How “green” are the products we use exactly? This question is becoming increasingly important today, alongside the issues of sustainability and environmental protection. In industry, there’s still tremendous potential for maintaining the carbon footprint of products and even reducing it. But how can it be done across the entire supply chain and the different phases of production? We ran a simulation using our own products.

Every day we’re seeing that sustainability starts with the little things. We’re increasingly replacing plastic bottles with glass bottles and shopping for our weekly produce using mesh bags instead of plastic ones. Although these steps are small, it’s with small steps like these that each of us can – and must! – contribute to greater sustainability. Over the past few years, our awareness of the need to live a more sustainable and environmentally friendly life has been growing. This awareness has prevailed society more and more, with movements like Fridays for Future advocating for environmental and climate protection measures. At the same time, lawmakers have been issuing an increasing number of regulations compelling us to live more sustainably, from the ban on plastic straws and light plastic bags in our everyday lives to laws demanding a transparent carbon footprint of products and the carbon tax.

Our goal is to raise awareness. We want to sensitize industry so that companies pay more attention to their carbon values.
Gunter Beitinger, Senior Vice President Manufacturing & Head of Factory Digitalization at Siemens AG

Although our everyday lives are impacted by sustainability and environmental protection measures, the effects on industry are much greater. Over the years, the globalization of product supply chains has made it increasingly difficult for producing companies to determine a product’s “CO₂ backpack.” More than 90% of the carbon emission impact of a product lies in the supply chain with tremendous potential for optimization. Direct agreements with Tier 1 suppliers on carbon footprint transparency won’t have the desired success over the long term, especially when a single product involves many suppliers. But how can we satisfy the demands of society and lawmakers for greater sustainability? How can we make the carbon impact of our products transparent, including the upstream and downstream supply chains? At Siemens, we’ve been giving this some serious thought – using our own products for research.

Starting with ourselves

Making product-related carbon emissions transparent throughout the supply chain

It was the most obvious to start with ourselves. We have almost completely determined our product-related carbon emissions (Scope 1 and 2) generated within the Siemens Electronics Works in Amberg, Germany, primarily by applying our own products such as Energy Management and Industrial Edge. We were able to make CO₂ emissions transparent. With this transparency, we were able to proceed to reduce emissions with targeted measures. Overall, the plant has increased output by 140% in the last 4 years without increasing energy consumption. This was one of the reasons why the Electronics Works in Amberg was nominated as Lighthouse Factory of the World Economic Forum in March 2021. The second reason was the lean digital factory approach and the high level of digitalization.

Tested and found satisfactory

The challenge, however, was to determine the product carbon footprint across the entire supply chain. Every year about 17 million SIMATIC products are manufactured in Amberg, including the controller SIMATIC S7-1500. We wanted to identify this controller’s complete product carbon footprint (PCF), investigate optimization potential in terms of decarbonization, and ultimately reduce its PCF. We eventually realized that this is more difficult than it sounds. It requires a substantial outlay – not just for us, but also for other companies. Efficiently generating a carbon footprint has a lot to do with the data exchange between suppliers. The greatest challenge – and the most important factor – is a reliable and secure data transfer between all stakeholders across the entire supply chain. This is exactly where the ecosystem we’ve developed comes into play.

Using cryptographic encryption within a blockchain, verifiable certificates and proofs can be forwarded to the next company in the delivery chain along with the product’s carbon value. It’s then possible to ensure that manufacturing companies receive the necessary product data from their suppliers in a secure manner, and that they’re also able to securely forward the data to their customers. This distributed ledger technology allows us to generate and forward a product’s real data, including its PCF. Manipulation or modification of the data is impossible.

As a proof of concept, we first simulated this solution in-house on SIMATIC S7-1500 – and we succeeded!

In the future, producing companies in the discrete and process industries will be able to use this ecosystem – an ecosystem initiated by Siemens but managed independent of us. It’ll serve as a platform for company-wide data exchange with suppliers and customers. We want every company to be able to efficiently identify its carbon footprint and use simulations to determine any remaining CO₂ savings potential in the supply chain. This ecosystem will also connect partners within the supply chain with certifiers (that act as a trust anchor) and sink providers (that can help compensate carbon emissions through sustainable forestry or algae cultivation).

It’s time to act

Our goal is to raise awareness. We want to sensitize industry so that companies pay more attention to their carbon values. Ultimately, it’s just a number on paper, but is it relatively high or low? What can be done to lower it? In the food and beverage industry, it’s already possible to use blockchain technology to guarantee that consumers have food traceability from the field to the table. My question is: Why shouldn’t there be the same traceability for industrial products? Especially if it’ll help us reduce and ultimately even compensate carbon values! It’s certain that in the near future there will be certificates that provide end consumers with information about the PCF. To remain competitive over the long term, producing companies will, sooner or later, have to acquire knowledge about the PCF of their products.