Company: NGVT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001653477-25-000015
Chunk: 1267

Company: Ingevity Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 1
Chunk 1267
---
raft pulp processing around the world. Also, there are regulatory pressures that may incentivize suppliers of CTO to sell CTO into alternative fuel markets (e.g., biofuels) rather than to historical end users such as Ingevity. CTO-based biofuel has been deemed to meet the EU’s Renewable Energy Directive, second phase (“RED II”) biofuel sustainability criteria. As a result of RED II and related government incentives, there has been a significant increase in demand for CTO and its derivatives over the past several years. The increased demand, combined with the rationalization of softwood kraft pulp processing, has created pressure on CTO pricing and driven the cost of CTO to unprecedented levels, higher by as much as 300 percent in some cases.

During 2024, we sourced approximately 81 percent of our CTO from two primary parties: Smurfit WestRock and Georgia-Pacific. CTO accounted for approximately 14 percent of our consolidated cost of sales and 38 percent of our consolidated raw materials purchases in 2024.  

In addition to these developments in the EU, various pieces of legislation regarding the use of alternative fuels have been introduced in the U.S. at both the federal and state level. Currently, none of the U.S. legislation mandates or provides incentives for the use of CTO or its derivatives as a biofuel. Future legislation in the U.S. and elsewhere may promote the use of CTO or its derivatives as a feedstock for the production of biofuels, further constraining supply.

The other key raw materials used in the Performance Chemicals business are maleic anhydride, ethoxylates, amines, and acrylic emulsions. These are sourced where possible through multiple suppliers to protect against supply disruptions and to maintain competitive pricing.

10

Markets Served

Road Technologies

Our road technologies product line produces a broad line of innovative additives and technologies utilized globally in road construction and pavement preservation, including pavement reconstruction and recycling. With the 2022 acquisition of Ozark Materials, LLC (“Ozark Materials”), we added road markings technologies to the portfolio.

Road Construction. Evotherm®, our premier road construction additive, is a warm mix asphalt technology that acts as both a liquid antistrip and a warm mix asphalt. Once Evotherm® is mixed into the binder utilized for road layer construction, production temperatures can be significantly lowered compared to conventional hot mix asphalt. Lower production temperatures reduces our customers' emissions and fuel use during road construction as well