Arendals Fossekompani : EU Taxonomy Report 2023

ATIONS

FORGENE

GENERATIONS

FORGENERATIO

EU Taxonomy Report 2023

2	ARENDALS FOSSEKOMPANI

Content

1.	Introduction	3
2.	Results and Initiatives in 2023	3
3.	Scope	5
4.	Process	6
5.	Assessments	28
6.	Minimum Social Safeguards	28
7.	Accounting Policies and Contextual
	Information About the KPIs	29
8.	Future Work	32

EU TAXONOMY REPORT 2023

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1. Introduction

The EU Taxonomy aims to scale up sustainable investments and avoid greenwash- ing by defining a common language and understanding of sustainable activities. As part of the European Union's Green Deal, the EU Taxonomy is a classification system for sustainable economic activities, consisting of the following six environmental objectives:

1. Climate change mitigation
2. Climate change adaptation
3. The sustainable use and protection of water and marine resources
4. The transition to a circular economy
5. Pollution prevention and control
6. The protection and restoration of biodiversity and ecosystems

Environmental objectives 3-6 were adopted in the EU in June 2023, through the Commission Delegated Regulations of June 2023, (EU) 2023/2486 and (EU) 2023/2485. In addition, amendments to Delegated Regulation (EU) 2021/2139 for the environmental objectives 1 and 2 were also adopted as of June 2023. Due to delays in the legislative process in the European Economic Area, the June 2023 regulations did not enter into force in Norway in 2023. The Norwegian Ministry of Finance has communicated that Norwegian undertakings are encouraged, but not required, to report on the environmental objectives 3-6 for the financial year of 2023. Only climate change mitigation and climate change adaptation following Commission Delegated Regulation (EU) 2020/852 are required for the 2023 reporting in Norway. However, considering the implementation in the EU and the encouragement from the Norwegian Ministry of Finance, AFK has chosen to include environmental objectives 3-6, in accordance with the Commission Delegated Regulations of June 2023. AFK reports on eligibility and alignment for environmental objectives 1 and 2 following Commission Delegated Regulation (EU) 2020/852 and on eligibility for economic activities adopted by the EU as of June 2023. Additionally, one of AFK's portfolio companies have chosen to report alignment on one of their activities contributing to water and marine resources.

2. Results and Initiatives in 2023

We are proud to report on all six environmental objectives of the EU Taxonomy. Arendals Fossekompani's portfolio contribute to multiple environmental objectives, covering climate change mitigation, climate change adaptation, and water and marine resources. Further, we recognize that one of AFK's main contributions going forward may be through enabling others in the transition, through activities that have potential to be enabling.

Throughout 2023, AFK has developed its reporting on the EU Taxonomy in line with the developments and new guidance from the European Commission regarding the EU Taxonomy Regulation. This has also led to strengthened understanding of the EU Taxonomy's definitions of the KPIs.

This year's reporting show stable developments of the KPIs compared to last year. Aligned turnover is largely consistent, with a small increase of 0.3%. Eligible, not aligned turnover has seen an increase of roughly 1.3%. Aligned, and eligible, not aligned CapEx have seen an increase of 12.9% and 1%, respectively. We are pleased to observe that the capital expenditures across AFKs portfolio are yielding tangible results that are reflected in the EU Taxonomy score. Both aligned, and eligible, not aligned OpEx see decreases compared to the voluntary reporting in 2022. These changes highlight the improvements made to the calculation methodology in the

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2023 report, driven by a strengthened understanding of the EU Taxonomy's OpEx definition. For further explanation of the KPIs and the relevant accounting policies, see chapter 7.

The high percentage of eligible activities reflects the great potential in our portfolio companies. Our goal is to further increase both eligible and aligned reporting in the years to come.

EU TAXONOMY ELIGIBILITY AND ALIGNMENT

Turnover1			CapEx2			OpEx3
	Aligned	22.3%			Aligned	16.6%		Aligned	6.9%
	Eligible, not aligned	37.6%			Eligible, not aligned	46.3%		Eligible, not aligned	10.4%
	Non-eligible	40.1%			Non-eligible	37.0%		Non-eligible	82.7%

1. Within the aligned turnover	2. Within the aligned CapEx	3. Within the aligned OpEx
and the eligible, not aligned	and the eligible, not aligned	and the eligible, not aligned
turnover, 3.7% and 12.1%	CapEx, 4.7% and 2,7%	OpEx, 1.9% and 1.7%
respectively are related to	respectively are related to	respectively are related to
the Commission Delegated	the Commission Delegated	the Commission Delegated
Regulations of June 2023.	Regulations of June 2023.	Regulations of June 2023.

AFK's portfolio companies' show great diversity, with eligible activities within a specter of sectors and environmental objectives. Summarized, the portfolio companies' eligible and aligned economic activities can be listed as follows:

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ECONOMIC ACTIVITIES IN THE PORTFOLIO

Environmental	Economic activity as defined	Transitional/	Aligned/eligible,	Relevant
objective	in the EU Taxonomy	enabling	not aligned	companies
Climate	4.9	Transmission and	Enabling	Aligned	Volue
change		distribution of electricity
mitigation	4.5	Electricity generation		Aligned	AFK Vannkraft
		from hydropower
	3.6	Manufacture of other	Enabling	Aligned	TEKNA
		low carbon technologies
	3.6	Manufacture of other	*	Eligible,	ENRX,
		low carbon technologies		not aligned	TEKNA
	7.1	Construction of new buildings		Eligible,	AFK Property,
				not aligned	Ampwell, ENRX
	7.7	Acquisition and		Eligible,	AFK Property,
		ownership of buildings		not aligned	Volue, ENRX
	8.2	Data-driven solutions	*	Eligible,	Volue,
		for GHG emissions reductions		not aligned	Alytic
	6.15	Infrastructure enabling low-carbon	*	Eligible,	ENRX
		road transport and public transport		not aligned
	3.4	Manufacture of batteries	*	Eligible,	Ampwell
				not aligned
	4.10	Storage of electricity	*	Eligible,	Ampwell
				not aligned
	8.1	Data processing, hosting	**	Eligible,	Ampwell
		and related activities		not aligned
	7.2	Renovation of existing buildings	**	Eligible,	AFK Vannkraft
				not aligned
Climate	7.2	Renovation of existing buildings		Aligned	AFK Vannkraft
change	8.2	Computer programming,		Eligible,	Volue
adaptation
	consultancy and related activities		not aligned
	9.1	Close to market research,	*	Eligible,	Alytic
		development and innovation		not aligned
	14.1	Emergency services	*	Eligible,	NSSLGlobal
				not aligned
	7.1	Construction of new buildings		Eligible,	AFK Property
				not aligned
	4.5	Electricity generation from hydropower		Eligible,	AFK Vannkraft
				not aligned
Transition	3.1	Construction of new buildings		Eligible,	AFK Property,
to a circular				not aligned	Ampwell, ENRX
economy	5.5	Product-as-a-service and other circular use-		Eligible,	NSSLGlobal
		and result-oriented service models		not aligned
	5.2 Sale of spare parts		Eligible,	ENRX
				not aligned
	4.1	Provision of IT/OT	*	Eligible,	Volue
		data-driven solutions		not aligned
	3.2	Renovation of existing buildings		Eligible,	AFK Vannkraft
				not aligned
Sustainable use	4.1	Provision of IT/OT data-driven	Enabling	Aligned	Volue
and protection of		solutions for leakage reduction
water and marine
resources

• Activities that have the potential to be enabling, however are not
  lassified as such since the technical screening criteria are not considered met.
• Activities that have the potential to be transitional, however are not
  classified as such since the technical screening criteria are not considered met.

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3. Scope

All portfolio companies in the AFK group have been included in the reporting on the EU Taxonomy for 2023. We have not included joint ventures and associated compa- nies, as they are not consolidated in the group's financial statements. Each portfolio company has identified their business activities and assessed each activity with regards to the EU Taxonomy economic activities within the scope of all six environmental objectives.

4. Process

The EU Taxonomy assessment has been conducted by each portfolio company, supported by a core team with representatives from AFK. Assessments have been performed in accordance with the structure of the EU Taxonomy, starting with eligibility assessments before assessing compliance with the criteria for substantial contribution and do no significant harm ("DNSH").The minimum safeguards assessment has been conducted by AFK on group level, based on policies and procedures covering the AFK group. Eligible activities that meet the criteria for substantial contribution and DNSH, as well as the minimum safeguards, are reported as aligned. AFK reports the EU Taxonomy on an aggregate of portfolio companies. To ensure consistency in reporting and assessments of eligibility and alignment across the portfolio, the core AFK team has put in place reporting routines and guidelines for assessments.

In 2023 we performed a re-evaluation of the eligible activities from the 2022 report- ing. Considering new acquisitions, activities for the four remaining environmental objectives adopted by the EU and FAQs published by the European Commission. Eligibility was assessed considering the portfolio companies' business activities against the economic activities defined in the EU Taxonomy. Relevant NACE-codes and activity descriptions for each economic activity were identified and examined. Vergia does not have any eligible economic activities since all activities and investments are through joint ventures and associated companies, and as such accounted for through the equity method.

The alignment process consists of assessing the criteria for substantial contribution and do no significant harm, as well as minimum safeguards. When assessing the technical screening criteria, we have experienced challenges within interpretations and best practice. Some of the criteria refer to EU-directives, that may not be, or is only partially adopted and implemented in Norway. Subsequently this may lead to requirements and thresholds not being provided.

5. Assessments

LIST OF ABBREVIATIONS

ABBREVIATION	DEFINITION
CCM	Climate change mitigation
CCA	Climate change adaptation
W&M	Sustainable use and protection of water and marine resources
CE	The transition to a circular economy
PP	Pollution prevention and control regarding use and presence of chemicals
B&E	Protection and restoration of biodiversity and ecosystems
DNSH	Do no significant harm

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Economic activity	Type of assessment	Interpretation and assessment	Conclusion
4.5	Eligibility	AFK Hydropower operates the hydropower plants at Bøylefoss	Aligned
Electricity		and Flatenfoss, generating electricity from hydropower
generation from
Substantial	Both plants are run-of-river plants and do not have artificial res-
hydropower
contribution	ervoirs. As such, both hydropower plants meet the substantial
(CCM)
	contribution criteria listed in letter a).
	DNSH	CCA: Climate risk assessment has been conducted in accor-
		dance with Appendix A. The assessment is based on a TCFD
		analysis conducted in 2021, performed at company level, which
		has been further developed in 2023 by analysing the physical
		risks listed in appendix A at economic activity level. Adaptation
		solutions for the identified physical climate risks are considered
		and implemented as part of the concession.
		W&M: The Water Framework Directive is implemented through
		the Norwegian 'Vannforskriften', which both hydropower plants
		are required to comply with. The directive follows European
		standards for water management. Additionally, both plants
		have fish friendly turbines. As such, the criteria related to mit-
		igation measures for impacts on water and species directly
		dependent of water are considered met.
		B&E: Environmental impact assessments are carried out on
		an annual basis for both plants in relation to concession and
		permit. Mitigation measures are implemented within the time
		constraints of the concession/permit. None of the plants are in
		or near biodiversity-sensitive areas. However, measures have
		been taken to accommodate eels, should it return to the water-
		ways. Measures are also in place to support salmon spawning
		downstream at Bøylefoss. As such, the criteria listed in appen-
		dix D are considered met.
4.5	Eligibility	See description of the activity in activity 4.5 contributing to	Eligible,
Electricity		CCM above. Additionally, a climate risk assessment is con-	not aligned
generation from		ducted in line with Appendix A, and an expenditure plan has
hydropower		been set up to implement adaptation solutions to reduce the
(CCA)		activity's most significant physical climate risks.
	Substantial	A climate risk assessment has been conducted in accordance
	contribution	with criteria, based on a TCFD analysis conducted in 2021, per-
		formed at company level. This was further developed in 2023
		by analysing the physical risks listed in Appendix A at economic
		activity level. Adaptation solutions for the identified physical
		climate risks are considered and implemented as part of the
		concession.
		The identified solutions are consistent with the applicable local,
		sectoral, and national adaptation plans and strategies, and a
		plan for implementation of the identified adaptation solutions
		is in place. As of 2023, these measures have yet to be imple-
		mented to full extent. As such, the economic activity is not con-
		sidered compliant with the criteria for substantial contribution
		to climate change adaptation.

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	DNSH	The economic activity fulfils the DNSH criteria, however the
		activity will not be reported as aligned against the climate
		change adaptation objective since the substantial contribution
		criteria is not met. For reference, the DNSH criteria are identi-
		cal to those accounted for above in relation to climate change
		mitigation, except for the DNSH to CCM. The DNSH to CCM is
		considered met as the direct GHG of the electricity generation
		activity is lower than 270gCO2e/kWh.
7.2	Eligibility	AFK Hydropower are conducting façade rehabilitation at the Aligned
Renovation		Bøylefoss power plant.A climate risk assessment has also been
of existing		carried out an the rehabilitation is considered eligible.
buildings
Substantial	The façade rehabilitation has implemented physical and
(CCA)
contribution	non-physical adaptation solutions that substantially reduce the
		most important physical climate risks material to the activity.
		The material climate risks are identified based on the list set
		out in Appendix A. For the screening of physical climate risks,
		three climate scenarios have been used: RCP 1.2 & IEA Net Zero,
		RCP 4.5 and RCP 6.0As such, the economic activity fulfills the
		substantial contribution criteria. For this assessment, the risks
		have been assessed based on three time-horizons defined by
		CSRD: Short-term (less than 1 year), medium-term(1-5 years)
		and long-term (more than 5 years). As such, the economic
		activity is considered aligned with the criteria for substantial
		contribution.
	DNSH	CCM: The building is not dedicated to extraction, storage,
		transport or manufacture of fossil fuels.
		W&M: Not applicable, as there are no water appliances are
		installed.
		CE: The renovation follows standards and instructions set by a
		leading Nordic provider of circular solutions and waste manage-
		ment. The standards are in accordance with EU Construction
		and Demolition Waste Management Protocol and ensure that
		minimum 70% of the non-hazardous construction and demo-
		lition waste is prepared for reuse, recycling, or other material
		recovery. The renovation utilizes as much as possible of the
		original components and does only use recycled concrete.
		PP: All building components and materials used in the con-
		struction comply with the criteria set out in Appendix C. The
		majority of the products used are chalk, mortar, and mineral
		silicate paint. None of these or other products or instances
		used are in violation with EU REACH. All possible measures
		have been taken to reduce noise, dust, and pollutant emissions
		during the construction works.
		As such, the economic activity is considered aligned with the
		criteria for do no significant harm.

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7.2	Eligibility	See eligibility description from activity 7.2 contributing to CCA	Eligible,
Renovation	assessment	above.	not aligned
of existing
buildings	Substantial	The renovation work complies with the definition for'major ren-
(CCM)	contribution	ovations' of buildings from Directive 2010/31/EU, as more than
		25% of the surface of the building envelope underwent reno-
		vation in 2023. The Energy Performance of Buildings Directive
		(EPBD, 2010/31/EU) is not implemented in Norwegian law
		and the specific cost-optimal minimum energy performance
		requirements are therefore not known. Since the building is
		a cultural heritage and protected, there are restrictions on
		which measures AFK Hydropower can implement, affecting the
		potential for increasing the energy performance. Due to these
		limitations, AFK Hydropower have not assessed the renovation
		as compliant with the substantial contribution requirement.
	DNSH	The façade rehabilitation fulfills the DNSH criteria. However,
		the economic activity does not comply with the substantial
		contribution criteria and is therefore not reported as aligned.
3.2	Eligibility	See eligibility description from activity 7.2 contributing to CCA	Eligible,
Renovation		above.	not aligned
of existing
Substantial	The technical screening criteria are not considered as report-
buildings
contribution	ing on alignment is not a requirement for the environmental
(CE)
and DNSH	objective Transition to a circular economy, refer to section 1
		Introduction.

Economic activity	Type of assessment	Interpretation and assessment	Conclusion
7.1	Eligibility	AFK Property is involved in the development of the residential	Eligible,
Construction		building project Bryggebyen on own account, by bringing the	not aligned
of new buildings		financial means to realise the project for later sale and exe-
(CCM)		cuting the work on a contract basis. Further, AFK Property is
		involved in the development of an annex to an existing com-
		mercial building at Bølevegen 4, financing the project on own
		account and operating on a contract basis.
	Substantial	The calculated Primary Energy Demand (PED) of the build-
	contribution	ings are not 10% lower than the defined threshold for nearly
		zero-energy building (NZEB) requirements, and the substantial
		contribution criteria is not considered met. Additional require-
		ments related to air-tightness and thermal integrity are not
		applicable as none of the buildings exceed 5000 m2.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.

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EU TAXONOMY REPORT 2023

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7.1	Eligibility	See description of the activity "Bryggebyen" related to activity	Eligible,
Construction		7.1 regarding CCM above. As required by the Taxonomy, a cli-	not aligned
of new buildings		mate risk assessment has been carried out and an expenditure
(CCA)		plan for adaptation solutions is implemented for Bryggebyen,
		in accordance with Appendix A. As a result, Bryggebyen is con-
		sidered eligible under climate change adaptation.
	Substantial	The economic activity is currently not considered aligned with
	contribution	all the technical screening criteria for substantial contribution
		to CCA.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.
7.1	Eligibility	See description of the activity "Bølevegen" related to activity 7.1	Not
Construction		regarding CCM above.The climate risk assessment and expen-	eligible
of new buildings		diture plan for Bølevegen complies with regional requirements
(CCA)		but fell short of meeting the requirements of Appendix A. As
		a result, Bølevegen is not considered eligible under climate
		change adaptation.
	Substantial	Since the economic activity is not considered eligible for the
	contribution	environmental objective Climate Change Adaptation, no fur-
	and DNSH	ther assessment of technical screening criteria has been car-
		ried out.
3.1	Eligibility	See eligibility description from activity 7.1 regarding CCM	Eligible,
Construction		above.	not aligned
of new buildings
Substantial	The technical screening criteria are not considered as report-
(CE)
contribution	ing on alignment and is not a requirement for the environmen-
	and DNSH	tal objective Transition to a circular economy, refer to section
		1 Introduction.
7.7	Eligibility	AFK Property owns several properties and exercises own-	Eligible,
Acquisition		ership of these real estates. This goes for the properties at	not aligned
and ownership		Steinodden, Bedriftsveien 17, Gullknapp, Bølevegen 4, and
of buildings		Bryggebyen Vindholmen.
(CCM)
Substantial	None of the buildings have an Energy Performance Certificate
	contribution	(EPC) class A, nor are any of them within the 15% of the national
		or regional building stock expressed as operational Primary
		Energy Demand (PED) and the substantial contribution criteria
		is not considered met.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.

7.7	Eligibility	See description of the activities related to Steinodden,	Not
Acquisition		Bedriftsveien 17, Gullknapp, Bølevegen 4 and Bryggebyen	eligible
and ownership		Vindholmen for economic activity 7.7 regarding CCM above.
of buildings		The climate risk assessment and expenditure plan for the
(CCA)		properties does not meet the requirements of Appendix A. As
		a result, none of these buildings are considered eligible under
		climate change adaptation.
	Substantial	Since the economic activity is not considered eligible for the
	contribution	environmental objective Climate Change Adaptation, no fur-
	and DNSH	ther assessment of technical screening criteria has been car-
		ried out.

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Economic activity	Type of assessment	Interpretation and assessment	Conclusion
9.2	Eligibility	Edge by Kontali provides a collection of seafood data, giving	Eligible,
Close to		access to world-leading data insight with millions of data	not aligned
market research,		points 24/7. The platform offers expertise on a large variety of
development		seafood species and industries, closely follow the value chains
and innovation		end to end. Covering global trends, detailed in-depth analy-
(CCA)		ses and research. Kontali delivers reports to decision makers
		worldwide, both in private and public sectors.
	Substantial	Due to uncertainties regarding the technical screening criteria,
	contribution	the platform is considered not aligned. This specifically related
		to the adaptation criteria and the use of best available science.
	Do no	Since the economic activity does not fulfill the criteria for sub-
	significant	stantial contribution, a complete assessment of the DNSH cri-
	harm	teria has not yet been carried out.
9.1	Eligibility	The Edge platform is not considered eligible for economic	Not
Close to		activity 9.1 contributing to Climate Change Mitigation, as it is	eligible
market research,		not dedicated to reduction, avoidance or removal of GHG emis-
development		sions.
and innovation
Substantial	Since the economic activity is not considered eligible for the
(CCM)
contribution	environmental objective Climate Change Mitigation, no further
	and DNSH	assessment of technical screening criteria has been carried
		out.
8.2 Data-driven	Eligibility	Veyt is the global insight business for all significant low carbon	Eligible,
solutions for		markets and renewable energy. Veyt's platform offers inde-	not aligned
GHG emissions		pendent and neutral market intelligence, covering green cer-
reductions		tificates for power and gas and carbon markets. The aim is to
(CCM)		simplify these complex markets to make informed decisions
		and positively contribute to the global net-zero transformation,
		supporting firms by providing price benchmarking, insights
		and analytics. As such, the activity is predominantly aimed
		at the provision of data and analytics enabling GHG emission
		reductions.
	Substantial	Veyt's solution substantial contributes to GHG emission reduc-
	contribution	tions by enabling the energy market to efficient source renew-
		able energy as the only source of their energy consumption.
		The documentation requirement regarding life-cycle GHG
		emissions calculation has not been fulfilled, hence the substan-
		tial contribution criteria is considered not met.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.

EU TAXONOMY REPORT 2023

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Economic activity	Type of assessment	Interpretation and assessment	Conclusion
3.4	Eligibility	Ampwell's subsidiary Commeo GmbH is engaged in the man-	Eligible,
Manufacture		ufacturing of energy storage and management solutions, uti-	not aligned
of batteries		lizing lithium-ion battery technology with a focus on safety
(CCM)		and modularity. The products cater to various industrial appli-
		cations, spanning from manufacturing to energy supply. This
		comprises the manufacture of rechargeable batteries, battery
		packs, accumulators, and associated components such as bat-
		tery cells, casings, and electronic components.
	Substantial	The economic activity manufactures rechargeable batteries,
	contribution	battery packs and accumulators, including from secondary raw
		materials, that result in substantial GHG emission reductions
		in transport, stationary and off-grid energy storage and other
		industrial applications. However, it does not recycle end-of-life
		batteries. As a result, the activity is not aligned with the sub-
		stantial contribution criteria.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.
3.4	Eligibility	See description of the activity in 3.4 related to CCM above. A	Not
Manufacture		climate risk assessment and expenditure plan has not been	eligible
of batteries		conducted yet. As such, the activity is not considered eligible
(CCA)		under climate change adaptation.
	Substantial	Since the economic activity is not considered eligible for the
	contribution	environmental objective Climate Change Adaptation, no fur-
	and DNSH	ther assessment of technical screening criteria has been car-
		ried out.
8.1	Eligibility	Ampwell's subsidiary Cellect provides solutions for energy	Eligible,
Data		storage in the renewable energy sector. The activity involves	not aligned
processing,		software for energy storage assets, hardware for on-site data
hosting and		control and acquisition, and battery system integration with
related activities		the Cellect cloud.
(CCM)
Substantial	The economic activity is currently not considered compliant
	contribution	with the technical screening criteria for substantial contribu-
		tion. This primarily relates to uncertainties regarding criteria
		related to data centers, as Cellect neither owns or operates
		data centers, but uses cloud hosting companies. Cellect will
		continue the assessment and further develop its understand-
		ing of the criteria going forward.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.

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7.1	Eligibility	Ampwell's subsidiary Commeo Property GmbH is involved	Eligible,
Construction		in the development of a battery factory in Germany on own	not aligned
of new buildings		account.
(CCM)
Substantial	The primary energy demand (PED) is 10% lower than the
	contribution	threshold for nearly-zero energy building (NZEB) require-
		ments in Germany, as outlined in the building's GEG certificate
		(German Building Energy Act). However, as a DGNB certifica-
		tion (Deutsche Gesellschaft für Nachhaltiges Bauen) was not
		commissioned from the outset, the activity does not meet all
		the criteria for substantial contribution.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.
3.1	Eligibility	See eligibility description from activity 7.1 regarding CCM	Eligible,
Construction		above.	not aligned
of new buildings
Substantial	The technical screening criteria are not considered as report-
(CE)
contribution	ing on alignment is not a requirement for the environmental
		objective Transition to a circular economy, refer to section 1
		Introduction.
7.1	Eligibility	See description for activity 7.1 related to Climate Change	Not
Construction		Mitigation above. A climate risk assessment and expenditure	eligible
of new buildings		plan has not been conducted in accordance with the require-
(CCA)		ments of the criteria . As such, the activity is not considered
		eligible under climate change adaptation.
	Substantial	Since the economic activity is not considered eligible for the
	contribution	environmental objective Climate Change Adaptation, no fur-
	and DNSH	ther assessment of technical screening criteria has been car-
		ried out.
4.10	Eligibility	Ampwell GmbH has invested in a small battery storage facility,	Eligible,
Storage of		contributing to both research and development of product and	not aligned
electricity		services and acting as a showcase for electric vehicle charging,
(CCM)		specifically for trucks and HDVs.
	Substantial	In 2023, the activities carried out were related to research and
	contribution	development at the facility used as a show case. As such, there
		has not been any commercial activity for operation of electric-
		ity storage and the substantial contribution criteria related to
		the operation of electricity storage were not considered met.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.
4.10 Storage of	Eligibility	See description related to the economic activity 4.10 for CCM	Not
electricity (CCA)		above. A climate risk assessment and expenditure plan has not	eligible
		been conducted in accordance with the requirements of the
		criteria . As such, the activity is not considered eligible under
		climate change adaptation.
	Substantial	Since the economic activity is not considered eligible for the
	contribution	environmental objective Climate Change Adaptation, no fur-
	and DNSH	ther assessment of technical screening criteria has been car-
		ried out.

EU TAXONOMY REPORT 2023

15

Economic activity	Type of assessment	Interpretation and assessment	Conclusion
3.6	Eligibility	Manufacturing of induction power generators for a wide range	Eligible,
Manufactureof		of applications; brazing, welding, bonding and more. The activ-	not aligned
other low carbon		ity enables customers to lower own emissions in production
technologies		processes and also enable manufacturing of low carbon tech-
(CCM)		nologies.
	Substantial	The purpose of the applications is to strengthen the material
	contribution	structure, durability, and lifetime of metal components, all with
		high accuracy and repeatability, and replacing alternative tech-
		nologies with traditional methods such as manual work with
		flame and gas. As of today, the criteria are not yet fulfilled, as
		no documentation on the life-cycle GHG emissions savings are
		available at this point. However, the assumption is that induc-
		tion is the economically best solution for several applications
		available at the market.
	DNSH	Since the economic activity does not fulfill the criteria for sub-
		stantial contribution, a complete assessment of the DNSH cri-
		teria has not yet been carried out.
3.6	Eligibility	See description of the activity related to activity 3.6 regarding	Not
Manufacture of		CCM above.The activity enables customers to lower own emis-	eligible
other low carbon		sions in production processes and enable manufacturing of low
technologies		carbon technologies. Yet, there is currently no documentation
(CCA)		available to demonstrate ENRX's technology to have lower
		life-cycle GHG emissions compared to the best performing
		alternative in the industry. Hence, the activity is not considered
		eligible under the Climate Change Adaptation objective.
	Substantial	Since the economic activity is not considered eligible for the
	contribution	environmental objective Climate Change Adaptation, no fur-
	and DNSH	ther assessment of technical screening criteria has been car-
		ried out.
6.15	Eligibility	Manufacturing of wireless charging systems for electric-driven	Eligible,
Infrastructure		busses, heavy-duty vehicles, and ferries for public transpor-	not aligned
enabling low-		tation. Wireless charging based on inductive power trans-
carbon road		fer offers a higher utilization of the available charging time,
transport and		increased safety, and unprecedented system reliability. ENRX's
public transport		charging solutions may result in less maintenance and no
(CCM)		cabling requirements.
	Substantial	The wireless charging systems for busses, heavy-duty indus-
	contribution	trial vehicles and public ferries are used as electric charging
		points for zero tailpipe emissions and are not dedicated to
		transport or storage of fossil fuels. The criteria for substantial
		contribution are therefore considered met.
	DNSH	Since the economic activity does not fulfill the DNSH criteria
		for all environmental objectives, a complete assessment of the
		DNSH criteria has not yet been carried out.

16	ARENDALS FOSSEKOMPANI

5.2	Eligibility	Sale of spare parts to support lifetime extensions of ENRX's	Eligible,
Sale of spare		systems. In addition to refurbishing and upgrading existing	not aligned
parts (CE)		installations, spare parts are sold to exceed baseline up to 25
		years.
	Substantial	The technical screening criteria are not considered as report-
	contribution	ing on alignment is not a requirement for the environmental
	and DNSH	objective Transition to a circular economy, refer to section 1
		Introduction.
7.1	Eligibility	ENRX is involved in the development of an annex to the existing	Eligible,
Construction		office building at Bølevegen 4, on own account.	not aligned
of new buildings
Substantial	AFK Property is engaged in the construction. Refer to assess-
(CCM)
contribution	ment provided for activity 7.1 Construction of new buildings in
	and DNSH	the section for AFK Property.
7.1	Eligibility	See description of the activity 7.1 regarding CCM above. The	Eligible,
Construction		climate risk assessment and expenditure plan for the annex at	not aligned
of new buildings		Bølevegen 4 does not meet the requirements of Appendix A.
(CCA)		As a result, the activity is not considered eligible under climate
		change adaptation.
	Substantial	AFK Property is engaged in the construction. Refer to assess-
	contribution	ment provided for activity 7.1 Construction of new buildings in
	and DNSH	the section for AFK Property.
3.1	Eligibility	See activity description of activity 7.1 regarding CCM above.	Eligible,
Construction			not aligned
Substantial	AFK Property is engaged in the construction. Refer to assess-
of new buildings
contribution	ment provided for activity 7.1 Construction of new buildings in
(CE)
and DNSH	the section for AFK Property.
7.7	Eligibility	ENRX leases Bølevegen 4, consisting of offices, production	Eligible,
Acquisition		facility and storage space. The property is formally owned by	not aligned
and ownership		AFK Property but is leased through a bare-house agreement
of buildings		where ENRX is responsible for maintenance and repair and
(CCM)		risks related to the building. ENRX is considered eligible as a
		right-of-use asset is recognized in the balance sheet in accor-
		dance with IFRS 16.
	Substantial	AFK Property have performed the alignment assessment as
	contribution	they are the legal owners of the property. Refer to assessment
	and DNSH	provided for activity 7.7 Acquisition and ownership of buildings
		in the section for AFK Property.
7.7	Eligibility	See activity description of activity 7.7 regarding CCM above.The	Not eligible
Acquisition		climate risk assessment and expenditure plan for Bølevegen
and ownership		complies with regional requirements but fell short of meeting
of buildings		the requirements of Appendix A. As a result, Bølevegen is not
(CCA)		considered eligible under climate change adaptation.
	Substantial	AFK Property have performed the alignment assessment as
	contribution	they are the legal owners of the property. Refer to assessment
	and DNSH	provided for activity 7.7 Acquisition and ownership of buildings
		in the section for AFK Property.

EU TAXONOMY REPORT 2023

17

Economic activity	Type of assessment	Interpretation and assessment	Conclusion
14.1	Eligibility	The communication system "Airtime" supports rapid mobile	Eligible, not
Emergency		deployment in areas of natural disaster and conflict. The com-	assessed for
services		munication system is considered eligible as part of technical	alignment
(CCA)		protection response and assistance to a climate hazard by
		operating emergency communication system.
	Substantial	The technical screening criteria are not considered as
	contribution	reporting on alignment is not a requirement for the activities
	and DNSH	added through the Commission Delegated Regulation (EU)
		2023/2485, refer to section 1 Introduction
5.5	Eligibility	VSAT Leasing Orders is a take back program where equipment	Eligible, not
Product-as-a-		is refurbished for resale, rental, or support stock. The revenue	assessed for
service and other		model is to a large degree based on multi-year subscription	alignment
circular use-and		contracts, providing customers with access to products and
result-oriented		securing a significant degree of recurring revenues.
service models
Substantial	The technical screening criteria are not considered as report-
(CE)
contribution	ing on alignment is not a requirement for the environmental
	and DNSH	objective Transition to a circular economy, refer to section 1
		Introduction.

18	ARENDALS FOSSEKOMPANI

Economic activity	Type of assessment	Interpretation and assessment	Conclusion
4.1	Eligibility	The software solution segment "Water and communities" pro-	Aligned
Provision of		vides a complete overview of the water supply network and its
IT/OT data-		condition, enabling municipalities and water companies to be
driven solutions		data-driven and to control, manage and mitigate leakages in
for leakage		the water supply systems.
reduction
Substantial	As a holistic water tool that gives the user a complete overview
(W&M)
contribution	of the water supply system and capabilities to control, manage,
		reduce and mitigate water leakages, "Water and communities"
		comply with the technical screening criteria:
		(a) Monitoring systems including holistic IT/OT suites/tools, or
		add-ons/extensions to such tools that provide identification,
		tracking and tracing water leakage
		(b) IT/OT solutions, or add-ons/extensions to such tools, that
		provide controlling, managing and mitigating water leakage
		In the risk analysis, it has been identified that the use of Volue's
		solution does not lead to any risks related to water quality or
		water stress. Nor does the use of Volue's software provide any
		risks that may prevent the operator of achieving good water
		status and good ecological potential.
	Do no	CCA: Climate risk assessment is performed in accordance with
	significant	appendix A. The assessment is based on a TCFD analysis con-
	harm	ducted in 2021, performed at company level, which has been
		further developed in 2023 by analysing the physical risks listed
		in appendix A at economic activity level. No material physical
		climate risks have been identified.
		TCE: The primary end-of-life waste is the computer hardware
		used in the development and management of the software.
		Volue has an agreement with an electronic recycling service
		provider, who works in accordance with EU WEEE Directive.
		P&C: The equipment used for "Water and Communities" meet
		the requirements set out in the Directive 2009/125/EC of the
		European Parliament and of the Council for servers and data
		storage products. No equipment used contain any of the
		restricted substances listed in Annex II to Directive 2011/65/EU.
4.1	Eligibility	The construction software "Gemini Terrain" is a design and	Eligible,
Provision of		engineering software that supports eco-design of infrastruc-	not aligned
IT/OT data-		ture. The software is used for terrain calculations which can
driven solutions		help the user limit the damage to nature and for mass calcula-
(CE)		tions ensuring that the infrastructure is designed in an efficient
		way. Gemini Terrain is considered eligible through design and
		engineering software supporting the eco-design of products,
		equipment, and infrastructure, including waste management
		and resource efficiency.
	Substantial	The technical screening criteria are not considered as report-
	contribution	ing on alignment is not a requirement for the environmental
	and DNSH	objective Transition to a circular economy, refer to section 1
		Introduction.

EU TAXONOMY REPORT 2023

19

4.9	Eligibility	Volue's Power Grid Software is used by electricity grid com- Aligned
Transmission		panies to design, maintain, analyze, and monitor their power
and distribution		grid in real-time. The software solution includes grid documen-
of electricity		tation and data management, grid planning & analytics, grid
(CCM)		connection services and grid operation. Although Volue does
		not directly transmit or distribute electricity, the economic
		activities of Volue's Power Grid Software are listed in the sub-
		stantial contribution criteria, under "2. The activity is one of the
		following". As such, Power Grid Software is considered eligible.
	Substantial	Volue does not directly operate the transmission and distribu-
	contribution	tion infrastructure or equipment. However, all Volue's custom-
		ers' power grid is a part of the interconnected control areas of
		the Norwegian Power Grid.
		Volue delivers advanced software that increases the controlla-
		bility and observability of the electricity system and enables the
		integration of renewable energy sources in line with require-
		ment 2 (e) installation of equipment to increase the controlla-
		bility and observability of the electricity system and to enable
		the development and integration of renewable energy sources,
		where advanced software in this context is considered as
		equipment.
	DNSH	CCA: Climate risk assessment is performed in accordance with
		appendix A. The assessment is based on a TCFD analysis con-
		ducted in 2021, performed at company level, which has been
		further developed in 2023 by analysing the physical risks listed
		in appendix A at economic activity level. No material physical
		climate risks have been identified.
		TCE: Waste regarding Power Grid Software is electrical equip-
		ment used in the development.Volue has a waste management
		agreement with a third party, who ensures maximal reusage
		of all electrical waste. Volue's waste management plan is
		reflected in financial projections on a higher level and not for
		each product.
		PP: Considered not applicable as the activity do not include
		high voltage lines.
		B&E: Considered not applicable. Appendix D requires an
		Environmental Impact Assessment (EIA) or screening in accor-
		dance with Directive 2011/92/EU. According to Article 2(4) in
		Directive 2011/92/EU, the EIA must only be conducted if the
		project is listed in Annex II of the Directive. As the activity is not
		listed in the Annex, an EIA has not been completed.