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December 18, 2007

DuPont Uses Support Programs & Incentives To Encourage Energy Efficiency

DuPont has in place several programs to encourage and support its business units to implement energy efficiency goals to reduce its greenhouse gas emissions. As a result of these and other initiatives, DuPont has cut emissions by 72 percent since 1990 (with plans for another 15 percent by 2015).

“The corporation at various points in the organization set up some large programs specifically around energy efficiency,” said Robert Reich, Manager, Global Environmental Stewardship.

According to Reich, DuPont has improved energy across the company using five primary practices:

1. Switching to cogeneration, which is the simultaneous production of steam and electricity from the combustion of a single fuel source. Cogeneration can have efficiency of 60 percent to 80 percent versus the typical 25 percent to 27 percent.

2. Finding and eliminating operating defects. For example, 11 sites implemented or enhanced existing steam trap maintenance programs to reduce annual steam costs and seven plants implemented projects to improve burners and combustion efficiency.

3. Modifying or replacing equipment to eliminate defects. DuPont has a “Capital Set-Aside” program to help business units fund these changes. Dozens of projects have been approved and so far, most have internal rates of return exceeding 50%, according to Reich.

4. Changing processes to improve energy efficiency. According to Reich, “This might be the best area for future savings in DuPont because so few plants and businesses have explored it systematically.” For example, about 15 sites implemented 41 manufacturing process improvement projects to reduce steam costs.

5. Making less energy-intensive products. DuPont’s portfolio has changed dramatically since 1990. They’ve eliminated energy-intensive products like Conoco, Nylon, Dacron, Lycra, Films (JV); and introduced bio-based materials like Solae and Pioneer.

The company uses a series of support programs and incentives to encourage business units to undertake these energy saving initiatives. Under the Capital Set-aside program, for example, corporate takes care of funding and managing implementation of energy saving projects that are non-core investments, which allows business to focus on core competencies while corporate focuses on ancillary activities.

In addition, DuPont’s Energy Center of Competency has a series of tools to help business units implement these practices. The Center provides training, best practices documentation, and an energy efficiency analyzer and other tools.

DuPont also has a corporate sustainability growth award. Under its “Energy Breakout,” program, the corporation annually awards the business unit with the greatest energy savings. The program, instituted in 2005, has resulted in over 60 sites implementing projects; over 500 projects will have been completed by year-end 2007.

All of these efforts are helping DuPont reach its goals. But the key to all of it is innovation, according to Dawn Rittenhouse, director of sustainability development. “Can we come up with some other ideas to create more value within DuPont?” she asked. She said that this type of challenge is what keeps DuPont reaching.

Rittenhouse did acknowledge that sometimes, in limited capital situation, that to meet goals can mean a tradeoff or added cost. “Sometimes we have to work with businesses: How can you meet the goals in a different way?” She said that DuPont believes that it’s important in such situations to have a dialogue involving people from many areas of the business and corporation to come up with different ways of achieving the goals.

In addition to flexibility in how a goal is met, another key factor is time. All of DuPont’s goals are 10-year goals, said Rittehnhouse. Shorter-term goals, like 2-3 years, can reduce options to do things innovatively or creatively.

The bottom line though, is to have everyone in the company involved in working to achieve the goals. “You need everyone in company looking for opportunities. You need both top down and bottom up looking at opportunities, or you won’t be successful either way,” said Rittenhouse

At DuPont, they look for goals that are good for the environment, society, and the economy. “You look for business goals that support all three,” said Reich. “If you can make that case then the entire corporation, the people who make up the corporation, support it. So it’s about trying to reduce your footprint, but in a way that’s sustainable. And once it’s sustainable then they can see themselves as a part of it.”

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