The government would like the manufacturing sector to play a bigger role in the country's economy.
It has set a target to increase the sector's contribution to the GDP to 15 per cent, from the current level of about 10 per cent.
To achieve this, green energy is a fundamental driver through the Renewable Energy Bill, which has gone through the second reading.
While this growth is necessary, Kenya's environmental concerns need to be mitigated, the manufacturing sector must use energy and resources efficiently, and minimise waste.
It is estimated that even if every factory, power plant, car, and an aeroplane is shut down, the average global temperature would still increase by 0.6˚C in this century.
Green Manufacturing is now the need of the hour and no more an empty slogan.
It involves the transformation of industrial operations in, using green energy, developing and selling green products, and employing green processes in business operations.
Green energy is a critical part of reducing global carbon emissions and increasing the pace of investment as the cost of technologies falls and efficiency continues to raise manufacturing companies that adopt.
Green practices benefit not only through long–term cost savings but equally importantly, from brand enhancement with customers, better regulatory traction, greater ability to attract talent, and higher investor interest.
The financial market regulators are in process of introducing the first green bond in Kenya; this will introduce the concept in Kenya for companies to follow.
However, these benefits require a long-term commitment and making tradeoffs against short-term objectives, as the economics of green manufacturing is still evolving and not well understood as yet.
Growing price competitiveness gas, fossil fuels, and other energy alternatives- each with their unique advantages- collectively pose a threat to power plant operators and end-users: volatility and insecurity of price.
The price of gas fluctuates across regions and, for fossil fuels, in a cyclical fashion.
Green energy prices on the contrary will continually decrease, we will witness advancement on the whole value chain, more energy-efficient equipment, better engineering work, park design, and most notably the technology leap enabled by innovation.
Long-term certainty green has been heavily encouraged by policy measures and financial support, with the explicit aim of driving costs down through early deployment.
Therefore, green shall continue to generate electricity for a very long time while their efficiency continues to increase, further boosting competitiveness.
And of course, green is an infinite source of power the ultimate definition of long-term certainty.
Energy security the majority of oil & gas sources are concentrated in certain regions, many of which are getting more technically challenging and more expensive to reach, whereas green energy is domestic.
It provides security of supply, helping Kenya reduce its dependence on imported sources.
It plays a significant role in addressing our energy needs by replacing foreign energy imports with clean and reliable home-grown electricity with the bonus of fantastic local economic opportunities.
Growing waste generation and pollution increased industrialisation and urbanisation have led to significant growth in waste generation and environmental pollution.
Industrial waste with a chemical composition can be potentially dangerous to health, and its disposal without treatment is leading to land and water pollution.
The release of industrial effluents in rivers and other water bodies is destroying local habitats. As the demand and use of electronic products rise, e-waste is also becoming a major source of environmental pollution
With the fast depletion of scarce natural resources with ever-increasing population and industrialization, the consumption of natural resources example: wood, coal, oil, food, water is rapidly on the rise, while their availability is shrinking.
This has led to periodic mismatches in demand-supply and highly fluctuating prices, impacting both corporate margins and consumer spending.
There is an urgent need to adequately manage the use of these resources and find and develop less scarce alternatives.
Green as an integral part of the business over the past decade, climate change from greenhouse gases has moved from being a topic of general discussion to become an important factor contributing to the financial performance of manufacturing companies.
Companies that undertake green initiatives stand to be advantaged on brand enhancement, political traction and regulatory compliance, greater ability to attract and retain talent, enhanced customer retention, and potential cost savings.
However, these benefits require a long-term commitment and making tradeoffs against short-term objectives, as the economics of green manufacturing are not well understood yet.
Green manufacturing is imperative, not just due to tightening regulations or cost benefits, but also because consumers are demanding it.
Not only are consumers becoming increasingly aware and conversant with green, but they are also adopting green habits and buying green products.
The continuing expansion of green consciousness around the world presents a huge opportunity for smart companies.
It is, therefore, critical for companies to discover how their target consumer segments feel about green, what they expect from green products and what prices they are willing to pay for them.
They are willing to pay a premium price for green products that have better quality perception.
The government has to play a key role in the transformation into green manufacturing.
The promotion of green technologies has to be included in the draft strategy for the manufacturing sector.
Financial analyst watermark consultants
Edited by Kiilu Damaris
