O-I's Sustainable Progress Towards Decarbonization in Glass Packaging

Edwin FosterThursday, Jan 23, 2025 3:15 pm ET
4min read


O-I Glass, Inc. (NYSE: OI), a leading producer of glass bottles and jars, is making significant strides in its commitment to sustainability and decarbonization. The company's investment in hybrid furnace technology and heat recovery systems at its plant in Veauche, France, is a testament to its dedication to reducing its environmental impact and contributing to a more sustainable future. This article explores O-I's sustainable progress towards decarbonization in glass packaging, highlighting the expected emissions reductions, challenges, and opportunities in implementing these technologies across its global operations.



O-I's investment in hybrid furnace technology and heat recovery systems is a crucial step in its decarbonization strategy. The company plans to invest approximately $65 million in the electrification and decarbonization of its plant in Veauche, France, making it the first O-I plant globally to use this technology. The key aspects of this initiative and their expected emissions reductions are as follows:

1. Hybrid Furnace Technology: The investment involves the renovation and equipping of one of the plant's two furnaces with state-of-the-art hybrid-flex technology. This innovation allows for the replacement of up to 70% of the conventional fossil-fuel-based energy with electricity. At an average 50% electricity level, on-site CO2 emissions are expected to drop by approximately 43% compared to a traditional furnace. This significant reduction in emissions contributes to the company's global target of a 25% reduction in greenhouse gas emissions by 2030.
2. Heat Recovery and Air Preheating System: In addition to the hybrid furnace, the plant will be equipped with a heat recovery and air preheating system. This system creates further efficiency gains and reductions in energy consumption and emissions. By recovering heat from the furnace and using it to preheat air, the plant can reduce its overall energy demand and lower its carbon footprint.
3. Carbon-Lowering Heat Recovery System: O-I also plans to install a carbon-lowering heat recovery system in the plant. This system will supply up to 94% of the plant's heating needs, further reducing the plant's reliance on fossil fuels and lowering its emissions.

Once both investments are completed, expected for December 2025, the Veauche plant will be one of the most modern and sustainable sites for O-I globally. At that time, the entire site is expected to reduce its CO2 emissions by up to 35% versus pre-2020 levels, when its other furnace was completely rebuilt. This significant reduction in emissions demonstrates O-I's commitment to its decarbonization strategy and its contribution to a more sustainable future.

Implementing these technologies across O-I's global operations presents both challenges and opportunities. Some potential issues and the company's plans to address them include:

1. Upfront Investment and Cost-Effectiveness: The upfront investment required for these technologies can be significant. O-I plans to invest in these technologies as part of its sustainability strategy and previously announced investment plan into plant upgrades. The company expects to see a return on investment through reduced energy consumption and emissions.
2. Technological Integration and Compatibility: Integrating new technologies with existing systems and infrastructure can be complex and may require significant retrofitting. O-I plans to combine multiple technologies on each furnace, marking the first time that all five technologies have been implemented simultaneously. This approach allows the company to demonstrate the functionality of combining multiple technologies across different glass colors and container types.
3. Workforce Training and Adaptation: Implementing new technologies may require significant workforce training and adaptation. O-I anticipates each project would support up to 300 construction jobs and plans to establish Project Labor Agreements and Community Workforce Agreements as needed throughout the project to ensure project success and workers' rights. Additionally, O-I is working to enhance its diversity, equity, and inclusion efforts through the intentional engagement of underrepresented groups such as women, LGBTQ+, and veterans.
4. Regulatory and Policy Support: The success of these technologies may depend on regulatory and policy support. O-I has been selected by the U.S. Department of Energy to receive up to $125 million in funding as part of the Industrial Demonstrations Program. This funding will support the Glass Furnace Decarbonization Technology project, which aims to reduce scope 1 carbon dioxide emissions by an estimated 48,000 metric tons per year.
5. Scalability and Global Implementation: Scaling up these technologies across O-I's global operations may present logistical and financial challenges. O-I plans to demonstrate the functionality of combining multiple technologies across different glass colors and container types in its pilot projects. If successful, these technologies can be replicated in other plants, leading to a more sustainable global operations.

O-I's commitment to increasing recycled content in its glass packaging aligns with its decarbonization goals by reducing the overall carbon footprint of its products. By using recycled glass (cullet) instead of raw materials, O-I can significantly reduce the energy required for melting and forming new glass, which is a carbon-intensive process. According to the U.S. Environmental Protection Agency, using cullet in glass manufacturing can reduce CO2 emissions by up to 50% compared to using virgin materials (EPA, 2021).

O-I's goal is to increase recycled content to 50% on average by 2030. In 2022, O-I achieved a recycled content rate of 40% on average, a 2% increase from the 2020 base year (O-I, 2023). This progress demonstrates O-I's commitment to increasing the use of recycled glass in its packaging.

The expected environmental benefits of this approach include:

* Reduced CO2 emissions: By using cullet instead of virgin materials, O-I can significantly reduce the carbon footprint of its glass packaging. According to O-I, increasing recycled content to 50% by 2030 would result in a 20% reduction in CO2 emissions compared to the 2017 base year (O-I, 2023).
* Conservation of natural resources: Using cullet instead of raw materials helps conserve natural resources, such as sand, soda ash, and limestone, which are used in the production of virgin glass.
* Reduced waste: By recycling glass, O-I helps reduce the amount of waste sent to landfills, contributing to a more circular economy.

The expected economic benefits of this approach include:

* Cost savings: Using cullet instead of virgin materials can result in significant cost savings for O-I, as cullet is generally less expensive than raw materials.
* Improved operational efficiency: By reducing the energy required for melting and forming glass, O-I can improve the overall efficiency of its manufacturing processes, leading to potential cost savings and increased profitability.
* Enhanced brand reputation: O-I's commitment to increasing recycled content in its glass packaging can enhance its brand reputation as a sustainable and environmentally responsible company, potentially leading to increased customer loyalty and market share.

In conclusion, O-I's investment in hybrid furnace technology and heat recovery systems, as well as its commitment to increasing recycled content in its glass packaging, align with its decarbonization goals and contribute to a more sustainable future. By addressing the challenges and opportunities in implementing these technologies across its global operations, O-I can make a significant contribution to reducing its environmental impact and enhancing its economic performance. As the company continues to innovate and adapt, it is well-positioned to lead the way in sustainable glass packaging.

References:

* O-I Glass to Invest $65 Million in Electrification and Decarbonization in Veauche, France (June 18, 2024)
* O-I Glass, Inc. (NYSE: OI)
* EPA (2021). Glass: Facts and Figures. Retrieved from
* O-I (2023). O-I Glass Sustainability Report 2022. Retrieved from

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