Wacker sets new corporate sustainability goals

17 December 2021

During its online Capital Market Day on December 16, Wacker Chemie AG presented its new sustainable development goals to investors and analysts. Wacker’s new goals are much more ambitious than its previous ones. For example, by 2030, the Munich-based chemical group now aims to cut its absolute greenhouse gas emissions by 50% relative to 2020. Previously Wacker had committed to reducing specific greenhouse gas emissions – i.e. per metric ton of product – by 33% relative to 2012. Wacker is striving to ensure that its entire product portfolio meets defined sustainability criteria by 2030 (previously: 90%). It also expects all its key suppliers to meet defined sustainability standards by 2030 (previously: 90%). During the same period, it expects a 25% drop in emissions relating to upstream products used by Wacker. A new goal refers to specific water withdrawal, which Wacker aims to reduce by 15% by 2030.

The new goals to cut greenhouse gases are so-called Science-Based Targets. In other words, they are consistent with the goal of keeping the global rise in temperature below 1.5 degrees Celsius and therefore comply with the Paris Agreement. Wacker has joined Race to Zero, the UN’s carbon neutrality initiative. The company is, thus, voluntarily committing to the 1.5-degree target and undertaking to issue transparent progress reports on its course toward climate neutrality, which it strives to achieve by 2045.

As Wacker CEO Christian Hartel spelt out, the company is following two strategic approaches to improving its own environmental footprint and making substantial contributions to limiting global warming: "First, we are working toward minimising greenhouse gas emissions and consumption of resources for our own products and processes. At the same time – and we see this as an even bigger lever – our unique chemical products already play a decisive role in enabling our customers in a wide range of user industries to bring climate and resource-friendly solutions onto the market,” said Hartel. "Over the next few years, we want to considerably expand our portfolio of particularly sustainable products.”

In the words of the CEO, the new sustainable development goals are ambitious: "We have spent the last few months scrutinising our product portfolio and production processes. Our goals take us to the limit of what we consider to be technically feasible and achievable,” he emphasised.

A great many Wacker products are used in key ways to combat climate change. Examples include thermally conductive speciality silicones for electric vehicles. One use of Wacker’s dispersions and dispersible polymer powders in the construction sector is as thermal insulation systems in buildings. As a leading manufacturer worldwide, Wacker plays a crucial role in making the energy transition a success thanks to its polysilicon, the most important raw material for solar modules. The amount of solar-grade silicon produced by Wacker in one year results in photovoltaic modules that avoid more than 450M metric tons of CO2 annually. This is equivalent to offsetting the annual emissions of a city the size of Hamburg for 30 years.

What is more, Wacker supplies a host of products based on renewables. Examples include dispersible polymer powders, which are produced using acetic acid made from wood waste, cyclodextrins produced by fermentation for applications in the food and pharmaceutical industries or silicone sealants made with plant-based methanol.

"However, our initiatives toward further improving the sustainability of our portfolio are not only a contribution to countering global warming,” Christian Hartel highlighted. "They are also a tremendous business opportunity for us.” According to Hartel, Wacker products that enable customers to launch climate-friendly and resource-efficient solutions make up about two thirds of our overall portfolio. "As demand for such products continues to grow, we expect that they will develop to be among the most important drivers of our sales and earnings in the coming years,” said the CEO confidently.

Wacker is adopting defined projects and measures to meet its new goals. For example, it is currently working on specific concepts that will enable the Holla site in Norway to replace the coal that it currently uses for producing silicon metal with charcoal and other biomass obtained by sustainable means. Wacker sees such a move as an important lever in significantly lowering its carbon footprint. Other options available to the company to achieve even more sustainable silicon-metal manufacturing processes include the increased use of hydroelectric and wind power in order to meet the site’s electricity demand, as well as employing carbon capture, storage (CCS) and utilisation (CCU). Silicon metal is a key raw material for producing silicones and for polysilicon, which is used to make solar cells and semiconductors. The quantities produced in Holla cover roughly a third of Wacker’s annual demand.

Other Wacker projects are concerned with the value-adding potential of using CO2 as a raw material for chemical products. For instance, Wacker is planning to build a 20-megawatt electrolysis plant – known as RHYME Bavaria – at its Burghausen site. This plant is intended to use renewable electricity to produce hydrogen, which, together with CO2 from existing production processes, is then converted into methanol in a synthesis plant. The expected capacity of the synthesis plant is 15,000 metric tons per year. Feasibility studies on comparable projects at other sites are underway. Hydrogen and methanol are both key starting materials for chemical products such as silicones. Compared with current production methods, the new processes could cut CO2 emissions by as much as 100%. Combined with CO2-optimised silicon metal from Holla, the carbon footprint of silicones can be significantly reduced in this way.

Wacker regards the systematic electrification of its production processes as essential if further progress is to be made in the defossilisation of its manufacturing base. The company is already in a very good starting position in this respect. "Sixty percent of our production processes are already electrified,” explained Wacker’s CEO. "That is much higher than the figure in many other chemical companies.” At the same time, Hartel made it clear that further progress on the electrification front can only be made if sufficient quantities of affordable green electricity are available: "The German Chemical Industry Association (VCI) estimates that going forward, German chemical companies alone would need 600 terawatt-hours per year – equivalent to the current electricity demand of the whole of Germany.” He went on to say that electricity had to be available to companies at globally competitive prices: "That’s the reason that we’ve been advocating a green industrial electricity price of at most 4 cents per kilowatt-hour for years.” He added that the transmission lines needed for a reliable power supply had to be made available, too. "Ultimately, policymakers must ensure the necessary infrastructure is in place,” underscored Hartel. "Wacker and the chemical industry as a whole are ready to play their part in making the energy transition and the reversal of climate change a success.

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