Challenge of moving beyond compliance in sustainability stakes

By Paula Wallace

The company’s manager of environmental sustainability planning told a conference that the industry needs to maintain its lead position as an environmentally attractive transport option and to “think innovatively”.
“Energy has got to be one of the key considerations. It hasn’t been in a lot of operational decisions…your consideration of energy flows on through the supply chain…” he said.
Wilson, speaking at the Environmental Management in Rail conference, said that the term ‘environment’ has become an “all encompassing thing”, which has moved beyond the traditional subsets of noise or contamination and spills.
“…environment now has expanded to cover climate change and all those things that come under climate change from greenhouse gases to energy efficiency and climate change adaption,” he said.
If Australia’s emissions are growing and growing at the projected rates, and the government wants to reverse this trend, the gap gets wider over time and the challenge gets bigger.
“You need to really understand if you’re working in the environmental field…what that means in terms of the size of the task. It’s a phenomenal task…it’s so huge that the government admits it can’t do it," he said.
Transport represents 14 per cent of greenhouse gas emissions and the significance of this sector moving forward presents both threats and opportunities for the rail industry.
“What really concerns me as an industry is the lack of innovation and I read numbers of articles about innovation happening in the trucking industry and there are concept trucks out there…that give fantastic potential energy reductions. And I’m not hearing the same story from the rail industry” Wilson said.
He believes that the rail sector needs to take interest in what other industries are doing in terms of sustainability and see what it can learn and what threats they might pose to rail in the modal shift discussions.
“So the centre of gravity for us now in the rail industry now, I believe, is all about energy…and everything’s radiating out from that so the investment community, the government, customers, compliance issues and so forth,” he said.
From Asciano’s perspective, Wilson said the company has been dealing with a number of issues related to sustainability and in the short-term the focus has been on compliance.
“Currently, most companies in Australia who use lots of energy have been focussing on accounting for their greenhouse gases….and these come primarily through diesel use. At Asciano 92 per cent of our energy comes from diesel,” he said.
“The challenge we’re finding in rail transport industry is that we don’t have good energy data and we don’t have the means to analyse it. If you’ve ever looked at the fuel gauge on a locomotive…you get out of the cab, climb down the ladder, walk down the side and there’s a little spirit level there and you hope the ground’s flat and that’s how you read the fuel gauge.”
Wilson said the federal government’s Energy Efficiency Opportunities (EEO) program has been good at “finding lots of solutions” but ultimately he believes it’s suppliers that need to come up with solutions.
Of all the members and sectors participating in the EEO program, the average energy savings identified were 6.3 per cent; the average energy savings implemented were 3.8 per cent; and the average energy savings identified by the transport sector were 4.3 per cent. The program only identifies energy savings with up to a four year payback period and Wilson said this usually does not include “strategic projects” – these might include projects that are complex, that deal with third parties or are more costly.
“…from a compliance point of view, that only covers the long hanging fruit and there is potential for a lot of other much greater energy savings out there in the industry which are not being captured or reported by this program,” Wilson said.
In terms of what stakeholders can do to assist operators with the compliance task in the short term, Wilson said they can “tell us which technologies exist”.
“Because our loco fleet is so large and we keep the equipment for so long, the solution isn’t about buying a new one, it’s about how do we fix the existing one and bolt on,” he said.
“Part of the problem though is capital and who pays when we’re looking at technology and looking at operation efficiency. As a rail company, we’re captive to what other people do; what the network providers do with their equipment.”
In the longer term, Asciano’s focus is about decarbonising the supply chain and lowering its energy intensity.
Taking a hypothetical example of a packet of potato chips, whose transport emissions make up around 9 per cent of its overall emissions, Wilson suggested that putting the package of chips on a train may reduce its transport footprint to around 3 per cent. But when a carbon price comes in the whole carbon price of that product and the carbon price will impact on that product.
He said the longer term issue is about competitive advantage from low carbon footprint for transport, but also to market for product.
“There needs to be a real appreciation within industry that the road industry is thinking and innovating on energy and we need to be doing the same. And maybe we are doing it but we’re not very good at telling the story,” he said.
“We need to look at the short-term solutions, we need to look at the strategic projects and we need to not just look in isolation. Your energy savings in your company will actually provide flow ons to other companies and to the supply chain, to us in our operation and ultimately to our customers and what they do.”