RESOURCE USE AND CIRCULAR ECONOMY

Pollution-related impacts, risks, and opportunities

Currently, FORCIT Group does not have a group-wide process for identifying actual and potential pollution-related impacts, risks, and opportunities. Risk analysis and due diligence have been conducted in procurement in FORCIT Explosives, and the company follows a Sustainable Procurement Policy. Additionally, all members of the upstream value chain have received FORCIT’s Code of Conduct.

This information has been used as input for the Double Materiality Assessment (DMA). The HSEQ team and other specialists have had the opportunity to contribute to the DMA process.

Stakeholder engagement in resource use and circular economy

FORCIT has not conducted formal consultations specifically focused on resource use or circular economy. Sustainability-related inquiries from customers are addressed individually on a case-by-case basis. In Finland, community stakeholders have the right to provide their input whenever the company applies for new environmental permits or updates existing ones. Meanwhile, in Sweden, regulations stipulate public participation only for certain categories or levels of environmental permits.

Sustainability policies and environmental management

FORCIT has several policies governing resource use and circular economy, all of which are approved by the CEO and apply across the company:

• Environmental Management System (EMS) – ISO 14001: Certified in Finland, covering sales, service, design, development, and manufacturing of explosives, as well as supply chain operations in Finland, Sweden, and Norway.

• Environmental Policy: Recognizes environmental risks, promotes energy efficiency, and commits to regular reporting to stakeholders.

• Sustainable Procurement Policy: Requires suppliers to follow principles related to circular economy, climate change, water management, and energy use.

• Operational and Quality Policy: Includes continuous improvement, risk assessments, and auditing.

The Environmental Policy and EMS are audited annually by DNV. The Environmental Policy is published on the company website, ensuring transparency for stakeholders.

Circular economy and transitioning from virgin resources

While FORCIT does not currently maintain a formal policy on phasing out the use of virgin resources, we actively prioritize secondary resources whenever feasible. Notable examples include the implementation of regenerated oils from recycled sources for production in two manufacturing lines within our Explosives Business Unit at Vihtavuori. Additionally, recycling initiatives are embedded across our production processes; for example, Intermediate Bulk Containers (IBCs) are reused whenever possible and ultimately recycled at the end of their lifecycle. Moreover, we actively pursue the reuse of by-products: diluted nitric and sulfuric acids generated in production are sold externally for alternative applications, thereby reducing the need for new chemical resources.

While green explosives are technically viable, current market conditions make them financially unfeasible for customers due to higher production costs.

Sustainable sourcing and circular economy integration

Sustainable sourcing and the use of renewable resources are embedded in FORCIT’s Code of Conduct and Sustainable Procurement Policy, which mandates suppliers to adhere to:

• UN Guiding Principles on Business and Human Rights

• OECD Guidelines for Multinational Enterprises

• ILO Declaration on Fundamental Principles and Rights at Work

• Norwegian Transparency Act

Suppliers are also required to consider Environmental Product Declarations (EPDs) and sustainability factors, such as climate impact, water management, energy efficiency, and circular economy principles. FORCIT conducts pre-planned supplier audits annually to ensure compliance.

Resource use, circular design, and waste management

FORCIT does not currently meet the specific target-setting requirements of ESRS 2 MDR-T for:

• Resource inflows and outflows

• Circular material use rate

• Minimization of primary raw material use

• Reversing depletion of renewable resources

• Waste management targets

However, the company is actively working to improve circular economy practices:

• Recycling initiatives: Use of recycled oil in bulk emulsion explosives and reuse of non-contaminated, returnable packaging.

• Durability considerations: Packaging materials (e.g., cardboard boxes for shipping) comply with UN type approval for the Transport of Dangerous Goods (VAK).

• Explosive waste management: Monitoring and reduction efforts are in place, but disposal is subject to environmental permit limitations.

• New circular economy opportunities: Participation in the Business Finlandpartially funded Linear2Circular project (2025–2026).

Challenges in circular material use

FORCIT is part of Responsible Care program (Chemical Industry Federation of Finland), which supports resource effiency. Due to the nature of its products, increasing the circular material use rate is challenging. FORCIT is exploring:

• Recycled materials in product casings and other components.

• Side-stream utilization to repurpose production by-products for other industries.

Waste management and environmental impact reduction

FORCIT continuously monitors its waste streams with dedicated efforts to minimize environmental impacts. We regularly track explosive waste on a monthly basis, actively working to reduce its generation. Efforts are also in place to significantly decrease open burning of waste at our production sites, alongside reducing the volume of waste sent externally, where the material or energy content is not utilizied. We prioritize enhancing the sorting processes and maximizing utilization of non-hazardous waste. Additionally, internal projects are actively underway to develop innovative, environmentally sound waste disposal methods, further advancing our commitment to sustainability.

New technological advancements may significantly reduce explosive waste generation in the near future. These ongoing R&D initiatives are documented in FORCIT’s 2023 Sustainability in Short report.

Key raw materials and resource considerations

FORCIT’s primary raw materials include:

• Nitric acid, sulfuric acid, process oil, ethylene glycol, aluminum, ammonium nitrate

• Fuels (fossil and renewable) for raw material transport

• Water sources: Spring water (Hanko), surface water (Vihtavuori), municipal water (Kemi and Karlskoga, partly Hanko and Vihtavuori)

•Packaging materials: Cardboard boxes, plastic tubes, and cartridges

No critical raw materials or rare earth elements are used in FORCIT’s production processes.

Circular design limitations

FORCIT’s key products are single-use explosives, meaning full circular economy integration is not feasible. Mobile units have relative long life time and after that they are possible update and to rebuild again.

Data management and reporting

Material use data is collected from FORCIT’s Powered Production ERP system and supplier billing records. Investment data is derived from supplier quotations and direct cost calculations. Waste stream data is obtained from waste transfer notes provided by contracted waste collectors, as well as from onsite waste measurements. Explosive waste management is carried out in compliance with Finnish environmental regulations and site-specific permits.

Future developments in circular economy

• Linear2Circular Project: A two-year initiative starting in 2024 with additional impacts in the years to come.

• New storage and production facilities: Recent expansions in Kuopio, Niinikoski, Vihtavuori and in Sweden Slite, Aneby, Lönsboda and Fjärås support enhanced sustainability practices.