in helping to achieve a clean, secure, and affordable energy future.
At ARC we just released a brand new Hydrogen report which analyses the market for control systems and devices in hydrogen production, transportation, storage and distribution. So that’s technology like flowmeters, pressure and temperature transmitters, PLCs, DCS, and control valves. We forecast that the market for these technologies in the hydrogen sector will therefore develop faster than average and decouple from normal market growth. Again, Asia Pacific is set to be the fastest-growing region in the forecast period 2020-25, with a CAGR of 11%.
Jim: Completely agree with you on the importance of cleaner fuels and renewables to reduce greenhouse gas emissions. In addition to Solar and Wind, we are seeing a growing demand for Bioenergy, Hydropower and Hydrogen across the region…
Pravin, you are best placed to comment on this, how are we able to support our customers to incorporate cleaner fuels into their energy mix?
Pravin: As Bob mentioned, we are seeing a significant increase in the use of cleaner fuels across the region. With each country’s domestic energy mix and need varying, it is essential that we collaborate closely across the value chain to implement safe, cost effective and reliable solutions.
Let’s take a look at Hydrogen as an example. There are many ways of producing, storing, transporting and using hydrogen. Currently the cost of green hydrogen production is still high, and cost reduction of the electrolysis process is expected. Also, many ongoing R&D efforts are going into efficient & safe transportation through different medium such as ammonia as a hydrogen carrier.
Depending on availability of resources, different countries & companies have been focusing on different parts of the hydrogen value chain. We are seeing many successful collaborations materialize. Several cross-region partnerships & collaborations have been formed, such as between Japan and Australia as well as between Korea and Australia.
Emerson has a whole suite of solutions across this entire value chain from pilots to scaled-up projects around the world. For example:
- We provided process control, instrumentation, solenoid valves and pressure regulators to successfully complete the world’s largest Polymer Electrolyte Membrane (PEM) electrolyzer project in Canada.
- We participated in a project in Western Australia which generates clean hydrogen through solar-powered electrolysis. This was a significant step in Western Australia’s moves towards a hydrogen economy.
- In Korea, we have worked with major power generation companies on various fuel cell type projects including the largest fuel cell power plant in Korea.
In the Solar Power segment, our Ovation DCS and SCADA systems can help control critical solar power generation processes, increase operational efficiencies and megawatt production, and realize long-term operations & maintenance savings.
In the Wind Power segment, we are very excited about Emerson’s recent acquisition of Mita Teknik, as our wind portfolio can now provide holistic solutions to customers for complex wind operations, encompassing wind turbine control and wind farm operations.
Jim: Thank you for those insights Pravin. Great examples of strategic partnerships and Emerson’s capabilities to help drive the usage of Hydrogen, Wind and other cleaner fuels forward.
Well, we can continue talking about this topic, but am afraid that’s all the time we have today. Bob and Pravin, any final comments?
Bob: In this area of sustainability & decarbonization what we do here in Asia Pacific will play a critical role in overcoming this urgent global challenge of climate change. Because… this region is home to 60% of the world’s population; is responsible for more than half of global energy consumption (with 85% of that currently coming from fossil fuels); and as a consequence, Asia Pacific region generates more carbon dioxide emissions than the combined total of all other regions in the world (16.75 billion metric tons in 2020). And as we’ve discussed today, technology will play a huge part in developing and growing renewable energy industries across the region and in making our industrial facilities and operations far more sustainable.
Pravin: It is inspiring to see the tremendous momentum here in Asia Pacific pertaining to investments in sustainability & decarbonization projects. Coordinated efforts by countries, companies and communities are moving us in the right direction to achieve a low carbon future. Having said that, much more needs to be done, and we want to contribute towards making that possible. Emerson is committed to working together with our partners here in Asia to develop innovative technologies and to provide a complete solutions portfolio to enable industries to decarbonize and to help companies operate in a more sustainable way.
Jim: Well, it’s been a great discussion! Pravin, before we wrap things up, and where can our listeners go to learn more and how can they connect with us on any specific questions they might have?
Pravin: Well, a great place to start is our sustainability & decarbonization webpage. Through that, you can find out more about our sustainability initiatives, our solutions and reach out to us. So that’s a great start. Also, as part of this Asia Pacific podcast series, we will also be sharing with you the contact details of the Emerson Sustainability & Decarbonization representative for your respective countries here in Asia Pacific. Please feel free to contact them if you have any queries or need assistance.
Jim: Well, there you have it folks! It’s been a great discussion! Thank you Pravin and Bob for joining us and sharing your insights on Sustainability & Decarbonization across Asia.
Bob: Thank very you much for having me Jim
Pravin: Thanks a lot Jim, it’s been great
Jim: For all our listeners, this was the first in a series of our Asia Pacific Sustainability & Decarbonization podcasts coming your way! Do follow our page for details for the next podcast where we will cover specific segments like Hydrogen, Carbon Capture, etc in more detail with our subject matter experts from Asia Pacific.