LyondellBasell (LYB) Inches Closer to 2030 Renewable Energy Goal
LyondellBasell Industries N.V. LYB has inked two new Power Purchase Agreements (PPA) in the United States. This brings the company's total procured renewable electricity to 1,366 megawatts (MWs), representing 89% of its goal of procuring at least 50% of its electricity from renewable sources.
The company is taking significant steps to reduce scope 1 and 2 greenhouse gas emissions, and power purchase agreements are an important lever in attaining its goals. These two new agreements will assist LYB in accelerating the development of renewable energy and shifting to the usage of low-carbon energy at its facilities.
The company signed a long-term PPA for 125 MW of renewable energy from TotalEnergies' Brazoria Solar project in Brazoria County, TX. The 15-year arrangement is projected to generate around 300,000 megawatt-hours (MWh) of solar power each year, which is equivalent to more than 28,000 American homes' yearly electricity consumption. The project is scheduled to begin operations by the end of 2025. This is LYB's second PPA with TotalEnergies.
LyondellBasell also inked a long-term PPA with Industrial Sun to supply 50 MWs of renewable energy to the LyondellBasell Matagorda Complex from Industrial Sun's Industrial Bravo solar plant in Matagorda County, TX. This factory manufactures high-density polyethylene (HDPE) plastic resins, which are used to make a variety of consumer products. The project is expected to start in the first half of 2026.
LyondellBasell aims to obtain at least 50% of its power from renewable sources by 2030, based on procurement levels in 2020. Electricity usage accounts for approximately 15% of the company's 2020 baseline scope 1 and 2 greenhouse gas emissions. Renewable energy is a critical component of its plan to achieve net zero scope 1 and 2 emissions by 2050.
Shares of LyondellBasell have gained 17.8% over the past year against a 7.1% decline of its industry.
Image Source: Zacks Investment Research
The company, on its third-quarter call, said that it anticipates seasonally lower demand across most industries in the fourth quarter. Higher feedstock costs, new industry capacity and slowing Chinese demand growth continue to put pressure on global olefins and polyolefins margins. Following the end of the summer driving season, oxyfuels and refining margins are projected to fall.
Nonetheless, oxyfuel margins are expected to remain significantly higher than historical averages. LyondellBasell plans to operate its assets in line with market demand during the fourth quarter, with average operating rates of 85% for North American olefins and polyolefins (O&P) assets, 75% for European O&P assets and 70% for Intermediates & Derivatives assets.
LyondellBasell Industries N.V. Price and Consensus
LyondellBasell Industries N.V. price-consensus-chart | LyondellBasell Industries N.V. Quote
Zacks Rank & Key Picks
LyondellBasell currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Denison Mines Corp. DNN, Axalta Coating Systems Ltd. AXTA and Hawkins, Inc. HWKN.
Denison Mines has a projected earnings growth rate of 100% for the current year. It currently carries a Zacks Rank #1 (Strong Buy). DNN delivered a trailing four-quarter earnings surprise of roughly 225%, on average. The stock is up around 53.2% in a year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta has a projected earnings growth rate of 5.4% for the current year. It currently carries a Zacks Rank #1. AXTA delivered a trailing four-quarter earnings surprise of roughly 6.7%, on average. The stock is up around 34.7% in a year.
Hawkins has a projected earnings growth rate of 21% for the current year. It currently carries a Zacks Rank #2 (Buy). Hawkins delivered a trailing four-quarter earnings surprise of roughly 27.5%, on average. HWKN shares are up around 91.1% in a year.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
LyondellBasell Industries N.V. (LYB) : Free Stock Analysis Report
Denison Mine Corp (DNN) : Free Stock Analysis Report
Axalta Coating Systems Ltd. (AXTA) : Free Stock Analysis Report
Hawkins, Inc. (HWKN) : Free Stock Analysis Report
