Hydratec Industries’ policy is to reduce our overall environmental impact by reducing, reusing and recycling raw materials and products along the Reduce - Reuse - Recycle axis. We actively seek opportunities to reduce our carbon footprint. This aspect will continue to increase in importance because our customers are imposing more stringent requirements in this regard. We calculated our carbon emissions for the first time for 2022 and they came to 130kg1 per €1,000 of added value. This is a good starting point to further shape our carbon reduction policy in the coming years.
Hydratec strives to minimise, and where possible prevent, any adverse environmental effects of its operations through preventive measures. We look at every stage of our production processes and the life cycle of our products. Some of our activities monitor the reuse of raw materials in the production process. We also offer solutions that lead to a more efficient production process or are less harmful to the environment. The social agenda was set largely by climate change and the energy transition. These aspects can have an impact on financial reporting as they pose risks to operations, the measurement of assets and provisions and access to financial markets. We currently assess this risk as low. The risk we recognise in relation to the environment, environmental legislation and mitigating measures is shown in our risk matrix. In our customers’ production chain, we are required to comply with environmental certifications.
Hydratec Industries' policy is to reduce our overall environmental impact by reducing, re-using and recycling raw materials and products along the Reduce - Re-use - Recycle axis. We actively seek opportunities to reduce our carbon footprint. This aspect will continue to increase in importance because our customers are imposing more stringent requirements in this regard. We calculated our carbon emissions for the first time for 2022 and they came to 130kg1 per €1,000 of added value. This is a good starting point to further shape our carbon reduction policy in the coming years.
Hydratec has set out the policy for energy and waste reduction and the transition towards sustainability in our code of conduct. Our policy is geared towards minimising our carbon footprint. When it comes to our partner relationships, we pursue a customer policy and an agent policy. Our companies individually take care of any aspects for which the group has not defined a formal policy. The group has not set any central KPIs to measure these topics.
- 1 Carbon emissions based on lease car fuel consumption and electricity and gas consumption. For each source, the following conversion factor was used for carbon emissions (in kg): m3 gas (natural gas) - 2.09 | kWh (green) - 0.00 | kWh (grey/unknown) - 0.52 | kWh (generated) - 0.00 | Litre of petrol - 2.78 | Litre of diesel - 3.26 | Litre of gas - 0.81 | kWh of electricity - 0.10
In 2022, we faced a global energy crisis, with energy prices rising unprecedentedly. Our companies consume relatively little energy. At High-Tech Components, we generally consume more than at Industrial Systems. Costs of electricity consumption by machines amount to a few per cent of revenue at Components companies. For Industrial Systems companies, energy consumption mainly concerns the heating of premises.
There are several ways to prevent waste. One of them is to reduce the energy needed to manufacture products. The rise in energy costs has naturally boosted various savings initiatives. For example, in 2022 there was a significant fall in Hydratec’s gas and electricity consumption per €1,000 of added value. This is due, among other things, to the use of LED lighting, improved controls and time clocks on heating and lighting, the use of solar boilers and better insulation. We are cutting back on the use of materials and resources, also among our customers. At Lan, for example, we have launched a system that allows our customers to dry packaging materials ‘inline’ as soon as they come out of the sterilisation boiler. This solution reduces energy consumption by 60% and results in a 50% smaller footprint as the machine takes up less space.
Weight reduction is often a key design requirement, which significantly reduces the application’s material and, in many cases, energy consumption. For example, Rollepaal supplies materials to manufacture water pipes, systems which require up to 60% less PVC than traditional production systems. Royal Pas Reform reduces feed wastage by providing day-old chicks with food right from hatching, allowing them to grow better on less feed.
Helvoet and Timmerije pay ample attention to reducing waste flows during injection moulding. Better quality procedures and information use reduced the amount of waste by 8% in 2022 compared to 2021.
In addition to reduction, we also focus on the more prolonged use of our products. We do this first and foremost by improving the quality of products to make them last longer than alternative systems and components. Furthermore, the Hydratec Industries companies do not produce disposable products. There is an exception for applications for the Health market, which are subject to strict hygiene rules on production and use. Where possible, we upgrade existing equipment so that it can be used for longer. For instance, new controls are delivered on older machine versions.
One way of recycling is to feed waste in-house directly back into the production process so that fewer (virgin) materials need to be purchased. Wherever possible, we purchase recycled materials as raw materials for our products. We cooperate intensively within the industry to increase knowledge of how to recycle plastic products. Timmerije worked with Swapfiets, the Dutch supplier of bicycle mobility, on a fully circular bicycle, all parts of which are made of recyclable plastic. Rollepaal supplies multilayer solutions where only the outer layer of the water pipe is made from virgin material and the inner layer from recycled material.
The first part of the EU taxonomy for environmentally sustainable activities came into force on 1 January 2022. The EU taxonomy provides a standardised and mandatory classification model to determine which economic activities are classified as sustainable. Under the statutory regulations, Hydratec’s economic activities must be classified with explanatory notes in the 2022 report. Hydratec annually determines which economic activities apply and whether they classify as eligible activities under EU taxonomy requirements.
For 2022, Annex I and II apply (climate change mitigation and adaptation). The remaining Annexes are still under development and were not declared applicable in 2022. To qualify for the EU taxonomy, the segments’ economic activities must meet the technical screening criteria listed in the regulations in Annex I and Annex II.
With regard to revenues, we have determined the economic activities for the segments and the extent to which the codes are included in Annex I and Annex II of the legislation. Based on the current legislation, none of the economic activities of the segments are eligible. The economic activities were not eligible in 2021 either.
The eligibility of CapEx and OpEx has also been determined. For CapEx, eligibility is determined by dividing the investments into economic activities from Annex I and II (numerator) by the total investments in 2022 from Notes 1.29, 1.30 and 1.31 (denominator). This showed that an amount of €4.4 million was invested in land and buildings for a High-Tech Components company in India in 2022. This investment amounts to 33% of the total investment in 2022. It is an eligible activity (7.7), but is not taxonomy-aligned because it does not meet the technical criteria. Based on the business activities, location and surroundings, there is no investment plan to make the land and buildings taxonomy-aligned within 5 years. However, there are plans to make the property more sustainable in the coming period. In 2021, the investments in solar panels for LAN Handling were eligible (8%).
For the OpEx, eligibility has been determined by dividing the cost of economic activities from Annex I and II (numerator) by the total operating costs from Note 1.27 (denominator). Based on the current legislation, none of the economic activities of the operating companies are eligible. This also applies to the comparative figures.
Since only CapEx activities are eligible under the EU Taxonomy, an abbreviated table listing the relevant business activities is included below. The reported activities regarding freight costs in 2021 have been corrected since they do not form part of Hydratec Industries’ core business. The regulations are expected to evolve significantly in the coming years. Hydratec will continue to monitor these developments and provide disclosures on their impact in future years in the annual report.
Share of capital expenditure on taxonomy economic activities
Actual expenditure in 2022 (€)
Ratio versus total capital expenditure in 2022 (%)
Taxonomy-aligned percentage of capital expenditure in 2021
1. Environmentally sustainable taxonomy-aligned activities
LAN - Electricity generated
2. Eligible but not taxonomy-aligned activities
Helvoet - Purchase of business premises