Incitec Pivot : 2021 Climate Change Report

IPL CLIMATE CHANGE REPORT 2021

For personal use only

Incitec Pivot Limited

ABN 42 004 080 264

onlyLevel 8, 28 Freshwater Place Southbank, Victoria, Australia, 3006

Telephone: [phone]

Facsimile: [phone]

www.incitecpivot.com.au

usepersonal

ForIncitecPivot LimitedClimate ChangeReport 2021

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For personal use only

CONTENTS

1. MESSAGE FROM MANAGING DIRECTOR & CEO
2. HIGHLIGHTS ON OUR JOURNEY
3. OUR BUSINESS AND OUR MARKETS

1. OUR POSITION ON CLIMATE CHANGE

1. OUR CLIMATE CHANGE STRATEGY
2. 1. ENSURING STRONG GOVERNANCE

1. OUR CLIMATE CHANGE GOVERNANCE
2. MANAGEMENT ROLES AND RESPONSIBILITIES

1. 2. REDUCING OPERATIONAL EMISSIONS
2. OUR CURRENT OPERATIONAL EMISSIONS AND REDUCTION OPPORTUNITIES

1. OUR NET ZERO PATHWAY

1. 3. DELIVERING PRODUCTS THAT REDUCE CUSTOMER EMISSIONS
2. OUR SCOPE 3 EMISSIONS

21	OUR SCOPE 3 EMISSIONS REDUCTIONS OPPORTUNITIES

1. 4. MANAGING STRATEGIC BUSINESS RISKS AND OPPORTUNITIES
2. OUR SCENARIOS
3. SCENARIO A | 1.5° Fast Action (1.5 Degrees)

28	SCENARIO B | 2° Required Action (2 Degrees)
30	SCENARIO C | Delayed Action followed by Rapid Action (Inevitable Policy Response - IPR)
32	SCENARIO D | 3°+ Current Trajectory (Reviewed version of IPL's previous 4 degree)
34	RISKS AND OPPORTUNITIES
34	Summary of Material Climate-related Risks and Opportunities
36	Managing our Risks and Opportunities

1. Non-MaterialRisks and Opportunities
2. BUILDING OUR RESILIENCE TO PHYSICAL CLIMATE RISK

1. APPENDICES
2. 1. SCENARIO REFERENCES

49	2. TCFD DISCLOSURES TABLE

1. 3. ENERGY AND GHG EMISSIONS DATA
2. 4. SCOPE 3 EMISSIONS CALCULATION METHODOLOGY

58 FORWARD LOOKING STATEMENTS

2021 Report Change Climate Limited Pivot Incitec

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MESSAGE FROM

MANAGING

DIRECTOR & CEO

	We owe it to future generations to show
	leadership on climate change. We will do
	our part - working with all our stakeholders
	- to take action to create a greener, more
onlysustainable world.
	Our products and services are vital to providing food for the world's
	growing population, along with the raw materials required to shape
	our cities and create renewable energy infrastructure critical to a
	decarbonised future. The challenge for us at Incitec Pivot Limited
	(IPL) is to continue to unlock the world's natural resources while
	reducing our environmental footprint and working towards a
	long-term Net Zero future.
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	We are committed to achieving Net Zero operational emissions by
	2050, or as soon as practicable, and in this - our first stand-alone
	IPL Climate Change Report - I am pleased to provide you with
	information on what we have achieved to date as well as our
	future strategy.
	We acknowledge the mainstream science on the existence of
	climate change and have been increasing our disclosures against
	Task Force on Climate-Related Financial Disclosures (TCFD) guidelines
	since 2018. This report aims to provide the next step of disclosure
	f our approach to address the challenge of climate change.
	The risks and opportunities we face, including the physical risks
	associated with climate change, have informed our climate
	change strategy. Like other business risks and opportunities, those
	associated with climate change and the global energy transition
	equire strong governance and strategic management and,
	alongside our strategy, this report also sets out the comprehensive
	governance structures we have in place.
	We have detailed our plans to reduce operational emissions,
	including our commitment to execute projects that materially
	reduce greenhouse gas emissions (GHG), as part of our pathway
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	to Net Zero.
	We have also set out how we will deliver products that improve
	efficiency and reduce life cycle GHG emissions.
	As we grow our Incitec Pivot Fertiliser business from a leading
	fertiliser company to a sustainable soil health company, our
	innovative products will play an increasingly important role
	in assisting the agriculture sector achieve carbon neutrality.
	Our focus on soil health and precision agriculture aims to help
ForLimitedPivotIncitec farmers increase yields of food and fibre on their existing cleared
Climate	land. This includes our Enhanced Efficiency Fertiliser (EEF) range,
which helps increase plant nutrient uptake and reduce GHG for our
farming customers.
Change
In our Dyno Nobel explosives business, our products and services
will be crucial in providing our customers with efficient access
Report
to the minerals and resources necessary for renewable energy
infrastructure and new technologies. Our premium technology
solutions aim to help our customers reduce their carbon footprints.
2021

We know our world-class blasting technology DeltaE is more efficient in use and have a customer partnership underway to quantify the GHG reductions associated with the use of this technology.

We're also excited by the opportunities presented by renewable hydrogen for our business and our customers. Given our world class hydrogen and ammonia handling expertise and our ammonia assets capable of converting to renewable hydrogen, there's many opportunities for us and our customers in the medium term as we assess new technologies to deliver these longer-term benefits.

As we move towards Net Zero, it is crucial that we take our people and our communities with us. As we transition, our plan to decarbonise our manufacturing assets over time seeks to protect and sustain the employment opportunities we provide, along with the communities we work and operate in.

I welcome your interest in our Climate Change Report and invite your feedback as we continue to provide transparent reporting on our progress and work with our customers and all our stakeholders to better care for our people, our communities and the environment.

Jeanne Johns

Managing Director & CEO

Incitec Pivot Limited

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HIGHLIGHTS ON OUR JOURNEY

IPL Leadership conducts an initial assessment of the

risks and opportunities associated with climate change.

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IPL joins the Australian Industry Greenhouse Network.

Setting of our first GHG intensity reduction target:

a 1.5% reduction in GHG emissions per tonne

of Australian manufactured product by 2015.

Setting of our first global greenhouse gas reduction

target linked to executive remuneration: a 2% global

reduction in tCO2e/t ammonia produced by 2017.

Completion of the Waggaman, Louisiana Ammonia Plant, which uses

the industry's leading technology and is among the most efficient plants

of its kind in the world. This increases our production, and therefore our

Creation of IPL specific 2° and 4° future climate-related

global operational GHG emissions, but reduces our global emissions per

scenarios and completion of our second climate specific

tonne of ammonia.

risk and opportunity assessment with TCFD reporting

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adopted in our 2018 Sustainability Report.

The IPL Climate Change Policy is adopted by the Board.

Completion of the AU$2.7m Moranbah Solar Hydrogen

The IPL Board Charter and the Audit and Risk Management

Feasibility Study, supported by AU$0.9m from the Australian

Committee Charter are updated to formally enshrine Directors'

Renewable Energy Agency (ARENA).

roles in relation to the strategic management and oversight

Setting of our first absolute GHG reduction target of 5% by

of climate change-related issues.

2026 against our 2020 baseline.

IPL joins the Carbon Market Institute.

IPL becomes a founding member of the Australian Climate

Leaders Coalition (CLC), a group of cross-sectoral Australian

5% absolute GHG reduction target brought forward to 2025

corporate CEOs supporting the Paris Agreement commitments

and setting public decarbonisation targets.

25% medium-term target set for 2030

GHG intensity per tonne of ammonia produced

Long-term Net Zero Ambition set for 2050

tCO2e

Formation of the IPL Decarbonisation and Energy Transition

3.00

Steering Committee, chaired by our CEO, to develop our Net

Zero Pathway and oversee the incorporation of climate-related

2.50

risks and opportunities into company strategy.

Updating of our 2018 IPL specific 2° and 4° future climate-

2.00

related scenarios and addition of 1.5° and Delayed Action

Trend

(Inevitable Policy Response) scenarios.

1.50

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2010

NEXT STEPS:

2025

SHORT TERM

To support our short and medium-term targets, as

TARGET:

These initiatives include:

5% absolute

shown to the right, IPL has developed a pipeline of

reduction (1)

» CO2 sequestration at our Waggaman, Louisiana

d carbonisation initiatives to materially reduce GHG

missions from our major manufacturing facilities.

ammonia manufacturing facility;

These initiatives are at varying levels of development,

» Abatement of nitrous oxide emissions from

the nitric acid plants at our Moranbah and

personalbut are all considered technologically ready.

2030

Louisiana, Missouri ammonium nitrate

Commercial readiness is being continuously evaluated,

MEDIUM TERM

manufacturing plants; and

as demonstrated by the feasibility study for green

TARGET:

» Feedstock conversion from natural gas to

For

ammonia production at Moranbah in 2019 and the

25% absolute

renewable hydrogen at our Gibson Island

ecently announced partnerships with Fortescue

reduction (2)

and Moranbah ammonia and ammonium

Future Industries to investigate green ammonia

nitrate manufacturing plants.

pr duction at our Gibson Island manufacturing

site, and with Keppel Infrastructure and Temasek

to investigate green ammonia production at

Newcastle and Gladstone in Australia.

2025 SHORT TERM2050TARGET: % absolute reduction(1)

LONG TERM

(2)

2030 MEDIUM TERM TARGET: 25% absolute reduction

AMBITION:

(3)

2050 LONG TERM AMBITION: NET ZERO

NET ZERO (3)

1. Our short and medium-term targets are absolute reductions against our 2020 baseline year operational (Scope 1 and Scope 2) emissions of 3,961,222 tCO2e.
2. Subject to economic feasibility of CCUS at Waggaman, Louisiana.
3. Our ambition to achieve net zero operational emissions by 2050 is based on the assumptions that; green hydrogen reaches economic parity with natural gas for hydrogen production by 2040; US grid decarbonisation is achieved by 2035-2040; Australian grid decarbonisation is achieved by 2040; and carbon offsets

are available for residual emissions that are not practical to abate.

2021 Report Change Climate Limited Pivot Incitec

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