Illustration by Phil Foster
Corporate sustainability is making headlines. “L’Oréal USA Announces Innovative Approach to Achieve Carbon Neutrality,” says one. “Apple Now Globally Powered by 100 Percent Renewable Energy.” And “Microsoft Tackles Big Problem with Fuel Cell-Powered Data Centers.”
These giants of global commerce are going carbon neutral, demonstrating their commitment to sustainability in its environmental as well as economic and social senses. What might be surprising to some people is that these initiatives showcase the role of natural gas in sparking out-of-the-box thinking. With natural gas as a tool in the sustainability toolbox, companies are forging paths for others to follow.
“As the worldwide leader in beauty, we feel that we have a responsibility to lead on sustainability issues and to use the scale of our business to make changes that positively impact the world,” L’Oréal USA Vice President of Environment, Health, Safety and Sustainability Jay Harf told American Gas. “L’Oréal is committed to being a contributor to a low-carbon economy, and it is equally important for us to illustrate that what is good for the environment can also be good for business.”
It’s a misconception that sustainability applies only to environmental practices. As writer Andrew Beattie describes in Investopedia, environmental action is one of three pillars of sustainability, providing equal balance alongside economic and social efforts. As corporations striving for environmental sustainability demonstrate, thoughtful and groundbreaking efforts can achieve that three-pillar impact known as “people, planet and profits” by also benefiting communities and cutting costs.
“The trend seems to be making sustainability and a public commitment to it basic business practices, much like compliance is for publicly traded companies,” Beattie said. “If this comes to pass, then companies lacking a sustainability plan could see a market penalty, rather than proactive companies seeing a market premium.”
Meanwhile, the United Nations Global Compact calls corporate sustainability an “imperative for business today—essential to long-term corporate success and for ensuring that markets deliver value across society.”
Under the sustainability umbrella, carbon neutrality has long played a major role. Globally, industries are responsible for 21 percent of greenhouse gas emissions, primarily through “fossil fuels burned on site at facilities for energy,” according to the U.S. Environmental Protection Agency. Companies seeking to reduce their carbon emissions or neutralize them entirely might reduce their GHG emissions, invest in renewable energy or purchase offsets.
L’Oréal USA made its announcement in March 2018: The beauty giant would achieve carbon neutrality for its 19 U.S. manufacturing and distribution facilities in 2019. The kicker? The goal will be achieved through renewable natural gas, “with a financially sustainable approach that could potentially serve as a model to support new [RNG] projects in the future.”
It’s a milestone being created by teams that are chasing “a new renewable energy approach that benefits one of our local communities while being a long-term, financially viable solution,” President and CEO Frédéric Rozé said in a news release.
“Achieving carbon neutrality for all of our Operations facilities furthers our commitment to being a sustainability leader in the United States,” he said. “We have seen that a dedication to sustainability fosters innovation, inspires creativity and builds a strong team spirit.”
L’Oréal USA has entered into a 15-year agreement to purchase 40 percent of the landfill gas produced by Big Run Landfill in Ashland, Kentucky, 135 miles from L’Oréal USA’s Florence, Kentucky, plant. That gas, from a newly built facility for processing and conditioning LFG for use as RNG, is then directed into the interstate natural gas transmission system.
RNG can be costly—as much as eight times higher in price than nonrenewable natural gas due to production and demand—so to make the project financially viable, L’Oréal USA will sell its environmental attributes into the natural fuels market for about five years, helping fuel producers comply with the EPA’s Renewable Fuel Standard. At the same time, the company will buy carbon offsets from an EPA-award-winning RNG site. After about five years, at the financial break-even point, L’Oréal USA plans to use the environmental attributes to maintain carbon neutrality for all 19 of its manufacturing and distribution facilities.
Even before the initiative, officials at L’Oréal USA took pride in their record of 100 percent renewable electricity and 84 percent reduction in CO2 emissions, said Harf. But the drive to do more led it to tackle the “industrywide challenge” of thermal, or scope 1, emissions, and achieve carbon neutrality at all U.S. manufacturing and distribution facilities.
“As our U.S. Operations team considered approaches to achieve this goal, 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,” said Harf.
The search started in Kentucky because the hair care manufacturing facility in Florence is L’Oréal USA’s largest, “with the largest carbon footprint,” said Harf. The company decided on LFG from Big Run Landfill “after 18 months of extensive research, including looking at alternatives like anaerobic digesters.”
A solution designed around a local partnership achieves impact nationwide by satisfying L’Oréal’s sustainability principles. “[It] was particularly attractive given that Big Run Landfill had enough gas to meet our needs as well as the interconnection rights to the national pipeline, which will enable us to achieve our carbon neutrality goal for all 19 sites with a single solution,” said Harf.
The measurement known as power usage effectiveness, or PUE, has improved in U.S. data centers, which serve as the crucial brains behind all the calculations that our computers, homes, televisions and smart speakers are churning out every second. That’s a good thing, but demand from streaming video, artificial intelligence and the internet of things is skyrocketing, forcing data centers to keep pace. In the worldwide IoT alone, devices are projected to increase from 8.4 billion in 2017 to 20.4 billion by 2020.
In their search for solutions, tech companies are finding help from natural gas. In 2017, Microsoft announced development of the world’s first gas data center, directly connected to natural gas pipes and powered entirely by integrated fuel cells.
Microsoft also wowed data-center watchers with a unique tariff developed in 2016 in collaboration with Wyoming utility Black Hills Energy. The agreement centers around Microsoft’s Cheyenne data center, which, like all Microsoft data centers, requires a megawatt of backup power for every megawatt of grid-supplied energy used. The agreement gives Black Hills Energy access to Microsoft’s backup generation, created through a natural gas turbine, during peak-demand times. Black Hills Energy also buys power from the market on Microsoft’s behalf “at a firm price to meet their energy needs,” said Black Hills Energy President and Chief Operating Officer Linn Evans.
The new tariff is open to any Black Hills retail customer with loads over 13 megawatts that can also deliver generation. The agreement avoids costs that would have been passed on to customers by deferring construction of utility-scale generation, Black Hills officials told the Public Service Commission of Wyoming in their filing. Wyoming’s consumer advocate called the tariff “an outside-the-box solution to a really unique problem.”
Microsoft General Manager of Energy Brian Janous said the collaboration was “an opportunity to partner with the utility so that each is not optimizing on its side of the fence to end up with a suboptimal solution of redundant generation expenditures.
“While our data centers have a tremendous amount of on-site backup generation, we’re far from the only organization with robust generation and/or energy storage capabilities,” Janous told American Gas. “These are beneficial to each organization but are used infrequently. This agreement shows a path forward, where these existing assets can be used for the community’s benefit as integrated grid assets.”
The use of natural gas turbines was a linchpin of the agreement. Microsoft typically uses diesel generators because backup power must operate within one minute of a power outage. However, actually displacing a power plant called for natural gas turbines, so Microsoft and Black Hills engineers came up with a solution after “extensive testing, piloting and tweaking to get the turbines to do more than they were designed to do,” said Janous. Black Hills, he added, “was willing to engage with us and think about how we could work together to create optimized solutions.”
Microsoft is “continuing to innovate on this model, now looking at how to use our batteries as energy-storage solutions and grid assets,” Janous said. “As utilities increasingly take on more renewables, finding cost-effective solutions to peak demand and storage will be a challenge. Repurposing these existing customer-side resources into grid assets can help solve that challenge.”
Over on the East Coast, Apple is utilizing RNG to take a bite from its power usage. A 10-megawatt fuel cell station at its Maiden, North Carolina, data center is powered, along with solar technology, by biogas produced at landfills. And its new Apple Park headquarters in Cupertino, California—a 2.8 million-square-foot circle nicknamed the Spaceship—is powered by solar panels and 4 megawatts of energy from biogas fuel cells, which create energy electrochemically.
Toward its goal of a carbon-neutral facility, Microsoft also built a biogas-powered fuel cell facility for its Cheyenne data center. The biogas comes from a municipal wastewater treatment facility and divides its product, generating about 250 kilowatts of power but using only 100, so the rest powers the wastewater facility.
When global giants set the tone on carbon neutrality, others follow, further expanding the space in which RNG and natural gas can operate. When Apple announced in April 2018 that it was globally powered by 100 percent renewable energy, it also noted that nine new vendors were pledging the same, bringing the total to 23 suppliers. The newbies included a designer of high-performance bio-based polymers, a leather producer, an assembler, and a producer of optical communication components and vertical-cavity surface-emitting lasers, the VCSEL lasers that give us Face ID, portrait-mode selfies and animojis.
L’Oréal USA also embraces its leadership role, which is written into the L’Oréal “Sharing Beauty with All” sustainability program. The effort, launched in 2013, pivots around tangible commitments in becoming carbon balanced, acting ethically, promoting diversity and inclusion, conducting corporate philanthropy, working with stakeholders and institutions, and innovating, producing, living and developing sustainably.
“Reducing our environmental footprint—including our carbon emissions, waste and water use—is a key component of our global ‘Sharing Beauty with All’ sustainability program,” said Harf. “L’Oréal USA is achieving carbon neutrality through a portfolio of renewable energy projects, including solar, wind and renewable natural gas as well as the purchase of locally sourced renewable energy credits and carbon offsets. [Our] latest RNG project further diversifies our renewable energy portfolio and demonstrates our commitment to serving as a sustainability leader in the United States.”
It’s a responsibility that the company takes seriously, and its approach continues to create room for further consideration of natural gas.
“Given the number of landfills in the United States that have the potential to convert landfill gas to renewable natural gas, we believe that our approach could potentially serve as a model for other businesses to support new RNG projects in a way that is both environmentally and financially sustainable,” Harf said.