Delivering Tangible Carbon Emission and Cost Reduction through the ICT Supply Chain (Pages: 01-10)

Anders S.G. Andrae1, Ling Hu2, Long Liu3, John Spear4 and Keagan Rubel5

1Huawei Technologies Sweden AB, Skalholtsgatan 9, 16494 Kista, Sweden; 2Huawei Technologies CO. Ltd., Industrial Base, Bantian Longgang, Shenzhen 518129, China; 3Huawei Technologies CO. Ltd., 156 Shichuang Technology Park, Beiqing Road, Zhongguancun, Haidian District, Beijing, China; 4epi Consulting, 4th Floor, Rex House, 4-12 Regent Street, London, United Kingdom and 5epi Consulting, A207, Yuexing 3rd Rd No. 8, Nanshan district, Shenzhen, China

DOI: http://dx.doi.org/10.30634/2414-2077.2017.03.1

Abstract: Actual commitments by suppliers—in the Information and Communication Technology (ICT) supply chain—to reduce their energy use are rare. The upstream supply chain is also very complex for electronic/ICT products and therefore challenging to control and measure for use by Life Cycle Assessments (LCAs) of products and upstream Scope 3 footprints of companies. In LCAs primary measured data over time are rarely used. The purpose of this research is to propose a method for identification, measurement and analysis of specific energy (electric power) and CO2-eq. savings in the supply chain of an ICT Original Equipment Manufacturer (OEM). The aim is also to find the share of the supply chain savings—of energy use and CO2-eq. emissions—compared with a telecom carriers’ total supply chain spend for an identified contract. It is described how three suppliers of a large ICT OEM are engaged—via a contractual requirement— to identify and commit to substantial energy, cost and CO2-eq. savings. First streamlined LCAs are performed—of four specific products—identifying the most impacting parts from a CO2-eq. perspective. Second specific suppliers and factories are identified. Third visits are done in which energy assessments are made, savings identified, implementation costs quantified, and net cost saving opportunities are calculated. The suppliers are also trained in the International Performance Measurement and Verification Protocol (IPMVP). The last steps include quantifications and analyses of Energy and Conservation Measures (ECMs), final agreement of net CO2-eq. and cost savings followed by actual implementation and monitoring with IPMVP. All in all these efforts are estimated to help save around 27,000 MWh energy and around 25,700 tonnes CO2-eq. annually. For a five-year rollout contract around 1.5 times more CO2-eq. can be saved than emitted. More than 1% of the telecom carrier’s annual energy consumption and Scope 3 ‘Purchased goods and services’ emissions can be saved. This shows a clear indication of the possibilities of the proposed approach. Broadly speaking, the methodology presented is a potentially replicable model that can be used by ICT OEMs to make significant cuts within their supply chain, while lowering their suppliers’ operational cost base. By using the proposed methodology it is possible to address specific suppliers and engage them via a contractual requirement to identify and commit to specific savings to the benefit of ICT OEMs and telecom carriers both. In order to improve the current practice, the next step is to integrate the savings framework into an end-to-end dynamic framework based on LCA.

Keywords: Carbon footprint, Electric power, Energy, ICT, Scope 3, Supply chain, Supplier, Upstream.