Sustainability Report 2024

Performance Data Tables

Social Performance Data Tables

Employees

 

2020

2021

2022

2023

2024

 

GRI

Total Employees at Year End

4,715

4,760

4,968

5,142

5,481

 

2-7
2-8
Headcount by Region1

 

2020

2021

2022

2023

2024

 

GRI

North America

4,207

4,254

4,414

4,522

4,866

 

2-7
2-8

Female

20%

20%

21%

20%

20%

 

Male

80%

80%

79%

80%

79%

 

Non-binary/Gender Nonconforming

–

–

–

<1%

0%

 

Europe

306

322

337

350

355

 

Female

29%

30%

29%

28%

27%

 

Male

71%

70%

71%

72%

72%

 

Asia Pacific

151

136

163

156

145

 

Female

54%

53%

50%

52%

54%

 

Male

46%

47%

50%

48%

46%

 

Middle East

51

48

54

104

115

 

Female

10%

10%

9%

10%

11%

 

Male

90%

90%

91%

90%

87%

 

1

Unaccounted percentages are due to employees choosing not to disclose this information.
Represented Employees by Region1

 

2020

2021

2022

2023

2024

 

GRI

North America

557

569

584

570

556

 

2-7
2-8

Female

11%

11%

10%

10%

9%

 

Male

89%

89%

90%

90%

91%

 

1

Represented employees in Europe and Asia are not included due to privacy laws. Employee representation is an employee who has the right to seek a union or individual to represent them for the purpose of negotiating with management on issues such as wages, hours, benefits and working conditions.
Employment

 

2020

2021

2022

2023

2024

 

GRI

New Employees

252

469

691

657

612

 

401-1

Attrition Rate

6.9%

9.1%

9.7%

6.8%

6.8%

 

Voluntary Attrition Rate
(less retirements)

2.6%

3.8%

4.60%

4.2%

3.7%

 

Full and Part Time Employees Offered Healthcare (US)

–

–

–

–

100.0%

 

401-2
Parental Leave Utilization (total employees)

 

2020

2021

2022

2023

2024

 

GRI

Total Employees at Year End

180

183

207

228

195

 

401-3

Total Female

27

36

30

35

27

 

Total Male

152

142

177

193

168

 

Total Undisclosed Gender

1

1

0

0

0

 

Return to Work Rate
(not termed the following year)1

95%

95%

90%

97%

–

 

Return to Work Rate (Female)

100%

95%

90%

96%

–

 

Return to Work Rate (Male)

95%

94%

90%

97%

–

 

Retention Rate
(12 months after returning to work)1

–

–

87%

90%

–

 

Retention Rate (Female)

–

–

81%

87%

–

 

Retention Rate (Male)

–

–

95%

90%

–

 

Retention Rate (Undisclosed)

–

–

100%

–

–

 

1

Data Point lags by one reporting year.
Occupational Health & Safety

 

2020

2021

2022

2023

2024

 

GRI

Total Recordable Incidence Rate
(Recordable injuries × 200,000/hrs.)1

0.05 (0.18)

0.10 (0.21)

0.12

0.08

0.10

 

403-9
403-10

Combined Employee and Contractor Recordable Incidence Rate
(excluding major capital projects)

0.05 (0.18)

0.10 (0.21)

0.12

0.10

0.13

 

Employee Recordable Incidence Rate
(excluding major capital projects)

0.05 (0.31)

0.09 (0.31)

0.11

0.10

0.15

 

Contractor Recordable Incidence Rate
(excluding major capital projects)

0.05 (0.06)

0.10 (0.00)

0.12

0.10

0.11

 

Major Capital Projects Recordable Incidence Rate

–

–

0.18

0.03

0.08

 

Fatalities

0

0

0

0

1

 

Work-related Injuries (Work-related Recordable Injuries × 200,000/hrs.)1

9

17

29

22

41

 

403-9

Employee Work-related Injuries
(excluding major capital projects)

4

8

10

9

14

 

Contractor Work-related Injuries
(excluding major capital projects)

5

9

17

11

11

 

Major Capital Projects Work-related Injuries

0

0

2

2

16

 

Fatalities

0

0

0

0

1

 

Work-related Ill Health (Work-related Recordable Ill Health × 200,000/hrs.)1

0 (23)

0 (19)

1

1

0

 

403-10

Employee Work-related Ill Health
(excluding major capital projects)

0 (22)

0 (19)

0

0

0

 

Contractor Work-related Ill Health
(excluding major capital projects)

0 (1)

0

1

1

0

 

Major Capital Projects Work-related Ill Health

0

0

0

0

0

 

Fatalities

0

0

0

0

0

 

1

TRIR is the number of recordable injuries, multiplied by 200,000, then divided by the total number of hours worked in a year. Data within parentheses indicate rates inclusive of confirmed work-related COVID-19 illnesses.
Training

 

2020

2021

2022

2023

2024

 

GRI

Total Employee Training Hours
(LMS and In-Class Training)1

265,302

251,000

317,062

254,374

313,559

 

404-1

Hours of Training per Employee1

56.3

52.7

63.8

49.5

57.0

 

Number of Skills Trainings Provided

–

–

–

–

942

 

404-2

Total Workforce Who Received Regular Performance and Career Development Reviews

–

–

–

–

100%

 

404-3

Salaried Employees with Development Objectives in Plan

–

–

–

–

85%

 

1

2020 data only includes months April through December for classroom trainings due to changes in tracking these courses. This disclosure does not include hours for any external trainings taken by employees and paid for by the company.
U.S. Employee Diversity1

 

2020

2021

2022

2023

2024

 

GRI

American Indian/Alaskan Native

2%

2%

2%

2%

1%

 

405-1

Asian

5%

5%

6%

5%

6%

 

Black or African American

9%

9%

9%

10%

9%

 

Hispanic or Latino

15%

15%

16%

17%

17%

 

Hawaiian or Other Pacific Islander

0%

0%

0%

0%

<1%

 

Two or More Races

1%

1%

2%

2%

2%

 

White

68%

66%

65%

64%

63%

 

1

CPChem employees are not required to disclose information related to diversity and these figures represent the number of employees who voluntarily self-identified with one or more of the listed groups. “Manager” is defined as a supervisor of at least one employee. “Senior Leadership” is defined at a certain salary grade within the organization.
U.S. Manager Diversity1

 

2020

2021

2022

2023

2024

 

GRI

American Indian/Alaskan Native

1%

1%

1%

1%

1%

 

405-1

Asian

5%

6%

6%

6%

6%

 

Black or African American

5%

7%

7%

8%

8%

 

Hispanic or Latino

10%

10%

11%

12%

12%

 

Hawaiian or Other Pacific Islander

0%

0%

0%

0%

0%

 

Two or More Races

2%

2%

2%

1%

2%

 

White

78%

75%

71%

72%

71%

 

1

CPChem employees are not required to disclose information related to diversity and these figures represent the number of employees who voluntarily self-identified with one or more of the listed groups. “Manager” is defined as a supervisor of at least one employee. “Senior Leadership” is defined at a certain salary grade within the organization.
U.S. Senior Leadership Diversity1

 

2020

2021

2022

2023

2024

 

GRI

American Indian/Alaskan Native

2%

1%

1%

1%

1%

 

405-1

Asian

5%

6%

6%

8%

8%

 

Black or African American

2%

4%

4%

5%

6%

 

Hispanic or Latino

4%

6%

7%

7%

8%

 

Hawaiian or Other Pacific Islander

0%

0%

0%

0%

0%

 

Two or More Races

2%

1%

1%

2%

2%

 

White

86%

82%

80%

77%

76%

 

1

CPChem employees are not required to disclose information related to diversity and these figures represent the number of employees who voluntarily self-identified with one or more of the listed groups. “Manager” is defined as a supervisor of at least one employee. “Senior Leadership” is defined at a certain salary grade within the organization.
Global Employee Diversity1

 

2020

2021

2022

2023

2024

 

GRI

Percent Women Among Total Employees

21%

22%

22%

20%

22%

 

405-1

Percent Women as Managers

21%

21%

22%

22%

22%

 

Percent Women in Senior Leadership

17%

18%

20%

23%

24%

 

1

CPChem employees are not required to disclose information related to diversity and these figures represent the number of employees who voluntarily self-identified with one or more of the listed groups. “Manager” is defined as a supervisor of at least one employee. “Senior Leadership” is defined at a certain salary grade within the organization.
Headcount by Generation

 

2020

2021

2022

2023

2024

 

GRI

Baby Boomers (1946–1963) ages 61–79

19%

15%

11%

9%

8%

 

405-1

Generation X (1964–1978) ages 46–60

44%

44%

44%

35%

34%

 

Generation Y (1979–1994) ages 30–45

34%

37%

39%

46%

47%

 

Generation Z (1995 and later) ages 29 and younger

3%

4%

6%

10%

11%

 
Volunteering

 

2020

2021

2022

2023

2024

 

GRI

Total Employee Volunteering Hours

–

–

4,534

3,496

9,785

 

203/
413
Process Safety

 

2020

2021

2022

2023

2024

 

 

Tier 1 and Tier 2 Process Safety Event Rate1 (events/hrs. × 200,000)

0.04

0.07

0.03

0.06

0.03

 

 

Tier 3 >10% of Tier 2 Quantity Threshold

0.38

0.37

0.36

0.27

0.33

 

Tier 1 Process Safety Severity Rate2

0.07

0.11

0.00

0.08

0.05

 

Industry Tier 1 PSESR per API

0.18

0.28

0.25

0.03

0.25

 

1

The total Tier 1 and Tier 2 events, divided by work hours, then multiplied by 200,000.

2

Tier 1 process safety events are ranked 1–4 based on severity. Tier 1 PSE Severity Rate = [(# of Level 4 ratings × 1) + (# of Level 3 ratings × 3) + (# of Level 2 ratings × 9) + (# of Level 1 ratings × 27)] / [Total Process Safety Work Hours × 200,000] where a Level 4 incident is the least significant Tier 1 event. The Tier 1 Process Safety Severity Rate for 2023 was restated from .04 to .08 due to an error that was corrected in December 2024.

Environmental Performance Data Tables

Plastic Management

 

2020

2021

2022

2023

2024

 

 

Reported Plastic Releases from Facilities (pounds)

0

0

0

0

0

 

 

Plastic Recycled from Facilities in the U.S. (millions of pounds)

31.3

28.2

31.5

32.4

32.5

 
Energy

 

2020

2021

2022

2023

2024

 

GRI

Energy Consumption1 (million mmbtu)

202

200

204

211

229

 

302-1
302-4

Electricity

33

32

33

34

35

 

Fuel (net purchased and produced)

140

139

133

138

151

 

Steam (net purchased and produced)

28

29

38

38

43

 

1

Energy consumption totals are reported on an equity basis and represent wholly owned operations, with the exception of Performance Pipe, and the equity stake for facilities where CPChem has only partial equity ownership, with the exception of AmSty and CPChem owned owner operations in Borger, Texas. Reported electricity consumption represents a mix of renewable and non-renewable sources. CPChem currently procures electricity from local utility grids and cogeneration facilities and does not currently procure or generate electricity directly from renewable sources, outside of those supplied to local utility grids. The compilation of our energy consumption data is consistent with the methods used by American Chemistry Council (ACC) for the ACC Energy Efficiency and Greenhouse Gas Annual Survey.
Energy Index1

 

2020

2021

2022

2023

2024

 

GRI

Energy Index (Operations in the U.S.)

0.90

0.95

1.00

0.97

1.04

 

302-3

Energy Index (Operations in Europe)

0.81

0.73

0.73

0.80

0.72

 

Energy Index (Operations in Singapore)

0.91

0.92

0.94

0.94

0.90

 

1

Energy Index compares a facility’s performance to a baseline year. A majority of our facilities use 2008 as a baseline year.
Energy Intensity1

 

2020

2021

2022

2023

2024

 

GRI

Energy Intensity1 (btu/lb of product)

5,306

5,547

5,561

5,378

5,703

 

302-3

Energy Intensity1
(current year/average of prior 3 years)

0.98

1.03

1.04

0.98

1.04

 

Energy Intensity1
(current year/previous year)

1.02

1.05

1.00

0.97

1.06

 

1

Energy intensity is reported on an operated basis and represents 100% stake for wholly owned and joint venture operations which are operated by CPChem, with the exception of Performance Pipe.
Water

 

2020

2021

2022

2023

2024

 

GRI

Total Water Intake1
(thousand mega liters)

570

581

553

574

582

 

303-3

Surface Water

48.1

46.4

47.4

48.0

53.0

 

Ground Water

0.8

0.7

0.4

0.4

0.4

 

Seawater

509.4

527.4

501.3

519.4

522.0

 

Third-Party

4.3

6.1

4.0

6.3

6.0

 

Total Freshwater Intake
(less seawater)1
(thousand mega liters)

53.2

53.1

51.8

54.7

59.9

 

Freshwater Intake Intensity2
(liters freshwater/kg product)

3.7

3.9

3.9

3.9

4.1

 

Total Water Intake in Areas of Extremely High Water Stress | Equity Share2
(thousand mega liters)

–

500.55

486.39

490.79

490.58

 

Surface Water

–

7.30

7.48

0.10

0.11

 

Ground Water

–

0.05

0.05

0.04

0.04

 

Seawater

–

493.00

471.07

490.62

490.20

 

Third-Party

–

0.20

0.14

0.03

0.04

 

Total Freshwater Intake in Areas of Extremely High Water Stress
(less seawater) | Equity Share2
(thousand mega liters)

–

7.6

7.7

0.2

0.2

 

Total Water Discharge1
(thousand mega liters)

538

549

523

540

545

 

303-4

Surface Water

22.4

20.9

22.3

19.6

21.0

 

Ground Water

0.2

0.2

0.1

0.8

1.0

 

Seawater

514.9

525.7

499.7

518.2

521.0

 

Third Party

0.9

1.8

1.5

1.6

2.0

 

Total Water Discharge
(less seawater)1
(thousand mega liters)

23.4

22.9

23.4

22.0

24.0

 

Total Water Discharge in Areas of Extremely High Water Stress | Equity Share2
(thousand mega liters)

–

496.5

476.0

490.8

490.5

 

Surface Water

–

4.0

5.3

0.0

0.0

 

Ground Water

–

0.2

0.1

0.1

0.2

 

Seawater

–

491.0

469.4

489.4

488.9

 

Third-Party

–

1.3

1.3

1.3

1.4

 

Total Freshwater Discharge in Areas of Extremely High Water Stress
(less seawater) | Equity Share2
(thousand mega liters)

–

5.5

6.6

1.4

1.6

 

Total Water Consumption1
(thousand mega liters)

31.1

31.9

30.1

33.9

37.2

 

303-5

1

Water intake, discharge and consumption totals are reported on an equity basis and represents wholly owned operations, inclusive of CPChem operated Owner operations at Old Ocean, Texas, and Pascagoula, Mississippi, and the equity stake for facilities where CPChem has only partial equity ownership, with the exception of AmSty and CPChem ownen Owner’s operations in Borger, Texas, as well as 100% stake is reported for a CPChem-operated joint venture in Baytown, Texas, and a CPChem operated Owner’s facility in Old Ocean, Texas. Total Water Consumption represents the difference between water intake and water discharge and includes water lost due to evaporation. Totals are rounded to the nearest hundred thousand mega liters.

2

Freshwater intake intensity is reported on an operated basis and represents 100% stake for wholly owned and joint venture operations which are operated by CPChem, inclusive of one CPChem operated Owner’s facility in Old Ocean, Texas.
Emissions

 

2020

2021

2022

2023

2024

 

GRI

Total Direct (Scope 1) and Indirect (Scope 2) GHG Emissions | Equity Share1
(million tonnes of CO2e)

9.3

9.5

9.3

9.6

9.8

 

305-1
305-2
305-3
305-5

Direct GHG Emissions (Scope 1)

6.9

7.2

7.1

7.2

7.3

 

Indirect GHG Emissions from Electricity and Steam (Scope 2)

2.5

2.4

2.3

2.4

2.5

 

Total Direct (Scope 1) and Indirect (Scope 2) GHG Emissions | Operated2 (million tonnes of CO2e)

6.4

6.5

6.1

6.2

6.7

 

Direct GHG Emissions (Scope 1)

4.5

4.7

4.5

4.4

4.8

 

Indirect GHG Emissions from Electricity and Steam (Scope 2)

1.9

1.7

1.7

1.8

1.9

 

GHG Emissions Intensity3
(MT CO2e/MT product)

0.44

0.48

0.46

0.44

0.45

 

 305-4

Emissions Events4

51

54

45

40

36

 

Total Criteria Pollutant Emissions5 (thousand metric tons)

10.10

10.61

11.54

11.64

11.78

 

305-7

PM

0.58

0.58

0.54

0.55

0.59

 

SO2

0.55

0.68

1.14

0.65

0.65

 

NOx

3.86

3.80

4.00

4.27

4.42

 

CO

2.53

2.80

3.23

3.66

3.66

 

VOC

2.58

2.75

2.63

2.50

2.47

 

Criteria Pollutant Emissions Intensity6 (metric tons/thousand metric tons product)

0.52

0.56

0.59

0.56

0.52

 

1

GHG emissions reported on an equity basis represent wholly owned operations, inclusive of one CPChem operated Owner’s facility in Old Ocean, Texas, and the equity stake for facilities where CPChem has only partial equity ownership. Totals are rounded to the nearest hundred thousand metric tons.

2

GHG emissions reported on an operated basis represent 100% stake for wholly owned and joint venture operations which are operated by CPChem, inclusive of one CPChem operated Owner’s facility in Old Ocean, Texas. Totals are rounded to the nearest hundred thousand metric tons.

3

GHG Intensity is reported on an operated basis and represents 100% stake for wholly owned operations, inclusive of one CPChem operated Owner’s facility at Old Ocean, Texas. GHG intensity is the ratio of the greenhouse gases emitted (MT of CO2e) divided by the products produced (MT of product).

4

A reportable emissions event includes air, water or land releases above the Reportable Quantity, exceedance of a water discharge limit (permit and regulatory), and emissions events as defined in local regulations or permit conditions that require immediate agency reporting. Emission events count includes wholly owned operations and operations in the Middle East.

5

Air emissions data is reported on an equity basis and represents 100% stake reported for wholly owned operations, with the exception of Performance Pipe and inclusive of one CPChem operated Owner’s facility at Old Ocean, Texas and one CPChem-operated joint venture in Baytown, Texas, and the equity stake for facilities where CPChem has only partial equity ownership, with the exception of AmSty and owner operations in Pascagoula, Mississippi.

6

Air emissions intensity data is reported on an operated basis and represents 100% stake for wholly owned operations, with the exception of Performance Pipe and inclusive of one CPChem operated Owner’s facility at Old Ocean, Texas.
Waste1

 

2022

2023

2024

 

GRI

Hazardous2 (thousand metric tonnes)

26.51

32.78

30.06

 

306-3 306-4 306-5

Waste Directed to Disposal

24.90

30.96

29.11

 

Onsite

12.63

12.68

12.26

 

Offsite

12.28

18.28

16.85

 

Waste Diverted from Disposal

1.61

1.82

0.95

 

Onsite

0.06

0.00

0.00

 

Offsite

1.55

1.82

0.95

 

Non-hazardous (thousand metric tonnes)

161.04

117.67

117.60

 

Waste Directed to Disposal

130.55

70.90

64.23

 

Onsite

38.76

15.78

27.95

 

Offsite

91.79

55.12

36.28

 

Waste Diverted from Disposal

30.49

46.77

53.37

 

Onsite

0.01

0.01

0.03

 

Offsite

30.48

46.76

53.34

 

Other Material (thousand metric tonnes)

4.26

1.34

0.04

 

Waste Directed to Disposal

0.00

0.00

0.04

 

Onsite

0.00

0.00

0.00

 

Offsite

0.00

0.00

0.04

 

Waste Diverted from Disposal

4.26

1.34

0.00

 

Onsite

0.00

0.00

0.00

 

Offsite

4.26

1.34

0.00

 

Universal Waste (thousand metric tonnes)

0.05

0.13

0.20

 

Waste Directed to Disposal

0.05

0.11

0.12

 

Onsite

0.00

0.00

0.00

 

Offsite

0.05

0.11

0.12

 

Waste Diverted from Disposal

0.01

0.02

0.09

 

Onsite

0.00

0.00

0.00

 

Offsite

0.01

0.02

0.09

 

1

Waste totals are reported on an equity basis and represents wholly owned operations and the equity stake for facilities where CPChem has only partial equity ownership, with the exception of AmSty and CPChem owned Owner’s operations in Pascagoula, Mississippi and Borger, Texas, as well as a 100% stake reported for a CPChem operated joint venture in Baytown, Texas, and CPChem operated Owner’s facility in Old Ocean, Texas. Data for years prior to 2022 was not included due to amendments in CPChem’s waste data collection to include onsite waste management, treatment and disposal, as well as recycled, recovered, universal and other wastes. Waste directed to disposal includes landfill, incineration, energy recovery and other treatment methods. Waste diverted from disposal includes materials recovery.

2

Hazardous waste data represents waste deemed hazardous by region specific definitions.
Waste Disposal Method

 

2022

2023

2024

GRI

Energy Recovery

3%

2%

4%

306-3 306-4 306-5

Hazardous

–

2.8

6.0

 

Non-hazardous

–

0.0

0.1

 

Universal Waste

–

0.0

0.0

 

Other

–

0.0

0.0

 

Incineration

30%

11%

12%

 

Hazardous

–

16.1

17.6

 

Non-hazardous

–

0.0

0.1

 

Universal Waste

–

0.0

0.0

 

Other

–

0.0

0.0

 

Incineration with Energy Recovery

–

1%

2%

 

Hazardous

–

2.1

2.4

 

Non-hazardous

–

0.0

0.0

 

Universal Waste

–

0.0

0.0

 

Other

–

0.0

0.0

 

Landfill

44%

30%

20%

 

Hazardous

–

1.1

1.4

 

Non-hazardous

–

44.6

27.9

 

Universal Waste

–

0.1

0.0

 

Other

–

0.0

0.1

 

Deepwell

–

18%

23%

 

Hazardous

–

2.7

0.1

 

Non-hazardous

–

25.1

33.8

 

Universal Waste

–

0.0

0.0

 

Other

–

0.0

0.0

 

Other Treatment

4%

5%

2%

 

Hazardous

–

6.2

0.9

 

Non-hazardous

–

1.2

1.9

 

Universal Waste

–

0.0

0.0

 

Other

–

0.0

0.0

 

Materials Recovery

19%

33%

37%

 

Hazardous

–

1.8

0.9

 

Non-hazardous

–

46.8

53.4

 

Universal Waste

–

1.3

0.0

 

Other

–

0.0

0.0

 
Environmental Compliance1

 

2020

2021

2022

2023

20242

 

GRI

Total Fines

9

11

7

2

1

 

2-27

Total Amount

$210,829

$621,048

$3,572,093

$11,310

$10,000

 

1

The information presented in the table reflects all environmental non-compliance for which a penalty was assessed in the reporting year. Dollars do not directly reflect prior years’ performance due to the variability and timing in how penalties are processed. The total amount of fines paid in 2022 related to environmental compliance includes a $3.4MM penalty associated with a settlement between three CPChem facilities in Texas and the United States Environmental Protection Agency (EPA) as part of EPA’s flaring initiative.

2

Penalty paid to the U.S. Department of Transportation’s Federal Railroad Administration.

Financial Performance Data Tables

Financial Performance1

 

2020

2021

2022

2023

2024

 

GRI

Annual Sales and Other Operating Revenues

8,407

14,104

14,180

11,560

12,105

 

2-6

Total Liabilities2

4,774

5,014

5,087

5,026

5,021

 

Total Members’ Equity

12,252

12,763

13,569

14,683

15,638

 

Net Income

1,260

3,684

1,662

1,173

1,726

 

Current Assets

2,816

3,381

3,472

3,284

3,506

 

Total Assets

17,026

17,777

18,656

19,709

20,659

 

Current Liabilities3

1,394

1,854

2,146

1,757

2,270

 

Debt-to-Capital Ratio

16%

16%

15%

14%

14%

 

201-1

Total Revenues & Other Income4

8,266

14,403

14,247

11,372

11,901

 

Capital Spend

525

726

1,534

1,948

1,615

 

Community Investment

7

6

6

6

7

 

1

Reported in millions of dollars

2

2023 number is restated from 5,025 due to rounding adjustments.

3

2021 number is restated from 1,853 due to rounding adjustments. Some short-term debt was included in the 2022 value stated, descriptor of “Excluding Debt” has been removed from this metric.

4

2022 number is restated from 14,274 due to a transcription error.

Additional disclaimers:

Carbon Pricing Risks – A central theme in future climate scenarios is the institutionalization of a carbon price, varying by region. Under the IEA SDS and NZE scenarios, carbon pricing is expected to be implemented in CPChem operating regions. Carbon prices in the scenarios range from $120–$130 per metric ton in 2030, ramping up to $200–$250 per metric ton in 2050. Based on emissions from industry today, this would represent a significant increase in direct cost to companies, including CPChem. CPChem’s operated Scope 1 emissions in 2021 were 4.7 million metric tons. Our MACC process is an institutionalized program that is one avenue used to limit the exposure of CPChem to carbon pricing risks by incorporating carbon pricing into emission-reduction project funding decisions. Other processes to proactively limit carbon price exposure risk are detailed throughout this report.

Energy Pricing Risks – The IEA’s SDS and NZE scenarios model crude oil and natural gas prices significantly declining from now through 2050. CPChem’s variable costs are reliant on ethane prices, which are dependent on natural gas prices. Global polyethylene prices are dependent on Asian naphtha cash costs, which trend with crude prices. Together, these moving prices affect the overall polyethylene chain margin. CPChem considers the impacts of these prices for the IEA scenarios as well as for internally generated scenarios on our overall margins to assess the risk to our business in various scenarios. Our strategy considers results from scenario analysis and aims to mitigate risks of plausible scenarios, including, but not limited to, our efforts to diversify feedstocks.

Exposure to Physical Risks – According to the analysis, most of CPChem’s physical risk results from acute exposure to hurricanes and associated flooding at high-value assets in the U.S. Gulf Coast region, as they are associated with higher asset-damage levels and longer business interruption during extreme weather events. In the RCP 7 scenario1, hurricanes are not expected to increase in frequency2 but are expected to have higher wind speeds and longer interruption times due to heavier rainfall leading to an increase in potential annualized impact compared to our baseline risk. However, most sites with current flood risk actually see projections for lower inundation levels leading to a reduction in potential annualized impact in a high global warming scenario compared to our baseline risk. Additional chronic physical risks include extreme heat and water stress, which are both modeled to increase from baseline in a high-global warming scenario. Extreme heat conditions are modeled3 to occur at several CPChem sites.

Materiality – This report contains references to materiality. Use of said term, and inclusion of any topic, information or data in this report, does not correspond to the concept of materiality used in securities laws and disclosures required by the U.S. Securities and Exchange Commission.

1 RCP 7 is aligned with TCFD’s recommendation to “stress test” a portfolio of assets for “business as usual” temperature change conditions that represent little effort to mitigate against the physical impacts of climate change. Under RCP 7, chronic risks from extreme heat and water stress begin to take effect, and risks from coastal flooding and hurricanes increase in magnitude.

2 Projections from Knutson et all 2020 (National Oceanic and Atmospheric Administration).

3 Coupled Model Intercomparison Project Phase 6 (World Climate Research Programme).

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