Opportunities in clean technology for manufacturers
April 13, 2023
By Mario Cywinski
Alps Welding Limited is a custom metal fabricator in Woodbridge, Ont, with an over 50-year history. In that time, it has manufactured a wide variety of process equipment, including pressure vessels, heat exchangers, piping systems, and stacks, for the energy, chemical, and food industries.
In recent years, Alps has become a supplier to clean technology designers and is increasingly manufacturing equipment for customers to reduce their energy and water use and control their emissions.
Plant discussed how sustainability and carbon reduction trends impact manufacturers, and the opportunities and barriers that manufacturers face.
PLANT: How can manufacturers be more sustainable and reduce their carbon footprint, by using clean technology in the manufacturing space?
Dennis Dussin: An obvious place to start is to retrofit lighting and heating systems. Many companies have already done some of this, and it’s the low-hanging fruit. Lighting systems for manufacturing spaces have become much more effective and efficient recently.
Companies should also look at their operating equipment (machining centres, welding machines, or material handling systems) to see what is eligible for updating or replacement. New equipment usually uses less energy than older machines and is often more productive.
Technology that helps to eliminate waste or recycle resources is also a big opportunity. We fabricate heat exchangers and water filtration equipment for our clients, who have developed systems to capture waste heat or reuse water in their processes.
Manufacturers should be looking at where in their process they see lost energy, wasted inputs, or scrap and whether there is technology that can help them reduce, capture, or reuse those inputs and materials. We continue to see demand for these systems growing strongly in the coming years.
Vehicles are another area ripe for electrification, as technology has become cost-effective. We are looking at electrifying our forklifts and company vehicles. We are planning to install EV chargers in some of our parking spaces to encourage employees to start purchasing EVs.
These ideas are about improving efficiency and reducing energy or material use in existing processes. The significant carbon footprint improvements in the manufacturing space will come from electrification of processes currently powered by fossil fuels. You’re seeing this in the current initiatives to electrify steel mills that run on coal. Those are mammoth investments, but there are opportunities to electrify in many manufacturing processes that are smaller in scale.
One area flying under the radar is the improvements that can come from simple process improvement. Too often, we focus on technological solutions to problems, when there may be considerable benefits to simply redesigning processes. Any company that has implemented lean manufacturing principles finds enormous waste and inefficiency in any manufacturing process, much of which can be reduced or eliminated by changing the process. These changes could involve changing the sequence of operations, floor layout, or employees’ tools, information,
Although large companies tend to have invested in some version of a lean journey, many small and medium-sized manufacturing companies are behind the curve. This is a missed opportunity and one that policymakers should focus on ways to make significant gains quickly and cost-effectively.
These ideas require some amount of up-front investment, but over the medium to long term, they offer positive financial returns to manufacturers and reduce their carbon footprint. This is even more so if you can find municipal, provincial, or federal funding to offset part of the cost. These initiatives aren’t just good for the environment; they’re good business investments.
Further, many companies find that in their journey, they see intangible benefits when they make these improvements, such as better employee retention and engagement and enhanced reputational standing among their customers and in the community where they operate. It’s hard to put a value on that.
PLANT: Do you see clean technology as being a priority for many companies in manufacturing.
Dussin: I see a clear division among manufacturers in Canada now. Some companies see the opportunity in clean technology and are pursuing it aggressively. However, many manufacturers still see it only as an increased cost to their operations and a barrier to competitiveness.
For it to become a priority, we need to start seeing it as an opportunity to improve our operational efficiency and competitiveness. Further, it’s not just an opportunity to improve our own carbon footprint. The bigger opportunity is to help other companies reduce their carbon footprints.
Large companies are making considerable environmental investments in their operations and are looking for Canadian suppliers to support them. Often, they purchase technology and expertise from other countries, even though they prefer to “buy Canadian.”
At Alps Welding, most of our current fabrication projects are related to clean technology, including water treatment, heat exchangers, emissions control, alternative energy, or battery manufacturing. This will continue in the long term.
Entire new industries are emerging in clean technology: EVs, battery manufacturing, and different forms of nuclear power. Canadian manufacturers can form part of the supply chain for these industries.
Most importantly, if Canadian manufacturers see the opportunity to supply the clean technology industry, we can join the global supply chain and export our skills and capabilities. Canada could and should become a global leader in exporting clean technology and manufacturing for the sector.
This is the most significant opportunity for Canadian manufacturers in clean technology. If Canada eliminated its carbon emissions entirely, we wouldn’t significantly impact global emissions as we are a small country. However, if we supplied clean technology to other countries, we could have a disproportional impact on global emissions and truly “punch above our weight.” Not enough manufacturers are seeing this opportunity, and so aren’t making clean technology enough of a priority.
PLANT: What are some of the obstacles that Canadian companies face in their path to go green? How can this be overcome?
Dussin: Cost is an obvious one, because adopting clean technology requires investment. Although there are government programs to assist with these investments, there’s no getting around the fact that it will require up-front expenditures. This is a real barrier in today’s uncertain economic environment, with higher interest rates.
Viewing clean technology as only a threat or a cost instead of an opportunity is also an obstacle.
A more significant and less obvious obstacle is a lack of knowledge, especially among small and mid-size manufacturers. We are experts in our products and processes but not in the latest clean technology. We don’t always know the current state of technology, what will work in our operation, and the expected benefits. We often must rely on the sales promises of clean tech companies, and it’s hard to get objective advice on the right path to take. There’s a risk that we’ll choose the wrong technology that doesn’t provide the benefits promised, or it will become obsolete in the short term. This risk stops companies from making the financial and operational commitment required to adopt clean technology.
Manufacturers need help just to get started down the path. When they get started and see benefits, they will continue looking for further opportunities. I think it’s especially true when they see the intangible benefits they didn’t expect, like greater employee engagement and retention, and stronger reputation among customers.
PLANT: What do Canadian companies have to do to become more carbon neutral? Do you feel complete carbon neutrality is an achievable goal?
Dussin: Companies can do many things to reduce their carbon footprint, and they can also become part of the clean tech supply chain to help reduce carbon emissions outside of their companies. However, reducing carbon footprints is different from achieving carbon neutrality.
Carbon neutrality is achievable, but not simply through minor incremental improvements and piecemeal reductions in emissions. It will require much more significant changes.
Companies will need to look at their processes from beginning to end and re-think them completely to achieve carbon neutrality. From the materials we use, where we source them, how we handle and process them, how we sell and transport them, and how we handle waste and scrap. We can improve individual steps in the process to reduce our footprint. Still, to achieve neutrality, we’ll have to look at the entire process, including all the linkages with our supply chain and customers.
It’s an ambitious goal and one worth pursuing. Companies, especially small and mid-size companies, cannot do it independently. It will require coordination within supply chains and jurisdictions.
PLANT: How can governments help put Canada on the right road to a cleaner future and help support manufacturing in the adoption of clean technology?
Dussin: Governments need to continue, and to increase, funding alongside companies to invest in clean technology projects. Companies won’t incur the costs alone, especially in the current economic climate. Governments need to start funding process improvement initiatives, instead of just investments in equipment or technology. There is a lot of low-hanging fruit in optimizing manufacturing processes to reduce waste, which is a missed opportunity.
Just as important, governments need to help de-risk these investments, and it’s not just about the cost. Companies need trustworthy, objective advice and data on which technologies and process improvements will work for them. They need help connecting with other manufacturers or the expertise they need to make these investment decisions.
Governments should also help manufacturers tap into export opportunities in the clean technology sector. Many small and mid-sized manufacturers are part of the clean technology supply chain that aren’t actively involved in exporting their technology and projects. Governments can connect these companies with potential markets outside of Canada and impact reducing emissions globally, not just at home.
If we aim to achieve true carbon neutrality, governments will also have to make enormous investments in the economy’s systems and infrastructure. For example, if we all electrified our production processes and transportation completely, it’s unlikely we’ll have enough “clean” electricity. This is particularly true outside of Ontario and Quebec, which have significant nuclear and hydro. Governments will have to invest in significantly more clean electricity production and foster the development of emerging new industries like hydrogen, new battery technologies, and small modular nuclear reactors, to name a few.
PLANT: Do you have a case study or example of successful clean technology implementation?
Dussin: Over the last few years, we have built a series of large heat exchangers for an Ontario clean technology company, who have sold their system to a major oil sands operator. Our customer, Combustion & Energy Systems, designs condensing economizers that recover energy and water from industrial exhaust gases. The end-user has made the investment, along with some government funding, and is seeing significant benefits in terms of both saved energy and water.
The project has helped them reduce their energy use and carbon emissions while at the same time reducing waste and saving money. By investing in this system, they’ve proven the benefits at a large scale, such that other companies can now make similar investments at much lower risk. The data they’ve generated by operating the systems can de-risk the investment for other potential end-users.
Further, our customer, and by extension, we at Alps Welding, have always been exporters, primarily to the U.S. In proving this system’s effectiveness, we can look together for opportunities outside of Canada where it could benefit and generate savings and emissions reduction.
We frequently see this kind of opportunity, where we work with Canadian technology companies to build systems that improve efficiency and environmental performance. We see that there’s an opportunity to scale up these collaborations both in Canada and in the export market, if we can work together with end users and governments to eliminate some of the barriers standing in our way.
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