The fourth - and final - part of this month's members' briefing, which looks at environmental sustainability in the spirits sector, considers the growing move to generate energy from waste products.

In common with brewing, spirits production produces a lot of solid organic waste material and waste water with high organic content. The industry has generally had a good record of making use of this waste, for instance by selling organic residuals from the production process, such as spent grains, into the cattle feed market.

Waste to energy conversion, notably the generation of biogas using anaerobic digestion (AD), has also featured in the energy strategies of distillers, particularly since concerns began to rise over carbon emissions.

Biogas and biomass

Bacardi commissioned its first digester at its production facility in Puerto Rico some 22 years ago, and now has three at the same plant. Stuart Lowthian, the company's global technical director, describes the company as a "pioneer" in the use of the technology. "Between 50% and 60% of our total equivalent energy mix in Puerto Rico comes from biogas."

This has contributed to the company's impressive performance on renewable energy and reductions in carbon emissions. "As a company, about 16% of our total energy comes from renewable sources and obviously Puerto Rico is a big part of that mix," Lowthian tells just-drinks.

He also reports that Bacardi has reduced its greenhouse gas emissions by 29% against a 2006 baseline, while renewable energy initiatives now coming on stream will help the company push that reduction to 45% within the next 12 to 15 months, which Lowthian describes as "a significant achievement".

The other renewable energy initiatives, meanwhile, including one at its Aberfeldy distillery and one at its Bombay Sapphire gin distillery in the south of England, will be biomass burners rather than anaerobic digestion units producing biogas.

Burning biomass in combined heat and power plants (CHPs) is also increasingly common among Scotch whisky producers and elsewhere. Bacardi, for example, has a biomass burner at its Tequila production site in Arandas, Mexico.

Using biomass as an energy source is a less technically demanding process, although the sourcing of the wood pellets generally used in biomass burners has been a controversial issue, with some environmental campaigners asserting that, at times, this is being done unsustainably.

One important distinction about the use of biomass in distilling or brewing is that, in addition to wood pellets that may be bought in, the organic solid residuals from the production process can also be used as biomass feedstock.

"We have looked at doing that [AD] in other distillery locations, but they really are sizeable investments and we've never been able to get the justification to extend that further," says Lothian.

Diageo also uses AD at a number of its sites in Scotland, including its Roseisle and Cameronbridge facilities. The bio-energy plant at its Roseisle unit typically provides around 50% of the distillery's energy requirements, according to Michael Alexander, the company's head of environment communications & policy.

Alexander also acknowledges that AD is not right for every distillery. "Each circumstance is very different. It's very important that we recognise that we can't just take something off the shelf and slot it in at each distillery. Every distillery is different and every approach needs to be tailored to meet their requirements," he says, adding that these investments "work better at scale". It is no coincidence, then, that Roseisle and Cameronbridge are the company's two largest distilleries.

However, Alexander adds that such projects will not be subject to the same constraints regarding return-on-capital employed as other investments might be. "If you're measuring that return on investment keeping to the traditional three- or four-year payback requirements, then these projects would certainly be challenged to meet those specifications. But, we view it very much as a longer term investment. These projects aren't short-term payback projects, they're long-term net value projects across a wide range of benefits and that's why we continue to invest in them."

Growth potential for anaerobic digestion in Europe

Dr Ignacio Sanchez Recarte, director, internal market & sustainability at SpiritsEurope, believes there are excellent opportunities for the uptake of anaerobic digestion in the European spirits sector, and plays down the technical barriers and issues of scale.

"In general, AD suits perfectly industries with constant waterwaste in volume and characteristics, which is the case in most spirit facilities," Sanches Recarte says. "In addition the average characteristics of the spirit industry effluents, BOD [biochemical oxygen demand] and COD, [chemical oxygen demand], makes the implementation and activation of the digester relatively easy. Finally, the efficiency of this technology, the small space requirement and the economic return is an opportunity for all the spirit industry."

Lowthian, however, is more circumspect. "These are damned complicated things to use and they're damned expensive," he says.

However daunting the technical difficulties and scale considerations may be now, these are likely to become less prohibitive over time. For a start, costs are likely to come down: History shows more or less universally that the cost of new technology goes down over time as the technology matures and further advances are made. And, even if costs remain the same, the technology will effectively become cheaper as the price of fossil fuels inexorably rises.

This is a further justification for taking a long-term view on return on investment. "We know that energy prices will continue to increase [and] we know that security of energy is also an important issue," says Alexander.

Furthermore, as with all forms of renewable energy, research and development is a priority both within the private sector and within government, making the necessary technological advances that much more likely.

A case to point is the launch last month of the Biogas Opportunities Roadmap by the US Department of Agriculture (USDA). According to USDA data, there are some 2,116 biogas systems operating in the US. However, the USDA believes there is the potential to increase this to 13,008. This would provide, the USDA estimates, some 41bn kWh/year of electricity from 654bn cubic feet of biogas per year, enough to power more than 3m homes for one year or produce the equivalent of 2.5bn gallons of vehicle fuel.

A key element within the Biogas Opportunities Roadmap, developed in response to President Obama's Climate Action Plan, is research and development, while the Roadmap is also intended "to help the private sector voluntarily realise the full potential of biogas systems".

Lowthian concludes: "We are all always looking for new solutions to improve sustainability and commercial performance, and anaerobic digesters are an important part of that mix. As energy becomes more expensive, I'm sure that will push the technology to make it more suitable for small-scale and easier to use. With time, it [AD] will become easier [and] more cost-effective, and we will use more."

The Scotch Whisky Association has set sector-wide targets on renewable energy as part of its Environmental Strategy, and Julie Hesketh-Laird, director of operations & technical affairs at the SWA, expects AD to play a role in meeting those targets. "I believe there will be take up of more AD technology in the Scotch whisky world, but also of other renewables technologies," Hesketh-Laird says.

"Our members are approaching their renewables needs via a variety of angles," she continues. "Some are using AD with an aim of being self-sufficient in energy terms; others firing boilers with distillers’ by-products and others looking for sustainable renewable fuels such as wood pellets."

A notable joint venture in renewable energy in Scotland illustrates how collaboration can bring benefits in energy efficiency. Helius CoRDE is a JV between Helius Energy plc, Rabo Project Equity BV and The Combination of Rothes Distillers Ltd, a group of companies operating some 12 distilleries in the Speyside region. The companies participating in the project are Diageo, Edrington, Pernod Ricard, Bacardi, Inver House Distillers, Campari and Ben Riach.

The CHP at the Helius CoRDE facility in Rothes burns distilling by-products together with wood pellets to create electricity, which is the sold to the National Power Grid. It generates enough electricity to power around 9,000 homes while, at the same time, still producing a quality liquid animal-feed product.

Hesketh-Laird believes the venture could be a model for further collaboration in the spirits sector. "The Helius CoRDE collaboration is one that appears to work well for the environment and the businesses involved and I’ve no doubt distillers will be looking closely at whether the model could be replicated elsewhere."

To access the other sections of this briefing, click here.