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CARBON NEUTRALITY – CASTROL CARBON NEUTRAL PRODUCTS

“Carbon neutrality of the products in scope achieved by Castrol in accordance with PAS 2060 at 31st December 2022 with the commitment to maintain to 31st December 2023, for the period commencing 1st January 2023, DNV certified”– Castrol’s Carbon Neutrality Declaration as documented in its PAS 2060 Qualifying Explanatory Statement - Castrol Carbon Neutral Products.

 

For the year 2022, Castrol has achieved carbon neutrality on the basis of a combination of carbon offsets (credits) and GHG emissions reductions (as demonstrated by the reduction in the average product carbon intensity of Castrol’s carbon neutral portfolio). For the year 2021, Castrol relied on 100% offsets to meet the requirements of carbon neutral achievement and to compensate for the carbon emissions in its baseline period – this is in accordance with the provisions of PAS 2060. Carbon emission reduction activities were nonetheless in action in 2021 and the impact of these actions are now visible in the 2022 recalculation of the carbon footprint of carbon neutral products. Some examples of these activities are included in Section 5.3 of the Qualifying Explanatory Statement that also resides under the DOCUMENTATION AND VERIFICATION section below. Table 6.1 of the Qualifying Explanatory Statement lists the projects from which carbon credits were retired for achievement of product carbon neutrality in 2022. 

 

CARBON NEUTRAL – GUIDING PRINCIPLES

Applicable to all Castrol carbon neutral products

  • PAS 2060 is an internationally applicable specification developed by the British Standards Institution (BSI) for the demonstration of carbon neutrality. Carbon neutral is defined within PAS 2060:2014 as a condition in which during a specified period there has been no net increase in the global emission of greenhouse gases to the atmosphere as a result of the greenhouse gas emissions associated with the subject during the same period.  PAS 2060 follows a 4-step process establishing guidelines for measuring, reducing, and offsetting greenhouse gas (GHG) emissions for businesses, products, and events as well as reporting of these actions.
  • In 2014, Castrol became the first company in the world to offer a carbon neutral lubricant, verified and assured by an independent third party to be carbon neutral in accordance with PAS 2060.  In 2021, Castrol increased its Carbon Neutral offer further to cover ~30% of volume sold; this now includes a brand in every space served (e.g., automotive, industrial, marine, energy, and e-fluids) as well as all products sold by Castrol in Australia, New Zealand, and Vietnam.
  • The World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD) have developed the GHG Protocol’s Product Life Cycle Accounting and Reporting Standard.  In accordance with this protocol, Castrol assesses the cradle to grave lifecycle greenhouse gas (GHG) emissions of all products in the Carbon Neutral Portfolio and then verifies their carbon neutrality using BSI’s PAS 2060.
  • This product lifecycle assessment includes measuring all product-related Scope 1, 2 and 3 GHG emissions (raw materials, manufacturing, packaging, distribution, losses in use and end of use treatment) and excludes non-product related GHG emissions like indirect purchases, capital goods and employee commuting.
  • Castrol works on reducing its GHG emissions through a target-driven carbon management plan that is set out in Section 5.2 of the PAS 2060 Qualifying Explanatory Statement (“QES”) that resides under Documentation and Verification section below.  For example, at the end of 2022, Castrol has transitioned 10 owned blend plants to renewable energy using renewable electricity contracts, and 4 blend plants are utilizing solar-sourced electricity.
  • Remaining emissions are offset through the purchase and retirement of carbon credits from a portfolio of projects provided to Castrol by bp Target Neutral. A carbon offset is an action or activity that compensates for (such as the planting of trees or carbon sequestration) or prevents or avoids (such as renewable energy projects) the emission of CO₂ or other greenhouse gases to the atmosphere. Put another way, carbon offsetting is a way for compensating for emissions by making an equivalent CO₂ saving elsewhere. The carbon offset program Castrol has used since 2014 has supported a range of projects.
  • bp Target Neutral is a member of ICROA (The International Carbon Reduction and Offset Alliance). This means its portfolio of carbon reduction projects comply with the requirements of ICROA’s Code of Practice and bp Target Neutral are independently audited against it annually. All carbon credits used are from projects that meet recognised standards from international carbon offset registries and are listed in Table 6.1 of the QES.
  • Castrol products contribute to saving energy and driving efficiency in use, but there are carbon emissions associated with their lifecycle. Reducing product lifecycle carbon emissions will take time and requires action all along the value chain. Carbon offsetting is a way for us to contribute to the climate challenge while we and society work to reduce emissions in other ways. The PAS 2060 process addresses both actions.
  • All ~1000 product variants in Castrol’s Carbon Neutral Portfolio are verified as carbon neutral in accordance with PAS 2060. A summary of the brands in scope is included below and a full list of products can be found in Table D.3 of the QES.
  • Castrol®, a bp brand, blends and markets Castrol lubricant products made from hydrocarbons.  The global scientific community has reached consensus that emission of carbon dioxide (CO₂) and other gases from the use of hydrocarbons, including the combustion of fossil fuels, is a contributor to global warming causing what is commonly referred to as climate change.  Castrol acknowledges this scientific consensus but also recognizes the role that lubricants play in supporting efficient motion to meet everyday energy needs.   When you use a carbon neutral lubricant in your vehicle or machine, some CO₂ will be emitted into the atmosphere through its lifecycle – for example, from production or as losses in use or end of life treatment or disposal.

CASTROL’S CARBON NEUTRAL DECLARATION

“Carbon neutrality of the products in scope achieved by Castrol in accordance with PAS 2060 at 31st December 2022 with the commitment to maintain to 31st December 2023, for the period commencing 1st January 2023 DNV certified”– Castrol’s Carbon Neutrality Declaration as documented in its PAS 2060 Qualifying Explanatory Statement - Castrol Carbon Neutral Products.

 

In accordance with PAS 2060, Castrol provides a qualifying explanatory statement (QES) that includes the evidence substantiating the declaration in respect of carbon neutrality.  Castrol’s QES (PAS 2060 Qualifying Explanatory Statement - Castrol Carbon Neutral Products) includes, in Annex A, the checklists of criteria for substantiating evidence for the declaration of the commitment to and achievement of carbon neutrality in accordance with PAS 2060.  These checklists (Tables A.1 (commitment) and A.2 (achievement)) include the full description of the criteria and the specific locations within the QES where the supporting evidence for each can be found.  The criteria checklists require evidence on the application of PAS 2060 and it’s four-stage process as summarized below in the section below.

CARBON NEUTRAL PRODUCTS IN ACCORDANCE WITH PAS 2060

PAS 2060 specifies a four-stage process to demonstrate carbon neutrality which includes:

  • Assessment of greenhouse gas (GHG) emissions based on accurate measurement data
  • Reduction of emissions through a target-driven carbon management plan
  • Offsetting of residual emissions, often by purchasing carbon credits
  • Documentation and verification through qualifying explanatory statements and public disclosure 

Castrol’s application of PAS 2060 involves two external independent third parties; Environmental Resources Management Limited who carry out the carbon footprinting of Castrol products and a second, DNV Business Assurances UK Limited who do the verification and assurance of carbon neutrality.

ASSESSMENT

Castrol assesses, identifies, and measures CO₂ emissions throughout each product’s life cycle. The figure below is derived from the GHG Protocol’s Product Life Cycle Accounting and Reporting Standard and demonstrates the key activities that make up a product’s life cycle.

To quantify the GHG emissions of the product, primary activity data (process-specific data obtained by direct measurement of the energy or business activities) and secondary data (data obtained from sources other than direct measurement of the emissions from processes included in the life cycle of the products) is collected for each activity and used in conjunction with emissions factors (coefficients) to convert activity data into GHG emissions.

 

Table 3.2 of the QES provides a description of each lifecycle stage shown above and the key inclusions and exclusions used to quantify GHG emissions have been summarized below:

Lifecycle Stage Inclusions Exclusions
Material acquisition & pre-processing Raw material extraction and processing to produce components (e.g., base oils and additives) and packaging

Capital goods and infrastructure (i.e., manufacture and maintenance of machinery and buildings)

Personnel activities (e.g., commuting to and from work)

Storage at distribution warehouse

Production Blending of components (base oils and additives) and filling into product packaging (plastic bottles, steel drums, Intermediate Bulk Containers (IBCs), etc.)
Distribution and storage Distribution of packed products from Castrol blending sites to customers (e.g., dealerships and retailers)
Use

Filling of product (e.g., vehicles, equipment, and machinery)

Leakage of product during use

Where applicable, combustion of product during use

Draining of product from product application system as this is a manual operation.

Beneficial greenhouse gas emission impacts of the product in use (e.g., fuel savings from reduced friction, raw material saved due to durability/extended drain, etc.)

End-of-life

Transportation of used product to a waste management facility

Used product incineration with and without energy recovery, landfill, or re-refining, where only incineration without energy recovery and landfill have GHG emissions impacts within the Castrol boundary

Treatment of waste packaging to recycling, incineration with energy recovery, incineration without energy recovery or landfill

In line with the recycled content method (Chapter 9 of the GHG Product Protocol), the following processes are not included in the boundary of this life cycle stage:

Processes that transform waste to a useful material in another process (e.g., re-refining of used oil and recycling of plastic)

REDUCTION

Castrol’s carbon management plan is a global program encompassing activities across Scope 1, 2 and 3 emissions in support of its aim to halve the net carbon intensity of its products sold by 2030 or sooner, vs the 2019 baseline (measured in 2020). Castrol’s carbon reduction activities are not limited to its carbon neutral portfolio, but the impact of its carbon reduction activities is assessed in relation to both the carbon neutral portfolio and the overall carbon footprint (Scope 1,2 and 3 emissions). Castrol’s carbon reduction plan includes activities across each lifecycle stage, but its key focus areas (beyond its Scope 1 and 2 emissions) are its raw material purchases and what happens to products at the end of their use, working to transform the lifecycle of lubricants from linear to more circular.

 

OFFSETTING

Castrol purchases and retires (destroys) carbon credits, from carbon reduction projects, to offset residual product carbon emissions.

 

Castrol has purchased its offset credits from a portfolio of projects provided by bp Target Neutral. bp Target Neutral are a member of ICROA (The International Carbon Reduction and Offset Alliance). This means its portfolio of carbon reduction projects comply with the requirements of ICROA’s Code of Practice and bp Target Neutral are independently audited against it annually. All carbon credits used are from projects that meet recognized industry standards from international offset registries, including the UN CDM and the Verified Carbon Standard.  After purchase, sufficient carbon credits are retired (destroyed) to balance the emissions associated with the Carbon Neutral claim.  See http://www.bptargetneutral.com for more details.

 

Table 6.1, extracted from PAS 2060 Qualifying Explanatory Statement - Castrol Carbon Neutral Products, contains the list of carbon credits retired in relation to the achievement period and more information about the projects they are from. Since the inception of its carbon neutral program in 2014, Castrol has offset (through the purchase and retirement of carbon credits) more than 6.2 million tons of GHG emissions.

 

DOCUMENTATION AND VERIFICATION

The Qualifying Explanatory Statement (QES) is a requirement of PAS 2060 and demonstrates that (and how) Castrol has achieved carbon neutrality for its Carbon Neutral Products:

PAS 2060 Qualifying Explanatory StatementS

The QES is being provided in English only, because this version was assured by DNV. Translated versions are not assured.

CASTROL’S CARBON NEUTRAL PRODUCT PORTFOLIO - IN ACCORDANCE WITH PAS 2060

LEAD BRANDS - CARBON NEUTRAL PRODUCTS FOR EACH SECTOR CASTROL SELLS TO
EDGE Automotive Passenger Car Oils (PCO) All Products Sold Globally
POWER1 Automotive Motorcycle Oils (MCO) All Products Sold Globally
VECTON Automotive Commercial Vehicle Oils (CVO) All Products Sold Globally
OPTIGEAR Industrial Gear Oils All Products Sold Globally
EDGE PROFESSIONAL, MAGNATEC PROFESSIONAL & GTX PROFESSIONAL Automotive Passenger Car Oils sold primarily to OEMs and Franchise Workshops All Products Sold Globally
BRAYCO & TRANSAQUA Compressor Oils and Hydraulic Fluids sold to customers in the Energy sector All Products Sold Globally
BIOBAR, BIOSTAT & BIOTAC Hydraulic Fluids and Greases sold to customers in the  Marine sector All Products Sold Globally
ALUSOL XBB and HYSOL XBB; TECHNICLEAN XBC Industrial Coolants and Cleaners All Products Sold Globally
Castrol ON e-Mobility Fluids All Products Sold Globally
LEAD COUNTRIES – ALL PRODUCTS SOLD IN COUNTRY ARE CARBON NEUTRAL
Australia, New Zealand and Vietnam
MARKET-SPECIFIC CARBON NEUTRAL PRODUCTS
Europe & Russia PCO All EDGE, GTX, MAGNATEC & TRANSMAX branded passenger car oils sold in Europe & Russia
Japan PCO All EDGE, Engine Shampoo, GTX, MAGNATEC & TRANSMAX branded passenger car oils sold in Japan
Europe CRB All CRB branded commercial vehicle oils sold in Europe
India MAGNATEC All MAGNATEC branded passenger car oils sold in India
US TRANSYND & AUTRAN All TRANSYND, TRANSYND RD and AUTRAN SYN 295 Automatic Transmission Fluid (ATF) products sold in the US
Castrol’s carbon neutral portfolio includes the products that were verified as carbon neutral between 2014 - 2020 as well as the additional products introduced into Castrol’s carbon neutral portfolio from 2021. In 2021, the scope of Castrol’s Carbon Neutral Portfolio was expanded, and a new verification and assurance program was initiated to bring together all carbon neutral products under one program. All products in this program have achieved carbon neutrality in accordance with PAS 2060 at 31st December 2022 with the commitment to maintain to 31st December 2023, for the period commencing 1st January 2023, DNV certified.

Carbon neutrality - Castrol’s operational activities

Castrol’s PATH360 Programme also includes making its scope 1 and 2 GHG emissionsi from its operations carbon neutral in accordance with PAS 2060.

 

Consistent with its approach for carbon neutral products, Castrol’s application of PAS 2060 for Scope 1 and 2 GHG emissions involves two external independent third parties; Environmental Resources Management Limited  who carry out the carbon footprinting of Castrol’s operational activities and a second, DNV Business Assurances UK Limited,  who do the verification and assurance of carbon neutrality.

 

Assessment

Castrol uses the GHG Protocol’s Corporate Standard to assess its Scope 1 and 2 GHG emissions.

  • Scope 1 emissions are the direct emissions from sources owned or controlled by Castrol. Scope 1 includes on-site fossil fuel combustion and fleet fuel consumption.
  • Scope 2 emissions are the indirect emissions that result from the generation of electricity, heat or steam purchased by Castrol from a utility provider.

 

Reduction

Castrol is targeting a 50% reduction in its Scope 1 and 2 GHG emissions by 2025 vs. its 2019 baseline and has delivered a 38% reduction when comparing 2022 Scope 1 and 2 GHG emissions vs the 2019 baseline. Castrol is committed to continuing its carbon reduction efforts as demonstrated in its carbon management planii.  The 3 main pillars of Castrol’s Scope 1 and 2 carbon management plan include operational efficiency, transitioning to renewable energy, and replacing carbon-intensive energy sources with cleaner, lower carbon alternatives.

 

Offsetting

See above offsetting section for details of how Castrol purchases and retires carbon credits to achieve carbon neutrality.

 

Table 6.1 - Scope  1 and 2, extracted from PAS 2060 Qualifying Explanatory Statement - Castrol Carbon Neutral Scope 1 and 2, contains the list of offset credits retired in relation to 2022 and more information about the projects they are from. 

 

Documentation and verification 

Castrol's qualifying explanatory statement for 2022 achievement is in progress. This page to be updated in q4 2023.
 

“Carbon neutrality of Scope 1 and Scope 2 GHG Emissions achieved by Castrol in accordance with PAS 2060:2014 at 31st December 2022 with the commitment to maintain to 31st December 2023, for the period commencing 1st January 2023, DNV certified”

 

The QES is being provided in English only, because this version was assured by DNV. Translated versions are not assured.

PATH360 QUALIFYING CRITERIA

Carbon Neutral is one of four qualifying criteria in Castrol’s PATH360 Strategy. Please see PATH360 Qualifying Criteria for more information.

 

iCalculated in accordance with the GHG Protocol’s Corporate Standard.

iiCastrol’s Carbon Management Plan is explained in detail in Section 5.2 of the PAS 2060 Qualifying Explanatory Statement - Castrol Carbon Neutral Scope 1 and 2.