EU Taxonomy
Introduction
The EU Taxonomy is a classification system that identifies environmentally sustainable economic activities through established criteria, guiding investments towards a low-carbon economy. It is a cornerstone of the EU’s sustainable finance framework, enhancing market transparency. Additionally, it includes criteria for economic activities that not only align with climate change goals but also address a broader range of environmental objectives.
Taxonomy-eligible activities are defined by the EU Taxonomy as activities that can positively contribute to any of the environmental objectives set out by the European Union. Taxonomy-aligned activities are those that significantly contributes to at least one of the environmental objectives and meet the defined technical screening criteria.
Taxonomy-eligible economic activities
A comprehensive review of economic activities related to Höegh Autoliners’ operations was conducted to identify those pertinent to the assessment. There are no changes to our reporting scope for 2024. Our business in PCTC shipping, chartering, and operating vessels specifically designed and equipped for transporting cars and other equipment is deemed eligible under economic activity 6.10: Sea and coastal freight water transport, vessels for port operations, and auxiliary activities.
We have assessed and documented the compliance of Höegh Autoliners’ eligible economic activity (6.10) against the ‘substantial contribution’ criteria. The taxonomy-eligible share of Höegh Autoliners’ revenues, CapEx, and OpEx indicates a significant potential to contribute towards climate change mitigation, which we have identified as our primary objective. The assessment concludes that two vessels in our existing fleet meet the substantial contribution criteria by achieving Energy Efficiency Design Index (EEDI) values below the required threshold set out in activity 6.10. See accounting policies below for more information.
We have evaluated and documented the compliance of the same activity with the ‘Do No Significant Harm’ (DNSH) criteria. This assessment considered criteria related to the remaining five environmental objectives: climate change adaptation, sustainable use and protection of water and marine resources, transition to a circular economy, pollution prevention and control, and protection and restoration of biodiversity and ecosystems. Höegh Autoliners has concluded it meets the DNSH criteria. See accounting policies below for more information.
Höegh Autoliners has evaluated its procedures and measures related to human rights, anti-corruption and bribery, taxation, and fair competition against the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. Our approach to Minimum Social Safeguard (MSS) is embedded in our business conduct, as covered in sections S1 section and GOV-1 of this report. We continue to update our human rights risk assessment annually.
We ensure compliance with the minimum social safeguards outlined in the EU Taxonomy by having established robust governance practices supported by our policies. In 2024, we have not registered any infringements related to human rights, corruption, tax evasion, or fair competition. See accounting policies below for more information.
Performance Measures
Höegh Autoliners Taxonomy Reporting
| 2024 | 20231 | |||
| MUSD | % | MUSD | % | |
| Revenue | ||||
| Taxonomy-aligned | 31 | 2.3% | 0 | 0% |
| Taxonomy eligible but not aligned | 1 339 | 97.7% | 1 442 | 99.7% |
| Taxonomy non-eligible | 0 | 0% | 4 | 0.3% |
| CapEx | ||||
| Taxonomy-aligned | 395 | 92.4% | 117 | 78.5% |
| Taxonomy eligible but not aligned | 32 | 7.6% | 32 | 100% |
| Taxonomy non-eligible | 0 | 0% | 0 | 0% |
| OpEx | ||||
| Taxonomy-aligned | 1 | 3.1% | 0 | 0% |
| Taxonomy eligible but not aligned | 32 | 96.9% | 40 | 100% |
| Taxonomy non-eligible | 0 | 0% | 0 | 0% |
| 1 2023 numbers have been restated due to an updated assessment of Alignment criteria. | ||||
|---|---|---|---|---|
Key Performance Indicator Reporting
Nuclear and fossil gas/related activities for revenue, CapEx and OpEx
| Yes/No | |
| Nuclear energy-related activities | |
| Research, development, demonstration and deployment of innovative electricity generation facilities that produces energy from nuclear processes with minimal waste from the fuel cycle. | No |
| Construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial process such as hydrogen production, as well as their safety upgrades, using best available technologies. | No |
| Safe operations of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. | No |
| Fossil gas-related activities | |
| Construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. | No |
| Construction, refurbishment and operation of combined heat/cool and power generation facilities using fossil gaseous fuels. | No |
| Construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. | No |
Accounting Policies –
EU Taxonomy
Definitions
Höegh Autoliners’ report on EU Taxonomy is based on the financial statements.
Taxonomy-eligible activities are defined by the EU Taxonomy as those activities that have a potential to contribute to one or more of the six environmental objectives.
To determine the taxonomy-eligible economic activities, Höegh Autoliners followed the steps:
- Perform a high-level screening of its activities, considering the activities that represents key aspects of Höegh Autoliners’ operations.
- Evaluate if the economic activities identified are described by the EU Taxonomy Climate Delegated Act (EU) 2021/2139.
Höegh Autoliners operates within the shipping sector, specializing in the Pure Car and Truck Carrier (PCTC) segment. The company charters and operates vessels specifically designed and equipped for the transportation of cars and other equipment across sea and coastal waters globally. Consequently, the economic activity eligible for taxonomy-eligible KPIs for Höegh Autoliners includes:
- (6.10) – Sea and coastal freight water transport, vessels for port operations and auxiliary activities, such as tugboats, mooring vessels, pilot vessels, salvage vessels and ice-breakers.
Other activities, such as ‘Retrofitting of sea coastal freight and passenger water transport (6.12)’ and ‘Infrastructure enabling low carbon water transport (6.16)’, were also considered for the eligibility assessment.
According to the EU Taxonomy, ‘retrofit’ involves modifying and upgrading vessels to significantly enhance overall performance and energy efficiency. While Höegh Autoliners is upgrading its current fleet, these installations do not qualify as ‘retrofit’ since they do not achieve substantial energy savings as required by the EU Taxonomy. Consequently, activity 6.12 does not align with our interpretation of retrofitting activities and was excluded from the eligibility assessment.
The economic activity 6.16 was also excluded from the EU Taxonomy reporting, as it represents an insignificant part of the company’s business.
To define taxonomy-eligible numerator and denominator, the KPIs was allocated in accordance with the overall eligibility assessment, as described below:
The EU Taxonomy is set out based on the financial accounts. Taxonomy-eligible KPIs are calculated as:
- Taxonomy-eligible-Revenue = eligible Revenue/ total Revenue. Total revenue is stated in Note 2 – total revenues, which includes IFRS 15 revenues – net freight revenues, other surchargers and time charter income, and excluding terminal related income.
- Taxonomy-eligible-CapEX = eligible CapEX /total CapEx. Total CapEx refers to capitalised additions as stated in Note 7 – vessels, newbuildings, equipment and right-of-use-assets which include additions to vessels, newbuildings, equipment and leased assets, excluding leases not leading to a recognition of a right-of-used asset.
- Taxonomy-eligible-OpEx = eligible OpEx /total OpEx. Total OpEx includes expenses related to maintenance, repairs, and short-term leases related to both eligible and non-eligible assets.
Höegh Autoliners process to identify taxonomy-aligned economic activities was evaluating its eligible-activities against the following criteria:
- Meet the Technical Screening Criteria, ‘substantial contribution’ to at least one of the six environmental objectives.
- Comply with the ‘Do no Significant Harm (DNSH)’ criteria for the remaining five environmental objectives.
- Meet the ‘Minimum Social Safeguards’ concerning human rights, anti-corruption and bribery, taxation, and fair competition.
Economic activities that meet all the established criteria are assessed as taxonomy-aligned. If the eligible economic activities fail to meet the criteria, they are classified as eligible but not taxonomy-aligned.
For the current reporting year, Höegh Autoliners was able to report aligned KPIs.
1. Substantial contribution
We have evaluated and documented compliance with ‘substantial contribution’ criteria relating to the eligible activity in scope for Höegh Autoliners (6.10). The ‘climate change mitigation’ requirements were considered as the primarily screening objective for our eligible activity.
Climate change mitigation
The assessment consisted of an evaluation of the Energy Efficiency Design Index (EEDI). Höegh Autoliners concludes that two vessels meet the EEDI criterion specified in both criteria 1(d) (up until 31 December 2025) and 1(e) (after 1 January 2026). This means that the vessels meet the substantial contribution criterion for Climate Change Mitigation for the entire period covered by the EU Taxonomy, including after 1 January 2026, and onwards, complying with criteria stated in both.
The assessment led to the conclusion that Höegh Autoliners’ activity complies with the criteria stated in the Consolidated Delegated Act 2021/2139.
2. Do no significant harm (DNSH)
Climate change adaptation
Höegh Autoliners has conducted and documented a qualitative assessment of its business resilience against various physical climate-related risks. The analysis indicates that, in the longer term, physical climate-related risks such as weather and water-related hazards could negatively impact vessel operations. Corresponding mitigation actions (adaptation solutions) have been identified to mitigate these risks.
The assessment concludes that the assets used in our shipping services will withstand potential long-term physical climate-related risks and comply with the criteria set out in Consolidated Delegated Act 2021/2139.
Sustainable use and protection of water and marine resources
Höegh Autoliners has screened its activities for potential impacts on water and marine resources. Our core activity does not involve significant water use, aside from utilizing the ocean for our services. Consequently, no risks related to water stress and water availability have been identified. Fresh water is not a material input source for our vessel operations. Environmental degradation risks are closely linked to pollution and biodiversity impacts and are addressed in the respective DNSH discussions (DNSH 5 and DNSH 6).
It is concluded that the eligible activity complies with the criteria set out in Consolidated Delegated Act 2021/2139.
Transition to a circular economy
Höegh Autoliners has evaluated and documented its activities against potential impacts on transition to a circular economy. Our approach to waste management, hazardous materials and ship recycling involves several initiatives such as implementing comprehensive actions and procedures tailored to our vessel operations, in accordance with the IMO’s regulations, which we are required to meet.
This includes promoting waste prevention and proper disposal; manage and monitor the inventory of hazardous materials (IHM) and ensure compliance with its Green Recycling Standard. The assessment led to a conclusion that the eligible activity complies with the criteria set out in Consolidated Delegated Act 2021/2139.
Pollution prevention and control
Höegh Autoliners has thoroughly evaluated and documented its activities to prevent and control pollution. In compliance with IMO requirements, we have established procedures and measures to address the impacts of water and air pollution. Consequently, Höegh Autoliners’ operations meet the criteria set out in Consolidated Delegated Act 2021/2139.
Protection and restoration of biodiversity and ecosystems
Höegh Autoliners has evaluated and documented its activities against the DNSH 6 criteria. In compliance with IMO regulations, we have established procedures to address the impacts related to the introduction of non-indigenous species via ballast water and biofouling. To reduce the impact of noise and vibration on ecosystems, we have implemented technical and operational measures. Our assessment concludes that these measures do not hinder the achievement of good environmental status.
This assessment confirms that Höegh Autoliners’ policies and initiatives effectively address the material impacts of our activities, ensuring compliance with the criteria set out in Consolidated Delegated Act 2021/2139.
3. Minimum Safeguards
Our activities are carried out in compliance with the minimum safeguards, in particular covering human rights, corruption, taxation and fair competition.
Human rights
Höegh Autoliners’ commitment to human rights is embedded in its Human Rights Policy, Code of Conduct, and Supplier Code of Conduct. We engage with customers, suppliers, vendors, and partners to protect human rights across our operations. We conduct due diligence to identify, prevent, mitigate, and account for human rights impacts, establish reporting mechanisms, and evaluate risks in our upstream value chain. In 2024 there were no incidents on human rights reported.
Corruption
Our anti-corruption policies include mandatory training, a whistleblower hotline, and requiring vendors, suppliers, and agents to sign our Supplier Code of Conduct. In 2024 there were no convictions or fines for violations of anti-corruption laws.
Taxation
Höegh Autoliners adheres to its Taxation Policy and Code of Conduct, ensuring compliance with tax regulations and adopting transparent tax practices. In 2024 there were no cases of tax evasion reported.
Fair competition
Fair competition is outlined in our Code of Conduct and Competition Law Compliance Manual. Mandatory training ensures employee awareness and compliance. No infringements of competition law were registered in 2024.
For further details on Höegh Autoliners’ approach to business conduct and responsible business practices, please refer to the Governance section of these Sustainability Statements.
Taxonomy-Aligned KPIs
Aligned revenue KPI is calculated as follows:
Taxonomy-aligned revenue = Aligned revenue/Total revenue.
- The numerator includes revenues generated by Höegh Autoliners’ aligned vessels during the current reporting year.
- The denominator represents total revenue. Refer to Note 2 – total revenues IFRS 15.
The Aligned CapEx KPI is calculated as follows.
Taxonomy-aligned CapEx KPI = aligned CapEx/total CapEx.
- The numerator represents the proportion of CapEx additions to existing aligned vessels and the capitalization of instalments and other related CapEx for the near zero-carbon ready Aurora class newbuilding program during the year.
- The denominator includes additions to vessels, newbuildings, equipment, and right-of-use assets, excluding leases that do not lead to the recognition of a right-of-use asset. Refer to Note 7 – Vessels, newbuildings, equipment, and right-of-use assets.
The Aligned OpEx KPI is calculated as follows:
Taxonomy-aligned OpEx KPI = aligned OpEx/total OpEx.
- The numerator represents the proportion of OpEx (as defined by the Taxonomy) related to maintenance, repairs and short-term leases associated to aligned vessels in 2024.
- The denominator includes the total OpEx (as defined by the Taxonomy) related to maintenance and repairs, and short-term leases.
