Circular Raw Materials: Extending Resource and Biogenic Carbon Value

For more than a century, YFY has continued to place the circular economy at the core of its operations, promoting the sustainable use of resources from the raw-material stage. Wood chips, pulp, recovered paper, and base paper are among the Group's principal production inputs. Through the use of recycled fibers and paper recovery, materials are repeatedly reintroduced into production processes, extending material life cycles and reducing demand for virgin resources. In 2025, 96.5% of the raw materials used in products and packaging across YFY's three major business groups were renewable materials, of which recovered paper accounted for 36.2%. In the Containerboard and Packaging Business Group, more than 90% of the raw materials used in pulp production were sourced from recovered paper. By continuously strengthening paper-fiber circularity, YFY extends the value of biogenic carbon stored in fibers throughout the product life cycle.

Responsible Procurement: Building a Traceable and Sustainable Forest Supply Chain

YFY strengthens upstream raw-material governance through responsible procurement and traceability management, giving priority to raw materials verified by independent third parties and applying forest certification schemes such as FSC and PEFC to reduce risks associated with forest conversion and natural-resource use. In 2025, 95% of the raw materials procured by YFY were sourced from FSC- or PEFC-certified sources. Within CHP's Taiwan operations, 95.71% of purchased wood chips were certified, while certification coverage for imported pulp reached 100%. During the same year, green procurement of raw materials reached NT$10.3 billion, accounting for approximately 55% of total raw-material procurement, while the Group continued to explore opportunities to expand local sourcing. In addition, the Forestry, Pulp and Paper Business Group manages more than 30,000 hectares of plantation forests across Taiwan and China and continues to advance sustainable forestry practices and FSC Forest Management Certification. Through supplier no-deforestation requirements, certified raw-material procurement, and supply-chain traceability, YFY seeks to protect forests, biodiversity, and natural capital from the source.

To support sustainable consumption and production, YFY recognizes that responsible raw-material management is essential to maintaining long-term, circular, and sustainable operations. The Group gives priority to environmentally preferable products for raw materials, facility operations, and office supplies, including products carrying environmental labels, energy-efficiency labels, and FSC certification. In 2025, 95% of the raw materials procured by YFY were sourced from FSC- or PEFC-certified sources. In line with its green procurement principles, annual procurement of recycled fiber amounted to NT$10.3 billion, representing 55% of total procurement expenditure. Procurement practices are primarily aligned with each business group's commitments to the use of recycled fibers and internationally certified materials, the production of green products, and customer and consumer requirements, while appropriate risk controls are implemented throughout the process.

Maintaining Stable Circular Use of Key Paper-Fiber Raw Materials and Improving Resource Efficiency

Recent trends in the use of key paper-fiber raw materials show that YFY's consumption of virgin pulp/wood chips, recovered paper, and base paper for corrugated packaging has generally increased since 2022, with continued growth in 2023 and 2024 alongside business expansion. In 2025, total consumption of these three major raw-material categories was approximately 4.055 million metric tons, representing a slight decrease of approximately 1.7% from 2024, while the overall material mix remained stable. Recovered paper remained the largest category in 2025 at approximately 1.649 million metric tons, accounting for around 40.7% of the three major raw materials. Virgin pulp/wood chips accounted for approximately 1.224 million metric tons, while base paper for corrugated packaging accounted for approximately 1.183 million metric tons. By continuing to increase the use of recycled fibers, certified raw materials, and renewable materials, YFY is able to meet production needs while reducing reliance on virgin resources and improving overall material circularity.

Greenhouse Gas Management

As the global transition to net zero accelerates, carbon pricing mechanisms expand, and Taiwan progressively implements carbon fees and emissions-control policies, greenhouse gas management has evolved from an environmental issue into a key business consideration affecting operating costs, capital allocation, energy strategy, and supply-chain competitiveness. YFY continues to monitor carbon emissions across its operating sites through GHG inventories, energy transition, process improvements, and digital carbon management. In line with its voluntary carbon-fee reduction plans and net-zero transition pathway, YFY has established short-, medium-, and long-term reduction targets, progressively decoupling production growth from carbon emissions and advancing toward net-zero emissions by 2050.

YFY Greenhouse Gas Reduction Strategy

YFY advances GHG reductions through three strategic pillars: Energy Structure, Process Optimization, and Transformative R&D. Under Energy Structure, YFY continues to expand the use of biomass fuels and resource-recycling fuels to reduce reliance on fossil fuels, while investing in renewable energy such as biomass energy, biogas power generation, and solar power. Process Optimization focuses on equipment replacement and upgrades, system-level energy efficiency, residual-heat recovery, and productivity improvements to reduce energy consumption and emissions per unit of product. Under Transformative R&D, YFY is introducing AI-enabled and digital management, renewable-energy and energy-storage systems, and carbon management accounts to monitor emissions at sites and production lines in real time. The Company is also advancing saccharide-based low-carbon materials, voluntary emissions-reduction projects, afforestation carbon-credit initiatives, and artificial-wetland reduction methodologies, while incorporating internal carbon pricing into low-carbon transition management.

Greenhouse Gas Reduction Pathway

In response to Taiwan's carbon fee system, in 2025 YFY had seven entities subject to carbon fees in Taiwan, accounting for approximately 97% of YFY's total emissions in Taiwan. All seven entities submitted voluntary reduction plans for 2025–2030. Following review by the competent authority, two plants were approved for Preferential Rate A and five plants for Preferential Rate B, and all received carbon-fee preferential treatment for industries at high risk of carbon leakage. Key decarbonization measures include switching to low-carbon and biomass fuels, replacing and upgrading equipment, improving energy efficiency, introducing renewable energy such as solar power, and optimizing compressed-air, paper-machine, and steam systems.

In accordance with the designated GHG reduction targets for entities subject to carbon fees, YFY uses 2021 as the baseline year for its carbon-fee voluntary reduction plans; combined Scope 1 and Scope 2 emissions across Taiwan, Mainland China, and Vietnam were approximately 2.574 million metric tons CO₂e. Based on the commitments in each plant’s voluntary reduction plan, YFY has set targets to achieve a 16% reduction from the baseline year by 2030, a 50% reduction by 2040, and alignment with the national net-zero target by 2050.

Greenhouse Gas Emissions Trends and Reduction Performance

YFY defines its GHG inventory boundary using the operational control approach. Production sites across its three major business groups conduct annual GHG inventories in accordance with ISO 14064-1, the GHG Protocol, or applicable local requirements. The parent company, YFY Inc. (Head Office), introduced GHG inventory and verification in 2023 and completed the first-year GHG inventory for all consolidated subsidiaries in 2025, progressively establishing a carbon management foundation aligned with the financial reporting boundary.

In 2025, Scope 1 and Scope 2 emissions from the three major business groups across Taiwan, Mainland China, and Vietnam totaled approximately 2.33 million metric tons CO₂e, a 9.5% decrease from 2021. Scope 1 emissions decreased by 3.3% from 2024, mainly due to reduced coal use, increased use of alternative fuels and biomass energy, and transformation projects at selected sites. Market-based Scope 2 emissions remained broadly stable year on year.

Of this total, Scope 1 and Scope 2 emissions in Taiwan totaled 1.336 million metric tons CO₂e in 2025, down 19.9% from 2021 and 5.1% from 2024; Scope 1 emissions were approximately 1.101 million metric tons CO₂e, accounting for about 82% of Taiwan emissions and arising mainly from the Forest, Pulp & Paper Group and the Containerboard and Packaging Group. With increased use of alternative fuels and biomass energy, Taiwan Scope 1 emissions in 2025 were 19.5% lower than in 2021; biogenic emissions totaled 753,000 metric tons CO₂e, approximately 8% higher than in the prior year.

In 2025, GHG emissions intensity per metric ton of product was 0.77 for Pulp, 1.19 for Fine Paper, 0.87 for Household Paper (Taiwan sites), 0.81 for Containerboard and 0.10 for Corrugated Packaging. Intensity varies across product lines because of differences in process characteristics and energy requirements. YFY continues to reduce emissions per unit of product through equipment improvement, process optimization and energy-mix transformation, with the higher-intensity pulp and paper production lines as the priority for further reduction.

Product-based and revenue-based emissions intensity should be read together, as they respond to different drivers. On the consolidated financial reporting boundary, absolute Scope 1 and Scope 2 emissions fell 3.1% in 2025, while consolidated revenue declined 6% to NT$73.643 billion – mainly reflecting international pulp prices consolidating at relatively low levels and changes in U.S. tariff policy affecting export momentum for certain products. Because revenue fell faster than emissions, GHG emissions intensity per unit of revenue rose from 31.7 to 32.7 metric tons CO₂e per NT$ million of revenue. As revenue-based intensity is sensitive to product prices and product mix, YFY manages both measures: physical intensity per metric ton of product to track operational and energy performance, and revenue-based intensity to monitor the carbon intensity of earnings.

Strengthening Value Chain Carbon Management and Expanding Scope 3 Inventory Coverage

Since 2024, YFY has progressively established a Group-wide Scope 3 GHG inventory mechanism, extending carbon management from Scope 1 and Scope 2 to the upstream and downstream value chain. In 2025, YFY further expanded its domestic inventory boundary by including additional paper mills of selected Taiwan subsidiaries, improving the completeness of value-chain emissions data. Scope 3 emissions totaled approximately 1.224 million metric tons CO₂e in 2025, inventoried across all 15 categories of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Category 1 (purchased goods and services) accounted for approximately 905,000 metric tons, or about 74%; Category 3 (fuel- and energy-related activities not included in Scope 1 or Scope 2) for approximately 194,000 metric tons, or about 16%; and Category 4 (upstream transportation and distribution) for approximately 80,000 metric tons, or about 6.5%. The remaining approximately 45,000 metric tons, or about 3.7%, were distributed across the other categories, of which end-of-life treatment of sold products and downstream transportation and distribution were the largest. YFY will continue to expand inventory coverage and advance supply-chain decarbonization targeting major emissions hotspots in raw materials, energy, and logistics.

Internal Carbon Pricing

YFY is progressively incorporating carbon costs into corporate investment and capital-allocation decisions. Internal carbon pricing is calculated based on the estimated costs required for each plant’s decarbonization measures, including initial investment, subsequent operation and maintenance expenses, and the expected cumulative Scope 1 and Scope 2 emissions reductions, to derive the abatement cost per metric ton of GHG emissions reduced. The Company applies a Shadow Price mechanism, incorporating a carbon price into investment assessments and capital-expenditure decisions. The mechanism is prioritized for listed subsidiaries that are significant emissions sources and serves as an evaluation metric for new investment projects and related capital expenditures.

By translating carbon-reduction benefits into financial value and combining them with payback period (PBP) and investment-benefit assessments, YFY can compare the effectiveness of different energy-efficiency, process-improvement, renewable-energy, and low-carbon technology projects, guiding capital allocation toward low-carbon transition. Based on the consolidated financial reporting boundary, combined Scope 1 and Scope 2 emissions were approximately 2.487 million metric tons CO₂e in 2024 and decreased to approximately 2.409 million metric tons CO₂e in 2025, a 3.1% reduction from the baseline year, meeting the phased milestone of a 1% reduction from the baseline year. The Company uses 2024 as the emissions-reduction baseline year for this reporting boundary and has set targets to achieve a 2% reduction by 2026, a 22% reduction by 2035, a 50% reduction by 2040, and net-zero emissions by 2050.

Strategy and Targets

Energy management is a key foundation of YFY's low-carbon transition and an important means of strengthening operational resilience and cost competitiveness. In response to energy price volatility, rising carbon costs, and coal phase-out policies adopted by local governments in Taiwan, YFY continues to prioritize coal substitution to reduce reliance on fossil fuels. The Group advances alternative fuels, biomass energy, low-carbon fuel switching, renewable energy, energy storage, and smart energy management through four strategic directions: developing low-carbon energy based on the Saccharide Economy and enabled by technology; integrating the green industry chain and systematizing green power generation and sales; creating green power value and introducing smart energy systems; and integrating energy and carbon management systems.

In 2025, eight YFY production sites across Taiwan, Mainland China, and Vietnam maintained ISO 50001 Energy Management System certification. Through institutionalized energy management, YFY continued to improve energy efficiency through process optimization, equipment replacement, and digital energy management, while strengthening energy self-sufficiency and power-supply resilience through on-site biomass power generation, solar power, and smart energy systems. By 2030, YFY targets an average annual electricity-saving rate of at least 1.5% at each site and a combined alternative-energy input share (biomass energy plus alternative fuels) of at least 35%. In 2025, the actual annual electricity-saving rate reached 2.3%, while the combined alternative-energy input share reached 36%, both outperforming the annual targets and supporting the gradual decoupling of production growth from energy use and carbon emissions.

Energy Mix and Consumption

In 2025, total energy input across the three business groups was approximately 33.93 million GJ, down 2.7% year on year. Renewable energy input increased by 1.8%, while non-renewable energy input decreased by 4.3%. After deducting energy sold, total energy consumption was approximately 33.72 million GJ, down 2.9% from the previous year. Coal use decreased by approximately 1.52 million GJ, while heavy oil/fuel oil use decreased by approximately 59,000 GJ, reflecting progress in fuel transition and energy-efficiency improvements.

In terms of the energy mix, fossil fuels accounted for 55.4% of total energy input across the three business groups in Taiwan, Mainland China, and Vietnam in 2025, followed by biomass energy at 26.7%, alternative fuels at 9.5%, and purchased energy at 8.2%. The combined share of biomass energy and alternative fuels reached 36%. Among individual business groups, the highest biomass-energy share was 46.3%.

Focusing on Taiwan, total energy input in 2025 was approximately 20.75 million GJ. Fossil fuels accounted for 47.5%, biomass energy for 28.4%, alternative fuels for 15.0%, and purchased energy for 8.9%. Biomass energy and alternative fuels together accounted for 43.4%, higher than the 36% share across the three business groups as a whole, reflecting continued efforts at Taiwan sites to reduce reliance on fossil fuels through biomass energy and resource-recycling fuels. Biomass energy accounted for 41.8% of energy input in the Forest, Pulp & Paper Group, while alternative fuels accounted for 37.3% in the Containerboard and Packaging Group. Renewable electricity was generated primarily from on-site biomass power, with more than 210 million kWh generated and consumed on site in 2025. Renewable electricity has accounted for approximately 11% of electricity use over the past two years.

In terms of energy self-sufficiency, electricity generated and consumed on site accounted for 67% of total electricity use across YFY sites in Taiwan, Mainland China, and Vietnam in 2025. The ratio was approximately 60% at Taiwan sites, while the electricity self-sufficiency rate exceeded 80% at certain sites. YFY also continued to expand renewable energy. In 2025, more than 210 million kWh of biomass-generated electricity and approximately 13.3 million kWh of solar power were generated and consumed on site. YFY has applied for and obtained nearly 140,000 renewable energy certificates.

Energy-Saving and Carbon-Reduction Performance

In 2025, YFY's Taiwan production sites completed nearly 40 energy-saving and carbon-reduction initiatives, delivering total energy savings of more than 0.66 million GJ and carbon reductions of more than 87,000 metric tons CO₂e. Fuel switching contributed the largest share of energy savings at 48.8%, while equipment improvement or replacement accounted for the largest share of carbon reductions at 64.7%, demonstrating tangible results from replacing energy-intensive equipment, improving process efficiency, and switching to lower-carbon fuels.

Energy Intensity within the Organization

YFY continues to reduce energy demand in product manufacturing through equipment improvement, process optimization, and energy-mix transformation, while tracking energy-use efficiency through energy intensity per unit of product. In 2025, energy intensity was 19.19 GJ per metric ton of product for Pulp and Fine Paper, 10.59 for Household Paper, 9.80 for Containerboard, and 0.94 for Corrugated Packaging. YFY continues to support the low-carbon transition of its products through ongoing improvements in energy efficiency.

Strategy and Targets

Water is an essential medium in papermaking, carrying fibers and energy while helping maintain product quality. In response to water scarcity risks arising from climate change, rising water costs, and increasingly stringent effluent management requirements, YFY is guided by the principle of "maximizing the value of water resources." The Group continues to improve water circulation and reuse efficiency to mitigate risks including production interruptions caused by water shortages, higher costs resulting from inefficient water use, and environmental impacts associated with inadequate discharge management. YFY advances water stewardship through five strategic pillars: establishing management systems; process water recycling and reuse; optimizing water treatment and improving water quality; establishing a public and transparent water footprint; and recharging wetlands and fostering ecosystems. By 2030, YFY aims to achieve a water recycling rate of 90% at paper mills and reduce annual water consumption by 1% compared with the previous year.

Water Resource Use and Circular Management

YFY manages water across the full cycle, from withdrawal and process use to recovery, reuse and discharge. Through white-water recovery, process-water reuse, equipment upgrades and real-time water-quality monitoring, the Group reduces freshwater demand and improves water-use efficiency. In 2025, the average water recycling rate at paper mills exceeded 90%, while the rate at the Containerboard and Packaging Group’s paper mills in Taiwan and Vietnam reached 95.35%. Production sites also use online water-quality and flow monitoring, supplemented by manual sampling and laboratory testing, to monitor process wastewater and final effluent around the clock.

In 2025, total water withdrawal across the three business groups in Taiwan was approximately 32,156 million liters, total water discharge was approximately 31,645 million liters, and total water consumption was 511 million liters. Water consumption was approximately 543 million liters for the Containerboard and Packaging Group and 195 million liters for the Consumer Products Group. At certain Forest, Pulp & Paper Group sites, effluent from neighboring farmland flows into the sites and is discharged together through the sites’ outfalls. As a result, reported discharge volumes may exceed process water withdrawal, causing a negative value when water consumption is calculated as the difference between withdrawal and discharge; this does not represent actual negative water consumption. YFY continues to improve water-use efficiency at its Taiwan sites through water-balance management, process-water recycling and monitoring mechanisms.

Resource Circularity Management

YFY originated from the use of agricultural and forestry residues in building materials and papermaking, and has long followed a zero-waste philosophy. From recycled-fiber papermaking and water circularity to process-residue recovery, biomass energy and low-carbon material development, YFY continues to advance resource circularity, which is critical to reducing dependence on raw materials, lowering waste-treatment costs, improving resource efficiency and developing new business opportunities. In response to global resource constraints and the transition toward a circular and net-zero economy, YFY applies a value-chain approach to manage resource inputs, process use and final destinations. Through source reduction, reuse, recycling, alternative fuels, product redesign and new technology R&D, process residues, by-products and waste are returned to material or energy cycles, reducing demand for virgin resources and fossil fuels.

YFY has established "advancing the Circular Economy and zero waste while reducing total waste generation" as its long-term direction, continuously increasing resource recovery while reducing waste directed to final disposal. The Group targets a waste-to-resource ratio of 95% by 2030 and a 1% annual reduction in direct waste disposal versus the prior year. In 2025, the waste-to-resource ratio reached 94%, exceeding the interim target of at least 87%; waste directed to disposal decreased by 14% year on year, outperforming the annual management target of a 1% reduction.

Waste Generation and Resource Recovery Performance

In 2025, total waste generated across all YFY production sites was 569,588 metric tons, representing a decrease of nearly 2% from 2024. Approximately 534,879 metric tons were recovered through recycling, including conversion into paper or other products, production of alternative fuels, and reuse after solidification or physical treatment as cement raw materials, cement products, insulation materials or fertilizers. The overall waste-to-resource ratio reached 94%. Waste that could not be further recovered was managed through incineration, landfilling or other lawful treatment methods according to its characteristics. In 2025, waste directed to disposal totaled 34,709 metric tons, down 14% from the previous year, further reducing the need for final disposal.

Beginning in 2025, YFY revised its waste treatment classifications and terminology in alignment with GRI 306. Under the revised approach, "Recycling" incorporates the previous year's categories of reuse, recycling and production of alternative fuels. This page uses the classifications "Preparation for reuse," "Recycling" and "Total waste disposed"; data are therefore not directly comparable with prior-year classifications.

Waste Management Strategies and Measures

YFY extends waste management beyond end-of-pipe disposal to production processes and the product life cycle, reducing resource losses at the source and increasing recovery value through circular technologies and waste-flow management.

• Source Reduction and Production Planning: Optimize production scheduling, improve raw-material use efficiency and control process losses to reduce waste generated from production inefficiencies and process losses.
• Strengthen Material Recovery and Recycling Technologies: Continue recovering agricultural and forestry by-products, fibers, recovered paper, water-based printing pigments and iron wire. For example, the Yangzhou Plant extracts straw fiber from rice and wheat straw to make nPulp bio-pulp, which is then processed into various green packaging materials, increasing the value of agricultural by-products.
• Invest in Waste-Reduction and Low-Carbon Fuel R&D: Establish dedicated waste-application teams to integrate on-site process residues with external reusable feedstocks and develop wood pellets and resource-recycling fuels to substitute for coal and reduce waste-disposal demand.
• Product Redesign: Improve recyclability through product design. For example, Chung Hwa Pulp Corporation's CircuWell all-paper recyclable, plastic-free series can enter conventional paper recycling systems directly, increasing fiber circularity.
• Strengthen Environmental Management to Reduce Impacts: Follow ISO 14001 management mechanisms by recording waste movements, conducting monthly inventories, annual risk identification, and internal and external audits, and carrying out hazard identification and improvement measures for regulated waste.
• Track Waste Flows and Ensure Proper Treatment: Track off-site transport and final treatment through government waste-management systems, GPS routing, transport manifests and treatment records. Vehicle follow-up or final-destination verification is conducted when necessary to ensure that waste clearance and treatment comply with applicable regulatory and contractual requirements.

Waste-to-Energy: Building Liquid, Gaseous and Solid Energy Circularity

Papermaking is inherently resource-circular. YFY further converts process residues, by-products and organic resources into energy and develops liquid, gaseous and solid forms of green energy, transforming materials that once required disposal into energy assets and creating a circular model of "Process Residues → Resource Recovery → Self-Generated Energy."

Liquid | Lignin Power Generation
In the Forest, Pulp & Paper Group, lignin (black liquor) recovered from the pulping process is used as biomass energy for cogeneration and process steam, replacing heavy oil. The Hualien Plant operates Taiwan's only and largest lignin-based biomass power system and is currently advancing a large-scale retrofit, with plans to increase lignin concentration from 65% to 85% and generation capacity from 18,000 kW to 43,500 kW. Annual green electricity output is expected to double from 150 million kWh, moving toward full power self-sufficiency, with estimated annual emissions reductions of approximately 105,000 metric tons CO₂e.

Gaseous | Biogas Power Generation
YFY uses anaerobic treatment technology with proprietary bacteria to convert organic matter in papermaking process water into methane. The Xinwu Plant operates Taiwan's largest biogas power system, with an installed capacity of 5,200 kW, reducing the organic load of process wastewater while converting organic resources into usable energy. The system can also digest external food sludge, septic waste and food waste.

Solid | Resource-Recycling Fuels
YFY processes recovered paper residues, recovered wood materials and high-calorific-value process residues through shredding, magnetic separation, air separation and conditioning to produce resource-recycling fuels. These fuels are used in cogeneration systems to replace a portion of coal consumption, supporting both waste diversion and lower-carbon energy use. In 2019, YFY built Taiwan's first cogeneration system operating entirely on resource-recycling fuels without coal.

In 2025, across the three business groups, alternative fuels accounted for 9.5% of energy input and biomass energy for 26.7%, representing approximately 36% combined. This demonstrates how resource circularity has expanded beyond conventional waste management to become an important contributor to the energy transition, while reducing waste-treatment costs, dependence on fossil fuels and associated environmental impacts.

Waste Flow and External Treatment Management

In 2025, YFY’s waste treatment flows comprised 38% treated on site, 7% treated at other Group plants and 55% managed by external vendors. External treatment includes recycling, alternative-fuel production, incineration, landfill, physical or chemical treatment and other approved methods. Because more than half of waste relies on external treatment, vendor qualifications, transport records, final destinations and reuse quality are important potential impacts. Through qualified-vendor management, retention of transport and treatment records, reconciliation of declaration data, follow-up on abnormalities and, where necessary, audits of final destinations, YFY maintains traceability from waste generation through final treatment.

Overall waste flows maintain 100% traceability, supported by a waste-management network comprising on-site treatment, other Group plants and qualified external treatment organizations. This approach reduces the environmental and compliance risks associated with illegal dumping, pollution, air emissions, improper residue management, unstable recycling quality and regulatory or reputational exposure.

Hazardous Waste Management

In 2025, YFY generated 343 metric tons of hazardous waste, only approximately 0.06% of total waste generated. Although the share is low, the potential environmental, occupational-safety and compliance impacts are higher because hazardous waste may include ink sludge, waste oil, waste-oil drums, waste developer, waste fixer, monitoring waste liquids and flammable mixed waste; hazardous waste is therefore prioritized for control. It is mainly treated by external providers through incineration, landfill and other methods. Improper temporary storage, labeling, transport or treatment can cause soil or water pollution, leaks, fire risks, worker exposure and legal violations. YFY uses source reduction, segregated storage, clear labeling, qualified treatment organizations and complete transport, treatment and declaration records to ensure final destinations remain traceable.

Non-Greenhouse Gas Emissions Management

Managing non-greenhouse gas air emissions is fundamental to YFY's efforts to maintain air quality, protect employees and nearby communities, and comply with environmental regulations. Poor management of air pollutants can lead to neighborhood complaints, regulatory penalties, production restrictions, equipment shutdowns or reputational risk. Effective control improves working conditions, reduces compliance risk and responds to societal expectations for health and environmental quality.

YFY centers its approach on "regulatory compliance, source reduction and real-time monitoring." Each site strictly monitors and reports air-pollutant emissions under local requirements and continues investing in air-pollution control and monitoring equipment. Going forward, YFY will balance control-equipment investment costs against pollution-prevention benefits and continue reducing air-pollution risks to protect employees, local communities and the environment.

Management Strategy

YFY strengthens air-pollutant management through three strategies. Under Establish Management Systems, the Group implements ISO 14001 Environmental Management Systems to provide institutionalized environmental management and risk-control mechanisms. Under Comply with Government Regulations, aging equipment is replaced as required and additional pollution-control equipment is installed. Under Evaluate and Improve Technologies, YFY continuously evaluates access to cleaner fuels and maintains optimal boiler operating technologies to reduce pollutant generation at the source.

Air Pollutant Emissions Performance

At sites meeting local monitoring and reporting thresholds, emissions are periodically reported to local governments. Major air pollutants are nitrogen oxides (NOx), sulfur oxides (SOx), particulate matter (PM) and volatile organic compounds (VOCs).

In 2025, NOx emissions totaled 770 metric tons, SOx emissions 649 metric tons, PM emissions 208 metric tons and VOC emissions 167 metric tons. NOx and VOC emissions each decreased by more than 10% year on year, while SOx and PM were broadly unchanged. All emissions complied with local regulations; any non-compliance triggers immediate corrective action.

In addition to major air pollutants, YFY also monitors hazardous air pollutants (HAPs), including lead, cadmium, mercury, arsenic, hexavalent chromium and related compounds. In 2025, emissions of these pollutants were approximately 0.2 metric tons and remained extremely low. Historical data coverage has consistently been 100%.

Air-Pollutant Management and Measures

YFY’s major production sites are equipped with dedicated air-pollution control equipment selected according to the characteristics of individual emission sources, and third-party inspections are scheduled regularly. Continuous online monitoring supports uninterrupted tracking of emissions, real-time operating adjustments and regular reporting. Pollution-control equipment is operated by professionally trained and certified personnel, with maintenance and operating records managed under standardized procedures to ensure reliable equipment performance.

Each site also maintains equipment inspection and preventive-maintenance plans. Critical equipment undergoes annual shutdown maintenance and comprehensive inspections, while designated personnel continuously monitor local air-quality conditions. When government authorities issue air-quality deterioration alerts, sites activate established response plans and, as appropriate, implement measures such as voluntary load reduction or equipment shutdowns in coordination with local authorities to help protect regional air quality.

Air-Pollution Incident Risk and Emergency Response

For higher-risk emission sources, YFY assesses potential pollutant dispersion and impact areas associated with major air-pollution incidents. Based on simulation results, surrounding sensitive receptors are identified, evacuation routes and assembly areas are planned, and relevant measures are incorporated into site emergency-response and notification procedures.

Sites maintain appropriate personal protective equipment, communication systems, firefighting equipment, warning devices, emergency-response equipment and decontamination supplies, and conduct regular emergency-response drills. Emergency-response plans define team responsibilities, notification procedures, personnel control requirements, use of protective equipment and spill-response methods. The locations of higher-risk equipment and emergency-access routes are also marked on site layout plans to support rapid response by both internal and external emergency personnel.