Reducing Greenhouse Gas Emissions in DuPont

1. Reducing Greenhouse Gas Emissions in DuPont William F. Bailey, Principal Consultant E. I. DuPont de Nemours and Co., Inc. Charlotte, NC

2. Presentation Outline • Company Background and Transformation • Commitment to Sustainable Growth • Reducing Greenhouse Gas emissions • Improving Energy Efficiency to Contain CO2 Emissions

3. An Overview of DuPont Today • Ranked 67th in the most recent Fortune 500 • 2003 business results • $27 Billion in Sales • $1 Billion in Net Income • 135 manufacturing facilities in 70 countries • 60,000 employees • Major business segments • Performance Materials • Coatings and Color Technologies DuPont Tyvek® Housewrap

4. DuPont is Transforming Itself • Since ranking 15th in the Fortune 500 in 1997, DuPont has • Spun off its Conoco petroleum unit (1998) • Acquired Pioneer Hi-Bred and Protein Technologies Inc. (1999) • Sold its pharmaceuticals business to Bristol-Myers Squibb (2001) • Sold its Dacron® polyester business to DAK Americas (2001) • Agreed to sell its Nylon and Lycra® business to Koch Industries • DuPont is recreating itself to achieve “sustainable growth” • Increasing shareholder and societal value… • While decreasing the environmental footprint of our operations… • Along the value chains in which we operate

5. Making “Sustainable Growth” Practical • Our goal: grow profitswhile reducing our impact on society • To do this, our manufacturing plants must • Reduce operating costs, energy use and emissions • How will we reduce our costs and our emissions? • Use Six Sigma and other methodologies to improve productivity • How do we know we’re doing it? • Measure our progress versus an established baseline • How do our shareholders and society know we’re doing it? • Commit to meet a publicly-stated level of performance

6. DuPont’s Public Commitment on Energy • We have committed to achieve the following by 2010 • Reduce greenhouse gas emissions by 65% versus 1990 • Hold total energy use flat versus a 1990 baseline • Supply 10% of total energy needs from renewable resources at a cost competitive with best available fossil derived alternatives • My presentation will discuss how we’re working to achieve the first two goals

7. Greenhouse Gas Emissions in DuPont • Most of our CO2 emissions come from energy use • But CO2 is not our only Greenhouse Gas (GHG) emission • The manufacture of some refrigerants create HFC’s • 1 pound of HFC-23 is equivalent to 11,700 pounds of CO2 • The manufacture of adipic acid creates N2O • 1 pound of N2O is equivalent to 310 pounds of CO2 • These other GHG’s dwarfed our CO2 emissions

8. 1990 GHG Emissions (CO2 Equivalent)

9. Reducing Non-CO2 GHG Emissions • To reduce GHG emissions by 65%, we had to change the way we make two profitable products: Nylon and HFC’s • We worked hard to develop innovative and cost-effective abatement methods for both HFC-23 and N2O • We developed advanced thermal destruction technology for N2O • We co-developed a process to convert N2O to nitric acid • We used Six Sigma methodology to improve HFC process yields • We found markets for non-emissive uses of HFC-23 • We are building facilities to incinerate the remaining HFC-23 • These changes cost over $50MM but they were worth it…

10. Greenhouse Gas Emissions have been reduced by 65% since 1990. We’ve met our GHG Goal 8 Years Early

11. But What Are We Doing About CO2? • CO2 emissions are driven primarily by energy use • Energy use is largely a function of production • The more “stuff” you make, the more energy you use • To grow earnings, you have to make more stuff, right? • DuPont’s approach to sustainable growth says “No” • We are striving to develop new, less energy-intensive products • We want to generate income from our knowledge + our products • We are using Six Sigma to improve yields and energy efficiency • Let’s look at our history of energy use…

12. DuPont’s Energy Use in the 1990’s • Although energy use was flat, production grew 35% • This efficiency gain equates to $300MM in pretax profits! • Our energy efficiency improved for a number of reasons • Portfolio mix • Cogeneration • Yield improvements • Improved manufacturing uptime • Conservation measures • So, what do we do for an encore?

13. Picking the “High Hanging Fruit” • Keeping energy use flat gets more difficult over time • If you make more pounds, you’ve got to use less energy/lb • Improving the energy efficiency of existing plants is tough • Most plants have hundreds of energy-using devices • Inefficiencies are usually invisible • Data required to pinpoint losses is frequently unavailable • On-site expertise to identify and make improvements is limited • Energy efficiency is not a product quality variable • So how do you reach the “high hanging fruit”?

14. Making the Case for Energy Efficiency • Additional work is required to improve energy efficiency • This work must represent an attractive value proposition • Potential benefits must outweigh cost of resources to work on it • This is a complicated issue for most of our sites • Site resources may not know how to reduce energy use • Our approach to improving energy efficiency • Uses Six Sigma to standardize improvement methodology • Leverages knowledge of the few to help the many • Let’s look at these in a little more detail…

15. What is Six Sigma? • A business management process to eliminate “defects” • A methodology for improving a process in a structured way • A set of tools to help identify and correct problems • Let’s look at an example • A plant has 7 centrifugal pumps to provide cooling water • Pumps operate in parallel to supply 15,000 – 60,000 gpm • Operators decide when to start and stop pumps • Are there any “defects” that increase energy use, cost and CO2 emissions?

16. 7:03 AM 4 3:03 AM 3 11:03 PM 2 1 7:03 PM Parallel Pump Example: The “Box Plot” The “Box Plot” enables one to analyze thousands of data points in a simple chart to “see” defects In this example, each box object shows the distribution of header pressure data versus a time period The Six Sigma methodology enables us to quantify the cost of these “defects” and to eliminate them. This saved $120K/year in energy and reduced CO2 emissions at the utility generation station. Average of third quartile Median Average of first quartile Lowest value within limit The plot reveals that header pressure increases at night, because operators do not shutdown unneeded pumps to save energy.

17. How We Leverage Knowledge to Many • Virtual Workshops • Comprehensive intranet website • 600-person e-mail distribution list • “Templates” for common Six Sigma projects • Interactive web-based “self assessment” surveys • “Qualitative”: Assesses behaviors related to energy use • “Quantitative”: Assesses energy efficiency of specific equipment • Bi-annual internal energy conferences

18. Virtual Workshops: Training, No Travel Image from the instructor’s PC is acquired over the network by NetMeeting and projected for easy group viewing Speakerphone Laptop connected to DuPont network and students receive the presentation in their site conference rooms using Microsoft NetMeeting® Up to 22 Sites can participate in a single NetMeeting® workshop! Wide Area Network connection We’ve conducted over 20 of them in the last 4 years Speakerphone The Instructor presents from his office using a speakerphone and his laptop PC...

19. DuPont’s Intranet Website for Energy Full searching capability across the site Links to our Six Sigma tools and templates Links to external websites

20. The Power of Targeted E-Mail in DuPont • E-mail is a powerful medium for interactive communication • But not all 60,000 employees are interested in energy! • We maintain a distribution list of 600 “energy professionals” • We use this list for targeted communications • “I’ve got a problem… can you help?” • Energy news and announcements • A recent exchange helped one of our sites quickly and safely extinguish a coal bunker fire

21. Six Sigma Pumping System Template We captured the learnings from an early parallel pumping system project and developed a template for other plants to use on similar systems. The new alarms enable the operators to run the “right” number of pumps for any load. and a characterized alarm for high pressure… Original system had only a low pressure alarm set at 62 psig. The Six Sigma project added a characterized alarm setpoint for low pressure…

22. Energy Self Assessment Templates • We don’t have experts to cover 135 plants in 70 countries • We have to help plants help themselves • We’re developing web-based “self assessment” templates • These enable plants to examine behaviors and systems on their own to identify the most lucrative opportunities • Experts can then help with feasibility and implementation of specific opportunities

23. Competitive Pressures Demand Success • Despite our makeover, competitive pressures are still rising • We have publicly committed to cut costs by $900 Million • We spend $600 Million/year on energy, so it’s a big target • We believe our approach to energy efficiency can reduce costs and CO2 emissions by up to 10% • Our shareholders and society are counting on us!