Chemicals and materials science giant Dow announced today the completion of its inaugural green bond offering, raising over $1.2 billion to support the company’s decarbonization and circular economy strategies, including the construction of a new net zero emissions chemical plant in Canada.
The issuance follows the announcement by Dow in November of its final investment decision to move forward on Fort Saskatchewan Path2Zero, a $6.5 billion project to build the world’s first net zero Scope 1 and 2 emissions ethylene plant in Alberta, Canada. The project will see Dow build a new ethylene cracker and increase polyethylene capacity by 2 million metric tons annually (MTA), as well as retrofitting an existing cracker to net zero Scope 1 and 2 emissions. Dow initially unveiled its plans for the new plant in 2021, along with its intentions to allocate approximately $1 billion per year of capex on investments aimed at decarbonizing its global asset base.
Dow said that the proceeds from the green bond offering will be used for expenditures and investments related to the new plant, and to support the achievement of its climate protection and circular economy goals, which include achieving carbon neutrality across all scopes by 2050, reducing Scope 1 and 2 emissions by 5 million metric tons by 2030, and commercializing 3 million metric tons of circular and renewable solutions annually by 2030.
The company’s recently published green bond framework outlines eligible criteria for allocation of green bond proceeds, with eligible categories encompassing climate protection investments, including energy efficiency, renewable energy and decarbonization-related expenditures, and circular economy investments, including circular economy adapted products, production technologies and processes, and certified eco-efficient products.
The offering included $600 million of 5.150% notes due 2034 and $650 million of 5.600% notes due 2054.
Jeff Tate, Chief Financial Officer at Dow, said:
“This green bond offering marks a foundational opportunity for investors to participate in Dow’s strategy to decarbonize and drive circularity while growing earnings over the cycle. We expect the proceeds of this instrument to primarily support our project to build the world’s first net-zero Scope 1 and 2 emissions ethylene and derivates complex in Alberta, which achieved the critical milestone of final investment decision from our Board in November 2023.”