Emerald - Jaarverslag 2017 EN

Emerald Kalama Chemical

2017 Environmental, Health & Safety Annual Report

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Introduction

We are pleased to present the first-ever edition of our corporate EH&S report. This report replaces previous issues of site-based reports and provides a more global perspective on our EH&S performance and improvement projects.

At Emerald Kalama Chemical, we believe in achieving objectives by operating as a responsible corporate citizen in all aspects of our business. That is why we are committed to meeting or exceeding the requirements of all applicable laws and regulations and to continually improving our performance in the areas of health, safety, security and the environment.

Synergy

As a world leader in the industry, each of us at Emerald places great emphasis on being a responsible corporate citizen.

This is expressed in how we address environmental issues, in the way we implement safe work practices and in Emerald’s views on product stewardship.

Compliance with laws and regulations is vital in order to minimize adverse impacts on health, safety, production processes and the environment. In this report, you will read about key projects and their results which demonstrate our commitment to the goal of synergy in achieving our business goals while complying with all rules and laws of the countries in which we operate.

Carbon Footprint

In this first global issue, we devote extra attention to our carbon footprint.

Wikipedia defines this as “the total emissions caused by an individual, event, organization, or product, expressed as carbon dioxide or CO2 equivalent”. CO2 is emitted by the combustion of fossil fuels and is the most significant man-made greenhouse gas driving climate change.

Emerald’s commitment to actively reducing emissions is set out in the paragraph devoted to this topic. We will provide some examples of how Emerald has reduced our carbon footprint by Reducing, Reusing, Recycling, or Refusing, and by optimizing our supply chain.

We hope you enjoy this first edition of our corporate EH&S report. Suggestions are welcome!

Jan Eland Vice President, Manufacturing and R&D Emerald Kalama Chemical

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General Our company Emerald offers a wide spectrum of material solutions that bring value and performance to adhesives, foods, beverages, fragrances, cosmetics, home care, rubber, vinyl, and other consumer and industrial products.

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Emerald is committed to operating responsibly, ethically, and sustainably, utilizing the highest standards for safety and quality at our manufacturing sites in the United States (Kalama, WA and Henry, IL) and Europe (Rotterdam, The Netherlands and Widnes, United Kingdom). We utilize globally recognized certification schemes, such as ISO 14001 and FSSC 22000, as well as continuous improvement to advance safe and sustainable practices across our entire organization, improve efficiencies, and reduce our carbon footprint.

Our 471 employees (as of December 31, 2017) include dedicated quality, regulatory, and EH&S personnel at each of our operations, allowing us to continually outpace regulations and industry standards for operational excellence.

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Kalama (WA, USA)

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Widnes (UK) Rotterdam (The Netherlands)

2017 EH&S Results Criteria Pollutant Emissions

2012 through 2017

■ Pollutants

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■ Results

0,2 0,1 0 -0,1 -0,2 -0,3 -0,4-0,5 CO (tons)

NOx (tons)

SOx (tons)

PM (tons)

VOX (tons)

Chris Wrobel, Corporate EHS Manager: “For the trends in criteria pollutant emissions, CO2, emissions/production, and energy/ production, we can say that the company goals of emissions reductions and efficiency improvements have been fruitful. This has allowed us to increase production by more than 20% (20.1%), while reducing emissions by an average of almost 20% (-19.9%) from 2012 through 2017”.

Production CO2/ Energy/ (total MT) Production Production

Main key projects Kalama (WA, USA) • Installation of Anaerobic Digester, T-286 • Benzene railcar vapor balance pressure monitoring • Columbia River dock working platform upgrade • Wastewater storage tank vent control • Chilled water system upgrade Widnes (UK) • Highly flammable storage tanks modification • Remote shutoff systems securing Earthing Varification • Highly flammables residue tank 3T209 adjustment • Mobile tank and container handling movements monitoring • Removal and replacement of asbestos containing material Rotterdam (The Netherlands) • F-9502 Air preheater replacement • DCS monitoring system • Sodium Benzoate installation upgrade

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Quality & Compliance

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“Providing food safe and quality product is not only critical in my role as Quality Manager, but is also important to me on a personal level as a fellow consumer of the goods manufactured by our customers�.

Cherise Hylton:

“Keeping up with international standards is important” “The end consumer is the most important component of the food supply chain. Food Safety regulations and protocols are needed so that not only the manufacturer of the consumer product, but suppliers of ingredients in the entire food supply chain have risk-based preventive controls in place”, says Cherise Hylton, Quality Manager at Emerald Kalama Chemical.

Cherise has worked at the Kalama, Washington facility for 23 years in both Quality and EH&S roles. As Quality Manager, she is responsible for all quality control and quality assurance activities at the facility. This includes oversight of the quality control testing lab, the ISO 9001:2015 quality management system and the FSSC 22000 food safety system.

Framework

Cherise explains how Food Safety protocols work for Emerald: ‘’the Food Safety System Certification 22000 (FSSC 22000) is a global standard recognized by the Global Food Safety Initiative (GFSI). There are numerous requirements in the standard, including riskbased hazard analysis, critical control point identification, food defense protocols, food fraud risk analysis and controls, monitoring procedures, verification and corrective action, good manufacturing practices, personal hygiene, traceability and record keeping. These are important to Emerald Kalama Chemical, because they provide the framework for how we operate and manufacture our products, ensuring all employees keep food safety and the consumer in mind from the beginning to the end of our manufacturing processes’’.

Challenges

Emerald Kalama Chemical has made food grade products for many years at both the USA and The Netherlands facilities. Many of the food related good manufacturing practices

were already in place when the GFSI and Food Safety Certification processes were formed.

In Cherise’s opinion, the biggest impact to the production process was ‘’improving how we conduct our hazard analyses, implementing additional preventive controls, and improving our documentation and monitoring of the critical controls in place’’. Emerald’s facility in the United Kingdom is in the process of manufacturing some of their products as food grade. They are able to utilize documents, control schemes and expertise from Emerald’s other facilities to ease their transition into the manufacture of food grade products, making the change less challenging overall.

Corporate responsibility

‘’At Emerald Kalama Chemical, we treat our food grade products with the same care that a consumer product manufacturer would. We have invested in the training of our employees, including a year-long college course in food science and food safety. They can then provide guidance and support to our manufacturing groups to ensure we keep our standards as high as possible. We push for continual improvement in all of our ISO programs, including food safety, and are fully supported

by EKC leadership. This is critical to our success as well as our customers’ success, and is one reason why Health, Safety, Environmental and Quality improvements are key components in our organization’s mission and values’’.

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Food Safety

Environment

Emerald Kalama Chemical conducts internal FSSC 22000 and ISO 9001:2015 audits at least annually, besides the annual third party audits.

Emerald periodically reviews and updates the hazard analysis program and is closely involved in the management of change processes to ensure any changes meet the food safety and quality standards. Critical control point documentation is reviewed by the quality department prior to the food product being approved for sale in the market.

As a responsible corporate citizen, Emerald will protect the environment and the communities where we operate. We are committed to continuous improvement in the efficient use of resources and minimization of environmental impact. Because everyday operation of a facility can have an impact on the environmental performance of the company, Emerald will enhance environmental competencies by providing the appropriate training on environmental regulations and company rules and procedures to all people at our sites.

Employees are expected to understand the impact of their actions on the environment.

Emerald embraces the concept of maintaining an open dialogue with community groups, governmental bodies and other stakeholders on environmental issues.

Health and

Product

Safety

Stewardship

Emerald’s goal is to prevent accidents and uncontrolled process operation, eliminating injuries to employees, contractors and visitors and protecting the communities where we operate. Adhering to the Emerald Health and Safety Standards, using safe work practices and fostering an attitude of accident prevention is the responsibility of all employees. Every manager and supervisor is accountable for the safety of the employees reporting to him or her. Emerald is committed to providing the appropriate equipment, tools, procedures, information and training to allow employees to safely perform their jobs.

At Emerald we consider the protection of human health and the environment an integral part of designing, manufacturing, marketing, distributing, recycling and disposing of products. In that context Emerald will continuously assess its processes and the products it produces and minimize adverse impacts on human health, the environment and communities.

Upgrade to ISO 2015 standards Emerald Kalama Chemical, LLC Kalama, WA, USA • Certified to ISO 14001:2015 in June 2018 • Certified to ISO 9001:2015 in April 2018

Emerald Kalama Chemical, Ltd Widnes, UK • Certified to ISO 14001:2015 in June 2018 • Certified to ISO 9001:2015 in April 2018

Emerald Kalama Chemical BV – Rotterdam, The Netherlands • Certified to ISO 14001:2015 in March 2017 • On track for certification to ISO 9001:2015 standards

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Carbon footprint

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“Emerald believes reducing our carbon footprint is vital to the health of our planet�.

Brian Denison:

“Reducing CO2 emissions is a joint effort between all of our plants” “At Emerald Kalama Chemical we believe we must earn the right to operate our facilities every day. This involves protecting our employees and the communities in which we operate. As global leaders within our industry, we recognize the importance of raising EH&S standards and reducing the environmental impacts of our plants”.

These are the words of Brian Denison, Vice President and Manufacturing Technology Specialist at Emerald Kalama Chemical.

Sustainability goals

‘‘In order to formalize the plant’s past and present efforts to reduce their impact on the environment, setting sustainability goals was a priority’’, Brian says. ‘’This involved establishing transparent expectations to engage employees around the common purpose to reduce the company’s carbon footprint and the desire to communicate our commitment to sustainability to stakeholders. In 2014, Emerald Kalama Chemical set two sustainability goals: to reduce energy used per metric ton of production by 10% and to decrease direct CO2 emissions per metric ton of production by 30% at its global manufacturing sites by 2020 compared to a baseline of 2010 performance. Both goals have since been achieved. Energy usage per metric ton of production has been reduced by 15% and CO2 emissions per metric ton of production have been reduced by 36%. An important consideration in reducing waste is the impact on CO2 emissions. Emerald Kalama Chemical burns much of its waste in order to recover the energy content. Burning waste generates almost twice the CO2 emissions per Gcal of energy recovered as does burning natural gas’’.

Sharing best practices

Brian explains why it is important to cooperate at all levels within the organization: ‘’In our commitment to work towards a shrinking

global carbon footprint, we incorporated sustainability and other EH&S metrics into our monthly reporting. These results are communicated to employees during monthly communication meetings with the CEO. The Emerald Kalama Chemical Operations Group schedules technology exchanges to allow employees from each discipline to interact with their counterparts at the other facilities. This enables us to share best practices and discuss solutions to common problems. All sites are committed to improving production efficiency, reducing emissions, decreasing energy used per pound of material produced, eliminating spills, and reducing the overall environmental impacts’’.

Twofold benefit

‘’Emerald believes reducing our carbon footprint is vital to the health of our planet’, Brian explains. Emerald therefore takes a long-term approach when considering how to implement future expansions, plant infrastructure upgrades, and new chemistries.

These improvements will bring the added benefit of a positive impact on the company’s bottom line’’.

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EH&S Key Projects 2014-2018

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Widnes (UK)

Kalama (WA, USA) Anaerobic Digester, T-286

Emerald installed a third anaerobic digester to ensure the efficient treatment of process wastewater and to provide operational flexibility.

This third digester operates in parallel with the two existing digesters, and allows one digester to be temporarily taken out of service for maintenance, inspection and repair. The additional capacity provides the microorganisms, necessary for chemical degradation, with more time to digest and break down the chemicals present in the wastewater. The anaerobic digesters are the first phase of wastewater treatment. By making this phase more efficient, Emerald is reducing the chemical load on the aerobic digesters ensuring the effluent meets the highest standards and ensures the protection of the Columbia River.

Benzene Railcar Vapor Balance Pressure Monitoring

Emerald added a safety interlock to the benzene railcar loading system. A pressure transmitter and high pressure alarm are tied into the computer control system. If the pressure set point is reached, the computer will close the benzene railcar loading valve automatically, thus protecting employees and the environment.

Columbia River Dock Working Platform Upgrade

Emerald completed modifications to the dock working platform and ancillary equipment. The entire working platform is designed to capture toluene and direct it to onshore containment where the material can be recovered. The upgrade included moving piping above ground where it can be closely monitored and installing containment on all underground piping. These upgrades prevent toluene from reaching the Columbia River in the event of an accidental release during ship to shore transfer operations.

Wastewater Storage Tank Vent Control

Emerald added two new carbon filters to capture organic vapors emitted from wastewater storage tanks. The carbon filters operate in series. A sample point between the first and second filter allows Emerald personnel to determine when the first filter is spent. The second filter acts as a backup to ensure any organic vapors are captured when the first filter is spent. When organic vapors are detected after the first filter, it is removed from service and the second filter is moved into the first position. A fresh filter is put in to the second position; thereby ensuring that all organic vapors are captured. This project keeps organic vapors from entering the atmosphere and harming the environment.

Chilled Water System Upgrade

Emerald installed new glycol chillers to provide consistent temperature control, allowing for more efficient condensation of organic vapors.

This allows unreacted chemicals to be recovered and recycled back to the process. The upgrade reduces raw material demand, reduces the organic vapor load on downstream atmospheric controls and supports sustainability and continuous improvement goals.

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Widnes (UK) Highly Flammable Storage Tanks

Two highly flammable storage tanks Proprionaldehyde and Isovaleraldehyde sit in a common bund and are filled via road tankers. Emerald has installed overfill protection on these tanks. The scope of the modifications included new level transmitters, new liquiphant probes and associated trip valves preventing transfer on high level detection. A local level indicator and flashing high level beacon were also installed.

Earthing Verification System

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Emerald installed an intelligent system able to automatically verify and confirm the earthing connection before allowing offloading to commence at the Methanol, Benzaldehyde, Proprionaldehyde and Isovaleraldehyde off-loading points.

The system clearly indicates a positive earthing connection via visual LEDS and has an interlock to the transfer pumps valves with the earthing connection. Remote shutoff systems were installed with field emergency shutdown buttons located in accessible positions outside of the tanker offloading area.

Highly Flammables Residue Tank

This storage tank receives highly flammable residues from the plant. Although this is not the largest tank containing flammable material, the tank is located closest to occupied buildings with potential for a large pool area in the event of loss of containment. The removal of aqueous material is important as the residues are used as fuel for the boilers. Emerald installed an aqueous holding tank inside the bund with high level automation to capture drainings and ensure the potential for pool fire outside the bunded area is eliminated.

Mobile Tank and Container Handling

Emerald Widnes identified that throughout its processes there are movements of mobile tanks and containers between a variety of storage tanks.

This increases the potential for overfill due to human error and the potential for loss via fork lift truck movements. On a priority basis the company has worked on removing these movements via installing fixed pipework transfer lines. This involved the installation of a direct transfer line from the distillation plant to storage and also the connection of the reactor process to a waste storage tank to eliminate the handling of highly corrosive sulphuric acid waste. This programme continues across site.

Asbestos Removal

Emerald Widnes has committed to removing the main identified asbestos containing materials on site. The asbestos board used to surround and roof the two main warehouses on site has been completely removed and replaced with box profile steel plastisol coated sheets. This was necessary as the asbestos boards originally installed in the 1970’s are prone to potential damage, increasing the potential exposure to employees. Further replacement of remaining asbestos boards is being carried out on a programme basis.

Rotterdam (The Netherlands) Two major projects set the tone for 2017: the replacement of the air preheater and the migration of the process control system DCS (Distributed Control System) to a new DCS supplier.

Air preheater replacement

The air preheater of the hot oil furnace was replaced to increase the thermal fuel boiler’s yield and to lower the NOx emissions (the hot oil furnace air preheater had already been replaced in 2015). This improved the efficiency of the hot oil furnaces, reducing consumption of natural gas by approximately 980,000 m3 of natural gas and the emission of CO2 by 1.760 tons.

DCS monitoring system

A Distributed Control System (DCS) is one component of the process automation.

Processes can be monitored and controlled via a DCS, which functions autonomously without the need for a human operator. In practice, however, screen-based interface is often installed to allow the operator to monitor the machine’s performance during processing and observe any errors that may occur. In such cases, the operator might (for example), change the set value, the temperature or the pressure in the pipes. Emerald’s old DCS system was in need of replacement by a state-of-the-art system.

This updated version provides a wider range of possibilities for ensuring efficient operation of the installations in terms of energy and other resources.

Energy Efficiency Program

Within the scope of the 2017-2020 Energy Efficiency Program, Emerald has initiated various actions to combat energy losses and use energy more efficiently. One major effort in this regard concerns preventing and repairing leaks in the steam and condensate system. Another example involves re-assessing whether certain tracing is in fact necessary and whether it can be conducted more efficiently.

Emerald has implemented projects that geared toward improvement in terms of environmental and safety performance. As part of the Energy Efficiency Program, the process air preheaters in the sodium benzoate installation were replaced. These process air preheaters were replaced in order to comply with the new emission requirements, as well as to improve energy efficiency. This renovation of the sodium benzoate installation reducing consumption of natural gas by approximately 540,000 m3 and the emission of CO2 by 1,000 tons.

The company’s latest energy efficiency project concerns the heat integration of the toluene oxidation reactors. The reaction process within the toluene reactor is exothermic. The heat released by the reaction is currently being cooled after the reactor via waste gases, meaning that heat is now being lost. In future, however, this heat could be reused for generating steam. Any excess steam produced might then also be delivered to the Rotterdam heating network and used to heat homes in the city.

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Material effiency

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Chris Wrobel:

“Achieving the goal of reducing GHG emissions means going the extra mile” “Emerald Kalama Chemical attaches great value to reducing its carbon footprint. We believe it is everyone’s responsibility to reduce GHG emissions whenever possible”, says Chris Wrobel, Corporate EHS Manager at Emerald Kalama Chemical.

ISO certified

Chris explains: ‘’Emerald has had ISO 14001 certified environmental management programs for many years and recognizes the value such certification can provide by ensuring the company is focused on reducing environmental impacts. Our approach includes considering all options for reducing energy consumption, such as utilizing steam produced by a neighboring trash incinerator rather than installing new GHG emission sources , and choosing more energy-efficient variable frequency drive pumps instead of cheaper, less energy-efficient standard motors’’.

Material efficiency

Increasing production while simultaneously reducing waste and emissions is another example of how Emerald is meeting its commitment to the goal of reducing our environmental impacts. ‘’Improving raw material efficiencies is beneficial to both the environment and the corporate bottom line’’, says Chris. ‘’Emerald has invested in a Continuous Improvement Team that seeks to improve process efficiencies to reduce raw material usage. For example, we recently completed a project that improved the yield of cinnamic aldehyde. This reduced the amount of both raw materials used and the waste byproduct generated’’.

Continuous improvement

Chris feels that ensuring everyone’s participation throughout a process is critical to its ultimate success. ‘’Our employees are aware of the company’s sustainability goals and are actively engaged in the process. This means that Emerald is committed to the principle of continuous improvement in all aspects of the business; through that process, the company will improve process efficiencies, reduce GHG emissions, and reduce its overall environmental impact’’.

“Improving raw material efficiencies is beneficial to both the environment and the corporate bottom line”.

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Vision, mission, values and priorities

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Our vision

Our values

Emerald Kalama wants to be the premier solutions provider and supplier of high-quality ingredients that customers choose because we deliver on our commitments and bring excellence to our customers’ products. We will build on our legacy and grow our expertise in technology, operations, and service to help our customers create value with our trusted brands around the world. We protect and support each other, our community and the environment.

• Value our customers and suppliers • Conduct our business and operate our plants responsibly and ethically • Continually improve our quality, service and value • Always do the right thing

Our mission Emerald Kalama is the global leader in toluene oxidation chemistry and a trusted and reliable supplier of specialty materials focusing on flavor and fragrance ingredients, phthalate-free plasticizers, anti-microbial agents and synthesis intermediates. Our mission is to hear the voice of the customer and drive innovative solutions that exceed their expectations. We will utilize our expertise, expand our capabilities and leverage our strong brands to drive growth and generate market leading value for our stakeholders.

For information on products produced in our facilities, please visit www.emeraldkalama.com.

Our priorities • Be our customers’ first and preferred choice • Protect our community and employees • Execute growth initiatives and invest for the future • Diversify our product, region and customer base • Meet or exceed service and quality goals • Meet or exceed EBITDA and working capital goals • Foster an environment of personal accountability and drive to be a high performance organization

Emerald produces technologically advanced specialty chemicals for a broad range of consumer and industrial applications. Its products play a variety of roles in the products that are consumed and used every day enabling them to last longer, look, smell, taste or perform better. Emerald® products are used in aerospace, food, beverages, cosmetics, toothpaste, household products, paint, automobiles, sports gear and many other applications.

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Emerald Kalama Chemical, LLC 1499 SE Tech Center Pl, Ste 300, Vancouver, WA 98683, USA +1 360-954-7100

Colophon This public report contains a summary of our official environmental report.

Edition Emerald Performance Materials Design SD Communicatie, Naaldwijk Photography Emerald Performance Materials Interviews Novitekst Copyright Š 2018 All rights reserved.

Emerald Kalama Chemical Limited Dans Road Widnes, Cheshire WA8 0RF, UK +44.151.423.8101

Emerald Kalama Chemical BV Mijnweg 1 6167 AC, Geleen, The Netherlands +31 181-249224