Dow unveiled on Wednesday plans to boost its core earnings by $3 billion a year over the next decade, with investments that include building a new net-zero carbon emissions ethylene and derivatives facility in Alberta, Canada.
The chemicals maker, once part of DowDupont, joins a growing list of companies that have announced plans to cut emissions and reduce carbon footprint following pressure from investors.
Calling the new project a "no-regrets" move, Dow's Chief Executive Officer Jim Fitterling said he expects the facility to deliver about $1 billion of additional earnings before interest, tax, depreciation and amortization (EBITDA) per year by 2030.
Near-term investments to expand manufacturing capacity of chemicals and materials used in packaging, specialty plastics, coatings and other businesses are expected to generate about $2 billion of EBITDA, the company said.
The new facility would more than triple Dow's ethylene and polyethylene capacity from its Fort Saskatchewan, Alberta site, and the company expects to allocate about $1 billion of capital spending annually for the project.
The projects will help Dow produce about 3.2 million metric tons of certified low- to zero-carbon emissions polyethylene and ethylene derivatives.
It also signed eight new renewable power purchase agreements to reduce Scope 2 emissions, or emissions from the power a company uses for its operations, by more than 600,000 metric tons of carbon dioxide equivalent per year.
Dow had said last year that by 2030, it would reduce its net annual carbon emissions by 5 million metric tons versus its 2020 baseline, amounting to a 15% reduction, and set a target to be carbon neutral by 2050.
United Nations scientists say the world's net emissions must fall to zero by 2050 to limit the rise in global temperatures to no more than 1.5 degrees Celsius versus pre-industrial levels.
Net zero plans require companies to decrease carbon dioxide emissions and offset any remaining emissions using projects that capture the gas.
(Reporting by Arathy S Nair in Bengaluru; Editing by Saumyadeb Chakrabarty and Uttaresh.V) ((firstname.lastname@example.org; +1 646 223 8780 (Extn 2726); Twitter: https://twitter.com/ArathySom;))