Circular Economy & Climate neutrality�Innovation and collaboration for sustainable development

Fernanda Porto

Technical Sales Representative

Covestro│Circular Economy

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covestro.com

Covestro – a global plastics manufacturer

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Innovative�and sustainable

• 1,350 employees in research and development
• 80 years of ideas and inventions
• Pioneer of the circular economy

Game-changing

and beneficial

• Polymer materials of superior quality
• Across numerous industry sectors
• Keeping an eye on global challenges

Strong�and global

• €14.4 bn in sales
• 17,500 employees¹
• 48 production sites

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Information is based on financial results for 2023

¹calculated as full-time equivalent (FTE)

Our products - everywhere in modern life

Focused around two distinct polymer types

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Providing solutions for various key industries

Construction

Automotive and transportation

Wood and furniture

Electrical and electronics

Chemicals

Sports/leisure, cosmetics, health..�

Components for Polyurethanes

Polycarbonate

Covestro transforms its activities towards a Circular Economy to address global sustainability challenges

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Expectations from society

Customer demand

Investor ESG standards

Other external stakeholders

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“We will be fully circular”

Strong vision substantiates Covestro purpose �of making the world a brighter place

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Innovative recycling

Alternative raw materials

Joint�solutions

China Climate Strategy

US Climate Directives

Expectations from society

Customer demand

Investor ESG standards

Saving fossil resources

Climate neutrality

EU Green Deal

(Supra)national policies

Other external stakeholders

Reducing plastic waste

Renewable energy

Brazil – CE Policy Framework

RENEWABLE ENERGY

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Sustainable manufacturing and renewable energy to lead path

Climate neutrality target for GHG emissions scope 1 and 2

Notes: GHG emissions = Greenhouse gas emissions, calculated in accordance with GHG Protocol and WBCSD recommendations

Climate neutrality currently includes residual GHG emissions (scope 1 and 2) of c. 0.2-0.3mt per year; we are planning to offset these unavoidable, remaining GHG emissions through adequate compensation measures

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GHG emissions in million metric tons, scope 1 and 2

• Three main levers make a vital contribution to reduce GHG emissions:

More sustainable manufacturing (scope 1 and 2)

Renewable electricity (scope 2)

Renewable steam (scope 2)

EMISSION REDUCTION MEASURES

Numerous measures effectively reduce GHG emissions

Climate neutrality target for GHG emissions scope 1 and 2

Notes: PPA: Power purchase agreement

Datang: Datang Wuzhong New Energy Co.� CGN: China General Nuclear New Energy

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Employing digital technologies for efficient production control

Optimizing production processes to increase energy efficiency

Solar&wind energy, PPAs for ~45% of Shanghai site electricity with Datang Power&CGN New Energy

Offshore wind energy, PPA with Ørsted starting 2025 for 10% of sites’ electricity in Germany

Develop options to use e.g. biogas or green hydrogen as energy source to generate steam

Develop options to electrify steam generation based on renewable energies

Reducing nitrous oxide emissions by installation of highly efficient catalysts

Onshore wind energy, PPA with ENGIE since 2021 for 45%

of site’s electricity in Antwerp

Converting steam generation from fossil to renewable energy sources

MORE SUSTAINABLE MANUFACTURING

RENEWABLE ELECTRICITY

RENEWABLE STEAM

CIRCULAR ECONOMY @ MATERIALS

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“Material Selection” is the first step towards circular design

Optimized Material Selection may influence up to 80% of the CO2 emission in total

Carbon emissions can be reduced by 56% by 2050

…if a circular economy model is introduced in �the production of major industrial raw materials.

Nearly 80% of the stated carbon reduction can be achieved by combining material recirculation and material efficiency.

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According to a 2018 joint study by Material Economics and multiple EU climate organizations

Material Circulation

Increasing the circular use of materials, and reducing the requirement for new materials, recycled materials can be selected instead.

Material Efficiency

Reducing the amount of material required per unit during product manufacturing. For instance, selecting materials that are lighter and stronger, or more efficient in the manufacturing process.

Circular Business Models

Reducing the quantity of a product needed to meet specific demands, through a change in business model. For example, changing the sale of a physical product into a service.

Target reduction of 10m tons GHG until 2035 and net-zero until 2050

Climate neutrality target for GHG emissions scope 3

Notes: GHG emissions = Greenhouse gas emissions, calculated in accordance with GHG Protocol and WBCSD recommendations� MAKE = Covestro internal sustainable raw material sources� (1) Raw materials (part of category 3.1), End of Life (EoL) Treatment (category 3.12), Fuel and energy related (category 3.3),

Upstream transportation (category 3.4)

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GHG emissions in million metric tons, scope 3 - categories 1, 3, 4, 12⁽¹⁾

• Four main levers make a vital contribution to reduce scope 3 GHG emissions:

Supplier scope 1&2 reduction

Advancing MAKE projects - Recycling

Profitable sales of products based �on alternative raw materials

Other measures

• Contribution of different levers can vary depending on technical realization of MAKE projects
• Scope 3 emissions represent ~80% of Covestro’s 2023 greenhouse gas emissions
• Strict commitment to net-zero underlines consistent implementation of the green transformation
• Net-zero 2050 target in line with SBTi and 1.5° goal

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EMISSION REDUCTION MEASURES

ALTERNATIVE RAW MATERIALS

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Alternative raw materials for a circular economy

Lowering the ecologic footprint by utilizing biomass or waste streams

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1^st generation biomass

Crops, sugar, oil

Relevant feedstocks and processes not yet sufficiently developed for use at a commercial scale

Limited availability, but offerings steadily growing

Today available in larger volumes

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2^nd generation biomass

Bio-waste, residue

Waste as feedstock

Recycled materials

Biomass: Using old oil and fat

Use of mass-balanced raw materials

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Phenol �based on renewable�raw materials

For high-performance polycarbonate, mass-balanced according to the ISCC PLUS system

Benzene �based on renewable�raw materials

For the foam component MDI, mass-balanced according to the ISCC PLUS system

Covestro invests in industrial maturity of non-fossil process for aniline

Plastics precursor made from Biomass

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• Aniline is an important precursor of MDI used in energy saving polyurethane insulation foam for buildings and refrigerators
• Up to now aniline was purely based on fossil raw materials
• New process uses biomass that gets converted by microorganisms into industrial sugar which then undergoes catalytic transformation into aniline
• Covestro invests into a pilot plant for upscaling into industrial scale
• Joint R&D program of the CAT Catalytic Center of RWTH Aachen, the University of Stuttgart and Covestro funded by the German Government

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HIGHLIGHTS

SCHEMATIC SYNTHESIS OF ANILINE

Covestro underlines its ambition to become fully circular and reduce scope 3 GHG emissions

Fossil-route

Bio-based route

DESIGN

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Collaboration is key when it comes to Circular Economy

Design plays a key role in the transition to a circular economy

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Design

Focused on Electrical and Electronics industry

Embedded in Circular Economy Business Models

Material selection

5 Circular Design Strategies

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Product as a service

Product life extension

Circular material choices

Demateria-lization

Modular Design

Covestro teams up with REnato lab to introduce the Circular Design Guidebook

Mono-material LED car headlamp designed for end-of-life �and leading-edge lighting technologies

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Mono-material design reduces sorting, �separation and storage

Designers of tomorrow’s car headlamps are creating sleek �new 3D forms that express brand identity and incorporate �the latest smart technology. Moving to a more sustainable, �circular model means designing end-of-life material �recycling into car parts and applications as they take �shape on the drawing board. 

Lower complexity means lower costs and more �sustainability for headlamp manufacturers.

Sustainability marries leading edge style as headlamp design is transformed.

“Our boundary-pushing headlamp demonstrator has more sustainability designed into it. Its mono-material design permits a single PC-based recycling stream at the end of its useful life and makes its easier – and cheaper – to produce than comparable headlamp systems.”

Jackie Wang ⎜Founder, REnato lab

INNOVATIVE RECYCLING

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Circular Foam – closing the material cycle for PU rigid foams

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Notes: This project has received funding from the European Union’s Horizon 2020 research and innovation program

under grant agreement No. 101036854

GOAL AND BENEFIT

• Establish coordinated waste management and suitable recycling processes for sustainable circular economy
• Develop innovative chemical recycling processes for rigid polyurethane foams
• Savings potential of one million tons of waste and 2.9 million tons CO₂ annually from 2040 onwards��INNOVATIVE RECYCLING
• Enable reuse of materials at end of useful life where mechanical recycling is no suitable option
• Develop new processes in chemolysis and smart pyrolysis to obtain polyols and amines as circular raw materials for production of polyurethane (PU) rigid foams

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HIGHLIGHTS

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‘CIRCULAR FOAM’ PROJECT – COORDINATED BY COVESTRO WITH 22 PARTNERS

Conceptual illustration,

selected partners only

Collection &

dismantling

Intelligent

sorting

Innovative recycling &

processing of feedstock

Manufacturing

of refrigerators, insulation panels

and boards

Consumer &

End-of-life

KINGSPAN

ELECTROLUX

FRAUNHOFER

ALBA GROUP

ETH ZÜRICH

RWTH AACHEN

UNILIN

REDWAVE

BIO BTX

UNIV OF GRONINGEN

Innovative recycling / joint solutions

COLLABORATION

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Brazilian Circular Economy HUB

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Multisectoral ecosystem in operation since 2020, aimed at accelerating the transition to the

Circular Economy in the country through structural changes, education, and practical actions.

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THE CIRCULAR ECONOMY!

IN MATERIALIZING

JOIN US

LATAM / Brazil team

Covestro

Further annotations? Contact:

Thank you!

Fernanda Porto

Fernanda.porto@covestro.com

+55 (11) 98432-9928

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Muchas gracias!

Muito obrigado!

covestro.com

BACKUP

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Collaboration is key when it comes to Circular Economy

A selection of our network

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Design

Strategic alliances �with producers

OEMs/Tiers

Academia

Sustainability Initiatives

Recycling

Digitalization

Energy