Energy and Emissions

It is our goal to become carbon neutral by the end of 2030 for scope 1 and 2 emissions, with 100% of our energy coming from renewable sources. Our scope 1 emissions are those that we produce on site through fuel combustion and refrigerant usage. Scope 2 emissions are those that we indirectly produce through the direct purchase of electricity and steam. Scope 3 emissions encompass a broader scope of indirect sources, such as purchased goods and services and upstream transportation and distribution.

We are identifying opportunities to reduce our scope 1 emissions by replacing fossil fueled equipment with electric and other alternatives. In 2023, we added a requirement to include scope 1 emissions criteria as part of our capital expenditure approval process.

We are also focused on reducing our scope 2 emissions by expanding our use of renewable energy resources. In 2023, we made great progress towards reducing our scope 2 emissions. At one of our Türkiye sites, we added more solar panels and at our other Türkiye location we invested in two wind turbines which are expected to be in service during 2024, and will provide electricity for the entire site. In India, we secured a power purchase agreement (PPA) to supply clean energy for roughly half of the site’s annual electricity needs. This agreement is expected to take effect in the second quarter of 2024. We remain committed to exploring renewable energy options across all our regions, with the goal of achieving 100% renewable electricity use at each facility.

In addition, we are focused on reducing energy usage at our facilities through energy reduction projects. In 2023, our associates completed over 12 energy reduction projects. Projects completed include optimizing machinery to reduce run times when sites are closed and improving the efficiency of our lighting systems.

In 2023, our total energy usage was 647,569 gigajoules (GJ). Our total scope 1 and 2 location-based emissions were 71,295 metric tons CO2e and our total scope 3 emissions were 1,224,000 metric tons CO2e. Total indirect energy and emissions decreased year-over-year primarily because we closed operations at our Yangzhou, China facility.

16 Defined as scope 1 and scope 2 location-based emissions divided by annual net sales including discontinued operations excluding field service sales.