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									  2010 Sustainability Report



Our Ability...
For questions regarding this report
or its contents, please contact (3.4),1

Investor Inquiries:
713.627.7474

Media and Community Inquiries:
Sara Cronin
Director, Corporate Communications
713.627.7474




1 Throughout the report, numbers
  and letters in parentheses refer to
  items identified for sustainability
  reporting in the Global Reporting
  Initiative (GRI) G3 guidelines.




Contents


Letter from the President                                      2
Our Commitment to Excellence                                   3
Quality Products, Dependable Services                          4
Economic Highlights                                            6
Protecting People and the Environment                          8
   Houston Plant Focus: Reducing 1,3-Butadiene Emissions      14
Environmental, Health, Safety, and Security (EHS&S) Policy    16
Spotlight on Energy Management                                17
Product Responsibility                                        18
Making a Difference                                           20
Engage, Educate, and Inform                                   24
Building Opportunity, Building Lives                          25
Reaching Our Potential                                        26
Corporate Compliance                                          28
Global Reporting Initiative (GRI)
  Application Level Check Statement                           29
GRI Index                                       Inside Back Cover
2 • TPC Group 2010 Sustainability Report
  to Think
...
Beyond Tomorrow
At TPC Group, we will always serve the communities
where we operate by creating value through environmental
stewardship, social responsibility, and economic prosperity.
These commitments are an integral part of our drive for
sustainability because they help our employees achieve,
our customers succeed, our shareholders prosper, and
our communities thrive; they support everything that
creates a livable and sustainable world.

                                                    TPC Group 2010 Sustainability Report • 1
                                                                             “We are committed to being environmental
                                                                           stewards and community partners every day,
                                                                             and we have achieved much along the way.
                                                                           We regard the path to sustainable operations
                                                                              as continuing, and will stay the course for
                                                                                                  many years to come.”


                                    Letter from the President
                                    At TPC Group, sustainability combines economic success          Some of our recent accomplishments include:
                                    with social responsibility and environmental protection.
                                                                                                    • Reduced our reportable releases by 47 percent
                                    This principle encompasses many of the core values
                                                                                                      compared to 2006
                                    that guide how we do business. Our commitment to
                                    sustainability is reflected not only in our efforts to estab-   • Reduced our greenhouse gas emissions by
                                    lish environmentally and socially responsible business            33 percent and our nitrogen oxide emissions
                                    practices throughout our organization, but also by working        by 68 percent compared to 2006
                                    with customers, suppliers, and other business partners
                                                                                                    • Reduced emissions of 1,3-butadiene from our
                                    who, like us, are looking to build a sustainable future. For
                                                                                                      Houston plant by over 75 percent from the
                                    TPC, sustainable management minimizes risks, promotes
                                                                                                      baseline year of 2004
                                    existing business, and helps create new opportunities.
                                                                                                    • Increased our financial contribution to community
                                    Throughout the past several years, we have illustrated
                                                                                                      programs by almost 300 percent over a four-
                                    our commitment to sustainability in many ways. For
                                                                                                      year period
                                    example, we have enhanced management systems
                                    throughout our operations, committed to the Responsible         Some of our goals include:
                                    Care® principles of the American Chemical Council,
                                                                                                    • Develop and roll out new Company mission,
                                    increased public outreach, reduced emissions to the
                                                                                                      vision, and values
                                    environment, strengthened process safety manage-
                                    ment systems, broadened our investment commitment               • Obtain Responsible Care® certification
                                    in the communities where we operate, developed and
                                                                                                    • Implement new industry recommended practices
                                    maintained one of the most robust energy management
                                                                                                      on process safety metrics and fatigue management
                                    systems in the industry, and rolled out new business
                                                                                                      along with additional enhancements to other
                                    code of conduct and whistleblower systems – all while
                                                                                                      process safety systems
                                    also weathering the economic downturn, strengthening
                                    the financial performance of the Company, registering           • Upgrade our chemical plant security infrastructure
Michael T. McDonnell                the Company’s common stock with the Securities and
                                                                                                    • Construct a new laboratory for research,
President and Chief                 Exchange Commission, and listing our Company on
                                                                                                      development, and quality assurance
Executive Officer                   The NASDAQ Capital Market.
                                                                                                    Although this may be our first company sustainability
                                    This report – TPC’s first sustainability report – is
                                                                                                    report, it will not be our last. We pledge to continue our
                                    designed to provide a window to investors, the public
                                                                                                    drive towards zero injuries and process safety events,
                                    at-large, and all other stakeholders into our overall
                                                                                                    further implement technology and initiate projects to
                                    sustainability performance. While we provide financial
                                                                                                    reduce our emissions and energy consumption, and
                                    reporting through our public filings and conference
                                                                                                    broaden our partnerships with stakeholders to foster
                                    calls, the full range of our sustainability performance
                                                                                                    relationships built on accountability. I look forward to
                                    and programs are only addressed in this report. True
                                                                                                    discussing our achievements and progress towards
                                    to the broad tripart definition of “sustainability,” our
                                                                                                    these goals in the 2012 sustainability report.
                                    report addresses environmental and social issues in
                                    detail and summarizes the economic component.                   (1.1, 1.2)



2 • TPC Group 2010 Sustainability Report
                                                                                        TPC’s Governance Structure

                                                                                        TPC’s governance structure consists of
                                                                                        our Board of Directors and four standing
                                                                                        Committees of the Board:

                                                                                        • Audit Committee



Our Commitment
                                                                                        • Compensation Committee
                                                                                        • Nominating and Governance Committee
                                                                                        • Environmental, Health, Safety, and



to Excellence
                                                                                          Security Committee




Corporate Governance Guidelines and the committee          Whistleblower Policy are located on our internet site
charters may be viewed on our internet site at             at http://investors.tpcgrp.com/governance.cfm (4.8, 4.9)
http://investors.tpcgrp.com/governance.cfm (4.1).          and the Environmental, Health, Safety, and Security
As of June 30, 2010, the end of the reporting period       (EHSS) policy is provided in this report (4.8, 4.9).
for this report, the Board consisted of eight directors,
                                                           TPC defines stakeholders as those groups who are
seven of whom are independent and non-executive
                                                           involved in, affected by, or have the power to assist
members (4.3). The Chairman of the Board is not an
                                                           or block our proceedings in any material way. To that
executive officer (4.2).
                                                           extent, we have a long-standing history of dialogue
TPC encourages communications to the Board of              with our stakeholders. Each year, we assess the
Directors, and these may be made according to the          effectiveness of our two-way communications through
procedure defined on page 13 of the Company’s most         informal means and build on prior activities with
recent Proxy Statement, a copy of which is located on      changes or additional practices to enhance our
our internet site at http://investors.tpcgrp.com/          effectiveness. We engage some of our largest share
financials.cfm (4.4). In addition, the Proxy Statement     owners through their member representation on our
provides information-related to the following:             Board of Directors including at least four Board
                                                           meetings per year. In addition, TPC obtains stakeholder
• Linkage between compensation for members
                                                           input from stockholders, investors, and other members
  of the highest governance body, senior
                                                           of the financial community through annual meetings
  managers, and executives (including departure
                                                           and quarterly conference calls. Other sections of the
  arrangements) to the organization’s performance
                                                           report describe methods for obtaining stakeholder input
  (including social and environmental performance)
                                                           from customers, elected officials, governing bodies,
  (4.5) – “Compensation Discussion & Analysis,”
                                                           communities, and employees (4.15, 4.16).
  pages 21 to 31
                                                           TPC addresses Article 15 of the Rio Principles 2
• Processes in place for the highest governance
                                                           regarding the precautionary approach through our
  body to ensure conflicts of interest are avoided
                                                           risk management approach to all EHSS issues as
  (4.6) – “Certain Relationships and Related
                                                           described in the Company’s EHSS policy (see page                    2 For more information on the
  Transactions,” page 37
                                                           16), and through our robust energy management and                     United Nations Conference on
                                                                                                                                 Environment and Development,
• Process for determining the qualifications and           energy conservation management system, described                      held in Rio de Janeiro from
  expertise of the members of the highest gover-           under “Spotlight on Energy” (4.11).                                   June 3 to 14, 1992, and the Rio
                                                                                                                                 Principles, please refer to the
  nance body for guiding the organization’s strategy                                                                             United Nations Environment
                                                           As a member of the American Chemistry Council (ACC),
  on economic, environmental, and social topics                                                                                  Program internet page at
                                                           TPC subscribes to the principles and requirements                     http://www.unep.org/
  (4.7) – “Director Nomination Process,” pages                                                                                   Documents.multilingual/
                                                           of ACC’s Responsible Care ® program and is seeking
  10 to 11; “Information on Director Nominees,”                                                                                  Default.aspmentID=78&
                                                           third-party certification under the program (4.12).                   ArticleID=1163.
  pages 6 to 8; and “Executive Officers,” page 18

TPC is developing new mission and values statements
which will be completed during the next reporting
cycle and made available in our next report (4.8).
Our policies related to corporate governance including
our Business Conduct and Ethics Code and our




                                                                                                                     TPC Group 2010 Sustainability Report • 3
                                     Quality Products,
                                     Dependable Services
                                     TPC Group (TPC Group or TPC),3 formerly known
                                     as Texas Petrochemicals (2.1), is a global leader in
                                     providing a diverse range of quality products to
                                     chemical and petroleum-based companies worldwide.
                                     Integrity is stamped into everything we do – from the
                                     chemicals we produce to the services we provide.

                                     This is the first sustainability report for TPC (3.2, 3.3).   lines, including our position as the largest producer
                                     The report covers TPC’s fiscal years 2009 and 2010,           by production capacity of finished butadiene, the
                                     which were the years ending on June 30 of 2009                second largest active merchant producer by production
                                     and 2010, respectively (3.1). However, certain data           capacity of isobutylene, and the sole merchant producer
                                     are collected on a calendar year basis, such as               of highly reactive polyisobutylene, a major component
                                     Environmental, Health, Safety, and Security data, to          of dispersants for the fuel and lubricant additive markets.
                                     conform to regulatory reporting periods; where this is        We operate as a value-added merchant processor and
                                     the case, the report covers the calendar years 2008           marketer, linking our raw material providers with our
                                     and 2009 (3.1). TPC Group’s Board of Directors                diverse customer base of chemical consumers (2.7).
                                     recently approved a change in the Company’s fiscal            We believe this market position has resulted in stable
                                     year end from June 30 to December 31, with the                supplier and customer bases and has enhanced our
                                     change to the calendar year reporting cycle beginning         growth and expansion opportunities.
3 Except as otherwise indicated      January 1, 2011.4 Therefore, future Company
  or required by the context,                                                                      We operate in two principal business segments,
  references in this report to       sustainability reports will transition to calendar
                                                                                                   C4 Processing and Performance Products (2.3).
  “we,” “our,” and “the Company,”    year reporting periods for all parameters.
  refer to the combined business                                                                   In the C4 Processing segment, we process the crude
  of TPC Group Inc. and its direct
                                     In the future, TPC plans to provide a sustainability          C4 stream into several higher value components as
  and indirect subsidiaries.
                                     report biennially. Due to the transition from fiscal to       follows (2.2):
4 Throughout the report,
                                     calendar year management cycles, we plan to cover
  “FY 2010.5” denotes references                                                                   • 1,3-Butadiene, primarily used to produce
  to the transition fiscal period    the 18-month period from July 1, 2010 through the end
  from July 1, 2010 through                                                                          synthetic rubber that is mainly used in tires
                                     of calendar year 2011, in the second report, which we
  December 31, 2010.                                                                                 and other automotive products
                                     plan to publish during 2012 (3.3).
                                                                                                   • Butene-1, primarily used in the manufacture
                                     Throughout this report, data reported on a fiscal year
                                                                                                     of plastic resins and synthetic alcohols
                                     basis have been designated with “FY” as a prefix to the
                                     year, and data reported on a calendar year basis have         • Raffinates, primarily used in the manufactur-
                                     been designated with only the year.                             ing of alkylate, a component of premium
                                                                                                     unleaded gasoline
                                     TPC is a leading producer of value-added products
                                     derived from niche petrochemical raw materials such as        • Methyl tertiary-butyl ether (MTBE), primarily
                                     C4 hydrocarbons. Our products are sold to producers             used as a gasoline blending stock
                                     of a wide range of performance, specialty, and inter-
                                                                                                   In our Performance Products segment, we process
                                     mediate products, including synthetic rubber, fuels,
                                                                                                   isobutylene and refinery grade propylene to produce
                                     lubricant additives, plastics, and surfactants. We are
                                                                                                   higher-value derivative products including (2.2):
                                     a leader in North America across our major product




 4 • TPC Group 2010 Sustainability Report
                                 Sales Volumes FY 2010 (2.8)
Number of Employees (2.8)        (in thousands of pounds)      Corporate Information



494                              2,441,304                     Company Headquarters (2.4)

                                                               Countries of Operations (2.5)
                                                                                                                   Houston, Texas

                                                                                                                   United States
Company employees as of                        C4 Processing
                                                               Company Website                                     www.tpcgrp.com
June 30, 2010, plus third-
party contractors provide                                      Proxy Statement, 10-K, and Other Financial or       http://investors.tpcgrp.com/index.cfm
approximately 280 employees to
perform maintenance activities
and operate supply chain
                                      601,590                    investor-related Communications and Documents

                                                               Nature of Ownership and Legal Form (2.6)            TPC Group Inc. (NASDAQ: TPCG) is a
                                        Performance Products
facilities on and around our                                                                                       Delaware corporation. See Proxy Statement
Houston and Port Neches                                                                                            pages 16–17 for beneficial ownership.
facilities.
                                 3,042,894                     Stock Exchange

                                                               Business Segments (2.3)
                                                                                                                   NASDAQ: TPCG

                                                                                                                   • C4 Processing
                                                       Total
                                                                                                                   • Performance Products

                                                               Significant Changes During Reporting Period (2.9)   January 22, 2010: Corporate name
                                                                                                                   change to TPC Group Inc.

                                                               Operational Structure, Divisions, Operating         Please refer to Form 10-K located at
                                                                Companies, Subsidiaries, Joint Ventures            http://investors.tpcgrp.com/index.cfm




• High purity isobutylene (“HPIB”), primarily used             To define the content of our first sustainability report,
  in the production of synthetic rubber, lubricant             TPC reviewed all GRI performance indicators to identify
  additives, surfactants, and coatings                         those that are material to the Company and for which
                                                               data were available for the reporting period. The
• Conventional polyisobutylenes (“PIB”) and
                                                               Company targeted preparing a C level GRI report, for
  highly reactive polyisobutylenes (“HR-PIB”),
                                                               which GRI requires reporting on ten performance indicators
  primarily used in the production of fuel and
                                                               in addition to standard disclosures. Nonetheless, the
  lubricant additives, caulks, adhesives, sealants,
                                                               Company identified as material and had data available
  and packaging
                                                               for many more than ten performance indicators; thus,
• Diisobutylene (“DIB”), primarily used in the                 this report covers more performance indicators than the                                  Tires from
  manufacture of surfactants, plasticizers,                    minimum. The Company plans to upgrade to a B level                                     1,3-Butadiene
  and resins                                                   report for future reports, and the extensive performance
                                                               indicator reporting in our first report will provide better
• Nonene and tetramer, primarily used in the
                                                               continuity to the second report (3.5).
  production of plasticizers, surfactants, and
  lubricant additives                                          This report covers all operations of TPC Group and its
                                                               business segments, and does not cover TPC’s contractors.
Additional information about our primary products may
                                                               For environmental air emissions and water use data, the
be found on our website at http://www.tpcgrp.com/
                                                               report covers TPC’s large operating facilities at Houston
Products/Overview-194.html.
                                                               and Port Neches, Texas; emissions data do not cover
We have three principal processing facilities, all of          the smaller Baytown, Texas operating facility or the
which we own and all located in Texas, in Houston,             terminal in Lake Charles, Louisiana, which we judged to
Port Neches, and Baytown. The Houston and Port                 be less than material to the data. All other environmental,
Neches facilities, which process crude C4 into butadiene       health, and safety data cover the Baytown facility, but
and related products, are strategically located near           not the Lake Charles terminal (3.6).
most of the significant petrochemical consumers in
                                                               TPC has no material joint ventures (2.3, 3.8). Other activities
Texas and Louisiana. Our Baytown facility primarily
                                                               such as leased facilities and outsourced operations were
produces nonene and tetramer. All three locations
                                                               judged to be not material to the scope of the report
provide convenient access to other Gulf Coast petro-
                                                               (3.6, 3.8). There were no other limitations on the scope
chemicals producers and are connected to several
                                                               or boundary of the report (3.7). In addition, since this is
of our customers and raw materials suppliers through
                                                               TPC’s first report, there were no restatements of informa-
an extensive pipeline network. In addition, our Houston
                                                               tion and no changes applied from prior reports (3.10, 3.11).
and Port Neches facilities are serviced by rail, tank
truck, barge, and ocean-going vessel.                          This report has not been externally assured. TPC plans
                                                               to seek external assurance for future sustainability
                                                               reports (3.13).


                                                                                                                            TPC Group 2010 Sustainability Report • 5
                                    Economic Highlights
                                    Fiscal 2010 revenues of $1,688.5 million increased $311.6 million,
                                    or 23 percent, compared to fiscal 2009 revenues of $1,376.9 million.
                                    The increase was due to a combination of seven percent higher
                                    overall sales volume as well as 15 percent higher average selling
                                    prices. The overall higher average selling prices in fiscal 2010
                                    were driven by substantially higher average prices across all
                                    C4 Processing product lines.


                                    Summary of TPC Group’s Financial Results for the Past Two Fiscal Years (EC1)


                                    (in thousands, except per share data)                                                                 Fiscal Year
                                                                                                                                   2009                  2010

                                    Revenues                                                                                  $ 1,376,874        $ 1,688,484
                                    Cost of Sales                                                                                 1,194,173             1,444,156
                                    Net Income (loss)                                                                               (22,278)              30,541
                                    Earnings (losses) per Share – Basic                                                               (1.29)                    1.70
                                    Earnings (losses) per Share – Diluted                                                             (1.29)                    1.70
                                    Weighted Average Shares Outstanding – Basic                                                      17,714               17,928
                                    Weighted Average Shares Outstanding – Diluted                                                    17,714               17,930
                                    Adjusted EBITDA                                                                                 40,292               101,831
                                    Cash Flows from Operating Activities                                                            50,197               126,818
                                    Capital Expenditures                                                                             16,128               14,400
                                    Net Cash Flow                                                                                     5,973              108,054
                                    Cash and Cash Equivalents                                                                        6,588               114,642
                                    Total Debt                                                                                $    272,570       $       269,470



                                    The Company continues to spend money in and around              health, safety, and security-related projects totaled more
                                    its operating facilities to insure safe and reliable delivery   than $7 million dollars during FY 2009 and FY 2010, or
                                    of our products. Capital expenditures have totaled more         almost one-fourth of our total capital expenditures for
                                    than $30 million dollars during FY 2009 and FY 2010.            the time period (EN30). We currently expect to spend
                                    We currently expect to spend approximately $31 million          approximately $11 million dollars for environmental,
                                    dollars in 2011. Capital expenditures for environmental,        health, safety, and security capital in 2011.




6 • TPC Group 2010 Sustainability Report
                   23%                                                                               33%
                                                                                                      Improved Gross Profit

                                      Increase in
                                    Revenues from
                                     2009 to 2010
 NASDAQ
 TPCG




                      TPC’s operations have a
                    significant positive impact
                        on the communities in
                             which we operate.

We conduct our research and development work at the         Some of the Full-year Highlights for FY 2010
Houston operating facility. Our research and development
innovation activities include process improvement of        • The Company successfully ramped up the
existing TPC processes and new process development            polyisobutylene product line expansion project,
for business development in the performance and               growing sales volume by over 50 percent for the
specialty chemicals. Over the last five years, we have        year and operating at over 88 percent of our new
spent approximately $7 million dollars in research and        capacity in the fourth quarter. Customer accep-
development activities. We are constructing a state-          tance has exceeded our initial expectations.
of-the-art laboratory facility at the Houston operating
                                                            • While volumes increased seven percent year over
plant that will house our research and development
                                                              year, the Company improved gross profit by over
as well as quality control laboratories, and will be
                                                              33 percent year over year through a series of
completed by mid-2011.
                                                              management-led initiatives to increase selling
TPC’s operations have a positive impact on the well           prices, initiate additional fees for services
being of those who live and work in the communities           provided in servicing our customer base, and
where we operate. Company wages for operators and             through better asset utilization.
craft workers are more than three times the Texas
                                                            • In May 2010, the Company’s common stock began
minimum wage. In addition, for FY 2010, approximately
                                                              trading on The NASDAQ Capital Market under the
70 percent of our spending goes to suppliers, vendors,
                                                              symbol “TPCG.”
contractors, and consultants in Texas and more than
three-fourths of that amount goes to businesses within      • In January 2010, the Company changed its name
the greater Houston and Beaumont-Port Arthur areas,           from Texas Petrochemicals Inc. to TPC Group Inc.
where our operations are located (EC1, EC6).                  and launched a new website, www.tpcgrp.com,
                                                              with an enhanced Investor site.
Additional information including annual reports, earnings
releases, and other financial documents and news            • In January 2010, the Company began filing
releases can be found on the Company’s website, on the        customary reports under the Securities and
Investors tab, at http://investors.tpcgrp.com/index.cfm.      Exchange Act of 1934, as amended, with its
                                                              Exchange Act registration having become effective.




                                                                                                             TPC Group 2010 Sustainability Report • 7
                                       Protecting People
                                       and the Environment
                                                                                                                             (5)




                                       In accordance with the Company’s Environmental, Health, Safety,
                                       and Security (EHSS) policy, TPC Group’s vision is to protect
                                       people and the environment; therefore, we conduct all of our
                                       operations and manage all of our products in a safe, reliable,
                                       environmentally responsible, and efficient manner. We strive
                                       to achieve excellence in environmental, health, process safety,
                                       safety, and security (EHSS) performance.

                                       The Company has established safety programs to              In 2007, TPC underwent a process safety management
                                       address both process safety and individual employee         (PSM) audit by the regional office of the Occupational
                                       occupational safety including:                              Safety and Health Administration (OSHA). The audit
                                                                                                   was performed under their Regional Emphasis Program
                                       • A robust incident investigation system with more
                                                                                                   (REP), a predecessor to OSHA’s National Emphasis
                                         than 100 employees trained in the Company root
                                                                                                   Program (NEP) for evaluating PSM programs at U.S.
                                         cause analyses process and quarterly Operations
                                                                                                   refineries and their later NEP for U.S. chemical plants.
                                         Company-wide review sessions of significant
                                                                                                   As a result of the audit, TPC and OSHA entered into a
                                         investigation findings and corrective actions
                                                                                                   settlement agreement to address audit findings. As of
                                       • A corrective action tracking system to ensure             June 2010, TPC has completed all of its obligations
                                         timely and complete closure of corrective actions         under the settlement agreement. TPC continues work to
5 Emissions and waste generation         resulting from incident investigations, audits,           enhance its process safety programs through ongoing
  data in this section of the report
  represents TPC’s two largest
                                         process hazards analyses, and other appropriate           efforts to evaluate Recognized and Generally Accepted
  facilities, its Houston and Port       EHSS reviews                                              Good Engineering Practices (RAGAGEP) and upgrade
  Neches plants. Emissions data
  for the Baytown site, a much
                                                                                                   its programs accordingly.
                                       • Behavioral-based safety observations, regular
  smaller facility, is not material
  compared to the larger sites.          safety meetings, and employee safety teams for            The Company uses third-party auditors for its three-
  Compliance and incident data           each operating site                                       year compliance audits under the OSHA PSM program.
  represent Houston, Port Neches,
  and Baytown sites.                                                                               Third-party audits for all Company operations covered
                                       As a member of the American Chemistry Council
                                                                                                   under the PSM program were completed during the
6 More information about ACC’s         (ACC), TPC follows definitions and public reporting
  public reporting criteria for                                                                    year 2009. The audits serve as a tool to facilitate
  process safety incidents can
                                       requirements under ACC’s Responsible Care® program
                                                                                                   continuous improvement in Company process safety
  be found at http://reporting.        for process safety incidents as well as all other aspects
  responsiblecare-us.com/                                                                          programs. Upon completing resolution of audit findings,
  reports/psi_ia_rpt.aspx.
                                       of the program (4.9). Based on ACC’s definitions,6
                                                                                                   TPC validates the completion.
                                       TPC has experienced no process safety incidents in
                                       any of the years 2007 through 2009.                         TPC’s employees sustained seven recordable injuries
                                                                                                   and illnesses in 2009, resulting in an employee recordable
                                                                                                   incident rate of 1.32 per 200,000 hours worked. Two
                                                                                                   of these injuries and illnesses involved days away from
                                                                                                   work and two required days of restricted work activity,




 8 • TPC Group 2010 Sustainability Report
Safety is a cornerstone of our
organization. Each employee is
accountable to take responsibility
for eliminating unsafe acts and
conditions, as we strive for our
ultimate goal of zero accidents
and zero process safety events.                                                                       Occupational Safety Performance (LA7)


                                                                                                      • Total Case Incident Rateand Transferred Rate
                                                                                                      • Days Away, Restricted,
                                                                                                      2




                                                                                   Rate per 200,000
                                                                                    Hours Worked
                                                                                                      1


                                                                                                      0
                                                                                                             2006         2007          2008           2009




resulting in a days away, restricted, or transferred        The Company believes that a healthy work force is
(DART) rate of 0.38 per 200,000 hours worked. During        a productive work force. TPC provides a number of
the same period, the onsite contractor recordable           resources to assist employees and their families in dealing
incident rate was 0.47. There were no work-related          with life’s challenges, illnesses, and disease (LA8):
fatalities to Company employees or onsite contractors
                                                            • An employee assistance program to help
during the reporting period (LA7).
                                                              employees and members of their families deal
TPC considers any injury to employees or contractors          with stress and other issues that prevent them
to be unacceptable. Therefore, we have active programs        from living life to its fullest
in place to strengthen our policies and procedures and
                                                            • Annual influenza vaccination shots made available
adherence to them, and to engage employees at all levels
                                                              to all employees
in the goal of ensuring a safe and healthy workplace
where each employee goes home every day as safely           • Hepatitis vaccination shots made available to
as he or she came to work that day. We have recently          members of plant Emergency Response Teams
expanded behavioral safety observations to all sites and
                                                            • Employee training on substance and alcohol misuse
utilized an employee team to develop newly upgraded
life critical safety procedures, which will be consistent   • “Lunch and Learn” meetings on allergies, sleep
across all TPC operations. We are currently focusing          problems, influenza, stress management, work
on implementing the new procedures.                           life balance, brain health, back pain, diabetes,
                                                              prostate and breast cancer awareness, heart
All employees covered by a collective bargaining
                                                              health and high blood pressure, nutrition, and
agreement are represented in formal joint management-
                                                              other topics
worker health and safety committees for the purpose
of monitoring and advising on plant safety activities,
programs, and performance. Sites without formal labor
agreements also have management-worker health and
safety committees, representing all hourly employees.
The committees also address topics relating to
contractor worker safety (LA6).




                                                                                                                                   TPC Group 2010 Sustainability Report • 9
TPC conducts our operations
in a responsible and ethical                                                                                                                            Greenhouse Gas (GHG)

manner that is protective of
                                                                                                                                                        Emissions (EN16)

                                                                                                                                                        • Direct GHG Emissions
the environment. We meet                                                                                                                                • Indirect GHG Emissions
                                                                                                                                                        1,000

regulatory requirements
and strive to minimize our
                                                                                                                                                         800




                                                                                                                        Thousand Metric Tons per Year
environmental footprint.                                                                                                                                 600



                                                                                                                                                         400



                                                                                                                                                         200



                                                                                                                                                            0
                                                                                                                                                                2006   2007   2008   2009




                                    TPC has ongoing processes to identify, recognize and         TPC has a robust energy management program, as
                                    control potential health hazards in the workplace. This      described in the “Spotlight on Energy Management”
                                    includes a risk-based exposure assessment process            section of this report. Strong energy management
                                    which ensures compliance with regulations and the            programs result in best practices to minimize our
                                    effectiveness of controls. Hazard communication is a         greenhouse gas emissions footprint. In addition to the
                                    key process which identifies safety and health hazards       impact of our ongoing energy management practices,
                                    so that measures can be taken to reduce the risk             shutdown of TPC’s isobutylene manufacturing units
                                    from exposure. An integral component of hazard               at its Houston plant and a shift from operating older,
                                    communication is training. Employees are trained             less efficient boilers to modern efficient boilers
                                    on asbestos, blood borne pathogens, hearing                  (including a shutdown of an oil-fired boiler at TPC’s
                                    conservation, exposure to certain hazardous chemicals        Port Neches plant) resulted in a 33 percent reduction
                                    such as 1,3-butadiene, how to use Material Safety Data       of greenhouse gas emissions, comparing the years
                                    Sheets (MSDS), personal protective equipment, safe           2009 to 2006 (EN16, EN18).7
                                    work practices, heat stress, and other safety and
                                                                                                 Direct greenhouse gas emissions include those
                                    health-related topics.
                                                                                                 from fuel burned in our operations, both natural gas
                                    With respect to plant security, TPC’s operating facilities   and plant offgas, for plant boilers, heaters, and onsite
                                    and terminal fall under the Marine Transportation            electricity generation. Indirect greenhouse gas
                                    Security Act (MTSA – three facilities) and Chemical          emissions include those from purchased electricity
7 Greenhouse gas emissions
  for 2006 through 2009 were        Facility Anti-Terrorism Standard (CFATS – one facility).     and purchased steam.
  calculated in accordance with     TPC has implemented the Transportation Worker
  ACC’s Responsible Care metrics                                                                 Nitrogen oxide (NOx) emissions from TPC’s operating
  methodology. Starting in early    Identification Card (TWIC) system of MTSA for all of
                                                                                                 plants totaled 515,000 kilograms in the year 2009,
  2011, TPC will begin reporting    its operations and requires valid TWIC credentials of
  direct greenhouse gas emissions                                                                a 68 percent reduction from 2006 emissions (EN20).
  in accordance with the Environ-   all of its employees including employees working at
                                                                                                 Plant boilers use various types of NOx emissions control
  mental Protection Agency (EPA)    the Company’s headquarters. Visitors to secure areas
  new mandatory reporting rule                                                                   technology appropriate to the time each unit was built
  for greenhouse gases.             of our operating plants must either have a valid TWIC
                                                                                                 or permitted, including low NOx burner technology and
                                    credential or must be escorted in accordance with the
                                                                                                 Selective Catalytic Reduction (SCR). Similar to reductions
                                    requirements of MTSA. In addition, TPC adheres to the
                                                                                                 in greenhouse gas emissions, NOx emissions reductions
                                    security program requirements of ACC’s Responsible
                                                                                                 occurred due to shutdown of older boiler equipment
                                    Care® program.
                                                                                                 including oil-fired equipment and isobutylene manufac-
                                                                                                 turing equipment.


10 • TPC Group 2010 Sustainability Report
                              Nitrogen Oxide (NOx)                                     Sulfur Dioxide (SOx)                                                 Toxic Release Inventory (TRI)
                              Emissions (EN20)                                         Emissions (EN20)                                                     Emissions to Air (EN20)

                                                                                                                                                            • 1,3-ButadieneChemicals
                                                                                                                                                            • All Other TRI
                              2,000                                                    10,000                                                                125



                                                                                        8,000                                                                100
Thousand Kilograms per Year




                                                                                                                              Thousand Kilograms per Year
                              1,500
                                                                  Kilograms per Year

                                                                                        6,000                                                                 75

                              1,000

                                                                                        4,000                                                                 50


                               500
                                                                                        2,000                                                                 25



                                 0                                                         0                                                                   0
                                      2006   2007   2008   2009                                 2006   2007   2008   2009                                          2006   2007   2008   2009




Sulfur dioxide (SOx) emissions were relatively low,                                                    TPC’s Port Neches plant also operates a flare gas
averaging around 4,000 kilograms in recent years                                                       recovery system and a gas chromatograph style
(EN20). After reducing operation of an oil-fired boiler and                                            fenceline monitoring system (EN20, SO1).
its eventual permanent shutdown, the only remaining
                                                                                                       While TPC’s 2009 emissions of 1,3-butadiene from its
source of sulfur emissions is the odorant added to
                                                                                                       Port Neches and Houston plants rank fifth and seventh
natural gas fuel by the suppliers for safety purposes.
                                                                                                       respectively for 1,3-butadiene emissions to air reported
TPC’s operating philosophy requires minimizing emissions                                               in Texas, emissions from the top four facilities add up to
of hazardous air pollutants through the use of advanced                                                43 percent of the total Texas emissions of the chemical,
technology and operating principles. Despite acquiring                                                 and TPC’s emissions from our two facilities combined
a second large manufacturing facility in mid-2006,                                                     constitute less than 10 percent of the Texas total. As




                                                                                                                                                                                                       38%
TPC’s Toxic Release Inventory (TRI) emissions to air                                                   described in the inset, the Company continues aggressive
under the U.S. Environmental Protection Agency (EPA)                                                   efforts towards reducing these emissions (EN20).
TRI release reporting requirements dropped steadily
                                                                                                       TPC’s TRI emissions to land and water in 2008 and
over the past several years, with 2009 emissions at
                                                                                                       2009 were not significant, at two and one percent
63,000 kilograms, a 38 percent reduction compared
                                                                                                       of the total TRI emissions, respectively.
to 2006 emissions (EN20).                                                                                                                                                                                Reduction from 2006
                                                                                                       In 2009, TPC had a total of 16 reportable releases, of                                            TRI Emissions (EN20)
In 2009, almost two-thirds of TRI emissions to air
                                                                                                       which 15 were to air. Compared to the year 2006, this
were from 1,3-butadiene, a chemical that is a primary
                                                                                                       was a reduction of 47 percent in total releases reported
product for the Company and which is used by many
                                                                                                       and a reduction of 32 percent in releases to air reported
of our customers to make rubber for tires, elastomers,
                                                                                                       (EN23). TPC’s policy requires that a formal incident
and nylon. TPC implemented a number of projects and
                                                                                                       investigation, root cause analysis, and corrective
programs to reduce its emissions of 1,3-butadiene, and
                                                                                                       actions be completed for each reportable event. This
has successfully reduced them by 37 percent since
                                                                                                       policy has been an important part of the Company’s
2006. Compared to the baseline year of 2004, just
                                                                                                       release reduction effort.
prior to a major program to reduce 1,3-butadiene
emissions, the Houston plant reduced total 1,3-butadiene
emissions by 76 percent. See section titled “Houston
Plant Focus: Reducing 1,3-Butadiene Emissions.”




                                                                                                                                                                                        TPC Group 2010 Sustainability Report • 11
                                            Other Projects and Activities That Supported the Reduction in Reportable Events


                                            • Systematic elimination of underground piping at the Port Neches plant
                                            • Heat exchanger bundle replacement at the Houston plant
                                            • Ongoing facility renewal programs at the Houston and Port Neches plants
                                            • Focus on process safety implementation and RAGAGEP
                                            • Stronger culture of accountability


8 Reportable Distribution                   TPC had two reportable distribution incidents8 (shown           During 2009, TPC’s facilities generated approximately
  Incidents: Incidents involving
  hazardous material or                     as “Distribution” in the Reportable Releases graph) in          2,200,000 kilograms of waste 9 of which about
  hazardous waste reported                  the year 2008 and one in 2009 (EN29), each involving            three-fourths was hazardous waste. TPC regularly
  by carriers to the Department
  of Transportation (DOT) on                rail car fittings and valves. None of these incidents had       assesses potential opportunities to minimize waste
  Form 5800.1, as required                  an impact on the environment, and TPC has implemented           production and to reuse or recycle materials wherever
  by DOT in 49 CFR 171.16.
                                            corrective actions for these incidents. Similarly to in-plant   appropriate to the type of material and in accordance
                                            incidents, the Company policy requires performing an            with applicable regulations. For those materials that
9 Construction debris and
  plant/office refuse were
                                            incident investigation and root cause analysis with             cannot be legitimately recycled or reused, all liquid
  not considered in weight of               corrective actions for each offsite distribution incident.      hazardous wastes were disposed by incineration and
  waste generated due to their
  relatively low potential envi-
                                                                                                            all solid non-hazardous wastes were landfilled. TPC
                                            During each of the years 2008 and 2009, TPC’s
  ronmental impact. Weights                                                                                 does not use deep-well injection for any of its wastes
  include all wastes classified             operating facilities used an average of 7.9 million
  as Class I Hazardous and
                                                                                                            nor does it export any of its wastes outside the United
                                            cubic meters of water, a combination of surface
  Class I Non-Hazardous                                                                                     States (EN22 and EN24).
  under Texas environmental                 water and municipal water (EN8).
  regulations.                                                                                              In 2009, TPC’s operating facilities had 63 exceedances
                                            Reportable Releases (EN23 and EN29)
                                                                                                            of numerical permit limits, considering air and water
                                                                                                            permits, an improvement of 51 percent from 2007
                                                                                                            performance (EN28).
                                            • Distribution        • Air
                                            • Water               • Land                                    The reduction includes elimination of water permit
                                            30                                                              exceedances at our Baytown plant. We identified the
                                                                                                            presence of alcohols in plant feedstock from one raw
                                            20                                                              materials source. Since alcohols were not removed
                                   Number




                                                                                                            by the plant waste water treatment unit, they carried
                                            10
                                                                                                            through in the effluent and caused a variety of effluent
                                                                                                            permit exceedances. Upon identification, we eliminated
                                             0
                                                       2006       2007         2008         2009            feedstock purchases from that source and thereby
                                                                                                            resolved the issue.




12 • TPC Group 2010 Sustainability Report
                     Waste Generation (EN22)                                                       Notices of Violation or Enforcement, Orders,
                                                                                                   and Settlement Agreements (EN28)
                     • Hazardous             • Non-hazardous
                                                                                                   • Houston          • Port Neches   • Baytown
                       3,000                                                                        40
Thousand Kilograms




                                                                                                    30
                       2,000
     per Year




                                                                           Number
                                                                                                    20
                       1,000
                                                                                                    10

                           0                                                                         0
                                   2007          2008          2009                                            2007           2008      2009



                     Permit Exceedances (EN28)                                                     Fines and Penalties Assessed (EN28)


                     • Houston          • Port Neches     • Baytown                                • Houston          • Port Neches   • Baytown

                     150                                                                           $300




                                                                           US Dollars, Thousands
                     100                                                                           $200
 Number




                      50                                                                           $100


                       0                                                                             $0
                                 2007           2008           2009                                            2007           2008      2009




The Houston plant had NOx air permit limit exceedances                The Company continues its efforts to drive the number
at three of its boilers, accounting for approximately                 of enforcement-related communications and the
80 percent of all Company permit exceedances in                       amount of penalties and fines to the ultimate goal
2009. We made repairs on an older boiler and then                     of zero. To accomplish this, the Company continues
subsequently retired it permanently and upgraded                      progress towards fulfilling the Houston Corrective
burners at the two newer boilers, resulting in the                    Action Order and continues focus on root cause
last four months of 2009 having zero NOx air permit                   analyses for incidents, and couples these activities
                                                                                                                                                       10 Due to a system of deferred
limit exceedances.                                                    with strong emphasis on process safety implementation                               penalties provided by the
                                                                      to reduce the potential for releases to occur.                                      Texas Commission on
TPC tracks the number of enforcement-related commu-                                                                                                       Environmental Quality,
                                                                                                                                                          the amount of fines and
nications from government agencies including notices                  Additional EHSS actions planned for FY 2010.5 and
                                                                                                                                                          penalties assessed may
of violation or enforcement, citations, agreed orders,                FY 2011 and not mentioned above include:                                            not equal the amount of
                                                                                                                                                          fines and penalties paid.
and settlement agreements for its operating plants.
                                                                      • Obtaining Responsible Care® certification for the
In 2009, the Company received 18, a 40 percent
                                                                        headquarters and one facility (equivalent to the
reduction from 2007 (EN28).
                                                                        facility sample required by ACC) in FY 2010.5
Similarly, TPC tracks the amount of money assessed
                                                                      • Auditing remaining facilities for Responsible Care®
by government agencies for fines and penalties.
                                                                        certification during FY 2011
In 2009, the Company was assessed $110,646, a
52 percent reduction from the amount assessed                         • Evaluate the newly issued American Petroleum
in 2007 (EN28).10                                                       Institute (API) Recommended Practices (RP) for
                                                                        fatigue and process safety metrics and implement
These reductions in enforcement-related communica-
                                                                        through a staged plan
tions from government agencies and in fines and
penalties assessed reflect the Company’s progress                     • Begin federally assisted construction projects
in reducing the number of reportable releases at its                    to enhance plant security infrastructure
Houston and Port Neches facilities, eliminating the
source of effluent water permit exceedances at the
Baytown site, fulfilling the terms of the OSHA process
safety settlement agreement, and implementing the
Corrective Action Order for the Houston plant as
described on the following pages.



                                                                                                                                               TPC Group 2010 Sustainability Report • 13
                                    Houston Plant Focus:
                                    Reducing 1,3-Butadiene
                                    Emissions
                                    In mid-2005, TPC’s Houston plant entered into
                                    a Voluntary Emissions Reduction Agreement
                                    (VERA) with the State of Texas and another
                                    similar agreement with the City of Houston (EN20).
                                    These agreements called for several actions to
                                    reduce emissions of 1,3-butadiene including (SO1):




Photos:                             • Installation of a flare gas recovery system,       • Reducing the monitoring leak definition to
Fenceline Monitoring Equipment
at the Houston Plant using FTIR       thus eliminating continuous flaring of emissions     250 parts per million for the site fugitive
(Fourier-Transform Infrared)          and reducing flare emissions of 1,3-butadiene        emission monitoring Leak Detection and
Technology. Housing holds infra-
red beam source. Beam bounces         by 90 percent from 50,000 pounds per year or         Repair (LDAR) program
off of mirrors at 400, 200, 100,      more (2004 baseline year and prior years) to a
and 50 meter locations from the                                                          • Installation on monitors for emissions at
source, back to the FTIR device       limit of 5,702 pounds per year
                                                                                           cooling towers capable of indicating upstream
in the housing.
                                    • Installation of a fenceline monitoring system        heat exchanger leaks
                                      on the plant north and south fencelines, using
                                                                                         • Use of handheld infrared camera technology
                                      Fourier Transform Infrared (FTIR) technology,
                                                                                           to locate fugitive emissions
                                      to monitor 1,3-butadiene at the fencelines

                                    • Use of “DryLok” technology for rail car loading
                                      hoses to eliminate emissions associated with
                                      hose losses during hose disconnection




14 • TPC Group 2010 Sustainability Report
Handheld Infrared Camera                                                            Houston Plant: 1,3-Butadiene Emissions (EN20)
The handheld infrared camera makes
normally invisible emissions visible
through the camera lens, thus providing
a useful tool to locate undesired                                                   100
emissions so they can be addressed.




                                                               Thousand Kilograms
                                                                                     75


                                                                                     50


                                                                                     25


                                                                                      0
                                                                                           2004   2005    2006   2007    2008   2009




TPC has completed all of the projects required by the          In 2008, the Company approached the State of Texas
VERA. The flare gas recovery system was instrumental           to develop an agreement to manage these unintended
in providing the largest portion of the emission reductions.   consequences of the VERA in a more predictable
The fenceline monitoring system was instrumental in            manner. As a result, in May 2009, TPC and Texas
driving a culture change with ownership of performance         entered into the first ever “Corrective Action Order,”
at the plant front line operations level. Whenever the         calling for continued operation of the fenceline monitoring
fenceline system signals an alert due to an incrementally      system, spending $20 million over a five-year period
higher concentration of 1,3-butadiene at the fenceline,        for “incremental projects” designed to further reduce
operating personnel immediately embark on a full out           emissions, and stipulated penalties for emissions events.
search. Since 2007, operations management set an               This Order provided TPC with the essential element
expectation that opening up even the largest process           of predictability and a clear strategy to continue along
equipment for maintenance will not trigger a fenceline         its path of reducing emissions including emissions
alert. Operations personnel implemented significant            of 1,3-butadiene.
changes in maintenance cleanup procedures, and




                                                                                                                                                  76%
                                                               TPC is well on its way towards fulfilling its commitment
have demonstrated repeated success at meeting the
                                                               for incremental projects and has initiated or installed
new expectation.
                                                               projects including:
The overall results of the monitors receive high level
                                                               • Upgrading pump seals to double seals
attention within the Company. The Board of Directors
EHSS (Environmental, Health, Safety, and Security)             • Upgrading instrumentation and controls to                                       Houston Plant Reduced
Committee reviews results on a quarterly basis and               reduce the likelihood of events leading to flaring                              1,3-Butadiene Emissions
                                                                                                                                                       since 2004
the Company Chief Executive Officer (CEO) receives
                                                               • Upgrading metallurgy in process equipment
a weekly summary. The attention and leadership from
the very top drives the continued importance of the            The Company policy requiring incident investigations
system. As a result, the average fenceline concentration       and root cause analyses for reportable releases has
of 1,3-butadiene has been steadily dropping since              been instrumental in identifying projects that provide
TPC installed the monitoring system in 2006 (SO1).             the greatest impact on reducing reportable releases.
                                                               The early impact of these projects has been fewer
Typically, TPC’s Houston plant has accounted for the
                                                               flaring events and the lowest flare emissions the facility
Company’s largest percentage of the reportable air
                                                               has ever seen as well as further reduced fenceline
releases including 53 percent in 2009 (EN23).
                                                               concentrations of 1,3-butadiene.
Experience operating the fenceline monitoring system
                                                               As a result of all of these programs and projects, TPC’s
led the Company to realize that it resulted in identifying
                                                               Houston plant has reduced its emissions of 1,3-butadiene
an increased number of reportable emissions events
                                                               by 76 percent from the baseline year of 2004.
due to the extreme sensitivity of the system and its
ability to see any increase in emissions along the entire
north and south fencelines, coupled with the low
reportable quantity, 10 pounds for 1,3-butadiene,
the chemical compound that the fenceline system
looks for (SO1).




                                                                                                                                    TPC Group 2010 Sustainability Report • 15
Environmental, Health,
Safety, and Security
(EHS&S) Policy
TPC Group’s vision is to protect people and the environment;
therefore, we conduct all of our operations and manage all of
our products in a safe, reliable, environmentally responsible, and
efficient manner. We strive to achieve excellence in environmental,
health, process safety, safety, and security performance.

To accomplish this, it is TPC Group’s policy to:
• Assure conformance to the letter and spirit of all applicable    • Seek sustainable operations through energy and resource
  EHS&S regulations and legislation, regardless of the degree of     conservation and by reducing wastes and emissions
  enforcement from regulatory and enforcing government agencies
                                                                   • Manage change in a manner consistent with this policy
• Go beyond compliance where, in the opinion of management,
                                                                   • Participate responsibly and ethically in the regulatory and
  it supports TPC Group’s objectives
                                                                     legislative advocacy process where, in the opinion of
• Use risk assessment, risk prioritization, and risk management      management, it supports TPC Group’s objectives
  principles to make decisions and manage our internal resources
                                                                   • Develop partnerships with our stakeholders that are based
• Seek and achieve appropriate management systems third-party        on open dialogue, credibility, and accountability for our actions
  certifications and use the principles and requirements of
                                                                   • Report our progress to our stakeholders and to the public
  management systems to guide all aspects of our operations
                                                                     at large
  and product management
                                                                   • Be transparent in our actions and communications
• Apply systematic approaches and drive continuous improvement
  in our programs, systems, implementation, and performance        • Provide training and education to employees to ensure
  through management review, metrics, and goals                      understanding of this policy, applicable requirements,
                                                                     and their individual responsibilities




EHS&S is integral to all of our business activities. This policy applies to all aspects of our business including
planning, research, development, design, construction, operation, maintenance, marketing, commercial
transactions, transportation, distribution, and delivery.

Leadership is a key factor for success. Within TPC Group, our leaders are accountable for implementing this
policy. All employees are responsible to know and understand the applicable environmental, health, safety,
and security requirements for their jobs, to follow the requirements, to encourage fellow employees to do
the same, and to raise any concerns to management or a member of the EHS&S or legal departments.

(4.8)

16 • TPC Group 2010 Sustainability Report
Spotlight on Energy
Management                                                                                                             We seek sustainable
                   Energy Consumption – FY 2009 and FY 2010                                                            operations through
                   • Direct Energy Consumed (Natural Gas plus Process Gas)                                             energy conservation.
                   • Net Energyand Sales after Indirect Energy (Steam and Electricity)
                                Consumed
                     Purchases


                   4,000
Kilojoules/Pound




                   3,000
   Energy Use

   Production




                   2,000

                   1,000

                        0
                             FY09     FY09     FY09      FY09     FY10      FY10     FY10   FY10
                              Q1       Q2       Q3        Q4       Q1        Q2       Q3     Q4



Energy costs add up to the second largest component                             Engineering and Technology provides functional
of the Cost of Goods Sold (COGS) for TPC. Therefore,                            oversight through a full time Energy Manager and
TPC maintains a robust energy management system                                 process engineering support. TPC exports electricity
at all of its operating plants, equivalent to that of the                       from its Houston plant to the grid, and therefore relies
strongest energy leaders in the industry, through the                           on outside support from Fellon McCord to manage
use of well-maintained automated systems.                                       broker sales and the interface between TPC and the
                                                                                Electric Reliability Council of Texas (ERCOT) who
Our energy management system includes several key
                                                                                operates the grid and manages the Texas deregulated
components – natural gas pricing, product plan and
                                                                                market (EN18).
mix, and efficiency – and provides more controllable
and predictable energy costs through the use of                                 Key results of TPC’s energy management program
budgets, targets, optimized inventory use, a business                           include:
team approach, and regular communications and
                                                                                • Monthly energy balance closure to within
support throughout our organization at all levels.
                                                                                  two percent
The system is integrated into our maintenance,
capital, and procurement programs.                                              • Ability to absorb varying quality feedstock
                                                                                  without increase in energy use
• At the board of directors’ level, the system
  provides the foundation for annual budgets and                                Looking ahead, TPC targets a 10 percent energy use
  the basis for targets and tracking performance                                reduction (normalized for production rates) over
  against the budget.                                                           five years.

• At the business team level, the system is                                     The graph above shows TPC’s direct and net (direct
  an important component of business results                                    plus indirect) energy use. In accordance with GRI’s
  and is considered in capital project planning.                                Indicator Protocol for Environment version 3.0, TPC
                                                                                defines direct energy use as natural gas and process off
• At the operations level, the system includes
                                                                                gas burned for energy recovery and indirect energy use
  an energy dashboard that provides critical
                                                                                as purchased steam and purchased electricity. The net
  information for discussion at daily meetings.
                                                                                energy use is less than the direct energy use because
                                                                                TPC is a net exporter of indirect energy through sales
                                                                                of electricity to the grid and steam to other customers
                                                                                (EN3 and EN4).



                                                                                                                                      TPC Group 2010 Sustainability Report • 17
Tire Inner Tubes from              Gasoline from                 Lube and Fuel Additives      Personal Care Products        Coatings and Films from
Isobutylene Derivatives            Fuel Products                 from Polyisobutylene         from Polyisobutylene          1,3-Butadiene Products




                                   Product Responsibility
                                   TPC’s policy requires that we manage all of
                                   our products in a safe, reliable, environmentally
                                   responsible, and efficient manner.

                                    TPC manufactures nearly 50 product chemicals, and           TPC is in the process of developing product stewardship
                                    provides Material Safety Data Sheets (MSDS or SDS)          summary documents, in accordance with the require-
                                    for each of its products. Each of these documents           ments of ACC’s Responsible Care ® program, and
                                    contains information regarding the chemical content         has posted one such document on its public website,
                                    of the product, potential environmental impact of the       the summary for 1,3-butadiene. TPC has identified
                                    product, instructions for safe use of the material, and     16 products for the first grouping of product stewardship
                                    proper disposal of the product (PR3). TPC is in the         summaries, based on potential risk associated with our
                                    midst of reviewing and updating product safety data         products, and expects to complete summaries for this
                                    sheets to ensure full conformity to regulatory require-     first product grouping and make them publicly available
                                    ments in all of the countries to which TPC ships each       during the next reporting period (PR3).
                                    product, including local language requirements. This
                                                                                                In addition, during FY 2010.5, TPC is conducting its
                                    project is expected to be completed prior to the end
                                                                                                first formal customer satisfaction survey (4.16). Our
                                    of the next sustainability reporting period.
                                                                                                customers’ feedback will provide valuable insights in
                                    During FY 2009 and FY 2010, TPC experienced no              what specific targeted measures TPC can take in support
                                    incidents of non-compliance with regulations or             of our continuous process improvement initiatives.
                                    voluntary codes concerning health and safety impacts        Nonetheless, TPC maintains close relationships based
                                    of products and services (PR2) or concerning product        on frequent dialogue with representatives of its customer
                                    and service information and labeling (PR4), and paid        companies, and has a formal system of registering and
                                    no fines for non-compliance with laws and regulations       resolving customer complaints (PR5, 4.15).
  Bags from                         concerning the provision and use of products and
  Butene-1                          services (PR9). ACC’s Responsible Care® program is
                                    the primary voluntary code to which TPC subscribes
                                    and adheres (4.9).




18 • TPC Group 2010 Sustainability Report
Lubes and Engine Oil
from Polyisobutylene
   and Propylene
     Derivatives




                         Tires from
                       1,3-Butadiene
                          Products




                                   Plastics
                               from Isobutylene
                                  Derivatives




                                                          Cleaners from
                                                            Propylene
                                                           Derivatives


                                                  TPC Group 2010 Sustainability Report • 19
                                   Making a Difference
                                    TPC engages in a number of activities to measure
                                    its impact on society and the communities in
                                    which we operate. We believe that responsible
                                    and ethical actions are critical to sustainable
                                    operations. We are committed to ensuring
                                    the highest levels of corporate responsibility,
                                    environmental stewardship, and
                                    safety leadership.


                                   TPC aims to develop partnerships with our stakeholders     TPC has a significant community investment program
                                   that are based on open dialogue, credibility, and          which has increased year over year for each of the
                                   accountability for our actions. We regularly report our    past several years. FY 2010 community investment
                                   progress to our stakeholders and to the public at large,   totaled more than $210,000, and was an increase
                                   in a manner that is transparent in both our actions        over our FY 2007 community investment of almost
                                   and our communications. One significant goal in            300 percent (EC1).
                                   communicating transparently was to publish the
                                                                                              For FY 2010, education-related issues received the
                                   Company’s first Company Sustainability Report,
                                                                                              largest percentage of our contributions at 37 percent
                                   and make it publicly available (4.15).
                                                                                              of the total, followed by health and humanities issues
                                                                                              at 28 percent and civic and community issues
                                                                                              at 15 percent.



                                                                                              Areas of Community Concentration and
                                                                                              Their FY 2010 Investment Distributions

                                                                                              TPC has a focused community investment strategy that distributes
                                                                                              funds into six concentrated areas:


                                                                                              • Education                         42%

                                                                                              • Civic/Community                    31%

                                                                                              • Public Info/Government Affairs    17%

                                                                                              • Health and Humanities               7%

                                                                                              • Memberships                         1%

                                                                                              • Environment                         1%




20 • TPC Group 2010 Sustainability Report
For more than a half century, the people of TPC Group have donated their time, talent, and resources to make
a difference in the lives of our friends and neighbors. In addition to smaller daily activities in support of the
communities in which we live and work, TPC Group is involved in larger, ongoing annual efforts to support
education, environmental, and civic initiatives, including:


Education                                                    Environment


• TPC Group Mark of Excellence Scholarship                   • Texas Coastal Conservation
  Awards for college bound students
                                                             • Galveston Bay Foundation
• National Academy of Engineering / Project Lead
                                                             In recognition of our efforts, we have received the
  the Way at Chavez High School for high school
                                                             following honors (2.10):
  students focusing on an engineering, mathematics,
  and science curriculum and encouraging these                 • 2009 NPRA Award for outstanding
  students to pursue careers in these disciplines                achievements in safe operations in 2009

• TPC Group Chemical Engineering Scholarship                      – Baytown Operations, Meritorious Safety
  awarded to an incoming freshman planning to                       Performance Award for 0.0 Total Recordable
  pursue a degree in chemical engineering at                        Injury and Illness Rate (TRIR)11
  Texas A&M University
                                                                  – Houston Operations, Gold Award for
• NPRA’s Science Teacher Enhancement Program                        74.3 percent reduction in injury and illness
  (STEP), designed to provide teachers from grades                  rate and Meritorious Safety Performance
                                                                                                                             11 The Total Recordable Injury
  K-8 with the tools and resources they need to                     Award for 0.4 TRIR                                          and Illness Rate, TRIR, is the
  improve and nurture quality education for their                                                                               number of recordable injuries
                                                               • 2008 Corporate Citizen of the Year, East End                   and illnesses sustained
  students in chemistry and physics. Based on an                                                                                by Company employees,
                                                                 Chamber of Commerce
  award-winning curriculum developed at Miami                                                                                   calculated on the basis of
                                                                                                                                200,000 working hours.
  University of Ohio, STEP focuses on hands-on                 • 2007 Pinnacle Award, Union Pacific Railroad
  activities to bring science to life for students.
                                                               • 2006 Texas Technology Showcase —
  Teachers learn how to build on students’ curiosity
                                                                 Showcase Plant
  using toys and everyday objects to encourage
  them to make real-life connections between the               • 2006 Industrial Energy Technology Conference
  classroom and the outside world.                               Energy Award

                                                               • 2005 American Chemistry Council Energy
Health and Wellness
                                                                 Efficiency Award with “Exceptional Merit”
                                                                 Designation
• Julie Rogers “Gift of Life” Program

• Multiple Sclerosis Society                                   • 2005 Texas Chemical Council “Caring for Texas”
                                                                 Recognition Award
• Susan G. Komen Foundation
                                                               • 2005 NPRA Award for Meritorious Safety
Civic                                                            Performance: For outstanding achievements
                                                                 in safe operations in 2005, achieving a total
• United Way                                                     recordable incidence rate of 1.2 or less
• OFA Little League                                            • 2005 NPRA Gold Award: For achieving at least
• Oak Meadows Civic Club                                         a 25 percent reduction in total recordable
                                                                 incidence rate during 2005 as compared with the
• Community Advisory Panels                                      average rate from the three previous years. TPC
• Annual Charity Golf Tournament benefiting local                achieved a 50 percent reduction
  charities chosen by our employees each year                  • 2005 UP Pinnacle Award: For safety excellence
• Marine Toys for Tots Foundation                                in transporting hazardous products

• Family Services Women and Children’s Shelter




                                                                                                                    TPC Group 2010 Sustainability Report • 21
                                                                                                                               42%
                                                                                                                              Community Investment
                                                                                                                                Distributions for
                                                                                                                                   Education




                                   TPC participates actively in monthly Community            In 2010, TPC had a telephone survey conducted of
                                   Advisory Panel (CAPs) meetings in each community          our neighbors in the Allendale neighborhood, near our
                                   where we have a chemical plant (4.16). In 2008, TPC       Houston plant (4.14, 4.16). The following summarizes
                                   received recognition for its community involvement        the main concerns of residents with percentages in
                                   and communication efforts in Houston’s East End.          parentheses indicating the percent of residents
                                   Highlighted for the strong educational partnership the    stating they were a lot or somewhat concerned
                                   Company has with Chavez High School, located near         about the item (4.17):
                                   the Houston plant, this strategic collaboration between
                                                                                             • Air pollution (89 percent)
                                   the school and the Company has helped to engage
                                   students in the Project Lead the Way curriculum which     • Odors (82 percent)
                                   focuses on math, science, and engineering. Through        • Water pollution (74 percent)
                                   our participation and Mark of Excellence Scholarship
                                                                                             • Flaring (72 percent)
                                   Awards, students are encouraged to pursue careers
                                   in these areas. We serve on boards of directors or as     • Noise (58 percent)
                                   a member of business chambers, conduct regular
                                                                                             More than half the residents believe industry must reduce
                                   mailings to fenceline community regarding our plant
                                                                                             emissions and communicate with their neighbors, with
                                   operations and inviting feedback from our neighbors,
                                                                                             increases of 20 and 15 percent of respondents respec-
                                   and conduct periodic surveys of neighborhood residents.
                                                                                             tively agreeing over our previous survey completed in
                                                                                             2006. Regarding TPC Group specifically, approximately
                                                                                             half of respondents believe the Company tells the truth
                                                                                             about its impact on the environment, informs the public
                                                                                             about what it is doing, and does a good job in environ-
                                                                                             mental performance, and 45 percent said the Company
                                                                                             shows respect for our neighbors. Most residents,
                                                                                             81 percent, are interested in receiving information from
                                                                                             local industry, and the preferred method is through
                                                                                             mailings to their homes.




22 • TPC Group 2010 Sustainability Report
Yearly Fiscal Community Investment (EC1)                   Houston Area Telephone Survey Respondents




$250,000                                                   55%
                                                           Believe that local
                                                                                          50%
                                                                                          Believe that local
                                                           industry should                industry hires locally
$200,000
                                                           support local schools          (an 18% increase
                                                                                          from 2006)


                                                           51%
$150,000



$100,000
                                                           Believe that local
                                                           industry contributes
                                                                                          48%
                                                                                          Believe that local
 $50,000                                                   to local charities             industry pays taxes


       0
           FY2007      FY2008     FY2009      FY2010




In the future, we plan to continue our work towards
reducing our environmental footprint including reducing
emissions and reducing flaring events, and also to
provide more information about Company efforts and
results to our neighbors and community leaders.
Based on these survey results, TPC concludes that our      Thus, TPC’s fenceline monitoring systems serve to
efforts to reduce emissions are well-placed in the eyes    ensure the safe handling of 1,3-butadiene with minimal
of the community, but that we have more work to do         impact on the community. As a result of the fenceline
as well as needing to provide more information to the      monitoring systems, flare gas recovery systems, and
community about our emissions reductions and positive      additional projects and activities to reduce 1,3-butadiene
economic impact on the community.                          emissions, the Texas Commission on Environmental
                                                           Quality (TCEQ) was able to remove 1,3-butadiene from
As described elsewhere in this report, TPC operates
                                                           its Air Pollution Watch List for areas located in the
fenceline monitoring systems at both of our larger
                                                           vicinity of TPC’s operations in both Houston and
chemical plants to measure the impact of our opera-
                                                           Port Neches (SO1).
tions at the fenceline and, by extrapolation, nearby
communities. We produce 1,3-butadiene, an essential
ingredient to make synthetic rubber for automobile tires
and hoses. Under EPA’s 1999 Guidelines for Carcinogen
Risk Assessment (U.S. EPA, 1999), 1,3-butadiene is
characterized as carcinogenic to humans by inhalation.




                                                                                                                 TPC Group 2010 Sustainability Report • 23
                                    Engage, Educate,
                                    and Inform
                                    At TPC, we actively participate in applicable
                                    public policy debates. We believe dialogue and
                                    participation with stakeholders is an important
                                    part of sustainable operations over the long-term.


TPC maintains mem-                  Charles W. Shaver, our President and Chief Executive        Under the umbrella of the Company’s Corporate
bership and active                  Officer, holds positions on the boards of both ACC          Communications activities, TPC manages its govern-
participation in several
                                    and NPRA. Luis Batiz, our Senior Vice-President of          mental affairs activities on a year-round basis although
national, statewide,
and local industry                  Operations, holds a position on the Executive Committee     the Texas Legislature meets on the biennium. It is
trade associations,                 and Board of Directors of TCC and Chairs the TCC Air        general practice of the Company to visit legislators one-
and business-oriented               Conservation Committee. He is also the Vice-Chair of        on-one during the legislative session to discuss issues
organizations includ-
                                    Houston Regional Monitoring Corporation. Many other         that are or potentially have an impact on business
ing (4.13):
                                    Company leaders maintain membership and leadership          operations. In addition, we meet on an as-needed basis
• American Chemistry                roles on various committees of the organizations to         with elected officials representing the geographical
  Council (ACC)
                                    which we belong (4.13).                                     locations of our operations and with members of local
• National Petrochemical                                                                        government to discuss issues that impact the Company
  and Refiners                      The Company participates actively in public dialogue-
                                                                                                and industry. The Company’s strong outreach program
  Association (NPRA)                related to environmental regulatory issues primarily
                                                                                                tenders political engagement, as well (4.16). By seeking
• Texas Chemical                    around the development of regulations-related to Federal
                                                                                                opportunities to support projects and activities that
  Council (TCC)                     and State issues regarding ongoing implementation of
                                                                                                are mutually beneficial to both elected officials and the
• East Harris County                provisions of the Federal Clean Air Act. In all matters,
                                                                                                Company, we often partner together to serve the needs
  Manufacturers                     the Company advocates positions consistent with its
                                                                                                of the community. We work cooperatively and collec-
  Association (EHCMA)               EHSS policy, participating responsibly and ethically in
                                                                                                tively within trade associations and groups with similar
• Texas Industry                    the regulatory and legislative advocacy process where,
                                                                                                viewpoints (SO5).
  Project (TIP)                     in the opinion of management, it supports TPC Group’s
• Houston Regional                  objectives. In general, TPC supports regulations that       As needed, we encourage employees to participate in
  Monitoring                        are cost effective towards addressing EHSS issues,          the political process, whether it is simply “getting out
  Corporation (HRM)                 based on sound science. In addition, TPC recognizes         the vote” or creating awareness of hot ballot items
• Greater Houston                   the value in understanding the expectations of regulators   that voters will be able to impact at the polls (SO5).
  Partnership (GHP)                 and in establishing constructive dialogue with the
                                                                                                TPC does not maintain a Political Action Committee
• East End [of City of              applicable agencies. In FY 2009, TPC created a full-time
                                                                                                (PAC). In compliance with applicable laws and
  Houston] Chamber                  position for a Corporate Director – Regulatory Affairs,
                                                                                                regulations, the Company has made no financial
  of Commerce                       dedicated to conducting EHSS regulatory advocacy,
                                                                                                or in-kind contributions to political parties,
• Port Arthur Chamber               to building and maintaining constructive relationships
                                                                                                politicians, and related institutions (SO6).
  of Commerce                       with external regulators, and to stepping up our involve-
• Baytown Chamber                   ment in related trade association committees (SO5).
  of Commerce


24 • TPC Group 2010 Sustainability Report
Building Opportunity,
Building Lives
TPC is committed to providing an equal employment opportunity
(EEO) to all applicants and employees without regard to race,
sex, color, age, national origin, religion, marital status, disability,
veteran status, or any other protected status as defined by
applicable law. The Company makes reasonable accommodations
to the extent required by applicable law.

The Company EEO policy encompasses co-workers,              All reported EEO concerns and potential violations
vendors, clients, customers, contractors, and visitors      of EEO law will be investigated. Once the Company




                                                                                                                              0%
and extends to every relationship between the               is made aware of the situation, an investigation will
Company and its employees, including but not                be conducted in as timely a manner as is reasonably
limited to:                                                 possible. Any employee found to have engaged in
                                                            harassment or discriminatory conduct is subject to
• Recruiting                  • Compensation                disciplinary action up to and including termination.
• Hiring                      • Career Development
                                                                                                                              During FY 2009 and
• Discipline                  • Work Conditions             As a means of ensuring compliance with TPC’s EEO
                                                                                                                              FY 2010, TPC had no
• Job Classification          • Leaves of Absence           policy, the Company provides annual harassment
                                                                                                                              substantiated incidents
• Transfer or Promotion       • Training                    prevention training to all its employees. All new employees
                                                                                                                              of discrimination or
• Termination                 • Social/Recreational         are required to take a classroom-based course within
                                                                                                                              harassment (HR4).
• Layoff/Recall               • Benefits                    six months of employment. Each year thereafter,
                                                            employees must complete a computer-based course.
All employees are expected to abide by the letter, intent
                                                            During FY 2009 and FY 2010, TPC had no substantiated
and spirit of the Equal Employment Opportunity (EEO)
                                                            incidents of discrimination or harassment (HR4).
policy. The Company expects that every employee
should play an important role in maintaining a work         TPC’s operations are wholly within the United States
environment free from harassment and discrimination.        and TPC adheres to the applicable United States laws
                                                            and regulations. Therefore, issues regarding freedom of
Each employee is expected to immediately report
                                                            association and collective bargaining, child labor, forced
harassment or discrimination by an employee or
                                                            and compulsory labor, security personnel training in
any person doing business with the Company to
                                                            aspects of human rights, and rights of indigenous
their immediate supervisor or a Human Resources
                                                            people would not typically be issues of concern
Manager. If an employee is not comfortable report-
                                                            (HR5, HR6, HR7, HR8, HR9).
ing the situation to either of these individuals, they
should file a report with EthicsPoint, the Company’s
independent, third-party ethics hotline. Any supervisor
or manager who receives a complaint must notify
Human Resources immediately.




                                                                                                                    TPC Group 2010 Sustainability Report • 25
                                                                                                  Company Employees (LA1)13


                                                                                                  • Craft Workers                     43%



                                     Reaching
                                                                                                  • Professional & Sales              26%

                                                                                                  • First/Mid-level Supervisors       16%

                                                                                                  • Executive and Senior Management   3%



                                     Our Potential                                                • Technicians
                                                                                                  • Administrative
                                                                                                                                      6%

                                                                                                                                      6%




                                    TPC Group offers career opportunities that span from engineering
                                    and technical specialties to corporate roles such as finance,
                                    marketing, and IT. Beyond that, we also offer internships and
                                    co-op programs that give recent graduates and current students
                                    the opportunity to get hands-on industry experience and a true
                                    feel for the TPC culture. In some cases, participation may lead to
                                    full-time employment. However, in all situations, these experiences
                                    are invaluable to shaping young careers and futures.

                                     TPC’s headquarters and operating facilities are located      In many cases, workers rise to fully qualified wages of
                                     largely within Texas, plus one small terminal in Louisiana   four to five times the minimum wage within two to four
                                     (LA1). At the end of FY 2010, TPC employed a workforce       years of employment (EC5). A total of 21 percent of
                                     of nearly 670 Company employees plus contract                employees were covered under a collective bargaining
                                     supervised workers,12 of which nearly 500, or 75 percent,    agreement, or nearly half of plant operator and craft
                                     were TPC Company employees. TPC employed 100                 employees (LA4).
                                     percent of all Company employees on a full time basis
                                                                                                  TPC makes a generous 401(k) plan available to all full-time
                                     (LA1). The greatest percentage of contract supervised
                                                                                                  Company employees, allowing employees to save
                                     workers was employed for various general and special-
                                                                                                  from one to 25 percent of eligible salary. Employees are
                                     ized maintenance-related functions.
                                                                                                  automatically enrolled in the program after the first 31 days
                                     Total Company turnover for the year was approximately        of Company employment. TPC matches dollar-for-dollar
                                     15 percent (LA2). TPC does not track turnover by age         up to the first five percent of eligible salary for non-repre-
                                     group or gender (LA2).                                       sented employees and seven percent for represented
                                                                                                  employees. TPC also provides a quarterly Discretionary
                                     TPC encourages two-way communication with all of its
12 The term “supervised workers”
                                                                                                  Contribution Plan (DCP) to employee retirement savings
                                     employees through a variety of mechanisms including
   is used in accordance with the                                                                 accounts in an amount equal to three percent of non-
   definition provided in the GRI    monthly safety meetings, quarterly face-to-face com-
   Indicator Protocol Labor
                                                                                                  represented employees’ eligible salary, regardless of the
                                     munications meetings with members of senior leadership
   Practices & Decent Work,                                                                       employee’s ongoing participation in the 401(k) program
   version 3.0, “an individual       including the Chief Executive Officer (CEO) and Senior
   who performs regular work
                                                                                                  (EC3). While TPC management and Board of Directors
                                     Vice-President of Operations, an employee feedback
   on-site for, or on behalf of,                                                                  suspended payment to the Discretionary Contribution
   the reporting organization        link on our intranet homepage, quarterly mailings to
   but is not recognized as an
                                                                                                  Plan for two quarters in FY 2009 during the economic
                                     employees’ homes, frequent articles and announcements
   employee under national law                                                                    downturn, payment was reinstated for all of FY 2010.
   or practice.”                     on the intranet, events to celebrate or recognize perfor-
                                                                                                  The Company had no part-time or temporary employees
                                     mance and accomplishments, joint labor management
13 Except as indicated, numbers                                                                   during the reporting period of FY 2009 and FY 2010 (LA3).
   are as of the end of FY 2010      meetings and negotiations, and regular formal and
   (June 30, 2010).                  informal face-to-face opportunities between management       TPC makes an extensive package of other benefits
                                     or supervision and employees (4.16).                         available to all Company employees. In addition to the
                                                                                                  standard medical and dental insurance programs, the
                                     TPC pays wages that are competitive for the skilled
                                                                                                  Company also offers flexible spending accounts for
                                     workers that typically work within the petrochemical
                                                                                                  medical and dependent care expenses, vision insurance,
                                     industry. Company wages for operators and craft work-
                                                                                                  basic life and accidental death and dismemberment
                                     ers are more than three times the Texas minimum wage.
                                                                                                  insurance (AD&D), occupational AD&D and business

 26 • TPC Group 2010 Sustainability Report
Breakdown of Employees by Indicators of Diversity (LA13)

For the reporting period of the Company’s most recent Equal Employment Opportunity Commission (EEOC) report14 completed during the            14 July 31, 2009 to
reporting period of this report                                                                                                                  August 14, 2009.



20%
Women in the entire
                             13%
                             Black or African
                                                         4%
                                                         Hispanic or Latino
                                                                                     3%
                                                                                     Asian including 12% of
                                                                                                                 >1%
                                                                                                                 Native Hawaiian or Pacific
Company workforce,           American including 9%       including 9% of profes-     professional employees      Islander, American Indian
including 27% of execu-      of executive and senior     sional employees                                        or Alaska native, or two
tives and senior level       level managers                                                                      or more races
managers and 31% of
professional employees




                                          14%
                                          Approximate armed
                                          services veterans, as
                                          of November 30, 2009




travel accident insurance, supplemental life and AD&D,                 In-house training programs included certification
and long-term disability. Many programs such as basic                  training courses for plant operators to perform the
life, occupational AD&D and business travel insurance,                 requirements of their job positions, a wide variety of
long-term disability, and employee assistance are 100                  safety topics, operation of various pieces of equipment
percent paid by the Company.                                           such as forklifts and aerial lifts, individual accountability
                                                                       management, use of various business computer
In addition to a tuition reimbursement program for qualifying
                                                                       systems, and health-related topics.
job-related college courses, the Company offers a wide
range of training programs for its employees. In FY 2010,              TPC has a performance management system that
TPC provided an average of 66 hours of training per                    includes performance planning at the beginning of
employee, an increase of more than 10 percent over                     the fiscal year plus mid-year (interim) and year-end
FY 2009, and in addition, many professional and super-                 performance reviews for salaried non-exempt and
visory employees attended outside courses, seminars,                   exempt employees. During FY 2009 and FY 2010,
and conferences to expand specialized expertise. Plant                 97 percent of targeted employees had year-end perfor-
operators received the most training, and craft workers                mance reviews. The Company is currently considering
ranked second. The following table summarizes training by              expansion of the performance management process to
employee category, comparing FY 2010 to FY 2009 (LA10):                include non-represented hourly employees that would
                                                                       include shift operators, lab technicians, and mainte-
Training by Employee Category,                                         nance crafts. In July, 2010, TPC implemented a robust,
Comparing FY 2010 to FY 2009 (LA10)                                    web-based system that will automate the performance
                          Hours of Training     Percent Training       management process and improve tracking and
Employee                   per Employee         Hours Increase         documentation. The Company has also revamped
Category                      FY 2010         Compared to FY 2009
                                                                       the performance management system such that
Plant Operators                 130                    6%              competencies will be formally evaluated in 2011 (LA12).
Craft Workers                    53                    26%
                                                                       The Company follows the requirements of the Work
Technicians                      48                    7%              Adjustment and Retraining Notification (WARN) Act,
Professionals                    36                    29%             providing 60-days notice to applicable employees, for
First and Mid-level                                                    significant operational changes involving layoffs (LA5).
Managers                         29                    26%
                                                                       TPC is in the process of establishing a robust electronic
Administrative                   26                    13%
                                                                       tool that will enable tracking absenteeism rates in the
Company-wide                     66                    10%             future (LA7).


                                                                                                                                     TPC Group 2010 Sustainability Report • 27
                                                                                                                      100%Employees trained in the
                                                                                                                         Company’s anti-corruption

                                    Corporate                                                                             policies and procedures
                                                                                                                       including our Code of Conduct
                                                                                                                             and whistleblower


                                    Compliance
                                                                                                                                hotline (SO3).




                                    TPC is committed to conducting business ethically and legally
                                    throughout its organization. Its employees are expected to
                                    uphold the highest ethical and business standards no matter
                                    where in the world business takes them, even if maintaining
                                    high ethical standards results in a loss of business.


                                    Since 2007, TPC embarked on and completed a project          The guiding principle is to fully comply with the spirit
                                    to become compliant with the Sarbanes-Oxley (SOx)            and the letter of the law. Beyond that, everyone must
                                    Act of 2002. TPC has a system of policies, procedures,       conduct business in accordance with the highest stan-
                                    and controls designed to mitigate the risk of fraud,         dards of honesty and integrity wherever the Company
                                    including a clear code of conduct – our Business             operates. When the law is unclear, each individual must
                                    Conduct and Ethics Code – acknowledged by all                conduct their business in such a way that everyone
                                    employees, a whistleblower system in place, and a            would be proud to have all the facts disclosed.
                                    clear pattern of management strictly enforcing against
                                                                                                 No matter what job each person has, everyone may face
                                    serious breaches, including termination, when war-
                                                                                                 ethical questions at one time or another – in dealings
                                    ranted. TPC has conducted a fraud risk analyses of the
                                                                                                 with supervisors, peers, and subordinates; with
                                    entire Company, consistent with guidance under
                                                                                                 customers and suppliers; with business partners; and
                                    Statement of Auditing Standard No. 99, Consideration
                                                                                                 with the governments and communities where each
                                    of Fraud in a Financial Statement Audit (SAS 99) and
                                                                                                 employee lives and works. These situations continually
                                    using a risk event classification scheme promulgated by
                                                                                                 test one’s judgment and integrity in the face of changing
                                    the Association of Certified Fraud Examiners (ACFE) (SO2).
                                                                                                 cultural values and increasing competitive pressures.
                                    Controls have been implemented to reduce risks (SO2).
                                                                                                 For fiscal years 2009 and 2010, TPC had no actions in
                                    Since 2007, all employees have been required to complete
                                                                                                 response to incidents of corruption including employee
                                    annual training – both instructor-led and computer-
                                                                                                 discipline or dismissal, no cases where contracts with
                                    based – on business conduct and ethics. As part
                                                                                                 business partners were not renewed, and no concluded
                                    of the training, TPC’s Business Conduct and Ethics
                                                                                                 legal cases regarding corrupt practices brought against
                                    Code as well as its policies on insider trading and
                                                                                                 the Company or its employees (SO4).
                                    whistle-blowing are covered.
                                                                                                 During the reporting period, the Company was not
                                    TPC’s Business Conduct and Ethics Code explains the
                                                                                                 involved in any legal actions-related to anti-competitive
                                    Company’s policies on how employees conduct them-
                                                                                                 behavior, anti-trust, and monopoly practices (SO7)
                                    selves and how they do business around the world.
                                                                                                 and paid no fines and incurred no non-monetary
                                    Whether an employee or member of the board of
                                                                                                 sanctions for non-compliance with associated laws
                                    directors, each individual needs to understand and
                                                                                                 and regulations (SO8).
                                    commit to this Code and the policies it discusses.




28 • TPC Group 2010 Sustainability Report
TPC Group 2010 Sustainability Report • 29
Forward-looking Statements

Certain statements in this report are “forward-looking statements.” These statements
include assumptions, expectations, predictions, intentions or beliefs about future events.
Although TPC Group believes that such statements are based on reasonable assumptions,
no assurance can be given that such statements will prove to have been correct.
A number of factors could cause actual results to vary materially from those expressed
or implied in any forward-looking statements. More information about the risks and
uncertainties relating to TPC Group and the forward-looking statements are found in the
Company’s SEC filings, including its Annual Report on Form 10-K for the fiscal year ended
June 30, 2010, which is available free of charge on the SEC’s web site at http://www.sec.gov.
TPC Group expressly disclaims any obligation to update any forward-looking statements
contained in this report to reflect events or circumstances that may arise after the date
of this report, except as otherwise required by applicable law.




30 • TPC Group 2010 Sustainability Report
                                                              GRI Index (3.12): According to GRI (G3 Core Indicators)

                                                                                                                                          Page Number                                                                                      Page Number
                                                               1.     Vision and strategy                                                                           Aspect: Emissions, Effluents, and Waste
                                                               1.1    Letter from the President                                                         2    EN16   Direct and indirect greenhouse gas emissions                                         10
                                                               1.2    Key sustainability impacts, risks, and opportunities                    2, AR 13-22    EN18   Initiatives to reduce greenhouse gas emissions and reductions achieved           10, 17
                                                              2.      Organizational profile                                                                 EN20   NOx, SOx, and other significant air emissions by weight                    10-11, 14-15
                                                               2.1    Name of the company                                                               4    EN22 Waste by type and disposal method                                                   12-13
                                                               2.2    Major brands, products, and services                                            4-5    EN23   Releases of hazardous substances by number and volume                        11-12*, 15*
                                                               2.3    Business areas and operational structure                                        4-5    EN24   Weight of transported, imported, exported, or treated wasted deemed
                                                               2.4    Location of Company’s headquarters                                                5           hazardous and percent of transported waste shipped internationally                12-13
                                                               2.5    Countries in which the organization’s main operations are located                 5           Aspect: Compliance
                                                               2.6    Nature of ownership                                                     5, PS 16-17    EN28   Monetary value of fines and number of non-monetary sanctions
                                                                                                                                                                    for non-compliance with environmental laws and regulations                        12-13
                                                               2.7    Markets                                                                           4
                                                                                                                                                                    Aspect: Transport
                                                               2.8    Scale of the Company                                                              5
                                                                                                                                                             EN29   Significant environmental impacts of transporting products,
                                                               2.9    Significant changes during the reporting period                                   5
                                                                                                                                                                    goods, materials, and members of workforce                                          12*
                                                               2.10   Awards received in the reporting period                                          21
                                                                                                                                                                    Aspect: Overall
                                                              3.      Reporting parameters
                                                                                                                                                             EN30 Fines/sanctions for non-compliance with environmental regulations                      6*
                                                                      Reporting profile
                                                                                                                                                                    Social Performance
                                                              3.1     Reporting period                                                                  4
                                                                                                                                                                    Working Conditions
                                                              3.2     Date of most recent previous report                                               4
                                                                                                                                                                    Management Approach                                                        8-10, 25-27*
                                                              3.3     Reporting cycle                                                                   4
                                                                                                                                                                    Aspect: Employment
                                                              3.4     Contact for questions regarding the report                                      IFC
                                                                                                                                                             LA1    Breakdown of workforce by employment type and region                                 26
                                                                      Scope and limitations of the report
                                                                                                                                                             LA2    Workforce fluctuation by age group, gender, and region                              26*
                                                              3.5     Process for defining report content                                               5
                                                                                                                                                             LA3    Benefits provided to full-time employees not provided
                                                              3.6     Limits of the reporting procedure                                                 5           to temporary or part-time employees                                                  26
                                                              3.7     Limitations on the scope of the report                                            5           Aspect: Labor/Management Relations
                                                              3.8     Joint ventures, subsidiaries, outsourcing                                         5    LA4    Percentage of employees covered by collective wage agreements                        26
                                                              3.10    Changes in the presentation of information compared to earlier report             5    LA5    Minimum notice period(s) regarding significant operational changes                   27
                                                              3.11    Changes in the scope and limitations of the report or in the measurement                      Aspect: Occupational Health and Safety
                                                                      methods applied                                                                   5
                                                                                                                                                             LA6    Percent of total workforce represented in formal joint
                                                              3.12    Index according to GRI with page numbers                                        IBC           management-worker health and safety committees                                        9
                                                              3.13    Verification: External verification of the statements                             5    LA7    Injuries, absentee rates, and work-related fatalities                          8-9, 27*
                                                              4.      Management, obligations, and commitment                                                LA8    Risk control and programs with respect to serious diseases                            9
                                                                      Management                                                                                    Aspect: Training and Education
                                                               4.1    Governance structure                                                         3, WG     LA10   Training and continuing education hours by employee category                         27
                                                               4.2    Indication of whether highest governance body is also an executive officer        3    LA12   Percent of employees receiving performance and career
                                                               4.3    Governance body and/or independent members of management                          3           development reviews                                                                  27
                                                               4.4    Mechanisms for stockholders and employees to provide recommendations                          Aspect: Diversity and Equal Opportunity
                                                                      to the Board of Management or Supervisory Board                    3, PS 13            LA13   Composition of senior management and employee structure
                                                               4.5    Linkage between Board of Management compensation and                                          (e.g., age, gender, culture)                                                         27
                                                                      company performance                                                               3           Human Rights
                                                               4.6    Mechanisms in place for the governance bodies to ensure                                       Management Approach                                                                 25*
                                                                      avoidance of conflicts of interest                                                3
                                                                                                                                                                    Aspect: Non-discrimination
                                                               4.7    Expertise of the governance bodies in sustainability issues                       3
                                                                                                                                                             HR4    Incidents of discrimination and action taken                                         25
                                                               4.8    Mission statements, company values, and codes of conduct                 3, 16, WG*
                                                                                                                                                                    Society
                                                               4.9    Procedures of the highest governing body
                                                                                                                                                                    Management Approach                                                           20-24, 28
                                                                      for overseeing sustainability performance                                      3, 8*
                                                                                                                                                                    Aspect: Community
                                                                      Obligations towards external initiatives
                                                                                                                                                             SO1    Policy to manage impacts on local communities                              11, 14-15, 23
                                                               4.11   Implementation of the precautionary principle                                     3
                                                                                                                                                                    Aspect: Corruption
                                                               4.12   Support of external initiatives                                                   3
                                                                                                                                                             SO2    Percentage and number of business areas analyzed                                     28
                                                               4.13   Principal memberships in industry and business associations                      24
                                                                                                                                                             SO3    Percentage of employees trained in corruption prevention                             28
                                                                      Stakeholder commitment
                                                                                                                                                             SO4    Action taken in response to incidents of corruption                                  28
                                                               4.14   Stakeholder groups engaged by the organization                                    3
                                                                                                                                                                    Aspect: Public Policy
Design: SAVAGE, Branding + Corporate Design, Houston, Texas




                                                               4.15   Selection of stakeholders                                                  3, 18, 20
                                                                                                                                                             SO5    Public policy positions and participation in public policy
                                                               4.16   Approaches to stakeholder dialogue (type/frequency)                  3, 18, 22, 24
                                                                                                                                                                    development and lobbying                                                             24
                                                               4.17   Statements on key concerns raised by stakeholders                            22-23*
                                                                                                                                                             SO6    Total value of financial and in-kind contributions to political parties,
                                                              5.      Performance indicators                                                                        politicians, and related institutions                                                24
                                                                      Economics                                                                                     Aspect: Anti-Competitive Behavior
                                                                      Management Approach                                                        AR* 3-8     SO7    Total number of legal actions for anti-competitive behavior,
                                                                      Aspect: Economic Performance                                                                  anti-trust, and monopoly practices and their outcomes                                28
                                                               EC1    Economic value generated and distributed                                 6-7, 20, 23          Aspect: Compliance
                                                               EC2    Financial implications of climate change                        AR* 10-11, 18, 76      SO8    Fines/sanctions for non-compliance with regulations                                  28
                                                               EC3    Defined Company benefit plan obligations                                        26*           Product Responsibility
                                                                      Aspect: Market Presence                                                                       Management Approach                                                                 18*
                                                               EC5    Spending with locally based suppliers                                            26           Aspect: Customer Health and Safety
                                                               EC6    Business policy towards local suppliers                                           7    PR2    Total number of incidents of non-compliance with regulations and voluntary
                                                                      Environment                                                                                   codes concerning health and safety impacts of products and services                  18

                                                                      Management Approach                                                  6, 10-15, 17*            Aspect: Product and Service Labeling

                                                                      Aspect: Energy                                                                         PR3    Principles/measures related to product information and labeling                      18

                                                               EN3    Direct energy consumption by primary energy sources                             17*    PR4    Total number of incidents of non-compliance with regulations and voluntary
                                                                                                                                                                    codes concerning product and service information and labeling                        18
                                                               EN4    Indirect energy consumption by primary energy sources                           17*
                                                                                                                                                             PR5    Practices relating to customer satisfaction, including results
                                                                      Aspect: Water                                                                                 of customer satisfaction surveys                                                    18*
                                                               EN8    Water withdrawal by source                                                      12*           Aspect: Compliance
                                                                                                                                                             PR9    Significant fines for non-compliance with laws and regulations
                                                                                                                                                                    concerning the use of products and services                                          18
                                                              *Partially reported.

                                                              “AR” refers to Annual Report to Stockholders (Form 10K) located at http://files.shareholder.com/downloads/ABEA-3YCOT3/1129798003x0x409922/616DF75B-CB39-4E5A-BD74-
                                                              5F3E4416A451/2010_Annual_Report_to_Stockholders.pdf “PS” refers to Proxy Statement located at http://files.shareholder.com/downloads/ABEA-3YCOT3/1129798003x0x409923/
                                                                                                                                                                                                   TPC Group 2010 Sustainability Report • 31
                                                              B5E7AF51-8E97-45DD-B99A-D232722BB9FF/2010_Proxy_Statement.pdf “WG” refers to Company website Governance page located at http://investors.tpcgrp.com/governance.cfm
                                                              “IFC” refers to Inside Front Cover. “IBC” refers to Inside Back Cover.
TPC Group Inc.
5151 San Felipe, Suite 800
Houston, Texas 77056
713.627.7474
www.tpcgrp.com

NASDAQ: TPCG

								
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