Industry 4.0 and it's Effects on The Environment

Abstract

Industry 4.0 as the main driver of future industrial manufacturing is receiving considerable attention in recent years. Especially since it is viewed as technology that could decouple economic growth from resource use. However, there is no definite agreement how this technology will affect our environment, more specifically global energy demand, greenhouse gas emissions and consequently climate change. At the core of Industry 4.0 lies a vast expanding data layer that is being connected through cloud computing. Energy consumption from cloud computing and thus the number of data centres is on the rise and with it the associated greenhouse gas emissions. This is due to the increasing amount of data created in the world. Since adoption of Industry 4.0 is expected to generate additional, exponentially growing amounts of data it will impact cloud computings energy consumption and subsequently its environmental effects. Since the magnitude of the effect is not yet determined this thesis examines it via a quantitative analysis of secondary data in a mixed approach. To this end, the total energy consumption of ICT is defined and then broken further down into energy consumption by cloud data centres which is then used to calculate the share that Industry 4.0 is responsible for. In a second step, three different growth scenarios based on two base variables of amount of data created and cloud data centre efficiency are elaborated to predict possible developments until 2025. This paper finds that currently the amount of data generated through Industry 4.0 manufacturing processes represents a small part of overall generated data and therefore total energy demand. Moreover, Industry 4.0 is expected to deliver efficiency gains that by far outweigh the increase in energy consumed for its operation. Therefore, its use to further boost manufacturing efficiency can provide a valuable contribution to addressing global challenges such as climate change and increasing the share of renewable energy in the system which in turn will also reduce the environmental impact of the energy consumed.