Note 6: Carbon positive

AkzoNobel is taking steps towards a positive carbon balance. We see reduction as an important measure of climate impact and protection, and also as a proxy indicator of resource productivity – how efficiently we and our supply chain partners are using raw materials and energy in our products and operations.

Climate change

Climate change is one of the biggest challenges that will shape the way we do business, both now and in the decades to come. We support the Paris Agreement reached at COP21 of keeping the global average temperature increase well below 2°C above pre-industrial levels and pursuing efforts to limit temperature rise to below 1.5°C.

To support the transition to a low carbon economy and help reduce our industry’s dependence on fossil fuels, we have committed to carbon neutrality by 2050. We also joined the RE100 initiative, emphasizing our commitment to source 100% renewable energy by 2050.

Carbon pricing

We introduced carbon pricing into relevant investment decisions, and merger and acquisition initiatives, to drive further awareness of the environmental and future economic impact of major decision-making. It also enables us to make more informed decisions and strengthen our sustainable business portfolio. Alongside the base case for any investment, we routinely include the impact of a cradle-to-grave carbon footprint cost at a price of €50 per ton. With many countries discussing different schemes to put a price on carbon as part of their legally binding COP21 carbon reduction targets, carbon pricing enables sustainability leaders to de-risk their businesses. In 2017, we included carbon pricing in seven major appropriation requests submitted to the Executive Committee.

Avoided emissions

To support our growth agenda, we focus on creating positive value for our customers. We develop and sell solutions that help customers avoid energy use and carbon emissions, such as Dulux Trade Plus products, as described in the Introduction to this section. Using the avoided emissions guidelines we developed together with the International Council of Chemical Associations and the World Business Council for Sustainable Development, we have started to evaluate the amount of carbon emissions society avoids by using the solutions we have developed, compared with mainstream solutions. First results show these avoided emissions add up to nine million tons of CO2, compared with our total product cradle-to-grave footprint of 24.6 million tons.

Cradle-to-grave product carbon footprint

in million tons of CO2(e) and % reduction per ton of sales

Carbon positive – Cradle-to-grave carbon footprint (bar chart)

The 25-30% target applied to the combined businesses of AkzoNobel in 2017. AkzoNobel Paints and Coatings and the separated Specialty Chemicals companies will review and set their own individual targets in due course.

Cradle-to-grave product carbon footprint
Total in million tons CO2(e) and reduction per ton of sales

 

2014

2015

2016

2017

1

Scope 1 and 2 includes emissions from our facilities and our own transport, including VOCs.

AkzoNobel

 

 

 

 

Scope 3 upstream

10.7

9.7

9.5

9.7

Scope 1 & 21

4.0

3.8

3.7

3.4

Scope 3 downstream

12.2

11.1

10.5

11.5

Total

26.9

24.6

23.7

24.6

% reduction per ton of sales

-4

3

6

7

Decorative Paints

 

 

 

 

Total

3.9

3.6

3.7

3.7

% reduction per ton of sales

0

4

9

16

Performance Coatings

 

 

 

 

Total

13.6

12.3

11.6

12.6

% reduction per ton of sales

-2

-2

-2

-5

Specialty Chemicals

 

 

 

 

Total

9.4

8.6

8.4

8.2

% reduction per ton of sales

-2

6

9

15

Our target is to reduce our product cradle-to-grave carbon footprint by 25-30% per ton of sales between 2012 and 2020, including the impact from VOC emissions. We intend to achieve this through innovation, technology and energy management, by switching to renewable energy and bio-based materials. Because we measure carbon footprint on a cradle-to-grave basis, collaboration with suppliers and customers is crucial for our success.

In 2017, we were able to further reduce our carbon footprint per ton sold, more than offsetting the impact of the Industrial Coatings business acquired from BASF. Our cradle-to-grave footprint per ton of sold product is now 7% lower than the 2012 baseline.

AkzoNobel carbon footprint

in million tons CO2(e)

Carbon positive – AkzoNobel carbon footprint (graphic)

Our share of renewable energy continues to improve. Emissions from our own operations are 9% lower than in 2016. We continued our work with suppliers and have increased sales of paints with a lower carbon footprint in Asia. As volumes grew, our total product footprint increased to around 24.6 million tons of CO2(e), which is 11% lower than 2012. Without the BASF acquisition, our absolute cradle-to-grave footprint would have been approximately equal to that in 2016, while the reduction of footprint per ton from the 2012 baseline would have been approximately 10%.

A detailed breakdown of our greenhouse gas emissions, including scope 3 and scope 2 location-based emissions, is available on our website.

The illustration above highlights the impact of our main initiatives on different areas of our value chain:

  • Raw materials that have a lower footprint and are bio-based or recycled
  • Improved energy efficiency and fuel mix for our energy-intensive operations (see Note 7)
  • Improvements in formulation to reduce product footprint, particularly during customer application (see Note 1)

Raw materials contribute around 40% to our cradle-to-grave product carbon footprint. Bio-based or recycled materials can, in most cases, offer an option to reduce this footprint. In order to accelerate the deployment of bio-based materials relevant to our markets, we have been setting up and developing partnerships across our supply chain.

Total volume of raw materials

in % per source

Carbon positive – Total volume of raw materials (pie chart)

We partnered with Advanced Biochemical (Thailand) Co., Ltd. (ABT) and EY to develop a new online tool which can track the use of bio-based raw materials in products for end customers. The new system, called ProBioTracker, will be the first tool ever to use e-certification to track bio-based content along the value chain.

Our renewable energy supply strategy has three focus areas: protecting our current renewable share; participating in cost-effective, large energy ventures; and exploring commercially feasible on-site renewable energy generation.

Total energy

in % by source

Carbon positive – Total energy (pie chart)
Renewable energy

in % of total electricity, heat and energy use

2015

2016

2017

Ambition 2020

Renewable electricity (%)

44

46

52

Renewable heat (%)

16

17

22

Renewable energy (%)

38

40

45

45

The diagrams above detail our energy mix and renewable energy use. We made good progress on some key programs and initiatives during 2017 in order to increase the use of renewables in our energy supply and decrease our carbon footprint. The proportion of renewable energy in our operations is now 45%, which is already at our 2020 ambition level.

Carbon footprint

The carbon footprint of a product is the total amount of greenhouse gas (GHG) emissions caused during a defined period, of the product lifecycle. It is expressed in terms of the amount of carbon dioxide equivalents CO2(e) emitted.