The environment

• Commitment to SBTi: Ambitious new climate targets
• Long-term agreement to purchase power from offshore wind farm
• Significant increase in green electricity by 2030
• New targets for water and waste
• Biodiversity: expansion of our analyses

Strategy and management

As a specialty chemicals company, we are aware that our production impacts the environment. To minimize the impacts, we have set ambitious targets and put many measures in place. According to our materiality analysis, the most important sustainability issues for Evonik include mitigating climate change, green energy, water management, and biodiversity.

Our actions are based on an extensive, integrated management system for the environment, safety, health, and quality. This applies to the whole of the Evonik Group and takes into account legal requirements, internal policies, and standard operating procedures. In addition to meeting compliance requirements, we therefore support a targeted improvement in our environmental performance. Furthermore, we require our manufacturing sites to be validated as conforming to ISO 14001, the internationally recognized environmental management standard. In the energy sector, we use ISO 50001 and are working to implement it digitally. At present, 48 sites are certified in conformance with ISO 50001, so around 80 percent of Evonik’s energy consumption is certified.

The ESHQ (Environment, Safety, Health & Quality) function has a central audit system to regularly monitor the implementation of our strategy and management system. Based on the findings and analyses of internal and external audits and site inspections, talks are held on possible improvements and ways of implementing them. The executive board is informed annually of the outcome of the audits. The processes used to collect and process environmental data are subject to internal and external audits. Our high quality standards are backed up by regular training. Data input is decentralized, and the data can be evaluated on the basis of management units, legal structures, or regions.

In 2022, we made further progress with the introduction of our global ESHQ software ESTER (Evonik Standard Tool ESHQ and Reporting) to harmonize processes within the Evonik Group and make workflows leaner. For example, we continued to roll out the ESTER support organization, which offers users help with technical questions and should further improve the quality of the processes. For this we developed dashboards, which are available group-wide, and established an overview of key safety indicators, which is updated daily. In addition, we took the first step towards switching our environmental reporting to ESTER.

Mitigating climate change

Strategy and management

Mitigating climate change—which is one of our material topics—and the related extreme weather events are a major challenge for society and one that we are also addressing. We are driving forward the reduction of all climate-relevant emissions and other environmental impacts of our business activities. To actively mitigate the effects of climate change, we set ambitious new targets in the reporting period. We also integrated reducing our CO₂ emissions (scope 1 and 2 emissions) in the remuneration of the executive board and other executives. Carbon pricing is used as an additional planning criterion in investment decisions. Along the value chain, we are working on innovative solutions to reduce emissions—often in collaboration with suppliers and customers.

Our levers for GHG savings along the value chain

The main lever to reduce GHG emissions is our own production. In addition, compared with conventional alternatives, many of our Next Generation Solutions make a further contribution at the application stage.

New climate targets 2021 – 2030 due to our commitment to SBTi

We joined SBTi in the reporting period. SBTi is a partnership of CDP, the United Nations Global Compact, the World Resources Institute, and the World Wide Fund for Nature. It defines and encourages best practices for science-based target-setting and independently evaluates targets set by companies from this perspective. It has now become an internationally accepted standard.

We are committed to the SBTi target “well below 2 °C” and to reducing our absolute scope 1 and 2 emissions by 25 percent between 2021 and 2030. In the same period, we aim to reduce scope 3 emissions in all upstream categories and the downstream category “transport and distribution” by 11 percent. In this way, Evonik actively supports the Paris Agreement on Climate Change.

Our commitment to SBTi: ambitious new scope 1& 2 targets

Here is a summary of our previous and new climate-related targets:

Previous target for Scope 1 and Scope 2 (valid until the end of 2021):
This comprised an absolute reduction in our Scope 1 and Scope 2 emissions of 50 percent by 2025 based on 2008 - the first full year after Evonik was established (status 2021: - 43 percent).

New target for Scope 1 and Scope 2:
We aim to reduce our Scope 1 and Scope 2 emissions by 25 percent in the period 2021 - 2030. This is in line with the "well below 2°C" target of SBTi (status 2022: - 6 percent).

Scope 3 target to date (valid until end of 2021):
Scope 3 emissions from the upstream value chain - essentially from the "raw material backpack" - should decrease by 15 percent relative to the base year 2020.

New target for Scope 3:
We aim to reduce our Scope 3 emissions from all upstream categories and the downstream category "transport and distribution" by 11 percent by 2030 compared with the base year 2021 (status 2022: - 7 percent).

To achieve our ambitious Scope 1 and Scope 2 targets, we envisage a wide range of measures. These include the phase-out of coal-fired power at the Marl site, the global further development of production processes and infrastructure (Next Generation Technologies), and the switch to renewable energies.

Our roadmap for 2030 (scope 1 & 2)

In the first half of 2022, the EAGER project identified the potential to reduce GHG emissions at our sites. A cross-functional team identified the scope to reduce CO₂eq (scope 1 and 2 emissions) at the top 20 sites around the world by around 1 million metric tons (including the related costs of emissions avoidance), in accordance with the “well below 2 °C” target. The top 20 sites account for 80 percent of Evonik’s GHG emissions1. In the period to 2030, we plan to invest €700 million in Next Generation Technologies, in other words, in the ongoing development of production produces and infrastructure to reduce GHG emissions. We are continuously developing our GHG reduction path in consultation with the business lines and multi-user sites and have started to implement the first measures.

In view of the geopolitical situation, we could not decommission the coal-fired power plant in Marl (Germany) as planned in 2022. Due to the consequences of Russia’s invasion of Ukraine, we are required use to retain the capacity for the time being in order to safeguard general reliability of supply. Following modification of the statutory framework, Evonik hired the necessary personnel, invested in technical maintenance, and procured coal on the global market. The supply of electricity, heat, and steam to the site is therefore safeguarded beyond 2022. We nevertheless assume that we will be able to achieve our scope 1 and 2 emissions reduction target for the period between 2021 and 2030.

Measures to reduce scope 3 emissions between 2021 and 2030

Reducing scope 3 emissions is challenging for the entire value chain because these emissions are outside their direct sphere of influence and are affected by many external factors. That necessitates intensive cooperation with partners along the value chain.

We aim to reduce our scope 3 emissions in all upstream categories and in the category “Downstream transport and distribution” by 11 percent by 2030. Therefore, we are analyzing which raw materials and suppliers offer us the greatest potential for reduction. The starting point comprises secondary data from databases but also, increasingly, primary data. To increase the proportion of primary data, we contact our key suppliers once a year. In this context, we discuss, among other things, the main ways we can leverage emissions reduction with our suppliers. That may be renewable energies, improved processes, or alternative raw materials. Taking the overview of all factors, we then discuss specific targets with our suppliers. In 2022, Evonik signed a letter of intent on a strategic alliance with Pörner Group (Austria) and Phichit Bio Power Co. Ltd. (Thailand) to offer the global tire industry the first bio-based silicas made from rice husk ash. By using this by-product, we can reduce the carbon footprint of the natural raw material sodium silicate by 30 percent and support our customers’ focus on reducing carbon emissions and circularity.

The short-term availability of low-carbon raw materials is limited. Therefore, we use detailed mid- and long-term scenario analyses for the alignment of our procurement strategies. Green hydrogen is expected to drive the energy transition in the area of raw materials. That opens up opportunities for the production of green ammonia and green methanol. In the methanol process, CO₂ removal is possible, so the product would have a negative carbon footprint. Evonik is monitoring these developments and is in close contact with potential suppliers. Since ammonia can be used as a transport medium for hydrogen and as a substitute for marine diesel, we assume that the development here will be faster than for other raw materials.

A first step towards reducing our scope 3 emissions is the use of green C4 crack, which is produced from green naphtha in Marl (Germany). There are signs of a significant increase in volumes, especially of biomethanol, which is used to produce MTBE. In addition, initial amounts of green acetone are being used to produce sustainable isophorone products. We have also extended certification under the mass balance standard of the Roundtable on Sustainable Palm Oil. For the first time, we are able to report process improvements on the supplier side as a scope 3 measure thanks to the improved data transparency resulting from various supplier commitments.

Outlook and measures 2030 – 2050

On our climate journey, we are currently focusing on reducing our scope 1 and 2 emissions. In the period to 2030, this will be leveraged principally by exiting coal-fired power generation, switching to green electricity, and increasing process and energy efficiency at our sites, especially by applying best practices. Our efforts will be supported by digital process technologies and the establishment of a sustainability data management system.

Looking beyond 2030, we see broadening our technology and raw material portfolios as the key drivers of our transformation. We anticipate that the availability of alternative raw materials will improve significantly and drive forward circularity. From 2035, we expect new technologies to reach maturity, one example being the widespread availability of green hydrogen. In the following years, we expect to see the breakthrough of processes such as carbon capture and storage (CCS) and carbon capture and utilization (CCU). Together with partners, we are engaged in research in this field to improve our understanding of the interaction of such technologies with our portfolio of specialty chemicals under market conditions. For example, we have gained knowledge from the first projects on CCU in connection with the production of ammonia. We are following these projects and are in close contact with the relevant suppliers.

Greenhouse gas emissions

GHG emissions decreased by 6 percent to 5.9 million metric tons CO₂eq in the reporting period. The principal reasons for this, apart from specific energy-saving measures, were a demand-driven reduction of 8 percent in production and the commissioning of the new gas and steam turbine power plant in Marl (Germany). External input of electricity from renewable resources purchased, for example, by the Active Oxygens business unit, remained at the prior-year level. Globally, these purchasing activities reduced our scope 2 emissions by around 250,000 metric tons CO₂ in the reporting period.

In 2022, Evonik had 24 (2021: 23) facilities that fell within the scope of the EU Emissions Trading System (EU ETS). Our new gas and steam turbine power plant in Marl (Germany) came into service in the reporting period. We have therefore completed the renewal of our energy infrastructure at this site. Overall, Evonik’s emissions from the EU ETS facilities totaled 3.0 million metric tons CO₂ in 2022 (2021: 3.2 million metric tons CO₂).

Evonik Carbon Footprint

We pay special attention to greenhouse gas emissions along the value chain. Since 2008, we have reported an extensive overview of greenhouse gas emissions—from the extraction of raw materials through production to the disposal of the products. The key parameter is the carbon footprint (CO₂eq footprint). The data cover Evonik’s direct energy and process emissions (scope 1), emissions from purchased electricity and heat (scope 2), and relevant up- and downstream emissions (scope 3). These include emissions from the production of purchased raw materials, services, and capital goods, energy-related emissions not included in scope 1 and scope 2, emissions from inbound and outbound shipments, from the disposal of waste, emissions caused by business trips and employee commuting, energy requirements for administrative buildings, and emissions from the use, disposal, and recycling of sold products. The method is closely based on the GHG Protocol Standard of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), as well as the Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain published by the WBCSD.

Until the 2021 report, the published GHG inventory included CO₂ removals (due to biological carbon sequestration by biomass at the beginning of the life cycle) and biogenic CO₂ emissions due to the use of biomass that was relevant to Evonik. To meet the requirements of the GHG Protocol Standard, these are no longer included in the inventory from 2022 onwards; instead, they are disclosed separately. We have adjusted the data for 2021 accordingly.

In 2022, greenhouse gas emissions decreased to 27.6 million metric tons CO₂eq, compared with 29.7 million metric tons CO₂eq in 2021. This was mainly due to a cyclical reduction in business activities, which was reflected in lower procurement, production, and sales volumes. Shifts between business units were another factor. As well as measures to reduce emissions, the changes in the emissions data for individual scope 3 categories were due to the integration of more specific emissions factors, among other things, as a consequence of the successful increase in the proportion of primary data used.

Other emissions into the air

Alongside emissions of greenhouse gases as reported above, energy generation and industrial production result in further emissions into the air. We want to reduce these further and therefore take the emissions situation into account when planning new facilities. Our clean air measures include returning exhaust gases to the production process, thermal processing of residual gases with a high calorific value (as substitutes for natural gas), the use of electric filters to remove particulates, the use of catalysts to reduce nitrogen oxide, and desulfurization by washing with subsequent precipitation. We also use other methods to reduce emissions from production facilities. Examples are wet and dry scrubbing, condensation, adsorption, and thermal and catalytic incineration. Some of these emissions treatment facilities are used simultaneously by several units.

Green energy

Strategy and management

Green energy is one of Evonik’s three most important material topics. In the reporting period, we made good progress with the strategic transformation of Evonik in this area. More and more of our sites source energy from renewable resources. Worldwide, we are working closely with the various business lines, sites, and specialists in the Technology and Infrastructure division to increase the proportion of total energy sourced by Evonik that comes from certified sustainable energy sources (green energy). In the reporting period, more than 15 percent of the electricity used in the Evonik Group came from renewable sources. More than 30 sites in Europe, Asia, and North and South America currently source or generate sustainable energy is sourced or generated sustainable energy. That avoids around 250,000 metric tons of CO₂ a year. Our energy management system, which we are extending to create an integrated digital solution, increases our energy efficiency and, at the same time, helps us further optimize the efficient use of resources.

Significant increase in the proportion of green energy

From 2026, our European sites will be far less dependent on fossil fuels. In November 2022, we signed a long-term power purchase agreement (PPA) with the utility company EnBW for the 900 megawatt (MW) He Dreiht offshore wind farm. On the basis of this PPA, Evonik will source output of 100 MW from this new wind farm in the German North Sea over a period of 15 years. A second PPA was signed in December 2022 to increase this by a further 50 MW. Consequently, renewable energy sources will cover more than one-third of our electricity requirements in Europe from 2026. Evonik will compensate for fluctuations in the wind energy feed-in through its own balance group management. This shows that we have a keen eye on the reliability of supply, can avoid potential bottlenecks, and safeguard the long-term operation of our production facilities.

In 2022, we concluded PPAs for the supply of electricity from wind farms and photovoltaic installations to five Chinese sites. For example, since May 2022, our Health Care business line at the site in Nanning has been supplied with green electricity from wind power instead of coal-fired plants. Additional energy and recycling activities at the site have brought a further appreciable reduction in CO₂ emissions.

Worldwide, 23 percent of electricity purchased by Evonik from external suppliers already comes from renewable sources. The PPAs with EnBW in Germany increase this substantially to around 50 percent. At the same time, this cooperation reduces scope 2 emissions (purchased power) by 150,000 metric tons CO₂ a year. Our goal is to reduce scope 1 and 2 emissions from 6.3 million metric tons to 4.7 million metric tons between 2021 and 2030. About one-third of this reduction should be achieved by using renewable energies.

In addition to green electricity, biomethane is becoming increasingly important for Evonik as a substitute for fossil-based natural gas. At our site in Schörfling am Attersee (Austria), we increased the proportion of biomethane from 25 percent to 100 percent in the reporting period. Similarly, the High Performance Polymers business line has used biomethane in the production of some of its products in Germany since 2021.

Beyond its own power supply interests, Evonik markets a range of products and solutions that enable the increased use of renewable energy and makes it more efficient. For instance, our crosslinkers are used in robust and durable rotor blades. Silicas and silanes strengthen the bonding of glass fibers and resin. Structural foams from Evonik help bring about a further optimization of the weight and design of future installations. Coating additives and polyurethane foam components protect rotor blades, which rotate at speeds of up to 400 kilometers an hour through rain, salt particles, and hail. Synthetic base oils lubricate the gears and protect them from wear and corrosion.

Energy management systems and measures to increase energy efficiency

Evonik aims to reduce both absolute and specific energy consumption by 5 percent by 2025 (baseline year: 2020). That is helped by new technologies and efficient processes such as digitally controlled energy systems. In this way, our digital energy management system (EnMS) supports the achievement of operational energy targets at our sites. In 2021, successful energy efficiency activities led to a reduction of more than 218 GWh in energy consumption, as well as reducing emissions by around 42,000 metric tons CO₂.

The ISO 50001-validated energy management system was used at 48 sites in the reporting period. As a result, more than 80 percent of our global energy consumption is subject to continuous improvement via a certified EnMS. In 2022, we successfully certified further sites in Europe and Asia-Pacific. ISO 50001 certification is planned for a further 20 sites in the coming years.

Through the targeted rollout of energy efficiency measures, we reduced specific energy consumption at all sites that use the energy management system by an average of 3.8 percent a year between 2019 and 2021.

Energy data

In our energy reporting, we distinguish between primary energy inputs, generally fossil fuels used to generate electricity and steam, and secondary energy inputs. These mainly comprise purchased electricity and steam. We also use substitute fuels such as thermal processing of by-products, waste, and sewage sludge.

At present, natural gas and coal are Evonik’s main fuels. Looking beyond the current energy shortage caused by Russia’s invasion of Ukraine, Evonik’s goal following the commissioning of the new gas and steam turbine power plants in Marl (Germany) is to completely exit coal-fired power generation worldwide. In addition to natural gas-fired generation of electricity and steam for captive use, large amounts of process heat from exothermic reactions, for example, from the production of acrolein, are used in integrated heating systems.

Evonik’s energy data 2022^a,b

The reduction in the volume of coal used in 2022 was due to the start-up of the new gas and steam turbine power plants in Marl (Germany). Since then, heating oil has played an insignificant role in the energy mix. It is only used for auxiliary firing systems in the coal-fired power plant I in Marl. Moreover, insignificant amounts are required for emergency generators at some sites.

The decrease in the use of substitute fuels was due to the drop in production and, among other things, to the renewal of the energy infrastructure in Marl. The electricity and steam data were virtually unchanged. The change in absolute and specific net energy input versus 2020 mainly reflects the trend in production.

Water management

Strategy and management

We save water wherever possible and endeavor to achieve a further reduction in our emissions. In the reporting period, we set a new target for water: Between 2021 and 2030, we aim to reduce specific freshwater withdrawal relative to production volume by 3 percent. This is to be achieved by a wide range of measures at our production sites. The measures were identified in the EAGER project. At the same time, we are continuing our work on established water management topics and monitoring our sites in water stress areas.

Adequate availability of water for cooling and production processes plays a key role in our production activities. We therefore regularly analyze the short-, medium-, and long-term availability of water at our sites. The focus is on the next ten to twenty years. We pay special attention to water scarcity and water stress, which is defined as the ratio of the amount of water available in a specific area to general demand for water. If this indicator points to mid- or long-term water scarcity, the site is potentially exposed to water stress. In such cases, Evonik takes steps to reduce water requirements and safeguard production. We draw up a catalog of all relevant measures and evaluate them from technical and economic perspectives. Our global water management takes into account quantitative, qualitative, and social aspects of water use. We also consider our neighbors’ claims. We take the AWARE method recommended by the EU Commission as our guide. This uses the categories extreme—high—medium—moderate.

Our water stress analysis is supplemented by a risk analysis covering the potential impact of natural catastrophes such as storms, hail, floods, hurricanes, tornadoes, and heavy rainfall. Moreover, our sites are regularly audited by insurance companies.

Water data

Total water intake was 446 million m³ in the reporting period, while discharges amounted to 439 million m³. The difference of 7 million m³ between water intake and discharge mainly comprises water used to replace evaporation losses. Around 98 percent (1,810 million m³) of our total water intake (including water consumption) was for cooling purposes in energy generation and production. Only around 2 percent (45 million m³) was used for production processes. We include water used in closed cooling circuits and evaporation losses when calculating the proportion of total water used for cooling.

Evonik's water data 2022

Evonik’s consumption of freshwater—the total of recycled water, drinking water, groundwater, and surface water—declined slightly from 255.9 million m³ to 249.8 million m³ in the reporting period. Freshwater is mainly used for cooling. The amount required therefore depends on capacity utilization in production and the temperature. That is also the reason why specific freshwater consumption increased by 6 percent in 2022, although production declined.

Emissions into water

Our sites aim to make a contribution to protecting natural water resources. When planning new production plants, we therefore consider the use of processes that generate little or no wastewater. Where contaminated water from production processes (production effluent) is unavoidable, partial streams are tested, for example, for biodegradability. We have high technology standards and infrastructure for the disposal of wastewater at our sites. In some cases, production effluent is pretreated in the production plants. Consequently, the effluent load of wastewater discharged into our own or third-party treatment facilities is moderate.

Waste management

Strategy and management

Our efforts to further reduce production waste are aligned with a clear principle. The first priority is to avoid waste through continuous process improvements and by extending integrated production systems, otherwise waste should be recycled or used to generate energy. As a third option, if this is not possible, it should be disposed of safely. In the reporting period, Evonik set a new target for waste: Between 2021 and 2030, the target is to reduce specific production waste relative production volume by 10 percent. This is to be achieved through a wide range of measures at our production sites. These measures were identified in the EAGER project. In addition, we will be continuing our work on a waste management system. The main focus here is on circular waste streams.

Continuous optimization of production processes contributes to avoiding and minimizing waste. That includes in-plant reprocessing of substance streams and the use of highly specialized catalysts to minimize side reactions. Where waste is unavoidable, the focus is on mechanical or thermal reprocessing. For this, we have set up collecting stations at our sites. Various types of recyclable waste such as glass, paper, and wood are collected separately and sent to external recycling firms. We regularly monitor them through audits and demonstrate their suitability in conformance with statutory provisions.

Biodiversity

Strategy and management

Biodiversity is one of Evonik’s 15 material topics. It is also plays a role in SDG 12, which is of relevance for the Evonik Group. We are aware that our business operations involve both opportunities and risks with regard to biodiversity. These include the loss or protection of biodiversity on land and in the oceans, including microbial organisms. It is important to avoid supply chain disruption and production stoppages caused by reduced biodiversity and damaged ecosystems. The starting points for our examination of biodiversity are conventional environmental topics such as emissions into water and the air and responsible water and waste management, which we report on regularly.

The following aspects of biodiversity are addressed in the sustainability analysis of our business: water, eutrophication, acidification, land use, use of renewable raw materials, emissions of critical and persistent chemicals, and microplastics.

Our contributions to maintaining diversity are bundled in our Sustainability Focus Area to safeguard ecosystems. Within this Sustainability Focus Area, we examine both water withdrawal for production and water consumption over the entire life cycle of our products, including raw materials and the usage phase. A life cycle assessment of our entire water consumption in the reporting period confirmed that the main leverage for our water consumption is in the upstream value chain: More than 70 percent of our water consumption is attributable to our procurement of both fossil-based and bio-based raw materials.

As part of a strategic project in the reporting period, we gained a deeper insight into our stakeholders’ biodiversity requirements by conducting interviews, for example, with NGOs and investors. In the future, we intend to look more closely at both the impact of our activities on biodiversity and our dependence on what nature provides. Furthermore, we keep a close eye on the activities of biodiversity initiatives such as the Task Force on Nature-related Financial Disclosure (TNFD).

Evonik’s products and solutions

Declining biodiversity has a negative effect on Evonik’s business activities. At the same time, our business activities can have a negative effect on biodiversity. Evonik’s products and solutions also play a part in maintaining biodiversity and help protect habitats. For example, the use of amino acids in the nutrition of poultry and pigs greatly reduces the land required to produce feed. The use of our amino acids in aquaculture aims to maintain marine biodiversity by replacing the use of fishmeal and fish oil. For salmon farming, Evonik and DSM have jointly developed an innovative process for the biotechnological production of omega-3 fatty acids from natural algae. This can avoid the use of fish oil, which is a limited resource. The joint venture Veramaris has a world-scale production facility in Blair (Nebraska, USA). Veramaris therefore helps meet demand from the global salmon farming industry for the omega-3 fatty acids EPA and DHA. Evonik produces special marine coatings such as silicone hybrid resin and silicon dioxide to protect ships from fouling by marine organisms and thus reduce the spread of non-native species in our oceans. In the selection of raw materials, we apply internationally recommended certification standards for palm oil and plan to use exclusively deforestation-free palm derivatives. In 2022, Evonik once again participated in CDP Forest and was awarded a B rating.

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