Diageo Takes Stride Towards Climate Change Goal with First Carbon Neutral Distillery

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06/29/2020 - 08:00 AM

LEBANON, Ky., June 29, 2020 /PRNewswire/ -- Global beverage leader Diageo announced today that its new Kentucky whiskey distillery, which will distill Bulleit, is expected to be carbon neutral – one of the largest in North America, and a first for Diageo. Reinforcing Diageo's global commitment to reducing its carbon emissions and addressing climate change, the site will be powered by 100% renewable electricity, with a capacity to produce up to 10 million proof gallons per year.

The new distillery, which is currently under construction in Lebanon, Kentucky, reflects Diageo's commitment to achieving net-zero carbon emissions and moves the company closer to its goal of sourcing 100% of its electricity from renewable sources by 2030. Employing electrode boilers, the site will utilize a mix of renewable electricity sources to power a 72,000 square-foot distillery, dry house, and warehousing facilities. As previously announced "The Diageo Lebanon Distillery" will have the capability to distill a variety of bourbon and American whiskey brands. Bulleit will be the first and lead brand produced at the new distillery – supplementing existing production at The Bulleit Distilling Co. in Shelbyville, Kentucky. This move will further strengthen the brand's commitment to a more sustainable future.

"As a company we know that our long-term sustainable growth depends on reducing our reliance on fossil fuels that contribute to climate change," said Perry Jones, President, North America Supply for Diageo. "This groundbreaking undertaking to electrify our operations and then power them with renewable electricity will result in one of the largest carbon neutral distilleries in North America. This is a significant step to strengthen our commitment to minimizing our carbon emissions and will result in an important reduction of Diageo's environmental impact on a global level."

"For Bulleit, our passion for sustainability began when we built the Bulleit Distilling Co. in Shelbyville, where we focus on reducing carbon emissions, water conservation and waste management during production. Then, when we opened our Visitor Experience there, we chose to implement practices like eliminating single use plastics from our bar and sourcing locally-grown organic cocktail garnishes from our onsite garden," said Sophie Kelly, SVP Whiskies, Diageo NA. "Our commitment to the environment evolves with the Lebanon distillery, where no fossil fuels will be consumed for the production of Bulleit. This allows us to really begin to double down on our ambition to reinvent category standards."

To achieve carbon neutrality at the site, Diageo plans to incorporate a variety of features that will avoid annual carbon emissions by more than 117,000 metric tons[1]. This is the equivalent of taking more than 25,000 cars off the road for an entire year[2].

These features include:

Electrification of operations:

Electrode boilers will enable the avoidance of direct carbon emissions that would normally be generated by the use of fossil-fuel fired boilers. Electrode boilers also offer benefits that include reduced noise pollution and reduction of other air contaminants.
All vehicles operated onsite, including trucks and forklifts, will be electric, and charged onsite by renewable energy.
100% of the steam used onsite – for the cooking, distillation and drying process – will be generated by the electrode boilers (which are powered by the renewable electricity)

Energy efficiency embedded into facility design:

Energy efficiency will be optimized in the new electric boilers
Exterior lighting will be solar powered
All onsite interior lighting will be light-emitting diode (LED)
Warehouse interior lighting will only activate during loading or unloading activities
Lowered roofs will minimize heating and cooling requirements

Sourcing renewable electricity:

Long term contracts with the local utility will allow for the purchase of zero greenhouse gas emission electricity from certified renewable sources.
Renewable electricity will be supplied by Inter-County Energy and East Kentucky Power Cooperative (EKPC).

Water savings design

Site is being designed to be industry-leading in efficiency and minimization of water usage

Zero waste to landfill

Once operational, the site is designed to minimize use of materials and waste through reuse and recycling, and any residual waste will not be sent to landfill

"I welcome Diageo's commitment to carbon neutrality and using renewable electric at its Bulleit distillery in Lebanon. This is a notable example of a historic Kentucky industry embracing a new future," said Kentucky Governor Andy Beshear. "To continue the commonwealth's economic recovery, attract business investment and create jobs for Kentuckians across all counties, it's important we and our economic development partners provide a cost-competitive energy mix. Energy diversity is something more industries are considering when they choose where to locate, and offering the right mix will help us provide a brighter future for generations to come."

"We want to extend a warm welcome as Diageo makes this valuable investment in Lebanon-Marion County," said Jerry Carter, President and CEO of Inter-County Energy, which will provide electric service to the Lebanon distillery. "Inter-County Energy is proud to work in partnership with Diageo and East Kentucky Power Cooperative (EKPC) to understand the energy needs of this facility and to develop innovative ways to meet the sustainability goals of one of the largest renewable energy consumers in Kentucky."

A Commitment to Sustainability
Committed to decarbonization with approved science-based targets, Diageo is part of a pioneering group of organizations that are championing a green recovery and supporting the Sustainable Development Goals, through membership of the United Nations Global Compact, We Mean Business Coalition and other key global advocacy organizations. Also, as mentioned above, as a signatory to RE100, Diageo aims to source 100% of its electricity from renewable sources by 2030. In addition, Diageo has also signed onto the global Race to Zero campaign, a commitment to achieving net-zero carbon emissions by 2050. The company recently joined over 150 multinationals to reaffirm our commitment to Science Based Targets and urge governments around the world to align their COVID-19 recovery efforts with the latest climate science.

Bulleit has a long-standing commitment to sustainability at their current distillery in Shelbyville, KY, which was recently honored with the title of 'Highly Commended' for Sustainable Distillery of the Year at Whisky Magazine's 2020 Icons of Whisky American Awards. The Shelbyville site includes the first ever industrial solar array in Shelby County, and a focus on reducing their carbon footprint by sourcing local ingredients from local farmers. In addition, Bulleit implemented thoughtful practices at the Visitor Experience, such as a partnership with the non-profit Oceanic Global to ensure its tasting experience and cocktail bar aligns with The Oceanic Standard (TOS), a badge and certification for venues that have adopted sustainable operating practices and are committed to eliminating single-use plastics.

Investing in Kentucky
Bulleit continues a strong trajectory of growth, with the brand continuing to gain share, and global volume up more than six percent year over year[3]. Diageo broke ground on the $130 million distillery in July of 2019, and the site is expected to be fully operational in 2021. Once fully operational the facility will employ 30 full-time team members. Since 2014, Diageo has invested more than $500 million in Kentucky. This facility will supplement the company's other Kentucky operations: Stitzel-Weller in Louisville, and The Bulleit Distilling Company and Visitor Experience in Shelbyville.

About Diageo
Diageo is a global leader in beverage alcohol with an outstanding collection of brands including Johnnie Walker, Crown Royal, Bulleit and Buchanan's whiskies, Smirnoff, Cîroc and Ketel One Vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray and Guinness.

Diageo is listed on both the New York Stock Exchange (DEO) and the London Stock Exchange (DGE) and our products are sold in more than 180 countries around the world. For more information about Diageo, our people, our brands, and performance, visit us at www.diageo.com. Visit Diageo's global responsible drinking resource, www.DRINKiQ.com, for information, initiatives, and ways to share best practice.

Follow us on social media for news and information about Diageo North America: @Diageo_NA on Twitter and Instagram. Celebrating life, every day, everywhere.

Media contacts:
Kristen Crofoot, Diageo: Kristen.Crofoot@diageo.com
Allison Fleischer, Diageo: Allison.Fleischer@diageo.com

Note to editors:
Carbon neutrality of Diageo's new Lebanon, Kentucky distillery for all Scope 1 and 2 emissions from site operations will be achieved by Diageo in accordance with PAS 2060 for the period commencing with the first grain delivery to completion of distilling operations, certified by Jacobs Engineering Group Inc. View the PAS 2060 Qualifying Explanatory Statement. Through sourcing for renewable electricity and the electrification of operations, the site will only require residual amounts of carbon offsets to be purchased, associated with operational elements such as emergency back-up power.

[1] Both direct and indirect carbon emissions - comprising over 35,000 metric tons direct emissions, and over 82,000 metric tons of indirect emissions of CO2-eq
[2] According to the United States Environmental Protection Agency (Greenhouse Gas Equivalencies Calculator): https://www.epa.gov/energy/greenhouse-gas-equivalencies-calculator
[3] Diageo results, F20 P6, +6.4%