Climate Change Data

Environmental Metrics

ESG Focus Areas

• Sustainable Energy Uses of Methanol
• Environment
• Workplace
• Community
• Product Stewardship

Environmental Achievements

• Zero significant environmental spills for the third consecutive year.
• CO2 emissions intensity from methanol production decreased by 6% compared to 2015.
• CO2 emissions intensity from marine shipping fleet reduced by 5%.
• Decreased the amount of water used for methanol production by 18%.

Social Achievements

• Substantial improvement in safety metrics across operations.
• Lowered the severity of injuries by 48% over 2015.
• Reached 1,340 people from nearly 300 organizations with Responsible Care seminars and webinars.
• Invested over USD $1 million into communities, reaching 235 organizations worldwide.

Governance Achievements

• Improved risk management and global standardization within Process Safety Management (PSM) programs.
• Developed six new process-safety initiatives focusing on preventing significant incidents.
• Completed 100% of marine vessel-inspection, crew-training, and safety-visit programs.
• Earned the American Railroad Association’s Grand Slam award for exemplary shipping practices.

Climate Goals & Targets

Environmental Challenges

• Increase in injury frequency rates with contractors.
• Variations between national requirements and international standards and best practices in terminal safety inspections.
• Anticipated gas shortages in Egypt and mounting reliability issues at the Damietta plant.

Mitigation Strategies

• Improvements to contractor-management and job-supervision processes; providing more detail and instruction in job planning stages; incorporating messages from the safety culture program into contractor induction.
• Working to improve fire-fighting equipment and explosion prevention at contracted terminals; progressing towards world-class standards.
• Idled the Damietta plant earlier than anticipated to do maintenance and testing; replaced the reformer catalyst to improve methane to methanol conversion.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Distributor Responsible Care Standard implemented with 19 distributors globally.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Growth of methanol as an alternative source of energy and fuel.

Reporting Standards

Frameworks Used: Responsible Care

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Methanol as a marine fuel, vehicle fuel, and renewable power source.

Awards & Recognition

• American Railroad Association’s Grand Slam award
• Highly Commended recognition in the Company of the Year category at the 2016 Lloyd’s List Global Awards

Environmental Metrics

ESG Focus Areas

• Sustainable Energy and Methanol
• Environment
• Workplace
• Community
• Product Stewardship

Environmental Achievements

• Reduced CO2 emissions intensity from manufacturing by 2% (0.568 tonnes of CO2 per tonne of methanol in 2018, compared to 0.580 in 2017)
• Zero significant spills to the environment in 2018
• Overall plant reliability of 95%, an improvement from 93% in 2017

Social Achievements

• USD $1.47 million and 12,474 hours contributed to support communities around the world, benefiting 302 organizations
• 20% decrease in employee injury frequency
• 91% participation rate in the biennial Global Employee and Culture Survey

Governance Achievements

• Seventh successful Responsible Care verification by the Chemical Industry Association of Canada

Climate Goals & Targets

Environmental Challenges

• Higher injury-frequency rate in 2018 than in 2017
• Increase in contractor injuries due to major projects
• Moderate increase in CO2 emissions intensity from marine shipping due to a greater number of long-haul voyages with less backhaul cargo

Mitigation Strategies

• Focus on working at heights and dropped objects
• Enhanced focus on leadership and employee engagement, contractor engagement and performance, plant maintenance turnaround performance, and learning
• Creation of a new Executive Process Safety Steering Committee
• Improved quality of incident investigations and sharing of lessons learned, expanded speak-up program

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Partnerships with terminals to implement Responsible Care practices
• Rigorous railcar preventive maintenance program (100% compliance in 2018)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and cleaner fuel applications for methanol

Reporting Standards

Frameworks Used: Responsible Care® Ethic, Principles for Sustainability, and Codes of Practice

Certifications: Null

Third-party Assurance: Chemical Industry Association of Canada (CIAC)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Methanol as a marine fuel, vehicle fuel, and power source

Awards & Recognition

• Lloyd’s List 2018 Best Fuel Solution Award
• Ship of the Year (2017) from Japan’s Society of Naval Architects and Ocean Engineers
• Best New Employer by China Europe International Business School (CEIBS)

Environmental Metrics

ESG Focus Areas

• Sustainable Energy and Methanol
• Environment
• Workplace
• Community
• Product Stewardship

Environmental Achievements

• Reduced CO2 emissions intensity from manufacturing by 33% from 1994 to 2019
• Reduced CO2 emissions intensity from marine shipping by 17% since 2002
• Zero significant spills for the second consecutive year
• Recycled 32% of total waste generated

Social Achievements

• Achieved one of the best annual occupational safety performances in history
• Invested USD $1.67 million and contributed 12,620 hours to support communities
• Supported the development of four six-hour e-learning courses focused on workplace health and safety
• Launched a global Hazard Awareness Campaign, educating over 250 people

Governance Achievements

• Board monitors Responsible Care matters related to ethics, sustainability, safety, environment, crisis management, physical security, product stewardship, and social responsibility
• CEO compensation is linked to meeting strategic goals related to Responsible Care performance
• Third-party assessments provide external benchmarking and verify the integrity of our systems

Climate Goals & Targets

Environmental Challenges

• Disappointing safety performance in previous years
• Increased CO2 emissions intensity in 2019 due to increased production in Chile and plant refurbishment
• Process-safety incident at Damietta plant

Mitigation Strategies

• Focus on leadership and employee engagement, learning and competency, contractor safety performance, and turnaround management
• Ongoing efforts to improve energy efficiency and CO2 emissions intensity
• Implementing process-safety management (PSM) programs and sharing lessons learned
• Debottlenecking project at Geismar facilities to increase production capacity and improve efficiency

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Contractor Health, Safety, Security, Environment, and Quality Management Standard

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of green methanol

Reporting Standards

Frameworks Used: GRI, CIAC Responsible Care®

Certifications: ISO 14001, ISO 45001, ISO 9001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Green methanol (Vulcanol)

Awards & Recognition

• ICSB Humane Entrepreneurship Award
• AICM Responsible Care Merit Award (2 years consecutively)
• Safe Shipper rail awards from multiple rail lines (Grand Slam Award)

Environmental Metrics

ESG Focus Areas

• Greenhouse gas (GHG) emissions and the transition to a low-carbon economy
• Safety
• Diversity and inclusion
• Societal benefits of methanol

Environmental Achievements

• Produced more than 59,000 tonnes of low-carbon methanol at Medicine Hat plant (approximately 12% of the plant’s 2020 production) by using captured CO2 from a neighboring industrial facility.
• Obtained International Sustainability & Carbon Certification for biomethanol production in the US.
• Redesigned and upgraded Medicine Hat plant reformer to improve efficiency and reduce CO2 emissions. Installed 312 low NOx burners, reducing NOx emissions by 75%.
• Achieved zero significant environmental spills across global operations.

Social Achievements

• Successfully executed two turnarounds in a challenging pandemic environment.
• Hosted 35 product safety and stewardship sessions.
• Established a taskforce to advance diversity and inclusion efforts.
• Invested approximately $1.7 million and 7,500 hours to strengthen communities, with a focus on COVID-19 emergency relief.
• Received a Grand Slam Award from the Association of American Railroads for rail safety performance.

Governance Achievements

• Appointed a new director to the Board.
• Embedded a target into the Board Diversity Policy that each gender comprises at least 30% of the directors.
• Completed cybersecurity training for approximately 1,900 global employees and contractors.

Climate Goals & Targets

Environmental Challenges

• High temperature heat requirements in methanol production currently rely on carbon-based fuels.
• Long lifespan of manufacturing plants makes significant technological upgrades expensive.
• Trade considerations in a commodity business make it challenging to adopt more expensive, lower-emission production pathways.
• Climate change poses risks including water scarcity, changing weather patterns, and potential supply chain disruptions.
• Changing stakeholder perceptions and regulations related to climate change.
• Cybersecurity threats related to increased reliance on digital systems.

Mitigation Strategies

• Continuously working to reduce emissions intensity through reliability, natural gas efficiency optimization, recovered/recycled CO2 injection, and trialing new catalysts.
• Exploring longer-term emissions reduction technologies such as renewable methanol, biomethanol, carbon capture, and green electrification.
• Implementing water conservation procedures and protecting water quality.
• Comprehensive spill-prevention program.
• Developing a comprehensive long-term CO2 emissions reduction and climate strategy.
• Implementing a cybersecurity system that aligns with the NIST Cybersecurity Framework.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct (pilot in New Zealand)

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity
• Changing sea or river levels
• Changing storm patterns
• Changing temperature levels

Transition Risks

• Policy and regulatory changes
• Technology costs
• Changes in consumer behavior
• Reputational risks

Opportunities

• Growing demand for methanol as a lower-emission fuel; growing interest in green methanol.

Reporting Standards

Frameworks Used: SASB, TCFD, GRI

Certifications: International Sustainability & Carbon Certification

Sustainable Products & Innovation

• Low-carbon methanol
• Biomethanol

Awards & Recognition

• Grand Slam Award from the Association of American Railroads
• New Zealand Energy Excellence Award

Environmental Metrics

ESG Focus Areas

• Climate Change
• Greenhouse Gas Emissions
• Energy Use
• Transition to a Low-Carbon Economy
• Diversity and Inclusion
• Safety
• Community Relations
• Responsible Procurement
• Cybersecurity
• Anti-corruption
• Water Stewardship

Environmental Achievements

• 60% reduction in recordable injuries from 2020; zero recordable injuries at Geismar 3 project site.
• Achieved approximately 32% reduction in Scope 1 emissions intensity and approximately 3% reduction in absolute emissions from manufacturing operations (1994-2021).
• Produced approximately 80,000 tonnes of methanol using injected CO₂ in 2021.
• Completed a project to improve the output of the Trinidad desalination facility, increasing desalinated water output by an estimated 43,000 m³ per year.
• Zero significant environmental spills in 2021.
• Installation of a new floating roof on a methanol storage tank in Trinidad, anticipated to reduce VOC emissions by 300 tonnes annually.

Social Achievements

• Established a Global D&I Council and a new Director, Diversity & Inclusion role.
• Developed a three-year Diversity and Inclusion roadmap.
• 93% of team members participated in the diversity and inclusion survey.
• Launched a global hazard awareness and training campaign.
• Increased hazard observations by 111% from 2020 to 2021.
• Implemented a new Contractor Management Standard.
• Donated $1.3 million and more than 4,000 hours of employee time to community efforts.

Governance Achievements

• Established two senior-level leadership teams to address GHG emissions and the transition to a low-carbon economy.
• Aligned measurement and reporting of CO₂ emissions to ISO standards.
• Completed a review of low and zero-carbon pathways for methanol production.
• Developed a project screening tool for evaluating potential low-carbon investments.
• Conducted a corporate internal Responsible Care® audit at each manufacturing location.

Climate Goals & Targets

Environmental Challenges

• Economic feasibility of CCUS.
• Availability of cost-effective, long-term, and secure underground storage for CCUS.
• Access to low-cost, clean, and reliable power for renewable methanol production.
• Availability of concentrated sources of CO₂ for e-methanol production.
• High capital requirements and operational costs for e-methanol production.
• Water scarcity in some regions.
• Changing sea or river levels impacting logistics.
• Changing storm patterns and extreme weather events.
• Potential for increased cost of production due to carbon taxes and regulations.
• Risk that maritime customers may prefer other fuels.
• Securing access to renewable natural gas (RNG) as feedstock.
• Cybersecurity threats.
• Potential vulnerability to attacks on key vendors.

Mitigation Strategies

• Desalination of seawater in Trinidad and Chile.
• Water conservation procedures.
• Resilient supply chain.
• Emergency preparedness plans and response processes.
• Modeling a wide range of carbon prices and mechanisms when forecasting.
• Integrating carbon pricing into the AFE process.
• Hedging natural gas prices.
• Engaging with governments.
• Emissions reduction initiatives (plant efficiency, CCUS, alternative feedstocks).
• Market development (marine fuel, passenger and cargo vehicle fuel, other uses).
• Investment in CRI (e-methanol technology).
• Active discussions with renewable methanol projects for offtake and marketing.
• Assessing CCUS feasibility.
• Comprehensive cybersecurity system.
• Critical assets in separate networks.
• Risk assessment and threat modeling.
• Annual cybersecurity awareness training.
• Awareness campaigns and testing.
• Assessing cyber risks of suppliers.

Supply Chain Management

Supplier Audits: 107 terminal assessments; pilot of Supplier Code of Conduct in New Zealand.

Responsible Procurement

• Supplier Code of Conduct (pilot program); consideration of environmental, health, and safety performance during vendor selection; contractual prohibition of facilitation payments in shipping.

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity
• Changing sea or river levels
• Changing storm patterns/intensities and extreme weather events

Transition Risks

• Carbon taxes/trading schemes
• Clean fuel regulations
• IMO regulations
• Demand for lower-carbon methanol
• Demand for alternative fuels (hydrogen, LNG, ammonia, etc.)

Opportunities

• Increased competitiveness with regions producing methanol from coal.
• Increased demand for lower-carbon methanol.
• Methanol as a marine fuel.
• Methanol as a passenger and cargo vehicle fuel.
• Methanol for other uses (thermal applications).

Reporting Standards

Frameworks Used: SASB (Chemicals and Marine Transport), TCFD, GRI

Certifications: ISCC (biomethanol production)

UN Sustainable Development Goals

• Not disclosed

Sustainable Products & Innovation

• Biomethanol
• E-methanol

Awards & Recognition

• Non-Accident Release Grand Slam Award (AAR)
• Responsible Care 2021 Award (Association of Chemical Industrialists of Chile)
• Green Agenda Award (Trinidad and Tobago Chamber of Industry and Commerce)
• Responsible Care Award (AICM, China)

Environmental Metrics

ESG Focus Areas

• Low-carbon Solutions
• Protecting People and the Environment
• Fostering Inclusion and Community Connection
• Working with Integrity
• Transporting Methanol Safely and Responsibly

Environmental Achievements

• Achieved zero significant environmental spills and releases.
• Completed 75% of construction on the G3 plant, expected to significantly lower GHG intensity.
• Committed to executing efficiency projects to avoid an estimated 100,000 tonnes of CO₂ per year.
• Received a gold medal sustainability rating from EcoVadis (top 5% of chemical companies assessed).

Social Achievements

• Maintained excellent safety performance on major projects, including over 4 million hours worked with no Days Away From Work cases on the G3 project.
• Tripled the number of hazard identifications since 2020, indicating increased team member engagement in safety.
• Progressed commitments in diversity and inclusion initiatives, piloting a D&I training program.
• Increased community investments.

Governance Achievements

• Improved ESG ratings from EcoVadis and MSCI.
• 100% completion of annual cybersecurity awareness training sessions.
• 50% of independent directors on the Board are women.
• Conducted a corporate internal Responsible Care audit at each manufacturing location.

Climate Goals & Targets

Environmental Challenges

• GHG intensity increased slightly in 2022 due to production volume changes and unplanned plant outages.
• Overall plant reliability was below target (95.6% vs. 97%).
• The 'green premium' (cost difference between lower-carbon methanol and customer willingness to pay) remains a challenge to scaling lower-carbon methanol production.
• Securing access to renewable natural gas (RNG) as feedstock for biomethanol.

Mitigation Strategies

• Implementing efficiency projects to reduce GHG emissions.
• Focusing on preventive maintenance and condition monitoring to improve plant reliability.
• Exploring multiple pathways to reduce the carbon intensity of existing methanol plants (efficiency, reliability, catalysts, facility upgrades).
• Conducting feasibility studies on carbon capture and storage (CCS), integrating e-methanol technology, and exploring alternative feedstocks.
• Working with customers on demand and pricing for lower-carbon methanol.

Supply Chain Management

Supplier Audits: 115 terminal assessments completed in 2022.

Responsible Procurement

• Contractor Management Standard
• Distributor Responsible Care Standard
• Supplier risk assessment for cybersecurity.

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity
• Changing sea or river levels
• Changing storm patterns/intensities and extreme weather events

Transition Risks

• Increased cost of production due to carbon taxes/trading schemes.
• Reduction in CO₂ emissions allowance/cap.
• Carbon border adjustment mechanisms.
• Rapid technology transitions in other industries.
• Securing access to renewable natural gas (RNG).
• High capital requirements and operational costs for e-methanol production.
• Insufficient volumes of lower-carbon methanol to meet demand.
• Maritime customers may prefer another fuel.

Opportunities

• Increased demand for lower-carbon methanol.
• U.S. Inflation Reduction Act incentives for carbon capture and green hydrogen.
• Carbon tax/trading schemes boosting competitiveness.
• Clean fuel regulations increasing demand for lower-carbon methanol.
• IMO regulations creating demand for methanol as marine fuel.
• EU regulations for shipping creating incentives for GHG reductions.
• Leveraging existing assets to produce lower-carbon methanol.

Reporting Standards

Frameworks Used: SASB, TCFD, GRI

Certifications: ISCC (for biomethanol production at Geismar)

UN Sustainable Development Goals

• SDG 8: Decent work and economic growth
• SDG 12: Responsible consumption and production
• SDG 13: Climate action
• SDG 16: Peace, justice and strong institutions

Methanex's contributions to these SDGs are detailed on page 16.

Sustainable Products & Innovation

• Biomethanol
• Lower-carbon methanol

Awards & Recognition

• EcoVadis Gold Medal
• MSCI ESG Rating improvement from BBB to AA
• Chemistry Industry Association of Canada Award For Canada’s Safest Chemistry Employer
• Association of American Railroads Grand Slam Award (7th consecutive win)

Environmental Metrics

ESG Focus Areas

• Greenhouse gas (GHG) emissions
• Transition to a low-carbon economy
• Employee and contractor safety
• Process safety
• Equity, Diversity and Inclusion (EDI)

Environmental Achievements

• Successfully completed three major turnarounds at our Geismar 1, Chile 1, and Motunui 2 plants to maintain safe, reliable and sustainable operation.
• Debottlenecking of two distillation columns at our Motunui facility in New Zealand, simplifying operations while also reducing greenhouse gas emissions.
• Successfully completed the first-ever net-zero voyage, on our dual-fuel vessel Cajun Sun, which was fueled by bio-methanol from our ISCC (International Sustainability and Carbon Certification) certified plant in Geismar.

Social Achievements

• Received three Responsible Care® awards from the Chemistry Industry Association of Canada, including the Company of the Year award, for achievements in safety and environmental performance.
• Global roll-out of foundational EDI learning module to all team members.
• Development of a Guide to Equitable Succession Planning.
• Launch of an Employee Resource Group (ERG) Toolkit.

Governance Achievements

• Successful CEO transition process.
• Maturing of enterprise risk management program.
• More explicit risk management discussions and analyses integrated into the corporate strategy process.
• Welcomed John Sampson and Roger Perreault to the Board of Directors.

Climate Goals & Targets

Environmental Challenges

• Delayed start-up of the Geismar 3 plant.
• Softer than expected demand for methanol in mid-year.
• Higher than typical operating rates.
• Low methanol-to-olefin (MTO) affordability leading to lower prices.
• Unplanned outages at various production sites.
• Natural gas constraints in New Zealand and Trinidad and Tobago.
• Uncertainty and challenges in Iran due to sanctions, plant technical issues, and seasonal natural gas constraints.
• Potential gas diversion from methanol to LNG in Equatorial Guinea.

Mitigation Strategies

• Layered hedging program to secure a competitive cost structure over the long term in North America.
• Secured gas from Argentina to restart the second plant in Chile.
• Working with natural gas suppliers to extend the period of full gas availability to Chilean plants.
• Secured a two-year natural gas agreement with the National Gas Company of Trinidad and Tobago for the restart of the Titan plant.
• Halted share buyback in June and allocated excess cash flow to building cash reserves to repay the $300 million bond due in December 2024.
• Focus on planning and executing major maintenance programs to ensure efficient and reliable operation of facilities.

Climate-Related Risks & Opportunities

Physical Risks

• Water scarcity
• Changing sea or river levels
• Changing storm patterns and intensities
• Changing temperature levels

Transition Risks

• GHG regulations
• Carbon taxes
• Carbon border adjustment mechanisms
• Decarbonization targets

Opportunities

• Growing demand for low carbon methanol
• Methanol as a marine fuel
• Methanol as a vehicle fuel

Reporting Standards

Frameworks Used: SASB, TCFD

Certifications: ISCC

Sustainable Products & Innovation

• Bio-methanol

Awards & Recognition

• Three Responsible Care® awards from the Chemistry Industry Association of Canada, including the Company of the Year award