Annual Report 2024

1.Operating result before depreciation, amortisation and capital gain (loss) on non-current assets.

2.Operating result (Earnings Before Interest and Tax).

3.Net result allocated to shareholders' equity adjusted for non-recurring items divided by the average number of outstanding shares.

4.Net result allocated to shareholders' equity divided by the average number of outstanding shares.

5.Net result allocated to shareholders' equity divided by the average number of outstanding shares expressed in NOK using USD/NOK at year-end

6.Net result plus interest expenses adjusted for non-recurring items divided by average total assets.

7.Net result plus interest expenses divided by average total assets.

8.Net result adjusted for non-recurring items divided by average total equity.

9.Net result divided by average total equity.

10.Operating result divided by average total equity plus net interest-bearing debt and IFRS 16 debt

11.Shareholders' equity divided by number of outstanding shares per 31.12.

12.Bank deposits and securities includes cash and cash equivalents and other current financial assets.

13.Interest-bearing debt less bank deposits and securities, divided by cash flow from operations before capital gain (loss) on non-current assets.

14.Current assets divided by current liabilities.

15.Total equity as percentage of total assets.

16.Including employees in Joint Ventures.

Board of Directors' Report 2024

The consolidated 2024 net result for the Odfjell Group amounted to a net profit of USD 278 million, compared with a net profit of USD 203 million in 2023. This represents the best financial result ever. Total assets by year-end amounted to USD 2 168 million, up from USD 1 994 million at the end of 2023. The cash flow from operations was USD 406 million in 2024, compared with USD 340 million in 2023. Cash and cash equivalents were USD 147 million end of 2024 in addition to undrawn loan facilities of USD 83 million. Total equity at the end of 2024 amounted to USD 930 million compared to USD 799 million at the end of 2023, and the equity ratio increased to 42.9% from 40.0% during the year. Including dividend for 2H 2024 paid in February 2025, the Company paid a total dividend of USD 141 million for FY 2024 compared to USD 99 million for FY 2023. The 2024 results gave a total dividend per share of USD 1.78.

The operating result (EBIT) was positive with USD 354 million in 2024, compared to USD 294 million in 2023. The Company showed further improved results in 2024, and delivered the strongest financial result ever with a net result of USD 278 million, driven by strong markets and improved contract rates. Chemical tanker spot rates strengthened during the first half of the year but weakened towards the end of the year. Swing tonnage in our market was at low levels in the beginning of the year due to high margins in the clean petroleum product (CPP) tanker segment, contributing to the tight chemical tanker supply. The average rates achieved on Contract of Affreightment (CoA) cargoes ended in 2024 at a level approximately 10% higher than the year before, while achieved spot rates were down around 2% for the same period. The majority of CoAs that were renegotiated in 2024 were renewed at healthy rate increases in addition to seeing improvements in other contractual terms. Global seaborne chemical and vegoil volumes grew compared to 2023, but increasing competition from swing operators led to lower spot demand for chemical tankers in the second half of 2024. The Board is satisfied with the record strong result and recognizes that several years of continuous focus on reducing cost and improving efficiency and quality continue to pay-off, and that we have been able to take advantage of the strong markets by increasing volumes and improving rates. The Board takes the opportunity to express gratitude to all employees at sea and ashore who have contributed to this record result.

In 2024, inflation eased but proved to be more persistent than anticipated, prompting central banks to navigate the balance between controlling inflation and fostering growth. The U.S. Federal Reserve implemented several rate cuts while upholding a "higher-for-longer" approach. Geopolitical risks continued to be of significant concern. The tensions influenced global commodity markets, leading to downward pressure on prices as fears of recession and expectations of weak demand overshadowed concerns about supply. Macroeconomic uncertainty remains, on the back of less economic activity in China and Europe. Global industry and manufacturing continue to struggle, with lower levels of new orders.

Odfjell has not been directly affected by the war in Ukraine, as we do not operate in the area, nor do we participate in sanctioned trades. Nevertheless, we monitor the situation and implement measures to minimize any adverse impact on our employees, operations, and financial results. Our top priority continues to be to ensure the safety and well-being of our crew, vessels, and cargo.

Security remains a paramount concern, especially given the increasing reports of piracy and attacks on shipping around the east coast of Africa, Gulf of Aden, and Arabian Sea. This uptick is primarily attributed to regional instability, including conflicts involving Yemen's Houthi rebels and broader unrest in the Red Sea corridor linked to the Israel-Hamas war. The situation in the Red Sea and Gulf of Aden has led us to adjust our shipping routes to navigate around Africa, as the safety of our crew and cargo remains our top priority. Odfjell has remained vigilant, monitoring these developments closely, and making informed decisions to mitigate risks.

Sustainability remains at the core of Odfjell SE’s business strategy, guiding our decision-making and operational improvements. 2024 was the warmest year in recorded history, underscoring the accelerating impacts of climate change. Recognizing the urgency, we further embedded climate risk assessment and double materiality analysis into the Board’s strategic and risk management processes. These assessments are integral in shaping our long-term resilience and ensuring our operations align with global and industry climate goals. As we move forward, Odfjell remains dedicated to sustainable growth, innovation, and industry collaboration, ensuring that we remain a leader in the global transition towards a low-carbon society.

Odfjell maintains an uncompromising commitment to health and safety across all aspects of our operations. Whether on board our ships, at terminals, or in offices, safety remains our top priority in daily operations, long-term planning, and new initiatives. Lost Time Injuries (LTIs) increased from one in 2023 to seven in 2024, all of which were promptly addressed with thorough follow-up measures. The individuals involved received the necessary care and have recovered well. Importantly, there were no serious process safety incidents during the year, underscoring our continued focus on risk mitigation and operational excellence.

In 2022, the Board announced a new dividend policy stating that Odfjell will distribute 50% of net income, adjusted for extraordinary items. The policy is designed to deliver predictable and sustainable dividends going forward. Other excess capital will be earmarked for extraordinary debt reductions, but may also be used for value creative investments, future fleet renewal, share-buybacks and dividends. Dividends will be paid out semi-annually. For FY 2024, including dividend for 2H 2024 paid in February 2025, the company paid a total dividend of USD 141 million versus USD 99 million for FY 2023.

Due to strong financial performance, and limited investments in new assets, our balance sheet has improved significantly over the year. At year-end, the IFRS 16 adjusted equity ratio was 53%, up from 46% at the end of 2023. At the end of 2024, our book equity ratio was at 43%, above our long-term equity ratio target range of 30% to 40%. Our commitment to sustainable finance was further demonstrated in April 2024 when we successfully refinanced a facility that included seven vessels in total. This was also our first facility with a Transition Finance component. At the close of 2024, we finalized a term sheet for a new USD 242 million bank facility, with the formal agreement concluded in January 2025. This facility encompasses most of our forthcoming financing transactions and purchase commitments for 2025. All deals finalized in 2024 were achieved on favorable terms, lowering our cost of capital and enhancing our financial position. By December 2024, all our traditional bank debt facilities included either a sustainability-linked feature or a transition element. Early 2025, Odfjell repaid its only remaining bond, the ODF11, with outstanding amount equal to USD 100 million. We consider the balance sheet to be sound, with limited financing needs for new capital commitments in the upcoming years, a strong anticipated cash flow, a well-diversified debt structure, and access to a variety of finance sources and arrangements.

Odfjell operates one of the world’s largest, most efficient, and competitive deep-sea stainless steel fleet. With limited capex for our tankers in 2024, the priorities have been operations, cash flow generation, and debt reduction. 2024 saw significant volatility in the spot markets. The peaks of the first half of 2024 contributed to record earnings, while increased competition from swing tonnage caused a decline in cargo availability towards the end of the year. Renewed contracts in 2024 saw healthy average rate increases, and achieved rates are now up around 42% on average since the market upswing started in the second quarter 2022. Although geopolitical unrest has caused market conditions to be volatile, a solid future tonne-mile demand outlook and limited supply growth together with market inefficiencies should ensure continued healthy and strong markets for our tankers. Policy shifts in the US, including potential import tariffs, port fees on Chinese built ships, may however influence trade flows. These shifts, an economic downturn, and perhaps an influx of swing tonnage, are the biggest risks. We need to be ready for such scenarios.

Longer term, newbuilding orders picked up significantly in 2024 and the year ended with a 16% orderbook as share of current fleet. Ship recycling, on the other hand, has been very limited since 2022, and the number of recycling candidates is rapidly growing. In sum, we believe the outlook in our core market is healthy, with balance between supply and demand fundamentals, subject consequences of the policy shifts.

The number of trading days for the Odfjell fleet, including external pool vessels, decreased marginally to 24,666 days from 24,850 in 2023. Trading days also decreased modestly when excluding external pool vessels, to 23,619 days from 23,826 in 2023. Total volume carried in 2024 was 13.1 million tonnes, compared to 13.7 million tonnes in 2023, the decline was partly driven by longer voyages due to deviation from the Red Sea and also reduced demand at the end of the year. The contract coverage for the year ended at 56% compared to 64% in 2023, and we were able to renew contracts with healthy rate increases through all quarters, providing support to future earnings.

At the end of 2024, our total chemical tanker fleet counted 71 vessels, including 46 owned or leased, four on operational bareboat charters, 14 on time charter, and three pool vessels. All our vessels are tailored for the deep-sea chemical tanker trades, with super-segregators comprising about 40% of our fleet. Odfjell now has 18 new buildings on order, of which 16 are contracted under long-term time charter and two will be owned. 17 of the newbuilds are to be delivered between the second half of 2025 and 2028 from different yards in Japan. Through long-term time charters with purchase options, we have significantly increased the flexibility of our fleet with limited upfront capital expenditure.

Odfjell remains a market leader within sustainability and fleet efficiency. We are well prepared for new regulations and emerging zero- emissions technologies, and we have ambitious targets to further reduce our environmental footprint.

We aim to reduce our carbon intensity by 57% by 2030, compared to 2008 levels, and to have a climate-neutral fleet from 2050. As such, we will only order newbuildings with zero- emission capable technology. Odfjell has been able to achieve its target of minimum C-rating for all vessels since we started to report on the actual Carbon Intensity Indicator (CII) of our vessels in 2023. Odfjell has a history of being at the forefront of our industry, and we are committed to continue playing an active role in shaping the industry and staying ahead of the needed curve to reach net zero by 2050.

For Odfjell Terminals, 2024 was another year marked by continuous improvements in safety performance and financial results, and steady progress in executing accretive capacity expansions. These achievements demonstrate the strength of our operating model, and we are now focused on scaling and expanding further. In the first quarter, the Bay 13 expansion project at Odfjell Terminals Houston (OTH) was successfully commissioned, adding 32,433 cbm (+9%) of fully automated storage. At the terminal in Antwerpen (NNOAT), construction began on two new tank pits— Tankpit R (27,500 cbm, 10 tanks) and Tankpit Q (12,000 cbm, 2 tanks). In November 2024, the board of OTK approved the E5 expansion, which will boost capacity by 28% to over 400,000 cbm with 10 carbon steel tanks of total 99,900 cbm. 

Since May 7, 2024, the Board has comprised Laurence Ward Odfjell (Chair), Christine Rødsæther, Jannicke Nilsson, Tanja Jo Ebbe Dalgaard, Erik Nyheim and Jan Kjærvik. The Audit Committee is made up of Jan Kjærvik (Chair), Jannicke Nilsson and Tanja Jo Ebbe Dalgaard. The Nomination Committee consists of Bjørg Ekornrud (Chair), acting as an external, independent member, Christine Rødsæther, and Laurence Ward Odfjell. The Board also has a separate Remuneration Committee which is composed of Laurence Ward Odfjell (Chair) and Christine Rødsæther.

We have directors’ and officers’ liability insurance (D&O) in place for the Odfjell SE group. This is a liability insurance policy that covers a company's directors, officers, and the organization(s) itself when an employee holds a managerial position. It serves as defense cost advancement or loss indemnification in the event that an insured party experiences a loss due to a lawsuit brought against them for alleged wrongdoings while serving as directors and officers.

Sustainability

Odfjell continued its efforts to enhance energy efficiency and reduce emissions. We achieved a new record low in carbon intensity, reinforcing our position as the operator of the world's most energy-efficient deep-sea chemical tanker fleet. However, our absolute emissions saw a slight increase due to longer sailing routes due to deviating away from the Red Sea. We embarked on an innovative retrofit project to equip one of our tankers with suction sails. This groundbreaking initiative was successfully installed in March 2025, and we anticipate that this technology will significantly advance our ongoing efficiency improvements and emission reduction objectives.

We raised our ambition by setting a new climate target for further reductions in carbon intensity, reinforcing our long-term commitment to a net-zero future. To support this journey, we launched the first Transition Finance Framework in the Nordics, enabling financing of large and small investments in sustainability-driven initiatives. In 2024, we developed a comprehensive transition plan aligned with the EU’s Sustainability Reporting Standard (ESRS) and prepared for compliance with the Corporate Sustainability Reporting Directive (CSRD). Our continued commitment to sustainability was recognized through multiple awards, including the prestigious Bergen Chamber of Commerce’s Sustainability Award.

Sustainability reporting has undergone significant changes compared to previous years. Odfjell falls within the scope of the Corporate Sustainability Reporting Directive (CSRD) and reports in accordance with the European Sustainability Reporting Standards (ESRS). Our general disclosures, along with our reporting on Environmental, Social, and Governance (ESG) matters and the EU Taxonomy, are included in our Sustainability Statement as an integrated part of this Directors' Report.

Health, Safety, Security (HSS)

In 2024, we continued our commitment to health, safety, and security across all Odfjell operations. Safety remains our number one priority, and we are dedicated to ensuring a safe working environment for all employees.

We experienced an increase in Lost Time Injuries (LTIs), rising from one in 2023 to seven in 2024, with four of these incidents occurring within the Fleet Flumar operations. Fortunately, all affected individuals have recovered well. While these incidents were not severe, they reinforce our belief that even a single LTI is one too many. The Board has expressed concern over this increase and emphasizes the need for strengthened efforts to reduce LTIs to zero. To address this, we have initiated targeted actions to learn from these incidents and mitigate risks.

As a result, the Lost Time Injury Frequency (LTIF) in our shipping operations increased to 0.61 in 2024 from 0.09 in 2023.

At our managed terminals, we recorded one LTI, leading to an LTIF increase to 0.18 in 2024 from 0 in 2023.

Aligned with the new Sustainability Statement under the ESRS, we now provide a comprehensive report on safety, covering both General Disclosures and the Social reporting requirements under S-1 Own Workforce.

We did not experience any significant safety or security incidents at our ships or terminals. This reflects our proactive and rigorous approach to security risk assessment and mitigation. Odfjell has established a dedicated task force to monitor risks related to the Red Sea and piracy threats in the Gulf of Aden. Due to heightened risks in these regions, we have rerouted our vessels away from affected areas and redirected our shipping routes around Africa.

Cybercrime is still a significant concern for the maritime industry. At Odfjell, we have adopted a holistic approach to cybersecurity, addressing both technical and human factors. Our efforts focus on fostering behaviors that effectively mitigate cyber threats. We have implemented advanced cybersecurity technologies to protect our systems and conduct regular training for all employees to reinforce cyber risk awareness and preparedness.

Corporate Governance

The framework for our corporate governance is the Norwegian Code of Practice for Corporate Governance of October 14, 2021. Odfjell is committed to ethical business practices, honesty, fair dealing, and compliance with all laws affecting our business. This includes adherence to high standards of corporate governance. The Board’s statement on corporate governance is part of the Group’s Annual Report. Our Corporate Social Responsibility policy also focuses on quality, health, safety, and care for the environment, as well as human rights, non- discrimination, and anti-corruption. The company has its own Code of Conduct that addresses several of these matters. All Odfjell employees are obliged to comply with the Code of Conduct, and the same applies to our main suppliers who must adhere to our Supplier Code of Conduct.

Business summary

We remain committed to our long-term strategy of enhancing our position as a leading company in the global market for the transportation and storage of bulk liquid chemicals, acids, edible oils and other specialty products.

By focusing on the safe and efficient operation of a versatile and sophisticated fleet of global and regional chemical tankers, with cargo consolidation at our tank terminal network, we aim to enhance product stewardship in the solutions we provide to our customers. The fleet is operated in complex and extensive trading patterns, meeting our customers' demand for safety, quality, and the highest standards of service. Our fleet has a critical mass that enables efficient trading patterns and optimal fleet utilization. The industry in general continues to suffer from congestion in port due to lagging investment in port infrastructure.

Comments to segment figures below are by the proportionate consolidation method.

Chemical Tankers

Gross revenues from our chemical tanker activities amounted to USD 1,247 million in 2024, an increase from USD 1,192 million in 2023. EBITDA came in at USD 506 million and EBIT at USD 344 million, compared with USD 443 million and USD 286 million respectively in 2023. Corporate costs related to Odfjell SE are included in the general and administrative expenses for chemical tankers. Total assets at year-end stood at USD 1,983 million, up from USD 1,809 in the previous year.

We achieved healthy rate increases on Contract of Affreightment (CoA) renewals during all quarters of the year, and CoA share of total volume transported ended at 56%.

The operation of chemical tankers is complex. In 2024, our ships loaded approximately 500 different products during our more than 2,000 port calls. Unlike in most other shipping segments, our ships may call at several berths in each port, both loading and discharging a variety of products with different properties. This is an expensive and time-consuming process that sets high demands on our personnel, equipment, and procedures. We maintain our position as a preferred chemical tanker operator, by delivering world class safety, quality, and efficiency performance.

Odfjell expanded its fleet with four medium sized stainless steel newbuildings on long-term time charter in 2024, and we also took ownership of one supersegregator previously on operational lease. We also sold one of our oldest tankers, the 1995-built Bow Atlantic.

We have exercised purchase options on four supersegregators currently on operational lease, and we will take ownership of these vessels in 2025 and 2026. Additionally, we ordered ten newbuildings in 2024, leaving us with a total orderbook of 18 vessels by December 31, 2024. Two of these vessels will be Odfjell-owned whereas the rest will be on long-term time charters. Most of the vessels we have on order are long-term time charter agreements with purchase options, offering flexibility with regards to future propulsion technologies and changing regulations.

All in all, our contract portfolio leaves us with a reasonable exposure to spot markets, and our fleet provides flexibility for both cargo requirements and trade lanes. This combination supports Odfjell’s strategy to capture the short term and de-risk the long term.

Tank Terminals

For 2024, gross revenues from Odfjell’s tank terminal activities amounted to USD 88 million, compared with USD 82 million in 2023, while EBITDA for 2024 amounted to USD 44 million, up from USD 38 million in 2023. These results represent the strongest financial performance since we restructured our terminal portfolio in 2018/2019. At year-end 2024, the book value of Odfjell’s share of tank terminal assets was USD 357 million, compared with USD 361 million at the end of 2023.

Odfjell’s terminal platform comprises four strategically located tank terminals in the United States (Houston and Charleston), Korea (Ulsan), and Belgium (Antwerp), with a total capacity of 1.3 million cbm. With a portfolio of strong assets, a legacy spanning over half a century, and the strategic advantages of also being a shipping company, we are uniquely positioned as an active, long-term industrial owner of terminal infrastructure assets. By leveraging Odfjell’s know-how, brand and customer reach, we support our strong local management teams in driving performance, operational improvements, and pursuing accretive expansions.

Odfjell Terminals continues to maintain a strong safety record, with zero personnel injuries at our Ulsan and Charleston terminals in 2024. Odfjell Terminals US was awarded the International Liquid Terminal Association (ILTA) Safety Excellence Award in 2024 for the second consecutive year, reflecting our ongoing commitment to maintaining the highest standards of safety.

In the first quarter of 2024, the Bay 13 expansion project at OTH was successfully completed, adding 32,433 cbm of fully automated storage capacity across nine tanks. At our Antwerp terminal, construction commenced on two new tank pits: Tankpit-R (27,500 cbm) and Tankpit-Q (12,000 cbm). These mark the sixth and seventh expansions at our Antwerp terminal since 2018. In November 2024, the Board of Odfjell Terminals Korea (OTK) approved the E5 expansion project, which will increase the Ulsan terminal’s capacity by 28% to over 400,000 cbm with 10 carbon steel tanks of total 99,900 cbm. Since 2018, we have collectively added 276,000 cbm to our total capacity, with the ongoing Tankpit Q and E5 projects contributing an additional 99,900 cbm. In aggregate, these expansions represent a 25% increase in our capacity compared to our 2018 footprint. With a high degree of automation and by leveraging existing infrastructure, these projects represent very value accretive investments.

Also from a commercial perspective, the terminal portfolio continued to perform well in 2024, maintaining an average commercial occupancy of a high 96%, in line with previous years. High occupancy rates at our Ulsan and Antwerp terminals have been a positive driver, largely offsetting a somewhat softer tank storage market in the US. While potential trade wars and toll barriers add another layer of uncertainty for 2025, we expect storage demand to remain robust across all our locations. The Antwerp terminal achieved unprecedented activity levels in 2024, bolstered by robust demand for glycols and base oil.

In 2024, we advanced our multi-year digital transformation program at our US terminals, upgrading our terminal management system and digitizing core operational processes across marine, truck, and rail activities.

Looking ahead, we will remain focused on delivering safe, reliable, and efficient services to our customers, while enhancing the quality of our operations through continued investments in automation and digitalization. We remain committed to disciplined growth, seeking accretive opportunities both within and beyond our existing footprint.

Profit & loss for the year - consolidated

The Group’s Financial statements have been prepared in accordance with IFRS. Gross revenues for the Odfjell Group came in at USD 1 249 million, up 4.6 % from the preceding year. Much of the increase in gross revenue can be attributed to higher freight rates. The consolidated result before taxes in 2024 was positive USD 280 million, compared with positive USD 210 million in 2023. The income tax expense in 2024 amounted to USD 2 million, compared with USD 7 million in 2023.

EBITDA for 2024 totaled USD 517 million, compared with USD 451 million the preceding year. The increase in EBITDA in 2024 was mainly driven by stronger chemical tanker markets impacting results from Odfjell Tankers. EBIT was positive USD 354 million in 2024, compared with positive USD 294 million in 2023. The net result for 2024 was positive with USD 278 million, compared to a net profit of USD 203 million in 2023.

Net result from associates and joint ventures was up to positive 11 million in 2024 from a positive USD 9 million in 2023, mainly driven by increased capacity and improved rates.

Net financial expenses for 2024 totaled USD 75 million, compared with USD 84 million in 2023. The average USD/NOK exchange rate in 2024 was 10.74 compared to 10.56 in 2023. The NOK weakened against the USD to 11.34 by December 31, 2024, from 10.20 at year-end 2023.

The cash flow from operations was USD 406 million in 2024, compared with USD 340 million in 2023. The net cash flow from investments was negative USD 73 million, which includes docking expenses and acquisition of one vessel previously on bareboat charter. The cash flow from financing activities in 2024 was negative USD 299 million as we continued to reduce debt and pay dividend. 

The parent company (Odfjell SE) delivered a positive net result for the year of USD 402 million compared to positive net result of USD 34 million in 2023. The increase in the net result is mainly driven by received dividend from subsidiaries. The net result for 2024 will be allocated to other Equity. As of December 31, 2024, total equity amounted to USD 871 million.

The Annual General Meeting will be held online May 7, 2025.

According to §3.3 of the Norwegian Accounting Act, we confirm that the financial statements have been prepared on the going concern assumption.

Shares and shareholders

The Company is an SE (Societas Europaea) company subject to Act No 14 of April 1, 2005, relating to European companies. The company’s registered office is in the city of Bergen, Norway. The object of the company is to engage in shipping, ship agency, tank terminals, real estate, finance and trading activities, including the transportation of freight in the company’s own vessels or chartered vessels, the conclusion of freight contracts, ownership and operation of tank terminals, as well as investment and participation in other enterprises with a similar object and other activities related thereto.

Total shares as of end of December were 79 719 846 shares, with 60 463 624 A-shares and 19 256 222 B-shares. The total shares include Odfjell SE treasury shares of 153 292 A-shares and 497 634 B-shares. By end of December 2024, Odfjell A- and B-shares were trading at NOK 116.8 and NOK 115.8 respectively, against NOK 116.5 and NOK 116.5 respectively at the close of 2023, reflecting a total weighted return (including dividend paid during 2024) of 13.3%. In the same period, the Oslo Stock Exchange Shipping Index was positive with 13.2%.

Key figures

The return on equity for 2024 was 32.1% and return on total assets was positive 17.4%. The corresponding figures for 2023 were 27.2% and 14.1% respectively. The return on capital employed (ROCE) was 19.4% in 2024. Earnings per share in 2024 amounted to positive USD 3.5 (NOK 39.9), compared with positive USD 2.6 (NOK 26.3) in 2023.

Financial risk and strategy

Odfjell’s financial strategy is to ensure that we have a business model and capital structure that is robust throughout market cycles, yet flexible enough to take advantage of trends and opportunities. We need to be able to withstand prolonged adverse conditions in the chemical and financial markets, while also being able to act on opportunities and challenges, at any given time. To achieve this, Odfjell has an active approach to financial risk management, with a focus on attracting funding from diversified sources, maintaining high liquidity and credit reserves, and systematic monitoring and management of financial risks related to currencies, interest rates, bunkers and emission allowances. Derivatives may be used to reduce our exposure to some of these financial risks.

The average historical fluctuation in time charter earnings per day for our chemical tanker fleet has been approximately 15% per annum over the last five years, an increase of around one percentage point from last year. Sensitivity analysis shows that a prolonged change in time charter earnings of 10% will impact our pre-tax net income by approximately USD 79 million.

The single, largest cost component affecting time charter earnings is bunkers, and Odfjell makes physical purchases of bunkers worldwide. A substantial part of our consumption is hedged through bunkers adjustment clauses in contracts of affreightment. Uncovered consumption from spot volumes, or contracts without bunkers adjustment clauses, are considered for financial hedging. However, we did not have any financial bunkers hedges in place during 2024. A USD 50 increase in the average bunkers price per metric ton would reduce our pre-tax net income by approximately USD 7 million.

In 2024, shipping was included in the EU ETS, introducing a new voyage cost component in the form of emission allowances. Most of the cost is passed through to end-charterers, with full transparency on actual emissions, which is in line with the intention of the new ETS regulations, but we may consider financial hedging of emission allowances to reduce inefficiencies. However, our best risk-reduction action to counter new emissions regulations is to continue improving the energy efficiency of our fleet. Odfjell is not engaged in the derivatives market for forward freight agreements. A EUR 25 increase in the average price for an EU emission allowance unit would increase our gross voyage expense by EUR 3 million.

All interest-bearing debt, except bonds in the Norwegian bond market and debt borne by tank terminals outside the US, is denominated in USD. Loans have various amortization profiles, but the majority are floating rate with SOFR as a benchmark. A 1% increase in the interest rate would reduce our pre-tax net income by approximately USD 7 million, before hedges. As of December 31, 2024, we have USD 300 million of interest rate hedges in place, covering approximately 41% of interest-bearing debt. Debts related to right of use of assets are mainly related to fixed USD denominated charter hire for long-term charted vessels.

The Group’s revenues are primarily denominated in USD. Non-financial currency risk relates mainly to the net income and cash flow from voyage related expenses, ship operating expenses, including crew costs, and general and administrative expenses denominated in non-USD currencies, mainly NOK and EUR. A 10% decrease in the USD against the NOK would reduce our pre-tax net income by approximately USD 9 million, before hedges. Our NOK exposure is relatively long-term, visible and stable, and we have hedged parts of our expected NOK cash flows, for up to two and a half years, through forward exchange contracts. Financial currency risk, relating to non-USD denominated debt, being our NOK denominated bond, is hedged 100%, as interest payments and principal in NOK is swapped for principal and interest payments in USD at the time of issuance.

Liquidity and financing

Total nominal interest-bearing debt as of December 31, 2024, was USD 745 million, compared with USD 849 million at the start of the year. Total debt, in carrying currency and including debts related to right of use of assets (IFRS16 leases) and capitalized transaction expenses was USD 1,142 million. Cash and cash equivalents totaled USD 147 million as of December 31, 2024, compared with USD 112 million at the start of the year. Undrawn commitments under long-term bank facilities totaled USD 83 million, bringing total available liquidity to USD 229 million at year-end 2024. The equity ratio was 42.9% at year-end, compared to 40.0% as of December 31, 2023. Available liquidity and equity ratio are both in the upper end of our long-term targeted ranges.

Odfjell has a diversified capital structure and has solid access to a wide range of funding sources from top-tier banks, leasing houses and from the bond market. Our cost of financing has improved in all credit markets over the last few years. In 2024, we completed one refinancing transaction, involving six vessels. A seventh vessel was added to the facility later in the year after we repurchased it from a financial lease. The transaction was done at improved terms and contributed to lowering our cost of capital. This loan facility also incorporated a transition finance tranche based on the framework we developed and implemented early in 2024, supporting the funding of our decarbonization project. 70% of our interest-bearing debt per December 31, 2024, was sustainability-linked.

The average maturity of the Group’s total interest-bearing debt is 2.9 years (3.8 years in 2023). Average maturity on mortgaged loans from financial institutions is 2.3 years (3.3 years in 2023), financial leases mature on average in 6.6 years (6.4 years in 2023) and unsecured bonds mature on average in 0.1 years (1.1 years in 2023). The average loan margin for the Group's interesting-bearing debt per end of 2024 is 2.77% versus 2.86% end of 2023. Odfjell had a bond that matured in January 2025 for a total of NOK 850 million that was swapped to USD 100 million. This bond was repaid with available liquidity reserves upon maturity. We have few other upcoming and material maturities in 2025 but will continue to optimize our debt portfolio to reduce debt and further improve our cost of capital. Debts related to the right of use of assets totaled USD 397 million as of December 31, 2024. This obligation is mainly related to fixed USD denominated charter hire for long-term chartered vessels with an average maturity of 3.6 years.

Organization, working environment and job opportunities

Looking back on 2024, it was a year marked by numerous record-breaking financial results, a strong safety performance, and a widely recognized sustainability position. Our continuous efforts to improve safety, profitability, and efficiency are having a positive impact. To deliver strong results we need to evolve individually and as an organization. This is enabled by a physically and psychologically safe work environment. Over the past year, we have rolled out a holistic all-company development program for our onshore employees and managers, based on the results of employee engagement surveys, to further strengthen our work environment. Fleet Week conferences, where we bring together colleagues from sea and shore to share information and learn, also continued in 2024 with positive feedback.

Our leadership courses and external assessments of senior officers at sea continue; in 2024, we scheduled five Odfjell Leadership Training courses, ten Elite Pro assessments, and several Bridge Resource Management (BRM) and Engine Resource Management (ERM) training courses.

In 2024, we stayed on track to achieve our goal of a minimum 30% gender balance at all levels by 2030. With 170 employees at our Bergen headquarters, the overall composition stands at 66% men and 34% women (same figures as in 2023). Globally, our figures are 68% men and 32% women, also consistent with the previous year. Three of the six directors of the board of Odfjell SE are women. We have set specific targets to further improve our gender balance in line with our strategy and the requirements of the Equality and Anti-Discrimination Act §26.

Our commitment to freedom of association and adherence to local norms and collective bargaining agreements, both onshore and at sea, remains steadfast. Through councils, committees, and surveys, we actively listen to our employees. Our annual performance management wheel enables a structured dialogue between onshore employees and their direct managers, supports our overall direction and fosters competence development and employee growth.

In 2024, we focused on training employees and leaders through the above-mentioned all-company development program. The aim of this initiative is to continue to foster a safe, sustainable, and inclusive workplace, where everyone can contribute and is treated with respect. We believe that such a workplace will retain and attract tomorrow’s talent.

Our organization has maintained a below-industry absence rate, with a decrease compared to last year. In 2024, the absence rate at our headquarters was 2.37% (down from 2.82% in 2023). Among our own pool of Odfjell and Flumar seafarers, the absence rate for 2024 stood at 2.5% (rising from 1.35% in 2023). The turnover rate at our headquarters decreased to 1.18% (from 3.6% in 2023), and for seafarers, the rate for 2024 was 2.6% (compared to 3.4% in 2023). High scores in engagement and enablement surveys, coupled with our low absence rates onshore and at sea and high retention, indicate a robust and healthy working environment.

The Board would like to thank all employees for the many positive achievements in 2024.

Remuneration of the Executive Management group

The Remuneration Committee handles the salary and other remuneration for the Executive Management and makes its recommendations to the Board. A description of the remuneration of the Executive Management and the Group’s remuneration policy, including the scope and organization of bonus and share-price-related programs, is provided in the Board of Directors’ Guidelines for salary and other remuneration to leading personnel. A ceiling has been set for performance-related remuneration. The Board of Directors’ Report on salary, and other remuneration for leading personnel, is considered at the general meeting and made available to shareholders, together with the notice of the annual general meeting. It is also available on the company's website. Also see Note 20 in the Odfjell Group accounts for details about the remuneration of management in 2024.

Market development

Despite core supply and demand fundamentals being relatively stable in 2024, our markets saw significant volatility driven by external factors. The year began with several market drivers simultaneously pulling up spot rates. Transit restrictions in the Panama Canal were followed by attacks on commercial shipping in the Southern Red Sea and Gulf of Aden, both disrupting shipping markets.

At the same time, chemical and vegoil volumes remained solid and demand factors in our neighboring Clean Petroleum Product (CPP) segment contributed to high product tanker earnings. In combination, this led to a very tight balance between supply and demand, supporting high spot freight rates and chemical tanker earnings.

The picture changed in the summer as softened crude tanker markets led operators of the largest ships to swing into the clean tanker markets. This eroded MR earnings and pushed MR operators into the chemical tanker trades. While competition from swing tonnage remained at a moderate level compared to the previous high in 2021, it still put pressure on chemical tanker earnings, although operators with strong CoA portfolios saw a more limited impact compared to spot operators.

The overall outlook is healthy, albeit with uncertainties when looking ahead. Global seaborne volumes of chemicals and vegoils are expected to grow at a steady pace, short-term fleet growth in our core segment is expected to be low or negative, and expectations are for swing tonnage to normalize in 2025 compared to recent slightly more elevated levels.

Longer term, the core, deep-sea chemical tanker orderbook has reached 16% as share of current fleet, with most vessels scheduled for delivery in 2026 and 2027. We are likely to see net fleet growth over the next three to four years, especially in the medium-sized segment, whereas the picture is more balanced for large chemical tankers and supersegregators. The orderbook is higher in our neighboring segment of product tankers and simple chemical tankers, reaching 20% as share of current fleet, although net fleet growth is expected to be moderate due to the aging fleet. In summary, we believe the orderbook is at a reasonable level when accounting for fleet age and demand outlook.

The most significant uncertainties are related to macroeconomic and geopolitical developments. Both China and Europe are struggling with lower economic growth, and there are signs of increased barriers to international trade which usually lead to lower economic growth over time. Meanwhile, conflicts persist in the Middle East and Ukraine, and countries worldwide are adopting increasingly cautious positions on international diplomacy and alliances.

 
Company strategy and prospects

The chemical tanker market exists in an increasingly complex environment. This highlights the importance of a having a strategy that accounts for uncertainty and sudden developments.

Odfjell strives to provide safe, efficient, and cost-effective chemical tanker and tank terminal services to our customers worldwide. Our strategy can be summed up as "Capturing the short term while de-risking and preparing for the long term". We want the flexibility and agility to take advantage of upswings in our markets. At the same time, we must be prepared for weaker markets by operating an efficient fleet, being a leader in sustainability, and having a strong balance sheet and well-run organization.

Our strategy is backed up by six long-term goals:

• Safety
  Industry leading safety record with zero incident target
• Chemical tankers
  The leader within deep-sea Chemical Tankers
• Terminals
  A growing terminal business that is robust, profitable and significant in scale
• Finance
  Positive Cash Flow across the cycles, a strong balance sheet and a competitive cost of capital
• Sustainability
  Embed sustainability to gain a competitive edge in the market and drive positive change
• People
  An organization that attracts, develops and retains the best people

Deliveries of new chemical tanker vessels are anticipated to increase in 2026. However, an aging fleet coupled with projected demand growth is expected to mitigate the risk of an oversupply. The volatile geopolitical and macroeconomic situation adds uncertainty, and shocks could send our markets in either direction but they have, in recent years, mostly supported spot freight rates through disruption of the supply side.

The main risk to the chemical tanker market outlook, in the medium –term, is a slow-down in the CPP market leading product tankers to swing into chemicals, as we saw in the second half of 2024. While we were able to generate solid earnings through this period, the share of swing tonnage was not very high in historical terms. Should we see significant newbuilding deliveries coincide with a slump in demand for shipping of CPP, the impact on chemical tankers could be significantly worse. While we expect the share of product tankers operating in chemical trades to remain reasonably stable, we must take this risk into consideration.

The global chemical output grew by 3.4% in 2024 and is projected to increase by around 3% in 2025 according to S&P Global. Much of the growth came from the Asia/Pacific region with an increase of 4.8%, and this is expected to continue in 2025.  US chemical output saw a flat development in 2024 but is forecasted to grow by around 3% in 2025 with the ethane feedstock advantage continuing to be a comparative advantage for US production. These projections were provided before the proposed US import tariffs and may be affected by the economic fallout from this. For the Middle East growth was below the global average in 2024 but is expected to pick up in 2025. After two years of decline, Europe expanded its output in 2024 by 1.9%, while for 2025, a modest growth of 0.5% is forecasted by the European Chemical

Industry Council (CEFIC). The chemical industry in Europe continues to struggle with energy and feedstock costs above competing regions.

Looking further ahead, continuing the decarbonization of our fleet is necessary both to alleviate risk and to gain a competitive advantage. Innovation remains at the heart of our decarbonization strategy and Odfjell has established programs and roles to evaluate novel technologies and develop concepts for the next generation of chemical tankers. Among other initiatives, we have installed suction sails on one of our supersegregators in first quarter of 2025. We are on track to meet regulations for 2030 and will only order newbuildings with zero-emission capable technology going forward. From 2050, we aim to have a zero-emissions capable fleet.

The geopolitical situation remains very uncertain. The Russian invasion of Ukraine continues but there are ongoing talks between various parties that may lead to a solution in the future. At the same time, the pressures on Europe to substantially increase defence spending are escalating. The fragile ceasefire agreement in Gaza represents a step towards stability, which may contribute to an improved situation in the Red Sea, although commercial shipping through the region is likely to recover only gradually.

We analyze and assess geopolitical risk as part of our overall corporate risk assessment. The risk picture is dynamic and frequently updated. According to our assessment, Russia and tensions between the US/the West and China pose the most significant geopolitical risks in 2025 and, together with the risk for increased protectionism, tariffs and proposed new US Port Fees that all may potentially harm global trade, this will continue into the first half of 2025.

In the meantime, we remain focused on deleveraging to build financial strength, reducing our cash break-even level, and delivering positive free cash flow throughout the cycles. We have a clear target to increase our market share, and our long-term ambition is to expand our fleet within our core markets. As the infrastructure for sustainable fuels is lacking, we are currently concentrating on fleet renewal and expansions through long-term time charters with purchase options to retain flexibility. We are also monitoring opportunities in the second-hand market and potential new pool arrangements, and we evaluate M&A prospects  if deemed attractive.

Our mission remains clear: We handle hazardous liquids safely, sustainably, and more efficiently than anyone else in the industry.

Sustainability Statement

In line with the European Union's Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standards (ESRS), this sustainability statement offers a comprehensive overview of Odfjell's sustainability initiatives and business conduct. The CSRD aims to enhance corporate transparency and accountability by mandating detailed disclosures on environmental, social, and governance (ESG) factors, thereby facilitating informed decision-making among stakeholders.

This statement is structured to provide insights into our material impacts on people and the environment, as well as the significant effects of sustainability matters on our business operations. By adhering to the ESRS framework, we ensure that our reporting is consistent, comparable, and aligned with EU regulatory requirements.

The sustainability statement is organized into four distinct sections:

General Information: This section complies with ESRS 2, offering an overview of our sustainability policies, management approaches, and outlining the context within which we operate.

Environmental Information: Aligned with ESRS topical standards, this segment details our environmental performance, including disclosures pursuant to Article 8 of Regulation 2020/852 (EU Taxonomy), highlighting our contributions to environmental objectives.

Social Information: This part addresses social aspects as per ESRS topical standards,

Governance Information: Following ESRS topical standards, this section outlines our governance structures, policies, and the practices that underpin our commitment to ethical and effective management. This section also encompass an entity-specific standard in ship recycling.

Through this structured approach, we aim to provide stakeholders with transparent and detailed information on our sustainability performance and demonstrate our dedication to responsible business practices and compliance with EU sustainability reporting standards.

Content Index

General Information

General basis for preparation of the sustainability statement (ESRS 2 BP-1)

The sustainability reporting is based on a double materiality assessment, risk assessments, and current standards. Odfjell SE (Odfjell) has recently developed a thorough sustainability reporting framework that incorporates our strategy, risk assessments, and performance. Risk assessments and materiality assessments set the priority for actions and reporting.

Odfjell is an integrated shipping company with stakes in terminals located in the United States, Belgium, and South Korea. The terminals in the United States and South Korea are structured as joint ventures with Odfjell holding a 50% ownership stake, while the terminal in Belgium is an associated company. In our financial reporting, Odfjell Terminals (Terminals) are accounted for using the equity method rather than through full consolidation.

Although these terminals support the value chain for chemical storage and transportation, they are independently operated and are public terminals, not specifically integrated into Odfjell’s shipping activities. Governance of these terminals is managed through shareholder agreements, which allocate equal control among the shareholders and establish a board with equal representation from each shareholder. As a result, Odfjell does not have operational control over these terminals and, therefore, does not serve as a controlling owner. Due to this lack of operational control, Terminals are not consolidated in our financial statements nor are they included in our sustainability reporting. Instead, these terminals are considered part of the upstream value chain for Odfjell’s activities and are accounted for as such.

The sustainability statement includes material topics from the double materiality assessment for upstream, across, and downstream operations. A complete value chain analysis (VCA) has been developed as the foundation for evaluating key sustainability topics (Ref. ESRS 1) at all stages of the value chain. The VCA has also played an important role in disclosing scope 3 carbon emissions metrics, conducting human rights impact evaluations, and managing our supplier relationships.

The sustainability statement consolidates all controlled entities in the Odfjell Group, the same as the financial reporting.

Classified and competitively sensitive information identified in the opportunity section of the climate and nature risk assessments, as well as details about fleet transition and investments to meet climate targets, are not shared. Examples of this are the specific fleet transition activities and investments.

Disclosures in relation to specific circumstances (ESRS 2 BP-2)

GENERAL DISCLOSURES

The 2024 Sustainability Report marks Odfjell’s first year reporting under the new, mandatory European Sustainability Reporting Standards (ESRS). Given the complexities inherent in this initial reporting cycle, it will include some interpretations. As we implement these standards, we anticipate certain uncertainties in specific reporting details, especially in the interpretation of new regulatory requirements, the reliance on estimates, and adjustments that may arise from the limited assurance process. There will also be challenges related to data collection, as we need data that is produced outside our control, uncertainty in estimates, and areas where we have to recalculate older data to match new data requirements.

Moreover, decarbonization in shipping entails significant capital investment in an industry marked by competition, market fluctuations, and unpredictable pricing and availability of alternative fuels. We aim to provide transparency in this report while acknowledging these factors which influence our sustainability journey, and will likely continue to shape our reporting in the coming years.

Odfjell has previously included Terminals in selected ESG metrics. Following ESRS and disclosure under BP-1, Terminals will not be included in the reporting in 2024.

EMISSION REPORTING AND FLEET CATEGORIZATION

Emissions from our vessels includes all GHG emissions through all of the ships operations. Odfjell’s fleet is categorized based on criteria related to control, responsibility, operations, and ownership of individual ships. Historically, Odfjell has reported fleet emissions data according to two primary categories: the controlled fleet and the operated fleet, in alignment with the Greenhouse Gas (GHG) Protocol. With the introduction of the European Sustainability Reporting Standards (ESRS), new fleet categorization criteria have been established, differing from Odfjell’s previous reporting practices.

To ensure transparency and consistency, Odfjell has aligned its reporting with both industry standards and the ESRS definitions of responsibility. These definitions have been fully integrated into our Scope 1 emissions reporting.

Carbon intensity reporting is entity-specific; therefore, Odfjell reports carbon intensity exclusively for the controlled fleet. The controlled fleet consists of vessels for which Odfjell can influence carbon intensity through both operational and technical measures. In contrast, for the operated fleet, Odfjell can primarily influence carbon intensity only through operational measures, as the company neither owns nor has control over technical measures for a significant portion of this fleet.

For clarity, the fleet categories are defined as follows:

*Odfjell has one vessel, Flumar Brazil, that is time chartered out from Odfjell to Petrobras mainly for storage in Brazil. The vessel is owned by Odfjell but excluded from IMO DCS reporting and, therefore, not reported as Odfjell’s controlled fleet The vessel is included in Operational controlled fleet in 2024. The vessel represent 0.58% difference of Operated Control and Odfjell Operated fleet.

Scope-3 Category 3 encompasses emissions associated with the fleet for which Odfjell holds responsibility for fuel procurement, in accordance with industry standards and the Greenhouse Gas (GHG) Protocol.

See illustration of the fleet definitions:

TIME HORIZON

Climate and nature risk assessments have been critical inputs for the double materiality assessment (DMA). The impacts, risks, and opportunities (IRO) associated with climate and nature have been divided into two categories: near term (0-5 years) and long term (5-25 years). The reason for this is that there are small variances in short-term climate scenarios, and we need to consider vessel lifetimes. For the impacts, we use short, medium, and long term. IAW ESRS 1 6.4 defines three time-horizons: short term (the period used in financial statements), medium term (from the end of the short-term reporting period to 5 years), and long term (more than 5 years).

TRANSITION PLAN FOR CLIMATE CHANGE MITIGATION

The sustainability statement includes a Transition Plan for Climate Change Mitigation in accordance with ESRS E1-1, see link; E1-1. A key component of this plan is the identification of actions and targets aimed at mitigating climate change and contributing to the 1.5°C goal of the Paris Agreement.

As sectoral pathways for the shipping industry have not yet been defined by public policy, it is not currently possible to determine whether Odfjell’s targets are explicitly aligned with a 1.5°C trajectory. However, Odfjell has developed a transition plan to achieve net-zero emissions, outlining concrete measures to reduce carbon intensity in the short term. While these efforts support decarbonization, Odfjell does not assert that its targets are explicitly aligned with a 1.5°C pathway.

VALUE CHAIN ESTIMATION – EMISSIONS IN SCOPE-3

Odfjell applies a structured and transparent approach to scope 3 emissions reporting, ensuring consistency with internationally recognized greenhouse gas (GHG) accounting frameworks. The methodology aligns with the GHG Protocol and employs spend- and activity-based calculation methods where applicable.

Scope and Methodology

Odfjell reports absolute scope 3 emissions across upstream and downstream activities. These emissions are categorized into 15 distinct groups, of which nine are relevant to Odfjell. The primary calculation method relies on a spend-based approach, supplemented with activity-based data for specific categories such as business travel, employee commuting, and waste management.

The spend-based approach is applied where supplier-specific, hybrid, or average-data methodologies are not feasible due to data limitations. This method involves collecting financial data on purchased goods and services and applying environmentally extended input-output (EEIO) emission factors to estimate associated emissions. For categories where direct measurement is possible, such as fuel consumption in category 3 (Fuel and Energy-Related Activities), business travel, commuting, and waste disposal, an activity-based approach is used.

Reporting and Data Sources

Odfjell has reported scope 3 emissions to the Carbon Disclosure Project (CDP) for several years. Since 2022, the company has disclosed emissions for categories 1 (Purchased Goods and Services) and 3 (Fuel and Energy-Related Activities) in its annual report. The data collection and calculation for these categories have been supported by ReFlow.

Odfjell employs a spend-based method for estimating emissions from procurement activities under category 1 (Purchased Goods and Services), and a well-to-tank emissions approach for category 3 (Fuel and Energy-Related Activities). These methodologies align with the GHG Protocol and ensure a comprehensive assessment of the company’s indirect emissions.

Emission Factor Application

For purchased goods and services, the spend-based method estimates emissions per unit of expenditure using EXIOBASE v.3.3, a multi-regional input-output (MRIO) database that links financial transactions to sector-specific environmental intensities. Given that the latest EXIOBASE data is from 2011, an inflation adjustment was applied based on the Harmonized Index of Consumer Prices (HICP) for the European Union, correcting emission factors by 27.5% to reflect 2024 economic conditions. Data for this category was sourced from Odfjell’s procurement records, covering ship management, provisions, IT infrastructure, and port costs. These expenditures were mapped to the most relevant EXIOBASE sectors, ensuring methodological consistency. Where direct, maritime-specific categories were unavailable, emissions were allocated to the closest industry benchmarks, such as shipbuilding, port services, food supply, and IT services. Additionally, mixed-use procurement categories were allocated proportionally, food emissions were weighted based on varying climate impacts, and IT spending was distinguished between hardware and cloud services.

For fuel and energy-related activities, the methodology follows IPCC 2021 GWP100 factors, which provide internationally recognized data on well-to-tank (WTT) emissions. This category accounts for the supply-chain emissions from fuel extraction, refining, and transportation but excludes combustion-related emissions (tank-to-wake, TTW), ensuring compliance with GHG Protocol guidelines. Data was sourced from Odfjell’s Bunker Purchase List, which details the quantity of each fuel type used in the company’s shipping operations. The corresponding IPCC 2021 GWP100 emission factors were applied to each fuel type to calculate WTT emissions.

Business Travel, Employee Commuting, and Waste Management

Business travel emissions are calculated using data provided by Odfjell’s travel agent, employing the distance-based method in accordance with the GHG Protocol. Employee commuting and office waste emissions are estimated using a combination of distance-based and average-data methods. No vessels were recycled in 2023 or 2024, resulting in zero downstream emissions for this category.

Continuous Improvement and Methodological Refinements

Odfjell is committed to continuously improving its scope 3 reporting methodology. As supplier data availability increases, the company aims to transition from spend-based calculations to activity-based measurements for enhanced accuracy. For the 2024 assessment, category 3 emissions calculations have shifted from a spend-based approach to a volume-based approach, providing a more precise and representative estimate. This refinement is expected to result in a reduction in reported scope 3, category 3 emissions between 2023 and 2024, reflecting improved data accuracy rather than an actual decrease in emissions.

Although a full scope 3 analysis was not available in 2021, historical data has been recalculated based on the average scope 3-to-scope 1 ratio observed in 2022 and 2023. Since 85% of scope 3 emissions are directly correlated with scope 1 emissions, fleet decarbonization remains a key focus area in Odfjell’s sustainability strategy.

Odfjell remains committed to transparent, accurate, and methodologically sound scope 3 reporting, ensuring alignment with regulatory expectations and industry best practices.

SOURCES OF ESTIMATION AND OUTCOME UNCERTAINTY

Our most material focus area is climate change mitigation, with a clear emphasis on emission reduction. A material metric is scope 1 carbon emissions. This number has been externally certified by DNV as part of the Sustainability-Linked Financing Framework, as well as the EU MRV and IMO DCS reporting systems. While we have reliable, verified scope 1 emissions data based on years of consistent tracking, uncertainties arise regarding scope 3 data, which relies on a spend-based approach and carries inherent limitations. As data access and availability of data from suppliers improve, we might find areas of scope 3 that have not been previously included. Scope 2 emissions data is particularly uncertain due to the variability in electricity sourcing across multiple operational geographies, but the volume is not material.

As scope 3 is mainly based on a spend-based approach, it will have some uncertainty. There is also a risk that not all factors have been included. But most of scope 3 is in fuel production, where we have very accurate data. Reference see also link; Risk management and internal controls over sustainability reporting (ESRS 2 GOV-5).

The ESRS framework also requires forward-looking plans and projections, a complex undertaking given that Odfjell operates in a highly regulated sector. We anticipate that additional regulations addressing climate change mitigation will emerge, adding to the complexity of decarbonizing the shipping industry—a challenge that is far from straightforward. With critical technological solutions, regulatory frameworks, and other essential factors still under development and beyond Odfjell’s direct control, these uncertainties impact our ability to predict this transition's future cost and path.

PLANNED ACTIONS TO IMPROVE ACCURACY OF METRICS IN FUTURE

Improving data availability and quality is an ongoing process, particularly the data provided by sources upstream and downstream in the value chain. As more companies and suppliers comply with reporting requirements for their scope 1 emissions, it will become easier to obtain product-specific emissions data from our suppliers, which constitute Odfjell’s scope 3 emissions.

To address this, we have requested our suppliers to prepare and share such data. However, we have noted significant variability in both the maturity of their reporting practices and the materiality of the data provided. As a result, we will prioritize engagement with our largest suppliers, as they represent the most substantial impact on our scope 3 emissions profile.

In addition to direct engagement, we have initiated the use of a third-party qualification and due diligence platform, Achilles. This platform enables our suppliers to report their ESG data in a standardized manner, thereby enhancing the quality and consistency of upstream ESG data.

Looking ahead, our strategic objective is to transition from spend-based scope 3 data to activity-based scope 3 data as soon as sufficient, reliable data becomes available. This shift will provide a more accurate and actionable understanding of our value chain emissions and support our broader sustainability goals.

CHANGES

2024 is the first year of ESRS reporting, and therefore, there is no clear reference to all metrics from previous years. For 2024, we have moved to include not only CO2 emissions but also total GHG emissions and excluded data from terminals. This will make minor changes to the reporting from previous total data. Data for previous years has not been subject to the mandatory limited assurance. 

OTHER REPORTING OR BY REFERENCE

Norwegian companies have to report in accordance with the Transparency Act of Human Rights Due Diligence. This report is a separate one. Odfjell also issues the executive remuneration report required by Directive 2007/36/EC that is also subject to audit.

ENTITY-SPECIFIC DISCLOSURES

Given the diversity and complexity of Odfjell’s workforce categories and employment types, turnover rates and employees who left are reported in Chapter S1-6 using both the mandatory ESRS method and the industry-specific INTERTANKO method. This dual approach ensures an accurate and comprehensive representation of turnover rates and employee departures. For detailed figures and methodology, refer to ESRS S1-6. Odfjell also report on Carbon Intensity iaw IMO standard as a KPI. Odfjell have also included reporting of scope-1 for operated fleet as entity specific and operated and financially controlled fleet in line with ESRS.

Entiy-specific KPI's are

• Annual Efficiency Rate according IMO (AER, defined in Transition plan for climate change mitigation see link; E1-1 About the targets
• Scope-1 emissions Operated fleet (defined in Gross Scopes 1, 2, 3 and Total GHG emissions see link; E1-6
• Turnover rate according INTERTANKO method (defined in Characteristics of the company’s employees see link; S1-6
• Absence rate (defined in Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities see link; S1-5
• Total Recordable Case Frequency according OCIMF (TRCF, defined in Targets related to managing material negative impacts, advancing positive impacts, and managing material risks and opportunities see link; S1-5

The role of the administrative management and supervisory bodies (ESRS 2 GOV-1)

The board of directors (BoD) is committed to upholding the highest standards of corporate governance. It holds supreme responsibility for the oversight of Odfjell's management, operations, and the establishment of control systems. The BoD is tasked with setting the independent overarching direction and strategic objectives for the company, providing oversight, and ensuring accountability. The functions and proceedings of the BoD are dictated by its rules of procedure and the relevant legislation that outlines its responsibilities, duties, and administrative processes i.e. the Norwegian Company Act and Code of Corporate Governance. The BoD also approves significant sustainability strategies, objectives, and targets. It routinely reviews, monitors, and deliberates on the group's sustainability and climate-related strategy, targets, performance, risks, and reporting. The BoD has six directors, where the chair is dependent and the majority owner, and five directors are independent (83% independent). The BoD has a 50/50 gender diversity.

In 2023, the scope of the board audit committee (AC) was broadened to encompass sustainability issues. The AC serves as an advisory body to assist the BoD in its supervisory role regarding sustainability and ESG reporting. Committee members possess the requisite knowledge and expertise in sustainability matters.

Odfjell executive management consists of the chief executive officer (CEO), chief financial officer (CFO), chief sustainability officer (CSO), chief technical officer (CTO), chief commercial officer (CCO), and managing director Terminals (MD Terminals). All executive managers are male and have long experience in the sector, services, and locations.

The CEO is authorized to ensure that our sustainability ambitions and priorities are monitored, managed, and seamlessly integrated into our corporate strategy and ethos. The operational lines of business are responsible for enacting the agreed-upon strategy, and for managing associated risks and performance metrics. Decarbonization is a material topic in Odfjell. The technology section of the Ship Management division is responsible for ensuring compliance and driving energy efficiency and decarbonization initiatives in the fleet.

Odfjell established the CSO role in 2020 as an integral part of the executive management team, ensuring that sustainability remains a focal point in executive discussions. The CSO regularly updates the BoD and AC on sustainability-related matters, such as reporting, regulatory, performance and training issues, among other updates. In collaboration with the CFO, the CSO is responsible for ESG reporting. Additionally, the CSO leads the DMA and IRO processes. The CSO also drives relevant sustainability training.

The Chief Compliance Officer (CComO) reports to both the CEO and the BoD via the AC.

Details regarding the governance and composition of the BoD can be found in the corporate governance section and the BoD report within the annual report.

Odfjell follows national and international regulations regarding employee representation. For Odfjell Management AS, we have a works council (WC) with representation from management and elected employees to ensure dialogue and alignment of relevant topics and decisions. Odfjell also has a working environment council (AMU), a Norwegian regulation, with employee representation. Our offices and companies outside of the EU follow local regulations.

OVERSIGHT OF IMPACTS, RISKS, AND OPPORTUNITIES

The BoD holds ultimate responsibility for oversight of Odfjell’s IROs. Management is responsible for presenting the BoD with updated and relevant assessments of IROs, facilitating thorough discussion, review, and strategic alignment. These assessments are integrated into our corporate risk assessment process and included in the double materiality assessment (DMA) review to ensure alignment with Odfjell’s overarching sustainability strategy.

The Audit Committee (AC) plays a key role in the frequent follow-up of ESG reporting and progress. It conducts in-depth reviews of specific reporting elements, monitors internal controls over sustainability reporting, and advises the Board of Directors (BoD) on ESG disclosures. The AC liaises with management and the sustainability auditor to ensure the accuracy and accountability of sustainability disclosures. However, the Board retains full responsibility for reviewing and approving the ESG reporting. Key sections of the reporting, such as risk assessments, materiality analysis, transition planning, strategy, and targets, are addressed in separate cases at the Board level to ensure a comprehensive governance approach.

RESPONSIBILITIES IN TERMS OF REFERENCE, MANDATES, AND RELATED POLICIES

Board responsibilities are defined in alignment with the Norwegian Company Act and the Norwegian Code of Corporate Governance. The AC operates under a dedicated charter, available on Odfjell’s website, which defines its role in ESG reporting oversight. The responsibilities of the CEO and the CSO are outlined in their job descriptions, with the CSO also designated as CComO to reinforce alignment with regulatory and ESG requirements.

MANAGEMENT’S ROLE IN GOVERNANCE PROCESSES, CONTROLS, AND PROCEDURES

The CSO, as part of the executive management team, is pivotal in overseeing and managing impacts, risks, and opportunities within Odfjell’s risk review and strategy sessions. The CSO also facilitates focused discussions on relevant IROs and aligns them with the organization’s strategic goals. The CSO reports directly to the CEO and, in the capacity of CComO, also reports to the AC, ensuring a direct line of accountability for compliance and sustainability matters.

Dedicated control functions for managing sustainability-related IROs are currently in development, with integration into broader internal functions to ensure consistency and accountability in governance. Reference see also link; Risk management and internal controls over sustainability reporting (ESRS 2 GOV-5).

Management is responsible for preparing and updating medium-term targets and goals, which are subject to BoD approval and monitored closely to ensure alignment with Odfjell’s IROs as identified through the DMA process.

DESCRIPTION OF SKILLS AND EXPERTISE FOR SUSTAINABILITY OVERSIGHT

Odfjell conducts its own annual review across the BoD and management to ensure sustainability-related expertise is current and sufficient. Key roles, such as the chair of the AC and the CSO, regularly participate in external training programs to enhance their knowledge in emerging sustainability practices. In addition, periodic reviews and consultations with the ESG auditor are valuable for tapping into current trends and expertise.

Odfjell’s organizational review processes evaluate the adequacy of skills and expertise for managing sustainability-related IROs. The organization prioritizes tailored training, professional development, and competence-building initiatives to meet the evolving demands of sustainability governance. This approach ensures that Odfjell’s oversight bodies are equipped to respond effectively to material sustainability IROs in a complex and highly regulated shipping environment.

The role of the administrative, management and supervisory bodies – Governance (ESRS 2 GOV-1-G1)

The BoD holds ultimate responsibility for overseeing business conduct within the organization, ensuring alignment with Odfjell’s ethical standards and regulatory requirements. However, oversight of business conduct has been delegated to the AC as part of its ESG mandate. Management conducts an annual integrity risk assessment to evaluate potential risks associated with business conduct, and the outcomes—including reported actions and improvement plans—are presented to the AC for review and discussion. This process reinforces transparency and accountability within Odfjell and its approach to maintaining high standards of business conduct.

To further support comprehensive oversight, any relevant external reviews, ratings or assessments concerning business conduct are presented to both the management team and the BoD. This practice ensures that the BoD remains informed of industry benchmarks and best practices, and is positioned to make decisions grounded in a thorough understanding of Odfjell’s business conduct obligations and performance.

The expertise of Odfjell’s oversight bodies regarding business conduct is reinforced through regular training and professional development initiatives. Key figures, such as the chair of the AC and the CSO, engage in specialized training programs to stay updated on evolving regulations and best practices in business conduct and ethics. This expertise is periodically evaluated and developed further as part of Odfjell’s annual organizational review to ensure our leadership can effectively navigate business conduct matters relevant to the company’s IROs.

By embedding business conduct within the broader ESG governance framework and prioritizing expertise development, Odfjell is committed to maintaining a responsible, transparent, and ethically robust organization. This alignment with regulatory expectations and industry standards further strengthens Odfjell’s commitment to sustainable and ethical operations in a complex global environment.

Information provided to and sustainability matters addressed by the business’s administrative, management and supervisory bodies (ESRS 2 GOV-2)

FREQUENCY AND PROCESS FOR INFORMING GOVERNANCE BODIES ON MATERIAL IMPACTS, RISKS, AND OPPORTUNITIES (IROS)

In alignment with Disclosure Requirement IRO-1, Odfjell has established a robust process for regularly informing the BoD and the AC on material impacts, risks, and opportunities related to sustainability:

BoD: CSO provides a sustainability update at each of the seven annual board meetings, ensuring that sustainability remains an integral part of board discussions throughout the year. Climate and nature risks, as well as human rights impact assessments, are included in the BoD’s annual review of IROs, forming a key component of the DMA process. These IROs serve as the basis for the board’s annual strategic review and the setting of sustainability-related goals and targets, and they are also fundamental to management’s annual priorities, which the BoD reviews. Essential IROs are listed in Odfjell’s corporate risk register, which is reviewed at each board meeting to ensure ongoing alignment with Odfjell’s strategic and sustainability ambitions and targets.

AC: The AC has a standing agenda item dedicated to ESG reporting, with the CSO present at each meeting to provide updates. The AC has the mandate to conduct in-depth reviews of specific IROs throughout the year, allowing for comprehensive evaluation of critical sustainability topics.

Management: Sustainability IROs are reviewed at all management meetings, with corporate risk discussed and assessed across departments. The management team also prepares the annual risk assessment and DMA, aligning IROs with operational priorities. The CSO is responsible for ensuring effective due diligence, monitoring the results, and assessing the effectiveness of sustainability policies, actions, metrics, and targets adopted to address these IROs.

CONSIDERATION OF IMPACTS, RISKS, AND OPPORTUNITIES IN STRATEGIC AND OPERATIONAL DECISIONS

Odfjell integrates sustainability IROs and ESG considerations into its strategic planning, decision-making processes, and risk management. Key sustainability matters are embedded in the strategy preparation, and all major transactions, investments, and target-setting activities consider these IROs. As an integral member of the executive management team, the CSO ensures that sustainability issues are addressed in relevant meetings and that these considerations guide Odfjell’s approach to potential trade-offs.

In cases where trade-offs are required, the BoD and management evaluate factors such as compliance obligations, the materiality of specific ESG investments, and the expected return on these initiatives. For instance, decisions may involve determining whether to exceed compliance requirements or to proceed with less material ESG investments that may yield a lower or negative return. This balanced approach enables Odfjell to make informed, strategic decisions that align with its sustainability commitments while considering the broader business impact.

The list of the material impacts, risks and opportunities has been aligned with the administrative, management and supervisory for the relevant reporting period. No specific IROs have been identified by governance bodies that have not already been addressed by management (see also SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model, see link; SBM-3).

Integration of sustainability-related performance in incentive schemes (ESRS 2 GOV-3)

ODFJELL STATEMENT ON INCENTIVE SCHEMES LINKED TO SUSTAINABILITY PERFORMANCE

Odfjell integrates sustainability-related performance metrics into its incentive schemes for all shore-based employees, including members of executive management, to ensure alignment with our strategic sustainability goals, specifically in safety and decarbonization. These incentive programs are structured to reinforce Odfjell's commitment to environmental and social responsibility within the organization. Members of the BoD are not included in the incentive schemes.

KEY CHARACTERISTICS OF THE INCENTIVE SCHEMES

Odfjell offers two primary incentive programs: a short-term incentive plan (STIP) for all shore-based employees and a long-term incentive plan (LTIP) for members of executive management. Since 2018, the STIP has offered eligible employees an annual bonus of up to four months’ salary based on performance, with the executive management eligible for up to six months. The LTIP offers executive management the opportunity to earn shares vested over three years, with a target bonus of up to 33% of their annual salary (50% for the CEO).

PERFORMANCE ASSESSMENT AGAINST SPECIFIC SUSTAINABILITY-RELATED TARGETS

Both the STIP and LTIP include specific sustainability-related targets to promote safe and sustainable operations:

• For the shipping division, 17% of the STIP is dedicated to decarbonization objectives.

• For headquarters and terminal operations, 22% of the STIP is linked to safety and spill-prevention metrics.

• The LTIP dedicates 33% of its target to decarbonization performance, specifically aligned with Odfjell’s annual efficiency ratio (AER) targets, measuring the degree to which emissions reductions align with Odfjell's climate commitments.

INCLUSION OF SUSTAINABILITY METRICS IN REMUNERATION POLICIES

Sustainability-related metrics, including safety and decarbonization, serve as key performance indicators within both the STIP and LTIP frameworks. These metrics are incorporated into Odfjell's annual remuneration policy and reflect the company's strategic focus on reducing environmental impact and ensuring safe operations.

APPROVAL AND UPDATING OF INCENTIVE SCHEME TERMS

The terms and metrics of both the STIP and LTIP are subject to annual review and approval. The Odfjell General Meeting approves guidelines for the incentive programs, while specific KPIs and targets are reviewed and approved by the Board of Directors’ Renumeration Committee to ensure that they remain aligned with current sustainability ambitions and targets.

For additional information on the STIP and LTIP and other executive compensation details, please refer to the executive remuneration report available at Odfjell.com.

Integration of climate change-related performance in incentive schemes (ESRS 2 GOV-3-E1)

Climate change-related considerations are integrated into the remuneration of Odfjell’s administrative and management bodies through short-term and long-term incentive plans. Specifically, decarbonization performance, tied to Odfjell's AER and GHG emission reduction targets, is a core component of these incentive programs.

For shore-based employees and executive management, 17% of the short-term incentive plan (STIP) is linked to decarbonization goals within the shipping division, while the long-term incentive plan (LTIP) for executive management dedicates 33% to decarbonization-related performance. Performance is hence linked to climate targets.

Statement on due diligence (ESRS 2 GOV-4)

Risk management and internal controls over sustainability reporting (ESRS 2 GOV-5)

a. SCOPE, MAIN FEATURES, AND COMPONENTS OF THE RISK MANAGEMENT AND INTERNAL CONTROL PROCESSES AND SYSTEMS IN RELATION TO SUSTAINABILITY REPORTING

Odfjell’s risk management and internal control processes over sustainability reporting are based on the COSO Internal Control–Integrated Framework, addressing five key components:

Control Environment: Odfjell fosters a strong ethical foundation and clear governance structures, supported by the AC and BoD. The AC oversees the effectiveness of sustainability reporting controls, ensuring alignment with regulatory requirements (e.g., EU Taxonomy, ESRS).

Risk Assessment: Risks, including data inaccuracies and regulatory non-compliance, are systematically identified and prioritized, through a risk assessment process described in our risk policy. Internal control risk over sustainability reporting is assessed in the process and aligned with the AC and external auditor.

Control Activities: Policies, automated system checks, validation procedures, and regular internal and external audits mitigate identified risks.

Information and Communication: Effective communication systems ensure that internal functions and external stakeholders receive timely and accurate sustainability data.

Monitoring: The internal audit team regularly evaluates control effectiveness, reporting its findings to the AC, which informs the BoD. External auditors provide assurance over ESG reporting to further enhance credibility.

b. RISK ASSESSMENT APPROACH AND RISK PRIORITIZATION METHODOLOGY

Odfjell employs a structured methodology to assess and prioritize sustainability reporting risks:

Defining Objectives: Objectives align with ESRS requirements and other sustainability and emission reporting standards and regulations (e.g., CDP, Poseidon Principles, IMO DCS, EU MRV).

Identifying Risks: Comprehensive reviews identify risks such as errors in scope 1, 2, and 3 data, pollution reporting inaccuracies, and recycling compliance gaps.

Prioritizing Risks: Risks are ranked based on their potential financial, reputational, and operational impact. Priority is given to regulatory compliance and high-impact areas like emissions and financial disclosures.

The AC reviews the company’s risk assessment methodologies, ensuring they adequately address sustainability reporting requirements.

c. MAIN RISKS IDENTIFIED AND THEIR MITIGATION STRATEGIES

The identified risks are then scored on the probability of not achieving the internal control objective, and the impact if objective is not achieved.

Legend: 1 Climate Change mitigation and Energy Consumption | 1a Scope 1 | 1b Scope 2 | 1c Scope 3 | 2 Pollution | 3 Recycling | 4 Own Workforce | 5 Workers in the Value Chain | 6 Business Conduct

d. INTEGRATION OF RISK ASSESSMENT AND INTERNAL CONTROLS INTO INTERNAL FUNCTIONS AND PROCESSES

Odfjell integrates risk assessment findings into internal functions and processes through:

• Embedding control activities, such as emissions monitoring and supplier evaluations, into routine operations.

• Leveraging internal audit findings to refine policies and procedures, ensuring alignment with ESRS and other standards.

• Using IT systems for secure and accurate data collection, with automated validation checks and audit trails.

• Establishing a feedback loop where risk assessment results inform operational adjustments and continuous improvement.

The AC discusses the findings with management and external auditors, ensuring compliance and the effectiveness of internal controls.

e. PERIODIC REPORTING OF FINDINGS TO ADMINISTRATIVE, MANAGEMENT, AND SUPERVISORY BODIES

Odfjell has established robust mechanisms for reporting findings related to sustainability reporting:

AC Oversight:

• The AC reviews and evaluates the internal control framework, discussing sustainability reporting standards (e.g., ESRS, EU Taxonomy) and their assurance processes with management and external auditors.
• The AC reviews the results of annual external assurance and ensures compliance with relevant standards and regulations.

BoD:

• The AC informs the BoD about assurance results, explaining their role in ensuring the integrity of sustainability reporting. The BoD provides strategic oversight and monitors progress against sustainability ambitions and targets.

Internal Audit:

• The internal audit team conducts periodic evaluations of corporate risks and control processes, reporting findings to the AC and senior management.

External Assurance:

• Annual assurance reviews by external auditors are discussed and reviewed by the AC to ensure data credibility and compliance.

Through these reporting mechanisms, Odfjell upholds transparency and accountability, ensuring sustainability reporting meets the highest standards of accuracy and reliability.

Strategy, business model and value chain (ESRS 2 SBM-1)

Odfjell’s strategy centers on providing safe, efficient handling and transportation of hazardous liquids, a crucial function within the global supply chain that supports a wide range of industries. Our core services include specialized chemical tanker shipping and terminal operations in strategic hubs, linking sea and land for safe storage and transit. With a global network and diverse product portfolio, we serve over 600 customers, including major chemical producers, across all continents.

KEY ELEMENTS OF GENERAL STRATEGY AFFECTING SUSTAINABILITY MATTERS

a. Products, Markets, and Workforce:

Products and Services: Odfjell specializes in transporting chemicals and other liquid products, focusing on specialty and easy chemicals, as well as vegetable oils and, in specific cases, clean petroleum products (CPP). Our vessels, primarily equipped with stainless steel tanks, offer unique versatility, allowing us to handle a broad range of liquid products. This flexibility enables Odfjell to adapt to changing market demands and underscores our resilience within the cyclical shipping industry.

Significant Markets and Customer Base: We operate on a global scale, serving key markets across the Americas, EMEA, Asia, and the Pacific. This global reach connects us with a broad spectrum of customers, including major chemical producers, and industrial manufacturers, supporting essential sectors from food production to construction.

Workforce Composition: The composition of Odfjell’s workforce reflects the nature of our operations, divided between seafarers and shore-based employees, as shown in the table below. Further details on workforce composition are provided in S1-ESRS 2-SBM-3.

b. Revenue Breakdown by Sector:

Odfjell only operates in one sector, as our revenues from terminals are dividend from joint ventures where we do not have operational control. Gross revenue from sea transport in 2024 was USD 1184.6 million.

Notably, while our fleet does not specialize in transporting fossil fuels, we occasionally transport them. Fossil fuel revenue for 2024 was USD 13 million, down from USD 24 million in 2023, representing 1.4% of total revenues.

c. Sustainability-Related Goals:

Odfjell’s sustainability-related goals apply uniformly across our services, customer categories, geographical areas, and stakeholder relationships. These objectives center on decarbonization, safety, and reducing our environmental impact, in line with our overarching climate targets outlined in the sections, see links; Climate Targets and Progress in E1-1.

d. Assessment of Products, Markets, and Customers in Relation to Sustainability Goals:

Shipping remains the most energy-efficient mode of transporting large volumes over long distances. Odfjell’s specialized chemical shipping operations play a vital role in supporting industries that produce essential goods, including food ingredients, pharmaceuticals, and fertilizers. These products are fundamental to global food security, healthcare, and agriculture.

Our commitment to sustainability is reflected in our adherence to stringent safety and environmental standards. By optimizing our fleet operations, reducing emissions, and continuously improving efficiency, we enable the safe and responsible transport of critical products while aligning with global sustainability goals.

e. Strategy Elements Impacting Sustainability:

Odfjell’s vision is to be a world-class, preferred provider of transportation and storage for specialty bulk liquids. Sustainability is a core pillar of our strategy, ensuring the safe and efficient handling of hazardous liquids while supporting industries essential to global development.

A key challenge in achieving our sustainability goals is the decarbonization of shipping. This requires navigating evolving regulations, securing access to sustainable fuels, and overcoming technological and financial barriers—all while maintaining the highest safety standards. As regulations tighten and market expectations shift, we must continuously adapt to ensure compliance, operational efficiency, and long-term resilience.

Our approach prioritizes sustainability as a competitive advantage, embedding it into every aspect of our operations. By leveraging innovation, strategic partnerships, and our expertise in safe and responsible shipping, we are committed to driving meaningful change in the industry and contributing to a more sustainable future.

BUSINESS MODEL AND VALUE CHAIN

Odfjell operates an integrated business model centered on chemical tanker shipping and terminal storage, positioning us as a key link within the broader supply chain. Our business model allows for flexibility in product handling and rapid adaptation to market changes, contributing to stability within the cyclical tanker segment. See also our chapter in resilience under SBM-3.

a. Inputs:

Our primary inputs include fuel and vessels designed for safe chemical transport, produced and maintained by shipyards that meet our stringent quality standards. Terminals and voyage materials also form part of our upstream value chain, essential for supporting our transportation and storage operations.

b. Outputs and Outcomes:

Odfjell provides various services, from chemical storage and ship management to reliable and cost-effective product transport. These services yield benefits for customers by ensuring safe, compliant delivery of essential chemicals, contributing to investor confidence and supporting sustainable growth within the chemical shipping sector.

c. Value Chain Overview:

Our value chain consists of upstream activities, such as ship production and fuel supply, and downstream activities, such as shore based cargo transport, terminal operations, and ship recycling. Our close relationships with key suppliers and customers, vital to Odfjell’s value chain, enable us to serve as a lynchpin in the global chemical supply network. This integrated structure supports a sustainable business model, providing transparency and resilience across all aspects of our operations.

Interests and views of stakeholders (ESRS 2 SBM-2)

At Odfjell, we are committed to developing and implementing our strategy and business model by considering the interests and perspectives of all our stakeholders. Our approach to sustainability is shaped through proactive engagement with our stakeholders, including employees, investors, banks, customers, tonnage providers, suppliers, regulators, and communities. This engagement fosters a comprehensive understanding of their interests, views, and expectations, which we integrate into our strategic decisions.

Our key stakeholders comprise employees, possible employees, investors, banks, customers, regulators, and local communities. Engagement with each group occurs through regular dialogue, facilitated by our commercial, technical, finance, and administrative teams. These interactions are organized to cover key topics, ranging from sustainability, ethics, and safety to efficiency, quality, and business terms. Relevant environmental, social, and governance (ESG) topics are always covered. Specifically:

Commercial Team: Engages continuously with customers and tonnage providers on efficiency, safety, and sustainability expectations.

Technical Team: Regularly interacts with ships, suppliers, and service providers to drive sustainable practices in our operations.

Finance and Administrative Teams: Maintain a constructive dialogue with banks, investors, and community representatives, focusing on sustainable finance and ESG commitments.

Local Offices: Actively involve local stakeholders and communities to ensure our operations meet regional expectations and contribute to local sustainability.

Each engagement is designed to not only understand stakeholder interests but also to translate them into actionable insights. Our commitment to integrating these insights is reflected in our DMA and identified IROs, ensuring a holistic consideration of stakeholder needs in our decision-making.

UNDERSTANDING STAKEHOLDER INTERESTS AND INCORPORATION IN STRATEGY

Through ongoing stakeholder engagement and our due diligence processes, we gain valuable insights that inform Odfjell’s strategy and business model. We benchmark our materiality assessments against industry peers and align our approach with inputs gathered through participation in industry groups and events. We address regulatory requirements proactively, adjusting our strategy in response to transition risks and evolving regulations. This ongoing benchmarking and regulatory responsiveness reinforce our competitive position while addressing stakeholder concerns.

Our structured engagements have revealed that our stakeholders are particularly focused on:

Sustainable operations: Emphasis on minimizing environmental impact through innovative practices.

Compliance and ethics: A commitment to uphold the highest standards of safety and integrity.

Operational efficiency: Delivering quality and timely services in line with global standards.

Feedback from stakeholders is regularly presented to management and incorporated into our DMA and IROs. In addition, feedback from multiple ESG ratings, including those from banks, analytics and ratings companies, informs our updates across reporting, communication, and key business elements. Odfjell also participates in reporting through platforms like EcoVadis, CDP, UNGC Communication on Progress, SHE, Euronext, Position Green, and DNV, and using these disclosures as a basis for continuous improvement.

STRATEGIC AMENDMENTS IN RESPONSE TO STAKEHOLDER VIEWS

Odfjell’s strategy is dynamically updated to reflect stakeholder feedback. For instance, we have committed to expanding our sustainability initiatives by increasing investment in green technologies and pursuing industry partnerships for sustainable solutions. We recognize that these steps, to be implemented over the next five years, will strengthen our relationship with stakeholders and meet their expectations for sustainable growth. We anticipate enhanced stakeholder satisfaction and alignment with our strategic objectives by fostering transparent and active engagement.

GOVERNANCE AND STAKEHOLDER FEEDBACK

Odfjell’s BoD and management are frequently informed of stakeholders’ views, especially concerning our sustainability impacts. Management receives regular updates, which are then used to refine our strategy and prioritize sustainability goals. This inclusive governance approach allows us to proactively respond to stakeholder expectations and work towards our sustainability ambitions.

Interests and views of stakeholders – Own workforce (ESRS 2 SBM-2-S1)

We engage with our employees in various ways, including intranet updates, town halls, workers’ councils, working environment councils, officers’ (seafarers’) councils, employee boards, social interests/ sports committees, annual individual performance dialogues, and bi-annual employee engagement surveys. Outcomes from our employee engagement survey are analyzed and integrated into decision-making processes.

Our commitment to gender equality, and the prevention of discrimination, is carried out systematically and continuously and in collaboration with employee representatives. In our drive to prepare our workforce for the future, we have clear objectives: retain and develop our current employees, establish a diverse talent pool, and create an inclusive workplace for all. Diversity is not the objective in itself, though. Research has shown it may promote well-being, contribute to improved decision-making, and help attract and retain talent. In the long run, that will contribute to the safety and quality of our operations.

Safety is more than a priority at Odfjell. It is a core value and part of our license to operate. We are relentless about ensuring the safety of our employees, our contractors and surrounding communities by improving the way we operate as a company. We continuously develop and monitor our safety training, and we do not compromise on safety

The company has no corporate assembly. The interests of the employees are safeguarded through an agreement between the employees and Odfjell. The employees have established a permanent employee representative body consisting of up to six representatives from the main office in Bergen and the maritime officers' council. Employee involvement at corporate level, and in most subsidiaries abroad, is also secured by various committees and councils in which management and employee representatives – both onshore personnel and seafarers – meet to discuss relevant issues.

As a central group of stakeholders, engagement with our employees drives key aspects of our people strategy. Our people's health, safety, well-being, and rights are vital to us and our business. Respect for human rights is integral to our organization.

Employees can also raise concerns through our independent whistle-blowing mechanism see link; G1-1.

Interests and views of stakeholders – Workers in the value chain (ESRS 2 SBM-2-S2)

We also recognize that our business impacts people in our supply chain. As such, we have set out clear standards and expectations for our suppliers and partners in our corporate supplier conduct principles to ensure people's safety and human rights. We have dedicated functions in the organization responsible for communications with our suppliers and partners including agents, external ship managers, T/C vessel owners and shipyards, which employ most of our value chain workers.

Workers in the value chain can also raise concerns through our independent whistle-blowing mechanism see link; G1-1.

Material impacts, risks and opportunities and their interaction with strategy and business model (ESRS 2 SBM-3)

Since 2020, Odfjell has conducted materiality assessments, transitioning to the concept of double materiality in 2022. In 2024, we refined this process to comply fully with ESRS standards, leveraging extensive stakeholder engagement and internal evaluations. This systematic approach enabled us to identify material IROs, their origins, and potential effects on our business model, strategy, and financial performance.

BRIEF DESCRIPTION OF MATERIAL IROS AND THEIR CONCENTRATION IN THE BUSINESS MODEL AND VALUE CHAIN

Through our double materiality assessment, we identified key material IROs affecting our operations, upstream supply chain, and downstream activities. The IROs are presented in the following table, and specified under relevant topical standard.

CURRENT AND ANTICIPATED FINANCIAL EFFECTS OF MATERIAL IROS AND STRATEGIC RESPONSES

Current Effects: Transition risks associated with climate change and compliance with evolving regulations, such as the EU ETS, create financial implications in the short term. Transition costs related to scope 1 decarbonization are being managed through targeted investments and operational efficiencies and further described in our transition plan.

Anticipated Effects: Medium- to long-term impacts include capital allocation to low-carbon technologies, resilience investments, and potential financial penalties for non-compliance. Strategic responses include robust mitigation plans, outlined in our transition plan (see link; ESRS E1-1), and enhanced governance oversight.

Adaptations: Odfjell has integrated sustainability risks into corporate strategy, driving adjustments in fleet operations, procurement, and workforce management.

MATERIAL POSITIVE AND NEGATIVE IMPACTS ON PEOPLE AND ENVIRONMENT AND CONNECTION TO BUSINESS MODEL

The following table provides a high-level overview of the material IROs identified through our materiality assessment. These topics are regarded as having actual and/or potential positive and negative impacts on people and the environment. Reference table above for further description of the IROs. Climate-related impacts are further described in the climate risk assessment (CRA). They are further elaborated upon in the sections under IRO-1, see link; IRO-1. This table outlines the alignment of these IROs with our strategy and business model, focusing on their implications for Odfjell.

FINANCIAL EFFECTS OF MATERIAL RISKS AND OPPORTUNITIES

Financial Position: Current risks impact financial performance through cost of regulatory compliance (e.g. EU MRV, IMO DCS) and emission-related penalties. Opportunities arise from enhanced ESG ratings and access to sustainable finance.

Phase in: For the 2024 reporting period, Odfjell has incorporated financial assessments of material IROs; however, the specific financial impact assessment for each IRO is subject to a phase-in period. During this phase-in, we have used a guiding scale to evaluate anticipated financial effects, focusing primarily on qualitative assessments for this reporting cycle. Detailed financial assessments of individual IROs are still under development and will be completed in subsequent reporting periods. This approach aligns with the phase-in provisions outlined in ESRS 1 Appendix C and ESRS 2 SBM-3. Additionally, capital expenditure (CapEx) plans related to our transition strategies are included in the transition plan and provide further insights into our financial planning.

Short-Term Effects: Increased operational costs due to regulatory requirements and decarbonization measures.

Medium- to Long-Term Effects: Expected shifts include enhanced revenue streams from sustainable shipping services and improved access to green finance. Investments in fleet modernization and CapEx for decarbonization initiatives are planned and will be funded through sustainable financing.

RESILIENCE OF STRATEGY AND BUSINESS MODEL

Odfjell’s business model for seaborne chemical transportation has demonstrated resilience through decades of operational expertise, strategic market positioning, and adaptability to evolving global dynamics. This resilience is assessed through a combination of qualitative and quantitative evaluations, incorporating historical data, market analysis, and climate scenario modeling.

In 2024, Odfjell conducted a comprehensive assessment of its business model’s ability to address material impacts, risks, and opportunities. These evaluations, which are subject to continuous review, apply the previously defined time horizons and consider potential regulatory shifts, decarbonization trajectories, and economic fluctuations. Scenario modelling indicates that Odfjell’s strategy remains robust under multiple plausible futures, with no identified risk of stranded assets. Fleet modernization efforts ensure compliance with evolving regulatory requirements while maintaining operational flexibility to adapt to market developments.

A key pillar of Odfjell’s resilience lies in the flexibility of its fleet and commercial strategy. The company’s stainless steel chemical tankers are fitted with advanced systems for heating, cooling, inert gas application, and cleaning, enabling the transportation of a wide range of chemical and specialty liquid products. This versatility makes the fleet highly robust to shifts in customer demand, ensuring continued relevance across a broad customer base of more than 600 clients. Furthermore, Odfjell’s global fleet operations provide agility in adapting to route disruptions, supply chain bottlenecks, and geopolitical shifts.

This flexibility extends to Odfjell’s commercial model, which balances long-term contracts with spot market exposure, allowing the company to optimize market opportunities while managing commercial risks effectively. The ability to adjust to fluctuations in demand, shifting trade patterns, and emerging market needs has been a cornerstone of Odfjell’s business success. Highly trained crews, experienced in handling diverse and complex cargoes, further enhance operational resilience and ensure best-in-class service reliability.

Odfjell’s long-term resilience is further supported by its industry’s strong historical correlation with GDP growth and recovery patterns during economic downturns. While future uncertainties remain, the chemical transportation market is deeply integrated into global supply chains, and no fundamental risks to the continuity of core markets have been identified. The company’s track record of successfully navigating geopolitical shifts, economic volatility, and external disruptions reinforces confidence in its ability to adapt to changing conditions.

Recognizing the inherent uncertainties in forward-looking projections, Odfjell remains committed to continuous monitoring and adaptation. By integrating quantitative scenario analysis with qualitative risk mitigation strategies, the company aims to sustain its resilience and ability to capture emerging opportunities, while addressing material risks, in an evolving regulatory and environmental landscape.

IROS COVERED BY ESRS DISCLOSURE REQUIREMENTS VS. ENTITY-SPECIFIC DISCLOSURES

Entity-Specific Disclosures: Ship Recycling, reflecting unique operational challenges in end-of-life vessel management.

Description of the processes to identify and assess material impacts, risks and opportunities (ESRS 2 IRO-1)

Odfjell undertook a thorough process in 2023 to identify, assess, and prioritize material IROs, adhering to the principles of double materiality as outlined in the European Sustainability Reporting Standards (ESRS). The process ensured that the organization’s impacts on people and the environment, and the financial implications of sustainability-related risks and opportunities, were fully considered. This disclosure outlines the steps taken, methodologies applied, and integration mechanisms used to align with the ESRS framework.

FIVE PHASES

Odfjell conducted the DMA in five structured phases:

1. Understanding and Mapping: Defined the context and scope of Odfjell’s operations and value chain.
2. Identification: Pinpointed actual and potential impacts, risks, and opportunities.
3. Assessment: Evaluated the materiality of identified IROs using qualitative and quantitative criteria.
4. Decision-Making and Strategy Integration: Prioritized and consolidated material IROs into strategic ESG focus areas.
5. Reassessment: Conducted reviews and refinements to ensure accuracy and relevance.

PROCESS TO IDENTIFY, ASSESS, PRIORITIZE, AND MONITOR IROS

The first phase involved understanding and mapping Odfjell’s operational context, including its activities, value chain, and business relationships. All business segments and geographic regions were analyzed to identify areas of potential impact. This phase also included updating the stakeholder analysis to incorporate both qualitative and quantitative feedback. Stakeholder engagement was critical to understanding Odfjell’s significant impacts on people and the environment, and in identifying new sustainability matters.

In the second phase, Odfjell identified actual and potential impacts, risks, and opportunities through consultations with internal and external stakeholders. The activities were mapped against ESRS topics, sub-topics, and sub-sub-topics to ensure alignment with the reporting framework. Past materiality assessments provided a foundation for this process, which also incorporated sector-specific and geographic considerations.

We have also considered the connections between our impacts and dependencies and the risks and opportunities identified from these. We have not identified any clear dependencies where the dependency itself is identified as a risk. We have integrated dependency assessments into our risk assessment in the DMA process.

During the third phase, Odfjell assessed the materiality of identified IROs. A comprehensive matrix was used to evaluate impact materiality based on scale, scope, rememberability, and likelihood. Financial materiality was assessed by analyzing the magnitude, likelihood, and nature of potential financial effects. The assessment also integrated climate and nature risk evaluations, employing scenario analysis to understand physical and transitional risks across short-, medium-, and long-term horizons.

In the fourth phase, decisions were made to prioritize material IROs. This process involved multiple discussions with senior management, the audit committee, and the board of directors. Material IROs were consolidated into eight strategic ESG focus areas, which informed Odfjell’s corporate strategy. Internal controls and governance processes ensured that the prioritization adhered to ESRS requirements and aligned with Odfjell’s sustainability goals.

The fifth and final phase involved reassessment to validate and refine the materiality assessment. Peer reviews and consultations with industry experts were conducted to benchmark findings. Minor adjustments were made to reflect evolving regulatory and market contexts. This reassessment ensured that the identified IROs remained accurate and relevant.

METHODOLOGIES AND ASSUMPTIONS APPLIED

Odfjell’s double materiality assessment applied methodologies consistent with ESRS 1. Impact materiality was evaluated by assessing the scale, scope, irreversibility, and likelihood of impacts on people and the environment. Financial materiality was determined by analyzing the potential magnitude, likelihood, and nature of financial effects on Odfjell’s position, performance, and cash flows. Specific thresholds for short-, medium-, and long-term impacts were defined, drawing on Odfjell’s enterprise risk management (ERM) system to ensure consistency with corporate risk practices.

STAKEHOLDER ENGAGEMENT

Stakeholder engagement played a crucial role in the DMA. Internal stakeholders provided insights into potential impacts and risks across Odfjell’s operations, while external stakeholders, including suppliers and industry experts, contributed perspectives on value chain risks and opportunities. Interviews and workshops were conducted to gather input, with particular focus on high-impact areas such as ship recycling and dry-docking processes. This engagement ensured that the materiality assessment reflected a diverse range of perspectives and addressed the most significant sustainability matters.

INTEGRATION WITH RISK MANAGEMENT PROCESSES

The process to identify and assess IROs was fully integrated into Odfjell’s broader risk management framework. ESG risks identified through the DMA were incorporated into corporate risk assessments and reviewed quarterly by the board of directors and senior management. Internal control measures were developed to ensure accurate and consistent reporting of material IROs. The audit committee oversaw the alignment of ESG risks with corporate governance processes, ensuring that sustainability considerations were embedded in decision-making.

INTEGRATION OF OPPORTUNITIES INTO MANAGEMENT PROCESSES

Opportunities identified during the DMA were incorporated into Odfjell’s strategic planning and management processes. These included opportunities such as transitioning to low-carbon operations, leveraging green finance, and adopting innovative technologies. Each opportunity was evaluated for its alignment with Odfjell’s long-term business goals and integrated into operational and financial planning.

RESILIENCE AND MONITORING

The outcomes of the DMA demonstrated the resilience of Odfjell’s business model in addressing sustainability-related risks and opportunities. Scenario analyses were conducted to anticipate potential impacts under different sustainability scenarios, and periodic reassessment ensured the continued relevance of identified IROs. This approach enabled Odfjell to adapt proactively to emerging challenges and opportunities.

FUTURE STEPS

Odfjell remains committed to refining its processes for identifying and managing IROs. Annual reviews will be conducted to ensure that the DMA reflects the latest regulatory, market, and stakeholder developments. Plans are underway to integrate double materiality findings into Odfjell’s ERM and management systems, further strengthening the alignment of sustainability considerations with corporate decision-making. This iterative process underscores Odfjell’s commitment to sustainability and its alignment with ESRS standards.

Description of the processes to identify and assess material climate change-related impacts, risks and opportunities (ESRS2 IRO-1-E1)

SCREENING OF ACTIVITIES AND IDENTIFICATION OF GHG EMISSION SOURCES

We have comprehensively screened our activities and plans to identify actual and potential sources of GHG emissions and other climate-related impacts. This process involved:

Value Chain Mapping: We analyzed our business model and mapped all activities across our operations and the value chain. This value chain map provided a detailed overview of our operational footprint and was instrumental in identifying IROs through a DMA. All ESRS topics and subtopics have been evaluated for all activities in the value chain and in our business and assessed with regard to impact. We have included all GHG emissions, black carbon, and potential other emissions for the climate-related impact.

Scenario Analysis: Parallel to the value chain mapping, we conducted a climate change scenario analysis, assessing direct and transitional risks across short-, medium-, and long-term horizons. This enabled us to evaluate our business's resilience under varying climate and policy scenarios.

ASSESSMENT OF IMPACTS ON CLIMATE CHANGE

We employed a rigorous methodology aligned with international frameworks such as the GHG Protocol to assess our actual and potential impacts on climate change. Key aspects of this assessment included:

Scope 1 emissions: Scope 1 emissions, stemming from the direct operations of our ships in the fleet, represent the largest source of GHG emissions. Emissions are quantified based on fuel consumption. We have categorized our fleet as described under BP-2 Emission reporting and fleet categorization see link; BP-2.

Scope 2 emissions: constituting less than 0.1% of our total emissions, are linked to energy use in our offices.

Scope 3 Emissions: Scope 3 emissions comprise 42% of our total GHG emissions, with 85% of these attributed to fuel production and transport of fuel. These were calculated using a spend-based and volume-based approach and relevant carbon factors, acknowledging a degree of uncertainty.

GHG Categorization: In line with the GHG Protocol, we focused on emissions of carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). Other GHGs were deemed irrelevant to our operations.

Black Carbon and Non-GHG Pollutants: We also evaluated emissions of NOx, SOx, and black carbon due to their broader environmental impacts, including climate change, acidification, and pollution. We also noted the reduced impact of SOx emissions due to the widespread adoption of very low sulphur fuel oil (VLSFO). Emissions of black carbon were examined due to their potential contribution to climate change and pollution.

Climate Adaptation Challenges: Transitioning to alternative fuels such as e-fuels will require significant green energy inputs. This presents challenges, as increased demand for renewable energy in shipping could displace its availability for other sectors, potentially leading to replacement emissions.

Through our systematic analysis of activities and value chain impacts, Odfjell has identified the primary sources of GHG emissions and potential drivers of climate-related risks in our business and value chain and for the identification of IROs.

CLIMATE SCENARIOS

To adopt a scientific and structured approach to climate risk, Odfjell has undertaken scenario assessments. Projecting climate developments and changes over the next 75 years involves substantial uncertainties. Climate change scenarios are indispensable tools for evaluating potential future climate conditions based on varying levels of greenhouse gas emissions and policy interventions.

We have referenced scenarios developed by the Intergovernmental Panel on Climate Change (IPCC), the International Energy Agency (IEA), and the Network for Greening the Financial System (NGFS) to guide our analyses. Specifically:

IPCC Scenarios: These were used to identify climate-related hazards. From the AR6 synthesis report, we selected:

• Intermediate Scenario (SSP2-45)
• High Scenario (SSP3-7.0)
• Very High Scenario (SSP5-8.5)

These scenarios provide insights into potential direct and indirect climate effects, helping us address adaptation needs with increased global warming compared to the present.

IEA Scenarios: These informed our transition planning and decarbonization studies. The scenarios assessed include:

• Stated Policies Scenario (STEPS): Reflects current policies and measures.
• Announced Pledges Scenario (APS): Assumes all announced energy and climate targets, including net-zero goals, are met.
• Net Zero Emissions by 2050 (NZE): Aligns with a pathway to achieve global net-zero CO₂ emissions by 2050.

Parallel to these efforts, Odfjell has conducted proprietary studies to evaluate the requirements for achieving net-zero targets in the shipping industry, providing critical input to our fleet transition plan.

SUSTAINABILITY, DEPENDENCY, AND CLIMATE RISK

While comprehensive, IPCC scenarios are not industry-specific and require interpretation for our industry’s unique impacts. These scenarios highlight highly interdependent risks, emphasizing the interconnectedness of sustainability challenges.

Odfjell incorporates insights from the World Economic Forum Risk Report, which underscores the interconnected nature of risks such as climate change, hunger, migration, and security. Recognizing that most climate models inadequately address non-linear impacts and risk interdependencies, we have sought to capture these complexities in our own analyses.

IDENTIFICATION OF CLIMATE RISKS AND HAZARDS RELEVANT TO ODFJELL

For each IPCC scenario, we identified climate impacts and adaptation challenges, as summarized in the following table.

Subsequently, we analyzed the implications of these impacts on our business model and geographic locations. This assessment is detailed in the table below.

Further, we examined the temporal dimensions of these scenarios—short-term, mid-term, and long-term—using tools such as the Climate Impact Explorer by Climate Analytics. This analysis helped identify regions and operational areas prone to direct climate risks. The same scenarios were employed to evaluate nature-related risks and value chain vulnerabilities, with a focus on ports and terminals due to limited visibility into upstream production sites.

TIME HORIZON

The IPCC scenarios define three temporal perspectives for climate impacts:

• 2021–2040 (Near-Term): Represents immediate impacts and challenges.
• 2041–2060 (Mid-Term): Encompasses mid-range projections of climate risks.
• 2081–2100 (Late Century): Captures long-term implications under varying warming scenarios.

In Odfjell's climate risk analysis, we have adopted a time horizon that aligns with our operational and strategic planning:

Near-Term (0-5 years): This period aligns with our financial statement timelines and captures immediate risks and opportunities.

Long-Term (5-25 years): Reflects impacts on vessel lifetimes and strategic planning. Notably, this includes the mid-term impacts projected by IPCC scenarios.

For our IRO assessment, we have used the following three time-horizons (Anticipated financial effects assessment is a phase-in requirement under ESRS, and not disclosed Ref ESRS2 -BP2):

• short-term (the period used in financial statements),

• medium-term (from the end of the short-term reporting period to 5 years), and

• long-term (more than 5 years).

The rationale for using these horizons lies in the limited variability in short-term climate scenarios and the need to account for vessel lifetimes, which can extend up to 32 years. For instance, our youngest ships will operate well into the IPCC’s mid-term scenario timeline.

USE OF THE RISK MODEL

Odfjell applies the TCFD risk model to categorize identified hazards within the framework. Impacts from these hazards, along with risks and opportunities, are incorporated into our double materiality assessment and corporate sustainability risk framework. This includes assessments of climate, nature, value chain, reputation, and litigation risks.

Corporate climate and nature risks are analyzed for probability and consequence under the three climate scenarios. Transition and direct risks identified via the TCFD framework are evaluated for near-term (0-5 years) and long-term (5-25 years) impacts. Mitigating actions for these risks are integrated into our action plans.

CLIMATE-RELATED PHYSICAL RISKS AND CLIMATE-RELATED HAZARDS

The analysis of hazards, derived from the aforementioned processes, informs our DMA and climate risk assessments. The following table outlines climate-related risks and areas of sensitivity for Odfjell:

CLIMATE-RELATED TRANSITION RISKS AND OPPORTUNITIES

The identification of transition risks follows the same methodology as direct risks, leveraging scenarios to pinpoint risks and opportunities across the value chain. Key considerations include regulations, market dynamics, and technological advancements. These findings are incorporated into the DMA and the ESRS E1-1 transition plan.

The transition plan evaluates locked-in emission risks, EU Taxonomy alignment, and pathways to net-zero. While no industry-wide policy exists for achieving a 1.5°C target, frameworks such as the Science Based Targets initiative (SBTi) provide guidance. Odfjell has assessed SBTi requirements but has not yet aligned its targets with the initiative’s guidelines.

Our transition plan is built on an IMO Net-Zero scenario, focusing on actions to achieve net-zero by 2050. Given the regulatory environment of the shipping industry, these actions depend on advancements in technology, infrastructure, and long-term policy development. Transition risks and opportunities are summarized in the table below:

Description of the processes to identify and assess material pollution-related impacts, risks and opportunities (ESRS 2 IRO-1-E2)

POLLUTION

Through a comprehensive assessment of our activities and value chain analysis, pollution to air and water has been identified as a material concern. Pollution to soil, however, is not considered material, as our maritime operations occur at sea, and our office activities do not constitute a significant source of pollution. Pollution, in this context, is defined as the direct or indirect introduction of pollutants into air and water resulting from our activities, which may harm human health and/or the environment or interfere with amenities and other legitimate uses of the environment. Pollutants are substances or other contaminants present in the air and sea that may adversely affect human health and/or the environment. For details on involvement of stakeholders please see policies related to pollution see link; E2-1.

The analysis indicates that actual pollution arises from greenhouse gas emissions (addressed under see link;  ESRS E1), wash water from cleaning processes, and sulphur, nitrogen oxide and black carbon emissions from combustion engines. Potential pollution risks include cargo-related fuel or substance spills. Odfjell ensures full compliance with IMO MARPOL regulations as well as international and local pollution-related regulations. Waste and wastewater, which may have environmental impacts, are addressed under see link; IRO-1-E5 and are therefore excluded from IRO-1-E2.

Other forms of pollution, such as light and noise pollution, are deemed non-material. Underwater noise is addressed under see link; IRO-1-E4. Similarly, pollution from microplastics and marine debris is considered non-material based on findings from our LEAP analysis and DMA. Possible pollution from building and recycling of vessels is addressed under see link; IRO-1-E5, and in the company specific IRO on ship recycling.

LEAP PROCESS AND FINDINGS

Odfjell has been one of the TNFD early adopters and previously reported on nature risk in line with the TNFD framework. Through this process, we have used the LEAP model in line with TNFD’s guidance on the identification and assessment of nature-related issues: the LEAP approach. We have used this approach to assess impact, risk, and opportunities related to pollution.

The table below describes the process and outcomes.

IDENTIFIED TRANSITION RISK RELATED TO POLLUTION

IDENTIFIED PHYSICAL RISK RELATED TO POLLUTION

CONSIDERATIONS OF COMMISSION RECOMMENDATION (EU) 2021/2279 ON THE USE OF THE ENVIRONMENTAL FOOTPRINT METHODS

Odfjell has considered the Environmental Footprint (EF) methods outlined in EU Recommendation 2021/2279 to measure and communicate the environmental performance of the fleet throughout the lifecycle. The EF methods provide a structured approach for evaluating and disclosing environmental impacts using life cycle assessment (LCA) principles.

The life cycle of a ship encompasses all stages, from design and construction through to operation and decommissioning or recycling. This life cycle has been used in the LEAP process and in the DMA to identify environmental, social and governance IROs, and the results of these assessment are presented in the relevant topical standards. 

Odfjell initiated a study in 2023 to determine the emissions throughout the life cycle of vessels, focusing on GHG emissions and using ISO 14040/14044 standards, a recognized method for evaluating environmental impacts during a product's life cycle.

Below is an outline of the key phases:

Description of the processes to identify and assess material water and marine resources-related impacts, risks and opportunities (ESRS 2 IRO-1-E3)

INTRODUCTION

Water and marine resources are indispensable for biodiversity, human communities, and economic activities. These interconnected systems regulate the climate, provide fresh water, and sustain ecosystems, making them vital for global sustainability. This chapter outlines Odfjell’s considerations of our impacts, mitigation measures, and contributions to water-related global and regional sustainability ambitions.

Water and marine resources play key roles:

• Foundational for biodiversity: Supporting ecosystems and delivering critical services essential for life.
• Essential for human needs: Ensuring access to clean water for drinking, agriculture, and industries and supporting livelihoods through fishing and trade.
• Linked to climate resilience: Directly impacted by sea level rise, saline intrusion, and changing precipitation patterns caused by climate change.

LINKAGES TO OTHER ESRS TOPICS

Water and marine resources are closely linked to:

• ESRS E1 Climate Change: Addressing risks from sea level rise and ocean acidification.

• ESRS E2 Pollution: Managing emissions to water, including microplastics.

• ESRS E4 Biodiversity: Conserving aquatic ecosystems to sustain biodiversity.

• ESRS E5 Circular Economy: Promoting wastewater recycling and reducing reliance on resource extraction.

IDENTIFICATION OF MATERIAL IMPACTS, RISKS, AND OPPORTUNITIES (IROS)

Odfjell conducted a comprehensive assessment to identify material IROs concerning water and marine resources in its operations and across its value chain. This included:

• Assessing water use, including consumption of surface and groundwater, withdrawals, and discharges.
• Evaluating marine resources to determine whether activities fall under extraction and associated economic activities.

ASSESSMENT PROCESS

1. LEAP Methodology: The LEAP process, as outlined under ESRS E2 Pollution, was used to screen sites and activities for water-related impacts, risks, and opportunities.
2. Value Chain Evaluation: Water-related topics and sub-topics were assessed for all activities in the value chain as part of the DMA.
3. Water Scarcity Analysis: Scenarios and climate risk assessments included evaluations of water scarcity.

KEY FINDINGS

Own Operations:

• Water consumption is limited to office use (non-material)
• Freshwater on board ships is produced from seawater using reverse osmosis systems.
• No material volume of water is discharged from Odfjell’s operations.

Value Chain:

• Water use includes cleaning and discharge activities at terminals, addressed under ESRS E2 Pollution.
• Water consumption at suppliers of products used in Odfjell has been assessed in the DMA, but not in interaction with the suppliers.

Community Impacts:

• Odfjell’s operations do not significantly impact local communities with regard to water, so no consultations have been conducted with affected communities.

Marine Resources:

• Activities involving the extraction and use of marine resources, as defined under ESRS E3, are outside the scope of Odfjell’s operations.

RESULTS

Based on the LEAP methodology, DMA, and climate risk assessments, water and marine resources are not considered material topics for Odfjell. Given the limited material impacts identified, these topics are not reported in the topical standard. However, Odfjell remains committed to ongoing monitoring and will reassess if circumstances change.

Description of the processes to identify and assess material biodiversity and ecosystems-related impacts, risks and opportunities (ESRS 2 IRO-1-E4)

INTRODUCTION

Biodiversity and ecosystems are essential for sustaining life on Earth, providing critical services such as food, water, clean air, and climate regulation. These interconnected systems underpin the health of the planet and human well-being. This chapter outlines Odfjell’s approach to managing its impacts on biodiversity and ecosystems, mitigation actions, and alignment with global and regional sustainability ambitions.

Biodiversity and ecosystems are:

• Foundational for ecosystem services: Supporting essential functions like nutrient cycling, pollination, and climate regulation.
• Critical for human well-being: Providing food, medicine, and raw materials while maintaining cultural and recreational values.
• Linked to climate resilience: Biodiversity enhances ecosystem stability, aiding in adaptation to climate change and mitigating its effects.

THE INTERRELATION TO OTHER ESRS

Biodiversity and ecosystems are closely connected to other environmental matters. The main  drivers of biodiversity and ecosystem degradation are climate change, pollution, land- freshwater- and sea- use change, direct exploitation of organisms and invasive alien species.

• ESRS E1 Climate Change: Addressing greenhouse gas emissions and energy consumption, which impact habitats and species.

• ESRS E2 Pollution: Managing pollution to air, water, and soil, which directly affects biodiversity.

• ESRS E3 Water and Marine Resources: Highlighting water consumption and marine ecosystem impacts.

• ESRS E5 Circular Economy: Promoting practices that reduce resource extraction and waste generation, supporting ecosystem preservation.

ASSESSMENT PROCESS

Odfjell’s assessment of biodiversity and ecosystems follows a structured approach, leveraging methodologies used in other ESRS assessments:

LEAP Methodology: The LEAP process was applied to screen sites and activities to identify actual and potential biodiversity and ecosystems-related impacts, risks and opportunities in own operations and upstream and downstream value chain. The methodology is explained under E2 Pollution, see link; ESRS 2 IRO-1-E2.

Double Materiality Assessment (DMA): Biodiversity-related topics and subtopics were assessed across Odfjell’s operations and value chain.

Climate Risk Assessment: Scenarios included evaluations of biodiversity risks and dependencies, consideration of habitat changes, species loss, and ecosystem degradation.

Odfjell’s operations do not significantly impact local communities with regard to biodiversity and eco-systems, so no consultations have been conducted with local communities.

FINDINGS

The table below presents key findings based on the ESRS E3 impact areas and evaluates whether the identified impacts, risks, and opportunities may constitute significant impacts or risks.

Based on the assessments, analyses, and findings, Odfjell recognizes its impact on biodiversity. While multiple mitigating actions are in place, the level of impact, risks, and opportunities associated with biodiversity is not considered material and is therefore not reported under the Topical Standard ESRS E4.

Description of the processes to identify and assess material resource use and circular economy-related impacts, risks and opportunities (ESRS 2 IRO-1-E5)

INTRODUCTION

At Odfjell, we recognize the increasing importance of circular economy principles in advancing sustainable practices globally. Circular economy, as described under ESRS E5 AR 4, encompasses resource inflows, resource outflows, and waste management. As a provider of transportation services, Odfjell does not engage in activities that generate significant resource inflows or outflows in the conventional sense. Consequently, our operations produce limited waste, which is managed in compliance with all applicable regulations. Based on these considerations, we do not regard Circular Economy as a material topic for Odfjell.

However, we have assessed its relevance through our LEAP process and other rigorous methodologies to ensure alignment with sustainability reporting standards.

ASSESSMENT OF LIFE CYCLE IMPACTS AND SHIP RECYCLING

A comprehensive lifecycle assessment of our vessels has been conducted, with regards to carbon emissions.

Ship recycling has been identified as a distinct topic but falls outside the scope of ESRS E5 since it does not involve direct resource inflows, outflows, or waste as defined by ESRS E5 AR 4. Ship recycling is defined as a company specific topic and addressed separately.

Description of the processes to identify and assess material business conduct-related impacts, risks and opportunities (ESRS 2 IRO-1-G1)

INTRODUCTION

The shipping industry operates in a dynamic, globally interconnected environment, engaging with diverse regulatory frameworks, cultures, and business practices. This complexity increases exposure to integrity-related risks, such as facilitation payments and corruption. Maintaining strong business conduct practices is crucial for ensuring compliance, fostering trust, and upholding ethical standards.

This chapter on ESRS G1 Business Conduct outlines Odfjell’s approach to business ethics, governance, and transparency. Through comprehensive disclosures, we provide insights into our strategy, policies, and performance, reinforcing our commitment to corporate integrity and responsible stakeholder engagement.

Key focus areas of this standard include:

• Business Ethics and Corporate Culture: Policies and measures addressing anti-corruption, anti-bribery, and whistleblower protection.
• Supplier Relationship Management: Ensuring fair payment practices, particularly with small and medium-sized enterprises.
• Political Influence and Lobbying: Transparency in commitments and activities related to political engagement.

While human rights are integral to Odfjell’s business conduct assessments, they are covered separately under ESRS S1 in this report.

To proactively manage integrity risks, Odfjell employs a structured approach, utilizing various methodologies and tools to assess and mitigate potential impacts, risks, and opportunities. By embedding ethical business conduct into our operations, we strengthen resilience, enhance stakeholder confidence, and contribute to a responsible and sustainable shipping industry.

RISK ASSESSMENT FRAMEWORK

Odfjell’s integrity risk assessment draws on insights from various authoritative sources and tools, enabling a comprehensive understanding of the risks related to corruption, human rights, and business conduct matters. The following elements form the foundation of our approach:

1. Integrity Risk Assessment

Conducted annually to map out potential risks and exposures across all operational areas and value chains.

Uses data from key indexes such as Transparency International’s Corruption Perceptions Index (CPI), the Maritime Anti-Corruption Network (MACN), and various human rights indexes including the Global Rights Index and the Global Slavery Index.

2. Geographical Exposure

• Risk assessments focus on countries with low CPI scores, high MACN incident rates, and identified human rights vulnerabilities.
• Examples include regions such as India, Egypt, and Bangladesh where facilitation payment requests have been reported. Ports frequently visited by Odfjell in high-risk countries are also prioritized in assessments.

3. Sector and Activity Analysis

• Specific activities, such as vessel operations and supply chain interactions, are assessed for integrity risks.
• The shipping sector’s exposure to practices such as facilitation payments during port calls and customs clearance is a focal point of our evaluations.

4. Inputs from Established Frameworks

• The Odfjell Anti-Corruption Framework aligns with the UK Bribery Act’s principles and the OECD’s Due Diligence Guidance for Responsible Business Conduct.
• Human Rights Due Diligence (HRDD) follows the OECD’s guidelines, ensuring a systematic approach to identifying and addressing potential human rights impacts. These are addressed under ESRS S1.

CRITERIA AND METHODOLOGIES FOR IDENTIFYING IROS

To identify material IROs, Odfjell applies the following criteria:

1. Location-Specific Factors

• CPI scores and other risk indexes to gauge corruption
• Historical data on incidents and requests for facilitation payments in specific countries and ports.

2. Activity-Specific Factors

• Vessel operations and interactions at ports where integrity risks are historically prevalent.
• Supply chain activities, including procurement and relationships with suppliers.

3. Sectoral Considerations

• Shipping industry-specific risks, such as customs clearance and interactions with government officials.
• Alignment with industry best practices as guided by MACN.

4. Engagement and Monitoring

• Regular reporting and monitoring of integrity incidents through platforms such as the PortLog system.
• Continuous engagement with internal and external stakeholders, including whistleblower reports and industry collaborations.

KEY TOOLS AND SOURCES

Odfjell employs a range of tools and data sources to inform its integrity risk assessment process:

Transparency International’s CPI: Provides country-specific corruption risk insights.

MACN Data: Offers detailed port-level integrity incident data.

Human Rights Indexes: Includes the Global Rights Index, Global Slavery Index, and other metrics to assess human rights vulnerabilities.

Internal Monitoring Tools: Dashboards and reports that track facilitation payment requests, whistleblower incidents, and compliance metrics.

OUTCOMES OF THE ASSESSMENT

The outcomes of Odfjell’s integrity risk assessment have been incorporated into our broader sustainability and compliance strategies:

1. Proactive Mitigation Measures

• Strengthening policies and procedures to address identified risks.
• Enhancing employee training on anti-corruption and human rights principles.

2. Stakeholder Collaboration

• Engaging with industry bodies such as MACN to share best practices and drive collective action.

3. Continuous Improvement

• Regular reviews of the integrity risk framework to ensure relevance and alignment with emerging risks and regulatory changes.

Odfjell’s structured approach to assessing and mitigating risks related to corruption, human rights, and facilitation payments underscores our commitment to upholding the highest standards of integrity and ethical business conduct. By leveraging comprehensive methodologies and tools, we ensure that material impacts, risks, and opportunities are identified and managed effectively, fostering trust and sustainability across our global operations.

Disclosure Requirements in ESRS covered by the business’s sustainability statement (ESRS 2 IRO-2)

ESRS CONTENT INDEX LIST

A list with all disclosure requirements in ESRS covered by the undertaking’s sustainability statement (Disclosure Requirement ESRS 2 IRO-2 paragraph AR 19 & ESRS 2 Appendix C) can be found at the beginning of the Sustainability Statement, see link; content index.

LIST OF DATAPOINTS IN CROSS-CUTTING AND TOPICAL STANDARDS

A list of data points in cross-cutting and topical standards that derive from other EU legislation (Disclosure Requirement ESRS 2 IRO-2 paragraph 56 & ESRS 2 Appendix B) can be found in Appendix A, see link; Appendix A.

EXPLANATION OF HOW MATERIAL INFORMATION TO BE DISCLOSED IN RELATION TO MATERIAL IMPACTS, RISKS AND OPPORTUNITIES HAS BEEN DETERMINED

Odfjell has employed a structured process to determine the material information to be disclosed in relation to the IROs assessed as material. This approach is in line with the criteria outlined in ESRS 1, section 3.2, on Material Matters and Materiality of Information. Below is a detailed explanation of our methodology:

• Materiality Determination Process The material topics were identified through a double materiality assessment process. The material topics are described in detail under IRO-1 and SBM-3 of this report. This process enabled us to identify topics deemed material to Odfjell’s business, stakeholders, and the environment.

• Mapping and Assessment Using the EFRAG Guidance Following the identification of material topics, we used the EFRAG Guide ID 177 – Links between AR16 and Disclosure Requirement (July and Nov. 2024). This guidance was instrumental in mapping the link between the sustainability matters listed in AR 16 and the disclosure requirements in the topical standards. Each topic, sub-topic, and sub-sub-topic identified as material was assessed for its corresponding data points.

• Categorization and Disclosure of Data Points We categorized data points based on their status as mandatory, conditional, if applicable, or phase-in:
• Mandatory: Fully addressed in our disclosures.
• Conditional and If Applicable: Addressed where relevant to our operations.
• Phase-In: Not addressed in this reporting period, as these data points are not yet applicable.

• If policies, actions, or targets were unavailable, this has been explicitly mentioned in our comments, ensuring transparency in our reporting. Additionally, for all required metrics, estimates have been provided where actual figures were unavailable.

• Use of Thresholds and Judgement No fixed quantitative thresholds were applied during the materiality assessment. Instead, professional judgement was exercised to determine applicability and materiality, ensuring a tailored and context-specific approach to each data point.

Environmental Information

EU Taxonomy Report

EXECUTIVE SUMMARY

This report provides disclosure on Odfjell’s activity and its eligibility and alignment with the EU Taxonomy criteria.

The EU Taxonomy, a classification system developed by the European Union, aims to determine the environmental sustainability of economic activities. It was incorporated into Norwegian law in December 2021 and became effective under the EES Agreement on December 15, 2022.

Odfjell has been reporting on the EU Taxonomy since 2022, focusing on sustainable maritime operations and regulatory compliance. The company's core activities under the EU Taxonomy include seaborne transportation and storage of bulk liquids, with a focus on climate change mitigation and adaptation objectives.

However, while all of Odfjell's activities are Taxonomy-eligible, they do not currently meet all requirements for full Taxonomy alignment.

The report outlines Odfjell's methodology, governance structure, data collection, and reporting practices. It highlights that Odfjell's eligible activities include sea and coastal freight transport and retrofitting, but the company does not meet the alignment criteria due to its failure to meet required emission thresholds.

Odfjell plans to invest in new ships and sustainable technologies, including retrofitting vessels with wind-assisted propulsion to improve fuel efficiency. These investments will contribute to achieving our climate goals and may also help Odfjell meet taxonomy alignment criteria.

BACKGROUND AND PERSPECTIVE ON THE EU TAXONOMY

Background

The EU Taxonomy is a classification system developed by the European Union to provide a clear framework for determining whether economic activities are environmentally sustainable. It was introduced as part of the European Green Deal to drive sustainable investment and align financial flows with climate objectives. The Taxonomy Regulation (EU) 2020/852 came into effect to support the transition to a low-carbon, resilient, and resource-efficient economy.

Since its inception, the EU Taxonomy has evolved through delegated acts and supplementary guidelines to cover additional sectors and clarify technical screening criteria. The proposal to incorporate the EU Taxonomy into Norwegian law was approved by Stortinget (the Norwegian Parliament) in December 2021. However, implementation in Norway was delayed until taksonomiforordningen and offentliggjøringsforordningen came into force under the EØS Agreement. These regulations became effective within the EØS framework on December 15, 2022. Consequently, the Norwegian government formally enacted the law on December 20, 2022, with an effective date of January 1, 2023.

The EU Taxonomy is now part of Norwegian law through the newly established “Lov om offentliggjøring av bærekraftsinformasjon i finanssektoren og et rammeverk for bærekraftige investeringer”.

The law references Taksonomiforordningen and Offentliggjøringsforordningen as they are implemented and amended over time. The Taxonomy regulation mandates that the European Commission assess potential expansions of the framework, making it likely that further amendments will be introduced in the future.

Odfjell has been reporting on the EU Taxonomy since 2022, demonstrating its commitment to sustainable maritime operations and regulatory compliance. This report outlines Odfjell’s approach to taxonomy alignment, including eligible activities, environmental objectives, and financial disclosure as a part of the environmental report in its sustainability statement in line with ESRS.

The EU Commission adopted a new package of simplification initiatives (the Omnibus package, released February 26, 2025) that will affect future taxonomy reporting. It is therefore likely that the taxonomy reporting will be different for 2025.

Relevance

The EU Taxonomy applies to large companies that meet specific criteria related to turnover, employee count, and total balance sheet assets. Companies are in scope if they meet at least two of the following thresholds in the table below. Odfjell SE, as a listed entity on the Oslo Stock Exchange with headquarters in Norway, is subject to the EU Taxonomy and falls under the scope of the Corporate Sustainability Reporting Directive (CSRD). Odfjell meets the scope requirements based on the following key financial and operational figures:

METHODOLOGY AND ELIGIBILITY

Activities and consolidation

Odfjell’s core business includes the seaborne transportation of bulk liquids and their storage through our joint venture terminals. These activities are relevant under the EU Taxonomy framework, particularly in relation to climate change mitigation and adaptation objectives.

However, our EU Taxonomy reporting does not include Odfjell’s investments in terminals and its associated activities. This is because Odfjell does not consolidate revenues from its joint venture terminals, nor does it have operational control over these entities. While ESRS follows assets on the balance sheet plus operational control, the EU Taxonomy solely follows how revenue, CapEx, and OpEx are recorded in consolidated financial statements.

For reporting revenue from eligible and aligned activities, the Taxonomy's definition of the turnover KPI refers to IAS 1 82(a), which means that sales revenue from consolidated entities is included, while revenue from investments in associates and joint ventures (JVs) is excluded. Based on this, Odfjell’s terminals should not be included in the 2024 Taxonomy reporting.

This approach is different from our 2023 reporting, where terminals were included. The level of control and consolidation has not changed, but our interpretation has been updated in 2024 to align with CSRD and Taxonomy guidance.

Governance and Ownership Structure of Terminals

Odfjell is an integrated shipping company with ownership stakes in terminals located in the United States, Belgium, and South Korea.

• The United States and South Korea terminals are structured as joint ventures, where Odfjell holds a 50% ownership stake.
• The Belgium terminal is an associated company.

In our financial reporting, Odfjell Terminals (Terminals) are accounted for using the equity method rather than full consolidation. Although these terminals support chemical storage and transportation, they are independently operated as public terminals and not specifically integrated into Odfjell’s shipping activities. Governance of these terminals is managed through shareholder agreements, which allocate equal control among shareholders and establish a board with equal representation from each shareholder. As such, Odfjell does not have operational control over these terminals and is not a controlling owner.

Due to the lack of operational control, terminals are not consolidated in Odfjell’s financial statements nor included in our sustainability reporting. Instead, these terminals are considered part of the upstream value chain for Odfjell’s activities and are accounted for as such.

Our sustainability statement includes material topics identified through the double materiality assessment, covering upstream, core operations, and downstream activities. A value chain analysis (VCA) has been developed to evaluate sustainability topics across the entire value chain (Ref. ESRS 1). This analysis has also played a key role in disclosing scope 3 carbon emissions, assessing human rights impacts, and managing supplier relationships.

The sustainability statement consolidates all controlled entities in the Odfjell Group, using the same methodology as our financial reporting.

Data collection

The EU Taxonomy has six environmental objectives; however, well-defined criteria have only been developed for two objectives relevant to Odfjell's activities: climate change mitigation and adaptation.

The data used in the taxonomy assessment consists primarily of qualitative evaluations under the substantial contribution criteria, the Do No Significant Harm (DNSH) principle, and Minimum Safeguards (MS). No quantitative data has been employed, and Odfjell does not meet the alignment criteria.

This report further details the calculations of OpEx, CapEx, and revenue. The data aligns with ESRS reporting and is consistent with Odfjell’s financial statement, and is subject to limited assurance. Emissions data play a crucial role in sustainability reporting and in evaluating compliance with the taxonomy criteria. These emissions data undergo external review and verification by DNV, ensuring their accuracy and reliability.

ELIGIBILITY AND COMPLIANCE

Eligibility and Transitional Activity

The EU Taxonomy establishes criteria to determine whether an economic activity qualifies as environmentally sustainable. To be considered Taxonomy-eligible, an activity must fall under the environmental objectives defined in the Taxonomy and meet the substantial contribution criteria outlined in Regulation (EU) 2020/852.

Odfjell’s possible Taxonomy-eligible activities include:

• Sea and coastal freight water transport (6.10)
• Retrofitting of sea and coastal freight and passenger water transport (6.12)

These activities align with the delegated acts adopted under Article 10(3), Article 11(3), Article 12(2), Article 13(2), Article 14(2), and Article 15(2) of Regulation (EU) 2020/852, which specify the technical screening criteria for substantial contribution to climate change mitigation and adaptation.

The activity is a transitional activity as referred to in Article 10(2) of Regulation (EU) 2020/852, provided it complies with the remaining technical screening criteria.

Odfjell has not had activity under 6.12 that meets the eligibility criteria in 2024, as the results of the retrofitting investments in 2024 will be clear in 2025. This means that investments in 2024 can be reclassified.

Assessment of Compliance with Article 3 Criteria

To qualify as Taxonomy-aligned, an activity must:

• Contribute substantially to at least one environmental objective
• Do no significant harm (DNSH) to other environmental objectives
• Comply with minimum social safeguards
• Meet the technical screening criteria established in the delegated acts

Odfjell assessed its activities using these compliance criteria and found that while its operations are Taxonomy-eligible, they do not currently meet all requirements for full Taxonomy alignment. This assessment is based on qualitative reviews of compliance with the substantial contribution and DNSH principles.

Interpretation of alignment

As outlined in this report, Odfjell’s eligible activities do not meet the criteria for substantial contribution to the climate change mitigation objective, as they fail to comply with the required emission thresholds.

The criteria for alignment with the climate change adaptation (CCA) objective are more qualitative in nature; however, they do not align well with Odfjell’s or the broader shipping industry’s activities. Based on climate risk assessments and evaluations of climate-related hazards, the only relevant adaptation solution for Odfjell is weather routing. However, as this solution does not qualify as a nature-based adaptation measure under the substantial contribution criteria, Odfjell cannot claim alignment with the CCA criteria.

Given that 100% of Odfjell’s turnover falls under the same sea freight transport activity, classifying this activity as non-aligned with one environmental objective while considering it aligned with another would be inconsistent.

As a result, Odfjell has determined that the activity should be classified as not aligned with the EU Taxonomy. This approach ensures consistency with the intent and spirit of the EU Taxonomy Regulation, reinforcing the principle that an activity can only be classified as green if it meets all applicable alignment requirements in a coherent and transparent manner.

ACCOUNTING PRINCIPLES

Accounting Policy

Odfjell’s accounting principles are presented in note 2 of the Group’s financial statement. The Odfjell Group prepares its consolidated financial statements in accordance with International Financial Reporting® (IFRS) as adopted by the EU.

For 2023 reporting, Odfjell included its share of joint ventures (JVs) in the taxonomy calculations. However, for 2024 reporting, terminal activities in joint ventures have been excluded as previously described. Storage is not a screened activity under the EU Taxonomy and, therefore, is not an eligible economic activity.

We refer to the EU commission delegated regulation 2021/2178 annex 1 and 2013/34 for use of KPIs, and follow the guidance for KPIs.

Changes in Calculation Approach

For 2024, Odfjell has updated its Taxonomy reporting approach to align with CSRD and EU Taxonomy guidance, leading to the following changes:

• Exclusion of joint ventures and terminals from Taxonomy reporting, as previously explained

Material Changes in CapEx Plan

Odfjell remains committed to investing in sustainable technologies, with a particular focus on retrofitting vessels for fuel efficiency and initiating investments in wind-assisted propulsion. While Odfjell has not yet developed a dedicated CapEx plan to ensure future EU Taxonomy alignment, ongoing investments in retrofits and fleet renewal may support alignment in the future. As of 2024, no material CapEx investments have been reclassified as Taxonomy-aligned, but this may change in future reporting cycles.

Key CapEx Changes in 2024:

• No new Taxonomy-aligned investments were made, affecting the timeline for potential future alignment.
• A restatement of CapEx and OpEx KPIs was required due to the exclusion of terminals from the reporting scope.
• Impact on alignment expectations: While Odfjell continues investing in sustainability-driven improvements, no current investments meet the EU Taxonomy alignment criteria.
• Odfjell has initiated investments in retrofit activities, specifically for wind-assisted propulsion. While these investments may qualify under a separate economic activity (Retrofits), they will not contribute to the alignment of activity 6.10 (Sea and Coastal Freight Water Transport) under the EU Taxonomy.

Odfjell will continue to evaluate investment strategies to enhance sustainability while monitoring regulatory developments for future Taxonomy alignment opportunities.

KPI CONTEXTUAL INFORMATION

Contextual Information about Turnover KPI

Odfjell’s turnover is determined by gross revenue from sea transport (Ref Financial Statement, note 4).

Odfjell does not have amounts related to Taxonomy-aligned activities pursued for internal consumption.

The key change in the Turnover KPI during the reporting period is the exclusion of terminals, which were included in prior reporting.

Odfjell has issued sustainability-linked bonds and loans as well as transition finance loans. Activities under these frameworks are the same activities as the defined eligible activity. Future activities under the Transition Finance Framework may be aligned when they meet CapEx criteria or retrofit activity criteria.

Contextual Information about Taxonomy CapEx KPI

Contextual Information about OpEx KPI

The denominator has, since 2023, been adjusted to exclude operational expenses at JV terminals.

TAXONOMY CRITERIA AND ALIGNMENT ENVIRONMENTAL OBJECTIVES

Approach

Odfjell has assessed the criteria provided in the EU Climate Delegated Act published on December 9, 2021, which has been applicable since January 1, 2022 and updated in the EU Taxonomy Compass, Regulation 2021/2139 (Screening criteria objective 1 and 2) , 2021/2178 (Reporting requirements and templates), 2022/1214 (Supplement on nuclear and gas), 2023/2486 (criteria for objective 3-6) and 2023/2485 (new technical criteria or objective 1 and 2)  supplementing EU 2020/852. Odfjell has not included the full text of the criteria but rather a shorter version in this report to aid the reader's understanding. For the complete text, we refer to the applicable regulation and the Compass.

Substantial contribution to Objective 1 - Climate Change Mitigation

Odfjell only meets one of two criteria.

Do No Significant Harm Criteria for Climate Change Mitigation

Substantial Contribution to Objective 2 - Climate Change Adaptation

Do No Significant Harm Criteria for Climate Change Adaptation

GOVERNANCE AND MINIMUM SAFEGUARDS

Minimum Safeguards

Minimum safeguards Platform on Sustainable Finance criteria

The Platform on Sustainable Finance delivered its final report on minimum safeguards in October 2022, advising on the application of minimum safeguards (MS) in relation to the Taxonomy Regulation Articles 3 and 18. It does so by a) embedding MS in existing EU regulation, b) identifying substantive topics relating to the standards and norms referenced in Article 18 of the Taxonomy regulation and c) presenting advice on compliance with MS. The report highlights following indicators of non-compliance with MS.

Odfjell does not meet any of the criteria for non-compliance and therefore meets the criteria for minimum safeguards.

REPORTING OF NUCLEAR AND GAS

All companies will have to report on nuclear and gas as part of the requirements 2021/2178 and 2022/1214. Odfjell does not operate ships with gas as fuel, use nuclear energy, or invest in any such activity. Nuclear is, therefore, not included in our DNSH assessments. Ref. tables below for disclosure on use of nuclear energy- and fossil gas-related activities.

Nuclear energy-related activities

Fossil gas-related activities

DOUBLE COUNTING

All Odfjell’s activities are regarded as eligible and related to one activity and so avoiding the risk of double counting.

EU TAXONOMY TEMPLATES

Climate Change (E1)

INTRODUCTION TO CLIMATE CHANGE

This chapter of the Sustainability Statement addresses the reporting requirements of ESRS E1. Odfjell has developed a transition plan for climate mitigation, which is closely linked to climate risk and impact, risk, and opportunity (IRO) disclosures in the General Disclosures section, as well as other aspects of the topical standard in E1.

The transition plan also incorporates considerations for a just and equitable transition, which are relevant to the S1 and S2 disclosures. Due to the disclosure requirements of the ESRS, there is a risk of overlapping topics related to climate change.

Furthermore, the implementation guidance document from EFRAG on transition plans is still under development. As a result, updates to the guidance may occur after Odfjell’s initial disclosure.

TRANSITION PLAN FOR CLIMATE CHANGE MITIGATION (E1-1)

Introduction

In line with the Corporate Sustainability Reporting Directive (CSRD) and the European Sustainability Reporting Standard (ESRS), Odfjell presents this Transition Plan for Climate Change Mitigation, outlining our strategic roadmap toward net-zero emissions. This plan is integral to our sustainability strategy, demonstrating our commitment to addressing climate change while aligning with regulatory requirements and stakeholder expectations.

Our primary objective is to reduce greenhouse gas (GHG) emissions across all operations, contributing to global climate goals, including the Paris Agreement. The plan details key actions to mitigate climate risks, transition to a low-carbon economy, and navigate evolving regulations while ensuring that our climate targets align with operational strategies and financial investments.

By integrating decarbonization goals with capital expenditure (CapEx), operating expenditure (OpEx), and revenue generation, we embed sustainability across our business. Investments will focus on newbuildings, fleet upgrades, retrofitting, and sustainable fuels, reinforcing our commitment to emissions reduction.

Operational efficiency, stakeholder engagement, and continuous monitoring are crucial to achieving our climate objectives. We aim to balance compliance, technological advancements, and financial prudence to ensure resilience amid regulatory and market shifts.

While sectoral pathways for shipping are still undefined in public policy, Odfjell has developed a robust transition plan to achieve net-zero emissions. Though we cannot currently confirm explicit alignment with a 1.5°C trajectory, our plan outlines concrete measures to reduce carbon intensity in the short term, supporting the broader decarbonization of the industry.

This transition plan serves as a high-level framework, with further details available in Odfjell's sustainability statement. Due to its strategic sensitivity, the fleet transition plan remains confidential.

Just and equitable transition

At Odfjell, a just and equitable transition means ensuring that the shift to low-carbon shipping is inclusive and beneficial for all stakeholders, including workers, communities, consumers, and the broader maritime industry. This approach recognizes that addressing climate change is not solely about reducing emissions but also about ensuring fairness and equity throughout the transformation process.

Double Materiality and Social Matters

Our double materiality assessment identifies impact, risk, and opportunities, highlighting the importance of integrating social considerations into our transition strategies. Social matters, identified as material to Odfjell, play a pivotal role in shaping our transition plan. As we work to mitigate climate change, we are committed to addressing the social implications of our actions, ensuring that they are fair and inclusive for all.

Just Transition and Climate Disclosures

The concept of a just transition is particularly relevant to Odfjell’s plan for climate change mitigation. A just transition requires careful consideration of the social impacts of moving towards a climate-neutral and more sustainable economy. It is widely recognized that this shift has significant implications for workers, communities, and consumers across various sectors, including energy, transport, and financial services.

Supporting Workers and Communities

For the shipping industry, a just transition involves supporting seafarers and other workers as we adopt new technologies and fuels. Odfjell actively participates in initiatives like the IMO Maritime Just Transition Task Force, which focuses on preparing the workforce for the future by prioritizing safety, education, and skills development. Ensuring that our workforce is adequately trained and supported during this transformation is a priority.

We are also committed to minimizing disruptions for workers and communities affected by the transition from fossil fuels. This includes engaging with stakeholders, sourcing responsibly, and upholding human rights across our supply chain. By addressing these challenges directly, Odfjell aims to reduce potential inequities and strive for the benefits of decarbonization are distributed fairly.

Avoiding Unintended Consequences

A just transition means recognizing and addressing the broader social and economic impacts of decarbonization. It is essential to ensure that the decarbonization of the shipping industry does not inadvertently increase emissions in other sectors or transfer the challenges to other parties. Odfjell remains committed to a holistic approach that prioritizes fairness and equity across the value chain, including our partnerships with suppliers and customers.

Leadership in Sustainable Shipping

By embedding the principles of a just and equitable transition into our business practices, Odfjell aims to lead the creation of a sustainable shipping industry. This involves not only addressing the urgent need for climate action but also supporting people and communities throughout the transition. Our commitment to fairness, equity, and inclusivity ensures that our journey toward a low-carbon future is one that leaves no one behind.

Climate Targets

Greenhouse Gas emissions

According to the GHG Protocol, emissions are categorized into three scopes to help organizations identify and manage their greenhouse gas emissions comprehensively:

Scope 1: Direct emissions from sources owned or controlled by the company. For Odfjell, these primarily include emissions from the combustion of fuel in the company’s operated vessels. Scope 1 emissions constitute approximately 63.7% of Odfjell's total emissions.

Scope 2: Indirect emissions from the generation of purchased electricity, steam, heating, or cooling consumed by the company. For Odfjell, scope 2 emissions represent less than 0.1% of total emissions, reflecting the relatively minor role of electricity consumption in the company’s operations.

Scope 3: All other indirect emissions that occur in the value chain of the company, including both upstream and downstream activities. For Odfjell, scope 3 emissions, such as those from shipbuilding, supply chain activities, fuel production and end-of-life disposal, account for approximately 36.3% of total emissions. 45.6% of scope 3 is related to fuel activities (Scope 3 cat 3).

Climate Targets

Odfjell has set the following climate targets (Ref to other parts of ESRS, E-1-4):

1. Odfjell will cut greenhouse gas emissions by more than 57% by 2030 compared to 2008.
2. Odfjell is dedicated to pursuing a zero-emission strategy and will only order new net zero-capable vessels.
3. Odfjell will be a net-zero company by 2050.
4. Odfjell will support initiatives to develop technology for decarbonization, energy efficiency, and net zero emissions, promoting a fair and equitable transition.
5. Odfjell will actively collaborate with our suppliers and customers to improve energy efficiency and reduce total emissions from our activities.

Absolute emissions

Odfjell is committed to transparency and leadership in the maritime industry's journey toward decarbonization. As part of our climate change mitigation strategy, we recognize the importance of distinguishing between absolute emissions and emissions intensity—two key metrics that offer distinct perspectives on our environmental performance.

Absolute emissions represent the total volume of GHGs emitted, regardless of activity levels or fleet size. This metric aligns with global climate goals such as the Paris Agreement, which targets absolute reductions in emissions.

Emissions intensity, on the other hand, measures emissions per unit of transport work, such as per ton-mile. This provides a normalized benchmark for operational efficiency, reflecting how effectively we are reducing emissions relative to our business activities.

Odfjell reports emissions from both its controlled fleet (owned vessels) and operated fleet (chartered vessels and pool vessels). Including time charter (TC) vessels and pool vessels in our absolute emissions ensures comprehensive transparency. However, this approach presents a dilemma: while we strive to decarbonize, we do not have direct control over the long-term trajectories of vessels we do not own.

Odfjell's absolute emissions may increase if our fleet grows, either organically or through a larger operated fleet. This growth does not imply higher emissions globally, as other owners might operate these vessels less efficiently. By integrating these vessels into Odfjell's operations, we often achieve greater efficiency and lower emissions on a holistic scale. Nonetheless, this limits our ability to design a clear trajectory for absolute emission reductions since our fleet size, vessel mix, and access to decarbonization technologies are dynamic and partly outside our control.

Navigating Toward Net Zero

Odfjell has set an ambitious target of achieving net-zero absolute emissions by 2050. However, this pathway is complex due to factors such as:

• The reliance on external developments, including the availability and adoption of new low- and zero-carbon fuels.
• The timeline for phasing out older vessels and replacing them with ships equipped with advanced technologies.
• Uncertainties in fuel pricing, infrastructure readiness, and the pace of global regulatory developments.

We anticipate that the most significant reductions in absolute emissions will occur closer to 2050 as the adoption of alternative fuels matures and well-to-wake emissions decrease. Older, less efficient vessels will be retired, and state-of-the-art technologies will dominate the fleet. In the meantime, intensity-based targets provide an actionable metric for driving operational efficiency and ensuring year-on-year improvements. The historic absolute emissions and prediction pathways in the figure below illustrate this.

About the targets

The targets encompass relevant greenhouse gas emissions in accordance with the Kyoto Protocol, specifically covering carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). Other gases listed under the protocol are not applicable to Odfjell’s operations.

The Odfjell fleet’s emission reduction target for 2030 (Target 1) is an intensity-based target, for our controlled fleet measured using the Annual Efficiency Ratio (AER), and benchmarked against the International Maritime Organization (IMO) standards, using 2008 as the baseline. AER calculations are conducted in accordance with IMO regulations, specifically MARPOL Annex VI, Regulation 2.49, and the guidelines outlined in documents MEPC.336(76), MEPC.337(76), MEPC.338(76), and MEPC.339(76).

Emission calculations are based on the applicable carbon factors as stipulated in Regulation (EU) 2023/957, which amends Regulation (EU) 2015/757, including Annexes I and II.

EU ESRS requires a reference baseline. The baseline for the AER target is a linear trajectory that can be calculated from the 2008 reference and the 40% reduction in 2030. Odfjell will therefore use a reference value based on the IMO industry standard of AER of 11.45 in 2021. Targets cover our controlled fleet, consisting of owned, bareboat and financial lease vessels, but excludes time charter and pool vessels.

Net zero emissions for Odfjell means achieving a balance where any greenhouse gas emissions produced are fully neutralized. This is accomplished by reducing emissions through efficiency improvements and sustainable fuels, carbon capture or shore power, and offsetting any remaining emissions via verified carbon reduction projects. The goal is to ensure that all emissions are addressed on a full well-to-wake lifecycle basis, targeting net zero by 2050 in line with the IMO’s GHG reduction strategy.

Net zero capable is defined as a vessel that is technically adaptable and prepared for the retrofit of machinery and fuel systems that can accommodate alternative fuels or emission reduction technologies, including emission capture systems. This readiness is contingent on the commercial, environmental, and practical feasibility of such technologies at the time of implementation. A net zero capable vessel must be equipped for the use of alternative fuels, such as biofuels, bio-LNG, e-ammonia, and e-methanol, as and when these become viable. Additionally, it should be prepared for carbon capture and storage (CCS) systems, if applicable, and optimized for energy efficiency through measures like shore power integration and wind-assisted propulsion.

The net-zero emission target for 2050 reflects Odfjell’s long-term ambition to contribute to global climate goals. However, achieving this target is subject to various uncertainties and factors beyond Odfjell’s direct control, including but not limited to the availability, scalability, and affordability of alternative fuels and technologies, evolving regulatory frameworks, and broader market and economic conditions. While Odfjell is committed to taking reasonable measures to pursue this target, there is no guarantee that all necessary conditions will be met.

Compatibility with Limiting Global Warming to 1.5°C

The Paris Agreement on climate change was agreed in 2015 by Parties to the United Nations Framework Convention on Climate Change (UNFCCC) and entered into force in 2016. The Paris Agreement’s central aim is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels, and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. The agreement binds states to implement actions and report on their National Determined Contributions (NDCs). The Paris Agreement does not include international shipping, but the IMO, as the regulatory body for the industry, is committed to reducing greenhouse gas emissions from international shipping. Odfjell is regulated by the IMO,and complies with the regulations and strategy to reduce greenhouse gas emissions to be net zero by 2050.

In July 2023, the IMO adopted the 2023 IMO Strategy on Reduction of GHG Emissions from Ships. The strategy falls within a broader context that includes the Paris Agreement. The IMO Strategy aims to enhance the IMO's contribution to global efforts by addressing GHG emissions from international shipping. International efforts to address GHG emissions include the Paris Agreement and its goals.

IMO GHG Strategy

The IMO has set out four levels of ambition and indicative checkpoints, to reach net-zero GHG emissions from international shipping. These targets were adopted by the Maritime Environmental  Protection Committee (MEPC) 80 7 July 2023 in resolution 377(80)  - 2023 IMO Strategy on reduction of GHG emissions from ships. The strategy is available on IMO’s website and not repeated here. The pathway is illustrated below.

Carbon intensity

A critical metric in the pursuit of net-zero emissions is carbon intensity, which quantifies the amount of CO₂ emissions per unit of transport work. The IMO has set forth a benchmark known as the Annual Efficiency Ratio (AER), which serves as a reference value to measure and regulate carbon intensity in line with global decarbonization efforts. While the IMO’s targets provide a framework for carbon intensity reduction, Odfjell’s approach surpasses these industry standards.

Odfjell has implemented a comprehensive and ongoing strategy focused on emission reduction, placing carbon intensity at the core of our sustainability agenda. Through continuous innovation and operational efficiency improvements, Odfjell has consistently maintained carbon intensity levels well below the benchmarks and trajectories established by the IMO. This proactive approach has enabled us to operate with significantly lower emissions since 2008, the IMO’s initial reference year, resulting in a performance surplus relative to the IMO calculated baseline.

Fuel initiatives

FuelEU Maritime regulations (FEM) will be implemented in 2025 and targets a reduction in the carbon intensity of maritime fuels used within EU waters. The regulation mandates ships to reduce their carbon intensity by 2%, escalating to 50% by 2050 for voyages in scope of the EU regulation. The regulation incentivizes the use of low-carbon and renewable fuels such as biofuels, hydrogen, and ammonia while discouraging reliance on conventional fossil fuels through financial penalties for non-compliance.

FuelEU Maritime will work alongside the EU Emissions Trading System (ETS), placing a price on carbon emissions from ships, further encouraging the uptake of green fuels and energy efficiency measures.

At a global level, the IMO’s Global Fuel Intensity standard (GFI) will complement the EU’s efforts, focusing on reducing the carbon intensity of international shipping. The GFI will be a goal-based1 marine fuel standard regulating the phased reduction of the marine fuel's GHG intensity as a part of the basket of measures that will be implemented by the IMO.

1 Goal-based standards (GBS) in the IMO are high-level standards and procedures that are to be met through regulations, rules and standards for ships.

IMO Strategy and Alignment with Climate Goals: A Critical Perspective

The IMO strategy outlines the global ambition and framework for decarbonizing shipping. These targets are designed for the entire shipping industry and cannot be directly applied to individual ships or fleets. To achieve the goals of the Paris Agreement, the IMO intends to follow up this strategy with updated regulations that will establish a trajectory toward net-zero emissions. Revised technical and economic regulations are expected in 2025, with implementation planned for 2027.

Odfjell’s GHG reduction targets are aligned with the IMO’s net-zero strategy and, in some cases, exceed the IMO’s intensity targets for 2030. However, despite the IMO adopting the Paris Agreement’s objectives, there is no scientific evidence to suggest that the 50% reduction target by 2050 is sufficient to align with the 1.5°C pathway, which requires net-zero emissions across all sectors by mid-century.

Limitations of the Current IMO Strategy

The IMO’s strategy does not mandate immediate or aggressive enough measures to address emissions in the short term. This delay risks slowing the adoption of decarbonization technologies and practices that are urgently needed. The Intergovernmental Panel on Climate Change (IPCC) has provided clear guidance on what is required to meet the 1.5°C target:

• Global emissions must decline by approximately 45% by 2030, relative to 2010 levels, and reach net-zero by 2050

• For the shipping sector, this necessitates near-complete decarbonization by mid-century, with substantial reductions achieved by 2030.

However, under the current IMO strategy, projections indicate that absolute emissions from international shipping will not peak until the 2030s, let alone achieve the sharp reductions required this decade. The strategy’s reliance on efficiency improvements, while valuable, cannot deliver the absolute reductions necessary to meet the 1.5°C pathway.

Alignment with 1.5 degrees

There are multiple standards and initiatives for setting science-based targets in line with climate science. However, Odfjell has not yet verified its targets under any specific framework or standard. Public policies for the shipping sector have not defined clear sectoral pathways, making it challenging to confirm whether Odfjell’s targets are fully compatible with the 1.5°C goal. Consequently, Odfjell does not claim that its targets are aligned with the 1.5°C pathway. This position complies with the disclosure requirements under see link, E1-4.

While the IMO strategy provides a critical foundation for global shipping's decarbonization, it falls short of the scientific benchmarks needed to meet the 1.5°C target. Odfjell remains committed to ambitious emissions reduction targets and continues to advocate for more aggressive action to address climate change. As the sector evolves and public policies provide clearer frameworks, Odfjell will continue to refine its strategy and align with best practices to ensure meaningful progress toward a sustainable future.

Decarbonization Levers and Key Actions

Odfjell has identified several key decarbonization levers to achieve its emission reduction targets:

Fleet transition plan

Odfjell has a specific fleet transition plan that includes new ships, changes to existing ships, and recycling plans for our managed fleet. This plan aims to meet the company’s strategic ambitions and targets, as well as compliance with IMO and EU regulations, lifetime considerations, and capacity for renewal. The plan is company confidential.

Transition activities

Odfjell has introduced a Transition Finance Framework (TFF), aimed to support funding our transition. The framework offers a holistic approach to transition investments, capturing both small and large decarbonization projects in which Odfjell intends to invest. The framework can be used for bonds and loans and adhere to the latest industry guidelines for use-of-proceeds and transition financing. The framework encompasses a wide range of energy-efficiency initiatives that will support Odfjell’s journey towards a climate-neutral fleet in 2050. The participating financial institutions will benefit from our commitment to transparency and see their funds being directed towards a wide range of initiatives aimed at emission reduction. The plan has the following six transition categories:

1. Ship retrofit projects
2. Energy-efficient solutions
3. Research and development and transition strategy
4. Infrastructure
5. Vessel lifetime extensions
6. Low-carbon and zero emissions newbuildings

For more information about our transition finance framework and sustainable finance, see our website www.odfjell.com.

Decarbonization initiatives and possible effects

Since 2007, Odfjell has implemented and tested various technologies and initiatives to reduce emissions and improve efficiency. While significant progress has been made, additional initiatives remain under consideration. These measures are categorized in the graph below, with potential improvement effects estimated by DNV.

It is important to note that not all tested or evaluated activities have been or will be implemented. The decision to proceed with any initiative is contingent upon its demonstrated ability to impact emission reductions and operational efficiency positively, and in an economically sustainable manner.

The figure below illustrates various potential levers and actions for emission reductions, as identified by the DNV Maritime Forecast. Additional technologies and operational measures will be incorporated as they become available. The figure also highlights initiatives that Odfjell has already implemented or tested.

Operational Efficiency

In addition to fleet transition, we are working on improving the operational efficiency of our fleet in terms of optimal speed, weather routing, hull cleaning, port efficiency, and utilization. This is done by improving information and digitalization for better decision support.

Indirect and Value Chain emissions

Odfjell is dedicated to achieving net-zero emissions across all scopes, including scope 3, as part of our long-term sustainability ambitions and targets. To advance these goals, we are actively collaborating with suppliers to improve scope 3 reporting accuracy by transitioning from a spend-based to an activity-based reporting approach. More than 80% of our scope 3 emissions are attributed to fuel production. These emissions are closely linked to our scope 1 reduction efforts, as our net-zero targets address "well-to-wake" emissions, encompassing emissions during production, transportation, and consumption of fuel.

At present, we have not set a formal target for scope 3 emissions. Our focus remains on enhancing data quality by collecting detailed activity-based data to replace our initial spend-based estimates.

Additionally, Odfjell is committed to reducing scope 2 emissions by implementing energy-saving measures and increasing the use of renewable energy across our office locations, despite scope 2 emissions representing less than 1% of our overall footprint.

Beyond fuel-related emissions, we are working closely with our broader supplier base to enhance reporting transparency and reduce the environmental impact of the products we source. These initiatives are integral to our ongoing commitment to minimizing our environmental footprint and fostering sustainable practices throughout our value chain.

Furthermore, Odfjell is engaging with the owners of our time chartered vessels to enhance efficiency and reduce emissions. Although we do not have direct control over these ships, they are part of our operated fleet and contribute to our scope 1 emissions. This collaboration includes knowledge sharing, as well as the implementation of technical and operational measures to drive improvements.

Complementing these initiatives, Odfjell actively supports the development of the infrastructure and technologies necessary to achieve a net zero-emission shipping industry. By doing so, we contribute to the decarbonization of the maritime value chain and the broader transition towards net-zero and sustainable shipping.

Lifetime extension

An integral aspect of reducing total emissions, including those within the value chain, is evaluating the potential for extending the lifespan of existing vessels. Shipbuilding is a significant source of emissions that are categorized under scope 3. Extending the operational life of a vessel, however, necessitates additional maintenance and upgrades, which also contribute to scope 3 emissions.

To better understand these dynamics, Odfjell conducted a Life Cycle Assessment (LCA) for a specific ship class. The assessment sought to evaluate the requirements for lifetime extension, the feasibility of obtaining certification and approval for operation beyond the design life, and the total emissions throughout the ship's life cycle. The findings revealed that scope 1 emissions generated during the operational phase of a ship significantly exceed the scope 3 emissions associated with its construction. This indicates that, over an extended period, a life extension does not substantially impact the total emissions across a ship's life cycle. These considerations will be an integral part of the transition planning.

The implementation roadmap for the transition

Investments and Funding

Capital Expenditures

Odfjell is making significant investments in its transition plan, with a strong focus on fleet renewal and technological innovation. These investment plans are carefully aligned with the company's fleet transition strategy, ensuring that we have the capacity to execute the necessary actions related to new vessel acquisitions, time charter commitments, energy-saving devices, adoption of alternative fuels, and measures to enhance operational efficiency.

To support our sustainability ambitions, Odfjell has established two sustainable finance frameworks. The first is the Sustainability-Linked Financing (SLF) framework, which is designed for general purpose financing. Through this framework, Odfjell can issue bonds and secure loans linked to our sustainability targets. The SLF framework has garnered significant interest from both investors and financial institutions, leading to strong demand for bonds and loans issued under this structure.

In 2024, Odfjell introduced a Transition Finance Framework (TFF), a use-of-proceeds framework that enables the issuance of bonds and loans specifically linked to activities supporting our transition to net-zero. Both the SLF and TFF frameworks are externally verified by a third-party organization and are fully aligned with the principles and guidelines set forth by the International Capital Market Association (ICMA) and the Loan Market Association (LMA).

We recognize that the replacement of our large stainless steel ships (supersegregators) will need to form part of our owned and controlled fleet. These vessels, which feature multiple segregations and stainless steel tanks, will incorporate the latest in energy efficiency and fuel technology. However, the cost of these vessels remains difficult to estimate due to their advanced configurations.

As part of our fleet transition plan, we are considering the potential construction of 6-12 newbuildings to replace part of our ageing fleet of supersegregators. While these vessels are not yet committed or ordered, we anticipate commencing construction in 2027, contingent on shipyard capacity and market conditions. This initiative could potentially require investments in the range of USD 500-900 million over the next 3-8 years, although these estimates are subject to vessel configurations, shipyard availability, pricing and market considerations. Odfjell's overall investments may also be lower if some of these vessels are committed through long-term time charters.

As of 2024, Odfjell has committed to the acquisition of 18 new vessels, comprising 2 owned ships and 16 vessels on long-term time charter (TC), scheduled for delivery between the second quarter of 2024 and 2028. These modern stainless steel chemical tankers, secured under TC arrangements, frequently include purchase options and are designed to be retrofitted for operation with net-zero fuels. Of these vessels, one is under construction in China, and the remaining 17 are being built in Japan.

Odfjell has a long history of investing in energy-saving devices on our vessels, which have not only reduced fuel costs but have also delivered a net positive return, with payback periods ranging from 1 to 7 years.

While specific CapEx figures related to these investments have not been publicly disclosed, Odfjell is expected to align its CapEx with the EU Taxonomy criteria for sustainable activities. It should be noted that deep-sea chemical tankers are not eligible under the taxonomy until they achieve zero tailpipe emissions. In line with Odfjell’s sustainability targets, all newbuildings will be net-zero capable, and as such, will be aligned with the EU Taxonomy provided they operate on net-zero well-to-wake fuels, as defined by the Commission Delegated Regulation (EU) 2021/2178.

Operational Expenses

It is worth noting that OpEx in this transition plan are different from OpEx under the EU Taxonomy reporting, and from the OpEx in Odfjell’s financial statement. In the transition plan we include all operational expenses that are incurred as a result of performing our operations.

As it will take time for new fuels to become commercially available, it is crucial that Odfjell maintains flexibility by using both fossil and green fuels during the transition.

To align with FuelEU Maritime regulations and Odfjell's climate objectives, the company anticipates a shift towards biofuels, which are expected to be more expensive than conventional fuels. Significant uncertainties regarding future fuel prices and biofuel costs compound this transition.

Odfjell’s contracts include bunker adjustment clauses designed to help manage fuel expense fluctuations. Additionally, to address the financial impact of EU emissions trading, Odfjell has incorporated clauses in its contracts that ensure customers bear the increased costs of EU emission allowances, safeguarding the economic viability of compliance efforts.

It is important to note that industry bodies like BIMCO and other stakeholders are actively working on developing standardized contract clauses. These will clarify the allocation and sharing of increased compliance costs associated with international regulations, including the IMO Carbon Intensity Indicator (CII), EU FuelEU Maritime, and the IMO Global Fuel Intensity standard . Odfjell is committed to incorporating these evolving standards into our contractual agreements as they develop to ensure fair and transparent cost distribution.

In the interim, we expect the availability of e-fuels to be limited, with material adoption in the fleet likely some time away. Currently, e-fuel prices are multiple times those of very low sulfur fuel oil (VLSFO), presenting a significant financial consideration. Odfjell will continue monitoring fuel technology advancements and collaborating on sustainable, cost-effective solutions as they emerge in the market.

Locked-In GHG Emissions and Transition Risk

Odfjell is fully committed to achieving net-zero emissions and ensuring that our operations align with global climate goals. A critical part of this effort is the assessment of potential locked-in greenhouse gas emissions from our assets and products, particularly our fleet. Based on a thorough evaluation of our current operations, we conclude that Odfjell does not have any significant locked-in emissions that would jeopardize our GHG reduction targets.

Our fleet currently operates on fossil fuels, including VLSFO and Marine Gas Oil (MGO). While these fuels are associated with GHG emissions, it is essential to highlight that our existing vessels are technically capable of operating on sustainable, net-zero fuels such as biofuels or e-fuels without requiring considerable engine retrofits. This capability significantly mitigates the risk of locked-in emissions over the lifetime of the fleet.

Moreover, Odfjell has committed to only ordering new vessels that are net-zero capable, which further underscores our forward-looking approach to eliminating locked-in emissions. Therefore, the emission profile of our current and future fleet is fully aligned with our long-term sustainability targets.

The transition to a low-carbon future presents challenges for the entire maritime industry, including the cost and availability of sustainable fuels. However, Odfjell has developed a comprehensive fleet transition plan that balances cost efficiency with the need to meet regulatory requirements, including compliance with the IMO Global Fuel Standard and FuelEU Maritime regulations.

By integrating biofuels and other renewable energy sources into our operations, Odfjell has the flexibility to achieve net-zero emissions without the need for costly retrofits. This approach ensures that our fleet remains both competitive and environmentally responsible, minimizing transition risk.

Importantly, Odfjell’s reporting includes both owned and time chartered vessels. While an increase in the fleet size may lead to higher absolute emissions, this does not reflect an overall increase in emissions at the global level. In fact, Odfjell has demonstrated its ability to run ships more efficiently than others, meaning that by managing additional vessels, we can reduce carbon intensity across the board.

As vessels reach the end of their economic life—estimated at 25-32.5 years—they will be responsibly recycled. The recycling process will contribute to a net positive effect on GHG emissions, as recycled materials, such as steel, reduce the need for new resources, thereby lowering life-cycle emissions.

Odfjell’s strategy to manage its existing fleet, adopt sustainable fuels, and responsibly recycle vessels ensures that locked-in emissions are not a significant risk. Our climate targets remain within reach, and our ongoing fleet transition plan will continue to align Odfjell with global sustainability goals, minimizing both transition risk and environmental impact.

Alignment with EU Taxonomy Regulation

In an era where sustainable practices are increasingly vital for operational resilience and competitiveness, Odfjell remains focused on embedding sustainability into our operations in line with the EU Taxonomy Regulation and the Commission Delegated Regulation (EU) 2021/2139. As we implement our strategy, our economic activities—including CapEx, OpEx, and revenue-generating activities—will, over time, reflect a greater alignment with taxonomy criteria for climate mitigation and adaptation.

It is important to note that alignment with the EU Taxonomy is not the goal but rather a result of our efforts to deliver on our sustainability strategy. By prioritizing our strategy, we ensure that the progression toward taxonomy alignment is a natural outcome of focused and meaningful action. This approach allows us to support our long-term vision and the industry’s transition toward a low-carbon economy without viewing regulatory alignment as an endpoint.

Through this strategic focus, we position ourselves to advance sustainable practices that meet the evolving standards and reinforce our commitment to resilient and responsible maritime operations.

Odfjell operates in two primary sectors:

• Transport
• Storage/Terminals

Within the transport sector, we have identified two economic activities that fall under the scope of transitional activities, as defined in the Delegated Act for Climate Change Mitigation. These activities are deemed "taxonomy eligible" under the EU Taxonomy, as they are included in the current regulations:

• Sea and coastal freight water transport, vessels for port operations and auxiliary activities (6.10)
• Retrofitting of sea and coastal freight and passenger water transport (6.12)

While Odfjell’s activities in these areas are eligible under the taxonomy, they are not yet fully aligned with the criteria established for zero direct emissions. Our current fleet operations, which rely on fossil fuels such as VLSFO and MGO, do not meet the stringent requirements for zero direct emissions under the Delegated Regulation for 6.10, and Odfjell has not had activities that meet the criteria for 6.12 in 2024.

Odfjell has developed a comprehensive fleet transition plan that outlines our path to net-zero, and that will align with the EU Taxonomy, by focusing on the following key areas:

CapEx

• Investments in new vessels that are net-zero capable are central to our CapEx strategy. These vessels, which can operate with significantly reduced GHG emissions, are expected to meet the criteria for taxonomy alignment. This includes compliance with the relevant emissions thresholds established under the Delegated Regulation for activity 6.10. There are technical exemptions that are valid until December 2025, but Odfjell has not planned for any new economic activity that will meet these criteria in 2025.

• Additionally, retrofitting existing vessels to improve fuel efficiency and reduce emissions will contribute to alignment. Under activity 6.12, retrofitting projects that result in a reduction of fuel consumption by more than 10% meet the taxonomy criteria. For instance, the planned installation of e-sails across our fleet is projected to achieve fuel reductions exceeding this threshold, thus qualifying as a taxonomy-aligned investment.

OpEx

• Once the newly acquired vessels begin operations and achieve net-zero emissions, the ongoing OpEx associated with these vessels will also align with the taxonomy criteria.

• Similarly, the OpEx related to retrofitted vessels, provided they meet the 10% fuel efficiency improvement criteria, will be considered taxonomy-aligned.

Revenue

• As Odfjell’s fleet transitions to net-zero emissions, the revenues generated from these operations will be classified as taxonomy-aligned under activity 6.10. This shift is anticipated to occur as the new vessels enter service and retrofitted vessels begin operating at reduced emissions levels.

Our retrofit strategy is a critical component of aligning with the EU Taxonomy. The installation of technologies such as e-sails and other fuel efficiency measures are expected to deliver substantial reductions in GHG emissions and fuel consumption. These retrofitting measures not only reduce Odfjell’s carbon footprint but also contribute directly to meeting the criteria under activity 6.12.

In addition to retrofits, our newbuildings program will ensure that all future vessels are net-zero capable. This proactive approach to fleet renewal ensures that Odfjell will remain at the forefront of sustainability in the maritime industry, contributing to climate mitigation goals while remaining compliant with the evolving regulatory landscape.

Odfjell’s approach to taxonomy alignment is centered on the transition to a net-zero emissions fleet and ongoing investments in retrofitting technologies. While our current operations are eligible but not yet fully aligned with the EU Taxonomy, the plans in place will support possible taxonomy alignment later.

Policy for offsetting

Odfjell is committed to prioritizing direct emissions reductions across our operations as the most effective path toward achieving sustainability and aligning with climate objectives. Our primary focus remains on the decarbonization of our fleet and shore-based activities through innovation, advanced technologies, and optimized operational efficiencies. We believe that tangible emissions reductions at the source should take precedence over external compensatory measures.

While we prioritize reducing emissions directly, we acknowledge that residual emissions may remain due to technological or operational limitations. In these instances, we consider the use of offsetting mechanisms to address such residual emissions. However, in compliance with the European Financial Reporting Advisory Group (EFRAG) guidance, we must clarify that any purchased or planned carbon credits will not be counted toward Odfjell's gross GHG emissions reduction targets. Instead, we transparently will report these credits as separate mitigation efforts.

Our approach to offsetting will ensure alignment with ESRS E1-7, which requires transparency on the financing and intentions behind any carbon credits used. For projects outside our value chain that generate GHG removals, we will disclose the scope, nature, and extent of any financed carbon credits in our sustainability reporting, including those supporting climate mitigation projects that achieve verified GHG removals.

In line with the ESRS definitions, we distinguish between credits for GHG removals (suitable for achieving net-zero objectives) and carbon credits related to emissions avoidance or reduction, which can only serve as compensatory measures, not for achieving net-zero emissions. Any claims or public statements Odfjell makes regarding GHG neutrality will detail how residual emissions are intended to be neutralized by GHG removals and how these actions complement, rather than replace, direct emissions reduction efforts. The integrity and credibility of the carbon credits we choose will meet the highest standards, ensuring that they do not impede or detract from Odfjell’s commitment to achieving gross GHG reduction targets.

Odfjell remains dedicated to transparency and accountability in all offsetting activities. Our disclosures will align with the ESRS, fully informing stakeholders—including investors, regulators, and the public—of the scope, purpose, and impact of our offsetting initiatives.

Customers and value chain

At Odfjell, we recognize that achieving our net-zero ambition requires collaboration across the entire value chain. As part of our energy transition strategy, we work closely with our customers to ensure a smooth, efficient, and sustainable transformation. The journey towards net-zero emissions is a shared responsibility that requires a collective effort across industries. Odfjell believes that the costs and risks associated with the energy transition should not be borne by one party alone. Instead, these should be distributed across the value chain, from our operations, to our customers, and ultimately, to the end consumers.

We aim to work closely with our customers to share the financial and operational risks of this transition. This includes:

• Collaborating on innovative solutions to reduce emissions and improve energy efficiency.
• Cargo consolidation and port efficiency
• Co-financing initiatives that promote decarbonization, such as the adoption of low-carbon fuels and technologies.
• Joint ventures or partnerships that spread the risk of new investments.

By working together, we can accelerate the transition while ensuring the financial burden is equitably shared.

The costs of the energy transition are an inevitable part of achieving a net-zero future. These costs, including investments in new technologies, compliance with emissions trading systems (ETS), operational changes, and increased price on energy/fuel, must be passed through the value chain. We believe that:

• Customers should understand that the shift to more sustainable practices will be reflected in transportation costs due to higher fuel price, emission tax, and cost of upgrades to ensure compliance.

• End consumers will also play a role in bearing these costs, as the need for sustainable solutions becomes the market norm.

This transparent approach ensures that the true cost of sustainability is accounted for across the entire supply chain.

While the energy transition comes with challenges, it also offers significant opportunities. Odfjell views this as an opportunity to create value for our customers through:

• Reduced ETS costs: An efficient transition will lower our customers’ exposure to ETS-related expenses as emissions are reduced, and compliance becomes easier.

• Scope 3 Emissions Reduction: By partnering with Odfjell, customers will see a reduction in their scope 3 emissions, contributing positively to their sustainability goals and reporting obligations.

The transition to net-zero emissions is not just a compliance necessity; it also represents an opportunity for Odfjell and our customers to improve operational efficiency, reduce long-term costs, and enhance our collective sustainability performance.

Disclosure of CapEx Related to Fossil Fuels

Odfjell is dependent on fossil fuel for the fleet, but does not have any investments in coal, oil and gas-related economic activities per relevant NACE codes.

Exclusions

Odfjell’s activities are not excluded from the EU Paris-aligned benchmarks, consistent with the requirements in Commission Delegated Regulation (EU) 2020/1818 (Climate Benchmark Regulation), Articles 12.1 (d) to (g) and 12.2.2

Transition Governance

Alignment of the transition plan

At Odfjell, sustainability and energy transition are deeply rooted in our core business strategy and financial planning. Odfjell has set six long-term goals and medium-term targets. Goals and targets are aligned with the transition plan.

Every year, Odfjell's board of directors and management conduct a comprehensive climate and nature risk assessment following the guidelines set by the Task Force on Climate-related Financial Disclosures (TCFD) and the Task Force on Nature-related Financial Disclosures (TNFD). This annual review identifies both risks and opportunities related to climate change and environmental challenges, offering critical inputs into our strategic planning. The climate transition risk assessment is a central driver of our broader climate change mitigation and fleet transition strategy, ensuring that we proactively address regulatory and operational challenges associated with decarbonization.

Our financial planning is linked to the fleet transition plan, enabling Odfjell to allocate the necessary resources to execute our sustainability and fleet renewal ambitions. By aligning capital investments with the long-term needs of our fleet transition, we ensure that the company has the financial strength to adopt greener technologies and new fuels without compromising operational stability.

Additionally, Odfjell carries out a board-aligned double materiality assessment. This assessment helps us identify the financial and environmental impacts of our operations, ensuring that our sustainability actions are financially sound and aligned with broader societal goals. The results of the DMA are used to regularly update our sustainability targets and action plans, ensuring that our strategies remain dynamic and relevant to the evolving external environment. The transition plan will be subject to annual review by management and the board of directors.

Sustainability is a fundamental part of our overall business strategy and a critical goal for Odfjell. This is reflected in how we align actions to drive the energy transition and decarbonization efforts with our long-term incentive plan for management and short-term incentive plan for all shore-based employees. By embedding sustainability into our performance-based incentives, we ensure that our entire organization drives the transition progress towards net-zero.

Approval of the transition plan

The transition plan has been approved by Odfjell’s management and board of directors, ensuring that it is a central component of the company’s strategic direction. The governance structure supports the implementation of the plan, with oversight from the chief sustainability officer and regular reporting to the board of directors.

Progress

Odfjell has made significant progress in implementing its transition strategy. As of 2024, the company has achieved a 53% reduction in carbon intensity compared to the 2008 baseline. Odfjell report progress on carbon intensity and significant energy efficiency projects in quarterly reporting. We report the GHG emission reduction progress annually, measured against EU benchmarks.

In 2024, Odfjell set new ambitious climate targets to continue the transition towards net-zero and ensure compliance with existing and upcoming regulations to achieve the goals of the Paris Agreement. Continuous investment in fleet renewal, energy efficiency, and new technologies are essential parts of the transition.

MATERIAL CLIMATE CHANGE-RELATED IMPACTS, RISKS, AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL (ESRS 2 SBM-3-E1)

The double materiality assessment outlined in ESRS IRO-1 (see link, IRO-1) identified the following material impacts, risks and opportunities: climate change mitigation, climate change adaptation and energy consumption, as described in the table below.

At Odfjell SE, our strategic ambition regarding climate change is rooted in a profound commitment to sustainability and long-term value creation. Recognizing the critical importance of mitigating climate risks, we have integrated comprehensive climate strategies into our core business operations. Our approach is guided by the principles of transparency, accountability, and continuous improvement, ensuring that we not only meet, but exceed regulatory requirements and stakeholder expectations. We aim to achieve climate neutrality by 2050, aligning our efforts with the goals of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels. Odfjell’s climate targets do  not claim to be compatible with the 1.5-degree pathways, as there are multiple challenges to being able to assert this. Our targets are set to achieve net-zero GHG emissions by 2050.

Our actual negative impact on climate change occurs in our own operations and across our whole value chain in the short, medium and long term. Our biggest environmental impact is our emission of GHG from our operated fleet. The main source of GHG emissions is carbon dioxide (CO2) from the combustion engines on our vessels (Scope 1). The most significant factors for emitted CO2 are:

• Fleet size (number of operated ships)
• Efficiency of the ships (technology, fuel efficiency)
• Operation of the ships (speed, routing, port time)

These factors will vary from year-to-year. The most important factor for absolute emissions is the size of the fleet. The Odfjell fleet consists of the controlled fleet (owned, financial lease, bareboat) and the operated fleet (controlled fleet, time chartered vessels and pool vessels), see link; ESRS 2 IRO-1-E1.

Odfjell mitigates its material climate change impacts by focusing on reducing scope 1 emissions from our operations, improving energy efficiency in our offices, and engaging with upstream value chain partners to address and minimize scope 3 emissions.

This actual reduction of a negative impact occurs in our own operations over the short, medium and long term by reducing GHG emissions through optimized route planning and improved energy efficiency through retrofits. See our fleet transition plan E1-1 for further descriptions, see link; E1-1.

Our analysis has identified an inherent risk that ships may not be able to meet emissions and energy-efficiency requirements. For more details, see link; E1-1. However, the same analysis indicates that, due to Odfjell’s initiatives to reduce emissions across our existing fleet and the estimated lifespan of our vessels, we do not consider the risk of stranded assets to be significant. Reference, see link; ESRS 2 IRO-1-E1 and notes on financial risk in Financial Statement. Despite these risks, Odfjell’s commitment to sustainability position Odfjell as a preferred provider, offering lower costs for customers when CO2 is taxed and scope 3 emissions are reported.

In our climate risk assessment, we have identified relevant climate physical and transitional risks, using the TCFD framework. We have presented an analysis of the most significant risks with a potential financial impact related to climate risk. For results, see link; ESRS 2 IRO-1-E1.

Resilience of our strategy and business model related to climate change related impacts.

Odfjell has assessed the resilience of its strategy and business model through comprehensive climate and nature risk assessments, as well as a double materiality assessment. These analyses incorporate climate scenario assessments to evaluate potential future risks and opportunities associated with climate change. Our approach ensures a holistic understanding of how climate-related factors may impact our operations, financial stability, and long-term strategic positioning.

The resilience analysis has been conducted as part of our ongoing risk management and strategic planning efforts. We have systematically assessed transition risks, direct physical risks, and financial implications using climate scenario analysis aligned with the requirements set out in ESRS 2 IRO-1. These assessments consider multiple time horizons to evaluate both short- and long-term risks to our fleet, business operations, and financial performance.

Our risk assessments include evaluating the financial impact of transition risks, such as regulatory changes, carbon pricing mechanisms, and evolving market expectations. The analysis also considers direct risks posed by physical climate hazards, including extreme weather events and long-term shifts in environmental conditions. The findings from these assessments are integrated into our broader corporate strategy and sustainability roadmap.

The results of our resilience analysis indicate that Odfjell’s business model is currently robust when considering the  impacts of climate change and transition risks as they are presently understood. Our strategic initiatives to reduce emissions across our existing fleet, coupled with the estimated lifetime of our vessels, ensure that we do not face a risk of stranded assets. Additionally, our approach to fleet renewal and energy-efficiency improvements mitigates the risk of locked-in emissions, supporting our long-term decarbonization strategy.

We have developed a clear pathway to align with industry standards and achieve net-zero emissions. This includes investments in energy-efficient technologies, operational efficiencies, and ongoing engagement with regulatory and industry bodies to remain ahead of evolving requirements. While our current analysis supports the resilience of our business model, we acknowledge that the regulatory landscape is continuously evolving. New regulations could pose additional challenges, particularly if they impose restrictions that limit our ability to trade ships. As part of our commitment to proactive risk management, we will continue to monitor and adapt our strategy to ensure ongoing compliance and alignment with global climate objectives.

Additionally, we actively engage with stakeholders to incorporate their insights into our risk management and strategic planning processes, ensuring our business model remains adaptable and forward-looking. Please also see link; ESRS 2 SBM-3 Resilience of Strategy and Business Model.

The financial effects of our material risks and opportunities on our financial position, financial performance and cash flows were evaluated in the financial materiality assessment in the DMA process and follow our corporate risk level definitions for consequences. Please also see link, ESRS 2 SBM-3 Financial Effects of Material Risks and Opportunities and ESRS 2 IRO-1 Methodologies and Assumptions Applied.

POLICIES RELATED TO CLIMATE CHANGE MITIGATION AND ADAPTATION (E1-2)

Odfjell’s environmental policy is part of a comprehensive framework designed to manage material IROs related to climate change mitigation and adaptation. The policy’s general objectives include reducing greenhouse gas emissions, enhancing energy efficiency, and supporting the transition to renewable energy sources. It addresses key material issues such as operational emissions, regulatory compliance, and technological advancements. The environmental policy sets Odfjell’s climate targets. The process for monitoring involves regular assessments and reporting to ensure continuous improvement and adherence to environmental standards.

The scope of Odfjell’s environmental policy encompasses all company activities, including upstream and downstream value chains, across all geographies where the company operates. It includes stakeholders such as employees, customers, suppliers, and regulatory bodies. The policy excludes no significant activities or geographies, ensuring a holistic approach to environmental management. As part of our governance structure, the board of directors and executive management hold ultimate responsibility for overseeing the company’s environmental strategy and ensuring adherence to this policy. The chief sustainability officer (CSO), operational and ship management teams are tasked with implementing environmental initiatives and regularly updating the board on progress.

Odfjell’s Environmental Policy aligns with third-party standards and initiatives, such as the International Maritime Organization (IMO) regulations and the Paris Agreement ambitions. In setting the policy, Odfjell considers the interests of key stakeholders, including customers and regulatory authorities, to ensure it meets their expectations and requirements. The policy is made available to all potentially affected stakeholders through the company’s website and internal communication channels, ensuring transparency and accessibility.

The policy addresses climate change mitigation by investing in low and zero-carbon capable ships, net-zero fuels, and optimizing route planning to reduce emissions. For climate change adaptation, Odfjell supports the development of zero-emission technologies and infrastructure to enhance resilience. Energy efficiency is a core focus, with continuous improvements in operational practices and technological upgrades. Additionally, the policy promotes the deployment of renewable energy sources to further reduce the company’s environmental footprint.

ACTIONS AND RESOURCES IN RELATION TO CLIMATE CHANGE POLICIES (E1-3)

Odfjell has identified several key decarbonization levers to achieve its emission reduction targets like a fleet transition plan, transition activities, decarbonization initiatives, operational efficiency measures, indirect and value chain emission reductions, and ship life-time extension. For details, please see link; Decarbonization Levers and Key Actions in ESRS E1-1.

At Odfjell, we recognize that achieving our net-zero ambitions requires collaboration across the entire value chain. Odfjell believes that the costs and risks associated with the energy transition should not be borne solely by one party. Instead, these should be distributed across the value chain, from our operations to our customers and ultimately, to the end consumers. For more details see link; Customers and value chain in ESRS E1-1.

Odfjell is making investments to support the achievement of the climate targets as described in the transition plan, with a focus on fleet renewal and technological innovation. Please see link; Investments and Funding in ESRS E1-1, for more details.

TARGETS RELATED TO CLIMATE CHANGE MITIGATION AND ADAPTATION (E1-4)

Odfjell has set climate targets to manage climate change mitigation and adaptation (material IRO’s). Please see link; ESRS E1-1 Climate Targets. We describe our emission reduction targets in detail in ESRS E1-1 Transition Plan, see link; About the targets and Carbon intensity.

Odfjell has made significant progress in implementing its transition strategy. Regarding the progress of the targets please see ESRS E1-1 Transition Plan, see link; Progress. Regarding definition of Annual Efficiency Rate (AER) please see ESRS E1-1 Transition Plan, chapter About the Targets, see link; About the targets.

ENERGY CONSUMPTION AND MIX (E1-5)

Transportation is a high climate impact sector according to NACE Sections A to H and Section L (as defined in Commission Delegated Regulation (EU) 2022/1288). The energy values are calculated per quantity of fuel type with the energy consumption calculator tool by the Sustainable Energy Authority of Ireland (SEAI) since 2011. All conversion factors in this tool are based on net calorific values. Please find energy consumption and mix in the following table.

Note: all numbers, excluding Terminals JV, not comparable with earlier reported numbers in previous annual reports

Note: all numbers, excluding Terminals JV, not comparable with earlier reported numbers in previous annual reports. Net revenue from activities in high climate impact sectors (Tankers) and total net revenue from annual report 2024, Note 4 Segment information and disaggregation of revenues

GROSS SCOPES 1, 2, 3 AND TOTAL GHG EMISSIONS (E1-6)

About scope 1 emissions

The direct emissions from our vessels (scope 1) are the biggest source of emissions for Odfjell. This is the factor that has biggest impact on the environment. The absolute emissions do not tell the full story, as it is so dependent on fleet size. That is why Odfjell also reports on the carbon intensity for the controlled fleet. The scope 1 GHG emissions in this reporting (see table below) contain CO2, CH4 and N2O emissions of our vessels. These emissions are calculated based on fuel consumption per fuel type with the applicable emission factors according to EU regulation 2023/1805. For fleet categorization, please see link; Emission reporting and fleet categorization in BP-2.

About scope 2 emissions

Scope 2 covers the indirect emissions created by the production of energy we buy (i.e power for offices). We calculate location- and market-based scope 2 emissions. The national electricity generation emission factors and/or the national electricity residual mix factors for Norway, The Philippines, Singapore and Brazil by Carbon Footprint Ltd. were used. Since 2023, the Bergen office in Norway has a 100% renewable energy certificate of origin, which accounts for 11.6% of the total location-based scope 2 emissions. No other contractual instruments were used. Other scope 2 emissions, other than the consumption of electricity, came from the consumption of biofuel and kerosene (until 2021) in the Bergen office. The emissions factor for biofuel by the Norwegian Environmental Department (Miljødirektoratet) and the emissions factor for kerosene from the SEAI  were used. Scope 2 emissions account only for about 0.01% of Odfjell’s total emissions and are therefore regarded as not material.

About scope 3 emissions

Scope 3 covers our upstream and downstream value chain emissions. Scope 3 is divided into 15 different categories, where nine are relevant for Odfjell.

Purchased goods and services (category 1) and fuel and energy-related activities (category 3) of scope 3 emissions were included from 2022. The values for the 2021 baseline year were extrapolated for this report from the years 2022-2023. Odfjell has been supported by ReFlow ApS, a carbon footprint consultation and software solution company (https://re-flow.io/). For more details, please see link; Value Chain Estimation – emissions in scope-3.

The spend-based method was used by ReFlow for category 1 calculations. In 2024, a new category, covering port costs (including towage), IT purchases and all provisions on board was introduced and included using the spend-based method.

The main reason for the difference in category 3 emissions between 2023 and 2024 is the methodological shift in calculations. In previous years, emissions were calculated by ReFlow using a spend-based approach, while for 2024, the emissions were calculated based on IPCC 2021 GWP100 factors and fuel-specific well-to-tank (WTT) emission factors derived from Ecoinvent 3.9.1. This change in methodology leads to a more accurate evaluation of supply chain emissions, focusing on extraction, refining, and transportation, while excluding direct combustion emissions (tank-to-wake, or TTW).

Capital goods (category 2) and upstream transportation and distribution not included in scope 1 or scope 2 (category 4) were calculated on spend-based basis with the GHG Quantis scope 3 emission evaluator up until 2022. The evaluator was decommissioned in 2023. The same percentage from total location-based GHG emissions from 2022 were extrapolated for 2021-2024 (0.3% for category 2 and 0.1% for category 4).

Waste generated in operations (category 5) includes waste from the main offices in Bergen, Manila, Singapore and Sao Paulo. Waste emissions calculation is based on the average-data method using primary data. The emission factor for municipal waste from the Norwegian Emission Inventory 2016 by Statistics Norway was used. Waste amount from ships was not measured for 2023. The first measurements from ships will be available in 2024.

Business travel (category 6) includes travel by plane and car by the crew on Odfjell managed ships and the employees of the offices in Bergen, Manila, Singapore and Sao Paulo. It is calculated on the distance-based method using primary data

Employee commuting (category 7) is calculated on the distance-based method, based on average kilometer commute by car or public transport per employee for the offices in Bergen, Manila, Singapore and Sao Paulo.

Investments (category 15) includes scope-1, scope-2 and scope-3 emissions from JV terminals in USA and South Korea. In the scope-3 emissions from JV terminals category 5 waste, category 6 business travel and category 7 employee commuting are included. The 2024 date is estimated from the reported data in 2023 and account only for 3.9% of all scope-3 emissions.

The following scope 3 categories are not relevant to Odfjell:

• Upstream leased assets (category 8) – Odfjell has no leased assets
• Downstream transportation and distribution (category 9) – Odfjell does not have downstream transportation or distribution processes of sold products (including retail and storage)
• Processing of sold products (category 10) - Odfjell does not sell products or have processing of sold intermediate products by third parties
• Use of sold products (category 11) – Odfjell provides only transport and storage services for products owned by others. We report our scope 1 emissions for these services to our customers, but we do not sell or have any responsibility for the products that are stored or transported.
• Downstream leased assets (category 13) - Odfjell has no leased assets
• Franchises (category 14) - Odfjell does not have any franchises.

Scope 3 emissions account for 36.3% of Odfjell’s total location-based GHG emissions. 1.2% of scope 3 emissions were calculated using primary data for category 5 and 6.

GHG emissions

In 2024, the total GHG emissions reduction was 27.9%, compared to the 2021 emissions base year. The reduction in scope 1 emissions for 2024 was 21.9%, compared to the 2021 emissions base year. The reduction in scope 3 emissions for 2024 was 36.4%, compared with the 2021 emissions base year.

Note: Net revenue from activities in high climate impact sectors (Tankers) and total net revenue from annual report 2024, , Note 4 Segment information and disaggregation of revenues

GHG REMOVALS AND GHG MITIGATION PROJECTS FINANCED THROUGH CARBON CREDITS (E1-7)

Odfjell does not have any GHG removals or GHG mitigation projects financed through carbon credits.

INTERNAL CARBON PRICING (E1-8)

Odfjell does not apply internal carbon pricing schemes in its business.

ANTICIPATED FINANCIAL EFFECTS FROM MATERIAL PHYSICAL AND TRANSITION RISKS AND POTENTIAL CLIMATE-RELATED OPPORTUNITIES (E1-9)

Odfjell has opted to exercise the phase-in allowance to omit the financial effects from material physical and transition risks and potential climate-related opportunities required in E1-9 standards. The transition plan and climate risk assessment present a thorough insight into the risks and opportunities and financial effects.

Pollution (E2)

MATERIAL POLLUTION-RELATED IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL (ESRS 2 SBM-3-E2)

Our double materiality assessment (DMA), described in IRO-1, determined the following pollution-related material impacts in the table below. For more details, please see the Description of the Processes to Identify and Assess Material Pollution-Related Impacts, Risks and Opportunities, see link ESRS 2 IRO-1-E2.

POLICIES RELATED TO POLLUTION (E2-1)

Pollution of air and water

Pollution-related objectives of Odfjell’s environmental policy (see also link; E1-2) focus on eliminating accidental pollution, minimizing emissions, and phasing out harmful substances. Specific measures include compliance with IMO regulations (e.g., on SOx, NOx, and particulate matter), implementation of advanced waste and ballast water management systems, and ongoing monitoring of pollutant emissions using best practices and technologies. Pollutants, or substances included in our environmental policy, are GHG, SOx, NOx and particulate matter, as well as harmful and hazardous substances and substances of very high concern. The policy is explicit about minimizing the use of hazardous substances and phasing out those of very high concern (SVHC), particularly in shipbuilding and maintenance processes. Odfjell adopts a "zero accidents" philosophy, prioritizing the prevention of environmental incidents and minimizing risks.

The policy targets material aspects such as emissions (air pollutants, greenhouse gases), marine pollution (wastewater, ballast water), and hazardous substances. Its efficacy is monitored through regular reporting aligned with frameworks like the Carbon Disclosure Project (CDP) and the Task Force on Climate-Related Financial Disclosures (TCFD), with progress reviewed annually in sustainability reports featuring metrics like the IMO's Carbon Intensity Indicator (CII).

The policy encompasses Odfjell’s entire operational value chain, including its fleet and supporting logistics. Affected stakeholders include employees, suppliers, local communities, and global maritime regulators, all of whom are integral to implementing and monitoring the policy.

At the most senior level, the chief sustainability officer (CSO) is responsible for implementing the policy, supported by the ship management teams and operational teams. Ultimate oversight lies with the board of directors and executive management, ensuring alignment with the company's strategy.

The policy aligns with global standards and initiatives, such as the International Maritime Organization (IMO) GHG Strategy, MARPOL regulations, the Paris Agreement, and the United Nations Global Compact. It also adheres to the European Union’s Corporate Sustainability Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS) and national regulations.

In formulating the policy, key stakeholders such as regulators, customers, employees, and local communities are considered. For instance, the collaboration with suppliers to reduce scope 3 emissions highlights Odfjell's commitment to engaging with its value chain. Additionally, the company works with tonnage providers and industry partners to ensure collective progress toward environmental goals.

The policy is available to stakeholders through Odfjell’s webpage, transparent reporting and disclosures, including annual sustainability reporting. It is also integrated into training programs to educate employees and other implementers, ensuring widespread understanding and adherence.

ACTIONS AND RESOURCES RELATED TO POLLUTION (E2-2)

Odfjell’s strong commitment to pollution prevention and control is demonstrated through a comprehensive suite of actions and dedicated resources. These measures address pollution in air, water, and waste streams, ensuring compliance with international regulations and promoting sustainable operations. The following actions related to pollution are implemented in our own operations.

Advanced Waste and Ballast Water Management

To prevent marine pollution, Odfjell's fleet is equipped with advanced waste and ballast water treatment systems (BWTS), aligning with the IMO Ballast Water Management (BWM) Convention. As of the end of 2024, all 42 controlled vessels within the requirements have installed BWTS. Effluent, wastewater, and oily water management systems on all vessels meet class-approved standards and are subject to regular inspections by authorities to ensure effective operation. Odfjell enforces MARPOL Annex V regulations through ship-specific Garbage Management Plans (GMPs), which cover waste segregation, disposal, and record-keeping. Garbage is categorized into plastics, food waste, incinerator ashes, and electronic waste, among others, with compactors implemented fleet-wide to optimize waste handling and recycling. Operational waste, including mooring lines, is delivered to reception facilities to ensure responsible disposal.

Air Emission Compliance and Monitoring

Odfjell adheres strictly to IMO regulations and EU directives, such as the FuelEU Maritime Regulation, to manage air emissions, including SOx, NOx, and black carbon. Odfjell’s policy avoids retrofitting the fleet with scrubbers, focusing instead on low sulphur fuel usage to meet sulfur regulations.

Hazardous Substances and Material Assessment

The company prioritizes substituting non-essential hazardous substances with safer alternatives. Regular assessments of shipbuilding and maintenance materials ensure alignment with best environmental practices, minimizing the environmental footprint of operations.

Emergency Preparedness and Incident Management

All vessels operate under a Shipboard Marine Pollution Emergency Plan (SMPEP), supported by regular training and readiness drills to manage potential environmental incidents effectively. Collaboration with port authorities, local communities, and emergency services facilitates the development of rapid response plans to control and minimize the impact of pollution incidents.

Certification and Environmental Management Systems

Odfjell has an environmental management system. This system is audited several times a year as part of the Tanker Management Self-Assessment (TMSA), and this is reported to the Oil Companies International Marine Forum (OCIMF). Among others, our vessels hold the following certifications, covering compliance with international environmental rules and policies: the International Safety Management (ISM) certification, IOPP (International Oil Pollution Prevention), ISPP (International Sewage Pollution Prevention), International Ballast Water Management Certificate and IAPP (International Air Pollution Prevention) certificates. These certifications ensure compliance with the IMO MARPOL convention and international environmental standards.

Actions for the future

Odfjell will enhance the monitoring of suppliers through the Achilles platform to improve insight into suppliers' use of materials and actions to mitigate pollution in the value chain. We anticipate this will be refined in the coming years. We aim to improve how we monitor and report NOx emissions, obtaining more activity-based data, and expect to report on this in 2026 for the year 2025.

TARGETS RELATED TO POLLUTION (E2-3)

Odfjell maintains a zero-accident philosophy to avoid and minimize the impact of our activity on the environment. The target is zero spills for the environment. For our fleet, all spills of any substance, harmful or not, are registered and handled as a spill. We also register whether the spill has been contained on board or affected the environment beyond (pollution).

We have set a voluntary target for 2024, for Odfjell managed vessels, to limit pollution to below two (total number of cases) and a long-term target of one pollution. Odfjell managed vessels involve our own operations in Fleet Bergen and Fleet Flumar, as well as upstream value chain operations in the external fleet Thome. The base period for which progress is measured is per year. The targets related to pollution are not based on scientific evidence and we have not involved stakeholders in the target setting.

Odfjell has not set a target for SOx, NOx, and black carbon emissions to the air, as we must adhere strictly to IMO regulations and EU directives, such as the FuelEU Maritime Regulation regarding mandatory carbon emission thresholds, and the IMO for sulfur content. Emission to air is closely connected to the volume of fuel consumed and must follow the IMO MARPOL regulations. As such, no further targets have been set. Since pollution to soil is not material, according to our DMA, no targets were set regarding this topic.

POLLUTION OF AIR AND WATER - METRICS (E2-4)

According to annex I of the E-PRTR regulation (EC) No 166/2006, shipping is not an included activity. Odfjell follows MARPOL Annex I and II regarding emission into water and MARPOL Annex VI regarding emission into air.

We are not able to monitor SO2, NO2 and black carbon emissions directly, but we can calculate a weighted average based on all bunker delivery notes for purchase. Fuel consumption is measured, internally verified, and then verified by DNV for external reporting according to EU MRV and IMO DCS regulations.

SO2 is sulfur dioxide and refers to SO, SO2 and SO3, which are created when sulfur is burned in the fuel combustion process. SO2 is the predominant gas, and we therefore assume that SO and SO3 equals zero. In terms of calculation, there are two oxygen atoms per supermolecule. This is because oxygen is exactly half the weight of the sulfur atom. For the calculation of sulfur oxides (SO2) we used the emission conversion factor of 1.997, regardless of fuel type. SO2 = [ton fuel]*[Ton Sulfur/Ton Fuel]*[S02/Ton Sulfur].

In 2024, for the calculation of nitrogen oxides (NO2) we followed the 2023 guidelines set out in NOx-fondet, as specified in Forskrift om særavgifter § 3-19-9. (1) and (2), and the Norwegian Maritime Authority, based on engine type and motor rotational speed.

Black carbon emission factors vary widely, but studies suggest black carbon emissions from shipping range between 0.2 to 0.5 grams per kilogram of fuel burned, depending on engine type, fuel quality, engine load/speed and operating conditions. For the calculation of black carbon we used the maximal value of the average estimated emissions factors in volume per ton of fuel burned (HFO, VLSFO and MGO) according to the International Council on Clean Transportation (ICCT) study from 2015*.

The calculated pollutant emission values are not validated by an external body or assurance provider. Please see table below.

Ref.: *Black Carbon Emissions and Fuel Use in Global Shipping 2015 (icct), https://theicct.org/wp-content/uploads/2021/06/Global-Marine-BC-Inventory-2015_ICCT-Report_15122017_vF.pdf

Note. Odfjell managed vessels as part of the Odfjell controlled fleet, see link; ESRS 2 SBM-3-E1 include vessels in Fleet Bergen, Fleet Flumar and Fleet Thome (external managed vessels in our fleet).

For our fleet, all spills of any substance, harmful or not, are registered and handled as a spill. We also register whether the spill has been contained on board or affected the environment beyond. According to ISGOTT and MARPOL 73/78, spills are contained on board whereas pollution is when a liquid escapes into the sea or land, regardless of the quantity, or when accidental emissions escape into the air. In 2024, we had one case of pollution of a terminal area from one of our managed ships. During the connection of a cargo hose to shore, the manifold valve was incorrectly operated which resulted in a cargo spill on deck of about 30-50 liters, some of it reaching the terminal side. The cargo was an Annex II category Y (MARPOL 73/78) noxious liquid substance with moderate risk of hazard to the environment and human resources. The affected area was cleaned immediately, an incident investigation was conducted, and a Lesson Learned issued.

Our shipping operations follow the main routes between major ports around the world. We follow international and local regulations and guidance to avoid protected areas. We do not currently track time and operations in areas of protected conservation status in accordance with the UN Environment Programme World Conservation Monitoring Centre (UNEP WCMC). Emission control areas (ECAs), or sulfur emission control areas (SECAs), are sea areas in which stricter controls are established to minimize airborne emissions from ships, as defined by the MARPOL Protocol. Odfjell follows this regulation and changes fuel in the applicable ECA areas.

Odfjell is committed to phasing out the use of harmful and hazardous substances. Odfjell does not produce, distribute, commercialize or import/export any substances of concern or substances of very high concern, in our own operations.

SUBSTANCES OF CONCERN AND VERY HIGH CONCERN (E2-5)

Odfjell does not produce, distribute, commercialize or import/export any substances of concern or substances of very high concern, in our own operations.

All our managed vessels are provided with firefighting foam, containing PFAS, which is a substance of concern. This firefighting foam is only used in an emergency and in line with current regulations. In September 2024, the EU Commission adopted new measures under the REACH Regulation (the EU chemicals legislation) to protect human health and the environment by restricting the use of undecafluorohexanoic acid (PFHxA) and PFHxA‑related substances. We plan to update the firefighting foam on board our vessels to PFAS-free firefighting foam.

ANTICIPATED FINANCIAL EFFECTS FROM POLLUTION-RELATED IROS (E2-6)

Odfjell has opted to exercise the phase-in allowance to omit the financial effects from material pollution risks and potential pollution-related opportunities required in E2-6.

The operating and capital expenditures incurred in the reporting period, in conjunction with major incidents and deposits, are zero. In the one case of pollution in the terminal area, this can be considered negligible as the affected area on board and at the terminal was promptly cleaned by the personnel on sight, requiring no additional resources.

Social Information

Own Workforce (S1)

At Odfjell, our workforce is the cornerstone of our ability to safely and efficiently transport and store chemicals and liquids across the globe. Every team member contributes to our culture of innovation, operational excellence, and long-term sustainability, from our dedicated seafarers to our highly skilled shore-based employees.

As part of our commitment to responsible business practices, we continuously invest in attracting, developing, and retaining a diverse and highly competent workforce. We foster a safe, inclusive, and engaging work environment that supports employee well-being, professional growth, and ethical business conduct. Through robust training programs, leadership development initiatives, and a strong focus on health and safety, we empower our people to thrive in an evolving maritime industry.

By prioritizing our workforce, we strengthen our ability to adapt to the changing demands of global trade while upholding our commitment to sustainable and responsible operations. Our people are at the heart of Odfjell’s success, and their expertise and dedication drive our mission to deliver world-class services to our customers.

MATERIAL OWN WORKFORCE-RELATED IMPACTS, RISKS AND OPPORTUNITIES AND THEIR INTERACTION WITH STRATEGY AND BUSINESS MODEL (ESRS 2 – SBM-3-S1)

Through our double materiality assessment, we have identified the following key material impacts.

Odfjell’s workforce is divided into two main categories:

Shore-Based Workforce: This group includes employees in Odfjell Tankers, Ship Management, and Flumar, as well as Odfjell corporate and Terminals corporate staff.  It also covers personnel provided by third-party undertakings (non-employees).

Seafarers: This group comprises all employees within Odfjell’s seafarer pool: Filipino (PHP), North West (NWE), and Flumar seafarers. NWE seafarers are permanent employees, while PHP and Flumar are employed on contractual terms for the duration of their sailing assignments. Additionally, this group includes personnel provided by third-party undertakings (non-employees). 

This disclosure includes all individuals within Odfjell’s workforce, including both shore-based personnel and seafarers, who are materially impacted by our operations. While some topics are relevant to both categories, the disclosure recognizes the unique characteristics and operational contexts of each group and presents the following information accordingly. For more details on our employees, see link; S1-6.

Diversity and Gender Equality within Own Workforce

A diverse and gender-balanced workforce is essential to Odfjell’s operational success and long-term resilience. Diversity drives innovation, improves adaptability, and supports more informed decision-making, creating opportunities to boost operational excellence, attract top talent, and meet evolving societal and stakeholder expectations. Achieving gender equality enhances the company’s reputation by reflecting broader societal values and underscoring a commitment to inclusivity.