IKEA – Yuanxin Lin – 2022

Goals

China is currently facing the challenge of “carbon peaking by 2030 and carbon neutrality by 2060” and the manufacturing sector, as the main energy consumer in China, will undergo energy reforms to reduce its energy consumption. IKEA intended to understand the impact of relevant policy on its suppliers and identify next steps. Therefore, IKEA engaged Yuanxin Lin to analyze the current policy, suppliers’ priorities for energy saving retrofits and energy saving retrofit measures.

Solutions

The solution can mainly be divided into three parts:

• Definition of industry priorities: Through investigating current energy efficiency related policies, Yuanxin Lin identified the domestic glass, domestic ceramics and textile industries among IKEA’s suppliers as industries with high pressure and relatively urgent energy saving needs.
• Analysis of industry energy saving measures: Through literature research, interviews and onsite visits, Yuanxin Lin investigated the current energy-saving status of IKEA’s suppliers and benchmark companies in the industry, so as to assess energy saving technologies available to suppliers.
• Case studies: Using a supplier as a case study, Yuanxin Lin analyzed the economic benefits of energy-saving retrofits. 

Potential Impact

Yuanxin Lin analyzed energy-saving measures for three industries: domestic glass, domestic ceramics and textiles. The greatest potential for energy savings is currently found in domestic glass, where the replacement of oxy-fuel kilns with all-electric kilns would save 3.431 million yuan in annual operating costs and reduce energy consumption by 2,403 tce. Therefore, IKEA can prioritize the kiln retrofits for its domestic glass suppliers in its next energy saving initiatives.