Environment
Protection

Corresponding Policies for Climate Change

Corresponding Policies for Climate Change

The impact of climate change becomes more and more significant because of the increasing greenhouse gas emission.Global warming has caused polar ice melting, rising sea level, extreme drought, and broaden desertification, which would havesevere consequence on ecology, water and soil resources, human social and economic activities and safety. For Tang Eng Iron Works, we would also be disturbed by

01
Greenhouse gas emission would be regulated, and thus, production would be limited.
02
The collection of and carbon fee increases operating costs.
03
Government's mandate on regularly reporting carbon dioxide emission amount and reducing measures for big carbon dioxide emitters would indirectly jolt economy.

To leave our children with a better environment, we also have the responsibility of taking various approaches to help environmental sustainability and to adapt to climate change, for example

According to Taiwan's carbon emission reduction policy and the Climate Change Response Act (formerly the Greenhouse Gas Reduction Management Act), Voluntary Reduction Promotion Plan of the Industrial Bureau of the Ministry of Economic Affairs, or the Kaohsiung City Environmental Protection Management Autonomous Regulations, as well as other government regulations, set greenhouse gas reduction targets, and review the status of target achievement every year. 01

Carry out inventory and verification of greenhouse gas emissions every year, and publish environmental performance data to the outside world, focusing on the improvement of process equipment, energy efficiency, and greenhouse gas reduction targets to achieve the goal of energy conservation and carbon reduction. 02

In the face of global climate change, Tang Eng Company analyzed the risks, opportunities,countermeasures and implementation results that may impact the Company by climate change as follows:

Aspect TCFD Proposed Disclosure Project Processing Status
Governance How the Board of Directors oversees climate-related issues The Company reports the implementation progress of greenhouse gas inventory and verification to the Board of Directors on a quarterly basis, and reports the implementation of greenhouse gas management work to the independent directors.
How management assesses and manages climate-related issues Every year, the Company will consider the regulations of the competent authorities and important domestic and foreign issues to formulate climate-related business strategy plans and goals, track and review the implementation situation regularly, and develop improvement plans at the same time.
Strategy Climate-related risks and opportunities identified by the Company in the short, medium and long term Short-Term Risks and Opportunities
  • Risk:
    In line with Taiwan's greenhouse gas reduction policy, greenhouse gas emissions should be reduced year by year.
  • Opportunity:
    Promote voluntary greenhouse gas reduction work in the early stage. Currently able to meet the stage control goals.
Medium-term risks and opportunities
  • Risk:
    The Government implements carbon fee collection, resulting in additional costs for the Company.
  • Opportunity:
    Continue to implement the greenhouse gas reduction plan and reduce the impact of carbon fee collection.
Long-Term Risks and Opportunities
  • Risk:
    Reaching the goal of net zero carbon emissions in response to climate change is difficult and will significantly increase the cost of investment transformation.
  • Opportunity:
    Plan and roll-over carbon reduction pathways to achieve goals.
Impact of climate-related issues on the Company's business model, strategies and financial planning In response to climate-related issues, if Taiwan or other countries in the supply chain start to levy carbon fees, it will directly impact the Company's operations and finances. Business models and operating strategies need to be transformed as soon as possible.
Scenario analysis (including 2°C or harsher scenarios) Climate change and global warming have led to rising sea levels, abnormal drought, and extreme weather, which will have a great impact on ecosystems, water and soil resources, economic activities, and life safety. The Company's operations, production and sales may be restricted as a result.
Risk Management Process for identifying and assessing climate-related risks The Company has a risk management and control group to regularly identify, respond to, and control climate change risks.
Processes for managing climate-related risks According to the established climate risk control strategy and objectives, implement the implementation and regularly report the implementation status and improvement plan in the risk control group meeting.
Explain how the above-mentioned risk identification and management process is integrated into the Company's overall risk management system Define climate change risks in the risk management project and link it with the Company's overall core business. Regularly hold risk control meetings every quarter to track and review, and report the annual implementation status and corporate governance implementation status to the Board of Directors.
Metrics and Targets Assess whether the indicators are consistent with the Company's strategy and risk management Relevant climate issue assessment indicators have been combined with the Company's overall plans, strategies and goals, and incorporated into annual budget execution and control.
Disclose Scope 1, Scope 2 and Scope 3 (if applicable) GHG emissions and associated risks The Company discloses Scope 1 and Scope 2 greenhouse gas emissions and related risks in its Annual Report, Sustainability Report and company website.
Management objectives and related performance The Company continues to implement greenhouse gas reduction work every year to achieve the management goals of greenhouse gas reduction. The 2024 management objectives and related performance are as follows:
Management objectives
  • Execute the 2024 greenhouse gas emission inventory and verification. The total emissions should be reduced by 8% compared to the baseline year (2005), targeting below 245,000 metric tons of CO2e.
  • Report the 2024 voluntary greenhouse gas reduction performance, the implementation rate of the 2024 reduction plan should reach 100%, and submit the 2025 greenhouse gas voluntary reduction plan.
Related performance
  • The inventory of greenhouse gas emissions in 2024 has been completed. The inventory results show the total emissions were 95,444.684 metric tons of CO2 equivalent.
  • There were 6 voluntary greenhouse gas reduction plans submitted in 2024. All 6 plans focused on improving electricity use. The implementation rate was 100% , resulting in total savings of 2,111,114.22 kWh of electricity and a total reduction of 1,042.89 metric tons of CO2e.

Tang Eng Company conducts risk and opportunity analysis in three aspects: law, policy and practice.The countermeasures and implementation results are as follows:

The Government calls for caps on greenhouse gases
Risk / Opportunity Countermeasures Implementation effectiveness
Risk
  • The total amount of greenhouse gases is limited by the competent authorities, and the production and sales of steelmaking may be affected.
  • The Government is about to levy carbon fees, increasing operating costs.
  • Conduct greenhouse gas inventory every year to ensure that the total control value of each stage is not exceeded.
  • Make a budget year by year to accelerate the replacement of old and new process equipment.
  • Strictly abide by the Government's environmental regulations.
  • In 2024, Tang Eng Company implemented six voluntary reduction plans, all of which were aimed at improving the electricity use, with a total reduction of 2,111,114.22 kWh and 1,042.89 tons of CO2e.
Opportunity
  • Strengthening process control and continuing to update old process equipment will help improve production efficiency and reduce production costs.
The Government requires enterprises to use green energy for more than 10% of total electricity consumption
Risk / Opportunity Countermeasures Implementation effectiveness
Risk
  • The Company will complete more than 3,000kW green power facilities by at least 2023, which will increase the equipment investment cost.
  • Prepare a budget to build solar power facilities at appropriate locations in the Company.
  • Reduce the contract capacity of Taipower.
  • The construction of the solar power plant was completed in July 2023 and connected to the grid. By the end of 2024, the solar power plant generated a total of 3,179,700 kWh of green electricity, which was used by itself to reduce the power purchased. In 2024, the overall power saving rate was 11.34%.
Opportunity
  • Increase the ratio of self-generated power to reduce dependence on Taipower.
Circular economy and Green products
Risk / Opportunity Countermeasures Implementation effectiveness
Risk
  • The Company's steelmaking process uses a large amount of recycled scrap stainless steel and scrap carbon steel. However, due to insufficient domestic supply, it is necessary to bid for foreign scrap at high prices, resulting in an increase in the Company's operating costs.
  • Strengthen the flexibility and initiative of procurement to ensure that the sources of scrap can fully supply the needs of steelmaking production.
  • Strengthen sales business channels, reduce costs, and steadily increase the company's stainless steel production and sales.
  • In 2024, the consumption of raw materials was 17,039.964 metric tons of stainless steel waste, 1,572.460 metric tons of scrap steel, 656.32 metric tons of Nickel Iron and 1,974.340 tons of ferrochromium. The self-produced waste is recycled to the electric furnace for remelting, so as to achieve the principle of circular economy. In 2024, a total of 9,491.452 metric tons of waste materials were reused in the process, accounting for 32.24% of the total steelmaking output.
Opportunity
  • The stainless steel produced by the Company is a green product, and the market demand is growing steadily.
Water crisis
Risk / Opportunity Countermeasures Implementation effectiveness
Risk
  • Insufficient water supply, forces the Company to reduce production, affecting operating income.
  • Carry out various water-saving measures, such as improving system design, adopting high-efficiency equipment and recycling.
  • Keep abreast of the water supply status at any time, and dynamically adjust the production schedule.
  • In 2024, Tang Eng saved a total of 308,500 tons of water, and recycled water used 177,000 tons a year, and the water recovery rate of the whole plant was 81.66%.
  • In 2024, total water consumption was 720,900 metric tons. The overall unit water intensity was 3.86 m$^3$/ton of steel coil. The annual average total water consumption and overall unit water intensity from 2020 to 2024 decreased by 16.72% and 7.017% respectively compared to 2019's total water consumption. This has achieved the goal of a 15% reduction in total water consumption compared to 2019 within the last 5 years.
Opportunity
  • Improve water use efficiency and reduce production costs.
Power crisis
Risk / Opportunity Countermeasures Implementation effectiveness
Risk
  • Insufficient power supply, forces the Company to reduce production, affecting operating income.
  • Carry out various energy-saving measures, such as on-site motors, pumps, and air conditioners are changed to frequency conversion control, and energy-saving lamps are fully replaced, etc.
  • Master the power supply status at any time, and adjust the production schedule flexibly.
  • The Company implemented the "Demand Response Load Management Measures" and related energy-saving measures in 2024, and the energy-saving rate was 11.32%.
Opportunity
  • Improve energy resource utilization efficiency and reduce production costs.
Air Pollution & Acid Rain
Risk / Opportunity Countermeasures Implementation effectiveness
Risk
  • The Government is tightening air pollution control. The Company must strengthen various prevention measures and invest in various pollution prevention equipment, which will increase operating costs.
  • Strengthen the maintenance of existing air pollution control and monitoring facilities to ensure that there are no incidents of fines for air pollution.
  • In 2024, the detection of particulate matter and NOx in P001~P003 discharge pipes of steel mill M01 process, dioxin detection once a year, and NOx detection in P012 and P027 discharge pipes of steel mill M02 process and M04 process were carried out once each.
Opportunity
  • The use of stainless steel as roofing materials is increasing.
  • Make good use of the anti-corrosion and anti-oxidation properties of stainless steel to expand the use of stainless products and increase revenue.