Ecology and carbon-neutrality strategy*

Naturally, the first thing we look at in terms of sustainability at all of our sites worldwide is our own production, as this is where we can make direct changes. In this way, we have succeeded in lowering CO₂ emissions per produced ton of lubricant by 30 percent since 2010. And through continuously optimizing procedures and processes, we will further reduce energy and water consumption and further increase the share of renewable energies, which currently stands at 27 percent. In this way, we will be able to gradually roll back carbon-compensation measures through the support of climate protection projects in the medium term.

Climate change is one of the greatest challenges of our time and it affects the whole human race, even though we in Central Europe are lucky enough to feel the effects only to a comparatively small extent. In other regions of the world, the consequences of global warming such as rising sea levels and the drying-up of lakes and rivers are existential threats for the people living there. The rich industrialized nations emit a comparatively large amount of CO₂, especially through intensive industrial production. So for FUCHS, our commitment to global climate protection means assuming global responsibility with regard to economic, ecological and social aspects. In October 2019, therefore, FUCHS joined the “Alliance for Development and Climate” of the German Federal Ministry for Economic Cooperation and Development (BMZ) as an official supporter. The members of this alliance, which combines climate protection and sustainable development, strive for CO₂-neutrality by avoiding, reducing and offsetting CO₂ emissions at the same time.

Climate-damaging CO₂ emissions result from numerous processes directly or indirectly related to the combustion of fossil fuels. Since CO₂ emissions impact on the climate at a global level, it is ultimately irrelevant where on the planet they originate and where they are saved. So the offsetting of emissions proportionate to the amount produced – for example, through investments in international climate protection projects – ultimately ensures that the carbon footprint remains neutral. With carbon offsetting, therefore, the added value for the environment is generated through the voluntary promotion of climate protection projects, which would not be possible without such additional income. This voluntary financial support not only helps the selected countries to improve their economic, social and ecological circumstances, but is also a major driver for the transfer of clean technologies and sustainable global economic development.

Although the direct CO₂ footprint in the manufacture of lubricants is comparatively low – a factor that sets FUCHS apart from the rest of the chemical industry – it was and remains our aim to reduce it continuously and systematically. For example, energy-consumption-specific CO₂ emissions per ton of FUCHS lubricant produced have already been reduced by a total of around 30% since 2010. Global CO₂-neutrality is another milestone in our FUCHS sustainability strategy, which we launched ten years ago. Sustainability is one FUCHS’ core corporate values. The success of global emission reductions depends to a great extent on the voluntary and systematic actions of the business sector in industrialized countries. This is why we decided to take our share of responsibility and offset our CO₂footprint. In this way, we are taking responsibility for global climate protection and making an important contribution to achieving the goals of the UN climate protection agreement ratified in Paris in 2015. This agreement aims to limit global warming to well below two degrees Celsius compared with pre-industrial levels. We want to actively protect our environment and help our customers to do their bit, too. Since January 1, 2020, our customers across the world receive lubricants from FUCHS as a CO₂-neutral lubricant company, produced in CO₂-neutral processes.

As of January 2020, FUCHS is completely CO₂-neutral globally.This means that we no longer leave a CO₂ footprint and thus no longer have a negative impact on CO₂ concentrations in the atmosphere. As an industrial company, FUCHS continues to emit CO₂. This is unavoidable in many places. But by 2020, we have neutralized all our CO₂ emissions from our 58 FUCHS locations worldwide – from energy consumption in production to consumables in administration. To achieve CO₂-neutrality as early as 2020, FUCHS offsets its previously unavoidable CO₂ emissions with compensation measures. This is be done by investing in high-quality climate protection projects aimed primarily at promoting renewable energies.

The step towards global FUCHS CO₂ neutrality since January 1, 2020 was prepared for one year and accompanied by the sustainability consultancy Fokus Zukunft. Fokus Zukunft reviewed the calculation of FUCHS’ CO₂ emissions in September 2019 and confirmed the accuracy of the data basis and the application of the Greenhouse Gas Protocol guidelines as the calculation standard for determining CO₂ emissions. Fokus Zukunft then certified the FUCHS Group as a CO₂-neutral company, which means that FUCHS is entitled to declare itself CO₂-neutral since January 1, 2020.

Neutrality refers to the global CO₂footprint generated by FUCHS at all its worldwide locations through heat, fuel and electricity consumption in production, administration and research processes, through upstream energy-related emissions, business trips, hotel overnight stays and employee commutes as well as through waste generation and waste water in the company. This enables us to precisely calculate the CO₂ emissions generated. Based on this calculation, FUCHS then makes compensatory investments in climate protection projects to offset the corresponding amount of CO₂.

Our projects are accredited, approved and monitored according to internationally recognized certification standards such as the Gold Standard as well as by renowned organizations such as the United Nations (UN). The projects certified according to the Gold Standard fulfill especially stringent requirements. They not only save CO₂, but also contribute to local sustainable development. The validation of the project results with regard to the CO₂ savings achieved is verified by independent testing bodies such as TÜV.

When selecting projects, we focus on high-quality voluntary climate protection projects that support economic, ecological and social development worldwide in countries and regions of the “Global South” with FUCHS locations and where these projects are aimed primarily at promoting renewable energies. According to the current list of the German Federal Ministry for Economic Cooperation and Development (BMZ), the “Global South” refers to socially, politically and/or economically disadvantaged countries. In this way, FUCHS fulfills its global social responsibility in the sense of corporate citizenship. At the same time, we are also supporting most of the 17 sustainable development goals of the UN, to which we have officially committed ourselves since 2018. When selecting projects, we also ensure that we support at least one high-quality project every year within each of the six project sectors (biomass, ovens, solar energy, forest conservation, hydropower, wind energy).

CO₂ offsetting means that greenhouse gases that are produced in one region of the earth and cannot be avoided are compensated by climate protection projects in another region. To finance these, companies buy certificates for a range of different projects. Each certificate represents 1 ton of CO₂ saved by the project. Numerous climate protection projects – most of them in the field of renewable energy – have been launched worldwide. In return for their participation, the project initiators receive emission credits, which can be traded in the form of climate protection certificates. The amount is calculated, for example, on the basis of a comparison with the emissions that would have resulted from the construction of a coal-fired power plant.

Yes, because they are tested and certified by independent institutions – a minimum requirement for FUCHS. These institutions – including various TÜV companies – issue the certificates according to internationally applicable standards. A key aspect of emissions trading is the retirement of certificates after they have been acquired. Retirement must be clearly documented. Each CO₂ offset ends with the documented retirement of the certificates. This ensures that the same certificates are not traded more than once, which, in turn, would invalidate the principle of balance. FUCHS acquired its climate protection project certificates via Fokus Zukunft and the organisation First Climate.

Voluntary CO₂offsetting works according to the principle that greenhouse gas emitters invest in and support voluntary climate protection projects by purchasing emission reduction certificates. Prices depend on the individual project; in other words, when an emission reduction certificate is purchased, a third party is commissioned to save one ton of CO₂ in the atmosphere in another region of the earth on the company’s behalf. Pricing on the CO₂ market is also determined by supply and demand. Projects that, above and beyond simple climate protection, offer additional benefits for the people and the environment in the region where the project is being undertaken frequently achieve higher prices on the market.

With CO₂ offsetting, the added value for the environment is generated through the voluntary promotion of climate protection projects, which would not be possible without the additional income. Only climate protection projects that can prove their added value within the framework of certification are recognized and so gain access to the market. Trading in CO₂ reduction certificates follows a principle known as “results-based finance.” This refers to the idea that the developers of climate protection projects can issue emission reduction certificates only if their project has already been implemented and demonstrably helps to reduce CO₂ emissions. So anyone who acquires CO₂ reduction certificates in order to compensate for their own emissions can be confident that purchasing certificates will be matched by a real benefit for climate protection. This mechanism, which is embedded in the Kyoto Protocol, has become firmly established over the past 20 years and proven itself as a central component of voluntary, non-governmental climate protection. The process is supported by the UN, numerous non-governmental organizations and hundreds of large companies, including those in the petroleum industry. FUCHS invests exclusively in projects that meet the above criteria and was able to choose its project partner and climate project with the support of Fokus Zukunft respectively First Climate. But it is also clear that this form of CO₂ offsetting will merely support and not replace our ongoing efforts to globally reduce our (avoidable) CO₂ emissions.

FUCHS continues to follow the principle of avoid–reduce–offset. Around 80% of FUCHS’ CO₂ emissions are caused by heat and electricity consumption, so energy efficiency is an important lever in avoiding or reducing CO₂. In the medium term, FUCHS intends to gradually reduce its CO₂ compensation payments and increase its share of renewable energy supplies while continuing to invest in improving the energy efficiency of its locations.

In the long term, the company aims to sell CO₂-neutral products to its customers. However, this also requires that FUCHS will in the future receive CO₂-neutral raw materials from its suppliers – after all, these account for around 90% of the carbon footprint of FUCHS lubricants. As the world’s largest independent manufacturer, however, we occupy a central position in the lubricant market and so are well-positioned to exert our influence in the upstream value chain. We expect our suppliers in the future to use more sustainable, innovative preliminary products so that they can supply us with either lower-carbon or CO₂-neutral raw materials for lubricant production. Only in this way can FUCHS, as a CO₂-neutral lubricant company, offer its customers CO₂-neutral lubricants from CO₂-neutral production.

Absolutely. Through a number of internal and external measures, FUCHS not only promotes its own CO₂-neutrality and, in turn, climate protection as a whole, but it has also been developing, producing and marketing numerous emission-reducing and eco-friendly lubricants for almost 90 years. So during the application phase, these products make a greater contribution to saving energy and CO₂ emissions than conventional alternatives thanks to reduced friction and their ability to protect against wear and corrosion. FUCHS has begun to quantify these higher CO₂ savings effects by performing lifecycle analyses and assessments so that, in the future, it can categorize its lubricant portfolio by the CO₂ footprint of individual product groups. We believe that the CO₂ categorization of the product portfolio will become a key component in the production specifications published by lubricant manufacturers and, in addition to performance and price, a key differentiating feature and, in turn, a competitive advantage for FUCHS. One objective of our business activities is to develop solutions aimed at reducing the CO₂ footprint of not only our raw materials and lubricant production processes, but also of our customers.