The role of renewable energy and energy efficiency in the decarbonisation of the fashion industry

The Science Based Target Initiative identifies energy efficiency and the transition to renewable energy sources as the first levers, along with interventions on materials, on which fashion companies must focus in order to achieve the objectives set by the Paris agreement.

These two fundamental elements not only promote circularity and decarbonisation, but also reduce energy waste and make the most of energy sources that are naturally renewed or regenerated.

To confirm these principles, in July 2021 the European Commission proposed an amendment (RED II) to the Renewable Energy Directive, in order to align the European Union’s renewable energy targets with its new climate ambition. The proposal provides for a binding increase in the share of renewable energy in the EU’s energy mix to 40% by 2030, while also promoting the use of renewable fuels, such as hydrogen, in industry and transport.

Renewable energy and energy efficiency: what they are and what differentiates them 

Renewable energy and energy efficiency are two key levers to address the energy challenges of our time. Although they are often mentioned together, it is important to understand their differences and their importance in today’s landscape.

Renewable energy refers to forms of energy that come from natural and inexhaustible sources, such as sun, wind, water and biomass. These sources are not only abundant, but do not produce emissions of greenhouse gases or other pollutants during energy generation (net of the impact of installations). 

On the other hand, energy efficiency is about optimising the use of existing energy resources. It focuses on reducing waste and achieving better performance by using less energy. This can be achieved through the adoption of efficient technologies, such as low-consumption electrical equipment, thermal insulation, LED lighting and intelligent energy management systems. Energy efficiency is an essential tool for reducing energy demand and limiting the environmental impacts associated with energy production.

Thus, while renewable energy focuses on the transition to clean energy sources, energy efficiency aims to maximise the use of existing resources. Both of these approaches are indispensable for addressing the challenges of climate change, reducing greenhouse gas emissions and achieving long-term energy sustainability.

The most appropriate choice for companies looking for renewable energy sources depends on several factors, including:

• Energy needs: the needs of the company’s electricity and heat, which must be evaluated according to the activities carried out.
• Available spaces: for example, the presence of areas within or around the company that can be used for the installation of plants or devices for the production of renewable energy.
• Geomorphological context: the geographical and morphological characteristics of the surrounding area, such as the available area, the geographical position and the proximity to water sources.

Energy efficiency and renewable energy solutions available to companies

According to the Monitor for Circular Fashion 2022 Report, the analysis of companies and their related sites shows that energy circularity is a common goal, but so far only a few preliminary steps have been taken in this direction.

There are some solutions that companies can take to facilitate the transition to renewable energy and energy efficiency. These are:

• Energy Monitoring (EMS): Energy Monitoring Systems (EMS) provide companies with energy consumption data and KPIs, helping them make management decisions and maximize efficiency. 
• Energy Diagnosis: Energy diagnostics, in addition to optimizing energy consumption, allow to obtain Energy Saving Certificates, negotiable securities issued by an authorised body that certify the achievement of energy savings through interventions and efficiency projects. In general, this is an extremely interesting solution for companies seeking financial support to improve their production technology, reduce energy consumption and contribute to the mitigation of CO₂ emissions.
• Demand response: The demand response allows energy consumers to reduce or shift their demand for electricity at specific times, in order to ensure greater stability of the electricity system and greater efficiency in the use of energy resources.
• Electric mobility: Electric vehicles are not only more energy efficient than fossil fuel vehicles, but can also drastically reduce the climate impact of mobility when powered by renewable energy sources.
• Self-production from renewable sources: The installation of photovoltaic systems for energy self-sufficiency and storage of green energy is certainly the most significant step towards reducing CO emissions. 
• Renewable energy communities: Renewable energy communities are associations of companies, businesses and citizens who decide to join forces to equip themselves with one or more plants for the shared production and self-consumption of energy from renewable sources.
• Energy Purchase Agreement (PPA - Power Purchase Agreement): The PPA is a similar, but less collective, alternative to renewable sources, for companies wishing to fuel their energy consumption with renewable sources, but do not have the investment capacity to buy a photovoltaic system.
• Guarantees of Origin (GO): Companies that are faced with technical constraints that hinder the implementation of the previously mentioned solutions should require their energy supplier to provide 100% energy from renewable sources, certified by Guarantees of Origin (GO).

Energy optimization programs for the fashion industry

To meet the challenge of decarbonisation in the fashion industry, programs have been developed for companies in the sector to promote the transition to a more sustainable energy future.

One such program is Clean by Design, developed by Natural Resources Defense Council (NRDC), a non-profit environmental organization. The Clean by Design initiative focuses on working with textile companies to improve energy efficiency and reduce the environmental impact in clothing production, especially in the most impactful stages of the production process, like dyeing and finishing. Clean by Design is based on interventions that are easy to implement, at no cost or at low cost, with reduced payback times. Some well-known names in the fashion industry, such as Kering Group, H&M and Target, have joined this program.

Noteworthy are the BAT (Best Available Techniques), which promote the adoption of the best available technologies to reduce pollution and improve energy efficiency in industries. BAT is collected by the European Institute for Integrated Pollution Prevention and Control (IPPC) and represents the reference point for companies wishing to invest in environmental technologies. BATs are listed in the Best Available Techniques Reference documents (BREFs), which are regularly updated by the European IPPC Institute through an exchange of information between the Member States, the industries concerned, non-governmental organisations and the European institutions. In the fashion industry, brands like Gucci and Stella McCartney have adopted the best techniques available to minimize the environmental impact of their productions.

An important initiative in the field of renewable energy is the project CVVPA (Collective Virtual Power Purchase Agreement). This program, sponsored by The Fashion Pact, allows companies to join and buy renewable energy from sources such as wind or solar. Through the aggregation of energy demands, companies can negotiate advantageous prices for the purchase of clean energy and reduce their dependence on non-renewable energy sources. The Prada Group and Ralph Lauren are some of the partners participating in this project.

Finally, the RE100 program is a global initiative launched in 2014 by The Climate Group in collaboration with Carbon Disclosure Project, which aims to encourage companies to commit to using energy from 100% renewable sources and support the energy transition of delocalized supply chains. This program challenges companies to achieve this goal within a certain period of time and to demonstrate their transition to cleaner energy by making public their progress through the CDP. Fashion brands such as Burberry, Chanel and Nike have joined the RE100.

The benefits and challenges of using renewable energy in the fashion industry

The use of renewable energy and the adoption of energy efficiency solutions offer several significant benefits for fashion companies. Firstly, it is important to consider reducing carbon emissions. 

According to a study by McKinsey, energy plays a crucial role in the decarbonisation process of fashion companies. In fact, 63% of the emissions reduction potential of the fashion industry comes from the management of energy sources and their use, as follows:

• 45% of emissions savings can come from energy efficiency solutions 
• 39% is made possible by the transition to renewable energy sources
• The remaining 16% refers to the electrification of energy consumption

In addition, while considering initial investments, the adoption of energy efficiency solutions and the use of renewable energy can lead to significant energy cost savings in the long term. Finally, these practices can improve the reputation of the companies that apply them, making them more attractive for a wider and more informed customer base.

However, there are also significant challenges associated with these strategies. For example, the initial costs of implementing renewable technologies and energy efficiency can be high. Moreover the collaboration with the suppliers, also being fundamental, can introduce difficulties, because of complex agreements and negotiations to manage in order to guarantee the implementation of the sustainable practices along the entire supply chain. The 2022 Fashion and Sustainability Report by Cikis also confirmed the difficulty: 90.5% of the companies interviewed said they did not collaborate with their direct suppliers to encourage them to reduce their energy impact.

Despite these challenges, it is essential to promote greater collaboration and adopt energy efficiency strategies throughout the value chain. According to studies, the application of these strategies could lead to a reduction in greenhouse gas emissions of about 1 billion tons in 2030.

Conclusion

The use of renewable energy and the implementation of energy efficiency solutions represent a great opportunity to reduce the carbon footprint of the fashion industry.  

There are already many energy management programs and systems that companies can adopt.

Nevertheless, the transition to green energy presents significant challenges that must be addressed through careful management, strategic planning, supply chain collaboration and long-term commitment.