5.1

ENVIRONMENTAL CARE IN ACTIONS

Material topics: Water and Effluents, Waste: Generation, treatment and disposal, Gaseous emissions: release of substances to the atmosphere, Energy: efficient use, Regulatory compliance and anti-corruption

Our Integrated Management System (IMS) gives us the framework to work towards the continuous improvement of our processes, products and services. We operate focused on:

• The prevention of environmental impacts.
• The safety of the facilities and people’s health.
• The training of producers for the responsible use of fertilizers at a social and environmental level.
• The integration of our environmental commitment into new business and community.
• Measuring our impact, defining objectives and integrating policies and programs into operations for the continuous improvement of environmental performance.

ISO 9001, 14001 and 45001 cover our production, logistics and marketing processes.
ISO 50001 is focused on our Ingeniero White production plant.

⁽⁴⁾ The objective of this standard is to implement responsible business management processes throughout the product life cycle, improving safety and sustainability in fertilizer production plants, beyond the physical boundaries of the factory, in collaboration with like-minded suppliers, transporters and business partners.

The systematic monitoring of the following Environmental- indicators feeds our continuous improvement.

These controls comply with strict legal standards, established by national and international organizations. The observance of the environmental commitments (legal and voluntary) is audited once a year, through an independent external auditor, in addition to internal audits of the integrated management system and external audits of the partners YPF SA and Nutrien Inc.. In addition, several competent organizations control and monitor us: Consorcio de Gestión del Puerto de Bahía Blanca (CGPBB), Prefectura Naval Argentina (PNA), Autoridad del Agua (ADA, province of Buenos Aires),- Provincial para el Desarrollo Sostenible (OPDS, province of Buenos Aires) and Comité Técnico Ejecutivo (Government of Bahía Blanca). In 2021, these agencies conducted in total of 21 inspections of our Company, and no significant fines or non-monetary sanctions were received for non-compliance with environmental regulations.

MASS compliance audits were conducted at all certified sites and ISO 9001 certifications were maintained through external audits: Quality Management System and ISO 14001: Environmental Management System, ISO 45001: Occupational Health and The Safety Management ISO 50001: 11 Energy Management Also, the internal audits were conducted and the management review. All these audits demonstrated that our management system is consolidated throughout the organization.

In 2021, we continued to adhere to and participate in the Responsible Care of the Environment Program administered by the Argentine Chamber of Chemical and Petrochemical Industries (CIQyP), This is a voluntary program that seeks continuous improvement in the management of processes that include chemical substances and their interaction with the environment, the health and safety of people, the maintenance of facilities and community relations.

Within this framework, we participated as speakers at the round table of the Seminar “Process and Operations Safety: the importance in the Chemical and Petrochemical Industry”, presenting specific cases of success implemented in our organization. The objective of the seminar, which was based on the PCRMA® Management Code No. 3 “Process Safety”, was to exchange experiences, obtain updated knowledge and listen to the references on the subject, so that the participants took away a clear vision of risk-based management as a fundamental part of an operation that respects the environment, safety and its processes.

This year, in addition, a comprehensive audit of the Company’s Environmental Management System and strategic environmental performance indicators (water and energy consumption, waste, effluents and emissions) was performed. This audit was planned by the Company’s Board of Directors and carried out by a specialized company. Based on the results, recommendations have been made to improve the process, which will be developed during the following year.

ENVIRONMENTAL INVESTMENT, TRAINING AND AWARENESS

5.2

A RESPONSIBLE PRODUCTIVE PROCESS

Material topics: Water and Effluents, Waste: Generation, treatment and disposal, Gaseous emissions: release of substances into the atmosphere, Energy: efficient use, Regulatory compliance and anti-corruption

Our production process is continuous, so responsible management of natural resources, especially non-renewable resources, is essential for operations. Natural gas and water are basic inputs necessary for the development of our activities.

Air, which provides nitrogen (N), natural gas (CH4) and water (H2O) are the raw materials for producing ammonia (NH3) and carbon dioxide (CO2). From the reaction of these two products, a solution of Urea is obtained which is later thus achieving our final product: Granulated Urea.

^(*) The gas consumption corresponds to its use as raw material and fuel.
^(**) The decrease in Sodium Hypochlorite and Urea Formaldehyde is due to the two months of Plant Turnaround. The increase in Nitrogen is due to the fact that it was used to inert equipment during the plant shutdown.

The non-potable water (internally referred to as “raw”), which is fed to the complex, is sent to the Utilities Plant to be filtered in the filtration unit. From there, a portion is sent to the cooling tower system, a semi-closed system where it is recirculated, and another portion is sent to the Demineralization Plant to meet strict process requirements for boiler water and process steam. Steam is conditioned to fulfill two main functions: as motive power to drive the turbines of large machines, and as a raw material for the reforming system together with natural gas.

Through heating and the intervention of catalysts, the feedstocks are transformed into carbon and hydrogen oxides, then air is added to obtain nitrogen and oxygen to complete the reaction to carbon dioxide. Subsequently, the carbon dioxide is separated to be sent to the Urea Plant, the hydrogen with the nitrogen provided by compressed air is sent to the synthesis section to produce ammonia. Part of the Ammonia is sent to the Urea Plant to be combined with carbon dioxide, previously separated, to form Urea under certain temperature and pressure conditions

Through separation and concentration processes, a 96% Urea solution is obtained, a condition required for the subsequent granulation process. In the granulators, the Urea is transformed into granules (small spheres of 3 millimeters in diameter), which constitute the final product. The Ammonia not used in the Urea Plant (main product of the Industrial Division of Profertil) is sold as a coolant and raw material in the cosmetics and cleaning industries.

5.2.1

ENERGY AND EMISSIONS

At Profertil we manage energy use through the ISO 50001 Standard. We monitor consumption on a daily basis and report daily on the scorecard and monthly on the production and energy KPI indicators. Annually, the energy management group sets targets for reducing and/or controlling consumption in order to continuously improve production processes.

At the same time, we systematically implemented different controls and processes that allow us to make efficient use of natural gas, both for combustion and for processing and transformation into fertilizer. Thus, we adopted the use of off-gas as a fuel, which contributed to reducing the consumption of the high-pressure steam boiler. Below are some consumption reduction data for the use of off-gas:

In 2018, we began a process of replacing all fluorescent lighting fixtures with LED lights in the urea plants, utilities and office buildings. This work reached in 2021, a replacement of 2,475 light fixtures. We will continue working in the ammonia plant, which will involve the replacement of 500 fixtures, to finally move forward on the internal streets of the plant, which will add 300 more lights that will become LED.

This replacement, which reduces the power and heat of the lighting fixtures by more than 50%, in addition to Profertil´s other actions in pursuit of energy efficiency, such as the ISO 50001 Certification, the Energy Saving and Capacity Expansion Project, and the agreement for 60% of our electricity consumption to be wind-powered, among other initiatives.

During the months of July and August 2021, the plant shutdown was scheduled for maintenance. Several of the tasks performed during that period were to improve energy efficiency and recover production capacity, which is why the specific energy indicators improved by around 15% as a result of the improvements made.

TOTAL ENERGY CONSUMPTION PER TON OF UREA PRODUCED

We also carry out actions aimed at minimizing the impact of GHG emissions. We permanently take measurements at the Bahia Blanca Plant and generate actions for their reduction. Thus, for example, within the framework of the project in alliance with Compañía Mega, we continue with the purchase of carbon dioxide from this company (which would otherwise be emitted into the atmosphere) and use it as raw material to increase the production of Urea. We are currently working on adjusting and updating our carbon footprint and evaluating action plans to reduce it.

5.2.2

WATER AND EFFLUENTS

The water arrives at our Plant through an aqueduct, which is diverted to this area before it enters the Patagonia Drinking Water Treatment Plant, from where it is supplied to the city of Bahia de la Plata. from where it is supplied to the city of Bahía Blanca. The source used for water collection is the Paso de las Piedras Dam. The water that enters the complex, called "raw" (non-potable), is then filtered and demineralized at the Auxiliary Services Plant to meet the strict requirements of the production process. Since it is such a valuable resource, we carry out the following engineering interventions, in order to make its use more efficient:

• Water treatment plant of filter backwashes.
• Installation of a water pretreatment plant for reverse osmosis (this unit provides flexibility to process water with high organic and mineral solids load) allowing for a reduction in water consumption by improving its quality).
• Flotation and ultrafiltration system.
• Water recovery circuits.
• Reuse of granulation wash water.

Liquid effluents are discharged into the estuary after passing through treatment basins, a process that complies with and falls within the scope of Resolution 336/03 of the Water Authority of the Province of Buenos Aires ⁽⁸⁾.

At Profertil we are aware of the existing pressure on water resources, that is why we focus on the analysis of measures to optimize and better manage the use of this vital resource. Since 2020, we have been making progress in the determination of the water footprint of Profertil Urea from cradle to distribution, and we continue to work in this direction in order to have accurate data that allow us to evaluate trends and make decisions to improve the management of this scarce resource.

⁽⁸⁾ We have not experienced any significant spills during the reporting period. Nor have we had any non-compliance incidents related to water quality permits, standards and regulations.

5.2.3

WASTES

As a result of our production processes, we generate waste that is monitored by the Environment, Health and Safety area, verifying compliance with applicable legal standards.

We manage solid waste following an internal procedure, which allows the identification, registration and control from the points of generation, collection, classification and treatment or final disposal. Our priority is to eliminate or minimize the generation, reuse, recycling and finally treatment and final disposal (when the above is not possible). We renew, on an annual basis, the hazardous waste affidavit before the enforcement authority, and we have an agreement with the Municipality of Bahía Blanca for the disposal of recyclable solid waste: paper, paperboard and plastics.

We seek to reduce our impact by closing the life cycle of resources, so that the necessary goods and services are produced while reducing waste. In this regard, during Plant Turnaround 2021:

• Approximately 400 m3 of inert refractory material from F-201 were donated to the municipality (for backfilling municipal land).
• 45,000 l of plant oil were drained and sent to a company that produces alternative fuels based on industrial waste, to be used in clinker furnaces.
• 58.8 tons of wood were donated to various institutions in Bahía Blanca and the surrounding area to be reused for making furniture and handicrafts or to be burned as firewood.
• 9,248 kg. of cardboard and paper were sent to a recycler and the economic value of this material is donated to the Luis Braille Center.
• 1,417 empty drums were sent to an operator to be washed and reused.
• 6,471 kg of exhausted batteries were sent to an operator for recovery.
• The following sales were managed.