By Dr. Paige Marie Morse, Sustainability Advisor and Lawrence Ng, Vice President of APJ Sales, Aspen Technology, Inc.
The United Nations released its latest report on the status of Human Development across the globe in September. It may not be a surprise to learn that progress has stalled in recent years as the impact of global crises and local climate disasters has taken its toll. The global Human Development Index declined for the past two years, reversing the progress of the previous five years. Prior to this report, the Index was tracking steady upward progress since its inception in 1990 and progress had been particularly strong in Asia.
The challenge for industry leaders is to make progress despite ongoing external challenges. First, the COVID-19 pandemic, which the International Monetary Fund has described as “a crisis like no other,” created an unprecedented business environment in 2020 whose effects continue to linger. Just as some market recovery was starting, the second major shock of the conflict in Europe and associated energy and inflation impact has carried through to economies and businesses worldwide. The ongoing supply chain chaos has further exacerbated these effects.
These overlapping calamities have created a new uncertainty complex that permeates communities and businesses, says the UN Development Program (UNDP), requiring even stronger and more creative responses. “The trans¬formations in energy and materials required now . . . portend even more upheavals, which some believe to be as large as the shift from ag¬ricultural to industrial societies.”
Thankfully the outcome is not all doom and gloom, as the report recommends several processes and pathways to progress, highlighting “three I’s” to chart a new course:
- Investment for future capabilities, from renewable energy to preparedness for pandemics;
- Insurance to prepare our societies for the ups and downs of an uncertain world; and
- Innovation in technology, economics, and culture to build capacities to respond to whatever challenges come next.
The vital lessons and approaches discussed for these themes are targeted at policy activities, although they have relevance to the challenges being faced by companies in the process industries and the increasing importance of ESG reporting and performance.
Digitalisation solutions are especially relevant for companies in the process industry as they respond to external drivers and target operational excellence to meet to deliver on sustainability goals. These three I’s provide a helpful framework for the activities needed for progress.
Invest for the Future
As companies explore and scale new technologies for renewable energies, they need creative solutions to assess the development and economics of projects. Many new technologies are emerging that target new energy sources or alternative product offerings that emit less CO2 and generate less waste in processing.
For carbon capture and storage (CCS), risk modeling technologies offer the most practical and economically feasible options that align with specific carbon reduction goals. For example, industry leaders are using subsurface geophysical and geological modeling software to quickly determine the best reservoir targets for reliable, long-term carbon storageii.
Valuable investment in the process industry goes beyond capital allocation to include building the skills of your labor force. Targeted training courses provide technical details to ensure they are well-prepared for the safety, operational and reliability demands of current and future assets.
Insurance for operational resilience
Markets have become more volatile as communities and comp¬anies work through alternatives and uncertainties of the energy transition. Regional disparities in supply and energy options are creating unfamiliar and often isolated conditions that can significantly impact profitability and operational capabilities, and companies must be able to respond quickly.
Large price swings in feedstocks and products, as well as raw material availability, require flexibility in operations. Digital solutions provide visibility on emission and waste metrics, in addition to financial impact, and give operators the insight to respond to market shifts while staying within regulatory boundaries. And supply chain solutions help companies optimise scheduling as customer and raw material needs vary, using alternative scenarios to define optimal outcomes to meet customer demand.
Enterprise visibility was a key drive for Birla Carbon for a data solution: “Adopting the right technology positions companies to be resilient, productive, and agile leaders of their industries tomorrow,” according to Santosh Panday, AGM – Manufacturing IT, Digital & OT. “This is made possible by increased profitability and greater sustainability in operations.” iii
Innovate to address growing challenges
“Innovation will be at the heart of successfully navigating the many unforeseen, unknowable challenges ahead,” as highlighted in the report. Many companies are working on new technologies to meet ambitious net zero targets over the next few decades. This work requires significant resources; both for research and development now and for capital allocation for large scale assets later.
Artificial intelligence offers significant improvement by enhancing human capabilities, not replacing, but, instead, augmenting innovation strategies. This is particularly relevant for automated tasks that serve to improve technology developments, such as autonomous vehicles, medical diagnoses and inventory management.
Research efforts are accelerated using simulation capabilities to evaluate alternatives and reduce laboratory experiments (along with the related time and expenses). Accurate modeling is a crucial requirement to select the right processes to design the most energy-efficient and sustainable solutions and to include economic analysis at each stage.
ACME Group highlighted the value of modeling technologies in the design and optimisation of its green hydrogen and green ammonia projects planned in India and Omaniv.
New processes and products can then be more successfully scaled and duplicated using capital project solutions that integrate critical design and siting decisions early in the planning phase. This alignment and early timing also reduce project risk for engineering and cost management, helping to speed the scale-up and expansion of new processes.
As we look forward to the November COP27, the 27th Conference of Parties for the UN Framework on Climate Change, these observations and recommendations will be further discussed and reviewed by governments, NGOs and private companies in the weeks ahead. I am sure that digitalisation will again emerge as an important enabler to push faster progress across the global industrial sector.
“Countries face a fork in the road on future progress,” notes Kanni Wignaraja, UN Assistant Secretary General and UNDP Director for Asia and the Pacificv. “Governments can scale up policies and investments that address economic opportunity while protecting natural assets and can invest in knowledge and innovation to help societies adapt to the world of uncertainties we face. Or they can proceed down unsustainable pathways.”
iHuman Development Report 2021-22, United Nations Development Program, 8 September 2022.