Covestro says improving scope 3 emissions will require 'transformation'

Covestro A.G., the German maker of polycarbonate, polyurethane and other resins, has released plans to cut its scope 3 carbon emissions by 2050, a move that will require a "transformation" of the entire supply chain.

Covestro already had published its plans to reduce scope 1 and scope 2 goals. scope 1 refers to direct emissions from the business. Scope 2 covers indirect emissions, such as those from purchased energy, heat and steam used by the business. scope 3 covers indirect emissions not already covered under scope 2.

"Calculating scope 3 emissions is challenging for us as a chemical company," said Torsten Heinemann, head of innovation and sustainability at Covestro. "This is because such emissions are generated both upstream, when we purchase raw materials, and downstream, after we sell our products.

"Because of this, measures to reduce scope 3 emissions impact our suppliers as well as our customers and will require a transformation of the entire supply chain," he added.

Covestro's scope 3 emissions make up 80 percent of its total greenhouse gas emissions, with the raw materials it purchases being responsible for the greatest share, it said in a sustainability statement on its website.

In the path to reduce its greenhouse gas emissions by 10 million metric tons by 2035 and to neutralize scope 3 emissions by 2050, Covestro has identified four levers to drive down emissions.

The first is to require the company's suppliers to reduce its scope 1 and 2 emissions, which in turn count towards Covestro's scope 3 emission levels. The material manufacturer said "many" of its raw materials already have their own targets for scope 1 and 2 emissions reduction. Covestro recently signed a deal with Encina for the supply of chemically recycled feedstock materials to reduce its scope 3 emissions.

Other short-term measures for Covestro include electrification, improved efficiency and carbon capture and storage (CCS) in supplier production processes.

The second lever covers improving the business case for products made from feedstock that doesn't come from fossil fuels. Recycled plastics and bioplastics in particular are still not cost competitive with products made from virgin plastic. Closing that gap would give Covestro a financial incentive to use more fossil-free materials.

Covestro's third option for scope 3 reductions are its Make-brand projects that use alternative raw materials with a smaller carbon footprint such as using bio-based aniline or its Evocycle CQ technology for recycling mattresses.

The fourth focus will take a broader look at ways to improve recycling rates to reduce emissions from waste incineration and changes to mining and other energy extraction processes. Covestro said it will accelerate innovations through digital research and development and artificial intelligence.

"Our scope 3 targets are both ambitious and realistic supported with a concrete implementation plan," Covestro CEO Markus Steilemann said. "This is an essential building block of our climate strategy. Completing our climate neutrality targets is another major milestone in aligning all of our activities with our vision of becoming fully circular."