Greenhouse gas emissions management

Pirelli has monitored and reported on its CO2eq emissions since 2002. The expression CO2eq is used, which accounts for the contribution, albeit marginal, of methane (CH4) and nitrous oxide (N2O). Greenhouse gases are generated by the combustion of hydrocarbons at production sites, mainly to operate heat generators that power Group plants, and particularly those that produce steam for vulcanisers, or by the consumption of electrical or thermal energy. The first are called “direct emissions” or Scope 1 emissions insofar as they are produced at company production sites, while the emissions resulting from electrical power or thermal energy consumption are defined as “indirect emissions”, or Scope 2 emissions insofar as they are not produced within the perimeter of company production sites but at the plants that generate the energy and steam purchased and consumed by Pirelli. Performance as measured by energy and greenhouse gas emissions is calculated on the basis of coefficients obtained from the following official sources:

  • IPCC: Guidelines for National Greenhouse Gas Inventories (2006);
  • IEA: CO2 Emissions from Fuel Combustion;

and reported according to the scheme proposed by:

  • GHG Protocol: A Corporate Accounting and Reporting Standard.

Specifically in regard to the CO2eq emissions of Scope 2, the average national coefficients are defined in relation to the last available year in the aforementioned reports and are updated annually. It must be pointed out that tyre manufacturing industry is not carbon intensive, to the point that it is covered by the European Emission Trading Scheme only in reference to thermal plants having more than 20 MW of installed power. The Company is not subject to other specific regulations at the global level.

As in the case of energy, Pirelli monitors and accounts for its direct and indirect CO2 emissions (either Scope 1 or Scope 2 as defined above) by using two principal indicators:

  • absolute emissions, as measured in tons;
  • specific emissions, as measured in tons per ton of finished product;
  • specific emissions, as measured in tons per euro of Operating Income.

The Pirelli Industrial Plan has set a target to reduce specific CO2 emissions by -15% by 2020 from its 2009 levels. The horizon for meeting this target has been extended from the previous goal (2015), due to the delay in production cycles that affected the previous Strategic Plan.

DISTRIBUTION OF GREENHOUSE GAS EMISSIONS BY SCOPES

DISTRIBUZIONE DELLE EMISSIONI DI GAS SERRA SECONDO SCOPE

The close link between energy consumption and CO2 emissions was confirmed again in 2013, with a decrease in specific emissions per tons of finished product down by -1% from the previous year. In contrast, the weight of the energy index on operating income grew by 4% from 2012, although the trend was still in steep decline over the past three years (-24% since 2011).

Biogenic CO2, generated by the small rice husk silica manufacturing site, Pirelli emitted about 5,300 tons of CO2 equivalent in 2013. This amount is not counted in the absolute emissions of the Group mentioned above. The Pirelli greenhouse gas emissions management, calculation and reporting system was certified by an independent third party that implemented ISO 14064-1. This audit satisfies the criteria of materiality, competence, independence, terminology and methdology.

GREENHOUSE GAS EMISSIONS

GREENHOUSE GAS EMISSIONS

GREENHOUSE GAS EMISSIONS

GREENHOUSE GAS EMISSIONS

GHG201120122013
Absolute emissions ton 1,083,392 1,076,361 1,116,762
Specific emissions ton/tonFP 1.00 1.09 1.08
ton/k€ 1.86 1.36 1.41

Pirelli participated in the Carbon Disclosure Project (CDP) again in 2013. The company reached the top positions in the ranking, obtaining a disclosure score of 96 points out of 100, falling in the top scoring bracket: Senior Management. In consequence of this score, and recognising the transparency and reporting quality of the information that relate to climate change, the CDP added Pirelli to the CDLI 2013 (Carbon Disclosure Leadership Index).

CDP

As from 2014 Pirelli became Member of the CDP Supply Chain, activating the monitoring of the Climate Change performances of its own key suppliers at Group level, identified with environmental and economic materiality criteria. Pirelli is the first Company among the competitors in engaging this extensive approach, aligning itself to the best practice of the most advanced automobile companies.

CARBON ACTION PLAN

As part of the Carbon Action Plan, the conversion of the Egyptian manufacturing site to natural gas was completed in 2013, while its effects on the emissions intensity of this factory will be seen beginning in the next year. In regard to the supply of electric power from renewable resources, the opportunity sought last year found that the contract-making phase was still open. However, the Company is working to extend this opportunity to other Group affiliates as well. A 500 kW photovoltaic energy plant was installed at the United States manufacturing facility in 2013, with the aim of generating more than 13,000 MWh of clean energy over the next 20 years. This project will make it possible to reduce emissions at the affected manufacturing plant by 5%.

With the collaboration of the Forum das Américas, Pirelli and the Italian Environment Ministry presented a project in 2013 to build the first large solar energy plant in the world at the Pirelli Feira de Santana, Brazil plant for the direct production of medium temperature steam to serve the production process of a factory.

Construction of the plant implements the collaboration agreement signed in January 2012 by the Ministry and Pirelli to reduce carbon dioxide emissions, and falls in the context of environmental cooperation between Italy and Brazil, reinforced in June 2012 by the agreement signed by the Italian Environment Minister and the Brazilian Energy Minister. In particular, the Group will implement the most advanced technologies and know-how in the sector. The Milan Polytechnic as well as Italian and Brazilian firms assisted with the design of the plant, which is expected to be built in 2014. With this pilot plant, it is estimated that CO2 emissions will be reduced by 2,000 tons over five years, avoiding the use of natural gas. The new Pirelli Tyre plant at Settimo Torinese started up its cogeneration plant to produce electricity, steam and hot water.

There are two cogeneration modules, yielding a total of 6 MW in electric power. A 4.8 MW turbine fed by natural gas, and a 1 MW endothermic engine fuelled with vegetable oil will thus guarantee that 20% of energy comes from renewable sources. The generated electricity is used for the internal power needs of the plant. Thermal energy is used primarily to generate high pressure steam used by the production plant. Low temperature recoveries are instead dedicated to the production of hot water, used to improve the efficiency of the thermal power plant and to supplement plant heating. The plant is completed with an approximately 1.2 MWe photovoltaic plant, thereby complementing the generation of renewable energy at the Italian plant.

The benefits expected from the actions listed hitherto will have an impact on the trend in the indices in coming years. The actions taken over the past years, especially those related to energy efficiency, have helped to reduce emissions of CO2eq by about 9,815 tons in 2013. This value was calculated on the basis of the production volumes of the reporting year and the change in efficiencies achieved in 2013 from the previous year.

emissions offset activities

A new internal policy covering management of the company car fleet in Italy was drafted at the end of 2011. It applies to Italy, the Pirelli Group centre where most vehicles owned by the Group are concentrated. The policy affects all cars assigned to managers and the sales force, by calling for the complete offset of CO2 emissions by each fleet vehicle with forest protection and development work.

Aside from being an incentive to choose more sustainable cars, the new policy has the merit of spreading the culture of environmental responsibility in a simple, tangible way, through the direct participation of employees. The calculation model used took account of the emission factors of each individual vehicle and of the miles covered. In 2013 about 1,290 tons of CO2 were released, nearly 8% less than in 2012, when about 1,400 tons were released. In 2012 the Company had offset its consumption by purchasing credits from ARBolivia, a project associated with the reforestation of an area in Latin America, where Pirelli has a strong, recognised presence. By pursuing this philosophy, half the 2013 amount will be offset by an Italian forestry conservation project, while the other half will be offset by a Brazilian reforestation project.

emission free project

The Italian project is named Forcredit and consists of a plant to manage the forest properties of the Township of Lemie in the Province of Turin, about 50 kilometres from the Pirelli manufacturing plant at Settimo Torinese. Its purpose is to promote sustainable forest management as a tool to reinforce biodiversity and promote the increase in carbon stored in forest ecosystems. The planned work is part of a management plan aimed at reducing wood cutting and uptake of wood material, so that tall trees may grow. Regardless of whether these woods consist of maple and ash trees, birch or beech trees, the activities are aimed at improving the structural quality of the plants. In addition to active forestry management for sustainable development of local economies, the project aims at improving forestry assets and developing natural resources and the landscape for local tourism and recreational activities. The management implemented with this project allows lasting accumulation of carbon (i.e. “carbon sink”) in its components of epigeal biomass (trunk, branches, leaves), hypogeal biomass (roots), necromass (dead trees, stumps), forest bed and soil.

In other words, this material is accumulated in the reservoirs that capture carbon and remove CO2 from the atmosphere, in consequence of the natural process of photosynthesis. The affected area measures 670 hectares. Certification of the independent party VCS by CSQA and SAI Global Italia is still underway.

The Brazilian project is named Climate Protection Acacia. Its overall goal is a 3.7 million ton reduction in CO2 through reforestation with Acacia mangium of 3,507 hectares of land in the far north of the South American nation, in the Boa Vista region. The project, aimed at sustainable production of wood and capture of CO2, generates numerous benefits for local communities, such as the creation of over 200 permanent jobs, the construction of a new school and the implementation of professional courses. The project also respects the rights of local populations to collect non-wood materials from the forests, improves water and soil quality and secures over 15,000 hectares of bordering forest areas with great benefits for local biodiversity. The plantings are carried out in accordance with the principles and criteria set out in the Forest Stewardship Council (FSC) certification, which guarantees appropriate environmental management of forests, social benefits and economic feasibility. The project is audited by an independent certifying entity, using recognised standards. The Acacia Brazil project is developed according to the ACR (American Carbon Registry) standard and certified by SCS (Scientific Certification System).

Just as it has done every year, in 2013 Pirelli offset the CO2 emissions at its Vizzola Ticino testing ground, corresponding to its 2012 test activities (about 20 tons of CO2) with work to protect 3,704 square metres of forest in Italy, at the Rio Vallone park and in Costa Rica, with 6,300 square metres of growing forest. Pirelli is again committed to the Impatto Zero (“zero impact”) project that, through LifeGate, assigns a proportionate area of forest to be protected according to the CO2 that is produced.