What is your role with DNV?
Lilholm: Within the DNV supply chain and product assurance division, I’m the global head of sustainability and ESG services. My role is about accelerating responsible and credible decarbonization across hard-to-abate sectors as well as sectors where DNV has a strong presence, including wind energy. I’m based in Copenhagen, but we have a global focus.
Zeitzen: I’m based in Copenhagen, and I have the Nordic focus. We have a team of sustainability specialists within supply chain and product assurance and focus our clients with a couple of key questions. One of them is: How can you prove that something is green – or better: environmentally and socially sustainable? This is related to green claims and trust in the market. DNV provides trust, and one of the trust elements is: Do you have proof of what you are saying? Is something green/sustainable, does your claim live up to the standards, to best practices?
And secondly, of course, in terms of the wind industry, if something is doing good, is it also made well? For example: If you make a wind turbine that is producing renewable energy, you don’t want to have the reputational issue that the copper you’re using has been sourced from a mine, which is environmentally unsustainable or violates workers’ rights or is unable to control corruption.
What makes the environmental and social impact of the wind-turbine supply chain an important issue to tackle?
Zeitzen: To create energy, you need the space to put up the wind turbines. You have to prove that your turbines are technically performing to the standard in that certain location in the expected wind conditions. You need to showcase and prove technically it’s doing the trick, that it’s performing.
And you also have to look at it in terms of how it’s made. We see this increasingly, especially in Europe, where the legislators or the tendering bodies are asking for information or mitigation of social impact within their value chain. They’re asking for footprint; they’re asking for recyclability and circularity, biodiversity; they’re asking for information about the social impact of turbine production, during the construction phase and the operation phase. All aspects and questions that look beyond the technical performance.
If you look at one of the most sustainable companies in the world, Ørsted, which is a Danish utility company, they’re even going so far that when they put up a wind turbine and put in the concrete foundations, they put bubble curtains around the installation to lower the impact on biodiversity, on the sea life, around the installation site.
Lilholm: Wind energy is trying to do good. It’s part of the climate mitigation that goes toward renewable energy and energy transition. But in that process, what is defined as a part of the EU taxonomies or in other taxonomies globally is to do no significant harm. In other words, while you try to achieve one objective, you don’t compromise another one. You don’t need loss of biodiversity or violations of human rights or pollution or other concerns, and you don’t have material negative adverse impacts on other things while you try to achieve one good, positive outcome. That holistic view is key for the industry to demonstrate that they have full control.
Another consideration is the different frameworks in place depending on where you are installing and where you are supplying. At DNV, we are helping to manage all these performance metrics surrounding the product in terms of environmental performance, social performance — according to guidelines and principles and frameworks — and what is needed to be disclosed.
How can wind farms accelerate supply chain decarbonization through digital transformation and comprehensive life cycle assessment?
Zeitzen: Let’s start with the last part: life cycle assessment, the LCAs. They have been around for 30 years, and what they do is shed light on how much carbon you are emitting when you are producing and when you are transporting between the production site, from the mine or from the raw materials location down to the factory gate — or even to the installation gate. It gives you the insight, the transparency, about where you have the levers to work with your production in order to decarbonize.
How to do an LCA is described in ISO standards. If you look at the greenhouse gas protocol, which has been around for decades, on how to assess the emissions and how to assess impact, this is where the value counts for these companies — to shed light on the impact and where the impact is caused in the supply chain. Ask yourself, do my Tier One, Tier Two, and Tier Three suppliers have an LCA? Do they have a focus on their own processes? And then you can develop levers and see where the biggest impact or the biggest value is gained. Where should the focus be set to decarbonize? If you explore the decarbonization in turbines, then you can’t get around the question of steel.
Lilholm: Steel makes up a huge chunk of the wind turbine. Approximately 85 percent of material mass in the turbine tower is steel. Looking at the kind of product itself, designing the product, and also sourcing the material for the product in a more sustainable way is key.
Ultimately, the purpose of the energy transition is to lower the emissions per kilowatt, but you also need to look at the products. They should exhibit a lower emissions profile, and, therefore, the steel bought should be steel that is sustainably made.
When it comes to steel, even steel makers are now undergoing quite a bit of a transition toward becoming more sustainable and also becoming more responsible. DNV works with organizations like Responsible Steel. It defines 13 principles of responsible steelmaking — looking at ethics, social, health & safety, environmental, and so on. That’s on the steel making side.
But the steel supply itself also needs to be low carbon intensity, and there are different performance levels.
So, what defines a green steel? There is not yet one single definition of what green steel is, but there are definitions on some steel definitely being greener than others.
The ones buying the steel need to be able to navigate this, and they need to be able to understand it well enough so they can translate it into communicating their emissions resulting from their purchase. That’s where we can help a lot. We understand that the performance requirements when you recycle steel are different than when you take prime steel.
The reality is, to sustain urban growth for every need of the population and so forth, we can’t only rely on recycled steel, we are going to also need to rely on prime steel. There is a definition there. You also want to favor sustainable prime steel as well as sustainable scrap steel that goes into turbines. To make informed decisions, they can only do that by unpacking those definitions.
Zeitzen: It gets exciting here, because you buy a slab of steel, and you have no idea if you can trust how much the emissions were. So, you need to be able to trace this back to where, and how, it has been made. There are digital tools available that can trace aluminum through the supply chain, and it’s possible for steel, too.
You actually want to be able to trace it back and to transparently see and demonstrate to your buyers, to your stakeholders that, yes, we have done everything possible to document and to trace where the steel is coming from. Is this really including 30 percent scrap steel that is coming from the construction industry that has been used to make the steel slab? Yes! Now, you can prove it and this is what we are about. That’s what we live for.
Why are advanced turbine coatings important, and how can they make an impact on durability, erosion prevention, and long-term sustainability?
Zeitzen: With an anti-corrosion protection or with a corrosion-retarding solution, you’re trying to increase the lifetime of the asset and during this lifetime you have to maintain it. For a wind turbine on land, it’s easy. Any day of the week you can send a drone up and take a picture to see if there’s any corrosion.
For offshore wind installations, you don’t get to go there every day. So, we need to be sure that what has been put up — be it the concrete, the steel, the sleeve, the tower, the nacelle — that these steel elements are effectively protected against the impact of a harsh environment.
And then comes the coating. What the coatings are doing is helping to optimize the use of steel and then helping to optimize the maintenance intervals and potentially reduce maintenance cost. It’s about what the coating is made of and if it been proven that the coating has been successfully used in a harsh, marine environment.
You can deduce a lot from inspection data, performance data, and even from the oil industry where steel has been used on steel rigs — where coatings have been used to protect the steel construction. Can this knowledge be transferred into the wind-turbine world? Absolutely.
This is what we are doing with our engineers — looking at the structural effects of coatings and then looking at the tests, reviewing inspection data, and looking at scientific studies in order to find out if we can corroborate and support a case.
What measures can be taken in order to strengthen market credibility?
Lilholm: In our role as an independent accredited assurance company, we bring a lot of impartial expertise in assessing scientifically whether it’s corrosion or whether it’s a claim around low carbon intensity or if this steel was recycled. All those claims need a level of confidence linked to the evidence. Someone needs to understand what evidence you need and how you measure it with the confidence levels required. That’s exactly what we can do at DNV. We provide that assurance; we provide that credibility as a third party.
Companies are increasingly trying to become more credible and transparent about their sustainability performance, but they don’t always have the data — but they start from something, and then they become better and better at it. We talked before about life cycle assessment, and we talked about suppliers’ environmental profile. Not every data point is available upfront, but the idea is to begin the journey and then build more and more depth and detail into it as you advance your decarbonization data.
What is circular manufacturing and how is it being applied to the wind industry?
Lilholm: Circular manufacturing is about product design, product innovation, and business model innovation. An example of such would be: How can you enable your suppliers to base their supply on something of circular origin and how can you define your product design and material strategy in such way that what you supply is also more recyclable — so that what you are buying and supplying ultimately is part of a circular economic model or a circular value chain?
A common myth around circularity is that a single actor really can accommodate the entire circular activity, but this is not the reality. Instead, there needs to be a collaboration between players to reduce adverse impacts and extend the use and longevity of materials. Making product design more standardized also helps the repairability and serviceability of the systems, making the access to training on maintenance more scalable and the access to spare parts more widely accessible.
Digital transformation is an example that is going to support and likely accelerate it. We see in Europe the so-called digital product passport, commonly referred to as DPP. This is a connected products platform, performing as an electronic data carrier of valuable product information through its value chain, with the purpose of enabling circular economic behavior. For instance, what it is made from, how to best recycle a product, and how to make a claim about the end-of-life of that product. All these data points will optimize that circular efficiency.
Zeitzen: If we look back at the U.S. way of dealing with used blades, you’ve probably seen the pictures and been at landfill sites where they dig a hole, put a blade in, and put sand over it, and hope that the site isn’t reused. You don’t want to be connected to a landfill at the end of it. And then, in the European theater, you’re not allowed to landfill used blades anymore. There’s a lot of focus on downcycling and on recycling.
Our customers, who are leaders in the industry, are now looking at how to recycle blades chemically or biologically, asking themselves: How can I break them down with any sort of physical matters and reshape the materials for, let’s say, the building industry as building materials. We have houses made out of ground-down wind-turbine blade waste. The golden solution here, of course, is: Can I unpack the composite materials in blades, and can I reuse it to make blades again? Then, you get to full circularity.
How is DNV helping organizations ensure they are properly addressing these ESG compliance, supply chain integrity with performance optimization?
Zeitzen: It’s about transparency, and this is the real key. If you can be transparent about how you produce and how your product is impacting the environment and also about the social impacts that are potentially connected to your product, then you can work against this. You can improve on this, and at DNV, we go into the engine room of the companies in production, into the aluminum mines, into the steel production facilities and figure out if a claim holds water.
We are going into the supply chain and analyzing if there are human rights violations in there. We are going and looking at what the supply chain does. We don’t want to just see the documentation. We actually go and have a look. We do this across different industries about 25,000 times a year with the suppliers of our customers. It’s very old-fashioned, but if there’s, for example, possible child labor involved somewhere, we want to go and see, experience how a company is managing its environmental and social impact if they want to be a supplier to one of our customers. So, we are sent out anywhere in the world.
So, basically, just boots on the ground kind of verification?
Zeitzen: Yes, it’s boots on the ground. We are starting to see that also in the assurance world; you can deploy digital tools for that, but nothing beats on-site confirmation.
Because even if you have a sensor in some production site that tells you so-and-so much steel of a certain quality has been received, you need to also make sure those sensors and the processes around these are managed well. We don’t want to appear like the police, but in a sense, we are policing what they’re doing — helping to build trust across the supply chain ecosystem. Looking at supply chain resilience around the world, companies need to build and maintain these ecosystems with their suppliers.
Manufacturers want to have something from their suppliers. And what they want to have is resilience, reliability on the quality and the timing of deliveries, over and above technical product performance. You only get this these days with ongoing engagement.
What’s been the industry reaction to your role in advocating this more robust sustainability and risk management strategies?
Lilholm: DNV’s legacy since 1864 is risk management. Now, these risks extend into environmental, social and governance risk. At DNV, we have management systems that take care of some of the governance part, but also, in terms of risk management, we quantify risk.
For example, what’s the environmental performance of a supplier? How is a supplier claiming something? How can you trust your supplier and proactively work with your supplier mitigating these risks? We can provide that as part of enabling engagement with suppliers in this risk. If you are betting your future possessions to buy your materials from one supplier and they’re going to say, “We are going to invest heavily in changing our plant design,” and on this basis our products will become more sustainable – how will you know that you’re going to get the outcome? Is it feasible? You’re going to need expertise; you’re going to need a risk management approach to assess it.
And then we move into the area of opportunity as well because of optimization. We, of course, want to remove adverse impacts, but we also want to identify areas to create positive impact. DNV supports its clients on the digital transformation type of engagement where we can identify opportunities as well.
We like to cover risks and prevent them. We like to size risk, define and make proportional efforts according to risks. And that’s where many companies may struggle if they try to identify things in the supply chain themselves. Manufacturing companies are good at manufacturing, they are not rooted in risk management or being risk professionals at large, so they might look for the wrong things when they try to address a risk.
With DNV, as a professional risk management company, we are experienced in identifying, mapping, managing and monitoring risks and working with suppliers on resolving and reducing risk through defining risk protocols and audit programs and ultimately lower the risk exposure and enable the long-term resilience of the companies that we work with.
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