Disclosures pursuant to Article 8 of Regulation 2020/852 (EU Taxonomy Regulation)

Introduction

The EU Taxonomy is a classification system that sets requirements for companies to disclose the sustainability of their economic activities, expressed in three Key Performance Indicators (“KPIs”): Revenue, Capital Expenditure (CapEx) and Operating Expenditure (OpEx). It forms part of the EU’s plan to scale up sustainable investment, avoid greenwashing and implement the European Green Deal.

The EU Taxonomy Regulation (Regulation 2020/852 of 18 June 2020) was first implemented in 2020, requiring mandatory disclosures under Article 8 of the EU Taxonomy Regulation. Since then, the Taxonomy framework has been expanded with the inclusion of Delegated Acts. The Climate Delegated Act (“CDA”), the Complementary Climate Delegated Act (“CCDA”), and the Environmental Delegated Act (“EDA”) set out a list of eligible activities along with Technical Screening Criteria (“TSC”) for when activities can be considered sustainable.

The EU Taxonomy includes six environmental objectives (EO):

• Climate change mitigation (CCM)

• Climate change adaptation (CCA)

• Sustainable use and protection of water and marine resources (WTR)

• Transition to a circular economy (CE)

• Pollution prevention and control (PPC)

• Protection and restoration of biodiversity and ecosystems (BIO)

A Taxonomy-eligible economic activity is potentially sustainable, and is an economic activity that is described in any of the Delegated Acts, irrespective of whether that economic activity meets any or all of the TSC outlined in the annexes to the Delegated Acts. To be Taxonomy-aligned and thus sustainable, an eligible economic activity must substantially contribute (“SC”) to at least one environmental objective and do no significant harm (“DNSH”) to the other five environmental objectives. In addition, the Company must also comply with the minimum safeguards at the organisation level. A Taxonomy non-eligible economic activity refers to an economic activity that has not (yet) been identified in the EU Taxonomy as a substantial contributor to one of the six environmental objectives and, therefore, no criteria have been developed.

The EU Taxonomy will apply to Tata Steel Nederland B.V. from the financial year beginning on 1 April 2027. As a result, TSN will be required to prepare Sustainability Statements in accordance with the Corporate Sustainability Reporting Directive (CSRD), based on the European Sustainability Reporting Standards (ESRS), for group reporting purposes. TSN is not yet in scope of the CSRD regulation but, in line with the option provided by the legislation and for transparency reasons, TSN has chosen to apply the requirements set out in the Delegated regulation (EU) 2026/73 amending the Taxonomy Disclosures as well as the Climate and Environmental Delegated Acts as from the financial year 2025/26. The consolidation scope for the EU Taxonomy disclosure is the same as for the Consolidated Sustainability Statements.

All disclosures are based on our current understanding and interpretation of the regulation, which may change over time as market practice develops, and new regulatory guidance becomes available. This chapter contains a detailed overview of our assessment and outlines our perspective on the next steps.

Eligibility Assessment

TSN’s eligibility assessment for EU Taxonomy has been performed based on guidance from the EU Taxonomy Regulation and the EU Taxonomy Delegated Act for Disclosures¹. According to this guidance, a Taxonomy-eligible economic activity is an economic activity that is described in the delegated acts, irrespective of whether that economic activity meets any or all the technical screening criteria laid down in those delegated acts. TSN screened its internal reporting, the activity descriptions in the (annexes) to the CDA, CCDA, EDA, and EU Taxonomy disclosures by peers to identify eligible activities.

TSN’s core business activity is captured in EU Taxonomy under “CCM 3.9 Manufacture of iron and steel”. This economic activity covers (i) the production of crude steel and semi-finished products in IJmuiden, and (ii) finished products delivered to customers by the downstream business units.

TSN has assessed the activities performed by its downstream business units and concluded that these fall within the scope of “CCM 3.9 Manufacture of iron and steel”, as they constitute integral steps in the production of finished steel products. These downstream activities include Tubes, Plating and Building Systems, which further process steel; Colors, which applies surface treatments to steel products; and Distribution Europe, which further processes coils (including cutting steel and pressing plates) and is responsible for the commercial distribution of steel products.

In January 2026, TSN acquired the Vattenfall power plants in the IJmond region (refer to Note 7 in the Consolidated Financial Statements). These power plants produce electricity and steam that are used exclusively in TSN’s steel manufacturing processes. As a result, the CapEx incurred in connection with the acquisition of the power plants is considered directly attributable to, and therefore included within, the economic activity “CCM 3.9 Manufacture of iron and steel”.

Consistent with this assessment, TSN considers all its purchases of assets (CapEx) and relevant services (OpEx) to be essential to the performance of its steel manufacturing activities and therefore allocates these expenditures to “CCM 3.9 Manufacture of iron and steel”.

Technical Screening Criteria Assessment

Substantial Contribution

TSN has evaluated compliance with the Substantial Contribution criteria for Climate Change Mitigation, focused on the applicable greenhouse gas emissions thresholds for relevant specific materials (hot metal, sintered ore, coke and carbon steel) related to the steel production process, and the steel scrap input relative to product output. We anticipate that once we have installed the electric arc furnaces (for further details on the Green Steel transition project refer to the Climate Change section), the SC criteria for GHG emissions thresholds for the materials mentioned above can be achieved. We continue to work on increasing scrap input across the product range, and we will reassess the possibility of meeting the Substantial Contribution criteria as the Green Steel transition project progresses. On this basis, TSN has concluded that, for the financial year 2025-2026 the Substantial Contribution criteria have not been met.

DNSH criteria

TSN has evaluated compliance with the Do No Significant Harm (DNSH) criteria for Climate Change Mitigation. TSN has a Climate Risk and Vulnerability Assessment in line with TCFD recommendations (CCA), a Water Use and Protection Management Plan implemented for its IJmuiden operations (WTR). TSN has established substance identification processes (PPC), and has an Environmental Impact Assessment for its IJmuiden operations (BIO). TSN is actively managing all these areas and continues to identify gaps and enhance its processes and supporting documentation to enable future alignment with DNSH criteria. On this basis, TSN has concluded that, for the financial year 2025/26 the DNSH criteria have not been met.

Minimum Safeguards

Compliance with minimum safeguards is a requirement for an economic activity to be reported as aligned and is generally assessed at the organisation level. Companies are required to implement the safeguards to prevent that economic activities which are beneficial to the environment have any adverse impacts on social matters.

The minimum safeguards criteria require procedures in place to ensure the alignment with internationally accepted guidance such as the UN Guiding Principles on Business and Human Rights, OECD Guidelines for Multinational Enterprises, ILO Core Labour Standards and the International Bill of Human Rights, covering human rights (including labour rights), bribery and corruption, taxation and fair competition, and that certain Principle Adverse Indicators (“PAIs”).

TSN is committed to respecting internationally recognised human rights across its own operations and value chain, including matters relating to taxation, fair competition, and corruption. In this context, TSN has identified several areas of improvement in relation to its HRDD process and is continuously working towards alignment with minimum safeguards criteria, including the adoption of a TSN human rights policy and the strengthening of Due Diligence procedures within the supply chain (for further details refer to the Own workforce section). On this basis, TSN has concluded that, for financial year 2025-2026 the minimum safeguards criteria have not been met.

For more information on Corruption and Bribery, Fair Competition refer to the Risk and Compliance chapter, Board Diversity refer to the section, and for Equal Pay refer to the Own workforce and Responsible value chain chapters.

Key Performance Indicators (KPIs)

TSN has calculated its EU Taxonomy KPIs for the first time for the financial year 2025/26. The financial information for calculating EU Taxonomy KPIs according to the commission delegated regulation (EU) 2021/2178 is gathered from TSN's accounting system. Revenue, CapEx and OpEx KPIs are disclosed in the accompanying tables (refer to EUT disclosure tables).

Definition of KPIs

Contextual information

Steel manufacturing is TSN’s largest and primary revenue generating activity, with steel inputs predominantly sourced through internal transactions with group companies and a limited portion (~12%) procured from external third parties. TSN has included in eligible revenue all revenue from basic steel products that TSN processes. For Colors and Distribution Europe revenue, TSN only includes revenue as eligible to the extent it relates to the steel TSN has manufactured inhouse, so excluding revenue related to third-party purchased steel.

The total net revenue (€6,028.1 million) is related to the manufacture and sale of a range of steel products, from the single performance obligation to transfer steel products under arrangements in which the transfer of control of the products and the fulfilment of the TSN performance obligation occur at the same time. Eligible Revenue (€5,914.2 million) excludes the portion of Colors and Distribution Europe revenue related to third-party purchased steel.

TSN consider all purchases of assets, processes, or services essential to carry out a particular eligible activity for reporting CapEx and OpEx. For TSN, this means that since the core economic activity of steel manufacturing is deemed Taxonomy-eligible, both the CapEx for investments in essential assets or components and the OpEx for essential services corresponding to this activity are considered Taxonomy-eligible.

Total CapEx (€217.0 million) is related to assets that support the steel manufacturing process, including additions to intangible assets (€ 16.7 million). Eligible CapEx (€214.8 million) excludes the portion of Colors and Distribution Europe CapEx attributable to third-party purchased steel.

Total OpEx (€645.7 million) is related to all the expenses that support the steel manufacturing process, including research and development (€39.5 million), building renovations (€2.6 million), operating leases (€26.6 million), maintenance and repair (€430.7 million – including related to €361.9 million for machinery repair and €63.2 million for spare parts), and other direct expenses relating to day-to-day servicing of property, plant and equipment (€146.3 million – including costs of personnel allocated to maintenance and repair activities). Eligible OpEx (€641.2 million) excludes the portion of Colors and Distribution Europe OpEx attributable to third party purchased steel.

TSN has not issued any environmentally sustainable bonds or debt securities for the purpose of financing specific identified Taxonomy-aligned activities in the financial year 2025-2026.

Alignment looking forward 

TSN does not meet the alignment criteria under the EU Taxonomy, and therefore reports all Taxonomy Revenue, CapEx or OpEx for the financial year 2025-2026 as eligible, not-aligned.

TSN has not yet set any strategic targets for EU Taxonomy alignment for future years. Nevertheless, the company is developing a multi‑phase Green Steel Project (IJmuiden), aimed at supporting a long‑term investment programme of approximately €4-6.5 billion in its own production facilities and infrastructure. This programme is intended to enable the transition to hydrogen‑based manufacturing processes and, in the longer term, the production of low‑CO₂ steel.

The Green Steel Project represents a strategic, multi‑year commitment to industrial transformation and decarbonisation and anticipates that implementing the Green Steel Project will support reducing the gaps with the EU Taxonomy Technical Screening Criteria for “CCM 3.9 – Manufacture of iron and steel” over time. The implementation of the project is dependent on coordinated commitments between TSN, Tata Steel Limited (TSL) and the Dutch State (for further details on the Green Steel transition project refer to the Climate Change section).

Disclosure tables

Template 1: Proportion of Revenue, CapEx, OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering the financial year 2025/26 (summary KPIs)

Template 2: Proportion of Revenue from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering the financial year 2025/26 (activity breakdown)

Template 2: Proportion of CapEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering the financial year 2025/26 (activity breakdown)

Template 2: Proportion of OpEx from products or services associated with Taxonomy-eligible or Taxonomy-aligned economic activities – disclosure covering the financial year 2025/26 (activity breakdown)