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Renewable energy

Definition

Uses energy collected from resources that naturally replenish on a human timescale.

Overview

Lumi defines renewable energy sources as those that naturally replenish within a human lifetime. Solar, wind, hydropower, geothermal, and biomass are considered renewable power sources. These renewable sources contribute to fewer carbon emissions than fossil fuels1.

Currently, wind energy accounts for about 3% of global electricity production, while solar and geothermal are less than 1%, respectively2. But renewable energy has the potential to grow to a much higher percentage of global infrastructure, and by supporting renewable energy, brands can use market demand as a tool to support growth and investment in the renewable energy sector.

The energy used throughout each touchpoint in the supply chain — including transportation, warehousing, and recovery — is crucial, but for the sake of this definition, renewable energy refers to the energy source used for manufacturing packaging.

In production, there are two ways to use renewable energy. Either by generating it on-site or by purchasing renewable energy certificates (RECs)3 8. A REC is a certificate that indicates payment for an equivalent amount of renewable energy to be generated elsewhere9.

US Renewable vs Non-Renewable Energy Production in 2019 (in Billion kWh)

Why choose it

By supporting renewable energy sources, brands can minimize the negative environmental impacts of their manufacturing. Renewable energy is particularly beneficial in paper manufacturing, as the production of paper produces a large quantity of waste material that can be utilized as biomass to power the processing, heating, and drying necessary for paper manufacturing4 10.

If a manufacturing plant can not be powered by on-site renewable energy generation, renewable energy credits (RECs) are still an excellent option as they support the market for renewable energy by easing the strain of demand that comes from real-time end users3.

Why not choose it

In some cases, renewable energy can be more expensive than fossil-fuel-based non-renewables. However, tax credits and technological advancements are making renewable cost competitive with natural gas and coal 5.

The major critique of renewable energy is the inconsistent availability of sources like wind and solar. The National Renewable Energy Laboratory found that renewable technologies available today could adequately supply 80% of US electricity generation in 2050, but the uneven geographic distribution and output variability would pose challenges to the nation’s grid 6. This doesn’t deny the viability of a renewable energy future, but instead speaks to necessary improvements in energy storage and grid infrastructure needed to accompany such a shift.

Another consideration is that the measurement of environmental impact goes beyond energy consumption7. Emissions are associated not just with production, but also with transportation, warehousing, and the product’s end-of-life. This is why many institutions are transitioning toward more all-encompassing carbon offset frameworks rather than RECs 8.