Entrepreneurship and Innovation at Toyota: A Sustainability Report

This report provides an in-depth analysis of Toyota's entrepreneurial and innovative approaches to sustainability, focusing on its efforts to reduce carbon emissions and transition to renewable energy sources. The report begins with an introduction to Toyota's global presence and its commitment to environmental sustainability, particularly its goal of achieving zero carbon emissions by 2050. It then examines Toyota's current situation, highlighting its existing use of solar energy across various manufacturing plants and its plans to incorporate hydrogen fuel cells and other renewable sources like tidal and wind energy. The report presents data on Toyota's energy consumption, emissions, and the environmental impacts of its manufacturing processes. It also provides specific recommendations for future actions, including increasing solar power usage, implementing stationary pure hydrogen fuel cells, and utilizing tidal and wind energy. The report concludes with a critical review of relevant change management theories, such as Kurt Lewin's three-stage model, to facilitate organizational change towards sustainability. Overall, the report offers valuable insights into Toyota's sustainability strategies and provides recommendations for further improvements in emission reduction and renewable energy adoption.

Running head: entrepreneurship and innovation
ENTREPRENEURSHIP AND INNOVATION
Name of the Student
Name of the University
Author Note

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Introduction
Toyota is a global automotive industry from Japan that manufactures diverse lineup of
vehicles. Toyota is famous as an innovative leader and in its management philosophies as
well as the producers of the first mass market hybrid cars in the world (toyota-global.com
2018). As of 2014, Toyota had a market share of 12.19% in the production of cars
(statista.com 2018). This makes Toyota one of the largest automaker in the world (Market
Realist 2018).
The global impact of emissions from greenhouse gases like carbon dioxide has
adverse effects on the environment, increasing the global average temperatures, and further
causing massive changes in the environmental patterns. Due to this reductions of carbon
emission have been at the forefront of all major environmental assessments and summits. The
international carbon action partnership is a global forum that focuses on governments and
public authorities to implement policies to reduce carbon emissions (Frerk 2018). Keeping in
line with such aims, Toyota also aimed to reduce their carbon emissions to zero by the year
2050 (toyota-global.com 2018). Toyota have already implemented various strategies to
minimize the carbon emission at various manufacturing units globally (using solar energy),
which can be further improved to ensure better and more efficient harvesting of renewable
sources of energy.
Analysis of current situation in Toyota
Alternative sources of energy source are a significant aspect of consideration of any
manufacturing industry. Different types of alternative (non-conventional) sources of energy
are possible: namely Solar Energy, Wind Energy, Geothermal Energy, and Hydroelectricity,
Biomass energy, Tidal energy and Hydrogen energy. Toyota has made it an organizational
policy to move towards more nonconventional and renewable sources of energy from the

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conventional ones to power their factories and manufacturing units and also reduce their
emissions gradually. Solar energy has been utilized by Toyota factories in various locations
globally. The Toyota factory in North Wales, utilizes 12,860 solar modules which provides
10% of the annual energy demands of the unit, providing around 3.4 million kWh per year
which can be used to produce 22,500 engines (solarpowerportal.co.uk 2018).
Picture 1: Solar energy usage by Toyota at Deeside, North Wales (source:
solarpowerportal.co.uk 2018).
In San Antonio plant (USA), Toyota started solar panels for harnessing energy by
2017, generating about 200 kWh of energy, making a savings of approximately $15,000 on
electricity bills each year (Chapa 2017). Similarly, in Altona North manufacturing plant in
Melbourne (Australia) installed 2000 Kyocera Solar Modules to a 22000 v medium voltage
network, making it the largest solar power system in Victoria and third largest in Australia.

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The system produces 668,460 kWh of energy annually. In addition, the system also helps in
the reduction of emissions of carbon dioxide by 668,460 kg (Como 2018).
The Toyota plant in Kyushu, Japan planned the implementation of hydrogen power of
fuel cells to power factory equipments. The hydrogen is produced by the solar electricity,
electrolyzing water to make hydrogen. This energy is then used to power forklifts and fuel
cell systems, and surplus energy can also be used to power the manufacturing plant. It is
estimated that this system can be used to reduce the emissions of C) 2 by up to 50% (Kaneko,
2016).
As of 2015, the total Global Energy Consumption by Toyota industries was estimated
at 89.4 x105 joules (petajoules or PJ), thereby spending 8.80 x109 Joules (gigajoules GJ) per
unit. The highest consumption is in Japan (45.1 PJ), followed by North America (12.8 PJ).
Also, the main sources of energy in the plant are: electricity (37.5 PJ), city gas (26.9 PJ),
natural gas (16.0 PJ), LPG (2.3 PJ) and LNG (0.9 PJ). Other sources of energy includes: coke
(1.0 PJ), Coal (0.5 PJ), Heavy Oil (1.2 PJ), Diesel oil (0.5 PJ), Kerosine (0.3 PJ), Steam (1.1
PJ), hot water (0.5 PJ), renewable energy (0.3 PJ) and others (0.1 PJ).This is shown by the
tables below:

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Table 2: Energy consumption of Toyota, globally (source: Toyoda 2016).
Table 3: Types of energy resources used by Toyota (source: Toyoda 2016)
The 2005 audit showed that 27% of the energy consumption of Toyota was in Japan
and 30% globally, while 43% was from non consolidated sources. Highest consumption
among these was from the manufacturing of engines (33%), consumption by compressors
(29%), vehicular consumption (23%), materials handling machinery (10%), textile machinery
(2%) and others (3%).

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Figure 4: Energy consumption of Toyota (source: Toyoda 2018).
The major pollutants emitted from the various plants of Toyota in Japan includes:
CO2, volatile organic compounds, fluorocarbons, and oxides of sulphur. The types of
environmental impacts of the various processes in the Japanese manufacturing units of
Toyota are shown in the table below:

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Figure 5: Emissions are environmental impacts at each process in Japan (source: Toyoda
2018).
This shows that CO2 is a significant and common pollutant from the different
processes in the Toyota factories in Japan. Also, the energy consumption report shows a
continued reliability on sources of energy like electricity, gas and oil, all of which can have
significant carbon footprint and carbon dioxide emissions. The Zero emission challenge of
Toyota, have shown significant improvement in the carbon dioxide emissions across various
locations over the years. Toyota motor corporations (TMC) were able to reduce the carbon
dioxide emissions per unit produced from 0.415 in 2012 to 0.398 in 2016, globally.
Figure 6: Trends in Total CO2 Emissions (from Energy Consumption at Stationary
Emission Sources) and CO2 Emissions per Unit Produced at TMC (source: toyota-
global.com 2018)

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Figure 7: Trends in Global CO2 Emissions (from Energy Consumption at Stationary
Emission Sources) and CO2 Emissions per Unit Produced (source: toyota-global.com 2018).
The figures (6 and 7) above, shows that Toyota was able to reduce their carbon
dioxide emissions globally, however also points out that more can be done to further reduce
the carbon dioxide emissions in order to fulfill the ‘zero co2 emissions’ policy.
The specific recommendations that can be utilized to further reduce emissions and
increase the usage of non-conventional, renewable and less polluting (non CO2 emitting
source of energy). This recommendation will be discussed next:
Recommendations for future action
A. Increasing solar power usage:
The current rate of harnessing solar energy to power equipments in Toyota can be
further increased by installing additional solar panels in the manufacturing units. More
number of solar panels will help to produce more power, however would require a lot of
space for installation. For example, the Tengger Desert Solar park in China has a solar panel
field covering 27 sq km of land and produces approximately 850 mW of power (as of 2013)

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(Philips 2013). The project is estimated to produce up to 2GW of energy upon completion
(Clover 2018). The utilization of solar energy can also go beyond the conversion of solar
energy to electrical energy using solar cells, and include heating water using the solar energy
producing high energy steam as another source of energy. Steam boiler systems integrated
with solar energy harnessing system can further reduce emissions of carbon dioxide and
improve energy savings. For example, the Bosch steam boiler system can be used for
reducing emissions of CO2 by 85% and improve energy savings by 15%. A single unit can
provide 2500 kWh of energy using 320 sq m of solar panels to heat 6000 liter of water to 103
degree Celsius (Bosch-industrial.com 2018). Several of such units can be utilized alo0ng with
conventional solar panels to allow harnessing of additional energy
B. Using stationary pure hydrogen fuel cells:
This will allow the use of hydrogen as a source of energy using stationary pure
hydrogen fuel cells. These cells have an average power output of 3.5kW. This cell combines
the solar energy harnessing technology, with storage batteries (toyota-global.com 2018). The
solar panels provide power to the fuel cell systems, in which water is electrolyzed to obtain
pure hydrogen, which is then stored and later used to provide energy. This system in addition
to storage batteries can be used to supplement the total energy demand of the facility
(Newsroom.toyota.co.jp 2018). A stationary hydrogen fuel kit consists of a fuel cell,
hydrogen safety system, hydrogen storage tank, hydrogen piping system, inverter, AC/DC
converter, remote sensing and monitoring system and can be used to power transportation
systems (Hydrogen fuel cell kit 2018). Hydrogen fuel cell system of Toshiba, for example
can provide 100kW of energy per cell and provide zero carbon electricity as well as hot
water, as it does in the island of Honshu, Japan (doi.org 2017).

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Figure 8: Meeting the energy demand using solar energy, fuel cell and storage
batteries. (Source: Newsroom.toyota.co.jp 2018).
A significant challenge exists in the safe storage of pure hydrogen, which is highly
combustible. Due to this, different types of storage options can be utilized: like storing
compressed gas or storing liquid hydrogen or in solid form by absorption or reaction with
metals or chemical compounds (in the form of chemical hydrates and complex chemical
hydrates). The costs of storage (in USD) and energy required (per unit volume and weight)
are shown in the diagram below:
Figure 9: Storage of hydrogen (source: fsec.ucf.edu 2018).
C. Using Tidal energy
In addition of harnessing solar energy for supplying energy for the plant, tidal energy
can also be utilized to further improve the utilization of re3newable source of energy and
reducing carbon emissions. In this technique, the energy is derived from the tidal waves of

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the ocean (Bahaj 2013). This can reduce the carbon dioxide emissions and reduce the use of
conventional sources of energy. Toyota manufacturing units which are at close proximity to
the sea can significantly utilize this freely available source of energy to supplement the
existing energy budget of the organization and also reduce the emission levels further. Tidal
energy therefore can be considered as an important renewable, sustainable and predictable
source of energy (Nicholls-Lee and Turnock 2018). Moreover, in large turbine farms, short
term storage of energy is an inherent property which was studied by Vennell and Adcock
(2014). This can be useful in maintaining a high energy throughput from the turbine farms
that harnesses the tidal energy.
D. Using Wind energy
Wind energy can be harnessed through windmills that utilize the kinetic energy of the
moving blades of the turbine to produce electrical energy, which can be stored later. The
offshore wind farms for example in Tokyo, Japan which is estimated to produce up to 10
gigawatt of energy by 2020, which shows the promising future in wind energy harvesting
technologies (Tsukimori 2017).
Critical review of relevant theories and paradigms
Change in the organization can be implemented using change management theories
like the freeze unfreeze model of Kurt Lewin.
Kurt Lewin’s 3 Stage model:
The Kurt Lewin’s 3 stage model for change management involves the implementation
of a change in an organization in a three step process. These steps include: unfreezing,
changing and refreezing.

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In the unfreeze state, the need for change is identified by the organization. In the
current context, it would be the further reduction of emissions from the Toyota manufacturing
units. This step allows the status quo to be discontinued, thereby fostering the implementation
of new changes in the operational process. In this stage, existing sources of energy usage will
be analyzed, to identify processes which can be supplemented with alternate sources of
energy. To do this, the beliefs, attitudes and values of the organization will be scrutinized, to
identify the factor which allows the utilization of energy sources with high levels of emission.
In this stage, it can be useful to communicate the ‘zero emission’ goals of the organization,
which further implies the reduction in current emission levels, and adoption of technologies
to ensure zero emissions. This can be made possible through increased utilization of
renewable, non-conventional, zero emission based sources of energy. Since Toyota already
uses solar energy across various manufacturing units globally, increase in the energy
throughput from solar energy can be made possible through the addition of more solar panels
installed in the solar energy harvesting units. Moreover, the existing system can also be
upgraded to allow solar powered heating of water and solar powered electrolysis of water to
produce hydrogen. Both these sources: superheated water and pure hydrogen can provide
additional sources of energy with zero carbon emission.
Steps in the Unfreeze stage:
 Identifying what needs to change (current levels of emission)
o Understanding the current emission levels
o Understanding why emissions needs to change (Zero emission policy)
 Ensuring support from senior management
o Using stakeholder analysis and management to get support
 Create a need for change