Environment

Climate change

Table. Summary of IROs, policies, key actions, metrics and targets related to climate change

Climate change is a material topic for TSN reflecting the inherently carbon‑intensive nature of integrated steelmaking and the scale and complexity of its operations. TSN established a Climate Change Policy and a multi‑phase transition plan (Green Steel Project), with the objective of achieving net-zero CO₂ emissions for Scope 1 and Scope 2 by 2045.

This transition is central to TSN’s long‑term strategy and capital allocation, and is designed to enhance resilience to regulatory, market and technological developments associated with the low‑carbon transition.

The transition also represents a strategic opportunity for TSN to strengthen its competitive position as a supplier of low‑CO₂ steel. The table below shows the IROs identified for 'Climate change' and a summary of the  related key policies, actions, metrics and targets as further described in this section.

Strategy

Transition plan for climate change mitigation

Climate change is one of the world’s biggest challenges threatening our society. As an established steel producer, TSN is aware of the impact that primary steelmaking has on global GHG emissions. As the only steel manufacturing company in the Netherlands, with maximum emissions of 12.6 Mt CO₂ annually (EU ETS scope) related to the maximum production capacity, we recognise and acknowledge that a transformation is needed in our production processes. Achieving the goals of the Paris Agreement, specifically to limit global warming to 1.5°C, requires additional efforts for reduction of GHG emissions, and this has been the driving force in developing our multi-phase transition plan to reach the long term goal of net zero by 2045 (Scope 1 and Scope 2), in line with the EU’s objective of achieving climate neutrality by 2050. TSN has publicly stated that substantial public support is essential to enable the Green Steel Project, which is designed to deliver emission reductions in line with EU and national climate objectives derived from the Paris Climate Agreement.

TSN has its primary steelmaking site located close to the IJmuiden seaport. This site has two coke ovens producing metallurgical coke from coal. This coke is charged into two blast furnaces together with agglomerated iron ore to produce liquid hot metal, which is subsequently converted into steel using the basic oxygen steelmaking process (BF-BOS). The BF-BOS route depends on metallurgical coke as a feedstock that fulfils three essential functions: providing structural support, acting as a chemical reductant, and serving as an energy source. This combination of functions limits substitution options and makes the blast-furnace route inherently CO₂‑intensive. Through efficient operation and the use of pulverised coal in the blast furnaces, TSIJ already achieves one of the lowest coke consumption rates per tonne of hot metal produced globally, as reflected by the World Steel Association carbon‑intensity benchmarks¹.

However, given that approximately 70% of global steel production still relies on the BF‑BOS route and that further decarbonisation potential within this route is limited, TSN has decided to transition towards steelmaking technologies that do not require metallurgical coke.

Our transition plan, the Green Steel Project, is designed to reduce our Scope 1 CO₂ emissions and contribute towards climate change mitigation by reducing our reliance on coal‑based steelmaking processes. This plan is aligned with our Scope 1 emission reduction targets. Based on our GHG emissions profile, Scope 2 emissions represent a non-material proportion of TSN’s total emissions compared with Scope 1 emissions. Accordingly, the Green Steel Project focuses primarily on Scope 1 decarbonisation measures, while scope 2 decarbonisation is dependent on progressive decarbonisation of the electricity grid.

TSN’s Green Steel Project is integrated into the company’s long-term business strategy. It forms the core of our transition from coal-based blast furnace steelmaking to Direct Reduced Iron (DRI) and Electric Arc Furnace (EAF) technology. The Green Steel Project is structured in two phases. This report covers the actions, milestones and objectives related to Phase 1, which is currently in an advanced preparation and development phase. Phase 2 remains under development and may be subject to further refinement as strategic, technological and regulatory considerations evolve. The outcomes, commitments and finalised targets for Phase 2 will be detailed in subsequent reporting cycles once the plan is confirmed.

Phase 1 of the Green Steel Project is expected, once implemented, to deliver an annual reduction of approximately 5 Mt of Scope 1 CO₂ emissions. This technology shift supports our strategic ambition to remain one of Europe’s most competitive and efficient steelmakers in an environment characterised by high energy costs and shifting market demand.

The plan is embedded in our multipronged transformation programme, which focuses on maximising production efficiencies while enhancing product mix and margins. These operational changes provide the structural basis for implementing low CO₂ steelmaking as part of the business model. The Green Steel Project focuses primarily on the steelmaking operations at the IJmuiden site given that this location represents the most material source of TSN’s Scope 1 GHG emissions. Accordingly, the decarbonisation levers, interim targets, and implementation measures outlined in this report are centred on the transformation of this primary steelmaking facility. In parallel, TSN is working to enable its downstream sites (TSDE) to progress towards net-zero Scope 1 emissions by 2045 through knowledge sharing and the gradual adoption of new technologies.

The goal is to have an approximate annual reduction of TSN’s Scope 1 emissions by 5 Mt CO_2, which will directly reduce the scope 3 emissions in the downstream value chain, supporting our customers in meeting their climate change targets. We are also improving the mapping and granularity of the value chain Scope 3 emissions that TSN has responsibility for, in order to improve transparency and inform future target‑setting.

This alternative route requires limited amounts of coal, which may be replaced with renewable carbon sources, and is known as Direct Reduction Plant and Electric Arc Furnace (DRP-EAF). These two independent processes will be linked at TSN to work in tandem and ensure that the same qualities of steel products continue to be made, utilising the strengths of both routes. The multi-phase approach spreads the significant capital investment over a longer time period, and is envisioned as follows:

Phase 1

1. Construction of one DRP-EAF followed by closure of one coke oven and blast furnace

2. Carbon Capture and Storage (CCS) facility commissioned

3. Replacement of Natural Gas with Bio-methane and/or Green Hydrogen

Phase 2

1. Construction of further reduction and melting facilities³ followed by closure of remaining coke oven and blast furnace

2. Replacement and/or modification of existing and remaining ancillary plant equipment⁴

Phase 1 of the transition plan is documented in the published Joint Letter of Intent, finalised in September 2025⁵, which sets out the agreement between TSN, the Dutch government and the Province of North Holland to work towards a Tailor-Made Agreement. This phase focuses on reducing Scope 1 direct emissions through the replacement of coal‑based steelmaking processes with lower‑carbon technologies using Natural Gas and electricity, while avoiding long‑term fossil fuel lock‑in; and making use of sequestration opportunities for captured CO₂. Following this, the facilities to prepare the captured CO₂ for sequestration will be commissioned, reducing the emissions by capturing and preparing the CO₂ and sending it to a third party for secure sequestration. As the infrastructure and availability continue to expand, further steps to reduce the use of fossil energy sources will be made by replacing natural gas with bio-methane and/or green hydrogen made using renewable electricity. In line with the gradual decarbonisation of the Dutch electricity grid, the carbon intensity of the electricity will decrease, eventually creating an entirely renewable electricity source. The phasing of the activities in the Green Steel Project may be influenced as TSN is exploring the possibility of closing the coke and gas plants sooner than previously anticipated. 

Phase 2 of the transition plan builds on the foundation of Phase 1, focusing on the construction of further reduction and melting facilities and fully replacing the remaining blast furnace and coke oven operations. It also focuses on the replacement or modification of existing and remaining ancillary plant equipment to ensure compatibility with low‑carbon steelmaking processes. This phase underpins TSN’s commitment to achieve Scope 1 and 2 climate neutrality by 2045. The technology required to meet the requirements of this phase is subject to internal investigation to keep abreast with developing advancements in this area.

The specific decarbonisation levers that are relevant to the transition plan are as follows.

• Chemical reductant changed from coke to natural gas, made possible by replacing existing technology, executed in two steps

• Energy for melting changed from coal and coke to renewable electricity, made possible by replacing existing technology, executed in two steps

• After technology replacement, CO₂ emissions to atmosphere collected and sequestered, made possible by additional capital investment

• After technology replacement, natural gas replaced by biomethane and/or green hydrogen, made possible by infrastructure investment leading to increased availability and affordability.

• Increased use of scrap in steelmaking process, this lever has limitations in the BOS steelmaking route, but some improvements are identified for the period before the technology transition. This lever will be boosted significantly by the transition to EAF steelmaking. This lever is also relevant for TSN’s circularity targets.

• Purchasing slab from certified low CO₂ steel suppliers for downstream processing in between Phase 1 and Phase 2

Key dependencies

The delivery of the Green Steel Project is dependent on coordinated commitments between TSN, Tata Steel Limited (TSL) and the Dutch State. TSN and TSL commit to providing most of the project financing, while the Dutch Government supports the transition by addressing the remaining funding gap through a one‑off subsidy, subject to TSN meeting the agreed conditions. The conditions that underpin the Green Steel Project are listed below:

• Necessary regulatory approvals, including permits for construction and operating the new installations will need to be secured.

• Government financial support and policy stability. The Dutch government has expressed its intent to contribute financial support to Phase 1 of the Green Steel Project subject to the conclusion of enforceable agreements and the fulfilment of agreed conditions.

• Availability and scalability of low-carbon energy sources. The DRI plant and EAF are designed to operate initially on natural gas and green electricity, with the assumption that hydrogen and/or bio-methane will become sufficiently available and affordable to enable a later transition.

• Successful engineering, construction and commissioning of the new DRI/EAF facilities. TSN has already awarded basic engineering contracts for these assets, but the realisation of targeted emission reductions depends on timely delivery, integration with existing operations, and the capability of the technology to perform at the required scale.

• Internal cost reduction and organisational restructuring efforts. TSN is pursuing internal efficiency and organisational measures to strengthen financial resilience and support investment capacity.

• Community acceptance and environmental expectations, including commitments to reduce particulate emissions, cover ore fields and support a Health Impact Assessment (HIA), all of which influence public trust and permitting processes.

• Realisation of Assets to facilitate secure sequestration of CO₂. TSN will have capability to isolate a relatively pure CO₂ gas flow from the DRP and with the addition of a gas purification and pressurisation facility, it will be ready for sequestration by a third party.

• Decarbonisation of the Dutch Electricity Grid as planned. TSN will move away from coal as the main energy source and toward electricity. The envisioned move to renewable electricity is dependent on the continued decarbonization of the Dutch electricity grid.

Role of Administrative, management and Supervisory Bodies

The governance of TSN’s Green Steel Project operates across four interconnected levels:

• Board-level oversight: Management Boards are responsible for reviewing strategic alignment, reporting, and performance with advice from Supervisory Board (SB).

• Corporate sustainability governance: Chief Operations Officer (COO) leads the development and implementation of the Green Steel Project.

• Local management structure: Senior managers, experts in different functions, and operational leadership are accountable for executing the transition and supporting the Director of Sustainability, who reports to the CEO. The Risk & Compliance function will oversee adequate management of the related risks to this large project.

• External governance: Dutch government oversight through funding agreements and enforcement bodies, and community health & environmental scrutiny.

Capital Expenditure related to coal, oil and gas economic activities

Pending closure of two coke and gas plants, these facilities continue to be maintained and selectively upgraded to ensure safe and compliant operation in line with increasingly stringent environmental and emissions standards. No capital expenditure is directed towards increasing production capacity of the existing coke and gas plants. In 2025/26, capital expenditure related to the maintenance of the coke and gas plants amounted to €25 million, representing 11.5% of TSN’s total capital expenditure for the year. Future investment needs and timelines may be subject to change depending on regulatory developments, permitting requirements, and the further elaboration of the Green Steel Project.

Within the reporting year, TSN acquired LAG Velsen B.V. thereby becoming the owner of three power plants located in the IJmond region and previously owned by Vattenfall — Velsen 24, Velsen 25 and IJmond 01. See Note 7 to the consolidated financial statements (Business combinations). Ownership of the assets and the transfer of 116 employees became effective on 1 January 2026. The acquired assets generate electricity and steam using residual gases from TSN’s iron and steelmaking processes and support implementation of actions under the Green Steel Project. Internal ownership of these assets enhances TSN’s ability to manage energy flows, energy transition‑related risks, strengthens energy security during the transformation period, and supports the phased transition towards hydrogen‑ ready DRI–EAF steelmaking.

Transition Plan Progress to Date

TSN has made substantial progress in advancing its Green Steel Project and has progressed from plan development into the preparatory phase for implementation, with activities focused on regulatory readiness, engineering definition and financing arrangements in advance of a potential Final Investment Decision (FID) .

In June 2025, TSN submitted a comprehensive Environmental Impact Assessment (EIA) to the Province of North Holland. The EIA represents a key regulatory milestone and forms a prerequisite for the required permitting procedures, which are currently a primary area of focus. In parallel, and as part of the preparation for the introduction of low-carbon production technologies, TSN has awarded engineering contracts for the Direct Reduced Iron (DRI) plant and Electric Arc Furnace (EAF), which are intended to replace existing blast furnace and coke-making assets.

In support of the transition, TSN entered into a Joint Letter of Intent (JLoI) with the Dutch State. The JLoI provides for interim operation of the DRI plant on natural gas, with a pathway for future conversion to lower-carbon alternatives such as biomethane or hydrogen. The JLoI establishes the framework for the negotiation of a Tailor-Made Agreement (TMA). Discussions on this agreement are ongoing, with agreement expected to be reached in the latter part of 2026. Further information on JLoI and the TMA is provided in the Joint Letter of Intent chapter.

To support readiness for the transition and the associated investment programme, TSN has initiated a broader transformation programme that includes restructuring measures and efficiency improvements aimed at strengthening financial resilience and execution capability. As part of the wider Tata Steel Nederland Group ambition to achieve net-zero Scope 1 and Scope 2 emissions by 2045, certain downstream service centres have already achieved Scope 1 and 2 CO₂ neutrality, including locations in Halmstad (Sweden), Naantali (Finland) and Gelsenkirchen (Germany). At the Colors Maubeuge site, Tata Steel Nederland has implemented a major Scope 1 decarbonisation measure through the replacement of two natural gas fired incinerators with a fully electric Regenerative Thermal Oxidiser (RTO). The RTO treats volatile organic compounds (VOCs) arising from paint curing processes and incorporates heat recovery, significantly improving energy efficiency while eliminating the combustion of fossil fuels previously required for VOC abatement. The electrification of the VOC abatement process results in a reduction of approximately 7,500 tonnes of CO₂ emissions per year, corresponding to a reduction of around 12–16% of total site emissions, and represents one of the largest single decarbonisation measures implemented within the Colours business unit. The project required an investment of approximately €10–10.4 million and was partially supported through external funding from the French State under the France 2030 programme, administered by ADEME. The RTO became fully operational in early 2026. 

Overall, TSN’s progress demonstrates a structured and increasingly mature transition plan, supported by regulatory submissions, initiation of capital projects, government-backed financing, and early environmental mitigation actions, all underpinning its pathway toward large-scale emissions reductions and long-term climate neutrality.

Climate-related risks and scenario analysis

TSN has identified a set of material climate-related physical and transition risks through TCFD-aligned climate-scenario analysis and ERM supported assessments covering its IJmuiden site, its key supply chain and its logistics network in 2023. The analysis is designed to enhance understanding of how different climate pathways could affect TSN’s operations, value chain, and strategic resilience over short-, medium-, and long‑term time horizons.

The analysis followed a structured, multi-step approach combining scenario analysis, qualitative risk assessment, and quantitative financial analysis, with outcomes feeding into the Climate Financial Driver Analysis (CFDA).

The analysis shows that TSN’s most strategically important production site in IJmuiden may face physical risks, including water stress and drought affecting cooling water availability from Lake IJsselmeer, particularly during dry periods, and storm-related disruptions to inbound and outbound logistics, such as interruption of rail transport, load zone operations, crane activity, dockside handling and vessel movements. In addition, climate hazard exposure across TSN’s iron ore and coal suppliers presents material upstream risks linked to heat, drought, flooding and storm impacts at global supplier locations.

The physical climate risk assessment was conducted using a four-step methodology:

• Data collection and hazard screening: including analysing site coordinates, and logistics locations, deriving baseline and projected climate hazard data from IPCC Sixth Assessment Report datasets, supplemented with national and regional sources (e.g. Klimaateffectatlas, WRI), climate projections focused on 2030 and 2050 under the IPCC SSP5-8.5 (high-emissions) scenario, and screening of different hazards such as extreme heat, extreme cold, flooding, storms, water stress and drought, wildfires, rainfalls, etc.

• Site assessment and operational review: key site aspects were identified and assessed (e.g. utilities, cooling water, logistics, raw material storage, power supply, wastewater treatment).

• Risk identification, scoring, and analysis: including identifying potential physical risk items by combining site aspects with hazard data, scoring risks using TSN’s internal risk matrix based on likelihood and impact for present day, 2030, and 2050.

• Prioritisation for financial quantification (CFDA): risks with the highest combined risk scores were selected as potentially material and recommended for further quantification.

TSN also faces transition risks arising from the policy, market and technological shifts associated with decarbonisation, including exposure to carbon pricing mechanisms, such as the Dutch CO₂ levy and EU ETS, and the need for significant capital investments in new low-carbon technologies, including DRI EAF, supporting hydrogen infrastructure and CCS.

Additional market-driven risks include uncertain timing of demand for low CO₂ steel, competitive pressure as peers bring low-carbon capacity online earlier, and shifts in EU trade policy and origin rules that may alter sourcing and price dynamics of low CO₂ steel, while policy and reputational risks stem from tightening emissions regulation, permitting requirements and stakeholder expectations for accelerated decarbonisation.

The transition climate risk assessment followed a scenario-based screening and prioritisation methodology, structured into four main steps:

• Identification of climate-related risks and opportunities (CRROs): including developing a long list of transition risks and opportunities, qualitative assessments of CRROs based on impact, likelihood, and timeframe, and developing a shortlist of CRROs (7 risks and 4 opportunities) for detailed scenario analysis.

• Scenario selection and indicators: two climate scenarios were applied (IEA World Energy Outlook 2022 – Stated Policies (STEPS) (~2.5°C) and IEA Net Zero Emissions by 2050 (NZE) (~1.5°C)) supplemented with NGFS climate scenarios when needed. Each CRRO was mapped to one or more quantitative scenario indicators (e.g. EU carbon price, hydrogen prices, capital cost of new technologies).

• Exposure ratings and scoring: including rating TSN exposure to each scenario indicator based on earlier impact assessments, calculating scenario deltas (differences between STEPS and NZE over time) for each indicator, and generating risk or opportunity scores for 2025, 2030 and 2045.

• Prioritisation for financial quantification (CFDA): risks with the highest scores and sufficient data availability were recommended for quantitative financial analysis.

TSN’s scenario analysis applies multiple IPCC-aligned pathways to understand how these risks evolve across time horizons and to assess the resilience of TSN’s strategy and business model. The results inform ongoing adaptation and mitigation actions, including water use reduction initiatives, alternative cooling water options, supply chain rerouting in adverse climatic conditions and the phased transition to lower carbon steelmaking technologies.

Table. Overview of climate scenario analysis results

Resilience in relation to climate change

In 2024, global average temperatures exceeded 1.5°C above pre-industrial levels for the first time on an annual basis. The Intergovernmental Panel on Climate Change (IPCC) has warned that such warming is likely to increase the frequency and severity of heatwaves, storms, droughts and sea-level rise, with potential adverse effects on ecosystems, human health and economic activity worldwide. TSN operates sites in Europe and the United States, some of which may be exposed to the physical impacts of extreme weather events. We therefore recognise the importance of identifying and assessing climate-related physical and transition risks and opportunities in order to support the long-term resilience of our business. In 2023, TSN engaged external experts to conduct a climate risk assessment for its IJmuiden site. As part of our roadmap towards compliance with the Corporate Sustainability Reporting Directive (CSRD), this assessment will be further refined and progressively integrated into our enterprise risk management (ERM) framework.

Current financial effects

TSN has assessed the effects of its material climate‑related risks and opportunities on its financial position and financial performance for the reporting period. The identified risks and opportunities are described in the DMA table, with the related current financial effects discussed below.

Carbon pricing

TSN is exposed to carbon pricing mechanisms that have a material financial impact on its results and financial position. The Group incurs recurring expenditure in relation to compliance with the EU Emissions Trading System (EU ETS), primarily through the purchase of carbon emission allowances. A provision for CO₂ emission rights is recognised in the balance sheet when the Group expects a shortfall between emission allowances allocated and the actual level of emissions. Expenses related to CO₂ emission rights are recognised within other operating costs in the income statement.

No material effect from the Dutch CO₂ levy has been identified in the reporting year, and no future impact is anticipated as the effective rate for TSN became 0% from 1 January 2026.

Based on current legislation and announced policy developments, the Group does not expect a material future impact from the Dutch CO₂ levy.

During the reporting period, the Carbon Border Adjustment Mechanism (CBAM) was in its transitional phase, during which obligations were limited to reporting requirements only. Accordingly, at the reporting date, CBAM did not give rise to a direct financial obligation for TSN. 

The 2025/26 liabilities recognised in the balance sheet in respect of environmental provisions amounted to €308 million, while the expenses recognised in the income statement amounted to €179 million. The provision for CO₂ emission rights is sensitive to fluctuations in market price for emission allowances. To manage this exposure, the Group utilises commodity contracts to hedge volatility in carbon prices. Further information on emission rights, related costs and hedging activities is provided in Note 20. Provisions for CO₂ emission rights are included within environmental provisions and disclosed in Note 21. The costs of emission rights are presented in Note 2 to the consolidated financial statements.

Investments in decarbonisation

As part of the Green Steel Project, TSN has initiated investments in decarbonisation projects, including the Direct Reduced Iron–Electric Arc Furnace (DRP-EAF) route and carbon capture and storage (CCS). During the financial year, expenditure primarily relating to pre-engineering phase, permitting, and attributable employee costs amounted to €46.5 million, and were capitalised as part of property, plant and equipment, presented in Note 8 to the consolidated financial statements.

Price fluctuations of natural gas

Natural gas is an important energy source within TSN’s operations, supplementing blast furnace gas for electricity generation and providing heat in key production processes. The Group has been exposed to current financial effects arising from natural gas price fluctuations and maintains a hedging strategy to mitigate short-term volatility. Given that the effects are not separately identifiable, we have not quantified them for this reporting period.

The Group anticipates that material financial impacts associated with this risk will arise primarily in future reporting periods, as the implementation of the DRP-EAF production route will increase TSN’s reliance on natural gas during the transition phase. Refer to Note 20 for further information on financial risk management.

Low CO₂ steel products

TSN offers Zeremis Carbon Lite, an independently verified reduced-CO₂ solution that allocates verified CO₂ savings to customer purchases and generates revenue from its sale. Since TSN does not yet offer low-CO₂ embodied steel on a large scale; we are exploring opportunities to use selected externally sourced lower-CO₂ coil or slab for further processing at TSN sites. The current financial effects arising from these products are not material and as such, have not been quantified for the reporting period.

Notwithstanding the current effect, low-CO₂ steel products represent an important strategic opportunity for TSN. Material financial effects are expected over time as the Group progresses its decarbonisation pathway, including the implementation of DRP-EAF and CCS technologies and renewable gas integration in the steelmaking process.

The revenue from sale of low-CO₂ steel products is part of Group's revenue disclosed in Note 1. The finished goods are part of Inventories presented in Note 12 to the consolidated financial statements.

Impact, risk and opportunity management

Climate change policies 

The TSN Climate Change Policy document sets out the approach to reducing TSN’s impact on climate change and communicates our commitment to reducing greenhouse gas emissions across our own operations and value chain. The table below describes the key contents of the Climate Change Policy, including its general objectives and the material IROs it relates to, a description of the scope of the policy, and the key stakeholders.

Table. Policies related to climate change

Climate change actions 

TSN’s decarbonisation actions and resources are primarily focused on the integrated steelmaking site in IJmuiden, which generates the vast majority of TSN’s Scope 1 emissions. The Downstream entities have also developed decarbonisation plans for Scope 1 and 2 GHG emissions, with five sites (service centes Halmstad in Sweden, Naantali in Finland, Gelsenkirchen in Germany, Maastricht in Netherlands and Geldermalsen facility in the Netherlands) gaining certified climate neutrality status, and others awaiting capital expenditure allocation to complete the transition. TSN strategy is to maintain focus, and concentrate resources, on strategies at scale. This section outlines actions related to climate change and also breaks down actions related to GHG emissions linked to Scope 1, 2 and 3 emissions.

Actions addressing Scope 1 emissions

Scope 1 emissions represent the largest share of TSN’s greenhouse gas footprint and are primarily concentrated at the steelmaking site in IJmuiden. The Green Steel Project is detailed in the JLoI document, and encompasses the following decarbonisation levers:

• Closure of coal dependent coke ovens and coke dependent blast furnaces while maintaining steelmaking capacity with new facilities compatible with renewable sources of gas and electricity¹

• Operation of new facilities with natural gas, with future conversion to biomethane and/or green hydrogen, as they become available. This facilitates an immediate CO₂ reduction, while building in the capability to continue the CO₂ reduction pathway in line with the growth of renewables infrastructure.

• Making use of the in-built carbon capture functionality of the DRP by installing gas treatment and a compression station to facilitate sequestration by a third party to avoid 0,6 Mt per year CO₂ emission to the atmosphere, diverting it to secure storage in depleted North Sea oil and gas fields.

• Increased use of scrap, with electrically powered melt capacity and expansion of the scrap handling facilities, reducing the demand for virgin ore and associated upstream emissions. The extent of scrap use will be limited by availability of suitable scrap rather than the equipment.

The steps in the first phase of the Green Steel Project expressed as CO₂ emissions associated with maximum steelmaking capacity (7.2 Mta) are presented in the graph further in this section. As stated in the JLoI, these values can be considered to be reduction objectives for the time being and create the basis for further discussion for the Tailor-Made Agreement. There is a margin of (technical) uncertainty about the magnitude of the CO₂ reduction quantified at 0,6 Mt over the total.

Actions addressing Scope 2 emissions

Actions related to Scope 2 emissions focus on reducing indirect emissions from purchased electricity and energy use across TSN’s operations. These include site‑wide energy efficiency and optimisation measures, increased electrification of processes where technically feasible, and enhanced control over energy generation assets. Energy efficiency and optimisation is a constant improvement factor on any steelmaking site, and IJmuiden is no exception to that. The acquisition on January 1^st of the three Velsen power plants, recently under ownership of Vattenfal but originating from the same time as the original blast furnaces on the IJmuiden site, gives more opportunity for TSN to meet the needs of the Green Steel Project. As an integrated site, the generation of energy in the form of gas goes hand in hand with coke, iron and steel production. By assuming full operational and financial control of the power plants allow investments to be targeted within the most energy efficient operating window for the gases, and for the electricity required throughout the Green Steel Transition.

While the existing equipment remains in place, the capability to reduce CO₂ emissions is limited. However, the following levers are present and will continue to be exploited to the maximum extent possible. TSN has progressively tested the previously held beliefs around what constitutes ‘maximum scrap usage’ and has increased scrap usage from 10% industry standard to 17% at the steelmaking facility in IJmuiden. Along with site-wide energy efficiency measures and minimising coke use in the blast furnace, this has been one of the key components in delivering a carbon intensity, measured in tonne CO₂ per tonne Crude Steel, of >0.5 tonnes lower than the industry average for the BF-BOS route¹.

Actions addressing Scope 3 emissions

Actions in relation to Scope 3 emissions focus on reducing indirect emissions across TSN’s value chain, including upstream transportation, logistics and raw‑material supply. Inbound, outbound and site transportation of our raw materials, intermediary products and products to our customers have been areas of attention over the past couple of years. Tracking of the inbound bulk raw materials and associated vessel information is being recorded with an aim to actualising the Scope 3 category 4 data collection, providing a reliable baseline upon which to set meaningful targets. Transportation on and between the TSN sites has already seen steps forward with specific, mainly barge, solutions running on biofuel for transport between Netherlands, Belgium, France and Germany. Over 85% of our rail transport is CO₂e free using renewable electricity² and road transport on the IJmuiden site is decarbonised through the use of biofuel and certified to that effect. This contributes to reductions in our Scope 1 emissions, benefitting our Zeremis customers who can select the Carbon Lite and Delivered product offerings. Our customers can also receive the LCA documentation on demand to inform their decarbonisation plans. During the transition period, Scope 3 emissions may temporarily increase due to construction activities associated with new facilities and the phased closure of existing assets.

Resources allocated to actions

In terms of resources made available for the realisation of the Transition plan, a project team of around 50 FTEs has been assigned to the Green Steel Business Transformation, a department dedicated to managing the company-wide transition to the new way of working. The efforts from the Project and Engineering department who is tasked with delivering the project is equivalent to 106 FTEs, not including the engineering firms who have worked on separate work packages. The technical de-risking to ensure that the product portfolio can still be delivered with the new steelmaking technologies has been developed into a Technology Roadmap. These actions are to be delivered primarily by Technical and R&D employees with a total effort estimated at over 70 personnel in FY26. Akash Latchman, board member with specific expertise in mega-projects was recruited in November 2024, and he has strengthened the TSN Projects and Engineering team with experienced personnel from his network. External Engineering firms specialising in projects with comparable levels of complexity and size have been hired to support TSN, and the technical expertise of the OEMs has been, and continues to be utilised. In total, TSN has allocated human capital resources equivalent to approximately 225 FTEs.

During the reporting period, TSN allocated significant financial resources to its decarbonisation actions under the Green Steel Project. These resources comprised approximately €70 million of operating expenditure, primarily relating to non-capitalised employee and technical consultancy costs, as well as €47 million of capital expenditure for pre-engineering and project development activities incurred during the year. The scale, financial magnitude and strategic relevance of these expenditures underpin TSN’s assessment that the current resources allocated are significant for reporting purposes. The operating expenditure is recorded as part of operating costs as disclosed in Note 2, while the capital expenditure is included in additions to property, plant and equipment, as presented in Note 8 to the consolidated financial statements.

The implementation of Phase 1 is expected to require future financial resources in the range of €4–6.5 billion which are planned to be sourced from different sources. TSN and TSL intend to secure external debt financing in the range of €2.3–4.0 billion. In addition, the Dutch government has expressed its intention to provide financial support in the form of a one‑off subsidy of up to €2.0 billion. The remaining amount is expected to be funded through a combination of cash generated and contributed by TSN, and funding covered by TSL. The final and confirmed capital expenditure will be determined at the time of signing the Tailor‑Made Agreement, which is expected by the end of September 2026. Further information on JLoI and the Tailor‑Made Agreement is provided in the chapter Joint Letter of Intent. The estimated cost for Phase 2 cannot be made until the alternatives route configurations have been fully evaluated

Metrics and targets

Climate change targets 

The GHG emission reduction targets for TSN originate from the required contribution from the steel sector to the National decarbonisation targets of the Netherlands, which in turn are aligned with the Paris agreement and EU Climate Law. To meet the required decarbonisation targets within this framework, 60% of the steelmaking capacity at TSN will be decommissioned and replaced with new technologies designed to be compatible with operating on 80% renewable hydrogen, or 100% biomethane, and renewable electricity.

TSN has established climate-related targets that are consistent with its decarbonisation strategy, including interim and long-term objectives of reducing Scope 1 greenhouse gas emissions from carbon-intense energy to renewable energy. As set out in the JLoI, TSN has committed to reducing its maximum annual Scope 1 CO₂ emissions (EU-ETS Scope) of 12.6 Mt/a through a phased transformation of its iron and steelmaking assets, including a reduction of 5.4 Mt CO₂/a via the implementation of Phase 1 steps of the transition plan. The targets refer to the steelmaking assets at the IJmuiden site, known as TSIJ. There is a 0.6 Mt uncertainty margin that applies to these targets, as stipulated in the JLoI.

The targets are calculated according to the EU-ETS scope, related to the maximum production capacity of 7.2 Mt per annum. This production capacity scales to approximately 12.6 Mt Scope 1 CO₂ on an annual basis, with each transition step target following the same EU ETS scope for the resulting maximum CO₂ emissions. The ESRS reporting guidelines stipulate the use of the GHG protocol for the reporting boundary of Scope 1. This has a slightly broader scope, including items such as emissions from downstream entities in TSN, vehicles owned and operated by the reporting company. For comparison purposes both values are reported in E1-8  Gross Scope 1,2,3 GHG emissions, where the deviation between them in the reporting year was around 0.5%.

The CO₂e emissions for TSN are 99.8% CO₂, with the balance being CH₄, N₂O, HFCs and SF₆. For the transition plans the CO₂ is calculated and the other GHG are expected to reduce pro rata with the CO₂. As the CO₂e quantities are within the rounded values for CO₂, both can be considered to be synonymous with one another for the purposes of the reduction targets.

Chart. TSN Scope 1 CO₂ Reduction Path

These interim milestones contribute to the long-term ambition of achieving net zero Scope 1 and Scope 2 emissions by 2045, as set out in our climate strategy.

With respect to Scope 3 emissions, TSN has not yet set a quantitative reduction target. This reflects the significant and temporary non‑linear effects that the transformation of primary steelmaking processes will have on Scope 3 emissions, particularly upstream categories. TSN is prioritising the establishment of a robust Scope 3 baseline by improving data quality and enhancing transparency across the value chain. TSN has committed to engaging suppliers, logistics partners and customers to improve reporting and identify long‑term reduction opportunities, particularly in Scope 3 categories less affected by the transition.

TSN recognises that the majority of its total GHG emissions are Scope 1, which therefore remain the immediate focus of its decarbonisation efforts. 

Scope 2 is not specifically addressed as a target for reduction because TSN scope 2 emissions in its current configuration are practically immaterial. As an integrated steelworks the arising gases are used to generate the electricity needs of the main steelmaking site in IJmuiden. The transition to low CO₂ steelmaking will see the generation of gas decrease as the coke ovens and blast furnaces close, and so the generation of fossil-based electricity will also decrease, and TSN will start sourcing electricity from the grid. As the Dutch electricity grid decarbonises the TSN electricity source will similarly become more renewable, with the Dutch Climate Law setting a target for electricity from the grid to be carbon neutral by 2035.

TSN has set a long-term ambition to reach net zero Scope 1 and 2 emissions by 2045, and its decarbonisation pathway is informed by recognised 1.5°C compatible scenarios such as the IEA Net Zero by 2050 (NZE) pathway for heavy industry. In line with these sectoral pathways, meaningful emissions reductions in steelmaking typically occur through major technology shifts rather than incremental improvements. For TSN, this shift is driven by the planned commissioning of its first Direct Reduction Plant (DRP) and Electric Arc Furnace (EAF) as part of Phase 1 of the Green Steel Project. This new facility is expected to replace a substantial portion of coal-based production and enable an initial reduction of 43% in Scope 1 emissions, with potential for reductions of up to 50% depending on developments in hydrogen and CCS technologies. As a result, emissions are expected to remain relatively stable until the new facility becomes operational, after which a significant step change reduction is anticipated, reflecting the practical realities of asset replacement in integrated steelmaking. Further reductions are expected through Phase 2 of the Green Steel Project, which is aimed for completion by 2045 and is expected to enable TSN to achieve net zero Scope 1 and 2 emissions.

Climate change metrics

Energy consumption and mix metrics

During the 2025/26 reporting year, total energy consumption increased by 0.4%. It should be noted that the scope of reporting changed year‑on‑year: the 2024/25 figures covered only TSIJ, whereas the 2025/26 figures cover TSN operations, including both TSIJ and TSDEs. Within the expanded scope, total fossil energy consumption decreased slightly by 0.4%, driven by changes in the energy mix.

Energy consumption from renewable sources increased by more than 300% year‑on‑year, primarily due to the inclusion of TSDEs in the reporting scope alongside TSIJ in the 2025/26 reporting year.

Table. Total energy consumption related to own operations

Note1: energy consumption from coal and coal‑derived fuels of FY 2024/25 (15,148,878 MWh) in the current report is revised from last year's annual report value (30,247 GWh). This difference is because in the previous year, injection coal and metallurgical coal used in the blast furnace were calculated as fuel in the fuel consumption from coal and coal products. In the current year, metallurgical coal used in the blast furnace was reclassified to feedstock and excluded from the calculation of fuel consumption from coal and coal products and only injection coal was considered in the calculations.

Note2: reporting scope is different between current year and previous year. Values reported in the previous year include only TSIJ. Values reported in the current year include TSIJ and significant TSDEs.

Table. Total energy production

Gross Scopes 1 & 2 GHG emissions metrics

This section provides an overview of TSN’s Scope 1 & 2 GHG emissions for the reporting period disaggregated by scope emissions source. The overall emissions performance is driven by the nature of TSN’s steelmaking operations, and energy consumption. As indicated in the metrics and targets section above, Scope 1 emissions continue to represent the largest share of TSN’s emissions, mainly driven by direct process and combustion emissions from steel production, while Scope 2 emissions are minimal.

During the 2025/26 reporting year, gross Scope 1 GHG emissions representing a decrease of approximately 4% compared to last year. It should be noted that the reporting scope changed year‑on‑year: the 2024/25 figures covered only TSIJ, whereas the 2025/26 figures cover all TSN operations, including both TSIJ and TSDEs. The reduction in Scope 1 emissions is consistent with the changes in the fuel mix observed during the reporting year. Scope 2 GHG emissions relate exclusively to TSDE operations, as TSIJ does not have Scope 2 emissions. As the prior‑year reporting scope did not include TSDE, no comparative Scope 2 figures are presented for 2024/25.

Table. Scope 1 and 2 GHG emissions (excl. biogenic CO₂ emissions from the combustion or biodegradation of biomass)

Note 1: Scope 1 of 2024/25 (11,360,700 tCO₂eq) in the current report is revised from last year's annual report value (11.33 million tCO₂eq). This difference is mainly due to a change in methodology. In the previous year, TSN applied a methodology based on World Steel Association (WSA) guidelines. In the current year, TSN is using a methodology based on ESRS.

Note 2: Scope 2 (market and location based) of 2024/25 (0 tCO₂eq) in the current report is revised from last year's annual report value (-0.11 million tCO₂eq). This difference is mainly due to a change in methodology. In the previous year, TSN applied a methodology based on World Steel Association (WSA) guidelines. In the current year, TSN is using a methodology based on ESRS.

Share of contractual instruments for Scope 2 metrics

TSN accounts for market-based Scope 2 emissions through bundled contractual instruments. These instruments are used to reflect the emissions attributes associated with purchased electricity in TSN’s market-based Scope 2 reporting. For bundled contractual instruments, TSN purchases energy products where the claims attributes, such as renewable energy certificates or guarantees of origin, are integrated directly in the supply contract. This enables TSN to report the corresponding emissions based on the specific attributes associated with the purchased energy. During 2025/26, the share of energy consumed under these arrangements was 4%. 

Table. Biogenic CO₂ emissions from the combustion or biodegradation of biomass

GHG intensity metric

The crude steel production for the reporting year is very much in line with that of the preceding year.

Table. Steel production

In 2025/26, an improvement in GHG intensity of 1.662 tCO₂/tonne steel with a 3% change was achieved, primarily by the increased use of scrap in the steel plant compared to virgin ore, and a combination of multiple other energy efficiency improvements.

Table. GHG intensity 

Note1: GHG intensity of 2024/25 (1.73 tCO₂e/tonne steel) in the current report was revised from last year's annual report value (1.69 tCO₂/tonne steel). This difference is mainly due to a change in methodology. In the previous year, TSN applied a methodology based on World Steel Association (WSA) guidelines and considered CO₂. In the current year, TSN is using a methodology based on ESRS  and considering all greenhouse gases calculating GHG intensity based on greenhouse gas emissions expressed in CO₂ equivalents (CO₂e), thereby incorporating all relevant greenhouse gases.

Scope 3 GHG emissions metrics

The GHG Intensity is a useful metric to assess the CO₂eq reduction progress without having to take the volume of steel made into consideration. As the steelmaking process is the source of the emissions, an increase or decrease in tonnes produced will directly influence the CO₂eq produced. The GHG intensity nullifies this effect. Up until this year the calculation has followed the World Steel Association calculation version 9,5 for the determination of the GHG emissions. This calculation has been updated by WSA and aligns more closely to the GHG protocol calculation, but with some differences. As the ESRS requires reporting according to the GHG protocol, and the difference is immaterial, TSN has decided to report the GHG intensity using the Scope 1 GHG emissions calculated according to the GHG protocol. It should be noted that GHG Protocol Scope 1 emissions are not fully aligned with the EU‑ETS scope; as a result, JLoI figures, which are based on EU‑ETS emissions, are not directly comparable with the Scope 1 GHG emissions reported elsewhere in this document. This change allows full transparency and aligns fully with the ESRS reporting requirements.

Table. Scope 3 GHG emissions (excl. biogenic CO₂ emissions from the combustion or biodegradation of biomass)