Resetting our base year
As our company evolved over the last several years, there have been substantial structural changes. We believe resetting our base year from 2012 to 2019 will provide an accurate view of our company and its emissions profile. As we continue our journey to achieve a 50% reduction in Scope 1 and 2 emissions by 2030 and net-zero by 2050, a reset to 2019 also results in more aggressive mid-term targets over this decade. Please refer to the bar graph on the Scope 1 and 2 greenhouse gas emissions by year on the next page.
Our carbon emissions reporting is conducted in accordance with the World Resources Institute and World Business Council for Sustainable Development (WRI/WBCSD) Greenhouse Gas Protocol for corporations. Each year, we evaluate organizational structure changes to determine if adjustments are needed related to acquisitions or divestitures of business units. For 2019, we have restated our emissions to account for recent divestitures, to include emissions related to field activities, and to reflect changes in methodology.
The recalculation of our fixed-base year emissions after structural changes is in accordance with the WRI/WBCSD Greenhouse Gas Protocol’s “same-year/all-year” approach. Our new 2019 emissions base year allows for a more precise comparison of emissions reduction going forward, and while not directly comparable for the aforementioned reasons, our original 2012 base year provides a reference point for our emissions reduction journey.
Reducing Scope 1 & 2 emissions
Our 2020 Scope 1 and 2 emissions represent a 15% reduction compared to 2019. Please refer to the section above titled “Resetting our base year”. This substantial reduction was partially due to lower activity during the COVID-19 pandemic, but also due to efficiency and emissions reduction efforts across our global business. Further in this report, we list our 2020 progress across the key decarbonization pathways for the scope 1 and 2 emissions: facility energy efficiency and operational energy efficiency, uptake of renewable and zero-carbon energy, and emissions reduction in our vehicle fleets.
Improving energy efficiency
Improving energy efficiency and reducing emissions at our facilities
Baker Hughes engages employees in practical energy emissions reduction programs. We are continuously undertaking operational improvement projects at our sites globally. Facility energy-efficiency and emissions reduction from our manufacturing processes are the core elements of our strategy.
Energy-efficiency programs: We equip our site teams with resources and training to build targeted improvement programs. We take a standardized approach to energy-efficiency assessments, action plans, and tracking of improvements, including formal energy audits. Our energy “treasure hunts” and “weekend walk throughs” are designed to evaluate a comprehensive set of improvement opportunities applicable to our operations. More than 230 assessments were completed in 2020, and more than 850 have been completed in the last two years.
Energy efficient lighting and equipment: We continued our work to retrofit lighting and equipment at sites to improve energy efficiency. We completed 17 LED lighting projects during 2020, comprising more than 22,000 fixture replacements. In addition, a number of other projects including heating/air conditioning upgrades were completed.
Operational improvements: We continue to make improvements in facility operations that increase efficiency and reduce emissions. For example, in our TPS business, we continued steps to replace conventional refrigerant gases for compressor testing with a new low-emissions gas that we expect will reduce about 20,000 metric tons of CO2 equivalent emissions in future years, as compared to 2020.
We have increased our share of renewable and zero-carbon electricity from 15% in the prior year to 22% in 2020. From the U.S. to Brazil, Europe, and Singapore, we continue to find opportunities to use renewable and zero-carbon energy sources at our sites across the globe.
We apply renewable energy certificates from wind-generated power at all of our Texas facilities for 2020, supporting new wind and solar assets coming online in Texas during 2021.
We now have 100% zero-emission electricity sources for all Baker Hughes sites in the United Kingdom from a combination of wind and nuclear power.
Renewables are in place for three facilities in Macae, Brazil, using a combination of solar, biomass, and hydroelectric energy and at our Celle, Germany campus.
Rooftop solar installations were completed in 2020 for the Singapore Completions site as well as facilities in Talamona, Bari, Florence, and Massa, Italy. A three-year plan to procure additional renewable energy has been developed.
We have evaluated the use of microgrids and will further pursue such opportunities to achieve carbon emissions reduction, particularly in areas where diesel generators are used to support grid resilience.
We utilize in-vehicle monitoring systems (IVMS) to track and reduce unnecessary idling. Current metrics indicate a 26% reduction in average idle time per vehicle, year-over-year. While we believe that increased awareness is a significant contributor to this reduction, the economic downturn and associated travel restrictions related to COVID-19 likely also affected these results. We have completed an analysis of the energy efficiency improvements that can be gained by using hybrid vehicles and plan to further evaluate how to cost-effectively incorporate electric vehicles into our existing fleet in future years.
In March 2020 Baker Hughes’s offices around the world shifted to remote offices for those employees not working at a manufacturing site or distribution center. Since home offices became the place of work for thousands of employees, we felt it was necessary to include home office contribution in Baker Hughes’s carbon footprint disclosure. As very little data existed, we installed smart home monitors in the homes of three employee volunteers based in Texas and Florida in the United States. That data was used to construct a remote office baseline. This pilot has been expanded to include a larger population of people in more regions of the world for different configurations of equipment based on selected volunteer user profiles. The GHG emissions associated with remote work are included in Scope 2 as a counterbalance to reduced emissions resulting from fewer office-based employees working onsite at our facilities in 2020 due to the COVID-19 pandemic. In the context of the pilot study, there was an estimated 84% reduction in carbon emissions per person compared to the emissions for the same person that would commute and work in an office building.