GHG Management | TCC GROUP HOLDINGS

Net Zero by 2050

“That is the path we must succeed for the 30 years to come, the path of the carbon revolution!” ~ Chairman, Nelson An-ping Chang

In 2024, TCC Group Holdings will adhere to the 1.5°C pathway in accordance with the COP26 Climate Summit resolutions, setting science-based targets (SBT) for 2030, and committing to achieving net zero by 2050.

TCC Group Holdings Committed SBT Carbon Reduction Target

TCC GROUP HOLDINGS cement business units include Taiwan, Mainland China, OYAK and CIMPOR.

The first cement company in East Asia to pass the Science-Based Targets (SBT) for carbon reduction

◤	In December 2019, TCC committed to reduce carbon emissions in accordance with the SBT method, and to set goals based on the SBT well-below 2°C pathway
◤	In July 2020, the SBTi review is passed. Base year: 2016. A target was set for the year 2025 (compared to the base year of 2016) to reduce Scope 1 carbon emission intensity by 11% and Scope 2 by 32%. SBT Decision Letter Link

TCC Well-below 2°C
	2016 Base Year	2017	2018	2019	2020	2021	2022	2023	2025 Target Year	2030 Target Year	2050 Target Year
Carbon Emission Intensity (Metric Tons CO₂e / Metric Ton of Cementitious Materials)	0.755	0.736	0.738	0.740	0.733	0.724	0.709	0.686	0.675 (-11%)	0.585 (-22%)	Carbon Neutral Concrete (Self-declared)
Progress Achieved	N/A	Achievement Rate 101%	Achievement Rate 99.69%	Achievement Rate 98.27%	Achievement Rate 97.93%	Achievement Rate 97.94%	Achievement Rate 98.78%	Achievement Rate 101%

The First Cement Company in East Asia to Commit to Net-zero by 2050, While Also Updating its 1.5°C SBT Goal.

Scope: A total of 14 cement plants in Taiwan and Mainland China

SBT 1.5°C 2030 NEAR TERM Target

◤	Date submitted: July 3rd, 2024
◤	Date passed: Q4 2024 expected
◤	TCC Group Holdings has committed SBT 1.5°C target Base year: 2016. A target was set for the year 2030 (compared to the base year of 2016) to reduce Scope 1 carbon emission intensity by 23.9%, Scope 2 carbon emission intensity by 64.4% The combined reduction for Scope 1+2 by 26.8% (adjustments will be made according to the SBT validation results)

2050 NET-ZERO Commitment

◤	Date submitted: July 2nd, 2024
◤	Commitment passed: On July 24th, 2024, TCC has received the official notification from SBTi as shown below:
◤	Target Setting for NET-ZERO and Schedule Stage 1: Calculating Scope 3 emissions, TCC has completed 15 Scope 3 carbon inventories in Taiwan, and plan to expand to the Mainland China plants by the end of 2024 Stage 2: Expected to pass the SBT expert panel by the end of March 2025

Setting Status of Subsidiaries of TCC Group Holdings

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In March 2024, TCC announced the completion of the expansion of its investment in low-carbon cement in Europe, forming a joint venture with Turkey's OYAK and has also acquired 100% of the shares of Portugal's CIMPOR

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In its merger and acquisition strategy, TCC places a high emphasis on carbon reduction issues to enhance its global layout's carbon competitiveness. The SBT goals for OYAK and CIMPOR are as follows:

OYAK Cement

NEAR TERM	LONG TERM	NET-ZERO
1.5°C	1.5°C	2050

CIMPOR

NEAR TERM	NET-ZERO
COMMITTED	COMMITTED

TCC 10 Decarbonization & Green Transition Strategies

TCC Decarbonization & Green Transition Strategy:Alternative raw materials, Alternative fuels, Alternative clinker*, Equipment & Process enhancements, Power genration by waste heat recovery, Renewable energy, Energy storage, Power cells, Carbon Capture, Carbon sink

* New materials

** TCC will evaluate the progress of strategies and technological developments both domestically and internationally to neutralize residual emissions and/or further mitigate emissions beyond its value chain using carbon credits. These credits may be purchased from external or internationally verified sources, or from captured carbon in alignment with government policies for carbon credits

Scope 3 Inventory | Taiwan

◤	Management Approaches

While reducing carbon emissions in its own cement industry, TCC goes further to influence the value chain to promote carbon reduction, aiming to become a company that proposes climate solutions and has a significant impact on carbon reduction. This initiative is intended to drive and collectively achieve net-zero targets. In 2023, TCC initiated a Scope 3 inventory in Taiwan, and has obtained a third-party verification.

Item	Cement Plant	RMC Plant	Operation Headquarters (including Low-carbon R&D Center)
Purchased Goods and Services	135,997.0404	94,281.9293	1,352.7027
Capital Goods	46,738.7781	261.5054	645.1093
Fuel- and Energy-Related Activities Not Included in Scope 1 or Scope 2	120,213.7865	1,884.3995	306.7983
Upstream Transportation and Distribution	83,014.8159	68,662.1969	1.0231
Waste Generated in Operations	20.6384	95.4969	19.9614
Business Travel	15.7637	95.7656	149.2656
Employee Commuting	555.2565	356.1993	96.9158
Upstream Leased Assets	17.7676	403.5988	4,413.9969
Downstream Transportation and Distribution	66,973.7580	15,861.6036	0.0000
Processing of Sold Products	27,736.7582	9,506.9559	0.0000
Use of Sold Products	0.0000	0.0000	0.0000
End-of-Life Treatment of Sold Products	69,448.3364	59,670.1330	0.0000
Downstream Leased Assets	268.1522	16,350.2538	670.0480
Franchises	0.0000	0.0000	0.0000
Investments	0.0000	0.0000	5,491,803.3121
Total	551,000.8516	267,430.0380	5,499,460.1332

Unit：tCO₂e

2050 Net-zero Pathway for the Cement and Concrete Business Units Worldwide

TCC’s Road Map to 2050 Net-zero Pathway for the Cement and Concrete Business Units Worldwide

Coverage

TCC Headquarters (including Low-carbon R&D Center)

Cement Plants in Taiwan, Mainland China, Turkey, and Portugal

RMC Plants in Taiwan, Turkey, and Portugal

Methodology

◤	SBTi’s Sectoral Decarbonisation Approach (SDA) for the cement sector’s 1.5°C-aligned and net-zero SBT
◤	ISO Net Zero Guidelines (IWA 42); ISO 14064-1
◤	MIT En-ROADS net-zero simulator’s open-source formulas
◤	International Energy Agency (IEA) Global Energy and Climate Model (GEC Model) logic and NZE Scenario parameters

Carbon reduction percentage. 1.Alternative clinker、Alternative raw materials 42%。2.Alternative fuels、Equipment & Process enhancements 35%。3.Equipment & Process enhancements、 Power genration by waste heat recovery 5%。4.Carbon Capture 18%

TCC Group Holdings Global Cement & Concrete Business Net-zero Pathway Implementation Steps

The Net-zero Pathway scope covers TCC Group Holdings Global Cement Business, including cement and RMC plants across Taiwan, Mainland China, Turkey, Portugal, Low-carbon R&D Centers, and TCC Headquarters in Taiwan. Upon reviewing the Net-zero Pathway for the TCC Group Holdings Global Cement & Concrete Business Units, it is feasible to achieve the SBTi Interim 1.5°C target in the context of existing regulations, permissions for alternative raw materials and fuels, and market demand. The carbon reduction measures for alternative clinker and raw materials are estimated to reduce emissions by approximately 19.56 million tons by 2050, contributing about 42% to the Net-zero Pathway; alternative fuels and process improvements are estimated to reduce emissions by approximately 16.08 million tons by 2050, contributing about 35%; renewable energy and power generation by waste heat are estimated to reduce emissions by approximately 2.29 million tons by 2050, contributing about 5%. TCC prioritizes the measures above to reduce carbon emissions, with CCUS as a last resort for reducing CO₂ emissions. Considering the sustainability report targets, the IEA’s Net-zero Roadmap, and the simulation results of the above-mentioned carbon reduction measures, the CCUS targets for each year are set accordingly. Annual CO₂ capture capacity for the group by 2050 will be 8.13 million tons, contributing about 18% to the Net-zero Pathway. Compared to the GCCA’s estimate of 36%, the IEA’s 48%, TCC’s Net-zero Pathway CCUS proportion of 18% is more realistic. A residual CO₂e volume of 730,000 tons that needs to be counterbalanced can be handled following the ISO IWA 42 Net-zero Guidelines “Counterbalancing Residual Emissions.”

Avoided Emissions of TCC Business Units Worldwide

Using global standards and international methodologies, the external carbon reduction capabilities of low-carbon construction materials, renewable energy, energy storage, and the battery industry are assessed, aiming to transform and enhance corporate value through increased influence

Methodology

◤	WBCSD’s Guidance on Avoided Emissions
◤	WRI’s methodology for product carbon reduction impact quantification
◤	European Union Innovation Fund’s Methodology for GHG Emission Avoidance Calculation

TCC Products & Services
Estimated proportion of external carbon reduction impact by 2030

Estimated proportion of external carbon reduction impact of TCC Products & Services by 2030:Cement Business Units and Low-carbon Construction Materials:Energy Business Units=63%:37%

	2023 Performance	2030 Target
Low-carbon Construction Materials	Assist construction industry -1.09 million tons	-1.69 million tons
Renewable energy	Assist energy sector -60,000 tons	-530,000 tons
Energy Storage	Stabilize grid -75,000 tons	-160,000 tons
Battery	Assist power tool customers -2,300 tons	Assist the aviation industry -320,000 tons

UNIT：CO₂e

ISO 14064 GHG Emissions Inventories and Intensity

◤	100% cement plants in Taiwan & Mainland China, RMC plants, and Operation Headquarters obtained third-party ISO 14064-1 certification

Taiwan & Mainland China (weighted average)

	2016	2019	2020	2021	2022	2023
GHG emissions (kt)	35,991.99	35,501.22	35,240.24	30,618.37	26,084.54	21,530.14
Cementitious materials production (Mt)	47.69	47.99	48.07	42.29	34.60	31.82
GHG emissions per Cementitious materials production (kg/t cementitious materials)	755	740	733	724	709	686

Coverage: 100% of production

Note: The data in this table is based on the Environmental Protection Administration's inventory guidelines (AR5), and therefore may slightly differ from the ISO 14064 database (AR6)

MAINLAND CHINA

TAIWAN

Carbon emission intensity-concrete in Taiwan in 2021 is 271.05 kg CO2e/m3. Carbon emission intensity-concrete in Taiwan in 2022 is 275.53 kg CO2e/m3. Carbon emission intensity-concrete in Taiwan in 2023 is 247.93 kg CO2e/m3

TAIWAN + MAINLAND CHINA

GHG Emissions ｜Unit: metric ton of CO₂e

Item		2016 (Base year)*	2020	2021	2022	2023
Cement Plant
Scope 1 + 2	Taiwan	4,621,312	4,613,399	5,009,703	4,522,663	3,644,049
	Mainland China	31,370,681	30,626,843	25,608,665	20,008,788	18,176,986
	Total	35,991,993	35,240,241	30,618,367	24,531,451	21,821,036
Scope 3	Taiwan	-	22,427	28,761	16,709	498,569
	Mainland China	-	-	-	-	1,103,290
	Total	-	22,427	28,761	16,709	1,601,859
RMC Plant
Scope 1 + 2	Taiwan	-	9,160	8,383	8,347	7,798
Scope 3	Taiwan	-	-	-	181,053	265,297
Distribution Station
Scope 1 + 2	Taiwan & Mainland China	-	-	-	-	1,455
Operation Office
Scope 1 + 2	Taiwan	-	1,339	1,251	1,782	1,684
	Mainland China	-	-	-	-	130
	Total	-	-	1,339	1,251	1,814
Scope 3	Taiwan	-	-	-	719	5,517,091

*SBT (WB2D) base year 2016 emissions: Scope 1 4,371,170 t CO₂e; Scope 2 250,142 t CO₂e

Internal Carbon Pricing & Carbon Trading Platform

Management Approaches

◤	Daily: AI Carbon Reduction Management Platform real-time data, warnings for achievement situation; Monthly: Reports on executives' management meetings; Annually: Tied with performance bonus
◤	In 2021, based on the SBT commitment, the "Alternative Raw (Fuel) Material Indicator Assessment Method" was established, and each plant set carbon reduction assessment indicators according to the actual situation
◤	TCC set an internal carbon price of NT$300/ton-CO₂e in Taiwan, based on LSE’s guidelines, and RMB101/ton-CO₂e in Mainland China, in anticipation of the cement industry’s inclusion in carbon trading. This pricing aids in assessing the impact on capital investments and operations
◤	Internal Carbon Trading: In 2024, TCC introduced an internal carbon trading platform, inspired by Guangdong Pilot ETS and EU ETS, to help plants control emission intensity and align product sales. Year-end carbon allowance settlements will influence performance appraisals

Performance

◤	Taiwan: Carbon reduction achieved a 100% execution rate in 2023. Carbon emission intensity (tCO₂e/metric ton of cementitious materials) achievement rate is 100%
◤	Mainland China: Carbon reduction achieved a 100% execution rate in 2023. Carbon emission intensity (tCO₂e/metric ton of cementitious materials) achievement rate is 99.5%
◤	Taiwan & Mainland China (weight average): Carbon emission intensity (tCO₂e/metric ton of cementitious materials) achievement rate 99.13%

New Generation Pure Oxygen Combustion Technology

TCC has been working with ITRI since 2011 to develop first- and second-generation calcium-looping carbon capture research and test, which is verified and with a solid basis of practical experience
In 2024, TCC and Germany's thyssenkrupp Polysius (tkPOL) cooperate to develop third-generation pure oxygen combustion technology together at Hualien Hoping Plant. Adding oxygen to cement calcination will capture over 90% of CO2, reducing energy needs

Please visit TCC Lastest News for more detail.

Performance

Since 2011, a total of NT$189 million has been invested in carbon capture research and development
Calcium-looping carbon capture technology: Global R&D 100 Award
The Oscars of Invention – The Chicago Tribune
Negative Carbon Astaxanthin: 2016 National Innovation Award, 2020-2021 National Innovation Excelsior Award

Target

Cumulative investment of NT$1.3 billion in 2025
100,000 metric tons captured per year in 2030
1,600,000 metric tons captured per year in 2050

TCC Joins Hands with Germany's thyssenkrupp Polysius to Develop Innovative Carbon Capture Technology with Separate Oxyfuel

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