The EU’s new Taxonomy Regulation is designed to support the transformation of the EU economy to meet its European Green Deal objectives, including the 2050 climate-neutrality target. At the core of the Taxonomy Regulation is the definition of a sustainable economic activity.
The new Taxonomy classifies economic activities, which can be potentially aligned with EU’s environmental targets. There are six environmental targets in the EU Taxonomy, two of which are now regulated: Climate Change Mitigation and Climate Change Adaptation.
Tire industry is included in the economic activity group Manufacture of other low carbon technologies in the EU Taxonomy’s technical screening criteria. After investigating and consulting on EU Taxonomy’s technical screening criteria, following conclusions about Nokian Tyres’ economic activities have been made:
- Car and van tires with low rolling resistance ratings which are manufactured by Nokian Tyres have substantially lower life-cycle carbon footprint than corresponding average tires. This is a combined result of low use phase emissions and industry’s best-in-class manufacturing emissions.
- At this stage, Nokian Tyres will exclude all heavy professional tires as there is no solid comparison data available of use phase CO₂ emissions for heavy professional tires.
Manufacture of car and van tires with low life-cycle greenhouse gas emissions represented 35% of Nokian Tyres’ total net sales in 2021. Based on the company’s assessment, these economic activities are eligible for the EU Taxonomy criteria. Share of Opex within the scope of EU Taxonomy was 31% and share of Capex within the scope of EU Taxonomy was 26%.
|KPI||Total (EUR million)||Proportion of Taxonomy eligible economic activities||Proportion of Taxonomy non-eligible economic activities|
The Taxonomy reporting scope and criteria may change in coming years as this is the first reporting round, and therefore also the figures may not be comparable between the reporting periods.
Nokian Tyres’ approach to calculate the eligibility for the EU Taxonomy
- A: Amount of eligible net sales coming from car and van tires having EU Tyre labeling grade A, B or C in rolling resistance
- Heavy tires will be excluded as there is no solid data (or public benchmark) available for use phase CO2
- B: Total amount of net sales
- C: Share of net sales within the scope of EU Taxonomy
- C = A/B %
Capex & Opex
- D: Eligible passenger car tires production companies’ Opex: Research and Development and real estate expenses deducted by depreciation & amortization
- E: Group Opex: Research and Development and real estate expenses deducted by depreciation & amortization
- F: Share of Opex within the scope of EU Taxonomy
- F = C*D/E %
- Justification: represents share of Opex used for producing low rolling resistance car and van tires with reasonable accuracy.
- G: Eligible passenger car tires production companies’ tangible Capex
- H: Group Capex including tangible and intangible investments
- I: Share of Capex within the scope of EU Taxonomy
- I = C*G/H %
- Justification: represents share of Capex used for production readiness for low rolling resistance car and van tires with reasonable accuracy
- Remark: handpicking and assessing each investment’s relation to EU Taxonomy separately is regarded not to give much additional accuracy