Planet in 2010

Environment

DSM has set itself environmental targets on the basis of the principle that all DSM plants, wherever they are in the world, should comply with at least the same environmental standards as set in the European Union or the United States. In 2007, based on findings in pilots, the target for the improvement of energy efficiency was doubled from 1% to 2% per year, targeting an 8% improvement in 2010, compared to 2005. Of the nine environmental targets set, eight were realized in 2010. As in 2009, total energy consumption decreased considerably (from 63 to 49 PetaJoules). The decrease in 2010 was mainly due to divestments, which more than offset the increase in energy consumption due to higher production volumes. Energy efficiency was 8% better than in 2005.

The reported figures are the result of improvements achieved in the year 2010, changes in production volumes, the impact of divestments carried out in the same year, as well as the correction of some errors which emerged from a detailed analysis of DSM’s Planet data in March 2010.

In the framework of the new corporate strategy, new long-term SHE targets for 2010-2015 have been defined and translated into plans and activities in a so-called Corporate Multi-year Plan Responsible Care (CMP), which is intended to give guidance to the rolling 3-year plans from the business groups.

From a long list of about 40 topics, 9 issues were identified as being material for DSM on the basis of a combination of potential business impact and societal interest or for reasons of internal stakeholders’ interest and common industry practices. For six of the selected topics, quantitative targets were set.

In the CMP 2010-2015 not only SHE topics are addressed, but also security as a strategic subject. In January 2010 the Managing Board gave its approval for a Security Roadmap.

Reaping maximum rewards from energy-saving investments

Investments in energy-saving measures are by themselves very sound investments, but they have to compete with other investments. DSM has introduced what it calls a Beauty Contest to select the most rewarding energy-saving investments. All business groups are invited to send in their best investment ideas for saving energy. A judging panel selects a short list and ranks the proposals according to the rewards they bring, not just financially but also in terms of sustainability (conserving fossil resources and reducing greenhouse-gas emissions). Aspects such as innovativeness, process integration and example setting for other businesses also play a role in the selection process.

The implementation of the top 50 ideas that emerged from the 2010 Beauty Contest should result in savings totaling approximately 2% of DSM's current energy consumption.

In 2010 DSM reached a partnership agreement with the US Department of Energy (DOE) to help reduce DSM’s energy consumption at selected DSM facilities in the United States by 25% over the next 10 years, consistent with the company’s sustainability strategy. The DOE will provide expert services, third party consultants and resources to help make this goal a reality.

Sharing information on the safe use of chemicals

Within the scope of REACH (Registration, Evaluation, Authorization and Restriction of Chemical substances), the European legislation on chemicals, DSM is running a program to share with its peers all available information on the properties and safe use of chemical substances. The importance of REACH cannot be overestimated: companies that fail to comply with REACH will at some point no longer be able to do business in the European Union.

Before 2018 all substances that DSM produces and imports in the European Union have to be registered under REACH. Registration includes providing information on the safety of the substances’ intended use. The total number of substances involved exceeds 600, of which 79 had to be registered by 1 December 2010. DSM succeeded in meeting this deadline, thus providing security of supply for its customers. Currently DSM is REACH compliant, and focused on the future: the next deadlines in 2013 and 2018, follow-up of its 2010 dossiers and integration of REACH in daily operations.

DSM has also committed itself to actively participate in the Global Product Strategy (GPS), initiated by the International Council of Chemical Associations (ICCA). The aim of the GPS initiative is threefold:

• To reduce differences in the safe handling of chemical substances between developing, emerging and industrialized countries
• To ensure the correct handling and use of chemicals across the value chain and across geographical boundaries by providing relevant and reliable information
• To increase transparency by helping companies provide stakeholders with information about marketed chemicals in an easily understandable format: the GPS Product Safety Summary

DSM has started the development of GPS Product Safety Summaries, the first six of which have been published on DSM’s Product Stewardship website. In 2010 DSM finalized the format of these Product Safety Summaries and linked the first five to the GPS portal of ICCA. In addition, the company actively participated in the ICCA Taskforce on Information Gathering and Sharing that published an ICCA Guidance on Chemical Risk Assessment.

DSM carefully aligns its GPS and REACH activities by prioritizing its GPS initiatives on the basis of REACH deadlines.

One of DSM’s SHE (Safety, Health and Environment) targets for 2020 is to use GPS company-wide as the tool to communicate on product safety to the outside world.

DSM continuously monitors developments with regard to the UN Globally Harmonized System (GHS) and the EU Regulation on Classification and Labeling (CLP) and takes the necessary actions to ensure compliance. Products have been relabeled and revised Safety Data Sheets are provided according to the new requirements. In that process national and regional deadlines are respected. DSM employees are informed and trained on the new information.

ICT contribution to GHG emission reduction

In 2010 DSM’s ICT department added some new aspects to the reduction of energy use and CO₂ emissions. Besides a focus on replacing desktops, laptops and servers with less energy consuming equipment the department introduced a new way of working. The reduction of travel by using video conferencing resulted in additional savings in both costs and CO₂ emissions. The consolidation of printing capacity in the follow-me printing concept also resulted in savings. Continued improvement in DSM’s datacenters together with the earlier mentioned initiatives resulted in total savings of 642 tons of CO₂ in 2010 compared to 385 tons in 2009.

Manifesto for Sustainable Procurement

A group of Chief Procurement Officers of private companies, including DSM, and public institutions have taken the initiative of drawing up a Manifesto for Sustainable Procurement and Corporate Responsibility. By signing and endorsing the Manifesto, each participant declares that they will promote the offering of more sustainable products and services by enhancing the sustainability of their procurement practice and thus contribute to the sustainability of their company. It contributes, for instance, to maintaining an up-to-date and efficient ICT infrastructure.

Environmental targets for 2010

The following pages provide an overview of DSM’s emission and consumption figures for 2010 as well as comments on the realization of the reduction targets for the period 2005-2010.

The environmental targets are based on the principle that all DSM sites in the world should as a minimum meet the standards as applied in the European Union or the United States. New plants and major plant modifications should meet this requirement right from the start, whereas existing plants should meet it within five years.

DSM realized eight out of its nine environmental targets for 2010 and exceeded some of them. Clear improvements by 65% were realized for SO₂ emissions, although the ambitious target of 75% reduction was not achieved. Further reduction of SO₂ emissions is one of the new environmental targets for 2015.

The figures reported here are the result of improvements achieved by 2010, changes in production volume, divestments carried out in the same year, and the correction of some errors that surfaced from a detailed analysis of DSM’s Planet data in March 2010.

The following table shows DSM’s environmental reduction targets for 2010 and the degree to which these were realized.

The reduction percentages shown in the table are the result of calculations incorporating changes in production volume. Acquisitions and divestments in the period 2005-2010 are excluded for the determination of target realization in order to have a like-for-like comparison.

The graphs on the following pages show the uncorrected DSM totals, which can give rise to some apparent differences. The graphs make a distinction between continuing operations and discontinued operations. In this framework, discontinued operations are DSM Agro, DSM Melamine, Citrique Belge, DSM Special Products and DSM Elastomers. Since the divestment of the Keltan^® business unit of DSM Elastomers was not yet finalized at the end of 2010, the emissions and consumption figures for this business unit are still included in the 2010 figures. The other discontinued units are no longer included in the environmental data for 2010.

It should be taken into account that the production volumes of several plants were higher than in 2009, when they were reduced for economic reasons.

In addition to the consolidated graphs shown in this section, on www.dsm.com DSM publishes detailed information on the environmental performance of all its production sites, such as emissions, consumption figures and SHE highlights. Data reporting by the sites is regularly audited by DSM’s Corporate Operational Audit department.

Emissions to air

Dust

The 75% reduction target for 2010 was amply achieved, mainly as a result of improvements in previous years. The 125-ton reduction from 2009 to 2010 is the net result of small increases at DSM Fibre Intermediates’ plants and the divestment of DSM Agro.

N₂O

The 40% reduction target for emissions of nitrous oxide (N₂O) for 2010 was amply achieved. Major improvements had been realized in previous years in the plants of DSM Agro, but these were not taken into account in calculating the overall reduction achieved since 2005 (45%) because this business group was sold in 2010. The reduction percentage of 45% is due to the fact that production volumes at the caprolactam plants of DSM Fibre Intermediates, which are the main remaining sources of N₂O emissions, increased significantly more than N₂O emissions in the period 2005-2010.

The changes from 2009 to 2010 were mainly the result of the divestment of DSM Agro and an increase in the production volume at the caprolactam plant in Augusta (USA). Measurement of nitrous oxide in these plants is complex, which causes some uncertainty in the reported values.

DSM Fibre Intermediates is working on new technology for N₂O abatement in its caprolactam plants. DSM’s 2020 greenhouse-gas reduction target is based on the assumption that the development and implementation of this new technology will be successful.

SO₂

DSM’s SO₂ emissions have decreased significantly since 2005. Nevertheless, the ambitious reduction target of 75% was not achieved. The reduction percentage, relative to production volumes, was 65%. The reduction target of 75% was partly based on a reduction to be realized at DSM Fibre Intermediates Nanjing. Due to local circumstances, the intended reduction at that site is expected to be realized in the next target period (2010-2015).

From 2009 to 2010 only minor changes occurred in SO₂ emissions, mainly as a result of variations in the sulfur content of the fuel used.

NO_x

The reduction target of 20% for NO_x emissions was amply achieved. NO_x emissions fell in 2010 compared to 2009. This was the result of an increase in production volume in the caprolactam plant of DSM Fibre Intermediates in Augusta (USA) on the one hand and the divestment of DSM Agro and several other units on the other hand.

VOC

The reduction target of 50% for emissions of Volatile Organic Compounds (VOC) for 2010 was just achieved. VOC emissions in 2010 were reduced by approximately 500 tons compared to 2009, due to several changes. Major reductions were achieved at DSM Anti-Infectives Ramos Arizpe, Mexico (450 tons) as a result of the introduction of enzymatic processes, and at DSM Fibre Intermediates Nanjing, China (450 tons) as a result of technical reduction measures. A further reduction resulted from smaller changes, including the divestment of several units.

On the other hand, there were increases at DSM Fibre Intermediates Augusta, USA and DSM Elastomers Triunfo, Brazil due to increases in production volumes. DSM Fibre Intermediates, Augusta, USA has already taken measures to reduce VOC emissions and will significantly reduce these emissions further in 2011 and beyond. As reported in DSM's Triple P Reports for previous years, VOC emission figures at DSM Fibre Intermediates Augusta, USA for 2005 needed to be corrected, from approximately 250 tons to 1,500 tons (see also the section on Fines).

Reported emissions of DSM Nutritional Products Dalry, UK also increased, partly due to an increase in production volume and partly due to a necessary upward restatement by approximately 200 tons per year in the whole period 2005-2010, as a result of a more robust calculation method. DSM has started an evaluation into possible measures to reduce the emissions.

Emissions to water and landfilling of waste

COD

The reduction target of 15% for emissions of COD (Chemical Oxygen Demand: an indicator of the degree of pollution of wastewater by organic substances) was amply achieved. Several wastewater treatment plants had been taken in operation or improved in previous years, as reported in previous Triple P reports.

In absolute terms, the discharge of COD in 2010 increased by approximately 1,600 tons compared to 2009. This is the balance of an increase of approximately 1,800 tons due to increased production volumes, in combination with some technical problems, and a decrease of approximately 200 tons due to the divestment of several units.

Non-hazardous waste

The reduction target of 5% for landfilling of non-hazardous waste was amply achieved. The landfilling of non-hazardous waste was reduced by approximately 3,000 tons in 2010 compared to 2009. A major reduction resulted from a successful shift from landfill to a composting facility at DSM Nutritional Products Belvidere, USA. Other changes were mainly the result of changes in one-off disposals of waste materials and the deconsolidation of several units.

Hazardous waste

DSM intends to ban the landfilling of hazardous waste for all situations where feasible alternatives exist. This is reflected in the 100% reduction target. Landfilling is only accepted within DSM if there are no technically feasible or legally permissible alternatives.

In 2010 a total of approximately 8,300 tons of hazardous waste were landfilled, which is significantly higher than the 2,800 tons landfilled in 2009. The vast majority comprised material from the DSM Anti-Infectives site in Toansa, India. For all material it was shown that no technically feasible and legally permissible alternatives existed. DSM therefore considers the reduction target to have been achieved.

Biodiversity

Eleven DSM sites are located in or adjacent to (protected) areas of high biodiversity. This is one less than in 2009, due to the divestment of DSM Melamine in Bontang, Indonesia. DSM has no indication of any adverse impact of its operations on these areas.

Energy and greenhouse gases

Energy consumption

Energy consumption in 2010 was approximately 14 PJ lower than in 2009. This was the balance of two opposing effects: the divestment of several units and increased production in most of the remaining units. In addition, there were significant effects of energy saving projects, most notably at DSM Fibre Intermediates, and of product portfolio shifts at a number of sites.

Energy efficiency

Thanks to a considerable improvement in 2010, the energy efficiency improvement target for 2010 was achieved. The improvement in 2010 was mainly due to the recovery from the low production levels of 2009. Production levels were up to 50% higher. In some cases this resulted in an energy efficiency improvement of 30%. In addition, there were some improvements caused by shifts to products with lower energy intensity at a number of sites. The acrylonitrile plant of DSM Fibre Intermediates in Sittard-Geleen (Netherlands) contributed 0.6 percentage point of the 8% overall improvement through results of the Advanced Manufacturing Program, including the application of advanced process control.

Greenhouse-gas emissions

Just like energy consumption, greenhouse-gas emissions decreased as a result of the divestment of several units and increased due to increased production levels. The total greenhouse-gas emission for 2010 was 5.2 million tons of CO₂ equivalents.

Water consumption

The graph below shows DSM’s global water consumption, split up into surface water, groundwater and potable (tap) water. Total water consumption decreased by approximately 60 million m³(30%) compared to 2009. The deconsolidation of several units, most notably DSM Agro in IJmuiden (Netherlands), resulted in a large decrease, particularly in the consumption of surface water, whereas the increase in production volume caused a relatively moderate increase in the continuing operations.

Raw materials

In its Triple P Report for 2009, DSM presented its use of renewable raw materials as a percentage of the total amount of raw materials used on a weight basis (ton/ton). DSM has decided to change the reporting on (renewable) raw materials from a weight basis (ton/ton) to a money basis (€/€), because this better reflects DSM’s financial dependency on fossil-based versus renewable raw materials and the associated risks. The analysis was done for the period 2007-2010.

In 2010 approximately 7% of DSM’s total spend on raw materials related to renewable raw materials (7.3% for continuing operations). This is a decrease compared to 2009, when this percentage was 9.4%, mainly as a result of stronger growth of the Materials Sciences businesses compared to the Life Sciences businesses.

The previous increase from 2008 to 2009 was due to the economic crisis in 2009, when the Materials Sciences businesses were relatively strongly affected, while Life Sciences were relatively stable.

Fines

Environmental sanctions were given to eight DSM sites. Four of these were fined. The total amount paid in fines amounted to approximately €670,000, compared to €95,000 in 2009. The fines were imposed on DSM Fibre Intermediates Augusta, USA, DSM Anti-Infectives Zhangjiakou, China, DSM Pharmaceutical Products Greenville, USA and DSM Dyneema in Heerlen, the Netherlands.

By far the largest fine related to DSM Fibre Intermediates Augusta, USA. Information on this incident has already been given in previous Triple P Reports.

To the best of DSM’s knowledge, no other fines or non-monetary sanctions were incurred in 2010.

Environmental incidents and complaints

The total number of registered environmental complaints was 27 (79 in 2009), of which 18 were about odor, 8 about noise and 1 fell in the ‘miscellaneous’ category.

The total number of environmental incidents was 336, compared to 421 in 2009. Of these incidents, 23 were rated as serious (15 in 2009).

Of the total number of 336 environmental incidents, 124 have also been classified as related to process safety. Together with one of DSM’s Lost Workday Cases in which contact occurred with process chemicals, this adds up to 125 incidents that have a relation to process safety. In 2009 DSM reported 158 such incidents. The lower number for 2010 is almost entirely due to divestments.

In the absence of agreed uniform industry standards for reporting process-safety-related incidents, over the last three years DSM has reported on these incidents using its own criteria. These criteria specified the release of (low) quantities of hazardous substances or a Lost-Workday Case due to contact with process chemicals as a process-safety-related incident.

Currently, industry developments are in the direction of two slightly different approaches for reporting process safety incidents. One approach originated in the United States and has resulted in an American Petroleum Institute standard, and the other originated in Europe (it is being developed by CEFIC). These approaches differ in the release threshold quantities and the systems used for the classification of hazardous substances. Both approaches will serve the purpose of giving more insight into the occurrence of process-safety-related incidents, but unfortunately the results are not comparable. DSM’s intention is to follow the approach under development by CEFIC and use the results as the baseline for its new 2020 target of reducing process-safety-related incidents by 75%.