GHG emissions reductions

IBM's energy conservation program has been the cornerstone of the company's climate protection program, since our energy use represents the greatest potential climate impact associated with IBM's operations. Since 1996, IBM has had a corporate wide energy conservation goal which currently requires IBM's business units to reduce or avoid 3.5 percent of the current year's energy use. IBM considers its energy conservation goal to be its "first generation" CO2 emissions reduction goal since energy use reductions result in the reduction of CO2 emissions associated with the use of fuels and electricity. In aggregate, IBM's energy conservation program has reduced or avoided annualized CO2 emissions of 3.9 million metric tons from 1990 to 2012, an amount equivalent to 57 percent of IBM's global CO2 emissions in 1990. Changes due to acquisitions, divestitures and downsizing are not included in those results; they represent the benefits of the many energy conservation and efficiency projects implemented for over two decades across our operations.

In 2006, IBM established a second generation goal, which set an absolute operational CO2 emissions reduction objective. Between 1990 and 2005, IBM reduced or avoided CO2 emissions by an amount equivalent to 40 percent of its 1990 emissions through its global energy conservation program. To further extend this achievement, IBM set itself an aggressive "second generation" goal: to reduce the CO2 emissions associated with its energy use 12 percent by 2012 against a 2005 base year through energy conservation and the procurement of renewable energy.

IBM met its second generation climate protection goal in 2012, reducing our operational CO2 emissions by 15.7 percent against the 2005 baseline.

IBM's CO2 emissions reductions have been achieved through:

• IBM's energy conservation efforts have reduced or avoided a total of 1.83 million MWh of electricity and 2.9 million MMBtu of fuel use (based on one-year savings associated with conservation projects) from 2006 to 2012, which resulted in a reduction in IBM's electricity and fuel use by 2.3 percent and 25.9 percent, respectively, against the 2005 baseline use adjusted for acquisitions and divestitures.
• IBM's direct purchases of electricity generated from renewable sources, i.e., beyond that supplied through grid-purchased electricity, and the associated CO2 avoidance, increased by a factor of 3.8 from 2005 to 2012.
• An increase in the amount of renewable energy IBM procured as part of the grid-supplied electricity between 2005 and 2012. This is evident as the average grid emissions factor for IBM electricity purchases reduced from 0.45 metric tons CO2/MWh in 2005 to 0.43 metric tons CO2/MWh in 2012, as reported by the International Energy Administration and the U.S. (EPA). This increase is the result of higher percentages of wind, solar and natural gas generation and lower levels of coal (in some jurisdictions) in the mix of grid generation.

IBM releases some perfluorocompounds (PFCs) from its semiconductor manufacturing operations. Although the releases are in relatively small amounts (in carbon dioxide equivalents, when compared to the company's indirect CO2 emissions), IBM was the first semiconductor manufacturer to set a numeric reduction target for PFCs in 1998 and was one of the industry leaders in Semiconductor Industry Association (SIA) and EPA collaboration for voluntary industry emissions reporting and reduction initiatives. This collaboration resulted in two Memorandums of Understanding:

• 1996 - Signed Memorandum of Understanding (MOU) with U.S. EPA to voluntarily reduce PFC emissions from semiconductor manufacturing processes. IBM expanded its commitment under the MOU, setting its first goal to reduce PFC emissions by 40% by 2002 indexed to production against the 1995 baseline.
• 2002 - Signed second MOU with U.S. EPA, which commits the industry to an absolute reduction of 10% in PFC emissions by 2010 against the 1995 baseline.

After completion of our first corporate goal in 2002, we set a second generation goal to achieve an absolute reduction in PFC emissions from semiconductor manufacturing of 25 percent by 2010 against a base year of 1995. We exceeded this goal by reducing IBM's PFC emissions by 36.5 percent at year-end 2010. Two key PFC reduction approaches enabled us to exceed the goal commitment.

1. IBM's 300 mm manufacturing facility abates all significant sources of PFC emissions, minimizing the emissions from the manufacturing operations.


2. IBM's 200 mm manufacturing facility has been an industry leader in developing and implementing chemical substitution alternatives to reduce PFC emissions. The facility pioneered the conversion of selected equipment chamber clean processes from C2F6, a gas with an average utilization of 30 to 40 percent, to NF3 which is utilized at greater than 95 percent, significantly reducing emissions. The facility is also implemented substitutions with C4F8, which also has better utilization rates and a lower Global Warming Potential.

We continue to take actions to reduce our PFC emissions and monitor performance. Between 2010 and 2012, we reduced our PFC emissions by 2.9 percent -- primarily as a result of work at the Burlington, Vermont, facility where C2F6 was substituted by C4F8 and NF3 in several chamber clean processes in the 200 mm fab. For the 2012 reporting year, semiconductor manufacturing process emissions were 231,800 MT of CO2e, representing approximately 9 percent of IBM's overall scope 1 and 2 emissions.

A separate but relevant activity is the Semiconductor Industry Association's current work with the United States Environmental Protection Agency (EPA) to modify the Subpart I Semiconductor Manufacturing Requirements under the Mandatory Reporting Rule. The work includes updates to various parameters (e.g., process emissions factors, emissions abatement system destruction efficiencies) and methodologies for estimating PFC emissions from semiconductor operations. EPA published the revised rules in August 2013. IBM plans to incorporate, as appropriate, the updated factors and methodologies which will result in changes in IBM's reported emissions.

IBM also monitors two other materials with global warming potentials that are used in connection with manufacturing operations: 1) nitrous oxide (N2O), which is used in the manufacture of semiconductors but has lower global warming potential than the PFC gases; and 2) heat transfer fluids that are primarily used in tool-specific chiller units associated with manufacturing processes.

• IBM emitted 24,000 metric tons of CO2e of N2O, which has a lower global warming potential than the PFC gases used in its semiconductor operations.
• IBM generated a CO2e of 57,000 metric tons from fugitive emissions of heat transfer fluids used in chiller systems and semiconductor test operations.

In addition to monitoring emissions, IBM continues to evaluate preferable replacements for these materials. At IBM's Burlington facility, a wafer test team completed a two-year project to qualify a new low global warming potential, non-conductive heat transfer fluid used in wafer testing processes. The new fluid fills the microscopic air gaps between the wafer chuck and the physical wafer, on wafer test equipment. The lower vapor pressure of the material results in fewer process fluid losses, reducing the metric tons of CO2e emitted from the process by more than two orders of magnitude and the fluid expense by over $100,000 a year.

IBM uses absolute metrics as opposed to intensity metrics to assess the effectiveness of its GHG emissions reductions programs. We do not establish intensity metrics against which to assess our progress toward emissions reductions because the diverse nature of IBM's business activities precludes the development of a meaningful correlation between IBM's emissions and activities, and typical emissions normalizers such as revenue, employee population or a measure of output. IBM's diverse range of business activities include, but are not limited to, software labs, consulting services, data center operations, data center services, hardware design, hardware manufacturing and assembly, and semiconductor manufacturing. Often, these activities are co-located at a single facility. There is no effective methodology to disaggregate operations or to allocate the overhead energy use and GHG emissions associated with centralized activities.