Sustainable Manufacturing

Sabine Klages-BuechnerManager, International Government Affairs

OECD Workshop, Copenhagen, Denmark

June 21, 2007

A Comprehensive Strategy

15/06/2007

2

DuPont in 1802 DuPont in 2006

60,000 employees

210 sites

> 75 countries

~ 500,000 SKU’s

> 400,000 customers

$36 billion investment

$1.3 billion investment in R&D

$27 billion revenue

100 employees

1 site

1 country

1 product

12 customers

15/06/2007

3

Our VisionTo be the world’s most dynamic science company, creating sustainable solutions essential to a better, safer, healthier life for people everywhere.

Our MissionThe creation of shareholder and societal value while we reduce the environmental footprint along the value chains in which we operate.

• Safety and Health• Environmental Stewardship• Highest Ethical Behavior• Respect for People

Core Values

15/06/2007

4

Don’t do the wrong thing just more efficiently but do the right thing more sustainably!

Societal Issues

Climate Change Population Growth

Food

Energy

BiodiversityEnvironmental DegradationHealth

Markets

Supply Chain

Manufacturing

The key to start with : Goals, Planning, Measurement, Reporting and Continuous Improvement

15/06/2007

6

First Goal: 1990’s for 2000

Footprint ReductionParameter 1990 - 2000 Goal

Air Toxics (60%)

Air Carcinogens (90%)

Hazardous Waste (Dry) (35%)

Energy Flat

GHG Emissions (40%)

15/06/2007

7

Step 1: Define – Plan – Measure - Improve

Progress toward Goals – Global Planning, Measurement and Reporting

• Businesses prepare annual “Environmental Plan”

• Sites provide waste and emissions data to Corporate database

• Reports due by May 1 of each year to web-based system

• Corporate team conducts quality assurance of data

• Data is compiled to meet external reporting commitments

• 80/20 Analysis

15/06/2007

8

80/20 Cost Benefit Analysis• Project costs, savings and environmental benefits are reviewed

and compiled in the corporate environmental plan• Experience: 80% of the waste and emissions reductions can be

accomplished for 20% of the total cost• Most cost effective projects are recommended for

implementation• Less efficient projects are held for future review and potential

improvements

0102030405060708090

100

0 20 40 60 80 100Percent of total implementation cost

Perc

ent o

f tot

al w

aste

re

duce

d

80/20 Point – Environmental Index = 1.0

Efficient Marginal

15/06/2007

9

Commitment to Continuous Improvement

DuPont is a strong believer in the Continuous Improvement of existing manufacturing practices and evolution of the design of new facilities to reduce environmental footprint.

19901992

19941996

19982000

20022004

0

10

20

30

40

50

60

70

80

90

100

Bill

ions

of P

ound

s of

CO

2 Eq

uiva

lent

sHFCs, PFCs, CH4

CO219871990

19931996

19992002

0

10

20

30

40

50

60

70

80

Mill

ions

of P

ound

s/Yr

US Toxic Release Inventory

Global Greenhouse Gases

15/06/2007

10

Continuous Improvement

• Processes• Senior leadership selects focus areas and identifies targets

• Regions and businesses can add to these goals

• Accounting systems are defined to track progress

• Competency Centers and specialists are made available to providespecialized technical assistance and to create best practices

• Projects and programs are typically funded within operating budgets

• Progress is reviewed by senior leadership quarterly and annually

• Tools • Management Practices

• Energy Efficiency

• Best Practices for Pollution Prevention

… and don’t forget your most valuable asset: People

15/06/2007

12

Reward Employee Initiatives

Annual Sustainable Growth Excellence AwardNomination period open March 15 to May 1Categories include:

• Reducing DuPont’s Footprint• Goal of Zero Injuries, Illnesses, and Incidents-• Goal of Zero Waste and Emissions-• Reduced Use of Depletable Raw Materials and Energy

• Serving the Marketplace• Products that reduce greenhouse gas emissions-• Revenues from non-depletable resources• Products that protect people

• Stakeholder Engagement

The early years achievements

15/06/2007

14

First Goal: 1990’s for 2000

Footprint ReductionParameter 1990 - 2000 Goal

Air Toxics (60%)

Air Carcinogens (90%)

Hazardous Waste (Dry) (35%)

Energy Flat

GHG Emissions (40%)

Achieved all goals ahead of time

15/06/2007

15

Societal Issues

Climate Change Population Growth

Food

Energy

BiodiversityEnvironmental DegradationHealth

Markets

Supply Chain

Manufacturing

15/06/2007

16

=> environmental impacts, e.g. energy consumption, greenhouse gases, etc.

MS clip art style 592

AirEmissions

WaterborneWastes

Solid WastesCo-Products

EnergyRaw Materials

TransportTransportTransport

Product Manufacturing

Product Use

Recycle

Waste Management

Raw Material Extraction

LCA System

Cradle-to-Grave LCA

15/06/2007

17

ProductsRawMaterials

Intermediates Use & Maintenance

End ofLife

ProcessCradle-to-Gate Cradle-to-Grave

Environmental Footprint along the Value Chain

15/06/2007

18

Set New 2010 Goals – More Site Footprint Reduction

• Energy in 2010 flat with 1990Down 7% in 2005

• 65% reduction in CO2-equivalent greenhouse gas emissions from global operations versus 1990 base

Down 72% in 2003

• 10% renewable energy at costs competitive with best available fossil fuels

Almost 6% in 2005, saving $10 million per year

• 25% of revenues from non-depletable feedstocks 17% in 2005

15/06/2007

19

Carried Forward GoalsFootprint Reduction

Parameter 1990 - 2000 Goal

Air Toxics (60%)

Air Carcinogens (90%)

Hazardous Waste (Dry) (35%)

U. S. TRI “Releases”

Energy Flat

GHG Emissions (40%)

Note: Production increased 40% during this period.

2005 Actual

(76%)

(92%)

(51%)

(80%)

(7%)

(72%)

15/06/2007

20

Societal Issues

Climate Change Population Growth

Food

Energy

BiodiversityEnvironmental DegradationHealth

Markets

Supply Chain

Manufacturing

15/06/2007

21

DuPont’s new 2015 Sustainability GoalsWe are reducing DuPont’s footprint

• Greenhouse Gas Emissions• Water Conservation • Fleet Fuel Efficiency• Air Carcinogens• Independent third-party environmental management

systems verification

We help others to reduce their footprint• Environmentally Smart Market Opportunities from R&D

Efforts

• Products that Reduce Greenhouse Gas Emissions

• Revenues from Non-Depletable Resources

• Products that Protect People

15/06/2007

22

Broad Range of Opportunities

• Refrigerants with lower greenhouse warming potential

• Automotive finishes with lower VOC content

• Coatings and engineering polymers based on renewable materials

15/06/2007

23

DuPont Refrigerants Vision—The Science of Cool™

We will use our science and technology, market knowledge and global reach to provide sustainable materials and solutions to enhance personal comfort; enable food preservation; improve industrial processing and reduce environmental footprints.

Next Generation Refrigerants & Cooling TechnologiesNext Generation Refrigerants & Cooling Technologies

MobileA / C

RefrigerantFluids

Not in KindCooling

Technologies

Lubricants&

Secondary Fluids

Emission ReducingSeal Technologies &System Monitoring

StationaryA / C

StationaryRefrigeration

15/06/2007

24

Reducing reliance on fossil fuels through bio-based materials

DuPont has nearly a dozen business opportunities for bio-based materials using renewable resources.

Applications• Fibers, fabrics and carpeting made from

DuPont™ Sorona®, a polymer derived in part from corn

• Biobutanol, an advanced biofuel being developed in partnership with BP

More under : www.renewable.dupont.com.

15/06/2007

25

Biofuels

DifferentiatedProducts

Cellulose

Starch

Biobutanol

PlantFeedstocks

BiofuelsBiochemicals

FermentationProcesses

Agricultural Inputs

Conversion to Sugars

Sugar

SeedCrop Protection

CO2

Ethanol

Bio-PDOTM

Biochemicals

DuPont Biorefinery Value ChainCarbohydrates to Fuels & Chemicals

15/06/2007

26

Bio-PDO™ and Sorona® Commercialization&TATE LYLE

Loudon SiteFeb. 2006

15/06/2007

27

RENEWABLEFEEDSTOCKS

BIOBUTANOL

WORLDWIDE FUEL MARKETS

• Powerful partnership• Shared commitment• Global reach • Complementary capabilities

DuPont - BP Biofuels PartnershipBiobutanol Development & Launch

15/06/2007

28

Other Market Opportunities

Nomex® in windmills

Fuel Cells

Tyvek® Housewrap

15/06/2007

29

Other Technological Opportunities, e.g. “Green Chemistry”• Need

• Development of new formulations

• Design of new chemical processes

• Predictable regulatory environment that allows for flexibility in solutions

• Available capital and time

• Expected Outcome• Inherently safer products and / or processes

• Less waste / pollution / energy use (balance)

• More cost efficiency

15/06/2007

30

Current Barriers

• Investment

• Infrastructure and integration

• Tax code treatment of investment and depreciation

• Short compliance time lines

• Environmental regulations often geared toward control equipment rather than emissions

• Technology gaps

But most importantly:

It all makes economic sense…..

15/06/2007

32

“Flat” Energy has Saved Real MoneySince 1990, production volume grew by 40% while energy use remained flat

1990 1997 2004

150

Production

Cumulative Savings @ $20-60/bl of oil = $3.0B

20 MM barrels of oil

$800 MM or 60 cents per share

100Energy Use

Baseline = ¼ Quad Btu

140

130

120

110

Energy efficiency improved due to portfolio changes, cogeneration, yield improvements, capacity utilization, better uptime and conservation measures.

15/06/2007

33

Sustainable Manufacturing is Good for Business• Energy costs saved > $3.0 Billion

• Renewable energy saves more than $10 Million/yr.

• Total Environmental costs reduced >$250 Million per year

• “Hidden” Capacity = hundreds of $ Millions in reduced investment (1st pass yield improvement)

• Waste reduced = product sold

• Improved Operational Excellence

• Green House Gas Credits sold on Chicago Climate Exchange

• DuPont reputation transformed

Don’t do the wrong things just more efficiently, but do the right things more sustainably !

15/06/2007

34