DuPont 2011 Annual Report Download - page 37

Table of Contents
Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS, continued
Considerable uncertainty exists with respect to environmental remediation costs, and, under adverse changes in circumstances, potential liability may range up
to three times the amount accrued as of December 31, 2011. However, based on existing facts and circumstances, management does not believe that any loss,
in excess of amounts accrued, related to remediation activities at any individual site will have a material impact on the financial position, liquidity or results of
operations of the company.
Environmental Capital Expenditures
In 2011, the company spent approximately $85 million on environmental capital projects either required by law or necessary to meet the company's internal
environmental goals. The company currently estimates expenditures for environmental-related capital projects to be approximately $110 million in 2012. In
the U.S., additional capital expenditures are expected to be required over the next decade for treatment, storage and disposal facilities for solid and hazardous
waste and for compliance with the Clean Air Act (CAA). Until all CAA regulatory requirements are established and known, considerable uncertainty will
remain regarding estimates for future capital expenditures. However, management does not believe that the costs to comply with these requirements will have
a material impact on the financial position or liquidity of the company.
Climate Change
The company believes that climate change is an important global issue that presents risks and opportunities. The company has made its overall portfolio less
energy and emissions intensive, reducing 2010 absolute energy use by 6 percent since 1990 while significantly increasing production. In addition, the
company sourced 6 percent of 2010 total energy use from renewable resources. The company continuously evaluates opportunities for existing and new
product and service offerings in light of the anticipated demands of a low-carbon economy. About $1.6 billion of the company's 2010 revenue was generated
from sales of products that help direct and downstream customers reduce greenhouse gas (GHG) emissions.
The company has achieved major global reductions in GHG emissions since it began taking action in the early 1990's. The company is actively engaged in the
effort to develop constructive public policies to reduce GHG emissions and encourage lower carbon forms of energy. Proposed and existing legislative efforts
to control or limit GHG emissions could affect the company's energy source and supply choices as well as increase the cost of energy and raw materials
derived from fossil fuels. Such efforts are also anticipated to provide the business community with greater certainty for the regulatory future, help guide
investment decisions, and drive growth in demand for low-carbon and energy-efficient products, technologies, and services.
At the national and regional level, there are existing efforts to address climate change. Several of the company's facilities in the European Union (EU) are
regulated under the EU Emissions Trading Scheme. In other countries, including the U.S., policy debate continues. The current unsettled policy environment
in the U.S. adds an element of uncertainty to business decisions particularly those relating to long-term capital investments. If in the absence of federal
legislation, states were to implement programs mandating GHG emissions reductions, the company, its suppliers and customers could be competitively
disadvantaged by the added administrative costs of complying with a variety of state-specific requirements.
In 2010, EPA launched a phased-in scheme to regulate GHG emissions first from large stationary sources under CAA permitting requirements administered
by state and local authorities. As a result, large capital investments may be required to install Best Available Control Technology on major new or modified
sources of GHG emissions. This type of GHG emissions regulation by EPA, in the absence of or in addition to federal legislation, could result in more costly,
less efficient facility-by-facility controls versus a federal, market-based cap and trade program. Differences in regional or national legislation could present
challenges in a global marketplace highlighting the need for coordinated global policy action.
Registration
The European Union's regulatory framework concerning the Registration, Evaluation and Authorization of Chemicals (REACH) entered into force in 2007
and requires manufacturers and importers to gather and register information on the properties of their substances that meet certain volume or toxicological
criteria. The company has successfully integrated REACH registration requirements into its safety, health & environment processes and timely met all such
requirements to date. REACH also contains a mechanism for the progressive substitution of the most dangerous chemicals when suitable alternatives have
been identified. Depending on which chemicals are identified, the requirement to use safer alternatives could necessitate changes in production processes.
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