Green Production and Low-carbon Practices

• Green Product Innovation

  • 1. Water-based technology R&D achievements

    

    With over a decade of expertise in water-based material technology, we have secured 68 green technology patents, with core technologies reaching internationally advanced levels. In 2025, we helped downstream customers reduce VOC emissions by 127,000 tonnes and save over RMB 200 million in environmental treatment costs:

    Low-VOC water-based resin technology:

    Our self-developed water-based polyurethane resin contains less than 10g/L of VOC, far below the 500g/L+ emission level of traditional solvent-based products, reducing volatile organic compound emissions by over 98%.

    Biodegradable bio-based material technology:

    Our plant-based water-based materials achieve a degradation rate of over 90% within 6 months in natural environments, and replacing traditional petroleum-based materials reduces carbon footprint by 70%.

    Recyclable coating technology:

    Our peelable water-based coating materials can be fully recovered and reused after use, with a recycling rate of over 95%, significantly reducing downstream customers' waste disposal costs.

    Technology application results:

    Low-VOC water-based resin technology has been applied across our full product range. In 2025, we helped downstream customers reduce VOC emissions by 127,000 tonnes and save over RMB 200 million in environmental treatment costs. Our biodegradable bio-based materials have been successfully applied in food packaging, medical protection and other sectors, earning high industry recognition.

  • 2. Product carbon footprint management

    

    We have established a comprehensive product life-cycle carbon footprint management system covering the entire process from raw material procurement to product disposal. In 2025, the carbon footprint of our core product, water-based polyurethane resin, was 3.2kg CO₂e/kg, 38% lower than the industry average. Our biodegradable bio-based materials achieved a carbon footprint of just 1.1kg CO₂e/kg, 72% lower than comparable traditional petroleum-based products, demonstrating significant carbon reduction advantages:

    Carbon footprint accounting:

    We have adopted the international ISO 14067 carbon footprint accounting system, completing carbon footprint calculations for all core products, with data verified by third-party authoritative organisations.

    Data disclosure:

    Carbon footprint data for core products is transparent and publicly available. We provide product carbon labels to downstream customers, helping them calculate their own product carbon footprints and jointly achieve carbon reduction targets.

    Continuous optimisation:

    We have established a dynamic carbon footprint optimisation mechanism, updating accounting data annually and continuously reducing product carbon footprints through technological iteration.

    Carbon footprint data:

    In 2025, the carbon footprint of our core product, water-based polyurethane resin, was 3.2kg CO₂e/kg, 38% lower than the industry average. Our biodegradable bio-based materials achieved a carbon footprint of just 1.1kg CO₂e/kg, 72% lower than comparable traditional petroleum-based products, demonstrating significant carbon reduction advantages.

  • 3. Green product portfolio

    

    We have developed a full-series green product portfolio tailored to diverse application scenarios, meeting environmental requirements across industries. In 2025, green products accounted for 82% of revenue, exported to 32 countries and regions worldwide, serving over 1,200 customers including 28 Fortune Global 500 companies, with continuously growing market recognition:

    Eco-friendly home furnishing materials:

    Water-based home furnishing leather and water-based adhesives are odour-free with zero formaldehyde release, meeting infant-grade contact safety standards. Widely used in furniture, soft furnishings, children's products and more.

    Green building materials:

    Water-based architectural coatings and waterproof breathable membranes offer strong weather resistance and extremely low VOC content, meeting three-star green building standards. Already applied in multiple large-scale public building projects across China.

    Low-carbon industrial coating materials:

    Water-based industrial paints and metal surface treatment materials deliver excellent corrosion resistance while reducing VOC emissions by over 90% compared to traditional solvent-based products, providing low-carbon solutions for automotive, equipment manufacturing, electronics and electrical industries.

    Market application results:

    In 2025, green products accounted for 82% of revenue, exported to 32 countries and regions worldwide, serving over 1,200 customers including 28 Fortune Global 500 companies, with continuously growing market recognition.

• Low-Carbon Operations Practice

  • 1. Energy Management

    

    The company continuously promotes energy structure optimisation and energy-saving technological upgrades to reduce carbon emissions in production. As of Q1 2026, clean energy accounted for 35% of total energy consumption, energy consumption per RMB 10,000 output value decreased by 8% compared to the same period in 2025, and carbon emissions per unit product decreased by 9%. The annual carbon reduction target is 35,000 tonnes, with an input-output ratio of 1:4.2 for energy-saving upgrades, delivering significant economic and environmental benefits:

    Clean Energy Usage:

    In 2025, clean energy accounted for 32% of production energy consumption. Rooftop photovoltaic installed capacity reached 12MW, generating 13 million kWh annually, equivalent to reducing CO2 emissions by 9,200 tonnes per year.

    Energy-Saving Upgrade Results:

    Over the past three years, RMB 120 million has been invested in 27 energy-saving upgrade projects, including waste heat recovery, motor efficiency improvement, and intelligent production transformation, achieving a 28% reduction in energy consumption per RMB 10,000 output value and saving 15,000 tonnes of standard coal annually.

    Energy Management System:

    An intelligent energy management system has been established to monitor energy consumption data across all production processes in real time, dynamically optimise production scheduling, and maximise energy efficiency.

    Latest Progress in 2026: As of Q1 2026, clean energy accounted for 35% of total energy consumption, energy consumption per RMB 10,000 output value decreased by 8% compared to the same period in 2025, and carbon emissions per unit product decreased by 9%. The annual carbon reduction target is 35,000 tonnes, with an input-output ratio of 1:4.2 for energy-saving upgrades, delivering significant economic and environmental benefits.

  • 2. Water Resource Management

    

    The company has established a comprehensive water resource recycling system to improve water usage efficiency. The water recycling rate in production reaches 92%, reducing fresh water intake by 1.2 million cubic metres annually, equivalent to the annual water consumption of 600 households:

    Water Recycling:

    The water recycling rate in production reaches 92%, reducing fresh water intake by 1.2 million cubic metres annually, equivalent to the annual water consumption of 600 households.

    Water-Saving Measures:

    Water-saving projects including reverse osmosis wastewater reuse, condensate recovery, and cascade water utilisation have been implemented. Water consumption per unit product is 40% lower than the industry average.

    Water Resource Management System:

    Certified under the ISO 14001 Environmental Management System, the company operates a real-time water quality monitoring system, ensuring discharged water quality exceeds national Class I standards.

  • 3. Pollutant Control

    

    The company implements the strictest pollutant control measures to achieve full-process compliant discharge. Compliance rates for exhaust gas, wastewater, and solid waste discharge remain at 100%, and VOCs emissions have decreased by 45% cumulatively over the past three years, far below national emission standards:

    Discharge Compliance Rate:

    Compliance rates for exhaust gas, wastewater, and solid waste discharge remain at 100%, and VOCs emissions have decreased by 45% cumulatively over the past three years, far below national emission standards.

    Hazardous Waste Disposal:

    A full life-cycle hazardous waste management system has been established. All hazardous waste is disposed of by qualified third-party organisations in a standardised manner, with transparent disposal records and 100% traceability.

    Solid Waste Comprehensive Utilisation:

    The comprehensive utilisation rate of industrial solid waste reaches 85%, with a 98% recovery rate for production offcuts, maximising resource utilisation.

  • 4. Green Factory Development

    

    The company actively promotes green factory development to set a benchmark for low-carbon operations in the industry. In 2024, the company was certified as a National Green Factory, and two production workshops were awarded the title of Provincial Low-Carbon Workshop, making it one of the first companies in China's water-based new materials industry to receive this certification. Through intelligent transformation of the entire production process, production efficiency has increased by 35%, energy consumption per unit product has decreased by 22%, and the product defect rate has dropped by 40%:

    Certifications & Honours:

    In 2024, the company was certified as a National Green Factory, and two production workshops were awarded the title of Provincial Low-Carbon Workshop, making it one of the first companies in China's water-based new materials industry to receive this certification.

    Intelligent Carbon Reduction Applications:

    Production workshops widely deploy intelligent carbon reduction equipment, including automated enclosed production systems, catalytic combustion exhaust gas treatment units, and intelligent energy management platforms, achieving fully digitalised production management and significantly reducing operational energy consumption and emissions.

    Campus Ecological Development:

    The factory green coverage rate reaches 35%. Environmental facilities including rainwater collection systems and constructed wetlands have been built to create a garden-style green factory, achieving harmonious coexistence with the surrounding ecological environment.

    Intelligent Application Results:

    Through intelligent transformation of the entire production process, production efficiency has increased by 35%, energy consumption per unit product has decreased by 22%, and the product defect rate has dropped by 40%, achieving the dual goals of green production and efficiency improvement, providing a replicable model for intelligent green transformation in the industry.

• Circular Economy System

  • 1. Supply Chain Circularity

    

    The company drives suppliers and partners across the value chain to jointly build a circular economy system. In 2025, renewable and bio-based materials accounted for 28% of production raw materials, with a plan to increase this to over 50% by 2030, reducing dependence on petroleum-based feedstocks. We co-develop bio-based polyol raw materials with upstream core bio-based material suppliers, achieving a 45% carbon footprint reduction compared to traditional petroleum-based alternatives. In 2025, procurement of this raw material reached 18,000 tonnes, realising a supply chain carbon reduction of 27,000 tonnes:

    Renewable Raw Material Usage:

    In 2025, renewable and bio-based materials accounted for 28% of production raw materials, with a plan to increase this to over 50% by 2030, reducing dependence on petroleum-based feedstocks.

    Recycled Material Application:

    Recycled materials account for 18% of production inputs, including recovered water-based resins and reprocessed offcuts, reducing waste emissions by 32,000 tonnes annually.

    Supplier Green Audits:

    We have established a supplier green assessment system that incorporates environmental performance, carbon footprint and social responsibility into supplier evaluation criteria. Green audits are conducted annually for core suppliers, achieving a 92% green compliance rate in 2025.

    Supply Chain Collaboration Case:

    We co-develop bio-based polyol raw materials with upstream core bio-based material suppliers, achieving a 45% carbon footprint reduction compared to traditional petroleum-based alternatives. In 2025, procurement of this raw material reached 18,000 tonnes, realising a supply chain carbon reduction of 27,000 tonnes.

  • 2. Product Take-back System

    

    The company has established a nationwide waste product take-back system, achieving closed-loop management across the entire product lifecycle. We have independently developed efficient recovery technology for waste water-based materials, achieving a resource utilisation rate of over 90%. In 2025, the product take-back system generated cumulative recovery revenue of RMB 32 million, while saving downstream customers RMB 12 million in waste disposal costs, delivering mutual benefits for the company, customers and the environment:

    Recovery Process:

    We have independently developed efficient recovery technology for waste water-based materials. Recovered waste products are processed through separation, purification and modification before being reused as production raw materials, achieving a resource utilisation rate of over 90%.

    Recovery Network:

    We operate 12 regional recovery centres nationwide and have established joint recovery mechanisms with over 300 downstream customers. In 2025, waste product recovery volume reached 27,000 tonnes.

    Recovery Mechanism:

    We offer incentive programmes such as trade-in and recovery credit schemes to encourage customer participation in product recovery, reducing recovery costs and improving efficiency.

    Recovery Economic Benefits:

    In 2025, the product take-back system generated cumulative recovery revenue of RMB 32 million, while saving downstream customers RMB 12 million in waste disposal costs, delivering mutual benefits for the company, customers and the environment.

  • 3. Industrial Chain Collaborative Decarbonisation

    

    The company collaborates with upstream and downstream partners to jointly advance whole-chain decarbonisation. As of 2026, we have driven cumulative carbon reductions of 420,000 tonnes across the industrial chain, supported 17 suppliers in achieving Green Factory certification, and accelerated the industry-wide green transformation, building a sustainable industrial ecosystem:

    Joint Decarbonisation Projects:

    We have launched 21 collaborative decarbonisation projects with upstream raw material suppliers and downstream core customers, covering low-carbon raw material transformation, logistics optimisation and joint product development. In 2025, these initiatives achieved industrial chain carbon reductions of 120,000 tonnes.

    Green Standards Co-development:

    We participated in developing five industry standards, including the Low-Carbon Evaluation Standard for Water-based Materials Industry Chain and the Green Supply Chain Management Specification, promoting a unified industry-wide green evaluation system.

    Industry Enablement:

    We have established a public service platform for green water-based material technologies, opening 23 green patent technologies to the industry and providing technical consultation and low-carbon transformation solutions for SME peers, driving industry-wide green upgrading.

    Collaborative Decarbonisation Results:

    As of 2026, we have driven cumulative carbon reductions of 420,000 tonnes across the industrial chain, supported 17 suppliers in achieving Green Factory certification, and accelerated the industry-wide green transformation, building a sustainable industrial ecosystem.

    Our green practices in core business areas have not only delivered significant environmental and economic benefits but also laid the foundation for fulfilling broader social responsibilities. We open our technological achievements and industrial resources to a wider range of stakeholders, achieving multi-stakeholder value co-creation and sharing.

  • 4. Responsibility Fulfilment: Multi-stakeholder Value Co-creation

    

    We firmly believe that sustainable development goes beyond technological and operational improvements — it requires building a multi-win value system. While pursuing our own green development, we actively fulfil our responsibilities to customers, employees, the industry and society, extending the benefits of green technologies to more stakeholders and achieving the integration of economic, environmental and social value.