Cummins Achieves Two Environmental Goals Early, Faces Challenges Ahead
Cummins has reached two of its seven 2020 environmental sustainability goals early, reducing the water it uses per hour worked and cutting carbon dioxide through collaborative projects with customers.
The company, however, still has work to do to fully meet Cummins’ goals to increase its recycling rate to 95%, cut energy use per hour worked by 32%, reduce the carbon dioxide (CO2) emitted from the shipment of goods within the company’s own network by 10%, and meet its water neutrality and zero disposal site goals.
“While it’s gratifying to accomplish our goals on water and reducing CO2 through our products in use, we still have work to do on waste, water neutrality, energy and logistics,” said Brian C. Mormino, Cummins’ Executive Director of Environmental Strategy and Compliance. “We wanted goals that would force us to stretch as a company and that certainly appears to be happening.”
THE GOOD NEWS
Greenhouse gas (GHG) emissions from Cummins products in use are the company’s largest environmental impact and represent an estimated 99% of Cummins’ GHG footprint due to fossil fuel use.
Cummins fuel teams throughout the world implemented 76 new products in use projects in 2018, bringing the total number of initiatives with customers since 2014 to nearly 300. The company has surpassed its 2020 goal of achieving an annual run rate reduction of 3.5 million metric tons of CO2. The 2018 rate was 4.3 million metric tons.
Cummins has also achieved its goal of a 50% reduction in water use intensity (water use adjusted for hours worked) by 2020 compared to the company’s baseline year of 2010. Leaders are not declaring this achievement complete, however, until the company can maintain its performance level while continuing to expand, or balancing any downturn in production.
In 2018, the company used 950 million gallons of water (3.6 million kL), a 14 million gallon decrease from 2017. Since the goal’s baseline year of 2010, direct water use is down 16% despite the company’s growth between 2010 and 2018.
Cummins’ water neutrality goal work is also progressing, but not yet fully achieved. The company set a goal of having water neutrality at 15 sites. Eight sites have been validated as water neutral toward the company’s 2020 goal of 15. These locations are off-setting their water use with community improvements that either conserve water or make new sources available.
THE WORK STILL AHEAD
Cummins is also getting close to reaching its 2020 energy goal to reduce energy intensity by 32% compared to the baseline year of 2010. This is the company’s third energy goal since 2006 and many of the “early win” projects have long been completed.
The company, however, has an aggressive investment and action plan through 2020 toward meeting its energy goal. Cummins invested $15 million in 140 energy efficiency and onsite solar photovoltaic capital projects in 2018. By the end of the year, the company’s energy intensity reduction was at 29%. Over the same 2010 to 2018 time-period, the company’s energy efficiency and renewable energy efforts reduced Cummins’ GHG intensity by 37%.
Cummins also made significant progress on its goal to encourage the use of renewable energy, entering into a virtual power purchase agreement to help an Indiana wind farm expand. The expansion will send about the same amount of power to the grid this year as the company uses in all of its headquarters state of Indiana.
On recycling, Cummins in 2018 reached the 90% mark for a second consecutive year, just short of the company’s 95% goal. The recycling rate has been flat due to regulatory barriers in regions like India and China for problematic waste streams, and an absence of waste management suppliers in some operating regions such as Africa.
In addition, the company has been reducing packaging waste globally by increasing its use of returnable and reusable packaging. That means less material is available for recycling.
Finally, on logistics, disruption from switching third party logistics providers has caused the team to take some steps back to better understand baseline data to determine where it stands toward meeting Cummins’ goal to reduce the CO2 per kilogram of goods shipped in the company’s network by 10%.
The logistics team has been working to better understand the increased amount of detailed data it receives from the company’s new vendor and launched a Six Sigma project in early 2019 to gain a better understanding. It is working toward making improvements that would smooth CO2 reductions throughout the year.
The team wants to improve transport planning to maximize loads, reducing miles when trucks are empty and minimizing distance traveled.
LOOKING TO THE FUTURE
Cummins is planning to announce the next generation of its environmental sustainability plan as part of the company’s 100th anniversary later in 2019, while still working to achieve its existing 2020 goals. The plan will look out to 2050, setting quantifiable goals for 2030 along the way.
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