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Carbon Foot Print Carbon Foot Print

mandatory impact assessment of mode- ture processes essential for initiating Reducing feedstock-embedded Through proactive planning, invest- September 2013, Volume 17, Issue 22. The life cycle analysis of these fer-
rate or major production variations – and chemical and biological reactions and carbon emissions comes with a much ments, and collaboration with supply 9. mentation processes excluded the
then implement them postapproval. sterilization. These fuels, derived from higher abatement cost for raw material chain partners, API manufacturers can 10. Kung Cheng et al., “Methodology production emissions from mono-
To minimize delays and accelerate the sustainable sources like biomass and suppliers. This reduction can only be chart a path to a 90 percent emissions for carbon footprint calculation in clonal antibodies.
decarbonization progress in the next biogas, currently face widespread adop- accomplished if suppliers switch to renew- reduction by 2040. Taking bold action to crop and livestock production,” Car- 23. Spencer D. Schaber et al., “Economic
decade, the life sciences industry could tion challenges due to feedstock avail- able or low-carbon feedstocks, some minimize their carbon footprint allows bon Footprint Handbook, December analysis of integrated continuous
proactively plan and implement climate- ability (biomass, for example, relies on of which require technologies that are API manufacturers to contribute to the 2017. and batch pharmaceutical manufac-
positive manufacturing variations while dedicated energy crops), regulatory - either not yet commercially viable (typi- fi ght against climate change while also 11. Target Dashboard, Science Based turing: A case study,” Industrial &
aligning with the latest regulatory stan- requirements, and suitability for specifi c cally costing more than $250 per ton ensuring their long-term sustainability Target Initiative, accessed April 14, Engineering Chemistry Research,
dards to ensure the quality, safety, and load profi les. API manufacturers should of CO ) or that face supply constraints. and competitiveness – as well as that of 2024. July 27, 2011, Volume 50, Issue 17.
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effi cacy of APIs. therefore consider a wide range of tech- These options include sustainable feed- their life sciences and healthcare stake- 12. “Health sector commitments to 24. Carbon price refers to both carbon
nical and economic factors, including stocks (for example, bio-based and CO holders. emissions reduction and resilience,” taxes and emission trading systems;
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Renewable-energy transitions that available investment, government incen- to X ) and net-zero technologies (like US Department of Health and global carbon prices are expected
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are slightly costlier tives, technology maturity, and accessi- carbon capture and storage and electri- REFERENCES Human Services, April 2022. to reach $40 to $200 per ton of CO
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API manufacturers can reduce emis- bility to renewable sources, and chart a fi cation of crackers) that help produce 1. “Healthcare’s climate footprint,” 13. “Delivering a ‘net zero’ National by 2030 and approximately $60 to
sions by roughly 5 to 10 percent by shift- feasible and commercially viable route low-carbon feedstocks. ARUP, September 2019. Health Service,” NHS England, $350 per ton of CO by 2050 based
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ing toward renewable power and fuel during the renewable – energy transition. 2. The 25 percent estimate is based updated July 4, 2022. on regional carbon pricing fi gures.
during manufacturing at a cost of $25 Some raw materials suppliers are on the data estimates described in 14. “Activate program launched to See “Global carbon market outlook
to $75 per ton of CO , which is within Sustainable feedstocks and solvent starting to use such sustainable feed- Exhibit 1. accelerate decarbonization in active 2024,” Bloomberg NEF, February
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the range of the projected global carbon procurement that would require stocks as vegetable oils, corn, sugar 3. “Technical guidance for calculating pharmaceutical ingredient (API) 21, 2024.
price(24). supply chain collaboration cane, and lignocellulosic biomass(27) to Scope 3 emissions, Category 1: Pur- supply chains,” Manufacture 2030, 25. “Energize announces program mile-
Renewable-power sources – solar, API manufacturers have the poten- produce a range of commodity chemical chased goods and services,” Green- November 9, 2022. stones, with formation of additional
wind, hydroelectricity, and geothermal – tial to further reduce their emissions by building blocks and solvents for down- house Gas Protocol, accessed July, 15. Based on median EBITDA margin buyers cohorts bringing new renew-
are essential in reducing GHG an average of 50 percent if they work stream industrial application across such 2024. for the top ten pharmaceutical com- able electricity to the grid for pharma,”
emissions. API manufacturers have with suppliers, particularly oil and gas sectors as automotive, electronics, and 4. Based on McKinsey Chemical panies. Schneider Electric, December 4,
several options for renewable electri- refi neries and petrochemical companies, personal care. However, high prices, Insights and Market. US data. 16. “Takeda unveils fi rst industrial ap- 2023.
city, including on-site installations, that reduce their own use of carbon- supply shortages, competing demand, 5. Manufacturing of biologic APIs is plication of natural gas-free steam 26. Refers to CO transformation, in
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renewable-energy certifi cates, and power emitting energy sources (potential for and cost sensitivity from downstream usually associated with lower emis- generation in pharmaceutical industry which CO removed from the atmo-
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purchase agreements (PPAs). The best a 10 to 20 percent reduction) and also customers will limit widespread adop- sions because they are derived from in partnership with Austrian govern- sphere or recycled from industrial
option depends on regional availability adopt net-zero technologies and sustain- tion over the next fi ve to ten years. biomass, and the transformation is ment and Institute of Technology,” processes is used to make chemical-
and technological feasibility. Renew- able feedstocks in their production of less energy intense due to lower pro- Takeda press release, Jan. 25, 2023. based products.
able electricity is especially important low-carbon chemical reagents and sol- Given the potential for signifi cant cess temperature, fewer steps, and 17. “12 principals of green chemistry,” 27. Cynthia A. Challener, “Green-by-
for API manufacturing as the indus- vents (potential for a 30 to 40 percent decarbonization with this lever, API smaller quantities of lower-carbon- American Chemical Society, design small-molecule API synthe-
try adopts electrifi ed boilers and heat reduction). However, doing so would manufacturers should take proactive intensity raw materials. accessed July 2024. sis,” Pharmaceutical Technology,
pumps, which would need to be powe- come at a relatively high cost to suppliers measures to prepare for and take advan- 6. McKinsey survey of more than 20 18. 2022 TRI national analysis, US September 28, 2023, Volume 47,
red by renewable electricity if the (up to $300 per ton of CO ). tage of these options when they become sustainability/procurement executives Environmental Protection Agency, Issue 10.
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industry’s decarbonization goals are more feasible. In the meantime, they from leading API manufacturers, March 2024.
to be achieved. Already, the Energize Raw material suppliers could reduce could become more familiar with the July 2023. 19. Yanqiu Tao, et al., “Environmental CHRISTOF WITTE
program (launched in 2021 through a the emissions attributed to their energy regulatory landscape around adoption 7. Based on European Solvent Recy- sustainability of the globalized McKinsey, Berlin
collaboration among Schneider Electric source for a relatively lower cost (up to of sustainable materials within existing cler Group data. pharmaceutical supply chains: The LUCY PÉREZ
and 20 sponsoring life sciences compa- $100 per ton of CO ). However, they will synthesis processes and pursue green- 8. PMI is a method used to calculate case of tenofovir disoproxil fuma- McKinsey, Boston
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nies) has recruited over 500 life sciences need to improve their operational effi - fi nancing instruments that could be used mass data on the amounts of mate- rate,” ACS Sustainable Chemistry & MARIA FERNANDEZ
suppliers and has increased their access ciency while transitioning to renewable- to secure sustainably produced materials rials, such as water, raw materials, Engineering, March 23, 2023, Volume McKinsey, New Jersey
to roughly 2 terawatt-hours (TWh) of energy sources. Options are available through offtake agreements with their consumables, packaging, et cetera, 11, Issue 17. CONG LUO
renewable electricity via fi ve PPA for API manufacturers to consciously upstream suppliers. required to produce 1 kilogram of 20. “Intellectual capital,” Lupin, Consultant
buyers’ cohorts across North America and procure raw materials from suppliers drug substance. accessed April 2024. THOMAS WESKAMP
Europe(25). that are already making this transition Despite the challenges, API manu- 9. David K. Leadhy, et al., “Seven 21. Deniz Etit, et al., “Can biotechno- McKinsey, Cologne
via sustainable-sourcing practices, but facturers should consider the full range important elements for an effective logy lead the way toward a sustain-
API manufacturers can also utilize doing so within a complex supply of options offered by these decarboniza- green chemistry program: An IQ able pharmaceutical industry?,” BALINT FRIDRICH,
renewable fuels for heat and steam pro- chain presents them with an operational tion levers and incorporate them into Consortium perspective,” Organic Current Opinion in Biotechnology, Knowledge Specialist, McKinsey,
duction for the low- to medium-tempera- challenge. their long-term implementation plans. Process Research & Development, June 2024, Volume 87. Amsterdam.

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