Operational Energy Use and Greenhouse Gas Emissions
Operational energy use and greenhouse gas (GHG) emissions are inextricably linked. The majority of our facilities' energy comes from fossil fuel sources; hence operational energy use is a significant source of our company-wide greenhouse gas emissions. Our efforts to reduce energy use and increase the use of renewable energy are also part of our strategy to reduce our GHG emissions and overall climate impacts.
We have been leaders in facilities-related GHG and energy-use reductions, public reporting of our GHG emissions, and participation in GHG reduction and trading schemes. For example, we were the first automaker to participate in GHG reporting initiatives in Mexico, Australia and the Philippines. We also voluntarily report GHG emissions in the United States and Canada. We were the first automaker to participate in GHG trading and reduction strategies and to join the United Kingdom Emissions Trading Scheme, which required us to agree to GHG emissions targets for all of our UK-based operations. We are also the only automaker participating in the Chicago Climate Exchange, North America's first GHG emissions reduction and trading program. Our participation in these reporting and emissions reduction and trading schemes have played an important role in accelerating our facilities' GHG emissions reductions activities. See the case study for more information on our participation in the Philippines GHG reporting initiative.
Ford has reduced global energy use by 30 percent overall, or 19 percent per vehicle, compared to 2000 levels. In 2007, Ford improved energy efficiency in the United States by 4.5 percent, resulting in savings of approximately $18 million. We are targeting an additional three percent improvement in energy use in 2008. Since 2000, we have reduced our total facilities-related CO2 emissions by approximately 39 percent, or 3.6 million metric tons. Ford has set a target to reduce its North American facility GHG emissions by 6 percent between 2000 and 2010 as part of its Chicago Climate Exchange commitment. The Company has also committed to reduce U.S. facility emissions by 10 percent per vehicle produced between 2002 and 2012, as part of an Alliance of Automotive Manufacturers program. Ford has already achieved a target to reduce absolute emissions from U.K. operations by 5 percent over a 2002–2006 timeframe, based on an average 1998–2000 baseline.
The Environmental Protection Agency (EPA) again recognized Ford's energy efficiency achievements by awarding us a 2008 Energy Star Partner of the Year Award in the category of Sustained Excellence, which recognizes Ford's continued leadership and commitment to protecting the environment through energy efficiency. This is Ford's third consecutive year winning this prestigious award. The Energy Star Partner of the Year Award requires organizations to demonstrate proficiency through management of projects and programs, data collection and analysis, and communication actions, including community outreach and active participation in Energy Star industry forums. Among the achievements recognized by the award is a 30 percent improvement in the energy efficiency of U.S. facilities since 2000, equivalent to the amount of energy consumed by 270,000 homes.
We are continually implementing new technologies throughout our operations that reduce energy use and emissions without sacrificing quality or cost effectiveness. For example, we implemented the SAVEnergy Campaign, through which Ford challenged tenants in Ford-owned commercial office buildings and its Research & Engineering Center to reduce energy consumption during the summer cooling season. During the past three years of this annual program, 17,000 metric tons of CO2 emissions were eliminated and $1.5 million in energy costs were reduced, without capital investment.
In 2006 and 2007, we installed a utility metering and monitoring system. This system collects incoming electricity and natural gas consumption data for all Ford plants in North America, to help Ford monitor plant energy use in near-real time and take appropriate actions to reduce consumption and improve the stability of delivered power. Collected data is used to plan cost-effective natural gas purchases, analyze plant non-production shutdowns, generate energy use profiles and monitor power quality.
Ford continues to upgrade and replace infrastructure through the use of energy performance contracts at its plants, commercial buildings and research facilities. In this process, Ford partners with suppliers to replace inefficient equipment, funding the capital investment over time through energy savings. Projects have been implemented to upgrade inefficient lighting systems, paint-booth process equipment and compressed air systems, and to significantly reduce the use of steam in our manufacturing facilities. Since 2000, Ford has invested more than $200 million in plant and facility upgrades, including about $190 million using performance contracts and $20 million in capital projects.
Ford has replaced inefficient steam heat at most of its manufacturing locations with networked, direct-fired natural gas air handling systems. This project involved replacing powerhouse boilers and large numbers of smaller steam-fed air houses with a few large units at each plant. Financing for this project was provided through energy performance contracting. The new systems allow us to eliminate cold air infiltration through positive building pressurization, reclaim and reuse process-generated heat and improve indoor air quality.
Ford has also established a three-year global effort to consolidate and redesign its data centers using best practices identified by the U.S. Department of Energy and the EPA Energy Star program. The redesign is targeting a 70 percent reduction in the number of global data centers and a 95 percent reduction in the number of computer servers. For more information, please see the data centers case study.
We have also improved the environmental performance of the heat-treating processes we use for making transmissions and other components. These processes are essential to ensuring that components provide long-lasting, durable performance; however, traditional processes use a lot of energy and produce significant emissions. A new heat-treating process called vacuum carburizing has been implemented at the Sharonville Transmission Plant. It has been shown to significantly reduce energy usage and process emissions, improve the plant floor environment and reduce processing time and operating costs.
In addition, we are implementing a new paint process that eliminates the need for paint to dry after the prime coat. This technology, called "three wet," reduces CO2 emissions by 15 percent and volatile organic compound emissions by 10 percent. In addition to these environmental benefits, this process improves quality and reduces costs. The paint formulation contains new polymers and other additives to prevent running and sagging during the three-wet application process. Ford's laboratory tests show that this high-solids, solvent-borne paint also provides better long-term resistance to chips and scratches than water-borne paint. The process also is expected to reduce costs by $7 per vehicle because it cuts the time required to paint a vehicle by almost 20 percent and reduces the size of the traditional paint shop by nearly 15 percent. So far, three-wet paint technology has been applied to a test fleet of 200 U-Haul® trucks, painted at our Ohio assembly plant. But we are working to replicate this technology in as many plants as possible. We have already completed the installation of a full production enamel line at the Ohio Assembly Plant, which started production in February 2008. We are planning installations of three-wet paint technology in Ford of India (with installation beginning in December 2008) and Ford of Romania, and assessing the possibilities of installing it at three other North American plants.
We are also capturing our own waste products and turning them into fuel. We have implemented "fumes-to-fuel" technology in paint shops at three of our manufacturing facilities, which captures emissions from the painting process and uses them to generate electricity. This process cuts down on fossil fuel use and resulting CO2 emissions, as well as reducing emissions from our paint shops. For more information on fumes to fuel, please see the Volatile Organic Compounds section of our Facility Emissions reporting.
To drive continued progress, we have set targets to improve our facility energy efficiency by 3 percent globally and 3 percent in North America each year in 2007 and 2008. We measure energy efficiency using our Energy Efficiency Index1.