How green manufacturing can maximize profitability


(Photo: iStock)

Japanese data communications company NTT DATA and Business Weekly co-organized an ESG forum on Jan. 11 in Kaohsiung to explore pathways for Taiwan’s manufacturing industry to align with the global net-zero trend.

With the first reporting period of the EU's Carbon Border Adjustment Mechanism (CBAM) is nearing its end this month, exporters are facing increasing urgency in achieving net-zero emissions. 

The forum, titled “Carbon pricing era: a survival battle for the manufacturing industry," delved into strategies through the exchange of practical experiences among enterprises, while exploring ways to optimize the cost-effectiveness in both hardware infrastructure and software usage to demonstrate the competitive edges of Taiwan's manufacturing sector.

How green manufacturing supports business decision 

Alex Chao (趙山貴), technical director of NTT DATA, shared how smart manufacturing helps achieve energy saving and carbon reduction. 

In the textile industry, for example, the biggest challenge in the dyeing process lies in color differences. However, re-dyeing requires additional raw materials and large amounts of water and electricity, he said.

NTT DATA provides a solution that involves digitizing equipment data through the Internet of Things (IoT), followed by the use of Manufacturing Execution Systems (MES) to identify the causes of color differences. The optimization of the dyeing process effectively reduced carbon emissions while increasing production capacity.

Chao also explained how the Carbon Footprint of Products (CFP) Management Platform co-developed with the chemical company Asahi Kasei helps businesses’ decision-making process. 

Launched in Japan in 2022, the platform was designed to meet the demand for supply chain emissions reporting from the country's automotive sector, where NTT DATA assists in Scopes 1 and 2 emissions calculation. 

Additionally, Asahi Kasei has implemented internal carbon pricing through the platform, which incorporates carbon costs, identifies high-margin, low-carbon products as the focus, and improves products with low margins and low carbon emissions to support business decisions. 

The platform features a "financial indicator" that can raise revenue, he said, suggesting that businesses conduct a GHG inventory based on ISO 14064-1, followed by a carbon footprint inventory based on ISO 14067 to identify the largest source of energy consumption, and then implement carbon reduction management to move toward the net-zero goal.

(Photo: NTT Taiwan)

Industry 4.0 transition through production process digitalization

Lin Chung-chi (林崇吉), general manager of NexAIoT I4.0, said the company is committed to providing green manufacturing services and solutions to assist the semiconductor, electronics, metals, and petrochemical industries in their digital transformation towards Industry 4.0, focusing on production optimization, automation of production line monitoring, robotics process automation, cloud-based production information, and IoT-based manufacturing services under the cyber-physical system, tailored to various needs at different phases.

According to Lin, enterprises can enhance production efficiency by utilizing digitalized carbon emissions calculation to identify equipment with the highest carbon emissions and the production line with the lowest. 

For instance, a precision metal processing company made its production line transparent, enabling customers to access production and shipment information including carbon emissions and helping it secure orders from major manufacturers such as Tesla and Google.

Smart manufacturing boosts energy efficiency 

Chen Chih-chiang (陳志強), chief information officer of Felli Group, emphasizes that smart manufacturing is not just about technology; it's also about financial management due to its substantial cost. 

Nevertheless, the transformation can lead to reduced energy consumption, increased production capacity, and improved profitability, while effectively managing materials, energy, and quality. 

Felli Group specializes in manufacturing household goods for export to Europe and the U.S., with Walmart being its largest customer. In response to the introduction of carbon taxes, Felli Group has integrated its internal systems and data to enhance production efficiency, with an aim to achieve sustainable development.

Felli's intelligent factories integrate automation, intelligence, and on-site applications to boost output and reduce workload. The company also adopts green energy for energy saving and emissions reduction. 

Currently, solar energy constitutes 20% of the company's annual electricity consumption, and Felli will continue to explore future energy opportunities, whether by investing in green energy or selling surplus electricity. 

Chen indicated that the company's products adhere to environmental testing standards in Europe and the U.S., aiming to minimize waste materials and extend product lifespans. 

In terms of processes, Felli has optimized its factory system and molds, reducing emissions by 70 tonnes, and has reduced the use of plastic bags by 600,000 annually, in an effort to minimize environmental impact.

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Germany approves 50% hike in its carbon price next year

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