March 11, 2024
Sustainability mission: the PCF creates transparency
Andreas, you are responsible for the branded products of the cutting tools division. What role does the PCF topic play in your job and what exactly does it mean?
The Product Carbon Footprint describes the specific greenhouse gas emissions on a product level. This can be expressed as kilograms of CO2 equivalent per kilogram of product produced. Through the PCF, we now classify our products according to the amount of CO2 emissions a certain product has caused. With that, we are the first in the industry and we want to be pioneers.
How was that done before? Did you have to estimate your Corporate Carbon Footprint?
Only a few years ago, no one cared about a CCF. As a company, you may have set a target to reduce your own emissions, but it has not become a concrete topic until the last few years. Now there are discussions about sustainability, and it is about delivering proof. Until then, it wasn’t a topic to categorize an indexable insert, a rod, or a drill.
Christian, your field of responsibility covers the sale and product management of cemented carbide rods. With the upGRADE rods (grade CT-GS20Y), you launched the first CERATIZIT product that had a low PCF as a key goal. How does it feel to take on a pioneer role in the company?
As a pioneer, the journey is not always as smooth as in conventional projects or daily business. When you are introducing something completely new to the market, the road can be quite bumpy, but there is also a steep learning curve. Until now, the PCF has not existed in our sector. We aspire to develop a standard for the market. For me, there is both an entrepreneurial and personal incentive – and that is exciting and highly interesting to me.
What is the basis for the PCF?
The basis for calculating a PCF is the Corporate Carbon Footprint, which quantifies how many greenhouse gas emissions a company has caused in total. We distinguish between different scopes that describe the exact origin of the emissions of the business activities. Scope 1 describes a company’s direct emissions. This would be e.g. burning oil or gas. Scope 2 are the indirect emissions due to purchased energy. The great unknown for most companies is Scope 3. This includes all indirect emissions caused by supplier products, employee commuting, business travel, etc. This data is very hard to grasp and hard to calculate.
How much effort is it to collect all this data? Scope 3 seems incredibly difficult.
Yes, the calculation is indeed quite complex. For the first step, the calculation of the Corporate Carbon Footprint, you calculate the total CO2 emissions of an entire company. For this sum, you don’t need to differentiate in which production line and for which product the emissions are caused. To get the PCF, you need to go much deeper into detail. You need to be able to tell from which materials the products are made, in which production line which products are made, and of course, you need to measure how much energy and how many operating resources are used in the respective production line. In modern ERP systems, you can imagine this as an additional currency in the system. When you are doing a cost calculation, the euros are being counted alongside. With the Product Carbon Footprint, you also have “kilogram CO2” as a currency, which is being calculated in parallel.
How is this now being integrated into the PCF?
Basically, the PCF is nothing else than the sum of the individual carbon footprints of the involved production steps of a product, that is the carbon footprint of the primary material + the carbon footprint of the blank + the carbon footprint of the finalization. In each step, the respective scopes are considered.
What exactly does the PCF classification look like?
It is an alphabetical classification from currently A to F. The most ambitious class is category A with 0 to 5 kilogram of CO2 emissions per kilogram of product produced. After that comes class B with 5 to 15, then 15 to 25, and so on. Depending on the calculation result, the products fall into one of these categories. It is also interesting to see that a blank and the finished tool that is created from it do not necessarily end up in the same PCF classification because finalization is a very high-emission production process.
Can the customer easily compare between different manufacturers based on the PCF?
It would of course be desirable that everyone in the industry uses the same system. Though we want to be pioneers, at the end of the day we can only be successful together if we all use the same basis. And that’s what we are striving for – we want to introduce an industry standard, which is why we are inviting our customers, competitors, and partner firms to join us, to go into discussion with us, and to further develop this idea. And yes, if everyone joins in, then we’d also have comparability. There’s still a lot of work ahead of us, that’s for sure, but I think we are on a good way. Of course, this is not something we have concocted on our own in our secret chamber. We are acting in line with ISO 14067, which clearly states how the PCF quantification and customer communication should take place.
How do the customers react? Are they interested or still rather sceptical?
Completely mixed. There are customers that have absolutely no relation to the whole topic yet. They must at first be sensibilized and convinced. Other customers, mostly suppliers of well-known companies in the big industry like the aviation or automotive industry, already receive demands by their end customers to deliver this data. They are welcoming us with open arms, of course.
What benefit does the customer have? Is there really a need for the PCF?
Essentially, our customers see themselves confronted with the problem that they can’t calculate their own CCF. They need our PCF value to integrate it into their calculation of Scope 3. So, before they can even start identifying saving potentials, they need to know the CO2 emissions of the purchased products. So, in a sense, the PCF is the basis for launching sustainable products. First, you need a transparent calculation model to collect all the data and based on this data you can then make decisions about which products to buy and which rather not.
We notice that especially big companies, key accounts, are already asking us for these values. And we are very proud to be able to offer them in the future. Probably not every client will ask for it unless something changes in legislation so that customers are either forced to deliver proof or maybe receive fiscal benefits.
I’m not very well versed in that area, but the CO2 tax would probably be a topic. If low-PCF products are used and Scope 1 and 2 are additionally reduced, this would of course influence the CO2 emissions and accordingly less taxes would have to be paid. Tools may not play the biggest role in the total CCF, but they contribute to it nonetheless.
I believe that the PCF will soon be an essential decision-making criterion for consumers and will entail fiscal benefits, meaning that products will in the future need to comply with a certain minimum requirement regarding their greenhouse gas emissions.
In 2022 you launched a product with a particularly low PCF. What is the lowest PCF of CERATIZIT products today?
The products with the lowest PCF fall into category A. Our upGRADE portfolio as well. The upGRADE products are characterized by using primary material, of which at least 99% stems from zinc recycling. Therefore, the PCF is very low. So far, in this portfolio, we have CT-GS20Y, formerly known as Green Carbide, for the rods for metal cutting, and KLC20+ for tool manufacturers for woodworking.
So, the upGRADE product line has a footprint of less than 5 kg CO2 per kilogram product. Are there any comparative figures e.g. from ten years ago, is it possible to determine a percentage change?
That’s an interesting question. Ten years ago, PCFs were not yet calculated. But based on literature, there are rough calculations. You can assume that upGRADE products cause up to 80 % less CO2 emissions than conventional cemented carbide. We have also compared the 2020 and 2022 values of certain products and just by shifting all locations worldwide to green electricity and renewable energies, the PCF improved by 30 % or more within two years.
So, there is a clear development. A product can also improve over time and we are not only talking about the upGRADE brand. With such measures, we can also achieve significant improvements in the carbon footprint of products that don’t have as much recycled materials and recyclate yet.
An improvement of 30 % within two years – it can go on like that, right?
Absolutely. We have set ourselves the target of reaching net zero until 2040, which means reducing our emissions in all three scopes by 90 %. This has of course consequences for our products. In the long term, more and more products will belong to upGRADE and have a very low footprint. That is also our goal: to be able to offer products low in emissions, and that all our existing products conform to this norm and can be produced accordingly.
Are the upGRADE products comparable to the premium products with respect to quality and performance?
Definitely. The upGRADE products pass the same quality controls and requirements as the other products. When we develop something new, it must be within the quality boundaries. We have proved that for example with our HPC milling cutter with our Silverline geometry. In some areas, we achieve more performance than the original product, so the difference to the equivalent of a product which is not upGRADE is very small. We are very aware of our responsibility and conduct many tests before releasing a new product or a new tool.
This interview first appeared as podcast episode 063 in the CERATIZIT Innovation Podcast and was simplified and slightly adapted for this blog.