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1 Corporate Einzeilige Carbon Headline Footprint Subline unter einzeiliger Headline

2 Content Corporate Carbon Footprint of Evonik Industries, Specialty Chemicals Core Business 1 Summary and outlook Methodology Organizational boundaries Operational boundaries Results Greenhouse gas emission reductions from the use of products by Evonik 1 Summary Methodology Greenhouse gas emission reductions from green tire technology Greenhouse gas emission reductions from amino acids in animal feed Greenhouse gas emission reductions from optimized insulation Greenhouse gas emission reductions from compact fluorescent lamps (CFLs) Greenhouse gas emission reductions from optimized hydraulic oils Results Appendix Independent Assurance Report

3 Corporate Carbon Footprint of Evonik Industries, Specialty Chemicals Core Business 1 Summary and outlook Protecting the climate and the environment represents a major global challenge. Evonik Industries (hereinafter Evonik ) considers protecting the climate and the environment a key element of its corporate responsibility. The company has therefore been compiling data, not only on direct greenhouse gas emissions in its specialty chemicals core business, but also on indirect greenhouse gas emissions for select relevant categories since 2008 (see Figure 1). Allocating emissions to their various sources along the supply chain is of particular importance. This has resulted in a greenhouse gas balance for the different life cycle phases of products by Evonik, covering the entire range from raw material extraction to and ultimate disposal. The methodology of the report is guided by the Greenhouse Gas (GHG) Protocol Corporate Standard ( GHG Protocol ) of the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD). 1 This standard for Scope 3 reporting by the chemical industry is further detailed in the Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain 2 published by WBCSD Chemicals in January 2013 (hereinafter WBCSD Scope 3 Guidance ), in which Evonik took an active part. Unless otherwise specified, the procedural instructions defined in the WBCSD Scope 3 Guidance document were taken into account for the compilation of greenhouse gas emissions. The most relevant indicator is the so-called carbon footprint or CO 2 eq footprint, which reflects the volume of greenhouse gas emissions (CO 2 equivalents, meaning CO 2 and other greenhouse gases defined in the GHG Protocol) for a company, a process, or an individual product. This balance report exclusively covers the greenhouse gas emissions of the specialty chemicals core business of Evonik. Other potential environmental impacts, including impacts on health and safety, are not subject to this analysis and are discussed in other publications of Evonik (e.g., CR Report, environmental declarations of individual sites). The greenhouse gas emissions development of the specialty chemicals core business, not including the use phase of products by Evonik, is shown in Table 1. Table 1: Development of greenhouse gas emissions along the supply chain of Evonik Industries, core business specialty chemicals (not including use phase and Carbon Black unit divested in 2011) CO 2 eq emissions in million metric tons 20,2 23,5 22,9 22,2 23,4 1 World Resources Institute, World Business Council for Sustainable Development: The Greenhouse Gas Protocol. A Corporate Accounting and Reporting Standard (Revised Edition 2004), Required Greenhouse Gases in Inventories, Accounting and Reporting Standard Amendment (2013), Corporate Value Chain (Scope 3) Accounting and Reporting Standard, Supplement to the GHG Protocol Corporate Accounting and Reporting Standard (2011) 2 World Business Council for Sustainable Development: Guidance for Accounting & Reporting Corporate GHG Emissions in the Chemical Sector Value Chain (2013, s. 3 Compared to the data provided for 2009 to 2012 (see Table 4), the audit parameters for 2013 include two additionally reported Scope-3 categories. 3

4 Table 2 shows the greenhouse gas emissions of Evonik along the supply chain by category for the year Greenhouse gas emissions from (gross) purchased energy totaled 2.9 million metric tons CO 2 eq; the calculation of the greenhouse gas emission balance used a balanced energy purchase figure (net, as purchase of electricity and steam less sales of electricity and steam to third parties) in the amount of 0.9 million metric tons CO 2 eq. Table 2: Greenhouse gas emissions along the supply chain of Evonik Industries, core business specialty chemicals (not including use phase and Carbon Black unit divested in 2011) Scope Category Greenhouse gas emissions in 2013 [million metric tons CO 2 eq] Scope 1 Evonik facilities 5,9 Scope 2 Purchased energy (net, balance of purchased electricity and steam less sales of electricity and steam to third parties) 0,9 Category 1: Purchased goods and services (chemical raw only) 8,3 Category 3: Energy-related activities (outside of Scope 1 & 2) 0,6 Category 4: Transports (inbound) 0,3 Category 5: Waste 0,5 Category 6: Business travel 0,04 Category 7: Employee commuting 0,1 Category 8: Leased assets (upstream) (company vehicles and air-conditioning of administrative buildings) 0,02 Category 9: Transports (outbound) 0,4 Scope 3 Category 12: Disposal of products sold 6,3 Total 23,4 4

5 The increase of greenhouse gas emissions in 2013 compared to the previous year is mainly attributable to the additional reporting categories for the disposal of waste and for energy-related emissions outside of Scope 1 & 2 ( burden for providing solid, liquid, and gaseous energy sources), which were not reported in previous years. The reduction of greenhouse gas emissions from purchasing chemical raw is primarily caused by the periodic annual adjustment of emission factors for the provision of raw. Evonik receives these emission factors from PE International AG 4. The increase of CO 2 eq emissions in the category Disposal of products sold has to do with methodology changes of greenhouse gas emission reporting in accordance with the new WBCSD Scope 3 Guidance. The same document specifies that Category 10, Downstream processing of products sold is not to be included in the balance. Due to the large number of products sold by Evonik, Category 11, Use of products sold is only balanced in select cases (see Section Greenhouse gas emission reductions from the use of products by Evonik ); in case of utilization by direct combustion (e.g. with fuel additives), the emissions are considered in Category 12, Disposal of products sold. Evonik was recognized for its transparent and detailed climate reporting by the not-for-profit organization CDP with a score of 81/D points when the company participated in the Carbon Disclosure Project (CDP) for the first time in The Group was able to again significantly improve its CDP scoring in 2013 with structural measures, such as implementing climate responsibility at the Executive Board level. With a score of 92/B points, Evonik is now among the top ten percent of all participating companies from Germany, Austria and Switzerland for this mid-sized business initiative. Current developments in climate reporting increasingly emphasize the evaluation of entire supply chains in the examination of climate-relevant effects. CDP established a separate Supply Chain Project for this purpose. It gives companies a tool to ask vendors about their own greenhouse gas emissions in a format standardized by CDP. The resulting feedback provides the inquiring company with important information about potential improvement 4 PE International AG, Hauptstraße , Leinfelden-Echterdingen, Germany, 5

6 as well as opportunities and risks in their supply chain. Evonik has also received requests for support from its own customers. CDP honored Evonik as the best participating German company in 2013 in the Supply Chain Project Participants category. Evonik plans to submit the figures compiled for this report to the Investor CDP for Furthermore, Evonik managed to reach its long-term environmental goals two years ahead of schedule. Specific energy-related greenhouse gas emissions, specific water consumption, and specific product waste volume was reduced by 20 percent or more in the chemicals business of Evonik 5. Evonik s new environmental goals can be found in the latest Corporate Responsibility Report The Group s internal Life Cycle Management (LCM) team is responsible for the compilation of greenhouse gas emission data. It uses a variety of tools such as eco-balances to quantify sustainability and to establish the concept in business and decision-making processes. The LCM team is allocated to the Process Technology & Engineering Service Unit and the strategic innovation unit, Creavis. 5 See Seeing. Linking. Creating. Corporate Responsibility Report 2012 ( DownloadCenterFileHandler.ashx?siteId=bbb7c219-72ac-4866-b79e-9397dc4d070b&fileid=538) 6 See Here we are! Corporate Responsibility Report 2013 ( DownloadCenterFileHandler.ashx?siteId=bbb7c219-72ac-4866-b79e-9397dc4d070b&fileid=1647) 6

7 2 Methodology The GHG Protocol provides the methodological framework for calculating the Corporate Carbon Footprint of Evonik (in the specialty chemicals core business). It contains a guideline for quantifying and reporting of greenhouse gases. Greenhouse gases are converted with the help of specified CO 2 equivalence factors 7 and then summarized as CO 2 equivalents (CO 2 eq). The WBCSD Scope 3 Guidance published in January 2013 describes standard procedures for implementing the requirements of the GHG Protocol in Scope 3 reporting of the chemical industry. 2.1 Organizational boundaries The Corporate Carbon Footprint of Evonik was calculated in accordance with the full consolidation approach for the core business specialty chemicals, which was chosen to match the financial and environmental reporting of Evonik. Evonik is aware of the fact that this approach can lead to double-counting of greenhouse gas emissions in cases where two or more companies holding shares of the same legal entity report their emissions. Discontinued activities were not reported. 7 Intergovernmental Panel on Climate Change (IPCC): Fourth Assessment Report (AR4): Climate Change 2007 The Physical Science Basis, Chapter 2, Table

8 2.2 Operational boundaries The Corporate Carbon Footprint of Evonik is calculated based on the principles of the GHG Protocol, following the scope concept of operational boundaries 8 (Fig. 1). Scope 1 covers the direct emissions of Evonik, while the indirect emissions from purchased electricity and heat for company use are combined in Scope 2 and those from other emission sources, in Scope 3. Evonik reports Scope 1 emissions from processes as well as the Scope 2 emissions, along with over one hundred other environmentally relevant reporting items through its Sustainability Reporting (SuRe) system, which brings together all required information associated with Environment, Safety, Health, and Quality (ESHQ) reporting, both for authority use and with regard to sustainability. Evonik s Scope 3 data include emissions from the following activities: Category 1: Production of chemical raw Category 3: Production of energy raw Category 4: Inbound raw material transports Category 5: Disposal and recycling of Evonik waste Category 6: Employee business travel Category 7: Employee commuting to work Category 8: Leased goods, upstream (company vehicles, electricity and heating needs of office buildings) Category 9: Product transport to Evonik customers Category 12: Disposal and recycling of Evonik products According to the specifications of WBCSD Scope 3 Guidance, Category 10, Downstream processing of products sold is not included in the balance. Due to the large number of products sold by Evonik, Category 11, Use of products sold is only balanced in select cases (see Section Greenhouse gas emission reductions from the use of products by Evonik ); in case of utilization by direct combustion (e.g. with fuel additives), the emissions are considered in Category 12, Disposal of products sold. The following specific calculation approaches, based in part on estimates and assumptions, were used to determine greenhouse gas emissions within the different scopes: Category 1: CO 2 eq burden of chemical raw In accordance with the WBCSD Scope 3 Guidance, this category calculates the emissions from extraction, and transports of chemical raw (except the transports to Evonik reported in Category 4). The following procedure was used: The calculation of the CO 2 eq burden is based on a list of all chemical raw provided by Evonik Procurement. The individual raw of this list were totaled in categories. Because of the multitude of raw CO 2 CH 4 N 2 O SF 6 HFCs PFCs NF 3 Scope 2 Scope 3 Scope 1 Scope 3 Purchased electricity and heat Purchased raw Transports Energy-related activities Disposal/recycling of waste Employee commuting Business travel Leased goods, upstream Energy and process emissions Disposal/recycling of products sold Transports of products sold Upstream activities Evonik Downstream activities Figure 1: Overview of captured scopes and emissions along the supply chain 8 See GHG Protocol ( for further details on the definition of principles and scopes 8

9 used by Evonik, these raw material categories and not the raw themselves served as the basis for evaluating the CO 2 eq burden. This included the 100 most frequently purchased raw material categories by volume. An extrapolation of greenhouse gas emissions was performed on the basis of raw material volumes. The 100 raw material categories considered represent a significantly higher coverage than the 80% mandated by the WBCSD Scope 3 Guidance. PE International AG then identified the current emission factors of the GaBi 6 database (2013 version) that could be used to calculate the CO 2 eq burden with consideration for purchased volumes. In cases where emission factors of specific substances were unknown, PE International AG estimated an emission factor based on similar products or applied an appropriate mean emission factor. The relevance of the calculation approach based on purchased tonnage was confirmed in An alternative calculation using the specific cost of raw did not prove effective. Emissions from the of technical goods and packaging are not reported for the year 2013; we are currently developing a method for future reporting. Category 3: Energy-related activities (outside of Scope 1 & 2) Category 3 reports emissions from producing solid, liquid, and gaseous energy sources that are used in the power plants operated by Evonik. These are not taken into account in Scopes 1 & 2. The calculation is based on the produced energy volumes recorded in the SuRe system. The determination of greenhouse gas emissions for the of solid, liquid, and gaseous energy sources relied on emission factors from the GaBi 6 database (2013 version). Category 4: Inbound transports of chemical raw Since Evonik does not have exact information about transport distances and shipping means for inbound raw, a mean emission factor per metric ton of transported product was calculated to determine the emissions of inbound goods transports on the basis of data for outbound transports. It assumes a mean distribution of different means of transport and distances of outbound Evonik product transports. The use of this mean emission factor is based on the assumption that the averaged transport means and distances are applicable to both inbound and outbound transports of Evonik. The emission factors for the various transport methods came from the European Chemical Industry Council (CEFIC) 9. Since these emission factors do not include the provision of fuels, an additional share was included. Transport emissions were determined for the extrapolated raw material volumes (see Category 1). Category 5: Emissions from waste disposal The emissions from waste disposal were calculated on the basis of the SuRe system data on the volumes per disposal type. Emission factors for the specific disposal types were selected analog to the end-of-life calculation in Category 12. The WBCSD Scope 3 Guidance specifies that waste used for internal energy is to be balanced in Scope 1. For example, the Marl site uses energy from its special waste incineration plant. Since the data does not permit a separation of waste processed internally and externally, all emissions were balanced in Category 5 in deviation from the WBCSD Scope 3 Guidance. Category 6: Calculation of emissions caused by business travel The CO 2 eq emissions caused by business travel were calculated on the basis of data about travelling distances provided by Evonik Travel Management, using the corresponding emission factors for all means of transport. The calculation of greenhouse gas emissions was performed for Germany and was extrapolated based on the global number of employees. Category 7: Calculation of emissions caused by commuting Emissions caused by employee commuting were calculated conservatively in accordance with the assumptions from the WBCSD Scope 3 Guidance. All Evonik employees use a private vehicle to commute a specified distance of 30 km one way (60 km round-trip per day) on 220 workdays. The emission factor per person-kilometer was based on the data of DEFRA 10 in accordance with the WBCSD Scope 3 Guidance. Category 8: Calculation of emissions caused by company cars (w/o utility vehicles) The CO 2 eq emissions of Evonik company cars were calculated using data about the average kilometers travelled, the total number of company cars, manufacturer data on CO 2 eq emissions (with 25% added) and additional allowances for car manufacturing and the provision of fuel. Again, this calculation was performed for Germany and was extrapolated based on the global number of employees. Category 8: Calculation of emissions from electricity and heating needs of administrative buildings CO 2 eq emissions from electricity and heating needs of administrative buildings are already included in the SuRe system and accordingly, in Scope 1 and Scope 2 emissions for facilities that 9 McKinnon, Prof. Alan; Piecyk, Dr. Maja: Measuring and Managing CO2 Emissions of European Chemical Transport, Logistics Research Centre, Heriot-Watt University, EDINBURGH, UK, 2011Germany, Copyright TM, Stuttgart, Echterdingen Department for Environment, Food and Rural Affairs, guidelines-ghg-conversion-factors.pdf 9

10 are subject to regulatory CO 2 eq reporting requirements. At purely administrative sites, greenhouse gas emissions were determined based on the extrapolation of data collected at several relevant sites. Using the employee numbers of the administrative sites allowed for calculating all CO 2 eq emissions of this category. Category 9: Outbound transports of chemical products CO 2 eq emissions of outbound chemical product transports were calculated with CEFIC emission factors as recommended by the WBCSD Scope 3 Guidance. The calculations were based on total outbound volumes, average transport distances, and the selected means of transport. Category 12: End-of-life emissions of products after use The emissions caused by the disposal of products by Evonik were calculated with the steps outlined below. Since Evonik does not always know the final application of its products particularly in case of intermediates, end-of-life emissions were not calculated for the applications per se, but only for their share of products by Evonik. That means end-of-life emissions were calculated only for the product volume sold by Evonik, not for the applications produced from them with the help of third-party raw. CO 2 eq emissions were calculated based on emission factors for the following disposal methods: Recycling, Sanitary and open landfills, and Incineration with and without energy recovery. Continent-specific percentage averages were calculated for every disposal method, which were then applied to the relative shares of all products sold by Evonik in 2013 on each continent. CO 2 eq emissions for disposal were calculated on the basis of the sales volume of each product line and the corresponding emission factors. Additionally, specific calculations following the recommendations of the WBCSD Scope 3 Guidance were performed for numerous product lines in which products are clearly not disposed in conventional ways: For example, emissions from the incineration of products were determined with stoichiometric calculations and a separate analysis was applied to inert products. The above-described approach for calculating greenhouse gas emissions does not reflect infrastructure measures, such as the construction of facilities, machinery, roads, or IT equipment. 10

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12 3 Results The total CO 2 eq emissions of Evonik along the supply chain in 2013 amounted to 23.4 million metric tons of CO 2 eq (see Table 3). The highest share of the emissions came from the CO 2 eq burden of the chemical raw in Scope 3, followed by the end-of-life emissions of Scope 3 and direct emissions in Scope 1. Table 4 shows the development of the individual categories from 2009 to Compared to 2009, the rise in volume in 2010 after the global economic crisis has caused generally higher levels of CO 2 eq emissions. Evonik saw significant increases in demand in Asia and Europe, but also in North America. In 2011, the company achieved a slight reduction of CO 2 eq emissions along the supply chain in spite of consistently high consumer demand. Both raw material purchases and sales volumes dropped slightly in 2012 compared to This led to a drop in the greenhouse gas emissions caused by the of raw and product disposal. The increase of greenhouse gas emissions in 2013 compared to 2012 primarily results from the integration of additional Scope 3 categories in 2013 (Category 3: Energy-related activities, Category 5: Disposal of waste). Furthermore, a reduction of greenhouse gas emissions results from the procurement of raw. This development is primarily associated with the periodic update of the applied emission factors by PE International AG. In return, emissions from product disposal showed an increase. Again, this effect was caused by a change of the emission factors in accordance with the methodology specified by the WBCSD Scope 3 Guidance. Table 3: Development of greenhouse gas emissions along the supply chain of Evonik Industries, core business specialty chemicals (not including use phase and Carbon Black unit divested in 2011) CO 2 eq emissions in million metric tons 20,2 23,5 22,9 22,2 23,4 11 Compared to the data provided for 2009 to 2012 (see Table 4), the audit parameters for 2013 include two additionally reported Scope 3 categories. 12

13 5,9 0,9 0,7 0,6 0,5 0,2 23,4 25% 6,3 27% 8,3 35% Raw material (Scope 3) Product disposal (Scope 3) Direct emissions (Scope 1) Emissions from purchased energy (net, Scope 2) Transport of purchased raw / products sold (Scope 3) Energy-related activities outside of Scope 1&2 (Scope 3) Production waste (Scope 3) Other Scope 3 emissions Total Figure 2: Carbon Footprint of Evonik in 2013 [in mil. t CO 2 eq] Table 4: Development of greenhouse gas emissions in the individual categories along the supply chain of Evonik Industries, core business specialty chemicals (not including use phase and Carbon Black unit divested in 2011) in million metric tons CO 2 eq Direct emissions (Scope 1) 5,5 5,9 5,8 6,0 5,9 Indirect emissions from purchased energy (net, Scope 2) 0,4 1,0 1,1 1,0 0,9 Category 1: Production of purchased raw (Scope 3) 8,7 10,2 9,9 9,1 8,3 Category 3: Energy-related activities outside of Scope 1 and 2 (Scope 3) 0,6 Category 4: Transports of purchased raw (Scope 3) 0,1 0,1 0,1 0,2 0,3 Category 5: Disposal of waste (Scope 3) 0,5 Category 6: Business travel (Scope 3) 0,02 0,03 0,04 0,04 0,04 Category 7: Employee commuting (Scope 3) 0,1 0,1 0,1 0,1 0,1 Category 8: Leased goods, upstream (Scope 3) 0,01 0,01 0,01 0,01 0,02 Category 9: Transports of products sold (Scope 3) 0,4 0,5 0,5 0,5 0,4 Category 12: Disposal of products sold (Scope 3) 5,0 5,7 5,4 5,3 6,3 Total 20,2 23,5 22,9 22,2 23,4 13

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15 Greenhouse gas emission reductions from the use of products by Evonik 1 Summary Evonik offers numerous products that compared to conventional alternatives make a positive contribution to reducing greenhouse gas emissions in their applications. This section presents certain selected beacon products which, compared to their established alternatives, save the greenhouse gas emissions shown in Table 5. These reductions are caused by the applications of the following five products: green tire technology, amino acids in animal feed, foam stabilizers for insulation, specialty oxides in compact fluorescent lamps, and oil additives in hydraulic oils. Savings were generated over the life cycle of applications that are manufactured with the product volumes sold by Evonik in the specified year. Unless otherwise specified, the data was compiled using the methodology recommended for balancing avoided emissions in the guidance published by the World Business Council for Sustainable Development (WBCSD) in October 2013 (hereinafter WBCSD Avoided Emissions Guidance ). 12 The WBCSD Avoided Emissions Guidance was developed with the participation of numerous globally active chemical corporations and represents a first international, multi-company agreement on a method to record avoided greenhouse gas emissions of products and their applications. Evonik also was an active participant in the development of the WBCSD Avoided Emissions Guidance. The criteria for adding beacon products to the portfolio of emission-saving products of Evonik closely follow the criteria for selecting a reference product listed in the WBCSD Avoided Emissions Guidance. Both the emission-saving product and the reference product must be at the same level of the value chain, deliver the same function to the user, and be used in the same application. Additionally, the reference solution must be available on the market (at least 20% market share in reference to sales volume), be exchangeable for the typical customer in the selected market and be as consistent as possible with the solution of the reporting company in terms of data quality, methodology, and assumptions. The increase in greenhouse gas emission reductions from 2012 to 2013 is attributable to methodology changes in data recording as specified by the new WBCSD Avoided Emissions Guidance. The data for 2009 to 2012 are based on the mathematically determined Evonik shares in the total savings of the corresponding applications. However, the contribution of a single product to the total savings in the supply chain is usually difficult to quantify and may therefore be based on assumptions. For this reason, the WBCSD Avoided Emissions Guidance recommends reporting all savings of the application in its supply chain; the contribution of the individual product is described qualitatively, but is no longer quantified. Table 5 therefore reports the total savings of the applications selected for 2013, which use products by Evonik instead of the previous reporting of the Evonik share in savings. Had the previous method been continued, Table 5 would have shown 49.9 million metric tons of CO 2 eq instead of the 61.2 million metric tons CO 2 eq shown. These CO 2 eq savings cannot be compared directly to the Corporate Carbon Footprint of Evonik, since it refers to emissions associated the manufacture of products by Evonik (generally intermediates) (incl. both and supply chain emissions, without use phase). By contrast, reductions were calculated based on the life cycle emissions of selected applications of products by Evonik. The Group s internal Life Cycle Management (LCM) team is responsible for the compilation of greenhouse gas emission data. It uses a variety of tools such as eco-balances to quantify sustainability and to support business and decisionmaking processes. The LCM team is allocated to the Process Technology & Engineering Service Unit and the strategic innovation unit, Creavis. Table 5: Development of greenhouse gas savings over the life cycle of applications of the products by Evonik that were sold in the specified year CO 2 eq reductions in million metric tons 38,3 45,1 47,1 50,1 61,2 12 World Business Council for Sustainable Development: Addressing the Avoided Emissions Challenge: Guidelines from the chemical industry for accounting for and reporting greenhouse gas (GHG) emissions avoided along the value chain based on comparative studies, Data for 2013 reported in accordance with changed methodology, see 12 15

16 2 Methodology Life cycle emissions are typically calculated with Life Cycle Assessments (LCA) according to DIN ISO 14040ff. The WBCSD Avoided Emissions Guidance specifies that comparative LCAs should be used to calculate greenhouse gas emission reductions. However, since LCAs are time and resource-intensive, they are not generated for all products by Evonik. If no LCA is available for a beacon product application, the calculation of emissions and reductions is guided by the externally reviewed Carbon Footprint Estimation (CFE) method, primarily on the basis of emission factors from the LCA software GaBi 14 used by Evonik. The CFE model was developed as a method for evaluating early project and research ideas in terms of their greenhouse gas emissions as well as for calculating CO 2 eq emissions and reductions of products or processes without the need to perform detailed Life Cycle Assessments. The methodology of a CFE resembles that of an LCA with some simplifications. However, compared to a full LCA, CFE only focuses on the greenhouse emission effects of products and processes. More detailed information about the final CFE model can be found in the Evonik brochure Carbon Footprint Estimation A model for the evaluation of potential climate impacts of new product ideas in early project stages. The Simplified Calculation Methodology listed in the WBCSD Avoided Emissions Guidance was used both for the reduction calculation on the basis of comparative LCAs and for comparisons based on CFEs. This method specifies the removal of identical parts from the reference and the Evonik solution, since they have no influence on the calculation of the greenhouse gas emissions that were saved. To give an example, the calculation of avoided greenhouse gas emissions for the green tire technology did not balance the entire vehicle over its supply chain, but only refers to the actual tire tread that leads to the reduction. This approach has no impact on the absolute amount of the calculated greenhouse gas emission reduction. The section below introduces further details about the calculation method in the context of the presented reduction projects. Figure 3 shows an illustration of greenhouse gas emissions and reductions in the reference and Evonik solution based on the WBCSD Avoided Emissions Guidance. Greenhouse gas emissions of reference solution Raw material supplier Chemical company Material processor Assembler of parts Technology user Disposal company Greenhouse gas emissions of Evonik solution Raw material supplier Evonik Material processor Assembler of parts Technology user Disposal company Avoided emissions Figure 3: Illustration of CO 2 eq emissions and reductions in the reference and Evonik solution (source: based on the WBCSD Avoided Emissions Guidance, p. 6) 14 Ganzheitliche Bilanzierung (GaBi, versions 4-6) software system and databases for Life Cycle Engineering by PE International, Leinfelden-Echterdingen, Germany and LBP, Chair of Building Physics, University of Stuttgart, Germany 16

17 Greenhouse gas reductions are calculated in the following cases: Comparison of emissions over the full life cycles of applications with Evonik products with similar alternatives without the corresponding Evonik products Innovative product applications of Evonik are compared to reference applications currently established in the market place that serve the same purpose. If there is no suitable alternative product in the reference application, the comparison can also be performed between the application with the product by Evonik and the same application without an alternative product, if the latter is applicable and reasonable. The following criteria listed in the WBCSD Avoided Emissions Guidance apply to the reference application: - The reference application is at the same level of the value chain. The reference application serves the same purpose. - The reference application is used in the same application. - The reference application is available on the market. - The reference application is interchangeable for a typical user in terms of quality criteria. - The reference application is a close match to the Evonik solution. Comparison of full life cycle emissions of applications with improved products by Evonik with the status of last year Products of Evonik are subject to continuous improvement processes. The greenhouse gas emissions of the resulting applications are compared to the status achieved in the previous year, and the calculated greenhouse gas reductions are included in the balance sheet. In accordance with the WBCSD Avoided Emissions Guidance, the results of the reduction calculations are indicated for the supply chain of the entire application, since the contribution of a single product to all savings in the supply chain is usually difficult to quantify and can therefore be based on assumptions. Table 6 shows the qualitative description of the contributions made by individual products. In deviation from the specifications of WBCSD Avoided Emissions Guidance, greenhouse gas reductions are not displayed individually, but as an aggregated figure for Evonik. The above-described approach to calculate CO 2 eq emissions and reductions is subject to certain limitations: Infrastructure measures such as construction of facilities, machinery, roads, and IT are not included. Due to the large number of products made by Evonik, the carbon footprint was only calculated for specific beacon applications that were identified in a screening process. Evonik does not claim to have a complete data inventory on the CO 2 eq emissions and savings of its full product range. Evonik is also aware that the CFEs performed are not comparative LCAs with an external review panel as defined in DIN ISO 14040ff. Table 6: Significance of the contribution of a chemical product to reduced emissions in the supply chain, based on its function (source: WBCSD Avoided Emissions Guidance, p. 27). Significance of contribution Fundamental Extensive Substantial Minor Too small to communicate Relationship between chemical product and end-use solution The chemical product is the key component that enables the GHG emission avoiding effect of the solution. The chemical product is part of the key component and its properties and functions are essential for enabling the GHG emission avoiding effect of the solution. The chemical product does not contribute directly to the avoided GHG emissions, but cannot be substituted easily without changing the GHG emission-avoiding effect of the solution. The chemical product does not contribute directly to the avoided GHG emissions, but it is used in the manufacturing process of a fundamentally or extensively contributing product. The chemical product can be substituted without changing the GHG avoiding effect of the solution. 17

18 2.1 Greenhouse gas emission reductions from green tire technology How does the technology reduce greenhouse gas emissions? Compared to conventional car tires, the use of silica-silane systems the so-called green tire technology can achieve significant fuel savings and improved wet traction without abrasion losses (see Figure 4). The lower fuel consumption causes end-users to generate fewer CO 2 eq emissions. Background The rubber compound of a tire has a major impact on the characteristics of the overall tire performance. Organic and inorganic chemicals determine the performance of the tread composition that is in contact with the road surface. Such treads typically contain about 30% reinforcing filler, without which rubber compounds could not reach the desired properties such as traction, abrasion resistance, and resistance to tearing and cuts. For decades, these properties could only be achieved with customized carbon blacks. Today, the replacement of carbon black with silica offers an additional opportunity for further optimization in car tires. Due to the different chemical properties of rubber and silica, however, these components cannot bond to form a single chemical compound. This is where bifunctional organic silicon compounds or organosilanes come in. They serve as coupling agents and form a bridge that bonds the two substances. Key characteristics such as rolling resistance, wet traction, and abrasion resistance can generally not be optimized to a great extent without causing other properties to deteriorate. In contrast to conventional carbon black filler systems, the use of silicasilane systems has allowed for the first change of this magic triangle of tire performance (see Fig. 5) in a long time. Rolling resistance and wet traction were substantially improved without any negative effect on abrasion, and therefore, the service life of the tire. These improvements have resulted in significantly lower fuel consumption for end-users, and therefore, have led to reduced CO 2 eq emissions. Please refer to the appendix for further information on the methodology, the selection of audit parameters and other reporting elements according to the WBCSD Avoided Emissions Guidance. Rolling resistance Silica-silane system with conventional tires Fuel consumption Braking distance in wet conditions at 80 km/h Standard Carbon Black with green tires 7.5% fuel savings 18 meter shorter braking distance Abrasion resistance Wet grip Figure 4: Braking characteristics and fuel consumption Figure 5: Expansion of the magic triangle with the silica-silane system 18

19 2.2 Greenhouse gas emission reductions from amino acids in animal feed How does the technology reduce greenhouse gas emissions? Animal feed is specifically formulated to meet the physiological nutrition needs of animals, particularly the necessary shares of essential amino acids. Lack of certain amino acids in animal feed can be compensated either by adding a higher percentage of protein-rich feed components such as oil seed, or by fortifying the feed with essential amino acids produced by Evonik for this purpose. Supplementing animal feed with essential amino acids can save significant amounts of feed raw, resulting in minimized use of arable land for crop and thus, fewer CO 2 eq emissions. Furthermore, feed supplementation with these essential amino acids reduces both nitrogen and greenhouse gas emissions resulting from feeding. Background MetAMINO is an example of an amino acid containing sulfur. Unlike several other amino acids, it cannot be generated in the animal s own body. Methionine is particularly important in poultry nutrition, as poultry has a much higher demand for this protein-forming amino acid than other species because of feather growth. Evonik manufactures MetAMINO in a chemical process called the carbonate process (Fig. 6). The company produces all important intermediates of the process such as acrolein, methyl mercaptan, and hydrocyanic acid in an integrated at the same site. The required raw such as crude oil and natural gas are provided by pipeline. All reaction steps are fully integrated into various cycles with maximum recycling of by-products and waste streams, and by-products and intermediates as well as energy streams can be used by other plants at the same integrated site. Biolys is the Evonik-specific brand of L-lysine (L-α, ε-diamino-n-caproic acid). It is an essential amino acid contained in almost all proteins, which is part of basic amino acids because of its basic side chain. L-lysine is the first limiting essential amino acid in hog farming. In contrast to MetAMINO, Biolys along with all other amino acids of this study is produced with the help of biotechnological fermentation processes aided by microorganisms. As a consequence, these amino acids automatically are available in the only biologically effective form of the L enantiomer. Evonik s commercial L-lysine trade product is Biolys, which contains L-lysine sulfate and biomass resulting from fermentation as an additional component. The active ingredient content is at least 50.7% L-lysine. ThreAMINO (L-threonine or L-αamino-β-hydroxybutyric acid) is a neutral essential amino acid. Next to methionine and lysine in poultry farming and lysine and methionine in hog farming, threonine is the next limiting essential amino acid. Evonik also uses biotechnology methods to produce ThreAMINO. Because the amino acid is separated from the biomass at the end of the fermentation process, the product has a significantly higher active ingredient content of at least 98.5% free L-threonine. TrypAMINO (L-tryptophan or L-2- amino-3-(3 -indolyl)-propionic acid) is part of the structurally more complex aromatic amino acids. Tryptophan is the next limiting amino acid after threonine in both poultry and hog farming, but it has much greater importance for hog farming. As described for ThreAMINO above, TrypAMINO is manufactured in a comparable fermentation process by Evonik. Please refer to the appendix for further information on the methodology, the selection of audit parameters and other reporting elements according to the WBCSD Avoided Emissions Guidance. 19

20 Chemical processes Biotechnological processes Acrolein Methylmercaptan Educts Saccharose 2 O O 2 NH Dextrose, HCN H + 4 Catalyst Catalyst Corynebacterium glutamicum Escherichia coli Hydantoin Pyruvat Pyruvat Pyruvat Intermediates Methionine potassium salt Oxalacetat Oxalacetat Chorismat MetAMINO Products Biolys ThreAMINO TrypAMINO Figure 6: Production of MetAMINO, Biolys, ThreAMINO, and TrypAMINO 20

21 2.3 Greenhouse gas emission savings from optimized insulation How does the technology reduce greenhouse gas emissions? Evonik develops additives, and particularly foam stabilizers, which are essential to producing and optimizing foam properties. These polyurethane-based foams are used, for example, in building insulation or for insulating electrical appliances such as refrigerators. The improvement of insulation properties reduces energy consumption and therefore makes a contribution to reducing greenhouse gas emissions. Background The latest developments in the field of foam stabilizers have produced microfine cell structures that improve the heat-insulating properties of foams. The structure of foam cells, however, is not the only factor that determines insulation efficiency, and homogeneous distribution of the foam is equally important. Accordingly, improving the flow property of foams is an important objective for additive manufacturers. Please refer to the appendix for further information on the methodology, the selection of audit parameters and other reporting elements according to the WBCSD Avoided Emissions Guidance. Microscopic images illustrate the positive effect of optimized Evonik foam stabilizers on the cell structure of rigid polyurethane foams. The top shows a microscopic image of the cell structure of a modern foam system for refrigerator insulation; the bottom image shows foam containing the same polyurethane system, in which the standard additives were exchanged for the new additives by Evonik (same magnification). The smaller the cell size, the lower the transmittance of heat radiation, which results in a lower overall thermal conductivity of the foam. 21

22 2.4 Greenhouse gas emission savings from compact fluorescent lamps (CFLs) How does the technology reduce greenhouse gas emissions? Modern compact fluorescent lamps (CFLs) with specialty oxides by Evonik consume less electricity than conventional CFLs that do not contain these specialty oxides during their use phase. This reduced energy consumption results in fewer greenhouse gas emissions based on the use of CFLs. Furthermore, compared with CFLs without specialty oxides by Evonik, modern CFLs have almost twice the life expectancy which can lead to further reductions of CO 2 eq emissions. Background Special Evonik oxides, such as fumed aluminum oxides, perform many functions in CFLs. Their use can significantly improve the performance of these types of lamps (Fig. 7): The adhesion of fluorescent to one another and to the glass surface is inherently poor because both the fluorescent and the glass surface usually have a negative surface charge. Aluminum oxide, which has a positive surface charge, can be used as a stable inorganic binder in this environment. A separating aluminum oxide layer between the glass tube and the layer of fluorescent material not only improves adhesion, but also fulfills other critical functions. To maximize the effectiveness of fluorescent lamps, the generated UV light must be fully converted to visible light, as UV radiation that is not converted will be absorbed by the glass tube and converted to heat. To prevent this, the layer of fluorescent could be made thicker. While this would keep the UV radiation from being absorbed by the glass, it would also prevent the visible light that is generated from leaving the tube. The use of aluminum oxide as a selective UV reflector offers a much better solution than increasing the thickness of the fluorescent material. In addition to its function as a selective UV reflector that permits light to pass through, it also acts as a barrier for other (see below). Without fumed aluminum oxide, small amounts of mercury continuously penetrate the layer of fluorescent material and the glass tube. This causes the tube to turn gray over time. This graying affects efficiency as well as light yield. First, less mercury is available, although it is needed to produce UV radiation (less mercury, less light). Secondly, as the tube turns gray, it absorbs more visible light, increasing the transformation of light into heat. Solutions to compensate for these losses include increasing the amount of mercury and the wattage of the lamp. However, this results in the generation of more heat and promotes the process of diffusion even more. Mercury atom Electron Electrode Figure 7: Design of a fluorescent lamp A layer of aluminum oxide acts as an effective mercury barrier. It keeps the use of this toxic heavy metal to a minimum, while simultaneously increasing the service life of the lamp. Please refer to the appendix for further information on the methodology, the selection of audit parameters and other reporting elements according to the WBCSD Avoided Emissions Guidance. Fluorescent powder (phosphors) UV radiation Visible radiation Glass tube Aluminum oxide layer Phosphor layer with aluminum 22

23 2.5 Greenhouse gas emission reductions from optimized hydraulic oils How does the technology reduce greenhouse gas emissions? Mobile construction machinery consumes the bulk of their required energy in their hydraulic units. Compared to conventional hydraulic oil (monograde), the use of DYNAVIS technology achieves significant fuel savings and higher productivity (Figure 8). Lower fuel consumption causes end-users to generate fewer greenhouse gases, especially carbon dioxide (CO 2 eq). Background Hydraulic fluid plays a major role in the use of hydraulic construction machinery such as excavators and wheel loaders. Their viscosity and viscosity/temperature behavior have a considerable impact on the operation of such hydraulic machinery (Figure 9). The Oil Additives specialists of Evonik performed field tests with hydraulic excavators of various sizes in accordance with a defined protocol that reflects the typical work modes of such machinery. In principle, the viscosity of hydraulic fluid decreases with rising temperature. This interdependency can be minimized with DYNAVIS technology. This system is based on fluid formulations with viscosity index improvers of high shear stability, which allows for energy savings. In low temperatures, such thinner oils reduce inner friction and enable an easier cold start and warm-up phase. In high temperatures, more viscous oil prevents the rise of internal return flow losses in the hydraulic pumps, thereby increasing volumetric efficiency. By staying at a certain minimum viscosity, these products prevent overheating, increased wear and premature idling. These improvements have resulted in significantly higher productivity and lower fuel consumption for end-users, and therefore, have led to reduced CO 2 eq emissions. Please refer to the appendix for further information on the methodology, the selection of audit parameters and other reporting elements according to the WBCSD Avoided Emissions Guidance. Monograde Fluid: 95 workcycles DYNAVIS Technology: 129 workcycles Figure 8: Comparison of monograde and DYNA VIS hydraulic fluid and effects on the application C C Less overheating, higher productivity and less fuel consumption Viscosity Cold Oil is thinner less friction and quicker start-up Benefits DYNAVIS Technology Hot Oil is thicker less leackage, more power Figure 9: Interdependency of viscosity and temperature, with positive effects on the application Monograde Fluid Benefits Temperature 23