Demand Management, Energy Efficiency, GHG Emissions, Industrial, Industrial, Solar, Sourcing Renewables  -  December 19, 2016 - By Amy Poszywak

Views from the top: How Toyota North America is stepping up to a global net zero emissions challenge

Exclusive to Smart Energy Decisions

The energy management team at Toyota Motor Engineering & Manufacturing North America Inc. has been focused on driving efficiency throughout its 14 manufacturing plants for many years but is now likely facing its biggest challenge yet as it works toward achieving the larger goals outlined in the company's 2050 Global Environmental Challenge. 

Announced in October 2015 by parent company Toyota Motor Corp., the challenge aims to reduce the negative impact of manufacturing and driving vehicles as much as possible, and is composed of six individual challenges across three areas: "Ever-better cars, ever-better manufacturing and enriching lives of communities." Of six key goals outlined in the challenge, three are directly related to CO2 reductions; the first is a goal to reduce new vehicle CO2 emissions by 90%, in comparison to 2010 levels, by 2050; the second and third to reach net zero emissions within Toyota's complete life cycle of operations and within its plants, respectively. 

While there may be a long road ahead, the team has a great deal of experiences to draw on as it takes on these new challenges. Earlier in 2016, the Toyota Motor Engineering & Manufacturing North America  group earned recognition for its twelfth-consecutive partner of the year award from the U.S EPA's Energy Star program for its efforts in energy efficiency including recording a 5% reduction in energy intensity in 2015 compared to the previous year while increasing production.

This year also brought solar into the company's mix in a new way: In June, it activated a unique retail electricity supply contract with provisions for both onsite and offsite renewable power at its new North American headquarters in Plano, Texas. Toyota said at the time that solar power will provide 25% of the Toyota campus' total electric demand, making it the largest corporate office onsite project in the state among nonutility companies.

To get a better view of what lies ahead as Toyota North America works to support the company's broader environmental goals, Smart Energy Decisions spoke with Robin Haugen, general manager of Toyota's plant and environmental engineering group, in early November. Below is an edited version of that conversation, which ranges from the team's energy efficiency initiatives to Toyota's new hydrogen fuel cell vehicle, the Mirai. 

Artist rendering of Toyota's new North American headquarters in Plano, Texas.  Source: Priority Power Management LLC

Smart Energy Decisions: Toyota recently announced a series of 2050 environmental goals, with three of them centered on carbon emissions reductions associated with various parts of the business, that I imagine will have a big impact on the way you think about energy use in your operations over the coming decades. Can you talk a little bit about where these came from and how you are looking at them broadly? 

Robin Haugen: So out of the six challenges, like you said three are focused on CO2 reduction. One is in our vehicle emissions, one is our stationary plants, and in there what we want to focus on is manufacturing facilities as they are our largest energy users; and also the life cycle. But there are also three other challenges in those 2050 goals that are also very important to the environment, which address water usage, recycling and a future society that's in harmony with nature, and those are all equally important to the CO2 challenge. 

It's really perfect timing for us to have this conversation because last week, as Jana mentioned, I was in Japan for our global production meeting, and our senior managing officer, who is the main champion of all six of these challenges, spoke to that audience of president level and senior vice president level in our manufacturing area, to remind us that we have these six challenges. Everybody is focused, of course, on the CO2, but don't forget about all the other challenges. And he really challenged us, and those manufacturing executives, to understand the commitment that Toyota has made and the necessity that we follow through on those commitments. So for me, it was great to hear that level, encouraging others to own the message and do whatever they can to make sure it gets implemented. 

So you asked where these challenges come from, and they come from the top. Many of the things Toyota does is from the bottom up, coming from the grassroots. But sometimes, when you get a challenge like this, it has to come from the top. It has to come from the top, be reinforced from the top, and everyone in the company needs to own it.  

You mentioned this a little bit, regarding Toyota's manufacturing facilities, which are the largest energy users and emissions creators. We're curious what you're looking at in terms of immediate actions that you're taking to reduce those emissions at those facilities to get them in line with your targets in the U.S.?

After the goals were announced at the highest level of the company last October, in March, the functions related to my function in Japan, (I'm the general manager of plants and environmental engineering so our responsibilities are for manufacturing and [research and development] facilities), we all got together with a plan from our global headquarters that identified the actions we'll take over the next year to begin to establish the strategy and targets for a mid-term target to 2025 on our way to 2050. And each region, so, for example, I'm North America, which includes Canada, the U.S. and Mexico, each region needed to come back with their plan to get to zero CO2 by 2050, with a more detailed plan to get to 2025. Those plans are due in December to identify related budgets that will be needed to support this vision. 

So I have 14 plants in North America, and my team is collecting and creating a detailed action plan for each of those plants, and we'll submit them upward and Toyota will consolidate them all globally, and based on the priority for CO2, our global headquarters will determine how the funds will get distributed. 

Sounds like you and your team have been busy, then? 

Well yes, but we are used to challenges, and we embrace them. It really is the culture of our company. And nothing is more exciting than to be in my job right now, to have that kind of support at the senior level, and for my people too, to be very active in making these changes. 

Toward challenge number one of those six 2050 challenges, which is to reduce vehicle CO2 emissions by 90% in comparison with 2010 levels, Toyota has said it will promote the development of next-generation vehicles and further accelerate the spread of those vehicles. What are some examples of how the company plans to do that? 

Recently at the [World Energy Engineering Congress] event that we hosted, what we tried to do was identify what we see the future of products to be, and that is our new product the Toyota Mirai, which is a hydrogen-based product. So we displayed the Mirai at the WEEC, and it combines hydrogen and oxygen to create electricity on board ... a lot of people don't realize it is an electric vehicle, it just makes its own electricity. Then the only emission is water vapor. Of course, the development of that infrastructure will really be key to the success, but we're really focused more on a hydrogen-based society, and how we can support that, because we really think it is a technology that will take us into the next 100 years, and that is for a couple of reasons. 

Number one is the convenience of fueling, it takes about three to five minutes to fuel, just like a traditional gasoline vehicle. Secondly and more importantly, is the scalability of fuel cell technology. Fuel cells can scale from something like a sedan, which is currently on the road in California right now, all the way to up heavy-duty, full-size trucks. We're conducting a feasibility study starting next year that will talk about that, the application of heavy-duty fuel cells, and what the potential for a large, large fuel cell could be, from an emissions perspective, it would be huge. 

So we're really looking at fuel cells for the future but at the same time, we have a portfolio of technologies. We're still working on pure battery electric vehicles as well, we see them as more, shorter distance around town applications, particularly for things like car sharing or catch to the last mile public transit scenarios, but EVs, we think, will have a place in the future as we're going to need multiple technologies that provide zero emission transportation. We also have our hybrid line of 14 models that are out on the road and their life cycles are pretty long nowadays, as most people keep their car for five to ten years, so for these complete zero emission vehicles, we're looking way down the line as far as replacing internal combustion engines, for example. That's probably not going to happen in our immediate future, but it's definitely something that we're planning for long term.

Toyota has already announced a series of energy efficiency and renewable energy projects within its U.S. operations specifically the zero plant emissions challenge. Are there any that really stand out to you as big successes that you may look to scale or emulate as you address these 2050 challenges? 

A little bit more about the 2050, or 2025 goals is that we've carved out efficiency, or what we call Kaizen, is being 50% of the content to get us to that goal. And then new equipment technology is 25%, and then, of course, we understand we're not going to get everything down to zero, so we're looking at renewable energy for 25%. 

So we have always focused on Kaizen or energy efficiency, but our normal business behavior is maybe we can get 25%. So in essence, I'm having to double that activity. There's also new technologies, which is something that has always happened but it's happening quicker and quicker, technology is changing rapidly. So that cycle is happening everywhere we look. So renewable energy is our third priority, so we don't have a lot of renewable energy, but we're definitely trying to establish ourselves through our One Toyota facilities in Plano [Texas], Georgetown [Texas] and in Michigan, we're building new buildings with a renewable energy element, but that is more visionary, to demonstrate our commitment in that space. But that renewable energy plan, I can't give you a project that we'll look to emulate across, because we're still looking at what our strategies might be in that area.

But one project that has gone really well for us in the renewable space is we do have one landfill gas project at our plant in Kentucky. It's our largest manufacturing plant in North America, and they make the Camry, the Lexus ES300, the Avalon and a few models. That plant and those people involved in that project were so determined to make the connection to that landfill and make it work, and it is really benefitting us quite a bit, because that plant has a huge CO2 content in its energy supply. So we have just begun the operations of that and we're hoping that landfill locations gets more business on the trash side so we can give them more business on the energy side. 

But at the core of what we do is really Kaizen, which is to continuously improve, and find efficiencies. So what we would call a Kaizen project, for example, is in our paint booths, to change how we humidify the space. So we have modified a lot of our existing manufacturing areas to revive how we do that humidification process. And actually, we worked with other manufacturers through the U.S. EPA's Energy Star program, and we've seen that gives us a good opportunity to find out from our competitors what they're doing to make U.S.-based manufacturing more efficient. It's a great program that has given us that opportunity, and so this paint process ... paint uses 50% of our energy in manufacturing, just in the painting of the vehicles. So obviously, my team and the paint engineers are always working together. So that's where we look first for our Kaizens. So we'll implement something at one plant, make sure it works, then transfer it across.

What are your biggest lessons learned from you've accomplished thus far in energy efficiency? 

One clearly is that strong executive leadership is required to achieve our targets. I've always considered myself very fortunate to work for a company such as Toyota where it is our nature to conserve, to strive for lean, so the energy efficiency story naturally sells well. But there is also a need for that executive leadership, which we try to emulate. But we also utilize tools that are available to us from government agencies, Toyota has partnered with the EPA and the U.S. Department of Energy over the years, and most of those focuses were on how to introduce new technology into manufacturing for the use of manufacturing here in the U.S., and to make us more efficient and more competitive. And that's the great thing about that Energy Star program, it helps us make better processes and helps us build across, with our competitors, gives us a free space to work together so that we all can become better. These organizations really give us those benchmarking tools, we get some technical knowledge from those national labs, and can assist the industry to move forward in energy efficiency. And all of those things really have supported us, and they encourage us, internally, too, to engage our executives. 

What are some of the biggest challenges that you face as an automaker with such a large demand for energy? 

There are times, and I think anybody in the energy efficiency business feels like we have to re-learn the same lesson and the simple lesson every five to 10 years. So when you go out to find that low hanging fruit and you think no low hanging fruit is left, you realize that something maybe you implemented 10 years ago has done a little bit of backsliding. So it's really the diligence of still looking at the stuff that's on the floor, and seeing what's going on on the floor, and empowering people who really can make the difference, and helping them understand that although energy efficiency can sometimes feel to them like a burden, they're really empowered to make the change. Many times when you do energy efficiency items, if you don't engage people to own the message, it feels like it is being imposed on them. But when you empower people to show them that every day you're looking for something to remove waste in the process, and they can see that they can make some simple behavioral changes and they can own the message, then it's a lot easier to move that forward. But the frustration can be, 'we just talked about this five years ago and we made those changes,' so that is a challenge. 

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