Energy

In 2011 we used 23,765 GWh of energy, an increase of 7% since 2010. This increase followed a significant reduction in 2010 due to an unusually small sugar crop. Last year we reported that we expected this reduction to be reversed in 2011 as the sugar crops were expected to be larger.

Our sugar operations accounted for 84% of our global energy use in 2011. Sugar crop yields overall were higher than in the previous year and this resulted in more energy being used. The yields increased due to an increased acreage of sugar beet in northern China and an expanded sugar cane growing area in Africa coupled with better agronomy and training. However there were processing difficulties in Africa, UK and southern China. Therefore more crop than last year was processed through our northern China beet factories which rely heavily on the use of coal and are not as energy efficient as other sugar sites, which impacted on our overall energy efficiency.

Despite the increase in use of carbon-intensive fuels, we are pleased to note that a substantial proportion, almost 47%, of our energy was derived from renewable sources.

Sugar factories require energy to separate the sugar from the beet and cane, to concentrate and then evaporate the sugar solution and to crystallise the sugar. To minimise energy we use the steam generated by the first evaporator as the heat source for the second evaporator and so on through the series of evaporators. In this way, one tonne of steam evaporates as much as five tonnes of water from the sugar solution.

A key performance indicator for this energy usage – percentage steam on feedstock – is calculated by dividing the amount of steam (tonnes) required to process the sugar beet or cane by the weight of the beet or cane processed (tonnes) and expressing the result as a percentage. The lower the figure the lower the amount of energy needed to process the sugar and therefore the greater the efficiency of the process.

Energy consumption in sugar factories in 2011 was targeted at 43% steam on feedstock but we fell slightly short at 44%. Our long-term aim is to use less than 40% steam on feedstock.

The reasons for the shortfall include:

• severe weather in the UK last winter damaged the crop. As a result it was necessary to increase energy use per tonne of sugar in order to maximise the extraction of the sugar from the beet;

• our operations in Spain implemented a successful programme in refining raw sugar resulting in increased product. However this increases sugar processing on site due to processing beet during part of the year and processing raw sugars at a different time resulting in higher absolute energy use; and

• improved agronomy, increased training of farmers and favourable weather in northern China increased production of sugar in a region where energy efficiency is improving but has not yet reached the levels achieved by European beet processors.

However the unusual weather variations masked successful energy-efficiency engineering improvement at sites across the group such as Nakambala (Zambia), Toro (Spain), Wuxuan (south China), Qianqi (north China) and Wissington (UK).Improving efficiency in our sugar factories allows us to use the surplus steam to generate substantial amounts of renewable electricity: more than is required for factory operations. The surplus electricity is sold to local electricity networks, effectively replacing energy currently produced by fossil fuels. This year we increased our supply by 1% to a total of 771 GWh of this surplus electricity to other users, typically to the national electricity distribution networks. This quantity of electricity would be sufficient to power around 150,000 UK houses for a year. This exported electricity is not included in the energy consumption data described above.

Energy efficiency programmes become all the more important as the global business environment becomes increasingly carbon constrained. The regulation of carbon, issues of energy security and spikes in energy costs impact all our operations. As such we view energy usage as a strategic issue and it receives a high degree of operational and commercial focus. Each business has a named director and a named senior manager who are accountable for its environmental performance. Many of our larger businesses have also appointed technical specialists to lead energy reduction initiatives.

Irrespective of the amount of energy used and its source, it is a core principle of the group that all energy must be used efficiently. 22 of our larger European sites are subject to the EU’s Pollution Prevention and Control regime and are under a statutory duty to minimise energy consumption by the use of best available techniques. Our UK manufacturing operations participate in the UK Government’s Climate Change Agreement. Our sugar sites in the UK and Spain participate in the EU Emissions Trading Scheme which encourages reduced energy consumption and cost-effective emissions.

When we use energy in our factories either we buy electricity and steam from external power stations or we burn fuels directly within our own power stations on site. The carbon dioxide emissions we report below are a consequence of that internal and external power generation.

We calculate the quantity of carbon dioxide emitted through the use of electricity using the latest internationally recognised factors published by the Greenhouse Gas Protocol. We calculate the carbon dioxide emitted from other fuels using the UK government’s latest conversion factors. In 2011 we emitted or caused to be emitted 3.61 million tonnes of carbon dioxide. The increase in carbon dioxide emissions reflects the increase in energy usage referred to above with a significant increase in carbon-intensive coal.

The UK’s Carbon Reduction Commitment Energy Efficiency Scheme (CRC) is a mandatory government scheme which applies to large, but non energy-intensive, businesses aimed at driving up efficient use of energy. The group has registered for CRC through the UK Environment Agency.

We are very conscious of our responsibilities towards our neighbours and work hard to prevent any nuisance or offence, as stated in our Environment Policy.

Most of our manufacturing sites only have small steam boilers and few process emissions. As such the emissions to air from most of our sites are not significant. Our sugar operations however are much larger but are subject to more stringent controls. Our non-carbon atmospheric emissions are dust particles, acid gases (oxides of sulphur and nitrogen) and odours, all of which have to comply with local environmental standards.

Recently we started to collect data on our emissions of sulphur dioxide and can now report that across our global operations we emitted 4,900 tonnes in 2011. Having established a benchmark we will now be able to report our progress in managing these emissions.

AB Mauri is continually finding innovative ways to save energy across its yeast and bakery ingredients plants. In October 2009, the business held its inaugural energy management forum in order to bring together technical experts from across the group. This forum was designed to share energy reduction projects, capture best practices and discuss novel ideas for further energy reduction. A key objective was to strengthen the global energy network across the business to ensure continuation of the trend that has seen a 9% reduction in energy use since 2007. During the forum a total of 32 energy-saving projects were reviewed with savings of £1.9m, around 5% of the total energy bill for AB Mauri. The majority of these projects can be replicated at a large number of the AB Mauri plants. For example, we invested £56,000 in the installation of two heat recovery exchangers at the La Salle yeast plant in Montreal, Canada, which led to annual savings of £43,000, 4.5% of the plant’s gas bill. Similarly, at the Camellia yeast plant in Sydney, Australia, installing a more efficient system for producing compressed air has brought annual electricity savings of £23,000 (7%), from a capital outlay of £36,000.

Established in 1944, the Azucarera sugar factory in Toro processes beet from the north of Spain. This year the factory installed a new combined heat and power (CHP) plant. This plant is so efficient that, for the same amount of fuel, it has increased electricity production by 9.3 MWh, and now supplies surplus electricity to the national grid. Costing £3.5m, investments in CHP and a high-pressure steam boiler have reduced Toro’s CO₂ emissions by more than 12,000 tonnes per year.