Chemical and materials science giant Dow today announced the completion of its inaugural green bond offering, raising more than $1.2 billion to support the company's decarbonization and circular economy strategies, including the construction of a new manufacturing plant. of net-zero emissions chemicals in Canada.
The issuance follows Dow's announcement in November of its final investment decision to advance Fort Saskatchewan Path2Zero, a $6.5 billion project to build the world's first Scope 1 and 2 net-zero emissions ethylene plant in Alberta, Canada. The project will see Dow build a new ethylene cracker and increase polyethylene capacity by 2 million metric tons per year (MTA), as well as retrofit an existing cracker to net zero Scope 1 and 2 emissions. plans for the new factory in 2021, along with its intentions to allocate approximately $1 billion per year in investments aimed at decarbonizing its global asset base.
Dow said proceeds from the green bond offering will be used for expenses and investments related to the new factory and to support the achievement of its climate protection and circular economy goals, which include achieving carbon neutrality in all scopes by 2050, reducing scope 1 and 2 emissions by 5 million metric tons by 2030, and commercializing 3 million metric tons of circular and renewable solutions annually by 2030.
The company's recently published green bond framework outlines eligible criteria for the allocation of green bond proceeds, with eligible categories encompassing climate protection investments, including energy efficiency, renewable energy and decarbonization-related expenditures, and circular economy investments, including products adapted to the circular economy, production technologies and processes, and certified eco-efficient products.
The offering included $600 million in 5.150% notes due 2034 and $650 million in 5.600% notes due 2054.
Jeff Tate, Dow's chief financial officer, said:
“This green bond offering represents a key opportunity for investors to participate in Dow’s strategy to decarbonize and drive circularity, while increasing profits throughout the cycle. We expect the proceeds from this instrument to primarily support our project to build the world's first Scope 1 and 2 net-zero emissions ethylene and derivatives complex in Alberta, which has reached the critical milestone of our Board's final investment decision in November 2023. ”
