Climate and energy

The production of our ingredients needs to be large scale to ensure long-term competitiveness in a globalised economy, requiring large investments in infrastructure and equipment, and consuming considerable amounts of raw materials, processing aids and energy.

Therefore, our business activities are dependent on reliable and affordable access to corn, chemicals, natural gas, electricity and transport. Thereby, they generate large amounts of Greenhouse Gas Emissions (GHG) and have an impact on climate change. The greatest contribution comes from fossil energy for stationary and mobile combustion, corn and chemicals.

To monitor closely their energy consumption and improve their energy efficiency, our production sites in Austria, France and Germany have implemented ISO 50001 certified energy management systems. The production site in Canada is preparing for the same certification. GHG emissions data collection and reduction measures are coordinated by our Corporate Sustainability Manager Operations, with the support of the Sustainability Managers located in the production sites

Jungbunzlauer recognises that GHG emissions are a root cause of climate change. As a predominantly European company in terms of manufacturing footprint and sales, we support the European Green Deal, the sustainability strategy of the EU launched in 2019 with the aim to become climate neutral by 2050. We therefore closely follow the associated changes to regulations on the European level and on national level in Austria, France and Germany.

To contribute to the mitigation of climate change, we aim to reduce our GHG emissions significantly to achieve our 2030 near-term Science Based Targets (SBTs). Actually, we aim to outperform our near-term SBT for scopes 1 and 2 by 2030, and to become carbon neutral by 2050.

To realise this objective, our strategy is to continuously improve the energy efficiency of our production processes, and to decarbonise their heat and electricity consumptions through carbon-free or low-carbon technologies, and to replace fossil energy sources by renewable ones, either purchased or self-generated.

With the long-term industrial vision and strong support of our owners, we aim to invest 30-40% of our capital expenditures in sustainability projects in the next five years, predominantly to make our production sites net-zero for scopes 1 and 2 between 2030 and 2040 depending on the site.

Near-term Science Based Targets
Jungbunzlauer has committed to the SBTi and to set group-wide near-term SBTs in line with a well-below 2°C ambition level in 2021, based on version 4.2 of the SBTi Criteria and Recommendations. Our near-term SBTs were approved by the SBTi in 2023. Jungbunzlauer has not yet submitted a net-zero SBT to the SBTi, and aims to evaluate this opportunity when we will review our near-term SBTs at end of the initial five-year period, i.e. in 2025.

Since corn is the largest single contributor to our category 3.1 emissions and total scope 3 emissions, we have completed an assessment of the magnitude of Forests, Land, and Agriculture sectors (FLAG) GHG emissions in our Corporate Carbon Footprint (CCF) in 2023. Our base year for our near-term SBTs, i.e. 2020, was used as the relevant year. The outcome was that the FLAG-related emissions were below the threshold of 20%, above which target setting for FLAG emissions would be mandatory. Jungbunzlauer has decided not to set voluntary targets now, but to use the resources that would have been needed for a FLAG target setting project to work more intensively with corn value chain partners to be able to use primary data instead of secondary emissions factors from databases in the future, and to determine appropriate GHG emissions reduction measures at field level.

Decarbonisation strategy for scopes 1 and 2
Jungbunzlauer belongs to the energy-intensive process industries. Due to their considerable energy consumption for medium-sized companies, our production sites are directly or indirectly subject to the Emissions Trading System (ETS) of the EU and Canada. Therefore, it has been core to our strategy for decades already to continuously improve our energy efficiency, develop robust energy management systems and generate energy on site, as an important lever to ensure cost competitiveness in a globalised commodity market.

Specific energy efficiency targets are set annually by the Vice President Manufacturing and Technology for all main production lines of every production site.

To support the energy-saving efforts at all levels of our production sites, we have decided to implement an ISO 50001 certified energy management system in all our production sites. We consider this as the foundation to achieve our emissions reduction targets for scopes 1 and 2, by understanding better our significant energy usages and visualising our energy flows, and thereby efficiently identifying priority projects to reduce CO₂ emissions. Such a system further allows a structured and focused approach for energy conservation, as well as education and training of employees on their roles in saving energy.

Since the 1980s, we have been replacing a portion of our natural gas demand in Austria by biogas, which is self-generated from a wastewater stream. Nowadays we operate the largest biogas production plant in Austria, and our biogas is certified renewable according to the Sustainable Resources Verification Scheme (SURE) scheme of REDcert. Already for many years as well, we have been generating a share of our power needs in on-site CHP installations, to optimise the efficiency of power production and consumption by recovering the cogenerated heat to produce useful high-temperature steam, and by avoiding losses occurring during transmission of grid electricity.

Since 2020, we have developed a comprehensive decarbonisation strategy for both our heat and electricity consumptions, thus taking our energy strategy from the level of continuous improvement of energy efficiency for cost competitiveness to the next level of transformation to low carbon for climate change mitigation.

Our heat decarbonisation strategy is mainly based on waste heat recovery and electrification, and the use of bio-based alternatives to natural gas like biogas and biomass to produce steam. Heat decarbonisation projects taking time to yield visible results in the CCF and Product Carbon Footprints (PCFs), we run an electricity decarbonisation strategy in parallel with our heat decarbonisation strategy to realise meaningful reductions of GHG emissions also shorter term through the purchase of Renewable Energy Certificates (RECs), the implementation of Virtual Power Purchase Agreement (vPPAs) and the installation of photovoltaic systems.

Emissions reduction strategy for scope 3
Our scope 3 emissions are mainly associated with three categories: purchased goods and services (category 3.1), fuel- and energy related activities (category 3.3), and upstream transportation and distribution (category 3.4). We have chosen to set SBTs for these material emissions categories to show our commitment to reduce these emissions and to structure our approach.

Emissions of category 3.1 are largely related to emissions of corn and chemicals which we consume in our production sites. Emissions of category 3.4 are mainly caused by road transportation of our finished products from our production sites to our customers, and of production inputs from our suppliers to our production sites. Our strategy is to collaborate with our suppliers of these products and services through appropriate measures. First, we want to improve data quality by moving from secondary emissions factors to reliable primary data where feasible and senseful. With this, we then aim to determine and implement impactful GHG emissions reduction measures for identified emissions hot spots. Furthermore, we encourage our suppliers of corn and chemicals accounting for significant emissions to commit to set SBTs with the SBTi.

Emissions of category 3.3 are mainly due to upstream production and transportation of natural gas. We consider our scope 1 heat decarbonisation strategy based on the substitution of natural gas as our main lever to reduce emissions in this category.

In 2023, our CCF has decreased by 33% compared to 2022 due to a strong reduction of our sales in volume, which resulted in a similar reduction of production volumes. Compared to our base year 2020, the decrease has even reached 35%. However, the year 2023 has been extraordinary because of the energy crisis caused by the war in Ukraine, which has caused costs of energy-intensive industries in Europe to skyrocket and business to shrink significantly. Our lower CCF for the year 2023 is thus not the result of our decarbonisation efforts, but of adverse market conditions. Under comparable market conditions we would have expected our CCF to decrease slightly as a consequence of the full year effect of the heat pumps started in Austria mid of 2022 and improvements in energy efficiency. Corporate GHG emissions intensity, which is now reported on revenue basis instead of volume basis, decreased by 25% from 2022 to 2023 because of higher prices (exact numbers can be found in chapter 6 in our report).

Since 2022, Jungbunzlauer has engaged with DEKRA to conduct an annual verification of our CCF. In 2023, the verification, which initially covered scopes 1 and 2, was extended to scope 3. Therefore, DEKRA audited all scopes and categories calculated for our CCF of 2022, and confirmed that it is in accordance with the requirements of the GHG Protocol.

^{Development of Jungbunzlauer's global GHG emissions intensity. GHG emissions intensity is calculated in kg of CO2e/EUR of gross sales since 2023, using Jungbunzlauer's global absolute CCF and global gross sales. Data were calculated retroactively for 2020 to 2022}

We evaluated the PCF for most of our main products for the first time in 2013. Since 2020 we have been calculating PCFs annually for always more products, allowing us to share high quality primary GHG emissions data with our customers, and to demonstrate our progress in reducing emissions for products relevant to them. In 2023, the interest of our customers in PCF data increased significantly, as they allow them to make a more accurate calculation of their scope 3 emissions. Compared to 2013, the 2023 PCF was reduced for all products for which we made a calculation in both years. Compared to 2022, most PCFs increased slightly in 2023 due to lower output impacting negatively the energy efficiency.

^{PCFs calculated according to ISO 14040/44. System boundary:
cradle-to-gate, minimum boundary for scope 3 in 2023, biogenic CO2 emissions excluded (carbon neutrality approach). Functional unit: 1 mt of product, at factory gate. Impact assessment: Global Warming Potential (GWP), IPCC 2007 for 2013 data and IPCC 2021 for 2023 data, 100 years. System model: cut-off. Source of activity data: primary data measured or calculated by Jungbunzlauer. Source of emissions factors: for 2013 secondary data from ecoinvent V2.2; for 2023 secondary data mainly from ecoinvent V3.9, some from Canadian and European ETSs and CBAM legislations. Allocation rules: economic allocation for overhead emissions, and for distribution of emissions between intentional product and by-products for multi-output production lines}