enaex - climate change 2018 … · top executives of each area of the company (production,...

Enaex - Climate Change 2018

C0. Introduction

C0.1

(C0.1) Give a general description and introduction to your organization.

Enaex, a subsidiary of the Sigdo Koppers Group, has 97 years of experience in the explosives industry. Over the years, the Companyhas established itself as the world's third largest producer of low-density ammonium nitrate as well as the leading provider ofcomprehensive rock fragmentation services for the mining industry in Chile and Latin America. Ammonium Nitrate production andBlasting Services are both Enaex's Core Business and its strategic vision is being a company of excellence with high qualitystandards on its products and services and growing in a responsible way with its stakeholders and the environment. Aboutammonium nitrate production Enaex has an annual and complete sold production of 755,000 tons distributed among Latam miningmarket and the exportation over 40 countries. Enaex started its internationalization process on 2009 and by today has local presencein Argentina, Colombia, Brazil and Peru. In order of achieving its vision of growth giving a complete blasting service to its miningcostumers Enaex recently bought the French company Davey Bickford, specialized on all type of detonators. All of Enaex's officesare ruled by the same principles and values in order of creating a solid corporate culture and reputation. Enaex is currently composedby 3309 workers, 50% of them located in Chile and distributed among three Productive Plants at the north part of Chile, 22 ServicesPlants installed inside the costumer site performing the complete blasting process; and in Chilean capital, Santiago, where theheadquarter office is located. Enaex Vision is “Being the worldwide most prestigious company on high quality ammonium nitrate andrelated services” and the Mission goes according to it: a)Growing along with our customers, supplying ammonium nitrate, relatedchemicals and high-quality mining services b)Giving a Blasting Service regarding safety, reliability and innovative with highestworldclass standards c)Having global presence with Latin America Explosives Market leadership d)Generating value for all itsstakeholders e)Being recognized as company respectful to the environment and its local communities. Back staging this Mission andVision Enaex has embedded four Corporate Values: 1) Taking care of Life anyplace, anytime. 2) Serving with Passion to ourcostumer 3) Accomplishing our Commitments 4) Living through Excellence. As many other companies, Enaex seeks to achievehighest share value to all its stakeholders through diversification and leadership of its products and services, reducing operationalcosts by optimizing and innovating its production processes and large logistic service. Enaex, as a world-class company, continuesbecoming a company of excellence, in permanent challenge understanding its customer needs and maintaining its sustainable andsocially responsible vision.

C0.2

(C0.2) State the start and end date of the year for which you are reporting data.

Start date End date Indicate if you are providing emissions data for pastreporting years

Select the number of past reporting years you will be providingemissions data for

Row1

January 12017

December 312017

No <Not Applicable>

Row2

<NotApplicable>

<NotApplicable>

<Not Applicable> <Not Applicable>

Row3

<NotApplicable>

<NotApplicable>


Row4

<NotApplicable>

<NotApplicable>


C0.3

(C0.3) Select the countries/regions for which you will be supplying data.Chile

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C0.4

(C0.4) Select the currency used for all financial information disclosed throughout your response.USD

C0.5

(C0.5) Select the option that describes the reporting boundary for which climate-related impacts on your business are beingreported. Note that this option should align with your consolidation approach to your Scope 1 and Scope 2 greenhouse gasinventory.Operational control

C-CH0.7

(C-CH0.7) Which part of the chemicals value chain does your organization operate in?

Row 1

Bulk organic chemicalsPlease select

Bulk inorganic chemicalsNitric acid

Other chemicalsSpecialty chemicals

C1. Governance

C1.1

(C1.1) Is there board-level oversight of climate-related issues within your organization?Yes

C1.1a

(C1.1a) Identify the position(s) of the individual(s) on the board with responsibility for climate-related issues.

Position ofindividual(s)

Please explain

Board Chair The highest level of responsibility for climate change is the Board itself leading by its president. Normative N° 385 Chilean Securities and InsuranceCommission (SVS) sets forth that all Board Members must be informed every three months about Enaex’s Sustainability, Diversity and Inclusionperformance. This practice has been implemented since 2016 onwards.

C1.1b

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(C1.1b) Provide further details on the board’s oversight of climate-related issues.

Frequency withwhich climate-related issues area scheduledagenda item

Governancemechanisms intowhich climate-related issues areintegrated

Please explain

Scheduled – somemeetings

Reviewing andguiding strategyReviewing andguiding majorplans of actionReviewing andguiding annualbudgetsReviewing andguiding businessplansMonitoringimplementationand performanceof objectivesOverseeing majorcapitalexpenditures,acquisitions anddivestitures

Every three months the Board is committed to review Sustainability issues within climate-related are considered. In thesemeetings CEO presents to the Board most important issues related to climate change which includes modification to theclimate strategy, major investments planned, annual master plan, annual revenues and cost from CDM projects, GHGinventory report and KPI targets. Then the Board gives the necessary feedback in order of being worldwide aligned.

C1.2

(C1.2) Below board-level, provide the highest-level management position(s) or committee(s) with responsibility for climate-related issues.

Name of the position(s) and/orcommittee(s)

Responsibility Frequency of reporting to the board on climate-relatedissues

Chief Executive Officer (CEO) Assessing climate-related risks and opportunities Annually

Chief Financial Officer (CFO) Both assessing and managing climate-related risks andopportunities

Quarterly

Chief Operating Officer (COO) Both assessing and managing climate-related risks andopportunities

Quarterly

C1.2a

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(C1.2a) Describe where in the organizational structure this/these position(s) and/or committees lie, what their associatedresponsibilities are, and how climate-related issues are monitored.

Below the Board Chair Enaex's CEO leads the Sustainability Steering Committee, which is responsible to supervise the execution ofthe sustainability strategy and the climate change-related projects (mitigation and adaptation) as one of its main pillars. The othermembers of the Sustainability Steering Committee are:

1) Enaex's COO (Production VP) leads all Enaex's productive plants, including ammonium nitrate manufacturing and explosivesproduction. In that way, his most important role regarding climate change is to ensure a low carbon production process through anon-failure operation of the CDM projects and drive energy efficiency projects.

2) Human Resources VP leads sustainable initiatives related to the relationship with the main stakeholders and employees. Relatedto climate change, she promotes initiatives to reduce the GHG emissions at the office, like campaigns to reduce printed paper, toturn-off the lights when not used, etc. or major changes like incentive the use of bike to commute to work.

3)Planning and Business Development Director is in charge of Enaex Strategic Planning which includes raising new and long terminitiatives among the company regarding climate change assessment and management.

4) Head of Sustainability is in charge of update and report the status of the carrying out initiatives regarding climate change andsustainability. Specifically, annual carbon footprint accounting, CDM projects emission reductions reporting to the Board andstakeholders, support any activity of the company related with climate change training

C1.3

(C1.3) Do you provide incentives for the management of climate-related issues, including the attainment of targets?Yes

C1.3a

(C1.3a) Provide further details on the incentives provided for the management of climate-related issues.

Who is entitled to benefit from these incentives?Chief Operating Officer (COO)

Types of incentivesMonetary reward

Activity incentivizedEnergy reduction target

CommentEnaex's COO (Production VP) has an annual monetary reward related to accomplish quoted or reduce unitary operation cost ofammonium nitrate through implementing energy efficiency projects. At reporting year 2017, the KPI was to achieve an energyconsumption per ton of ammonium nitrate equal or less than 50 kwh/tAN. This target was fully achieved during reporting year duethe implementation of a 3-million usd investment back-pressure turbine to generate clean energy by seizing a pressure delta atnitric acid plant n°3.

Who is entitled to benefit from these incentives?Environment/Sustainability manager

Types of incentivesMonetary reward

Activity incentivizedEmissions reduction project

CommentHead of Sustainability, has an annual monetary reward associated to a KPI related to CDM projects successful operation andissuance of CERs. KPI was fully achieved during reporting year by the issuance of 845,797 CERs.

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C2. Risks and opportunities

C2.1

(C2.1) Describe what your organization considers to be short-, medium- and long-term horizons.

From(years)

To(years)

Comment

Short-term

0 5 Related to Climate Change, short term as been defined by Enaex as the minimum time frame that a certain risk or opportunity couldaffect Enaex business model. If a risk or opportunity is considered to occur in the “short term” it means that the company must be takingby now the necessary knowledge or adaptation measures to face them.

Medium-term

5 10 Medium Term time frame related to climate change refers to a risk or opportunity that could be possible in order that it is currentlyoccurring in other countries but not yet in Chile. This is the minimum time frame that a public policy could take for being implemented.

Long-term

10 50 Long term time frame is applicable to those risks or opportunities that, even that we are aware of the chance of occurrence, we do notfully see the real impact that it could have in Enaex business model

C2.2

(C2.2) Select the option that best describes how your organization's processes for identifying, assessing, and managingclimate-related issues are integrated into your overall risk management.There are no documented processes for identifying, assessing, and managing climate-related issues

C2.2e

(C2.2e) Why does your organization not have a process in place for identifying, assessing, and managing climate-relatedrisks and opportunities, and do you plan to introduce such a process in the future?

Primaryreason

Please explain

Row1

We areplanning tointroduce ariskidentification,assessment,andmanagementprocess inthe next twoyears

During 2013, the Enaex Sustainability Steering Committee conducted a first exercise to analyze which could be the risks and opportunitiesrelated to climate change and how they can affect Enaex’s business model. That process was conducted by internal one-to-one interviews totop executives of each area of the company (production, finances, supply chain, human resources) concluding that Enaex's core business wasnot directly threatened in the mid-short term by major risks associated to climate change. For the same reason, this analysis was not reportedto the Board. Nevertheless, Enaex is now fully aware of the importance to develop and implement a formal and documented process toidentify, assess and manage related-climate change risks and opportunities, particularly with regard to Paris Agreement and Chilean INDC.The project, planned to be part of Master Plan 2019, will consider to conduct a whole process in order of set a baseline of considerations forfurther analysis: time frame from 0 to 50 years, likely of occurrence based of science facts, financial implications and costs of adaptation mustbe included. The results will be disclosed to Enaex board in order get the proper alignment and set best practices

C2.3

(C2.3) Have you identified any inherent climate-related risks with the potential to have a substantive financial or strategicimpact on your business?Yes

C2.3a

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(C2.3a) Provide details of risks identified with the potential to have a substantive financial or strategic impact on yourbusiness.

IdentifierRisk 1

Where in the value chain does the risk driver occur?Direct operations

Risk typeTransition risk

Primary climate-related risk driverPolicy and legal: Enhanced emissions-reporting obligations

Type of financial impact driverPolicy and legal: Increased operating costs (e.g., higher compliance costs, increased insurance premiums)

Company- specific descriptionChile has ratified the Paris Agreement presenting Chilean INDC (Intended Nationally Determined Contributions) in October 2015.This document represents a binding commitment of national government to implement measures regarding the reduction of GHGemissions in the mid and long term. Chilean INDCs includes the “Industrial Process” subsector (where Enaex belongs) whichcommits at least 25% of emission reduction by 2030. Regarding this upcoming national commitment and being Enaex a large scalechemical industry and the only one that produces nitric acid, there is a potential risk of being obligated to measure, report and verifyour corporative emissions in a near future (at least 2020 onwards) in order of having a better estimation of national emissionsreductions and subsector contributions.

Time horizonShort-term

LikelihoodVery likely

Magnitude of impactLow

Potential financial impact1500000

Explanation of financial impactFailure on complying with any environmental obligation could imply monetary penalties or even the partial close of the operations.In that way, the worst financial impact could be as high as USD 1,5 million per day depending on which facility is affected and howlong the closure can last.

Management methodEnaex performs its corporative GHG inventory since 2012 having a an annual verification in order of anticipating a possibleobligation. Furthermore, by its CDM projects, Enaex has developed good experience regarding monitoring and verificationprocedures. Regarding reporting experience, Enaex has published its GHG Inventory Report since 2014 as a way of being wellprepared and gaining knowledge in case of any future reporting obligation.

Cost of management50000

CommentEnaex has estimated a total annual cost monitoring, verifying and reporting GHG emissions inventory near of USD 50,000considering all necesary resources to complete the required process.

IdentifierRisk 2


Risk typeTransition risk

Primary climate-related risk driverPolicy and legal: Increased pricing of GHG emissions

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Type of financial impact driverPolicy and legal: Increased operating costs (e.g., higher compliance costs, increased insurance premiums)

Company- specific descriptionOn 2017 enter into force the new environmental tax legislation which includes a Carbon Tax for the power sector of usd 5 per ton ofCO2 released. With this action Chile became the first country in South America to tax carbon dioxide (CO2) emissions showing itsleadership regarding climate change fighting commitment. In the same way, the National Adaptation/Mitigation Program wasconfirmed to Paris Agreement. This active position of Chilean government regarding climate change raise the possibility of aCarbon Tax over N2O emissions could affect Enaex in the short term.

Time horizonMedium-term

LikelihoodLikely

Magnitude of impactMedium-low


Explanation of financial impactThrough the CDM projects and carbon footprint calculation Enaex knows the magnitude of its emissions which are low and could beunder a possible N2O normative therefore exempt from carbon tax. Nevertheless, the only financial estimation that Enaex canmake at this point is considering a carbon tax similar to current electric carbon tax of 5 USD/tCO2 released. If we have an annualaverage of emissions arround: 250,000 tCO2eq, the cost of a carbon tax could be near of USD 1,25 millon.

Management methodIn order of managing the carbon tax risk, Enaex has developed two strategies: 1) To maintain and promote low GHG emissionproduction. As Enaex is the only nitric acid plant in Chile, having low GHG emission production could discourage any possiblecarbon tax 2) To participate actively through CLG Chile with national environment authorities in order collaborate with the nationalGHG baseline inventory and then collaborate with any possible public policies regarding carbon taxes.


CommentMaintain low GHG emission production trough Enaex CDM projects costs USD 1.5 million per year and the membership of CLGChile about USD 5000/year

IdentifierRisk 3

Where in the value chain does the risk driver occur?Supply chain

Risk typePhysical risk

Primary climate-related risk driverAcute: Increased severity of extreme weather events such as cyclones and floods

Type of financial impact driverReduced revenue from decreased production capacity (e.g., transport difficulties, supply chain interruptions)

Company- specific descriptionEnaex’s production facilities and main mining costumers are located in northern Chile, a desert area which is not prepared toreceive more than 3 mm of rainfall per year. An increase of severity of weather events has occurred at the northern Chile during thelast three years with unusual out-of-season heavy rains (last one, occurred on May 2017, was a rainfall of 24 mm in just one day inCopiapó (III Region) where the normal precipitation is just 12mm /y) causing cut of energy, floods, landslides, closing of roads anddamaging installations.

Time horizonShort-term

LikelihoodMore likely than not

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Magnitude of impactMedium-high


Explanation of financial impactIf Enaex installations or the roads resulted closed or damaged could lead in the risk of interruption of logistic programs causing ashortage of explosives to our main mining customers who have a strict production schedule and, in consequence, the loss of salesduring the time that the emergency lasts. One month of no dispatching products to mining customers could represent a 25 millionUSD lost of profit to the company

Management methodIn order of managing this risk, Enaex has improved and reinforced it’s the whole logistic system, in example two initiatives has beento install more magazines on site of critical costumers and higher break-stock to assure on time deliveries.


CommentThe implementation of the initiatives conducting to improve the logistic system are not only regarding climate change risks.Nevertheless, the installation of magazines and to maintain more back-up stock to respond has been valued in 300,000 USD

IdentifierRisk 4


Risk typePhysical risk

Primary climate-related risk driverChronic: Rising mean temperatures

Type of financial impact driverIncreased operating costs (e.g., inadequate water supply for hydroelectric plants or to cool nuclear and fossil fuel plants)

Company- specific descriptionChanges in sea temperature affects Prillex Plant operation due it uses sea water as cooling system for some nitric acid andammonium nitrate production process. In summer time the sea water temperature increases 2°C, then the power needed forcooling system would increase 100 KW

Time horizonLong-term


Magnitude of impactHigh


Explanation of financial impactIf the sea temperature increases 2°C in a permanent way (not only in summer time) Enaex has estimated an annual additionalconsumption of energy near of 1100 MWh which could mean at least USD110,000 on energy cost.

Management methodEnaex has implemented a short-term management method by increasing the power demand during summer time in order maintainthe cooling system operation.


CommentThe cost of management implies to consider new investment regarding cooling water system which could be arround 500,000 USD

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C2.4

(C2.4) Have you identified any climate-related opportunities with the potential to have a substantive financial or strategicimpact on your business?Yes

C2.4a

(C2.4a) Provide details of opportunities identified with the potential to have a substantive financial or strategic impact onyour business.

IdentifierOpp1

Where in the value chain does the opportunity occur?Direct operations

Opportunity typeMarkets

Primary climate-related opportunity driverAccess to new markets

Type of financial impact driverIncreased revenues through access to new and emerging markets (e.g., partnerships with governments, development banks)

Company- specific descriptionEU Carbon market has been depressed for almost 5 years with prices lower than 0.5 USD/ CER. A future Chilean Cap and TradeScheme could offer a better price and a more steady demand for Enaex CERs than current EU carbon market.

Time horizonMedium-term




Explanation of financial impactEnaex's breakeven abatement cost is around 2,5 USD/CER. Enaex could offer almost 800,000 CERs/year in a local cap and trademarket. If the price for CERs of this market would be 3 USD, Enaex will received an additional no operational income of 400,000USD In other words, any price over 2,5 USD/CER offered by a local cap and trade market could impact positively Enaex results.

Strategy to realize opportunityEnaex's strategy to realize this opportunity has been to continue the verification of its emission reductions and CERs issuance inorder of having CERs to offer in potential Chilean Cap and Trade Market Also, has worked collaborating with environment nationalauthorities, through CLG Chile, by giving information of its process and emissions in order of build national baseline inventorywhich is needed for a potential cap and trade system

Cost to realize opportunity200000

CommentAnnual verification and issuance procces cost is USD200,000 and CLG membership is USD 5000 per year

IdentifierOpp2

Where in the value chain does the opportunity occur?Customer

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Opportunity typeProducts and services

Primary climate-related opportunity driverDevelopment of new products or services through R&D and innovation

Type of financial impact driverIncreased revenue through new solutions to adaptation needs (e.g., insurance risk transfer products and services)

Company- specific descriptionIncreasingly higher costs of energy are affecting Enaex mining costumers. This has been an opportunity for developing newproducts and services specially designed for downstream energy saving gaining a differentiation competitive advantage overEnaex's competitors. This is the case of Energex, a solution created in order to improve the efficiency of rock fragmentationprocesses and to reduce the energy requirement in the global process by reducing costs downstream of the blasting process. Thebenefits that Energex brings are: - Produces 21% more energy - Produces 5% more fragmentation - Decreases density by 5% -The VoD (Velocity of Detonation) increases by 26%

Time horizonCurrent

LikelihoodVery likely



Explanation of financial impactAs part of its long term strategic plan, Enaex has estimated that 12% of annual revenue can be achieved by 2020 from newsolutions (products or services) like Energex, specially developed for mining costumers in order of saving energy or having a moresustainable mining process.

Strategy to realize opportunityIn order to realize this opportunity Enaex has incorporated into 2017-2022 Strategic Plan several initiatives focused on solvingEnaex's mining costumer needs and problems developing “tailor made” solutions and using more sustainable products and servicessuch as Energex®. The impact of these strategy represented 29% difference in gross margin between new products andunchanged products.

Cost to realize opportunity4000000

CommentTo develop and introduce new and sustainable products and services Enaex spends in R&D an amount around 4 million USDduring reporting year 2017

C2.5

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(C2.5) Describe where and how the identified risks and opportunities have impacted your business.

Impact Description

Productsandservices

Impacted Through CDM projects installed at the nitric acid production facilities, Enaex has been capable to measure and certify that its ammoniumnitrate and all the products derived from it, are traceable-low carbon products. From this issue, Enaex is now working on a deepest LifeCycle Assessment of their products in order of being aware and manage any other material environmental impact. The main impact thatCDM projects have had is to afford the operation costs to maintain the GHG emissions as low as possible, especially when no revenuescome from the sale of CERs. This cost is about 2,3 USD per ton of ammonium nitrate or 1,5 MMUSD per year.

Supplychainand/orvaluechain

Impacted As Enaex products are traceable-low carbon products we are able to provide their emission factor to our mail mining costumers, who usethem to calculate their own carbon footprint. This is the case of Minera Santa Inés de Collahuasi, who reduced almost 40% their blastingprocess emissions by using Enaex products. The short-term impact was the cost of developing the LCA based on ISO 14040 in order toobtain ammonium nitrate emission factor. This cost was near 20,000 USD. Regarding the mid and long-term we look forward a competitiveadvantage that resulted in a deepest costumer preference or the willing to pay better price to Enaex’s low-carbon products.

Adaptationandmitigationactivities

Impacted Since the cost of Energy has been increased due climate change related-impacts as the decrease of annual precipitations, Enaex has beenlooking for optimizing the use and savings of energy in all its operations. Since 2010, several initiatives have been implemented in order tohave as much as 50% self-supply of energy by today at Prillex Plant in Mejillones and there are projects to do the same in the otherproductive plants by 2020. In terms of investments, since 2012, the company has spent around 4 MMUSD to develop several projects ofenergy efficiency but the cost saving per year today is as much as 5 MMUSD.

Investmentin R&D

Impacted Enaex is currently developing new technologies regarding to improve and make more efficient GHG emission reduction. In example: Since2015 Enaex has a mutual collaboration agreement with Pontificia Universidad Católica de Chile in order of development a SecondaryCatalysts according to Enaex needs which will reduce the cost of replacement but not affecting the abatement efficiency. Currently thesecondary catalyst must be replaced completely every three years. As it is manufactured abroad, the total cost (spare parts andtransportation) is around 250 MUSD per year, which will be a saving impact if the local catalyst is developed.

Operations Impacted CDM projects has impacted directly Prillex Plant operations due there are additional processes, besides the ones related to ammoniumnitrate production, to take care about. A specialized team has been named (CDM team) to supervise all CDM processes which include: themaintenance and calibration in a regular basis of all CDM instruments, to supply specific consumable goods, as propane or test gas bottles,etc. This impact has been valued in 2,3 USD per ton of ammonium nitrate. In other hand, measurement of GHG in other operations beyondCDM projects has been raised and implemented in the other productive plants due the possible event of having emissions-reportingobligations in the near future. To account and verify annually GHG inventory in order to report them in Enaex’s Integrated Report have acost of 20 MUSD.

Other,pleasespecify

Notevaluated

Enaex has not evaluated nor identified any other area where risks and opportunities have impacted our business

C2.6

(C2.6) Describe where and how the identified risks and opportunities have factored into your financial planning process.

Relevance Description

Revenues Impacted On 2014 Enaex applied to be part of NEFCO Fund who aimed to support CDM projects around the world in order to maintain themoperating. By participating with NEFCO Enaex received 1 MMUSD per year as revenues due the sales of CERs. From 2017 to 2020,Enaex is part of the World Bank’s third auction, making possible to receive 1 MMUSD/y as revenue from CERs selling.

Operatingcosts

Impacted Being aware of both, enhanced emissions-reporting obligations and the chance of a future Chilean ETS, Enaex has maintained theverification process of its two CDM projects and has improved other processes as the annual verification of GHG Carbon footprint andthe first Water footprint this year. This has impacted operational costs in an additional amount of 100 MUSD per year. In other hand, tomaintain the operation of CDM project, hence the emission reductions, has an annual cost of 1,5 MMUSD

Capitalexpenditures/ capitalallocation

Not yetimpacted

Although no major capital expenditures nor allocations have been necessary after the implementation of CDM projects on 2006, Enaexhas formally committed to implement N2O abatement system to the next nitric acid plant. The next nitric acid plant does not have adefined implementation date yet but it is estimated that an additional capital expenditure of 2 MMUSD will be needed.

Acquisitionsanddivestments

Not yetimpacted

On 2015, Enaex acquired two new companies, Britanite from Brazil and Davey Bickford from France. As the acquisitions are too recent,the scope of integration has not yet reached environmental impacts as GHG emissions. Nevertheless, it is an upcoming task to accountand verify the GHG inventory of these subsidiaries in order of being consistent with the scope of operational control given to Enaex GHGInventory and to disclose and report a more accurate data. We have planned to report consolidated GHG Inventory in 2019 IntegratedReport but not monetary additional cost of this implementation has been estimated yet.

Access tocapital

Not yetimpacted

Until now, Enaex has faced all the necessary investments by using its own capital. Nevertheless, new technologies regarding reducingscope 3 or developing new N2O abatement systems could need investments as high as 100 MMUSD. We expect a time frame to facethese impacts around 2020 - 2022.

Assets Impacted Climate Change-related opportunity has led to Enaex a new type of asset which are the Certified Emissions Reductions (CERs). CERsare monthly recognized in a provision account as a potential 50 MUSD revenue for the company. This revenue provision is estimated bymultiplying the emissions reduced every month by the monthly spot price of CERs.

Liabilities Impacted As part of the CDM process, Enaex has the liability to pay the administration fee (share of proceeds) in order of acquire the certifiedemission reductions and use them in NEFCO Fund or to the World Bank. This liability could be as much as 150 MUSD per issuance date

Other Notevaluated

Enaex has not evaluated nor identified any other area where risks and opportunities have factored into our financial planning process

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C3. Business Strategy

C3.1

(C3.1) Are climate-related issues integrated into your business strategy?Yes

C3.1a

(C3.1a) Does your organization use climate-related scenario analysis to inform your business strategy?No, but we anticipate doing so in the next two years

C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C-ST3.1b/C-TO3.1b/C-TS3.1b)

(C-AC3.1b/C-CE3.1b/C-CH3.1b/C-CO3.1b/C-EU3.1b/C-FB3.1b/C-MM3.1b/C-OG3.1b/C-PF3.1b/C-ST3.1b/C-TO3.1b/C-TS3.1b)Indicate whether your organization has developed a low-carbon transition plan to support the long-term business strategy.Yes

C3.1c

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(C3.1c) Explain how climate-related issues are integrated into your business objectives and strategy.

Climate change started influencing Enaex business strategy since Kyoto Protocol entered into force on 2005 by the development of aCDM project at the nitric acid plant n°3 (Panna3: UNFCCC Ref.1229) in order to reduce N2O emissions and selling certified emissionreductions at the EU ETS. This first CDM project of Enaex considered an investment of USD 12 million to reduce almost 800,000tCO2e per year and became an important source of additional revenue. Since then, Enaex Board has been aware about how climatechange mitigation/adaptation could bring opportunities into the business. As an example, on 2010 a USD 20 million investment wasapproved in order of having an energy cogeneration system based on seizing the steam surplus generated during production processof the new nitric acid plant (Panna4). This investment has allowed more than 30% energy cost saving. On 2011 considering both, thepositive impact of CDM on Enaex know how and the complex scenario of Chilean mining costumers due higher production costsbecause energy scarcity, Enaex Board defined that Climate Change impacts would be part of the long term Strategic Plan through theenhancement of GHG emission reductions and energy efficiency projects at Enaex Productive Plants Enaex Strategic Plan foundsitself in four pillars (Growth, Efficiency, Costumers and People) all of which have strategic initiatives to be develop in a 5-year horizon.Sustainability (and as part of it also mitigation and adaptation to climate change) is declared as a fundamental element whichsupports these four pillars whether as specific projects or as criteria for implementing any project in a sustainable way. In this way,one of the most important component of the strategy influenced by climate change is the “Efficiency of Productive Process” especiallyby developing and implementing projects tending to reduce the electric cost per ton of ammonium nitrate. These projects are mostlybased on using steam surplus of Prillex plant for energy co-generation. Since the energy efficiency projects started, Enaex hasreduced purchased energy by 45%. On 2016, the KPI of energy efficiency should not be over 52 kwh per ton of ammonium nitrate(AN), giving a monetary reward to the management team if this AN energy cost is equal or less than 49,5 kwh per ton AN. Also on2011 was approved to develop and install a N2O emissions catalyst system in Panna 4 Plant under a new CDM methodology(developed by Enaex and an Austrian Company (Carbon Climate Protection)). This allows Enaex reducing near of 80% of Panna 4N2O total emissions and obtain 250,000 CERs per year. Another important component of Enaex´s strategy influenced by climatechange is the strategic initiative “Lock-in of Mining Home Market (Chile)” which has the objective of developing innovative tailor-madesolutions which can help mining costumers on facing current challenges of higher cost of energy and water scarcity. One example is“Energex® project” which has developed an explosive product of high energy release resulting in a better prepared blasting materialfor the milling process reducing total energy consumption downstream. In other hand, Enaex mining costumers have had a positiveinfluence on Enaex business strategy in terms of Climate Change management because they have been constantly demandingknowing the “Carbon Emission Factor” of Enaex explosives. On 2015 a collaborative work resulted with one of the most importantChilean open-pit mines, Minera doña Ines de Collahuasi, by using Enaex’s emissions factors in their own carbon foot print calculation.This approach as long term collaboration with our customers also impacts on a strategic and sustainable business development.Another examples of important long term business decisions taken by Enaex regarding Enaex sustainable development and climatechange management commitment have been: 1) Supporting the ECOPLANTA Project (2005). The Ecoplanta, installed inside Enaexcustomer mining site, allows collecting and recycling wasted fuel oil from mining operation and use it for explosive production. 2)Incorporating LED Technology when new Corporate Building was designed on 2012 3) On 2016, the project "Back Pressure Turbine,Plant Prillex” was developed and installed aiming the generation of energy by sizing a differential pressure delta between to processat nitric acid plant n°3. This will generate a maximum of 1.4 MW annually. The start-up of the project was in October 2016 and beganto work at full capacity in March 2017. The target is to generate an additional 15% of total energy demand required by the PrillexPlant Complex, completing almost 50% of self-supply. On February 2017 Chilean government ratified the commitment with ParisAgreement by submitting an INDC setting the main actions to reduce its CO2 emissions per GDP unit by 30% below their 2007 levelsby 2030. Enaex, as a recognized leader company on climate change, has been actively involved in several public and privateactivities to prepare this new competitive scenario. One of these activities is the “Partnership for Market Readiness (PMR)” initiativecreated in 2010 by the World Bank and implemented in Chile by the Energy Ministry to provide funding and technical assistance toexplore, develop and pilot carbon pricing instruments in beneficiary countries. In consequence, Enaex is well prepared in order toaddress this new competitive scenario having assessed the economic impact that a further carbon tax or ETS could have on thebusiness sustainable development. Currently, Enaex is exploring TCFD recommendations about assessing and disclose climatechange financial risks to provide better and useful information to its stakeholders

C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C-ST3.1e/C-TO3.1e/C-TS3.1e

CDP Page of 5313

(C-AC3.1e/C-CE3.1e/C-CH3.1e/C-CO3.1e/C-EU3.1e/C-FB3.1e/C-MM3.1e/C-OG3.1e/C-PF3.1e/C-ST3.1e/C-TO3.1e/C-TS3.1e)Disclose details of your organization’s low-carbon transition plan.

Enaex's low-carbon transition plan kicked-off on 2006 when the first CDM project was approved by the Board. Nevertheless, beforethat fact, Enaex modernized the production of ammonium nitrate (AN) at Prillex Plant Complex by building a new-350 Mton nitric acidplant on 2006, reducing almost 50% the emissions per ton of AN.

In the light of the above we have the following timeline:

Before 1995: 100 Mton ammonium nitrate (AN) were produced per year with an average emission of 4,3 tCO2e per ton of AN.

1995: nitric acid plant N°3 enter in operation adding 350 Mton of ammonium nitrate per year and reducing the unitary GHG emissionsto 2,5 tCO2e

2007: CDM project 1229 was registered at UNFCCC and launched. The investment on this project was 12 MMUSD and allowedEnaex to reduce GHG emissions derived from ammonium nitrate to 0,4 tCO2e per ton of product.

2010: Implementation of a new 350 Mton nitric acid plant (plant n°4). As the plant did not have N2O catalyst system from the start, theGHG emission of Prillex Complex was raised to 0,8 tCO2e/tAN until December 2011.

The new Nitric Acid Plant N°4 included an energy generator based in a surplus-steam compressor system. This allowed Enaex’sPrillex Plant to self-supply 35% of its total energy consumption and avoid almost 25,000 tCO2e from grid-purchased energy.

2011: CDM project 5393 was registered at UNFCCC and implemented under methodology ACM0019. This methodology wasdeveloped by Enaex and Carbon Climate Protection (Austrian Company) in order to promote CDM in plants raised from 2010onwards. Once the CDM project 5393 was fully operative, the GHG emission per ton of ammonium nitrate was reduced again to 0,4tCO2e.

2012 to 2017: Seven projects of energy efficiency were developed in order to reduce the energy purchased from grid. By the end of2017, almost 60% of energy self-supply was reached at Enaex’s Prillex Plant Complex.

C3.1g

(C3.1g) Why does your organization not use climate-related scenario analysis to inform your business strategy?

Enaex does not use climate-related scenario analysis for assessing climate-related risks and opportunities and their potentialbusiness implications due it is a relatively recent methodology. We are currently gaining the necessary knowledge to address thismethodology in a proper and consistent way in the next two years.

C4. Targets and performance

C4.1

(C4.1) Did you have an emissions target that was active in the reporting year?Both absolute and intensity targets

CDP Page of 5314

C4.1a

(C4.1a) Provide details of your absolute emissions target(s) and progress made against those targets.

Target reference numberAbs 1

ScopeScope 1+2 (location-based)

% emissions in Scope100

% reduction from base year24.7

Base year2012

Start year2017

Base year emissions covered by target (metric tons CO2e)375446

Target year2017

Is this a science-based target?No, but we anticipate setting one in the next 2 years

% achieved (emissions)100

Target statusExpired

Please explainEnaex has implemented and improving N2O emission reductions at its nitric acid plants reaching at reporting year the most cost-efficient abatement of N2O emissions (85%). Enaex commitment target is not to get over 250,000 tCO2e from scope 1 by not usingthe oldest nitric acid plant (panna1) and being able to maintain the good performance of N2O catalyst systems. In other hand,scope 2 can still be reduced by energy efficiency projects. Since 2012 five projects related to energy efficiency have beenimplemented at Prillex Plant and two more are planned until 2020. The operation of these projects have resulted in an absolute24% reduction of scope1+2 compared to base year 2012. Base year emissions scope1+2: 375,446 tCO2e Reporting yearscope1+2: 282,421 tCO2e Absolute reduction: 93,025 tCO2e. Enaex is fully committed to set long term since- based targets withinthe next two years and to cooperate to develop SBT methodology for chemical sector in South America.

Target reference numberAbs 2

ScopeScope 2 (location-based)


% reduction from base year34

Base year2012

Start year2017

Base year emissions covered by target (metric tons CO2e)42080

CDP Page of 5315

Target year2017




Please explainAs the backpressure turbine installed at nitric acid plant n°3 was fully operating during reporting year, we expected an importantscope2 reduction by the end of the year. The established target was to reduce an additional amount of 4,900 tCO2e from scope 2with respect to previous year (2016) by the effect of the back pressure turbine. The target was fully achieved, reaching an amountof 9,588 tCO2eq. of emissions reduced with respect 2016. This accumulates 34% of emissions reduced of gross scope2 from baseyear 2012. Base year emissions scope2: 42,080 tCO2e Previous year (2016) scope2: 37,393 tCO2e Reporting year scope2:27,805 tCO2e Absolute reduction from 2016 to 2017 (back pressure turbine effect): 9,588 tCO2e

C4.1b

CDP Page of 5316

(C4.1b) Provide details of your emissions intensity target(s) and progress made against those target(s).

Target reference numberInt 1

ScopeScope 1+2 (location-based)


% reduction from baseline year10.54

MetricMetric tons CO2e per metric ton of product

Base year2012

Start year2017

Normalized baseline year emissions covered by target (metric tons CO2e)0.463

Target year2017




Please explainOn 2017 both parameters, emissions from scope1+2 and ammonium nitrate production, were lower than base year 2012 (25% and16% respectively). Hence, Intensity target (Scope1+2 tCO2/tAN) decreased by 10.54% from 2012. Base year emissions scope1+2:375,446 tCO2e Base year AN production: 811,344 ton Base year Intensity Target (normalized): 0.463 Reporting year scope1+2:282,421 tCO2e Reporting year AN production: 682,188 ton Reporting year Intensity Target (normalized): 0.414 Total reduction ofInt1 from 2012: 0.049 tCO2e/tAN (-10.54%)

% change anticipated in absolute Scope 1+2 emissions9

% change anticipated in absolute Scope 3 emissions0

C4.2

CDP Page of 5317

(C4.2) Provide details of other key climate-related targets not already reported in question C4.1/a/b.

TargetEnergy usage

KPI – Metric numeratorTo reduce not-renweal energy purchased from grid (SING) at Prillex Plant Complex (Kwh)

KPI – Metric denominator (intensity targets only)Annual ammonium nitrate (AN) production (Metric tonnes of AN produced)

Base year2012

Start year2017

Target year2022

KPI in baseline year60.72

KPI in target year42.23

% achieved in reporting year67.7

Target StatusUnderway

Please explainThis intensity target is a KPI for the Corporative Production Officer and it is focused on reducing the purchased energy from grid(SING) by ton of ammonium nitrate produced. The target seeks to reduce 40% the energy purchased from grid and replacing it forrenewable sources. This should mean to reduce from 60,72 kwh/tAN to 42,23 kwh/tAN by 2022. During reporting year 67.7% of thetarget was achieved due the operation of two new energy efficiency projects.

Part of emissions targetYes. this targest is part of the absolute tanget scope1+scope2 emission reduction

Is this target part of an overarching initiative?Please select

This target is not yet part of an overarching initiative

C4.3

(C4.3) Did you have emissions reduction initiatives that were active within the reporting year? Note that this can includethose in the planning and/or implementation phases.Yes

C4.3a

CDP Page of 5318

(C4.3a) Identify the total number of projects at each stage of development, and for those in the implementation stages, theestimated CO2e savings.

Number of projects Total estimated annual CO2e savings in metric tonnes CO2e (only for rows marked *)

Under investigation 0 0

To be implemented* 0 0

Implementation commenced* 0 0

Implemented* 2 10836

Not to be implemented 0 0

C4.3b

CDP Page of 5319

(C4.3b) Provide details on the initiatives implemented in the reporting year in the table below.

Activity typeEnergy efficiency: Processes

Description of activityProcess optimization

Estimated annual CO2e savings (metric tonnes CO2e)9749

ScopeScope 2 (location-based)

Voluntary/MandatoryVoluntary

Annual monetary savings (unit currency – as specified in CC0.4)1400000

Investment required (unit currency – as specified in CC0.4)3000000

Payback period1-3 years

Estimated lifetime of the initiative>30 years

CommentA back pressure turbine, installed on 2016 and fully operating during reporting year at Prillex Complex was responsible for reducing9,749 additional tCO2e. The investment was almost 3 million USD and it is expected to generate a maximum of 1,4 MW of power.Nevertheless, a target of 0,8 MW was set for 2017 as it was the first year of operation. This target multiplied by 330 days and 24h ofoperation, leads 6,300 MWh as total amount of self-supplied clean energy. This target was fully achieved, reaching 12,685 MWhself-generated and avoided for being purchased form grid (SING). In terms of costs, we saved near of 1 million USD in one year. Inthe upcoming years (2019 – 2020) Enaex expects to introduce additional amount of renewable energy by a recently signedagreement with an energy generation company.

Activity typeProcess emissions reductions

Description of activityChanges in operations

Estimated annual CO2e savings (metric tonnes CO2e)1087

ScopeScope 1

Voluntary/MandatoryVoluntary

Annual monetary savings (unit currency – as specified in CC0.4)10000

Investment required (unit currency – as specified in CC0.4)50000

Payback period<1 year

Estimated lifetime of the initiative>30 years

CommentAt Rio Loa Plant, located in Calama, there is a process to concentrate nitric acid to use it as raw material for mining-usedexplosives. In this process N2O and NOx emissions are released to the atmosphere. During 2016 a full overhaul was performed tothe plant in order to reduce the amount of N2O and NOx emissions and during 2017 we measured that 1,087 tCO2e was reduced.The investment was less than 50,000 USD and we expect that will prepare Enaex to an upcoming N2O/NOx normative.

CDP Page of 5320

C4.3c

(C4.3c) What methods do you use to drive investment in emissions reduction activities?

Method Comment

Internalincentives/recognitionprograms

From 2012 to 2017 major investments (7.5 MUSD) has been made associated to energy efficiency projects. Hence, there is currently a lowlevel of investment on this type of projects. Additionally, there is an important focus on Enaex’s Innovation Program (2 MMUSD/ y) andachieving a deepest commitment of employees with regard to local energy efficiency or any other low carbon driver project.

Internal price oncarbon

Enaex applies the internal price of carbon as a reference to compare any other emission reduction initiative in terms of cost and benefit toreduce 1 ton CO2e.

C4.5

(C4.5) Do you classify any of your existing goods and/or services as low-carbon products or do they enable a third party toavoid GHG emissions?Yes

C4.5a

CDP Page of 5321

(C4.5a) Provide details of your products and/or services that you classify as low-carbon products or that enable a third partyto avoid GHG emissions.

Level of aggregationProduct

Description of product/Group of productsEnaex’s Amonium Nitrate is a low carbon product since in the process (the nitric acid production) there are two CDM projectsimplemented which reduce almost 85% of the produced N2O. Enaex’s Prillex Plant, where all our ammonium nitrate is produced,also has implemented several projects related to energy efficiency, which has reduced scope2. Enaex’s ammonium nitrateemission factor (1,31 tCO2eq/tonAN) is almost 67% lower compared with the standard emission factor fromhttp://winnipeg.ca/finance/findata/matmgt/documents/2012/682-2012/682-2012_Appendix_H-WSTP_South_End_Plant_Process_Selection_Report/Appendix%207.pdf) As Enaex’s ammonium nitrate is low-carbon, all theexplosives blends produced using AN as raw material has a lower emission factor than a standard product. Since 2016, Enaex hasthe emission factor of all its products supporting our clients to calculate their carbon footprint using this emission factors which allowthem to reduce the emission at blasting process almost 40% In other hand, Energex® (http://www.enaex.com/productos/energex/)was specially designed to have higher power of fragmentation reducing the electric energy consumption needed downstream atmilling process by having smaller and homogeneous rock fragments. As an example of how many GHG emissions could beavoided by an average Enaex’s mining costumer the following calculation could be made: An average monthly consumption of ANat mine is 4,500 tons. Considering scope3 GHG emissions category n° 1 "purchase goods and services”, a mining costumer isallowed to avoid 64260 tCO2 per year using Enaex ammonium nitrate instead of a regular product. Energex represented 1% ofrevenues on 2017 Enaex AN emission factor was account during on 2015 using “cradle to gate” approach and the methodologydefined by the guideline “PAS 2050:2011 Specification for the assessment of the life cycle greenhouse gas emissions of goods andservices”. Enaex accounted 1.31 tCO2e/tonAN compared with the reference *4,09 tonCO2e/tonAN we have 67% less GHGemissions per ton of product which according to 2017 production represents 1,835,085 tonCO2e avoided.

Are these low-carbon product(s) or do they enable avoided emissions?Low-carbon product and avoided emissions

Taxonomy, project or methodology used to classify product(s) as low-carbon or to calculate avoided emissionsOther, please specify (PAS 2050 : 2011)

% revenue from low carbon product(s) in the reporting year37

CommentDuring reporting year 37% of revenues came from selling ammonium nitrate as pure product (not in blends or as part of otherproducts)

C5. Emissions methodology

C5.1

CDP Page of 5322

(C5.1) Provide your base year and base year emissions (Scopes 1 and 2).

Scope 1

Base year startJanuary 1 2012

Base year endDecember 31 2012

Base year emissions (metric tons CO2e)333367

CommentThe calculation was developed using the guidelines of the Greenhouse Gas Protocol (World Resources Institute / World BusinessCouncil of Sustainable Development) according to the corporate standard for accounting and reporting of emissions. Thus, and asreferential methodological, series of standards ISO 14064, which specifies general principles for quantification and reporting ofgreenhouse gas emissions were used

Scope 2 (location-based)

Base year startJanuary 1 2012

Base year endDecember 31 2012

Base year emissions (metric tons CO2e)42080

CommentThe calculation was developed using the guidelines of the Greenhouse Gas Protocol (World Resources Institute / World BusinessCouncil of Sustainable Development) according to the corporate standard for accounting and reporting of emissions. Thus, and asreferential methodological, series of standards ISO 14064, which specifies general principles for quantification and reporting ofgreenhouse gas emissions were used

Scope 2 (market-based)

Base year start

Base year end

Base year emissions (metric tons CO2e)

Comment

C5.2

(C5.2) Select the name of the standard, protocol, or methodology you have used to collect activity data and calculate Scope1 and Scope 2 emissions.Defra Voluntary 2017 Reporting GuidelinesIPCC Guidelines for National Greenhouse Gas Inventories, 2006ISO 14064-1The Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard (Revised Edition)

C6. Emissions data

C6.1

CDP Page of 5323

(C6.1) What were your organization’s gross global Scope 1 emissions in metric tons CO2e?

Row 1

Gross global Scope 1 emissions (metric tons CO2e)254616

End-year of reporting period<Not Applicable>

CommentThe calculation was developed using the guidelines of the Greenhouse Gas Protocol (World Resources Institute / World BusinessCouncil of Sustainable Development) according to the corporate standard for accounting and reporting of emissions. Thus, and asreferential methodological, series of standards ISO 14064, which specifies general principles for quantification and reporting ofgreenhouse gas emissions were used. Scope 1 has been verified by a third party with reasonable level of assurance

C6.2

(C6.2) Describe your organization’s approach to reporting Scope 2 emissions.

Row 1

Scope 2, location-basedWe are reporting a Scope 2, location-based figure

Scope 2, market-basedWe have no operations where we are able to access electricity supplier emission factors or residual emissions factors and areunable to report a Scope 2, market-based figure

CommentEnaex has signed a new energy-purchase agreement that will enter in force on 2019 allowing us to access electricity supplieremission factor and low carbon energy. We expect to start reporting market-based figures from that year onwards.

C6.3

(C6.3) What were your organization’s gross global Scope 2 emissions in metric tons CO2e?

Row 1

Scope 2, location-based27805

Scope 2, market-based (if applicable)<Not Applicable>

End-year of reporting period<Not Applicable>

CommentThe calculation was developed using the guidelines of the Greenhouse Gas Protocol (World Resources Institute / World BusinessCouncil of Sustainable Development) according to the corporate standard for accounting and reporting of emissions. Thus, and asreferential methodological, series of standards ISO 14064, which specifies general principles for quantification and reporting ofgreenhouse gas emissions were used. Scope 2 has been verified by a third party with reasonable level of assurance

C6.4

(C6.4) Are there any sources (e.g. facilities, specific GHGs, activities, geographies, etc.) of Scope 1 and Scope 2 emissionsthat are within your selected reporting boundary which are not included in your disclosure?No

CDP Page of 5324

C6.5

(C6.5) Account for your organization’s Scope 3 emissions, disclosing and explaining any exclusions.

Purchased goods and services

Evaluation statusRelevant, calculated

Metric tonnes CO2e918654

Emissions calculation methodology2011 Scope 3 GHG Protocol Calculation Guidance Emissions Factor from:http://winnipeg.ca/finance/findata/matmgt/documents/2012/682-2012/682-2012_Appendix_H-WSTP_South_End_Plant_Process_Selection_Report/Appendix%207.pdf

Percentage of emissions calculated using data obtained from suppliers or value chain partners0

ExplanationThis is the most important source of Scope 3 emissions as it represents 91.7% of the total scope 3 during reporting year. This isdue to the important number of inputs used in the production plants among which the most relevant is Ammonia, having an 80%directly impact of generated emissions from this category. An increase of 87,775 tonCO2e occurred with respect to previous year2016. Scope3 on previous year was 912,239 tonCO2e. Therefore, we had 9.6% increase on scope3 due the increase of thiscategory (87,775/912,239)*100 = 9,6% Reported value has been verified by a third party with a limited level of assurance.

Capital goods

Evaluation statusNot relevant, explanation provided

Metric tonnes CO2e0

Emissions calculation methodology2011 Scope 3 GHG Protocol Calculation Guidance


ExplanationAs Enaex’s core business is not based in capital goods and during reporting year there was no extraction, production andtransportation of capital goods purchased or acquired by the company, category n°2 has been considered as a non-material issuein 2017-GHG inventory

Fuel-and-energy-related activities (not included in Scope 1 or 2)


Metric tonnes CO2e0



ExplanationCategory n°3 from Scope3 has been evaluated and considered as no material in 2017-GHG inventory due to the structure andfunctioning of the company.

CDP Page of 5325

Upstream transportation and distribution



Emissions calculation methodology2011 Scope 3 GHG Protocol Calculation Guidance Emissions Factor from:http://winnipeg.ca/finance/findata/matmgt/documents/2012/682-2012/682-2012_Appendix_H-WSTP_South_End_Plant_Process_Selection_Report/Appendix%207.pdf


ExplanationUpstream transportation and distribution was calculated and is considered relevant as it represents 2,8% of total scope 3 duringreporting year. An increase of 3,959 tonCO2e occurred with respect to previous year 2016. Scope 3 on previous year was 912,239tonCO2e. Therefore, we had 0,4% increase on scope3 due the increase of this category (3,959/912,239)*100 = 0,4% Reportedvalue was verified by a third party with limited level of assurance.

Waste generated in operations

Evaluation statusNot relevant, calculated




ExplanationWaste generated in operations was calculated and considered not relevant as it represents only 0,025% of the total scope3.Reported value was verified by third party with limited level of assurance During reporting year no emission reductions norincreases occurred compared to previous year.

Business travel





ExplanationBusiness travel was calculated and considered not relevant as it represents only 0,2% of the total scope3. Reported value wasverified by third party with limited level of assurance During reporting year no emission reductions nor increases occurred comparedto previous year.

CDP Page of 5326

Employee commuting





ExplanationEmployee commuting was calculated and considered not relevant as it represents only 0,1% of the total scope3. Reported valuewas verified by third party with limited level of assurance During reporting year no significant emission reductions nor increasesoccurred compared to previous year.

Upstream leased assets


Metric tonnes CO2e0



ExplanationCategory n°8 from Scope3 has been considered as no material in 2017-GHG inventory due to the structure and functioning of thecompany.

Downstream transportation and distribution





ExplanationDownstream transportation and distribution was calculated and considered relevant as it represents 5,4% of the total scope3. Adecrease of 3,127 tCO2 occurred with respect to previous year 2016. Scope 3 on previous year was 912,239 tonCO2e Therefore,we arrived at 0,3% decrease on Scope3 due this category (3,127 /912,239)*100 = 0,3%) Reported value was verified by third partywith limited level of assurance.

CDP Page of 5327

Processing of sold products


Metric tonnes CO2e0




Use of sold products


Metric tonnes CO2e0




End of life treatment of sold products


Metric tonnes CO2e0




Downstream leased assets


Metric tonnes CO2e0




CDP Page of 5328

Franchises


Metric tonnes CO2e0




Investments


Metric tonnes CO2e0




Other (upstream)


Metric tonnes CO2e0

Emissions calculation methodology


ExplanationRevised the guidance no other relevant emissions upstream was consider as a material issue

Other (downstream)


Metric tonnes CO2e0



ExplanationRevised the guidance no other relevant emissions downstream was consider as a material issue

CDP Page of 5329

C6.7

(C6.7) Are carbon dioxide emissions from biologically sequestered carbon relevant to your organization?No

C6.10

(C6.10) Describe your gross global combined Scope 1 and 2 emissions for the reporting year in metric tons CO2e per unitcurrency total revenue and provide any additional intensity metrics that are appropriate to your business operations.

Intensity figure0.00065

Metric numerator (Gross global combined Scope 1 and 2 emissions)282420

Metric denominatorunit total revenue

Metric denominator: Unit total434800000

Scope 2 figure usedLocation-based

% change from previous year12

Direction of changeIncreased

Reason for changeOn the reporting year (2017) Enaex revenues decreased 7% compared to same-coverage revenue on 2016. At the same timegross emissions from scope1+2 increased 11,889 tCO2e (4%) despite the achieved 26% decrease of scope2 due energy efficiencyprojects, in relation to previous year because the relative greater importance of process emissions (scope1) in the intensity figureand the aged-expected loss of efficiency of the secondary catalyst installed at nitric acid plant n°4. 2016 Total gross globalemissions (scope1+2): 270,532 tCO2e 2016 Enaex revenue: 467,926,000 2016 Financial Intensity figure: 0,00058 tCO2e/USD.2017 Total gross global emissions (scope1+2): 282,420 tCO2e 2017 Enaex revenue: 434,800,000 USD 2017 Financial Intensityfigure: 0.00065 tCO2e/USD Therefore, we arrived 12% increase (0,000071 tCO2e/USD) in intensity revenue figure with respect toprevious year 2016. It is important to note that on 2015 Enaex acquired two subsidiaries abroad and the company revenue isofficially reported consolidated from that fiscal year onwards. GHG emissions from these facilities are not included in currentlyreported and verified 2017 GHG Inventory. Therefore, and in order of maintaining consistency with regard the “Financial emissionsintensity” indicator, revenue 2017 coverage has been reduced.



Metric denominatorunit of production




Direction of change

CDP Page of 5330

Increased

Reason for changeOn the reporting year (2017) Enaex ammonium nitrate (AN) production decreased 2% (16,959 ton) compared to previous year. Atthe same time gross emissions from scope1+2 increased 11,889 tCO2e (4%) despite the achieved 26% decrease of scope2 dueenergy efficiency projects, in relation to previous year 2016 because the relative greater importance of process emissions (scope1)in the intensity figure and the aged-expected loss of efficiency of the secondary catalyst installed at nitric acid plant n°4. 2016 Totalgross global emissions (scope1+2): 270,532 tCO2 2016 Enaex AN production: 699,147 ton AN 2016 Operation Intensity figure:0,386 tCO2e/ton AN 2017 Total gross global emissions (scope1+2): 282,420 tCO2 2017 Enaex AN production: 682,188 ton AN2017 Operation Intensity figure: 0.414 tCO2e/ton AN Therefore, we arrived 7% increase (0,027 tCO2e/ton AN) in Operationintensity figure with respect to previous year 2016.



Metric denominatorfull time equivalent (FTE) employee




Direction of changeIncreased

Reason for changeOn the reporting year (2017) Enaex’s Full-time Equivalent Employee (FEE) did not change compared to previous year. At the sametime gross emissions from scope1+2 increased 11,889 tCO2e (4%) despite the achieved 26% decrease of scope2 due energyefficiency projects, in relation to previous year 2016 because the relative greater importance of process emissions (scope1) in theintensity figure and the aged-expected loss of efficiency of the secondary catalyst installed at nitric acid plant n°4. 2016 Total grossglobal emissions (scope1+2): 270,532 tCO2 2016 Enaex FTE: 1,707 2016 FTE Intensity figure: 158,5 tCO2e/FTE 2017 Total grossglobal emissions (scope1+2): 282,420 tCO2 2017 Enaex FTE: 1,700 2017 FTE Intensity figure: 166,1 tCO2e/FTE Therefore, wearrived 5% increase (8 tCO2e/FTE) in intensity FTE figure with respect to previous year 2016.

C7. Emissions breakdowns

C7.1

(C7.1) Does your organization have greenhouse gas emissions other than carbon dioxide?Yes

C7.1a

CDP Page of 5331

(C7.1a) Break down your total gross global Scope 1 emissions by greenhouse gas type and provide the source of each usedgreenhouse warming potential (GWP).

Greenhouse gas Scope 1 emissions (metric tons of CO2e) GWP Reference

N2O 238188 IPCC Fifth Assessment Report (AR5 – 100 year)

CO2 16428 IPCC Fifth Assessment Report (AR5 – 100 year)

C7.2

(C7.2) Break down your total gross global Scope 1 emissions by country/region.

Country/Region Scope 1 emissions (metric tons CO2e)

Chile 254616

C7.3

(C7.3) Indicate which gross global Scope 1 emissions breakdowns you are able to provide.By facility

C7.3b

(C7.3b) Break down your total gross global Scope 1 emissions by business facility.

Facility Scope 1 emissions (metric tons CO2e) Latitude Longitude

Prillex Plant at Mejillones, II Region Antofagasta 245346 -23.096929 -70.431449

Rio Loa Plant at Calama, II Region, Antofagasta 9163 -22.517896 -68.948625

Punta Teatinos Plant at La Serena, IV Region Coquimbo 82 -29.813112 -71.291332

Enaex's HQ (Santiago) and other corporative offices 25 -33.413811 -70.587037

C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4

CDP Page of 5332

(C-CE7.4/C-CH7.4/C-CO7.4/C-EU7.4/C-MM7.4/C-OG7.4/C-ST7.4/C-TO7.4/C-TS7.4) Break down your organization’s total grossglobal Scope 1 emissions by sector production activity in metric tons CO2e.

Gross Scope 1emissions, metric tonsCO2e

Net Scope 1emissions , metrictons CO2e

Comment

Cement productionactivities

<Not Applicable> <Not Applicable> <Not Applicable>

Chemicals productionactivities

247482 <Not Applicable> Chemical production activities represent 97% of total gross scope 1 emissions due itincludes process emissions from nitric acid production plants at Prillex Complex.

Coal productionactivities


Electric utilitygeneration activities


Metals and miningproduction activities


Oil and gas productionactivities (upstream)


Oil and gas productionactivities (downstream)


Steel productionactivities


Transport OEMactivities


Transport servicesactivities


C7.5

(C7.5) Break down your total gross global Scope 2 emissions by country/region.

Country/Region Scope 2, location-based (metric tonsCO2e)

Scope 2, market-based (metric tonsCO2e)

Purchased and consumedelectricity, heat, steam orcooling (MWh)

Purchased and consumed low-carbon electricity, heat,steam or cooling accounted in market-based approach(MWh)

Chile 27805 0 36389 0

C7.6

(C7.6) Indicate which gross global Scope 2 emissions breakdowns you are able to provide.By facility

C7.6b

(C7.6b) Break down your total gross global Scope 2 emissions by business facility.

Facility Scope 2 location-based emissions (metrictons CO2e)

Scope 2, market-based emissions (metrictons CO2e)

Prillex Plant at Mejillones, II Region Antofagasta 25220 0

Rio Loa Plant at Calama, II Region, Antofagasta 2453 0

Punta Teatinos Plant at La Serena, IV Region Coquimbo 42 0

Enaex's HQ (Santiago) and other corporative offices (Iquiqueand Antofagasta)

90 0

Iquique Corporate Offices 4 0

CDP Page of 5333

C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7

(C-CE7.7/C-CH7.7/C-CO7.7/C-MM7.7/C-OG7.7/C-ST7.7/C-TO7.7/C-TS7.7) Break down your organization’s total gross globalScope 2 emissions by sector production activity in metric tons CO2e.

Scope 2, location-based, metric tonsCO2e

Scope 2, market-based (ifapplicable), metric tons CO2e

Comment

Cement productionactivities


Chemicals productionactivities

25220 0 Chemical production activities represent 90.7% of total gross scope 2emissions due the energy consumption of Prillex Plant Complex.

Coal production activities <Not Applicable> <Not Applicable> <Not Applicable>

Metals and miningproduction activities


Oil and gas productionactivities (upstream)


Oil and gas productionactivities (downstream)


Steel production activities <Not Applicable> <Not Applicable> <Not Applicable>

Transport OEM activities <Not Applicable> <Not Applicable> <Not Applicable>

Transport servicesactivities


C-CH7.8

(C-CH7.8) Disclose the percentage of your organization’s Scope 3, Category 1 emissions by purchased chemical feedstock.

Purchasedfeedstock

Percentage of Scope 3,Category 1 tCO2e frompurchased feedstock

Explain calculation methodology

Ammonia 74 Last year the emissions by purchased Ammonia as feedstock were 679,066 tCO2e. Our Category N°1- S3 emissionswere 918.654 tCO2e, therefore we arrived at 74% through (679,066/918,654) * 100 = 73.9%.

Specialtychemicals

17.4 Enaex uses imported ammonium nitrate for some bulk emulsions. Last year emissions from purchased ammonium nitrateaccounted 159,579 tonCO2e as emissions from Category N°1 –S3. Our Category N°1- S3 emissions were 918,654tCO2e, therefore we arrived at 17,4% through (159,579/918,654) * 100 = 17.4%.

Diesel oil 1.04 Enaex uses Diesel to produce some bulk emulsions. Last year emissions from purchased Diesel as feedstock accounted9,565 tonCO2e as emissions from Category N°1 –S3. Our Category N°1- S3 emissions were 918,654 tCO2e, thereforewe arrived at 1.04% through (9,565/918,654) * 100 = 1.04%.

C-CH7.8a

CDP Page of 5334

(C-CH7.8a) Disclose sales of products that are greenhouse gases.

Sales, metrictons

Comment

Carbon dioxide(CO2)

0 Enaex's products do no generates greenhouse gases directly by the use of them. S3-Category N°11 was defined as notrelevant due Enaex type of business

Methane (CH4) 0 Enaex's products do no generates greenhouse gases directly by the use of them. S3-Category N°11 was defined as notrelevant due Enaex type of business

Nitrous oxide (N2O) 0 Enaex's products do no generates greenhouse gases directly by the use of them. S3-Category N°11 was defined as notrelevant due Enaex type of business

Hydrofluorocarbons(HFC)


Perfluorocarbons(PFC)


Sulphur hexafluoride(SF6)


Nitrogen trifluoride(NF3)


C7.9

(C7.9) How do your gross global emissions (Scope 1 and 2 combined) for the reporting year compare to those of theprevious reporting year?Increased

C7.9a

(C7.9a) Identify the reasons for any change in your gross global emissions (Scope 1 and 2 combined) and for each of themspecify how your emissions compare to the previous year.

Change inemissions(metric tonsCO2e)

Directionof change

Emissionsvalue(percentage)

Please explain calculation

Change inrenewableenergyconsumption

0 No change 0 0

Otheremissionsreductionactivities

9585 Decreased 4 Last year 9,585 tCO2e were reduced with respect to previous year mostly due the full operation of theback-pressure turbine installed at nitric acid plant n°3. Our total S1 and S2 emissions in the previous yearwas 270,536 tCO2e, therefore we arrived at -4% through (-9,585/270,536) * 100 = -4%”.

Divestment 0 No change 0 0

Acquisitions 0 No change 0 0

Mergers 0 No change 0 0

Change inoutput

0 No change 0 0

Change inmethodology

0 No change 0 0

Change inboundary

0 No change 0 0

Change inphysicaloperatingconditions

21474 Increased 8 Last year 21,474 tCO2e were increased with respect to previous year mostly due a change in the physicalperformance of the secondary catalyst (abatement system) installed at nitric acid plant n°4. Our total S1and S2 emissions in the previous year was 270,536 tCO2e, therefore we arrived at 8% through (21,474/270,536) * 100 = 8%”.

Unidentified 0 No change 0 0

Other 0 No change 0 0

CDP Page of 5335

C7.9b

(C7.9b) Are your emissions performance calculations in C7.9 and C7.9a based on a location-based Scope 2 emissions figureor a market-based Scope 2 emissions figure?Location-based

C8. Energy

C8.1

(C8.1) What percentage of your total operational spend in the reporting year was on energy?More than 0% but less than or equal to 5%

C8.2

(C8.2) Select which energy-related activities your organization has undertaken.

Indicate whether your organization undertakes this energy-related activity

Consumption of fuel (excluding feedstocks) Yes

Consumption of purchased or acquired electricity Yes

Consumption of purchased or acquired heat No

Consumption of purchased or acquired steam No

Consumption of purchased or acquired cooling No

Generation of electricity, heat, steam, or cooling Yes

C8.2a

(C8.2a) Report your organization’s energy consumption totals (excluding feedstocks) in MWh.

Heating value MWh from renewablesources

MWh from non-renewablesources

Total MWh

Consumption of fuel (excluding feedstock) LHV (lower heatingvalue)

0 49446 49446

Consumption of purchased or acquired electricity <Not Applicable> 0 36389 36389

Consumption of purchased or acquired heat <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of purchased or acquired steam <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of purchased or acquired cooling <Not Applicable> <Not Applicable> <Not Applicable> <NotApplicable>

Consumption of self-generated non-fuel renewableenergy

<Not Applicable> 30145 <Not Applicable> 30145

Total energy consumption <Not Applicable> 30145 85835 115980

C-CH8.2a

CDP Page of 5336

(C-CH8.2a) Report your organization’s energy consumption totals (excluding feedstocks) for chemical production activitiesin MWh.

Heating value Total MWh

Consumption of fuel (excluding feedstock) LHV (lower heating value) 49446

Consumption of purchased or acquired electricity <Not Applicable> 36389

Consumption of purchased or acquired heat <Not Applicable> <Not Applicable>

Consumption of purchased or acquired steam <Not Applicable> <Not Applicable>

Consumption of purchased or acquired cooling <Not Applicable> <Not Applicable>

Consumption of self-generated non-fuel renewable energy <Not Applicable> 30145

Total energy consumption <Not Applicable> 115980

C8.2b

(C8.2b) Select the applications of your organization’s consumption of fuel.

Indicate whether your organization undertakes this fuel application

Consumption of fuel for the generation of electricity No

Consumption of fuel for the generation of steam Yes

Consumption of fuel for the generation of cooling No

Consumption of fuel for co-generation or tri-generation No

C8.2c

(C8.2c) State how much fuel in MWh your organization has consumed (excluding feedstocks) by fuel type.

Fuels (excluding feedstocks)Diesel

Heating valueLHV (lower heating value)

Total fuel MWh consumed by the organization31565

MWh fuel consumed for the self-generation of electricity<Not Applicable>

MWh fuel consumed for self-generation of heat0

MWh fuel consumed for self-generation of steam31565

MWh fuel consumed for self-generation of cooling<Not Applicable>

MWh fuel consumed for self- cogeneration or self-trigeneration<Not Applicable>

Fuels (excluding feedstocks)Liquefied Petroleum Gas (LPG)



CDP Page of 5337






Fuels (excluding feedstocks)Petrol








C8.2d

CDP Page of 5338

(C8.2d) List the average emission factors of the fuels reported in C8.2c.

Diesel

Emission factor74100

Unitmetric tons CO2e per GJ

Emission factor sourceIPCC 2006. IPCC Guidelines for National Greenhouse Gas Inventories. Vol 2. Tabla 2.2: Default Emission Factors for StationaryCombustion un the Energy Industries

Comment

Liquefied Petroleum Gas (LPG)




Comment

Petrol




Comment

C8.2e

(C8.2e) Provide details on the electricity, heat, steam, and cooling your organization has generated and consumed in thereporting year.

Total Grossgeneration (MWh)

Generation that is consumed by theorganization (MWh)

Gross generation fromrenewable sources (MWh)

Generation from renewable sources that isconsumed by the organization (MWh)

Electricity 0 0 0 0

Heat 0 0 0 0

Steam 30145 30145 30145 30145

Cooling 0 0 0 0

C-CH8.2e

CDP Page of 5339

(C-CH8.2e) Provide details on electricity, heat, steam, and cooling your organization has generated and consumed forchemical production activities.

Total gross generation (MWh) inside chemicals sector boundary Generation that is consumed (MWh) inside chemicals sector boundary

Electricity 30145 30145

Heat 0 0

Steam 0 0

Cooling 0 0

C8.2f

(C8.2f) Provide details on the electricity, heat, steam and/or cooling amounts that were accounted for at a low-carbonemission factor in the market-based Scope 2 figure reported in C6.3.

Basis for applying a low-carbon emission factorNo purchases or generation of low-carbon electricity, heat, steam or cooling accounted with a low-carbon emission factor

Low-carbon technology type<Not Applicable>

MWh consumed associated with low-carbon electricity, heat, steam or cooling<Not Applicable>

Emission factor (in units of metric tons CO2e per MWh)<Not Applicable>

CommentThis question does not apply to Enaex case due we do not purchase low-carbon energy, Enaex self-generates low carbpn energyfor its own consumption. Our self-generated energy has zero emission factor since it uses steam surplus from production process

C-CH8.3

CDP Page of 5340

(C-CH8.3) Disclose details on your organization’s consumption of feedstocks for chemical production activities.

FeedstocksDiesel oil

Total consumption14753834

Total consumption unitlitres

Inherent carbon dioxide emission factor of feedstock, metric tons CO2 per consumption unit0.56

Heating value of feedstock, MWh per consumption unit36

Heating valueLHV

CommentEnaex uses Diesel oil as feedstock to manufacture bulk emulsions which are raw material for explosives production at mining site.We uses the carbon dioxide emission factor of feedstock described by 2012 Guidelines to Defra / DECC's GHG ConversionFactors for Company Reporting wich is 0.56 tCO2 per litre of Diesel oil

FeedstocksPropane gas

Total consumption341

Total consumption unitmetric tons

Inherent carbon dioxide emission factor of feedstock, metric tons CO2 per consumption unit2.77

Heating value of feedstock, MWh per consumption unit0

Heating valueLHV

CommentPropane is used at EnviNOx abatement system of N2O. The emissions derived form propane consumption are considered as partof "Project Emissions" of CDM Project Ref N° 1229. Last year total emissions from propane were 944,51 tCO2e which areaccounted as part of total Scope 1. Total carbon content in propane is 0.76 tC/ton gas, hence we have an Inherent carbon dioxideemission factor of 2.77 tCO2/ton

C-CH8.3a

(C-CH8.3a) State the percentage, by mass, of primary resource from which your chemical feedstocks derive.

Percentage of total chemical feedstock (%)

Oil 0

Natural Gas 0

Coal 0

Biomass 0

Waste 0

Fossil fuel (where coal, gas, oil cannot be distinguished) 100

Unknown source or unable to disaggregate 0

CDP Page of 5341

C9. Additional metrics

C9.1

(C9.1) Provide any additional climate-related metrics relevant to your business.

DescriptionEnergy use

Metric value48.2

Metric numeratorPurchased energy consumed. Last year 32,882 MWh

Metric denominator (intensity metric only)Amoniumm Nitrate production. Last year 682,188 ton


Direction of changeDecreased

Please explainEnaex seeks to reduce every year how much energy is purchased from grid to produce ammonium nitrate (AN). Last year themetric was 48.2 Kwh/ton AN which is a 26% decrease from previous year.

C-CH9.3a

(C-CH9.3a) Provide details on your organization’s chemical products.

Output productNitric acid

Production (metric tons)682188

Capacity (metric tons)750000

Direct emissions intensity (metric tons CO2e per metric ton of product)0.373

Electricity intensity (MWh per metric ton of product)0.0482

Steam intensity (MWh per metric ton of product)0

Steam/ heat recovered (MWh per metric ton of product)0

CommentEnaex seeks to reduce as much as possible GHG emissions per ton of ammonium nitrate produced by considering N2Oabatement systems in all its productive.

C-CH9.6

CDP Page of 5342

(C-CH9.6) Disclose your organization’s low-carbon investments for chemical production activities.

Investment start dateJanuary 1 2006

Investment end dateDecember 31 2006

Investment areaProperty, plant and equipment

Technology areaProcess step integration

Investment maturityLarge scale commercial deployment

Investment figure12000000

Low-carbon investment percentage81 - 100%

Please explainTertiary technology for N2O abatement (EnviNOx) and CDM project developed at nitric acid plant n°3








Please explainSecondary Catalyst and CDM project developed at nitric acid plant N°4








CDP Page of 5343

Please explainBackpressure turbine instaled at nitric acid plant N°3 reduce scope 2 emissions in an additional amount of 25% with respect toprevoius year

C10. Verification

C10.1

(C10.1) Indicate the verification/assurance status that applies to your reported emissions.

Verification/assurance status

Scope 1 Third-party verification or assurance process in place

Scope 2 (location-based or market-based) Third-party verification or assurance process in place

Scope 3 Third-party verification or assurance process in place

C10.1a

CDP Page of 5344

(C10.1a) Provide further details of the verification/assurance undertaken for your Scope 1 and/or Scope 2 emissions andattach the relevant statements.

ScopeScope 1

Verification or assurance cycle in placeAnnual process

Status in the current reporting yearComplete

Type of verification or assuranceReasonable assurance

Attach the statement1VSCCP6405 ISO 14064-1 VOL INV 0114 2017 TR290318.pdfData and Assurance Statement - Enaex TR290318.pdf

Page/ section reference1-2

Relevant standardISO14064-3

Proportion of reported emissions verified (%)100

ScopeScope 2 location-based



Type of verification or assuranceReasonable assurance

Attach the statement1Data and Assurance Statement - Enaex TR290318.pdfVSCCP6405 ISO 14064-1 VOL INV 0114 2017 TR290318.pdf

Page/ section reference1-2


Proportion of reported emissions verified (%)100

C10.1b

CDP Page of 5345

(C10.1b) Provide further details of the verification/assurance undertaken for your Scope 3 emissions and attach the relevantstatements.

ScopeScope 3- all relevant categories



Attach the statement1VSCCP6405 ISO 14064-1 VOL INV 0114 2017 TR290318.pdfData and Assurance Statement - Enaex TR290318.pdf

Page/section reference1-2


C10.2

(C10.2) Do you verify any climate-related information reported in your CDP disclosure other than the emissions figuresreported in C6.1, C6.3, and C6.5?Yes

C10.2a

(C10.2a) Which data points within your CDP disclosure have been verified, and which verification standards were used?

Disclosure moduleverification relatesto

Data verified Verificationstandard

Please explain

C6. Emissions data Emissionsreductionactivities

Clean DevelopmentMechanism (CDM)

Enaex verifies annually its direct process emissions by CDM projects. These emissions represent 94%of total gross Scope1, which is also verified annually as part of the GHG Inventory verification

C11. Carbon pricing

C11.1

(C11.1) Are any of your operations or activities regulated by a carbon pricing system (i.e. ETS, Cap & Trade or Carbon Tax)?No, but we anticipate being regulated in the next three years

C11.1d

CDP Page of 5346

(C11.1d) What is your strategy for complying with the systems in which you participate or anticipate participating?

Enaex’s operations have not been regulated directly by a carbon price system yet. Nevertheless, it expects that a national carbonmarket enters in force in the near future (3-5 years).

As Enaex participates since 2007 at EU ETS with two CDM projects has focused its strategy in two main issues: First, by complyingCDM standards and proceedings and continuing monitoring and verifying our emission reductions in order of being prepared toaccomplish any local or global new scheme. In that way, Enaex aims to maintain a low internal price of carbon which allow us toprovide low-cost emission reductions to a potential local carbon market. Second, by supporting the development of a local carbonmarket scheme by participating in CLG Chile (Corporate Leaders Group on Climate Change) and the World’s Bank PMR (Programfor Market Readiness) who has lead the process to study which scheme would be the more appropriate to Chilean industries.

C11.2

(C11.2) Has your organization originated or purchased any project-based carbon credits within the reporting period?Yes

C11.2a

CDP Page of 5347

(C11.2a) Provide details of the project-based carbon credits originated or purchased by your organization in the reportingperiod.

Credit origination or credit purchaseCredit origination

Project typeN2O

Project identificationRef. 1229 "Catalytic N2O destruction project in the tail gas of the nitric acid plant PANNA 3 of Enaex S.A"

Verified to which standardCDM (Clean Development Mechanism)

Number of credits (metric tonnes CO2e)509521

Number of credits (metric tonnes CO2e): Risk adjusted volume509521

Credits cancelledNo

Purpose, e.g. complianceVoluntary Offsetting

Credit origination or credit purchaseCredit origination

Project typeN2O

Project identificationRef 5393 "Catalytic N2O destruction project at the new nitric acid plant PANNA 4 of Enaex S.A."

Verified to which standardCDM (Clean Development Mechanism)

Number of credits (metric tonnes CO2e)104020

Number of credits (metric tonnes CO2e): Risk adjusted volume104020

Credits cancelledNo

Purpose, e.g. complianceVoluntary Offsetting

C11.3

(C11.3) Does your organization use an internal price on carbon?Yes

C11.3a

CDP Page of 5348

(C11.3a) Provide details of how your organization uses an internal price on carbon.

Objective for implementing an internal carbon priceChange internal behaviorDrive low-carbon investmentIdentify and seize low-carbon opportunities

GHG ScopeScope 1

ApplicationEnaex applies the internal price of carbon as a reference to compare any other emission reduction initiative in terms of cost andbenefit to reduce 1 ton CO2e.

Actual price(s) used (Currency /metric ton)4

Variance of price(s) usedEnaex's internal price of carbon is related to the internal costs of abatement and issued of one CER unit. Nevertheless, andregarding the current carbon tax in chile, the price could change over time following the market.

Type of internal carbon priceImplicit price

Impact & implicationEnaex has defined as internal price of carbon as the one resulted from the operational cost from its two CDM projects divided bytotal issued CER (certified emissions reductions). So far, this price has been used for three main objectives: 1) In order of assessthe opportunity and benefits of participate to international funds supporting CDM projects by proposing the best cost-effective price.2) To assess the offsetting opportunity behind a future Chilean Trading Scheme as the 5usd-carbon tax to Chilean power sectorenter in force this year 3) As a base of comparison for further emission reduction activities by calculating a cost/impact ratio. Asmuch higher the ratio is, less impact will have the emission reduction activity

C12. Engagement

C12.1

(C12.1) Do you engage with your value chain on climate-related issues?Yes, our customersYes, other partners in the value chain

C12.1b

CDP Page of 5349

(C12.1b) Give details of your climate-related engagement strategy with your customers.

Type of engagementCollaboration & innovation

Details of engagementOther – please provide information in column 5

Size of engagement11.79

% Scope 3 emissions as reported in C6.50

Please explain the rationale for selecting this group of customers and scope of engagementThrough the years Enaex has sought to satisfy the needs of customers, creating products (explosives) that optimize the energyconsumption in processes such as crushing and milling in addition to optimizing processes such as load and transport. This isreflected in a reduction of energy consumed by Enaex customer´s. In addition to these new products, Enaex has provided to itscostumers the emission factor of the products used at their blasting process. Enaex products, especially the ones derived fromammonium nitrate, have an emission factor almost 40% lower than the same non-Enaex products, encouraging them to calculatetheir own carbon footprint. The rationale behind the “11,79% of engagement” is the tons of Ammonium Nitrate (AN) sold to theclients who follow the strategy of changing to low carbon products and using Enaex’s emission factor in their carbon footprint, overthe total 2017 ammonium nitrate sold into Chilean mining market. Last year the engaged costumers bought were 34,800 ton ofammonium nitrate and our total sells of AN were 295,000 tons, therefore we arrived at 11,79% through (34,800/295,000) * 100 =11,79%”.

Impact of engagement, including measures of successSo far, the strategy for prioritizing engagements has been following Enaex costumer’s needs regarding climate change adaptation.Success measurement of this strategy is fairly recent and has been done last two years by an annual “Customer SatisfactionSurvey”. Nevertheless, the revenues from new products as Energex® (which reduces the energy consumption downstream byincreasing fragmentation power) is increasing every year as well as the costumers who ask for the emission factor of Enaex’sproducts. As this strategy is too recent, the best indicator of impact that we have now, is to improve “Customer Satisfaction” everyyear. Nevertheless, we are defining a KPI which allow us order to understand and follow the costumer response to this engagementstrategy in a better way.

C12.1c

(C12.1c) Give details of your climate-related engagement strategy with other partners in the value chain.

Enaex also engages its employees to have a low carbon life style in and out of the office place. This engagement has been done byfacilitating commuting to work by bike with restrooms to arrive, motivating to reduce print paper, installing LED illumination in the HQ,recycling batteries, paper and plastic bottles in every facility. Additionally, there are permanent communication campaigns to takecare of the environment with their families and share it with their colleges.

C12.3

(C12.3) Do you engage in activities that could either directly or indirectly influence public policy on climate-related issuesthrough any of the following?Direct engagement with policy makersTrade associations

C12.3a

CDP Page of 5350

(C12.3a) On what issues have you been engaging directly with policy makers?

Focus oflegislation

Corporateposition

Details of engagement Proposed legislative solution

Cap andtrade

Support Enaex is founder and shareholder of "Santiago Climate Stock Exchange" which is anon-mutual stock market exchange, that is, brokers that trade on it are not required tobe shareholders. Transactions are allowed for a wide scope of participants, includingcorporations and individuals. In the long term, instruments such as derivatives areexpected to be available, just as in developed market

Enaex looks forward to actively participate in theassociation board meetings, and at the sametime, being updated about international carbonmarket and taking actions for influence it.

Adaptationorresilience

Support Enaex participates actively at CLG (Corporate Leaders Group on Climate Change)meetings where Chilean authorities of Energy and Environment work on climate changeadaptation /mitigation plan and further policies

Being part of CLG Chile, Enaex has participatedat the definition of Chilean INDC sent to ParisAgreement by giving to the government thenecessary observations from the private sector toaccomplish the national goal

C12.3b

(C12.3b) Are you on the board of any trade associations or do you provide funding beyond membership?Yes

C12.3c

(C12.3c) Enter the details of those trade associations that are likely to take a position on climate change legislation.

Trade associationSCX Bolsa Climática de Santiago

Is your position on climate change consistent with theirs?Consistent

Please explain the trade association’s positionSCX is the first private climatic exchange in the Southern Hemisphere, based on the strictest accounting criteria and methodologiesfor reducing greenhouse gas (GHG) emissions. The position of the SCX is to develop and support a transparent carbon market inChile and Latinamerica. In that way SCX has been working since 2011 with most climate-related entities of Chile as Corfo, EnergyMinistry, Environment Ministry, Treasury Minister and the Climate Change Office .

How have you, or are you attempting to, influence the position?Enaex agrees with this position and works, as part of SCX, to promote the results of its initiatives in the near future.

C12.3f

(C12.3f) What processes do you have in place to ensure that all of your direct and indirect activities that influence policy areconsistent with your overall climate change strategy?

The main process in place to ensure that Enaex’s activities influencing policies are consistent with our climate strategy is, in the firstplace, that Enaex’s Head of Sustainability is the one who leads all the instances related with Enaex’s position on climate change. TheHead of Sustainability is, then, the one in charge to link the activities related to influence climate change policies with the strategy andpresent them to the CEO in order to get the proper alignment.

C12.4

CDP Page of 5351

(C12.4) Have you published information about your organization’s response to climate change and GHG emissionsperformance for this reporting year in places other than in your CDP response? If so, please attach the publication(s).

PublicationIn mainstream reports

pag 46

StatusComplete

Attach the document1Enaex-Memoria-2017.pdf

Content elementsGovernanceStrategyRisks & opportunitiesEmissions figures

PublicationIn voluntary communications

StatusComplete

Attach the document1Huella-de-carbono-2017.pdf

Content elementsGovernanceStrategyRisks & opportunitiesEmissions figuresEmission targets

C14. Signoff

C-FI

(C-FI) Use this field to provide any additional information or context that you feel is relevant to your organization's response.Please note that this field is optional and is not scored.

Enaex has responded this year the CSA of Dow Jones Sustainability Index considering CDP alingment

C14.1

(C14.1) Provide details for the person that has signed off (approved) your CDP climate change response.

Job title Corresponding job category

Row 1 CFO Chief Financial Officer (CFO)

CDP Page of 5352

Submit your response

In which language are you submitting your response?English

Please confirm how your response should be handled by CDP

Public or Non-Public Submission I am submitting to

I am submitting my response Public Investors

Please confirm belowI have read and accept the applicable Terms

CDP Page of 5353

enaex - climate change 2018 … · top executives of each area of the company (production,...

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