We are intensifying our actions to reduce global carbon emissions and achieve a carbon-neutral Dow by 2050, demonstrated by our commitment to reduce our net annual Scope 1 & 2 carbon emissions by 5 million metric tons by 2030 compared to our 2020 baseline. Reflecting our focus to make meaningful progress in the near term, we will reduce CO2 emissions by approximately 2 million metric tons per year while growing underlying earnings by an estimated $2 billion by 2025.
reduction in CO2 emissions by 2030 at our Terneuzen site in the Netherlands
one of the top 20 global corporations using clean energy, adding 132MW through purchase agreements in 2021
reduction in CO2 emissions vs traditional processes for our proprietary FCDh pilot plant in Louisiana
Our science-based strategy includes a phased approach to decarbonize while meeting growing demand for our products and contributing to a low-carbon future through continued investment in new products, technologies and processes. Our actions include:
We are taking a phased, site-by-site approach to reducing our carbon footprint by replacing end-of-life and high carbon-intensity assets with more carbon-efficient technologies, and by investing in carbon abatement technologies, including circular hydrogen and carbon capture and storage.
To deliver low-carbon solutions to our customers, we are working to reduce the emissions from our manufacturing assets. Our plans build on the 15% emissions reductions we have already achieved since 2005 – during a period of significant growth – and enable us to reduce our Scope 1 and 2 emissions by another 15%, for a total of 30%, by 2030, while continuing to grow earnings. This modernization of our manufacturing assets will be a catalyst in helping us reach our 2050 zero-carbon emissions target.
World’s first net-zero carbon emissions integrated ethylene cracker and derivatives site: In 2021, we announced our plan to build the world’s first net-zero carbon emissions integrated ethylene cracker and derivatives site at our Fort Saskatchewan, Alberta, complex. The project will triple the site’s ethylene and polyethylene capacity and decarbonize 20% of our global ethylene capacity.
A roadmap to reduce CO2 emissions by 40% by 2030: Another example of low-carbon innovation is taking place in Terneuzen, the Netherlands, which is one of Dow’s largest integrated sites. The Terneuzen team announced plans in 2021 to reduce the site’s overall carbon emissions by 40% by 2030 using technology and engineering advancements. This puts the site on a path to achieve carbon neutrality by 2050.
In 2021, we expanded access to renewable power to more than 900 megawatts (MW), such that more than 25% of our purchased electricity comes from renewable sources.
In 2021, we were one of the top 20 global corporations using clean energy, and we added 132 MW of wind and solar clean power capacity through new renewable power purchase agreements. The power supplied by the new agreements is expected to reduce our Scope 2 emissions by more than 600,000 metric tons of CO2 per year. The new agreements bring our total access to clean energy to more than 900 MW, well ahead of our 2025 Sustainability Goal aligned to power from renewable sources.
New renewable purchase agreements include:
In Europe, six agreements have enabled eight Dow sites across Spain, the United Kingdom, Sweden, France and Germany to transition to 100% green electricity. Several other Dow sites across Europe have also transitioned to a cleaner grid power mix or are importing renewable power to complement the self-generation needed to assure reliable operations.
In Latin America, we signed a long-term agreement in Brazil with Casa dos Ventos aligned to the construction of a new wind power plant in the state of Rio Grande do Norte. The agreement provides our site in Cabangu, Brazil, with access to cost-competitive capacity for wind-generated electricity, with the assurance of 60 MW of continuous renewable power, which will supply power for silicon metal production.
In North America, a long-term agreement with Capital Power Corporation in Alberta, Canada, will provide clean power capacity, replacing approximately 40% of the energy demand at our Prentiss, Alberta, site for polyethylene production. The agreement with Capital Power, supplied through the company’s Whitla 2 wind farm project, supports grid diversity and provides greater access to renewable power for Dow.
We are helping our customers achieve their climate-related goals through products that enable benefits such as energy efficiency, lightweighting, fuel transition, circularity, increased operational efficiency, resource reductions and reduced emissions.
Applying our materials science expertise, we are helping the world’s best brands make their products more sustainable while expanding opportunity for innovation and future earnings growth.
Sustainable packaging: We are reducing the climate impact of packaging by offering post-consumer recycled (PCR) resins, using renewable feedstocks to offer plant-based polymers, and developing materials to help our customers design packaging that is resource efficient and recyclable.
Sustainable infrastructure: Energy efficiency is one of the greatest opportunities for sustainable innovation in infrastructure, industrial, commercial and residential construction applications. Dow has a broad portfolio of solutions in this area, including technologies that enable the transition to renewable energy and create more efficient buildings.
Sustainable mobility: Our materials science is helping transition to a world of low-carbon mobility with products that dissipate heat and provide long-lasting protection for electric and hybrid vehicles, and lightweighting solutions that expand design options to increase fuel- and energy-efficiency and improved range for automobiles.
Sustainable consumer applications: We are supporting the development of higher-performing and more sustainable consumer products that save energy, conserve natural resources and reduce emissions.
We are innovating next-generation manufacturing technologies, such as fluidized catalytic dehydrogenation (FCDh), ethane dehydrogenation (EDH) and electric cracking technology (e-cracking). These breakthrough manufacturing processes are at various stages of development and are part of our solutions to create a lower-carbon industry footprint.
Fluidized Catalytic Dehydrogenation (FCDh): We are investing in process technologies for producing ethylene and propylene that will help the industry in its journey to low- and zero-carbon emissions by 2050. For example, Dow is retrofitting our Louisiana-3 cracker with Dow’s UNIFINITY™ dehydrogenation process technology, which produces propylene with fewer CO2 emissions and less energy. Additionally, the technology requires less capital and has a streamlined process that supports greater reliability. In late 2022, Dow’s Louisiana-3 cracker retrofit will be the first industrial olefins unit to use this advanced technology, demonstrating its versatility to right-size or tailor capacity to meet supply needs more sustainably.
Electric cracking (e-cracking): In 2021, Dow and Shell reported progress on our joint technology program to electrically heat steam cracker furnaces. In the first year, the program advanced electrification solutions for today’s steam crackers while also pursuing game-changing technologies for novel designs of electrified crackers in the longer term. This dual-path approach aims to support emissions reductions required to meet the companies’ 2030 carbon reduction ambitions and their targets to achieve zero-emissions businesses by 2050 or sooner. The project was awarded $4.2 million in Mission-driven Research, Development and Innovation (MOOI) funding by the Netherlands government and will join forces with The Netherlands Organization for Applied Scientific Research (TNO) and the Institute for Sustainable Process Technology (ISPT). This multi-stakeholder collaboration aims to accelerate key milestones for near-term progress and longer-term breakthroughs.
SCOPE 3 EMISSIONS
Scope 3 emissions are inclusive of upstream emissions from products and services we procure from suppliers, as well as downstream emissions from the transportation of our products and the emissions emanating from the use and disposal of our sold products. These emissions are critical to Dow and represent approximately 70% of our total emissions. Because more than half of our Scope 3 emissions come from raw materials, transportation and other services we purchase as a company, it is critical to partner with suppliers and customers across the value chain to reduce emissions.
Purchased goods and services: We have partnered with CDP (formerly the Carbon Disclosure Project) to collect climate data from approximately 100 suppliers, representing 31% of our 2020 spend. Of those suppliers, 92% of respondents reported Scope 1 carbon emissions, and 80% have set a carbon reduction target. We are expanding the CDP program to target engagement with approximately 350 suppliers in 2022 and 500 globally in 2023, with an ask to disclose carbon emissions data and reduction plans. With this data, we will improve the accuracy of our Scope 3 values along with our ability to take action and track progress toward our emissions reduction goals.
Transportation footprint: Our Integrated Supply Chain (ISC) team developed the Transportation Carbon Footprint Tracker, which collects shipment data and uses with the Global Logistics Emissions Council (GLEC) Framework to calculate the carbon emissions generated at the shipping stage. This tracker produces much more granular data than historical reporting and will serve as the main source of transportation emissions data internally. Externally, this tracker can provide a baseline for discussions with customers and lead to collaborative efforts to reduce transportation emissions across the value chain.
Value chain and enhancing ESG engagement: Several efforts are underway to embed ESG criteria into supplier engagement activities, including all requests for proposals, tenders, contracts and supplier relationship management strategies. This will help us access robust ESG data and include sustainability as a key metric in the decision-making matrix.
Beyond our efforts within Purchasing and Integrated Supply Chain, we are investing in external collaborations to meet the goals we share with many stakeholders across our value chains. For example, in 2021, we joined Together for Sustainability, an industry group that enables us to engage with suppliers in a streamlined and strategic way alongside our peers in the chemical sector. We also are collaborating with the World Business Council for Sustainable Development (WBCSD) through the Partnership for Climate Transparency (PACT) to develop robust methodologies and systems for sharing product carbon footprint data along supply chains. In addition, we actively participate in several working groups that focus on improving sustainability in the chemical industry through the European Chemical Industry Council (Cefic) and the American Chemistry Council (ACC).
Our logistics supplier award programs (S4TAR and DowGOL) are designed to encourage and recognize logistics partners for excellent performance in the areas of safety, sustainability, social responsibility and service. The award program acts as a platform for sharing best practices, partnership cultivation, operation excellence recognition and sustainability advocacy.
Every year, Dow surveys its logistics partners about their sustainability strategies, certifications, carbon reduction efforts, waste reduction, recycling efforts and water conservation, as well as employee training and incentivization. Responses are shared with all participants to encourage a collaborative environment and cultivate new ideas for improvement.
CLIMATE PROTECTION: WATER
As part of our pledge to the Water Resilience Coalition (WRC) under the U.N. Global Compact CEO Water Mandate, we are committed to advancing water stewardship within our own operations and to working collaboratively to enhance water management at the watershed level. We have set a global target to reduce freshwater intensity by 20% at our key water-stressed sites by 2025. In 2021, we reduced our freshwater intake intensity by implementing water conservation projects and technologies with improved water efficiency and that were further aided by favorable impacts from increased rainfall. We continue to take actions to improve our water efficiency, management and measurement approaches to drive sustainable progress.
Implementing projects to increase water circularity. At our site in Terneuzen, the Netherlands, we are working with farmers and the regional water board to store fresh water underground – collecting it in the winter and using it in the summer, so farmers can benefit in periods of drought.
Collaborating with customers to drive innovation around water-saving technologies such as our ECOFAST™ Pure Sustainable Textile Treatment, which enables using up to 90% less process chemicals, up to 60% lower carbon footprint, up to 50% less water and up to 40% less energy in the cotton dyeing process.
Partnering with others to focus on addressing community freshwater needs. For example, our Dow Böhlen site in Germany is participating in a European Union-funded project to help implement technologies that will alleviate competition for freshwater resources.
Investing in projects that are good for business and better for ecosystems. To help stem the loss of critical wetlands in the Mississippi River Delta, we are working with multiple partners to restore habitats and build water resilience in and around our sites.
Implementing strategic water-savings technologies. For example, at our Freeport, Texas, site, we implemented water conservation projects in 2021 that saved the equivalent of 2% of the site’s freshwater withdrawal associated with production. Freeport accounts for roughly 80% of our overall freshwater intake intensity reduction goal.
CLIMATE PROTECTION: BIODIVERSITY
Through our pioneering Valuing Nature Goal, one of Dow’s 2025 Sustainability Goals, and our 10-year collaboration with The Nature Conservancy (TNC), we have demonstrated how nature can be a source of sustainable business value. We are now broadening our work with TNC to include biodiversity.
In 2021, in partnership with TNC, we assessed the potential impact that our global sites may have on areas of significance for biodiversity. We developed a land value assessment tool that can help us make informed decisions by exploring solutions and recommending the best land management strategy. The tool is helping us:
Analyze the environmental risk of global Dow locations and identify priority sites for implementing nature-based solutions; and
Optimize land-use transformation strategies at a selected site to capture optimal value from ecosystem services. Land-use transformations such as reforestation, restoration, remediation or wetland construction can provide natural-capital and environmental benefits that can supplement man-made mitigation systems such as carbon capture and storage. Several Dow-owned land parcels were identified as the priority areas to focus our continued work.