DSM Integrated Annual Report 2022

Scope 1 + 2 GHG emissions

On track with our scope 1 + 2 target

We are well on track to deliver our increased ambition of an absolute reduction of 59% by 2030. Our scope 1 + 2 market-based GHG emissions improved by 35% (compared to 27% in 2021) versus our recalculated 2016 baseline. The estimated structural improvement is ~26%. Total scope 1 + 2 emissions were 1.05 million tons of CO2eq in 2022, a decrease of nearly 150 kt CO2eq compared to 2021. Our GHG efficiency (year-on-year) improved by 5.1% in 2022.

Scope 1 + 2 reductions versus recalculated baseline

Recalculating our baseline in 2021

Our baseline GHG emissions figure was recalculated to 1.62 million tons of CO2eq. This adjustment is due to the inclusion of 22 acquired sites in our reporting scope in the period 2017–2022, the divestment in 2021 of Resins and Functional Materials and associated businesses, the divestment of DSM Protective Materials in 2022 (pro-rata), and the impact of methodology changes. Five newly built sites were also added to the reporting scope; however, as they were constructed after 2016, they have no impact on the baseline.

2016 GHG Baseline recalculation

In thousand tons CO2eq

Our GHG reduction program

In order to achieve the targeted absolute GHG reduction by 2030, we continued our dedicated program to help our key locations implement an appropriate energy transition, as well as energy efficiency measures. We use performance diagnostics as well as self-assessments that are carried out at key sites to identify GHG emission reduction opportunities. The learnings from these sites are shared across all sites to enable further roll-out of improvement projects.

Our greenhouse gas (GHG) emission reductions are driven by a rigorous energy transition program, comprising the following elements:

  • Reduction of total energy consumption through energy efficiency improvement measures
  • Energy transition to increased use of energy from renewable sources, comprising both purchased and self-generated renewable electricity, and renewable fuel and heat
  • Driving smart electrification, combined with energy efficiency improvements that enables a shift to the use of electricity from renewable sources instead of burning fossil fuels

Projects finalized in 2021 began delivering full benefits in 2022, further reducing 2022 emissions by approximately 20 kt CO2eq. These projects are of various natures: improving energy efficiency in steam generation and distribution, cooling and compressed air utilities, installing solar panels, minimizing heat losses through heat integration and heat pumps or, for instance, reducing energy required for water separation by using membranes. These projects often also deliver additional benefits such as cost and/or water savings.

Among the more than 40 projects executed in 2021 to save energy, significant improvements were realized in Jiangshan (Jiangsu province, China) with the implementation of new technology for product concentration, the internal recycling of solvent, investments in chiller improvements and many other operational improvements leading to more than 10 kt CO2eq savings. On top of the projects in 2021, we also saw operational improvements leading to greenhouse gas emissions reduction, especially at one of our recently acquired sites. In 2022, we also saw the benefits of our first efforts in 2021 to bring two digital solutions helping our sites better optimize equipment energy use and reduce energy losses: Energywise, our energy dashboard (applying, for example, model predictive analysis) allowing sites to steer the energy consumption of key assets, and steam trap monitoring technology, which allows us to identify in real time leaking or malfunctioning steam traps, thus enabling faster repair and maintenance.

In 2022, we again strengthened our efforts with even more energy-saving projects compared to 2021. Among the most noticeable projects were a new membrane project in Jiangshan (Jiangsu province, China) saving more than 10 kt CO2eq; the implementation of a high efficiency, state-of-the art cooling system in Xinhuo (Shanghai province, China), applying – head of local legislation – low global warming potential (GWP) refrigerants; and the further deployment of the above-mentioned digital technologies in Seclin (France), Village-Neuf (France) and Belvidere (New Jersey, USA) for Energywise, and Sisseln (Switzerland), Dalry (UK), Village-Neuf (France) and Kingstree (South Carolina, USA) for steam trap monitoring.

Renewable energy

We are a proud member of the Climate Group’s RE100, comprising leading companies that have committed to 100% electricity from renewable sources at the earliest possible opportunity. In 2022, we increased our purchased renewable electricity target to 100% by 2030 at the latest.

Purchased renewable electricity

In 2022, we once again made significant steps toward achieving our purchased renewable electricity target. The percentage of purchased electricity from renewable sources increased globally from 72% in 2021 to 78% in 2022, achieving our previous target eight years ahead of schedule and putting us firmly on track toward our new target level. The progress in renewable electricity is mainly due to a step-up in China.

Progress on purchased renewable electricity in China

For 2022, we concluded several renewable electricity contracts in China, increasing the share of electricity from renewable sources to 32% from 16% in 2021. This includes the sites Jiangyin, Jiangshan, Yantai, Yimante and Wuxi. In addition, we concluded purchasing agreements to provide renewable electricity for 2023 that will further increase the share of electricity from renewable sources.

Purchased renewable electricity in Europe and North America

For our operations in Europe, we maintained 100% renewable electricity through existing agreements combined with pre-production guarantees of origin (GOs) and production of electricity from a Power Purchase Agreement (PPA) in Spain. The wind park of the latter PPA commenced operations in late 2021, while the solar assets are currently under construction. Furthermore, a new hydro agreement for 2022 was concluded in Switzerland to replace a contract that terminated at the end of 2021.

In the US, we have three PPAs in place. The first is already operational and produces electricity from wind, while the assets for the other two are yet to be built and will provide solar-powered electricity. The production from the first agreement combined with pre-production renewable energy certificates (RECs) from the two other agreements means we had 100% of purchased electricity from renewable sources in the US and Canada in 2022.

Renewable electricity in the rest of the world

Besides Europe, North America and China, almost 90% of our purchased electricity in Brazil is from renewable sources, and we have several local renewable electricity contracts at smaller sites around the world. The amount of purchased non-renewable electricity in the rest of the world represents less than 5% of our total purchased electricity.

Working on the decarbonization of heat

We continued making progress to reduce the use of fossil fuels in the production of steam and heat using low-carbon and biomass heat sources. Besides the already concluded biomass cogeneration project in Sisseln (Switzerland) and the purchase of steam from local biomass residues in Chifeng (Inner Mongolia, China), our vitamin E production site Yimante (Hubei province, China) has significantly reduced its consumption of coal-based steam by purchasing by-product heat from a neighboring company. By concluding this contract with Nengtai, DSM Yimante was able to realize an absolute reduction of 7.5 kt CO2eq versus 2021 (2022 was the first full year of contracted heat). Other sites continue to work on various initiatives to decarbonize their operations. The search for low-carbon heat solutions is becoming more prominent in our GHG reduction program: we are working to optimize the use of waste streams and are actively screening the market for opportunities to collaborate with external partners.

Energy efficiency improvement

Our energy efficiency (on primary energy) was slightly negative versus 2021 (-0.4% year-on-year), below our target of an average annual improvement of 1%. This is mainly due to negative production volume and product mix influences at several important sites, compensating the executed energy-saving projects in 2022. Next to that, we see an effect of several shifts from fuel to electricity, negatively impacting the primary energy (due to a lower generating efficiency of purchased electricity compared to on-site generation of electricity from fuel). This is reflected in a more positive energy efficiency improvement of consumed energy of 0.8% from 2021 to 2022.

Energy efficiency1

1 All data presented in Planet are subject to the Non-financial reporting policy.

Carbon dioxide equivalent

Primary energy is energy that has not yet been subjected to a human engineered conversion process. It is the energy contained in unprocessed fuels.

Final (consumed) energy is the energy that is consumed by end-users. The difference between primary energy and final consumed energy is caused by the conversion process between the two as well as any transmission losses.

Greenhouse gas
Greenhouse gas emissions (GHG)
DSM applies the Greenhouse Gas Protocol, which defines GHG as “atmospheric gases that absorb and emit radiation within the thermal infrared range and that contribute to the greenhouse effect and global climate change.” We report GHGs based on their global warming potential over 100 years in carbon dioxide equivalent (CO2eq).
Purchase Price Allocation; also Power Purchase Agreement