Carbon trajectory: our path mapped out until 2025

17/07/2020 - Commitments

The Science Based Target Initiative* (SBTi) has approved Vallourec’s carbon trajectory until 2025, declaring its fulfillment of COP 21 - PARIS goal commitments to limit global warming to a level well below 2 degrees Celsius.

The Group is already seen as a low greenhouse gas emitter – it gains from its Brazilian forest, which acts as a carbon sink, and its industrial processes, such as its electric steel plants.

Vallourec intends to go further still and back climate change mitigation by reducing its direct and indirect carbon emissions. With expert help, Vallourec has set targets which have been assessed by the SBTi.

Recently approved objectives validate the relevance of our proactive approach which sanctions the development of our wide-ranging action plan. This is to be turned into tangible action to cover all the GHG Protocol scopes** and encompass the full value chain.

SBTi-approved 2025 emission reduction targets

Vallourec is committed to:

Reduce absolute Scopes 1+2 emissions by 20 % (the target boundary includes biogenic methane emissions from charcoal carbonization),
Reduce absolute Scope 3 emissions by 25%,
Reduce Scope 3 emissions from purchased goods and services, 45% per unit of value added,
Reduce absolute Scopes 1+2+3 emissions by 25 %.

Commitment

This trajectory results from our low-level emissions, together with our strategic focus and detailed action plan developed to further reduce emissions. Our commitment to a low-carbon economy absolutely sets us apart from the competition.
Jean-Louis Merveille Group Sustainable Development Director

Direct emissions reduction (Scopes 1+2) by at least 20 % by 2025 (based on 2017 data)

This objective is part of our ongoing energy savings program, The GreenHouse Project, which started in 2009 and targets our total gas and electricity consumption reduction by 20% before 2020. To achieve its Scopes 1+2 targets and reduce even further its direct emissions, Vallourec is extending this program to 2025 and is targeting a further 10% improvement (with 2017 as the baseline year).

In addition, the Group intends to further improve the split of non-carbon electricity (renewable and nuclear). Following the gradual shutdown of our supplier’s coal plant in Ohio and a switch to a nuclear power plant, this split has now increased swiftly from 68% in 2018 to 81% in 2019.

Our drive in Brazil is to reduce methane emissions in charcoal production. In recent years we have made significant progress in this area. These efforts are on-going with, for example, the use of furnace stack burners for methane to CO2 conversion.

25 % indirect emissions reduction via global Scopes

Our action on total value chain indirect emissions will be critical for bolstering our contribution to a low-carbon economy.

Concrete actions on the upstream part of our value chain...

Vallourec will leverage its relationship with strategic steel suppliers to engage them in reducing their carbon intensity per ton of steel. Notably, in November 2019 weobtained commitment from its largest European steel supplier to a 20% reduction in carbon intensity by 2025.

Additionally, in China, the Group is aiming to increase the share of electric steel units in its Chinese steel purchases, from 5% to 10% and projects a 10% reduction in carbon intensity of carbon steel suppliers.

...in parallel with strategic decisions acting on our downstream activity

Vallourec’s ambition is to focus on energy transition through geothermal, hydrogen, wind energy, and CCUS (carbon capture and storage).

The Group also serves other renewable energy markets, in particular the solar industry (supply of tubes for photovoltaic panels) and biomass energy industry (supply of tubes for biomass, waste-to-energy and biofuel projects). Building on this diversity of solutions, it plans to become a stakeholder in this shift and thus support its customers in their own energy transition process.

Recognized by many extra-financial rating agencies, member of the Global Compact since 2010 and CDP's A list***, it is Vallourec’s responsibility to continue to improve its results and remain a leading sustainable player in its markets.

Proud

We are proud of this recognition by the SBTi, which demonstrates our long-standing commitment to the fight against global warming and to a carbon-free economy. Indeed we are the first company in the Oil and Gas sector to obtain this recognition.
Edouard Guinotte Chairman of the Management Board

*The SBTi (Science Based Target Initiative) is a partnership between CDP (Carbon Disclosure Project), UN Global Compact, WRI (World Resources Institute) and WWF (World Wildlife Fund), which helps companies set targets to reduce their carbon footprint in line with the COP21 Paris Accord: namely, to limit global warming to well below 2°C.

** GHG protocol scopes: The GreenHouse Gas protocol covers 3 categories (direct, fossil and biogenic emissions (Scope 1), indirect emissions from electricity consumption (Scope 2), and indirect emissions from other sources, including the emissions associated with the entire life-cycle of our products (Scope 3).

*** The CDP (Carbon Disclosure Project) is a global, non-profit organization that encourages businesses and governments to reduce their greenhouse gas emissions and protect water resources and forests. It assesses companies independently, assigning a score from A to D. Vallourec ranks in the prestigious "A List" among 184 companies out of the 8,400 evaluated worldwide.

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