2015 Sustainability Report

IN THIS SECTION:

ENERGY & CLIMATE

Focus Area

ENERGY & CLIMATE

Climate Policy

SOLUTION

Shining a Light on the
Climate Benefits of
Natural Infrastructure

Caterpillar products are used to support infrastructure projects around the world, including natural infrastructure projects such as the restoration of forests, wetlands and other landscapes.

Caterpillar supports integrated carbon and climate policies that effectively balance environmental and economic considerations. We understand that the most immediate and measureable benefits will occur through energy-efficiency improvements and corresponding greenhouse gas (GHG) emissions reductions.

In responding to the challenge of reducing our GHG emissions, Caterpillar has formed cornerstone beliefs about carbon and energy-efficiency issues. Caterpillar supports intelligent, responsible public policies addressing these issues. We are:

  • Setting aggressive energy efficiency and GHG reduction goals for our operations.
  • Investing in energy-efficiency and emissions-reduction technologies for our products that are important to our stakeholders and represent significant areas of opportunity for our business.
  • Committing to the development and deployment of advanced technologies that capture and store GHG emissions.
  • Supporting policies and mechanisms that harness the marketplace to drive innovation, mobilize investment and facilitate sharing these technologies.
  • Encouraging the coordination of domestic and international programs that maximize the use of flexible, proven mechanisms to sequester carbon in soils, plants and ecosystems.

Operating in a Carbon-Constrained World

Despite the divergent proposals under discussion worldwide, Caterpillar believes that technology and innovation play a key role in any successful strategic approach to emissions reduction. We believe that the private sector must take the lead in developing and deploying technology solutions to reduce GHG emissions. Ideally, regulatory structures should provide a technology-neutral and level playing field in which competitive solutions can be developed.

Caterpillar believes in the importance of providing energy-efficient products and technologies for our customers and our facilities, and we advocate for policy solutions that balance environmental stewardship, social responsibility and economic growth. We work with policymakers on developing economy-wide emissions-reduction programs in the United States that work in conjunction with international efforts to reduce GHG emissions.

Businesses will struggle to find solutions if vastly differing approaches to GHG reduction are implemented around the world. That is why we will continue to advocate for a comprehensive, international approach that encompasses emissions-reduction commitments from all major economies.

Caterpillar has advocated for a comprehensive international approach to reducing GHG emissions for many years. In this context, the 2015 agreement in Paris within the United Nations Framework Convention on Climate Change seeks a broad, harmonized approach to GHG emissions reduction. In addition to our advocacy for a global approach, we advocate for GHG policy change at local, regional and national levels through our Government Affairs teams and our memberships in trade and lobbying associations. We encourage a constructive dialogue and a proactive approach to providing energy safely, efficiently and affordably to the billions of people who inhabit our planet.

Our Operations

Caterpillar has been a leader in setting aggressive GHG-reduction targets for our operations since 2003. We have established an intensity-based GHG-reduction goal that measures the efficiency of our growth. For more details on our GHG reduction efforts, see the operational impact focus area of this report.

Our Products, Services and Solutions

Caterpillar is committed to the success of our customers. As customers increasingly demand greater fuel efficiency and technology that helps them reduce GHG emissions, we are further motivated to help our customers achieve their emission-reduction goals. Their needs provide valuable business opportunities to Caterpillar.

In 2015, Solar Turbines received the San Diego County Air Pollution Control District’s Blue Sky Award in recognition of sustainability improvements in its manufacturing operations and product contributions to greenhouse gas emission reductions.

We continue to invest in research and development aimed at products with fewer direct emissions, improved efficiency and/or improved productivity. In doing so, we help our customers improve their own operations, while also driving our competitors to improve.

Job site fuel efficiency, which contributes to reductions of GHG emissions, is strongly considered in our new product development efforts. By developing products, services and solutions that increase customer efficiency, we are also reducing the emissions that would otherwise have been generated from the use of less efficient products or solutions.

Carbon Research Investments

We recognize the need to reduce GHG accumulation in the atmosphere and also believe carbon can offer productive uses in a variety of applications. We are investing in research and advocating for policies that support these developments in diverse areas such as improved land management, restoration of degraded lands, and carbon capture and storage technologies.

Caterpillar invests in research aimed at carbon capture and storage (CCS) with the U.K. Energy Technologies Institute (ETI). We are a founding member and co-funder of the ETI, a collaboration between industry and the U.K. government to accelerate the development of technologies that address the challenges of climate change and provide affordable energy access. The U.K. is a good base for this program as it has been pursuing the target of an 80 percent CO2 reduction by 2050 for a number of years.

To accelerate the deployment of new, low-carbon energy technologies, ETI has a budget of up to $75 million per year to fund a portfolio of technology development and demonstration projects across a wide energy spectrum, including distributed energy; offshore wind power; marine power technologies; energy infrastructure; transport, including heavy-duty vehicles; CCS; bio-energy and demand-side management for buildings. As part of its program, ETI has created a suite of modeling tools to understand the elements of such a low carbon energy system and then optimize the system for robustness, lowest cost and other criteria. The modeling work has also guided their strategic investment in critical low-carbon technology development projects. These projects bridge the gap between laboratory scale research and development and commercial deployment of large-scale engineering projects.

In 2015, Caterpillar Oil & Gas accepted an award of excellence from the World Bank Global Gas Flaring Reduction Partnership on behalf of Hess Corporation and GTUIT, a manufacturer of mobile gas treatment systems in which Caterpillar has made an equity investment. Hess is using 15 of GTUIT’s mobile gas capture and natural gas extraction units at well sites in North Dakota’s Bakken oilfield.

The use of CCS technologies has the potential to significantly reduce emissions from fossil fuel power stations if proven in industrial applications. The ETI carbon capture and storage work includes research on power station-scale technology, evaluating a number of technologies that absorb CO2 from the power station flue gas and then desorb the CO2 to be piped to a storage reservoir. Design guidelines for piping and pumping of CO2 and review of new CCS technologies are being evaluated as technology companies and universities develop them. In addition, Caterpillar supported ETI research to look at mineralization, although energy consumption of this technology is currently too high to justify its deployment in the short term.

Additionally, Caterpillar is a member of the project advisory group for the Midwest Geological Sequestration Consortium. In 2012, the Consortium began a CO2 storage project in Decatur, Illinios, with a goal to successfully demonstrate large-scale, deep saline geological storage of 1 million metric tons (1.1 million U.S. tons) of CO2.