Environment Responsibility and Leadership

Climate change, including the alteration of long-term weather patterns and the increasing frequency of extreme weather events represents a fundamental business challenge for every organization to understand and manage risks across its value chain, now and in the future. While this global ESG Report represents our commitment to quantifying our energy consumption and associated greenhouse gas emission impact, we are working to map carbon risk across all our activities and geographies and increase disclosure of current and future risks and opportunities to investors and other key stakeholders. Next year’s will report will highlight our progression in this activity and describe what initiatives have been undertaken to mitigate risks and leverage opportunities identified as material to our business and our stakeholder base.

Environmental Commitment

Westport Fuel Systems is committed to the protection of the environment and the prevention of pollution and strives to be an industry leader in mitigating the environmental impacts of fuel system research, development, testing and assembly. Working in conjunction with our partners, we are committed to delivering low-emission fuel solutions that will meet the demand for high-efficiency, high-performance, and low-carbon transportation.

In support of this commitment we have implemented an Environmental Policy Statement outlining our operational standards and expectations and we have added environmental stewardship and sustainability as an important element of our Code of Conduct.

The Environmental Policy can be found on our website at https://wfsinc.com/about/environmental-policy and a copy of our Code of Conduct can be found at wfsinc.com/about/commitment-to-integrity/.

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Environmental Compliance and Certification

Environmental Compliance

We are determined to operate responsibly to protect the environment. This means carefully considering the impact of our operations on the local environment and communities in which we design, manufacture, and deliver our products. Compliance with international, national, and sub-national regulations is a baseline environmental performance standard and we believe that leading organizations must go beyond minimum environmental requirements.

A significant spill is defined by the GRI as an “accidental release of a hazardous substance that can affect human health, land, vegetation, water bodies, and ground water” and regulatory bodies generally identify quantity thresholds that provide clarity on how to classify the significance of a spill. Our locations comply with all regulations and best practice for environmental protection, risk management, spill mitigation, containment and spill response.

The Company has not had any significant spills nor received any fines or non-monetary sanctions for environmental non-compliance during the reporting period.

Facility Certification

Production activities are carried out at plants in Italy and the Netherlands and have automated assembly lines, sophisticated lathes, milling and cutting equipment, robots to perform machining and assembly of critical electronic components, and automated testing capabilities. All Italian facilities are certified as having met the international standards of ISO 14001 for Environmental Management Systems, as is our technology center in Vancouver. This certificate is evidence of our commitment to develop, design, test and assemble engine and fuel system components that meet or exceed the expectations of our original equipment manufacturing partners and customers and formalizes the effective environmental practice and process at our facilities.

Copies of our ISO 14001 certifications are available on our website at https://wfsinc.com/about/quality.

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Energy Intensity & Consumption

Energy Intensity

Energy efficiency improvements in processes and equipment is an important element of our sustainability strategy. As production grows with increased sales and as new product development projects are launched, our need to keep our energy intensity low is amplified. This is our first disclosure of a metric on energy intensity using the ratio of Gigajoules (“GJ”) / $M-US dollar revenue.

Table 6: Energy Intensity as a Ratio of GJs Energy Consumed to Each US$M in Revenue for Fiscal Years 2018 and 2019.
  2018 2019 % Change
Energy Intensity (‘000 GJs / $M Revenue) 0.382 0.353 - 7.6 %

Direct and Indirect Energy Consumption

In 2019, we saw an increase in our energy consumption as a result of the increase in our business by 13% year over year. The energy sources listed in Table 7 are used in the production processes, testing and delivery of our products and services and the operation of office facilities. Not all sources of energy are required across all of our product lines or buildings, which explains why there isn’t necessarily consistency in the consumption trend across each energy type. Although we did consume 4.3% more energy than in 2018, we also improved our energy intensity, as reported in the previous section, confirming that as our business grows and triggers an increase in energy and fuel consumption, we are more efficient at consuming that energy on a per million dollar of revenue basis.

Table 7: Direct and Indirect Energy Consumption in Fiscal Years 2018 and 2019 Ended December 31 (Unaudited)
  Fiscal Year 2018 Fiscal Year 2019 % Change
Direct Energy Consumption
Compressed Natural Gas 41,635 GJ 47,075 GJ + 13.1%
Liquefied Natural Gas (LNG) 1,736 GJ 0 GJ - 100.0%
Liquefied Petroleum Gas (LPG) 4,876 GJ 4,500 GJ - 7.8%
Renewable Natural Gas 438 GJ 223 GJ - 49.1%
Diesel 3,770 GJ 6,505 GJ + 72.5%
Gasoline 1,854 GJ 1,763 GJ - 4.9%
Net Direct Consumption 54,309 GJ 60,066 GJ + 10.6%
Indirect Energy Consumption
Electricity 49,015 GJ 47,717 GJ - 2.6%
Net Indirect Consumption 49,015 GJ 47,717 GJ - 2.6%
Total Energy Consumption 103,324 GJ 107,783 GJ + 4.3%

Initiative Spotlight

Eindhoven Site Solar Panel Project

To reduce electrical energy consumption, our team in Eindhoven, Netherlands initiated a project in late 2019 to install 650 solar panels to the rooftop of the facility. The goal was to completely displace electrical power to the facility with solar power and, assuming sufficient sun exposure can be achieved, even generate enough energy to return some to the community power grid.

The project included an investment of approximately $100,000 U.S. dollars and was implemented over the course of two months. A brief video showing the final full roof installation is available on our sustainability website at https://wfsinc.com/sustainability/.

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Greenhouse Gas & Emission Intensity

Greenhouse Gas Emission Intensity

This report marks our first assessment of our greenhouse gas emissions intensity measured as a ratio of thousands of tonnes of carbon dioxide equivalent (“CO2-eq”) to each million U.S. dollar of revenue.

Table 8: CO2-eq Intensity as a Ratio of ‘000 Tonnes CO2-eq Emitted to Each US$M in Revenue for Fiscal Years 2018 and 2019.
 20182019% Change
CO2-eq Intensity (Tonnes CO2-eq / US$M Revenue) 0.0150 0.0146 - 2.7%

Greenhouse Gas Emissions

The organizational boundary of our greenhouse gas inventory includes all operating entities and both scope one and scope two emissions. We have not measured scope three emissions to date. As product sales increase, this leads to higher energy consumption and associated greenhouse gas emissions reported in Tonnes of CO2-eq. For 2019 we saw a 13% increase in our business and a 9.1% increase in the emission of Tonnes CO2-eq. When we compare our growth with our CO2-eq intensity, as we did in the previous section, we find that our ratio of emissions was less than 2018 by 2.7%. With this information and first ever year over year comparison, we can begin to investigate where opportunities to further decrease both our tonnes of CO2-eq emissions and continue to improve (decrease) our CO2-eq intensity are.

Table 9: Greenhouse Gas Inventory in Fiscal Years 2018 and 2019 Ended December 31 (Unaudited)
Tonnes CO2-eq for the 12 Months Ended December 2018 Tonnes CO2-eq for the 12 Months Ended December 2019 % Change
Total Scope 1 Direct Emissions 2,800 Tonnes CO2-eq 3,240 Tonnes CO2-eq +15.7%
Total Scope 2 Indirect Emissions 1,266 Tonnes CO2-eq 1,232 Tonnes CO2-eq - 2.6%
Total GHG Impact 4,066 Tonnes CO2-eq 4,472 Tonnes CO2-eq + 9.1%
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Community Impacts

Our locations and facilities around the world are adjacent to other industrial operations, commercial activities and in some cases homes and schools. Our commitment to be a responsible and respectful neighbour is captured within our Environmental Policy Statement and requires us to monitor and manage the potentially adverse impacts our operations might have on our community.  We will respond to community concerns regarding our facilities, infrastructure, noise levels and environmental impacts in a timely manner.

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News Releases

Industry News

Published: February 8

Amazon orders hundreds of trucks that run on natural gas

Amazon.com Inc has ordered hundreds of trucks that run on compressed natural gas as it tests ways to shift its U.S. fleet away from heavier polluting trucks.

Published: October 6

Volvo Trucks sees increased interest in LNG

Swedish truck maker Volvo said it’s seeing hauliers and transport buyers moving towards refrigerated liquefied gas as a cheaper and more environmentally friendly alternative to diesel.

Published: September 30

India: Maruti Suzuki sells 300,000 units of the WagonR S-CNG

The Maruti Suzuki WagonR S-CNG has emerged as the highest selling natural gas vehicle in the country, as this greener and safer factory-fitted CNG model has surpassed 300,000 units in sales.

Published: September 24

Why Fleet Managers Anheuser Busch Kehe Distributors are Fueling Renewable Natural Gas

While much attention has shifted to the potential for battery-electric or hydrogen vehicles, another technology with a vast infrastructure — renewable natural gas — is gaining traction among fleet managers.

Published: July 17

Egypt launches ambitious strategy to shift from gasoline to natural-gas powered cars

Egypt has launched an ambitious plan to shift the primary fuel for vehicles in its jurisdiction from petrol and diesel to compressed natural gas.

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