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L’Oréal USA reveals novel approach to carbon neutrality for its US operations

L’Oréal USA, the US-arm of France-headed "beauty major" has announced plans to achieve carbon neutrality in 2019 for all 21 of its US manufacturing and distribution facilities. The novel financially sustainable approach could potentially serve as a model to support new renewable natural gas (RNG) projects in the future. In order to reach this milestone, L’Oréal USA is adding to its diversified energy portfolio with RNG (biomethane) purchased from a new processing facility in Kentucky.

As part of L’Oréal Group’s “Sharing Beauty with All” global sustainability programme, L’Oréal USA had already surpassed the company’s 60 percent carbon emissions reduction goal in absolute terms in 2017, reaching an 84 percent reduction from a 2005 baseline and achieving 100 percent renewable electricity use for all 21 manufacturing and distribution facilities in the United States (US).

The company currently has 17 renewable energy installations across the US, including large on-site solar arrays in Arkansas, New Jersey and Kentucky as well as wind turbines in Texas.

Achieving carbon neutrality for all of our operations facilities furthers our commitment to being a sustainability leader in the United States. We have seen that a dedication to sustainability fosters innovation, inspires creativity and builds a strong team spirit. This new milestone can be credited to our passionate teams and their vision in finding a new renewable energy approach that benefits one of our local communities while being a long-term, financially viable solution, said Frédéric Rozé, President and CEO of L’Oréal USA.

Utilising landfill gas (LFG)

In considering approaches to reach carbon neutrality, the company aimed to pursue a local strategy that would have a positive impact in the communities in which it operates while providing “additionality,” meaning the project would not be possible without the company’s committed involvement.

After an 18-month research phase, the team identified a potential renewable energy production solution utilizing landfill gas (LFG) from the Big Run Landfill in Ashland, Kentucky, which is 135 miles (≈ 217 km) from the L’Oréal USA plant in Florence, Kentucky.

On March 1, during the Center for Climate and Energy Solutions (C2ES) Climate Leadership Conference in Denver, Colorado, L’Oréal USA announced that it has signed a 15-year purchase agreement for approximately 40 percent of the renewable natural gas (RNG or biomethane) produced from the Big Run Landfill.

The RNG L’Oréal USA purchases will be directed into the interstate natural gas transmission system. The RNG purchased from the new project alone is expected to eliminate the carbon equivalent of 1.8 million US gallons (≈ 6.81 million litres) of gasoline consumed per annum.

LFG upgrading to RNG

According to L’Oréal USA, it’s long-term purchase commitment of the RNG was a key underwriting component that led to the financing of the project. This spring, Ultra Capital-owned Big Run Power Producers will break ground on a new processing and upgrading facility that will process the LFG from the landfill and condition it for use as pipeline quality RNG instead of flaring the LFG.

Entrance to the Big Run Landfill, Ashland Kentucky where a landfill gas (LFG) to grid-injected renewable natural gas (RNG) facility will be built. L’Oréal USA has signed a 15-year purchase agreement for approximately 40 percent of the RNG (biomethane) that will be produced (photo courtesy Roberta Burnes / Kentucky Energy and Environment Cabinet).

Construction of the processing plant will begin during March 2018 and is expected to be completed by the end of the year. The project will generate 7-10 permanent jobs at the facility and utilize roughly 100 construction jobs during the buildout.

This accomplishment would not have been possible without our team’s determination to tackle the carbon emissions from our own heating systems, a difficult challenge shared across industries. We are proud to have found a local solution and approach with the potential to be replicated at landfills across the country, said Jay Harf, Vice President of Environment, Health, Safety and Sustainability for L’Oréal Operations Americas.

Novel approach

While the Big Run Landfill project satisfied L’Oréal USA’s key principles of being local and providing a new renewable energy source, the project also needed to be financially sustainable for the company. High production costs and demand for RNG drive the market cost up significantly — up to eight times the cost of non-renewable natural gas.

In order to offset the cost differential between RNG and non-renewable natural gas, L’Oréal USA will sell its environmental attributes into the transportation fuels market for approximately five years, which will help fuel producers to comply with the EPA’s Renewable Fuel Standard (RFS).

During this time, the company plans to purchase carbon offsets from an EPA award-winning RNG site. After approximately five years, L’Oréal USA plans to use the environmental attributes to maintain its carbon neutrality for all 21 of its manufacturing and distribution facilities.

This use of directed biogas after the initial five-year period is unique in its approach and scale. LFG has traditionally been used to generate electricity or for direct use at a single site. Today, the highest value use for RNG is in the transportation fuels sector.

L’Oréal USA’s approach enables the company to purchase enough RNG to achieve carbon neutrality for all 21 of its manufacturing and distribution facilities, spread across twelve states, with a single solution. Given the number of landfills in the country that have the potential to convert LFG to RNG, L’Oréal USA’s approach could potentially serve as a model to support new renewable natural gas projects in a way that is both environmentally and financially sustainable.

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