Sustainability Update
Our Vision | Core Values | Key Historical Achievements | Greenhouse Gas Emissions| Clean Energy | Ecosystem | Water | Product Stewardship | Workplace Safety | Diversity, Equity and Inclusion | Community Engagement | Governance
Chairman’s Letter
Since issuing our inaugural Sustainability Report last year, LSB Industries, Inc. (LSB) continues to make progress towards achieving our long-term sustainability goals. I am pleased to present some of our key developments from 2023.
Sustainability is a long journey and over the past year we have made positive contributions to many of our areas of influence. We expect to continue progressing on our sustainability journey in the coming years by adhering to our core values: Protect What Matters, Make it Better, Practice Integrity and Be One Team.
Everything we do at LSB is defined by our core values. They guide us to achieve operational and business practices that successfully meet our daily obligations to all our stakeholders – particularly our employees and the residents of the communities in which we operate – as well as society and the environment.
Protect What Matters
Safety Above All Else
Our focus on safety is the number one business driver. We believe that operational and financial success can only be possible when we commit to our core values. Our culture is driven by our most critical core value, Protect What Matters, which ensures a safe working environment. We’ve set high safety standards, with policies and procedures aimed at achieving Goal Zero: zero recordable incidents and injuries. In 2023, we achieved a total recordable injury rate of 0.33, a significant improvement from 2022. Ensuring positive results year after year is an area of continued focus and we expect our ongoing training efforts and investments in our facilities to help move us forward along our journey. A critical facet of our approach toward achieving Goal Zero is the dedicated commitment of our senior leadership team as they lead the way in our efforts to Protect What Matters. In addition, we have implemented key preventative measures, including enhanced safe working permitting processes, across our organization to continue to promote a safe workplace culture. Finally, throughout our company, it is and will always be about ensuring that all LSB employees have the resources necessary to live according to our Protect What Matters core value.
Make it Better
CO2 Emissions Reduction – A Growth Opportunity
As the fifth largest producer of ammonia in North America, LSB plays a crucial role in making and distributing products that improve the quality of life for numerous consumers. The ammonia and ammonia-derivatives we produce are important feedstock for materials and chemicals used to build housing and furnishings, mine for minerals and metals used in electric vehicles and technology infrastructure and construct critical civil infrastructure. Additionally, we produce fertilizers to support increasing food supply demands both domestically and internationally,
Our carbon capture and sequestration project at El Dorado, Arkansas continues to move forward. The EPA (Environmental Protection Agency) Region 6 office is working on completing the technical review of our Class VI permit application and construction of the injection well is currently expected to start in 2025. This should allow first CO2 injections in early 2026. The project is expected to reduce LSB’s overall Scope 1 CO2 emissions per ton of ammonia production by 25 percent by 2030. The resulting low carbon ammonia and ammonia-derivative products produced at El Dorado, should help our customers reduce the upstream CO2 emissions of their supply chains. In May 2024, we announced a first-of-its-kind agreement to sell low carbon ammonium nitrate solution (ANS) from El Dorado to Freeport-McMoRan Minerals (Freeport). Our low carbon ANS will assist Freeport in lowering its upstream scope 3 emissions in copper mining operations.
In October 2023, we announced our partnership with INPEX and Air Liquide to build a new 1.1 million ton per year low carbon ammonia plant on the Houston Ship Channel located on the Vopak-Exolum site. The ammonia from this facility is intended to be used as a clean fuel for power generation, a hydrogen carrier, an industrial chemical feedstock, and as a marine fuel in a variety of domestic and international markets. Over the past year, successful tests of ammonia for power generation and as a marine fuel were conducted by various companies around the world. The results of these tests give us confidence that new energy markets for low carbon ammonia will develop and that opportunities to supply will be significant. We started pre-FEED (Front End and Engineering Design) on our project during 2023 and finalized it recently. We expect to enter FEED during the first half 2025 and reach FID (Final Investment Decision) sometime by mid-2026. Once operational, this project will increase LSB’s ammonia production capacity by approximately 60 percent and will further reduce the carbon footprint of our ammonia production.
We believe that the opportunities for low carbon ammonia in the energy sector are tremendous with respect to its role in decarbonizing a wide range of industries around the world. Our company vision is to become a leader in the production of low carbon ammonia and a key enabler of the global energy transition over the coming years.
Practice Integrity
Giving Back to Our Communities
As an integral part of the larger social fabric, supporting our communities is an important aspect of the LSB corporate culture. We seek to uplift those in need by participating in philanthropic initiatives, sponsoring local events and by making financial donations to organizations whose work helps to create a positive environment for everyone to thrive. Our community outreach program is focused across four specific areas in the communities where we operate: STEM education, assisting families in need, and supporting agricultural and civic organizations.
One example of the commitment of our employees came during the annual 2023 United Way fundraising campaign, as teams across our sites collectively donated nearly $100,000 to their local United Way drives. In addition, team members participated in numerous volunteer activities, sharing their time and their financial support.
Be One Team
We Get it Done as One Team
We are proud of the progress we’ve made over the past several years to build a stronger organization, both operationally and financially. Our accomplishments on these fronts put us in a position to make real and lasting positive impacts on the lives of our employees and the communities in which we operate, while making inroads into safeguarding the environment that supports life around the world. Customer demands and government regulations in numerous countries are fueling global efforts to decarbonize industrial supply chains and develop readily available sources of clean energy and ammonia is emerging as one of the front-running solutions. We intend to be an industry leader, and the efforts we have under development are moving us towards our objectives.
We appreciate your interest in LSB Industries and look forward to reporting to you on our future progress on our sustainability journey.
Sincerely,
Mark Behrman
Chairman & CEO