Austin Powder initiated this process in 2023 with the calculation of the 2022 carbon footprint, which included scope 1 and scope 2 emissions and was aligned with the methodological guidelines of the GHG Protocol. The 2022 carbon footprint was published in the 2022 Sustainability ESG Report.

During 2023, Austin Powder worked to improve the data collection process from each reporting unit, and to improve the calculation methodology, increasing the scope of the carbon footprint and updating and improving the selection of emission factors for greater accuracy. Specifically, the following changes were made to the scope of the carbon footprint:

Improvements in 2023 Reporting

• Austin Detonator Assembly and Austin Detonator Electronics were included in the assessment.
• All operations in Mexico were included. Previously, only the nitric acid manufacturing plant was considered in the scope, due to lack of data for the previous year.
• The energy consumption of the housing complex that Austin Powder makes available to its workers in Juramento was added to the analysis.
• Wastewater treatment was added as an emission source in scope 1, for the reporting units where this type of activity is carried out in the company facilities.
• Malaysia and Indonesia, previously considered a single reporting unit, were disaggregated as independent reporting units.
• Austin Star Detonator and Detonadores Estrella, previously considered a single reporting unit, were disaggregated as independent reporting units.
• Emphasis was placed on fully understanding the processes in Juramento and USN, which allowed for the identification of emission sources that were not previously accounted for (natural gas consumption in compressors and reformers).

As a result of this review and the changes in the calculation scope, the 2022 carbon footprint was also recalculated using the new and improved methodology. This reassessment allowed Austin Powder to visualize and quantify the effects of the technological improvements and organizational shifts between 2022 and 2023.

Due to the nature of Austin Power’s business model, which requires producing great amounts of energy on-site, scope 1 emissions were far larger than scope 2 emissions. Total emissions in 2023 were reduced by 2,81% compared to 2022, mainly due to the closure of the nitric acid plant in Mexico, which allowed for a substantial reduction of scope 1 emissions. A more detailed analysis of each scope is presented in the following sections.

Scope 1 Emissions

Scope 1 emissions are the direct emissions of greenhouse gases produced by sources owned or controlled by the company. These include:

• Emissions from stationary combustion, which refers to combustion that takes place in stationary devices owned by the company that consume solid, liquid or gaseous fuels in order to produce energy or heat. This includes boilers, turbines, drilling machinery, furnaces, heaters, incinerators, generators, motor pumps (for fire networks), etc.
• Emissions from mobile combustion (i.e. from mobile sources) by on-road vehicles leased or owned by Austin. This analysis is centered in cars, motorbikes and delivery vehicles, such as trucks or mobile manufacturing units (MMU).
• Fugitive emissions that result from the direct release of GHG into the atmosphere. This usually relates to air conditioning and refrigeration equipment leaks, including the installations’ air conditioning systems and heat pumps, mobile air conditioning, chillers, cold storage and transportation, etc.
• Emissions from the incineration of solid waste in Austin Powder facilities.
• Emissions from anaerobic wastewater treatment in Austin Powder facilities.
• Process emissions come from the production of ammonia and nitric acid in USN, Juramento, and Mexico facilities. CO2 capture and N2O abatement technologies in these facilities are also considered, as this process substantially decreases the amount of GHG emissions that are released into the atmosphere. The CO2 captured in these processes is sold and later used by third-party beverage manufacturers.

Stationary combustion was the main source of GHG emissions in 2023 (167,205 metric tons of CO2e, equivalent to 49% of the company’s emissions), mainly due to the energy intensity of the ammonia production process, which requires the combustion of large amounts of natural gas to power compressors and reformers. This is evidenced by the stationary combustion emissions that result from USN and Juramento, which represent 34% and 55% of Austin Powder’s stationary combustion emissions, respectively.

Ammonia production would be the company’s second-largest source of emissions (95,488.11 metric tons of CO2e) if carbon capture systems were not in place. These carbon capture technologies were only available in the USN facilities in 2022 but were expanded to Juramento during 2023, allowing this facility to capture 4,876 metric tons of CO2 during the reporting year. The combination of the CO2 capture performed in these two facilities allowed Austin Powder to capture and sell to a third party 58,382 metric tons of CO2, reducing the carbon footprint of the overall ammonia process by 56%.

Due to the release of N2O during its production, process emissions from the manufacturing of nitric acid were the company’s second highest source of emissions (58,00.50 metric tons of CO2e, equivalent to 19.34% of the company’s emissions). It is worth mentioning, however, that the reduction of emissions in 2023 compared to 2022 for this category was achieved through the closure of the nitric acid plant in Mexico in mid-2023. This operation prevented the emission of more than 15,000 metric tons of CO2e in 2023.

Scope 2 Emissions

Scope 2 emissions include indirect emissions associated with generating electricity, heat, or steam that a company consumes. In other words, these emissions arise from sources owned or controlled by another entity from which the reporting company purchases electricity, heat, or steam.

This scope can be determined through a location-based methodology or a market-based methodology. The location-based methodology uses the average emission factors of the country where each installation is located (e.g., the average emission factor of its electrical grid). The market-based methodology, on the other hand, considers the emission factor of the energy purchased from the specific providers the reporting company has contracted, allowing any renewable energy acquired to be accounted for.

Austin Powder will continue working in the coming years to improve the data collection system. The objective is to determine the emission factors of the energy purchased at its facilities and calculate scope 2 emissions using market-based and location-based methods.

Results By Activity, Facility Type & Geography

The USN, Juramento, and Mexico facilities accounted for more than 86% of Austin Powder’s carbon footprint due to the nature of their activities (32.52% in the case of USN, 45.25% for Juramento and 8.58% for Mexico). Other high-emission reporting units were US Field Operations and Red Diamond, with 5.03% and 2.73% of Austin Powder’s carbon footprint, respectively. This led to the US and the South and Central America regions concentrating more than 95% of the carbon footprint of the company.