Integration in functions and projects

Research and Development: A project is being planned with academic partners to decarbonize heating demand by developing high-temperature heat pumps with renewable electricity to replace the use of fossil fuel for heating. This project has received the requisite financial support and resources. The operation will start in 2023.

All new product innovations are required to undergo sustainability evaluations to ensure the new products (e.g. TENCEL™ Lyocell Filament) offer benefits over conventional products by using life cycle assessments.

Operations: All production sites have been engaged to develop their targets and roadmaps. Please see the section on strategy, targets, and roadmaps for more information. Some emission reduction projects implemented globally during the reporting period include:

  • In 2020, two production sites in Austria obtained 100 percent renewable electricity from the public grid for the first time. Since January 2021, the Paskov site (Czech Republic) has bought 100 percent renewable electricity from the public grid as well, as has the Mobile site (USA) since July 2021.
  • The production site in China continued to transition its energy generation plant from coal to natural gas, which will substantially reduce the site’s CO2 emissions and improve Lenzing products’ CO2 footprint. The plant’s start-up is planned for the second half of 2022.
  • The Lenzing Group plans to build Upper Austria’s largest ground-mounted photovoltaic plant on an area of around 55,000 m2 in the south of the Lenzing site. The plant’s output will amount to 5.5 MWpeak. Construction is expected to start in Q2-2022. In addition, two new projects are in planning and are currently at the decision-making stage.
  • At the Lenzing site, an air purification and sulfur recovery project was also commissioned in the first quarter of 2021. In addition to increasing the recycling rate, there will be a reduction in scope 3 CO2 emissions due to the avoidance of sulfuric acid purchases. Furthermore, the use of sulfur in the air purification plant will lead to a reduced use of natural gas at the site and thus to lower scope 1 CO2 emissions.

Business management and sales: A process has been launched to identify and support the development of new product offerings with climate change benefits. See “Business value” section for more information.

Procurement and supplier engagement: Supplier engagement has been carried out with key chemical and pulp suppliers to reduce Lenzing’s scope 3 emissions. These engagements and partnerships are intended to develop raw materials with lower GHG and other impacts. Lenzing focuses on maintaining long-term relationships, helping suppliers achieve improvements, and being part of their transitional journey by buying their green products.

Strategy, mergers and acquisitions: Every capital project, both brown and green field developments, has to align with the climate change strategy and targets. In this regard, some projects have been assessed for their benefits and contribution to climate change impact as part of the Managing Board’s decision-making process. Internal carbon pricing for key projects is used to support this process.

Finance and controlling: In 2020, climate change metrics were integrated into the capital allocation and periodic management reporting process of the Group’s operations. This continued in the reporting year.

Internal carbon price: In 2021, an internal carbon price (ICP) of EUR 75 per ton of CO2 was implemented. The ICP comes on top of a regulatory carbon pricing in different Lenzing locations (e.g. EU ETS). It was applied in the 2021 strategic investment planning process for CAPEX projects of over EUR 2 million. The purpose of the ICP is to mitigate future carbon risks, trigger renewable fuels over fossils and support energy efficiency projects.

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