Feasibility analysis - what is it and how to do one?

Organizations are under increasing pressure to take action on their carbon footprint due to regulations (e.g. carbon tax), investor pressures, customer demands and climate risks. This is where a feasibility analysis can truly help. 

A carbon management feasibility analysis is the compass that guides enterprises, policymakers, and environmentalists through the complex terrain of carbon reduction and sustainability efforts. Here Minimum explores what it is and how to do it. 

What is a feasibility analysis?

Feasibility analysis helps decision-makers make informed choices, mitigate risks, and maximize opportunities before committing resources to a project or business venture. It does this by comprehensively evaluating the practicality and viability of a proposed project - for example, a carbon reduction plan. 

As an example, a company aiming to reduce its carbon emissions through a transition to renewable energy sources. Feasibility analysis would assess factors like:

• The availability of suitable renewable energy options
• Associated costs
• Potential savings
• Regulatory incentives
• Infrastructure requirements

The analysis may reveal that installing solar panels is economically viable, and it aligns with the company's energy needs and local regulations, making it a feasible and effective part of their carbon reduction plan.

Benefits

Identify efficiency gains and least-cost pathway to emissions reduction

Feasibility analysis plays a pivotal role in identifying efficiency gains and determining the least-cost pathway to emissions reduction. By conducting a thorough analysis of technical, economic and operational aspects, decision-makers can pinpoint opportunities for efficiency improvements within their current processes and identify cost-effective measures to reduce emissions.

Identify highest impact areas and opportunities for transition to green economy

Feasibility analysis helps identify highest impact areas and opportunities for transitioning to a green economy by evaluating the potential benefits, costs, and feasibility of various sustainability initiatives. 

By assessing technical, economic, and environmental factors, decision-makers can pinpoint areas with the greatest potential for positive change and identify achievable strategies for implementation.

Decrease transition risks associated with climate change

Feasibility analysis plays a crucial role in managing and minimizing transition risks associated with the challenges posed by climate change. By conducting a comprehensive feasibility analysis, organizations and policymakers can gain invaluable insights into the viability, costs, and potential impacts of climate adaptation and mitigation strategies.

This process involves evaluating the technical feasibility of proposed initiatives, assessing their economic implications, and carefully considering their potential to deliver tangible benefits in the context of climate change mitigation and adaptation.

Prepare for net zero

Organizations can prepare for net zero by evaluating the viability and effectiveness of emission reduction strategies. It identifies the most suitable and cost-effective pathways to achieve net zero emissions, guiding organizations in implementing sustainable practices - which is particularly effective when transitioning to renewable energy sources, optimizing resource usage, and adopting carbon offsetting measures. 

Through this analysis, organizations can set realistic targets, mitigate risks, and make informed decisions to align their operations with the goal of achieving net zero emissions.

Achieve decarbonization targets

By providing a structured and data-driven approach to assess the viability of emission reduction measures, feasibility analysis can be a key step in ensuring that an organization is able to meet its decarbonization targets.

Decarbonization (the process of transitioning away from carbon-intensive practices) requires a comprehensive understanding of the technical, economic, and operational aspects of potential emission reduction initiatives. 

Feasibility analysis facilitates this understanding by evaluating the viability and practicality of various strategies, enabling decision-makers to make well-informed choices in pursuit of their decarbonization goals. 

Considerations

To reduce the overall footprint, many different interventions can be taken by the reporting company - however even with a feasibility analysis, it is often not clear what interventions make the most sense and what impact they will have. It will give you a better view than you’d get without one, but it isn’t an exact science.

There is also a risk with feasibility analysis that it may demonstrate that your current approach is suboptimal. In the long term, it’s beneficial to know, but in the short term it could mean that costs have been expended in areas that may not have the most impact - which in turn could lead to resistance from stakeholders who were initially enthusiastic about the project.

How to do a feasibility analysis

Now that you understand the impact that a feasibility analysis can have, it’s time to put it into practice. A good carbon accounting software will help you to do this, but generally the steps you’d follow to conduct one yourself are:

Step one: Complete a detailed carbon footprint analysis

The first step is to define the boundaries of the analysis, including operational activities, supply chain, and product lifecycle and then gather data on energy consumption, fuel use, waste generation, and other relevant emissions sources. This enables you to calculate emissions and their sources. 

It’s important to rely on granular and traceable data, and not on benchmarks and extrapolations as this will jeopardize your inferences of the feasibility analysis. 

Step two: Identify emissions hotspots

Organizations can pinpoint areas with the highest carbon emissions and environmental impact. These hotspots might include:

• Energy-intensive processes
• Transportation
• Supply chain activities
• Waste disposal

Once identified, organizations can prioritize mitigation efforts in these critical areas, implementing targeted strategies to reduce emissions and drive progress toward their sustainability goals. 

Step three: Identify alternative technologies and solutions

Through thorough research and innovative thinking, organizations can explore cutting-edge technologies, renewable energy sources, and eco-friendly processes. 

By assessing the technical feasibility, economic viability, and environmental impact of these alternatives, decision-makers can make informed choices that align with their sustainability objectives. In the interest of carbon reduction, those technologies might include: 

Step four: Analyze these solutions

Before settling on a strategy, it’s important to analyze the suggested solutions to ensure that they’re being prioritized properly. Firstly, it’s important to define the objectives and establish specific criteria for evaluating the potential solutions based on their contribution to your goals. Then, you’ll need to evaluate the technical and economic feasibility of each solution, considering factors such as compatibility with existing infrastructure, ease of integration, and reliability, alongside weighing up the initial investment costs and revenue generation. 

It’s also key to ensure that a thorough risk assessment is carried out to ascertain whether there are any uncertainties with any of the new technologies - if there are, the organization will need to consider mitigation strategies to lessen the impact of them. 

Step five: Set targets and implementation timelines

Now that the goals are defined, it’s key to establish specific, measurable, achievable, relevant, and time-bound (SMART) targets aligned with the project's overall goals. Consider factors such as: 

• Budget constraints
• Resource availability 
• Regulatory requirements 

It’s also important to regularly review and update the plan to address any challenges or changes in circumstances, ensuring that the feasibility analysis stays on track and enables timely and successful project implementation.

How Minimum can help

Minimum can help organizations to understand their existing carbon output, and create plans to mitigate climate related risks in the future.  Our Emissions Data Platform seamlessly collects and processes emissions data from every corner of your organization and supply chain - no matter the format. Making it the ideal platform for emissions audits and all-round business intelligence. 

Learn more about how Minimum's Emission Data Platform can help to power you all the way to Net Zero today.