Diageo to use wind and solar power to make Bulleit bourbon at first carbon neutral factory in North America

Global spirits giant Diageo PLC, which owns the Guinness, Hennessy and more brands, has opened its first carbon neutral distillery in North America.

The 72,000 square foot facility in Lebanon, Ky., Will be used for a portion of its Bulleit bourbon operations. The facility has the capacity to produce up to 10 million gallons of “proof” per year using electrode boilers powered by 100% renewable electricity. Renewable energies will be used throughout the cooking, distillation and drying processes.

Diageo DEO,

+ 0.77%
will use a mix of wind and solar power to power electrode boilers, on-site electric vehicles, internal and external lighting and equipment, making the facility one of the largest of its kind in North America .

These technologies, along with advanced meters, will allow the Diageo Liban distillery to avoid around 117,000 metric tonnes of carbon emissions per year, he says. That’s the equivalent of taking over 25,000 cars off the road for a year.

Renewable energy boilers in the new Diageo plant in Bulleit.

The new plant complements the existing production of Bulleit Distilling Co. in Shelbyville, Ky. Bulleit also manufactures rye.

Read: Guinness to open brewery at Chicago’s Fulton Market: report

The company has already halved the carbon emissions associated with its operations since 2008 and is now striving to achieve net zero carbon in its direct operations by 2030, through 100% renewable energy.

According to the Beverage Industry Environmental Roundtable’s research on the carbon footprint of spirits, actual distillation accounts for between 36% and 40% of overall emissions, while the glass bottle of a spirit contributes between 19% and 20%. The rest is storage, basic materials, transportation, etc.

“We believe more than ever that companies have a responsibility to our environment, our communities and our planet,” said Sophie Kelly, senior vice president of whiskeys at Diageo NA.

Electric vehicles on Diageo’s site at its plant in Lebanon, Ky.,.

The Lebanese distillery’s carbon neutrality covers Scope 1, i.e. direct emissions from the production site, and Scope 2, indirect emissions to which a company is linked, for example from the production of electricity. The site will require the purchase of residual amounts of carbon offsets, in part because Diageo will purchase emergency back-up power.

The commitment does not extend to Scope 3 emissions. This category applies to emissions from non-owned parts of a supply pipeline, such as the retailer selling the bottle of spirits.

Diageo said he hopes to achieve net zero carbon across the entire supply chain by 2050 or earlier, with an intermediate milestone to achieve a 50% reduction by 2030.

Diageo acquired Bulleit, then a niche Kentucky bourbon, as part of its 2001 buyout of the Seagram Co. portfolio. The London-based company’s US-traded ADRs rose more than 20% in 2021 and by more than 40% in the past year.

Read:The tipping point for a low-carbon energy future is fast approaching: S&P Global Platts

Packaging waste is a major concern for the spirits industry. English producer Silent Pool Distillers created earlier this year what it claimed to be the “world’s first” spirits in a recycled cardboard bottle. Green Man Woodland Gin uses 77% less plastic than other plastic bottles and has a carbon footprint six times smaller than glass or PET plastic bottles.

Some manufacturers are using new innovations to achieve greener goals. A startup called Bespoken Spirits has been interested in sustainable distillation since its launch three years ago. The Bespoken technique bypasses the long barrel aging typical of its rye, bourbon and other offerings by creating accelerated aging in a controlled environment with wooden staves. The aroma develops much faster and therefore overall energy consumption is reduced.

The Scottish whiskey industry faces similar climatic considerations. Whiskey is the UK’s most valuable net export, worth almost £ 5bn in 2019, but its largest distilleries have relied for years on burning gas, as well as fuel oil for the most remote areas.

Whiskey producers are aware that droughts and seasonal variations in climate change will affect Scottish barley crops and water supplies essential for whiskey production, while flooding could impact both distillation and transportation, said Morag Garden, Scotch Whiskey Association sustainability manager.

The industry has set a net zero target date of 2040, 10 years earlier than the UK government’s current target and five years faster than Scotland’s, according to the SWA.

Companies, including the spirits industry, increasingly believe that efforts to reduce carbon emissions are part of the cost of doing business. For example, around 105 signatories who together generate more than $ 1.4 trillion in annual global revenue and have more than 5 million employees in 25 industries in 16 countries, joined Amazon AMZN,
in its climate commitment earlier this year.

Many have tried to respond to the pro-climate positions of their consumers and to get ahead of increased regulations; some face pushback accusations that they are too dependent on carbon offsets (promoting tree planting programs, for example) instead of aiming to reduce fossil fuel use.

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