SMEs and the net zero challenge

With manufacturing accounting for around 20 per cent of all of UK greenhouse gas emissions (according to figures published by BEIS), and around 95 per cent of the sector’s businesses classified as SMEs, it’s clear that the SME community has an important role to play in helping the UK hit its 2050 net zero targets.

But despite some striking progress towards this target from many organisations, others remain daunted and bewildered by the challenge, unsure where to even begin and fearful that prioritising sustainability and green initiatives could adversely affect the bottom line. 

In a recent panel session, The Engineer and the High Value Manufacturing (HVM) Catapult brought together a cross sector group of industry panelists to discuss some of the challenges and opportunities facing SMEs, examine key practical measures that they can take to reduce their carbon footprint and explore some of the help available to help drive these activities. 

Opening the discussion, Leah Rider - SME Lead at the HVM Catapult - sounded a positive note, pointing to an acceleration in SME progress on the push for net zero. “A huge number of the enquiries we get are from SMEs who want to go green and are looking for support,” she said.

This growing interest is, she added, driven by a range of factors: for instance, larger companies are placing increasing pressure on their suppliers to take action and customers are increasingly demanding that businesses behave responsibly with regard to the environment. Perhaps the biggest driver though, she said, is a growing realisation that operating more sustainably, and using technology to achieve this, can bring some immediate and tangible business benefits. “Through moving toward net zero and using digitalisation you’re also going to be able to improve productivity,” she said.

Nevertheless, she added,  there are numerous  barriers preventing SMEs from making as much progress as they’d ideally like to. “There’s quite often a lack of information on what works and building confidence on how you’re going to deliver value is a challenge. What’s more, it’s a hugely complex topic - encompassing manufacturing processes, materials, supply chain, buildings and facilities – so demystification is a huge topic at the moment.”

Enabling SMEs to navigate this complex and constantly shifting landscape by helping with things like feasibility studies, energy audits and lifecycle assessments is, said Rider, a key area of focus for the HVM Catapult.

Our next panelist, Helena Simmonds from the SME Group at WMG (one of the seven centres operating under the HVM Catapult umbrella) offered some specific examples of this help and assistance in action.

One key area of focus is on resource utilisation and helping organisations to make practical use of waste materials. In one project, for instance, Simmonds’ team has been working with an SME to recycle unused hospital PPE into polymer pellets that are then being used to produce sharps bins and trays for the healthcare sector.  Here, she explained, the centre has helped with moulding, testing and also the measuring of emissions and benefits. “They’re working with 10 hospitals, and by avoiding sending polymers to landfill are saving around 5000 tonnes of CO2 equivalent emissions,” she said.

Another fruitful area is waste heat recovery. Pointing to one specific project, Simmonds explained that by heat mapping a facility operated by an enamel coating firm, the team was able to quickly identify parts recently removed from an enameling furnace as a major source of waste heat. By diverting and reusing this heat the company has been able to switch off boilers that were previously being used to heat the factory’s drying room and make some important energy savings.  “That kind of project is applicable across all kinds of different businesses,” she said.

The team has also been helping organisations take a more forensic approach to energy usage, through the deployment of current clamps to monitor energy usage along a product’s lifecycle and identify areas of wastage and unnecessary consumption. “Using this process, you can pinpoint where in your processes you’re pulling out the most energy and identify areas for improvement,” she said. 

Expanding on some of the measures organisations can take to identify inefficiencies and reduce energy usage, business consultant and accountant Chris Wells stressed that taking the first steps towards a more sustainable operation can actually be very straightforward.   

“A lot of companies I deal with are making real moves without having to do too much to start with,” he said, citing an example of one client which immediately made a saving of £15k per year simply by turning off machines over the weekend. “That’s not a huge amount in the grand scheme of things but you’ve only got to find ten things like that and you’ve saved 150k,” he said.  “We need to spend more time looking at our factories and offices and finding those things that make the difference. And we need to get more of the bean counters down onto the shop floor and into the areas where we’re genuinely spending the money and where real savings can be made. They won’t be as impressive as the savings that can be made by e-recovery and alternative energy projects but that’s where we’re going to find the quick wins.”

The panel session concluded with some practical insights from an SME that’s now well on the road to net zero, Birmingham-based luxury cabinet manufacturer, Armac Martin.

Driven by a combination of ethical factors and consumer expectations, the firm’s net zero journey began around four years ago, explained its head of operations Steven West.

As per Chris Wells’ recommendations, the process began with small and relatively easy to implement measures: the adoption of electric company vehicles, low power LED lighting, and other “quick wins” such as the deployment of plastic insulating balls within the firm’s water heating tanks. 

The firm also enlisted the help of energy advice service Low Carbon SMEs which conducted a full carbon footprint assessment of the business and  - most importantly – provided the team with the tools and knowhow to routinely review their carbon footprint. This has given the team the ability to quickly measure and understand the impact of any new changes, said West.  

Armed with this understanding, and energised by the positive changes already made, the company is now drilling down into more granular detail on its energy usage and using current clamps to measure the power that each of the machines in its factory (which include 25 CNC machines and 30 lathes) is drawing.

According to senior design process engineer Will Thomas, this has already had a striking impact. “We’ve used it to increase utilisation by 14 per cent and increase parts output by up to 65 per cent, and it has led to us turning off two machines. That’s going to lead to significantly more output for less energy consumption and we’re looking to apply this across the factory for a variety of different processes,” he said. In addition, the company is now looking at installing on-site solar PV that Thomas said should ultimately account for around 30 per cent of its electricity usage.

Whilst the starting point for Armac Martin’s activities was an ethical desire to make the business as sustainable as possible, it’s clear that the measures taken have had a wider benefit.  “Most of the improvements we’ve made aren’t just sustainability improvements,” said Thomas, “they all have other tangible benefits.”