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Going beyond renewable electricity

Editor's note: This essay was contributed by one of the NGOs that make up the Renewable Energy Buyers Alliance (REBA), a consortium dedicated to growing large buyer demand for renewable power and helping utilities and others meet it. REBA’s next annual summit will be Oct. 14-16 in Oakland, California ahead of VERGE 18.

On the heels of the Global Climate Action Summit, where cross-sector leaders — including L'Oréal and World Wildlife Fund (WWF) — affirmed the actions they are taking to address the greatest challenge of our time, it is important to understand how the real work gets done. Achieving the carbon targets large buyers have set requires collaborative thinking and scalable action among companies, NGOs and governments all working together in innovative ways.

At L'Oréal, a leading beauty company, leveraging the business's scale to make changes that positively impact the world is viewed as a responsibility and an opportunity. At WWF, accelerating the growth of all forms of renewable energy is viewed as critical. For both organizations, the future of renewable thermal energy is a priority.

The Renewable Energy Buyers Alliance (REBA)'s work to improve access and scaling renewable electricity is off to a great start. But many companies also have large thermal energy needs from heating and cooling buildings and running industrial processes that most often burn natural gas. Right now, renewable solutions for these thermal needs are not well developed, cost-competitive or easily accessible to buyers. The Renewable Thermal Collaborative — an initiative facilitated by WWF, David Gardiner and Associates (DGA) and the Center for Climate and Energy Solutions (C2ES) — was created to enable more renewable heating and cooling options.

For its part, L'Oréal USA has been engaged in a sustainability transformation of its operations since 2005, formalizing commitments in 2013, as part of its global sustainability program, Sharing Beauty With All, which defines clear targets for the entire business including a goal to decrease carbon emissions for manufacturing and distribution facilities by 60 percent by 2020. In 2017, L'Oréal USA achieved a major milestone in the United States: 100 percent renewable electricity and 84 percent reduction of carbon dioxide (CO2) emissions compared to 2005 levels. To go even further, L'Oréal USA wanted to achieve carbon neutrality by finding a renewable energy solution for its thermal needs. It set out on an 18-month process to do that through a new investment that directly addresses the remaining emissions attributable to all its U.S. operations facilities. 

For more buyers to reduce their thermal energy emissions, there needs to be greater access to and market flexibility around bioenergy solutions.
In March, L'Oréal USA announced that all 19 of its manufacturing and distribution facilities — spanning 12 states and more than 7 million square feet of space — will be carbon-neutral by 2019. This will be achieved through an innovative project that adds renewable natural gas from a new landfill gas processing facility at the Big Run Landfill in Ashland, Kentucky, to its diversified energy portfolio, which already includes 16 solar installations plus wind turbines and locally sourced renewable energy credits (RECs). This long-term renewable natural gas purchase commitment was a key underwriting component that led to the financing of the processing facility. WWF sees this as an innovative model to address thermal needs in a way that drives positive change in the systems that companies currently rely on for thermal energy demand, while linking real emissions reductions more directly to a company’s facilities.                

L'Oréal USA's case shows that renewable natural gas can provide a single financially viable solution to address direct emissions across multiple facilities. L'Oréal USA and the Renewable Thermal Collaborative share the idea that to decarbonize thermal energy use more broadly, we need renewable thermal options to be accessible far more widely. Renewable natural gas potential alone is quite significant, with more than 10,000 landfills in the United States and only 650 active renewable natural gas sites. L'Oréal USA’s approach could serve as a model to support new renewable natural gas projects in a way that is both environmentally and economically sustainable.   

For more buyers to reduce their thermal energy emissions, there needs to be greater access to and market flexibility around bioenergy solutions (energy that comes from biomass, including renewable natural gas and solid biomass). WWF is leading the Renewable Thermal Collaborative's technical work and strategy to understand what the most sustainable options are and is facilitating better market conditions to access those options.

In the renewable thermal market, one level of confusion exists around how to standardize the carbon accounting of bioenergy so buyers know what climate benefits they are achieving. Additionally, buyers cannot track and verify claims in the same way they can with electricity renewable energy credits. This leaves onsite or direct, physical offtake as the most straightforward approach, which limits options. Standardized accounting, tracking and claims would create greater market clarity and flexibility. 

Improving flexible and cost-effective access to a wider range of renewable thermal solutions is what the Renewable Thermal Collaborative is all about. As the newest member of the Renewable Thermal Collaborative, L'Oréal USA is joining a group at the forefront of developing the policy and market infrastructure necessary to accelerate the pursuit of thermal energy solutions that reduce carbon emissions.  

In this moment when collaboration is imperative, the Renewable Thermal Collaborative provides a foundation upon which the market can mature, enabling buyers to more easily adopt solutions for their thermal energy needs. It is through initiatives such as these that we will get there. In just one year since the Renewable Thermal Collaborative was launched at the 2017 REBA Summit, we’ve seen that momentum and solutions are building and are confident that will only grow. We hope you’ll join us. 

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