Kronos Worldwide, Inc. (KRO): PESTLE Analysis [Nov-2025 Updated]

You're looking at Kronos Worldwide, Inc. (KRO), a company whose fate is tied directly to global economic cycles, and right now, those cycles are in flux. The big question for 2025 isn't just about paint demand; it's about navigating everything from EU chemical regulations (REACH) to raw material price spikes and the push for low-carbon manufacturing. While we project a modest revenue recovery to around $1.95 billion for the fiscal year, that number hinges on how well Kronos manages geopolitical trade friction and the high energy costs inherent in $\text{TiO}_2$ production. Let's break down the six macro forces-Political, Economic, Sociological, Technological, Legal, and Environmental-that will defintely determine Kronos's path this year.

Kronos Worldwide, Inc. (KRO) - PESTLE Analysis: Political factors

Global trade tariffs, especially US-China, impact pigment flow and cost

You need to pay close attention to the volatile global trade landscape, which is directly impacting the titanium dioxide (TiO2) pigment market, a core business for Kronos Worldwide, Inc. (KRO). The US-China trade tensions escalated significantly in 2025. While one temporary measure in May 2025 paused additional reciprocal tariffs, retaining a 10% tariff for 90 days on some goods, the underlying risk of massive duties remains a primary concern for the entire supply chain.

The European Union (EU) has taken a decisive political action, imposing definitive anti-dumping duties on Chinese TiO2 imports effective January 9, 2025. These duties, ranging from €0.25/kg to €0.74/kg, are in place for five years and are already reshaping European market dynamics. This political move is designed to protect the EU's domestic industry, which employs nearly 5,000 people. For Kronos Worldwide, with significant manufacturing in Europe (Germany, Norway, Belgium), this creates a competitive advantage against lower-cost Chinese imports, but it also increases overall market friction.

Here's the quick math: These trade disputes are creating significant market uncertainty, which Kronos Worldwide explicitly cited as a factor impacting sales volumes and pricing momentum in the first six months of 2025. The company reported a net loss of $9.2 million in the second quarter of 2025.

• EU duties are €0.25/kg to €0.74/kg on Chinese TiO2.
• Chinese exports to Europe dropped nearly 20% by April 2025.
• US-China tariff volatility is keeping customer inventory levels low.

Geopolitical stability in sourcing regions affects raw material (ilmenite, rutile) supply

The political stability of key raw material sourcing regions is a constant, high-stakes risk for Kronos Worldwide. The company relies on a global supply chain for titanium-containing feedstocks like ilmenite and rutile. Geopolitical tensions, such as the ongoing conflict in Ukraine, continue to add complexity and price volatility to the supply chain for these critical minerals.

Structural supply constraints are also being driven by political and regulatory factors, not just geology. For instance, the depletion of legacy mines, particularly in Africa, and the closure of operations like Base Resources' Kwale mine in Kenya, which removed approximately 90,000 tonnes per annum of rutile from the global market, highlight the fragility of the supply base. Kronos Worldwide's subsidiary, Titania AS, operates its own ilmenite mine in Norway, which provides a degree of vertical integration and supply security not enjoyed by all competitors. Still, the company's risk assessment, as of mid-2025, flagged suppliers in the Asia-Pacific region, South America, and the African continent as having generally high country-based risks.

EU and US government infrastructure spending drives coatings demand

Government spending on infrastructure and renovation is a clear tailwind for Kronos Worldwide, as it directly drives demand for high-performance coatings, which use TiO2 pigment. In the US, the industrial/protective coatings segment-a key market for infrastructure-is forecasted to grow in value by 6.2% to $2.8 billion in 2025, with volume growth of 2.3%. This spending is crucial because protective coatings are used for bridges, wastewater treatment plants, and other major public works.

Similarly, in Europe, the market is being supported by large-scale government programs. The European Green Deal includes renovation initiatives aimed at renovating 35 million buildings by 2030, which boosts demand for decorative and architectural paints. The overall Europe paints & coatings market is estimated to be valued at $32.2752 billion in 2025. This sustained public sector demand provides a critical foundation for Kronos Worldwide's European operations, helping to offset weakness in other market segments like residential construction.

Shifts in national industrial policy influence domestic manufacturing incentives

National industrial policies are shifting toward supply chain security, a trend that presents both opportunities and risks. In the US, the policy focus on critical minerals is translating into concrete financial support for domestic supply chains. For example, the US Department of Defense awarded IperionX $47.1 million in 2025 to develop a fully-integrated domestic mineral-to-metal titanium supply chain. This kind of domestic investment, while not directly for TiO2 pigment, signals a clear governmental priority to reduce reliance on foreign sources, which could indirectly favor US-based producers like Kronos Worldwide's joint venture in Louisiana.

Meanwhile, China's industrial policy focuses on maintaining economic stability and domestic demand. China expanded its stimulus program, including a consumer goods trade-in program, to consolidate economic growth around a 5% target in 2025. This effort to revive sluggish domestic demand is a defintely a factor to watch, as stronger internal consumption could reduce the volume of low-priced Chinese TiO2 exports flooding global markets, thereby improving pricing power for multinational producers like Kronos Worldwide.

Kronos Worldwide, Inc. (KRO) - PESTLE Analysis: Economic factors

The economic landscape for Kronos Worldwide is defined by volatile raw material costs and a direct, immediate link to consumer-driven sectors like housing and automotive. Your near-term revenue outlook for 2025 is modest, reflecting a challenging environment where pricing power is defintely constrained.

Global housing and automotive sector health dictates $\text{TiO}_2$ demand volume.

Demand for titanium dioxide ($\text{TiO}_2$), a key pigment for whiteness and opacity, is a classic quality-of-life indicator, meaning it rises and falls with global Gross Domestic Product (GDP). For Kronos Worldwide, this translates directly to the health of the construction and automotive coatings markets. The U.S. housing market is expected to remain 'largely frozen' through 2025, with mortgage rates projected to ease only slightly to around 6.7% by year-end, keeping existing home sales low.

However, the demand for repainting and home improvement is still providing some buoyancy. The U.S. house painting market is projected to grow by 5.3% in value in 2025, but the broader consumer home improvement market growth forecast was revised downward to 2.6% for the year. That mixed signal means you're seeing demand but not the robust, cyclical surge you'd want. The automotive sector also remains cautious, with consumer interest in all-battery electric vehicles (BEVs) muted in favor of internal combustion engine (ICE) and hybrid vehicles, affecting the specialized coatings market.

Raw material price volatility, particularly for ilmenite, pressures gross margins.

Raw material costs, especially for ilmenite (a primary titanium ore feedstock), are a constant pressure point on gross margins. Kronos Worldwide owns and operates its own ilmenite mine in Norway, which provides a degree of vertical integration, but not full insulation from market price swings. While the company expected raw material costs to continue to moderate in 2025, energy costs in Europe-where a significant portion of production capacity is located-have trended up and remain above historical levels.

This cost-absorption issue is clear in the Q3 2025 results. The $\text{TiO}_2$ segment reported a significant loss of $15.3 million, a sharp reversal from the $43.4 million profit reported in Q3 2024. This downside was largely due to approximately $27 million in unabsorbed fixed costs stemming from reduced operating rates at manufacturing facilities, a necessary move to align production with lower customer demand.

• Q3 2025 $\text{TiO}_2$ Segment Loss: $15.3 million
• Q3 2024 $\text{TiO}_2$ Segment Profit: $43.4 million
• Unabsorbed Fixed Costs (Q3 2025): Approximately $27 million

A strong US Dollar (USD) can negatively impact sales translated from European operations.

As a U.S.-based multinational with extensive European operations, Kronos Worldwide faces currency translation risk. A strengthening U.S. Dollar generally makes sales generated in Euros, which are then translated back into U.S. Dollars for reporting, look smaller. This is a standard headwind for any company with substantial foreign earnings.

However, the specific currency movements in 2025 have not been uniformly negative. In the second quarter of 2025, fluctuations in currency exchange rates, primarily the euro, actually increased the company's segment profit by approximately $14 million compared to the same period in the prior year. For the first six months of 2025, this positive impact totaled approximately $9 million. So, while the strong USD is a long-term risk, the near-term volatility has provided a favorable, though often unpredictable, tailwind to reported profitability.

Near-term 2025 revenue is forecasted around $1.95 billion, a modest recovery from the 2024 trough.

Analyst consensus for Kronos Worldwide's full-year 2025 net sales sits around $1.877 billion. This is a minor adjustment from the 2024 annual revenue of $1.89 billion and reflects a market that is stabilizing, but not yet rebounding strongly from the cyclical downturn. The company's Q3 2025 net sales of $456.9 million missed analyst estimates and were 6% lower year-over-year, driven by weaker average $\text{TiO}_2$ selling prices and reduced volumes in European and export markets. The recovery is proving slower than initially anticipated, which is why the full-year forecast remains below the $1.95 billion mark.

Here's the quick math on the full-year picture based on consensus estimates:

What this estimate hides is the continued pricing pressure; average $\text{TiO}_2$ selling prices declined by 4% during the first six months of 2025, even though they started the year 2% higher than the beginning of 2024. The company needs to hold prices to prevent the revenue figure from slipping further.

Finance: Track EUR/USD volatility and model the translation impact on segment profit for Q4 2025, assuming a EUR/USD rate of 1.08.

Kronos Worldwide, Inc. (KRO) - PESTLE Analysis: Social factors

Growing consumer preference for sustainable, low-VOC (Volatile Organic Compound) paints.

The shift in consumer values toward health and environmental sustainability is a major social factor impacting the demand for Kronos Worldwide, Inc.'s primary product, titanium dioxide ($\text{TiO}_2$). Consumers are increasingly prioritizing indoor air quality, driving a significant market expansion for low-VOC and VOC-free paints and coatings. This isn't a niche trend anymore; it's a core demand driver.

The global Low VOC Paints and Coatings market is projected to be valued at approximately $28.55 billion in 2025, with a Compound Annual Growth Rate (CAGR) of 3.46% projected through 2035. The smaller, but rapidly growing, VOC-free paint market is estimated at $5 billion in 2025. This means that $\text{TiO}_2$ suppliers like Kronos Worldwide must ensure their pigments are easily dispersible in waterborne formulations, which are the foundation of most low-VOC products. If your $\text{TiO}_2$ grade is not optimized for these newer, water-based systems, you risk losing market share to competitors who are focused on this high-growth segment.

• Market size: Low-VOC coatings market is $28.55 billion in 2025.
• Growth driver: Consumer health concerns and green building certifications (e.g., LEED).
• Action for KRO: Prioritize R&D for waterborne-compatible $\text{TiO}_2$ grades.

Increasing demand for durable, weather-resistant coatings in emerging markets.

Rapid urbanization and massive infrastructure projects in emerging economies are creating a robust, high-value demand for durable coatings, which is a major opportunity for Kronos Worldwide. These regions, particularly Asia-Pacific, require coatings that can withstand harsh, often tropical, climates and protect new industrial assets from corrosion and wear, which is where $\text{TiO}_2$'s UV-resistance and opacifying power become essential.

The Asia-Pacific region is the fastest-growing market for protective coatings, with the overall global Titanium Dioxide market size estimated at 360.16 kilotons in 2025. Asia-Pacific held a 35% share of the $\text{TiO}_2$ market in 2024 and is advancing at a 4.92% CAGR. The Waterproof Coatings Market alone is valued at an estimated $17,797.8 million in 2025, driven by construction and infrastructure needs in these developing nations. This is a volume-plus-value opportunity, as the demand is for high-performance, weather-resistant rutile grades of $\text{TiO}_2$-the premium product Kronos Worldwide specializes in.

Health and safety concerns regarding $\text{TiO}_2$ as a food additive (E171) in Europe.

The social and regulatory landscape around $\text{TiO}_2$ safety remains complex, but recent developments in 2025 offer some clarity. The European Union's ban on $\text{TiO}_2$ as a food additive (E171) has been in effect since August 2022, following the European Food Safety Authority (EFSA) concluding it could no longer be considered safe for this use. This ban affects a small but visible portion of the pigment market, namely food and dietary supplements in the EU.

However, in August 2025, the European Commission reaffirmed that $\text{TiO}_2$ remains approved for use as a colorant in medicinal products because it is deemed essential for the safety and efficacy of over 91,000 human medicinal products. Plus, a significant legal victory for the industry occurred in August 2025 when the EU Court of Justice upheld the annulment of the classification of $\text{TiO}_2$ powder as a suspected carcinogen by inhalation (the H351 warning). This ruling removes a major social and regulatory headwind for Kronos Worldwide's core industrial pigment business by eliminating the need for burdensome warning labels on its primary product.

Workforce shortages and rising labor costs in specialized chemical manufacturing.

The chemical manufacturing industry faces a structural demographic challenge that directly impacts Kronos Worldwide's operational costs and capacity. The specialized nature of $\text{TiO}_2$ production requires a highly skilled workforce, and that talent pool is shrinking.

Roughly 30% of the chemical workforce is expected to retire by 2035, and current labor trends suggest only about half of those roles will be filled. This talent gap is exacerbated by stagnant labor productivity in the sector, which has increased by less than 1% per annum over the last fifteen years in the US, lagging behind the average annual inflation rate of 2.4%. This imbalance forces companies to compete fiercely for skilled technicians and engineers, driving up labor costs and increasing the need for significant capital investment in automation and operational efficiency to maintain production levels. The US manufacturing sector already saw a loss of approximately 90,000 manufacturing jobs nationwide in 2024, underscoring the severity of the labor shortage.

You can't hire your way out of this problem; you have to optimize operations.

Kronos Worldwide, Inc. (KRO) - PESTLE Analysis: Technological factors

The technological landscape for Kronos Worldwide, Inc. is defined by a critical pivot toward process efficiency and product differentiation, driven by high energy costs and intense global competition. Your key takeaway is that Kronos Worldwide is investing its R&D budget of approximately $15 million in 2025 to solidify its position in the higher-margin chloride process and specialty grades, which is a necessary defense against low-cost Chinese producers.

Development of new, more efficient chloride-process $\text{TiO}_2$ production methods

The industry standard is shifting decisively to the chloride process, which is simpler, consumes less energy, and yields the higher-quality rutile $\text{TiO}_2$ pigment. Kronos Worldwide, a pioneer of this process, is actively participating in this shift by phasing out its older, less environmentally-friendly sulfate capacity. For example, the company closed its sulfate production line in Varennes, Canada, aligning with the broader industry trend to mitigate waste and pollution associated with the sulfate method. This move is defintely a long-term cost-reduction strategy.

The chloride process market is where the growth is, and this is a major focus for Kronos Worldwide. The global Chloride Process $\text{TiO}_2$ market size is projected to grow from \$13.36 billion in 2025 to \$16.84 billion by 2031, representing a Compound Annual Growth Rate (CAGR) of 3.9%. Kronos Worldwide must continually invest in process improvements-like debottlenecking projects-to maintain its operational utilization, which was approximately 96% in 2024, and keep its cost structure competitive against global rivals. You have to keep improving the process or you fall behind.

Research into alternative, non-pigmentary uses for $\text{TiO}_2$ nanoparticles

The most significant long-term opportunity lies in non-pigmentary applications, particularly in the rapidly expanding nanoparticle $\text{TiO}_2$ market. This market is projected to be valued at approximately \$12.93 billion in 2025 and is expected to grow at a CAGR of 6.10% through 2033. This growth rate is nearly double the projected growth for the chloride process market.

Kronos Worldwide's R&D efforts are focused on developing new grades for these diverse, high-value applications. Non-pigmentary uses leverage the ultrafine nature of titanium dioxide (less than 100 nm) for functional properties beyond whiteness and opacity. This is where you find the high-margin products.

• UV Filters: $\text{TiO}_2$ nanoparticles are a primary ingredient in sunscreens and cosmetics.
• Photocatalysis: Used in self-cleaning and anti-fogging coatings for windows and tiles.
• Advanced Materials: Applications in catalysts, solar cells, and even medical research like cancer treatments.

Adoption of digital tools for plant optimization, reducing energy consumption

The production of $\text{TiO}_2$ is an energy-intensive process, making energy efficiency a crucial technological factor for profitability. While Kronos Worldwide does not publish a specific 2025 energy savings number from digital tools, the company is strategically aligned with the broader industry trend of adopting Industry 4.0 technologies. They maintain a Global Sustainable Energy Team and have four of their five production facilities certified to the ISO 50001:2018 Energy Management standard, which mandates continuous review and optimization of energy use. This is a commitment to data-driven efficiency.

The industry is rapidly adopting Artificial Intelligence (AI) and the Industrial Internet of Things (IIoT) for plant optimization. Companies using these tools have seen significant gains: for example, some industrial use cases have demonstrated reduced energy consumption of 10% to 60%. Kronos Worldwide's focus is on capital projects that reduce energy consumption and enhance energy efficiency, which is the clear, actionable path to cutting operational costs and improving the segment profit, which was \$52.5 million for the first six months of 2025.

Competitor innovation in high-performance, specialty $\text{TiO}_2$ grades

The market demands high-performance and specialty $\text{TiO}_2$ grades, and Kronos Worldwide faces strong competition from global players who are also innovating. The competitive landscape is defined by technological moves that go beyond simple pigment production:

• Tronox Holdings plc: Leverages vertical integration (from mining to specialty formulation) and focuses on closed-loop recycling and eco-conscious pigments.
• Lomon Billions Group Co., Ltd.: As the lowest-cost producer, they gain a competitive edge by using process byproducts for other materials, such as lithium-ion batteries.
• The Chemours Company: A major player that continues to invest in chloride-process capacity and product differentiation.

Kronos Worldwide's response is a focus on its own high-performance portfolio, which includes new pigment slurries designed for coatings. These slurries are marketed as a game-changer for paint production effectiveness, offering a lean, simple, and cost-efficient manufacturing process for customers. This is a smart move because specialty grades command higher prices and are less susceptible to the cyclical price volatility that led to a net loss of $37 million in Q3 2025.

Kronos Worldwide, Inc. (KRO) - PESTLE Analysis: Legal factors

The legal landscape for Kronos Worldwide, Inc. is a double-edged sword in 2025: one side presents a significant, quantifiable compliance cost, and the other offers a competitive shield from foreign rivals via anti-dumping duties. You must budget for the regulatory overhead but also capitalize on the trade restrictions that are now firmly in place.

Compliance with the European Union's REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) regulation remains a major cost

REACH compliance is a continuous, non-negotiable cost of doing business in Europe, where Kronos Worldwide operates four titanium dioxide (TiO2) plants. A key development in late 2025 is the 19.5% increase in standard registration fees for large enterprises, effective November 5, 2025, following the Commission Implementing Regulation (EU) 2025/2067. For a large-volume producer like Kronos Worldwide, operating in the 1000+ tonnes/year band, the joint submission fee for a substance like TiO2 has risen from €25,274 to €30,202. This is a direct, immediate increase in administrative overhead.

On a more favorable note, the long-running classification risk for the core product has been mitigated. The European Court of Justice upheld a ruling on August 1, 2025, confirming that titanium dioxide is no longer considered a category 2 carcinogen within the European Union. This decision removes a massive potential restriction on the handling, labeling, and use of TiO2, defintely reducing future compliance risk and cost.

Stricter US EPA (Environmental Protection Agency) standards for air and water emissions

The trend toward stricter US EPA standards is a primary driver of capital expenditure. Here's the quick math: of the approximately $55 million Kronos Worldwide intends to spend on total capital expenditures in 2025, a substantial portion is earmarked for environmental programs. Specifically, the company estimates that approximately $24 million of the 2025 capital spending will be dedicated to environmental compliance, protection, and improvement programs.

These investments are essential to maintain operating permits and are primarily focused on increasing operating efficiency while simultaneously achieving improved environmental protection, such as lower emissions from manufacturing plants. Failure to meet these evolving standards would risk plant shutdowns or significant fines, making this $24 million a necessary investment to protect revenue.

Anti-dumping investigations in key markets can suddenly restrict sales channels

Anti-dumping measures are a critical legal factor that acts as a trade barrier, directly influencing market dynamics in favor of domestic producers like Kronos Worldwide. The most impactful development is the European Commission's imposition of definitive anti-dumping duties on titanium dioxide imports from China, effective January 9, 2025. These duties, ranging from €0.25/kg to €0.74/kg, are in place for five years and significantly restrict a major source of low-cost competition in Kronos Worldwide's core European market.

This is a clear opportunity, but it's not without its own legal costs. The company had to implement tariff mitigation strategies in the first quarter of 2025, including pre-positioning inventory from its Canadian facility in the U.S., which led to increased shipping and warehousing costs. Plus, anti-dumping actions are spreading globally:

• Eurasian Economic Union: Announced final ruling on February 13, 2025, with anti-dumping duty rates up to 16.25% on Chinese TiO2.
• India: Issued its final ruling on February 12, 2025, following a petition against Chinese imports.
• Saudi Arabia: Anti-dumping investigation expected to be completed by October 9, 2025.

Ongoing litigation risk related to historical environmental liabilities at older sites

Like many chemical manufacturers with a long history, Kronos Worldwide faces ongoing litigation risk related to historical environmental liabilities, particularly at older sites. The company acknowledges that certain past and current operations have the potential to cause environmental or other damage, and is a party to various legal proceedings and contingencies.

While the full provision for environmental liabilities is not public in the latest snippets, this risk is a material financial contingency. For example, the company is managing the legal and financial implications of the approved termination of the merged U.S. defined benefit pension plan, which was approved in February 2025 and is expected to be completed in the second half of 2026, following regulatory approvals. This kind of complex legal action requires significant financial and administrative resources, distracting from core business operations.

Next step: Operations: Review the $24 million environmental compliance budget to prioritize projects that offer the highest return on emissions reduction and permit certainty.

Kronos Worldwide, Inc. (KRO) - PESTLE Analysis: Environmental factors

You're looking at Kronos Worldwide, Inc.'s environmental profile to gauge long-term operational risk and capital expenditure needs, and the key takeaway is clear: the energy-intensive nature of $\text{TiO}_2$ production, coupled with the high-volume by-products from the sulfate process, creates a constant and growing pressure on cash flow for compliance and decarbonization. The most immediate, near-term risk is water scarcity at key production sites.

High energy consumption of the $\text{TiO}_2$ manufacturing process requires significant carbon reduction plans.

The production of titanium dioxide ($\text{TiO}_2$) is defintely an energy-intensive industrial process, which makes Kronos Worldwide acutely sensitive to energy price volatility and global decarbonization mandates. Industry estimates place the total energy consumption for $\text{TiO}_2$ manufacturing at a substantial 1.5 to 2.5 megawatt-hours (MWh) per ton of product. Here's the quick math: based on Kronos Worldwide's 2024 production volume of 535,000 metric tons, this translates to an estimated annual electricity demand between 802,500 MWh and 1,337,500 MWh just for the $\text{TiO}_2$ segment. That's a massive energy bill and a significant carbon footprint.

The company's latest reported Scope 1 (direct) and Scope 2 (indirect) emissions from its five wholly-owned $\text{TiO}_2$ plants totaled 760,858 metric tons of $\text{CO}_2\text{e}$ in 2022, the last year for which specific data is publicly available. While the company has a Global Sustainable Energy Team and ISO 50001:2018 certifications at four of its five facilities, it has not publicly announced a specific, near-term (e.g., 2025) numerical $\text{CO}_2$ reduction target. This lack of a clear, quantifiable goal leaves the company exposed to investor scrutiny, especially from large asset managers who are increasingly demanding Science-Based Targets (SBTs).

Increased scrutiny on waste management and disposal of sulfuric acid by-products from the sulfate process.

The company uses both the chloride and sulfate processes for $\text{TiO}_2$ production, but the sulfate route-which is utilized at several of its facilities-is notorious for generating large volumes of a challenging by-product: spent sulfuric acid. The industry standard for this process is the generation of approximately 6 to 9 tons of spent acid for every ton of $\text{TiO}_2$ pigment produced. This scale of industrial waste requires a high-cost, high-compliance disposal or conversion strategy.

Kronos Worldwide mitigates this liability through its KRONOS ecochem division, which focuses on the beneficial reuse of these by-products (a circular economy approach). This division converts iron sulfate from the spent acid into co-products, selling approximately 75,000 tons yearly for applications such as water treatment and chromate reduction in cement. This conversion strategy is critical, but the sheer volume of by-product generated by a 535,000 metric ton production base means that the margin for error in waste management compliance is minimal, particularly at European sites subject to strict EU environmental directives.

Pressure from investors and customers to meet specific Scope 1 and 2 emissions targets.

Investor and customer pressure is shifting from general ESG disclosure to mandatory, verifiable performance metrics. While Kronos Worldwide has not published a specific 2025 emissions target, the pressure is implicit: major customers are setting their own Scope 3 (supply chain) reduction goals, which directly impact the procurement decisions for $\text{TiO}_2$.

The core risk is a competitive disadvantage if the company cannot demonstrate a clear path below its 2022 baseline of 760,858 $\text{mt}$ $\text{CO}_2\text{e}$. Investors are now pricing in the cost of carbon, and companies without a credible decarbonization plan face a higher cost of capital. This is a capital-intensive industry, and a higher cost of capital is a killer.

• Quantify the carbon cost: Model a \$100/ton $\text{CO}_2\text{e}$ carbon tax scenario against the 760,858 $\text{mt}$ $\text{CO}_2\text{e}$ baseline.
• Prioritize capital expenditure on energy efficiency projects with a quick payback period.
• Increase the percentage of energy purchased from renewable resources beyond the current level.

Water usage restrictions in drought-prone regions impact plant operations.

Water scarcity is no longer just an agricultural issue; it is an industrial constraint. Kronos Worldwide's operations are exposed to this risk, particularly at its North American facility in Lake Charles, Louisiana, and its European plants in Germany (Leverkusen and Nordenham).

Louisiana, home to the key Lake Charles plant, faced a severe drought and saltwater intrusion crisis in the Mississippi River in 2023, which was a continued concern in 2024. As of November 18, 2025, approximately 39% of Louisiana is still under drought conditions, a situation that puts industrial water-intensive operations at risk of future restrictions.

Similarly, the German chemical industry, which includes Kronos Worldwide's major European sites, has faced significant supply chain disruptions due to critically low water levels in the Rhine River, a key transport and water source, highlighting the vulnerability of their European operations to climate-driven water stress. The need for cooling and process water is a constant operational vulnerability. This is a clear, tangible risk to production capacity.