Energy

As public concern grows, more customers are asking about our GHG emissions as part of the manufacturing process. The increasing demand for low-carbon products and processes, and the need to consider the effects of climate change in general, have had an impact on our long-term strategy.

1 Excludes indirect emissions generated by our supply chain, distribution network and employee travel.
2 Reduction targets shown are compared to a 2015 baseline.

Our progress

Scope 1 and 2 CO₂e emissions reduced by 8.2% in 2022 (compared with 2021).

Driven by improvements in:

• Green energy procurement: transition to renewable and other carbon free energy sources
• Efficiency & process optimisation actions: changes to processes (e.g., kiln firing profiles) and equipment operating protocols e.g., equipment shutdowns and idling machines
• Capital projects: replacement of inefficient assets, transition from gas to electric fuel types, and improvement in control systems

We have a broad-based improvement programme underway covering energy procurement, process improvements and behavioural changes in our plants. In 2022, we improved our energy intensity, price adjusted, by around 2% and continued the transition to carbon free energy for a number of our sites. Around half of our electricity now comes from green or carbon free sources.  

Energy performance in 2022

• Total GHG emissions (tCO₂e) were 211,104 tonnes; 8% decrease over 2021 levels and 38% decrease over
  2015 values.
• Scope 1 GHG emissions (tCO₂e) from stationary fuel combustion were 117,473 tonnes and scope 1 GHG
  emissions (tCO₂e) from process emissions were 4,516 tonnes. For 2022, total scope 1 GHG emissions (tCO₂e)
  accounted was 121,889 tonnes, which is a 1% decrease over 2021 values and 41% decrease over 2015 values
• Market-based scope 2 GHG emissions (tCO₂e) were 89,115 tonnes, which is a 17% decrease over 2021 values
  and 35% decrease over 2015 values.
• Achieved a “B” management score for Climate Change from CDP recognising we are taking coordinated action
  on climate issues.

Energy procurement

In 2022, we have focused on driving our sustainability agenda further into our organisation. We understand that engaging with and inspiring our people to create local initiatives will better enable us to reach our goals. We are proud of the contribution the Morgan Group is making and the contribution of our people to creating a more sustainable world. For us, sustainability is fundamental to our purpose and our strategy.

The total energy consumption (fuel and electricity) for Morgan was 1,058 GWh for 2022, which is 1% lower than 2021 (1,067 GWh). In 2022, we reached the milestone of 49% green (renewable and carbon free) electricity. We plan to increase this further in the coming years, with a target of 65% renewable or carbon free electricity by the end of 2025.

Our decarbonisation roadmap

The risks and opportunities considered by the Board have directly informed Morgan’s strategy to deliver on our 2030 goals and 2050 aspirations. These risks and opportunities form the foundation of our net zero roadmap to ensure we achieve our targets.

Preparing for the Future
Morgan's short-term planning (0-3 years) focuses on climate change-related actions towards process efficiency, improving net-water consumption, and changing power providers and/or power sources to renewable/carbon free energy to achieve our 2025 target of 65% carbon free electricity.

• Conversion of lower temperature furnaces to electricity. Building on the development work to convert low temperature processes, minimising exposure to carbon taxation
• Development of a scope 3 emissions strategy and targets. In 2023 we will complete a scope 3 inventory as part of our SBTi commitment. From this we will develop strategies to reduce these across the categories which are key to Morgan
• Life Cycle Assessment on our key products. To better support our customers in their decarbonisation journeys, we will conduct life cycle assessment on our key products, making carbon footprints available, but also identifying opportunities to reduce their impact.
• Engineering solutions to increase efficiency & water recycling. Leveraging our Furnace working group to ensure our existing assets are performing
• Inclusion of a shadow carbon price in Capex business cases. This will drive visibility of the potential environmental costs of business decisions.
• Investing in early-stage R&D projects for carbon free furnaces. Acknowledging that the solutions are not yet deployable in many cases, we will work with academia, industry groups and suppliers to develop solutions.
• Investing to grow capacity in key markets. We will invest in equipment to support the fast growth in the semiconductor, clean energy, and clean transportation markets, embedding and improving our market position.

Scaling up
Morgan’s medium-term planning (3-10 years) delivers more permanent solutions to achieve our 2030 ESG goals.

• Installation of strategic pilot carbon free furnaces. Higher temperature processes require more development, the installation of pilot furnaces for the different furnace types will support this.
• Further conversion of lower temperature furnaces to electricity. Finishing the remaining low temperature furnaces that can be
  converted to electricity.
• Working with our value chain to reduce scope 3 emissions. Deploying our strategy to reduce our Scope 3 footprint in key
  categories to achieve our target of 15% reduction.

Investment in key technologies
Morgan’s long-term approach (10-25 years) considers the achievement of long-term goals and implementing the solutions needed to decarbonise our business. Climate change-related long-term planning includes decisions on the future of power generation and supply, advancements in low carbon technology and larger investments in waste heat recovery and carbon capture.

• Conversion of higher temperature furnaces to electricity. Where technologically possible, converting higher temperature furnaces to
  electricity.
• Working with our value chain to further reduce our scope 3 emissions. Building on our progress, we will continue to work with our value chain to decarbonise.
• Conversion of remaining furnaces to carbon free alternatives. Electrification may not be possible or viable in all cases, so parallel R&D paths will develop and deploy alternative solutions.

Scope 3 emissions

Morgan Advanced Materials acknowledges the importance of assessing our value-chain emissions in achieving our long-term sustainability
objectives. We plan to collaborate with our key stakeholders and top-tier suppliers to reduce indirect emissions, which is our initial move towards minimising the impact of our product lifecycle. Regarding GHG reporting, Morgan defines its organisational boundary on an operational control basis, and we report our scope 1 and 2 emissions on this basis. This implies that we account for 100% of such emissions resulting from operations over which Morgan or one of its subsidiaries has operational control.

Generally, the term scope 3 refers to indirect GHG emissions originating from activities in our value chain, such as upstream emissions linked to raw materials, downstream emissions generated from the products we sell, and emissions from transportation activities upstream and downstream. The scope 3 standard further classifies these emissions into fifteen distinct categories.

In 2022, we utilized the GHG scope 3 evaluator tool to perform a scope 3 screening exercise across all categories. Our scope 3 emissions in 2021 were approximately 700,000 tCO₂e. The breakdown across various categories from 2019 to 2021 can be found in the table on the next page. Our objective is to complete a comprehensive scope 3 inventory exercise and create data collection schemes with specific targets in 2023.

Greenhouse gas emissions

Morgan’s greenhouse gas (GHG) emissions, such as carbon dioxide (CO₂), are mostly generated by the combustion of fossil fuels at various stages of our manufacturing processes. We track these using a reporting methodology based on the internationally recognised Greenhouse Gas Protocol. This stipulates the source for the global warming potential (GWP) rates that we use to convert non-carbon dioxide emissions into the standard measure of carbon accounting, i.e. carbon dioxide equivalents (CO₂e).

Our sustainability strategy includes actions to reduce GHG emissions and combat climate change. As public concern grows, more customers are asking about our GHG emissions as part of the manufacturing process. The increasing demand for low-carbon products and processes, and the need to consider the effects of climate change in general, have had an impact on our long-term strategy.