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PepsiCo UK: Gov’t must ensure that it pays to go green

By Elaine Watson , 18-Jan-2011

“Economic and policy barriers” are thwarting PepsiCo UK’s environmental ambitions, bosses have complained.

The soft drinks, cereals and snacks giant has committed to using energy exclusively from renewable sources across all manufacturing and distribution sites within 15 years.

However, to date, just 4% of its energy is from renewables, admitted the firm in a new sustainability report.

“Progress on reducing our energy has not been as quick as we would like, in part because of economic and policy barriers to generating on-site renewable energy.”

Higher price on carbon

It added: “Current UK public policy is unclear about the benefits to business of investing in renewable energy generation. Together with the Aldersgate Group we are pressing for a higher price on carbon which will incentivise businesses to invest in renewable technology.”

Bosses have also been forced to abandon plans to build a Combined Heat and Power Biomass boiler at the Quaker Oats factory in Cupar, Scotland, owing to the “long-term cost associated with such an investment and the unpredictable financial benefit”, revealed the report.

Using oat husks as fuel, the boiler was designed to produce enough steam and electricity to power the entire site, but would have proved around five times more expensive than a conventional fossil fuel boiler, said the firm.

“We will trial new methods of co-generation and we are also seeking planning permission for a wind turbine at our Skelmersdale site.”

Carbon credits

PepsiCo is exploring three different options for generating renewable energy: on-site, off-site or through power partnerships.

However, under current legislation it would not receive carbon credits for off-site generation or power partnerships, two of the most commercially viable options, added the firm. “A good way to encourage businesses to use more renewable energy would be to incentivise these options.”

Collaboration with ASDA to reduce road miles

On a more positive note, PepsiCo had managed to reduce food miles considerably through sharing trucks and routes with Asda, said the report.

“We began partnering with Asda in 2008 to see whether we shared any distribution routes, with the aim of taking miles off the road, not simply transferring it from one fleet to the other.

“We soon discovered many possibilities of close collaboration, particularly near our distribution centres in Leicester, Warrington and Peterlee. By working together and sharing vehicles, we took 333,000 miles off the road in 2008 and 540,000 in 2009.”

Water targets

It has also made significant progress on plans to reduce its water use at British manufacturing sites but admitted that implementing new technologies to extract water from its potatoes for re-use in its factories had been “tougher than anticipated”.

It added: “We have begun trialling ways to extract water from potatoes. Typically 80% of a potato is water. Previously this water was lost during the cooking process but we are now looking at how to capture this water and use it to clean potatoes before they are cooked.

“Once perfected, we will begin rolling out this technology to our four crisp manufacturing sites. We expect this to allow us to unplug our largest sites from the water mains.”

The firm, which recently unveiled plans to slash the carbon and water impact of its core crops in the UK (potatoes, oats, apples) by 50% over the next five years, is also investing in research to identify the greenest ways to grow, irrigate, fertilise and store its raw materials.

Click here to read more about PepsiCo’s sustainability commitments.

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