Picking up speed on the road to decarbonization
Raising our sustainability bar
Over the past three years, Solvay’s successive commitments towards climate action have been increasingly ambitious. For 2019 and beyond, the Group is once again setting the bar higher in terms of reducing its greenhouse gas emissions and shifting towards low-carbon energy.
We have stepped up our sustainability ambition this year and opted for a target aimed at reducing the greenhouse gas emissions of our operations in absolute value. What does this mean? No business growth at the expense of our planet. Essentially, our 2025 emissions should be lower by at least 1Mt CO2 compared to the 2017 level, at constant scope.
Let's start from the beginning
In 2015, Solvay implemented the first version of its climate action plan, pledging to reduce its greenhouse gas intensity by 40% over 10 years. This reduction concerned both the emissions directly caused by the company’s industrial activities (so-called “Scope 1” emissions) and those associated with the energy purchased by the Group (Scope 2).
“But early 2018, we had already reached 80% of that target,” explains Philippe Chauveau, Head of Solvay’s Climate Strategy. “So we started to reflect upon the nature of the target, which should be in line with the challenges our planet is facing – and we came to the conclusion that our decrease in emissions had to be in absolute value, not just in intensity.”
To rein in global warming, the cause of climate change, the world needs to reach zero net emissions from human activities. In other words, reducing human-induced emissions and matching the residual amount with an equivalent captured by the planet thanks to human activities (such as growing forests or conducting geological storage). “In the long term, some sectors are set to have zero net emissions or remain slightly net emitters, while others should be negative - but let’s face it, no sector can avoid to strongly reduce its emissions in absolute value,” adds Philippe.
Disconnecting our business growth from emissions reduction, three paths to follow
The decision was officially announced in September 2018: Solvay aims to reduce its global emissions by 1 million tons of CO2 per year by 2025, with 2017 as the chosen reference year – which already represented a historic low point in Solvay’s emissions (12.3 million tons of CO2).
“Emission reductions will be measured at constant scope,” details Michel Washer, Solvay’s Deputy Chief Sustainability Officer, “in order to be able to measure the reality of our efforts. This means that letting go of or acquiring activities won’t be taken into account when calculating our achievements. Also, we aim to continue to grow our business during that time, which means that in reality, we are looking at a 20% decrease in emissions.”
This is an ambitious goal – certainly more ambitious than what most of Solvay’s peers and competitors are aiming for: “We are among the most committed players in the chemical industry,” confirms Michel.
So how does the company aim to reach it? “We have three levers to implement our goal: energy efficiency, switching to a low-carbon energy mix, and reducing the process emissions released by our plants to the atmosphere,” explains Philippe.
Energy efficiency is a long-standing effort within Solvay, in particular through the Group’s widely recognized Solwatt® program, which conducts full energy reviews of industrial sites and identifies improvements to save energy and reduce emissions. Efforts will be made to continue such actions in order to meet the objectives, particularly by leveraging the power of digitalization. To that end, the Solvay’s Excellence Center created in 2018 hosts teams dedicated to support energy efficiency projects and accelerate operational support to Solvay’s Global Business Units.
I am optimistic about the future. Our climate targets have been increasingly ambitious since 2012. Innovation is accelerating, and I’m sure technology will allow us to set an even more ambitious target in a few years.
The shift to a low-carbon energy mix means both sourcing and producing sustainable types of energy. Most of the Group’s facilities produce their own energy; plants in France, Germany and Brazil have recently added biomass firing to their energy mix. In other instances, plants have started switching to renewable electricity: Solvay is a partner of a large new solar power plant in South Carolina and several of the group’s installations in the Southern US will be offering (starting Jan 2019) products made with clean power, such as the Aroma Performance plant in Baton Rouge, Louisiana.
Lastly, for the last decade, Solvay has been engaged in the reduction of its process emissions (greenhouse gases released during the chemical reactions necessary to produce its materials), in particular reducing by more than 95% its impact from nitrogen dioxide (N2O), the largest of its process emissions. “Process gases continue to represent 35% of our emissions and a large share is non-CO2 gases,” says Philippe. “There are no obvious solutions available on the shelf. Each source of process emissions requires a tailored solution and we are pursuing efforts to deliver innovative clean technologies.”
The indirect contribution of products
In addition to reducing the emissions generated by its operations, Solvay also contributes to climate targets by working with customers to deliver solutions reducing CO2 emissions. Typically: lightweight solutions for the automotive and aerospace industries, which make for lighter cars and planes that consume less fuel and emit less greenhouse gases, as well as battery solutions that accelerate the deployment of green mobility and electricity.
We don’t have any quantified greenhouse gas reduction objective here, because it would be too difficult to measure”, says Philippe, “but our Sustainable Portfolio Management tool is there for that. Thanks to SPM, we know that 26% of our portfolio matches our sustainability requirements for the climate and energy transition. This represents the second leg of our climate actions, and it’s fully integrated in our strategy.”
To strengthen the enforcement of its objectives, since 2017, Solvay has conditioned the long-term incentives of its senior executives to the Group’s greenhouse emissions objective. In clear, if the company doesn’t reach its emissions goal, its top managers won’t get their full bonuses.
In addition to that, the Group’s Solvay Way program was reformed at the same time as its climate target was revised, last September. Solvay’s business units are free to implement this program as they see fit, but the overall idea remains: the Group is committed to playing its part in ensuring a livable future on Earth, and expects the same commitment from all of its teams.
“Climate is changing, and it will change our business conditions. It is, therefore, crucial to anticipate and allocate our resources accordingly,” says Philippe. “We use internal carbon prices to stimulate our decisions. For industrial investments and capital allocations in the short to medium term, we use currently 25€/ton of CO2 for a sensitivity analysis on all our projects globally. And we model 75€/ton of CO2 to test the sustainability of solutions and businesses in our portfolio in the long run.”
“We set our initial climate objective in 2012, then a higher one in 2015, and now in 2018, increasingly ambitious every time,” sums up Michel. “I’m sure that in a couple of years, we will accelerate again and set an even more ambitious goal.”