Alpek Polyester ESG:

Internship 2022
Addison Vaughn – Raw Materials Team

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 Agenda
1. Terms Overview 5. Scope 3 Reduction
2. Carbon Reduction Goals 6. Supplier Research
3. Customer Initiatives 7. Recommendation
4. Scope 1 & 2 Reduction

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 Overview of Terms
Terms to know
REC: Renewable energy credit. Tradeable, non-tangible commodities that represent proof that 1 MWh of electricity was generated from
a renewable energy resource.
VPPA: Virtual power purchase agreement. Provides RECs at a price determined by the net difference between the fixed VPPA price and
the wholesale market price.
Scope 1&2 Direct emissions from business processes like electricity, heating, etc

Scope 3: Emissions not produced from Alpek, but from associated parties.
Science Based Target Initiative. Targets are considered ‘science-based’ if they are in line with what the latest climate science
SBTI: deems necessary to meet the goals of the Paris Agreement – limiting global warming to 1.5°C above pre-industrial levels.

GHG: Greenhouse gas. Includes carbon dioxide, nitrous oxide, and water vapor.

CO2: Carbon dioxide.

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 A lp e k Po lye st e r ’s Ca r b o n Re d u ct io n G o a ls
a n d Pro cu re m e n t Po licy
Goals
• Reducing Scope 1 & 2 CO2 emissions by
How
27.5% from 2020 by 2030 in US and • Procure green electricity to meet
Why
Canada CO2 emission reductions that cannot
• Carbon neutrality by 2050 be met by site reductions • To provide the highest value proposition to our customers and
• Ensure green electricity purchases are • Focus and promote long term CO2 stakeholders
reliable and cost effective reductions at each site via process • To meet the goals of the Paris Accord
improvement • Strive to minimize any adverse effects from our products and
• Explore alternative energy sources processes
• We rely increasingly on sustainable business practices across our
entire value chain to create value for our shareholders

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 Customer Initiatives
Coca-Cola Required to be a part of the SBTI Initiative

Pepsi Currently, the only customer that has a requirement outside of SBTI

Pepsi requests that 100% demand be produced by renewables by 2023. Our demand for 2021 was is
The Request equivalent to 59,000 MWh

The cohort was created with other suppliers to go in on other projects which provides cost
The Cohort Option advantages. A possible project with Schneider Electric would last roughly 3 years.

Utilizing VPPAs (Virtual Power Purchase Agreements) is our best option to

Solution reach their goal. VPPAs typically take 2-3 years to complete.

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 Scope 1 & 2 Emissions Reduction
Our Current Energy Savings

Current State Alpek Polyester’s Scope

Goals Future State: Reduction of 740,000
Currently, there are no energy saving projects in
progress in US and Canada plants to reach this MWh
goal 27.5% reduction of Scope 1 & 2 emission
by 2030
In order to reach 27.5% reduction goal by 2030 for Alpek Polyester
globally, the US and Canada will need to convert the full electricity
Net Zero by 2050
load to renewables.

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 AP’s Scope 3 Emissions

What
Current State
13.5% reduction target by 2030
Target Reduction
Current metric tons of CO2 produced
from suppliers is 5.01 million
To reduce 13.5% of total load, we would need to reduce CO2
emissions by rougly 675,000 tons

2030 Expected tons of CO2 reduced: 3,210,044

2050 Expected tons of CO2 reduced: 3,140,974
2030 Projected Reduction Percentage: 30% reduction
• Most suppliers have a roughly 30% reduction of CO2 emission goal
2050 Projected Reduction Percentage: 66% reduction
• Most suppliers have a roughly 60% reduction of CO2 emissions goal, taking Net Zero goals into consideration

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 Supplier Goal Examples
Some of Our Suppliers Sustainability Goal’s and How They Contribute to Our Scope 3

Supplier Goals Net Zero Goal Actions

Ineos 10% by 2025 NA Utilization of carbon capture/storage. Using

Biomass from manufacture of wood pulp
Eastman 33% by 2030 Carbon Neutral by Some manufacturing no longer uses fossil
2050 fuels for electricity generation
SABIC 20% reduction by Carbon Neutral by Partnership with Linde to create electric
2030 2050 powered steam-cracker technology. Launched
Trucircle initiative
Lyondell 30% by 2030 Net Zero by 2050 Launched a new plastic product line: Circulen,
founding member of Alliance to End Plastic
Waste Foundation
MEGlobal 32% by 2030 NA Optimizing fuel gas consumption in Kuwait,
Oyster Creek sustainability initiatives

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 Final Recommendation
• Purchase RECs in the short term to meet Pepsi 2023 goal and our 2030 goal.
Short Term: • REC opportunities from Duke and Dominion in surrounding area.
• Recommendation of purchasing RECs in same state as site.
Considerations:
• RECs must be purchased again each year
• Can achieve goal more quickly, but cost is high over time with estimated $13-33 million total by end of 2030

• Invest into energy savings products and projects

Long Term: • Solar projects, other renewable sources, etc
Considerations:
• High upfront cost with pay back period of roughly 8-10 years
• Cost decreases over time

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 Appendix
Agenda
Glossary
Alpek Polyester’s Procurement Policy
Customer Initiatives (Pepsi)
Scope 1 & 2 Reduction
Scope 1 & 2 Reduction Calculation
Scope 3 Reduction
Scope 3 Reduction Calculation
Supplier Research
Final Recommendation

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 Scope 3 Reduction Calculation

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 Scope 1 & 2 Reduction Calculation

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