Delivering carbon neutral solutions across a global enterprise
Having produced a dynamic range of products for industries including the bakery sector, Palsgaard has gained a notable breakthrough in its operations through becoming carbon neutral, as Neill Barston found at its Danish headquarters
Developing emulsifiers and stabilisers for major industries including bakery and confectionery markets requires significant investment, research and technical development.
So, it is fitting that in its centenary year, Palsgaard is continuing to enhance its product range while making the key milestone of becoming carbon neutral in its operations.
With the firm’s founding principles being based around social and environmental responsibility, its management team explains that such an ambitious goal was something the business felt was particularly important to its future.
Indeed, the company’s distinctive headquarters within a 12th century estate located at the Juelsminde peninsula in Denmark set amid rolling countryside reflect a broader aspiration of aiming to be as responsible as is possible with its activities.
However, as the company notes, achieving its sustainability goal poses ongoing challenges, including developing a carbon offsetting initiative in relation to its recently-introduced Malaysian production facilities. This forms part of a portfolio including sites in China, Brazil, Mexico and the Netherlands.
The scale of its operations has seen it increase its global profile with a presence in 120 countries, with an annual turnover last year of $211 million. Its workforce now totals 549 based in 16 different locations around the world.
In terms of pure results, the carbon neutral scheme that began in 2010 is being heralded as a key success on its completion two years ahead of target. As a result, over the past eight years, company net carbon emissions fell from 12,029 tonnes to zero in 2018.
Consequently, it has achieved CO2 reductions totalling 56,175 tonnes, which equates to around the amount produced by 4885 European (EU) households in a year. This includes the completion of an 800-panel solar powered facility in Denmark run off renewable energy, which is contributing to its overall policy of reducing its energy consumption.
The reduction in the firm’s carbon footprint, comes as costs have also been reducing, as the wider use of renewables becomes more common globally. It’s a timely development, as the Danish government has also committed to reducing its carbon footprint as well, by 70 per cent over the next 10 years.
As for Palsgaard’s own environmental strategies, these include new heat recovery and insulation techniques, a switch from heavy fuel oil to certified biogas, as well as the use of renewables.
The full extent of its actions become clear during our site visit, which reveals that electricity for the company’s headquarters is created from hydro power, and indoor heating is powered by burning home-grown straw rather than oil.
A demonstration of the latter procedure shows just how such relatively straightforward steps can help deliver a significant difference in terms of delivering alternative energy solutions.
Making such environmental progress is something the company’s founding entrepreneur Einar Viggo Schou, who invented of the first plant-based emulsifier way back in 1917, would surely have approved of. He swiftly moved on to set up the site’s first factory at its headquarters, which continues to develop a century later.
As we tour the company’s extensive Danish headquarters, it’s clear its production teams are enjoying playing their part developing solutions for a number of industry sectors. One of the firm’s key strengths is in its dedicated application centres which are ranged across the estate, continuing to prove a focal point for innovation.
Its industrious teams offer an insight into some of the key possibilities for the bakery and confectionery market, which has seen the firm working with some of the largest sector businesses in optimising product ranges that are best-suited to varying taste and flavour profiles for consumers around the world.
Though the company’s employee base continues to increase globally, there’s a definite sense of it still being a welcoming, close-knit business in terms of its outlook. This is underscored as we pass a wall display of individual photos showing well over 200 staff with more than 25 years of service each. Needless to say, such retention levels of experienced staff to pass on skills to junior employees is continuing to foster a particularly dynamic working environment.
Speaking to Confectionery Production, company CEO Jakob Thøisen says he is especially heartened to be working for a business which places environmental responsibility at its core.
“I am really proud we have achieved our C02 goal, which is only really possible because we are owned by a foundation, so we are allowed to take a longer-term view of events.
“We have been working on this for more than 10 years now and finally we have reached that target two years early.
“The journey for this began in 2005, when we installed a straw fired burner to heat the estate and factory buildings and by doing this, we saved, 1,900 tonnes of co2, and it was a fantastic business case in moving from using diesel to straw.
From there, the CEO of the Schou Foundation at that time went to Greenland, and having visited three years prior, he saw that the glaciers were melting, so he believed we needed to do more – so we set ourselves the ambitious target of being CEO neutral.
“A recent study showed that 76% of companies do something to fight climate change and I can’t see how this would not apply for the bakery and confectionery areas of our business.”
Because changing energy sources is not possible everywhere, Palsgaard has also partnered with the UN and purchases its official carbon credits to offset emissions.
In Malaysia, sources of green energy are difficult to source, so the decision was made to buy carbon offsets for its site there. As far as the company is aware, it is the only emulsifier manufacturer to achieve carbon neutrality, but it hopes others will follow suit.
Thøisen notes: “The production of emulsifiers is very energy-intensive and when we decided to eliminate our carbon footprint, many thought it couldn’t be done. However, we’ve demonstrated that with ambition and innovation, sustainable ingredient production is possible. Achieving carbon-neutral status ahead of schedule has given us extra energy to continue making a difference. We hope other companies will be inspired to go on the same journey.”
Linking in with its centenary, the company is planning a range of new green initiatives, including a new solar energy park at its headquarters in Denmark.
Anders Brix, group CEO of the Schou Foundation, which owns Palsgaard, adds: “Throughout Palsgaard’s 100-year history, we have been dedicated to meeting challenges and climate change is undoubtedly the greatest challenge facing us now.”
Rather interestingly, the move to carbon neutrality has also led to a rise in university students and younger people wanting to work for the company, he points out.
This employment surge will prove helpful as Palsgaard plans to double its total production capacity by 2023, all the while keeping the same emissions.
As well as being manufactured in carbon-neutral factories, all the company’s emulsifiers are vegetable-based and sourced as sustainably as possible.
Where the business uses palm oil ingredients, it relies on Roundtable on Sustainable Palm Oil (RSPO)-certified raw materials, enabling it to offer its complete product range as mass balanced (MB) or segregated sustainable (SG)-certified.
Brix adds that the company pays more for sustainably sourced palm oil: “We could save €1.5 million if we did not buy this, but in the long term we feel it is a good investment for us and the right thing to do, in order to offer our customers SG-certified and carbon neutral products.”
Thøisen notes: “It is important in the midst of the huge climate debate that we started early, and it is important to be the first mover. Our customers are choosing suppliers that have a serious approach to sustainability and it is part of our criteria.”
During the past few years, palm oil has received bad press, yet Palsgaard says its supply can be traced sustainably, offering more volume per hectare than other options including rapeseed.
“We use a lot of palm oil and we pay a premium to the farmer. We have a very strong belief that as there is more demand for the oil to be produced sustainably, the supply of sustainable palm oil will grow,” adds Thøisen.
Meanwhile, market demand is growing, particularly in Asia. Thøisen notes for Palsgaard, it is particularly the middle-sized customer that the firm can make a difference with, with the emulsifier company’s knowledge of the markets and of the supply chain.
The firm recently opened an application centre in Russia, as demand for processed foods have increased. Another emerging issue with India is its population growth, which he says is particularly interesting, in the area of bakery.
On the issue of carbon offsets in Malaysia, he adds: “We continue to explore ways we can do it on our own, looking at possible supplies such as palm oil residues that can be burned to provide power and heating.”
Overall, the move to carbon zero has had benefits for the firm, Thøisen adds. “People contact us frequently to tell our story, and it’s now a big part of our heritage.”
• $211 million turnover in 2018
• 549 employees in 16 countries
• More than 270 employees have more than 25 years of service each
• Six manufacturing sites on four continents: Denmark, the Netherlands, Mexico, Brazil, China and Malaysia
• Sells to 120 countries
- See our Palsgaard behind the scenes video on becoming carbon neutral and a chance to see its confectionery labs here: bit.ly/2ndxZL9