Management of climate change represents a significant potential for business growth. Air Products is also focused on managing its climate risks.
As a solution provider, our strategy for responding to climate change is straightforward—identify opportunities where our core technology and product strengths bring cost-effective solutions that enable our customers to reduce their overall supply-chain environmental impact, while using innovation and efficiency improvements to reduce GHG emissions and the potential cost impacts of a carbon-constrained energy supply on our operations. This approach is reflected in our Climate Change Policy Statement.
Climate Change Policy Statement
Climate change, energy consumption and water use are inextricably linked. Looking ahead, the world’s population is expected to grow to over nine billion people by 2050, while their needs for energy, water and food will increase even faster. For these reasons, maximizing the efficient use of the earth’s resources while minimizing environmental impacts is vital.
Air Products’ long-standing strategy for responding to these challenges is straight forward. We enable our customers to reduce their environmental impact by providing cost-effective technologies and products that improve their energy and water efficiency and reduce emissions to the environment. At the same time, we strive to reduce energy and water consumption, as well as emissions, in our own operations through efficiency improvements and technological innovations. We are making real progress in these areas, as demonstrated by our environmental sustainability targets and related cost savings.
In 2016, Air Products established a goal to reduce GHG intensity 2% by 2020 from a 2015 baseline. This goal was set based on past performance, operational changes, and industry benchmarks. We also evaluated techniques for establishing a science-based target. However, due to the nature of our business and heavy reliance on energy, thus far, we have been unable to develop a credible, economically viable, and achievable target.
Performance against our goal is calculated by totaling Scope 1 and 2 emissions normalized to production for the reporting year, and then dividing by this same ratio for the baseline year. This results in a dimensionless value that shows year-on-year changes, but does not disclose production levels, which are company confidential.
In 2018, our Scope 1 GHG emissions, which are primarily related to HyCO operations, were 17.3 million MT, representing a 5% increase from the prior year. Our Scope 2 emissions, which are due in large part to emissions related to the electricity stream we consume in our ASUs, were 10 million MT in 2018, which was a 3% increase from 2017. Our Scope 3 emissions were 5.2 million MT and rose by 6% to the prior year due primarily to increased energy consumption.
The increased emissions were due to a significant increase in industrial gas production, particularly in Asia, where our ASUs are often driven by steam produced from coal because electricity is not available. In 2018, our GHG emissions intensity declined by 1.5% compared to 2015, and we are on track to meet our 2020 goal.
Each year, our drivers travel about 150 million miles, or 240 million kilometers. That's the same as going to the moon and back more than 300 times. With that distance to travel, being as fuel efficient as possible makes strong financial and environmental sense.
Since 2015, we have improved our distribution efficiency by 16% and transportation related CO₂ emissions by 30 thousand metric ton.