Solvay to invest 2 billion euros to reach carbon neutrality by 2050

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FILE PHOTO: The logo of Belgian chemical group Solvay is seen at its headquarters in Brussels

By Marine Strauss

BRUSSELS -Belgian chemicals group Solvay said on Thursday it aimed to invest $2 billion to become a carbon-neutral company by 2050 and increased its 2030 goal for reducing greenhouse gas emissions.

Solvay also reported higher-than-expected third quarter sales and a 10th consecutive quarter of positive free cash flow.

It said it would invest up to 1 billion euro ($1.16 billion) so that all operations other than soda ash become carbon-neutral by 2040. It would invest a further 1 billion euros to ensure soda ash was carbon-neutral by 2050 and it also increased its goal for reducing greenhouse gas emissions by 2030 to 30% from a previous 26%.

The company, which also makes lithium derivatives for batteries, said the investments would generate returns well in excess of the group’s cost of capital and would represent on average some 10% of annual capital expenditure.

The group also raised its internal carbon price to 100 euros per metric ton of CO2, from 50 euros.

In 2016 Solvay introduced an internal price for its CO2 emissions of 25 euros per metric ton to help it take into account “climate challenges in its long term economic decisions”.

“We now have 36 projects representing 2.4 megatons of CO2 annually — the equivalent to cutting emissions of 1.3 million carbon fuel vehicles each year,” CEO Ilham Kadri told a news conference.

Solvay, whose products range from base chemicals such as soda ash to speciality polymers, reported third-quarter sales of 2.57 billion euros, beating a company-compiled consensus of 2.41 billion euros.

ING analyst Stijn Demeester said in a note that Solvay’s third-quarter results were strong, with record sales for the company’s specialty polymers division, which makes industrial and protective coatings and linings, and solutions, for the aerospace and automotive sectors.

($1 = 0.8630 euros)

(Reporting by Marine Strauss and Silvia Recchimuzzi; Editing by Susan Fenton)