SearchEnvironmental Capital
SABIC’s environmental capital comprises all the renewable and non‑renewable environmental resources that are essential for sustaining and growing our business activities – that is, our core goods and services – over the short, medium, and long term. When set within the context of the global challenges of climate change and biodiversity collapse, our approach to environmental capital is the most complex factor that we confront.
Environmental capital fundamentally crosscuts the six material topics and four priority areas that constitute our current sustainability approach. While we plan on refreshing our materiality analysis in 2023, the three fundamental components of our environmental capital will remain the same: our journey toward carbon neutrality; a growth strategy that is increasingly driven by an emphasis on innovation, sustainability and circularity in products and processes; and Safer Chemistry, a voluntary initiative by SABIC to reduce the impact of hazardous chemicals by investigating safer alternatives for 'chemicals of concern' in the product portfolio, along with sound, responsible management in terms of our manufacturing protocols and product stewardship (covered under Manufacturing Capital). Taken together, these three components help us build climate resilience and develop capacities to mitigate climate risk at every level of our organization.
CARBON NEUTRALITY BY MID-CENTURY
Our public commitment in 2021 to become carbon neutral by 2050 in the fight against climate change was the culmination of a journey that began in 2011, when we set our first sustainability targets. In our initially articulated climate ambitions, we set out intensity-based targets and mandated reductions in our greenhouse gas emission intensity, energy intensity, water intensity, and material loss intensity by 2025 from a 2010 baseline. However, evolving understandings and expectations of climate change action prompted us to reevaluate and reshape the targets. Our roadmap goal now targets a 20% reduction in absolute emissions (Scope 1 & 2) by 2030 to support SABIC’s Carbon Neutrality commitment. While we will continue to report our progress on both intensity-based and absolute reduction targets, our primary focus after 2025 shall be on these new absolute reduction targets.
SABIC has been reporting its direct emissions (Scope 1) and indirect emissions associated with outsourced energy supply (Scope 2) since 2011. Our previous efforts in energy efficiency and asset improvements have reduced greenhouse gas (GHG) emissions at an average of 3% YoY since the baseline year of 2018, and we are well-placed to meet our near-term target of a reduction in GHG emissions (Scope 1 & 2).
As we progress, we will continue to increase the breadth and depth of our disclosures. Last year, SABIC received limited assurance on Scope 3 emissions for the calendar year 2020, becoming one of the first companies in the industry to assure overall Scope 3 emissions. Our disclosure improvements extend to our wider environmental KPIs, too: we have increased the granularity of our environmental footprint reporting with the addition of water withdrawal, water discharge, and water consumption accounting across our manufacturing sites. Our full disclosures for GHG emissions, along with our other environmental KPIs, are presented in the SABIC Sustainability Report 2022.
A section of SABIC’s mega carbon capture and utilization plant at United in Jubail.
PATHWAYS TO DECARBONIZATION
Our Carbon Neutrality Roadmap is operationalized along five pathways to decarbonization - Reliability, Energy Efficiency and Improvements; Renewable Energy; Electrification; Carbon Capture; and Green / Blue Hydrogen - coupled with our ongoing focus on circular and renewable feedstock.
Improving the energy efficiency of our operations is a vital tool that we use in driving progress toward our climate goals. This year, we gave greater clarity to our efforts by developing site-specific carbon neutrality roadmaps aimed at our 2030 targets. Efficiency optimizations planned in these roadmaps, along with commencing decommissioning energy intensive sites in 2025, will lead to an expected reduction of about 7.2 million MTCO2e by 2030. Furthermore, we have continued to advance in the SEEC 2nd cycle journey with a commitment to bring the efficiency of operations and energy usage on par with global trends. To achieve this ambitious target, we have made an investment of US$ 1.38 billion toward 80 affiliate projects, including eight mega-projects. Important progress was made on several projects this year, including commissioning the Yanpet EG-II Energy Efficiency Project, which will reduce plant energy intensity by 30%, as part of our ongoing efforts to make our EG plants more sustainable.
In 2022, we began constructing the world’s first demonstration plant for an electrically-heated steam cracker furnace in partnership with chemical and industrial gas giants BASF and Linde. The plant, located at BASF’s Verbund site in Ludwigshafen, Germany, will test both direct and indirect heating concepts, and be operational in 2023. This new technology has the potential to reduce ethylene CO2 emissions by approximately 90% by using electricity from renewable resources instead of burning fossil fuel. We are also expanding our use of renewables in line with the Kingdom’s vision for the country to be 50% powered by renewable energy by 2030 and making meaningful strides across our global network as well; we aim to have in place 4GW installed capacity of renewable energy by 2025 and 12GW by 2030.
Our mega carbon capture and utilization (CCU) plant at United, Jubail, Saudi Arabia, which opened in 2015, is one of the largest facilities of its kind in the world, capable of capturing and purifying up to 500,000 metric tons of CO2 from the production of EG every year. This year, we also initiated a CCU program to capture CO2 from seven different affiliates, targeting 2 million MT of CO2 capture by 2026 and another 2 million metric tons by 2030. Expanding on these capacities, we aim to be in a position to supply CO2 to the proposed Saudi Arabia CCU hub in 2027.
Similarly, we continue to make strides as a pioneering participant in the low-carbon ammonia (blue and green ammonia) market. Our first major milestone in this project was in late 2020, when Aramco and SABIC collaborated to send the world’s first blue ammonia shipment to Japan for zero-carbon power generation. We aim to grow our presence in this market through a steady pipeline of projects under evaluation, spanning ammonia production to final marketing efforts across various end uses.
CLOSING THE LOOP THROUGH CIRCULARITY
Shifting to a circular economy involves adapting our processes to use renewable and recycled feedstock to create durable, recyclable product design solutions for customers. Doing so creates opportunities across value chains, enabling the creation of new sustainable products for our industry and customers, while reducing our carbon footprint. These bio-renewable and recyclable technologies enable delivering lightweight, durable, and cost-effective sustainable products and applications.
SABIC TRUCIRCLE™ was launched in 2019 with the objective of developing practical and innovative solutions that addressed plastic waste under three categories: Mechanically Recycled Products, Certified Circular Products, and Certified Renewable Products. In 2022, our efforts under TRUCIRCLE™ yielded promising results. A range of PCR compounds were developed under the Mechanically Recycled Products for use in various industries, such as on-shelf collation shrink film and household industry & chemical packaging. Our Circular Products efforts yielded 2.6 KT of pyoil processed in SABIC crackers with an additional 10 KT of renewable feedstock processed towards green polymer production. Meanwhile, our Certified Renewable Products led to partnering with various collaborators to incorporate certified renewable polymers from SABIC’s TRUCIRCLE™ portfolio to produce certified renewable products across diverse industries, ranging from the toy industry to the packaging industry.
This year, TRUCIRCLE™ also embarked on a blockchain pilot project that allows digital traceability and additional transparency along the supply chain. This was conducted in collaboration with technology partner Finboot and Plastic Energy and packaging specialist Intraplás, and should help to lower costs, save time, and improve data integration for all value chain partners.
Another crucial development in 2022 was the launch of the BLUEHERO™ initiative, an ecosystem of materials, solutions, expertise and programs designed to help the world transition to electric power in a bid to meet global goals on climate change. As a starting point, BLUEHERO™ directed its focus on supporting the automotive industry to create better, safer and more efficient electric vehicles (EVs). This included optimizing structural battery components with unique flame-retardant materials and solution development expertise.
The promise of circularity rests in part on its emphasis on ecosystems thinking and a collaborative approach, i.e. thinking through relationships of processes to products and impact throughout the value chain. SABIC is committed to working alongside its partners across the value chain, developing circular solutions that bring us closer to fulfilling our ambition for a new plastic ecosystem and a cleaner, greener world.