Sustainability

Environmental

Climate Change & Carbon Footprint

PPC's Climate Change Strategy

PPC has recognised climate change as a strategic priority and developed a climate change strategy that is aimed to address high-level interventions to support PPC's CO2-reduction targets and reduce the carbon footprint of its operations.

PPC Climate Change Targets

The climate change strategy contains a plan of action to reduce PPC's carbon footprint by setting achievable but ambitious targets for carbon emissions.

PPC will implement actions to reduce the greenhouse gas (GHG) intensity of the products it produces to 20% below 2008 levels by the year 2020.

The company also signed the energy efficiency accord of the National Business Initiative, with a commitment to reduce the energy intensity of the company by 15% from 2000 levels by the year 2015.

Reducing PPC's greenhouse gas intensity

PPC will reduce its GHG intensity by:

• Applying thermal and electrical energy efficiency measures;
• Optimising product composition;
• Using alternative fuels and raw materials; and
• Replacing old kilns with modern, energy-efficient cement plants.

PPC will increase its investment in projects and initiatives that lower CO2 emissions through the following initiatives:

Clean development mechanism

PPC will evaluate opportunities to use the clean development mechanism to improve the financial return of projects that lower its CO2 emissions;

Inclusion of the carbon footprint in the company's capex evaluation

PPC will evaluate the impact of capital projects on its carbon footprint during the investment decision-making process. A portion of the capital budget will be dedicated to projects that reduce its carbon footprint;

Research funding

PPC is funding research into the development of technologies that will reduce the carbon emissions from the company's kilns and increase the use of renewable materials in its processes; and

Monitoring and reporting

PPC will establish an energy working group to monitor the GHG emissions of the company and track its progress in achieving the targets set in the climate change strategy.

PPC will monitor the direct and indirect GHG emissions from all its operations according to the latest measurement protocols of the World Business Council for Sustainable Development.

Because of the specific nature of PPC's various operations, only direct and indirect emissions that stem from them will be monitored. Emissions derived from administrative functions in the company will be estimated once and then become the reported emissions figure.

PPC will include its GHG emissions and, if necessary, plans for their significant improvement, in the annual report. Moreover, the company will continue to participate in the Carbon Disclosure Project, which is an independent not-for-profit organisation that acts as an intermediary between shareholders and corporations on all issues related to climate change. It was extended to South Africa in 2007.

Climate Change & Carbon Footprint

According to the World Wildlife Fund's G8 climate scorecards (2009), climate change is the greatest threat to development and prosperity on this planet, endangering people and cultures as well as the natural base of life. The climate scorecard emphasises South Africa's strong dependence on coal, and the fact that approximately 27% of people have no access to electrical energy. In South Africa, emissions per capita are only slightly below the average of industrialised countries, but well above averages for developing countries. Cement production accounts for 5% of global emissions. At PPC, we acknowledge climate change as a strategic risk and have taken action to reduce carbon emissions.

PPC uses the World Business Council for Sustainable Development (WBCSD) CO2 protocol to calculate its carbon footprint. PPC's footprint from 1990 to 2008 is depicted below.

PPC's carbon footprint is based on both scope 1 (direct) and scope 2 (indirect) emissions. PPC has decreased its carbon footprint by 3% from 2008 to 2009 through lower fuel consumption due to the new kiln at PPC Dwaalboom and the decrease in tons of slag milled at PPC Saldanha. The CO2 per ton of cement, lime and dolomite for 2009, including both scope 1 and scope 2 PPC's carbon footprint of 883kg for cement, for 2009, is better than the world average of 890kg CO2/ton cement. PPC's direct emissions are from the calcining limestone (burning at high temperatures in the cement kilns) and using fuels such as coal and diesel. Electricity consumption forms the basis for indirect CO2 emissions. emissions, was 960kg. The CO2 for clinker, lime and dolomite for 2009, including both scope 1 and scope 2 emissions, was 1 128kg CO2/ton.

The PPC climate change strategy to reduce CO2 emissions by 15% per ton by 2020, using 2008 as a baseline, is under review.

PPC CO2 emissions Cement only

PPC's carbon footprint of 883kg for cement, for 2009, is better than the world average of 890kg CO2/ton cement.

PPC's direct emissions are from the calcining limestone (burning at high temperatures in the cement kilns) and using fuels such as coal and diesel. Electricity consumption forms the basis for indirect CO2 emissions.

PPC is contracting an external service provider to undertake greenhouse gas audits at all sites using the GHG protocol. This will provide a clearer understanding of PPC's impact on scope 2 (indirect) and scope 3 (travel) emissions. Once the audits have been completed, PPC will be able to identify its material impacts and develop mitigation strategies.