Norsk Hydro

Business Strategy and Model

Hydro is a leading aluminium and renewable energy company committed to a sustainable future. Hydro's purpose is to create more viable societies by developing natural resources into products and solutions in innovative and efficient ways. Hydro is present throughout the global aluminium value chain, from energy to bauxite mining and alumina refining, primary aluminium, aluminium extrusions and aluminium recycling.

Business Areas

Hydro Bauxite & Alumina represents the first two steps in the aluminium value chain through bauxite mining and alumina refining. Hydro Bauxite & Alumina covers Hydro's bauxite mining activities in Paragominas and the company's 62 percent interest in the Brazilian alumina refinery, Alunorte, both located in Pará State, North of Brazil. Alunorte is the biggest alumina refinery in the world outside China, with nameplate capacity of 6.3 million tonnes per year.

Hydro Aluminium Metal is the world's (excluding China) sixth largest producer and supplier of primary aluminium and value added casthouse products. The business area consists of five wholly owned aluminium metal plants in Norway, five partly owned plants in Qatar, Brazil, Canada, Australia, and Slovakia (currently curtailed), in addition to several advanced R&D facilities. Hydro's total annual primary aluminium capacity is about 2.1 million tonnes.

Hydro Metal Markets consists of the Recycling and Commercial business units. The Recycling business unit consists of 12 recyclers in Europe and the U.S., producing extrusion ingot and recycled foundry alloys with a total annual capacity of 995,000 tonnes. The Commercial unit supplies Hydro's value added products to a global market through a wide range of product offerings and services, including low-carbon aluminium products.

Hydro Extrusions operates the world's largest network of aluminium extrusion and recycling plants, counting 70 production sites in 20 countries. The extrusion production capacity amounts to 1.4 million tonnes annually, and the market shares are 16 percent in Europe and 19 percent in North America in 2024.

Hydro Energy is one of the three largest operators of hydropower production in Norway, and a large power market player in the Nordic region and Brazil. In Norway, Hydro Energy operates 40 renewable power plants, with combined installed capacity of 2.8 GW. In a normal year, Hydro Energy operate 13.7 TWh production, of which 9.4 TWh is captive power.

Value Chain

Hydro's main inputs and outcomes include:

Main inputs

• Bauxite: Bauxite resources, water
• Alumina: Bauxite, caustic soda, coal, lime, natural gas, oil, water
• Energy: Water resources, wind resources
• Primary aluminium: Alumina, aluminium fluoride, anodes, coke, pitch, power, water
• Casting: Alloying materials, natural gas, NGLs, post-consumer scrap, primary aluminium, process scrap
• Extrusion: Electricity, extrusion ingot
• Recycling: Standard, sheet and extrusion ingots, primary foundry alloys and wire rod, forge stock

Main outputs and outcomes

• Bauxite: Bauxite, rehabilitated land, tailings, land use change
• Alumina: Alumina and alumina hydrate, bauxite residue, GHG emissions, non-GHG emissions
• Energy: Hydropower, flood control, regulated watersheds, land use change
• Primary aluminium: Primary aluminium, GHG emissions, non-GHG emissions, spent potlining
• Products: Extruded products, Hydro CIRCAL, Hydro REDUXA, primary foundry alloys, wire rod and forge stock, standard, sheet and extrusion ingot

Ultimate outcomes: A more viable society by developing natural resources into products and solutions in innovative and efficient ways; Income and shareholder value; Salaries, taxes and supplier income; Community and industry impact; Full value chain provenance

Climate Change Targets

Total greenhouse gas emissions: 10 percent reduction by 2025 and 30 percent by 2030 against 2018 baseline. Net-zero by 2050 or before.

Indirect Scope 3 GHG emissions: 30 percent reduction per tonne aluminium by 2030 against 2018 baseline.

2024 Performance

In 2024, Hydro's total scope 1 and 2 emissions were 16.1 percent lower than the 2018 climate strategy baseline, exceeding the target of 10 percent reduction compared to the baseline. Total scope 3 emissions represent a 40 percent reduction of upstream scope 3 emissions per tonnes aluminium produced compared to the 2018 baseline, surpassing the 2030 reduction target of 30 percent.

Total scope 3 emissions: 12.5 tonnes (40% reduction of upstream scope 3 emissions per tonnes aluminium produced compared to 2018 baseline)

Other Emissions Targets

Hydro targets 50 percent reduction in material non-GHG emissions by 2030 against 2017 baseline, including:

• Sulfur dioxide (SO2) emissions: 50 percent reduction by 2030 against 2017 baseline
• Nitrogen oxide (NOX) emissions: 50 percent reduction by 2030 against 2017 baseline
• Particulate matter (PM) emissions: 50 percent reduction by 2030 against 2017 baseline

Hydro also has a fluoride performance target of 0.35 kg F / tonne aluminium for its fully owned smelters, by 2030.

Other emissions (SO2, NOX and PM)

Target: 50 percent reduction in material non-GHG emissions by 2030 against 2017 baseline

A key driver for this improvement has been the replacement of heavy fuel oil with natural gas at the Alunorte alumina refinery.

Substances of concern and substances of very high concern

Management approach

Hydro's global procedures for health risk management and environment management require all operational sites that are fully owned or operated by Hydro, identify, risk assess, minimize, evaluate for substitution and appropriately manage all hazardous materials or substances, purchased or generated in its processes, that have the potential to cause ill health, or to negatively impact the environment.

Hydro's products are subject to compliance declarations according to different EU and U.S. legislations. This includes registration, evaluation, authorization and restriction of chemicals (REACH) and restriction of hazardous substances (RoHS) in the EU, and the Toxic Substances Control Act and California's proposition 65 in the U.S. This gives Hydro's customers assurance that its aluminium profiles do not contain the prohibited substances above the defined limits.

Stakeholders and potentially affected communities can use AlertLine as a communication tool to report environmental and social issues concerning Hydro operations.

Quantitative disclosure

There is significant uncertainty in the data reported. Hydro's interaction with SoC and SVHC are primarily as part of mixtures, such as paints and solvents used in surface treatment of extruded aluminium profiles, cold tar pitch used for anode production, and cryolite bath used in primary aluminium.

Substances are reported as the sum of mixtures containing SoCs and SVHC, by main hazard classes, based on the amount of the mixtures used in the reporting year. Data on contents per mixture is not available at a consolidated level, and many substances are classified in several hazard classes. The sum of the substances reported by hazard class, below, therefore does not reflect total mixtures containing substances that are generated or used in production activities.

Substances used in non-production activities, such as construction, maintenance and repair, research and laboratory, and other substances used in quantities below one tonne per year, are not included.

The majority of reported mixtures containing SoC and SVHC are procured for use. The majority of mixtures reported are used for anodizing, painting, powder coating and other surface treatment of extruded aluminium profiles, anode production, or manufacture of primary aluminium.

Biodiversity Impact Targets

Rehabilitation of mined areas: 1-to-1 rehabilitation of mined areas in Paragominas, Brazil, within two hydrological cycles

No net loss – bauxite mine: No net loss of biodiversity for Hydro's bauxite mine, from a 2020 baseline

No net loss – new projects: No net loss of biodiversity in new projects

2024 Performance

Rehabilitation of mining areas: 100% - All suppressed land that has been released for rehabilitation prior to 2023, has been rehabilitated within the target of two years hydrological cycles, and a total of 292 hectares started rehabilitation in 2024.

Resource Use and Circular Economy Targets

Recycled post-consumer scrap: 850 – 1,200 thousand tonnes recycling capacity per year by 2030

Waste generation and waste recycling:

• Eliminate landfill of recoverable waste by 2040
• <35 percent of spent pot linings to landfill by 2030

Hydro aims to eliminate the need for new bauxite residue storage areas by 2050 and to eliminate the landfilling of all other recoverable waste streams by 2040.

E5-4 Resource Inflows

Hydro identifies and measures resource use by calculating resource inflows and outflows from all operations, including energy use and key materials needed for its industrial and commercial processes. Hydro's reporting on resource inflows covers the most material raw materials and inputs used in the industrial processes.

Primary resource use in alumina refining and primary aluminium production is defined as a driver of potential negative impact on resource use, as these industrial processes are energy and material intensive.

Resource Use per Material (1,000 metric tonnes)

Notes:

• Lime, caustic soda, sulfuric acid and flocculants (thickener) are primarily used in the alumina refining process. Flocculants are also used at Hydro's Bauxite mine in Paragominas.
• Alumina and aluminium fluoride are primarily used in the electrolysis process.
• Hydro follows strict procedures and policies related to storing, usage and handling of the materials.
• Reporting of material use is based on direct measurements through Hydro's internal systems.
• Aluminium scrap inflows are reported based on the amount of pre and post-consumer aluminium scrap used in Recycling and Extrusions' remelters.
• Hydro uses a definition for recycling agreed on by the European Aluminium Association, dividing recycled scrap into process scrap (pre-consumer scrap from downstream casthouses) and post-consumer scrap purchased from third parties.

Hydro also reports that in 2024, approximately 451 thousand tonnes of post-consumer scrap was recycled, with an ambition to increase post-consumer scrap recycling capacity from 560,000 tonnes in 2023 to 850,000-1,200,000 tonnes by 2030.

Resource outflows

Hydro differentiates its product portfolio through its production of renewable energy, low-carbon primary aluminium, and recycled aluminium of post-consumer scrap. The company produces two main low-carbon aluminium brands:

Hydro CIRCAL: A certified recycled and low-carbon product with more than 75% post-consumer scrap (PCS). Hydro CIRCAL has a carbon footprint of 1.9 kg CO2e/kg aluminium (previously 2.3 kg CO2e/kg). In 2024, Hydro sold 57,000 tonnes of CIRCAL.

Hydro CIRCAL 100R: Produced at Hydro's recycling plant in Clervaux, Luxembourg, with 100% post-consumer aluminium scrap and a carbon footprint below 0.5 kg CO2e/kg aluminium. In 2024, Hydro produced 130 tonnes of this near-zero carbon aluminium.

Hydro REDUXA: Low-carbon aluminium using renewable energy from water, wind and solar in the production phase. This reduces the full value chain carbon footprint to 4.0 kg CO2e per kg aluminium, significantly less than the global average of 14.8 kg CO2e/kg. Hydro has an ambition to deliver Hydro REDUXA 2.0 with a carbon footprint of less than 2 tonnes CO2e per mt of aluminium by 2030.

Durability: Aluminium can be recycled infinitely without degradation in quality. Aluminium recycling requires 95% less energy than primary aluminium production.

Design-for-circularity: Hydro works closely with customers through the Hydro EcoDesign process, which helps customers create better products with increased functionality and a lower-carbon footprint. The company is investing in technologies to increase usage of end-consumer scrap while securing access to scrap.

Waste

Hydro aims to eliminate landfill of all recoverable waste by 2040, and to landfill less than 35% of spent pot linings (SPL) by 2030. In 2024, Hydro landfilled 19% of its waste and 43% of its SPL.

Waste generation and waste recycling targets

Waste management approach

Hydro identifies and assesses impacts, risks, and dependencies associated with resource use and circular economy by measuring its resource use and resource outflows from all operations. This includes energy and raw material use for production processes, recycled content in resource inflows, as well as the generation of tailings, residue and waste from its operations, and the waste treatment and disposal methods for different waste streams.

Impacts associated with resource outflows include tailings from mining operations, bauxite residue from alumina refining and waste generation from operations in the aluminium value chain.

Hydro is developing circular production models in the aluminium value chain and has established partnerships to develop more circular solutions to waste streams. In relation to bauxite residue, Hydro engages several commercial partners and supports R&D projects connected to management and utilization of bauxite residue.

The Tailings Dry Backfill technology allows new tailings from bauxite mining to be returned to open and mined areas before the rehabilitation process, instead of being deposited in separate, permanent storage areas. Hydro aims to eliminate the need for new bauxite residue storage areas by 2050 and to eliminate the landfilling of all other recoverable waste streams by 2040.

Own Workforce Targets

Number of fatal accidents: Zero fatal accidents

Total recordable injuries: Zero life-changing injuries

Share of women employees: 25 percent share of women by 2025 (in permanent and temporary positions combined)

Share of women leaders: 25 percent share of women leaders by 2025

Employee inclusion: 78 percent inclusion index score by 2024

Employee characteristics

Total workforce: 32,000 employees at more than 140 locations in 42 countries

The company has 32,000 employees, at more than 140 locations in 42 countries, more than 30,000 suppliers, and serves more than 30,000 customers around the world.

Gender Balance Performance

Hydro targets 25 percent women employees in permanent and temporary positions combined, and 25 percent women in leadership positions by 2025.

Hydro's overall gender balance improved one percentage point from 2023, with 24 percent of the Hydro workforce comprising women at the end of 2024. The share of women in management has also increased by one percentage point in the same period, with 21 percent of leadership positions in Hydro comprising women at the end of 2024.

Health and safety metrics

¹ One contractor fatality in consolidated operations in 2024. In 2023, there was one contractor fatality in consolidated operations that is still under investigation for work relatedness, as well as one contractor fatality at the joint venture Qatalum that is not part of consolidated statistics.

Note: Includes both employees and contractors. In 2024, the total recordable injury (TRI) rate was 2.0 per million hours worked by employees and contractors, with the majority of injuries relatively minor.

Affected Communities - Actions and Performance

Hydro aims to improve lives and livelihoods wherever it operates by contributing to the protection of human rights and access to equal opportunities, resilient local communities in a changing world, and development of skills and jobs for the future low-carbon economy.

Community Investment and Support

In 2024, Hydro spent NOK 300 million in its local communities including community investments, TerPaz (local community centers), donations and sponsorships, and launched its program to increase funding to projects aligned with Hydro's Just Transition priorities in the communities where it operates.

In addition to this, Hydro made a provision in December 2024 of NOK 300 million to support communities along the pipeline between the Paragominas mine and Alunorte refinery in Brazil. The provisioned funds will support infrastructure, local production facilities, and skills development.

Skills Development Program

Hydro has a target to equip 500,000 people with new skills and education by 2030. Hydro progressed towards this target by reaching more than 44,000 people in 2024. In total, 241,000 people have benefitted from Hydro's education and skills initiatives since 2018.

Social Programs

100,000 people have been assisted by social programs since 2018 at Bauxite & Alumina operations.

Affected Communities Targets

Persons empowered with skills and education: Provide quality education and capacity building for 500,000 people by 2030

2024 Performance

Hydro progressed towards its target to equip 500,000 people with skills and education for the future low-carbon economy by 2030, reaching more than 44,000 people in 2024. In total, 241,000 people have benefitted from Hydro's education and skills initiatives since 2018.

Business Conduct and Corporate Culture

Hydro's values of care, courage and collaboration, reflect how the company aims at interacting with its employees, local communities, customers and suppliers.

Care

We act with respect for people and the environment, and place safety at the heart of our operations.

Courage

We break new ground and take measured risks with agility, accountability, and foresight.

Collaboration

We work as partners internally and externally to unite competencies and create win-win opportunities.

Management of Relationships with Suppliers

Hydro works with more than 30,000 suppliers around the world. The company maintains supplier relationships across its global value chain operations in more than 140 locations in 42 countries.

Prevention and Detection of Corruption and Bribery

Hydro has governance and compliance indicators including:

Combat corruption: Target of zero substantiated claims of corruption

Building a culture of integrity and trust:

• Compliance training and tracking performance on integrity culture index
• Compliance awareness and training

Performance Metrics

Incidents of Corruption or Bribery

2024 Performance

There was 1 substantiated claim of corruption in 2024, compared to 0 in 2023 and 0 in 2022. This represents a deviation from Hydro's target of zero substantiated claims of corruption.